What changed between the draft committee report and the plenary report

Workers in sectors such as construction, agriculture, domestic work, transport and logistics, meat and food processing, cleaning services, hospitality and care work are the backbone of our economy. At the same time, in most European countries, these are sectors that are plagued by persistent levels of abuse, exploitation and fraudulent competition, harming workers as well as legitimate businesses, especially SMEs.

Several tragic workplace incidents in recent years across Member States have exposed the real human costs of losing control over who is ultimately responsible for ensuring compliance with basic health and safety and employment standards, raising fundamental concerns about legal accountability, traceability and control over working conditions.

At the same time, Europol has warned that almost all of Europe’s most threatening criminal networks are using legal business structures to gain a foothold in the European economy, with logistics, cash-intensive businesses and construction being particularly affected.

In today’s security landscape, the lack of oversight can also present opportunities for hostile actors seeking to gain information on, or disrupt, critical infrastructure, or gain access to security sensitive workplaces.

There is not one single factor driving labour exploitation and the risks it represents to European workplaces. However, there are certain variables that keep recurring in national and European studies as well as in reports from enforcement authorities. One of those is the increasing reliance on long and complex subcontracting chains and the other is the presence of abusive labour intermediation. Together these two interconnected practices make it more difficult for authorities to prevent and detect fraudulent or criminal actors from entering a workplace.

For many workers and businesses on the ground, this does not come as a surprise. The rise of workplaces without adequate control and where responsibility is divided up, diluted and pushed downstream has been the source of discontent for many years.

In response to these challenges, Member States have tried to step up, tightening controls and taking action to prevent the most common forms of abuse. They have made efforts to limit long subcontracting chains, strengthen liability requirements, increase information exchange and set up specific control units focusing on detecting and rooting out labour exploitation and abuse. National and sectoral social partners have also stepped up to the challenge and taken autonomous initiatives to help clean up their sectors as well as jointly pushed their governments to do more. It is clear these efforts have had important positive effects, but it is also clear it is not enough and that more needs to be done.

The challenges are particularly felt when dealing with companies operating across borders, as cross-border cooperation between enforcement authorities, information exchange and legal frameworks have not kept pace with the developments on the ground. Without a united European response, it becomes easier for fraudulent and criminal actors to exploit weaknesses of the Single Market. There are also several instances where Member States have faced legal challenges when taking action against labour exploitation and to ensure fair competition, often with reference to Union law.

Labour exploitation in general, and abusive forms of subcontracting and labour intermediation in particular, therefore requires a coordinated response at European level.

A successful response to these challenges must mean making the business-models of fraudsters and criminals unprofitable, thus protecting workers and making life easier for all law-abiding businesses. This response should be based on three pillars:

1. Prevention, making it as hard as possible to engage in fraudulent activities

2. Control, making the risk of discovery as high as possible

3. Sanctions, making sure the consequences are strongly felt by those who get caught

Ultimately, I hope this report will provide an impetus for intensifying the fight against labour exploitation with a focus on abusive forms of subcontracting and labour intermediation, gathering broad support from across the political aisle and from social partners. While opinions may differ on the precise solutions, it is my sincere hope that we can all depart from the shared recognition that these problems on the European labour market are real, intensifying and in need of urgent attention.