Britain may be divided on the euro, but it has a more flexible labour market than other countries. Philip Whiteley reports on pan-European employment opportunities
It is a paradox seldom commented upon that the European Union economy best suited to a single currency is the UK.
Britain’s near absence of regulations on wage rates, and weaker rules on qualifications for many professions, mean that labour mobility is far easier here than in most continental economies.
Mobility helps the single currency work because for an economy to be truly unified there must be maximising of the skills available, as there is in the US.
Italian economist Andrea Boltho, a speaker at a CBI/ECA International conference on Friday 9 June on labour mobility, points out that the single currency greatly strengthens the hand of employers by undermining national agreements. Employers will want to be able to recruit from across the continent they are operating in, and consolidation of businesses across pan-European scale will intensify the pressure.
“Companies have European HR policies,” said Thomas Hadley, CBI senior adviser involved in setting up the CBI’s new European Mobility Forum.
“They are not treating employees as ex-pats when they move to another European country, but as being effectively national staff moving to another region.”
Web technology has given a huge spur to the practice of international recruitment patterns and more international placements.
Even fairly small companies have an international presence, and want managers with international experience. “On the management side there has to be people who can manage a mobile or international workforce. Mobility is part of career development,” said Hadley.
European employment legislation is therefore a defensive measure against these powerful forces.
So while the single currency pulls in one direction, the new Posting of Workers Directive tugs the opposite way.
The law, passed last year, forces employers to respect local agreed collective agreements, even for short periods of working. From France this means from day one – so if someone is working in France for one week for a British employer, they need not only to respect local minimum terms and conditions, but must have an employment contract written in French.
“It goes against the fundamental principle of freedom of movement,” said European employment consultant Peter Reid. “For example, if you win a contract to service computer equipment in Strasbourg and send your engineers to do the work they have to be covered by French law. Therefore you cannot compete with the local firm and you don’t get the contract.
“I think it is inevitable as Europe progresses that it has to break these barriers down,” Reid added. “But there is tremendous political pressure not to do so.”
Hadley of the CBI is more relaxed. He argued that the Posting of Workers Directive can encourage some individuals to move, by assuring them that rights will be protected. CBI members’ principal need is for information on the different country’s regulations he said.
The biggest barrier to mobility can be qualifications. Recognition of overseas qualifications tends to be on an ad-hoc, bilateral basis, and is easier in technical matters like engineering than in culturally shaped professions like the law. It is estimated that the number of English lawyers able to practise in Germany is fewer than five.
The Commission has taken a lead here. It has proposed a pan-European qualification in IT skills, and more comprehensive legislation on recognition of qualifications is in the pipeline.
And it is facilitating cross-border studying and experience-gathering through student and employee exchange programmes such as Europass, Leonardo and Erasmus.
The commission is also committed to dealing with problems posed by national social security and pensions systems, proposing ways of enabling mobile staff to maintain contributions while working in another country. The appearance of European employment contracts, and the European company statute legislation, when it finally arrives, will assist the process.
While politicians in Europe appear to be bogged down in the integration process, companies are pressing ahead. Globalisation, the single currency and the Internet are powerful forces pushing greater mobility of staff.