France threatens to stop applying EU law on seconded workers

French Prime Minsiter Manuel Valls delivers his speech at the National Assembly following Britain's referendum results last week to leave the European Union, in Paris, France, June 28, 2016. REUTERS/Jacky Naegelen

PARIS (Reuters) - The European Union should swiftly modify the regulation allowing pay differentials between seconded and local workers or France will stop applying it, Prime Minister Manuel Valls said on Sunday.

French politicians and unions have blamed the system of seconded or “posted” workers, allowing employers to pay them no more than the minimum rate in the host country, as the cause of job losses in France, particularly in the livestock industry.

“The French government is seeking to convince (the EU), and many countries agree, that we need to change. There must be equal treatment upwards to fight social dumping,” he told TF1 television in an interview.

“If it is not possible to convince ... France will not apply this directive.”

The number of seconded workers, employed in one EU state but temporarily sent to work in another, has jumped in recent years. There were some 1.9 million posted workers in the EU in 2014, the most recent data shows.

Employers are not now obliged to pay posted workers more than the minimum wage in the host country, which leads to underpayment of posted workers and competition between firms employing seconded or local workers.

The European Commission has proposed making the pay of the two categories the same. But several Central European countries such as Hungary and Poland oppose this, saying it would be disadvantageous to them and would threaten jobs.

Reporting by Sybille de La Hamaide and Elizabeth Pineau; Editing by Richard Balmforth