The Act on Contractor’s Obligations
and Liability when Work is Contracted Out promotes equal competition between
enterprises and observance of the terms of employment.
The Act obliges enterprises,
concluding contracts on temporary agency work or subcontracted labour with
other companies, to ensure that said companies discharge their statutory
obligations.
According to the Act, before
an orderer concludes a
contract, it is obliged to check whether the counterparty is entered in the
Prepayment Register and the Employer Register, and is registered as VAT-liable
in the Value Added Tax Register. Similarly, the orderer must ascertain whether the counterparty has
paid its taxes and taken out pension insurances, as well as the type of
collective agreement or principal terms of employment it applies to the work.
The same information must also be obtained on foreign companies.
Should an orderer neglect the obligation to check described
above, it shall be obliged to pay a fine for negligence.
The orderer need not request the above-mentioned
information, if it has good reason to trust that the counterparty will
discharge its statutory obligations.
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