Czech Business Today

Free movement of workers is one of the basic freedoms of the European Union. Germany and Austria applied the transitional period for free movement of workers from EU-8 (Member States that have joined the EU in 2004, excluding Malta and Cyprus) till the last moment, i.e. end of April 2011. 

On 1st May, the transitional period was automatically abolished at the end of the third phase. Although the initial worries of immigrant influx have not been confirmed, the decision was not made on voluntarily basis by the two countries concerned. A number of studies and EC reports show that the opening of labour markets had mainly positive impacts on EU-15 economies. Only few proofs exists that the EU-8 workers stood behind a dramatic decrease in wages in one of the EU-15 Member States or that the EU-15 workers would lose their job because of EU-8 immigrants. 

Since 1st May 2011, Austrian law against social and wage dumping has entered into force. The law was proposed on the request of Austrian trade unions that worried about insufficient protection of domestic labour market and about decrease in wages after the “opening” of the market to EU-8 workers. The law set up sever sanctions for employers who apply very low wages that do not respect collective agreements between social partners. The sanctions can rise from EUR 5000 to 50 000 per each employee with “insufficient” salary (or from EUR 10 000 to 100 000 in case of a repetitive violation of law). The aim is, therefore, to align the conditions on Austrian labour market between local and foreign employers. 

Unlike Austria, Germany is not planning any new law for protecting domestic market after its opening to EU-8 workers. In Germany, employers are already obliged to pay defined tariffs in specific sectors according to collective agreements. In case of absence of collective agreement, the salary should not be less than two thirds of the agreed tariff. The Germans do not expect any important influx of the Czechs to their labour market. Since January 2009, many Czechs have already been working in Germany as it opened its labour market to university graduates and other experts. Last year, 14 000 Czechs worked in Germany and 5,500 in Austria. At the same time, German labour market lacked 400 000 experts such as doctors, nurses, engineers but also craftsmen. 

According to the Association of German Chambers of Industry and Commerce´ (DIHK) survey, 16% of employers lacked qualified workers last year. Therefore, new labour force coming from abroad is needed. German chambers are also preparing a system of qualification recognition (“Anerkennungsgesetz”). There are about 350 different professions in German profession system, 110 out of them cover the crafts (butcher, carpenter, baker, and others). The chambers will be responsible for the recognition of qualifications i.e. examining and complementary training for applicants. From now on, Czech labour seekers will only subscribe themselves on German/Austrian labour office without the necessity to ask for labour and residence permit and register with job agencies.