In Finland, there are foreigners without work rights and work-related exploitation in the construction industry as well. In order for companies to be able to more effectively intervene in the trampling of working conditions and even human rights, a small change is needed in the Aliens Act.
On the last day of March, the foreigner supervision team of the Southern Finland Regional Administrative Agency published the results of the inspections it carried out in 2020, about a quarter of which were aimed at the construction industry. Regarding the results, it is good to have an open discussion about whether the exploitation of foreign labor or the gray economy has increased in Finland.
As a by-product of internal border control due to corona restrictions, workers whose work rights were not in order were injured at the border last year. This spawned a lot of useful tips for foreigner control and increased inspections, which in turn helped reveal more deficiencies than usual, especially at the construction sites in Southern Finland.
The fact that in Southern Finland raksas have roughly a third of the labor force with a foreign background, and in the rest of Finland on average about a tenth, is not in itself a sign of the gray economy. A significant part of that workforce has worked in Finland for a long time, many have started a family here and life takes place here. Similarly, the Finnish tax bear takes a large part of their salary.
The gray economy is often home-grown, it manifests itself especially in labor-intensive industries, where work is divided into long contract chains. Often, however, the gray economy and the use of undeclared labor are at least partially linked to foreign labor.
The trend is universal and our situation is no different from, for example, Sweden or Belgium. This is largely due to the fact that, whether it is in the construction, restaurant or agricultural sector, the workforce coming from abroad comes from a country where there is no work available or the country's wage level is significantly lower than the generally binding collective agreements in our country or, ultimately, the legislation requires workers to be paid.
A new problem has arisen when many old ones have been solved
The Regional Administrative Agency's report stated that the number of persons without the right to work detected in the inspection has also increased slightly in the construction sector since 2019. Over the past few years, the inspection has mainly been directed at sites where employers have had shortcomings in terms of labor legislation and thus also ensuring the right to work.
We have noticed the phenomenon becoming more common in discussions with various authorities, Rakennusliitto representatives and our member companies for a long time. In several cases that have come up, when workers without the right to work in Finland have been met at the construction site, the main contractor has not violated any regulation or supervision obligation. Instead, the Finnish employer company of the persons in question and the company that brokered labor from abroad have been guilty of illegal activities.
Although there is always room for improvement, I dare to be proud of how we in the construction industry have voluntarily invested the most in combating the gray economy out of all industries. During the past decade, the construction industry RT and its member companies have been developing voluntary procedures and legislation in such a way that the gray economy – to put it bluntly, economic crime – has significantly decreased in professional construction. This is a fact that has also been noted by the authorities.
Without the significant lobbying of the Finnish Construction Association and the Construction Industry, we would not have been able to pass into law, for example, the tightening of the customer liability law for construction, or the tax number for the construction industry and the regular reporting obligation of contract sums and employees working on a joint site.
The measures have collected hundreds of millions of euros in tax revenue for the state. In addition, they have improved the possibility of fair competition for companies operating honestly. These examples have come from the fact that we have demanded them ourselves, even though political decision-makers and other parties initially opposed the proposals.
A small step for the legislator, a big benefit in preventing abuses
The cooperation between the interest organizations of the construction industry and several authorities in combating the gray economy has been seamless, for which a big thank you goes to the tax administration and regional administration office holders. However, construction's long contract chains and labor mobility across borders are constantly exposing many kinds of hidden crime, which is why the next step is now needed.
A foreign person who does not have the citizenship of an EU country needs a residence permit entitling him to work in order to work in a Finnish company. Those who live and work in Finland without permission are vulnerable to exploitation.
In order to get to grips with this problem properly, the Aliens Act must be amended. It's actually just a few words and quite a bit of work.
According to Section 86 b of the Aliens Act:
When employees employed by a foreign employer work in contracting or subcontracting work or as temporary labor, the employer's obligations referred to in Section 72 and Section 86a, subsections 1 and 2, apply to the main contractor or main contractor operating in Finland.
By removing the words "those employed by a foreign employer" from the beginning of the section, the supervision obligation - and to a large extent also the possibility of supervision - would extend to the main contractor, even for Finnish companies. In this case, a fraudulent employer cannot hide unauthorized labor in the contract chain, which cannot be caught.
Although this brings more obligations for companies in the construction industry, Rakennusteollisuus RT and its members are ready for the change. Responsible operation is in everyone's interest.
Peesa's Construction industry here, just those four words out of the law.