Precautions when using subcontractors

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Precautions for use of contractors - Reduce risk and show responsible corporate behavior


Below is checklist C of initiatives that can contribute to reduce the risk of hidden forced labour.

list image Have guidelines been prepared on how to avoid exploitation of labour and hidden forced labour in the supply chain?
list image Has the company included a permanent clause in contracts with subcontractors and other partners which ensures zero tolerance of human trafficking and forced labour? Can the company terminate the contract immediately if this clause is not observed?
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Has the company chosen a strategy/policy concerning the use of suppliers and subcontractors?

Consider the following points:

  • Must the employees carrying out the task be employed directly by the supplier? Or is the supplier entitled to use additional subcontractors? If so, it should be a requirement that all suppliers are subject to the same conditions.
  • To what extent should it be possible for suppliers to have subcontractors carry out part of or the entire task?
  • Is the supplier obliged to ensure that the workers employed by the supplier and any subcontractors in Denmark are working under wage/pay and employment conditions which are not less favourable than the common conditions on the Danish labour market?
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Are the supplier’s obligations clear and part of the contract and is the company ensured that all statutory and authority requirements applicable to the company and the performance of the service are observed?

Has the company ensured that:

  • The supplier is responsible for ensuring that any subcontractors fulfill the same requirements and obligations as those applying to the supplier under the contract?
  • The company may at any time request documentation from the supplier showing that these requirements and obligations are fulfilled?
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Has the company ensured that it is only possible to use subcontractors which have been approved in writing? Also the company should ask the supplier and any subcontractors to present a service certificate from the Danish Business Authority or present documentation with similar information. The service certificate should not date back more than six months.

By checking the supplier’s service certificate, it is ensured that the
supplier:

  • Has not been found guilty of any criminal offences and is not involved in a pending criminal case.
  • Comply its payment obligations to the public authorities (social security schemes, direct and indirect taxes etc.). 
  • Is not facing bankrupcy or similar.
list image Does the company ask the supplier to present registration certificates documenting that the supplier is registered with SKAT (the tax authorities) in accordance with the Danish VAT Act (Momsloven) and the Danish Income Tax Act (Skatteloven)?
list image Does the company remember to check whether foreign suppliers are under an obligation to be registered in the Danish Register of Foreign Service Providers (RUT)? If a foreign company is found not to be registered with RUT, this must be reported to the Danish Working Environment Authority.
list image Has the company concluded a written contract with subcontractors which ensures that employees are not obliged to pay charges/fees in connection with recruitment?
list image Does the company consider whether the supplier complies with the following points?

  • The supplier employs and pays wages to the employees and assumes ordinary employer’s liability.
  • All employees have received a statement of terms and conditions before the commencement of the work. At the company’s request, the supplier sends a copy of the statement of terms and conditions within five working days.
  • All employees must be employed by the supplier or by a subcontractor approved by the company. The employees are not permitted to use own assistants, family members etc. for the performance of the work.
  • The employees must carry a visible identification card issued by the supplier or a subcontractor approved by the company. The identification card carries a photo of the employee and unambiguous identification of the employee (such as employee number, civil registration number). 
  • The company is entitled to contact the supplier’s employees without prior notice to obtain information about an employee’s identity.
  • The supplier is responsible for ensuring that only employees with valid residence and work permits are used. In order to ensure identification of foreign employees, the supplier makes a copy of the passport or other type of documented photo identification and work and residence permits, if relevant, for employees from non-EU countries. This documentation must be presented within two working days at the company’s request.
  • The supplier must ensure that wages, tax on regular income and labour market contributions are reported to the tax authorities for the work performed according to the rules applicable to the employer.
  • The employees have been provided with and wear uniform and easily recognizable work clothes (if such are used).
list image.......... Is it possible for the company to request at any time that the supplier within five working days present a copy of the subcontractor’s financial statements for the last three years, but not earlier than from the subcontractor’s starting date?

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last modified Jun 14, 2015