Latvian Labour Inspectorate investigates Dinotrans

The haulage company, Dinotrans, has Swedish owners and most of its operations are in Scandinavia but the company does not pay tax in Sweden and nor does it pay Swedish wages. The haulage company is registered in Latvia. The question is whether the company complies with the Latvian rules. A Latvian minimum subsistence allowance is EUR 40 a day. The Filipino drivers at Dinotrans have EUR 15. The Latvian Labour Inspectorate and the owner of Dinotrans have different perceptions of what allowance should apply.

This is the second part of an article on Dinotrans. The first part can be found here.
Dinotrans is a transport company which has its main operations in Scandinavia. The Annual Report shows that the company has a turnover of SEK 234 million (2014) with 75 percent of the sales coming from the Scandinavion market (SEK 176 million) and SEK 54 million from Central Europe. Only 2 percent of the sales are earned in the Latvian market. Stoppafusket has met drivers who work for Dinotrans. They have stated that drive frequently between the Scandinavian countries and Germany. Most of them load in Sweden and have their days of rest on Swedish soil. Dinotrans had 346 full-time employees in 2014. The total cost of salary was EUR 2.3 million. That makes an average monthly wage of SEK 5300.

Statutory Allowances
Dinotrans has employed drivers from the Philippines, as well as from Latvia. I have spoken with both Latvians and Filipinos. The most striking issue is that there is a large pay differential between them. Latvians say that they earn 60 euros a day, the Filipinos get 670 euros a month. In addition to salary, the Filipino drivers get EUR 15 a day for subsistence.
How can they live like that in Sweden? It sounds low. To find out what is normal in Latvia I call the Latvian Labour Inspectorate.
− The allowance should be EUR 40 a day, says Raivis Bušmanis, general counsel at the Latvian Labour Inspectorate.
Are you saying that it is mandatory?
− Yes it is.
What could it be for penalties for employers who do not follow it?
− At first, we will, in writing, ask them to follow the rules. If they still do not follow the law we will go to court and the company could be forced to pay fines and be required to pay regular allowances.
My thoughts goes to the Filipino driver Peter who gets EUR 15 per day in allowances. He says he has worked for Dinotrans for 16 months now. Underpaid by EUR 25 per day in sixteen months, it will be well over SEK 100 000 that he has not received. This money would probably be enough for him to fulfil his dream: an initial capital for his own business at home at the Philippines. The Latvian Labour Inspectorate has now started an investigation into Dinotrans handling of this allowance. So time will tell if Peter has the right to higher allowances, or not.
Owner comment:
Dinotrans owner, Staffan Resare, does not want to be interviewed over the telephone but I have emailed some questions which he has answered:
Why does not Dinotrans pay taxes in Sweden, as the operations are conducted mainly in Sweden and Scandinavia?
− SIA Dinotrans conducts international lorry traffic across the European Union with Norway and Switzerland, and not primarily in Sweden. Our employees are employees of SIA Dinotrans and have Latvian wage agreements. Wages in Eastern Europe are significantly lower than those in Sweden, which in itself would result in a lower tax in Sweden than in Latvia, because of difference in the tax scales, if it was possible to pay tax anywhere.
Why is there different pay and various allowances for Latvian and Filipino drivers?
− Our salary structure is not public but generally speaking, seniority and qualifications affect wages and benefits.
How come the employees do not have valid health insurance in Sweden when they work so much here?
− All staff in Dinotrans has health insurance. In case of illness Dinotrans pays the first ten days, after that the health insurance fund in Latvia pays. In case of acute illness or accident insurance covers all employees. Latvia does not have the same rules as Sweden that you can seek treatment for all diseases in which EU country you want. Not urgent medical care must take place in Latvia.
How does the company justify the deduction of salary for damage to the truck in the service?
− There is no deduction of wages. This is not consistent with Latvian law. Dinotrans are taking compensation for damage caused due to negligence or made with intent. This also includes injuries related to alcohol.
Does Dinotrans have any intentions to arrange laundry and shower facilities for the drivers?
− We are constantly trying to find the best solutions when it comes to these issues. In recent years, however, these opportunities has deteriorated due to poor infrastructure and too much demands. But I have to listen to this criticism.

Different levels of subsistence
After I received responses from Staffan Resare, I sent a supplementary question on the subsistence. I have seen something that I interpreted as a pay slip which a driver I interviewed showed me on his Ipad. This pay slip showed that the daily allowance was EUR 105 euros. According to the Latvian Labour Inspectorate the subsistence allowance is EUR 40 per day.
This is how Staffan Resares comment on this:
− It is not true that you write. You have not seen any payslip. Regarding the level of the subsistence allowance, you should examine this more closely. There are additional rules in relation to this. If you now want to publish information from the annual reports, which are public information in Latvia, so it may well be in place, to also compare the social security contributions paid per employee by others transport companies, where Dinotrans is paying the double.
This is also public information in Latvia. The tax payment is not so easy to compare, as different taxes are lump. You can find this information online.

Fact: the different Dinotrans companies
When you want to take a closer look at Dinotrans you will soon discover that there are several companies with the same name. It is easy to believe that there is a group of companies. But it’s not set up like a traditional corporation. There is a Swedish Dintrans, a Latvian and a German and in addition a holding company also named Dinotrans. To make it more clear, I take it in chronological order:
In 1998 Dinotrans AB started. Dinotrans AB is a Swedish company which conduct it business with the import and export of trucks and construction equipment as well as international transport. The company is controlled by a Swedish man living in Sweden: Magnus Monsén.
2001 SIA Dinotrans started, a company registered in Latvia, which would deal with the transportation of goods. The principal owner is Staffan Resare, who is from Sweden, but registered in Latvia. Resare and Monsén are brothers in law, but Monsén owns nothing in SIA Dinotrans.
2005 the Latvian AS Dinotrans Holding started. The holding company owns some companies engaged in transport operations. The company’s majority shareholders are Magnus Monsén. Staffan Resare has a minority stake.
There is also a company registered in Germany: Gmbh Dinotrans, which is a part of the sphere. But Dinotrans drivers are all employees of the Latvian SIA Dinotrans.
Between the Swedish Dinotrans AB and the Latvian SIA Dinotrans there is no ownership ties. But the kinship between Monsén and Resare makes that they have to report the business relationships between the companies. Therefore, you can deduce from SIA Dinotrans’ annual report that there have been transactions on SEK 60 million in 2014 between the Swedish Dinotrans AB and the Latvian SIA Dinotrans.

Sia Dinotrans annual report was obtained from the Latvian database Lursoft.

Thomas Lundh
thomas@stoppafusket.se