Since the entry into force of the first Posting of Workers Directive in 1996, the situation in the European labor market has changed considerably. One of the consequences of this change is that the wage differential between different member states has increased. This can result in unfair competition on labor costs and working conditions. For example, a foreign worker may be temporarily posted to another country at a lower wage. To counter this development, the EU member states agreed on a revised Posting of Workers Directive in 2018. The directive has been transposed in the Netherlands in the ‘Implementatiewet herziene detacheringsrichtlijn’. This law will enter into force on July 30, 2020. You can read what this law means for you in concrete terms in this contribution.
Hard core working conditions
The basic principle of the revised Posting of Workers Directive is ‘equal pay for the same work in the same place’. In short: more protection for the cross-border posted worker while reducing the difference between them and national workers. Under the old Posting of Workers Directive, employers only had to pay posted employees the host country’s minimum wage and minimum holiday allowance. Under the revised Posting of Workers Directive, workers are directly entitled to additional remuneration. What is meant by these “supplementary benefits” is at the discretion of Member States. However, member states must publish this in an accessible manner on a government website. In the Netherlands, this additional remuneration mainly refers to bonus payments, year-end bonuses and overtime bonuses. Cross-border posted workers in the Netherlands will therefore be entitled to bonus, year-end bonus and overtime pay as of July 30, 2020.
Housing Conditions
The hard core of working conditions will also be expanded to include conditions for accommodation. Thus, from July 30, 2020, cross-border posted workers will be entitled to reimbursement of expenses for travel, meals and accommodation if they are away from home on a professional basis. This includes expenses incurred by posted workers when they need to travel to and from their regular workplace in the Netherlands, or when they are temporarily sent by their employer from that regular workplace to another workplace in the Netherlands.
Additional benefits after 12 months
If an employee is posted for 12 months in, for example, the Netherlands, there is also a right to (additional) additional terms and conditions of employment as of July 30, 2020. These are in addition to the “hard core” as described earlier. Indeed, cross-border posted employees will then be entitled to all Dutch terms and conditions of employment under Dutch labor law and collective bargaining agreement provisions that have been declared generally binding. With the exception of supplementary pension and provisions on entering into and terminating the employment contract. This 12-month period can be extended to 18 months if the duration of the posting requires it. In short, with the implementation of the revised Posting of Workers Directive, a posted employee will receive even more legal protection after 12 (or 18) months and there will be even less difference between employees.
Incidentally, the posting period is not interrupted if a posted worker succeeds another posted worker. Allowing the initial posting period to continue prevents the posting period from starting over.
Temporary Workers
Foreign temporary employment agencies or other companies that provide temporary workers in the Netherlands must offer from day one all provisions of the applicable collective bargaining agreement that have been declared generally binding. This includes the exception of provisions on supplementary pension plans and provisions on entering into and terminating the employment contract. The responsibility for correct payment lies with the foreign temporary employment agency.
Transportation exception
For posted workers in the transportation sector, these changes do not yet apply. A separate regulation is being drafted for this sector.
Conclusion
If there are foreign employees working within your organization, pay close attention to what terms of employment you should offer to these employees. You will then avoid a claim in the future.
Do you have questions about how and which terms of employment to apply to which employees? If so, please feel free to contact one of our employment law specialists.