knowledge | 2 August 2018 |
Regulation of Posted Workers – What are the Obligations and do They Apply to You?
Contrary to popular belief, the practice of posting workers is not limited to the construction industry, and any employer who sends its employees to carry out duties in another EU Member State is likely to be subject to the obligations provided for under the (soon to be updated) Posted Workers Directive. In fact, between 2012 and 2016 almost 6000 employees a year were posted from Ireland, with a further 7000 being posted to Ireland from other EU Member States.
What is a posted worker?
A “posted worker” is a worker who normally works in another EU Member State but, for a limited period, is sent by his/her employer to carry out his /her duties in another EU Member State.
The Posted Workers Directive 96/71/EC was introduced to address concerns surrounding the exploitation of foreign workers and the issue of “social dumping”, whereby national minimum terms and conditions are undermined by the use of “cheap” foreign workers. The Directive guarantees posted workers an entitlement to minimum terms and conditions of employment. As a result of concerns surrounding compliance with this Directive, an updated Directive was introduced (Directive 2014/67/EU on the enforcement of Directive 96/71/EC) in an attempt to afford greater protection to posted workers. This updated Directive was transposed by the European Union (Posting of Workers) Regulations 2016 (the “Regulations”) and introduced a number of new measures.
The Regulations provide that service providers who post workers to Ireland are obliged to make a declaration to the Workplace Relations Commission (the “WRC”) prior to the date the posted worker commences providing services in Ireland. The Regulations provide that the declaration must be made in the prescribed form and contain the following information: identity of service provider; number of posted workers; duration of the posting; address of posted workplace; and the nature of services.
Neither the Regulations nor the Directive prescribe a minimum posting period which triggers this reporting obligation. Equally, the definition of posted worker is vague in that it simply refers to a posting for a “limited period”. Therefore strict compliance with the Regulations requires employers to make this declaration in respect of short term and even same day business travellers.
However, in Ireland, for the purposes of work permits and work permissions, there is a clear distinction between workers coming to Ireland for periods of 14 days for business purposes and those working in Ireland for periods longer than 14 days. If a foreign national is not visa required and only intends to stay in Ireland for a period of 14 days or less, they do not require a work permit/permission. While the Regulations do not make reference to such a distinction or draw any such parallels, this may be noteworthy for employers posting workers for very short periods.
Employers who second employees within a group company structure, or otherwise within the EU, should be aware that these reporting obligations are applicable to such postings. Similarly, employers who post workers using the “Van der Elst” scheme – which allows a non-EEA national who is legally resident and employed by a company in an EU country to provide services on a temporary basis to a company in another EU country on behalf of his/her employer without the need to obtain a further work permit – are also likely to find themselves subject to the provisions of the Regulations.
The Regulations place further obligations on employers to notify the WRC of a designated person who will liaise with the WRC in respect of the posted workers. Additionally, the service provider is obliged to keep at a location identified to the WRC certain documents in respect of the posted workers, namely: contracts of employment, payslips, timesheets and proof of payment of wages.
Failure to comply with any of these obligations on the part of the service provider amounts to an offence which attracts liability to a class A fine (i.e. at present a fine up to €5,000) on summary conviction or on indictment to a fine not exceeding €50,000. Directors, managers or secretaries may be personally liable where the commission of the offence is with the consent or connivance of or attributable to any neglect on their part. The Regulations allow for the enforcement of cross border financial administrative penalties and fines incurred in another Member State.
The Regulations introduce the concept of subcontracting liability in respect of the construction sector, so if a posted worker in this sector is not paid the applicable statutory rates of pay by their direct employer (i.e. the subcontractor), the contractor one up the supply chain and the direct employer are jointly and severally liable for any unpaid remuneration. Additionally, such posted workers can refer a complaint to the WRC naming both the direct employer and the contractor one step up the supply chain as respondents. A defence of due diligence is available in such instances to the contractor.
Revised Posting of Workers Directive
On 21 June 2018 the Council of the European Union approved the revised Posted Workers Directive. Once signed, Member States will have two years to transpose the Directive. In broad terms, the revised Directive provides for the following:
(a) the concept of long-term posting i.e. a posting for 12 months with the possibility of a 6 month extension. After this period, the posted worker will be entitled to an additional set of terms and conditions of employment that are mandatorily applicable to workers in the Member State where the work is carried out;
(b) collective agreements will apply to all posted workers is no longer limited to the construction sector.
What can we do for you?
Our Employment Team has significant experience in advising many of Ireland’s major employers on workforce mobility issues, including the Posted Workers Directive, as well as related immigration and tax issues.
Also contributed by Aoife Clarke.
This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.