Several articles have been published recently on how foreign construction workers have been employed through third-party companies using contracts that are far from what is acceptable or even legal for local workers. Their wages have been well below what Finns are paid, and according to these articles, these third-party companies appear to have deliberately not paid payroll taxes and other compulsory costs for each worker. The result has been that the construction companies have been able to benefit from low-cost workers without breaking the law!
According to the articles, it appears that the construction companies were not aware of what these contractors were doing! After disclosure in the media, they stopped using these arrangements, claiming that they were not aware of these abuses…
However, it is up to the reader to judge the veracity of such statements when these construction companies dominate the construction market in Finland with huge market shares employing thousands of workers!
Further proof of the pudding, if really needed, is seen clearly from the results where shoddy work is the most common complaint which in turn leads to endless disputes between the owners and the construction companies.
Here are a few true examples:
- Two years ago, your correspondent spoke with an owner resident of a newly built apartment in Helsinki. He listed more than 10 serious building errors, like leaking water pipes, blocked sewer pipes, doors that would not close, etc… Skanska, the largest construction company here, was the builder and they simply refused or failed to repair anything after 6 months of complaints. Stories still can be seen in the press about this project, and many other similar apartment projects. The apartment block in question was built right on the water’s edge in the centre of town and commanded one of the highest prices per square metre this last decade.
- In another case, your correspondent met with an apartment owner in Westend, an exclusive area near Helsinki, who had just finished a three-month dispute about shoddy work with YIT, another Finnish construction company. YIT had finished a large project upgrading the whole apartment building by installing new water and sewage pipes, upgrading electricity powerlines, installing new heat exchanges, as well as upgrading older kitchens and bathrooms. The work was done carelessly with many faults. The owner had agreed in writing to have new flooring tiles on the bathroom and hallway as extra work for an agreed price. YIT did not perform the work as agreed, and after several months of frustrating refusals to correct the errors, the owner had enough. He sent an email to a director of YIT, with a copy of the agreement, photographs of the shoddy work, and a demand to meet him personally or receive reparation demands from the owner’s named lawyer. That resulted in a face-to-face meeting within two days, and the repairs were performed quickly and without further problems.
- In one more case, your correspondent interviewed a family that was building a new house to the west if Helsinki. They employed a Finnish construction firm, based on references from their architect, only to stop work after 2 weeks when it was apparently obvious that the workers and their master builder proved to be both incompetent and in collusion together. The family refused to pay their invoices for work, and immediately employed a construction engineering specialist to inspect the foundations and invoicing of work performed. They reported that construction work was well below acceptable standards, and the invoicing more than three times more than what it should have been. They also pointed out that there were heavy costs for work and materials for correcting these errors. A new construction company finished off the contract o time and within budget.
- A fourth owner, interviewed recently by your correspondent purchased a turnkey home from Jukkatalot, a relatively large construction company selling prefabricated home packages. When the house was almost completed the firm went belly up, and the owner was left without a garage, plenty of faults, and quite a few missing fittings. Since the company had demanded upfront payments the owner was left with a fair amount of extra costs and no recourse on the company. Jukkatalot had employed many foreign workers and subcontractors who had no hesitation to knock on the owner’s door and demand payment for their unpaid wages and collect their materials that were still in the house! Naturally the owner to them to leave or he would call the police…
There are many more examples which are not necessary to describe here but the common theme is that owners and private people who want to build a new home here are faced with construction companies who routinely cut corners and who do not have the processes in place to design and build new homes properly. They just want to employ the cheapest possible labour and materials in their desperation for quick profits.
Probably the biggest problem is that this wild west situation has developed because there is a lack of formal training and worker registration, a lack of strong regulation, and a contractual base that favours the construction industry, a sector and a supervisory system that has clearly failed in their duty of care.
There appears to be a strong relationship between the construction companies and the big political parties here meaning that the construction lobby, together with the banks, get a better dealt in good and bad markets compared to ordinary folk.
The construction industry almost always demand that private buyers must use the so-called “RT-contracts” which offer little or no protection when things go wrong. These contracts are designed and maintained by the main industrial association and a long, difficult agreements covering many pages. The uninitiated should be warned before signing such contracts because they offer very little protection when things go wrong and t is very costly to litigate against these giants…