From 1 January 2025, it will be prohibited for subcontractors to accept an order from a main or other contractor only to subcontract it entirely to another subcontractor or retain a purely coordinatory role. This ban applies to subcontractors in the construction, meat and house removal sectors, but not to main contractors.
With this ban, the law[1] aims to step up measures against social dumping. A subcontractor must play a clearly active role in implementing the agreement it has concluded with its own co-contractor. According to the statement of position that we have received from FPS Employment, Labour and Social Dialogue, this requirement will be assessed against the facts in each case.
The activities retained by the subcontractor must be activities that can be regarded as subcontracting within the meaning of this new legislation (e.g. construction work, meat industry or house removal activities).
Tasks such as the mere delivery and transport of materials without specific additional services are not included, as they are considered to be delivery activities.[A1]
The term ‘coordination’ refers to all tasks and responsibilities relating to managing and supervising the performance of an agreement (e.g. planning and organising the various implementation phases, maintaining communication between all parties involved, monitoring progress).
Example of an infringement
Here is an example to clarify this: A direct subcontractor A of the main contractor receives an order (e.g. for the renovation of a bathroom) and outsources all construction work to a subcontractor B (e.g. demolition, plumbing, tiling). As well as coordination (e.g. drawing up a schedule, calculating the number of tiles, giving technical instructions on site), subcontractor A also takes care of the purchase of accessories and materials and the transport of the materials required for the work. As subcontractor A does not carry out any construction work itself (work as defined in the agreement with the main contractor), the ban on purely financial subcontracting is infringed in this case.
Each individual case will be assessed on the facts by the social inspector, the labour auditor or the administrative fines department, and ultimately by the courts.
An infringement of this ban can result in a level 4 sanction, with prison sentences[2] of up to three years and fines of up to €56,000. In addition, the court may also impose a prohibition on participating in public tenders or obtaining concessions.
It is therefore important in the subcontracting context to check that your company is still actually carrying out tasks that have been provided for in the agreement with your own co-contractor.
[1] Law of 15 May 2024, Belgian Official Gazette 21 June 2024.
[2] If the law provides for a custodial sentence for an infringement (sanction level 4), this is converted into a fine of between €24,000 and €576,000 for legal entities.
