Principle
We talk
about forbidden posting when an employer provides its employees to a user who
has any part of the authority over these workers that normally accrue to the
employer.
It is
therefore essential that the receiving company (the Belgian client) must not
behave as an employer in respect to the employees of the foreign service
provider.
The
inspection services that check this, will conclude a prohibited posting from
following elements: when the Belgian client is giving instructions directly to
the staff of the service provider, provides transport and housing, the own
staff mixes with the staff of the service provider, when the staff of the
service provider is not working with their own material, ...
However,
the law expressly prescribes that, in the context of a posting following
matters will not be considered as the exercise of employers ' authority:
the
observance by the user of the obligations on well-being at work;
instructions
provided by the user in performance of the contract that connects him with the
employer, both in terms of working and rest periods as in respect of the
implementation of the agreed work.
As a result
of this, it is extremely important to have a contractual agreement in which the
work to be carried out is described accurately. An additional security can be
built in by pointing out 1 representative of the service provider to which the
contact person of the client can give any instructions in relation to the
performance of the contract.
It is this
representative – that so is employed by or associated with the service provider
– that effectively gives further instructions to the staff of the service
provider. Hence it is appropriate to this arrangement also expressly
contractually negotiable and included in the contractor agreement.
It is this
representative – that is employed by or associated with the service provider –
that effectively gives further instructions to the staff of the service
provider. Hence it is also appropriate to expressly and contractually negotiate
this arrangement and include it in the contractor agreement.
Sanctions
In the case
of prohibited posting, this can lead to multiple sanctions, including:
the user
and the posted workers are considered to be connected by an employment contract
of indefinite duration.
Note: when
there is a prohibited posting, the Belgian client and the employees of the
external service provider deemed to be connected by an employment contract, while no
work permit nor labour card was requested.
Therefore,
the inspection services investigate in an active way if there is any prohibited
posting, because they then can prove that there also are offences on the law of
30 April 1999 stating that the application for a work permit – card is required
for subjects of the 10 new EU Member States (this law contains very strict
criminal penalties).
The user
is, together with the service provider, jointly and severally liable for the
payment of social security contributions, wages and allowances arising from the
employment contract.
Criminal
penalties for infringement of the rules on posting:
-imprisonment
of eight days to one month and/or a fine of 26 to 500 EUR (x 5.5) that is
applied as many times as there are workers in violation with a maximum of
50,000 EUR (x 5.5);
-If the
hearing Labour officer does not move to
prosecution, an administrative fine of 50 up to 1,250 EUR can be imposed,
multiplying by the number of employees in violation with a maximum of EUR
20,000.
Circumvention of the legislation on work permits
and cards
The
inspection services are very suspicious when it’s about working with
subcontractors from the new EU Member States. It’s very difficult for them to
discuss the validity of an A1 form, while on the other hand, it is known that
such forms are awarded rather ' smooth ' by the authorities of certain new
Member States.
Hence, the
inspection services, even if the posting is valid and there is no attempt to
show that posting is prohibited, will try to show that the mounted structure is
intended to get round with the regulations
of the law of 30 April 1999 (on work permits and licenses).
This law of
30 April 1999 contains a regulation that sanctions the collaboration in the
case of bypassing the law. So it is not
because the Belgian client could not be seen as an employer of foreign workers,
that there is no penalty possibility on the basis of the law of 30 April 1999.
The
aforementioned regulation on participation in bypassing the law was till now rarely
or never applied. We, however, understand
from the inspection services, that they intend to use this regulation to avoid bypass
constructions.
Abuse of the weak position of foreign workers
Another regulation
that is used by inspection services to avoid constructions with foreign
sub-contractors, is ended since the law of 10 August 2005. Until this law the
abuse of the weak position of foreign nationals in itself was punishable.
However,
the law of 10 August 2005 concretized this abuse on the basis of human
trafficking and slumlords.
Although
these charges are subject to terms and conditions and on first sight not seem
to be apply, the Belgian client possibly still can be prosecuted as the
accomplice (an accomplice is someone who necessarily provides help to a crime),
when the Bulgarian contractor would commit these crimes in respect of its
employees.
In our
view, these sanctions will certainly may apply, when it appears that the
Belgian client (with it) is responsible for the housing of the concerned
foreign workers.
Therefore it’s most important that only the
foreign employer is responsible for the housing of its staff in Belgium (e.g.
by taking out a rental contract) and that the workers certainly not will be
housed in buildings of the Belgian client (or of its connected companies or
persons).
Withholding obligation and joint liability,
mandatory declaration
The
European Court of Justice has held that the withholding obligation for the tax
authorities was in conflict with the European legislation and hinders the free
movement. In the meantime, the tax authorities stated that the tax deduction for EU contractors no longer has
to be done.
In
addition, when working with a contractor or subcontractor the joint and several
liability with regard to the payment of social security debts of the contractor
or subcontractor was valid. There was also a joint and several liability for
the payment of the tax debt of the contractor or subcontractor.
Following
the aforementioned judgment of the Court of Justice the Government had a law
ready to radically change the system of contractors, both on tax and social
security level. This draft of law was incorporated into the design of program
law that was submitted on 4 April 2007 by the Government in the House of
representatives and finally incorporated in the program law of 27 April 2007,
Belgian Official Gazette 8 May 2007.
The purpose
of the new regulation is that the withholding obligation and joint and several
liability no longer automatically apply, as soon as one has referred to a
contractor.
Via an
electronic database one can then determine whether such debts exist. This new system came into effect on
1 January 2008.
The
database for social security debts was ready on 1 January 2008 and is now
operational. The concrete modalities of the withholding obligation are governed
by the Royal Decree of 27 December 2007, Belgian Official Gazette of 31 december
2007, Fourth Edition.
Finally, we
bring you the notification obligation in memory for contractors and
subcontractors (article 30 bis § 7 of the SOCIAL SECURITY Act).
Before starting
the job, the contractor, on which the client referred to, should give to the
civil service, according to the
modalities fixed by the King, all the right information necessary to estimate the
nature and importance of the work and to identify the client and, where
appropriate, and at every stage, also
the subcontractors.
If, during
the execution of the work other subcontractors intervene, this contractor must
inform in advance the national social security office.
To that
end, each subcontractor which in turn appeals to another subcontractor, must
inform the contractor in advance by written notice and must give to him all the
right information, as determined by the King, necessary to the national social
security office.
The
contractor shall inform the aforementioned national service about the start and
end dates of the works and about the starting and ending dates of the work
carried out by subcontractors. The King determines what has to be understood by
ending dates of the works and by beginning and ending dates of the work
performed by the subcontractor.
In the same
manner, when the aforementioned intervention of a subcontractor reported to the
civil service is cancelled, the contractor will report this to the civil service
within fifteen days after the initial scheduled start date.
When there
is no mention, one risks a penalty of 5% of the amount of the work, exclusive
of VAT.
The
obligation to notify does not apply to the contractors who do not appeal to a
subcontractor, for the works that are entrusted to them, for which the total
amount payable, net of VAT, is less than EUR 25,000.
If you have
any questions, please do not hesitate to contact us.