Brussels, 05/07/2016 (Agence Europe) - Drawing on a number of concrete cases such as the Danish Crown abattoirs, the Vos Transport road haulage company, Serneke construction and the Fiat automobile manufacturer, the European Trade Union Confederation (ETUC) published a European Commission funded report on Tuesday 5 July. This report examines the practices of these so-called "letterbox companies" that often combine tax fraud and worker exploitation.
This report, "The Impact of Letterbox-Type Practices on Labour Rights and Public Revenue" was carried out on the basis of case studies in Germany, Netherlands, Italy and Sweden. The authors of the report focus on the meat, road transport, car manufacturing and construction sectors. In the first two case studies, the use of letterbox companies is particularly widespread in the whole structure of the meat sector in Germany according to the report. 83% of foreign direct investment into the Netherlands and 96% into Luxembourg is done through these kinds of companies.
The report subsequently reveals that "letterbox-type practices are not isolated cases but widespread across many countries and economic sectors, and that tax avoidance often goes hand in hand with exploiting workers. Letter box companies are facilitated by EU law and by weak national enforcement of labour and tax law".
This problem needs to be confronted, particularly by returning to a system of direct contractual arrangements between workers and employers, despite the spread of triangular systems using intermediaries. The report also suggests revising the 2014 implementing directive on posted workers, even though the EU is currently involved in a laborious targeted revision of the basic 1996 directive (EUROPE 11574). The report therefore highlights the need for the compulsory introduction of a joint system of responsibility and solidarity for subcontractors. The report also recommends limitations on the freedom of establishment, implementation of the anti-tax evasion directive (EUROPE 11577) and regulation of the consultancy industry. (Original version in French by Jan Kordys)