The revised Posting of Workers Directive states that the principle of equal pay for the same work position in the same EU Member State applies to the posting of workers throughout the EU.
Up until now, the concept of 'minimum wage' has been used in the text of the directive, but the scope of the concept of 'minimum wage' has been the subject of several decisions of the European Court of Justice. Therefore, the concept of "remuneration" has been introduced into the revised Posting of Workers Directive to ensure that posted employees also receive other mandatory renumeration elements in addition to the minimum wage in the Member State to which they are posted.
The previous provisions in this area also meant that employers posting employees to other EU Member States remained fully subject to the labour law of their own country (the so-called home country principle) and thus, in addition to the obligation to pay the minimum wage, were not bound by employment and labour law obligations in the host country.
This is now being amended so that the employer can only rely on the home country principle to apply for an exemption period of 12 or - in certain circumstances – 18 months. In other words, under the new rules, posted employees will now be subject to all relevant labour and employment law conditions applicable in the host country by law or an universally applicable collective agreement if their posting lasts more than 12 months (the exemption period) or 18 months, if this extension of the exemption period is justified in more detail by the employer. The Directive also contains provisions to prevent employers from strategically circumventing the exemption period by replacing the posted employee with another employee who is to perform the same job.
Since no minimum wage is set in Denmark, and no collective agreements exist in Denmark, which have been declared universally applicable in the sense of the Directive, the consequences of the shift from the concept of "minimum wage" to the concept of "remuneration" are unlikely to lead to a significant change in terms of remuneration when foreign companies post employees to perform work in Denmark. However, foreign companies covered by a Danish collective agreement will be required to pay their posted employees in accordance with the Directive's remuneration requirements.
As a key condition regarding the new minimum rights employers will henceforth be required to reimburse travel, boarding and lodging expenses to employees who are away from home for work purposes, or to pay an equivalent allowance to such employees.
In the field of labour law, on the other hand, foreign employers will experience some changes in the long-term posting of employees to Denmark if the posting has a duration that exceeds the prescribed exemption period of 12/18 months. Upon conclusion of the exemption period, foreign employers will generally be subject to mandatory Danish labour and employment legislation, such as e.g. the Danish Holiday Act [ferieloven].
Each Member State shall, however, in return take the appropriate measures to make the information on the terms and conditions of employment in their country generally available to Employers and the public.
If you have any questions, please do not hesitate to contact the legal experts at NJORD Law Firm at copenhagen@njordlaw.com
