CWS 3.0: July 13, 2011 - Vol. 3.16

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Behind the News: Other EU Directives

So much attention has been focused on the Agency Workers Directive, which comes into effect throughout the European Union this December, that it's easy to overlook other pending EU Directives that affect the use of contingent labor. One is the Sanctions Directive, which is designed to combat illegal immigration. Passed by the European Union in 2009, its implementation date -- July 20 -- looms large.

The Sanctions Directive establishes minimum standards on sanctions and measures against employers of illegally staying third-country nationals (TCN) -- i.e. from outside the European Union. Traditionally, the legal focus has been on the illegal workers themselves, but the Directive shifts that focus to employers, including buyers of temporary staffing services. To view the Directive in full, click here

The Directive introduces the following obligations for companies operating in the EU:
* To require that the TCN presents a valid resident permit or similar authorization for his/her stay;
* To keep for at least the duration of the employment a copy or record of the valid residence permit or similar authorization for stay; and
* To notify the competent authorities of the Member State of the start of the TCN employment, within a period defined by each Member State.

Further, the Directive requires Member States to carry out effective and adequate inspections based on regular risk assessments to control the employment of illegally staying non-EU nationals. The sanctions for those employers found to be in breach of the rules may include the following:

* Financial penalties that increase based on the number of illegal workers involved
* Back payment of outstanding remuneration for the worker based at least on the minimum wages of comparable worker plus presumption of employment of at least 3 months
* The costs of returning the worker to their home country
* Further possible sanctions include exclusion from benefits, aid, subsidies or public contracts (up to 5 years)
* Temporary or permanent closure of business
* Criminal offense in serious cases

Clearly, transgressions can be financially costly as well as harmful to a company’s reputation. So what have member states been doing to ensure they comply with the Sanctions Directive?

* France passed a bill introducing three EU Directives, including this one, in May, and in June it was approved by the Constitutional Council. (Projet de loi relatif à l’immigration, à l’intégration et à la nationalité)

* Germany is currently going through a similar process of implementation, with a bill, once passed, subject to consultation with experts of the Interior Committee. The pending legislation actually has stricter documentation obligations than those laid out in the Sanctions Directive.

* The Netherlands has legislation currently going through its First Chamber.

* The United Kingdom, Ireland and Denmark all have opted out. The UK government cited the back-payments provision, saying it essentially guarantees rights of illegally staying workers, “which would be difficult to administer and would send the wrong message by rewarding breaches of immigration legislation.”

*Other governments have been slower to act. While it’s not unusual for some countries to be slow in meeting EU deadlines, they do normally get around to complying eventually.

In light of this, buyers of staffing services in Europe will want to ensure that their staffing suppliers and/or MSP will be undertaking the right processes to minimise risk to their companies. In the event that a temporary worker is found to be working illegally on your premises, evidence that you took action to prevent it will be looked on favourably by regulators, even if it ultimately fails. Reviewing the contracts with your suppliers would be a good place to start.

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