The Danish industrial arbitration has on 10 March 2015 given its judgment in the biggest industrial arbitration on social dumping in Danish History. According to the judgment an Italian subcontractor was ordered to pay 22 million DKK (approx. 2.9 million euro) in compensation to the workers/the union 3F.
The Italian subcontractor was hired in relation to the construction of the Copenhagen metro system. The Italian subcontractor (as well as all other subcontractors) must follow the relevant Danish collective agreements which apply for their workers. This applies for pay, pension, pay supplements, holiday etc. In other words, the workers are entitled to the same terms as their Danish colleagues if covered by a CBA. However, according to 3F the Italian subcontractor had not followed the collective agreements for which reason a claim was raised.
This case concerned 39 specific workers. Each worker had according to 3F a claim of approx. 21,000 DKK in additional payment. Thus, the workers had according to 3F been paid approx. half of the hourly pay they were entitled to pursuant to the collective agreement. The claims of approx. 21,000 DKK were applied to the calculation of all employees who had been employed in the company in the period from February 2013 to December 2014 with a total of 2,178 employment months. This amount combined with a number of unjustified payments on account made up a total claim of 48,456,287.51 million DKK.
During the case a number of former and current workers gave their witness statement which according to the judge was concurrent and believable. Furthermore, a big number of written documentation in the form of pay checks, calendars, week plans etc. all which showed that the number of working hours did not consist with the payments.
3F has also reported the Italian subcontractor to the Danish police for false signing of documents. Thus, 3F states that the subcontractor has produced false receipts which the workers have signed in good faith. Afterwards these signings have been used again without the workers consent.
With reference to a former settlement in the case according to which the Italian subcontractor had to pay an amount for overtime and as the subcontractor should not pay holiday payment for 2014 yet, the judge set out a discretionary judgment according to which the subcontractor must pay 22 million DKK plus interest for the underpayment of their workers.
Bird & Bird comments:
This judgment is the biggest in Danish history on social dumping.
The judgment shows that both the Unions and the Labor system in general are very aware of the problems in relation to social dumping. Thus, if a foreign company commences activities with employees in Denmark it must be aware that the Unions pay strict attention to ensuring that a collective agreement is either applicable (by membership of an employers' organization) or agreed by the company by means of an adhesion agreement.
This is also illustrated by the increased focus on the foreign companies' obligation to register its workers in the so-called RUT-register.
Please contact Søren Narv Pedersen or Mia Boesen.