Stricter rules regarding posting of workers proposed

The main features of the proposal are the following

• Wage-related collective agreement terms that may be demanded by means of industrial action no longer have to be limited to minimum wage.
  
• Collective agreement terms for reimbursement of expenses for travel, board and lodging as well as accommodation conditions can be demanded though industrial action.
  
• Reimbursement of cost related to the posting should not be considered when assessing whether a posted worker has received the correct wage. A presumption rule is further proposed stating that all remuneration received by the posted employee should be regarded as reimbursement of costs if it cannot be shown that the remuneration constitutes wages.
  
• For long-term posting, 12 or 18 months, in general the additional working and employment conditions that, according to Swedish law or other regulations, apply to locally employed workers in the corresponding situation should also apply to posted workers. A posting can be extended to a total of 18 months without constituting a long-term posting if a notification of this is submitted to the Swedish Work Environment Authority (SWEA).
  
• When assessing whether a posting is long-term, several postings should be counted as one if a posted worker replaces another posted worker. When assessing whether one posted worker replaces another posted worker, consideration should be given to whether the worker performs the same work at the same place.
  
• An employer must inform a posted worker who replaces another posted worker about the total duration of posting in order for the posted worker to be able to exercise his or her right to additional working and employment conditions. Failure to provide such information may result in the employer having to pay damages to the employee.
  
• The possibility of reporting a posting to the SWEA’s posting register only on the sixth day of the posting is abolished and the reporting obligation instead applies from the first day.
  
• Both the foreign employer and the Swedish company that receives the service are required to provide information to the SWEA, and an administrative fine may be imposed on both the employer and the recipient of the service if this obligation is not fulfilled. The employer must report the posting to the SWEA and submit documentation to the service recipient showing that the report has been made. The recipient of the service shall in turn notify the SWEA if such documentation has not been provided within three days.
  
• The SWEA is granted increased authority regarding, for example, requests for information, admission to supervision and decisions on injunctions combined with a fine.
  
• Increased protection for hired out posted workers.
  
• Regional safety representatives shall have access to the workplaces that have or usually have collective agreements.
   

Background

On the 16th of December 1996, the first posted workers directive*
was adopted. The purpose was to coordinate the Member States' legislation in
order to establish a core of mandatory minimum protection rules, which would be followed by employers who posted workers to the territory of another Member State. More than 20 years since the adoption of the original directive, there was a need to review whether the directive still created the right balance
between the need to promote freedom to provide services and ensure equal
conditions of competition on the one hand and the need to protect posted
workers' rights on the other hand. On the 28th of June 2018 the PWD
was adopted. The PWD is primarily aimed at achieving greater equal treatment
between posted workers and local workers, partly through an expansion of the
hard core of conditions to be guaranteed to posted workers, and partly by
applying the same conditions as for local workers to long-term posted workers.

What happens next?

The provisions of the PWD must be implemented into Swedish legislation
no later than the 30th of July 2020. The Council of Legislation will review the Government's proposal to ensure that it does not contravene any law, after which the Government will process the proposal and submit it as a bill to the Parliament. The Government's bill is expected to be published in March and will contain the final proposal on how the PWD should be implemented into Swedish legislation. After that, the Parliamentary Committee will process the
bill before it can finally be adopted by the Swedish Parliament.
 

Deloitte’s comment

The Government's proposal entails that posted workers will, to a greater
extent, have a right to the same conditions as local workers in a corresponding
situation. Sweden has been a driving force in the work within the EU which resulted in the PWD. The focus has been on protecting the rights and safety of posted workers. It is likely that the Government's proposal, as stated in the referral to the Council of Legislation, in a broad sense will be implemented into Swedish law. This, in turn, will probably entail increased activity of the labor unions regarding entering into collective agreements and actively following up the application of collective bargaining terms and conditions for posted workers. Industrial action to enforce terms and conditions can be expected. 

Furthermore, the proposal entails several complicated assessments which need
to be made, for example in relation to whether one posted worker should be
considered to replace another by performing the same work at the same place.
Since this information, according to the proposal, is to be provided to a
posted employee who replaces another, the posting employer will need to make
this assessment on an ongoing basis. Also, the assessment of whether a posting
is considered long-term can be complicated even without the need to consider
two or more posting periods. How should the time be calculated and what
consideration should be given to, for example, temporary breaks in the posting?
The assessment of what wage may be demanded by a labor union by means of industrial action is also likely to cause questions, considering that the wage-structure is different from industry to industry, a wage often consists of several different components and that many different factors are taken into consideration when determining a wage. The additional working and employment conditions to be applied in long-term postings are another area that can be difficult to assess for foreign employers.

The proposed amendment regarding the obligation to report postings to the
SWEA from the first day of posting will increase the administrative burden, as
postings of five days or less will no longer be exempted from the obligation to
report. The fact that the service-receiving companies will also be required to
inform the SWEA of cases where they have not received documentation showing that the notification has been made adds to the administration regarding posting and implies new requirements on communication and coordination between posting and receiving companies. Furthermore, the requirements for the content of the notification will probably change. A new requirement is also introduced through the application for extension that must be made in order for a posting of 12 months to not be considered as a long-term posting until 18 months.

In the proposal it is noted that in many workplaces, due to for example
increased mobility, there are periods where there are no local safety representatives present. Therefore, for the purpose of ensuring a functioning work environment and promoting safety at work, an extension of the rules on regional safety representatives is proposed, ensuring that regional safety representatives will get access to the workplaces that have, or usually have, collective agreements.

Deloitte continues to follow the work on the implementation of the PWD and
will shortly be hosting a breakfast seminar where we will go through the
proposal in more detail and discuss various issues that may arise.
 

* Directive (EU) 2018/957 of The European Parliament and of The Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services

*Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services

Contact us

Johan Mikaelsson
Director, Tax and Legal
jmikaelsson@deloitte.se
+46 70 080 42 43

Martina Ljunge
Senior Manager, Tax and Legal
mljunge@deloitte.se
+46 70 080 21 80

Sharon Lion
Senior Manager, Tax and Legal
shlion@deloitte.se
+46 70 080 21 64

Torbjörn Hagenius
Partner, Tax and Legal
thagenius@deloitte.se
+46 73 397 11 68