The EU Directive on secondment: The key issues affecting immigration
The cross border assignment of workers is an essential element of the European Union– it safeguards one of the fundamental principles that underlies its very existence: the free movement of services.
"Contractors as well as the employers of seconded workers, must be well informed about their obligations in EU member states before calling on or sending seconded workers to these jurisdictions."
Marcel Houben, Partner, Peeters Advocaten/Avocats
The cross border assignment of workers is an essential element of the European Union – it safeguards one of the fundamental principles that underlies its very existence: the free movement of services. Marcel Houben, Partner at Belgian law firm member Peeters Advocaten-Avocats, explains what employers must understand before seconding workers in European Union member states.
To facilitate the free movement of services, European legislators enacted Directive 96/71/EG on 16 December 1996. Furthermore, to promote the free movement of services, legislators aimed to protect the basic rights of workers and avoid unfair competition and fraud.
However, the Directive and national legislation enacted in accordance with the Directive, did not adequately meet its goals: a frequently cited sticking point in this respect was the “assignment” of workers by foreign “mail box” companies that do not engage in real activities in the home country, but merely recruit workers in the home country with the intention to employ (“assign”) them immediately in another country. Respect for (minimum) salaries and terms and conditions of employment is another issue which is often at stake.
To confront these issues, European legislators adopted Directive 2014/67/EU in 2014. The deadline for EU member states to amend national laws accordingly was fixed at 18 June 2016.
In order to tackle the problem of “mailbox” companies, the Directive supplied tools to verify the real nature of the secondment: it clearly specified that “secondment” should adhere to two essential elements:
- The temporary employment of a worker in a country other than the country where he/she is usually employed
- The employer is engaged in substantial activities in the latter country.
To verify whether both elements are met, a non-exhaustive list of factual elements has been established. The Directive further focuses on measures aimed at furthering the means to control compliance with European and national regulations relating to employment as well as social security. In this respect, it should be noted that a large number of EU member states’ national employment regulations are imperative and, as a result, also apply to seconded workers.
In this context, the Directive instructs EU member states to make clear and transparent information on their employment regulations (e.g. working time, minimum salaries, etc.) easily accessible to all employers throughout the EU. It also instructs member states to take the necessary measures to ensure efficient cooperation and the exchange of information between various national authorities.
The Directive also gives EU member states the option to impose an obligation on employers of seconded workers that they must inform the authorities of the receiving member state about the secondment beforehand. Belgium introduced this obligation some time ago (known as the “LIMOSA” declaration). And recently France and Luxembourg introduced a similar obligation. However, EU member states must ensure that this obligation does not become too burdensome and obstruct the free movement of services. European authorities have rapped Belgium’s knuckles for this very reason!
EU member states can also impose an obligation on an employer of a seconded worker to appoint a liaison person who is in charge of providing all information and documentation on seconded workers as requested by the authorities of the receiving country. Belgium introduced this obligation recently and the physical person or legal entity can be located in any EU member state. France has followed suit, but in contrast to Belgium, the person must be located in France. The role of the liaison person in Luxembourg, according to national regulations, is rather limited.
In a number of EU member states (including France, Luxembourg and Belgium), the contractor is held jointly liable with the subcontractor/employer of the seconded workers for ensuring that all obligations and regulations (such as the preceding announcement and availability of the A1 statement) are complied with and may be subject to severe fines. According to Belgium’s rules, the contractor may also be held jointly liable with the employer of the seconded workers for payment of the minimum salaries.
Finally, the IMI system (Internal Market Information System) is now also available to EU member states. This can be used to call on the assistance of other member states to send out notifications related to these regulations to employers established in the EU member state, and to impose and collect fines.
It is therefore very clear that contractors as well as the employers of seconded workers, must be well informed about their obligations in EU member states before calling on or sending seconded workers to these jurisdictions.
For more information
Please contact Marcel Houben at Peeters Advocaten-Avocats in Brussels.