Rule Enactment in a Pan‐European Labour Market: Transnational Posted Work in the German Construction Sector

DOIhttp://doi.org/10.1111/bjir.12053
Publication Date01 Dec 2015
AuthorInes Wagner
Rule Enactment in a Pan-European
Labour Market: Transnational
Posted Work in the German
Construction Sector
Ines Wagner
Abstract
This article analyses the micro-level rule enactment of the posting of workers
framework in the German construction sector. I examine how actors draw on
different power resources in order to influence policies without formal negotia-
tion within transnational workspaces and thereby initiate institutional change.
Drawing on interviews with posted workers, managers, unionists, works coun-
cillors and labour inspectors I show how transnational subcontracting allows the
emergence of different regulatory spaces at national and workplace level. The
article concludes that the informal renegotiation of employment relations in
transnational workspaces is likely to destabilize the posting framework negoti-
ated at policy level.
1. Introduction
The European cross-border movement of services has facilitated a labour
market in which firms can ‘post’ workers temporarily to another member-
state. The issue has attracted political and academic attention because sub-
contractors employing posted workers pose a competitive threat to firms and
workers in high-wage countries (Menz 2005). The academic discussion has
revolved around how posted work in the enlarged EU should be regulated,
and how it may affect national labour market institutions and power dynam-
ics between management and labour in Europe (Dølvik and Visser 2009;
Lillie and Greer 2007). There has been less research, however, on how
transnationally operating firms engage with the regulatory framework in
place.
Ines Wagner is at the University of Jyväskylä and University of Groningen.
British Journal of Industrial Relations doi: 10.1111/bjir.12053
© John Wiley & Sons Ltd/London School of Economics 2014. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
53:4 D ecemb er 2015 0007–1080 pp. 692 –710
Transnational Posted Work
Transnational posting in a pan-European labour market is governed by a
strong market logic that created a sincere power imbalance between manage-
ment and labour through policy negotiations at EU and national level (Lillie
2010). I take this investigation further and discuss how these power imbal-
ances are translated to the workplace level. The aim of this article is twofold:
to study how employers enact the posting framework creatively by circum-
venting rules in the German construction sector and to examine how these
mechanisms initiate a process of institutional change through power dynam-
ics at the micro-level relevant for theories about institutional change gener-
ally. I focus on Germany because it emerged as the most significant case of
recourse to foreign subcontractors and posted workers in a recent compara-
tive country study on EU labour mobility in construction (Fellini et al. 2007:
289). The construction industry is not the only industry with a pan-European
labour market, but in construction, the transnational labour supply system is
at its most developed (Lillie and Greer 2007) due to the hierarchical nature of
the industry (Fellini et al. 2007: 280).
The focus on cases involving EU posted workers is meaningful in two
respects. First, it contributes to the growing literature on posted work. While
much of the literature on posted work studies processes of change and power
dynamics between management and labour at the supranational or national
levels (Afonso 2012; Eichhorst 2000; Greer et al. 2013; Krings 2009; Menz
2005), I study the power dynamics between actors involved in the posting
relationship and the rule enactment at the micro level. The examination of
how actors engage with an institution draws attention to the ‘gaps’ between
the design of an institution and its actual on-the-ground implementation and
effects (Pierson 2004: 103). Taking my cue from Lipski’s classic study ‘street-
level bureaucracy’ (1980) and Dubois’s (2010) recent work on street-level
bureaucrats, I look at how policy is renegotiated in the daily encounters of
actors in the posting relationship. Lipski and Dubois have both examined the
vertical relation between organizations strongly tied to national institutions
and alerted to the high degrees of discretion and the relative autonomy that
exists at the micro level within nation-states. By contrast, this research
focuses on transnational institutional spaces.
My findings show that the possibility for firms to diverge from rules is
accelerated in a transnational setting. Transnational worker posting offers
employers an additional power resource due to the increasing inability of
states to regulate (Lillie 2010) and enforce regulation in a cross-border work
relationship and the difficulties of unions to mobilize posted workers. Second,
it provides a microcosm for wider issues of institutional change. My findings
are similar to what Thelen (2004) elsewhere has called conversion and Hacker
(2005), in a very different context, has labelled drift. In both instances the
institution remains formally intact while policies may change without formal
revision, causing ground-level change (Hacker 2005: 47). While firms officially
adhere to the rules, thus leaving them formally intact, they conceal their rule
avoidance behind a façade of conformity. Firms divert the attention from the
actual power dynamics and processes of change within transnational posting
© John Wiley & Sons Ltd/London School of Economics 2014.
693

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