Posting of workers after 30 July 2020 | Legal Alert
Workers’ mobility has been significantly reduced in recent months due to the Covid-19 pandemic. However, employers posting workers abroad should be aware of changes that will take effect after 30 July 2020.
The new rules on posting follow from the implementation of Directive 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services.
All Member States should amend their national legislation by 30 July 2020.
The main objective of the changes is to ensure better protection for posted workers and to prevent the so-called social dumping.
New rules for remuneration
The amending Directive extends the list of minimum terms and conditions of employment for posted workers.
Until now, employers posting workers have been required to guarantee the “minimum rates of pay” applicable in the country of posting. After the legislative change, employers should pay remuneration according to the principle of “equal pay for equal work”. This means that posted workers should receive remuneration equal to that payable to local workers in the country to which they are posted, including all pay elements (such as additional pay for seniority or dangerous work).
Therefore, employers should first of all determine the salary to be paid to their posted workers. To this end, they will need to refer both to the national legislation of the country of posting and to collective agreements or arbitration awards, if they are universally applicable in that country.
Another novelty is the obligation to guarantee at least the same allowances or reimbursement of expenditure to cover travel, board and lodging expenses for workers away from home for professional reasons that apply to local workers. In addition, if the employer is obliged to provide accommodation to local workers where they are away from their regular place of work, accommodation should also be provided on equal terms to posted workers.
The new rules increase administrative obligations of posting employers and in many cases also increase the costs of posting. In fact, employers posting workers to other countries will have to identify the remuneration conditions applicable in the country of posting, compare them with the remuneration rules of the country of origin, and determine the final remuneration taking into account the favourability principle.
Duration of posting and aggregation of posting periods
The amending Directive redefines the rules for long-term posting (over 12 or 18 months).
Until now, the legislation has not specified any time limits for posting of workers within the EU. By contrast, the amending Directive introduces a 12-month posting period during which employers must ensure the minimum conditions of employment listed in the Directive.
Following the 12-month period, the posting may continue, but the employer will have to ensure employment on the terms and conditions applicable in the host country, resulting from the law, or universally applicable collective agreements or arbitration awards. Therefore, for postings of more than 12 months, local requirements on employment conditions will be applied to a broader extent (i.e. not only the minimum requirements listed in the Directive). The only exceptions will be procedures, formalities and conditions of the conclusion and termination of the employment contract, including non-competition clauses, and occupational retirement pension schemes.
In particularly justified cases, the 12-month posting period may be extended to 18 months at the request of the posting employer.
In order to establish the rules for determining the beginning of the 12-month posting period the national interim legislation of the receiving Member State will need to be reviewed. The Directive provides no guidance in this respect, so some EU countries have introduced the rule of retroactive counting of the posting period for those workers who are already posted. Thus, it may turn out that, in the case of long-term posting, local employment conditions will already be applied to a broad extent starting from 30 July 2020.
The amending Directive also introduces the principle of aggregation of posting periods for workers performing the same task at the same place.
Amendments to the Posting of Workers Act
Poland, along with other Member States, is obliged to implement the amending Directive by 30 July 2020. Work on the amendments to the Act on the Posting of Workers in the Framework of the Provision of Services dated 10 June 2016 is still ongoing and will certainly not be completed before the end of July. The draft amendments to the Act provide for the implementation of the amending Directive into Polish law.
It is worth noting that the Polish Posting of Workers Act applies not only to workers posted to Poland from other Member States, but also to those posted to Poland from outside the EU, e.g. workers from Ukraine.
Effects of new regulations
According to statistics, Poland is a leader in the cross-border posting of workers. Therefore, changes in the legislation of Member States resulting from the implementation of the Directive will most severely affect Polish employers posting their workers to EU countries. However, changes in the Polish act regulating the posting of workers to Poland will affect in particular employers posting their workers to Poland from non-member states, such as Ukraine.
Please note that failure to comply with requirements for the posting of workers applicable in individual Member States may result in high fines being imposed in the host countries.
Should you have any questions, please do not hesitate to contact us.
Attorney at Law, Partner,
Head of Labor Law Practice
T: +48 660 765 903