EU subcontractors on Belgian construction sites : The new Regulation concerning Government Contracts (Cottyn)

Author: Caitlin King (Cottyn)

Date of publication: 19/12/2017

The Belgian federal government has recently developed a new set of rules in order to combat social dumping in government contracts and concession agreements, which influence the obligations of foreign subcontractors working for main contractors on Belgian construction sites in projects that commence after June 30, 2017. These measures consist of new rules for executing government contracts, specific social obligations and sanctions in the case of non-compliance with these obligations.

Henceforth, each subcontractor needs to be recognized regardless their place in the chain. This needs to happen latest at the moment that the contractor transfers the information to the contracting government. Next, it is forbidden for subcontractors to subcontract the whole assignment. This limitation includes the prohibition for subcontractors to stay solely in charge of coordination of the project. This will guarantee that entrepreneurs comply with their obligations concerning environment, labour and social law. Lastly, the subcontractors’ chain is from now on limited in sectors where fraud forms a larger risk. For works concessions the maximum is set at two or three levels, depending on the recognition of the contractor. For service concessions, the maximum is set at two levels. In case of unforeseen circumstances, another level can be added if the contracting government issues a prior written agreement. It is advised to foresee contractual clauses regarding this issue.

Subsequently, specific social obligations need to be taken into account by subcontractors in government contracts. Firstly, employees hired by the contractor need to be ample and need to possess the required competence to guarantee the correct execution of the task. To replace an inadequate employee, the contracting government will need to issue a written statement. Subcontractors need to pay their employees whilst taking into account the minimum wage of the field. The contractor further needs to personally manage and supervise the works, or needs to authorize someone to do so.

It is important for foreign subcontractors to take into consideration the legislation concerning employment conditions, safety and hygiene, which apply to the personnel on the construction site. For foreign contractors specifically, the law of March 22, 2002 needs to be complied with.
The contractor needs to assure that every subcontractor keeps a daily updated list of all its personnel that is employed on the construction site. It is the responsibility of the subcontractor to make this list. The ‘hourly wage’ no longer needs to be present in this list, unless the contracting government requests this. If the construction site works with an electronic presence-system, an attendance list no longer needs to be made. Before the works start, foreign subcontractors do need to provide the address of where the payroll documents can be posted. These documents are the individual periodical wage-states according to the model provided by social legislation and the periodical declaration to the authorised service regarding social security.

In sum, the most important clauses in a subcontracting-agreement are clauses concerning well-being, the application of social legislation, the specific obligations of foreign employees, the mandatory presence registration, the obligation to provide information, documents that need to be present on the construction site and the sanctions in case of non-compliance.

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