Next time you go by a construction site, look carefully. You might be witnessing exploitation of workers. Urgent action is needed, and the European Commission cannot simply look away. Long subcontracting chains in construction projects must end, limits to subcontracting must be introduced and agencies in posting banned.
Fernando realised his social contributions were not being paid and that he did not receive the correct salary in the country he was working in. Ali was pushed to accept being declared as a part-time worker, even though he worked 8 hours a day. Arman came from Bangladesh to Belgium to work in construction and ended-up in a room with 20 more just like him without heating, water or food. Mohamed paid a lot of money to an intermediary to come to Europe, with the prospect of a good job and the opportunity to send some money home to his family. Needless to say, this did not happen.
These stories of construction workers are real, and they are not the exception. They were victims of subcontracting chains, which can be long and complex, with several hundreds of companies being involved in one construction project. Often, workers do not even know who their boss is. In the end, this means that no one will take responsibility if – and when – something bad happens. This needs to stop. It is time for the European Commission to act. The EFBWW calls for new rules to limit subcontracting. And we launched a petition to make this happen.
Construction is one of the most relevant sectors for the European economy contributing to about 9% of the EU’s GDP and too important for the Commission to look away.
In construction, subcontracting can lead to major risks of exploitation, fraud, and other labour abuses, especially in a cross-border context. If done in an appropriate way, subcontracting is not necessarily a problem. However, often, companies use subcontracting chains to disguise employment relationships, avoid tax and social security payments, and hide from controls by labour inspection bodies. These subcontractors repeatedly vanish without paying the workers their wage due after months of working.
Additionally, workers’ lives are at stake. In the last four months, we already counted more than 30 fatal victims of accidents in several construction sites in Europe. Subcontracting chains and posting seem to be the common denominator in all these cases. Time pressure? Too little attention to safety rules? Lack of (safety) training? Difficulties in clear communication? Insufficient inspections? It is clear, a lot needs to be done.
Large construction companies often make between 50 to 80 % of their turnover through purchasing and subcontracting. There are many projects with up to 100% “real” activity performed by subcontractors. It is time to put an end to this.
While main contractors are often multinational companies (MNCs), approximately 97% of the workers are employed by medium sized, small, and micro companies. Cost-saving pressure, imposed by clients and main contractors on subcontractors, and tight deadlines often lead to situations in which subcontractors avoid complying with the rules: They do not pay the remuneration according to collective bargaining agreements or minimum wage law, disregard rules on overtime, health and safety, accommodation and transport, or other fundamental workers’ rights. The longer the subcontracting chain, the less transparent and the more difficult to control and enforce existing legislation and collective agreements. Long chains are used by criminal companies to circumvent joint and several liability rules.
This state of play needs a change. We need the European Commission to introduce limits on subcontracting. EU legislation must ensure that subcontracting is limited to a maximum of one or two sub-layers. Also, the permitted percentage of employed workers, the number of tasks, and the percentage of the turnover generated down the subcontracting chain must be limited.
Additionally, EU legislation must ensure that all Member States set rules to limit the subcontracting levels in public procurement projects to a maximum of one or two sub-levels and allow only companies (incl. subcontractors) which engage in collective bargaining to participate in a public contract, and apply full joint and several liability.
All relevant EU rules must be revised so that only companies which pursue a real construction business in their home Member State (‘substantial activity’) are allowed to post workers to another country. Intermediary labour only suppliers must be prohibited to post workers. Posted and migrant workers need easy access to justice.
The European Commission should present a legislative proposal to introduce a European Social Security Pass (ESSP) that will enable real-time access to data during inspections on construction sites. We expect more European support for social identity cards in construction as a tool against social dumping in (cross-border) subcontracting chains, with respect for the autonomy of the social partners involved.
We expect more European support for workers.
