June 28, 2018 / 10:10 AM / a year ago

Fight over labor rules puts Swiss-EU treaty talks at risk

ZURICH (Reuters) - Switzerland’s top labor leader ruled out any weakening of laws to prevent foreign workers from undercutting local wages and working conditions, a stumbling block in Swiss negotiations with the European Union over a new treaty.

Brussels is pushing Bern to agree a treaty this year, saying it will not grant the Swiss more access to the EU’s single market — the biggest for Swiss exports — in the absence of an accord. Failure to agree would damage economic ties and plunge relations into a new ice age.

Labor rules are a bone of contention in the treaty talks, but the Swiss government faces stiff opposition to any dilution of “flanking measures” to ensure EU workers on temporary projects do not undermine high Swiss pay and perks.

The cabinet discussed the state of negotiations on Wednesday but postponed any action ahead of its next meeting on July 4, the last scheduled before the summer break.

Paul Rechsteiner, head of the SGB labor union federation and a member of parliament for the center-left Social Democrats party that is part of the governing coalition, took a tough line in a newspaper interview, arguing there was no reason to negotiate over the rules.

“If the EU thinks it can make concessions on protecting pay a condition, then the treaty is doomed to fail,” he told the Neue Zuercher Zeitung, threatening to fight any labor law changes by forcing a binding referendum.

The Tages-Anzeiger paper reported that Foreign Minister Ignazio Cassis had asked two cabinet colleagues to try to work out a compromise with labor and employer leaders by September, also his deadline for treaty negotiations with the EU.

Cassis seemed to float a trial balloon this month by suggesting room for flexibility on labor rules, only to quickly row back amid political uproar.

He has noted that Britain’s looming exit from the EU has made it harder for Brussels to grant any concessions to Switzerland for fear of creating a precedent for the Brexit talks.

Brussels has a particular problem with a rule that makes EU employers give Swiss authorities eight days advance notice before sending workers across the border. They also have to put down deposits to cover any fines.

It wants the Swiss to phase out labor rules introduced in 2004 in response to a 2002 accord allowing the free movement of people, and instead adopt laws in line with those in EU members to combat overly aggressive foreign competition.

Labor unions and employers contend that the eight-day rule allows time to arrange spot checks of visiting workers, including in the construction, hospitality, cleaning, gardening and sex industries.

Data for 2016 show inspectors checked 42,000 companies and 164,000 workers to ensure they adhered to Swiss norms.

Reporting by Michael Shields; Editing by Gareth Jones

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