European Parliament calls for EU framework to combat exploitation.

On 12 February, the European Parliament adopted an own-initiative report on addressing subcontracting chains and the role of intermediaries in order to protect workers’ rights. In the report, Members call for an EU framework to tackle labour exploitation, including illegal employment as well as abusive subcontracting and labour intermediation.

Call for a comprehensive EU strategy

Through the report, Parliament urges the European Commission to step up its efforts to combat labour exploitation and to present a comprehensive EU strategy. Labour exploitation – for example through illegal employment or abusive subcontracting – violates workers’ and human rights and at the same time undermines fair competition in the single market. MEPs are particularly critical of long subcontracting chains: outsourcing core business activities can lead to fragmented and unsafe workplaces, reduced transparency and weaker accountability. Workers are more frequently exposed to low pay, excessive working hours and occupational health and safety risks. The report therefore emphasises the importance of direct employment relationships, especially in high-risk sectors.

Stronger enforcement and mutual recognition of sanctions

Parliament also calls for better enforcement of existing rules and closer cross-border cooperation. It advocates strengthened collaboration between the European Labour Authority, Europol, national authorities and the social partners. One concern is that individuals subject to a trading prohibition in one Member State can currently circumvent such restrictions by establishing a business in another Member State. To close such loopholes, MEPs call for improved information exchange and the mutual recognition of trading prohibitions and criminal sanctions. Sanctions for work-related crimes and violations of workers’ rights should be effective, proportionate and dissuasive.

Diverging positions among political groups

The debate on the eve of the vote revealed a political divide within Parliament, which was reflected in the final result: 332 votes in favour, 209 against and 33 abstentions. Groups on the left of the political spectrum called for an EU directive introducing clear liability rules along the entire subcontracting chain and limiting its length. Liberal and conservative groups, by contrast, warned against additional bureaucracy and stressed the importance of subcontracting models for small and medium-sized enterprises (SMEs), competitiveness and innovation.

Divided views among the social partners

The social partners are similarly divided. The European Construction Industry Federation (FIEC), like BusinessEurope, opposes a new stand-alone EU legal act and refers to the freedom to provide services under Article 56 TFEU as well as to the highly fragmented structure of the sector, characterised by many SMEs. Instead of additional regulation, they advocate stronger use of existing instruments, for example through reinforced liability rules under the Enforcement Directive to the Posting of Workers Directive. By contrast, European trade unions – including EFFAT, EFBWW and ETF – support a directive limiting subcontracting chains. They argue that direct employment should be the rule and call for comprehensive joint and several liability throughout the chain.

Outlook

As this is a non-legislative own-initiative report, it does not create a binding obligation for the European Commission to act. In the plenary debate prior to the vote, Executive Vice-President Roxana Mînzatu referred to the ongoing preparations for the Quality Jobs Act and the Fair Labour Mobility Package. The aim, she underlined, is to strengthen the protection of workers while recognising subcontracting models as a legitimate business practice subject to effective regulation and control.