Germany is set to bid Auf Wiedersehen to up to 80,000 British building workers. Under a law passed by the Bonn parliament yesterday, foreign workers in the construction industry will have to be paid the same rates as their German counterparts from 1 March. Companies that break the rules are liable to fines of up to DM100,000 (pounds 45,000).
The law on "wage dumping" attempts to close a loophole that has been pricing native workers out of their own market. The cost of employing a skilled German bricklayer comes to DM85 an hour, including the steep national insurance contributions mandatory under German law. The cheaper solution is to sub-contract the work, for between DM35 and DM45 and hour. A British worker will get between DM20 and DM25 of that, with the remainder staying in the contractor's pocket.
The profit margin is even wider with cheaper workers from Eastern Europe, but construction firms tend to prefer Britons to Poles, so much so that English in recent years has been the building trade's lingua franca. On most sites there is a strict pecking order: The foreman is German, the skilled workers are British and Irish, the hod-carriers Portuguese and the Poles the labourers. The German authorities turned a blind eye to these practices because they kept down the cost of the east German building boom. In the wake of the reunification of the two halves of the country five years ago, billions of marks were pumped into the east by the west German taxpayer. Most of the money is spent on large building projects requiring skills east Germans could not provide.
Now the boom is over, and unions hit by large-scale unemployment have been clamouring for protection for their members. The number of jobless in Berlin alone is measured in tens of thousands, and in the western half of the country the building industry has virtually come to a halt.
The law passed yesterday is unique in being aimed specifically at citizens of other European Union countries, and exploits Britain's opt-out from the Maastricht Treaty's Social Chapter. The German government argues that it must offer the same protection to Britons that German laws afford native workers. The effect, as Bonn is aware, will be the exact opposite. The self-employed British worker will find it very hard after next month to compete against a German who benefits from a contract.Reuse content