The definition of a posted worker is regulated by Directive 96/71/EC of the European Parliament and of the Council regarding the posting of employees in connection with the provision of a service (Directive 96/71/EC). For the purposes of Directive 96/71/EC, a posted worker is a worker who, for a limited period, is posted by their employer to another EU Member State to provide a service within the framework of the company’s business activity or as a temporary agency worker or as a temporary employee by an employment agency.
Pursuant to section 3 subsection 1 of the Working Conditions of Employees Posted to Estonia Act (WCEPEA), an employee posted to Estonia is a natural person who normally works in a Member State of the European Union, a Member State of the European Economic Area, or the Swiss Confederation on the basis of an employment contract, and whom the employer posts to work in Estonia for a specified period of time for the provision of a service.
We can talk about posted workers if:
1) The undertaking posts the employee to the territory of the Member State on its behalf and under its direction on the basis of a contract concluded between the posting undertaking and the contracting authority operating in Estonia. Under this provision, for example, skilled workers, craftsmen, and other professionals are often posted.
Example: An Estonian undertaking orders the performance of construction works in the Republic of Estonia from a Polish undertaking. In order to provide the service, the Polish company sends its employees to Estonia to fulfil the order. The Polish employer is responsible for fulfilling the order and instructing its employees, while the Estonian company as the contracting authority is responsible for fulfilling the requirements for the working environment in Estonia.
2) The undertaking shall post the employee to an establishment or undertaking belonging to the group and situated in the territory of a Member State. Under this provision, for example, sectoral managers, specialists, and skilled workers are often posted.
Example: An Estonian employee is sent from a parent company operating in Estonia to a subsidiary in Finland to perform work duties. The work of the Estonian employee is organised by the undertaking in Finland. The Finnish company is also responsible for meeting the requirements for the working environment while the Estonian employee is working in Finland.
3) A temporary employment agency shall recruit an employee to an undertaking located or operating within the territory of a Member State. This is temporary agency work, where a tripartite employment relationship arises between the temporary employer, the temporary employee, and the user undertaking. This type of posting primarily involves work in the construction, agricultural, service, or catering sectors.
Example: A Lithuanian employee, through a temporary employment agency operating in Latvia, is sent to work at a user undertaking in Norway. A service contract has been concluded between the Latvian and Norwegian companies for the placement of labour. The employment contract is concluded between the Lithuanian employee and the Latvian temporary employment agency under Norwegian law, and the tasks are performed and their performance is controlled by the Norwegian company, which is also responsible for the Lithuanian’s work environment and safety. In such situations, the Latvian as well as the Norwegian company may be the payer of wages. However, in the event of a delay in the payment of wages, the employee must turn to the employer in Latvia because, in the case of a claim for payment of wages, only the actual employer is liable before the employee and not the third party (Norwegian company) for whom the work is performed.
4) A user undertaking posts a temporary employee to an undertaking located or operating in the territory of a Member State. The employee must be posted to a branch of the user undertaking or to a company belonging to the same group to perform the contract concluded between the user undertaking and the contracting authority providing the service in Estonia, or the user undertaking itself must be, for example, a temporary employment agency. A user undertaking that posts an employee to another Member State is, in that case, required to provide advance notification to the employer regarding the posting within a reasonable period of time.
Example: A Polish temporary employment agency hires the employee to a Latvian user undertaking, which in turn posts the employee to Estonia to provide the service. The employer is responsible for the employee’s working conditions, i.e. the Polish temporary employment agency must comply with the requirements set forth in the Working Conditions of Employees Posted to Estonia Act while the employee is working in Estonia.
In all cases, an employment contract must be concluded between the employer and the employee by the time of the posting, and this employment relationship must be maintained for the duration of the posting. If, during their stay in the host country, the employee’s employment contract with the employer ends and they conclude an employment contract with an undertaking in the host country, they will no longer be a posted worker.
Remember that an employee is a posted worker if:
- The place of employment is the territory of a Member State other than that in which the employee normally works.
- The work is of a temporary nature, i.e. the employee is not permanently moving to live in another country.
- The employee has a specific host in another country, i.e. a recipient of services, a parent or subsidiary belonging to the group or, in the case of temporary agency work, a user undertaking.
The difference between an employee on a business trip and a posted worker
A posted worker is distinguished from an employee on a business trip in particular by the fact that the posted worker always has a specific host i.e. a recipient of the service - a parent or subsidiary belonging to the group or, in case of temporary agency work, a user undertaking. Thus, in the host country the posted worker has a company which organises his or her work or working environment. Within the meaning of Estonia, when going on a business trip, for example to participate in a trade fair there is no one receiving the employee in the destination country.
Temporary agency work
Temporary agency work is a tripartite employment relationship. While two parties participate in a classic employment relationship – the employee and the employer – then in the case of temporary agency work, the user undertaking also participates in the employment relationship as a third party. In the case of temporary agency work relationships, the employer, i.e. the temporary employment agency, enters into an employment contract with the temporary agency worker, on the basis of which they temporarily send the temporary agency worker to work under the direction and supervision of a third party, i.e. a user undertaking. Pursuant to the Employment Contracts Act, a user undertaking is a third party under whose instructions and supervision the employee temporarily works.
The temporary employment agency and the user undertaking enter into a contract under the law of obligations, which regulates cooperation between the two.
For an employee, participating in a tripartite relationship means, first and foremost, understanding who is legally responsible and for what, and which company they should turn to if problems arise. The employee cannot forget that their employer while working for the user undertaking will be a temporary employment agency, i.e. it is this company’s obligation to provide the employee with work and to pay them wages. The only thing that can be demanded from a user undertaking is a suitable working environment. If a user undertaking from a foreign state posts an employee to a company located or operating within the territory of Estonia, then the employer, i.e. the temporary employment agency, is responsible for the performance of the requirements set forth in the Working Conditions of Employees Posted to Estonia Act.