The End of “It’s the Contractor’s Problem”: What the UK’s Illegal Working Crackdown Means for European Construction

Recent announcements by the UK Government concerning illegal working in the food delivery sector may, at first glance, appear to have little relevance to the European construction industry. The headlines have focused on delivery riders, digital platforms and immigration enforcement. It would be easy to dismiss the issue as one confined to the gig economy. 

That would be a mistake. 

The significance of the Government’s action lies not in the sector itself, but in the principle that underpins it. Increasingly, governments are moving away from viewing workforce compliance as the responsibility of the individual worker or their immediate employer. Instead, they are placing greater expectations on the organisations that commission, manage and ultimately benefit from that workforce. This represents a subtle but important change in regulatory thinking, and one that extends far beyond food delivery. 

The construction industry, and particularly the rapidly expanding European data centre sector, would do well to recognise the direction of travel. 

Is Workforce Compliance Still the Contractor’s Responsibility?

For many years, the accepted position on major projects was relatively straightforward. Developers appointed principal contractors. Principal contractors appointed subcontractors. Those subcontractors engaged their own workforce and were expected to ensure compliance with employment, immigration and taxation requirements. Responsibility flowed down the contractual chain, and with it the assumption that legal accountability rested elsewhere. 

That model is becoming increasingly difficult to defend. 

Why Are Developers Taking Greater Responsibility for Workforce Compliance?

Across Europe, regulators are showing greater willingness to look beyond contractual structures and examine how projects are governed in practice. Their interest extends beyond whether individual workers possess the correct documentation. They increasingly ask whether those responsible for delivering major infrastructure projects have exercised appropriate oversight of the workforce operating on their sites. In other words, governance is becoming just as important as compliance. 

This should not come as a surprise. 

Modern construction projects are among the most complex employment environments in Europe. A hyperscale data centre may involve hundreds of contractors and suppliers, thousands of workers and multiple layers of subcontracting extending across numerous countries. Workers may be directly employed, engaged through agencies, posted from another Member State or employed through locally registered branches of international companies. Every arrangement creates different obligations relating to immigration, employment law, taxation and social security. 

The legal responsibility for meeting those obligations will continue to sit with individual employers. The strategic responsibility for understanding whether appropriate controls exist, however, is increasingly becoming a matter for project leadership. 

There is an important distinction between managing contracts and governing a workforce. 

Contracts allocate legal responsibilities between organisations. Governance provides confidence that those responsibilities are being discharged effectively. The two are complementary, but they are not the same. 

Managing Contracts	Workforce Governance
Focus on legal obligations	Focus on oversight and assurance
Employer responsibility	Project leadership responsibility
Individual organisations	Entire labour supply chain
Compliance evidence	Governance confidence

The Need for Active Supply Chain Oversight in European Construction

The UK Government’s approach to the gig economy illustrates this distinction clearly. Rather than focusing solely on identifying individuals working illegally, it has sought to strengthen the systems through which workers are verified, identities are confirmed and digital platforms demonstrate that appropriate checks have been carried out. The emphasis has shifted from reacting to individual breaches towards improving the integrity of the entire operating model. 

The emphasis has shifted from reacting to individual breaches towards improving the integrity of the entire operating model. 

The same philosophy is beginning to emerge across major construction projects. 

Developers are increasingly asking questions that would have been unusual only a few years ago. Can every worker on site be linked to a legitimate employer? Is there evidence that the appropriate right-to-work and employment checks have been completed? Can documentation be produced quickly if requested by an inspector? Are standards being applied consistently across every contractor, or does each organisation interpret compliance differently? 

These questions are not driven solely by regulation. They reflect a broader appreciation that uncertainty within the workforce creates uncertainty within the project itself. 

Health and safety provides an obvious comparison. Few developers would now accept that each subcontractor should establish its own interpretation of acceptable safety standards. Experience has demonstrated that inconsistent approaches create unnecessary risk for everyone involved. As a result, common standards are established across entire projects, supported by independent assurance and regular oversight. 

Workforce compliance appears to be following the same path. 

Technology has an important role to play in supporting that evolution. Digital onboarding platforms, identity verification systems and document management tools have transformed the way projects collect and store workforce information. They provide greater visibility and improve operational efficiency. However, technology alone cannot determine whether the correct evidence has been requested, whether documentation has been interpreted consistently or whether the underlying governance arrangements are sufficiently robust. Digital systems are powerful enablers, but they cannot replace informed judgement or clear accountability. 

This is where many organisations continue to underestimate the challenge. They assume that because information exists somewhere within the supply chain, the project itself is protected. Increasingly, regulators appear to be asking a different question. They want to know whether the project can demonstrate, through clear and auditable evidence, that it understands who is working on site, under what arrangements and how those arrangements have been verified. 

That is a significantly higher standard than simply relying upon contractual obligations. 

The implications extend beyond regulatory inspections. Investors, insurers, clients and funding institutions are placing greater emphasis on environmental, social and governance performance. Workforce governance is becoming an increasingly important component of that wider assessment. Organisations that can demonstrate consistent oversight of their labour supply chains are likely to enjoy greater confidence than those that rely exclusively upon contractual assurances from others. 

The Government’s recent intervention in the food delivery sector should therefore be viewed as another indicator of a wider trend rather than an isolated policy response. Different industries face different risks, but the direction of travel is remarkably consistent. Governments expect organisations to understand their workforce more thoroughly, exercise greater oversight of their supply chains and demonstrate that appropriate controls are operating effectively. 

For the European data centre industry, this represents both a challenge and an opportunity. 

Those who continue to regard workforce compliance as an administrative responsibility delegated entirely to contractors may find themselves struggling to meet rising expectations. Those who treat workforce governance as a core discipline of project delivery, alongside safety, quality, programme and commercial management, will be better positioned to manage regulatory scrutiny, reduce operational risk and strengthen confidence among clients, investors and public authorities. 

The debate is no longer about whether contractors have responsibilities. They always will. 

The more significant question is whether developers can demonstrate that they have exercised appropriate oversight of the workforce delivering their projects. 

Increasingly, that is the standard against which major infrastructure programmes will be judged.