Wage and Social Dumping

Wage and Social Dumping - A Social Policy Issue in Austria and Hungary Master’s thesis for the purpose of obtaining the degree Master of Arts in Business at the University of Applied Sciences Burgenland submitted by Mag.a (FH) Eveline-Doris WILFERT (PKZ 1810402007) in the Master's program European Studies – Management of EU-Projects Supervisor: Dr. Czeglédy Tamás, PhD. Assoc. Professor Univ. Doz. Date: 04.06.2020 Sworn declaration Hereby I, Mag.a (FH) Eveline-Doris WILFERT (PKZ 1810402007) declare that I have written the present master’s thesis without any help from others and that I have only used the sources listed. I confirm that I have not yet submitted a master's thesis or any other written work with the same or a similar topic to a university as an examination paper. Nickelsdorf on 04.06.2020 (signature) I PUBLISHING AGREEMENT Master’s thesis online Your master's thesis should be easily accessible to other students for support. The author, as the sole owner of all rights to the work and the right of disposal over any enclosed illustrations, photos, graphics, tables, etc., grants the University of Applied Sciences Burgenland, the right to enter the work into a database, to distribute it online in electronic form on the Internet, and to make it available for downloading or printing. The electronic version is largely identical to the printed version of the master's thesis (minor changes in layout or the improvement of typing errors and the like are not regarded as changes). If excerpts and their translation from third-party works exceed the scope of a scientific citation, the written consent of the author was obtained for reproduction, translation and distribution as part of the master's thesis. In particular, the author declares that the publication of the work does not violate the claims or rights of third parties or the criminal law. The author is free to publish the master's thesis elsewhere or to make it available on the Internet. I hereby give my consent to the described online publication of the master’s thesis by the FH Burgenland X Yes O No Nickelsdorf on 04.06.2020 (signature) II Acknowledgements When the idea came up a few months ago to develop the master's thesis on "Wage and Social Dumping - A Social Policy Issue in Austria and Hungary", I could only guess the difficulties and the effort involved, even though I already had written some other scientific work. However, I hope that I will not only give cause for criticism, but also stimulate a productive discourse on this broad topic. This work is intended to be of use to other students, so that they can get an idea of the topic "Wage and Social Dumping", or at least get a first insight into this topic. I would like to heartily thank Ms. Univ.-Prof. Dr. Dr. h.c. Irena Zavrl, Ph.D. for the active support and uplifting words. She was always there for me with questions, always had a solution ready and knew how to motivate me! Many thanks also to Dr. Czeglédy Tamás, PhD. Assoc. Professor Univ. Doz. as part of my master thesis supervision. I would particularly like to thank my colleagues, Dr. Márta Pinkert and Bertold Dallos, who were already there to support me with my master's thesis and provided me with literature, reports, brochures, interviews and case studies on wage and social dumping. A special thank you goes to my colleague Ariadne Mavronikola, M.A. who provided me with necessary documents and literature. I also thank Dr. Jószef Varga, who also helped me with literature, case studies and contacts. But I would also like to thank Albert Scheiblauer, MLS, who gave me some tips and his book about postings. And a particularly big thank you goes to my colleague Mag. Angela Pfister, who helped me to get up-to-date documents and provided me with advice on the topic of my master's thesis. I would also like to thank my colleague Mag. Ernst Tüchler from the ÖGB Economic Department and above all Mag. Georg Kovarik, who always believed in me and gave me good feedback. Special thanks go to my family, my husband and especially my two-year-old son. Ben, you are a so cheerful nature that despite the difficult times of the past two years, I have drawn strength from your happiness and your child's motivation. I am very proud to be your mom! I love you! I would like to say to all of you that you have always motivated me and have helped me out of difficult situations. Thank you all very much! Eveline Wilfert Nickelsdorf, 04.06.2020 III Abstract During the last decades, the European Union has changed enormously. In the beginning only 6 founding countries; the EU has now grown into a large community with 27 Member Countries. By January 31, 2020, there were still 28 Member States, but Great Britain held a referendum on leaving the EU in 2016. The development of the common (single) market has resulted in many changes and innovations, which also produced critical voices. Not only in the accession of the former Eastern Bloc countries into the EU in 2004 and 2007, but also initially, there was a widespread concern that a common market in the EU could be limiting workers' rights and subsequently lead to wage dumping. Not merely the EU institutions but also workers' organisations such as ETUC1, AK Europa2 and ÖGB3 are addressing the topic of wage and social dumping in connection with The Posting of Workers Directive. The labour market in the border region of Burgenland - Western Hungary is experiencing a dynamic development, with its positive and negative effects on both sides of the border. Up to 20,000 Hungarian workers commute across the border every day, many of them have seasonal jobs in these regions, so their social-legal status changes several times a year. The cross-border workers, the labour market-relevant authorities and institutions have to deal with legal and administrative circumstances of two countries with its different languages including EU regulations. The focus of this master thesis is with its research question to critically examine factors, which implies effects on wage and social dumping using the example of Austria-Hungary. Additionally, the future-oriented perspective is important here. The aim is to find out how sustainability can be achieved and maintained through socio-political projects in the cross- border region to prevent it. The regional organisation Burgenland of the ÖGB has decades of experience in social-political cross-border projects in relation to the concerning workers and their legal situation. The knowledge transfer, the exchange of information and experience as well as cooperation of all labour market-relevant authorities, social partners and institutions on both sides of the border and the focus for further development of measures on the special situation of the region by 1 European Trade Union Confederation 2 Chamber of Labour Europe 3 Austrian Trade Union Confederation IV the large number of cross-border workers appear necessary to prevent wage and social dumping. The recommendation of this master thesis and practicability of sustainable measures is aimed at integrating a recurring social-political cross-border project into the ÖGB Burgenland, which should be funded by the EU with a benefit for the internal market. The topic of wage and social dumping will continue to be highly relevant in the future and it shows currently how important it is to take sustainable measures to curb it, in line with the principle of "same wages, for the same work, in the same place!" Key words: wage and social dumping, Posting of Workers Directive, minimum wage, European Labour Authority, socio-political projects, European Union, sustainability V Table of contents Page 1 Introduction .................................................................................................... 1 1.1 Problem............................................................................................................ 1 1.2 Objective and Research Question ....................................................................... 1 1.3 Structure and Research Method .......................................................................... 2 2 Introductory Information to the Topic “Wage and Social Dumping” .............. 4 2.1 Definition of Wage and Social Dumping ............................................................... 5 2.2 Historical Background in the European Union ....................................................... 6 2.2.1 The Creation of the European Union as Peacemaker ...................................... 7 2.2.2 The Formation of the European Economic Community ................................... 7 2.2.3 The Merger Treaty and the “Eurosclerosis” ................................................... 8 2.2.4 The Single European Act ............................................................................. 9 2.2.5 The Maastricht Treaty ................................................................................. 9 2.2.6 The Treaty of Amsterdam .......................................................................... 10 2.2.7 The Treaty of Nice .................................................................................... 11 2.2.8 The Laeken Declaration & the Treaty on the Constitution for Europe ............. 11 2.2.9 The Lisbon Treaty ..................................................................................... 12 2.2.10 Enlargement of the European Union ........................................................... 14 2.2.11 The Fall of the Iron Curtain ....................................................................... 15 2.3 Single Market

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