European law report - Cracking down on illegal employment

Tragic incidents of illegal immigrants seeking to reach European shores have unfortunately become a frequent phenomenon causing the death of approximately 3,000 to 4,000 persons annually. The European Commission has acknowledged that one of the driving forces for such immigrants is the certainty of finding some form of employment albeit illegal and sometimes even under exploitative conditions.

To this end, the European Commission recently decided that it is high time to take a tough stance at an EU level against the illegal employment by European employers of illegal immigrants by proposing an EU law providing for sanctions against such employers. This proposed law forms part and parcel of the European Migration Policy whereby the EU is seeking to thwart illegal migration from third countries.

Most member states already have in place criminal sanctions to combat illegal employment. However, such sanctions vary in severity and enforcement. The European Commission is now seeking to ensure that all member states introduce similar penalties and enforce them effectively in order to avoid distortions on the single internal market caused by unfair competition from employers of illegal migrants.

This proposed law imposes a number of obligations on both member states and in particular on employers. It applies not only to natural or legal persons employing others in the course of business activities but also to private individuals when they act as employers.

Primarily, employers would be required before recruiting a third-country national to check that such nationals have a residence permit or another authorisation for stay. Businesses would further be obliged to notify the competent national authorities. Once an employer can show that he has fulfilled this obligation, he would not be liable to sanctions.

Employers of illegally staying third-country nationals who have not carried out the pre-recruitment check would be liable to a number of sanctions. Such sanctions consist of fines, repayment of outstanding wages, taxes and social security contributions and if appropriate other administrative measures, including loss of subsidies (including EU funding) for up to five years as well as disqualification from public contracts for up to five years.

In certain sectors, such as the construction industry, it is commonplace for subcontracting to take place. In such cases, the proposed law envisages that all the undertakings in a chain of subcontracting would be held jointly and severally liable to pay financial sanctions against a subcontractor at the end of the chain who employs illegally staying third-country nationals.

Criminal penalties may also be awarded in serious cases such as in cases of repeated infringements by an employer, employment of at least four third-country nationals, particularly exploitative working conditions as well as in cases where the employer knows that the worker is a victim of human trafficking.

A number of obligations also fall on member states themselves. In particular, member states would be required to set up effective complaint mechanisms by which relevant third-country nationals could lodge complaints directly or through designated third parties such as trade unions or other associations. In addition, member states should grant residence permits of limited duration, linked to the length of the relevant national proceedings, to third-country nationals who have been subjected to particularly exploitative working conditions and who cooperate in criminal proceedings against the employer.

The proposed law also requires member states to conduct a minimum number of inspections of companies established in each member state. Member states are obliged to inspect at least 10 per cent of their companies every year.

The proposed law also makes provision for companies that post employees who are third-country nationals to another member state in the context of the provision of services. In such cases, such companies will be subject to control by the member state in which the company is established and not the member state in which the services are provided.

The message being conveyed by the European Commission via this proposed law is clear: the employment of illegal immigrants by European employers is not to be taken lightly. On the other hand, only time will tell as to whether, this proposed law, if and when adopted, will make any fundamental difference in thwarting the huge flow of persons hailing from third countries who embark on perilous journeys in the hope of reaching European shores and a better life.

• Dr Vella Cardona M'Jur, LL.D. is a freelance consultant in EU, intellectual property and competition law. She is also a visiting lecturer at the University of Malta.