Sure? Sure!

Mallet of justice

How does a proper collaboration with external workers look like? And how can criminal liability be ruled out completely? Questions we have talked about with Klaus Kunze, Head of Daimler Legal Regulatory Compliance/Criminal Law Global.

Mr. Kunze, you advise Daimler on criminal matters worldwide. What is the role played by criminal law when working with external workers?

Kunze: In certain cases, criminally relevant risks may arise when commissioning external workers. These can be: administrative offenses, criminal offenses or tax offenses. If such violations occur, the persons acting are individually responsible. However, these violations can also provide the basis for severe fines to be levied against the companies involved.

What are the most common risks?

Kunze: There is a risk when work or service contracts are designated thus but not “exercised”, not “lived” as such. For example, if an external worker is integrated in Daimler’s work organization. This incorporation might even give rise to the assumption that Daimler is the employer. The so-called pseudo-self-employment is particularly serious. A self-employed external employee carries out assignments in such a way that certain characteristics of non-independent work are present. For instance, if he is incorporated in work processes, or if he bears no entrepreneurial risk of his own, or only works for one client.

 

If in cases such as these – anywhere in the commissioning chain – social security payments are not made fully or are not made at all, this creates risks: In addition to civil law risks, social security, trade, and tax risks. In extreme cases there is a danger of committing criminal or administrative offenses. The non-payment of social security contributions, for example, is a criminal offense. In order for this to constitute a criminal offense there must be the presupposition that Daimler is the employer. This may happen in individual cases if the external worker is integrated in a work process.

Why is it so important for Daimler that everything is done according to the law?

Kunze: Integrity and compliance are the very groundstones of our global business practices. This means that we comply with all relevant laws, internal regulations, and voluntary self-commitments. Of course we also act according to ethical principles. That’s why we aspire to handle all commissioning of external workers in an orderly manner and according to these rules. We expect this from our business partners, too and call for it actively as well.

daimler-supplier-Legally compliant employment of external labor at Daimler
Integrity and compliance are the very groundstone of our global business practices.

How does Daimler prevent conflicts with the law in the employment of external workers?

Kunze: We want fair work conditions for employee cession contracts as well as for work and service contracts. To avoid the risk of prosecution, we have a series of measures at hand. We have pledged to observe stringent social principles. These “Standards for the Handling of Work and Service Contracts on Daimler AG Premises” include, among other things, guidelines on health and industrial safety, remuneration according to regional branch price Agreements, and information rights of employee representatives. In addition there are standards for each individual assignment: For example, sample specification books or descriptions of processes and responsibilities.

 

A coordination group set up by the Board of Managing Directors regularly reports on the measures from all business areas, under the conduction of the Management Board members responsible respectively for personnel and for Law and Integrity. A comprehensive External Workforce Compliance Program with its own Intranet portal offers training courses, self-assessments and help on this topic. The program provides information intended and guidance on what is possible to do and what is not allowed. In addition, suppliers receive requirement-oriented Compliance Audits.

And what about suppliers?

Kunze: The supplier must always prove to Daimler with whom he is performing the contractual service. This document should also contain information about whether the service is rendered with own or third-party employees and whether these are employed by a subcontractor. Spot checks are unavoidable here.

What else do suppliers have to do to make sure they are not violating the law?

Kunze: In similar manner, the supplier must make sure that work contracts are correctly performed and fulfilled. In plain text: this means that the co-workers are not integrated in the contractor’s workforce. In the case of subcontracting, the supplier must tell Daimler with whom he performs the service. Apart from this, he is required to carry out spot checks to ascertain if, and what kind of employment arrangements exist with the subcontractor. I know that this demands a great effort and expenditure. But in view of the risks outlined, it is well worth it for all concerned.

Date:
Mar 27, 2017
Author:
Birgit Hennefarth
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