Stricter sanctions to fight illegal work
Illegal work has recently come under the scrutiny of state inspection authorities and remains a central focus of their concern. For this reason, the Ministry of Labour and Social Affairs (MLSA) has proposed a further tightening of the rules concerning the ‘Svarc system’ (where dependent work is formally carried out by independent contractors). The bill is currently being discussed by the chamber of deputies and is scheduled to enter into effect on 1 January 2025.
One of the basic changes the bill will introduce is a penalty of the publication of the decision on the offence. This form of punishment could be imposed on perpetrators of both illegal work and disguised agency employment. The decision on their offence will be posted on the official noticeboard of the State Labour Inspectorate for one year. The MLSA justifies this move by assuming that potential contractors will refuse to cooperate with persons who have committed such serious offences.
Changes are also being made to the way in which inspections are carried out: inspectors will be entitled to make audio and visual recordings during inspections and their preparatory work, even without the knowledge of the persons being inspected. This means that inspectors will not have to obtain the consent of the persons concerned, nor will they be obliged to announce their presence when taking urgent steps prior to the inspection itself. Although this new authorisation applies to all offences, the MLSA expects the new rules to mainly help inspectors when carrying out inspections of illegal work. The reason is that especially such inspections are often thwarted because of the duty to advise that recordings are being made. However, the inspection authorities will be obliged to use this approach solely where their purpose cannot be achieved in any other way.
The law will in some cases also allow for a more lenient approach. Under the new rules, individual inspectorates will have the authority not to initiate proceedings for offences with a low degree of social harm. It will be solely within the inspection authorities’ administrative discretion whether they initiate the proceedings or defer the matter. They shall base their decisions on the circumstances of the offence, the way the offence was committed, and its consequences. This change will apply to offences under the Employment Act (e.g., illegal work) and to offences under the Labour Inspection Act.
Furthermore, supply recipients will no longer have to worry about being liable for the payment of a penalty if their supplier has committed disguised agency work. Under rules in effect since January this year, the Labour Inspectorate can demand they pay the penalty if it cannot be recovered from the offending contractor. However, due to a legislative error, the application of the concept is very complex and therefore in the future, the liability for the payment of the penalty will only arise where the contractor has allowed for the illegal work of a foreigner.
The amendment will make it even easier for the state to combat illegal work. It can be assumed that the legislation will continue to develop and that the penalties for illegal work will only become stricter.