The construction industry plays a crucial role in the EU economy, providing jobs for 13 million workers and contributing 9% to the EU's gross domestic product. However, it remains one of the most fraud-sensitive industries, characterised by complex subcontracting chains, undeclared labour, and the misuse of temporary work arrangements. According to the European Labour Authority’s 2023 report, the sector faces widespread fraud and violations of working conditions. The European Commission's recent review of the implementation and monitoring of the revised Posting of Workers Directive highlights the need for enhanced enforcement mechanisms to ensure fair competition and the protection of workers' rights across Member States.
The EFBWW presents its position on the proposed regulation establishing a public interface connected to the Internal Market Information System for the declaration of posting of workers (e-Declaration). The below outlines the areas the EFBWW has identified for improvement to ensure that the proposal effectively strengthens enforcement, promotes fair competition and respects the diversity of Member States’ approaches to enforcement of labour market regulation.
The EFBWW supports digitalisation in the construction sector, recognising its potential to improve transparency and enforcement efficiency. Digital tools, when designed and resourced well, can substantially benefit workers, labour inspectors and the construction industry more broadly by enabling more effective identification and prevention of fraud and abuse. However, while digitalisation is essential, the proposed e-Declaration in its current form prioritises administrative simplification and cost reduction over meaningful enforcement improvements and risks undermining existing well-functioning national systems (e.g. Belgium’s LIMOSA and France’s SIPSI systems). The restrictive information list, voluntary nature, lack of sufficient integration with established Social ID Card systems and inadequate attention to workers’ data rights all represent significant flaws that must be addressed to ensure that digitalisation genuinely serves workers' interests and supports enforcement bodies effectively.
The EFBWW has identified eight key concerns with the current e-Declaration proposal, outlined below, which must be addressed to ensure that digitalisation genuinely strengthens enforcement and protects workers effectively:
1. Complement and Support Existing Systems; Do Not Replace Them
- The proposal claims to be voluntary, yet in practice risks becoming effectively mandatory through harmonisation pressures, interoperability constraints and potential infringement procedures against non-adopting Member States.
- Instead of replacing national systems, the e-Declaration should serve as a portal or 'front office' that complements, integrates with, and enhances existing effective enforcement tools.
- While this initiative may represent progress for Member States with less-developed systems, it must not undermine or weaken advanced national mechanisms by setting a restrictive new standard of proportionality, limiting enforcement flexibility.
2. Restrictive Information List (Article 4)
- The proposal creates a restrictive "maximum" list of data points, limiting enforcement flexibility and undermining the principle of subsidiarity by requiring Member States to seek Commission approval for adding enforcement-relevant data points. This requirement is disproportionate and effectively removes Member States' prerogative to adapt enforcement measures to their specific needs and national systems, a clear breach of subsidiarity.
- List must be a minimum and non-exhaustive and have mandatory information points (including information on subcontracting chains, intermediaries, work locations and posting durations) while allowing Member States to independently add data fields necessary for effective monitoring.
- Sectoral social partners must be formally involved at national and European levels in defining and tailoring additional information requirements.
3. Voluntary Nature of the System (Articles 1 and 3)
While Article 1(2) allows Member States to opt-in voluntarily, the system poses a significant threat to existing national systems that are well-developed and effective, especially in enforcement.
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- The proposal penalises Member States that do not opt-in, as the standardised system risks becoming de facto mandatory by creating harmonisation pressure and limiting interoperability with non-participating systems.
- This undermines the diversity and flexibility of national approaches, which often reflect local labour market and enforcement realities.
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4. Priority is Social Benefit
The economic focus on cost reduction for businesses undermines the social benefits of enhanced enforcement. Investments in enforcement are a public good, essential for ensuring fair competition and decent working conditions. The system must serve the general interest by supporting well-resourced enforcement bodies and protecting vulnerable workers.
5. Enforcement and Digitalisation (Articles 1 and 2)
While EFBWW acknowledges the benefits of digitalisation, the system risks prioritising administrative simplification over effective enforcement.
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- Adequate funding and training for labour inspectorates is critical to ensuring the system strengthens enforcement, particularly in Member States with limited resources.
- The information collected via the e-Declaration should integrate seamlessly with national enforcement systems for targeted inspections.
- The system should support EU-level data collection, cross-referencing and flagging of suspect postings, particularly in high-risk cases such as:
o Complex subcontracting chains.
o Labour intermediaries.
o Letterbox companies.
o Bogus self-employment
o TCNs.
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6. Social ID Cards (New Article 4a)
The proposal must align with and complement social ID card systems in Member States, which are vital for monitoring compliance and improving enforcement.
- Mandatory fields should be included in the standard form to identify workers/situations covered by social ID cards.
- Ensure interoperability between the e-Declaration and national/regional social ID card databases for enforcement and to avoid duplication.
7. Monitoring and Evaluation (Article 9)
Social partners, including sectoral social partners, must play a central role in evaluating the system, particularly in sectors with significant subcontracting and intermediary involvement.
- The proposed draft standard form must be included as an annex to the proposal to ensure transparency in the legislative process and provide a basis for co-legislators to assess its adequacy.
- Evaluations must assess:
- The impact of the e-Declaration on existing national systems.
- Its effectiveness in improving enforcement, especially in high-risk cases.
8. Worker Access and GDPR Compliance (Articles 2 and 5)
The proposal must align with GDPR principles, ensuring that workers’ personal data is processed lawfully, fairly and transparently.
- It must be easily accessible for workers to verify, correct and, if necessary, object to the use of their data.
- The Commission, as a data controller (Article 5), must guarantee compliance with GDPR, particularly concerning data access rights, notification mechanisms and rules for data sharing.
- While Article 2(1)(d) mentions transmitting declarations to workers, this provision must be clarified to ensure GDPR-compliant access and transparency mechanisms without burdening workers.
Conclusion
The EFBWW considers that the proposed e-Declaration regulation, while well-intentioned, requires significant revision to genuinely support digitalisation as a means of effective enforcement. Addressing the above concerns is essential for ensuring that digital tools complement, rather than undermine, successful national systems, enhance transparency and accountability, and deliver social benefits for workers across the EU. We call upon the European Commission, Parliament and Council to prioritise enforcement effectiveness and involvement of social partners to ensure that digitalisation becomes a tool for social progress, fair competition and better working conditions in the construction sector.