When employees are sent to work temporarily in another Member State of the EU, a key question arises: which rules apply – those of the home Member State or those of the host Member State?
The answer lies in the Posting of Workers Directive (the “PWD”).
On the one hand, posted workers remain employed by the sending company and their employment is therefore, governed by the employment law of the home Member State, which typically applies to their employment contract.
On the other hand, the PWD ensures that certain key employment terms and conditions from the host Member State apply to posted workers throughout the posting period, unless the protection offered by the employment law of the home Member State (or the law applicable to their employment contract) is more favourable. These include working hours and rest breaks, paid annual leave, remuneration, and overtime, amongst others, which the sending company must guarantee to posted workers, on the basis of equality of treatment with local workers, in accordance with the employment law of the host Member State.
In the case of a long-term posting, the sending company must provide posted workers with all employment terms and conditions that apply in the host Member State. However, the following matter are not governed by the law of the host Member State: the conclusion and termination of the employment contract and supplementary pension schemes.
The Posting of Workers in Malta Regulations, S.L. 452.82, is the guiding law for any workers posted to Malta by a company established in a different Member State. When a Maltese company posts workers to another Member State, the applicable rules will be found in the law of that Member State which transposed the PWD locally.
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