Short duration posting-calculation of remuneration- a real headache?

Intra-EU frequent short duration postings raise a certain challenge: the determination of the applicable terms and conditions of employment, in particular of the remuneration.

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Intra-EU frequent short duration postings raise a certain challenge: the determination of the applicable terms and conditions of employment, in particular of the remuneration.

A relevant example is posting to carry out installation, repair, and maintenance works. Often, one payslip covers activity in several Member States (“sending Member State”, and several other Member States that vary from one month to another). 

Two main questions are raised by employers: whether it is really important to “consider” the remuneration (and the other terms and conditions of employment) when about short duration postings, and if the answer is in positive, “how to make it simple”.

As regards the first question, the host Member State (MS)’ national law transposing the Posting of Workers Directive lays down (or not) certain exemptions (in addition to the exemption laid down by Article 3.2 Directive 96/71/EC as amended by Directive 2018/957/EU, provision having direct effect). Beyond these exemptions, “significant burden” is not an overriding reason justifying non-compliance (settled ECJ case law).

To address the second question, we must look into the remuneration variables, in the relevant context.

1 Remuneration as a function of the host MS law and/or applicable collective agreement

Pursuant to Article 3.1 Directive 96/71/EC as amended, “the concept of remuneration shall be determined by the national law and/or practice of the Member State to whose territory the worker is posted and means all the constituent elements of remuneration rendered mandatory by national law, regulation or administrative provision, or by collective agreements or arbitration awards which, in that Member State, have been declared universally applicable or otherwise apply in accordance with paragraph 8.

The determination of the base gross remuneration due implies identification of the applicable collective agreement and/or of the applicable statutory threshold.

Assessing statutory terms and conditions of employment in conjunction with the applicable collective agreement, is a prerequisite in determining the other components of the total gross remuneration due in compensation for the work caried out (e.g., overtime rates in the context of maximum work periods, paid annual leave etc).

2 Remuneration as a function of favourability

Pursuant to Article 3.7 Directive 96/71/EC as amended, “Paragraphs 1 to 6 shall not prevent the application of terms and conditions of employment which are more favourable to workers.”

It reads simple, practically it raises a high degree of complexity.

Comparing the terms and conditions of employment under the law applicable to the employment relationship and the host MS law, requires an overall assessment of both laws- in certain circumstances a difficult task, however not impossible.

The fact is that certain MS national law provides for a “piece by piece” application of the principle of favourability (separately for each right arising from the employment relationship). That is not the scope of the Posting of Workers Directive (i.e., creating situations in which a posted worker is given more favourable conditions than both, sending MS’ workers and host MS’ workers).

As an example, the fact that certain breaks are considered (or not) as working time is relating to “maximum work periods and minimum rest periods”, and directly impacts the “remuneration and overtime rates”. The concept of “daily working time during which employees are not obliged to remain at the workplace” is given different interpretations by national courts. A piece-by-piece comparison of the terms and conditions of employment can lead to situations in which certain breaks must be paid by virtue of the host MS law, however, the remuneration due for the breaks will be determined based on the collective agreement applicable in the sending MS (more favourable regardless of the payment due for breaks).

What about situations in which notably paid breaks trigger a more favourable remuneration? Such situations must be merely disregarded, or finally a piece-by-piece application must be read as a kind of “limited overall assessment”?

3 Remuneration as a function of applicable exemptions

Exemptions laid down by national laws trigger inter alia the non-applicability of certain terms and conditions of employment (such as remuneration and other conditions having a direct impact on the remuneration), during a certain period, and under certain conditions.

Obviously, short term postings are concerned, and consequently, when determining the remuneration such exemptions must be considered.

Pursuant to Art 3.6 Directive 96/71/EC as amended,

The length of the posting shall be calculated on the basis of a reference period of one year from the beginning of the posting.

For the purpose of such calculations, account shall be taken of any previous periods for which the post has been filled by a posted worker.”

4 Remuneration as a function of the posting duration (and replacement condition)

Where the effective duration of a posting exceeds 12 months (eventually extended to 18 months), and due regard being given to the replacement condition (where an undertaking replaces a posted worker by another posted worker performing the same task at the same place, the duration of the posting shall be the cumulative duration of the posting periods of the individual posted workers concerned), additional terms and conditions of employment are applicable.

The replacement condition targets the activity carried out by the undertaking making the posting within the territory of the host MS (limiting its effect to the same task at the same place of work), and consequently, in certain situations, posted workers will benefit from additional terms and conditions as of the first day of work carried out within the territory of the host MS.

Certain terms and conditions are directly related to the remuneration due for the work caried out (e.g., in Belgium, if the employee is incapacitated for work as a result of an accident or a sickness other than an occupational disease or an accident at work, she/he is entitled to continued payment of his/her remuneration by his/her employer during the first 30-day period of incapacity for work, regardless of his/her seniority).

Conclusion

It appears that the variables are relating to:

  • the individual case of a posted worker (i.e., individual posting scenario)
  • the activity carried out by the sending undertaking within the territory of the host MS

In determining the relevant applicable collective agreement (in the host MS), the business sector relating to the main activity carried out by the undertaking making the posting (in the sending MS) must be considered.

Undertakings frequently posting workers for short duration, must comply within a limited period with national laws of several MS, that is to say maximum 26.

An initial investment can lead to a clear overview of certain terms and conditions of employment applicable in each host MS, and of the criteria must be used in determining other terms and conditions that vary based on the individual posted worker situation.

Such country-by-country overview can be codified (some would say automated, I would say why not, insofar as possible, although the determination of certain terms and conditions implies assessment of various interconnecting criteria, and that makes the automation laborious).

In any circumstances, it appears that monitoring each individual case in connection with the activity carried out by the undertaking making the posting within the territory of each host MS, might be a real headache.

An automated (assisted) monitoring would make the difference.

Answering the second question, “making it simple” is rather complex, however, making it possible is definitively an option, I would say more cost-efficient than provisioning non-compliance.

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