Since 2019, the ETUC is running a project on securing workers’ rights in subcontracting chains, with the financial support of the European Commission. During the second phase of the project, the experts Jan Cremers and Mijke Houwerzijl carried out a screening of all relevant legal provisions to identify existing provisions on subcontracting as well as loopholes and inconsistencies, covering both instruments at the EU and national level.

The group of experts concentrated on legal provisions in national and European legislation regarding the regulation of subcontracting with particular interest to due diligence, joint & several liability and transparency and reporting measures. The outcome of the assessment paints a clear picture of lacking legal provisions to regulate subcontracting through strong binding measures. Labour rights aspects are barely covered in the context of subcontracting but also mandatory shared responsibility, covering both domestic and cross border subcontracting situations, for compliance with legal obligations and labour standards is missing.

This legal analysis was crucial for the elaboration of policy recommendations for a consistent EU approach towards subcontracting.

To secure workers’ rights in supply chains, the ETUC is calling for a general legal framework on subcontracting, with a view to strengthening liability and transparency, and to ensure equal treatment, decent work and effective enforcement throughout the chain.

An EU legal framework on subcontracting should comprise, in particular:

Measures for enhanced liability

• mandatory joint and several full chain liability of contractors should strengthen compliance with legal obligations and labour standards, including applicable collective agreements;
• such liability schemes should cover both domestic and cross-border subcontracting situations, including in the context of public procurement;

Practices for ensuring decent work

• workers’ rights to information, consultation and participation at board-level should be guaranteed as a means for strengthening workers’ influence on corporate behaviour;
• alert systems, control and audit measures and compliance monitoring procedures, such as e.g.  codes of conduct or international framework agreements need to be established in collaboration with workers’ representatives and trade unions;
• subcontracting arrangements to circumvent collective agreements or opt for less favourable ones in the same sector of activity must be tackled. Collective bargaining and applicable collective agreements must be enforced throughout the subcontracting chain.
• the principle of equal treatment and its practical implementation in terms of equal pay for equal work in the same place should be ensured, independently of where the workers come from or how they are contracted;

Standards for increased transparency

• a limitation of the number of subcontracting levels and a prohibition of further subcontracting as soon as labour-only subcontracting enters into a chain should be introduced;
• mandatory non-financial reporting initiatives should be made more effective through the formulation of more precise and binding indicators, asking to ‘comply and explain’ instead of to ‘comply or explain’;
• a binding duty of investigation and verification by the main contractor or leading undertaking of the genuine activity of the subcontractor, its social record and compliance with applicable regulation should be established;

Tools for effective enforcement and access to justice

• solvency guarantees that secure the payment of wages, social security payments and other social obligations must be (re)installed;
• accessible mechanisms for legal redress and recovery should be available for all workers and their representatives to report abuses and enforce their rights;
• dissuasive and effective sanctions and compensations including back payments in case of non-respect of the applicable legislation and/or collective agreements.