Global Executive Mobility: employment and tax law e-bulletin

UK Alert: Call for evidence on EU proposal for a posting of workers enforcement directive

26 June 2012
by Lynda Finan, Jonathan Exten-Wright

Welcome to the second issue of our new Global Executive Mobility Alert. This is a new regular Alert in which we will focus on developments in the employment, pensions and tax fields which will be of interest to employers with globally mobile employees.

A worker is a 'posted worker' when he or she is employed in one EU member state but is sent by his or her employer on a temporary basis to carry out work in another member state. The European Commission estimates that one million workers are 'posted' to another EU country each year, with the UK posting around 38,000 workers and receiving around 37,000.

The Posting of Workers Directive ('Postings Directive') was introduced in 1996 and aims to ensure a level playing field when businesses post workers temporarily from one member state to provide services in another. The UK does not have specific provisions or legislation governing posted workers but is bound by the Postings Directive.

Under the Postings Directive, a 'posting' can be a:

• Posting under a contract between the business making the posting and the client for whom the services are intended
• Posting to an establishment or business owned by the group in the territory of another member state
• Hiring out by a temporary employment firm or placement agency to a user business established in another member state

The Postings Directive entitles posted workers to certain core employment rights available in the country they are posted to, including minimum rates of pay, maximum work periods, protection of health and safety at work and non-discrimination provisions. It applies to both workers posted from the UK to other member states and to workers posted from other member states to the UK.

On 21 March 2012, in response to ongoing debate about the effectiveness and implementation of the Postings Directive, the European Commission published a draft directive which seeks to improve the implementation and enforcement of the Postings Directive. The proposals can be found here. They are likely to impact on businesses who employ posted workers or post workers to other member states. They will also impact on workers posted to or from the UK. They include:

• Better setting out the situations which may be classed as a posting
• Improving co-operation between member states about potential evasions or contraventions of the Postings Directive
• Setting out mechanisms for the cross-border enforcement of penalties levied on employers who have not met their liabilities under the Postings Directive
• Introducing a new system of joint and several liability for contractors in the construction sector

On 14 June 2012, the UK Government issued a call for evidence, seeking views on the impact of the legislative proposals on the UK. The responses will help to form the UK negotiating position. The call for evidence closes on 26 July 2012. However, as EU negotiations have already commenced, the government welcomes responses as soon as possible.

The government has indicated that there will be future consultation on how the UK will implement any final EU legislation.

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