1. European Labour Law
Jean Monnet Chair of EU Labour Law Academic Year Silvia Borelli: Please, check the web site for any materials distributed during the course! Lesson 6

2. Posting of Workers: background
A posted worker is an employee who is sent by his employer to carry out a service in another EU Member State on a temporary basis. Rush Portuguesa: An undertaking established in Portugal entered into a subcontract with a French undertaking for the carrying out of works for the construction of a railway line in the west of France. For that purpose it brought its Portuguese employees from Portugal. At the time, Portugal was just entered in the EU and, due to the transitional provisions laid down in the Act of Accession, the Portuguese workers did not have the right to move and reside freely in the EU. The Portuguese undertaking did not comply with the French rules on employment of third-country employees. Consequently, the French Office nationale d’immigration required a payment of a sanction.

3. Posting of Workers: background
Distinction between free movement of workers and posted workers: the workers who are sent to another Member State to carry out construction work or public works as part of a provision of services by their employer “return to their country of origin after the completion of their work without at any time gaining access to the labour market of the host Member State” (§ 15).
“It is necessary for the purpose of the posting of workers to distinguish this freedom from the free movement of workers, which gives every citizen the right to move freely to another Member State to work and reside there for that purpose and protects them against discrimination as regards employment, remuneration and other conditions of work and employment in comparison to nationals of that Member State” (whereas 2 Directive 2014/67/EU).
“With respect to workers temporarily posted to carry out work in order to provide services in another Member State than the one in which they habitually carry out their work, Directive 96/71/EC of the European Parliament and of the Council establishes a core set of clearly defined terms and conditions of employment which are required to be complied with by the service provider in the Member State to which the posting takes place to ensure the minimum protection of the posted workers concerned” (whereas 3 Directive 2014/67/EU).

4. Posting of Workers: background
The articles of the Treaty on freedom to provide services preclude a Member State from “making the movement of staff in question subject to restrictions such as a condition as to engagement in situ or an obligation to obtain a work permit. To impose such conditions on the person providing services established in another Member State discriminates against that person in relation to his competitors established in the host country who are able to use their own staff without restrictions, and moreover affects his ability to provide the service” (§ 12).
«the authorities of the Member State in whose territory the works are to be carried out may not impose on the supplier of services conditions relating to the recruitment of manpower in situ or the obtaining of work permits for the Portuguese workforce” (§ 19).
“Community law does not preclude Member States from extending their legislation, or collective labour agreements entered into by both sides of industry, to any person who is employed, even temporarily, within their territory, no matter in which country the employer is established; nor does Community law prohibit Member States from enforcing those rules by appropriate means» (§ 18).

5. Directive 96/71/EC
The EU law defines a set of mandatory rules regarding the terms and conditions of employment to be applied to posted workers in the host Member State to avoid "social dumping" where foreign service providers can undercut local service providers because their labour standards, according to the home Member State’s regulation, are lower. Scope: The Directive shall applies to undertakings established in a Member State which, in the framework of the transnational provision of services, post workers to the territory of a Member State. In particular, the Directive applies to undertakings that: a) posts workers to the territory of a Member State on their account and under their direction, under a contract concluded between the undertaking making the posting and the party for whom the services are intended; or (b) posts workers to an establishment or to an undertaking owned by the group in the territory of a Member State; or (c) being a temporary employment undertaking or placement agency, hires out a worker to a user undertaking established or operating in the territory of a Member State.

6. Directive 96/71/EC
Member States ensure that the undertakings guarantee workers posted to their territory the terms and conditions of employment covering the following matters which, in the Member State where the work is carried out, are laid down: — by law, regulation or administrative provision, and/or — by collective agreements or arbitration awards which have been declared universally applicable in so far as they concern the activities referred to in the Annex: (a) maximum work periods and minimum rest periods; (b) minimum paid annual holidays; (c) the minimum rates of pay, including overtime rates; this point does not apply to supplementary occupational retirement pension schemes; (d) the conditions of hiring-out of workers, in particular the supply of workers by temporary employment undertakings; (e) health, safety and hygiene at work; (f) protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people; (g) equality of treatment between men and women and other provisions on non-discrimination. There is nothing to stop the employer applying working conditions which are more favourable to workers than those of the sending Member State.

7. Revision of the Posting of Workers Directive
On 8 March 2016, the Commission presented a proposal (COM(2016) 128 final) for a revision of the Posting of Workers Directive (Directive 96/71/EC), defining a set of mandatory rules regarding the terms and conditions of employment to be applied to posted workers.
The revision introduces changes in three main areas: remuneration of posted workers (principle of equal pay for equal work in the same place), rules on temporary agency workers (equal treatment for TAW), and long-term posting (24+ months).

8. Revision of the Posting of Workers Directive
14 chambers of national Parliaments from 11 Member States (Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia) sent reasoned opinions claiming that the proposal was in breach of the principle of subsidiarity. This triggered the subsidiarity control mechanism (the so-called 'yellow card' procedure). In addition, national parliaments from five Member States (France, Italy, Portugal, Spain and United Kingdom) submitted opinions that the Commission's proposal was indeed compatible with the principle of subsidiarity.
In accordance with the subsidiarity control mechanism, the Commission re-examined its proposal in order to decide whether to withdraw, amend or maintain it.
In June 2016 the Commission reaffirmed that it is appropriate to define at EU level the rules applicable to the posting of workers. The proposal seeks to ensure that workers carrying out work at the same location are protected by the same mandatory rules, irrespective of whether they are local workers or posted workers.

9. Directive 2018/957
Remuneration Posted workers are entitled to the same remuneration as local workers for the same work at the same place. The concept of remuneration must be determined according to the host state’s national law and/or practice but must include all mandatory constituent elements of remuneration and not only the minimum rates of pay. Collective agreements in the host state Collective agreements that are declared universally applicable apply to posted workers in all sectors (currently this is only the case for the construction sector). Long-term postings After 12 months, posted workers are entitled to all terms and conditions of employment of the host state that are mandatorily applicable with the exception of: procedures, formalities and conditions relating to the conclusion and termination of the employment contract, including non-competition clauses; supplementary occupational pension schemes. With reasoned notification, this 12-month period may be extended to 18 months. Temporary agency work Member States must ensure that the principle of equal treatment as provided for in the Temporary Agency Work Directive also applies to posted temporary agency workers. Transport sector The revised Posted Workers Directive will only apply to the transport sector once the sector-specific European legislation that is currently under negotiation is in force. Until then, the rules of the 1996 Posted Workers Directive will continue to apply.

10. Enforcement Directive: Aims
In 2014 the Enforcement Directive (Directive 2014/67/EU) was approved with the aim to strengthen the practical application by addressing issues related to fraud, circumvention of rules, exchange of information between the Member States. The Enforcement Directive will need to be transposed by the Member States by 18 June «In order to prevent, avoid and combat abuse and circumvention of the applicable rules by undertakings taking improper or fraudulent advantage of the freedom to provide services enshrined in the TFEU and/or of the application of Directive 96/71/EC, the implementation and monitoring of the notion of posting should be improved and more uniform elements, facilitating a common interpretation, should be introduced at Union level” (whereas 7 Directive 2014/67/EU). “This Directive establishes a common framework of a set of appropriate provisions, measures and control mechanisms necessary for better and more uniform implementation, application and enforcement in practice of Directive 96/71/EC, including measures to prevent and sanction any abuse and circumvention of the applicable rules and is without prejudice to the scope of Directive 96/71/EU” (Art. 1 Directive 2014/67/EU).

11. Enforcement Directive: content
Identification of a genuine posting and prevention of abuse and circumvention “In order to determine whether an undertaking genuinely performs substantial activities, other than purely internal management and/or administrative activities, the competent authorities shall make an overall assessment of all factual elements characterising those activities, taking account of a wider timeframe, carried out by an undertaking in the Member State of establishment, and where necessary, in the host Member State. Such elements may include in particular: […]” (art. 4 § 2 Directive 2014/67/EU). “In order to assess whether a posted worker temporarily carries out his or her work in a Member State other than the one in which he or she normally works, all factual elements characterising such work and the situation of the worker shall be examined. Such elements may include in particular: […]” (art. 4 § 3 Directive 2014/67/EU). “The failure to satisfy one or more of the factual elements set out in paragraphs 2 and 3 shall not automatically preclude a situation from being characterised as one of posting. The assessment of those elements shall be adapted to each specific case and take account of the specificities of the situation. The elements that are referred to in this Article used by the competent authorities in the overall assessment of a situation as a genuine posting may also be considered in order to determine whether a person falls within the applicable definition of a worker in accordance with Article 2(2) of Directive 96/71/EC. Member States should be guided, inter alia, by the facts relating to the performance of work, subordination and the remuneration of the worker, notwithstanding how the relationship is characterised in any arrangement, whether contractual or not, that may have been agreed between the parties” (art. 4 § 4 and 5 Directive 2014/67/EU).

12. Enforcement Directive: content
Improved access to information
« Member States shall take the appropriate measures to ensure that the information on the terms and conditions of employment referred to in Article 3 of Directive 96/71/EC which are to be applied and complied with by service providers is made generally available free of charge in a clear, transparent, comprehensive and easily accessible way at a distance and by electronic means” (art. 5 § 1 Directive 2014/67/EU).
Mutual assistance
«The cooperation of the Member States shall in particular consist in replying to reasoned requests for information from competent authorities and in carrying out checks, inspections and investigations with respect to the situations of posting referred to in Article 1(3) of Directive 96/71/EC, including the investigation of any non-compliance or abuse of applicable rules on the posting of workers” (art. 6 § 2 Directive 2014/67/EU).
Role of the Member States in the framework of administrative cooperation
“during the period of posting of a worker to another Member State, the inspection of terms and conditions of employment to be complied with according to Directive 96/71/EC is the responsibility of the authorities of the host Member State in cooperation, where necessary, with those of the Member State of establishment” (art. 7 § 1 Directive 2014/67/EU).

13. Enforcement Directive: content
Administrative requirements and control measures “For these purposes Member States may in particular impose the following measures: (a) an obligation for a service provider established in another Member State to make a simple declaration to the responsible national competent authorities at the latest at the commencement of the service provision, into (one of) the official language(s) of the host Member State, or into (an)other language(s) accepted by the host Member State, containing the relevant information necessary in order to allow factual controls at the workplace, including: […] “(e) an obligation to designate a person to liaise with the competent authorities in the host Member State in which the services are provided and to send out and receive documents and/or notices, if need be; (f) an obligation to designate a contact person, if necessary, acting as a representative through whom the relevant social partners may seek to engage the service provider to enter into collective bargaining within the host Member State, in accordance with national law and/or practice, during the period in which the services are provided” (art. 9 § 1 Directive 2014/67/EU). Inspections “Member States shall ensure that appropriate and effective checks and monitoring mechanisms provided in accordance with national law and practice are put in place and that the authorities designated under national law carry out effective and adequate inspections on their territory in order to control and monitor compliance with the provisions and rules laid down in Directive 96/71/EC, taking into account the relevant provisions of this Directive and thus guarantee their proper application and enforcement. Notwithstanding the possibility of conducting random checks, inspections shall be based primarily on a risk assessment by the competent authorities. The risk assessment may identify the sectors of activity in which the employment of workers posted for the provision of services is concentrated on their territory. When making such a risk assessment, the carrying out of large infrastructural projects, the existence of long chains of subcontractors, geographic proximity, the special problems and needs of specific sectors, the past record of infringement, as well as the vulnerability of certain groups of workers may in particular be taken into account” (art. 10 § 1 Directive 2014/67/EU).

14. Enforcement Directive: content
Defence of rights Member States shall ensure that there are effective mechanisms for posted workers to lodge complaints against their employers directly (art. 11 § 1). “Member States shall ensure that trade unions and other third parties, such as associations, organisations and other legal entities which have […] a legitimate interest in ensuring that this Directive and Directive 96/71/EC are complied with, may engage, on behalf or in support of the posted workers or their employer, and with their approval, in any judicial or administrative proceedings with the objective of implementing this Directive and Directive 96/71/EC and/or enforcing the obligations under this Directive and Directive 96/71/EC” (art. 11 § 3). Subcontracting liability “In order to tackle fraud and abuse, Member States may, after consulting the relevant social partners in accordance with national law and/or practice, take additional measures on a non–discriminatory and proportionate basis in order to ensure that in subcontracting chains the contractor of which the employer (service provider) […] is a direct subcontractor can, in addition to or in place of the employer, be held liable by the posted worker with respect to any outstanding net remuneration corresponding to the minimum rates of pay and/or contributions due to common funds or institutions of social partners in so far as covered by Article 3 of Directive 96/71/EC. […] The liability referred to in paragraphs 1 and 2 shall be limited to worker's rights acquired under the contractual relationship between the contractor and his or her subcontractor. […] Member States may in the cases referred to in paragraphs 1, 2 and 4 provide that a contractor that has undertaken due diligence obligations as defined by national law shall not be liable” (art. 12 § 1, 3 and 5). “Member States shall lay down rules on penalties applicable in the event of infringements of national provisions adopted pursuant to this Directive and shall take all the necessary measures to ensure that they are implemented and complied with. The penalties provided for shall be effective, proportionate and dissuasive” (art. 20).

15. Social security of posted workers
The social security of posted workers is regulated through Regulation no 883/2004 on the coordination of social security systems. “A person who pursues an activity as an employed person in a Member State on behalf of an employer which normally carries out its activities there and who is posted by that employer to another Member State to perform work on that employer's behalf shall continue to be subject to the legislation of the first Member State, provided that the anticipated duration of such work does not exceed twenty-four months and that he is not sent to replace another person” (art. 12).

16. REGULATION (EC) No 593/2008 on the law applicable to contractual obligations (Rome I)
«A contract shall be governed by the law chosen by the parties” (Art. 3). « An individual employment contract shall be governed by the law chosen by the parties in accordance with Article 3. Such a choice of law may not, however, have the result of depriving the employee of the protection afforded to him by provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable pursuant to paragraphs 2, 3 and 4 of this Article. To the extent that the law applicable to the individual employment contract has not been chosen by the parties, the contract shall be governed by the law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract. The country where the work is habitually carried out shall not be deemed to have changed if he is temporarily employed in another country. Where the law applicable cannot be determined pursuant to paragraph 2, the contract shall be governed by the law of the country where the place of business through which the employee was engaged is situated. Where it appears from the circumstances as a whole that the contract is more closely connected with a country other than that indicated in paragraphs 2 or 3, the law of that other country shall apply” (Art. 8).