This Policy Brief demonstrates how legal ambiguities in the EU’s regulatory framework on worker mobility between EU member states allow companies to circumvent social regulations in order to save on labour costs.

Taking concrete examples from Finland and the Netherlands, the authors show that firms can use three types of social dumping strategy: regulatory evasion (bluntly violating laws); regulatory arbitrage (exploiting differences between national systems); and regulatory conformance (bending, but without actually breaking, the rules of welfare and industrial relations systems).

The Policy Brief recommends minimising the legislative features that permit arbitrage by regulating posted work in such a way that the rules no longer lend themselves to the pursuit of cost-competitive objectives.

Table of contents

Social dumping at work: uses and abuses of the posted work framework in the EU

Related content

Strengthening the EU’s social dimension: using the EMU to make the most out of the Social Pillar

This policy brief examines how the European Pillar of Social Rights (EPSR) can be used to strengthen the social dimension of the EU. For the EPSR to matter, the relevant actors should strongly commit themselves to its principles, ideally through a legally binding mechanism. Starting from the premise that achieving consensus for committing to some... Find out more

Martin Myant, Laura Brandhuber

Uses and abuses of the OECD’s Employment Protection Legislation index in research and EU policy making

This paper provides a critical assessment of the OECD's Employment Protection Legislation (EPL). This indicator is designed to measure and compare employment protection legislation across countries and has dominated much of recent labour market policy making in the EU.The authors of this paper demonstrate that the construction of this instrument... Find out more

Jan Cremers

Letter-box companies and abuse of the posting rules: how the primacy of economic freedoms and weak enforcement give rise to social dumping

This policy brief demonstrates how the emphasis on the primacy of economic freedoms has negatively affected the application of EU social security rules and the working conditions of posted workers. It also discusses the legal ambiguities accompanying the notion of 'genuine undertakings' and some recent cases of abuse of the freedom of establishment... Find out more

Social dumping and the EU integration process

This paper proposes a conceptualization of social dumping and applies it to an analysis of the EU integration process. Building on recent contributions in the fields of economic theory, economic sociology and institutional political economy, it defines social dumping as the practice, undertaken by self-interested market participants, of undermining... Find out more

Denis Grégoire

Workers feel used and abused

Stress, pressure from above, disregard, abuse from customers and more are all daily fare for most supermarket workers. Add in job insecurity across the sector, and it is small wonder that psychosocial risks are taking a toll on a growing number of employees. "All staff have access to an onsite occupational health unit which offers massage and... Find out more

Isabelle Mahiou

French managers and flexitime. How the annual working days system is used and abused

The "annual working days system" for calculating working time came about with the introduction of the 35-hour week in France. It has gone way beyond the "non-office-based managers" originally aimed at and is open to abuse. This means of regulating managers’ individual working time is anything but straightforward, especially when the workload... Find out more