Breaching contracts: a business concept

Arkiv

The Irish electricians had employment contracts for six months work in Sweden, but they were sent home ahead of time – without pay. And still taxes remain to be paid. This is the story about the Irish staffing company Silverback.

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For the past three years Silverback has leased out about 370 electricians to various customers in Sweden including companies such as Bravida AB, Sallén Electric AB, and Goodtech Projects and Services AB.
Information about Silverback’s operations in Sweden can be retrieved from the posting registry at the Swedish Work Environment Authority. This is a registry that all foreign companies must report to when they have ongoing activities and employees working in Sweden. The records also include employee names and length of the posting period in Sweden.

Communication consultant
If you are posted for more than 183 days in Sweden you have to pay your taxes here. However, the Silverback tax account with the Swedish authorities shows that not a single penny of tax has been paid. In fact, since September 2015, the company has not reported anything to Skatteverket, i.e. the Swedish Tax Agency and Silverback has been fined several times for the fees and payments overdue. Stoppafusket always strives to include the opinions of all parties concerned, hence we have tried to get in contact with Silverback’s CEO, Paddy Lyons, for a comment. We called him on his office number, and he did answer the phone. However, when he understood that it was a journalist calling, he excused himself with a “Hold on” and reconnected the call to the switchboard. And now we were told that Paddy Lyons was not in. After that we never heard from Paddy Lyons again. Later the same day we were contacted by a hired Silverback communications consultant. Her name is Annette Nugent and in a written commentary she says that Silverback has now submitted all fees overdue and also caught up with the backlog of outstanding reports to the Swedish tax agency.

Rota
Based on the data in the posting register, Stoppafusket has counted and compared the number of workers liable to pay tax in Sweden with the Silverback rota. The employees work 60 hours per week for two weeks followed by a ‘work free’ week in Ireland. In order to be taxable in Sweden you must have been working in Sweden for more than 183 days during the period of a calendar year. According to our calculations there are 29 workers liable for tax payments. Annette Nugent does not agree with this and writes that “I can confirm that the number you suggest is untrue and the situation you describe currently relates to a much smaller number”. She also writes that Silverback will help the workers retrieve taxes paid in Ireland and ensure that they are submitted in Sweden instead.

Irish contracts
The number of workers who are liable to pay tax in Sweden are quite few. This is because the Silverback workers only work for a few months in Sweden, sometimes just for a few weeks. Then they simply return home, either to unemployment or to work for another employer, despite the fact that their contracts say they are employed by Silverback for a full six-month-period. This is something that SEF, the Swedish Electricians Union, has discussed with Silverback.
“The answer we get from the company is that the employment contracts are Irish and that we do not have any say about them. But we will fight them about this. Silverback is bound by the collective agreement and we have evidence suggesting that our members are sent home prematurely without pay”, says ombudsman Petter Johansson, SEF.

Irish norm
When Stoppafusket asks Silverback why most workers are in fact working less than what the contract stipulates, Annette Nugent responds: “You also appear to be uncomfortable with the idea of people working overseas and in non-permanent positions. Unlike for Swedes, this has long been a cultural and professional norm for Irish people, particularly in the construction sector.”

Violation of the law
Annette Nugent’s opinion is however not shared by Arthur Hall, the vice President of the Irish Electricians Union, TEEU.
“According to Irish law a contract must not be breached for any reason other than the worker seriously misbehaving. If the company claims the reason being lack of work, the legal process to get around it is lengthy”, he explains.
Can TEEU take any action against Silverback when the workers do not get to work according to the full extent of their contracts?
“We have tried to bring about a collective agreement, but Silverback refuses. One reason being, the company claims, that it does not have any operations in Ireland and therefor posts workers abroad”.

Operations
This is Silverback’s official stand in Ireland. But when the Swedish union SEF wanted to find out if Silverback had any operations in Ireland, the response was “…this topic is not one that I’m going to answer to you.”
SEF then addressed several of Silverback employees asking them if they had been working for Silverback in Ireland. The answer was No. Annette Nugent is, however, in her written reply to Stoppafusket, of the opinion that Silverback does have operations in Ireland. Confused? We understand. 

Social security contributions
This might all sound a bit contradictory. If Silverback’s business in Ireland is virtually non-existent and most of the company’s operations take place in Sweden – why does Silverback pay social contributions in Ireland? The law says, that in order for Silverback to pay social security contributions in Ireland and not in Sweden, they must, first of all, get so-called A1-certificates for their workers. And in order to get such certificates, they need to have at least 25% of their business operations in Ireland. That is EU law. There is however yet another rule of law that applies in this case. Since the workers stay for such a short period in Sweden, it is possible (if they are lucky) that they will be able to get another job in Ireland with another employer for the remainder of the year. And this is when the second EU-rule kicks in and overrules the posting legislation: If a worker is working in two or more countries, social security contributions, shall be submitted in the home country, in this case, Ireland.

The employment contracts
The levels of the social security-contribution fees are quite similar for most European countries – with a few exemptions. Ireland with its very low fees being one of them. That it is very important for Silverback to spend as little as possible on social security contributions is visible in the company’s employment contracts, which states that if a worker does not fulfil the requirements for an A1-certificate, that is if he or she should get employed by a another employer in Ireland during the rest of the year, Silverback may reduce their wages. Click here if you want to learn more and see for yourself what is said in their contracts.

Atlanco Rimec
Silverback Staffing is an interesting company, but for eight years, Paddy Lyons, the Silverback CEO, used to work for another company, the notorious staffing company Atlanco Rimec – an infamous business group which, among other things, is known for having deducted money from the workers’ salaries, but not paying their taxes. Over the years Stoppafusket has kept a close eye on Atlanco Rimec and we have frequently reported about the group’s activities. The company was, for example, sentenced to pay nearly 20 million SEK in France for undeclared work. You can read all our articles on Atlanco Rimec here! During his time with Atlanco Rimec, Paddy Lyons was immortalized in the Irish documentary From Portugal to Portadown which was released in Ireland in 2002. In the film he is presented as the Operating Manager of Atlanco Rimec, a role best compared with that of a vice president.

Caught on film
Paddy Lyons was filmed by reporters from Insight , the UTV investigative current affairs programme, as he was lured into believing that he was going to land a contract on graffiti cleaning in Belfast. The contract was described as being quite hazardous since it required the use of strong chemicals, not to mention that the worker could be facing risky, even life-threatening situations due to the strained and inflamed ongoing conflict between Protestants and Catholics. This was a sanitation project all other companies and employment agencies had declined. Paddy Lyons did however accept. When asked if Silverback has anything to do with Atlanco Rimec and its owner Michael O’Shea the answer from Silverback is a big NO.

Scandinavian operations
Silverback started up its business in Ireland on February 13, 2012 and immediately initiated operations in Norway. How many workers that are active in Norway we do not know since the company up until now has been exempt from the requirement of filing any annual reports. On February 21, 2013 Silverback registered for class F-tax in Sweden and started operations here, and in 2014 Silverback started a subsidiary in Denmark. The first public annual report for Silverback was released in Ireland only a few days ago. The company applies a split fiscal year, from April 1st 2014 to March 31st 2015. In the annual report you can learn that the company on average has 62 employees per month, directors and managers included.
Paddy Lyons also runs another company in Ireland, Exportise. Annette Nugent works here too, as a senior manager. So does another former Atlanco Rimec manager.

Anna-Lena Norberg
Translation: C-line productions

Silverback has made many comments, and we want to give the company the opportunity to have their statements published in their entirety. Therefore, we publish the entire communication between Stoppafusket and Annette Nugent / Silverback here. Click to read more!

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