Posting of Workers Directive - more than two ECJ rulings are needed to round of corners

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On 28 May, Advocate General Manuel Campos Sánchez-Bordona will deliver his Opinions in two cases: C-620/18 (Hungary v Parliament and Council) and C-626/18 (Poland v Parliament and Council).

The Polish government claims that the Council should annul certain provisions laid down by Directive 2018/957/EU amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services, alternatively, annul the said directive in its entirety. The Hungarian government pleads to annul the said directive, alternatively, most of its provisions.

As regards the importance of the expected rulings, it must be noted that the ECJ is called upon to rule for the first time on the amended Posting of Workers Directive, before its transposition into national legislations. Further rulings shall bring clarity in the interpretation of a legal instrument that represents (only) the best political compromise the parties could achieve.

One of the pleas in law invoked by the Hungarian government, is related to the concept of remuneration, inter alia to the “uncertainties as to the interpretation of that concept”. Where on the one hand, the principle of equal pay for equal work shall grant a higher level of protection for posted workers (and not as an ancillary issue, protection of certain host Member States’ labour markets),and on the other hand, Article 153(5) TFEU “excludes the EU’s legislative power in relation to the regulation of pay in the context of employment relationships”, the only possible compromise is regulating by means of leaving significant discretion to Member States, in the interpretation of a principle that (in context), is confusing per se.

First, pay and remuneration represent different concepts. Prima facie, the amended directive aims to grant equal remuneration for equal work, and not (only) equal pay for equal work. That is easy to provide for, however, not easy to implement. “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”. The concept is given different interpretations in different Member States (practically, the constituent elements are different, in different Member States).

Such a situation triggers “secondary effects” beyond the concept of remuneration.

Pursuant to Recital 19 and Article 1(2)(c) Directive 2018/957/EU, the employer shall reimburse the posted worker for expenditure actually incurred on account of the posting, in accordance with the national law and/or practice applicable to the employment relationship. (i.e. not necessary the sending Member State’ legislation, and not necessary the law chosen by the parties to the employment relationship).

Certain concepts must be addressed in the light of the current legal circumstances.

Remuneration

As a matter of principle ,remuneration covers the pay and any other forms of benefits provided in compensation for the work carried out, but as well other advantages to which the worker is entitled at the employer’s expense, although such advantages do not represent compensation for the work carried out.

Pursuant to Article 1(2)(a) Directive 2018/957, the concept of remuneration is determined by the national law and/or practice of the Member State to whose territory the worker is posted.

The concept of remuneration in the meaning of certain national legislations, covers allowances related to posting, inter alia allowances must be paid to cover expenditure actually incurred on account of the posting (travel, board and lodging).

Allowances

Two categories of allowances must be distinguished:

  • allowances cover expenditure actually incurred on account of the posting (such as travel, board and lodging)
  • other allowances (compensatory allowances), such as but not limited to public transport allowances, daily allowances

More ever, currently, as regards reimbursement of travel, board and lodging, rules vary significantly across the EU27. Certain Member States have rules for workers posted to their territory and (eventually other) rules for workers posted from their territory, other Member States have rules only for one of these categories of workers, or merely do not have any such rules.

By virtue of Article 9(1) Regulation 593/2008 (Rome I), the Posting of Workers Directive prevails over that regulation, and consequently under the said directive, as regards certain matters, the law of the host Member State applies, irrespective of which law applies to the employment relationship. Remuneration represents one of the matters regulated by the host Member State law and/or practice.

However, pursuant to the Posting of Workers Directive, allowances specific to the posting shall be considered to be part of remuneration, unless they are paid in reimbursement of expenditure actually incurred on account of the posting, such as expenditure on travel, board and lodging.

Having regard to the above considerations:

  • the expenditure actually incurred on account of the posting shall not be considered to be part of remuneration, and consequently, must be reimbursed, in accordance with the national law and/or practice applicable to the employment relationship
  • other compensatory allowances considered to be part of remuneration under the host Member State’ national legislation, must be paid in accordance with the latter legislation.

Questions

How exactly the following situations must be addressed:

  • The concept of remuneration in the meaning of the host Member State’ national legislation, covers expenditure actually incurred on account of the posting (travel, board and lodging)
  • Expenditure actually incurred on account of the posting, is regulated neither by legislations (applicable to the employment relationship or eventually host Member State), and nor by the relevant collective agreement
  • Member States whose national legislation provides for a distinctive category of workers (sent) on business trip vs worker posted, and expenditure actually incurred must be reimbursed only to the former (in general, such business trips are “postings” in the meaning of EU law)

Finally, what is the (new) status of such reimbursements/allowances (i.e. cover expenditure actually incurred on account of the posting),prima facie under “shall”, however where considering Recital 19 Directive 2018/957/EU: “It is for Member States, in accordance with their national law and/or practice, to set rules with regard to the reimbursement of such expenditure”.

The text of the directive does not contain any reference to an obligation to set such rules.

 

 

 

 

 

 

 

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Tanel Feldman

Senior Partner , Immigration Law Associates

Immigration Law Associates provides services in the following areas of law: A- INTRA-EU MOBILITY -European Union Services: A1 Freedom to provide services : Social security and labour law -intra-EU mobility of employed and self-employed workers A2 Freedom of movement of persons : a) Citizenship of the Union and Member State nationality b) Entry and residence rights from the Citizens’ Rights Directive-c) Freedom of movement of workers B LEGAL MIGRATION- Belgium and Luxembourg : corporate and private immigration

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