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‘Posting’ and ‘Posted Workers’: The Need

for Clear Definitions of Two Key Concepts


of the Posting of Workers Directive
Aukje van Hoek and Mijke Houwerzijl

Cambridge Yearbook of European Legal Studies, Volume 14 2011-2012

1. Introduction
As early judgments of the Court of Justice in the cases Manpower and Van der Vecht1 show,
employee posting was already a phenomenon in the late 1960s and early 1970s, even before
the internal market was launched. The practice of hiring (temporary agency) workers from a
country with a ‘cheaper’ social security scheme, with the sole purpose of posting them to a
Member State with a more expensive social security regime, was at that time labelled
abusive and ‘social dumping’. In the first half of the 1990s, in the context of the Delors’
project ‘Europe 1992’, the proposal for a Directive on the Posting of Workers led to fierce
debates in the European Parliament and Council.2 The debates focused in particular on
the extent to which Member States must be allowed, or should be required, to apply their
mandatory wage provisions and other working conditions to workers posted to their
territory. It was only after a six-year process of negotiations, deadlock and amended
proposals that the Posting of Workers Directive (Directive 96/71/EC, adopted on 16
December 1996, hereinafter referred to as PWD) was finally adopted.
The PWD aims to reconcile the exercise of companies’ fundamental freedom to provide cross-
border services under Article 56 TFEU (former Article 49 EC) with the need to ensure a
climate of fair competition and respect for the rights of workers (Preamble, paragraph 5).
In order to achieve these aims, it identifies which national mandatory rules of the host state
must apply to posted workers. The PWD establishes a hard core of clearly defined terms
and conditions of work and employment for minimum protection of workers (laid down in
Article 3(1)a–g) that must be complied with by the service provider in the host Member
State. According to the Preamble of the PWD (Recital 7–11), the Directive thus makes the
optional character of Article 7 Rome I Convention (now Article 9 Rome I Regulation)3
obligatory, by defining those subjects of employment law in which the national mandatory
rules must be seen as ‘overriding mandatory provisions’. In this way, the Directive intends
to provide a significant level of protection for workers, who may be vulnerable given their
situation (temporary employment in a foreign country, difficulty in obtaining proper

1
Case 19/67 Van der Vecht [1967] ECR 345 and Case 35/70 Manpower [1970] ECR 1251.
2
See for instance European Parliament, Posting of Workers. Proposal for a Directive COM(91) 0230—
C3/0320/91—SYN 356. Legislative Resolution (Cooperation procedure: first reading) embodying the opinion
of the European Parliament on the Commission proposal for a Council directive concerning the posting of
workers in the framework of the provision of services, 10 February 1993. OJ C 72/78, 15.3.93; European
Parliament, Resolution on the posting of workers in the framework of provision of services. B4-0858/95. OJ
C 166/123, 3.7.95; no. 4-464/204 and no. 4-464/206.
3
The Rome I Regulation (Reg 593/2008, OJ L177/6) is the direct successor of the Rome Convention of
1980. The relevant provisions have changed in text, but not drastically as to their contents. See as to the
continuity between Art 6 of the Rome Convention and Art 8 of the Rome I Regulation: Case C-29/10 Heiko
Koelzsch [2011], not yet reported in ECR, para 46. The provision on overriding mandatory provisions has
changed however (see Art 7 Rome Convention and Art 9 Rome I Regulation).
representation, lack of knowledge of local laws, institutions and language).
The European Commission has regularly monitored the implementation and enforcement of the
PWD to assess whether the aims of the PWD were being met. A comprehensive monitoring
exercise launched in 2006 by the European Commission led to the assessment that the PWD’s
main shortcomings, if not all of them, could be traced to a range of issues relating to its
implementation, application and enforcement in practice.4 The policy documents showed that
many Member States rely solely on their own national measures and instruments to control
service providers, in a way that does not always appear to be in conformity with either (old)
Article 49 EC (now Article 56 TFEU), as interpreted by the Court of Justice, or with the
Directive. This situation was caused by the virtual absence of administrative cooperation,
unsatisfactory access to information and cross-border enforcement problems, all of which
were provided for in the PWD but did not work in practice.
To put the evolving debate about the implementation, application and enforcement of the
PWD into the correct perspective, it should be noted here that the 2004 proposal for
what was commonly referred to in the popular press as the ‘Bolkestein Directive’,
together with the EU’s enlargement in 2004 and 2007 by twelve new Member States, has
played an important role in drawing attention to the limited impact of the PWD.5 The
judgments of the Court of Justice of the European Union (hereinafter CJEU) in the Viking-
Line, Laval, Rüffert and Commission v Luxembourg cases in 2007 and 2008,6 all fuelled
intense scholarly and public debate7 on the implementation and application of the PWD
and, inter alia, led to a quest for clarification on a number of points. In the meantime, the
issue of posting workers also led to intense debate in the European Parliament, which
adopted several resolutions on the issue. In particular, the resolution of 22 October 2008
stresses the need to correctly implement, apply and enforce the Directive.8
Against this backdrop, the European Commission launched a pilot project ‘working and
living conditions of posted workers’. Within this project, we conducted a study called:
‘Comparative study on the legal aspects of the posting of workers in the framework of
the provision of services in the European Union’, covering twelve (in majority host)
Member States (hereinafter PWD I study).9 This comparative study was complemented by
a second study, covering the other fifteen (in majority sending) Member States
(hereinafter PWD II study).10

4
See the Commission (EC), ‘Guidance on the Posting of Workers in the Framework of the Provision of
Services’ (Communication) SEC (2006) 439/COM (2006) 0159 final, followed by the Communication,
‘Posting of workers in the framework of the provision of services: maximising its benefits and potential
while guaranteeing the protection of workers’ SEC (2007) 747/COM (2007) 0304 final.
5
See for an account of the ‘integration fatigue’ and ‘(single) market fatigue’ in the old Member States in western
Europe due to the enlargements and the unemployment and discrediting of financial capitalism in the credit
crisis, the report of Mario Monti, A new strategy for the single market, at the service of Europe’s economy
and society, May 2010. See: http//:ec.europa. eu/bepa/pdf/monti_report_final_10_05_2010_en.pdf.
6
Case C-438/05 Viking [2007] ECR I-10779; Case C-341/05 Laval un Partneri [2007] ECR I-11767;
Case C-346/06 Dirk Rüffert v Land Niedersachsen [2008] ECR I-1989; Case C-319/06 Commission v
Luxembourg [2008] ECR I-4323.
7
The ‘Laval-quartet’ gave rise to numerous conferences among scholars and policymakers and led to a
‘tsunami’ of (working) papers and articles in Academic journals. See also many ETUC press releases and
reports on the aftermath of this case law.
8
European Parliament resolution of 22 October 2008 on challenges to collective agreements in the EU
(2008/2085(INI)).
9
A van Hoek & M Houwerzijl, Comparative study on the legal aspects of the posting of workers in
the framework of the provision of services in the European Union (Radboud University Nijmegen,
March 2011). See: http://ec.europa.eu/social/BlobServlet?docId=6677& langId=en. National experts: C
Maria Ana, K Ahlberg, G Castegnaro, A Claverie, K Ewing, M Muda, G Orlandini, F van Overmeiren,
B Palli, M Pliszkiewicz, L Roseberry, M Schlachter.
10
A van Hoek and M Houwerzijl, Complementary Study on the Legal Aspects of the Posting of
In this chapter we will discuss some of the findings of our PWD I and PWD II studies. Given
the limited space available we decided to concentrate only on issues that relate to the personal
scope of the PWD.11 From the many relevant topics, we selected this subject for the following
reasons: Firstly, the personal scope has not been (extensively) scrutinised before—neither in
the literature nor in policy documents. Secondly, it plays a key role in the implementation,
application and enforcement of the PWD: In order to apply and enforce the material scope of
the Directive effectively, it has to be known what situations and which workers are covered
by the PWD in the first place. Thirdly, the subject is highly topical, now that the European
Commission has recently launched a draft enforcement directive of the PWD, including an
Article 3 which lays down indicative factual elements to help competent authorities in
determining whether there is a genuine establishment of the posting company in the sending
state and in assessing whether a posted worker is only temporarily carrying out his or her
work in a Member State other than the one in which he or she normally works.12 On the
basis of our findings, we argue that a clear definition of ‘posting’ and of a ‘posted worker’ is
essential to enhance effective monitoring and compliance and to combat misuse and/ or
‘overuse’ of the PWD. It also fosters a proper distinction between posted workers (who move
in the framework of Article 56 TFEU) and migrant workers (who move under Article 45
TFEU).
Our contribution is structured as follows. Section II begins with a description of the personal
scope of the PWD and an account of its implementation in the Member States. Sections III
and IV address some issues related to the concept of posting and its three modalities. In this
context, the complicated case of international transport is examined. A more general issue
relates to the interaction between the internal market law on which the PWD is based and
private international law (hereinafter PIL), determining the law applicable to the individual
contract of employment. Section V elaborates on this interface, particularly in relation to
the concept of a posted worker. Section VI discusses the difficult legal position of
workers hired for the purpose of posting only. In that context, an important issue is raised:
who is responsible for covering the travel and lodging costs—the employer or the (posted)
worker? Section VII concludes. Throughout this contribution examples are given of
implementation and application by the Member States in their national law and/or practice.

II. The personal scope of the PWD and its implementation in general.

A. The personal scope


The PWD contains both a definition of posting (Article 1, paragraphs 1 and 3) and a definition
of posted worker (Article 2). The two concepts should be combined to determine the scope
of the Directive’s application.

Workers in the Framework of the Provision of Services in the European Union (University of
Amsterdam, November 2011). See: http://ec.europa.eu/social/main.jsp?catId= 471&langId=en. National
experts: F Burger, T Davulis, M Doherty, K Dupate, J Garcia Murcia, A Ceinos, J Hajdú, D Sári,
P Hů rka, R Knez, V Rošic, R Knight, U Liukkunen, A Olsovska, C Papadimitriou, E Soumeli, K
Sredkova, J Manuel Vieira Gomes.
11
Next to this, the PWD I and PWD II studies also deal extensively with the implementation, application
and enforcement of the material scope (Art 3) of the PWD (ch 3); actors involved in monitoring and control
of the rights and the presence of posted workers, and their cross-border cooperation on these matters, with
access to information, duties on service providers and service recipient as well as tools and remedies available
to posted workers (ch 4).
12
See: Proposal for a Directive on the enforcement of Directive 96/71/EC concerning the posting of workers
in the framework of the provision of services, Brussels 21 March 2012, COM (2012) 131 final.
 An undertaking established in a Member State, posting its worker(s) to another
The elements of the concept of posting are as follows:

 In the framework of a transnational provision of services.


Member State.

 The posting can be subsumed under one of the posting types mentioned in Art
1(3):
a) posting under a contract concluded between the undertaking making the posting and the
party for whom the services are intended,
b) posting to an establishment or an undertaking owned by the group,
c) posting by a temporary employment undertaking to a user undertaking operating in
a Member State other than that of the undertaking making the posting, with the
proviso, in all three situations, that there is an employment relationship between the
undertaking making the posting and the posted worker.
Furthermore, the Directive stipulates that undertakings established in a non- Member State
must not be given more favourable treatment than undertakings established in a Member
State (Article 1(4)).13

 The worker is posted for a limited period of time


The elements of the concept of posted worker are the following:

 To a Member State other than the one in which he normally works.


The PWD creates an obligation on the host Member State to ensure that, whatever the
law applicable to the employment relationship, the posting undertaking guarantees the
workers posted to its territory the terms and conditions of employment included in the
local laws and generally applicable collective agreements with regard to specific areas of
protection.14 If a worker does not fulfill the criteria for being a posted worker, he is not
covered by the Directive and consequently, no such obligation exists.15 Conversely, based on
the case law of the CJEU in inter alia the case of Commission v Luxembourg,16 the PWD
leaves only limited room to extend the protection of posted workers beyond the hard nucleus
mentioned in the Directive. So, when a worker does not fulfill the criteria of temporary
posting, the host state is allowed to apply its overriding mandatory provisions more fully
(as long as this is in conformity with the TFEU).

B. Implementation in the Member States


i. Method of Implementation
Regarding the personal scope, the Member States’ implementation measures that we
have studied may be roughly divided in two ways: (A) the Member States either more or
less literally transpose Articles 1 and 2 of the Directive, or (B) they deem their relevant
labour law provisions applicable to all temporary work performed within the territory.
The Belgium implementation law provides a clear example of the second method of
implementation, in which no definition of posting is given. The 2002 Act applies to anyone
who carries out work in Belgium. The precise definition of ‘posting’ as described in Article 1,
paragraphs 1–3, of Directive 96/71 has deliberately been left out of the implementation measure
in order to make the material scope of the national implementation as wide as possible.17 The
13
See also Recital 20 of the PWD which indicates that the Directive does not affect either the agreements
concluded by the EU with third countries or the laws of Member States concerning the access to their territory
of third-country providers of services. The Directive is also without prejudice to national laws relating to the
entry, residence and access to employment of third-country workers.
14
Simplified description of the content of Art 3 of the PWD.
15
Apart from duties arising under the free movement of workers and non-discrimination requirements.
16
Case C-319/06 Commission v Luxembourg (n 6).
17
The distinction in the PWD between three types of posting was not adopted in the Act of 5 March 2002. The
Explanatory Statement affirms that the type of posting is of no importance for the implementation of the PWD
law does contain a definition of posted worker, though. A ‘posted worker’ is defined as ‘a
worker who carries out work in Belgium and who usually works on the territory of one or more
other states than Belgium or who was recruited in a state other than Belgium’ (emphasis
added).18 The Explanatory Statement appended to the 2002 Act affirms that the type of posting
is of no importance for the implementation of the posting directive in Belgium. It was
considered that a detailed description of the types of posting falling within the scope of
application would narrow the measure’s effect. The Netherlands, too, refrains from including a
definition of posting in the implementation measures. This causes confusion because, inter
alia, in the (domestic) Dutch legal terminology the term ‘posting’ may be used to describe
intra-group posting (type B) or posting by TWAs (type C), but contracting and subcontracting
(type A) would not be included in the term.19 The Dutch implementation Act defines the
posted worker as someone who works temporarily in the Netherlands under an employment
contract governed by foreign law. Other criteria and distinctions provided in the PWD are not
implemented in the Dutch law.
There is no implementing statute in the United Kingdom. The British government takes
the view that the relevant domestic labour law applies to workers posted to the United
Kingdom, just as it applies to other workers.20 Thus, for instance, the National Minimum
Wage Act 1998 applies to a worker who ‘is working, or ordinarily works, in the United
Kingdom under his contract’ (section 1(2)(b)). This Act is widely thought to apply to
posted workers where their contractual terms are lower than the minimum prescribed by
the Act. Nevertheless, statutes may contain a certain qualification period before the
protection offered therein is actually available to an individual worker. In fact, the rights
set out in the Employment Rights Act21 and elsewhere are usually subject to a qualifying
period and therefore truly ‘temporary’ posted workers are excluded from protection.22
The advantage of the solution chosen by the UK (and to some extent also by Belgium
and the Netherlands) is that the protection offered by the national law is not made to depend
on difficult issues of interpretation and demarcation caused by Articles 1 and 2 of the PWD.
However, the clear disadvantage of this solution is that the rationale underlying the special
regime for posted workers might be lost and the specific position of posted workers is no
longer identified as such.23 This imprecise method of implementation may lead to over-
application of the PWD. It might be applied in cases in which application of host state

in Belgium. It was conceived that a detailed description of the types of posting falling within the scope of
application would narrow the measure’s effect.
18
Neither the nationality of the workers nor the country of establishment of the employer is relevant to the
application of the 2002 Act.
19
See for the effect of this confusion on the legal position of the workers: Kantonrechter Heerlen 24
September 2003, JAR 2003/268, Houwerzijl AI 2004/2 pp 39–41. For more information on the Dutch
implementation see also M Houwerzijl, The Dutch Understanding of Posting of Workers in the Context of
Free Services Provision and Enlargement: A Neutral Approach? Formula Working Paper 2010, see
www.jus.uio.no/ifp/english/research/projects/ freemov/publications/papers/2010/september/index.html.
20
Compare COM (2003) 458, p 8 and C Barnard, ‘The UK and Posted Workers: The Effect of Commission
v Luxembourg on the Territorial Application of British Labour Law’ (2009) 38(1) Industrial Law Journal
122, 125–26. See on the position of the UK also L Merrett, ‘Posted Workers in Europe from a Private
International Law Perspective’ (2011) Cambridge Yearbook of European Legal Studies 219–44.
21 See www.legislation.gov.uk/ukpga/1996/18/contents.
22
T Novitz, UK Implementation of the Posted Workers Directive 96/71, Formula Working Paper 2010, (see
www.jus.uio.no/ifp/english/research/projects/freemov/publications/papers/ 2010/september/index.html) p 17
with reference to Barnard, ‘The UK and Posted Workers’ (n 20).
23
To give but one example: from the UK it is reported that any complaints entered by posted workers will
not be recorded as such, since they are not in any way distinguished from national workers. Novitz, UK
Implementation of the Posted Workers Directive 96/7 (n 22) observes: ‘Following also from the lack of specific
legal implementation of the PWD, there are no registration or control measures which apply to posted workers
in the UK.’ (p 2).
law is ineffective and/or disproportionate but also in cases in which full (rather than limited)
application of host state law would be warranted.

ii. Exemptions for Postings of Short Duration and/or Minor Significance


Under most implementation measures of the PWD, the national protection of the host
state applies from day one though the protection may effectively be limited by other criteria,
such as the qualifying period in UK statutes. The possibility of partially exempting postings
of a short duration or insignificant work has been rarely used.24 Even the compulsory
exemption which is stipulated in Article 3(2) PWD for first installation (when not exceeding
the duration of eight days) is not always implemented (namely in Denmark, France and the
Netherlands). Hence, a ‘lower limit’ to the personal scope of the PWD seems to be rather
exceptional. An exception is France where some protective measures apply only to postings
exceeding one month.25

iii. Different Interpretations of the Concept of ‘Temporary’


One of the most controversial issues regarding posting of workers is the definition of
‘temporary’. Several notions of temporariness are used in the Member States as regards the
posting itself.26 The term could refer to postings of short duration,27 or rather postings with a
predetermined duration and/or predetermined, objective reason for termination,28 or both.
A maximum time limit for posting, linked to the maximum used in EU social security,29
was proposed inter alia in Luxembourg (Bill 5942). This proposal was not accepted, however;
the current system does not contain a specific maximum duration, merely referring to the
temporary character of the posting in the second meaning. Article L. 141-1, paragraph (3)
now reads:
Posted worker means any employee who regularly works abroad and who carries out his work in the
Grand Duchy of Luxembourg, during the limited period determined by the specific provision of services
for which the contract of provision of services as defined in paragraph (1) and paragraph (2) was
concluded. The limited period is assessed in terms of duration, frequency, periodicity and continuity of
the provision of services and in relation to the nature of the activity that is subject to the posting.
Hence, the Luxembourg law is clearly based on the case law of the CJEU on the
distinction between the free provision of services (Article 56 TFEU) and the freedom of

24
This conclusion was also drawn by the European Commission in its Communication to the Council,
the European Parliament, the Economic and Social Committee and the Committee of the Regions on the
implementation of Directive 96/71/EC in the Member States, COM (2003) 458 and the report by M Sargeant
on the implementation of the Directive in the new Member States of July 2007 (Contract VC/2005/38,
Human European Consultancy in partnership with Middlesex University).
25
This is the case in Art R.1262-1 C.trav with regard to work accidents, Art R.1262-3 C.trav on freedom
of expression, Art R.1262-4 on bank holidays and Art R.1262-7 on deli- very of a monthly pay slip.
26
For the discussion of ‘temporary posting’ under the Rome I Regulation, please refer to COM (2002) 654
final, p 35.
27
This element seems to be present in the Danish definition. See PWD 1 study, p 47, with reference to M Gräs
Lind, The Danish Law and the Posting of Workers, Formula Working Paper 2010, p 5, see
www.jus.uio.no/ifp/english/research/projects/freemov/publications/papers/ 2010/september/index.html.
28
This criterion is used inter alia in France and Luxembourg. See PWD 1 study, p 46–47.
29
The attachment of a worker to the social security scheme of the Member State in which the undertaking
which employs him normally operates (the posting State) maintains, when- ever the worker concerned is sent
by that undertaking to another Member State (the State of employment) for a period of time which
from the outset is limited (a maximum of 24 months), and provided that the worker was already
affiliated with the social security system of the posting State, prior to the posting. See Art 12 Reg (EC)
883/04 as amended by Reg (EC) 988/2009 and implemented by Reg (EC) 987/2009, which came into force
from 1 May 2010. As a main rule (Art 11) a person is subject to the legislation of the place where he is
employed or self-employed.
establishment (Article 49 TFEU).30
The common understanding in Germany seems to be that the posting should generally not
exceed 12 to 24 months to be classified as temporary. The centre of the worker’s activities
should be located abroad and the worker should be given the option to return to the
country of origin on termination of the posting. When these requirements are not met,
German law is deemed to apply by virtue of the Rome I Regulation. So, the concept of
temporary is primarily defined in the context of the Rome I Regulation. The interpretation
of this private international law provision is nevertheless contested amongst German scholars:
some advocate (more in line with the EU case law on free movement of services) that any
‘posting’ which is not definite and final, is temporary.31 Moreover, the criteria are not
included in the statute implementing the PWD.
Italian law stipulates that the posting must have an ‘upfront predetermined or predeterminable
duration with reference to a future and sure event’. Accordingly, there is no maximum
duration, but the termination of the posting must be based on objective factors, either by
specifying a period or specifying the relevant event (eg the end of the construction project).

III. Employers’ and services related issues of posting

In this section we take a closer look at two specific elements of the concept of posting,
namely the establishment of the employer and the performance of a cross-border service.
Issues regarding the implementation and application of the different types of posting are
highlighted in section IV, where specific attention is paid to the difficulties in applying the
concept of posting in the international transport sector.

A. Contentious Cases in the Media


As became clear above, implementation laws often do not contain a definition of posting.
Yet contentious cases often relate to situations which are not deemed to be ‘proper’
posting because the worker does not normally work in a state other than the host state, or
because the employer is not genuinely established in another state or because an employment
relationship between the employer and worker is lacking.32 When reporting on abusive cases
involving foreign workers, the popular press generally does not distinguish between the
different migration modalities, let alone recognise that they are governed by different legal
regimes.33 This may be explained by the fact that all these modalities seem to lead to

30
See C-55/94 Gebhard [1995] ECR I-41659.
31
The German report refers to authors relying on the temporal limit laid down in Article 12 Regulation (EC)
883/04 on the one hand and to authors relying on recital 36 of the Rome I Regulation on the other hand. See
Abbo Junker, ‘Gewöhnlicher Arbeitsort und vorüberge- hende Entsendung im Internationalen Privatrecht’
in Festschrift für Andreas Heldrich zum 70. Geburtstag (München, Beck, 2005) 719–39; Müko-Martiny,
Münchener Kommentar zum Bürgerlichen Gesetzbuch, Band 10, 5. Aufl, Art 8 Rom I-VO Rn 57.
32
The Lindsey Oil Refinery seems to be an exception in this regard. From the ACAS report we gather that
there was no dispute about the genuine nature of the posting. The conflict pertained to the labour conditions
offered to the posted workers and the effect on local employment opportunities of subcontracting to an
Italian company. See Report of an Inquiry into the circumstances surrounding the Lindsey Oil Refinery
Dispute, conducted by the Advisory Conciliation and Arbitration Service (ACAS), published on 16
February 2009.
33
The coverage of the Center Parcs media case no 30 in the Dutch media is a good example of this. See
PWD I study, Annex I, no 30. In this case, a German cleaning company had a service contract to clean
several Center Parcs’ holiday parks in the Netherlands, and posted workers from Germany to carry out
these services. A Dutch union claimed that the German company should apply the Dutch CLA in the
cleaning sector in full. The press dealt with this case as if it concerned migrant workers instead of posted
workers. www.depers.nl/ binnenland/236662/Schoonmakersprotest-in-Heijen.html; 22 and 27 August 2009.
very similar actual work patterns and problems. With regard to the latter, media reports
often concern safety and health, housing and underpayment. At the same time, the
reported cases show that intermediaries/service providers have nevertheless discovered the
legal possibility to hire people in the cheapest and/ or easiest way. When, for example, a
TWA recruits Polish workers for jobs in Sweden, the actual circumstances may not change
according to whether the TWA is Polish or Swedish, but the legal situation does. This
creates a clear incentive to look for the easiest and cheapest way (for the employer, the
worker or both).34 Labour law is but one of the points to be taken into consideration;
social security, tax law and migration being at least as important.35 This was most evident
during the transitional period in some Member States, when some of these modalities were
open to new accession states, but the traditionally specific modality for worker mobility (the
free movement of workers) was not (or still is not).36

B. Establishment of the Employer


Some contentious cases relate to letter box companies incorporated only for the purpose of
posting. The worker might actually be made to work under the direct supervision of the
user undertaking, thus creating a situation of bogus subcontracting or illicit provision of
manpower. The absence of genuine activities in the country of origin may be combined with
repeated postings, in which the ‘posted’ worker is working in a specific Member State on an
(almost) permanent basis.37 The provision of manpower through TWAs or subcontracting
poses special problems in this regard. Undertakings may outsource their manpower to
companies (sometimes subsidiary companies especially established for the occasion) in
other Member States, employ TWAs or use (bogus) subcontracting.
An example of how this works is the plan (which in the end was not followed through)
of an international group of temporary agency firms to dismiss a group of Polish agency
workers who were posted by a Swedish subsidiary to the Swedish construction company
Skanska and rehire them through a Polish subsidiary.38 Similarly, several authors39 read
the Swedish Laval case as a case of ‘reflagging’ the manpower division of a domestic
enterprise.40 It is not only the new Member States that feature in the list of ‘flags of

34
With this purpose, user company Skanska, a Swedish construction firm, made plans to replace Polish
agency workers at its firm who were employed by the Swedish TWA by (perhaps the same) Polish agency
workers employed by the Polish Adecco daughter company. See PWD 1 study, Annex I, no 39. Similarly, a
Belgian mushroom cultivator replaced (Belgian) seasonal workers by posted Polish workers to harvest his
mushrooms. De Standaard, ‘Zonder die Polen ga ik failliet’ (13 January 2010), see PWD I study, Annex I, no
3.
35
This is specifically reported from Sweden and France, see PWD I study, pp 56–58. On the Swedish
implementation of the PWD see also K Ahlberg, The Age of Innocence and Beyond, Formula Working Paper
2010,through:www.jus.uio.no/ifp/english/research/projects/freemov/publications/papers/2010/september/index.ht
ml.
36
A particularly problematic point concerned the status of workers from the EU8 /EU2 countries who are
posted to EU15 Member States by TWAs. Several Member States (Belgium, Denmark, Luxembourg and the
Netherlands) consider those ‘posted’ agency workers as subject to the restrictions on the free movement of
workers—a view that was strongly opposed by other Member States (eg Romania) and the European
Commission. In its judgment of 10 February 2011 the CJEU sided with the former and deemed the Dutch
transitional regime at this point to be in conformity with EU law. See Cases C-307–309/09 Vicoplus, not yet
reported in ECR.
37
See in this regard the indicators proposed in Art 3(1) and Art 3(2)(e) of the Draft Enforcement Directive of
the PWD (COM (2012) 131).
38
See PWD 1 study, Annex I, no 39, as referred to above n 34.
39
See for instance S Deakin ‘Regulatory Competition after Laval’ (2008) 10 Cambridge Yearbook of
European Legal Studies 581–609.
40
The term reflagging is derived from international shipping. It refers to the situation where a shipowner
convenience’: Luxembourg features as a sending state in several such reflagging cases, the
Kralowetz case being the most prominent.41 The report of this incident on EIROnline
summarises the case in the following terms:
In January 2002, a major scandal broke over the alleged illegal employment of drivers from central
and eastern European countries by Kralowetz, an international road haulage company with its registered
office in Luxembourg. The affair has uncovered serious shortcomings in Luxembourg’s system for
monitoring international transport companies registered there, and has caused a major political
controversy.’
But international transport by road is not the only sector in which such reflagging takes
place.42 A representative of the French employers’ organisation in the TWA sector,
PRISME, pointed out that many temporary agencies relocate to Luxembourg,43 where
social security contributions represent only 15 per cent of gross salary (against 40–50
per cent in France).
In the area of provision of manpower, the problem of combating illegal activities is
reported in almost all host Member States. Firstly, this concerns intermediaries in other
Member States which are used with the sole purpose of turning (temporary or seasonal)
migration into posting, in order to avoid the (higher) labour costs in the Member State in
which the work is performed. Secondly, provision of manpower is quite often associated
with illegal operations and undeclared work.44 In extreme cases this concerns forms of
modern slavery and/or trafficking in human beings.45 However, the latter forms of abuse
are not specific to posting (nor for provision of manpower). The illegal temporary work
agencies may be established both in the country of recruitment (leading to posting) or in the
county of work (leading to migration). These cases involve social dumping in its purest
form—with no respect for either the protective system of the country of origin or that of
the host country.

C. Cross-Border Provision of a Service


Although the PWD was adopted in the context of the free provision of services, the national
implementation measures do not always contain this requirement. The requirement has two
related aspects:
1. should the posting be connected to the provision of a cross-border service (carried
out by the posted worker) in the meaning of Article 56 of the TFEU?46 This
requirement seems to follow from the scope of application of the directive as
defined in Article 1(1).
2. should there be a service contract between the employer and a recipient established or

changes the flag of his ship to profit from a more favourable legal regime in the country of the new flag.
Lower labour standards are an important incentive for reflagging, as are taxation and manning requirements.
41
See www.eurofound.europa.eu/eiro/2002/02/feature/lu0202104f.htm.
42
From France a case of 2010 was reported concerning subcontracting in France by a Luxembourg firm
using Latvian workers. A Belgium case ‘Rb. Antwerpen, 21 May 2008’ concerns a Belgian shipping company
which had a branch establishment in Luxembourg where it recruited Polish and Slovak sailors who were posted
to Belgium under a subcontracting relationship.
43
Although the directors often are (and remain) French nationals.
44
Restrictions on the use of TWAs might be an explanation for the high incidence of irregular/ undeclared work,
but regulation does not itself explain underpayment and abuse.
45
See Belgium media cases no 5 and 6; the Netherlands media case no 26; Sweden media cases 35 and 36,
PWD I study, Annex 1.The risk of abuse seems to increase if the worker is in an illegal position him or
herself, eg for violation of the transitional migration regime. Several national experts reported exploitative
practices such as the taking of passports, overcharging for housing, transportation and other services, the
imposition of fines, etc.
46
Archetypal examples are cross-border services in the construction sector (such as in Rush Portuguesa and
Rüffert), where the employer has won a contract to build a part of a railway or a prison.
active in the country where the service is performed? The latter requirement is
mentioned in Article 1(3)(a), but not in Article 1(3)(b) and (c) PWD.
Whether only service-related types of ‘posting’ are covered by the implementation measures of
the Member States depends primarily on the formulation and interpretation of their scope of
application. For example, as mentioned above, the Belgian implementation is based on the
criterion of ‘working in Belgium’. This term could refer to anyone who is sent to Belgium in
the line of work. Thus it would include employees sent to Belgium to attend classes or
follow a training program. However, this is not how it is interpreted by the Belgian courts:
the relevant criterion is whether the worker, during his stay in Belgium, performs
economically relevant activities which are not marginal. This excludes workers sent to
Belgium to attend seminars or theoretical courses, but may include workers sent to Belgium
for on-the-job training. The criterion is deduced from a similar distinction in migration
law. Moreover, it echoes the case law on the free movement of workers (Article 45
TFEU), rather than that on the free movement of services.47 In other countries which apply
the place of work criterion, such as the UK and the Netherlands, the application of the
national provisions to trainees and people attending seminars is unclear. But also in several
other Member States there seem to be problems as regards trainees, who may both receive
services (training) and perform services. Under Italian law intra-company posting will also
be covered when there is no service against remuneration (type B posting).
By contrast, the requirement of an underlying service in the meaning of Article 56 TFEU
has become very prominent in the latest amendments to the posting regulation in
Luxembourg, introduced in 2010 in response to the judgment in the Commission v
Luxembourg case.48 A paragraph was added to Article L 141-1(2), stating that ‘the postings
referred to in points 1. to 3. above should take place within the framework of a contract of
provision of services covering an object or a specific activity limited in time and ending
with the execution of the contract’.
With regard to type-A posting, the Directive seems to add the requirement of an
underlying service contract between the employer and the recipient of the service (who
has to be established or active in the host state). This requirement—if interpreted
narrowly—might (sometimes unduly) restrict application of the posting provisions.
Below, in the section on transport workers we will refer to the problems Sweden perceives
with regard to cabotage services through an intermediary. But a similar problem can
arise with regard to TWA workers who are posted abroad by the user enterprise in order
to perform a service there (this system is referred to as ‘Huckepack’ in Germany). In that
case there is a (domestic) service contract between the TWA and the user company as well as
a (cross- border) service contract between the user company and the recipient of the service.
But the company making the posting is not the employer and a contract between the
employer and the recipient of the cross-border service is absent. Accordingly, the
application of the PWD to such situations is uncertain.

IV. Issues relating to specific types of posting and the special case of
international transport

A. The Impact of Limitations to Posting in Domestic Situations

47
See for an example C-413/01 Ninni-Orasche [2003] ECR I-13187, para 26. ‘In order to be treated as a
worker, a person must nevertheless pursue an activity which is effective and genuine, to the exclusion of
activities on such a small scale as to be regarded as purely marginal and accessory.’
48
Case C-319/06 Commission v Luxembourg (n 6).
As mentioned, pursuant to Article 1(3) of the PWD, three types of posting can be distinguished:
subcontracting (type A), posting within a group (type B) or hiring out through a TWA or
placement agency (type C). The findings in the Member States made clear that for all
three types of posting, national law may impose certain restrictions which also affect
cross-border posting. The most conspicuous example of this is Italy. This country has rather
strict requirements on the provision of manpower or ‘domestic posting’ in which a worker
is posted to perform activities within the work organisation of another employer (appalti
interni, D.lgs 276/03). As in the PWD, in Italy domestic posting could be the result of
subcontracting (type A), posting within a group (type B) or hiring out through a TWA or
placement agency (type C). In all cases, Italian law imposes strict requirements on the
posting before it can be regarded as legal. For example, posting within a group cannot be
against remuneration and the sending enterprise has to retain an interest in the ‘posted’
worker’s contract of employment. If the requirements for posting are not fulfilled, the
posting is illegal. These rules apply to any domestic posting to a company in Italy but also
seem to offer the Italian authorities the possibility to monitor the situation both of workers
posted within Italy and workers posted from another EU Member State. One of the
sanctions against illegal posting is that the user enterprise can be designated as the real
employer. If this were to happen in a cross-border posting situation, the employment
relationship would lose its cross-border character as the new employer would be Italian
and the place of work would be Italy—the nationality of the worker is irrelevant in this
respect.
Likewise, national law may contain specific rules on subcontracting. In Sweden, Sections
38 and 39 of the Co-determination Act afford trade unions the right to negotiate and possibly
even veto the engagement of a certain contractor. Again, this affords a certain measure of
control over the employment conditions of the workers involved, in both domestic and cross-
border subcontracting.
Regarding the activity of TWAs, the PWD contains two separate provisions on the
provision of manpower. Article 3(1)(d) stipulates that provisions regulating the activities of
TWAs are part of the hard nucleus. Article 3(9) allows Member States to extend the
protection offered to temporary agency workers to create equal treatment.
With regard to Article 3(1)(d), several Member States have regulated the activities of TWAs
and imposed strict limits on the provision of manpower. These restrictions may consist of

 Regulating the provision of temporary agency workers through a system of


rules:

authorisation, registration, licensing, certification etc. Such systems, either


compulsory or adopted voluntarily within the sec- tor, can be found in eg France,

 Limiting the use of temporary agency workers in certain sectors (notably


Sweden, Italy, the Netherlands and Luxembourg.

construction and transport by road, eg the Netherlands, and until recently Belgium

 Limiting the use of TWA workers to specific situations, usually connected to a


and Germany).

temporary increase in demand. This restriction can be found inter alia in Belgium,
France, Italy and Luxembourg.
Pursuant to Article 4 of the Temporary Agency Work Directive (2008/104) the Member
States had to review any restrictions or prohibitions on the use of temporary agency work
before 5 December 2011 in order to verify whether they are justified on the grounds
mentioned in the Directive.49

49
Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008 on temporary
agency work OJ L327/5.
The extra protection offered under Article 3(9) PWD usually takes the form of the equal
treatment principle under which the TWA worker has to be treated equally to a similar
worker in the user enterprise. This principle is incorporated (albeit limited to a hard nucleus
of protection) in Article 5 of the Temporary Agency Work Directive. It is already applied
(in full or to a limited extent) in France and Italy.
Besides rules regarding the restriction on the activities of TWAs or the (full) equal
treatment of agency workers with local workers in the same job/circumstances, several
Member States have specific rules in place for temporary agency work regarding the
enforcement of working conditions and related social security contributions and taxes,
such as systems for joint and several liability for occupational accidents and the payment
of (minimum) wages.50

B. The Specific Case of International Transport


The PWD does not exclude specific branches of industry from its scope of application with
the exception of the seagoing personnel of merchant navy undertakings (Article 1(2)).51
Nevertheless, our PWD studies reveal that the system of the Directive is ill-fitted to deal
with the kind of cross-border labour mobility characteristics of the international transport
sector.
With the most prominent exception of France,52 the implementing statutes and regulations
of the Member States do—implicitly—cover international transport but do not contain any
specific rules concerning this sector. The topic received ample attention during the revision
of the new transport regulation 1072/200953 for the internal road haulage market especially
as regards cabotage. The aim of the new regulation is to improve the efficiency of road
freight transport by reducing empty trips after the unloading of international transport
operations. The term cabotage refers to transport operations within a single state, not being
the state of establishment of the carrier. In the case of cabotage a cross-border service is
provided in the host state.54 Hence, cabotage could be subsumed under type-A posting:
posting of workers to the territory of a Member State on the account and under the
direction of the undertaking making the posting, under a contract concluded between the
undertaking making the posting and the party for whom the services are intended, operating
in that Member State, provided there is an employment relationship between the

50
See with regard to liability for eg wages also PWD 1 and 2 studies, resp. sections 4.4 and 4.7, and M
Houwerzijl and S Peters, Liability in Subcontracting Processes in the European Construction Sector
(Dublin, European Foundation, 2008): www.eurofound. europa.eu/pubdocs/2008/94/en/1/EF0894EN.pdf ; Y
Jorens, S Peters and M Houwerzijl, Study on the Protection of Workers’ Rights in Subcontracting Processes in
the European Union (Ghent University, 2012).
51
The exemption of Art 1(2) for seagoing personnel of merchant navy undertakings is implemented in
most of the Member States, with the exception of the Netherlands, Germany and the UK.
52
See PWD 1 study, section 3.2. Hungary, Slovakia and Czech Republic have or until recently had specific
conflict of laws rules for transport workers. Cross-border mobility of transport workers may not qualify as
posting under domestic law and/or the implementation measures in Austria, Hungary, Slovenia and Portugal.
See PWD 2 study, section 3.2.
53
Regulation (EC) No 1072/2009 of the European Parliament and of the Council of 21 October 2009
on common rules for access to the international road haulage market (Text with EEA relevance) OJ L300,
14 November 2009, pp 72–87.
54
However, the same seems to be true of an international transport operation ending in the host state. The
place of performance of a transport service can be deemed to be situated in both the country of origin and
the country of destination. Compare Commission notice on the definition of the relevant market for the
purposes of Community competition law, OJ C372/5 and Commission Decision C (2008) 8458 final of
17 December 2008 in Case No COMP/M.5141-KLM/Martinair, paras 28 ff and paras 103 ff for EU
competition law and CJEU 9 July 2009; Case C-204/08 Peter Rehder v Air Baltic Corporation [2009] ECR
I-06073, paras 29 ff, for the place of performance of the service under the Brussels I Regulation. In the case
of cabotage, both places are located within the same state.
undertaking making the posting and the worker during the period of posting. However, this
would mean that there has to be a contract between the transport company and a service
recipient operating in the state where the cabotage takes place. In Sweden such a contract is
deemed to be absent when the contract with the transport company was entered into by a
forwarding or freighting agency established outside the country of cabotage. This
(debatable) conclusion draws attention to the fact that the definition of type-A posting
may pose problems in cases where the end user of the service has no contract with the
employer.
Currently, cabotage operations are allowed to a limited extent only, in the course of an
international operation. However, the Member States are in a process of opening up of the
local markets to cabotage. In that context, the application of a minimum level of protection
to the workers performing the cabotage service is becoming more pressing, as was
acknowledged during the negotiations on the new transport regulation.55 The end result of
the discussions was the inclusion of a consideration in the preamble which states that the
provisions of the PWD apply to cabotage activities.56 In practice, however, the practical
effect thereof may be minimal due to the short time span of the cabotage activities. For
instance, in line with the new transport regulation, cabotage is permitted in France to a limit
of three cabotage operations (within the French territory) within seven days starting the day
after the unloading of the international transport in France.57 But the duty to notify the
presence of posted workers in the French territory applies only to postings exceeding eight
days.58
Other modalities of ‘posting’ are also used in international transport.59
For example: a Dutch transport company may contract with a Polish company (which may
or may not be a subsidiary company established for that purpose) for the provision of
manpower or the subcontracting of transport services. Such outsourcing or subcontracting
has a considerable impact on the Dutch transport market. Moreover, when the Polish
worker used for the services regularly works from the Netherlands rather than Poland, his
labour contract has a close link with the Dutch labour market. This would merit protection
according to Dutch labour standards. However, the PWD does not offer a solution to this
problem when the transport service itself is largely performed outside the Netherlands,
because its system is based on the premise that posted workers are working temporarily in
another country than the one in which they normally work. The system does not seem to fit
the situation in which someone is working from a country, as is the case in international
transport.60
The lacuna becomes all the more evident when cross-trade is taken into account. Cross-
trade refers to a situation in which a worker regularly plies the route between country A

55
See Preamble para 17 and 18 of Reg 1072/2009 and Draft recommendation for second reading on the
Council common position for adopting a regulation of the European Parliament and of the Council on common
rules for access to the international road haulage market (recast) A6–0211/2009 (11788/1/2008—C6
0014/2009—2007/0099(COD)) Committee on Transport and Tourism Rapporteur: M Grosch p 15/16.
56
Para 17 of the Preamble of Reg 1972/2009 of the European Parliament and of the Council of 21 October
2009 on common rules for access to the international road haulage market, OJ L300/72 confirms the
application of the PWD to cabotage activities.
57
This is in conformity with the European transport Regulation 1072/2009, in the course of an international
operation concerning the transport of goods by road.
58
The French Statute (no 2009–1503), which was adopted on 8 December 2009 lays down that special
conditions for the application of the posting provisions with regard to transport workers should be provided by
decree. This decree (no 2010–389) was subsequently adopted on 19 April 2010.
59
Illustrative examples were given for Italy, Romania and the Netherlands. See also the overview of media
cases in section 3.5 and Annex 1, PWD I study.
60
A van Hoek and M Houwerzijl, Report for the Dutch Social Partners in Transport (Nijmegen,
Radboud University, 2008).
and B, but is employed by a company established in country C.61 In such a case another
tension comes to light: namely, the discrepancy between private international law and
the free movement of services. The free movement of services is a freedom that focuses
on the provider of the service, which in this example is based in country C. The Rome I
Regulation, however, decides on the law applying to the contract of the individual
worker. When this worker is habitually employed from country A, the law of country A
may apply to the con- tract of employment. However, this individual perspective is often
lost when discussing the obstacles which may be caused by the application of national
labour law to the free provision of services. This brings us to the more general problem
of the unclear interaction between the Rome I Regulation and the PWD.

V. The interface between PWD and Rome I

The PWD is based on the EU competences in the area of the free movement of services. It
deals with specific aspects of the legal regime covering posted workers.62 To a great extent
this topic is also covered by the rules of private international law (PIL) and more
specifically by the rules of the Rome I Regulation on the law applicable to contractual
obligations. As mentioned above, the PWD acknowledges this overlap by explicitly
referring to the Rome Convention 1980 in its Preamble.63

A. Free Movement of Services and Private International Law


The exact relationship between the PWD and the Rome I Regulation is not clearly
established. Up until recently the CJEU had no competence to interpret the existing choice
of law instruments,64 with the result that the Member States have been able to develop
and/or maintain different interpretations of both the interaction between Article 8 and
Article 9 of the Rome I Regulation and the interaction between the Rome I Regulation and
the PWD. The recent judgment of the Grand Chamber of the CJEU in the eDate
Advertising case65 has drawn the attention to the problematic inter- action between the so-
called home country control rule in the context of the free movement of services and the
choice of law (PIL) rules on specific aspects of contract and tort law. In that case, the
CJEU concluded that the Directive on electronic commerce66 does not affect the national

61
Eurostat defines the concept as ‘international road transport between two different countries performed by a
road motor vehicle registered in a third country’, see :
http://epp.eurostat. ec.europa.eu/statistics_explained/index.php/Glossary:Cross-trade.
62
Preamble (6): ‘Whereas the transnationalization of the employment relationship raises problems with regard
to the legislation applicable to the employment relationship; whereas it is in the interests of the parties to lay
down the terms and conditions governing the employment relationship envisaged.’
63
See preamble PWD paras 6–11. See also S Evju, ‘Revisiting the Posted Workers Directive: Conflict of Laws
and Laws in Contrast’ (2010) 12 Cambridge Yearbook of European Legal Studies 151–82.
64
The competence to interpret the Rome Convention was established in a separate protocol which entered
into force on 1 August 2004 (see Case C-29/10 Heiko Koelzsch v État du Grand-Duché de Luxembourg,
not yet reported in ECR, para 30). The Rome I Regulation only applies to contracts concluded as from
17 December 2009: Corrigendum to Regulation (EC) No 593/2008 of the European Parliament and of the
Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (Official Journal of the
European Union L 177 of 4 July 2008), [2008] OJ L177.
65
Judgment of the Court (Grand Chamber) of 25 October 2011, Joined Cases C-509/09 eDate Advertising
GmbH v X and C-161/10 Olivier Martinez and Robert Martinez v MGN Limited, not yet reported in ECR.
66
Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects
of information society services, in particular electronic commerce, in the Internal Market (Directive on
Electronic Commerce) [2000] OJ L178, p 1.
choice of law rules on tort applicable in the Member States.67 However, the home
country control rule embedded in the Directive on the one hand obliges the home state to
regulate the liability of service providers established within their territory and on the other
precludes host states from imposing stricter standards of liability on providers established
in another Member State. This means that, though nominally respecting private
international law, the CJEU de facto overrides the conflict of law rules in place in the
Member States for non-contractual liability regarding electronic services offered within the
EU. With this judgment in mind, we examine how the interaction between the PWD and
PIL is currently perceived—and in particular whether or not a parallel can be drawn with
the Directive on electronic services.

B. The Law Applicable to the Employment Contract


Article 8 of the Rome I Regulation harmonises the conflict rules in Europe on the law
applicable to individual contracts of employment.68 The Rome I Regulation is based on
party autonomy. This also applies to contracts of employment where the parties to the
contract may designate the law applicable to the contract themselves. This chosen law will
be the law governing the contract—the lex causae. However, in order to protect the
employee, Article 8(1) limits the effect of such a choice of law on the protection of the
employee: a choice of law by the parties may not have the result of depriving the employee
of the protection afforded to him by provisions that can- not be derogated from by
agreement under the law applicable in absence of such a choice. Hence, in labour conflicts,
it is always relevant to ascertain the latter law, which can be done following the choice of
law rules in Article 8(2)–8(4) of Rome I.
According to Article 8(2), in the absence of a choice by the parties an employment
contract shall be governed by the law of the country in which or, failing that, from which
the employee habitually carries out his work in performance of the contract. Article 8(2) of
the Rome I Regulation refers to the habitual place of work under the contract. The
country where the work is habitually carried out shall not be deemed to have changed if
he is temporarily employed in another country. In other words: the Rome I Regulation
focuses on the habitual place of work in determining the applicable law.69 Moreover, the
second sentence of paragraph 2 creates a fiction of stability of the habitual place of work
in order to ensure that during a temporary posting the law applying to the contract does
not change. This posting rule applies only when the work performed in another Member
State is considered to be temporary in the meaning of this provision. The preamble
(paragraph 36) gives more detail to the concept of ‘temporary’: ‘As regards individual
employment contracts, work carried out in another country should be regarded as
temporary if the employee is expected to resume working in the country of origin after
carrying out his tasks abroad. The conclusion of a new contract of employment with the
original employer or an employer belonging to the same group of companies as the original
employer should not preclude the employee from being regarded as carrying out his work
in another country temporarily.’ The first sentence of the paragraph clearly limits the concept

67
Interestingly enough the reference in the publication on the curia.eu website gives as one of the topics of
the case: ‘law applicable to information society services’. The specific tort— defamation/ invasion of
privacy—is not covered by the Rome II Regulation, see Regulation (EC) No 864/2007 of the European
Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II)
Article 1(2)(g), [2007] OJ L199/40–49.
68
This is a first difference between the situation covered by eDate (where no such harmonised conflict rule
exists) and the situation as regards international employment contracts.
69
Compare the Brussels I Regulation Art 19, which uses an identical criterion to establish jurisdiction over
the employer: Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition
and enforcement of judgments in civil and commercial matters (Brussels I), [2001] OJ L12/1–23.
of posting by requiring previous employment in the country of origin as well as the intention
to return there. Note that the ‘country of origin’ in this case refers to the country of origin
of the worker—being his habitual place of work—rather than the country of origin of the
employer.
Article 8 Rome I contains an alternative reference rule in case the country where or from
which the work is habitually carried out cannot be identified. In that case the contract shall be
governed by the law of the country where the place of business through which the employee
was engaged is situated (Art 8(3)). In the recent cases of Koelzsch v Luxembourg and
Voogsgeerd the CJEU stressed that the referral to the place of establishment of the
employer is strictly secondary.70 Even in the case of a truck driver working in international
transport (Koelzsch) or a sailor working on a seagoing vessel (Voogsgeerd) the national
court should try to establish whether, based on the circumstances as a whole, a country can
be identified where or from which the work is actually performed.71 The identification of
the habitual place of work is left to the national courts. But in both the Koelzsch and the
Voogsgeerd cases it is clear from the facts of the case that there was no relevant link
between the actual performance of the contract by the employee and the country of
establishment of the employer. The German truck-driver operated from Germany, the Dutch
sailor from Antwerp (Belgium); both were employed by a Luxembourg company. These
cases demonstrate that in the case law of the CJEU, the country in which or from which
the work is habitually performed cannot in any way be equated to the country of origin of
the employer/service provider—though the two may in fact coincide.
Both pre-established connecting factors—place of work and establishment of the
employer—may be set aside where it appears from the circumstances as a whole that the
contract is more closely connected with another country (Art 8(4)). A prominent example
of this would be when an expat contract is governed by the law of the common country of
origin of employer and employee rather than by the law of the country where the work is
performed. The expat contract is characterised not only by the common origin of worker
and employer, but also by the special arrangements made to compensate for the expatriation
of the worker, such as travel arrangements, housing facilities and expat allowances.72 In
several Member States courts would submit the expat contract to the law of the country of
common origin, even in cases of prolonged postings.73 Currently a preliminary question
submitted by the Dutch Supreme Court is pending on the exact interpretation of the clause
on closer connection (referred to by private international lawyers as the ‘escape clause’).74
In its referral, the Supreme Court stresses that the choice of law rule for contracts of
employments seeks to protect the employee by offering him/her the protection of his social
and economic environment. Reference to the place of establishment undercuts this

70
Judgment of the Court (Grand Chamber) of 15 March 2011, Case C-29/10 Heiko Koelzsch v État
du Grand Duchy of Luxembourg, not yet reported in ECR and Judgment of the Court (Fourth Chamber)
of 15 December 2011, C-394/10 Jan Voogsgeerd v Navimer SA, not yet reported in ECR, in particular paras
34–35.
71
Koelzsch (n 70) paras 47–49.
72
See on this issue inter alia, CMEP van Lent, Internationale intra-concernmobiliteit (Deventer,
Kluwer, 2000) 16.
73
Landmark cases (old but illustrative) include Dutch Supreme Court (HogeRaad) 23 October 1987,
Sorensen v Aramco Overseas Company, Nederlandse Jurisprudentie 1987, 842 and German highest
labour court (Bundesarbeitsgericht) 29 October 1992—2 AZR 267/92, IPRax 1994, 123
(Pilotenentscheidung). For a more recent example see Austrian Supreme Court 28 November 2005, 9
ObA 150/05g and Van Hoek and Houwerzijl, PWD 2 study, p 68.
74
Pending Case C-64/12 Schlecker [2012] OJ C126/5. See for the original judgment Dutch Supreme Court
(Hoge Raad) 3 February 2012, case no 10/01806, LJN: BS8791 (publication number at
www.rechtspraak.nl), Nederlandse Jurisprudentie 2012, 90.
protection, as may extensive use of the escape clause.75 The Supreme Court in particular
wants to know whether it is allowed at all to set aside the law of the habitual place of
work in favour of a closer connection to the law of the common origin when the posting
has been prolonged and continuous or whether in such cases the new habitual place of work
should always determine the applicable law.
In summary, the provisions of the Rome I Regulation are based on the main principle that
the law of the place of work should apply to contracts of employment (lex loci laboris) but
allow for the law applying to the individual contract of employment to deviate from the
law of the actual place of work in at least three instances:
1. The worker is temporary employed in another country than the country in which the
work is habitually performed—posting in the meaning of Article 8(2). The law
applicable to the contract will (as a rule) be the law of the habitual workplace.
2. There is neither an identifiable centre of activities nor a country in which the
worker predominantly worked during the employment. So the secondary criterion of
the law of the place of establishment of the employer will have to be applied—
Article 8(3).
3. The contract has a closer connection with another country, usually the country of
common origin in the case of expat contracts—Article 8(4).
Though the rules mentioned above may lead to application of the law of the country in
which the employer/service provider is established, this is by coincidence and not by
choice or principle: Article 8 of the Rome I Regulation does not contain a country of
origin rule in the meaning of the free movement of services. The country of establishment
of the service provider/employer is only relevant as a secondary factor, in case there is no
habitual place of work and on the proviso that no other country has a closer connection to
the individual contract of employment.

C. The ‘Overriding’ Character of the PWD


In its Article 2(1), the PWD defines the posted worker as a worker ‘who, for a limited
period, carries out his work in the territory of a Member State other than the State in which
he normally works’. This phrasing closely resembles Article 8(2) of the Rome I
Regulation.76 Hence, previous employment in the habitual country of work as referred to in
Article 8(2) must be deemed part of the definition of ‘posted worker’ in the PWD.77
In cases of posting under the definition of Article 2 PWD the law of the country in which
the work is actually performed will not be applicable to the individual employment contract
of the posted worker as such. The PWD seems to follow this presumption where it states that
the host state should ensure that, whatever the law applicable to the employment
relationship, the posted workers enjoy protection to at least the standards set by host state
mandatory provisions (Article 3). Several national implementation laws underline this

75
It is important to note though that when host state law does not apply by virtue of Art 8(3) or Art 8(4), it may
still apply by virtue of Art 9 Rome I (see also below section VI).
76
The PWD uses the word ‘normally’, whereas the Rome I Regulation applies ‘habitually’. It is unclear
whether there is a difference in meaning between the two concepts; whereas the Rome I Regulation seems to
focus on the place of work under the specific contract of employment, the concept of PWD may also be
applied when the work in the country of origin is performed for more than one employer. Thus, a purely
literal reading of Art 2(1) PWD would fit with the posting rule with regard to social security: here, previous
insurance in the country of origin is required, not necessarily previous engagement with the posting
undertaking. See Art 12 Reg (EC) 883/04 as amended by Reg (EC) 988/2009 and implemented by Reg (EC)
987/2009, which came into force from 1 May 2010.
77
This link is made explicit in the indicator in Art 3(2)(b) of the draft enforcement directive of the PWD
(COM (2012) 131).
reference to PIL in the PWD. For example, the Dutch implementing statute specifically
refers to a foreign law being applicable to the contract.78 So, posted workers under the PWD
receive the protection of certain mandatory provisions of the country in which the work is
actually performed although another law applies to their contract. It conforms to the logic
of the PWD to assume that this other law—the lex causae—may extend the protection of
the worker beyond the minimum offered by the PWD under Article 3(7).
In several cases, the CJEU has formulated the better protection rule of Article 3(7) as
allowing the law of the Member State of origin to extend the protection of the workers.79
However, no further indication is given as to the interpretation of this phrase, which may
refer to the country of origin of the service provider, but also, and in the given context
more likely, to the country of origin of the worker, being the country in which he normally
performs his work (see Article 2 PWD). The law of this country would (in all but
exceptional cases) apply to the employment contract under Article 8 Rome I. Hence, we
assume that, contrary to the Directive on electronic services, the PWD does not purport
to overrule the existing choice of law rule, but merely regulates the (minimum and
maximum) application of host state laws as overriding mandatory rules. As soon as host
state law is applicable under Article 8 Rome I (either by choice or as the law applicable in
absence of a choice by the parties), the restrictions imposed by the PWD no longer hold
true.
This conclusion also follows from the limited scope of the PWD. The PWD does not contain
a full coordination of cross-border services.80 Moreover, it does not even fully coordinate all
employment in this context. As discussed above, the Directive only covers workers who
fulfil the definition of posted worker in Article 2 of the Directive. It would seem from the
facts of the cases that neither Mr Voogsgeerd nor Mr Koelzsch were posted workers in the
meaning of the PWD—even though their employer was a cross-border service provider. The
status of the employing company—as a cross-border service provider—can and should be
separated from the status of the worker— posted, migrant or otherwise.81 Moreover, the CJEU
made it quite clear that the law applying to the contract of employment should be ascertained
on an individual basis and does not (fully) depend on the country of establishment of the
employer.

VI. Workers hired for the purpose of posting and allowances specific to the
posting

A. Hiring for the Purpose of Posting

As mentioned, many Member States have not taken any measures to effectively implement
Article 2 of the PWD.82 In particular the requirement as to the habitual place of work is
78
The Dutch ‘Wet arbeidsvoorwaarden grensoverschrijdende arbeid (WAGA)’ defines the posted worker as
someone who works temporarily in the Netherlands, while foreign law is applicable to their labour contract.
Other criteria and distinctions provided in the PWD are not implemented in the Dutch law.
79
See, eg, Rüffert (n 6), para 34 refers to the Member State of origin and Case C-341/05
Laval un Partneri Ltd v SvenskaByggnadsarbetareförbundet [2007] ECR I-11767, para 81.
80
The coordination of cross-border services is regulated (inter alia) by the Services Directive. Labour law is
specifically excluded from the fields coordinated by this directive; see preamble paras 14 and 86–87 and Art
1(6) of Directive 2006/123.
81
Compare in the context of the transitional period and migration law: Joined Cases 307–309/09 Vicoplus v
Minister van SocialeZaken en Werkgelegenheid, not yet published in ECR, see on this judgment also above n
36; Compare also Services Directive, preamble paras 86 and 87.
82
PWD II Study, p 286.
largely neglected in the implementation measures of the Member States. The effect of
this omission seems to be that the rules applying to posted workers are also applied to other
workers employed by foreign service providers. This may seem practical from the point of
view of enforcement and does at any rate provide for minimum protection of the workers
involved. But the limits the PWD imposes on the host state with regard to better protection
or protection outside the hard core of Article 3(1) PWD, do not apply to non-posted
workers who hap- pen to be employed by foreign service providers. Their situation should
be measured against the Rome I Regulation and the TFEU.83 Hence, in the PWD I and
PWD II studies we recommend to the European Commission to further the
implementation of the definition of posted workers at EU or national level, in order to
avoid overextension of the limitations imposed by the Directive. However, the exclusion
of non-posted foreign workers from the scope of the Directive does not in itself
improve their legal position—this depends on the interpretation of Article 8 Rome I on
the one hand and the unilateral application of host state mandatory rules on the other. If a
worker does not qualify as a posted worker under the PWD, the obligation to offer the core
protection of the host state does not exist, but neither does the limitation to core protection
and public policy provisions which the CJEU deduces from the PWD. Hence, when host
state law does not apply by virtue of Article 8(3) or Article 8(4), it may still apply by
virtue of Article 9 Rome I. Importantly, if Member States’ interpretation of Article 9
Rome I includes the mandatory nucleus of labour law under Article 3(1) PWD, such non-
posted service workers will at least not be worse off than their posted colleagues.84
However, it should be noted that under Article 9 Rome I Regulation the courts of the
Member State are allowed—but not obliged—to give effect to the rules of the host state.
The more difficult cases to decide would be when a worker is hired for the purpose of
posting and is dismissed again after the posting has ended (which is not unusual in the
case of temporary agency work) or when a worker works regularly in the host country on
consecutive contracts for the provision of services. In such cases, the only place where work
is performed under the contract will be the host country. Hence, under Article 8 Rome I a
court will have to apply the law of the host country pursuant to Art. 8(2), unless one of
the parties demonstrates that there is a closer connection with the (common) country of
origin (Article 8(4)). Factors taken into account by courts include the common origin of
worker and employer,85 specific expatriate provisions in the contract, the continuation of
residence for tax purposes and the continuation of social insurance coverage in the country
of origin.86

B. The Responsibility for Travel, Board and Lodging Costs


Accordingly, the fact that the employer, rather than the worker, bears the costs of expatriation
may be a factor indicating a closer connection to the home country. Conversely, payment of
travel and subsistence costs by the workers themselves is an argument for applying host state

83
See on the limitations the treaty itself imposes Cases C-49/98 Finalarte [2001] ECR I-7831, C-164/99
Portugaia Construcoes [2002] ECR I-787, C-165/98 Mazzoleni [2001] ECR I-2189, C-369/96 Arblade
[1999] ECR I-08453 and C-272/94 Guiot [1996] ECR I-1905.
84
However, it must be noted that Member States make very divergent use of Art 9 Rome I. See the PWD I
study, pp 16 ff.
85
Traditionally, under Polish law, common Polish nationality used to be enough for the Polish labour law
to apply. Under German private international law as interpreted by the Bundesarbeitsgericht, common
nationality is a factor to be taken into consideration when determining the applicable law: see inter alia BAG
29 October 1992—2 AZR 267/92IPRax 1994, 123 (Pilotenentscheidung). See for case law under the Rome
Convention (and the similar rule of Dutch private international law), AAH van Hoek, Internationale
mobiliteit van werknemers (Den Haag, Sdu, 2000).
86
Pursuant to Art 12 Reg 883/2004.
law.87 Translated into the internal market perspective, this fits with the distinction between
movement of workers under Article 56 TFEU and Article 45 TFEU. In the latter situation
workers88 may be deemed to have entered the labour market of the host state (to search) for a
job, which makes travel costs and living expenses primarily their own responsibility.89 In the
former situation, it is the employer who is the initiator of the cross-border mobility of the
worker: he makes use of the right to freely provide services in the host state, which includes
the posting of his own employees to carry out the service. Hence, in contrast to the ‘active’
mobility of a migrant worker under Article 45 TFEU, the movement of posted workers under
Article 56 TFEU may be seen as ‘passive’ mobility. They are deemed to return to their
country of origin after the completion of the service, without at any time gaining access to the
labour market.90 Since posting in the framework of the provision of services always occurs
at the initiative of the employer, in our opinion, it would be logical that travel costs and living
expenses are the employer’s responsibility. A—cautious—reflection of this notion can also be
found in Art 7, second subparagraph of the PWD, which refers to allowances paid by the
employer to the posted worker to cover actual costs incurred by the posting, such as
expenditure on travel, board and lodging.
In this regard, a recent advisory opinion of the EFTA Court in a Norwegian case is of
interest, in which the Court judged inter alia91 that an obligation in an extended
collective agreement in the host state to give compensation for travel, meals and
lodging92 did not comply with the PWD. Contrary to the parties and some of the
interveners, the Court did not elaborate upon the role of Art 3(7) second subparagraph
PWD in this discussion. According to the Court, such payments could not fall within
the notion of pay within the meaning of Article 3(1) of the PWD,93 because of their

87
This is also proposed as an indicator in Art 3(2)(d) of the draft enforcement directive of the PWD (COM
(2012) 131).
88
Please note that only EU-nationals are entitled to free movement under Art 45 TFEU.
89
Notwithstanding the possibility to make contractual arrangements on this with the employer.
90
Case C-113/89 Rush Portuguesa [1990] ECR I-1417, para 15; Case C-43/93 Vander Elst [1994] ECR I-
3803, para 23. See for the development of this line in case law, H Verschueren, ‘Cross-border workers in the
European internal market: Trojan horses for Member States’ Labour and Social Security Law?’ (2008) 24(2)
The International Journal of Comparative Labour Law and Industrial Relations, 167–99, in particular 171–
77. Please note that in Vicoplus (n 36), the CJEU ruled that although an undertaking engaged in the making
available of workers is taking advantage of the free movement of services, the activities it carries out are
specifically intended to enable workers to gain access to the labour market of the host Member State. On the
basis of this judgment, it may be argued that an intermediate category comes into being, because posted agency
workers would qualify as both a posted and a migrant worker.
91
In this case also compensation for work involving overnight stays away from home was disputed and the
legality of awarding posted workers better protection on working time at collective agreement level than that
provided by legislation in the host country. This advisory opinion builds on the Judgment of the CJEU in the
Case-244/04 Commission v Germany [2006] ECR I-885 on the interpretation of the notion ‘minimum rates
of pay’. See on this subject also the PWD 1 and PWD 2 studies, respectively sections 3.6 and 3.6.
92
Under Section 7 of the Norwegian Tariff Board Regulation, an employer is required to cover
necessary travel expenses on commencement and completion of the assignment of a posted worker and for a
reasonable number of home visits. Before the employer posts an employee to work away from home, board
and lodging arrangements must be agreed. As a rule, the employer is required to cover board and lodging,
but a fixed subsistence allowance, or payment on the submission of receipts etc. may be agreed. On the
Norwegian implementation of the PWD see S Evju, Safeguarding the National Interests. Norwegian
Responses to Free Movement of Services, Posting of Workers, and the Services Directive, Formula
Working Paper 2010, through:
www.jus.uio.no/ifp/english/research/projects/freemov/publications/papers/2010/september/index.html.
93
Art 3(7) stipulates that ‘Allowances specific to the posting shall be considered to be part of the minimum
wage, unless they are paid in reimbursement of expenditure actually incurred on account of the posting, such as
expenditure on travel, board and lodging.’ Art 3(1)(c) on the other hand guarantees the posted worker the
application of host state rules with regard to ‘the minimum rates of pay, including overtime rates; this point
nature as compensation of necessary expenditure related to the posting.94 Neither does the
Court see any indication that the allowances in question justify a reliance on the public
policy exception enshrined in the first indent of Article 3(10) of the PWD.95 The
European Commission and Sweden, however, (in our opinion rightly) emphasised that
such a requirement of compensation for expenditure on travel, board and lodging ensures
equal pay in practice. In fact, it prevents the minimum wage of the posted workers from
being de facto affected because such costs reduce the compensation the worker receives
for the time worked.
Remarkably enough (and perhaps also a relief to the Norwegian defendants in the case
above), it was revealed in our PWD2 study that several predominantly sending states
indeed have established a—sometimes very generous—statutory right to compensation in
the case of business trips and similar travel on behalf of the employer.96 For instance, at
the time of writing of our PWD studies (2010/11), in Bulgaria the worker is entitled to
compensation for expenses limited to €130 for accommodation and a separate per diem of
€35 a day when posted to another EU country. Cyprus grants the worker the right to free
transportation as well as a transfer allowance. The amount of the latter depends on the
length of posting: for postings shorter than 30 months, the allowance is €178,72 a month,
for longer postings it is reduced to €93,80. The per diem in Latvia is approximately €45–
55. This amount also applies in cases of extended posting and constitutes around an
additional €1350–1650 a month. This is considered to be a very large sum especially
compared to the statutory minimum monthly salary being just LVL 200 (€285). In
Lithuania, all employers are required to pay a per diem allowance of 195 Litas (€56) if
the employee is posted to Belgium or Germany, or 142 Litas (€41) if the employee is
posted to Ireland.97 There is a legal possibility for private companies to agree individually
with an employee about a reduction of the per diem to 50 per cent of the official amount
but this option is rarely exercised, except in the transport sector. Per diems and statutory
rights to compensation of expenses are also reported from Hungary.
Beneficial as these rules may be from a worker’s protection (and anti- social dumping)
perspective, the high level of per diem remuneration is deemed prohibitive in especially
the Latvian daily practice. This results either in evasion of the rules on posting, to the benefit
of either direct employment in the host state, or illicit posting. Though the regulation of
per diem allowances and the application thereof to postings of the types covered by the
PWD is a matter of national law, in our PWD 2 study we concluded that it would help if
all host states would accept per diem allowances over and above the compensatory level to
be part of the rates of pay for comparison with the minimum rates due to posted workers
under their laws and regulations.

VII. Concluding remarks: towards the application of a more strictly


delineated personal scope

A. On the Need for a Clearly Defined Personal Scope of the PWD


On the basis of material gathered in both our PWD studies—inter alia in the analysis of
cases that have attracted media attention—we have explored and explained above why clear
definitions of posting and posted worker are necessary. The aim is to avoid ‘creative use’ of

does not apply to supplementary occupational retirement pension schemes.’


94
EFTA-Court, Advisory opinion in Case E-2/11, point 97.
95
EFTA-Court, Advisory opinion in Case E-2/11, points 99–101.
96
See PWD 2 study, p 131–33.
97
Resolution no 116 of 21 November 1996 of the Ministry of Finances of the Republic of Lithuania (State
Gazette, 1996, no 114–2660).
the freedoms in which the provision of services is used to avoid (full) application of the host
state’s law. Controversial cases include the setting up of letter box companies which then
hire workers specifically to ‘post’ them to other Member States and incidences of
consecutive ‘postings’ of a single worker to a single Member State by different ‘employers’
in different Member States. Hence, two main points of concern are the genuine character of
the establishment of the employer in the sending state and the proper implementation of the
concept of posted worker in Article 2 PWD.
In this regard we also stressed that the country in which the employee normally works may
often coincide with the country of establishment of the employer (the service provider), but it
is not necessarily true that the posted worker is covered by the labour law protection of the
country of establishment of the service provider. The reason was explained in section VI on
the interaction between the PWD and the law applying to the individual con- tract of
employment, in particular Article 8 of the Rome I Regulation. This provision primarily
refers to the place of work: the law of the country where or from which the work is habitually
performed will apply to the contract of workers—posted or not. The actual performance of
the work is the relevant factor here, not the contractual arrangements or the seat of the
employer. Hence, a worker employed by a service provider in Luxembourg may actually
work from Germany and be covered by German law (see the Koelzsch case discussed
above). Therefore, a clear distinction should be made between the country of origin of the
provider and the country of origin of the worker. Moreover, it should be clear that the
limitations which the PWD imposes on the application of the law of the host state do not
apply when host state law is applicable to the contract by virtue of Article 8 Rome I.
However, whereas only a few states have implemented requirements as to the establishment
of the employer, none has fully implemented the concepts of posting and of a posted
worker.98 One of the countries which has most seriously tried to do so is France. French
law requires that the worker is normally employed for an employer who is regularly
established abroad.99
The activities of the employer should not be wholly or substantially oriented to the French
market. The undertaking should not have an establishment in France nor seek to contract
clients or hire employees there.100 The posted workers must have been employed prior to
the posting101 and return to their country of origin thereafter. These latter two (or even three)
criteria are directly related to the individual worker’s habitual place of work. With regard to
the posting of third country nationals, the CJEU does not allow Member States to impose
minimum requirements as to the time of service prior to the posting.102 Hence, the French
circular accompanying the implementing statute specifically refers to this case law when
explaining why the French posting regulation does not require a specific period of previous
employment in the home state either.
The example of France illustrates the difficulties Member States encounter if they

98
France has a provision which excludes employees hired in France from the scope of application of their
implementing rules. CdT L 1262–3, see PWD I study, ch 3.2, p 32 and p 46.
99
The Circular requires significant activity in the home state.
100
L1262–3; Preventing undertakings providing services in France from recruiting complementary staff ‘on the
spot’, would probably constitute an obstacle to the freedom to provide services contrary to Art 56 TFEU. One
may also wonder if this latter criterion is desirable from a ‘local labour market perspective’: compare this to the
solution sought under the supervision of ACAS in the Lindsey oil refinery dispute, where the dispute
settlement agreement with the Italian subcontractor included recruitment of around 100 ‘locally sourced’
workers. See extensively C Barnard, ‘“British Jobs for British Workers”: The Lindsey Oil Refinery Dispute
and the Future of Local Labour Clauses in an Integrated EU Market’ (2009) 38(3) Industrial Law Journal
245–77.
101
This requirement does not apply in the case of TWAs.
102
See eg, Case C-244/04 Commission v Germany (n 91).
endeavour to introduce more strict and delineated posting and posted workers concepts.
Member States are not entirely free to implement and apply such requirements in their
national laws. The concepts used are based on EU law and should be interpreted
autonomously. Moreover, extra requirements put in place by national authorities invariably
will cause obstacles to the free provision of services which must be justified under the EU
rules. Hence, it would be preferable if clear working definitions of the main concepts used
in the personal scope of the PWD could be developed at EU level. Clear definitions at EU
level will also help Member States in distinguishing their own definitions of domestic
modalities of posting from the EU definitions of cross-border postings.103

B. What Does a Clearly Defined Personal Scope Entail?


The use of letter box companies is a problem as regards the freedom to pro- vide services (see
eg in Article 4(5) of the Services Directive 2006/123/EC) and can be countered by clear
requirements as to the activities in the home state as well as the temporary character of the
service provision. The attractiveness of consecutive and rotational posting of workers
can—to some extent—be diminished by stricter checks on the absence or presence of a
country in which the work is normally performed (as required under Article 2 PWD).
From that perspective, Article 3 of the recently launched draft Enforcement Directive of the
PWD seems to be (only) a first step in the right direction, by laying down a non-exhaustive
list of indicative factual elements to help competent authorities in determining whether there
is a genuine establishment of the posting company in the sending state (Article 3(1)) and
in assessing whether a posted worker is only temporarily carrying out his or her work in a
Member State other than the one in which he or she normally works (Article 3(2)).
With regard to the temporary character of the posting the following non- exhaustive list of
elements are proposed by the European Commission:
a) the work is carried out for a limited period of time in another Member State;
b) the posting takes place to a Member State other than the one in or from which the
posted worker habitually carries out his or her work according to the Rome I
Regulation and/or the Rome Convention;
c) the posted worker returns or is expected to resume working to the Member State
from which he/she is posted after completion of the work or the provision of
services for which he or she was posted;
d) travel, board and lodging/accommodation is provided or reimbursed by the employer
who posts the worker, and if so, how this is done; as well as
e) any repeated previous periods during which the post was filled by the same or another
(posted) worker.104
According to the text of the proposed Article 3(2), all the factual elements enumerated are
‘indicative factors in the overall assessment to be made and may not therefore be considered
in isolation. The criteria shall be adapted to each specific case and take account of the
specificities of the situation.’ In our opinion, these ‘indicative factual elements’ could take
the form of rebuttable presumptions. This would mean that postings which fulfil criteria

103
However, it cannot eliminate all the reported problems and uncertainties. As discussed in section IV above,
our PWD studies confirm the special status of transport workers, both as regards the exact criterion for
application of the protection offered by the PWD and as regards the practical application and enforcement
thereof. These findings underscore the relevance of a separate implementation of the PWD for transport
workers.
104
See Art 3(2) of the proposal for a Directive on the enforcement of Directive 96/71/EC concerning the
posting of workers in the framework of the provision of services, Brussels 21 March 2012, COM (2012)
131 final.
(a) to (d) above are presumed to be postings in the meaning of the PWD. This
presumption can be rebutted by the relevant authorities and/or the workers involved, for
instance if criterion (e) is fulfilled.105 Conversely, when a posting does not fulfil the
requirements (a) to (d), prima facie host state law applies in full, unless the employer
demonstrates that the ‘posting’ is indeed a posting in the meaning of the Directive.
To stress the distinction between ‘passive mobility’ of a worker posted in the framework of
service provision of his employer (governed by Article 56 TFEU) and ‘active mobility’ of a
worker entering the labour market of another Member State to take advantage of job
opportunities (governed by Article 45 TFEU), we advise amending the text of Article
3(7) second sentence of the PWD by making the reimbursement of expenditure on travel and
lodging/accommodation an obligation on the service provider. As pointed out above, several
Member States already have such an obligation in their labour law.106 The experience of
those states should be integrated in the discussion on the level of compensation to be
offered under the pro- posed obligation.
As regards the relationship between the PWD and the Rome I Regulation it should be kept in
mind that the Rome I Regulation also contains a concept of temporary posting. During a
temporary posting, the law of the habitual place of work will continue to apply to the
contract of employment. If the worker is relocated to another country indefinitely,
however, the law of the new habitual place of work will normally become applicable—
unless a closer connection with the country of origin is maintained. The same is true when
workers are hired for the purpose of posting. The presence of a closer connection to the
country of common origin is judged on the basis of inter alia the intention of the parties to
repatriate the worker and facilities in the contract to compensate for the expatriation. The
relevance of expat-facilities for establishing the applicable law in the ‘hard cases’ sup-
port the inclusion of a requirement on payment of costs in the definition of posting. But in
this context it should especially be stressed that when host state law applies to the contract
under Rome I, there is no legitimate reason to restrict this application to the hard core
provision of the PWD. In this respect, the Rome I Regulation may pre-empt application of
the PWD.

105
In our opinion, another (absolute) contraindication of a genuine posting situation would be the abnormally
limited number of contracts performed and/or size of turnover realised by the posting employer in the Member
State of establishment, see Art 3(1)(e).
106
See for specifics, above section VI and PWD2 study, ch 3.6 ‘per diems’.