Deutscher Gewerkschaftsbund

Wage claim enforced out of court

In the middle of June 2018, a group of Romanian construction workers turned to Fair Mobility Frankfurt am Main for help. Some of the 19 men had been working on a construction site in Neu-Isenburg for several months. Their employer could no longer be contacted and their wages had not been paid for weeks. Moreover, the men lived in the employer's accommodation and were afraid that they would soon be thrown out of it. The client of the construction site was the Gemeinnützige Wohnungsbaugellschaft Neu-Isenburg and the responsible general contractor was d&b-Bau GmbH. On 16 June 2018, the Romanians, accompanied by colleagues from the Rhine-Main district association of the IG BAU union and Fair Mobility, assembled at the construction site and drew attention to their situation. In the negotiations that followed, the general contractor agreed to settle part of their claim.

We spoke to Aura Plesca and Ivan Ivanov from Fair Mobility Frankfurt/Main and to Johannes Schader, industry secretary in the Rhine-Main district association of the IG BAU union, about the prerequisites for and possibilities of reaching out-of-court solutions in such cases.


Interview with Aura Plesca and Ivan Ivanov

How did the Romanian colleagues find their way to your advisory centre?

Aura Plesca: The men had heard about Fair Mobility from other construction workers and called us.

What role did IG BAU play?

Ivan Ivanov: IG BAU accepted its Romanian colleagues as members and agreed to represent them. Normally, a trade union can only provide legal advice and protection after a certain period of waiting. It was important for these colleagues that IG BAU made an exception in this case, because they would then have a large and competent organisation at their side. This significantly improved the colleagues' opportunities to negotiate. In addition, IG BAU in Frankfurt has – sadly, one must say – a great deal of experience in dealing with such situations.

What were the first steps you took?

Aura Plesca: The colleagues were in acute distress. They had no more money for food and were on the verge of becoming homeless. So we had to act very quickly, because, normally when people are thrown out of accommodation, they try to get back to Romania quickly. Or they look for a new job in another European city. But once they've gone, there is usually nothing more we can do for our colleagues.

You then decided to take public action. Why was that?

Aura Plesca: IG BAU claimed the unpaid hours due to its colleagues from the general contractor. The reply to this letter was prompt and stated, as follows, that the general contractor did not know the workers and rejected the claim. However, we had evidence that the colleagues had worked on the construction site. We wished to clarify this contradiction quickly and requested a meeting to talk things over.

Did the public action achieve anything?

Ivan Ivanov: Public pressure led the general contractor to immediately review the contractual relationships on the construction site. Without this action, this review would probably have taken a long time. It turned out that the subcontractor had engaged another subcontractor. The general contractor had probably had no idea of this before the review and that is why the colleagues were not known to the general contractor.

Did the Office of Financial Control of Undeclared Employment (FKS) play a role?

Aura Plesca: Absolutely! We established contact between the FKS and the employees. The FKS has also opened proceedings, but we don't know how they turned out.

As far as I know, you negotiated with the general contractor. What about the direct employer of the colleagues?

Aura Plesca: The direct employer had vanished. We immediately contacted the general contractor on the basis of the client's liability. This regulation gives employees the right to claim from the general contractor at least the net remuneration to the amount of the relevant minimum wage. It is absolutely essential that this regulation exists in Germany. Otherwise the colleagues would be dependent on the good will of the parties involved and, as is well known, rarely does anything come of that.

How did the negotiations go?

Ivan Ivanov: We had the impression that everyone involved was interested in finding a quick solution. Moreover, the building owners of the project, the municipal housing company and the real estate company, which belongs to the Helaba Group, also sat around the negotiating table. They also seem to have exerted their influence on the general contractor, which certainly helped to settle the dispute quickly. The large press response to our action also had a positive impact and rapidly led to a comprehensive review of the facts by the general contractor.

What was the outcome of the negotiations?

Ivan Ivanov: The performance of work worth over €81,000 was recognised. IG BAU had originally claimed a gross amount of €92,000. From this, deductions of €15,800 net that had already been paid out were subtracted. In the end, the colleagues were paid a net amount of €27,000. Normally, in such negotiations, one has to argue very intensively about the number of hours actually worked. And the employees are regularly in an unfavourable situation, because they are the ones who have to prove the number of hours worked. The proof of overtime is often particularly problematic. In this case, too, colleagues worked an enormous amount of overtime. Overall, however, we were able to agree on what I would call a reasonable number of hours worked. Besides that, we were able to agree with the general contractor on the application of the minimum wage bracket 2 in the construction industry. It is vital to note that many employers in the construction industry employed skilled workers, but paid them like unskilled workers. Ultimately, we were able to ensure that those colleagues who had not been registered with the social security institutions were also taken into account.

So are you completely satisfied with the result?

Ivan Ivanov: No, we're not. The general contractor's liability only relates to the net remuneration. In this case, however, the gross claim was assessed with tax class 6. This may be formally correct in individual cases, because some of the colleagues were not registered in Germany. In some cases, however, we had pay slips from individual colleagues for previous wage payments which showed that they had been paid in accordance with tax class 1 or 3. Assessment in line with tax class 6 for all the colleagues concerned meant that they only received about half of the recognised claim. Moreover, the men cannot get their taxes back through wage tax equalisation, because these taxes were not actually paid. I still think that the general contractor could have been more generous here.

How do the construction workers concerned regard the result?

Aura Plesca: The colleagues are generally satisfied. We informed them at an early stage that it was unlikely that their demands would be met in full. And we tried not to raise any false expectations. Of course, their emergency situation contributed to their willingness to recognise the outcome so quickly. Nevertheless, a bitter aftertaste remains.


Interview with Johannes Schader

The Romanian colleagues first turned to Fair Mobility. When did you hear about the case? And why did you decide to support the colleagues?

Johannes Schader: Aura Plesca called me on Monday morning, and in the evening I was at the construction site to find out who the client and general contractor were. On this basis, I was able to clarify with our regional manager whether we could support our Romanian colleagues for political reasons. The following day, our colleagues visited us in the union headquarters. In cases in which we are involved, the possibility of publicly effective action has to exist. This means that the workers concerned must remain in the area. In this case, we were interested in the contracting authorities in the public sector. This has enabled us to address the procurement practice of public contracting authorities.

Now, the colleagues weren't union members, were they?

If such actions are supported by us, the workers concerned have to become members of the union. When they join the union, they have to agree in writing to pay three to six months' dues to the union. Of course, we point out to colleagues that we are interested in them becoming permanent members.

Do you have any criteria as to the cases you act as described in and the cases you refuse to support?

Whenever workers try to enforce their rights individually, we usually have to refuse support because it is then almost impossible to reach an out-of-court agreement through public pressure. We also need the support of Fair Mobility, without which we would not be able to carry out such actions – as in the case of the Romanians. We also need to realise that, in most cases, the concerns of foreign workers cannot be successfully addressed in legal terms. Here too, however, there may be exceptions, for example if an important general contractor or contracting authority is involved or – as in this case – the public sector.

Are you satisfied with the outcome of the negotiations?

Yes and no. Our goal was to get the full refund of net wages with the normal deductions of taxes and social security contributions. What we achieved was the net wages with tax class 6 deductions. Due to time pressure – the Romanian colleagues wanted to go home or take up new jobs – and the ambiguous legal situation, we finally agreed to this settlement.

This isn't the first case you've handled that has involved a great deal of effort. What would you like from your foreign colleagues?

In the negotiations with the general contractor, we and our Fair Mobility colleagues were accused of promoting illegal employment practices through such actions. It was claimed that foreign workers would deliberately enter into employment relationships in which not gross wages but net wages or cash payments were agreed. It is true that these forms of undeclared work are common in the construction industry. Our aim, as trade unions, is to educate our colleagues about their rights and to take action against employers who get a financial advantage from undeclared work and who lure the workers into a trap. We are trying to make this clear to all our colleagues, both domestic and foreign ones. This also includes asking them to make a note of their working hours and the nature of their work. And they should also document the construction site they worked on and prove it, preferably with photos.

What do you demand of politicians so that such forms of wage dumping can be better prevented?

The IG BAU Region Hesse has presented a key issues paper on fair competition, with which we would like to achieve changes in Hesse's public procurement law. Among our demands are the limiting of subcontractor chains to three links, and the monitoring of the subcontractors during construction work by the public authorities or in addition to customs controls, which remain important. Besides that, we demand tangible penalties and, in the case of proven infringements, exclusion from public procurement procedures. That could help.