Two years of negotiations were needed before the EU Council of Ministers and European Parliament could secure this directive that amends the previous ‘unassailable’ 1996 directive (Directive 96/71), which had sought to safeguard social minima rules so that the fundamental freedom of service provision within the EU could be readily provided. At the heart of the 28 June 2018 revision was the goal to ensure the principle of ‘equal pay for equal work in the same place’ in order to combat social dumping, which is often associated with the issue of worker posting. Publication on 07 July in the Official Journal of the EU, number 2018/57 of this directive provides an opportunity to review the content of a text that is due to be transposed into national legislation by the EU Member States and thus come into force by 30 July 2020.

Core rules extended. As things currently stand, companies that post workers as part of trans-national services provision have to apply the social legislation of the source country because this is the legislation governing the employment relationship, with the exception however of a ‘hard core’ of host country rules, if they are more favorable. The desired objective is to restrict unfair competition by imposing local rules in areas deemed as essential in terms of the employment relationship, all the while, and in line with the 1996 Directive, avoiding any unfair hindering of the freedom to provide services within the EU area. The goal of this revised text to extend this ‘hard core’ beyond the application of the host EU Member State’s minimum legal or conventional salary to posted workers and to now include all elements concerning remuneration* (including several different types of bonuses), which stem from legal and conventional based rules that are broadly applied or at least have a generalized impact. This is especially important for those EU Member States that do not engage in State mechanisms that extend the scope of collective conventions.

To combat the widespread practice of making posted workers bear costs related to their posting (travel costs, accommodation and meals costs), such amounts will not longer come under employee remuneration and going forward they will have to be reimbursed by the posted worker’s employer.

In addition the host country’s ‘hard core’ rules (if they are more favorable) will, going forward, include travel, accommodation, and meals costs for workers who are posted on a temporary basis from their regular workplace in the host EU Member State to another workplace (in order to distinguish this from the costs involved with the actual posting aspect).

Posted worker duration times. Up to now the only limit on duration times was that specified in regulation 883/2004 on social security system coordination and which intends for duration times to remain under 24 months. Any posting that exceeds 24 months means the posted worker can no longer remain part of the social security system of the original country. Directive 2018/57 introduces limits on certain aspects of labor law. So now when the effective duration time for a posting exceeds 12 months, the companies concerned should apply, to the detached worker(s), and ‘on an equal treatment basis’, all work and employment conditions

that are set in the host EU Member State by their provisions and collective conventions, with the exception of rules relating to procedures, formalities and conditions that address the conclusion and termination of the employment contract, including non-competition clauses and rules relating to supplementary occupation pension schemes. The new Directive also allows for the possibility to extend the 12-month limit by an additional 6 months if the host EU Member State agrees and when the employer makes a reasoned argument in support of the extension. When an employer replaces one posted worker with another who carries out the same task in the same place the duration time will be cumulated.

Finally, the text guarantees equal treatment between locally based interim workers and detached workers from an interim employment agency located in a different EU Member State.

Transport sector-specific rules. The price of getting this new regulation adopted was that the transport sector could secure a specific directive that is in fact currently struggling to reach the EU Council of Ministers as it tries to surmount national hurdles (between posting and hosting countries) that already existed back in 1996 but are now even more challenging. At European Parliament level the project has been sent back to the Transport Commission as this body has been judged as having adopted measures that are insufficiently ‘social’.

*As a reminder, social contributions are defined by the original country’s social security system, which also receives the payments.