Deutscher Gewerkschaftsbund

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-Herzegovina 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 accommodation.

Tanasić forwarded the enquiry to Dragana Bubulj, a union representative who works as an advisor 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 advisor got in touch with the construction workers. The employer who is responsible for paying the costs of accommodation 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 accommodation 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 the payment of wages. Without the support of experts like Dragana Bubulj and Marko Tanasić, most construction workers would hardly succeed.