28th May 2023


How EU rules still allow social dumping through subcontracting

  • In Antwerp, subcontracting companies recruited up to 174 workers from non-EU countries like Ukraine, Bangladesh, Turkey or the Philippines (Photo: Sol)
Listen to article

Last summer, Belgium and Europe woke up to one of the worst cases of social dumping in recent history.

A documentary, "Qatar along the River Scheldt", uncovered the human trafficking scandal at a construction site of the chemical company Borealis in the Belgian city of Antwerp.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Subcontracting companies recruited up to 174 workers from non-EU countries like Ukraine, Bangladesh, Turkey or the Philippines. Once in Europe, these highly-skilled workers were mercilessly exploited, including through late or non-payment of salaries, bad housing and lack of safety at work. One worker would later testify that he had worked under better conditions in certain Gulf countries.

Unfortunately, a series of recent scandals throughout Europe illustrates these practices are no longer the exception in the European Union. Nor are they merely a problem of illegality.

A new study commissioned by The Left in the European Parliament sets out how even legal forms of subcontracting have become the business model for exploiting workers in the European Union.

Silvia Borelli, professor of labour law at the University of Ferrara, and author of the study, highlights how European rules on subcontracting allow employers to separate power and profits from risk and responsibility, such as wages and working conditions.

Even bona fide subcontracts pose structural problems, weakening workers' rights and protection in order to comply with conditions imposed by the lead company or the main contractor.

The consequences are often dramatic for workers. The complex webs of tangled contracts allow big companies to conceal their role and evade liability when accusations of exploitation and abuse surface. The work of labour inspectors becomes particularly difficult.

To make matters worse, subcontracting also negatively impacts power relations in the workplace. It fragments the labour force entrenching inequality and precariousness, negatively affecting labour movements and workers' bargaining power.

Under pressure from trade unions and workers' mobilisation, some countries have responded with legislative initiatives.

Letterbox loophole

Germany banned subcontracting in parts of the meat industry. Spain banned temporary agency or interim work in high-risk sectors. Italy and Spain, for instance, included "job security clauses" in their public procurement legislation.

However, current EU-law still actively promotes subcontracting, mainly in order to stimulate competition and competitiveness. This, however, goes the detriment of workers' rights and labour law.

Subcontracting should be the exception not the rule. Therefore, as Borelli study shows, we need a European regulation for decent work in the subcontracting chain.

Aside from banning subcontracting in particularly dangerous services and limiting the length of subcontracting chains, a core aspect of such a regulation would be to hold the lead company jointly and severally liable for the conditions of the employment contracts throughout the chain.

This will allow workers to seek redress if the subcontractor fails for whatever reason to fulfil its obligations. The direct joint and several liability currently established in the 2014 Enforcement Directive for posted workers is limited to one link in the chain only, and therefore relatively easy to circumvent by, for example, inserting a letterbox company.

In order to combat inequality and avoid a race to the bottom on working conditions, to the extent possible, workers of subcontractors should be guaranteed the terms and conditions of employment that would be applicable if they were employed by the lead company or the main contractor.

Additionally, the study is right to call for amendments to the European Commission's proposal for a Directive on corporate sustainability due diligence to increase transparency, establish liability and involve unions and worker representatives throughout the process.

Author bio

Marc Botenga is a Belgian MEP with The Left.


The views expressed in this opinion piece are the author's, not those of EUobserver.

Brussels unveils rules for Uber, Deliveroo, and other gig workers

The European Commission has unveiled a proposal aimed at improving employment conditions for gig workers, such as Uber drivers or Deliveroo riders. But industry players claim new rules would lead to the loss of thousands of jobs in the EU.

Gig economy workers need EU to end digital modern-day slavery

On Wednesday, the European Parliament is to adopt a report calling on the EU Commission to propose laws to better protect platform workers. The S&D want to ensure platform workers can be considered employees, with full social and worker's rights.

'Frustration' over the Porto Social Forum's plans

Two years after the Porto social summit, what progress has been made in the EU-27? Has it been enough? This Saturday, different stakeholders meet again to answer those questions.

How the EU's money for waste went to waste in Lebanon

The EU led support for the waste management crisis in Lebanon, spending around €89m between 2004-2017, with at least €30m spent on 16 solid-waste management facilities. However, it failed to deliver.

The EU needs to foster tech — not just regulate it

The EU's ambition to be a digital superpower stands in stark contrast to the US — but the bigger problem is that it remains far better at regulation than innovation, despite decades of hand-wringing over Europe's technology gap.

EU export credits insure decades of fossil-fuel in Mozambique

European governments are phasing out fossil fuels at home, but continuing their financial support for fossil mega-projects abroad. This is despite the EU agreeing last year to decarbonise export credits — insurance on risky non-EU projects provided with public money.

Latest News

  1. How the EU's money for waste went to waste in Lebanon
  2. EU criminal complicity in Libya needs recognition, says expert
  3. Europe's missing mails
  4. MEPs to urge block on Hungary taking EU presidency in 2024
  5. PFAS 'forever chemicals' cost society €16 trillion a year
  6. EU will 'react as appropriate' to Russian nukes in Belarus
  7. The EU needs to foster tech — not just regulate it
  8. EU: national energy price-spike measures should end this year

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us