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EU proposals: Tightening up Ts&Cs for temporarily posted workers

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30th Aug 2012
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A recent government consultation on the potential impact of a decision by the European Union to enforce its Posting of Workers Directive has just closed, but the responses should help the UK to formulate its negotiating position.

So what does it all mean and why is the move significant for employers?

A worker is classed as a “posted worker” when s/he is employed in one EU member state but is sent by their employer on a temporary basis to carry out work in another member state.   

There are three types of situation that can be classed as posting workers:

  • Posting under a contract between the business making the posting and the client for whom the services are intended. For example, a service provider may win a contract in another country and send their existing workers there to carry out the contract (contracting /sub-contracting)
  • Posting to an establishment or business owned by the group in the territory of another member state. An example would be a travel rep from a UK travel company who is posted to Spain for the summer tourist season (intra-corporate transfers)
  • Hiring out by a temporary employment firm or placement agency to a user business established in another member state.

 Recognising the need to guarantee the rights and working conditions of a posted worker, and to avoid the issue of “social dumping” where foreign service providers undercut local ones through lower labour standards, the European Commission established a set of rules about the terms and conditions applied to an employee posted to another member state. As a result, in 1997 the Posting of Workers Directive came into effect (Directive 96/7/EC). The Posting of Workers Directive The legislation says that, where a member state has introduced certain minimum terms and conditions of employment, they must also apply to workers posted to that state. For example, UK legislation says that if an employee who normally works in the UK is temporarily posted outside of the country to work, they must be paid at least the national minimum wage for any work performed abroad. However, in accordance with the Posting of Workers Directive, if they are posted to a member state that has a minimum rate of pay higher than the wage that they normally receive, they are entitled to the minimum rate of pay of that state.  The legislation covers a range of terms and conditions including: 

  • Maximum work periods and minimum rest breaks
  • Minimum paid annual leave
  • Minimum rates of pay
  • Health, safety and hygiene at work
  • The protection of workers who are pregnant or have just given birth
  • [***], race, disability, sexual orientation, religion/belief and age discrimination
  • The less favourable treatment of fixed-term employees and part-time workers
  • Conditions for hiring-out workers, in particular the supply of workers by employment businesses.

 In addition, employers must abide by any universally applicable collective agreements that apply in the member state to which workers are posted. Naturally, the same rules apply if a UK-based employer takes on a posted worker from another member state.  In the UK, posted workers also have the same protection under equality legislation as domestic workers. Any posted worker in the UK could take an equal pay claim to an employment tribunal in the same way as a UK worker.  Complying with the Posting of Workers Directive Employers need to be proactive when considering whether to post employees abroad. Any terms and conditions in a worker’s contract will continue to apply where they are more favourable than the minimum requirements of the host state. 
It is also vital that an employer understands the minimum terms and conditions of employment that apply where the employee is sent to work. The Posting of Workers Directive places an obligation on the member states to cooperate among themselves and to grant public access to information on national employment conditions. But there is also an onus on employers to ensure that the worker receives those basic conditions. Concerned that these minimum employment and working conditions were often not respected for the one million or so posted workers in the EU, however, on 21 March 2012, the EC proposed new rules to increase the protection of workers who are temporarily posted abroad. EU proposal for a Posting of Workers Enforcement Directive To address the specific issues of abuse where workers do not enjoy their full rights in areas such as pay or holidays, especially in the construction sector where the posting of workers is most prominent and reports of abuse are highest, the Commission has put forward concrete practical proposals as part of an Enforcement Directive to increase monitoring and compliance, and to improve the way that existing rules on posted workers are applied in practice.  What happens next? The UK government recently published a call for evidence on the impact of these legislative proposals on the UK. This consultation has now closed and the responses will help form the UK negotiating position. As a result of last year’s Modern Workplaces consultation on equal pay legislation, there are now proposals in the pipeline to give employment tribunals the power to order pay audits in certain cases. If these changes are made, they would be applicable to ET cases for all workers in the UK whether domestic or posted.  Helen Hargreaves is a senior policy & research officer for the Chartered Institute of Payroll Professionals.

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