A presentation given on the Infrastructure Projects Conference held in Bucharest on 12 and 13 March 2015 with the following theme: Usage of FIDIC contracts for contracting under the Public Procurement Act

“An increasing number of Bulgarian companies are hired as subcontractors of German companies for performing of works in Germany, or directly let their personnel to German companies. In the first case, the relations between the companies are regulated by a works agreements and in the second case – by an agreement for letting of personnel keeping in mind the statutory requirements for hiring of personnel in the respective EU – member state, e.g. with respect to the minimum wage and social security payments. In an agreement between a Bulgarian company and its German partner note should be taken that the Bulgarian company shall itself supervise its personnel, so that the agreement can be qualified as a works agreement. Otherwise, the agreement shall be treated as an agreement for letting of personnel, which is regulated by a special statute for temporary letting of personnel. By way of example, if the authorities in charge find that your personnel are dressed in the company apparel of the German firm and are instructed and supervised by it, they may sanction you. Recently, there have been decisions of the German courts imposing a sanction for hiring of foreign personnel in breach of the special statute (read more at: http://www.focus.de/finanzen/recht/tid-33077/scheinwerkvertraege-belasten-das-image-deutscher-unternehmen-scheinwerkvertraege-belasten-das-image-deutscher-unternehmen-wann-wird-ein-werkvertrag-zum-schein-werkvertrag_aid_1078036.html http://www.stuttgarter-zeitung.de/inhalt.swr-reportage-ueber-werkvertraege-daimler-betriebsrat-fordert-klageruecknahme.e0159619-e83e-4bbb-9a87-b8cc28ffae88.html http://www.etl-rechtsanwaelte.de/aktuelles/arbeitnehmerueberlassungserlaubnis-verhindert-zustandekommen-eines-arbeitsverhaeltnisses-nach-aueg )

Therefore, it is vital for a company letting its personnel, to be acquainted with the local legislation and to negotiate carefully the contractual terms, namely:
– the exact description of the scope of the agreement;
– the terms and conditions for acceptance of performed works;
– the rest of the parties’ rights and obligations;
– liability for improper performance and breach of the legislation and so on.

The German consulting company SAC GmbH has kindly provided the following comparison table for the above two types of agreements to the Bulgarian Society of Construction Law, which you can see here:”

Current Use of FIDIC under the Bulgarian Public Procurement Act (PPA).

Leave a Reply