Nobody wants to take responsibility for foreigners working on construction sites

Kristjan Mitt, board member of the building firm Mitt & Perlebach, admits honestly: « I do not even know the laws regulating the registration of foreign labor». Yet Ukrainians and Georgians are working on the construction site of his firm as Postimees reported last week.

The same Georgians, who built apartment houses in Harku since the end of April and claim to have been cheated out of their salary, left Estonia early this week and began a bus ride back home. The travel money was allegedly received from the local Georgian community.

But the problem does not leave with the Georgians – a number of foreigners may still be working on construction sites and no one wants to take responsibility for them.

«We have no construction workers, I have never encountered it. I know only what the newspapers write about it that foreign labor must be registered. But how it is done – I do not know, I have never done it,» said Kristjan Mitt, who had no opinion about whether the main contractor should check whether the foreigners working on his building are allowed to work in Estonia in the first place.

«The registration should be done by the one who they work for, who pays their salary,» Mitt said and added that their subcontracts have been concluded with other Estonian enterprises. «We are responsible for all people we pay for, but we do not hire a single construction worker. This is how all main contractors do in Estonia today,» he said.

Thus the Georgians built houses for Mitt & Perlebach according to a complicated scheme involving no less than three subcontractors. The construction firm has a contract with the Estonian firm Seltronic Ltd for general construction work, which in turn has a contract for general construction with a Polish-registered firm Buffo Ehitus z.o.o. The latter uses the labor of yet another Polish company TVI Inc, which included the Georgians described an earlier article.

«I have a subcontract with the Polish firm and all the work is paid for,» assured Tauno Aru, board member of Seltronic Ltd. «My subcontractor's business is all right as well, but it has another subcontractor. I cannot check whether they have transferred salaries to workers or not,» Aru said.

No one can take responsibility

Who is responsible for registering the workers in Estonia and paying them fair and lawful salary if the subcontractor's subcontractor is located in Poland? «But it meets the Polish law! It is the Polish state which must be responsible, not Estonia,» said Aru, who claimed to know nothing about his subcontractor's contracts. «Why should I know it? I have done my work, paid all the taxes and everything is clear,» he said, adding that the cooperation agreement with the subcontractor stipulates that the Polish enterprise is responsible for the registration of labor.

Aru later mailed a legal text of analogous content as further explanation. «The legislation of the Republic of Estonia regulates who is responsible and to what extent if the employer has failed to pay salaries to posted workers. According to the regulation of the law, the employer (i.e. enterprise registered in a foreign country) is responsible for the salary of posted workers and its payment,» Aru's written response read.

The head of the Polish-registered Buffo Ehitus is Deniss Borodin, who is operating as entrepreneur in Estonia. «I have a contract with a Polish firm, where these Georgians work. Accordingly I transfer money every month, which the firm pays to its workers,» Borodin explained Postimees last week. Whether or not the Georgians had been registered to work in Estonia Borodin did not know, because «the Georgians were not actually his workers». He was no longer able to make contact with the Polish firm TVI Inc.

Police business

Mitt said that the main contractor is unable to check the personnel of all subcontractors. «We are building 20 houses right now, we have a couple of hundred subcontractors. Other subcontractors have foreign labor as well. Are we checking them? No, we do not register workers,» Mitt said and pointed out that construction sites all over Estonia are using many foreign workers.

«We expect them to be registered. The increasing number of foreign labor in construction sites in Estonia is a recent tendency. They mainly build the structures,» Mitt said and admitted that the construction sector has a lot more vacancies than available labor.

If the law should require in the future that the main contractor must check the subcontractors' foreign workers, it shall be done, Mitt admitted. «It has not been done so far. The construction sector does not like a gray area. This is a new subject and a solution will come, since the pressure on labor is great. It was only a matter of time before somebody writes an article,» Mitt said.

Jaano Vink, board chairman of the construction firm Nordecon AS, also said that matters concerning foreign labor tend to touch the main contractors more remotely than subcontractors, since the former usually do not hire a large number of workers. Vink said that Nordecon does not check with the police the record of every worker on its construction sites. He thought that it would be the task of government institutions.

«But contracts with subcontractors stipulate specifically and unequivocally the requirements of legality of their activities. If there is well-founded suspicion of violation, we can respond to a specific incident, which we have done. Besides unlicensed workers this concerns observing all other legal requirements,» Vink said.

Raivo Rand, supervisory board member of the building firm Rand ja Tuulberg, said that they as the main contractor are trying to check the background of foreign labor, although he said that their sites do not employ many aliens.

«There have not been very many foreign workers, although I know that their number is increasing,» said Kaupo Kolsar, head of Astlanda Ehitus. «We have long-term partners and they do not include many firms with high-turnover labor. But not every firm has steady partners and long-established relations,» Kolsar said and added that the construction market is varied.

The law permits

Jana Laane, adviser of the Ministry of the Interior department of citizenship and migration, said that in principle an entrepreneur operating in one EU member country is allowed to use citizens hired from third countries for work in another EU country, but in that case they should be registered as labor in Estonia. Posted workers must be registered at the Labor Inspectorate starting from the end of 2016 and that must be done by the employer or the firm subject to tax in the foreign country.

If the enterprise itself hires a foreigner for a short period, he must be registered at the Police and Border Guard Board and that can be done only by an employer registered in Estonia. Laane said that some employers evade that obligation.

«The employer must register short-term work of an alien legally residing in the country and he is obliged to observe the requirements of the Labor Act and the Aliens Act,» Laane said, agreeing that discovering the abuse or violation of the system and responding is a matter of state supervision.

The police organize raids to discover violations. A total of 18 joint raids with the Labor Inspectorate and the Tax and Customs Board have been carried out this year; the police participated in 350 raids last year.

«During targeted inspections the Labor Inspectorate identified 18 allegedly posted workers (aliens with Polish visa) regarding whom the procedure was continued. That means the Labor Inspectorate had not been informed about their posting or the procedure had to be handed over to the police due to suspicion of illegal residence,» Meeli Miidla-Vanatalu, deputy director of the inspectorate, commented the discoveries made this year.

As of the end of June the police have registered 180 violations related to the working conditions of foreign citizens.

Postimees wrote last week how Georgian citizens built apartment houses in Harku for several months, but nobody admitted being their employer. As they did not receive the promised salary, Denis Borodin said that their salary should be paid by the Polish enterprise TVI Inc which he was no longer able to contact. Although Borodin did not consider himself responsible for the Georgians, he promised to pay them the salary owed to the men.

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