Less than a month after the expansion of the EU, HR can't be blamed for having difficulty understanding which workers they can hire. Natasha Gunn investigates why work permit procedures are far from consistent - and the best approach HR can take.

"There still remains some confusion across Europe on what the procedures are," says Robin Chater, Secretary General of the Federation of European Employers (FedDEE), who recalls a recent article in the Finnish press about the Finnish Government not having clear indications on what form the application should take."

Reports suggest that this confusing state of affairs has been driven by a "fear" among the older European countries of a wave of high migration and, as in the case of Eastern Europe, aggravated by the vestiges of old communist systems, where everything had to work its way up to the top for approval and where nothing was consistent.

Those countries which have had curbs extended towards their own labour force have tended to take a tit-for-tat approach, a behaviour which has been described as "reciprocality" by the media.

Poland and other accession states practising "reciprocality", such as Slovenia and Hungary, will not impose restrictions on UK, Irish and Swedish nationals whose respective countries have not imposed sanctions.

Chater observes that Slovenia is also worried about an influx from other accession states. "Only those from accession states are required to register and all other job applicants must have a work permit," he says.

However, Slovenia has added a further twist of sophistication.

Chater explains, "Slovenia is currently negotiating with Italy, Austria and Portugal for separate deals to allow their workers to work in Slovenia and for Slovenian nationals to work in these countries."

It would seem that Europe has paid scant attention to those experiences of countries joining the EU prior to the 1 May accession group.

Regional Director for Europe and Central Asia of the International Labour organisation, Friedrich Buttler, told Expatica HR, "Looking back to a similar situation when countries such as Spain, Portugal and Greece joined the EU, there was also a fear of high migration flows after the accession of those countries.

"However, the newly joined states caught up rapidly with the rest of the EU thanks to the integration process."

Chater confirms, "EU membership has generally been highly beneficial to the economies of new member states. However, Portugal is an exception to this rule. After Portugal joined the EU in 1986 its economy recovered rapidly – but the government made the mistake of using low labour costs as an attraction point, something which encourages fly-by-night-companies. In contrast, Ireland managed to maintain investment because they attracted in multinationals and worked on the companies and the government remained compliant and flexible."

Chater has observed that the new EU governments are tending to get more bureaucratic rather than less, and he questions if they will follow the same route as Portugal - attracting low labour-cost companies and then tying them up in red tape.

He is also concerned about poor unionisation in Eastern European countries and how this will affect working conditions.

"The plus side of collective bargaining with trade unions is that it puts some order into the pay determination process and stops companies competing on wage rates - the downside is that trade unions are associated with the former communist regimes," says Chater

The fact that goods and services can move freely through borders will initially boost the emerging economies but, "the honeymoon period might be short-lived," says Chater.

Looking on the bright side, "Fifteen years ago it would have been beyond anyone's wildest dreams that the Baltic States would become an integrated part of the EU," says Chater.

"The fact that labour restrictions are being imposed by the older EU states doesn't mean that more students won't be crossing borders. Staff will cross borders – more people will travel and they will start to learn the cultures of these states."

The bottom line is free movement, says International Labour Organisation's Friedrich Buttler, "For the EU and all the institutions at the origin of the union, as per the treaty of Rome, freedom of movement is a key issue."

Buttler continues, "In the current situation, where labour migration is restricted, this [freedom of movement] should be a key area for the European council to work on. The process of integration is essentially the liberalisation of the movement of labour, capital, and goods and services.

"It is important that all the new member countries have access to all the benefits which constitute the basic liberties characterising the EU."

"There is evidence, however, that Eastern European member states are not introducing European directives correctly," says Chater. "They want to implement directives as loosely as possible to encourage inward investment."

But integration is a slow process, and there is always time to get things right. As Buttler remarks, "Time frames have been negotiated between the EU and the new member countries- and there are always possibilities to shorten all these periods – political decisions can be changed. But it is important to have good examples to follow."

And anyhow, limitations can have advantages, as Chater points out, "You can always capitalise on restrictions - employers will rethink the way they operate. For example a new apprenticeship ruling in Germany, which stipulates that one in 15 of company employees has to be an apprentice or the company faces a fine, could initiate training opportunities for workers from the new EU states."

Chater advises HR whose companies are setting up in one of the new EU states,

"Use the services of the inward investment agency – or use a local consultancy. For example, use a local payroll provider. This is especially worth doing if companies only have a few staff. When a company has grown its operations to 50 or 60 people it can generally justify its own payroll administrator."

Useful links

The EURES job mobility portal provides information on the transitional rules governing the free movement of workers from, to and between the new member states.

http://europa.eu.int/eures/main.jsp?acro=free&step=0&lang=en

May 2004

Natasha Gunn is the editor of Expatica HR