The European Union (Posting of Workers) Regulations 2016 (the "Regulations") were signed into law in Ireland on 27 July 2016, transposing the most recent EU Directive in this area. "Posted workers" are individuals who are employed in one EU Member State, but are posted by their employer to work in another Member State on a temporary basis. The Regulations seek to ensure that posted workers are protected in respect of their employment law rights in Ireland, and to strengthen the enforcement mechanisms where those rights are breached.
Background and Recap
Posted workers have been afforded certain protections in the EU since the adoption of the Posted Workers Directive 96/71/EC ("PWD"). The purpose of this 1996 Directive was to address concerns arising from the increase in cross-border services, such as:
- the exploitation of foreign workers where inferior terms were applied to them in a host country;
- the undermining of minimum local terms and conditions by the use of cheap foreign labour (known as 'social dumping'); and
- the question of which country's laws would apply when a worker was posted from his/her own Member State to another Member State.
Under the PWD, Member States are obliged to guarantee to posted workers certain minimum terms and conditions of employment as are received by non-posted workers in the host country. These include maximum work periods, minimum rest periods, minimum paid annual holidays and minimum rates of pay. This is provided for in Irish law in the Protection of Employees (Part-Time Work) Act 2001 (a somewhat anomalous and misleading place considering that the rules apply to all posted workers no matter whether they are full-time or part-time). Under this legislation, workers, irrespective of their nationality or residence, who are working in Ireland or who are working under a contract of employment providing for their being employed in Ireland, have the benefit of the vast majority of Irish employment law rights (and in fact this provision goes far beyond the minimum requirements of the PWD).
Despite these existing protections, concerns were raised that the PWD was not being fully complied with. As a result, an updated EU Directive was passed in 2014 to strengthen the regime concerning posted workers, the provisions of which are transposed in Ireland in the new Regulations.
Key measures from the new Regulations
The key measures are:
- The Workplace Relations Commission ("WRC") is Ireland's designated "competent authority" and "central liaison office" for the purposes of both Posted Workers Directives.
- Before commencing the services in question, service providers posting workers to Ireland must now:
- make a declaration to the WRC (in English and using the form set out in the Regulations) setting out certain information, including the identity of the service provider, the number of posted workers, the duration of the postings, and the addresses of the relevant workplace(s) in Ireland for the posted workers;
- maintain for inspection, at a place identified to the WRC, copies of contracts of employment, payslips, time sheets and other information relating to the posted workers; and
- designate a person to liaise with the WRC.
Where the WRC receives a declaration that is in compliance with the Regulations it will issue an acknowledgment to the service provider.
- Failure to comply with the new declaration rules is an offence and can lead to fines of up to €50,000. If the offence is committed by a body corporate, then its directors, managers or other officers can be held directly liable.
- A concept of 'subcontracting liability' has been introduced with regard to the construction sector. This means that where a posted worker does not receive the required minimum rates of pay from his/her direct employer (the subcontractor), the contractor one step up the supply chain can now also be held liable and sued by the employee (in addition to the direct employer). The contractor can avoid liability by showing that it took all reasonable steps to ensure the subcontractor was compliant with its obligations, and obtaining certain information from the subcontractors as prescribed in the Regulations.
- A simplified and strengthened process has been put in place for a relevant authority in one Member State to pursue a service provider based in another Member State for breach of the rules on posted workers. This allows for a notification to be made from one such authority to the relevant authority in another Member State (being the WRC in Ireland) to inform it that certain penalties or fines have been levied on a service provider, and that authority receiving the notification will then pursue and recover the relevant penalty or fine from the service provider resident in its own Member State.
It is crucial that employers posting workers to Ireland comply with the newly-prescribed declaration obligations detailed above in order to avoid the new regime of fines. Employers/contractors in the construction industry should also be aware that if subcontractors fail to comply with certain obligations towards their posted workers, the employer/contractor itself can now also be held jointly liable with the subcontractor.