BRUSSELS (Reuters) - The EU launched a legal challenge on Thursday against an Austrian law that requires foreign drivers to be paid Austria’s minimum wage when making deliveries in the country, in a case that highlights strains between affluent western Europe and the poorer east.
The European Commission has already launched legal challenges against similar French and German minimum wage laws, saying they hamper the functioning of the EU’s internal market and the freedom to provide services.
Truck companies from eastern Europe, where wages are lower, have taken a big share of the trans-European road freight business, prompting complaints from hauliers in higher-wage countries and the introduction of minimum wage laws.
“The application of the Austrian measures to international transport operations which do not have a sufficient link to Austria cannot, in the Commission’s view, be justified, as it creates disproportionate administrative burdens which prevent the internal market from functioning properly,” the Commission, the EU’s executive arm, said in a statement.
The “Austrian Act to Combat Wage and Social Dumping” requires truck drivers unloading or uploading in Austria to be paid the Austrian minimum wage.
Eastern European countries have complained that such measures are protectionist and throw up unjustified barriers to cross-border road transport.
A spokesman for Austria’s Ministry for Social and Labour Affairs said Austria does not plan to change the law because it thinks it conforms with EU rules.
Austria has two months to reply to the Commission’s complaint. If no agreement is found the Commission could eventually take Austria to court.
The Commission will propose a legislative package at the end of May that aims to set a threshold for when a country’s minimum wage should apply to foreign truck drivers, so that drivers merely passing through would not face undue administrative and financial burdens, EU sources have told Reuters.
Additional reporting by Shadia Nasralla in VIENNA; Editing by Gareth Jones and Pritha Sarkar