Towards a preventive approach against abusive subcontracting practices in the European construction sector

The European Federation of Building and Wood­workers (EFBWW) launched its Subcontracting Campaign in 2020 to confront the growing misuse of subcontracting in the construction sector in Europe.

The EFBWW recognises that subcontracting can be a legitimate, practical way to bring in specialist expertise. However, it has mutated into a business model for social dumping and exploitation. Through complex and increasingly cross-border subcontract­ing chains, workers’ rights are undermined, health and safety is ignored and liability is circumvented. Many of these subcontracted firms are labour-only suppliers or letterbox companies with no genuine business operations and can vanish, leaving work­ers without their wages after months of labour.

This shift towards more abusive subcontracting practices has led to growing concerns from policy makers. Recent reports, including the European La­bour Authority’s 2023 report on construction1, the Commission’s 2024 report monitoring the revised Posting of Workers Directive2, Enrico Letta’s ‘Much More Than a Market’ report3 and the La Hulpe Decla­ration4 underscore the urgent need for stronger gov­ernance and elimination of abusive practices that undermine fair competition and social justice in the sector. These reports identify limiting subcontract­ing chains and banning agencies as good practice.

Building on these findings, the EFBWW and its af­filiates have campaigned intensely to make abusive subcontracting a core political issue in Europe. Mobilisations and demonstrations in Brussels and Strasbourg, the testimonies of exploited workers and strong engagement with EU policymakers have helped bring the issue into the political mainstream.

Across Europe’s capitals, the topic is raised fre­quently. In the European Parliament, politicians are drawing up a report and, in the Commission, Exec­utive Vice-President Roxana Mînzatu has included it in the Quality Jobs Roadmap. Limiting subcon­tracting is now widely recognised as the most effec­tive way for achieving fair working conditions and sustainable competitiveness.

The EFBWW has commissioned this study to pro­vide a detailed legal and policy analysis of how sub­contracting can be limited effectively within the EU framework. Conducted by Professor Mijke Houwer­zijl, the study was tasked with answering key ques­tions: how can subcontracting be effectively limit­ed within the framework of the internal market? How can “fraud-sensitive” industries such as con­struction be legally defined and addressed through targeted rules? And, how can EU-level action be balanced with the right of Member States to apply more stringent national provisions?

The research finds that current legislation at the EU-level regulating subcontracting is inadequate. There is no EU legislation that sets out specifically to regulate subcontracting and where subcontract­ing is addressed, such as in the Posting of Workers Enforcement Directive, the Temporary Agency Work Directive, EU OSH legislation and the Public Procurement Directives, it falls woefully short. To address this gap, the research considers two possi­ble legislative paths: firstly, updating the existing acquis or, secondly, developing a specific EU instru­ment on subcontracting.

The findings are clear: the fragmented nature of current EU rules leaves systemic gaps that enable abuse. A holistic approach in which limiting sub­contracting, with strong enforcement and liability mechanisms, is essential to protect workers and en­sure fair competition.

This report provides the foundation for the next stage of EFBWW’s campaign: turning political rec­ognition into binding European legislation that protects workers and promotes decent work and ensures accountability on every building site in Eu­rope. The time to act is now!