Chapter 3 - Social Dumping: A Symptom of the European Construction. An Exploratory Study of Social Dumping in Road Transport

Summary

INTRODUCTION

In this contribution we will discuss how the European construction leads to social dumping practices. Even though the focus is on the road transport sector, our analysis and some of our proposals also apply to other sectors.

Because of its very nature the transport sector is one of the key industries of the European internal market and a textbook example for the analysis of the functioning of the European Union.

Since the beginning of the liberalization process in the 1990s and the ensuing ever-growing competition, the road freight transport sector has undergone several major changes. Th anks to EU regulations, cross-border transport enterprises came into existence. By establishing a company in Eastern Europe, it is easy for road transport operators to use East European lorries and drivers in Belgium, not only to organize international transport but also for domestic transport activities. As a result of the introduction of cabotage rights on 1 July 1998, all businesses within the EU can offer transport services in a host Member State. These changes became even more prominent aft er the enlargement of the EU in three steps, i.e. in 2004, 2007 and 2013, with thirteen new Member States.

The policy and the legislation of the European Union were and are almost completely imbued with the further development of the liberalization process. No equivalent attention has been paid to social rights or upward social harmonization in the field of employment and working conditions.

The differences in terms of labour and social market structures in the EU countries are huge. The launch of an internal market and a common transport policy, together with the extension of the EU to the south and the east, in combination with weak enforcement, is the ideal breeding ground for social dumping practices. These practices raise serious questions with regard to the content and effectiveness of the European legislative and enforcement schemes and have consequences for the social rights of both resident and non-resident professional drivers. Moreover, there is the danger that as a result of “social policy regime competition” between Member States, national governments will be put under pressure to lower their employment and social standards in order to cut the high wage costs for companies.