Brussels is considering a radical overhaul of employment law to ensure that European job markets can grow despite an expected fall in many countries' populations.

The European Commission held a public hearing in Brussels on June 14 to consider how to develop labour policies that will allow workers from non-European Union member states, such as India and Russia to work without having to go through Byzantine national employment procedures.

At the hearing, the Commission acknowledged the need for better rules for economic migration. Part of the reasoning was an acknowledgement that the European Union will need an extra 20 million people to fill potential job vacancies by 2030.

Employment and social affairs commissioner Vladimir Spidla commented that the system would have "to balance fears of certain Europeans with the desires of migrants seeking a better life in Europe." Various contributors also mooted the idea of the creation of a database that would inform third country migrants of potential jobs.

The free movement of labour is one of the cornerstones of the nearly 50-year-old Treaty of Rome, but until now any discussion or law-making on this issue has revolved around access for EU nationals. The move is a radical part of Commission policy making that is analysing how Europe can adapt its workforce to ensure that an ageing population can look forward to a reasonably prosperous retirement rather than the pensions' crisis that many commentators and experts have been predicting.

The public hearing is all part of policy-making that starts with Brussels issuing what is called a green paper. This outlines the Commission's thoughts on a certain issue and becomes the starting block for a consultation process that will if thought necessary become draft legislation.

The green paper on economic migration outlines possible ways of developing an EU-wide approach to labour migration. It considers what sort of policy should be developed for workers who will be on contracts longer than three months and looks at admission procedures. It is basically the start of a move to what could become an immigration policy akin to the green card system used by the US and Australia.

There are directives dealing with the free flow of EU workers including one from 1996 that tried to reduce the administrative burden on employers that wanted to use such people for short-term projects or to fill long-term positions.

Any move in this area to clarify third-country workers' rights and access to the European employment market would probably be welcome to many HR professionals who have to deal with these issues as part of their working day. Jo Antoons, senior manager, human capital, at the consultancy Ernst & Young is one such person.

"Not only do we find it difficult to get permits for Russian or Indian employees, but also for Australians and Canadians," said Antoons.

To highlight the difficulties companies can face Antoons referred to recent hearing at the European Court of Justice on Luxembourg labour law, which was based on the Van der Elst case of 1994. In the original case the court found against what was seen as a limitation of the free movement of services. It said there were too many restrictions on how a company could use workers on contracts for work in another EU country. Belgian law said that if you are a company that wants to send an employee to another EU country that person can only be exempted from a Belgian work permit if you are a "stable" employee – that is an employee who has worked with the company for over six months.

Like Belgium, Luxembourg demanded that an employee should have worked with the company for six months. Both these countries were worried that any freeing up of the work permit system would encourage immigration tourism, but the court ruled against Luxembourg. Unfortunately, the implementation of court findings into national law can take time and national assemblies can slow down the process.

"Belgian MPs do not get the economic arguments for the free movement of labour. We have manpower problems, but the systems are very rigid for people who are not highly qualified," she said.

To qualify as such a person you should have a degree and a gross income of over 32,261 euro a year.

"Therefore we have problems with hiring blue collar workers and interim employers," added Antoons.

Antoons hopes that the Directive on Free Movement of EU Nationals will reduce some of the problems of residence, but more legislation would be needed to lessen the problems many companies have with hiring non-Belgian staff, whether they are EU nationals or not.

It seems the jury is still out on whether Belgium and Luxembourg will one day catch up with European labour legislation.

30 June 2005

Jeremy Slater is a freelance journalist based in Brussels.

Subject: EU labour law, work permits, European labour legislation.