"The Germans thought that free market regulations would be enough to protect the common market and its operation. The golden mean between these positions consisted in the inclusion in the Treaty of Rome of some social regulations. These regulations were essentially intended to fight social dumping. When salary equality between men and women was included in the Treaty in 1957, the main reason was to prevent certain countries from benefiting from regulations that allowed women to be underpaid, but that improved the competitive position of those countries – it wasn’t because they thought equality was a good thing in itself. France was particularly worried about competition from Italian textile workers, an industry in which women were paid less than men doing the same work”.

Alexandre Defossez maintains in his dissertation that after the signature of the Treaty of Rome, the problem of social dumping was alleviated, and did not re-emerge until the 1980s. Two phenomena were involved in its reappearance: the enlargement of the European Union, including countries that were perceived as poor (Greece, Spain, and Portugal), and the launch of the internal market, in the context of a general will to accelerate economic integration, and to go much further with regard to the liberalization of economic exchanges, including the service sector.

“The Commission, acting under particular urging from Jacques Delors, was pushing for the adoption of new rules regarding European social policy, especially in the area of working conditions. In official documents, the argument in favour of avoiding unfair competition between States is made, but in fact it is not so clear that the new rules had the effect of restraining social dumping. The working time directive focused on minimal harmonization, but did not prohibit exceptions. Some States used such a directive as an excuse to adopt rules that were less favourable to workers than they had been before! In addition, everything that had to do with salaries was excluded from the harmonization. If anyone had really wanted to get rid of social dumping, they should not have placed the question of salaries outside the competence of the European Union”.

A directive tries to regulate posting of workers

The author explains that not until 1996 would a more significant measure against social dumping in the European Union be adopted: the posted workers directive (“détachement”). Workers assigned to work in foreign countries by a company were sent on a provisional basis to another member State by their employer. For example, workers might be sent to work on a building site in another member State. The large differences in average salary between these workers and the workers of the country to which they had been sent raised concerns about unfair competition. At the time, references were made to “Portuguese masons”, the forerunners of the “Polish plumber”. The posted workers directive was intended to ensure that the most important norms for working conditions in the State receiving the workers were respected, particularly those related to minimum wages.

"The negotiation over the directive lasted from 1989 to 1996 because States opposed each other's position. On one side there was Portugal, which did not like any directive that privileged the law of the country in which the work was performed. Portugal was supported by the United Kingdom, which was defending “neo-liberal” positions. Other States reckoned that the labour law of their country should apply from the moment a detached worker set foot upon their territory. The compromise on this point, in this directive on posted workers, was to affirm certain aspects of the laws regarding labour in a country, such as those regulating working conditions and the minimum wage, but not all aspects. The directive allows States to enforce other norms regarding labour under certain conditions. Many States used this possibility to enforce all their national labour laws.”