On 8 February 2021 the European Labour Authority adopted a set of tools for carrying out concerted and joint inspections in a transparent and timely manner. These tools have clearly triggered many international companies. More generally, these companies ask us what to do. More specifically, they ask us in short how to translate all information on posted workers to make it work pragmatically, effectively and sustainably for their mobility business.
Any process starts with thinking strategically and creatively, gathering all relevant facts and circumstances to be able to perform a diligent analysis first. As a starter the new ELA tools make it even more important for companies to properly understand the main rules on posting workers in the EU under the Posted Workers Directives as well as the Dutch implementation legislation of Directive 2014/67/EU.
In summary
Directive 96/71/EC provides a list of working conditions which workers who are temporarily posted abroad by their employer must be granted in the host country. Its purpose is to guarantee the protection of workers as well as provide a level playing field for service providers.
Directive 2014/67/EU aims to improve the implementation and enforcement of Directive 96/71/EC. It addresses issues as abuse and circumvention of posting rules, joint liability in subcontracting chains and sharing of information between EU countries.
Directive 2018/957/EU updates and amends Directive 96/71/EC. It provides rules regarding working conditions and the protection of posted workers’ health and safety, and seeks to ensure fair wages and a level playing field between posting and local companies in the host country, whilst maintaining the principle of free movement of services.
Directive 2020/1057/EU provides specific rules for posting of professional drivers in the commercial road transport sector and for the effective enforcement of these rules. The directive provides rules that are better adapted to the highly mobile nature of work in the road transport sector.
Directive 96/71/EC
Directive 96/71/EC applies to undertakings established in a Member State which, in the framework of the transnational provision of services, post workers.
The provision of services may take the form either of performance of work by an undertaking on its account and under its direction, under a contract concluded between that undertaking and the party for whom the services are intended, or of the hiring-out of workers for use by an undertaking in the framework of a public or a private contract.
A "posted worker" is in short “a worker who, for a limited period, carries out his work in the territory of a Member State other than the state in which he normally works”. This implies e.g. that workers who are temporarily sent to work in another Member State, but do not provide services there, are not posted workers.
To protect posted workers’ rights when companies use the freedom to provide services and to facilitate the exercise of that freedom, Directive 96/71/EC contains core employment conditions that must be applied to posted workers in the host country, such as: - minimum pay rates; - maximum work periods and minimum rest periods; - minimum paid annual leave; - the conditions of hiring out workers through temporary work agencies; - health, safety and hygiene at work; - equal treatment between men and women.
Directive 2014/67/EU
Directive 2014/67/EU aims to establish a common framework of a set of appropriate provisions, measures and control mechanisms necessary for better and more uniform implementation, application and enforcement in practice of Directive 96/71/EC;
Directive 2014/67/EU aims to guarantee respect for an appropriate level of protection of the rights of posted workers for the cross-border provision of services, while facilitating the exercise of the freedom to provide services for service providers and promoting fair competition between service providers, and thus supporting the functioning of the internal market.
To help fight abuse and circumvention of the rules of Directive 96/71/EC, Directive 2014/67/EU contains a list of factual elements to help assess whether a specific situation qualifies as a genuine posting.
For greater legal certainty, Directive 2014/67/EU provides a list of national control measures that are considered justified and proportionate and that may be applied in order to monitor the compliance of Directive 96/71/EC and Directive 2014/67/EU itself.
To increase the protection of workers’ rights in subcontracting chains, EU countries must ensure that posted workers in the construction sector can hold the contractor in a direct subcontractor relationship liable for any outstanding net remuneration corresponding to the minimum rates of pay, in addition to or in place of the employer. Instead of these liability rules, EU countries may take other appropriate enforcement measures.
To increase awareness and transparency, EU countries are obliged to make available and free of charge any information on the terms and conditions of employment and on collective agreements applicable to posted workers via a single official national website. The information must be made public in the official language(s) of the host country and in the most relevant languages, taking into account demand in its labor market.
Directive 2014/67/EU also includes clearer rules to improve administrative cooperation between national authorities in charge of monitoring compliance, including time limits for the supply of information.
Directive 2014/67/EU also ensures that administrative penalties and fines imposed on service providers for failure to respect the applicable rules in one EU country can be enforced and recovered in another.
Directive 2018/957/EU Directive 2018/957/EU introduces a number of new rules:
the same rules regarding remuneration apply to posted workers as to local workers in the host country;
a worker will be considered to be posted long term after 12 months (with the possibility of a 6-month extension subject to a motivated notification by the service provider), after which the posted worker will be subject to nearly all aspects of the labor law of the host country;
the number of potential collective agreements that may apply in EU countries having a system for declaring collective agreements or arbitration awards of universal application may be increased;
temporary work agencies must guarantee posted workers the same terms and conditions that apply to temporary workers hired in the country where the work is carried out;
improved cooperation between EU countries’ authorities regarding abuse and circumvention of rules in the context of posting.
Directive 2020/1057/EU
Among the changes introduced by Directive 2020/1057/EU are:
an exception from the general posting rules applying to cabotage and international transport operations, with the exception of transit, ‘bilateral transport operations’ (both in goods and passenger transport) and bilateral operations with 2 additional carriage-related stops — this exception is restricted to cases where a service contract exists between the employer sending the driver and a party operating in the host EU country;
administrative rules relating to posting of drivers, control and enforcement — hauliers must use the IMI system to send posting declarations and any requested information;
penalties in the event of infringements;
‘smart enforcement’, which requires EU countries to integrate the control of posting rules into an overall control strategy;
rules ensuring that strengthening posting rules for EU drivers does not result in a competitive advantage for non-EU operators having access to the EU road transport market.
Terms of Employment Posted Workers in the European Union Act
Directive 2014/67/EU has been implemented in the Netherlands by the Terms of Employment Posted Workers in the European Union Act.
Employers from the EU, EEA or Switzerland that are going to post workers temporarily to the Netherlands are obliged to make a notification via the online notification portal on www.postedworkers.nl, in Dutch or English. Please note that exemptions apply.
Besides the duty to notify, employers are obliged to have various documents on hand at the workplace that apply to the worker. Employers must also designate someone in the Netherlands as a contact person for the Inspectorate SZW. On request from the Inspectorate, employers are obliged to provide the information needed by the Inspectorate for the enforcement of the Terms of Employment Posted Workers in the European Union Act.
Call to action
The aforementioned are just some high-level basics of the law in the books. The law in action unambiguously shows that the devil is in the details with far-reaching implications in the event of non-compliance. This makes full understanding and correct application of key definitions of all rules and regulations paramount. This works both ways. Also e.g. notifications “just to be safe” may imply applying administrative cumbersome terms and conditions under e.g. mandatory collective bargaining agreements that do not apply and can hence also backfire.
So, risk managing prescribed administrative duties cannot be a sole recourse and even be a business threat, if not first e.g. the application of the Posted Workers Directives per category of assignees has been determined, including but not limited to the implications thereof per country (combination), (individual) activity, (aggregated) duration and the like. We ask leading companies to strategically challenge current practices: why e.g. not assign to a different country for a different purpose at a different position level and shorter period or not assign at all in view of aspects like costs, business objectives and associated risks, including but not limited to Covid 19-restrictions and enduring trends of working from home? What are the business results of not assigning employees last year or only a limited number as well as people survey scores on employee experience, employee retention and employer attractiveness?
Given the potential disrupting complexities and reputational damages, we discourage companies designing future assignment models, if the current model is used as starting point, but already may contain pitfalls on e.g. holistic posted worker qualification, the applicability of mandatory collective bargaining agreements, the interpretation and/or execution of certain provisions thereof. Companies must have right focus on the rationale of the directives, so the proper functioning of the internal market, acknowledging that in short the administrative duties are supportive in nature for the core rights of the other directives.
This rapidly changing digital world dictates companies to urgently rethink in similar speed their mobility operating model. We strongly recommend companies to analyze, act and control now to safeguard the future in line with our people strategy approach, using tried and tested strategy methodologies. The improved strategic and tactical oversight as a result thereof makes complexities manageable and many times an opportunity in adversity to seize upsides and increase value and impact, brand and reputation. Companies need to avoid that the issues of the day become a perpetuum mobile by a more long term value focus as well as transformative mindset, by being mobile in mind.
