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Third country worker as a posted worker

lahetatud tootajaThe 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 subsection 3 (1) of the Working Conditions of Employees Posted to Estonia Act, a posted worker 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.

Within the meaning of Directive 96/71/EC and the Working Conditions of Employees Posted to Estonia Act, a posted worker may also be an employee from a third country, i.e. from outside the European Union. An undertaking that posts a third-country national must be registered in a European Union Member State, a member of the European Economic Area, or the Swiss Confederation. Posted workers from third countries must have a legal basis upon arrival in Estonia and for a temporary stay in Estonia.

Legal bases for a stay in Estonia are regulated by the Aliens Act. Additional information on the arrival and temporary stay of posted workers in Estonia from third countries can be found on the official website of the Police and Border Guard.

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 posting undertaking (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.
 

There are differences in regards to the road transport sector set forth in the Working Conditions of Employees Posted to Estonia Act. Namely, subsections 2 (11) and (12) of the Working Conditions of Employees Posted to Estonia Act do not apply to the road transport sector, i.e. in the road transport sector, an employee is not posted if the user undertaking posts the temporary employee to Estonia for the performance of their duties. Clauses 5 (1) 3) and 7) of the Working Conditions of Employees Posted to Estonia Act also do not apply to road transportation workers, i.e. workers do not have to be guaranteed overtime work or the compensation of costs accompanying a business trip. In addition, subsections 5 (61–63) and § 53 (duration of the posting and the extension thereof) and subsection 8 (6) of the Working Conditions of Employees Posted to Estonia Act will not be applied in regards to the road transport sector.

 

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 subsection 6 (5) of 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.

 

Obligation to register an employee posted from a third country

Registration with the Police and Border Guard

 

An alien who is legally staying in Estonia temporarily (for example, on the basis of a visa or visa waiver), and whose employment has been registered with the Police and Border Guard Board before starting work, may work in Estonia for a short period of time. Short-term employment can be registered for up to 365 days in a 455-day period.

Additional information on the arrival and temporary stay of posted workers in Estonia from third countries can be found on the official website of the Police and Border Guard.

Registration with the Labour Inspectorate

 

Pursuant to § 5¹ of the Working Conditions of Employees Posted to Estonia Act, employees posted to Estonia must be registered with the Labour Inspectorate. The employer of a posted worker must register the employees being posted to Estonia prior to the employee actually starting work in Estonia by sending the necessary data via e-mail in a form that can be reproduced in writing to the Labour Inspectorate, to the address posting@ti.ee. In the event of a change in the information, a corresponding notice must be submitted to the Labour Inspectorate at the same e-mail address before the change enters into force.

The following data must be submitted to the Labour Inspectorate:

  1. the name, personal identification code or registry code, area of activity, and details of the residence or location and means of communication of the employer of the posted worker;
  2. the name and details of communication of the contact person representing the employer of the posted worker;
  3. the number of posted workers, their names, personal identification codes or dates of birth, and numbers of identity documents;
  4. the expected duration of the posting and the scheduled start date and end date;
  5. the name, personal identification code or registry code, area of activity, and details of the residence or location and means of communication of the contracting entity or contracting authority and/or person for whom the posted employee works in Estonia;
  6. the name, personal identification or registry code, field of activity, residence or seat and means of communication of the contact person for the contracting authority and/or person for whom the posted employee works in Estonia;
  7. information regarding in which area of activity the posted employee will be working in Estonia, and the address of the place of performance of work of the posted worker.

Registration Form (DOCX)

In the event of failure to comply with the requirement to register employees that have been posted to Estonia, the Labour Inspectorate has the right to assign a penalty of up to 300 fine units to a natural person and up to € 32,000 pursuant to § 93 of the Working Conditions of Employees Posted to Estonia Act.

Pursuant to subsection 51 (6) of the Working Conditions of Employees Posted to Estonia Act, the Labour Inspectorate has the right to disclose personal data submitted to the Labour Inspectorate to ensure the performance of tasks assigned to the Tax and Customs Board by tax laws.

Example

If an employee from Ukraine is working for a Polish employer under the basis of a residence permit or visa, and the Polish employer posts this employee to Estonia to provide services, then the Polish employer must register the short-term employment of the employee hailing from Ukraine with the Estonian Police and Border Guard Board and submit information on to posting of the employee the Labour Inspectorate.

 

Submission of documents necessary for the performance of state or administrative supervision

At the request of the Labour Inspectorate, the employer of a posted worker is required to immediately submit to the Labour Inspectorate the documents necessary for the performance of state or administrative supervision.

The documents in question may be

  • an employment contract,
  • A certificate (so-called A1 certificate) issued on the basis of Article 19 (2) of Regulation (EC) No. 987/2009 of the European Parliament and of the Council laying down the procedure for implementing Regulation (EC) No 883/2004 on the coordination of social security systems (OJ L 284, 30.10.2009, pp.1–42).
  • working schedule,
  • extract regarding the payment of wages, or
  • any other document that can be used to prove compliance with the terms and conditions of employment applicable to the posted worker.

The Labour Inspectorate has the right to request documents for a period of three years after the end of the employee’s posting period (subsection 51 (5) of the Working Conditions of Employees Posted to Estonia Act). The employer of a posted worker is required to submit to the Labour Inspectorate, at the request of the Labour Inspectorate, the documents necessary for the performance of state or administrative supervision. If the employer fails to submit the required information or documents concerning the employees posted to Estonia, the Labour Inspectorate has the right to issue a precept and, in the event of non-compliance, to impose a penalty payment on the employer.