Last updated: 6 December 2017
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- Legal News
The posting of workers in the framework of the provision of services in the European Union has been a major issue for several years for all the EU Member States. Two points of view conflict in this matter: on one hand, there are the Western countries (who want to limit and better control this movement) and, on the other hand, there are the Eastern European countries (workers coming from these countries want to keep benefitting from this mechanism under the current conditions). Following discussions, the EU Council has recently passed a proposal to amend the European legislation in this area, so as to reconcile these two points of view.
The Current Legislation
The posting of workers in the framework of the provision of services is currently governed by European Directive no. 96/71/CE. This Directive defines a “posted worker” as a person who works for a limited period of time on the territory of a Member State different from the one where he normally works.
It is essential to say that posted workers enjoy the employment conditions applicable of the host country (such as the minimum wage, including payment of overtime, maximum number of work hours and the minimum rest period, the minimum duration of annual leave etc.).
As for social security, the employer who posts workers has the possibility to keep paying the social security contributions for the posted workers during their posting. In this case, the employer must obtain the A1 document, normally before the departure of workers for the host country; the A1 document is usually issued for a maximum period of 24 months. If the employer does not wish or does not receive the A1 document for his posted workers, they will be affiliated to the compulsory social security system of the host country during their posting.
The Proposed Reform
Several years ago, several Western European countries (among which France has the strongest voice) have started to promote more restrictive measures with regard to posted workers. These countries stress the need for non-discrimination and for strengthening the social protection of the workers. In fact, their dissatisfaction was especially caused by the fact that Eastern European posted workers were privileged on the Western market because they content themselves with the minimum wage (as opposed to national workers).
It is in this context that the Member States wished to revise Directive no. 96/71/CE. At this proposal, the EU Council has passed, on the 24th of October 2017, a proposal to amend the said Directive.
The major modifications proposed are the following:
• To align the salaries of posted workers to those received by national workers: equal pay for equal work;
• The posting duration will be limited to 12 months and it can be extended for 6 additional months in exceptional circumstances. This change aims to limit fraud, namely situations where the posted worker does not work in the host country on a punctual basis, but on a regular basis.
This project also includes important concessions for the benefit of Eastern European countries, namely:
• Posted workers can remain subject to the social security system of their State of origin, provided that they obtain the famous A1 document – although there have been initiatives to subject the remuneration of posted workers to the social security contribution system of the State of origin during posting;
• The reform will not apply to the road hauliers, even if France was in favor of it.
Please also note that the amendment project provides a transition period of 4 years from the entry into force of the amendments. For now, we have to wait and see if this proposal will lead to a legislative amendment and how it will be implemented.
For us, is it clear that the major stake for the advocates of this reform is the alignment of salaries, which will put an end to the preference for posted workers instead of the national ones. However, in practice we have noticed that employers who employ posted workers are not necessarily interested in the wages they have to pay, but in the fact that posted workers are more willing to acquire skills related to their core job and more willing to do work overtime.