On 23 October, the EU’s employment ministers reached an understanding concerning amendments to the directive that regulates the employment terms and conditions of posted workers. The amendments include a provision that posted workers would in future be entitled to the same pay for the same work as employees in the host country.
“The agreement reached today is an important step in promoting equal status for posted workers and improving the ability of companies to compete on an equal basis in the European Union,” says Minister of Employment Jari Lindström, representing Finland at the meeting of the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) in Luxembourg.
Posted workers are employees sent by an employer offering cross-border services to work in another EU Member State on a temporary basis. In Finland, the construction industry is an example of a sector that employs many posted workers.
The most difficult issues discussed at the Council concerned long-term postings, regulation of the road transport sector, and the transition period for application of the new provisions.
The Council decided that in long-term postings (more than 12 months), the treatment of posted workers should be equal to that of the citizens of the host country. Equal treatment will not, however, apply to matters concerning the signing and termination of employment contracts, or to occupation-specific supplementary pensions. The 12-month period can be extended to 18 months on the basis of a notification by the service provider.
The scope of the employment terms and conditions applicable to posted workers will be broadened by requiring that the same remuneration rules which apply to the host country’s employees be applied to posted workers as well. To ensure this, the aim is to convert the concept of minimum rates of pay to a concept of remuneration and reimbursement. This broadening of the scope will not mean any changes in Finland, as the employment terms and conditions for posted workers will continue to be determined in accordance with the law and with generally applicable collective agreements.
A new EU-level obligation for employers will be the obligation to pay posted workers for the costs of travel, accommodation and meals in the host country. These costs incurred in being temporarily posted to a host country will remain subject to the provisions of the country of origin and the terms and conditions of the employment contract.
Under the compromise reached by the Council, the amended directive on posted workers will apply to road transport only when agreement is reached on the sector’s specific regulatory provisions and when they become effective. Before that, the present provisions will continue to apply to road transport.
In the negotiations it was agreed that there will be a period of four years before application of the new provisions. It is expected that the European Parliament will this week confirm its position on the reform of the posting directive, after which the Council and the Parliament will begin tripartite negotiations on finalising the amended directive.
The Council also approved the proposal for an Interinstitutional Proclamation on the European Pillar of Social Rights. The Pillar defines 20 key principles and rights for supporting fair and well-functioning labour markets and welfare systems.