13 December 2017

EU to enhance rights of posted workers

For a long time, the EU has been fighting inequalities in the remuneration of workers posted abroad, and the subsequent competitive advantages of companies from countries where labour is cheap. To approximate the rights of all those working at the same time in the same country, the Posted Worker Directive stipulates that workers posted abroad are entitled to a rate of pay at least equal to the minimum wage in the host country. Now the EU wants to stipulate that they should also obtain all other constituent elements of remuneration received by local employees. For employers from Central and Eastern Europe this would mean a significant increase in the costs of their engagements carried out abroad, and a more complex administration.

Iva Baranová
Barbora Bezděková

Under the directive, a posted worker is a person assigned by an employer abroad to carry out tasks under a contract concluded with a foreign customer or to work at a company within the same group of companies; possibly also a person posted abroad by an employment agency within cross-border agency work. Under the current wording of the directive, these workers are guaranteed a rate of pay at least equal to the minimum wage in the host country, including extra pay for overtime work, where the foreign rate of pay is more advantageous for the employee.

According to the Council of the EU, the current wording of the directive no longer provides a sufficient tool to fight inequalities in remuneration and does not guarantee fair competition in the EU market. The Council thus proposes that, apart from the minimum rate of pay (wage), posted workers should be entitled to all remuneration components available to employees commonly working in the host country. In practice, these would include various types of extra pay, bonuses, contributions and other benefits, whether provided under the law or under collective bargaining agreements.

The Council now aims to initiate the legislative process for the draft amendment in the European Parliament. It will not be easy, as the merit of the amendment is perceived differently in various countries: Western countries welcome the change, as it would partly limit the competitive advantage of suppliers from countries with cheap labour; Eastern countries understandably do not wish to give up this advantage.

In any case, for employers, the amendment would bring many problems in practice. Its main downside is the increased cost of posting workers westwards, as the postings are already quite expensive due to the minimum-rate-of-pay requirement. Yet another issue is the availability of information on what the workers are entitled to under foreign legislations, not to mention collective bargaining agreements. Quite likely, employers would not be able to do without hiring a foreign legal counsel. Paradoxically, the change may not be welcome even by the workers themselves – while the amendment would approximate the rights of employees working at the same time in the same country, it would, on the other hand, deepen the differences between employees of the same employer doing the same work, just in different countries.

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