Last updated: 24 August 2018
Directive no. 96/71/EC on the posting of workers in the framework of the provision of services was amended by Directive no. 2018/957 of the European Parliament and of the Council of 28 June 2018, which entered into force on 29 July 2018. The deadline for the transposition of the Directive by the Member States is 30 July 2020.
What are the stakes of this legislative change, what are the main novelties and what will be the real effects of this change, in our opinion?
Context and Stakes of the Change in the Posting Rules
The growing interest of companies in the European Union to do business in other European countries, through the transnational posting of workers, is not a novelty. According to a report released in 2015 by the European Commission, 1.9 million workers were posted in the European Union in 2014, representing an increase of 44.4% compared to 2010! And it should be noted that this report is based on the number of portable A1 documents that have been issued, but does not include unregistered posted workers...
In this context, the issue of transnational posting has been a topic of intense reflection and debate for a number of years at both European and Member State level. This is the context in which Directive no. 2018/957 was adopted.
The preparatory documents for the adoption of Directive no. 2018/957 (proposal of the European Commission, opinion of the various European committees) clearly identify the objectives of this legal document.
First of all, the changes are based on the ultimate goal of Directive 96/71/EC, namely the protection of posted workers. In this context, the authorities considered it important to promote, among other things, equal treatment between posted and local workers, the transparency of the Member States' authorities with regard to the national provisions applicable to posting and the cooperation between Member States for a better implementation of the European provisions.
Secondly, from the companies’ point of view, according to the legislator, cross-border competition should not be based primarily on labor costs, but rather on factors such as the quality and efficiency of the services. The authorities were therefore of the opinion that favoring labor costs would lead to social dumping and a less advantageous situation for companies that do not use posting.
These objectives were subsequently transposed in the following legal changes.
Main Changes
• Extension of the “hard core” of Directive no. 96/71/EC
One of the principles set forth in Directive 96/71/EC already provides that posted workers are subject to certain conditions of employment in the country of posting, laid down by laws and collective agreements, although the law applicable to the employment relationship was the law of the country of origin. In practice, this "package" of conditions is called the "hard core" and includes in particular the maximum working time, the minimum rest time, the minimum wage, the minimum duration of annual leave, occupational safety, health and hygiene etc.
Previously, if these conditions were included in the collective agreements, they were only mandatory for posted workers working in certain fields, expressly stipulated by Directive no. 96/71/EC (construction, earthworks, renovation, demolition, maintenance etc.). From now on, this limitation has been removed. More specifically, the hard core rules included in collective agreements are applicable to posted workers, no matter the filed in which a worker works. This change seems important because, in our experience, there may be a significant gap between the provisions of the law and the provisions derogating from the applicable collective agreement, which in fact created a less advantageous status for workers who did not work in the fields covered by the Directive no. 96/71/EC.
In addition, Directive no. 2018/957 added two new elements to the "hard core", namely: (i) the conditions for the accommodation of workers when the employer offers housing to persons working away from their usual place of work and (ii) allowances or reimbursement of expenses to cover travel, accommodation and meal costs for workers who are away from home for professional reasons.
• Replacement of the notion of “minimum wage” with the notion of “remuneration”
If, previously, the employer who posted to another Member State had to comply with the applicable minimum wage, he must now comply with the applicable “remuneration”.
In accordance with Directive no. 2018/957, "remuneration" means all the constituent elements of the remuneration which are compulsory under the laws of the country of posting stipulated in legislative and administrative deeds, collective agreements and arbitration awards of general application. Thus, "remuneration" could also include elements that are not included in the concept of "minimum wage", such as the seniority bonus, hard work or hazardous work bonus, quality bonuses, thirteenth salary etc.
The European authorities involved in the adoption of the Directive insisted that the definition of "remuneration" remains an exclusive prerogative of the Member States. They also stressed that the challenge of this change is to ensure equal pay for the same work, carried out in the same place.
• Application of the laws of the State of posting to postings that exceed 12 months
Article 3 (1a) of Directive no. 96/71/EC - newly introduced - provides that, for cases where the posting duration exceeds 12 months, posted workers will enjoy all work and employment conditions applicable in the Member State where they work. Exceptions to this new rule are (i) the procedures and conditions for concluding and terminating employment contracts, including non-competition clauses, and (ii) supplementary occupational retirement pension schemes. This 12-month period may be extended to 18 months, through a justified notice from the service provider.
The purpose of this amendment is once again to protect posted workers and to ensure that local workers are not discriminated against, especially in light of the fact that posting should be temporary...
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In our activity, we often had the opportunity to know the real reasons why a company uses the transnational posting of Romanian workers in other EU countries. We can therefore say that the main interest is not strictly the lower pay, but rather the professional and human skills of Romanian workers. First of all, because there are no trained workers for certain trades on the local market. But also because, as our customers say, Romanians are open to learning, they are not afraid to work overtime and are therefore interesting in the context of European workers mobility. However, of course, with the strict observance of the rights of posted workers.
Although the legislative change will not necessarily lead to a significant change in practice with regard to the protection of workers or companies, the implementation of the various transparency measures by the authorities stipulated in the Directive will be a very useful change.