Road inspection and social dumping

J-M CRANDALHigh level expert

General Directorate Transport Infrastructure and Sea FRANCE

Road inspection and social dumping

How intelligent inspections can play an essential role for preventing and countering social dumping in road haulage market ?

The scattered factors of production of road freight transport

• to address the issues of UNFAIR COMPETITION and SOCIAL DUMPING road side inspectors have to work out the pieces of the jigsaw of the factors of production in road transport : labour & capital – scattered in many countries each one falling in the jurisdiction of several national inspection bodies

The scattered factors of production of road freight transport

• 3 examples– 1st international carriage

– 2nd cabotage

– 3rd letter-box subsidiaries

The scattered factors : 1st example

Haulier’s subsidiary

Registration of the vehicle

Consignor’s place

Place of delivery

Haulier’s parent company

Driver’s Work contract

Road side check

contract of carriage

The scattered factors of production : 1st example

case of an international carriage • to the Red country where the road side checks

take place • and where the parent company has its

registered head of offices• involving 2 countries : the Yellow and the Red

The scattered factors of production : 1st example

Clues of fraud :• the subsidiary is a letter-box in the

Yellow country • the driver seldom or never drives to the

place of this subsidiary • his real boss is the parent company

The scattered factors of production : 1st example

• What are the legal issues ?

• Who is competent to address them ?

The scattered factors of production : 1st example

Presumption of • fake establishment for the subsidiary ( Reg

1071/2009 a 5 c )

• undeclared work for the driver if he is working normaly in the country of the parent company ( ECJ C 29:10 15 03 2011 -KOELZSCH )

The scattered factors of production : 1st example

The information provided by road side checks should be shared and analysed by all the competent bodies ( road side inspection– labor inspection - social security – public revenue- justice…) of the country who lead investigation together up to the parent company

The scattered factors of production : 1st example

In this case efficient inspection relies mainly on the cooperation of different national bodies ( the Red one ) but could be more efficient with the cooperation of the authorities of the Yellow country ….

The scattered factors of production 2nd example

Haulier’s subsidiary

Registration of the vehicle

Place of consignor

Place of delivery

Haulier’s parent company

Driver’s work contract

Road side check

contract of carriage

The scattered factors of production : 2nd example

• Case of a irregular cabotagecarried out by a letter box company ( Yellow ) which is a subsidiary of a parent company located in a another EC Member country ( Purple)

3 countries are involved : Yellow, Red, Purple

The scattered factors of production : 2nd example

• The road side checks show that the driver is working normally in the parent company and not in the subsidiary

• and is paid 1000 €/ month instead of 2500 €/m.

• with a work contract of the Yellow country

The scattered factors of production : 2nd example

• Which labour law should be applied to drivers ?– the law of the work contract of the country where

is based the parent company ?– law of the country in which the driver is posted ?– both ?

The scattered factors of production : 2nd example

• Issues : – in the country of the road side check : how to

implement the posting of workers directive ?– what could be done in cooperation with the

authorities of the country where or from where the driver is working normally ?

The issue of letter box companies

• The letter-box companies : a challenge for the enforcement bodies of all the countries

The issue of letter box companies

• A survey on the letter-box companies in one EC Member State showed that 110 hauliers of the country share 15 addresses most of them in the capital city…

• none of those places are suitable for an establishment according to article 5 c of the Reg. 1071/2009,

• all those 110 companies are subsidiaries of parent companies established in 7 other EC Member States…

The issue of letter box companies

• Parent companies in the country where the survey was led are under investigation, prosecuted or sentenced,

• But what could be done for those based in other MS ?

• Could ECR cope with such issues ?

Road inspection and social dumping

Thank you for your attention