Implementation of the Posted Workers Reform Directive in Germany

On 28 June 2018, the EU Posted Workers Reform Directive (2018/957) (the „Reform Directive“) was passed, which contains extensive changes to the EU Posted Workers Directive of 1996 (96/71/EC). The implementation into EU Member State national law must now take place by 30 July 2020. Under German law, this especially means that the Posted Workers Act (Arbeitnehmerentsendegesetz – AEntG), which currently implements the (old) Posted Workers Directive, needs to be amended. The German legislator had announced the publication of corresponding draft legislation to amend the AEntG for summer 2019, but such draft legislation has not yet been published. The Federal Ministry of Employment and Social Affairs (BMAS) did, however, publish key points on the implementation of the Reform Directive, which give an overview of what employers have to expect with regards to the posting of workers to and from Germany. These key points are summarised below:

1. „Equal pay for equal work“

• In the first key point, the Ministry announces the implementation of article 3 para. 1 lit. c of the Reform Directive. Posted workers must receive the “remuneration” prescribed by law, regulation or administrative provision or by collective agreements applicable to them, and not just the ‚minimum rates of pay‘ as in the past. The obligation to pay remuneration will therefore be considerably extended, for example to special payments and allowances.

2. „Enforcement of better working conditions“

• Article 3 para. 1 lit. h of the Reform Directive provides for the mandatory application of the rules regarding posted workers’ accommodation where provided by the employer when these are prescribed by law, regulation or administrative provision or by collective agreements applicable to posted workers. According to the Ministry’s second key point, the implementation of this regulation is intended to prevent accommodation of posted workers in undignified conditions. This is to be achieved mainly through the Act to Combat Illegal Employment and Social Benefit Abuse. Furthermore, according to the Ministry, the same rules with regards to conducting business trips within Germany which are advantageous for German residents should also be made applicable to posted workers.

3. „Remuneration is remuneration – no more deductions of expense reimbursement“

• In addition, in accordance with article 3 para. 1 lit. i of the Reform Directive, allowances or reimbursement of expenditure to cover travel, board and lodging expenses for workers away from home for professional reasons, payment of which is prescribed by law, regulation or administrative provision or by collective agreements applicable to posted workers, must now also be paid to posted workers. The posting employer, not the posted employee, therefore bears the costs related to the posting; according to the third key point of the Ministry, such allowances or reimbursements may not be deducted from the posted worker’s remuneration.

4. „Special protection for long-term posted workers“

• According to the fourth key point, the Ministry also plans to implement article 3 para. 1a, subparagraph 2 of the Reform Directive, which states that when the duration of a posting exceeds 12 months, all the applicable terms and conditions of employment of the member state to which the employee is posted and which are prescribed by law, regulation or administrative provision or by applicable collective agreements shall apply to the posted worker on the basis of equal treatment.
• According to the Ministry, an extension of the posting period preceding complete application of employment regulations to 18 months should be made possible by means of a transparent, practical and non-bureaucratic procedure.
• This 12- or 18-month-rule considerably shortens the duration during which only a limited set of national employment regulations applies to the posted worker, who otherwise usually falls under the employment laws of his home country.
• Furthermore, according to the Ministry, circumvention of rules through “chain postings” must be avoided. The Ministry is therefore likely referring to article 3 para. 1a subparagraph 2 of the Reform Directive, which states that where a posted worker is replaced by another posted worker carrying out the same task at the same place, the posting periods of those posted workers are added together with regard to the 12-month or 18-month rule.

5. „Clearer rules for temporary agency workers – no predatory competition in temporary work in the EU!“

Referring to article 1 para. 3 and article 3 para. 1 lit. b of the Reform Directive, the Ministry announces in the fifth key point that it will ensure that temporary workers who are working in Germany are covered by German labour law. Furthermore, the Ministry announces the creation of information obligations for client firms to the extent that they must inform employers domiciled abroad when their employees are working in Germany.

6. „More transparency on the European labour market. Better conditions for companies and employees“

• According to the Ministry’s sixth key point, the German toll’s website, zoll.de, is supposed to be expanded in order to provide an overview of the working conditions to be met by posting employers, in accordance with article 3 para. 1 of the Reform Directive. All collective agreements applicable to posted workers should also be made accessible. The Ministry further intends to encourage the pooling of Member States‘ information services with the new European Labour Authority.

7. „Protection from exploitation through fair mobility“

• In the seventh and final key point, the Ministry presents its plans to strengthen the right of posted workers to sue with regard to their rights under the Reform Directive. In addition, the Ministry plans on the creation of a legal possibility for trade unions to support posted employees – even without trade union membership – with regards to enforcing their rights in front of court.

8. Conclusion

• Due to the Reform Directive and, consequently, the key points of the Ministry with regard to the Reform Directive’s implementation in the German Posted Workers Act, employers and employees are faced with considerable legal changes with regards to the posting of workers. It remains to be seen, however, how exactly the implementation of these changes in the German Posted Workers Act will turn out.