10 Seasonal Workers and Intra-corporate
Transfers
(a)
(31801)
12208/10
COM(10) 379
+ ADDs 1-2
(b)
(31802)
12211/10
COM(10) 378
+ ADDs 1-2
| Draft Directive on the conditions of entry and residence of third country nationals for the purpose of seasonal employment
Commission staff working documents: impact assessment and summary of impact assessment
Draft Directive on the conditions of entry and residence of third country nationals in the framework of an intra-corporate transfer
Commission staff working documents: impact assessment and summary of impact assessment
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Legal base | (Both) Article 79(2)(a) and (b) TFEU; co-decision; QMV
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Document originated | (Both) 13 July 2010
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Deposited in Parliament | (a) 13 July 2010; (b) 16 July 2010
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Department | Home Office
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Basis of consideration | Minister's letter of 4 October 2010
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Previous Committee Report | HC 428-ii (2010-11), chapters 10 and 11 (15 September 2010)
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To be discussed in Council | No date set
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Committee's assessment | Legally and politically important
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Committee's decision | Not cleared; further information requested
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Background
10.1 In 2005, the Commission published a Policy Plan on Legal
Migration which stated that:
"Whilst decisions on admission numbers for economic immigrants
entering the EU in order to seek work are the responsibility of
Member States, it is clear that the admission of third country
nationals in one Member State may affect others and their labour
markets.
"An effective migration policy cannot be limited
to instruments for the admission of immigrants. Other equally
important legislative and operational measures are necessary,
as immigration represents a complex phenomenon that needs to be
addressed coherently across all its dimensions. Admission of economic
immigrants is as inseparable from measures on integration on the
one hand, as it is from the fight against illegal immigration
and employment, including trafficking, on the other. It is in
this context therefore that the EU must intensify its efforts
to reduce the informal economy, a clear 'pull factor' for illegal
immigration, as well as a catalyst for exploitation".[34]
10.2 The Policy Plan included a "road map"
for the adoption of a range of measures, including Directives
on the conditions of entry and residence of various categories
of third country nationals. Last December, the European Council
agreed a five-year programme on freedom, security and justice
in the EU (the Stockholm Programme) for the period 2010-14 which
urged the Commission and Council to continue to implement the
Policy Plan.
10.3 In July, the Commission proposed two new Directives
which were envisaged in the Policy Plan. Document (a) would establish
common EU rules for the entry and temporary residence of third
country nationals for the purpose of seasonal employment in a
single Member State. Document (b) would establish a common EU
framework for the admission of skilled third country nationals
employed by a company based outside the EU and seeking a temporary
transfer to a branch or subsidiary in one or more Member States.
Both proposals would entitle third country nationals, if admitted,
to certain rights concerning working conditions and equal treatment
with nationals of the host Member State in a number of areas including,
for example, freedom of association, access to certain social
security benefits and to goods and services (but excluding public
housing and employment advice services).
10.4 Both draft Directives are based on Article 79
(2)(a) and (b) of the Treaty on the Functioning of the European
Union (TFEU). This Article provides for the adoption of EU measures
on the conditions of entry and residence of third country nationals
and the definition of the rights of those legally resident in
a Member State. Measures based on Article 79(2) must be for the
purposes of developing a common EU immigration policy, further
defined in Article 79(1) TFEU as ensuring "the efficient
management of migration flows, fair treatment of third country
nationals residing legally in Member States, and the prevention
of, and enhanced measures to combat, illegal immigration and trafficking
in human beings".
10.5 EU measures in the field of immigration must
also respect the principle of subsidiarity under which "the
Union shall act only if and insofar as the objectives of the proposed
action cannot be sufficiently achieved by the Member States, either
at central level or at regional or local level, but can rather,
by reason of the scale or effects of the proposed action, be better
achieved at Union level".[35]
The Protocol on the Application of the Principles of Subsidiarity
and Proportionality further provides that draft Directives should
include a statement of the proposal's financial impact and implications
for the rules to be put in place by Member States; include qualitative
and, where possible, quantitative indicators; and seek to minimise
any regulatory burden for public authorities, economic operators
and citizens and ensure that any burden is commensurate with the
objectives pursued by the proposal.[36]
10.6 Since the entry into force of the Amsterdam
Treaty in May 1999, EU legislation on immigration matters does
not apply to the UK unless the Government expressly opts in.
Previous scrutiny of the draft Directives
10.7 We considered both draft Directives at our meeting
on 15 September 2010 and decided to keep them under scrutiny while
seeking further information from the Government.
Document (a) the Seasonal Workers' Directive
10.8 We concluded that the legal base proposed was
appropriate but expressed doubt that the draft Directive respected
the principle of subsidiarity and invited the Minister to comment
further. We also requested information on the outcome of the Government's
consultations on the proposal, and on the principal factors informing
the Government's decision on whether or not to opt into the draft
Directive. We said that we would seek further information on the
cost implications, particularly as regards eligibility for social
security benefits, in the event that the Government decided to
opt in.
Document (b) the Directive on Intra-corporate
Transfers
10.9 We thought that the principal purpose of the
proposed Directive appeared to be to make the EU more commercially
attractive for multinational companies and asked the Minister
whether he considered this purpose to be consistent with the objectives
of the EU's common immigration policy as defined in Article 79(1)
TFEU. We noted the Minister's concern that Article 16 of the draft
Directive, which provides for mobility between EU Member States
once an intra-corporate transferee permit has been issued in one
Member State, might undermine the Government's freedom to determine
who to admit to the UK, and asked whether he considered that the
removal of this provision would diminish the justification for
the proposal on grounds of subsidiarity. We requested further
information on the outcome of the Government's consultations on
whether to include third country nationals moving to the UK on
the basis of an intra-corporate transfer within the proposed cap
on economic migration from outside the EU. We also said that we
would request an assessment of the cost implications, particularly
as regards social security payments and contributions, in the
event that the Government decided to opt in.
The Minister's letter of 4 October 2010
10.10 The Minister for Immigration (Damian Green)
says that the Government has not yet reached a decision on whether
to opt into either of the draft Directives.[37]
He adds that the Government is unable to provide realistic estimates
of the likely additional costs of participating in the Directives
because of uncertainty as to the number of third country nationals
that would enter the UK. Additional costs would most likely arise
"as a consequence of such workers having access to 'in work'
benefits, such as child benefit and child tax credit, rather than
'out of work' benefits".
Document (a) the Seasonal Workers' Directive
10.11 As regards the subsidiarity implications of
the draft Directive, the Minister says that the Commission has
argued that the draft Directive would reduce illegal immigration.
He continues:
"The argument here is that those who enter the
EU as seasonal workers may have less incentive than other categories
of migrant worker to return overseas at the end of their stay
and that, in the context of the Schengen area at least, this is
an issue with a collective dimension. The proposal therefore includes
provisions aimed at encouraging seasonal workers to return at
the end of their stay. This would appear consistent with the principle
of subsidiarity."
10.12 The Minister explains that the Government has
consulted the National Farmers Union (NFU), given its interest
in measures regulating the supply of labour to the agricultural
sector. The NFU considers that rules on the admission of non-EU
seasonal workers should be determined at a national level and
has therefore recommended that the Government should not opt into
the draft Directive. The Minister adds that the Government has
no plans to introduce a scheme for the admission of seasonal workers
from outside the EU.
Document (b) the Directive on Intra-corporate
Transfers
10.13 The Minister says he is satisfied that Article
79(2)(a) and (b) provide the right legal base for the draft Directive.
Although the proposal does seek to make the EU more attractive
for inward investment by multinationals, "this is nevertheless
achieved through the regulation of the conditions of entry and
residence of this category of worker". He says that the draft
Directive could still be justified on grounds of subsidiarity,
notwithstanding the removal of the principle of intra-EU mobility
in Article 16, on the basis that the absence of common EU standards
might result in unfair competition. He adds that the Government
is still considering responses to its consultation on introducing
an annual limit on economic migration from outside the EU, and
the inclusion within that cap of intra-company transfers, and
that the Government will announce its policy later this year.
Conclusion
10.14 We thank the Minister for his letter but
regret that the Government is still unable to inform us whether
or not it intends to opt into either Directive even though the
deadline for so doing by 14 October is imminent.
We ask the Minister to inform us of the Government's decision,
and the reasons for it, as soon as possible. In the meantime,
we shall keep both proposals under scrutiny.
10.15 We make the following further observations
at this stage.
Document (a) the Seasonal Workers' Directive
10.16 We note the Minister's view that the draft
Directive would appear to be consistent with the principle of
subsidiarity and so have looked again at the reasons advanced
by the Commission to justify EU action.
- There is a continuing
need for seasonal workers in most Member States but differences
in the treatment of those admitted to a Member State can affect
other Member States and distort migratory flows.
10.17 We understand the Commission to mean that
the conferral of more generous rights and entitlements in one
Member State may operate as a 'pull factor' and draw seasonal
workers to the Member State offering the most favourable employment
conditions rather than to the Member State/s where their labour
is most needed. However, the Commission's impact assessment (ADD
1) merely refers to "anecdotal evidence of competition among
Member States for the most attractive conditions in terms of salary,
travel arrangements, accommodation or working conditions".[38]
We doubt whether anecdotal evidence constitutes the qualitative
indicator required under the Subsidiarity Protocol. We also question
what practical difference the draft Directive would make as the
employment and equal treatment rights it confers are based on
those provided for by law in the Member State to which seasonal
workers are admitted and are thus largely determined at a national
level. Moreover, competition between Member States to improve
the conditions of employment for temporary seasonal workers strikes
us as a sign of a healthy labour market, not one that requires
further regulatory intervention.
- Common rules are needed
within the Schengen free movement area to reduce the risk of overstaying
or illegal entry which may result from differing rules on the
admission of seasonal workers or lax enforcement.
10.18 We understand that there is a correlation
between the sectors most likely to employ seasonal workers, for
example, agriculture and tourism, and the incidence of illegal
employment. Opportunities for overstaying or for taking up illegal
employment, possibly in a different Member State from the one
that first admitted a seasonal worker, are likely to be greater
within the Schengen area than, for example, in the UK where border
controls remain. The Minister suggests that Schengen introduces
a collective dimension sufficient to justify EU action to regulate
the conditions of entry of seasonal workers. He notes that the
draft Directive includes a provision Article 11
which expressly requires seasonal workers to leave the EU after
a maximum of six months' residence and another Article
12 which encourages circular migration by facilitating
the re-entry of seasonal workers who have a good record of compliance.
We perceive two difficulties with this justification. The first
is that each Member State remains at liberty to determine the
number of third country nationals (if any) it will admit for the
purposes of seeking or taking up employment.[39]
This will inevitably affect migratory flows within the EU to a
far greater extent than divergent national rules in those Member
States that do admit seasonal workers. The second difficulty,
as noted in the Commission's impact assessment and in our previous
report, is that the legal framework for entry and employment in
a particular Member State is only one of a number of 'pull' factors
influencing the decision to migrate. The Commission says that
the relative importance of these factors is difficult to measure
and that they are "outside the remit and impact of EU legislation".[40]
While we acknowledge the difficulty, we also question how the
Commission can assert that common rules on entry and residence
will have a beneficial impact on reducing illegal immigration
without attempting to weigh the importance of other contributory
factors.
- Only EU legislation can
ensure that third country seasonal workers employed within the
EU are accorded a minimum core of employment and social rights
to prevent exploitation.
10.19 We do not contest the Commission's assertion
that there is significant evidence of poor working conditions
and exploitation of migrant seasonal workers in some Member States,
although it is somewhat at odds with the first justification advanced
by the Commission that Member States are competing with each other
to offer more attractive conditions. However, as the Commission
acknowledges in its impact assessment, poor working conditions
are largely a result of deficiencies in national legislation and
lax enforcement and so it is not clear why the appropriate remedy
can be better achieved at EU level than at national level.[41]
- EU legislation on seasonal
workers is crucial to ensure effective co-operation with third
countries to tackle illegal immigration, not least by removing
obstacles to the legal migration of unskilled workers.
10.20 We understand the argument that opening
up opportunities for legal migration, particularly of low skilled
workers, may make it easier to secure co-operation on illegal
immigration from source countries. However, the Treaty on the
Functioning of the European Union does not empower the EU to determine
how many labour migrants to admit. Decisions on the volumes of
admissions remain in the hands of Member States. EU legislation
on seasonal workers cannot alter that fact and so we do not accept
the Commission's assertion that the draft Directive is crucial
for securing effective co-operation with third countries.
10.21 The Lisbon Treaty provides a new power for
any national parliament (or a chamber thereof) to issue a "reasoned
opinion" if it considers that draft EU legislation breaches
the principle of subsidiarity. The Austrian National Council and
Czech Senate have both issued reasoned opinions stating that the
draft Directive is in breach of the principle of subsidiarity
and other national parliaments may do so before the expiry of
the eight-week deadline in Article 6 of the Subsidiarity Protocol.
As the preceding paragraph indicates, we do question whether the
draft Directive complies with the principle of subsidiarity, but
we are also aware of the Commission's predicament, not least because
it has been asked by the European Council to implement measures
contained in its 2005 Policy Plan on Legal Migration for which
the justification, at least in terms of subsidiarity, is in doubt.
We think, moreover, that the difficulties identified above in
relation to this draft Directive are indicative of a deeper tension
within Article 79 TFEU, which provides, on the one hand, for the
development of a common EU immigration policy while, on the other,
preserving Member States' autonomy to determine how many third
country economic migrants to admit.
10.22 The parliamentary timetable does
not permit the House to issue a reasoned opinion within
the eight-week deadline in this case, even if we were minded to
recommend it to do so. In our Inquiry on Subsidiarity,
National Parliaments and the Lisbon Treaty the former
Commissioner for Institutional Relations and Communications Strategy
(Mrs Margot Wallström) said that the Commission would listen
to the views of national parliaments even if there was an insufficient
number of reasoned opinions to require the Commission formally
to review its draft legislation.[42]
It is in this spirit of a consensus-seeking approach by the EU
institutions that we intend to transmit our views on the subsidiarity
implications of the draft Directive to the Presidents of the European
Parliament, Council and Commission.
Document (b) the Directive on Intra-corporate
Transfers
10.23 We note the Minister's view that the content
of the draft Directive is consistent with the powers conferred
on the Union under Article 79(2(a) and (b) TFEU. Any EU measures
based on this Article must be within the scope and serve the objectives
of the Union's common immigration policy as defined in Article
79(1) TFEU. We accept that the draft Directive may contribute
to two of the objectives cited in Article 79(1) TFEU the
efficient management of migration flows and the fair treatment
of legally resident third country nationals. However, the principal
purpose of the draft Directive would seem to be to make the EU
more commercially attractive to multinational companies. While
we acknowledge that there are numerous policy pronouncements establishing
a linkage between economic migration, competitiveness and labour
market productivity, we continue to question whether this objective
falls within the scope of Article 79(1) TFEU.
10.24 The Minister says that, even without a provision
on intra-EU mobility, the draft Directive would be justified on
grounds of subsidiarity because a common legal framework for the
admission of intra-corporate transferees and for the conferral
of certain social and economic rights would reduce the risk of
unfair competition. We understand unfair competition in this context
to refer to the risk of 'social dumping' and the possibility that
multinational companies based outside the EU might seek to import
poor working conditions or salaries when transferring an employee
to a European branch or subsidiary, thereby undercutting the workforce
in the host Member State. We can see some merit in this argument,
and in the need for common EU rules, if the draft Directive includes
provision for mobility between Member States. We are not sure
why the Minister considers that EU rather than national regulation
would be preferable if the scope of the draft Directive were to
be limited to the conditions of entry and residence within a single
Member State.
34 See section 1.1 of the Policy Plan at http://eur-lex.europa.eu/LexUriServ/site/en/com/2005/com2005_0669en01.pdf
and HC 34-xviii (2005-06), chapter 20 (8 February 2006). Back
35
Article 5 of the Treaty on the European Union. Back
36
Article 5 of the Protocol on the Application of the Principles
of Subsidiarity and Proportionality, annexed to the Treaty on
the Functioning of the European Union (TFEU) and the Treaty on
European Union (TEU). Back
37
The deadline for notification of a decision to opt in is 14 October. Back
38
See paragraph 2.2.1 of the Commission's impact assessment (ADD
1). Back
39
See Article 79(5) TFEU. Back
40
See paragraph 2.2.1 of the Commission's impact assessment (ADD
1). Back
41
See paragraph 2.2.2 of the Commission's impact assessment (ADD
1). Back
42
See HC 563 (2007-08), paragraph 24, p.8. Back
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