Social Dumping: Protection, Prevention, and Best Practice for Carriers

Social Dumping: Protection, Prevention, and Best Practice for Carriers

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he European Single Market provides carriers with various opportunities to grow and advance their business internationally. However, the access to this is contingent upon complying with sometimes strict guidelines and regulations. The latest version of the Mobility Package[1] from 2021 is the most recent iteration of such a formal guideline stemming from the European Union.

The most “popular” topic stemming from the Mobility Package are the mandatory rest times or the cabbotage rules. Indeed, the fines can be costly and it is often troublesome to navigate the abundance of rules and method of administration in each country. Luckily, there are methods to counteract the risks presented by fines during regular transports which many transport companies already benefit from[2].

Social Dumping📉

However, the much less known element of the Mobility Package – the anti-social dumping regulations often get underestimated in terms of its regulatory scope and its impact on transport companies operating in the European Single Market. The EU has a longstanding issue with what is known as “social dumping”.[3] This term refers to the practice of companies hiring workers from other countries within the EU in order to cut costs and gain a competitive advantage. Many transport companies employ this strategy not only for its financial benefits, but for the organizational ease of completing recurrent transports for regular clients.

The Posted Workers Directive✒️

The EU responded to this increasing trend through the Posted Workers Directive (2020) in an effort to provide more labor protection and equalize the competitive advantage for companies regardless of their country of registration. The directive extends the requirement for equal pay and working conditions to all workers, regardless of whether they are posted or not. It would also introduce stricter enforcement mechanisms and penalties for companies that violate the rules.[4]

The proposed mobility package has sparked controversy, with some arguing that it goes too far and could harm the free movement of workers within the EU. In particular, companies from the logistics industry have signaled that the new regulations have prompted hostile behavior by the host country’s administrative bodies in attempts to enforce the new rules.

The main issues for transport companies arise due to the Directive’s use of national collective bargain agreements as a benchmark for remuneration along with national social security rules. As such, the necessary compliance with these standards creates a significiant administrative burden on transport companies and puts companies at financial risk.

Solutions and Best Practice🧩

In all European countries, posted workers regulations are enforced by labor inspectors who have the power to investigate complaints and impose penalties on employers who violate these regulations. Employers who are found to be in violation of posted workers regulations may be required to pay back wages to the affected workers, and may also face fines or other penalties.

“Typical” destinations for posted drivers such as Belgium and the Netherlands require employers to register them with the national authorities and present workers with their written rights and obligations apart from providing the workers with the same working conditions and remuneration levels as the local workers. These are also the countries who have a prominent level of enforcement as certain legal battles have progressed to the highest levels of judicial remedy in the respective national Supreme Courts.[5] In doing so, the rules and details for posting workers have been further defined and clarified through jurisprudence which transport companies can use in order to ensure compliance and prevent costs.

The different jurisdictions within the EU of course have various methods of administering this information through digital forms, written declarations and regulatory oversight with some countries like the Netherlands enjoying a fully digital and comprehensive portal for all of this administration.[6] However, every transport company can benefit from the following universal guidelines for compliance in order to protect themselves and prevent costly fines:

1. Check whether your company is actually “posting” workers

Different countries have a multitude of requirements which qualify workers as posted in a host country. These usually include the administrative information of the company itself, its main source of income, and most importantly, the structure of the labor contracts and labor descriptions offerred by the carrier. It is of paramount importance to check this as the conclusion of this check would change the requirements for the company itself with regard to its drivers.

2.Research the national collective bargaining agreement for transport workers

Each country possesses guidelines and regulations for the working conditions and remunerations for workers in the transport industry with differring degrees of detail and scope. If your company is posting workers according to the abovementioned, it would be necessary to comply and match the guidelines from these agreements.

3.Provide information to the national authorities of the host-country

Before employing the labor of posted workers, it is important to communicate the structure of the labor in advance to the national authority, usually the Ministry of Labor/Social Security, through written communication or digital declaration.

The Conclusion🚀

As a general rule, to prevent violations and fines arising from non-compliance, it is crucial to maintain proper documentation and records. This includes keeping detailed records of posted workers’ contracts, pay, and working conditions. It is also important to regularly communicate with the host country to ensure compliance with the posted workers directive. By taking these steps, transport companies can prevent violations and protect the rights of their workers while still maintaining their comparative advantage in the increasingly competitive transport industry.

At Claims Trans, we have already contributed towards efforts for compliance and dispute settlement arising out of accusations brought in front of Bulgarian transport companies operating in the European Single Market. If you’d like to save time and resources dedicated to compliance, as well as to protect your company from costly fines, do not hesitate to contact us so that we can support you in navigating these regulations so that you can allow more time for the growth of your business.

Bibliography:
[1] European Union Mobility Package I, Mobility and Transport. Available at: https://transport.ec.europa.eu/transport-modes/road/mobility-package-i_en (Accessed: February 4, 2023).
[2] International Road Union. Driving and rest time rules –  the EU’s mobility package, IRU. Available at: https://www.irumobilitypackages.org/driving-and-rest-time-rules (Accessed: February 4, 2023).
[3] European parliament. Understanding social dumping in the European Union (no date) Think Tank | European Parliament. Available at: https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2017)599353 (Accessed: February 4, 2023).
[4] Questions and answers on posting of Drivers Under Directive (EU) 2020/1057 Mobility and Transport. Available at: https://transport.ec.europa.eu/transport-modes/road/mobility-package-i/posting-rules/questions-and-answers-posting-drivers-under-directive-eu-20201057_en (Accessed: February 4, 2023).
[5] Emma van Kaemegem (2023) Are foreign employers who post workers to Belgium obliged to proceed with a Dimona obligation: What has the Belgian Supreme Court said (or rather not said)?, Altius. Available at: https://www.altius.com/en/news/are-foreign-employers-who-post-workers-to-belgium-obliged-to-proceed-with-a-dimona-obligation-what-has-the-belgian-supreme-court-said-or-rather-not-said/ (Accessed: February 4, 2023).
[6] Ministerie van Sociale Zaken en Werkgelegenheid (2022) Notifying online, Posted Workers. Ministerie van Sociale Zaken en Werkgelegenheid. Available at: https://english.postedworkers.nl/online-notification-portal (Accessed: February 4, 2023).

Does transport mediation deliver solutions tailored to the dynamics of the logistics industry?

Does transport mediation deliver solutions tailored to the dynamics of the logistics industry?

transport mediation

The dynamics of the logistics industry create serious challenges for carriers, freight forwarders and customers. Problematic situations arise on a daily basis. Losing control of a problem while it is still in its infancy makes solving it much more difficult.

How can logistics companies can benefit from mediation?

The logistics industry needs a mechanism to match its dynamics, namely an adaptable, dynamic, flexible and fast model through which disputes can be resolved efficiently. The mediation procedure is the means that would perfectly incorporate into the transport industry to help it continue to develop at a rapid pace.

Mediation is an alternative means of resolving disputes. It is precisely an alternative because it is an option that the parties have and the choice of which depends solely on their will. By agreeing to a mediation procedure with the assistance of a mediator, the parties aim to reach a mutually beneficial solution and agreement between them. Of course, the parties to a pending dispute may also proceed to mediation at any time and reach an agreement only with the mediator’s proper communication guidelines.

The mediation procedure is distinguished by certain principles which most clearly describe its nature, namely: voluntariness, equality, neutrality, impartiality and confidentiality. In view of these basic principles, the disputants have equal opportunities in the mediation procedure. They participate of their own free will and may withdraw at any time. It is also extremely important that the mediator does not show partiality and does not impose a solution on the dispute. In the mediation procedure, all issues are settled only by mutual agreement of the parties.

In order to gain a better insight into the nature of mediation, we should distinguish mediation from court and arbitration proceedings. While in the latter two proceedings the decision is made by a judge or arbitrator on the basis of the applicable law, in mediation the parties themselves resolve the dispute with the help of the mediator on the basis of their personal needs or business interests. Another important difference should not be overlooked, namely that court and arbitration proceedings follow a strictly formal procedure laid down in law or rules, whereas in mediation there is an informal and flexible procedure which is modelled and individualised according to the needs of the parties and the type of dispute respectively.

The advantages offered by the mediation procedure are significant in number and can be structured as follows:

1.Speed of outcome – this is one of the main advantages of mediation compared to court proceedings in particular. The parties can usually reach a mutually beneficial solution within 1-2 sessions, which would not take more than a month. Conversely, if the dispute is taken to court, it can take a considerable period of time to consider and resolve.

2.Lower financial cost – resolving the dispute in mediation would cost much less financially than court proceedings;

3.Convenience – no formal procedures;

4.Control – the parties have overall control over the development of the procedure;

5.High success rate and getting to the heart of the problem;

6.Preservation of alternative options – referring the dispute to a mediator does not deprive the parties of the possibility, if they fail to reach an agreement, to seek protection of their rights and interests in court or in arbitration;

7.Preservation of relations – resolving the dispute in mediation allows the parties to preserve good relations and continue their cooperation;

Most likely, after clarifying the nature of mediation, the question arises: How can mediation work in transport? The answer is clear – mediation is widely applicable in the transport sector as it would help to resolve the conflicts that inevitably arise on a daily basis. In view of the dynamics of the transport industry, mediation is the means by which disputes arising can be resolved in a quick, efficient and above all cost-effective manner.

Furthermore, business relations in transport are very important and as such should be preserved for the future. A mediator would help the two disputing parties to confront the problem, generate as many solutions as possible in the interests of the parties, find the balance in the demands of both parties so that they can reach a mutually beneficial solution and continue to cooperate with each other, rather than worsen their relationship as happens most often in litigation.

And what is the value for companies? Mediation gives a lot – companies reach quick and efficient solutions in line with their direct business interests – a very important circumstance in view of the dynamics in the transport industry. Mediation saves a lot of costs – a definite plus in view of the difficult economic situation we are in. Last but not least, mediation helps the parties to maintain good relations with each other and to continue working together – this fact also has a positive impact on the economic situation of the companies.

Mediation is best suited to the dynamics of the logistics industry. The latter requires quick, effective and forward-looking solutions, and mediation is able to help the parties themselves reach precisely such solutions.

What are the dangers and prevention opportunities for carriers when carrying cargo to the UK?

What are the dangers and prevention opportunities for carriers when carrying cargo to the UK?

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very month there are thousands of attempts by illegal immigrants to gain unauthorized access to vehicles en route to UK. Keeping your vehicle and trailer secure against stowaways can be a challenge. If the UK Border Force or Customs discovers immigrants in one of your vehicles, you may face a heavy fine up to up to £2,000 per illegal entry. Furthermore, your cargo is valuable. If clandestine entrants enter your vehicle, they may cause damage to the cargo, and its recipient may reject it. This can cause more complications, prolonged discussions and it may jeopardize successful business relations.

There are important pillars that every transport company should focus on when performing transport courses in and outside United Kingdom. Not only the overall safety of the driver and the freight can be increased, but carriers also have to act in compliance with all guidelines and requirements, the following key points should be considered:

1.Secure loading and unloading🧳

Those in control of loading / unloading operations, should check the vehicle prior departure. When possible, drivers should aim to park at secure facilities and always check for cuts or tears in the outer shell or fabric of the vehicle.

2.Vehicle security checklists and written instructions for the drivers 🗐

All drivers should have, and consistently use vehicle security checklists. Ideally the operators should fill their check list three times a day from the day of the loading. You can print an appropriate security checklist directly from the government site

📑LINK TO FREE SAMPLE CHECKLIST 📑

3.Provide additional training to drivers🏫

 All drivers should have an adequate training that covers processes, including what to do if they find any clandestine entrants on board. Their training should cover truck security, vulnerable spots on their vehicle and how to use the checklist correctly.

4.Provision of the right equipment🔧

Security devices, such as padlocks, seals and tilt cord, should be used to secure a vehicle as soon as it is loaded. This prevents stowaways from climbing on board once a loaded truck is left unattended. Security equipment should be checked at regular intervals.

5.Regular Checks✔️

Drivers should check their vehicle at the end of every stop and before they cross a border. If a driver suspects someone is attempting to enter their vehicle or has entered their vehicle, they should contact local police as soon as it is safe to do so. Drivers should not attempt to approach the stowaway themselves.

6.Accreditation scheme📝

Companies can join an accreditation scheme to help reduce penalties. To qualify they must have an effective security system for their vehicles and be in complete compliance with all requirements.

The Civil Penalty Code of Practice is an important document for all hauliers and truck drivers to read. You can download it from here:

ENGLISH

BULGARIAN

How can you defend against a civil penalty? 🛡️

If clandestine entrants are found in your vehicle after arriving in the UK, you and your company may receive a Notice of Liability to a Penalty IS11 Letter form Border Force. At this stage, no decision has been made regarding the imposition of any penalty. You now have 28 days from the date of the letter to respond and present your justifications and prove that you did not know or did not have reasonable grounds to suspect that a clandestine entrant was hidden in the vehicle and that you had secure systems in place which were properly operated at the time of the breach.

If you don’t manage to convince Border Force and find yourself in this unfortunate position, you will receive a second letter Notice of Penalty and an IS11 Form. This will tell you how much you are being fined and will invite you to file a Notice of Objection to Border force.

If after filing the Notice of Objection, the Border Force’s decision is still unfair, your only option is to appeal this to the County Court. You should make an appeal on Form N161 and pay court fee when sending your appeal. Judge will review your case and will make a decision whether the fine was properly imposed on you. The judge can diminish the fine or even abolish it completely, hence it is crucial to guarantee that your case is properly presented.

It is a difficult and expensive problem to resolve that’s why having a reliable and trustful guidance determines the course of events. Our company Claims Trans have advanced experience in the communication with key institutions and leads the process with agility, diligence and resilience. We know how to navigate the situation through whatever obstacle comes your way due to various cases we have represented. Our goal is to give you not only a quality and effective service but peace and vindication of right.