Original URL: http://www.theregister.co.uk/2008/09/23/timw_ec_illegal_working/

Fines all round! EU blames everybody for illegal employment

Takes aim at contractor chain, hits entire market instead

By Tim Worstall

Posted in Law, 23rd September 2008 11:33 GMT

As Bismark didn't quite point out, both sausages and laws are desirable and necessary things (mmm, sausages!), but you don't particularly want to be there when they're made. Recent experience inside the Brussels saucisson factory rather brought this home to me.

To set the scene: they're trying to get EU-wide laws covering illegal immigrants and those who employ them. Who should be responsible for paying to send them home, should they get their wages sent on to them after they have been, who should pay any taxes due, that sort of thing.

There were a couple of odd amendments proposed (that employers should pay the cost of repatriation....eh? It's the State that has failed by letting them in, not the company) but in the large part, whatever your views about immigration and how open it should be, the majority of the discussions were about nuts and bolts sorts of things. Until, until, this:

In view of the prevalence of subcontracting in certain affected sectors, it is necessary to ensure that all the undertakings in a chain of subcontracting are held jointly and severally liable to pay financial sanctions against an employer at the end of the chain who employs illegally staying third-country nationals.

You what? There's a couple of other clauses that ram home the same point, so it's not an abberation, it's meant to be in there. It's also a proposal from the EU Commission itself, not something smuggled in by one or other xenophobic nutjob. This really is what our European Lords and Masters want the law to be.

The liability daisy-chain

Firstly there's the appalling drafting of it. The way it's written, it applies only to those at the end of the subcontracting chain who employ such naughty naughty labour. Imagine, for example, a case involving tomatoes and supermarkets. If the tomato picker is an illegal, then everyone in the chain is jointly and severally liable. But then so is everyone if the supermarket, at the other end of the chain does. But if the wholesaler in the middle does then everyone isn't liable, for the illegality isn't happening at the end of the chain. It's simply appallingly written and drafted.

The second problem is that we've just ripped up the idea of limited liability... of strict liability as well. You're only responsible in law for those things which you (whether a natural person or a legal one) do or cause to have done on your behalf. You're not, and cannot be, held responsible for what other legal or natural persons do that you've not asked them to do nor that you know nothing about.

We might be all happy and shining faced at the thought that Tesco has to monitor Spanish tomato farms to make sure that no impoverished Africans manage to make a living working on them, but do you seriously expect the corner greengrocer to have the ability to do so? Or even desire him to have such? The law doesn't distinguish between the two here, they're both jointly and severally liable for what that farm does. Maybe we should just point out here that this is yet another way in which the reams of legislation dumped on commercial activities (and it's not the EU solely at fault here, our own government is just as bad and the Americans often worse) favour large companies against their smaller rivals. Tesco has at least the possibility of carrying out such monitoring: Blogg's Apostrophe's R Us Tomato shop on the corner of Brixton Hill doesn't and so is disadvantaged by the law.

But I think we can all see where this law is aimed, can't we? It is indeed at Tesco and the like, those “certain affected sectors” are farming and the subsequent retailing of farmed items. Those who make and monitor our laws are getting pissed off at the way that some companies appear to be using gangmasters as a cut out (of course no respectable company would ever do such a thing). The perception is that now there are tighter rules on gangmasters, now that their licences can be withdrawn for using illegal labour, well, why hasn't the whole problem gone away? Why is illegal labour still being used? Because those who employ the gangmasters don't monitor what they're doing.

Aha! If we make the supermarkets financially liable when the gangmasters are caught then the supermarkets will put pressure on the gangmasters and then the problem really will go away.

Ripples of guilt

It might even work too: if the law is better drafted, made a great deal more explicit, then it might indeed work. Except for one really rather niggly philosophical point. In a market economy, how do you define the subcontracting chain?

Stick with tomatoes and supermarkets. We can see that the gangmaster, the farmer and the supermarket are all part of an identifiable subcontracting chain. Perhaps the wholesaler too. That is, I think we'd agree, the group that the law is aimed at. But what about the haulier? Is Eddie Stobart jointly and severally liable if the gangmaster provides a living to some starving Transdniestrian? There's nothing there to say that he isn't, for he's part of the subcontracting chain. What about the petrol station that loads the diesel into the lorry? That's part of the chain, so is BP also going to be liable?

What about the guys that made the tractor? Those who made the tyres for the tractor? The guy setting up the Portaloo for the pickers? The farmer who made the wine that dulled our Slavic friend's aches and pains after a day in the fields?

Has no bugger in power ever bothered to read I Pencil?

They seem to be entirely ignorant of the fact that in a market economy the subcontracting chain is that entire market economy.

Wonderful as it is to be reminded of Dr. Heinz Kiosk and his cry that "We are all guilty!" that's not actually the way to run an economy. So sadly my recent experience of the law factory hasn't been all that uplifting. Not only are those who make the laws for us profoundly unskilled at doing so, they seem deeply ignorant of the most basic points about the society they're trying to administer.

So excuse me will you, I've some bangers on the barbie: I'm desperately hoping that they were made by some illegal labourer somewhere, grossly underpaid and oppressed though he may have been. By shifting his arse across national boundaries to better his lot, whatever bureaucrats tell him to do, he's shown a greater understanding of economics than it appears those who rule us do. ®

Tim Worstall knows more about rare metals than most might think wise, and writes for himself at timworstall.com, and for The Business, among others. He is a Fellow of the Adam Smith Institute.