Definition: Social dumping occurs when businesses abuse the opportunities offered by the free movement within the single market to undercut or evade existing labour standards and regulations, or to take unfair advantage of loopholes in the legislation, gaining competitive advantage over bona fide companies. Some employers hire the least protected workers with the cheapest salary and inferior working conditions to increase profit margins while preventing or reducing the collective representation of workers, geographically illustrated by the phenomenon of delocalization/offshoring. At sectoral level, social dumping is visible when employers reduce their personnel costs by using (agency) temporary workers, subcontracting, bogus self-employment, unorganized workers and precarious contracts, among others.
The railway sector is experiencing an increasing number of unfair practices that are becoming more extended and frequent with the establishment of an internal market and more and more railway undertakings competing with each other. The following social dumping practices at European cross-border level and at national level are already observed in the rail sector.