The regulations on the posting of workers have been defined by the rules of Directive 96/71/EC of 16 December 1996, as amended by Directive 2018/957 (hereafter referred to as the “Posted Workers Directive” (PWD)). According to the PWD, a posted worker is a worker who, for a limited period, carries out his/her work in the territory of a Member State other than the State in which he/she normally works. The Posted Workers Directive clarifies that when sent by their employer to another Member State to carry out a service on the employer’s behalf, core terms and conditions of employment, such as minimum paid holidays, minimum rest time, maximum working time, remuneration, etc. will have to be applied according to host Member State rules, while the rest of the conditions will be governed by the law applicable to the employment relationship. In case of a long-term posting, which exceeds 12 months (or 18 months in case of motivated notification made by the employer), all terms and conditions of the host Member State will become applicable.
With regard to social security, Article 12 of Regulation (EC) No. 883/2004 on the coordination of social security systems, provides for an exception to the lex loci laboris rule. It allows for a person working as an employed person in the territory of a Member State – on behalf of an employer that normally carries out its activities in that State, and who is sent by that employer to another Member State to perform work there for that employer – continues to be subject to the legislation of the posting State provided that the anticipated duration of that work does not exceed 24 months, and he or she is not sent to replace another person. The same rules apply with respect to self-employed persons who pursue an activity as a self-employed person in a Member State and who go to pursue a similar activity in another Member State. This means that social security contributions are paid according to the legislation of the employer’s home state or where the self-employed person is established (the “sending state”).
EU legislation does not determine which country can tax the work income during a posting (https://inhouse-legal.eu/current-development/european-union-labour-authority-challenges/: « if a worker is posted for a period of less than six months, he or she does not become liable to pay income tax in the country of destination. » (Regulation 883/2004). « However, there are no EU-wide laws laying down which country can tax income during a posting. This may be set out in national laws or tax agreements between EU countries »). This is subject to national law and tax agreements between the countries concerned and also applies to employers established outside the European Union.
The PWD was revised, and by 30 July 2020, Directive (2018/957) had to be transposed into national legislation. All sectors, with the exception of the international road transport sector (see below), are now subject to the payment of ‘remuneration’ and all its mandatory elements. While to date posted workers were only guaranteed the minimum rates of pay of the host Member State, they are now entitled to domestic collective bargaining wages (stemming from universally applicable collective agreements) including premiums for qualification or seniority and also to all additional benefits such as holiday and Christmas allowances, so that the rules of remuneration must be the same for posted workers as for local workers. This is aimed to close the partly large wage differences between posted and local workers. In addition, the new directive demands that posted temporary agency workers are treated equally to local temporary agency workers in the case of basic terms and conditions of employment.
These new regulations do not apply to the road transport sector for which a separate legislative act amending Directive 2006/22/EC has been adopted because of the “highly mobile nature of work” (Recital 15 of the 2018 Posted Workers Reform Directive) in this sector and the “particular legal questions and difficulties” (ibid) this poses, such as – probably – the transit issue. Inland navigation shares many characteristics with road transport but is not covered by a dedicated legislation. Whether it would be appropriate to introduce a specific directive on posting in inland waterways should be subject to a thorough assessment.
There are indeed diverging views to what extent the PWD Directive applies to workers in some inland waterway cross-border transport activities, in particular when the performance of their work does not have a sufficient connection with that territory. Although it does not directly concern international transport services, the Dobersberger case C-16/18 has indeed highlighted that a “sufficient connection with the territory of a (host) Member State” is necessary in order for the worker to be considered as a posted worker.
The Enforcement Directive on posting of workers and Directive 96/71, as amended by Directive 2018/957, give Member States tools to prevent abuse and circumvention of rules and to ensure effective monitoring of compliance with the obligations set in the Posting Directives. These include the use of administrative cooperation between competent authorities, the possibility to put in place administrative requirements and control measures, and criteria for identification of a genuine posting. In order to oppose the phenomenon of letter-box companies that used posting in order to fraudulently exploit lower labour and social security standards in some countries, the Enforcement Directive was transposed into national law by the Member States on 16 June 2016. Nevertheless, problems can arise even if posting regulations themselves are enforced properly.
The report on the implementation of the Enforcement Directive on Posting of Workers (COM(2019) 426 final https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2019:426:FIN) shows that the administrative requirements put in place in Member States have helped monitoring compliance by companies with the rules and ensuring the rights of posted workers. The report also notes that there are divergences between the different national systems. The main issue in relation to posting in the inland navigation sector relates to their implementation.
Concerning social security, whereas all employment of a cross-border nature such as inland navigation is subject to Reg 883/2004, there is a distinction between the case of workers pursuing activities in two or more Member States (covered by Article 13) and the case of posted workers (covered by Article 12 as mentioned above). Article 13 provides for a person who is normally working in two or more Member States to be subject to the legislation of the Member State of residence, if this person pursues a substantial part of his/her activity in that Member State or, if that is not the case, to the Member State in which the registered office or place of business of the company employing him/her is situated.
Regarding the characteristics of employment of posted workers, general indications can be drawn from a report by the European Commission (European Commission (2016)) published in 2016. It finds that, although there are no official statistics on the earnings of posted workers, they presumably earn less than comparable local workers in the host states, at least in the “older” EU Member States that have a higher average wage level. Construction and transport workers are particularly specified in this context.
The importance of posting of workers in European IWT is not easily assessable as quantitative information on this topic is scarce. In principle, the quantity could be vaguely assessed by the number of Portable Documents (PDs) A1 issued by social security institutions of the respective sending states in case of posting. However, in the European Commission’s annual “Report on A1 Portable Documents issued” (The latest version is De Wispelaere et al. (2019), relating to the year 2018), which finds that only about 0.6% of total EU employment of full-time equivalents in 2018 could be attributed to holders of PDs A1, the number of PDs A1 issued to persons working in IWT is unfortunately not given. This is because it is not requested in the questionnaire (See Annex 3 of De Wispelaere et al. (2019)) used to gain information from the national delegations of the Administrative Commission for the Coordination of Social Security Systems. Instead, there is only a breakdown of the “mariners” category, for which Croatia and Malta are the most important sending states. Apart from freight transport by road, no other more detailed category is reported. Furthermore, posted workers are not explicitly labelled in the Eurostat SBS database but instead included as employees in employment agencies (NACE category N78). Thus, they are not counted as such in the companies where they are placed and, consequently, nor are they counted as persons working in IWT.
Apparently, the lack of statistical information on the (sectoral) structure of posting has been recognised by Member States and the European institutions, and it could be expected that in the future more detailed information will be available. Recital 5 of the Posted Workers Reform Directive demands the following: “Sufficient and accurate statistical data in the area of posted workers is of utmost importance, in particular with regard to the number of posted workers in specific employment sectors and per Member State. The Member States and the Commission should collect and monitor such data.” The new European Labour Authority (ELA) that started operations in October 2019 is furthermore supposed to shed light on fair mobility in the European Union, including the posting of workers, other topics of social security coordination between Member States and the monitoring of compliance with EU labour law rules in the case of mobile workers.
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