Deutscher Gewerkschaftsbund

20.02.2024

Highly qualified and still only minimum wage - a case from Munich

transnational cases

Henrik G. Vogel / pixelio.de

By Jörg Meyer

In April 2021, a Hungarian employee seeking advice contacted Bernadett Petö from the transnational EU project "Fair European Labour Mobility" and the Fair Mobility advisory network. As a highly qualified skilled worker, he was only paid the national minimum wage and wondered whether this was right.

He worked for several months together with around 70 other colleagues from Hungary and Croatia at Fieldcore in Munich, a subsidiary of the globally active US company General Electric (GE). There they cleaned and maintained turbines and carried out repair work. Fieldcore is an industrial service provider with locations in 100 countries, including almost all Eastern European countries, and claims to employ around 12,000 people. From there, employees are regularly sent to Germany, France or Belgium. The Hungarian colleague who contacted the counselling centre had worked with his colleagues at nine different locations in combined heat and power plants over the past three years. The combined heat and power (CHP) plant in this case in Munich belongs to the municipal utilities, and the collective labour agreement for utilities (TV-V) applies. This collective agreement applies to employees in utility companies and essentially regulates wages and special annual payments such as holiday and Christmas bonuses. The problem: the provisions of the collective agreement do not apply to the posted employees, even though they worked at the Munich CHP plant. In consequence, the Hungarian engineer and his roughly 70 colleagues, all highly qualified skilled workers, were only paid the German minimum wage for their work, i.e. initially 9.50 euros, and from 1 July 2021 9.60 euros gross per hour. According to TV-V, they would earn more than double that. This inequality is not an isolated case. Posted workers are often paid significantly less for the same work.

Not generally binding and not regulated

The working conditions of workers posted within the EU are defined in the EU Posting of Workers Directive, which was last revised in 2018. It states that the remuneration and working conditions for posted workers are determined by the legal provisions applicable at the place of work or by collective agreements that have been declared generally binding. In Germany, these are collective agreements in areas such as care, construction, airports and temporary work, but not the collective agreement for utility companies.

"We are facing a legal problem," says Franz Schütz from ver.di Munich. As the TV-V is not generally binding, the Posted Workers Act, which stipulates that foreign employees must have the same working conditions and pay as domestic employees, does not apply. Instead, the engineers and skilled workers from Hungary and Croatia working at the combined heat and power plant were treated according to the German Posted Workers Act. This means that the employer can only pay them the local minimum wage.

A local company outsources some of its work to an external company, thereby saving on labour costs. A classic case of collective bargaining evasion? "No," says trade unionist Schütz. "It's not a case of collective bargaining evasion in the sense that we don't have a collective agreement for the colleagues concerned. The employees would have to conclude a collective labour agreement with Fieldcore or General Electric in their country of origin."

In addition, Bavaria does not have a Collective Bargaining Act like other federal states, according to which public employers are obliged to award contracts only to companies that are bound by collective agreements.

Together against inequality

After the colleague asked her for help, Bernadett Petö gathered information and investigated the case. After reviewing the colleague's documents, Bernadett Petö realised that the legal options were exhausted. Nevertheless, she wanted to draw attention to the fundamental problem.

The DGB counselling network Fair Mobility, for which she works, has been dealing with the problems of posted workers in Germany for years. However, employees can also turn to counselling centres in their countries of origin. The EU project "Fair European Labour Mobility (FELM)", in which Petoe is also involved, promotes, improves and uses networking between the international counselling centres. She contacted the local metalworkers' union SMH-IS via the project partner in Croatia. The union was in collective bargaining with Fieldcore in 2021. The Hungarian colleagues are members of the Chemical and Energy Workers' Union (VDSZ). Fieldcore has works councils at all subsidiaries and there is a European works council.

At an initial meeting between trade unionists and works councils from Hungary, Croatia and Germany, they decided that the posted colleagues should file a complaint with the European Fieldcore Works Council. They also wanted to contact the colleagues from Romania and Poland who had been sent to Munich. Ver.di secretary Schütz wrote a letter to Munich's municipal utilities at the same time, pointing out the principle of "equal pay for equal work".

The efforts were initially unsuccessful. Fieldcore Europe rejected the complaint and referred to the Posting of Workers Directive, municipal utility Munich wrote that the collective agreement was not generally binding and that it was not possible to dictate to the European partners what they should pay their employees over and above the mandatory requirements.

The unions then decided to publicise the situation of their colleagues. Ver.di Munich took over the organisation and invited the partner unions from Hungary and Croatia. All posted workers at the Munich site agreed to take part in the protest.

On the day before the action, Fieldcore's management threatened to lose orders if the employees demanded and received more money. However, the workers were not intimidated. "Fair pay for workers at SWM" was written on banners, and media in Munich and Hungary reported on the protest.

Success through networking

After the protest, the employer's reactions were mixed. While the wage negotiations in Croatia remained fruitless, Franz Schütz was informed by the Hungarian trade union that the basic salary there had been increased by 15 per cent and the project bonus by 20 per cent.

Bernadett Petö says that the Fieldcore case is a good example of what can be achieved with international cooperation. "Cross-border cooperation between trade unions is essential in the fight against wage dumping. It is unacceptable for highly qualified engineers to be paid only minimum wage. This puts enormous pressure on employees and companies that pay or are paid according to collective agreements. One lesson from this case that we are taking with us for our project: For a fair European labour market and fair cross-border wages, more collective agreements must be declared generally binding. That is an essential conclusion for us."


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