The legal basis for the rules on posting of workers in the EU is Articles 54 and 56 to 62 of the Treaty on the Functioning of the European Union (TFEU), with the scope of regulating two key principles, namely (i) creating a level playing field for cross-border provision of services with the least possible restrictions and (ii) protecting posted workers by guaranteeing a common set of social rights, thereby preventing unfair treatment and the development of a low-cost labour market.
The rules on posting of workers are rooted in the freedom to provide services as set out in Article 56 of the TFEU and reflects the EU’s commitment to eliminating barriers that hinder the free movement of services across its internal market.
The first directive (Directive 96/71/EC) (the “Posting of Workers Directive”) was adopted on 16 December 1996, after a key judgement by the Court of Justice of the European Union (CJEU) (Rush Portugesa Lda v Office National d’Immigration, C-113/89, which related to a Portuguese undertaking providing services in inter alia the construction sector in another Member State and its right to move with its workforce for the duration of the works). The Posting of Workers Directive laid down core terms and conditions of employment (covering matters such as maximum work periods, minimum paid annual holidays, minimum rates of pay, health and safety at work, amongst others) which posted workers must be granted in the host Member State.
Over the years, issues of interpretation led the Commission to propose changes to improve the directive and enforcement.
The changes also came about after a string of key cases decided by the CJEU. Between 2007-2008, the CJEU in the cases of Viking (C-438/05), Laval (C-341/05), Rüffert (C-346/06) and Commission vs Luxembourg (C-319/06) interpreted employment standards in the directive as a ‘maximum ceiling’ rather than minimum, limiting posted workers’ rights. However, later cases (such as the Sähköalojen ammattiliittory (C-396/13) and Regio-Post (C-115/14) cases), provided better protection for posted workers by holding that collective agreement pay categories must be applied to posted workers and by allowing minimum wage requirements by Member States in public procurement.
In 2014, Directive 2014/67/EU on the enforcement of the Posting of Workers Directive (the “Enforcement Directive”) was adopted, with the aim of establishing a common framework to identify a ‘genuine’ posting of workers to avoid misuse and circumvention of the posting of workers rules, based on a multi-factor and factual assessment. Other key elements of the Enforcement Directive include:
- Defined responsibilities incumbent on Member States to monitor compliance with the posting of workers rules.
- Enhanced cooperation between national authorities and mutual recognition of administrative penalties and fines, allowing sanctions imposed on service providers by one Member State to be enforced and executed in another Member State.
- Requirement for service providers established in another Member State to make a declaration to the responsible national competent authorities in the host Member State containing essential information on the posting in order to allow factual controls at the workplace.
A revised directive (Directive (EU) 2018/957) was adopted in 2018, effective from July 2020, introducing new rules on inter alia:
- Long-term posting: Posting can last up to 12 months, with a possible extension of six months, after which the labour law of the host Member State will apply.
- Remuneration: From the first day of their posting, all posted workers are entitled to the same remuneration rules as local workers in the host Member State. Clearer rules were also introduced regarding other elements of remuneration, including allowances and deductions for travel, board and accommodation costs.
- Posted temporary agency workers: Temporary work agencies are required to guarantee posted workers the same terms and conditions of employment which apply to temporary agency workers hired in the host Member State.
Specific rules for posting drivers in the road transport sector are laid down in Directive (EU) 2020/1057.
The European Commission published a proposal in late 2024 for a regulation aiming to create a single digital portal for posting declarations. This initiative seeks to reduce the administrative burdens resulting from differences across national systems. Read more about this proposal here.
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