Subcontracting has experienced a boom in recent decades that has benefited a great number of enterprises; however, it also means that labour is externalised to subcontractors and employment agencies. Subcontracting is increasingly misused by main contractors to circumvent their legal and financial obligations with the aim of reducing labour costs. Evidence points out that a great number of social fraud cases exist in long and complex chains of subcontracting.

As mobility of workers and services in the EU increases, the issue of subcontracting becomes even more problematic: companies that are interconnected in the same subcontracting chain are subject to different rules, depending on the country where they are established. ETUC strongly supports the idea of having clear rules in terms of social responsibility of undertakings in subcontracting chains that cover the whole chain. This can only be achieved by introducing an instrument on joint and several liability at European level.

ETUC Confederal Secretary Catelene Passchier stated: ‘This issue is very important as one element of a package to ensure that the internal market for services is developing in a context of social responsibility. Providing for clear rules that prevent unfair competition on wages, working conditions, taxes and social security is not only in the interest of workers, but also of companies and especially of small and medium-sized enterprises who are currently suffering from such unfair competition. We urge the Commission now to take the necessary action’.