Compliance- form and content

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Discussing compliance in relation to the Posting of Workers Directive, is now trend.

However, the very topic in discussion is relating to the administrative requirements and control measures laid down in Article 9 Directive 2014/67/EU, transposed into national legislations (i.e. the obligation to make a declaration of posting, to keep or make available certain documents etc).

Starting with a brief note on administrative requirements, a declaration of posting merely represents a notification, and grants compliance solely with the obligation to make such a declaration. Failure to notify the posting represents a serious, breach, however, such a declaration represents neither the first and nor the last step in granting compliance.

It must be recalled that Directive 2014/67/EU enforces the Posting of Workers Directive (96/71/EC), and the latter is about terms and conditions of employment must be granted to posted workers (such terms and conditions must be first determined, and then complied with).

More ever, Directive 2014/67/EU, lays down monitoring compliance rules (Article 9), after codifying the ECJ case law on identification of a genuine posting and prevention of abuse and circumvention (Article 4).

It is appropriate to review compliance policies, in the context of the amended Posting of Workers Directive and recent ECJ case law.

1 Determination of whether the PWD applies

The PWD does not apply if a service is not provided. However, the concept of “business trip” is not given an autonomous interpretation under EU law. National legislations must be addressed as regards a) nature of the activity b) permitted duration. Provided that the national legislation of the host Member State is silent, the “business trip exemption” does not apply ex-officio. The question whether or not a service is provided, is not necessarily easy to address. Example: a training, cannot be automatically excluded from the scope of the PWD (see to that context Edgard Jan De Clercq and Others C-315/13, paragraph 36).

To consider that compliance means also meeting the purpose of a regulation,even if the rules are not 100% clear.

Although “the directive applies to a wide array of situations in which workers are transferred from one Member State to another in the context of cross-border provision of services” (Danieli and Others C-18/17 paragraph 40), certain situations such as provision of catering services on board of international trains, might not fail under Directive 96/71/EC (see to that context the Opinion delivered by AG Szpunar in Michael Dobersberger C-16/18).

Lastly, it must be recalled that Directive 2018/957/EU will apply to the road transport sector, from the date of application of the directive amending Directive 2006/22/EC.

2 Determination of the type of posting

It is essential to determine the type of posting in the sense of Article 1.3 Directive 96/71/EC as amended, and in context, whether the national legislation of the host country is complied with.

In the same context, in the new subparagraphs of Article 1.3 (c), Directive 96/71/EC as amended by Directive 2018/957/EU, the wording “a temporary employment undertaking or placement agency”, must be read as “an undertaking”. A new subparagraph must be then “added”: the second and the third subparagraph of paragraph 3(c), are without prejudice to national legislations on hiring out of workers (see to that context the ruling in Danieli and Others C-18/17).

3 Identification of a genuine posting

Fans of “U-turn” posting scenarios, must consider that the principle of equal pay for equal work under Directive 2018/957/EU, does not preclude the identification of a genuine posting in the sense of Article 4 Directive 2014/67/EU, notably the determination of whether” an undertaking genuinely performs substantial activities other than purely internal management and/or administrative activities”.

It is however interesting to assess the interpretation must be given to the other criterion determining a genuine posting (i.e. “whether a posted worker temporarily carries out his or her work in a Member State other than the one in which he or she normally works”), in the light of the new paragraph provides for the terms and conditions of employment must be granted to posted workers if the effective duration of the posting exceeds 12/18 months.

Posting remains temporary in nature, and thus, the criteria under Article 4.3 Directive 2014/67/EU must be considered. Directive 2018/957/EU distinguishes between short and long duration postings. In the latter case, posted workers are granted a greater protection, and the undertaking making the posting is granted freedom to provide services. However, Article 4.3 applies to both cases, short and long duration postings (e.g. a nine months posting is not deemed to be temporary in nature, only because it last less than 12 months).

3 Replacement condition

Interestingly, the Practical Guide on Posting is silent in regard to the practical applicability of that condition.

Obviously, the period of 12 months is deemed to be “an effective period” and not an “anticipated period”.

However, is that period the effective duration of uninterrupted posting of an individual worker/several workers, or the cumulative duration of different (discontinued) posting periods of one or several posted workers, carrying out the same task at the same place of work, calculated from the beginning of the (first) posting ?

Provided that about an uninterrupted period, does a brief interruption of the posting period, whatever the reason, and where during that period,  the task at the relevant place of work is carried out by  “local” employees ,give rise to a new (12 months) posting period?

In any circumstances, the “non-replacement condition” provided for by Regulation 883/2204 and the replacement condition laid down in Directive 2018/957/EU, are cumulative.

4 Monitoring compliance

That matter was sufficiently addressed to be well understood by all.

It must be recalled that administrative requirements and control measures are imposed in order to ensure monitoring of compliance. With simple words, administrative requirements represent a means and not an end.

 5 Terms and conditions of employment

Directive 2018/957/EU, is notably about terms and conditions of employment : principle of equal pay for equal work in the same workplace, conditions of workers accommodation, allowances or reimbursement of expenditure for “workers away from home”, stricter rules for reimbursement of expenditure actually incurred on account of the posting, greater protection where the effective duration of a posting exceeds 12/18 months, application of Article 3.8 second paragraph (Directive 96/71/EC) not only in the absence, but also in addition to a system for declaring collective agreements or arbitration awards to be of universal application.

Obviously, the new terms and conditions shall not prevent the application of terms and conditions of employment which are more favourable to workers (principle of favourability).

On 30 July 2020, 27 single official national websites  will contain information on the terms and conditions of  remuneration and other terms and conditions of employment under national law and/or collective agreements, as well as on the additional set of terms and conditions of employment applicable to postings exceeding 12 or, where applicable, 18 months.

Do not expect to necessary find the actual remuneration to be paid, but rather its constituent elements.

Simplifying, the following steps must be observed:

  • Determination of the applicable terms and conditions of employment which are laid down by collective agreements and/or laws and regulations in the host Member State (applicable to the specific case, regardless the principle of favourability)
  • Determination and quantification of the applicable terms and conditions of employment applicable to the specific case, considering the principle of favourability

However, the application of the principle of favourability might override simple tasks. It is not the home country legislation, but the law applicable to the employment contract that must be compared with the host country legislation.

In certain situations (and not rarely) the employment contract is governed by the chosen law, supplemented by mandatory and semi-imperative provisions of another law, notably the law objectively applicable to the employment contract (provided that the latter provisions are more favourable to the employee).Lastly, the application of Articles 9(3) and 21 Rome I Regulation would determine the “final” law applicable to the contract.

The comparison between the law applicable to the employment contract and the host country law (i.e. the application of the principle of favourability), cannot be “provision by provision” (analytical comparison). An overall assessment of the relevant provisions must be carried out. In any circumstances, a posted worker may not benefit from the most favourable provisions of both, home and host country legal systems.

There are no “overall solutions” to address compliance with terms and conditions of employment. Human eyes and knowledge will be required to supplement IT tools and other “standard” solutions. Example: a shadow payroll would, in certain situations, result in depriving the posted worker of a higher level of protection granted by the law applicable to the employment contract.



Go to the profile of Tanel Feldman

Tanel Feldman

Senior Partner , Immigration Law Associates

Immigration Law Associates provides in-depth advice on rights and obligations triggered by the cross-border element of a given legal situation. Our know-how is built on an extensive experience in EU law and is supported by a network of partners across the EU. Social security coordination : • Autonomous application of the social security coordination regulations and ECJ case-law, to any situation involves a cross-border element EU Company law : • Establishment -permanent activities • Establishment -self-employment activities International Private Law : • Law applicable to the employment relationship Labour and employment law : • Freedom of movement of workers-equal treatment, access to social benefits • Employment contracts and termination of employment • Working conditions • Employee benefits • Transfer of undertakings • Authorisations of work for third-country nationals Special regimes : • Posted workers • Frontier workers • Highly mobile workers • Employment of record • Intra-EU mobility of third-country nationals

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