In 2014, the European Parliament and the Council adopted Directive 2014/67/EU (the “Directive”) on the enforcement of Directive 96/71/EC concerning the posting of employees in the framework of the provision of services and amending Regulation No. 1024/2012 on administrative cooperation through the Internal Market Information System.
Even though European legislation in the field of posting is not new, as it was first adopted back in 1996, the Directive aims to improve the conditions for the cross-border posting of employees by establishing a common set of appropriate provisions, measures, and control mechanisms necessary to ensure a better and more uniform implementation, application, and enforcement of rules concerning the posting of employees.
All Member States were obliged to implement the Directive by June 18, 2016. The Slovak Republic did so by adopting Act No. 351/2015 Coll. On Cross-Border Cooperation in Posting Employees for Work Performance in Framework of Provision of Services (the “Act”), which came into effect on the final day for implementation of the Directive.
As is clear from its title, the Act governs cooperation between Member States in the exchange of information and investigation of facts related to the posting of employees and serving of documents and decisions on imposing fines. It is worth mentioning that fines imposed on an employer in relation to the posting of employees in another Member State can be enforced by the authorities of the employer’s home Member State.
The Act brings with it new obligations, burdening especially those foreign employers which post employees to the Slovak Republic (i.e., host employers). For example, such employers are obliged to inform the Slovak National Labor Inspectorate prior to the posting (i.e., to provide information related to the posted employees) and to maintain documents related to the posted employees throughout the posting period.
The Slovak inspectorates will be able to follow the cross-border posting of employees more easily thanks to the indicative criteria stipulated by the Act (e.g., according to the place of the employer’s registered seat or the usual workplace of the posted employee). Once the cross-border posting is identified, the inspectorates can subsequently examine the fulfillment of the duties and compliance with the rules of the posting.
The Act also significantly amended other Slovak labor law legislation, including the Labor Code (Act No. 311/2001 Coll.) and the Act on Illegal Work and Illegal Employment (Act No. 82/2005 Coll.).
As regards the Labor Code, its brief provisions in the area of the posting of employees were extended by new definitions of the posting of employees, posting employer, and posted employee. The Labor Code introduced the joint liability of a Slovak service provider for the payment of wages to a host employee, if
it is not paid by the host employee’s employer, who is in the position of subcontractor of the service provider. Also, Slovak employers are obliged to inform their employees about working conditions in the country where they will be posted and to conclude a written agreement with them on the posting with all legal essentials.
The Act on Illegal Work and Illegal Employment introduces a ban on an entrepreneur client receiving work or services from a contractor performed by a person who is illegally employed by the contractor. This applies to the cross-border provision of services exceeding 5 days in a 12-month period, or to any work – whether cross-border or not – performed by temporarily assigned workers, without a time limit. For a breach of the ban, a fine of up to EUR 200,000 may be imposed on the client, regardless of whether it knew about the illegal employment.
The Act also influences commercial relations – as the client should introduce a mechanism for verifying that all work (service) providers have valid employment contracts and are part of the social security system – and introduces a mechanism of indemnification in case the contractor violates the prohibition of illegal employment.
To conclude, due to new EU legislation, the conditions for posting employees within the European Union have significantly changed, affecting the Slovak Republic. These changes will have, in our opinion, a substantial impact on the cross-border provision of services throughout the European Union, not only from a labor-law perspective but also from a commercial point of view.
