France -Posting of Workers- Is long-term posting only a moratorium on establishment?

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A few notes on the margin of the article “New EU rules on posted work enter into force”, published by Le Monde on 30 July.

Firstly, the article contains an error of “nuance”: “A worker posted by a foreign company will now receive the same remuneration as an employee employed by a locally established company performing the same tasks”.

A worker posted will not receive the same remuneration as an employee employed by a locally established company “performing the same tasks”. The principle of “equal pay for equal work” must not be interpreted as implying identical pay for equal work.

The remuneration must be determined on grounds of the host Member State “national law, regulation or administrative provision, or by collective agreements or arbitration awards which, in that Member State, have been declared universally applicable” (or overwise apply , in the absence of, or in addition to, a system for declaring collective agreements or arbitration awards to be of universal application).

It reads laborious, however about a mere calculation considering both, the home country remuneration, and the host country law and relevant collective agreement.

It does not make sense to determine the remuneration must be paid to a posted worker, based on the amount paid to an employee hired by the host company, or by any other locally established company.

On another note, the Lobour Minster Elisabeth Borne, is quoted as has said that the government wants to go further because "in the last ten years, the use of seconded labour in France has more than doubled".  The minister has emphasised that "the derogatory and temporary nature of this measure” (i.e. posting of workers), have been disregarded.

The directive is an acquis, its transposition, a step in going further. The concept of “long-term posting” brings only a partial solution to the “temporary nature” problem.

The temporary presence (or merely operation) of the sending company within the French territory is addressed, and not the presence of an individual posted worker.  

The question is when the activity carried out, will not be failing anymore within the scope of the provisions of the Treaty dealing with services, and consequently, will be failing within the scope of the provisions dealing with the right of establishment(see to the context C-55/94 Gebhard, 30 November 1995, ECLI:EU:C:1995:411).

The European Court of Justice has provided guidance on the “borderline” between the freedom to provide services and establishment (however, the matter is complex).

Article L1262-3 of the French Labour Code, introduces the concept of “activity carried out within the national territory, on a regular, stable and continuous basis”. In such situations, the employer is subject to the Labour Code’ provisions applicable to undertakings established within the national territory.

Pursuant to Article L8221-1 read in conjunction with Article L8221-3, a regular, stable, and continuous activity, triggers the breach of concealed employment by dissimulation of activity.

Pursuant to Article L8224-1, such a breach may result in three years' imprisonment, and a fine of EUR 45.000.

The ECJ has ruled that : “No provision of the Treaty affords a means of determining, in an abstract manner, the duration or frequency beyond which the supply of a service or of a certain type of service in another Member State can no longer be regarded as the provision of services within the meaning of the Treaty” (C-215/01, Schnitzer, 11 December 2003, ECLI:EU:C:2003:662).

As regards France, it follows from the current jurisprudence that the means of determining the borderline between the freedom to provide services and establishment, might override expectations.

It is hard to determine ex ante criteria as regards when an undertaking will be deemed to carry out a regular, stable, and continuous activity in France. A case-by-case assessment is required. However, it is easier to prevent, rather than reverse such a presumption.

With simple words, better to seek for advice before posting workers, rather than after receiving a courier from the French Labour Ministry.

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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