Pursuant to Article 1.4 Directive 96/71/EC, “Undertakings established in a non-member State must not be given more favourable treatment than undertakings established in a Member State”.

Directive 2018/957/EU does not amend that provision.

Article 1(2)(a) Directive 2018/957/EU, introduces the concept of “equality of treatment”, in respect to workers who are posted to the territory of a Member State, in regard to certain terms and conditions of employment.

National legislations of certain Member States lay down minimum wage thresholds, for third-country nationals locally employed or posted to their territory.

One of the frequently asked question is whether the principle of equal treatment precludes Member States from applying minimum wage thresholds, in addition to the remuneration determined on grounds of the principle of “equal pay for equal work” (e.g. provided that the remuneration determined on grounds of a collective agreement which has been declared universally applicable, is lower than the minimum wage threshold laid down by the national legislation, whether that threshold can be imposed). Such a question can be relevant only if the home country remuneration is not higher than both, minimum wage threshold and the remuneration determined on grounds of a collective agreement. Conversely, the principle of favourability applies.

It must be first observed that pursuant to Article 1(2) (a) Directive 2018/957/EU, the terms and conditions of employment must be granted to posted workers are laid down by : “law, regulation or administrative provision, and/or by collective agreements or arbitration awards which have been declared universally applicable or otherwise apply in accordance with paragraph 8” (emphasis added).

Preamble (17) Directive 2018/957, brings clarity in regard to the concept of remuneration “It is within Member States’ competence to set rules on remuneration in accordance with national law and/or practice. The setting of wages is a matter for the Member States and the social partners alone. Particular care should be taken not to undermine national systems of wage setting or the freedom of the parties involved”.

It must be however noted that in situations as those described above, the posted worker will be in a better position than locally employed workers, in both, sending and receiving country. Such a situation overrides the objectives of Directive 96/71/EC. The employer would be compelled to pay to a worker posted, a higher remuneration than the one paid to a local employee in the host Member State (although the worker posted usually earns less than the latter),and that goes beyond “the right balance between the need to promote the freedom to provide services and ensure a level playing field on the one hand and the need to protect the rights of posted workers on the other” (Preamble 4 Directive 2018/957/EU).

Provided that the sending company is established in a Member State, such a situation would be in breach of Article56TFEU (freedom to provide services).

However, undertakings established in a non-member State, cannot, as a matter of fact, claim rights within the scope of the Treaty.   

Having regard to the above considerations, in regard to third-country nationals posted by an undertaking established in a non-member State, the principle of equal treatment applies as a minimum standard.