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Hungary challenges EU's posted workers reform in court

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By Reuters

BUDAPEST (Reuters) – Hungary has challenged a European Commission reform on posted workers – those who travel to other EU countries to work on terms set in their home country – at the European Union court, the government said in a statement on Thursday.

Hungary wants the court to annul a directive announced in July, which extends to the provision of services the principle of paying equal wages for the same job in the same place.

That reform “does not serve the protection of posted workers but in fact … is a tool for protectionism,” the government said.

Poland and Hungary have led efforts to block the directive, which has been pushed by French President Emmanuel Macron.

Macron wanted to overhaul a system that allows people to work in other EU countries on contracts that need only guarantee the host country’s minimum wage and that allow taxes and social charges to be paid in the home nation.

Macron said the system created unfair competition in wealthier nations like France and Germany.

Paris complained that central and eastern Europe gains an unfair advantage from the “social dumping” of cheap labour, arguing that posting low-paid workers hurts local jobs and erodes labour protections in higher-wage member states.

Although posted workers make up less than 1 percent of the EU workforce, with many employed in haulage and construction, the issue has widened a divide between the poorer east and rich west.

Hungary said on Thursday that the EU directive violated the freedom of provision of services set out in the bloc’s Treaty.

It said Poland would also challenge the regulation.

The Polish government was not immediately reachable for comment.

(This version of the story rewords fourth paragraph to clarify Macron’s role in the directive)

(Reporting by Krisztina Than; editing by Larry King)