Forenede Service, the nation’s second-largest cleaning company, has been hit with a multi-million kroner fine for underpaying subcontractors, the trade magazine Fagbladet 3F has reported.

Earlier in the year, an investigation by Fagbladet 3F revealed that Forenede Service was systematically exploiting Romanian cleaners who were being brought over to Denmark by one of the company’s subcontractors.

The Romanians worked long hours with no pay and many lived in squalid conditions in a basement flat owned by Jimmy Nika, who served as a subcontractor to Forenede Service for years.

Fagbladet 3F spoke with over 20 Romanians who were hired by Forenede Service or subcontractors of the company, including many who were hired by Nika. Many of the workers reported being paid less than their promised salary of 500 euros a month, and some said they were not paid at all. Workers reported being threatened with physical violence, and some of them had their ID papers stolen.

Additionally, the trade magazine found that several employees of Forenede Service’s various subcontractors were discovered by the tax authority Skat to have been living and/or working illegally in Denmark.  

In a settlement reached with the unions 3F and Serviceforbundet, the cleaning giant has agreed to pay a massive fine and clean up its hiring and payment practices. The exact amount of the fine was not revealed by the involved parties.

Tina Møller Madsen, the chairman of 3F’s private services, hotel and restaurant group, said that with the agreement, Forenede Service acknowledged its wrongdoing.

“The settlement shows that the Danish model works,” Madsen told Fagbladet 3F. “Forenede Service has acknowledged that it has breached the collective bargaining agreement and has now promised to make good on that.”

Specifically, Fagbladet 3F reports that Forenede Service was found to have violated the terms of Section 42 of the collective bargaining agreement, which states that cleaning companies must pay the same hourly rate for subcontractors as they would pay their own employees.

In addition to the fine, Forenede Service has agreed to establish closer ties with the unions to ensure better pay and working conditions.

“We are very happy that Forenede Service is ready to engage in closer co-operation,” Madsen told Fagbladet 3F.