The European Parliament adopted by 479 votes to 50, with 47 abstentions a resolution on stepping up the fight against undeclared work.
The own-initiative report had been tabled for consideration by Pier Antonio PANZERI (PES, IT) on behalf of the Committee on Employment and Social Affairs.
Parliament welcomes the approach taken by the Commission and calls for a renewed fight against undeclared work and the underground economy which damage the economy, leave workers unprotected, are detrimental to consumers, reduce tax revenue and lead to unfair competition between undertakings.
Extent of undeclared work: Parliament expresses its deep concern over the extent of undeclared work which accounts for as much as 20% or more of GDP in some Member States. It is for this reason that it calls for a combination of financial, fiscal and labour inspection procedures to be introduced to combat undeclared work.
All-out offensive against undeclared work: to combat undeclared work, MEPs envisage a comprehensive approach which covers matters relating to monitoring and control, the economic and institutional framework and involves concerted action at several levels and the participation of all stakeholders (public authorities, social partners, undertakings and workers).
The envisaged measures would include the following :
At Community level, Parliament calls on the Commission to draw up policies to provide for both general measures and sectoral measures to prevent undeclared work, doing so with the full involvement of the social partners. In this regard, special measures should be envisaged for the most affected sectors, such as the hotel and catering industry, farming, domestic services and the construction industry. Parliament stresses that undeclared work has various definitions in the national legal systems and that a definition common to all Member States would ultimately eliminate uncertainties in relation to statistical surveys of this phenomenon.
Further measures are suggested such as: i) the introduction of national and Community programming instruments which allow economic and social support and development policies to be pursued, ii) the taking of supervisory and punitive action, iii) the assessment of the possibility of accompanying the fight against undeclared work with financial policies that support regional and local plans, iv) creation of specific tools based on Member States’ best practices aimed at curbing non-declared work by making it less appealing (as is the case already in Luxembourg), v) the financing of research projects into health and safety at work and of promotional activities geared to prevention and the dissemination of a culture of health and safety in the workplace, with particular reference to those sectors in which there is the highest risk of accident (and in which undeclared labour is more prevalent).
Reinforcing sanctions: Parliament invites the Member States to introduce severe penalties for employers who, notwithstanding any incentives offered, continue to make use of undeclared labour. It encourages them to combine preventive action and sanctions aimed at transforming undeclared work into regular employment. However, it points out that, unless it is followed up by better coordination between Member States, a policy that is exclusively punitive could concentrate undeclared work in the less structured States and in the less regulated economies. Parliament therefore advocate the conclusion of agreements at regional, national and local levels that provide a progressive and sectoral response to illegal labour and encourage the Member States and the social and economic stakeholders to conclude a 'pact to declare the undeclared', geared to allowing undeclared activities to gradually come to light. Such a pact should provide for a limited transitional period, during which there are no sanctions, at the end of which, however, stronger sanction mechanisms would come into effect. Parliament recommends that agreement be reached at national, regional and local levels involving social institutions and employers' organisations seeking a commitment to monitoring and progressively eliminating undeclared employment.
Among the Community measures that could help to better police undeclared work is Council Framework Decision 2005/214/JHA on the application of the principle of mutual recognition to financial penalties which could improve the situation. Overall, Parliament calls for greater and more effective respect of the right to work and of existing employment rules.
Greater involvement of the social partners: Parliament calls on the trades unions to become more active in the fight against undeclared work insofar as workers who do undeclared work often find they are not protected by important health and safety legislation and legislation on minimum wages. It calls in particular for better enforcement of existing minimum wage legislation and urges those Member States which do not currently have a decent minimum wage to consider adopting one. It also recommends the introduction of measures that would enable undeclared workers to become ‘legal’ and cite the service voucher schemes in Belgium, Germany and France, whereby households can buy household services at a lower price but still ensure that social security contributions and taxes are paid through the voucher.
Encourage the free movement of workers: Parliament calls on those Member States which have applied transitional arrangements to the free movement of workers within the Union to open up their employment markets to workers from all the new Member States, given that any restrictions – even partial ones – on access to the labour market, not only run counter to the founding principles of the Union and the European spirit but also give rise to increasing recourse to undeclared work. It believes it vital to implement the principle of equal workers' rights and to counteract unfair competition and social dumping.
Vulnerability of immigrant and illegal workers: Parliament is concerned about illegal immigrants who are particularly vulnerable in situations of undeclared work. It considers the issue of employment of immigrants in an illegal situation is a complex one that cannot be resolved simply by punishing employers but requires cross-sector, far-reaching measures. They therefore favour a comprehensive approach which must take into account the need to safeguard and promote the rights of migrant workers, whether legal or illegal, who are exploited by their employers. Parliament believes that the fight against undeclared work performed by illegal immigrants cannot be effective without opening up channels for legal migration in order to guarantee the third-country labour which the Union needs. It considers that the fight against the exploitation of migrant workers needs to be based not only on a policy of repatriation, but also on prevention mechanisms based on the recognition of and respect for fundamental human rights. It is in this context that the Parliament calls on the Member States to define or strengthen the appropriate legislative measures to encourage migrants who are victims of exploitation to report their situation. Although it welcomes the Commission’s efforts to provide for sanctions against employers of illegally staying third-country nationals, they express concern that repressive measures are being put in place before any common framework of rules and policies on lawful access to the employment market has been laid down.
Facilitation of administrative procedures: Parliament considers that simplifying or reducing administrative burdens and procedures, especially for small and medium-sized enterprises, would diminish the use of undeclared labour. The use of e-government and on-line registration should be encouraged, as well as the exchange of good practices with the aim of reducing the costs and complexity of registration and administrative procedures for businesses and, in particular, for SMEs. Parliament also calls for public information campaigns to raise awareness of the damage caused by undeclared work among employers, workers and those who exploit them. Parliament considers that such permanent campaigns should accompany the various measures adopted with a view to instilling a culture of legality and promoting quality work and a legal business culture.