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THE JULY VOTE IN THE EUROPEAN PARLIAMENT´S COMMITTEE ON THE AMENDMENT TO THE POSTING OF WORKERS DIRECTIVE

Slovakia, as well as 10 other countries mainly from Central and Eastern Europe, has given a yellow card to the proposal out of concern that the new conditions of the Directive will reduce the competitiveness of our workers on the European labour market.

In July 2017, the European Parliament´s Employment and Social Affairs Committee will vote on the revision of the Posting of Workers Directive. Evidence of the fact that cross-border posting of workers/employees[1] opens a number of practical, wage-related and social issues, is also seen in the number of current amending proposals. To date, 523 amending proposals have been tabled to the Directive in the European Parliament´s Employment and Social Affairs Committee. Of these, the rapporteurs must prepare a compromise text of the revised Directive for the summer vote.

Posted workers in numbers

Posting of workers has an increasing tendency. According to the EU data, the number of posted workers in the EU increased by almost 45 percent between 2010 and 2014. In 2014, there were 1.9 million posting cases in the EU and 2.05 million in 2015. Posting is most used in agriculture, construction and transport.

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Slovakia is a country that posts significantly more workers than it receives. According to the European Commission data from 2015, in the number of posted workers the country is ranked 6th, representing almost 98,400 posted workers. In the number of received workers Slovakia is ranked 18th. Slovak companies most often post their workers to Germany, Austria and the Czech Republic. In Slovakia, posted workers mostly come from Germany, Poland, the Czech Republic, France and Romania (according to the European Commission data for 2015).

What is the amending proposal for the European Directive?

The nucleus of the rules for posted workers is the 1996 Directive concerning the postingof workers in the framework of the provision of services (96/71/EC). In 2014, the second Posting of Workers Directive was adopted, the “Enforcement Directive” (2014/67/EU), aimed at strengthening the practical application of the rules on the posting of workers and addressing issues related to fraud or circumvention and the exchange of information between EU Member States. Subsequently, the European Commission carried out a review of the Posting of Workers Directive and in March 2016 presented another revision of the Posting of Workers Directive from 1996, in particular upon the request of France and Germany.

The main reason for the revision was the argument that the more frequent use of the “posted worker” institution creates social dumping in the EU, and therefore the draft of the new text is based on the principle “equal work for equal pay”. The current revision of the Directive should in practice provide for the equal treatment of posted workers with domestic workers, in particular in the field of remuneration during posting.

For Slovaks working abroad by way of posting, this means that their wage during the posting must meet not only the minimum wage scales of the country, where the work is done (Note: As it is in the current version of the Directive), but in the meaning of the proposed amendment of the Directive their remuneration in case of posting should have the same conditions as for the domestic worker working in that post.

The proposed revision of the Posting of Workers Directive had to be re-examined by the Commission, as several European countries, mainly from Central and Eastern Europe, including Slovakia, are of an opinion that the revised Directive takes powers in the field of wage issues. The proposal was given a yellow card on the grounds that the Directive will eliminate the competitive advantage of countries with lower wages.

However, the outcome of review was that the European Commission again supported its draft revision of the Posting of Workers Directive in July 2016 and considers it compliant with the subsidiarity principle (the Commission is of the opinion that the proposal does not interfere with wage issues that are the responsibility of the Member States, since the definition of what constitutes the wage is left to each MS). The EU Council and the European Parliament continues in discussions on the revision of the Directive.Other proposed changes, with the exception of the above mentioned wage scales and remuneration are to apply to: the application of collective agreements in all sectors of the economy; the same remuneration rules in the context of subcontracting; the principles of equal treatment for temporary agency workers; the rules on the protection of the labour law of the host State applicable on long-term posted worker; limitation on the length of the posting to 24 months (or 6 months), and strengthening the principle of equal pay for the same job.

The aim of the Commission´s proposal is to create a level playing field for posting companies and domestic companies to ensure that the rules applicable to domestic companies are equally applicable to posting companies.

The current European Posting of Workers Directive, as well as the Slovak law on Cross-border Cooperation in Posting Staff have brought many new obligations for employers in cross-border postings of staff. However, practice shows that the regulations on posting workers at both the European and the national level are unclear, complicated and administratively burdensome for both the employers and the posted workers. Even some EU states are still lagging behind in implementing the Enforcement Directive.

POSTING WORKERS IN PRACTICE

Who is a posted worker

A posted worker is a worker, who for a certain period of time, carries out his/her job in provision of services in the territory of another EU Member State than the one in which he/she normally works.

Categories of posted workers to provide services

Under Section 5 par. 4 of the Labour Code, the posting of a worker to perform service work is his/her cross-border:

  • Posting under the management and under the responsibility of the posting employer based on a contract between the posting employer as cross-border provider of service and the recipient of the service, if there is an employment relationship between the posting employer and the worker during the posting period – posting in cross-border provision of services;
  • Posting between the controlling entity and the controlled entity or between the controlled entities, if there is an employment relationship between the sending employer and the worker during the period of posting – concern posting, or
  • Temporary assignment to a user employer, if there is an employment relationship between the posting employer and the worker during the posting period – cross-border temporary assignment or cross-border delivery of work or cross-border leasing of labour.

The difference between posting a worker to perform work abroad and a foreign business trip

Foreign business trip

Cross-border posting to perform work

  • The worker performs work on behalf of and for the benefit of his/her employer, e.g. business meeting with a contractor;
  • Performing work during a business trip is not a provision of services, but is performed under an employment contract;
  • Worker on a business trip follows the instructions of his/her employer, the subject of which is not the provision of services as direct objective of his/her work.
  • The worker performs specific service for the recipient of such service abroad;
  • The employer sends his employee for the purpose of providing a specific service directly to the recipient of the service.

Written agreement on posting

Domestic employer may send a domestic employee to perform work in the provision of services from the territory of the Slovak Republic to the territory of another EU Member State only on the basis of written agreement with the employee containing, in particular the following:

  1. Date of commencement and end of posting period;
  2. Type of work;
  3. Place of work;
  4. Wage conditions.

In the case of cross-border posting in the form of temporary assignment to another employer (as opposed to a classical posting, in the case of cross-border temporary assignment giving instructions to the worker, work assignments, organising, managing and control of his/her work is done by the user employer abroad), the written agreement must contain, in addition to the above requirements, also the name and seat of the user employer and the conditions of unilateral termination of work before expiration of a temporary assignment.

In addition to a written agreement, the domestic employer must inform the domestic employee about the working conditions and conditions of employment by the state, in whose territory the domestic employee is posted. An informative overview of working conditions in the EU Member States can be found on the website of the National Labour Inspectorate http://www.nip.sk/?id_af=508&ins=nip.

The Posting of Workers Directive of 1996 provided that although a posted worker remains an employee of the posting company and is covered by legislation of the sending State, that posted worker shall be entitled to the fundamental rights valid in the host country, in which he carries out temporary work.

Conditions of host country applying to the posted worker:

- Minimum wage scales;

- Minimum wage benefit for overtime work;

- Maximum length of working time;

- Minimum rest;

- Minimum length of annual paid leave;

- The working conditions of women, adolescents and childcare of under three years of age;

- Conditions for hiring of workers through temporary employment agencies,

- Health, safety and hygiene at work;

- Equal treatment between men and women.

Employers´ obligations when posting employees under the Slovak Posting of Employees Act:

A. Obligations of the host employer (i.e. an employer from another EU Member State posting its employee to work on the territory of Slovakia)

At the latest on the day of posting the employer is required to notify in writing or electronically (https://www.nip.gov.sk/?lang=en) the National Labour Inspectorate:

  1. Its data (i) legal entity: business name, seat, ID No. and register, in which it is registered (ii) natural person: full name, permanent address, ID No. and register, in which it is registered;
  2. The estimated number of posted employees, including full name, date of birth, permanent residence and nationality of each posted employee;
  3. Date of commencement and end of posting period;
  4. Place of work and type of work during posting;
  5. Name of the service or services that the host employer will provide through the posted employee in the Slovak Republic;
  6. Contact person (full name and address of the person; it may be only a natural person) authorised to serve documents, who will be in Slovakia during the posting period.

At the place of work of the posted employee the host employer is obliged to:

  1. Keep an employment contract or other document confirming an employment relationship with the posted employee;
  2. Maintain and keep records of working time of the posted employee in the scope of Section 99 of the Labour Code (i.e. the record of working time, overtime, night time, active part and inactive part of the employee´s standby, so that the beginning and the end of the period of time, when the employee was at work or was ordered or agreed a standby time, is recorded);
  3. Keep documents on the wage paid to the posted employee for work during posting.

At the request of the Labour Inspectorate the host employer is obliged to:

  1. Submit a contract of employment or other evidence of employment relationship with the posted employee, records of the working time of the posted employee, documents on wage paid to the posted employee,
  2. Deliver an employment contract or other evidence proving employment relationship with the posted employee, records of the working time of the posted employee, documents on wage paid to the posted employee, even after the termination of posting,
  3. Submit a translation of the above documents or parts thereof into the Slovak language within a reasonable time specified by the Labour Inspectorate.

Additional important information can be found at: http://www.safework.gov.sk/?site_lang=en&t=46&s=198&id_fi=

B. Obligations of a domestic employer (i.e. an employer based in Slovakia posting an employee to work in provision of services on the territory of another EU Member State):

The domestic employer is required by the National Labour Inspectorate or the Labour Inspectorate, upon its request to provide information for the purpose of identification of posting and control compliance with the posting rules and other information related to the posting.

Other obligations for the domestic employer are set by the legislation of the State, to which the employee is posted to work in provision of services. Therefore, we always recommend contacting the relevant national liaison offices and authorities in the country, to which the employee is posted and ask for information about the conditions prior to posting employees abroad - see http://ec.europa.eu/social/main.jsp?catId=726&langId=en

Internal Market Information system and possible sanctions for non-compliance

The Internal Market Information System (IMI) was established under the Services Directive in the Internal Market in order to facilitate and accelerate the administrative cooperation between the competent authorities of the EU and EEA Member States. Through direct electronic communication, individual Member States verify the information and submitted documents themselves.

In the event of non-compliance with the obligations relating to the posting of employees, the fines imposed may also be enforced in another Member State.

Overview of basic legislation on posting of workers:

  • 96/71/EC European Parliament and the Council Directive of 16 December 1996 concerning the posting of workers in the framework of the provision of services;
  • 2014/67/EU European Parliament and the Council Directive of 15 May 2014 on the enforcement of 96/71/EC Directive concerning the posting of workers in the framework of the provision of services, amending Regulation (EU) 1024/2012 on administrative cooperation through the Internal Market Information System (“the IMI Regulation”);
  • Labour Code – Act No. 311/2001 Coll. as amended;
  • Act No. 351/2015 Col. on cross-border cooperation in the posting of employees for the performance of work in the framework of provision of services and on amendments to certain laws.

[1] European legislation uses the term “worker”, the Slovak legislation uses “employee”

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