Deutscher Gewerkschaftsbund

Transnational cases

DGB/ Stefan Glöde

Munich – Ljubljana – Mannheim

Marko Tanasić is a former police officer. Today, he works for the Confederation of Free Unions in Slovenia. The union representative benefits from his experience in law enforcement, as he often deals with the illegal practices of companies whose business models are founded on wage fraud. This summer, Marko Tanasić received a call from a construction worker from Bosnia-Hercegovina who was working in Germany. The caller explained that he had been hired by a Slovenian employer along with nearly a dozen colleagues. They were working at a construction site near Munich and had run into problems with their accommodations.

Tanasić forwarded the enquiry to Dragana Bubulj, a union representative who works as a counsellor for Fair Mobility in southern Germany and speaks Serbo-Croatian. “We communicate quite effectively”, Bubulj says, “I got to know Marko through the Fair Posting Project.” The counsellor got in touch with the construction workers. The employer who is responsible for paying the costs of accommodations in Germany had failed to pay the rent. The Slovenian firm told Dragana Bubulj that it was experiencing cash-flow problems, claiming that the client – a major Bavarian construction company – had not paid its bills.

The construction workers were forced to leave their accommodations and sleep at the construction site. Furthermore, it turned out that the men were still waiting for part of their wages. Dragana Bubulj and Marko Tanasić discussed the matter and decided to issue payment notices for the outstanding wages of the affected construction workers – to both the Slovenian employer and the Bavarian general contractor.

Their efforts were successful. “Following tough negotiations, the general contractor agreed to pay the workers the net minimum wage”, explains Dragana Bubulj. “The minimum wage in the construction industry is currently set at 11.30 euros per hour and skilled workers earn 14.70 euros. All in all, we settled for 23,000 euros.” The reference to the general contractor’s liability was helpful in the process. According to Art. 14 of the Posting of Workers Directive, the general contractor is liable for the net minimum wages of posted workers. Thus the general contractor assumes the risk in the event that a subcontractor fails to pay its workers.

The payment notices sent to the Slovenian employer were returned unopened – a familiar trick used to delay proceedings in cases involving wage fraud. Marko Tanasić had initiated just such proceedings against the Slovenian company. Further research into the matter revealed that the company had also cheated the posted workers out of their social security insurance contributions. Using falsified documents allegedly signed by the construction workers, the Slovenian company had retroactively deregistered the Bosnian workers with the social security insurance providers – thereby defrauding the construction workers - whose qualifying periods for unemployment insurance were consequently not recognised - and the Slovenian social security insurance system.

The company threatened Tanasić, stating that it would make sure that the union representative was forced to leave Slovenia if he continued to involve himself in its business affairs. But Marko Tanasić refused to be intimidated, and filed another complaint. He was unwilling to give up, but he also knew that the system is faulty. It is relatively easy to launch a company in Slovenia and the low hurdles are easy to overcome. Letterbox companies make money from posting, without setting aside reserves or undertaking any other business activities. Clients benefit from the favourable offers made by disreputable subcontractors. Compared to the potential profits, the risk is relatively low –general contractor liability notwithstanding – because every individual has to assert his own claims for payment of wages. Without the support of experts like Dragana Bubulj and Marko Tanasić, most construction workers would hardly succeed.

Sofia – Bavaria – North Rhine-Westphalia

Twelve construction workers appeared at the Fair Posting Network Advisory Centre in Sofia in the spring of 2018 and claimed that they had been cheated out of their wages. They addressed their problem to Neli Botevska and Velichka Mikova. These two counsellors work for the Confederation of Independent Trade Unions in Bulgaria (CITUB).

The men had been hired by a Bulgarian company, which then sent them to work in Germany. The Bulgarians had spent the whole summer working in the civil engineering sector in North Rhine-Westphalia and Bavaria. The contract for expansion of the broadband network had been awarded by the respective communal governments to two major German telecommunications firms. One of the workers reported that he had worked 600 hours from June to the end of August, but had received only a single advance of 770 Bulgarian Lev (approx. 385 euros).

The two union representatives from Fair Posting filed a complaint with the labour inspection agency in Sofia, which investigated the case and affirmed the claims for outstanding wages. The company was ordered to pay a fine. Several of the construction workers have now sued for their wages in court. The case was reported on Bulgarian television.

According to the client liability provisions set forth in Art. 14 of the Posting of Workers Act and Art. 13 of the Minimum Wage Law, both the Bulgarian company and the German client are responsible for the payment of wages. Consequently, Velichka Mikova and Neli Botevska engaged their network and contacted the Fair Mobility Advisory Centre of the Deutscher Gewerkschaftsbund (DGB). Ivan Ivanov is now supporting his Bulgarian colleagues from Frankfurt (Main). Ivanov will write to the German client and assert the construction workers’ claims for payment of back wages.

Mannheim – Zagreb – Ljubljana

Mannheim, summer 2017. Two Croatian workers visited the Fair Mobility Advisory Centre of the Deutscher Gewerkschaftsbund. The workers had worked in the metal processing industry in Herten for several months, but had received only a partof their wages from the employer.

DGB counsellor Dragana Bubulj asked them about their contracts and where they had worked. The Croatians were working for a general contractor from Thuringia, but their employer was a company based in Varaždin, Croatia. The employment contracts concluded by the Croatian firm with the Croatian workers (in German), specified gross wages of 800 euros for a 40-hour week. The possibility of posting was also cited in the contract. The contract specified that if they were posted, they would be paid in accordance with the laws of the country to which they were assigned. The two workers were told that they could expect to earn eight euros gross per hour in Germany.

The workers were not informed that the statutory minimum hourly wage in Germany was set at 8.84 euros, or that even higher gross wages were customary in the metal industry in accordance with collective labour agreements. Neither of the men possessed an A1 certificate, which posted workers are required to present as evidence of social security insurance coverage. They were also uncertain as to whether such a document had been issued by the company.

Dragana Bubulj and her colleague Sunčica Brnardić from the Croatian Trade Union Confederation in Zagreb got to work immediately. On the basis of the workers’ notes and their working-time records, they wrote payment notices (in German and Croatian), but received no response at first.

They eventually reached an employee of the German general contractor. He explained that the payments had been made to the subcontractors and that his employer did not consider himself liable and refused to make further payments to the workers. The subcontractor operated under the name of Kadra, and was obviously a Slovenian company, as the union representatives discovered. They contacted their colleague Marko Tansic in Ljubljana, who knew immediately which subcontractor they were talking about. The subcontractor had since gone bankrupt, however, and disappeared from the market. Furthermore, the German general contractor stated that he had already severed business relations with the subcontractor due to irregularities. According to the German Posting of Workers Act, the general contractor is to be held liable in such cases, but if the general contractor refuses to meet its obligations, the affected workers have no choice but to pursue their claims in court. Many workers are hesitant to do so in view of the risks involved in litigation – as were the workers in this particular case.

Contact

DGB Bildungswerk Bund
Michaela Dälken
Hans-Böckler-Straße 39, 40476 Düsseldorf
E-mail michaela.daelken@dgb-bildungswerk.de
Telephone +49 211 4301-198

 

DGB-Projekt Faire Mobilität
Dominique John
Kapweg 4, 13405 Berlin
E-mail mobilitaet@dgb.de
Telephone +49 30 21240540

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Funding

This publication has received financial support from the European Union Programme for Employment and Social Innovation “EaSI” (2014-2020). The information contained in this publication does not necessarily reflect the official position of the European Commission.