Guidelines on posting employees from 30 July 2020 – how to prepare your company for the new regulations?

The amendment of the rules on the posting of workers, undertaken due to the need to implement Directive (EU) 2018/957 of the European Parliament and of the Council dated 28 June 2018 into the legal systems of EU Member States, requires, among other things, the obligation to determine and grant remuneration according to the legislation of the host country and limits the application of local law regarding working conditions to 12 or 18 months, unless local provisions are more favourable to the employee.

The new requirements impose numerous obligations on European entrepreneurs, far exceeding those envisaged by previous law. This will naturally result in increased operational costs. In times of such dynamic changes, it is advisable to prepare the company meticulously for the new regulations, reducing the risk of errors and thus costs. The following guidelines should assist in this regard.

Calculation of the posting period

The first step should be to determine the posting period of the employee. This is important because it conditions to what extent the new obligation introduced by the amendment will apply — namely, to provide the posted worker with working conditions applicable in the host country. The type and number of conditions to be ensured depend on the type of posting — either “regular” or long-term — lasting over 12 months (or 18 months if an appropriate application is submitted). It is necessary to include the posting periods of previous employees sent to the same place for the same task.

Unfortunately, the directive itself lacks a clear scheme for calculating the term, which means that the method of calculating the posting period varies between countries. For example, in Germany, posting periods accumulate when an employee, immediately after the end of one posting for one service, is posted to perform work for another service. According to the European Commission’s position, the posting period must be counted separately for each service. It should not be forgotten that posting periods of subsequent employees accumulate if they are sent by the same employer to the same place for the same task. If the employer, posting address, or task changes, the posting period for the next employee is “reset” and must be counted anew.

Note

The 12-month posting period described in the directive must be distinguished from the 24-month posting period under social security regulations. The directive does not provide for a 2-month break after which the posting period restarts. After 12 months, there is no requirement to register the employee for social security. There is no need to shorten or withdraw the A1 certificate due to the expiry of 12 months of posting.

Areas where the host country’s working conditions must apply
• maximum working periods and minimum rest periods
• minimum paid annual leave entitlement
• remuneration including overtime pay rates; this point does not apply to supplementary occupational pension schemes
• terms of employee leasing, in particular by temporary employment agencies
• health, safety and hygiene at work
• protective measures for the employment conditions of pregnant workers or workers who have recently given birth, children and young people
• equal treatment of men and women and other non-discrimination provisions
• accommodation conditions for workers where accommodation is provided by the employer to workers located far from their usual place of work
• rates of allowances or reimbursement of travel, food and accommodation expenses for workers far from home for professional reasons (only concerning travel starting and ending in the host country)

Calculation of remuneration

According to the new regulations, the employee’s salary must include all mandatory components and allowances provided for an employee performing the same type of work in the same occupation and region in the host country. Aside from temporary workers performing work for the user employer, there is no obligation to compare the amount of remuneration or to pay remuneration equal to that of a worker in the host country. However, all allowances must be identified and paid, taking into account the occupation, sector and region of the work performed. These are most often regulated in collective labour agreements, sometimes even in national laws. If a given allowance has an equivalent purpose to an allowance under the sending country’s law, the more favourable one for the employee is applied (but only one). It is important to observe the timing and form of payment.

Extension of posting

The regulations regarding the application for extension of the posting period effectively prevent the host country authorities from refusing or even questioning the reasons for the extension. The application must be submitted before 12 months from the start of posting at the competent office or online. Even though it cannot be rejected, it must include justification. If the host country has an electronic system for reporting posted workers, the notification must be submitted via this system. It is advisable to verify which institution is responsible for receiving the applications.

Long-term posting

The specificity of long-term posting places the entrepreneur before a choice — organising the service so that the posting does not exceed 12 months (or 18 months if an application is submitted), or selecting the host country to avoid changes during service provision. The third option is to apply Polish law for up to 12 (or 18) months (except for elements where host country law must be applied mandatorily), and then submit an application to extend this period by 6 months. It is best to do this separately for each posted employee, as their individual posting periods may differ depending on the tasks performed and breaks. After 12 (or 18) months, the employment conditions of the host country must be applied.

Legal sources

Searching for information about employment conditions under Article 3(1) of the directive (i.e. conditions to be applied from the first day of posting) should begin with the national single website. However, the information provided there is usually very basic, often relating to the existence of collective labour agreements in some sectors but not always providing their content, which is key to establishing the applicable working conditions corresponding to local workers. A good way to obtain the required knowledge is to request the contractor to provide or share the collective agreement in force in their territory.

For long-term posting, the search unfortunately does not end there. The entrepreneur must establish additional employment conditions beyond those listed in Article 3(1) of the directive, applicable when posting exceeds 12 months (or 18 months with a justified notification). Remember that regarding rules on concluding and terminating contracts, non-compete clauses and occupational pension schemes, the law chosen by the parties applies, so these elements do not need to be checked.

The employer cannot even count on reduced information from the national single website, as it does not include the catalogue of employment conditions applicable after 12 (or 18) months of posting. This catalogue must be determined practically from scratch, considering the sector, occupation and region. It is also advisable to refer primarily to generally binding legal sources, collective labour agreements recognised as generally binding, or simply the most representative for a given sector. The entrepreneur will not avoid an in-depth analysis of the local labour law of each country and region where the service will be provided.

Note on the principle of favourability

The obligation to apply the host country’s employment conditions does not exempt the employer from applying employment conditions more favourable to employees. These primarily concern remuneration (including frequency and timing of payments!) and the amount of leave.

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