How complex subcontracting chains are driving exploitation, social dumping, and a race to the bottom in European road transport
The parcel that arrives at your door has likely travelled through a labyrinth. A common practice for subcontracting in road transport is the following: A client places an order with a transport supplier. This could be a transport company that employs its own drivers, or a logistics company provided with a wider service than only road transport, or a freight forwarder who does not own assets and would always subcontract to others. The company that ultimately carries the load and its drivers would often not even know which companies are involved in the contracting chain. Many transport companies subcontract work to others. This is common in the industry and is not always a problem. It becomes a problem when the subcontracting chain is long and unclear. In these cases, both companies and drivers may not know the rules, compliance standards, or human rights requirements set by the main contractor. When responsibility is unclear and oversight is weak, exploitation and social dumping are more likely to happen.
This is not a hypothetical. Since last summer, a group of truck drivers from Tajikistan have been living in their trucks on Western European roads, with no proper rest facilities, non-transparent wages, and working conditions that flagrantly violate EU Posting of Workers rules and indicate human rights violation. Employed in Lithuania but operating across Western Europe, they have been subcontracted to companies based in Austria and the Netherlands. The ultimate clients of the transports have not even been aware of their loads beeing subcontracted or the valuations take place. The Dutch police stepped in to protect the drivers from employer retaliation, and the ETF affiliates FNV Transport & Logistiek and FNV Havens are standing by their side. Client companies are made aware of the situation and do not always act. This is exploitation hiding in plain sight, made possible by the opacity of subcontracting chains.
Drivers bear the heaviest burden of these chains and often suffer retaliation when they report about their situation. As a recent report from the European Labour Authority (ELA) noted, complex subcontracting chains “can help to disguise the driver’s formal employer and it becomes difficult to assess, both for authorities and drivers, what rules and entitlements apply to them.” Subcontracting chains are also used to curb labour costs and generate abusively low prices, enabling social dumping and a race to the bottom.
The Solution: An EU Directive on Subcontracting
The European Transport Workers’ Federation (ETF), alongside the trade union federations from construction (EFBWW), and food and agriculture (EFFAT), is calling for an EU Directive on subcontracting. The demands are clear and proportionate:
- Limiting subcontracting chains to a maximum of two levels. Endless chains serve no legitimate business purpose. They exist primarily to obscure responsibility and reduce costs at the expense of workers.
- Ensuring equal treatment across subcontracting chains by establishing joint and several (full chain) liability, ensuring all entities (client, contractors and subcontractors) are accountable. This should cover a range of issues including remuneration, social security contributions, taxes, health and safety, and collective bargaining rights.
- Regulating labour intermediaries by standardising the role and responsibilities of recruiting and placement agencies, and other intermediaries across the EU.
The Road Ahead
The European Parliament has recently adopted a report that opens the way to an EU Directive to limit subcontracting, after years of trade unions’ struggle. The European Commission must now follow through. An EU Directive on subcontracting can close the legal loopholes that make exploitation structural, restore transparency to chains deliberately made opaque, and ensure that the cost of cheap transport is not silently borne by workers at the end of the line.
The chain ends somewhere. In road transport, it ends with the driver. It is time to make sure the law reaches them.
Read more here:
EFBWW-EFFAT-ETF joint campaign and demands
ETF article: EFBWW EFFAT ETF’s Voices heard
ELA report: Innovative approaches to tackle undeclared work in the road transport sector
