The London-based agency said that contractors can expect to pay a lower cost for foreign workers and added that UK contractors would not have to be responsible for the workers’ employment conditions, which include taxation, health and safety training and welfare.
The potential of overseas workers to undercut the wages of British workers horrifies unions. UCATT general secretary George Brumwell is happy to see legitimate foreign workers but says there must be “parity between pay, and no exploitation of these people.” M&E union Amicus is just as concerned. Paul Corby is worried about the impact on industry wage rates and safety and has already led a demonstration march to make the point.
One chief executive of a leading contractor is aware of the unions’ unease. He is keen to stay onside and says he won’t use foreign workers as cheap replacements for UK workers. Whether other contractors will avoid the temptation of gaining a competitive advantage by employing low-cost foreign labourers will remain to be seen.
UK contractors themselves are not immune from the threat of cheap labour. Construction Confederation industrial relations director Jerry Lean said that there was evidence that European contractors were looking to undercut British contractors by using cheaper locally sourced labour.
Foreign contractors’ success in infiltrating the UK market will largely depend on the government and its interpretation of a little-known European directive. The European Posted Workers Directive says that European firms must not use cheap labour to undercut British contractors when tendering for UK projects. The government says this means overseas workers should be paid the minimum wage, but unions such as Amicus believe that wages should be the same to make sure European firms operate on a level playing field.