Opinion of the Economic and Social Committee on the 'Communication from the Commission on an action plan for free movement of workers` (98/C 235/19)

On 2 December 1997 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the above-mentioned communication.

The Section for Social, Family, Educational and Cultural Affairs, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 May 1998. The rapporteur was Mr Vinay.

At its 355th plenary session (meeting of 28 May 1998) the Economic and Social Committee adopted the following opinion by 85 votes to one, with one abstention.

1. Introduction

1.1. Free movement of workers is a cornerstone of the single market, and the full, effective implementation of this right will become increasingly important when economic and monetary union becomes a reality.

1.2. The Commission communication presents an action plan which builds on the final report of the High Level Panel on free movement of persons, set up in 1996 and chaired by Simone Veil. The Panel concluded its work and presented its comments and recommendations on 18 March 1997.

1.3. Apart from some subsequent revision, the basic legal framework for free movement has been in place since 1968, as the Council did not incorporate the amendments proposed by the Commission in 1989 and 1990.

1.4. The High Level Panel now feels that it contains certain flaws and lacunae, and that the rules should be thoroughly revised and reinforced to take account of the extensive case law developed by the European Court of Justice in this area over recent decades.

1.5. The action plan recommends a five-prong strategy to:

- improve and adapt the rules;

- make the labour market more transparent;

- strengthen responsibility and cooperation;

- improve knowledge and visibility of the right to free movement;

- develop innovative projects.

1.6. Amongst the legal rules which particularly need improving in order to ensure free movement of workers are those on the right of residence, family reunion, equal treatment in general, and, more specifically, those concerning social security and taxation.

1.7. If the labour market is to respond efficiently to the needs of the single market, information must be readily available to the public and firms, and cooperation must be stepped up between the Member States' Public Employment Services (PES) and the Eures (European Employment Services) network.

1.7.1. Special attention should be paid to cross-border areas, where labour mobility is more common, and problems pertaining to vacancies, social security and tax law are more keenly felt.

1.8. Ad hoc machinery should be created to boost and strengthen cooperation between the Member States, in order to ensure the rules are implemented properly and to facilitate the solution of problems and conflicts surrounding the free movement of workers.

1.9. In order to enhance knowledge and awareness of the right to free movement, the Commission proposes specific actions, including seminars and a regular newsletter for citizens, legal practitioners and national authorities.

1.10. Finally, the Commission aims to encourage the presentation of innovative projects to promote free movement of workers, to be funded under Article 6 of the ESF Regulation.

2. General comments

2.1. The Committee endorses the action plan and calls on the Commission rapidly to introduce ad hoc machinery to comply with the comments and conclusions of the High Level Panel.

2.2. Against the background of an increasingly globalized economy, an ever-expanding European Union with no internal borders, and the need to find work or improve career prospects in another country, increasing numbers of people are feeling the need to spend sometimes considerable periods of time working or studying abroad.

2.3. From the social point of view, there can be no ignoring the implications of all this, both as far as rights, taxation, job opportunities, and social security are concerned, and not forgetting the fate of the migrant worker's family, which cannot be subjected to constraints on its membership or family ties.

2.4. Whilst these pressing problems cannot be avoided, the delay in updating the legislative framework in order to encourage workers' mobility and take account of their rights and welfare, is evidence of the complexity of the issue. It is therefore vital that all parties show themselves willing to work out concrete solutions which are acceptable to all.

2.5. Mobility tends to involve the professional classes, or specific types of workers, e.g. those employed in the building, hotel and catering trades. Nowadays, however, there are new reasons for working in another country, whether it be to acquire work experience, to do volunteer work, or just to look for a job.

2.6. Furthermore, intra-EU mobility is increasingly intense in cross-border areas, which thus find themselves having to cope first hand with complex situations and important matters such as welfare and taxation.

2.7. Moreover, the EU's millions of third country workers should be borne in mind: the problem of their rights and welfare must also be addressed.

2.8. Given the above, it is significant that the High Level Panel discussed the extent to which the basic principle of freedom of movement of persons is implemented. Consequently, the scope and objectives of the Commission's action plan for free movement of 'workers` might appear too restrictive. The broad thrust of the action plan nevertheless is towards a broader recognition of the term 'worker` and a wider application of the basic principle of free movement, as enshrined in the Treaty.

2.8.1. The Committee appreciates the Commission's pragmatic attempts to build on and open up existing EU instruments dealing with the free movement of workers. However, it considers that a parallel effort should be made to bolster this initiative with a deeper commitment to achieving freedom of movement throughout the EU for all European citizens - paying particular attention to the problems facing people with disabilities - and also for third country nationals legally resident in a Member State (). A bridge must be constructed between workers' and citizens' rights, their Community acquis, and between social and civil rights.

2.9. Essentially, the total removal of obstacles to the free movement and residence of Europeans - and not just of workers - is a political, social and economic priority. The Committee therefore calls on the Commission to waste no time in adopting the decisions needed to achieve this objective.

2.9.1. Moreover, in matters relating to the coordination of social security schemes, the Committee calls for Council deliberations to apply the qualified majority voting procedure, as is the case with other single market matters.

2.9.2. The Committee hopes, then, that the Commission initiative will be accompanied by the removal of the surviving differences of opinion expressed by the Member States.

2.10. However, the Committee endorses the Commission's attempt to broaden the scope of Article 48 of the Treaty of Rome on the free movement of workers. The Committee particularly supports the Commission's attempts to improve and extend the right of residence for workers looking for employment in another Member State and to reinforce the right to family reunion of those who have settled in another EU country. Such improvements must also be accompanied by proper civic rights and responsibilities enabling beneficiaries to play a full part in the society and community where they live.

2.10.1. At the same time, the Committee is conscious that the legal framework necessary for such free movement, whilst vital, is only a first step in breaking down the barriers to mobility. Although some progress has been made over the years, there is still a considerable amount of protectionism which undermines freedom of movement throughout the EU. The High Level Panel has pointed to the persistence of national protectionist practices which prevent other EU citizens from having access to jobs in the public sector, despite the rights enshrined in the Treaty and EU case law. These practices should be abolished once and for all.

2.10.2. Administrative formalities in terms of residence registration, social insurance and tax are often a disincentive to free movement. The time frame for complaints to be processed and solutions to be found to such obstacles to free movement is about four years, thus making it impossible to provide a swift response to the problem. Consequently, a fast track procedure could be useful here.

2.10.3. There are still delays and shortcomings in the implementation of mutual recognition of qualifications, training and professional experience, and portable occupational pension rights are far from the norm. The potential of a multicultural, multilingual labour force which can offer an important competitive advantage in the internal and global market, is not generally realized. However, it must be said that the language skills challenge is a substantial obstacle to freedom of movement in Europe.

2.11. In the absence of a better regulated, better structured and more operational basis for free movement in the EU, there is a risk of destabilizing competition within the internal market. Cases of 'social dumping` have arisen, involving transfer of employees, not covered by the posting of workers directive, from one Member State to another through subcontracting. Such practices risk provoking yet more national protectionist measures which threaten individual free movement.

2.12. With reference to future enlargement, the Committee would point out that the relevant agreements and Treaties must provide a regulatory framework for possible flows of labour in the pre-accession and transition phases.

2.13. The Committee endorses the High Level Panel's proposal to appoint a single Commissioner to coordinate all free movement issues.

2.14. Finally, it should be emphasized that the removal of the obstacles to free movement, which can be achieved by fine-tuning and adapting Community instruments and through appropriate cooperation between the Member States, would not only help promote a more united Europe; it would also be a key factor in strengthening the foundations of a 'social Europe`.

3. Specific comments

a) Improve and adapt the rules

3.1. First of all, there is a need to eliminate the flaws in the legal mechanisms which place EU citizens who wish to seek work in a country other than that of their habitual residence in a situation of administrative uncertainty. The practice of short-term renewal for people who have spent several periods as a legal resident in a Member State should be abolished where the periods total more than one year. This is needed in order to provide a more transparent, consistent interpretation of the right to freedom of movement, and to help combat undeclared work.

3.1.1. The Committee therefore endorses the Commission's proposal to amend Directive No 360/68/EC in line with the case law developed by the European Court of Justice over recent years.

3.1.2. More generally, the Committee would emphasize the importance of avoiding a situation in which Community rules are continually out of step with rulings by the Court of Justice. The case law developed by the ECJ must act as a further incentive to conclude rapidly any necessary consolidation and amendment of the rules. Endorsement of the Commission document thus takes on a political significance which goes beyond the - albeit considerable - importance of the communication's individual details.

3.2. As regards the problem of family reunion, which obviously entails the question of equal treatment and social integration of the family unit, the Commission is basically proposing to extend the right to family reunion, not just on the grounds of emotional ties, but also where there is an obligation - other than for economic reasons - to support family members. Clearly, the Committee welcomes this move.

3.2.1. Many of the above problems are a consequence of Regulation (EEC) No 1612/68; it is vital that this should be updated in order to provide a more comprehensive implementation of the right to free movement. In anticipation of the Commission's new approach to the rules, the Committee attaches great importance to any new provisions guaranteeing completely equal treatment and full integration in the host Member State for migrant workers and their families.

3.2.2. The Committee believes in particular that Regulation (EEC) No 1612/68 should be amended in line with consistent developments in ECJ case law regarding equal treatment in the social, economic, tax and cultural spheres for all migrant workers and their families, in full application of citizenship rights.

3.2.3. The Committee also recognizes the particular social significance of the High Level Panel's proposal to abolish visas for third country nationals who are related to an EU worker, and would point out that it has expressed this view on a previous occasion.

3.3. For frontier workers, the following problems are particularly important:

- social security, owing to the different criteria applied to frontier workers and their families in respect of invalidity, unemployment and healthcare benefits, etc.;

- taxation, since the tax regimes of the country of residence and the country of employment overlap.

3.3.1. The Commission document provides no indication of any instruments which might solve frontier workers' social security problems; it merely states that 'specific provisions ... should be adopted`, and that a proposal to reform and simplify Regulation (EEC) No 1408/71 will be presented to the Council before the end of 1998. The Committee awaits details of the Commission proposal.

3.3.2. In the absence of a specific Community regime, taxation is regulated by bilateral agreements between individual Member States; the only guidelines are to be found in Article 220 of the Treaty, on the abolition of double taxation. The Committee calls on the Commission to carry out a thorough assessment of how these taxation agreements work in practice, with a view to drafting a model agreement, to be submitted to the Member States.

3.4. There are many reasons why Regulation (EEC) No 1408/71 needs amending; more generally, there is a need to simplify and improve coordination of EU social security systems, and bring them in line with social, economic, demographic and cultural changes.

3.4.1. The Committee takes this opportunity to call for this simplification procedure to respect in full the rights acquired by the individual worker, and the specific features of each socio-economic, national and professional context, thus enabling workers to enjoy full seniority rights, and have their vocational qualifications recognized throughout their careers. Finally, simplification must make freedom of movement easier, and aim to provide equal treatment for all citizens.

3.4.2. The modernization process must take into account the large number of coordinated national systems, and bring the various provisions of the Regulation in line with ECJ case law; it must overcome existing difficulties arising from legislative discrepancies, reword certain provisions, e.g. on unemployment, and incorporate new Community measures relating to issues such as the scope of directives on residence rights, and to areas excluded thus far, such as early retirement and special schemes for civil servants.

3.4.3. In order to bridge the remaining gaps, agreements must be concluded as soon as possible between the EU and third countries which are particularly affected by worker mobility - starting with Switzerland, and extending to other countries which are concerned by the problem to a lesser extent.

3.4.4. Moreover, the Committee would reiterate the view expressed in its opinion on the Commission Communication on modernizing and improving social protection in the European Union (), that improved, more efficient social protection can help promote and strengthen the economy.

3.5. The Committee also endorses the Commission proposal amending Regulation (EEC) No 1408/71 to strengthen and improve the legal status of third country nationals who are legally resident in the Community, which was formally presented last November, in conjunction with the action plan ().

3.5.1. The Committee has already expressed a favourable view of this proposal (), stressing that the regulation will apply the principles of non-discrimination, and provide an instrument to combat illegal and undeclared work.

3.6. The Commission also refers to the proposal for a Directive on supplementary pensions. Although the Committee endorsed the proposal (), it considered it as just the first step towards achieving total freedom of movement as regards supplementary pension rights.

3.6.1. It should be stressed once again that the proposal concerns mainly workers on temporary detachment. It does not solve important stumbling blocks to the wholesale transferability of supplementary pensions, such as minimum contribution periods, difficulties in transferring acquired rights, taxation, etc.

3.6.2. The Committee is aware of the wide variety of national regulations in this area, but regards supplementary pensions as a fait accompli throughout the Member States, particularly given the cuts made to state pension systems.

3.7. Freer and more frequent movement of workers could also be achieved through improved education and training. The Commission's commitment in this area has already led to a green paper (), which identifies the obstacles to transnational mobility in terms of language, lack of information, and corporate reluctance to employ young trainees. The Committee has already adopted an opinion on the green paper ().

3.7.1. Improving the language skills of all citizens should be a priority, and the Committee would take this opportunity to stress the need to boost all Community programmes for the promotion of multi-lingualism and cultural exchanges, particularly the Socrates and Leonardo programmes.

3.7.2. The Committee is in favour of the arrangements to promote mobility for apprentices in Europe, and has already given its views on the promotion of European pathways for work-linked training.

3.7.3. The Committee therefore calls on the Commission and the Member States to strive towards full mobility not just for students, but also for apprentices and trainees on courses with a transnational dimension, on an equal footing with people who already enjoy freedom of movement under the terms of Article 48 of the Treaty.

3.7.4. Finally, these comments cannot ignore the urgent need for measures to overcome the remaining obstacles and shortcomings as regards the mutual recognition of diplomas, technical and vocational qualifications, and professional experience, or the need for constant Community-level monitoring of developments in each Member State; the social partners could also help in this.

b) Employment market: management, cooperation, information

3.8. The right to free movement must also be considered in the light of a common employment strategy and a pro-active labour market policy. The Eures network has been up-and-running since 1994, and, with the help of advances in technology and operational procedures to date, has proved to be an extremely useful tool in promoting and improving cooperation between the public employment services of the various Member States, collating information from a wide range of sources, and providing information and advice. The Eures network, should, however, be extended and reinforced, by raising its profile, improving the quality and quantity of the information, e.g. providing workers with advice and instruments to facilitate their smooth integration in the working environment, and enabling them, via specific procedures, to put their CVs on line.

3.8.1. Eures must not be restricted to pooling information on labour supply and demand; it should actively promote vocational training for frontier workers in particular, access to the labour market, and social welfare issues.

3.8.2. The Committee would highlight the important role Eures could play in overcoming obstacles to the free movement of workers. The Committee stresses the need for the network to enhance and strengthen the role of the social partners, who are vital players in the dialogue and consultation procedures on employment problems. The social partners could act in concert - particularly in frontier regions - to find solutions to the problems facing workers who go abroad. However, the Commission should heed the call made by several ITUCs () for the existing consultative committees to be used more efficiently and consistently. As regards the role of the social partners here and elsewhere, the Committee feels it should reiterate its call for them to be involved systematically in Community programmes and initiatives ().

3.8.3. The Commission intends to promote specific, information campaigns targeting the general public, labour market players, legal practitioners and the national authorities, to raise awareness of the right to freedom of movement. Here too, the problem of strengthening the Eures network, and the appointment and role of the Euroadvisors, needs to be addressed.

3.8.4. With regard to the action plan's various suggestions for improving information on job vacancies at European level, the Committee particularly agrees that cooperation between employment agencies should be stepped up, including via the Internet.

3.8.4.1. As the High Level Panel also pointed out, closer cooperation between national authorities could solve many mobility-related problems. The Commission intends to suggest Member States set up contact points within their administrations to deal directly with the Commission on specific, urgent obstacles to free movement. The Committee endorses the proposal, but feels that any special contact points for migrant workers should be set up within the Eures network, in order to avoid overlapping. The contact points must provide rapid, efficient solutions to problems relating to access to public sector employment, social benefits and the right to pool contributions.

3.8.4.2. The Commission suggests that the two Advisory Committees on free movement and social security for migrant workers should merge, in order to improve efficiency and effectiveness. The Committee endorses the proposal, providing the new body is given greater operational capability, and does, in effect, provide a more effective interface between the social partners and the Commission.

3.8.5. There is, of course, a strong case for launching initiatives to make EU citizens more aware of the right to free movement, but better information on how the right is currently implemented would also be useful. The Commission should, therefore, provide a more detailed analysis of the current state of play as regards the free movement of workers, focusing particularly on levels of qualification, salary scales, and type of work. The High Level Panel's report referred to this key assessment factor, and emphasized the need for a management forecast of the qualifications the labour market will need ().

3.8.6. In order to boost employment potential through worker mobility, the action plan provides for the use of funding under Article 6 of the ESF for innovative projects for training, redeployment or support for young jobseekers.

3.8.7. Whilst the Committee endorses this initiative, which aims to provide new opportunities for employment promotion and to remove the obstacles to free movement, it hopes the projects will not be implemented piecemeal, but that they will be framed as part of a systematic, integrated strategy capable of impacting on the structure of national systems. However, it would point out that synergies could already be activated between the Eures and Interreg programmes to provide an efficient interface between training projects and the labour market. Similarly, significant potential could be unleashed by boosting the synergies between Eures and other Community programmes.

4. The Committee is wholeheartedly convinced of the need to enhance freedom of movement, and intends to take an active part in preparations for the European Conference on the free movement of workers, scheduled for mid-1998 to mark the thirtieth anniversary of the 1968 Regulation.

4.1. The Committee calls on the Commission and the Council to press ahead with any initiatives which might be needed to make the right to free movement fully practicable, in order to make this a genuine right for all citizens.

4.2. Finally, the Committee would emphasize that the free movement of workers and citizens is one of the objectives which must be pursued - particularly via the provision of the requisite regulatory and labour market measures - in order to achieve a fully operative single market.

Brussels, 28 May 1998.

The President of the Economic and Social Committee

Tom JENKINS

() Opinion on the Proposal for a Council Directive on the right of third-country nationals to travel in the Community: OJ C 153, 28.5.1996.

() OJ C 73, 9.3.1998.

() OJ C 6, 10.1.1998.

() Opinion on the proposal for a Council Regulation (EC) amending Regulation (EEC) No 1408/71 as regards its extension to nationals of third countries, OJ C 157, 25.5.1998.

() Opinion on the proposal for a Council Directive on safeguarding the supplementary pension rights of employed and self-employed persons moving within the European Union, OJ C 157, 25.5.1998.

() COM(96) 462.

() Opinion on the Green Paper on education, training, research - the obstacles to transnational mobility: OJ C 133, 28.4.1997.

() Interregional Trades Union Councils.

() Opinion on the role of the socio-economic partners in the various frontier regions and in the Interreg programmes and the Eures network: OJ C 355, 21.11.1997.

() Report of the High Level Panel on the freedom of movement of persons, chaired by Simone Veil, p. 42.