Sunday, July 21, 2024

Breaking the chains: subcontracting in the EU

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The incoming European Commission should put forward a legislative initiative limiting the length of subcontracting chains.

Breaking the chains: subcontracting in the EU
Inspecting a construction site becomes a lot more complicated when there are multiple levels of subcontracting (Zivica Kerkez / shutterstock.com)

December 2023, Sundbyberg, Sweden: five workers died after the construction lift they were in fell from the eight floor. Four days after the accident, the contractor still could not say with certainty if they were his employees.

If one looks across Europe, a dark picture emerges of the state of the labour market. Workplace accidents, labour exploitation, tax evasion and criminal infiltration are at alarming levels.

The number of victims are staggering. One of the largest scandals in recent times concerned 174 potential victims of human trafficking at a construction site in the port of Antwerpen. These people were brought to Belgium to work via what appeared to be an intricate web of international subcontractors and abuse of labour-migration rules.

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Last year, a police investigation was launched against a subcontractor employing hundreds working at a building site in Kemi, Finland. The company is suspected not to have followed Finnish working conditions or collective agreements regarding salaries.

Work-related crime and labour exploitation are not just limited to construction. They have also appeared in transport, cleaning and food.


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Reports of exploitation of workers creating a hotbed for infection during the pandemic, revealed in the German meat-packing scandal, are still fresh in the mind. As is last week’s shocking revelation that an undocumented Indian farm worker in Italy died after being abandoned with his arm severed in a work accident.

Increased risk

We have known for a long time that complex and long subcontracting chains, including the engagement of labour intermediaries, are a key part of the problem. How can one control a workplace if the contractor hired to do the job contracts yet another to do it, who in turn contracts a third … and so on?

When Swedish trade unions investigated the site in Sundbyberg, they found 119 contractors, spread across five levels. As these chains become more extended, it becomes more difficult for primary contractors, labour inspectors and trade unions to monitor labour conditions and enforce collective agreements. This opacity leads to increased risk of poor working conditions, bogus self-employment, outright labour exploitation, work-related accidents and death.

According to the European Federation of Building and Woodworkers, the European Federation of Food, Agriculture and Tourism Trade Unions and the European Transport Workers’ Federation, ‘workers in subcontracting chains work longer hours, receive lower wages and suffer more insecurity’. The three union federations highlight the role of labour intermediaries and the link with exploitation in the subcontracting chain. The city of Copenhagen control unit found that construction contractors relying to the full on subcontracting were strongly over-represented in infringement cases related to their sites.

The intricate web of subcontracting can also obscure financial transactions, making it easier to integrate illicit funds, launder money, hide income and evade taxes. This not only harms workers but also increases the risk of criminal infiltration, subjecting serious, law-abiding companies to unfair competition and even forcing some into bankruptcy.

According to a European Commission study on workers in subcontracting chains, ‘The lower the levels in the subcontracting chain where labour intermediaries are involved, the more difficult it is to detect them and hold them accountable for infringements.’ But these problems can and must be addressed.

Decisive action

Following the 2020 meat-packing scandal, Germany showed the way in banning subcontracting in the sector. Norway has a rule limiting levels of subcontracting to two in construction and cleaning. In Sweden, several private construction companies have made similar pledges, seeking to avert site problems and non-compliance lower in the chain.

These examples show it is possible through decisive action to tackle the problems associated with long subcontracting chains. But they also bear witness to the international dimension of subcontracting and why it needs to be tackled on the European Union level.

The EU must now pursue a legislative initiative to limit the length of subcontracting chains in sectors at risk of labour exploitation and work-related crime, including but not limited to construction, transport, cleaning and food. It should also increase responsibility within and equal treatment across subcontracting chains and include regulation of labour intermediaries, bolstering the effectiveness of labour inspections and reinforcing our recent win on due diligence in corporate supply chains.

Such a legislative initiative would make sure that the transparency necessary to ensure health and safety, as well as to prevent fraudulent practices, becomes the norm in the EU.

As Socialists and Democrats, we believe it should be one of the group’s key social demands of the next commission president.

This is very important to workers in sectors where the idea of a social Europe often seems the most remote and where the far right is trying to mobilise anti-European sentiments. It would be a concrete way to show Europe can and will deliver for them.


Johan Danielsson is a member of the European Parliament from Sweden, having previously worked as EU co-ordinator at the Swedish Trade Union Confederation, LO.

Marc Angel is a vice-president of the European Parliament from Luxembourg.

Gaby Bischoff is a member of the European Parliament from Germany, a vice-president of the Socialists and Democrats group and a vice-chair of the Committee on Constitutional Affairs (AFCO).

Eero Heinäluoma is a member of the European Parliament and former deputy prime minister of Finland.

Marit Maij is a member of the European Parliament from the Netherlands.

Evelyn Regner, an Austrian MEP, is a vice-president of the European Parliament and former chair of its Women’s Rights and Gender Equality Committee.

Kathleen Van Brempt is a member of the European Parliament from Belgium and a vice-president of the Socialists and Democrats group.

Marianne Vind is a member of the European Parliament and a former deputy minister of labour in Denmark.

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