The European Parliament and the European Council have adopted amendments of the Directive on posting. The amendments, which are going to update the 20-year-old Directive, will replace the main requirement concerning “minimum wage” with “remuneration” so that more wage components will be covered by the concept in the future. Furthermore, a requirement is introduced concerning payment of travelling expenses and rules concerning long-term postings. The amendments came into force on 29 July 2018 and must be implemented in the Member States no later than 30 July 2020.

The Directive on posting lays down a number of requirements which foreign employer must fulfil when posting employees to other Member States.

One of the requirements so far has been “minimum wage”, but the interpretation and not least the scope of this concept has given rise to many judgments from the European Court of Justice. With the introduction of the concept “remuneration”, the aim is to ensure to a higher degree that other wage components mandatory in the Member State to where the employee is posted are also included in the remuneration secured under the Directive. Hopefully, this will make it more transparent to calculate the posted employee’s wage when it is no longer necessary to distinguish between “minimum wage” and other wage components.

It is emphasised in the amending directive that the concept “remuneration” is still fixed under national law and case law as was the case concerning “minimum wage”. As no minimum wage has been fixed or other statutory remuneration requirements apply in Denmark, and as there are no generally applicable collective agreements, the change from “minimum wage” to “remuneration” will presumably not result in a material change compared to previously applicable law within this area.

However, companies setting up a business in Denmark or Danish companies posting employees must still be covered by a collective agreement in order to be subject to the remuneration requirement.

BOARD AND LODGING

According to the amending directive, allowances or reimbursement of expenses covering travelling, board and lodging to employees away from their regular place of work will still be covered directly by the main requirements that the employer must fulfil. However, double payment of expenses for travelling, board and lodging should be avoided.

LONG-TERM POSTING

It appears from the amending directive that, after having been posted for more than 12 months, the employee will be covered by all relevant labour and employment terms applicable in the host Member State under legislation or generally applicable collective agreements. This period may be extended to 18 months if the employer submits a motivated notification.

The employer cannot circumvent this requirement by replacing the posted employee with another employee. When calculating the duration of the posting, consideration must be given to the total duration of the specific posting periods when a posted employee replaces another employees and is to perform the same assignments.

The amending directive does not include any requirements concerning procedure, formalities and conditions in connection with the conclusion and termination of contracts of employment.

DUTY OF DISCLOSURE

The Directive lays down a duty for the host Member State to disclose information on labour and employment terms, including the wage components included in the concept of remuneration, on a publicly available website. The host Member State is also obligated to disclose all applicable labour and employment terms if the posting period exceeds 12 or 18 months.

WHAT DOES THE AMENDMENTS MEAN?

The amending directive will hardly result in material changes as regards remuneration for businesses posting employees to Denmark. As Denmark has not laid down any remuneration terms, neither under legislation nor generally applicable collective agreements, it will still only be the foreign employers covered by a collective agreement in Denmark that are obligated to pay a specific wage to posted employees.

The amendment concerning long-term posting of employees will only have far-reaching implications for the employers if they post employees to other Member States for more than 12 or 18 months. When posting employees to Denmark, it should therefore be expected that, after 12 to 18 months of posting, the employees will be fully covered by mandatory Danish employment law, for instance the Danish Holiday Act.

The amending directive will also have an impact on Danish employers wishing to post employees to other EU countries. If these countries, as opposed to Denmark, have laid down remuneration terms under legislation or generally applicable collective agreements, the Danish employer's wage obligation will probably be wider and more comprehensive after the implementation of the new remuneration concept.

We will currently follow and inform you about the implementation of the Directive.

contacts

Jonas Enkegaard

Partner

Christian Traberg Bennetzen

Attorney