What are the risks and consequences for engaging in illegal worker leasing activities and how to avoid potential pitfalls?

Illegal Worker Leasing Activities

Work Supply – Trabalho Temporário Lda has seconded or leased workers to clients in over 12 EU and EEA countries and, based on our experience, the Labour Inspection authorities in EU and EEA countries are surprisingly active. In some countries we have been subject to inspection on approximately 15 occasions – and, we have only been in the business of intra-EU posting for a handful of years.

So, both TWA´s and their clients should be aware that the chance of being caught is by no means negligible – certainly like one in a million.

The negative consequences that may arise from engaging in illegal labour leasing are far too broad and diverse to be exhaustively covered in this short article, however there are a few consequences that are particularly significant and extend to the jurisdictions of virtually all EU and EEA member states.

Consequences of illegal activities:

Below are some of the consequences that we believe both TWAs and their clients should be particularly wary of:

If a TWA doesn´t pay the salaries of the workers leased to a user undertaking (client) located inside or outside Portugal, and no guarantee or possibility of payment can be extruded from the TWA, then generally the authorities will call upon the client to pay the salaries
If during an inspection the authorities detect the presence of illegal foreign workers or foreign workers with missing or fraudulent documentation, activity is immediately suspended until the investigation is completed – this not only has a devastating impact on the workers, but may also cause great damage and result in tremendous losses for the clients
The TWA may have it´s license revoked or indefinitely suspended and the user undertaking (client) may be banned from using leased workers for a considerable period of time which, of course, can cause great hardship and damage.
The TWA that engages in illegal or fraudulent labour leasing practices and, even more so, the user undertaking (client) that uses and benefits from the leased labour may be faced with extremely heavy fines (that are often in the hundreds of thousands of euros) levied by the national inspection authorities, along with additional sanctions
However, even worse, the client in another EU or EEA member state, completely unsuspecting and oblivious to events unfolding in Portugal, may get caught up in a criminal investigation being carried out by the Portuguese Judiciary Police (Polícia Judiciária) and ultimately be considered a suspect and face charges in a Portuguese court of law.
What many user undertakings (clients) fail to grasp is that leasing labour without a license, namely nationals from third countries with Portuguese residence permits can be interpreted as a crime (not only within the Portuguese legal framework) but in those of almost all countries in the developed world – the crime of facilitation of illegal immigration.The facilitation of illegal immigration is one of the EU’s priorities in the fight against serious and organised crime as part of EMPACT 2022 – 2025.

If you would like to check more information, you can do so here:

The user undertakings (clients) are completely oblivious to the fact that by engaging with an unlicensed TWA from which they have leased non-EU labour they may become involved, considered suspects, face charges and even be convicted for the crime of facilitation of illegal immigration – even if when it is entirely unintentional.

By leasing non-EU national labourers provided by an unlicensed TWA they can be considered to be assisting or participating in the facilitation process. That is, the Judiciary Police may consider that the user undertaking (client) is a participant or accomplice to the act. It may not seem fair, but ignorance of the law has never been an excuse.

For the reasons mentioned above and for countless others, companies outside Portugal are well advised to proceed with extreme caution in order to avoid the risk of getting caught up in a potentially nightmarish situation. The risk is not marginal, it is all too real.

When it comes to choosing the Portuguese TWA with which to do business the principle of “caveat emptor” should be the golden rule. Is there anything that can be done to greatly reduce or virtually eliminate the risks? Or is it something that foreign companies simply have to live with.

There are 2 simple things foreign work organizations can do practically eliminate any serious risks.

One of them is to call or email the IEFP, I.P. and simply ask them if any given Portuguese TWA with which a foreign company is considering working is licensed and in good standing. The employees at the temporary work agency oversight division will be more than happy to provide information and the good thing is that there is no shortage of English and French speaking personnel in the unit.