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Benelux Ministers Vow To Combat 'Social Dumping'

by Lorys Charalambous,, Cyprus

19 February 2014

During the latest Benelux "social summit" in Brussels, the Prime Ministers and Labor Ministers of Luxembourg, Belgium, and the Netherlands, focussed on efforts to combat social dumping, to protect employees against all forms of social abuse, and to clamp down on evasion of social security contributions.

In a joint declaration, the delegations made clear that the European Internal Market, with its free movement of persons, goods, and services, is of the utmost importance for the growth of their economies, and is essential for economic recovery in Europe and in the Benelux countries.

They nevertheless observed that it is necessary to address negative developments, such as underpayment, exploitation, and evasion of social security contributions; phenomena, which are "unacceptable," both from a perspective of protection of employees and self-employed workers, and in view of fair competition between employers.

The Ministers agreed that in promoting the Internal Market, social aspects should be observed and that decent pay and labor conditions and effective social protection for all employees and self-employed workers are essential not only for the workers involved but also to retain public support for the European project in general.

Furthermore, the Benelux Ministers noted that for the protection of their social achievements, it is necessary to strengthen the enforcement of the laws and regulations in the field of social policy and employment, and to this end stressed the importance of the Governments of the Benelux joining forces.

The Ministers explained that Benelux cooperation to tackle sham constructions, illegal temporary work, and benefit fraud has recently commenced, and emphasized the need to reach concrete results in the near future.

They said that they anticipate the possible adoption of a directive of the European Parliament and of the Council on the enforcement of Directive 96/71/EC concerning the posting of workers within the framework of the provision of services, and stressed the importance of immediate and effective measures in the fight against fraud and abuse.

They concluded that: "The Governments of the Benelux countries aim to play a leading role in the fight against fraud, social dumping, and exploitation in the field of social policy within the European Union, and to this end agree to intensify their cooperation."

The Ministers said: "This cooperation will take place both in the practical implementation of their laws and regulations in cross-border situations, and in a joint approach to enforcement issues within the European Union."

The Governments of the Benelux countries therefore pledged that they will, for the purpose of the implementation of these intentions, initiate a number of specific actions, including:

  • Aiming for a rapid implementation of the Directive for the enforcement of the provision applicable to the posting of workers, notably with regard to joint and several liability and enhanced control measures, and initiating a number of pilot projects on inspecting cross-border subcontracting chains and liability, and cross-border enforcement of administrative fines and penalties;
  • Supporting each other in their actions to curb abuse, notably by improving exchange of information on fraud and social dumping cases, both within the framework of Benelux cooperation, and at European Union level;
  • The signing and implementation of the Benelux Treaty on cross-border cooperation on road transport inspections, in order to further harmonize supervision on enforcement of European Union rules, to use advantages of scale in the areas of capacity, expertise, experience, and training, arrange mutual cross-border assistance of inspection services;
  • Stimulating the exchange of best practices including ways of improving identity controls at working places and instruments to fight fraud, social dumping, and unfair competition, hurting in particular SMEs;
  • Ministers in charge of the Labor Inspectorates are tasked with the implementation of this agreement and will report regularly to the Prime Ministers.
  • TAGS: compliance | tax | tax compliance | Belgium | Netherlands | tax avoidance | training | law | employees | corporation tax | Luxembourg | enforcement | social security | construction | regulation | penalties | services | Europe | Tax | Tax Evasion

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