If a temporary agency worker performs a service activity in a company established in one of the EU Member States, the agency must comply with the obligations introduced by the European directives on transnational posting and their respective national transpositions.
Which are the obligations?
These obligations introduced by the European directives include:
- The transmission of a prior declaration of posting. Its aim is to inform the foreign inspection authorities about the worker’s assignment in foreign territory;
- Appointment of a contact person. The posted worker himself or a professional figure domiciled in the host Country (depending on the applicable national regulation);
- The storage of documentation relating to the posting throughout the duration of the assignment and for at least two years after its end;
- Salary alignment to the collective agreement applicable in the host Country;
- A1 Certificate. It certifies the posted worker remains insured for social security purposes in the EU Country where the sending company is based;
- Elaboration of any immigration documents for third-country nationals, if needed (visas, permits, etc.).
In relation to remuneration, the European Court of Justice has recently ruled that a collective agreement offering lower pay to temporary workers compared to workers recruited directly must provide for compensatory benefits.
It is important to specify that requirements for temporary work agency vary according to the host Country regulations. Additionally, in some cases the employment of temporary staff is severely limited (e.g. in Belgium).
Court of Justice judgement on the authenticity of posting
In order to consider a posting as genuine, it is necessary to take into consideration the “place where the undertaking carries out its main economic activity” and the “amount of turnover achieved by the undertaking in the Member State of establishment”.
A transnational posting is genuine if the foreign employment agency has a substantial turnover in the country of establishment. The judgment of the Court of Justice, filed on 3 June 2021 and mentioned by the Labour Inspectorate in its note 936 of 15 June 2021, clarifies that the turnover cannot derive mainly from Countries other than the Country of establishment.
The dispute, which arose some doubt of interpretation of the EU rule, concerns a temporary employment agency based in Bulgaria. Their recruitment activities are carried out mainly in Germany and other EU Countries. The A1 certificates issuance for workers hired in Bulgaria and immediately posted to user companies in other EU Countries was refused by the competent Bulgarian authority. The reason for refusal deals with the agency’s “habitual activity”. Indeed, they did not carry out such habitual business in the Country of establishment.
Requirements for a Posting to be ‘genuine’
Therefore, the CJEU clarified the company must carry out “in a significant manner” the activity of hiring out workers in the Member State where there is its registered office. In order to consider a posting as genuine, it is necessary to take into consideration:
- the “place where the undertaking carries out its main economic activity” and
- the “amount of turnover achieved by the undertaking in the Member State of establishment”
so that any activity of mere internal administration can be excluded.