The fight against social dumping: the Flemish government optimises contractor chain responsibility schemes in case of illegal employment

In the aftermath of some highly-publicised social dumping cases in the media, the Flemish government has proposed a zero tolerance policy for bogus posting set-ups involving illegal employment, especially if they involve exploitation and “smart” contractor chain constructions. To achieve this aim, the Flemish government has adjusted some already existing chain liability schemes and is seeking to introduce, amongst other things, a duty of care obligation for certain contractors. The Flemish government approved the proposal of a new decree just before the summer break in July 2023 and the proposal will now be submitted to the Flemish Parliament for adoption. We explain below the most important points that can be expected in the near future.

Extension infringements

Until now, the principal client or a contractor could be held criminally liable if a direct or indirect subcontractor has not verified in advance whether a third-country national possesses a valid residence permit or has not made a copy of such a permit available to the inspection services. Under the proposed decree, the principal client or a contractor can also be held liable if a direct or indirect subcontractor employs or relies on the services of a self-employed third-country national who is not allowed to reside for more than 3 months on Belgian territory.

Introduction of a duty of care obligation for the direct contractor

The above-mentioned liability can be excluded by including a written declaration in the services contract confirming that the direct subcontractor does not employ illegal third-country nationals or will not develop a self-employed activity on Belgian territory without the required residence permits. This already existing principle continues to apply.  

However, under the proposed decree, the contractor will be required to act in a diligent manner when contracting a direct subcontractor, and to try to prevent that such a direct subcontractor employs illegal third-country nationals or develops activities as a self-employed person without having obtained the required residence permits.

This duty of care obligation implies that a contractor will have to ask the direct subcontractor to provide certain information about the posted employees and self-employed individuals. The exact scope of information that will have to be verified has still to be clarified, but the information relates to personal data, residence status, and employment-related information concerning the posted employees and self-employed individuals.

If the direct subcontractor does not provide the requested information, then the contractor is obliged to immediately notify the competent social inspection services of that fact.

The scope of the duty of care obligation remains limited. The contractor does not have the obligation to verify the validity of the information received. Furthermore, the duty of care obligation only applies before the start of the cooperation. No further checks during the cooperation are required.

When is the direct contractor’s liability triggered concerning illegal employment?

Despite a written declaration in the services contract or despite having requested the relevant information, the contractor can still be held criminally liable if the contractor is aware of the fact that the direct subcontractor is employing employees or develops activities as self-employed individual, without having the required residence permits. The burden of proof lies with the competent social inspection services. To this end, the competent social inspection services can use all possible means of evidence.

For the sake of completeness, but without going into all the detail, the draft decree provides for similar changes regarding the means of evidence when it comes to the main customer’s liability or in the relationship between indirect subcontractors.

Entry into force and practical action plan

As noted earlier, the new rules have not yet entered into effect. That being said, in anticipation of the new proposed measures, contractors can already review and update their internal (subcontractor approval) processes to ensure compliance. Furthermore, it remains to be seen if the other Belgian regions will follow the Flemish government’s example and also strengthen their legislation.

If you have any specific questions or would like more detailed information about this topic, then please contact Emma Van Caenegem.

Written by

• Emma Van Caenegem

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