The recent surge in transnational posting of workers and international remote working practices, arising from increasing employee mobility and expanded use of technologies that facilitate any kind of work, give special significance to the recent amendment of Spanish Law 45/1999 of November 29, on posting of workers for transnational provision of services. This is especially true in the context of the current pandemic and the increasing sensitivity of companies towards socially sustainable policies.
This amendment went into effect on April 28, 2021, when Spanish Royal Decree-Law 7/2021, which transposes EU Directives on several matters, was published in the Official Gazette of the Spanish State (BOE).
Transposing Directive (EU) 2018/957 of the European Parliament and of the Council of June 28, 2018, amending Directive 96/71/EC, on posting workers in the framework of the provision of services, was urgent for two reasons.
First, as the Spanish government acknowledges in the preamble to the above Spanish law, such transposing was required by July 30, 2020, but Spain failed to meet that deadline. This caused the European Commission to start sanctioning proceedings that “can be expected (…) to result in economic penalties.” Second, it is necessary to prevent unfair competition and social dumping against Spanish companies and workers (unlawful cost-cutting practices, where companies hire workers in countries with less stringent labor laws than those of the country where the services will be provided, in the context of a temporary posting). There is also a need to improve the living and working conditions of employees posted to Spain, especially in some of the industries most severely affected by the spread of COVID-19 such as agriculture and food processing.
It must be emphasized that Directive 96/71/EC (known as the posting Directive) is a critically important regulation of European labor law, because its purpose is to regulate employment conditions of posted workers, i.e., those sent by their employer to provide services for a limited period of time in a different EU Member State.
Directive (EU) 2018/957, which we reviewed in this blog when it was first published (link), was recently incorporated into the Spanish legal system through Title VI of Spanish Royal Decree-Law 7/2021, amending Spanish Law 45/1999, among others.
Given this situation, the main changes produced by Spain’s transposition of Directive (EU) 2018/957 and their entering into force on April 29, 2021 can be summarized as follows:
- New regulation of the consequences of so-called “chain” posting of workers by temporary employment agencies (ETTs) on behalf of client companies in the same country, in another Member State of the European Union or in the European Economic Area to temporary work in Spain.
- The change makes most of Spain’s employment law applicable to postings with effective duration of over 12 months (or 18 months in case a justified notice of extension is submitted). In these cases, a worker posted to Spain will be protected by the rest of the country’s applicable laws, except those involving the formalities of entering and terminating employment contracts (including post-contractual non-compete clauses) and those governing supplementary retirement systems.
- Although up until now workers posted in Spain were covered by a series of minimum employment conditions under Spanish law (e.g., working hours, salary, equal treatment and non-discrimination or occupational risk prevention), that protection is now enhanced by additional safeguards. These include new rules on housing conditions, per diems, and reimbursement of expenses for travel, lodging and meals for workers who are required to travel for professional purposes during their posting in Spain.
- With regard to salary levels in Spain, it is expressly stated that, unless otherwise agreed, additional amounts paid for travel must reimburse the actual travel expenses incurred rather than being part of the salary. This means that, unless the parties specifically agree that those payments are part of the salary, they must be treated as non-salary items, and the company must pay those amounts in addition to the minimum salary established under Spanish law.
- There is also a new section that protects posted workers, even if they are not considered so by their employer. It expressly states that those workers will be entitled to apply Spanish laws and regulations, and this will not affect any of the company’s other obligations or liabilities.
There is another new LISO section identifying certain acts committed by temporary employment agencies and their Spanish client companies as minor, serious and very serious infringements. It also states that, in cases where certain acts are repeated, companies will face the possibility of a temporary or indefinite ban on posting of workers in Spain.
- Finally, cooperation with government bodies from other Member States is enhanced to allow Spanish authorities to collaborate with their counterparts in other countries with regard to posting workers in the context of transnational provision of services. Also, Spain’s Employment and Social Security Inspectorate is given authority to initiate inspections on temporary postings of workers at Spanish companies.
Despite the changes summarized here, there can be no doubt that even more substantial changes will be coming with regard to Spanish and international labor laws and regulations on posting workers. We will continue to report on these.