Labour Ministry: Interim period for labour from new EU states causes problems

Tarja Filatov

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The Ministry of Labour has admitted that legislation which took effect in May 2004 limiting the free movement of labour from new member states of the European Union has not had the desired effect.
      In fact, an assessment conducted by the ministry points to a number of negative consequences of the two-year interim period. Under the law, which runs out in May 2006, citizens of countries that joined the EU this year need a work permit before they can take employment in Finland.
      Finnish trade unions, fearing a flood of cheap Estonian labour onto the Finnish labour market, were among the main proponents of the measure. However, loophole allows Finnish companies to recruit Estonian workers through labour rental agencies. The arrangement allows Estonians to work in Finland as long as they have a nominal Estonian employer.
      The situation has actually led to a decline in applications for work permits by citizens of new EU member countries.
      Now, just over 200 work permits are granted to citizens of the countries in question. Before the EU expansion in May, the rate outside the summer season was between 600 and 800 a month.
     
In addition to reducing the number of traditional work permit applications, the situation means that it is more difficult than before to compile accurate figures of the number of foreigners working in Finland, especially as the Estonians nominally employed by Estonian temp agencies pay their taxes to Estonia.
      Such employees are also excluded from Finnish social benefits.
      The Labour Ministry is also concerned that the situation further reduces the proportion of normal employment contracts. There are fears that the longer the law remains in effect, the more difficult it will be to shake off practices that it encourages.
      Labour Minister Tarja Filatov (SDP) said on Tuesday that she had always taken a critical view of the law. However, she does not believe that the duration of the legislation will be shortened. She noted that when the final analysis of the negative consequences is complete, the law will be close to its expiration.


Previously in HS International Edition:
  Loophole allows Estonians to work in Finland immediately after EU membership (5.4.2004)

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