Posting of an employee abroad

A posted employee is an employee who, for a limited period, performs work in the territory of an EU Member State other than the State in which they normally work. This implies that while the employee has an agreed place of work in one EU Member State under their employment contract, they will temporarily perform work in another EU Member State for a specified period. Consequently, employees whose employment contracts stipulate a place of work within the territory of the Slovak Republic are temporarily posted by their employer to perform work in an EU Member State.

As follows from the case law of the Court of Justice of the European Union, third-country nationals legally employed with a place of work in the Slovak Republic (within the EU) may be posted by their employer to another EU Member State in the framework of the provision of services without being subject to administrative restrictions in that host State, such as the obligation to hold a work permit in the State to which they are posted (C-43/93 (Elst) of August 9, 1994; C-44/03 (Commission v Luxembourg) of October 21, 2004; C-244/04 (Commission v Germany) of January 19, 2006).

Temporary posting is regulated by Act No. 311/2001 Coll., the Labour Code, as amended (hereinafter referred to as the “Labour Code”), and Act No. 351/2015 Coll. on Cross-Border Cooperation in the Posting of Employees for the Provision of Services and on Amendments to Certain Acts (hereinafter referred to as the “Act on Cross-Border Cooperation”).

Pursuant to Section 5(4) of the Labour Code, the posting of an employee for the provision of services shall mean their cross-border:

Thus, three models of cross-border posting come into consideration—posting under a specific commercial contract (e.g., a contract for work), intra-group posting, and temporary placement.

Where a Slovak employer, acting as a temporary employment agency (TEA), is to assign its employees pursuant to Section 5(4)(c), it must hold a permit to operate as a temporary employment agency in the territory of the Slovak Republic and also verify whether a permit to operate as a TEA is required in the Member State to which the employees are to be posted.

In this context, we wish to highlight a certain contradiction between the legal regulation of temporary placement under the Act on Employment Services and that under the Act on Cross-Border Cooperation. While the Act on Employment Services precludes the temporary placement of a third-country national, cross-border temporary placement under the Act on Cross-Border Cooperation constitutes one of the forms of temporary posting, which the legislation permits to be applied to third-country nationals as well—provided, of course, that all conditions for the employment of a foreign national in the territory of the Slovak Republic are satisfied and the employer has fulfilled all obligations imposed on it by the legal order regarding the temporary posting of employees.

We would also draw attention to scholarly legal literature (Olšovská, A. et al.: Agency Employment [Agentúrne zamestnávanie]. Wolters Kluwer. 2015): “The operating permit is not defined in relation to temporary placement and posting on an ‘either/or’ basis, i.e., both forms may be performed in parallel. At the same time, the operating permit specifies the region in which the TEA will operate. A TEA should always also carry out temporary placements in the SR, because if it were focused solely on posting employees, it could attract the scrutiny of foreign authorities as to whether it is an entity that is ‘genuinely established’ in the SR, i.e., whether the purpose of establishing such TEA is not to circumvent the labour law and other regulations of the host State. … As far as a foreign element (in this case, performance of work in another State) and the determination of governing law are concerned, this occurs during posting, wherein cross-border temporary placement with a user employer in another State also raises the question of determining the governing law, i.e., the law that will govern the employee’s employment relationship in whole or in part… Certain States may require the establishment of a branch office or the acquisition of a license if a TEA posts employees to a user employer abroad.”

If a Slovak temporary employment agency (TEA) intends to post employees to an employer headquartered in Austria (assign employees to Austria), it is required to register with the relevant authority in Austria (the Federal Ministry for Digital and Economic Affairs).

When registering the cross-border provision of services, the documentation submitted includes, in particular, the decision granting the permit for temporary agency employment in Slovakia, as well as an extract from the Slovak Commercial Register.

We would be pleased to assist you with the registration process for your TEA in Austria through our Slovak-speaking partner attorney based in Vienna. Please contact us at +421 915 046 749 or by email at recepcia@akmv.sk.

Similarly, if a Slovak TEA intends to assign employees to an employer in Germany, it is required to obtain an Arbeitnehmerüberlassungserlaubnis / AÜ-Erlaubnis (temporary employment permit). We would be pleased to assist you in obtaining this permit through our Slovak-speaking partner attorney. Please contact us at +421 915 046 749 or by email at office@akmv.sk.

A Slovak employer may post its employee, whose place of work is within the territory of the Slovak Republic, to perform work within the framework of the provision of services from the territory of the Slovak Republic to the territory of another Member State of the European Union on the basis of a written cross-border posting agreement – thus, the employee must consent to the cross-border posting. Such agreement must contain, in particular:

In the case of a cross-border temporary placement, the cross-border posting agreement must also contain the essential elements of a temporary placement agreement pursuant to the Labour Code.

Subsequently, well in advance of the commencement of the posting, an application must be submitted for the issuance of Portable Document A1 by reason of posting. The PD A1 “Certificate concerning the social security legislation which applies to the holder” shall be issued by the relevant branch of the Social Insurance Agency within a period of 45 days from the date of receipt of the application, provided that all conditions of posting have been satisfied by the posting employer, and transmitted to the posting employer. The posting employer shall deliver the original PD A1 to the posted employee, who shall present it during the posting in the event of inspections conducted in the field of social security.

The working conditions and terms of employment of a domestic employee shall be governed by the law of the State to whose territory the domestic employee is posted. Prior to the posting, the domestic employer is obliged to inform the domestic employee of the working conditions and terms of employment, being required to notify the information regarding working hours and holiday entitlement in writing.

In relation to the working conditions of posted employees, the so-called ‘hard core’ terms and conditions of employment of the State of temporary performance of work must be respected, which include the duration of working time and rest periods, holiday duration, minimum wage, minimum wage entitlements and wage supplements for overtime work, health and safety at work, working conditions of women, adolescents, and employees caring for a child under three years of age, equal treatment of men and women and prohibition of discrimination, as well as working conditions applicable to employment through a temporary employment agency. However, this shall not prevent the application of terms and conditions of employment that are more favorable to employees, provided that the favorability is assessed independently for each employment law entitlement.

Additional obligations in the context of cross-border posting of Slovak employees may be established by the legal order of the State to which the employees are to be posted. Therefore, it is essential to verify the scope of obligations under that legal order as well.

Determining whether a specific instance constitutes a temporary posting is often complicated in practice and relies on an assessment of the specific factual circumstances of each individual case, taking into account the interrelation of individual facts and the specificities of the situation. The legal framework does not establish an exhaustive list of criteria for the identification of temporary posting.

The factors to be assessed include the habitual place of work, the time of the employee’s return upon completion of the temporary posting, the provision of reimbursement for travel expenses, prior periods during which a particular post was repeatedly occupied, and the existence of a commercial contract between the posting employer and the employer to whom the employee is posted.

In assessing whether the Slovak Republic constitutes the habitual place of work of posted foreign nationals, consideration shall be given to facts such as whether the employee performs work abroad for a limited period, the location where the employee habitually works, the commencement date of the posting, whether the employee returns to the territory of the Slovak Republic upon completion of the posting, the nature of the activities performed, whether and in what manner the employer provides the employee with reimbursement of travel, board, and lodging expenses, and prior periods during which the post was repeatedly occupied by the same or another employee.

The essence of identifying a posting is to assess whether the posted employee temporarily performs their work in a Member State other than the Member State in which they habitually work. Thus, it involves an assessment of whether the employee is genuinely posted from the Member State in which they habitually work (or from which they habitually work), or whether, conversely, it constitutes, for example, a fictitious posting from a State in which the employee does not habitually work to a State in which the employee habitually works.

If, in light of the specific circumstances, it appears that the foreign national was not posted from the State in which they habitually work, such foreign national would be excluded from the temporary posting regime, which, in the case of a third-country national, could lead to illegal employment and unauthorized residence within the territory of the EU.

Pursuant to Section 5(2) of the Labour Code, effective as of 30 July 2020, “Employment relationships of employees posted to perform work within the framework of the provision of services by a host employer from the territory of another Member State of the European Union or a State which is a contracting party to the Agreement on the European Economic Area (hereinafter referred to as ‘another Member State of the European Union’) to the territory of the Slovak Republic shall be governed by this Act, special regulations, or the relevant collective agreement, which govern:

Paragraph 3 distinguishes between a posting exceeding 12 months (where Slovak labour law applies only to the limited extent of the ‘hard core’) and a posting exceeding 18 months (where the entirety of Slovak labour law is to apply, with the exception of the rules governing the establishment, commencement, termination, and expiration of employment, the prohibition of other gainful activity during the term of employment, and the non-compete clause): “Employment relationships of employees posted to perform work within the framework of the provision of services by a host employer from the territory of another Member State of the European Union to the territory of the Slovak Republic, where the duration of their posting has exceeded 12 months, or, where the host employer has submitted a reasoned notification for an extension of this period to the National Labour Inspectorate prior to its expiry, has exceeded 18 months, shall be governed by this Act, special regulations, or the relevant collective agreement; this shall not apply to the establishment, commencement, termination, and expiration of an employment relationship, the performance of other gainful activity, and post-employment non-compete restrictions. If a host employee replaces another host employee performing the same task at the same place, the duration of the posting of the replaced host employee shall also be included in the duration of the posting for the purposes of the first sentence; the performance of the same task at the same place shall be assessed having regard to the nature of the activities performed, the place of their performance, and the nature of the service provided.”

Section 58(6) of the Labour Code stipulates that “A temporary placement may be agreed for a maximum period of 24 months.” Since a posting pursuant to Section 5(6) of the Labour Code also includes a (cross-border) temporary placement (for more details see: Definition of a temporary employment agency, the concepts of posting and temporary placement), the question arose as to whether the said restriction also applies to a temporary placement carried out by way of posting. Regarding this question, the following opinions have been provided to us:

Directive 96/71/EC on the posting of workers provides, in Article 3(1)(d), for the obligation of Member States to ensure that temporary employment agencies providing their services from another Member State observe the same rules and limitations on temporary placement—namely, in particular, which employees may be temporarily placed, to which posts, in what numbers, and for what duration.

The Slovak Labour Code regulates cross-border temporary placement as one of the forms of posting under Section 5(4)(c). The amendment to the Labour Code incorporates into the ‘hard core’ the requirement of Directive (EU) 2018/957, pursuant to which the hard core includes the conditions under which an employee may be temporarily placed (compliance with the maximum period of temporary placement, prohibition of temporary placement for category four high-risk work), working conditions including remuneration conditions, and terms of employment of a temporarily placed employee, in the case of a posting by a foreign temporary employment agency to a user undertaking in the territory of the Slovak Republic. However, in the case of a cross-border temporary placement of an employee to a user undertaking established in the Slovak Republic, those provisions of the Labour Code which deem an entity other than the one having an employment relationship with the employee to be the employer shall not apply; nor shall the statutory mechanism for the termination of the employment relationship with the temporary employment agency and the creation of an indefinite-duration employment relationship between the employee and the user undertaking apply where the employee is placed in breach of the maximum period of temporary placement, or where their temporary placement is extended or re-agreed more than four times within a 24-month period.

A domestic employer may execute a cross-border temporary placement of an employee provided that the rules set forth in Section 58 et seq. of the Labour Code are concurrently complied with. We take the view that if a domestic employer breaches the Slovak provisions restricting the duration of temporary placement in general, such breach does not give rise to the statutory legal fiction of termination of the employment relationship under Section 58(7) of the Labour Code (this provision shall be explicitly amended with effect from 30 July 2020). Furthermore, when determining the duration of a cross-border placement, the domestic employer must also take into account the limitations arising from the legislation of the host State to which it temporarily places its employees. In the event of a breach of these provisions, it faces the risk of sanctions being imposed by the host State.” (Source: National Labour Inspectorate)

Terms and conditions of employment shall be governed by:

A domestic employee may be posted only on the basis of a written agreement on temporary placement, which shall contain at least the following information:

In the case of a posting that constitutes a cross-border temporary agency placement of an employee to a user employer, the aforementioned requirements must also be contained in the agreement on temporary placement. An overview of working conditions in EU Member States can also be found on this webpage, as well as here.

Directive 96/71/EC of the European Parliament and of the Council concerning the posting of workers in the framework of the provision of services requires mutual cooperation and the sharing of necessary information among the individual Member States. For this purpose, national liaison offices and bodies responsible for monitoring the terms and conditions of employment during posting have been established in all EU Member States. These liaison offices were established as contact points both for the competent state authorities of the respective EU Member States and for posting employers.

If a Slovak employer posts an employee to work abroad, the working conditions and terms and conditions of employment shall be governed by the law of the state to whose territory the domestic employee is posted. Slovak legal regulations and the provisions of Section 58(6) of Act No. 311/2001 Coll., the Labour Code, as amended, cannot be applied within the territory of Austria.

Slovak to English Translation

Slovak legal regulations may be applied in this case solely in the matter of social security. In order for an employer to utilize the mechanism of posting and for Portable Document A1 (PD A1) to be issued to the posted employee, the employer must satisfy certain conditions pursuant to European and Slovak legislation. (Source: Labour Inspectorate Prešov)

“Act No. 307/2019 Coll., amending Act No. 311/2001 Coll., the Labour Code, as amended (hereinafter referred to as the ‘Amendment’), with effect from July 30, 2020, transposed Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services. Among other things, the Amendment limited the duration of worker posting and distinguished between so-called ‘short-term posting’ (up to 12 or 18 months), to which Slovak labour law applies only to the limited extent of the hard core, and so-called ‘long-term posting” (exceeding 12 or 18 months), to which the entirety of Slovak labour law is to apply, with the exception of the rules on the establishment, creation, termination, and dissolution of an employment relationship, the prohibition of engaging in other gainful activity during the employment relationship, and non-compete restrictions.”

Rules for calculating the duration of a posting were also established in relation to the so-called replacement of posted workers (where a posted employee is replaced at the same place and performing the same type of work by another posted employee). The aforementioned legal regulation applies to employees posted to perform work in the provision of services by a host employer from the territory of another Member State of the European Union to the territory of the Slovak Republic.

Transnational posting of workers is part of the freedom to provide services pursuant to Article 56 of the Treaty on the Functioning of the European Union. The objective of the Directive concerning the posting of workers in the framework of the provision of services is to ensure that posted workers are guaranteed essential terms and conditions of employment (the so-called hard core terms and conditions of employment) in the EU Member State (host Member State) where the work is carried out. The employee and the posting employer may also agree, based on the principle of favorability, which law shall govern the relevant employment relationship beyond the scope of the so-called hard core terms and conditions of employment. Regulation (EC) No 593/2008 of the European Parliament and of the Council on the law applicable to contractual obligations (Rome I) expresses in its provisions a limitation on the free choice of law. For instance, Article 8(1) provides that a choice of law may not have the result of depriving the employee of the protection afforded to him by provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable.

In the case you have specified, this involves a domestic employer established in the Slovak Republic posting employees to perform work in the provision of services to another EU Member State. For this reason, we recommend that you contact the liaison bodies in Austria for specific information regarding posting to Austria (i.e., the limitation on the duration of posting to the territory of Austria). Liaison bodies in Austria for the posting of workers can be found on the website of the National Labour Inspectorate Košice.

“In this connection, however, we note that Directive (EU) 2018/957 does not limit the maximum duration of a posting to a specific time frame, but merely categorizes posting—for the purposes of the applicable legal order—into short-term and long-term posting.” (Source: Ministry of Labour, Social Affairs and Family)