In addition to the abolition of quasi-immunity, there is going to be another important change. As of 1 January 2025 subcontractors will no longer be permitted to pass on entire jobs to other subcontractors in certain sectors.
What will change?
On that date, a new regulation will enter into force prohibiting subcontractors, as a matter of principle, from completely subcontracting work that they have taken on to other subcontractors.
Which activities?
The ban will apply to activities in the construction sector (JC 124), the meat industry (JC 118-119) and the moving sector (JC 140.05).
Work in the construction sector includes not only those activities covered by Joint Committee 124 for the building industry, but also all activities that are subject to the withholding of social security contributions and tax.
What is not permissible for you as a subcontractor?
As a subcontractor, you enter into an agreement with a contractor or an intermediate contractor to perform or commission work for a fee. You can then subcontract this work again, leading to a chain of subcontractors.
As of 1 January 2025 however, it will be prohibited for you, as a subcontractor, to pass on an entire job to another subcontractor or multiple subcontractors.
This prohibition does not apply to a contractor who has a contract directly with the client.
What is still permissible for you as a subcontractor?
It is still permissible for you to perform part of the contract yourself and to subcontract another part. However, it is important that, as a subcontractor, you do more than just the coordination of the execution and outsource the rest. The legislator aims, with this law, to prevent subcontracting from being used only for financial purposes without actual involvement in the execution.
What actions can you take?
The law cannot be contractually excluded. In other words, it is not permissible to agree on a clause allowing a subcontractor to pass on the entire contract to another subcontractor, even if the original subcontractor continues to coordinate the job.
According to the parliamentary preparation, it is sufficient to keep 1% for yourself (as long as that does not consist solely of coordination). Furthermore, it is currently still a matter of conjecture how this will be tested by the competent authorities in practice (for example, what do they consider to be the so-called 1% rule?).
PKF BOFIDI Legal will be pleased to help you
Obviously, we would be pleased to help you work out a practical solution.
Perhaps this is also a good time to take a close look at your existing contracts. As of 1 January 2025, another important change will come into effect: it will then also be possible to hold every link in the chain liable (by amendment of the Civil Code). This means that your customers or subcontractors will not only be able to hold the company liable but also, for example, the directors. However, this can be contractually excluded.
Do you have any questions about this? Our PKF BOFIDI Legal experts will be pleased to help you.
This article was written by Christophe Piette, who specialises in corporate law, mergers, acquisitions and business law, and by Leonie Denooze, who specialises in employment and social security law.