Hiring out of workers- an important amendment and its history

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Jan 07, 2019
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Directive 2018/957/EU of 28 June 2018, amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services, shall be transposed into national legislations by 30 July 2020, and will produce full effect as of that date.

The following subparagraph is added to Article 1(c) Directive 96/71/EC:

Where a worker who has been hired out by a temporary employment undertaking or placement agency to a user undertaking as referred to in point (c) is to carry out work in the framework of the transnational provision of services within the meaning of point (a), (b) or (c) by the user undertaking in the territory of a Member State other than where the worker normally works for the temporary employment undertaking or placement agency, or for the user undertaking, the worker shall be considered to be posted to the territory of that Member State by the temporary employment undertaking or placement agency with which the worker is in an employment relationship. The temporary employment undertaking or placement agency shall be considered to be an undertaking as referred to in paragraph 1 and shall fully comply with the relevant provisions of this Directive and Directive 2014/67/EU of the European Parliament and of the Council

It must be noted that the text adopted by the European Parliament on 29 May 2018, does not contain any reference to such an amendment.

On 18 January 2016, Danieli & C. Officine Meccaniche SpA, an undertaking established in Italy (D1), has registered six workers with the competent authority in Austria, in the capacity of posted workers, and applied for the confirmation of EU postings in relation to them. (D1) has had concluded a contract of provision of services with an Austrian undertaking.

To provide the service, (D1) wished to deploy to Austria, Croatian nationals employed by an undertaking established in Croatia (D2), and third-country nationals employed by another undertaking established in Italy (D3). The undertakings (D1), (D2) and (D3) belong to the same group, and the workers were transferred by (D2) and (D3) to (D1). The workers were subjected to the social security system in Croatia and respectively in Italy.

The Austrian authority has rejected the application for confirmation of the posting. Where there is no employment relationship between the workers and (D1) -the undertaking has concluded the contract of provision of services-, pursuant to the national legislation, a work permit Is required.

The Supreme Administrative Court of Austria has referred to the ECJ two questions relating to the relevance of Articles 56 and 57 TFEU (freedom to provide services), and of the Directive 96/71/EC, in the context of atypical posting arrangements that “fit somewhat uneasily into the situations referred to in Article 1(3)(a) and (c)” (i.e. Directive 96/71/EC).

In Danieli and Other (C-18/17), recalling settled case-law (Martin Meat C‑586/13), the ECJ observed that the transfer of the workers employed by the undertakings(D2) and (D3), from Croatia and respectively from Italy, to a user undertaking (D1) established in the latter country, qualifies as hiring out of workers.

In regard to the particular case of hiring out of workers by (D3) to (D1), both established in Italy, the ECJ underlined that pursuant to the Court’s case law (Commission v France, C‑154/89), the service is provided on the territory of a MS other than the one where the user company (D1) is established, and as a consequence , Article 56 and 57 TFEU are of relevance.

In the same context, the ECJ observed that although the posting of third-country nationals in the framework of a transnational provision of services is not harmonised on the EU level, according to settled case law, Austria may not derogate from the provisions of Articles 56 and 57 TFEU (Essent Energie Productie C‑91/13).

In its ruling of 14 November 2018, the ECJ followed the Opinion delivered by the Advocate General on 26 April 2018.AG Wahl has clarified on the one hand, the relevance of the Directive 96/71/EC in determining the type of posting, and on the other hand, in identifying the undertaking making the posting : the undertakings (D2) and (D3) established in Croatia and respectively Italy, are posting workers to Austria, by means of hiring out such workers to the undertaking (D1), established in Italy and operating in Austria, for the purpose of the provision of services, in the framework of a contract concluded between the latter and an undertaking established in Austria.

Remarks:

  • The ECJ ruling is dated 14 November 2018 and produces its effects regardless the subparagraph added to Article 1(c) Directive 96/71/EC.
  • As the case at issue, the fact that the undertakings (D2) and (D3) are not temporary employment undertakings or placement agencies, is irrelevant. Pursuant to the Italian law (Legislative Decree No 81/2015), only temporary employment or placement agencies may hire out workers. However, the work was carried out on the territory of Austria, country where (D1) is operating, and not in Italy.

 

Go to the profile of Tanel Feldman

Tanel Feldman

Managing Partner, Immigration Law Associates

Corporate Immigration Law/Employment Law/Social Security Law/European Law

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