The EU’s Fair Labour Mobility Package must put clear emphasis on fairness and put an end to labour abuse arising from free movement. Only by ensuring fairness for workers in the Single Market can free movement strengthen the competitiveness of companies that follow the rules.

Free movement is the core of the EU Single Market and has helped companies and workers alike to prosper. Without it, there would be no European Union. It is key to Europe’s competitiveness that we continue to remove unnecessary burdens for companies and workers to ensure that the Single Market remains one of the most competitive and prosperous economies in the world.

However, free movement has also enabled the cross-border spread of insidious business practices by which some companies seek to gain profits by circumventing applicable working conditions and evading taxation. Such practices include letterbox constructions, opaque subcontracting chains that hide liability, undeclared work, social security fraud and fraudulent posting of workers. Together they undermine fair competition, erode workers’ rights and severely damage the EU labour markets.

As Enrico Letta notes in ‘Much more than a market’, “One of the downsides of free movement is that it can be used to undermine or evade existing labour standards and regulations in order to gain a competitive advantage over bona fide companies”.

Abuse in the Single Market

In Norway – which is part of the Single Market as an EEA country – as much as 10% of the turnover in the building and construction sector is rooted in criminal activity in the labour market, according to the Norwegian University of Science and Technology. Every year, 66 billion Norwegian Kroner (approximately 6 billion euros) are lost to criminal infiltration of the labour market, which is due to insufficient regulation and enforcement. This leads to lost tax revenues for the state, lost profits for decent and responsible companies that could otherwise have been contracted, and to lost wages for worker because of wage theft.

Especially, workers in labour-intensive sectors who are recruited in one EU Member State and then posted to another are a serious concern. Despite a significant social acquis in the area, posted workers are extremely vulnerable to abuse.

For instance, in Austria in 2025, the construction-sector inspection body (BUAK) carried out 12,631 inspections covering 2,647 posting companies and 9,017 posted workers. Suspected underpayment was identified in around 22.7% of inspected posting companies and 19.36% of inspected posted workers. By comparison, underpayment was only suspected in 0,24% cases of inspected domestic companies and 0.15% of workers employed by domestic companies.

This stark difference illustrates that posting arrangements in labour-intensive sectors remain associated with significantly higher risks of wage dumping and enforcement circumvention.

In Finland, the Service Union United PAM surveyed the working conditions and lives of foreign seasonal workers in Northern Finland. About a third of the respondents, 27 percent, said they had experienced signs of labour exploitation which concerned unpredictable work shifts, denied breaks and days off, no overtime pay and problems related to occupational health and safety.

The European Commission’s commitment to present a Fair Labour Mobility Package this autumn is therefore much welcomed as it could signal that fairness and workers have not been left behind by the von der Leyen II Commission as competitiveness and simplification now takes centre stage – sometimes at the expense of past achievements on the EU‘s social and sustainable goals.

Fair mobility and fair competition

From a trade union perspective, there is no contradiction between competitiveness on the one hand and social progress for workers on the other. In fact, they reinforce each other. Only by ensuring fairness for workers in the Single Market can further mobility strengthen competitiveness of decent companies that follow the rules.

The European Social Security Pass (ESSPASS) – a new legal instrument which will be presented under the package – should become an instrument to combat fraud and to assist enforcement authorities in verifying compliance with applicable working conditions and the legality of postings. While ESSPASS will help to simplify the portability of social security rights and reduce administrative burdens for individuals and companies, its potential as an enforcement tool can greatly contribute to fair mobility.

As for the revision of the European Labour Authority (ELA), which is the second leg of the package, it is important that the Authority’s core task, which is to ensure enforcement of EU-rules on labour mobility and social security coordination, remains intact. ELA should not become a help desk for companies to help them navigate the different national rules.  In countries such as Sweden where this is regulated by collective agreements, only the social partners can provide such information. Moreover, there are other bodies in place to assist companies such as the Single Official National Websites.

A workforce without rights

Finally, it is imperative that a Fair Labour Mobility Package addresses the abuse of migrant workers recruited from outside the EU – so called third-country nationals (TCNs).

TCNs are often low-paid or unskilled workers and they are disproportionately represented in high-risk sectors such as construction, transport, food and agriculture and hospitality where profits can be made by circumventing applicable wages and rules on occupational health and safety. TCNs are also increasingly present in white-collar professions such as IT and engineering.

The EU economy has come to rely heavily on such workers. For instance, TCNs account for 46% of posted drivers from Poland and 60% in Slovenia. This development will likely be compounded by the EU Talent Pool, which becomes fully operational next year.

According to the European Commission “posted third-country nationals are generally more exposed to abusive practices, such as fraudulent posting, labour rights violations, precarious working conditions, irregular payment and non-payment of social contributions. Posted third-country nationals are also likely to accept remuneration below what should be paid. “

For many TCNs, losing their job means losing their right to stay, while unfamiliarity with local rights and wages makes it harder to challenge abuse. In the most severe cases, which are unfortunately not rare occurrences, TCNs are recruited by way of unregulated labour intermediaries that resemble human trafficking networks, and they end up in work camps stripped of their passports and isolated from the surrounding society of the host country.

In principle, posted TCNs should be protected by the EU posting rules, but in reality they are not.  As such, a Fair Labour Mobility Package must ensure the protection and the equal treatment of TCNs. Part of the solution is to have clear rules and to set clear limitations on subcontracting chains – especially in high-risk sectors – so that liability can be clearly identified and placed.

Not only do we have a moral obligation to combat exploitation – but the functioning of the Single Market will suffer, if we do not. A Fair Labour Mobility Package must put an end to abuse and unfair competition.

This editorial was published in Euractiv the first time on June 16.

Text by

Are Tomasgard, 2nd Vice-President, Norwegian Confederation of Trade Unions (LO Norge),

Else-Mai Kirvesniemi, President, Finnish Confederation of Professionals (STTK),

Flemming Grønsund, Vice-President, Danish Trade Union Confederation (FH),

Jarkko Eloranta, President, Central Organisation of Finnish Trade Unions (SAK),

Johan Lindholm, President, Swedish Trade Union Confederation (LO Sverige),

Sofia Rydgren Stale, President, Swedish Confederation of Professional Associations (SACO),

Therese Svanström, President, Swedish Confederation of Professional Employees (TCO),

Wolfgang Katzian, President, Austrian Trade Union Federation (ÖGB)