ECJ Ruling Expands Cross-Border Work Options for Third-Country National Workers
November 6, 2014
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Foreign nationals working in one EU member country may be hired out by staffing agencies or similar companies to a company in another EU member country to provide services to a third EU entity without requiring a new work permit, according to a recent European Court of Justice (ECJ) ruling.
Prior to this decision, foreign nationals employed in one EU member country would require a new work permit to provide services in a different EU state unless they did so directly on behalf of their employer to a branch or client of their employer in a second EU country, based on the EU’s Freedom to Provide Services principle.
ECJ Case Facts and Holding
In the case that generated this ruling, a Dutch company engaged a second Dutch company for construction work in the Netherlands. The second Dutch company contracted with a staffing agency in Germany to provide workers for the construction project. The workers had German, but not Dutch, work permits. The second Dutch company was fined for hiring foreign workers without Dutch work permits, which is a labor law violation in the Netherlands.
The ECJ ruled that the local work permit requirement for foreign workers unjustifiably restricted the freedom to provide services. The Court determined that less-restrictive enforcement measures suffice under the law, such as requiring government notification of the foreign workers’ presence and the duration of their work activities.
What This Means for Employers and Foreign Nationals
While employers in the EU may no longer have to obtain new local work permits when their employees are hired by staffing agencies to work in other EU countries, case-by-case analysis will be required to confirm eligibility, and whether minimum wage or other requirements apply.
The full implications of the ECJ’s ruling across all EU member states is unknown at this time. We will provide additional updates when new information becomes available.
This alert is for informational purposes only. If you have any questions, please do not hesitate to contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
© 2009 - 2015 © Fragomen, Del Rey, Bernsen & Loewy, LLP, Fragomen Global LLP and affiliates. All Rights Reserved.
Prior to this decision, foreign nationals employed in one EU member country would require a new work permit to provide services in a different EU state unless they did so directly on behalf of their employer to a branch or client of their employer in a second EU country, based on the EU’s Freedom to Provide Services principle.
ECJ Case Facts and Holding
In the case that generated this ruling, a Dutch company engaged a second Dutch company for construction work in the Netherlands. The second Dutch company contracted with a staffing agency in Germany to provide workers for the construction project. The workers had German, but not Dutch, work permits. The second Dutch company was fined for hiring foreign workers without Dutch work permits, which is a labor law violation in the Netherlands.
The ECJ ruled that the local work permit requirement for foreign workers unjustifiably restricted the freedom to provide services. The Court determined that less-restrictive enforcement measures suffice under the law, such as requiring government notification of the foreign workers’ presence and the duration of their work activities.
What This Means for Employers and Foreign Nationals
While employers in the EU may no longer have to obtain new local work permits when their employees are hired by staffing agencies to work in other EU countries, case-by-case analysis will be required to confirm eligibility, and whether minimum wage or other requirements apply.
The full implications of the ECJ’s ruling across all EU member states is unknown at this time. We will provide additional updates when new information becomes available.
This alert is for informational purposes only. If you have any questions, please do not hesitate to contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
© 2009 - 2015 © Fragomen, Del Rey, Bernsen & Loewy, LLP, Fragomen Global LLP and affiliates. All Rights Reserved.
