Confederations: Proposal to extend contractors’ liability is not effective enough

The Act on the Contractor's Obligations and Liability when Work is Contracted Out has been in force since 2007. Now, the working group at the Ministry of Employment and the Economy has examined the need to revise the Act.

The Act stipulates that before entering into agreements with subcontractors and temporary work agencies, a contractor must ensure that the subcontractors and agencies are reliable and comply with terms of employment.

Wage dumping still possible

Working group representatives from the three confederations Akava, SAK and STTK included an additional resolution to the working group’s final draft which stresses that the proposed changes do not address nor will help in solving the problems of wage dumping.

Trade union confederations say that the proposals do not attempt to revise the whole Act, as was intended. The anticipated results or benefits such as an increase in tax revenue are unlikely to bear fruit.

The main unresolved problem in the proposal concerns subcontracted work from abroad, the confederations say. Wage dumping would still be possible.

More responsibility to subcontractors

Furthermore, the confederations take the view that subcontractors should be also obliged to bear responsibility.

The working group proposes that the contractor's obligation to check be altered with regard to data related to taxation and pension insurance and be expanded to include provision of occupational healthcare.

The working group would also like to see harsher consequences for negligence. The minimum fine for negligence would be set at 2,000 euro and the maximum at 20,000 euro. It could be prescribed when a contractor neglects their obligation to check. At present the maximum fine is 16,000 euro.

Another working group proposal would introduce a higher negligence fine that would range between 20,000 euro and 65,000 euro. It would be used when a contractor has signed a contract with a partner that is banned from conducting business operations. It would also be prescribed when the contractor is aware of the fact that the partner will not fulfil payment liabilities.

Heikki Jokinen