Saturday 7 June 2014

What are the Member States doing regarding sanctions on employers of irregularly staying third country nationals?

Elspeth Guild, Jean Monnet professor ad personam Radboud University, Nijmegen, Queen Mary University of London.


In 2009 the EU adopted a directive which required the Member States (except Denmark, Ireland and the UK) to adopt legislation creating fines and criminal sanctions against employers who hire third country nationals who are irregularly staying in their Member State. As is the case for most immigration and asylum directives and regulations, the Commission was mandated to prepare a report by 20 July 2014 and every three years thereafter on the application of the directive. The Commission has now published its report in advance of the deadline on 22 May 2014. 

This directive was so popular among the Member States that after the end of the transposition date, the Commission had to commence 20 infringement proceedings against Member States which had done nothing to transpose it. All of them have now been withdrawn as the Member States adopted national legislation.

The issue of employer inspections

The communication contains no information how many procedures have been taken against delinquent employers. It is unclear whether the Commission actually has access to this information but it did not include it nor indicate whether the Member States provided it. Under the directive, the Member States are required to provide annually information on the number of inspections which they have carried out to check that employers are compliant. The Commission has included a table on the number of such inspections carried out in 2012. This varies from 79 in Estonia to 243,847 in Italy. Of the other four big Member States, Germany chocked up 122,577, France 1,331 and Spain 53,671. Poland carried out 2,776.

These figures are very difficult to interpret not least as there is no clarity whether Member States with high numbers such as Italy, have included the obligation to check on irregular migrants into the job of general labour inspectors (which seems likely from the figures). Other Member States have probably not done this such as France where the number is very low. But this is supposition rather than knowledge.

There are of course, enormous issues which arise depending on which system a Member State uses. If labour inspectors are provided with general powers to check for irregularly staying migrants, they become sub-contracted immigration officers and, the argument goes, they are distracted from their main work of protecting labour standards. If the purpose of labour inspections is to ensure proper application of labour standards, it may not be wise to go down this route as it means that employers are more likely to hide any workers who have a dodgy immigration status from labour inspectors thus defeating the purpose of the inspection as regards the universality of the protection.

On the other hand, if a separate body must carry out the immigration status related labour inspections, that body must be identified (eg immigration officers?) given the powers to carry out inspections and set loose. As the UK system, which is based on this later approach shows, employers are not particularly delighted at having immigration related inspections. Also, while health and safety inspections include issues around migration, in the UK employers also have spot compliance inspections from immigration officers under the points-based system. UK Visas and Immigration (the successor of the UK Borders Authority) carry out these spot checks on employers.

How many irregularly staying third country nationals are working in the EU?

Returning then to the Communication, it is worth noting that it starts with the (relatively) new figures of the drop in third country nationals detected irregularly present in the EU between 2008 and 2013 (down 40% - the 2013 figure is 386,230). These figures originally appeared in the Commission’s report on the Returns Directive. The document, however points in two directions, on the one hand if the number of detected irregular migrants is dropping so fast one might have to question what the point of the directive is so the Communication states “the majority of irregular migrants remain undetected”. There is no evidence produced for this, though one can see the Commission’s interest in stating it. If the problem is merely that the Member State authorities have stopped detecting irregularly staying third country nationals then the blame falls on them and there could be huge numbers of contraventions of the directive. But if there has not really been much change in the intensity of the work of state authorities in the detection of irregular migrants, then the problem of irregular working is diminishing towards a vanishing point which is coming fast.

Once again, if the UK is any measure to go by, in 2008/9 the authorities issued 1,722 civil penalties to employers worth a total of GBP 16,715,000 but in 2012/3 it only issued 1,270 penalties worth GBP 10,843,750. This means that over the period, there has been about a 36% drop in the number of fines and a 35% drop in their value. While this is not as high as the 40% drop in detected irregular migrants in the EU as a whole, it is not far off. While the Commission’s document states that Austria, Cyprus and Slovakia have taken up the option of publishing lists of employers who committed the offence of employing an irregularly staying third country national, I have not been able to find and information or statistics on the respective government websites.

Why are irregularly staying third country nationals working in the EU?

According to the Commission people work to improve their lives and to meet demand from employers. There is nothing surprising here. However, as regards those who are irregularly staying in the EU, the Commission considers that they seek out employers “who are willing to take advantage of workers ready to undertake low-skilled, low-paid jobs in labour-intensive sectors such as construction, agriculture, cleaning and hotels/catering”. The Directive itself states that undocumented work is a pull factor in itself for people to stay irregularly.

All of this smells of arm-chair sociology based on supposition and prejudice rather than any actual empirical work. There is empirical work out there if anyone in the Commission is actually interested and much of it was produce in Commission funded research projects, but it does not necessarily support the Commission’s statements. (See, for instance, Vasta, E. (2011). Immigrants and the paper market: borrowing, renting and buying identities. Ethnic and racial studies, 34(2), 187-206).

In any event the Commission repeats the standard argument about the damage undocumented work causes: loss of tax revenues and social contributions (which may or may not be the case depending on whether the person is working under a registered identity or not), replacing workers or causing the “non-hiring” of workers through legal channels (strenuously denied by the Commission when it comes to EU national workers moving to find better jobs) and acceptance of hazardous working conditions.

These statements of ‘fact’ are unhelpful to the authority of the Communication. The Commission would be wise to refrain from such rather speculative asides which do nothing for its reputation as a source of reliable information.

How have the Member States implemented the sanctions against employers?

There are two types of sanctions which the directive obliges the Member States to create: financial and criminal. Regarding financial sanctions, the more irregularly staying third country nationals an employer hires, the greater the fine. Most Member States already had financial sanctions by the transposition date, only Belgium, Bulgaria, Finland and Latvia did not but now do. Among the sanctions which the Member States apply is the obligation to pay for the return of the third country national (somewhere outside the EU) though in Sweden and Italy this is simply included in the penalty. No information is provided about how the Member States calculate the cost of return or to where. Is it on the basis of actual costs incurred or some other basis? Further are employers required to pay the cost whether or not the return actually happens? Again there is no information.

The financial sanctions vary greatly in amount. The maximum fine for a natural person runs from 854 euros in Cyprus to 100,000 euros in Spain.  Alternatively where it is for the judge to set the fine, the maximum level varies from 500 euros in Latvia to 500,000 euros in Germany. The Commission queries whether these rather enormous variations constitute dissuasive and proportional sanctions as required by the directive.

It may be recalled that this directive was one of the first adopted after the CJEU held that the EU can use criminal sanctions to achieve EU objectives which are outside the provisions on cooperation in the field of criminal justice. As regards criminal sanctions, here again the Commission finds that there are very wide variations. In a minority of Member States illegal employment is a criminal offence to which aggravating factors may attach such as persistent and repeated infringements.

In the rest of the Member States a copy and paste approach to the obligation (in Article 9(1) of the Directive) to create criminal sanctions was adopted. Depending on the Member State the penalty can be between three months and five years imprisonment. For businesses the penalties for criminal sanctions include loss of public benefits and/or public contracts for five years, claw back of subsidies and closure. But there is a great variety among the Member States as to what they have transposed and what they have not. There is also a provision on liability for a chain of employers (Articles 2(c), 8, 9(2) and 11 of the Directive). The objective is to make sub-contractors also responsible for the offences of employing third country nationals irregularly staying in the Union, but this provision seems to have foxed a few Member States which have not transposed it. 

Protecting the third country national

The civil society sweetener in the directive has been its provisions which oblige employers to pay their third country national workers even if the state is expelling them or has already done so. It is interesting to note that few Member States have transposed these provisions. For instance, only Bulgaria, Cyprus, Greece and Slovenia have included in their laws the right of third country nationals who are (or were) irregularly staying and working to claim outstanding remuneration from their employer. The others rely on vague references to their civil law. Of course for the UK it would be a big step forward if third country nationals with an irregular immigration status could rely even on the labour contract to receive back pay but the UK does not participate in the directive.

More Member States have implemented the provisions requiring effective mechanisms for such third country nationals to lodge complaints against employers and to be represented by third parties (ie NGOs, trade unions etc). Only three Member States (Belgium, Greece and France) have put in place mechanisms so that these third country nationals can receive any payments due to them after they have left or been expelled. In the same vein, only ten Member States have introduced measures to comply with the duty to grant limited duration permits to third country nationals which are linked with the directive’s criminal proceedings.

Detection and enforcement

According to the Commission most Member States now require employers to keep accurate records of the immigration status of their employees. It is now pleased with the Member States’ compliance with their duty to provide it with information about inspections as they are required to do under Article 14 of the Directive (see above more generally). Further the Commission insists that Member States identify sectors most at risk in order to increase the effectiveness of the inspections. Offenders in this regard are the Czech Republic, Estonia, Lithuania, Malta and Romania which have not identified sectors according to the directive’s requirements. The others which have so identified sectors focus on: constructions, agriculture, horticulture, housework/cleaning, catering and hospitality services.

One is reminded of the joke about the rather drunk man who loses his keys on his way home one evening after dark. He retraces his steps and begins searching for his keys very carefully around a street lamp. A friend asks him why he thinks he lost his keys at that spot. The man answers that he has no reason to think that the keys are more likely to be under the lamppost than elsewhere on his route, but that it is much easier to look for them with the advantage of the light.

As the sectors identified by the member States have a fairly high staff turn over, are often short term contract based and in some cases are seasonal, the disruption to businesses generally may perhaps be less than in other sectors which are substantially globalized such as banking.


This is an interesting report notwithstanding its shortcomings. It is vital that the Commission continues to prepare and publish all of its reports on the functioning of the border, immigration and asylum measures so that we have some idea of what the outcomes are of the legislation adopted.

From the Communication, it is clear that the Member States are more interested in the coercive side of the directive than the provisions designed to help third country nationals claim and actually get their back pay from their employers. This is a pity as it undermines some of the key justifications for an EU measure in the field – not least that it was necessary to ensure fair play for third country nationals who are being or have been exploited by their employers. If there is somewhere for the Commission to increase pressure on the Member States as regards this directive it is in this respect.

Barnard & Peers: chapter 25, chapter 26

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