Posted: 17 Feb. 2023 2 min. read

Flemish inspection services to get new tools in the fight against chain constructions and illegal employment

Employment, Pensions & Benefits | Legal Newsflash

Social dumping 

Due to labour force and skills shortages, companies are forced to hire specialised contractors who themselves often employ foreign workers or subcontractors

(Sub)Contractors who deploy (foreign) personnel in Belgium must enforce Belgian mandatory salary and working conditions (such as (minimum) wages, salary protection and maximum amount of working hours), if these are more advantageous compared to those of the country of origin. 

In addition, for a.o. construction works, (sub)contractors must also comply with various registration and reporting obligations, such as the LIMOSA declaration and Checkinatwork (the online service for presence registration).

To avoid social dumping, the Salary Protection Act of 12 April 1965, amended by the Programme Act of 29 March 2012, foresees three regimes of joint liability under which a principal and/or contractor can be held liable for salary debts owned by a direct or indirect (sub)contractor towards their personnel.

The current provisions, however, still allow avoiding immediate liability, provided that certain contractual provisions are included in the services agreement, such as a reference to a website mentioning the applicable minimum wages, commitment to pay the minimum wages and/or not to employ personnel staying in Belgium illegally. 

Recent inspections have made it clear that, notwithstanding the regime of joint liability foreseen in the Wage Protection Act, social dumping risks still remain. 

The Flemish Government believes that this is due to the possibility to make use of the above-mentioned contractual provisions.

 

The new draft Flemish Decree to strengthen chain liability 

To counter this, the Flemish Government considers amending the Act of 30 April 1999 on the employment of foreign workers via a Flemish Decree. The Draft Flemish Decree of 9 December 2022 imposes an obligation on contractors (not on the principal) to conduct due diligence checks on their direct subcontractors by requesting specific information needed to assess compliance with the legal provisions regarding the employment of foreign workers.

The Flemish Government will draw up a checklist to this end. If the required information is not available, the (sub)contractor must inform his direct (sub)contractor and request that this information is provided. If the latter does not comply with this request, the former must notify the Flemish social inspection, which can then take appropriate action.

To exclude liability, it will no longer be sufficient to include a contractual clause or obtain a declaration from the direct subcontractor confirming that they do not hire illegal employees. This would tackle constructions meant to evade responsibility in case of illegal employment of foreign workers.

The extent and type of information included in this due diligence obligation is now being determined in consultation with the various sectors. It is expected that the new regulation will enter into force by the summer of 2023.

Key contacts

Stefanie Van de Perre

Stefanie Van de Perre

Director

Stefanie is part of the Deloitte Legal's Employment, Pensions & Benefits practice. She is an employment law and social security specialist, known for her outside the box thinking, innovative and pragmatic solutions for all her clients’ personnel related legal matters. Stefanie is a well know expert for social inspections in Belgium and advises the Belgian government on topics of social criminal law. She wrote a handbook on the topic which is used in the master after master social law. In addition, she advises clients on employment and social security law related aspects of compensation packages, structuring self-employment relations (consultancy and management agreements), the S within ESG and social inspections. Next to that Stefanie was a lecturer at Ghent University College for 7 years.

Stijn Demeestere

Stijn Demeestere

Partner

Stijn Demeestere joined Deloitte’s Global Employee Services in 2013 before becoming head of Deloitte Legal - Lawyers’ Employment, Pensions and Benefits team in 2015. In 2020 he took on the additional role of Talent Partner. As he always wanted to advise and defend the rights of people, becoming a lawyer was a natural choice. Stijn has garnered ample expertise in all legal HR matters and particularly specialises in dismissal law (both individual and collective), maximising flexibility in salary and working conditions, the specific HR needs of top executives (social status, contract drafting) and various types of business reorganisations (M&A, cross-border mergers, outsourcing). Stijn particularly enjoys strategic communications and negotiations at individual and collective levels (social unrest, strikes), finding the spot where flexibility can be introduced against the rigid background of employment law, and is in his element when he can defend or plead in court. The contentious matters he handles are, amongst others, disputes over protected employees, white-collar crime, harassment, and the dismissal of high-level employees following allegations of misconduct. He advises HR directors of large and medium-sized companies, always looking for the right balance and where possible a cost-effective amicable settlement for the client in case of a dispute, and otherwise looking into tailoring individual schemes to the benefit of the company and working out how they can be applied to remuneration, different types of employment. Stijn combines a dry sense of humour with sharp analytical skills. He is regularly interviewed by De Tijd, had a weekly column in Jobat and is frequently invited as speaker at HR Fora. In addition, Stijn has written many books on topics such as protected employees and anti-discrimination as well as articles on, amongst others, the new dismissal legislation, outplacement and the bridge pension. Stijn is recognized by Chambers and Legal 500.

Alexis Ceuterick

Alexis Ceuterick

Partner

Alexis Ceuterick joined Deloitte Legal – Lawyer’s Employment, Pensions and Benefits team in June 2022. Alexis is an employment law and social security specialist and known for finding innovative and pragmatic solutions for all his clients’ personnel related legal matters, from onboarding to offboarding employees. Alexis advises both Belgian and international companies. His main focus areas are employment and social security law related aspects of compensation packages, structuring self-employment relations (consultancy and management agreements). He often negotiates with unions in matters related to compensation, working time or in the event of a collective dismissal. Alexis also advises on the employment, social security and pensions aspects of corporate restructurings (mergers and acquisitions), including cross-border transfers of employees. Alexis has extensive experience advising corporate clients in the financial industry, especially relating compensation and benefits related matters. In addition, Alexis is a frequent speaker at seminars/webinars and (co)author of various legal publications.