Seconding temporary workers within the European Union - What you should know
Posting of Third-Country Nationals – Historical Context
The posting of temporary workers within the European Union (UE) who are not citizens of the EU, but rather third-country nationals (TCNs), has increased dramatically in recent years. It is expected that trend will continue and accelerate considerably in the decades to come driven by acute labour and skills shortages across the EU that will almost certainly only worsen.
Up until the final decades of the previous century (1980´s and 1990´s), it appeared that European nationals from the more economically disadvantaged nations of the EU (countries such as Portugal, Spain, Greece, Poland, Romania, Hungary, etc) could constitute a virtually endless supply of skilled and unskilled labourers for the more economically advantaged countries of the same continent (such as the Netherlands, France, Luxembourg, Belgium, Germany, Switzerland and others) that have consistently faced chronic and persistent labour shortages over many decades, particularly following WWII.
Today, this scenario has changed dramatically. Due to wide range of interconnected changes and developments, such as the continuous and strong economic growth coupled with considerably better salary and working conditions available in the traditionally poorer EU countries, along with the significant decreases of the active population, changing mindsets and mentalities in these same countries, the once apparently bottomless “well” of European workers ready and willing to respond to the labour shortages faced by businesses in the more wealthier EU countries has virtually dried up.
This development opened a door of opportunity for non-EU workers residing in these comparatively poorer EU countries where wages and good job opportunities, despite having significantly improved, remain lagging far behind those available in wealthier EU countries. Employers from the more economically favoured countries, no longer able to find, nor attract, the number of European workers they had before, began exploring alternative solutions to address their labour shortages. As such, their receptivity and willingness to make use of labour provided by TCNs increased dramatically – many had never previously even considered the proposition of hiring non-EU workers and others believed it was not possible to do so legally.
Before exploring in greater detail the topic of intra-EU mobility of non-EU or Third Country National workers, we believe it is useful and important to distinguish between the concepts of “posting” and “secondment”.
Although both concepts share some common features and are very often used interchangeably, they do not have the same meaning.
There are some fundamental differences that are worth highlighting.
Defining Posted Worker
A posted worker is employed and based in one EU Member State by his employer but for a definite and limited time period, is sent and “posted” to another EU Member State, to carry out such work as stipulated by the employment contract.
This is clearly defined in the EU Directive 96/71/EC:
This Directive, also designated as the Posted Workers Directive (PWD) states “(…)’posted worker’ means a worker who, for a limited period, carries out his work in the territory of a Member State other than the State in which he normally works”; and it is identically defined in the national legislations of all EU member States.
The employment relationship between the original employer and employee, as well as the role of a posted worker in this cross-border provision of services remains the same; it is simply the location of such employee which is temporarily altered.
Defining Secondment
Secondment consists of specific form (or variant) of posting. In a secondment an employee, or a group of workers, is temporarily transferred to a Third Party to perform another job, for a defined period and for a specific purpose, for the mutual benefit of all parties.
Through a tri-party relationship, an employee will be “seconded” by their employer to a third party who will use this employee to address his/her needs. The employee remains employed by his employer for the duration of the secondment and once the determined time period of the secondment has ended, the employee simply returns to the original employer.
Therefore:
- The employee is seconded to perform his working activity, for a specified time and place;
- The employer as the undertaking seconding the employee, retains title of legal employer;
- The third party, to which the worker is seconded, holds the authority to direct and supervise the employee sent from abroad.
In general, domestic secondment, as its name implies, is when the employee remains at the same host/original Member State in which he/ she originally works. On the other hand, cross-border secondment is when a worker is seconded from one country to another.
Of course, temporary staffing agencies and posted workers are always at greater risk when moving into foreign territory – largely due to lack of experience and knowledge and also, quite often, because of resistance met from local agencies, special interests groups and even government bodies, who, to a greater or lesser degree, do not hold a favourable view of foreign temporary staffing agency.
Many believe that competitors from abroad will not play by the same workforce contract or stick to the same standards, particularly with regard to wages, timely payments, rights and housing conditions. Based on our own experience, labour inspectors frown upon and target foreign temporary staffing agencies because of self-held and irrational beliefs that workers posted from abroad “steal” jobs from local workers and that that non-established foreign agencies are detrimental to the local economy because they benefit from a far more favourable tax situation than local temporary staffing agencies.
What they fail to take into account, or simply overlook, is that foreign temporary staffing agencies are obliged to pay taxes in their home countries of which they are tax residents and not in countries where they simply do business.
The Revision of the Posting of Workers Directive (2018/957/EU), established the principle of “equal pay for equal work” rules. EU member states were given 2 years to transpose this Directive to national legislation.
The most important elements of the Reform Directive are:
- Equal pay for equal work in the host country
- Applicable labor law in the host country
- Equal treatment of agency workers in the host country
Despite this new legislation, the potential for abusive practices remain – the heavy fines and penalties imposed by authorities in the host countries do not sufficiently dissuade the “bad apples” from mending their ways.
However, the 2018 Revision of the Posting of Workers Directive was indeed a huge step in the right direction, particularly because it determined that posted workers may not be paid less than workers in the host country who perform the same job.
For example, if Dutch law dictates that a mason must be paid at least 17,50€ per hour, a Hungarian mason posted to the Netherlands may not be paid less than this amount – regardless of what he was being paid in Hungary at the time he was posted or what is stated in Hungarian law.
That´s exactly what “equal pay for equal work” translates to – the Hungarian mason seconded to the Netherlands is entitled to receive the same wage per hour as his counterparts in the Netherlands. However, the mason job position in the Netherlands incorporates distinct levels (or categories) usually determined by the number of years of experience in the profession. These different categories also come with different levels of pay. Regardless of the number of years of experience in Hungary working as a mason, the Hungarian mason may be placed at the entry level in the Netherlands and be paid the corresponding entry level wage or salary – the difference is usually quite insignificant, best measured in cents and not euros.
If you have any questions, please don’t hesitate to get in touch. At work supply we are happy to help.
