Are you a contractor outsourcing work to specialist engineering and construction companies?
Have you heard about the subcontracting liability?
The scope of the subcontracting liability is to ensure that in subcontracting chains, the contractor of which the employer (service provider) posting workers is a direct subcontractor can, in addition to or in place of the employer, be held liable by the posted worker with respect to any outstanding net remuneration and/or contributions due to common funds or institutions of social partners in so far as covered by Article 3 of Directive 96/71/EC as amended by Directive 2018/957/EU.
The concept of remuneration must not be understood as the allegedly “decent remuneration” paid by certain subcontractors to their workers, but shall be determined by the national law and/or practice of the Member State to whose territory the worker is posted and means all the constituent elements of remuneration rendered mandatory by national law, regulation or administrative provision, or by collective agreements or arbitration awards which, in that Member State, have been declared universally applicable or otherwise apply.
Can the employer be held liable with respect to outstanding remuneration by the posted worker only?
The national law in certain Member States provides for criminal or administrative sanctions for failure to pay the remuneration due to the worker in accordance with the law/collective agreement.
Example: a bill proposal was recently brought to the Belgian Chamber of Representatives to introduce the concept of “aggravated economic exploitation”, shall be heavily sanctioned (imprisonment and/or high criminal fines or administrative fines).
Last but not least, have you ever quantified the value of reputational damage?
It is not easy to verify and manage a subcontracting chain.
COMIC (digital platform supported by specialised law firms across the EU) brings the solution.
With COMIC a contractor can verify due diligence and monitor subcontractors in one click, and at any moment.
Our “business card”? Most of our clients are imposing COMIC as a compliance label to their subcontractors.
In simple words, using COMIC represents a mandatory contractual requirement.
Two simple steps in granting compliance:
· COMIC = prerequisite to concluding a subcontracting agreement
· no positive compliance check = work may not be initiated (or work will be discontinued)
Tanel Feldman, Immigration Law Associates