Austrian engineering firms complain to EU about 'wage dumping' law
VIENNA, Aug 9 (Reuters) - An Austrian law which could deter companies from contracting out work to lower-cost eastern Europe firms is in breach of EU law, the country's engineering industry has argued in a filing to the European Commission.
Austria's Association of Metaltechnology Industries said late on Tuesday it had filed the complaint over the law against companies seeking to employ cut-price labour, saying it makes it hard for Austrian groups to work with foreign contractors.
The association listed as a recent example Austrian engineering group Andritz being fined around 22 million euros ($25.8 million) for using a Croatia-based contractor for a 7 million euro project in Austria.
It has appealed against the fine.
Wages in Austria are typically higher than in its eastern neighbours, many of whom are EU members. The government in Vienna is pushing for ever-tougher laws to prevent Austrian companies from hiring foreigners, a contentious goal given that within the EU the flow of services and workers should be free.
"The Association of Metaltechnology Industries has already filed a complaint in March ... with the EU Commission against the aspects of the (wage and social dumping law) that are contrary to (European) Union law," it said late on Tuesday.
"The Andritz case shows ... that the assignment of (jobs to) external service providers is practically being rendered impossible."
Association Chief Christian Knill said in a statement that the way Austrian authorities interpret the law is a "permanent threat" to companies and he expected companies to gradually exit the Austrian market should such practices continue.
Andritz Chief Executive Wolfgang Leitner told ORF radio last week the law was pushing him to move production to sites abroad and it was likely that jobs would be lost in Austria. ($1 = 0.8517 euros) (Reporting by Shadia Nasralla; Editing by David Holmes)
