Work-related crime must be fought with improved cooperation

“In Finland, political support along with the cooperation and exchange of information between authorities is the most important tool in the fight against unfair competition and the shadow economy,” said Päivi Kantanen from the Finnish Ministry of Economic Affairs and Employment.

She was the moderator at the conference “Nordic-Baltic Expert Seminar on Fair Competition and Fair Working Conditions”, held on 24 August in Stockholm. It gathered over 60 experts from Nordic and Baltic labour market and tax authorities, but also representatives from the social partners, in addition to representatives from different government ministries who deal with problems surrounding organised crime within the labour market. 

The Stockholm meeting was a follow-up to the Nordic labour ministers’ meeting held in the Swedish capital in April, where ministers agreed on a resolution aimed at fighting organisers crime in the labour market.

“We have so much to learn from each other when it comes to securing fair competition and fair working conditions,” said Irene Wennemo, State Secretary to the Swedish Minister for Employment and Integration.

Transferable experiences

She said that during the Swedish Presidency, there had been many exchanges between the Nordic countries aimed at fighting work-related crime, which is a threat to both fair competition and to good working conditions. In this context Sweden has a lot to learn from the other countries in the Nordics and the Baltics, said Irene Wennemo.

“If various measures against labour market crime work in for instance Denmark or Norway, they probably will work in Sweden too.”

Dealing with work-related crime is a must if you want citizens to deal with the changes which are happening in the labour market, according to Irene Wennemo. 

“If you want to gain acceptance for the flexibility and rapid technological development that characterises the Nordic labour market, it is crucial to avoid a worsening of working conditions.”

There is no doubt that cooperation is needed in order to face increasingly well-organised economic crime. Cooperation is needed on all levels to fight serious exploitation of labour, unfair competition, the shadow economy and criminal networks. As several of the speakers at the conference pointed out – labour markets move quickly across national borders, which opens up for organised crime that in turn is quick to find regulation loopholes and new ways of making money illegally. 

Labour market crime is persistent and it is spreading

Päivi Kantanen from the Finnish Ministry of Economic Affairs and Employment, summed up the new challenges facing the Nordic and Baltic labour markets. There are rapid changes in the labour market. Increased mobility for workers, cross-border services and migration all mean that more workers arrive to work in the Nordic and Baltic labour markets either short-term or for longer periods of time. Add globalisation, digitalisation, the platform economy and different types of atypical work, which influence both the labour market and the employees’ rights.

“Unequal competition, social dumping and the breaking of labour law and collective agreements are not new phenomena, but they are becoming more persistent and they are spreading. To fight this we need cooperation, joint operations and the exchange of information between authorities and the social partners,” said Päivi Kantanen.

Mobility changes direction

Liis Naaber from the Estonian working environment authority spoke about “The joint North European labour market”. She gave examples of how fast the labour market is changing. The Estonian economy is growing rapidly and needs labour. This means that the mobility has changed direction. In 2011, 12,000 Estonians worked in Finland. In 2017 that number was down to 4,000.

The red line shows migration to and from Estonia. Since 2015, more have left than arrived. Source: Statistics Estonia.

“We used to be an exporter of labour, now we are an importer. This means we have to update our legislation. We also work towards bringing our different authorities in the field together,” she said.

There is also an increase in the number of posted workers in Estonia, who the employers should register with the police, and they should be paying taxes. It is a priority to make this happen, said Liis Naaber. 

“Many come from Poland, but quite a few Ukrainians come from there too, and this represents a grey area,” according to Liis Naaber.  

She says Estonian labour market authorities have a range of measures to deal with the development. One is information campaigns explaining how the Estonian labour market works. Other measures include cooperation with police and different authorities in Estonia – but also creating cooperation with the Nordic countries. A cooperation agreement was reached with Norway in 2018, and there is also a new contract for Baltic cooperation with the Nordics which includes study visits to the other countries’ inspection authorities. 

“Sharing knowledge and information is far more efficient if you know each other,” said Liis Naaber. 

Necessary cooperation

Cooperation between authorities was a recurring theme during the experts’ meeting. Since labour market crime knows no borders, cooperation between the countries must work and it needs to expand. In Denmark the police, tax and work environment authorities work together to fight social dumping and unfair conditions in the labour market, explained Anne-Marie Knudsen from the Danish Working Environment Authority. 

“We look at social dumping and unfair conditions were foreign wages and conditions are worse than Danish ones, which leads to bad conditions and unfair competition. 

“The cooperation must be expanded beyond the working environment authorities if we are to successfully fight the shadow economy. It is also important that local authorities find ways of working together,” said Raivis Busmanis from the Lithuanian working environment agency.

One of the topics at the conference was experiences from shared inspection work between countries. Through the EU financed project UDW – Undeclared work – the five Nordic countries’ working environment agencies have been visiting each other and taken part in each other’s inspections. The aim has been to show each other how individual agencies work on a daily basis. Several of the conference participants talked about how much they had learned from following each other’s work. One lesson is that inspectors work differently in different Nordic countries. In Finland, they mainly work with labour law, including wages, while the control of wages is handled by trade unions in Sweden and Denmark. 

“In Finland we operate more like police and carry out our inspection together with police officers. In Iceland this does not happen at all. They talk to the employer in a far more normal manner. Perhaps we should learn to do that too,” said Riku Rajamäki from the Occupational Safety and Health Administration in Finland.

Hannes Kantelius from the Swedish Work Environment Authority asked how the process might look like if you wanted to reach the longed-for cooperation between Nordic and Baltic authorities to fight labour market crime.

“A lot happens via good contacts and personal networks. You know who you should call, but if that person is off sick you don’t quite know any longer. That’s why it is important to keep building those personal contacts. The political drive we have seen in Sweden is also important, and we need to see that drive travel all the way down the chain, including among managers on a state level.”

The interest for cooperation between Nordic authorities was clear not least towards the end of the conference. Despite it being a Friday afternoon and a bright late summer’s day outside the conference hall in central Stockholm, the participants hung around and kept talking about national and authority borderlines.