Debates concerning social dumping are constantly taking place in Europe: these debates concern assignment of workers to work in foreign countries, known as "posting of workers", truck drivers from Eastern European countries, and accusations regarding unfair competition directed at so-called “low cost” companies. A dissertation by (1) Alexandre Defossez, assistant at the Institute for European Legal Studies at the University of Liège, analyzes the reaction of the European Union to social dumping on its territory.

Social dumping has existed for a very long time. “The first uses of this expression appeared in the 1920s, but the reality that it represents is much older than that”, explains Alexandre Defossez. “At the time of the Acts of Union that united the kingdoms of Scotland and England in the early 18th century, the English feared that a large number of Scottish workers would come to England. In the 18th and 19th centuries, we also find references to fears concerning a loss of competitiveness on the part of states following the adoption of certain social regulations, such as the limitation on child labour or the recognition of Sunday as a day of rest for workers”.

At the beginning of his research, Alexandre Defossez tried to define the notion of social dumping. This turned out to be a complicated task, because the expression is used in a variety of contexts by a wide range of actors, from employers to union members, and from legal experts to politicians, but it has never been given a clear definition. “The question of the status of salaried workers is the focus of many discussions because there are still enormous differences in the cost of labor between different European countries”, Defossez says. “There are many other differences, concerning for example the application of the right to work. Some states are less strict about monitoring these regulations, and this attracts certain businesses”. 

It often happens that states that have a comparable level of economic development accuse each other of social dumping. In the introduction to his dissertation, Alexandre Defossez gives the example of the Grand Duchy of Luxembourg, which was accused by France of permitting temporary work bureaus to operate on its territory, companies that had no other activity but to employ French workers assigned to work in Luxembourg by businesses located in France. The absence of a minimum salary in Germany has also been criticized.

Defossez offers his own definition of social dumping: “a form of unfair competition consisting in the deliberate exploitation by an economic operator of a divergence between different social regulations in different member States of the Union, with the intention of gaining an economic advantage”. He observes that such a divergence may be the result of a deliberate policy on the part of a particular state that is attempting to establish or to strengthen its competitive position with regard to the single market.

Salary equality as a means of combating social dumping  

The dissertation focuses on intra-European social dumping and the European Union’s reaction to the phenomenon. Alexandre Defossez points out that this kind of thing is dealt with in 1957 Treaty of Rome. “Negotiation over this treaty created significant tension between States. France wanted social systems to be harmonized before signing. France feared that entry into the common market would cause the standard of living of its workers to decline and its businesses to relocate, and also feared unfair competition from workers from countries where the social security system was not as highly developed its own. In opposition to France, a group of countries led by Germany defended liberal positions. This group believed that the French positions were protectionist in nature. Germany did not want a European social system.»

(1) « Le dumping social dans l'Union européenne : Étude à l'aune du droit primaire et de la directive détachement » (Social dumping in the European Union : a study at the alder of primary law and the "posting" directive"), PhD Thesis, Université de Liège.