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New obligations when posting employees to Spain
05/07/2021
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Iberia
Authors
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Álvaro Fernández
Álvaro Fernández is a senior associate specialising in international labour law, compliance, and internal investigations at Cuatrecasas
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Iván Preciado
Iván Preciado is an associate advising on all areas of labour law, including social security and occupational health and safety, at Cuatrecasa

The surge in global mobility and international remote working practices give special significance to recent changes in Spanish law covering the transnational posting of workers for the provision of services. This is especially true in the context of the pandemic and the increasing sensitivity of companies towards socially sustainable policies.

The amendment of Spanish Law 45/1999 went into effect on 28 April 2021, when Spanish Royal DecreeLaw 7/2021, which transposes EU Directives on several matters, was published in the Official Gazette of the Spanish State.

Transposing Directive (EU) 2018/957 of the European Parliament and of the Council of June 28, 2018, amending Directive 96/71/EC, on posting workers in the framework of the provision of services, was urgent for two reasons.

First, as the Spanish government acknowledges in its preamble, such transposing was required by 30 July  2020, but Spain failed to meet that deadline. This caused the European Commission to start sanctioning proceedings that “can be expected (…) to result in economic penalties”.

Second, it was necessary to prevent unfair competition and social dumping against Spanish companies and workers, such as unlawful cost-cutting practices, where, in the context of a temporary posting, companies hire workers in countries with less stringent labour laws than those of the country where the services will be provided.

There is also a need to improve the living and working conditions of employees posted to Spain, especially in industries severely affected by the spread of covid-19, such as agriculture and food processing.

Directive 96/71/EC (known as the posting Directive) is a critically important regulation of European labour law. Its purpose is to regulate employment conditions of posted workers, such as those sent by their employer to provide services for a limited period in a different EU member state.

The main changes produced by Spain’s transposition of Directive (EU) 2018/957 are:

  • New regulation of the consequences of so-called “chain” posting of workers by temporary employment agencies (ETTs) on behalf of client companies in the same country, in another member state of the European Union, or in the European Economic Area to temporarily work in Spain.
     
  • Most of Spain’s employment law is applicable to postings with an effective duration of over 12 months (or 18 months in case a justified notice of extension is submitted). In these cases, a worker posted to Spain will be protected by the rest of the country’s applicable laws, except those involving the formalities of entering and terminating employment contracts (including post-contractual non-compete clauses) and those governing supplementary retirement systems.
     
  • Although up until now workers posted in Spain were protected by a series of minimum employment conditions (for example, working hours, salary, equal treatment, and non-discrimination or occupational risk prevention), that protection is now enhanced by additional safeguards. These include new rules on housing conditions, per diems, and reimbursement of expenses for travel, lodging, and meals for workers who are required to travel for professional purposes during their posting.
     
  • Regarding salary levels in Spain, it is expressly stated that, unless otherwise agreed, additional amounts paid for travel must reimburse the actual travel expenses incurred rather than being part of the salary. This means that, unless the parties specifically agree that those payments are part of the salary, they must be treated as non-salary items, and the company must pay those amounts in addition to the minimum salary established under Spanish law.
     
  • There is also a new section that protects posted workers, even if they are not considered so by their employer. It expressly states that those workers will be entitled to apply Spanish laws and regulations, and this will not affect any of the company’s other obligations or liabilities.
     
  • There is also a new section in the Law of Infractions and Sanctions, identifying certain acts committed by temporary employment agencies and their Spanish client companies as minor, serious, and very serious infringements. It also states that, in cases where certain acts are repeated, companies will face the possibility of a temporary or indefinite ban on posting of workers in Spain.
     
  • Finally, cooperation with government bodies from other member states is enhanced to allow Spanish authorities to collaborate with their counterparts in other countries about posting workers in the context of transnational provision of services. Also, Spain’s Employment and Social Security Inspectorate is given authority to initiate inspections on temporary postings of workers at Spanish companies.

Notwithstanding the relevance of the above changes, it is to be expected that even more substantial changes will be coming regarding Spanish and international labour laws and regulations on posting workers.