How visible the chain is
A point established by the posting rules. A foreign subcontractor is subject to the same obligations as the main contractor.
The posting declaration includes the identity, address and contact details of the direct subcontractor.
The subcontracting structure is therefore known to the administration from the start of the work.
That visibility changes the nature of the risk: a subcontracting chain is not a screen, it is a declared element.
A firm using a subcontractor in default cannot therefore plead ignorance, the chain having been disclosed.
| Element | Stays with the main contractor | Passes to the subcontractor |
|---|---|---|
| Site coordination | Yes | No |
| Liability to the client | Yes | No |
| Posting obligations | No | Yes, for their own staff |
| Checking the counterparty | Yes | Yes, down the chain |
The subcontractor's legal position
Two propositions to distinguish, from the sources consulted. They concern the reach of joint and several liability.
A subcontractor does not have the status of builder, having no direct link with the client.
Their civil liability may nonetheless be engaged towards the main contractor and the client.
The case law consulted indicates that they are in principle bound by all a contractor's obligations towards their own customer, without their liability following the same articles as a builder's.
Consequence for the main contractor: it remains in the front line towards the client, with recourse against its subcontractor on a distinct basis.
Consequence for the subcontractor: their status is no shelter, it merely changes the basis of their exposure.
What to check before contracting
Five points, before entrusting part of your contract. They are checked on the intended subcontractor.
The business permit, or the regularity of the subcontractor's position under establishment law.
The posting declaration for their own employees, if they send any.
Insurance cover, including for works carried out in Luxembourg.
Technical capacity, measured against the work entrusted.
Social and tax compliance, so far as verifiable.
These checks should be documented, and that documentation is what protects if difficulty later arises.
The risk of a long chain
Three effects of stacked levels.
Loss of visibility over who is actually working, where the declaration covers the direct subcontractor.
Dilution of checks, each level assuming the previous one checked.
Lengthened recourse in the event of a claim, each level having to turn against the next.
These three effects compound, and they explain why a short chain is generally preferable, including economically.
What subcontracting does not transfer
Three elements stay with the main contractor. They concern coordination, liability and payment.
The contractual obligation towards the client, defined by the contract.
Builder's liability, where engaged, as the article on liability after handover recalls.
Coordination of execution, whose failure is attributable to it.
Subcontracting transfers performance, not the obligation.
What this means for a professional
Four rules.
Check the subcontractor's position before contracting, and document that check.
Limit the number of levels, a long chain diluting controls.
Do not assume a subcontractor compliant at home is compliant in Luxembourg, obligations being territorial.
Provide contractually for the subcontractor's compliance duties, and the means of verifying them.
This article reflects the law and practice at the date of checking and serves professional orientation. It does not constitute legal advice.