Posted workers are employees who are temporarily sent to another EU Member State by their employer to carry out a service on the employer’s behalf. Their employment contracts typically remain governed by the employment laws of their home state. However, to avoid social dumping (the practice of using cheaper foreign workers entitled to lower levels of social protection to reduce costs) and to ensure fair competition, the Posted Workers Directive defines a set of core minimum working conditions in force in the host state that must also apply to posted workers while working in the host state. Under the 1996 Posted Workers Directive, this 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, non-discrimination, health and safety and conditions for hiring out workers.

A summary of the key changes is provided below.

Remuneration

Posted workers are entitled to the same remuneration as local workers for the same work at the same place. The concept of remuneration must be determined according to the host state’s national law and/or practice but must include all mandatory constituent elements of remuneration and not only the minimum rates of pay.

Allowances specific to the posting

These allowances are to be considered part of the posted worker’s remuneration, unless they cover expenses actually incurred on account of the posting such as travel or board and lodging. The employer must reimburse such expenses in accordance with the national law and/or practice that applies to the employment relationship. Where the terms and conditions applicable to the employment relationship do not make clear which elements of the allowance are attributable to expenses and which are part of remuneration, the entire allowance will be considered to cover expenses actually incurred on account of the posting.

Allowances and accommodation in the host state

Posted workers are entitled to the same allowances or reimbursement of travel, board and lodging expenses for workers away from home for professional reasons as local workers. These relate to travel to and from their regular place of work in the host state or when they are temporarily sent from this workplace to another workplace. In addition, the conditions of accommodation of posted workers where provided by the employer must comply with the rules in force in the host state.

Collective agreements in the host state

Collective agreements that are declared universally applicable apply to 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. In addition, Member States may also decide to apply:

• collective agreements or arbitration awards that are generally applicable to all similar organisations in the geographical area and in the profession or industry concerned;
• collective agreements that have been concluded by the most representative employers and labour organisations at national level and which apply throughout the national territory.

Long-term postings

After 12 months, posted workers are entitled to all terms and conditions of employment of the host state that are mandatorily applicable with the exception of:

• procedures, formalities and conditions relating to the conclusion and termination of the employment contract, including non-competition clauses;
• supplementary occupational pension schemes.

With reasoned notification, this 12-month period may be extended to 18 months.

Where a company replaces a posted worker with another posted worker performing the same task at the same place, the duration of the posting will be the cumulative duration of the posting periods of the relevant individual posted workers. To determine whether a posted worker performs ‘the same task at the same place’ as the worker they replace, the nature of the service to be provided, the work to be performed and the address(es) of the workplace should be considered, among other factors.

Temporary agency work

Member States must ensure that the principle of equal treatment as provided for in the Temporary Agency Work Directive also applies to posted temporary agency workers.

User companies must also inform temporary agencies if they intend to carry out transnational services with the temporary agency worker in a Member State other than the one where the worker usually works for the temporary agency.

Transport sector

The revised Posted Workers Directive will only apply to the transport sector once the sector-specific European legislation that is currently under negotiation is in force. Until then, the rules of the 1996 Posted Workers Directive will continue to apply.

Next steps

The next step is the publication of the revised Posted Workers Directive in the EU Official Journal and its entry into force 20 days after publication. Member States will then have two years to implement the new rules into their national legalisation and to start enforcing the new rules.

What the impact of the new rules will be also depends on how far Member States have already gone with the implementation of the current Posted Workers Directive.

However, global organisations must bear in mind that in two years more local legislation may apply when posting employees within Europe. Hence, they should already be considering the potential impact of the new rules for their future and current postings to make sure to have the right employee mobility strategies in place when the new rules enter into force.