EU States Have Until 2020 to Implement Revised Posted Workers Directive

 

By Ius Laboris October 12, 2018
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​To protect worker pay, the European Union (EU) has revised a rule that seeks to put workers who are temporarily assigned to foreign countries within the EU on par with local workers. The revision takes differences in working conditions among EU countries into account, while providing core minimum conditions for these foreign workers.

Posted workers (or "secondments") are employees who are temporarily sent to another EU member state by their employer to carry out a service on the employer's behalf.

The European Parliament and the Council of the European Union adopted the revised Posted Workers Directive on June 28. Member states have until July 30, 2020, to adapt their legislation to comply with the revised secondment rules.

This article discusses mobility strategies resulting from the directive across Belgium, Italy, the Netherlands and Poland.

Posted Workers Directive

Posted workers' employment contracts typically are governed by the employment laws of their home country. To avoid the exploitation of cheap foreign labor  and to ensure fair competition, the Posted Workers Directive defines a set of core working conditions in each host country that must also apply to posted workers  in the host country.

Under the 1996 Posted Workers Directive, this EU set of rights consists of minimum rates of pay; maximum work periods and minimum rest periods; minimum paid annual leave; protection for pregnant women, new mothers, children and young people; nondiscrimination; health and safety; and conditions for hiring out workers.

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Key Changes

Key changes to the revised Posted Workers Directive:

  • The set of core minimum working conditions is expanded to include the conditions of accommodation, if provided by the employer, applying in the host member state, and the same mandatory allowances as local employees for travel, board and lodging expenses when they are away from home for professional reasons.
  • Posted workers are entitled to the same remuneration as local workers for the same work at the same place. Remuneration is governed by the host member state and must include not only the minimum rates of pay but also all local mandatory constituent elements of remuneration, including, for example, additional premiums.
  • Indemnities, or "allowances," specific to the posting may be included in the comparison of whether or not posted workers receive the same remuneration as local workers for the same work at the same place, unless they cover expenses actually incurred on account of the posting, such as travel, board and lodging. The employer must reimburse such expenses in accordance with the national law and/or practice that applies to the employment relationship. When the conditions applicable to the employment relationship do not determine which elements of the allowance cover expenses and which are part of the remuneration, the entire allowance is considered to cover expenses actually incurred on account of the posting.
  • Collective agreements that have been declared universally applicable cover posted workers in all sectors. Currently, this is only the case for the construction sector, though in some member states this is already enforced for all sectors.
  • After 12 months, posted workers are entitled to all mandatory working conditions of the host member state except for the rules regarding the conclusion and termination of the employment contract and the supplementary occupational retirement pension schemes. With reasonable notification, this period may be extended to 18 months.
  • The principle of equal treatment between temporary agency employees and permanent employees also applies to posted temporary agency employees.

Impact

Not all member states have welcomed the revision. It was widely debated in Poland, which voted against it. The most controversial changes are the extension of the collective agreements that have been declared universally applicable to all sectors and the reimbursement of travel, board and lodging expenses. Polish companies posting workers to other member states fear that these changes will result in losing their competitive advantage.

The impact of the revision for posting to Poland is considered limited as Poland does not have universally applicable collective agreements, and the Polish remuneration and employment conditions are usually less favorable than those guaranteed by the original member states.

In Belgium, all working and remuneration conditions that are criminally sanctioned apply as of day one to posted workers—so, almost all employment laws (but not the dismissal laws), including the collective agreements, which have been declared generally binding in all sectors already apply to posted workers. It also means that posted workers are already entitled not only to minimum wages but to all mandatory allowances and premiums provided for at sector level.

In Italy, the Ministry of Labor clarified in January 2017 that the remuneration to be paid to posted workers includes all payments related to the employment contract. So, the broadest possible definition of remuneration, which is usually used for tax purposes, is applied to the pay of posted workers. As a result, it may include such increases that are usually agreed at an individual level and vary from employee to employee even within the same company. So, it is not clear yet what remuneration must be paid in Italy according to the directive.

Italy does not have collective agreements that have been declared universally applicable, but according to the current implementation of the directive, any national, local or company collective agreements applied at the host company would also apply to posted workers.

In the Netherlands, the impact may vary from sector to sector. 

Although the impact may vary from one member state to another, global organizations should bear in mind that in two years more local legislation may apply to the secondment of employees within and to Europe. Global organizations should already start assessing the potential impact on the terms and conditions of their current and future secondees to have the right strategies in place when the new rules take effect.

Ius Laboris is the world's largest global HR and employment law firm alliance. The article was led by Sophie Maes of Belgium law firm, Claeys & Engels in Brussels.  Other contributing members Tomasz Rogala of Polish law firm, Raczkowski Paruch in Warsaw, Poland, Inge Arts of Netherlands law firm, Bronsgeest Deur Advocaten in Amsterdam and Valeria Morosini of Italian law firm, Toffoletto De Luca Tamajo in Milan.

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