The draft bill transposing Directive 2018/957/EU into the German legislation, brings important amendments to the rules governing posting of workers to the first “receiving Member State” (during the year 2018, over 400.000 workers were posted to Germany).

Posting period and replacement condition

The draft bill contains rules dealing with the calculation of the posting duration, in respect to each transnational measure can be taken by an undertaking, in the meaning of Article 1.3 Directive 96/71/EC.

The ratio decidendi is the presence in Germany (and not necessary work carried out), on behalf of a given employer, unless the mutual obligations of the parties to the employment contract are suspended (such as maternity leave).

Work in another country shall interrupt the posting period, however, periods of work carried out within the territory of Germany, are aggregated in view of determining the initial period of 12/18 months.

Consequently, the replacement condition is regulated as well in respect to each transnational measure can be taken by an undertaking, in the meaning of Article 1.3 Directive 96/71/EC.

The concept of “same task at the same place of work”, must be understood in the sense of the same task carried out:

  • under the same service agreement (regardless the place of work)
  • at the premises of the same establishment belongs or related to the employer (in the sense of the German Stock Corporation Act)
  • at the premises of the same user undertaking established in Germany

As regards postings initiated before 30 July 2020 and ongoing on that date, the posting period completed before 30 July 2020, will be considered in the calculation of the initial period of 12/18 months.

The draft bill lays down the content of the notification must be sent by the employer, in view of extending the initial period of 12 months to 18 months. Provided that such a notification is submitted in due time, that period will be automatically extended.

Expenditure actually incurred on account of the posting (travel, board, and lodging)

Such expenditure is not considered to be part of the remuneration, and consequently, will be paid/reimbursed in accordance with the national law and/or practice applicable to the employment relationship (i.e. determined on grounds of Rome I Regulation).

The draft bill is silent as regards situations in which under the national law and/or practice applicable to the employment relationship, such payments/reimbursements are not mandatory.

Terms and conditions of employment

Collective agreements which have been declared applicable on national level, will be applying to employers posting workers, in all sectors of activity.

Employers posting workers to Germany, will be bound by:

  • During an initial period of 12/18 months: terms and conditions of employment laid down by law regulations or administrative provisions (as regards the general working conditions laid down by Section 2 §2 Posting of Workers Act), and collective agreements binding on national level (as regards the working conditions laid down by Section 3 §5 Posting of Workers Act)
  • After an initial period of 12/18 months: all the terms and conditions of employment laid down by law regulations or administrative provisions (beyond the general conditions under §2 Posting of Workers Act), and all generally binding collective agreements pursuant to § 5 of the Collective Bargaining Act (including generally applicable regional collective agreements), except for conditions of conclusion and termination of the employment relationship, post-contractual non-competition clauses, and occupational retirement pension schemes

As regards employers not bound by collective agreements, ordinances pursuant to Sections 7 and 7a Posting of Workers Act, will continue to produce their effects.

The concept of remuneration covers the basic remuneration (determined on grounds of the relevant collective agreement, considering qualification and professional experience, however with certain limitations), as well as other components set forth in collective agreements, including overtime rates. The due date of payment is deemed to be an intrinsic part of the concept of remuneration. Overtime rates are regulated by collective bargaining agreements as well.

As regards allowances or reimbursement of expenditure to cover travel, board, and lodging expenses for workers away from home for professional reasons, two situations are covered:

  • workers who must travel to or from their regular place of work in Germany (i.e. the worker is not assigned to a new place of work)-business trips within Germany are covered
  • workers will be temporarily sent from their regular place of work in Germany, to another place of work

Conditions of safety, health protection and hygiene at work, under §2 Posting of Workers Act, are extended to the conditions of accommodation directly or indirectly provided by the employer.

Exemptions

The exemption under Article 3.2 Directive 96/71/EC (i.e. initial assembly and/or first installation of goods, if the period of posting does not exceed eight days), applies as regards minimum wage, remuneration including overtime rates, minimum paid annual leave, and additional terms and conditions of employment after an initial period of 12/18 months.

The draft bill lays down other exemptions will be applying under the following cumulative conditions:

  • a service to a third party is not provided
  • duration does not exceed 14 consecutive calendar days, and not beyond 30 days within a period of 12 months

The following activities are concerned:

  • meetings or negotiations, prepare offers or conclude contracts
  • participation in a trade fair, conference, or symposium (in the capacity of “visitor”, without performing activities in the sense of Section 2a (1).8 Illegal Employment Act)
  • establish a business unit
  • intra-corporate vocational training (our note: vocational training refers to instructional programs or courses that focus on the skills required for a particular job function or trade)

The above-mentioned exemptions will be applying as regards minimum wage, remuneration including overtime rates, minimum paid annual leave, terms and conditions of employment set forth in collective agreements, and additional terms and conditions of employment applicable after an initial period of 12/18 months.

Hourly wage-record

Hourly payment give rise to the obligation to keep records of the beginning, end and duration of the daily working time, at the latest by the end of the seventh calendar day following the day on which the work was carried out (such records must be kept for at least two years).