New law on posting of workers in the framework of the provision of services
Law no. 16/17 March 2017 on posting of workers in the framework of the provision of service, published in the Official Gazette no. 196 of 21 March 2017
We have summarized below the main novelties and provisions of law no. 16/17 March 2017 (“Law 16/2017”).
Entering into force
Law 16/2017 will enter into force within 60 days as of its publication date in the Official Gazette, respectively on 20 May 2017.
As of the date of its entering into force the former law 344/2016 on posting of workers in the framework of the provision of services will be repealed.
Within 60 days as of the publication of the Law 16/2017 the Ministry of Labor and Social Justice will issue new methodological norms for the applicability of the law that will be approved by Government decision.
Transposition of the European directives
Law 16/2017 transposes under the national legislation, inter alia, the Directive 2014/67/EU of the European Parliament and of the Council of 15 May 2014 on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services and amending Regulation (EU) No 1024/2012 on administrative cooperation through the Internal Market Information System (‘the IMI Regulation’), published in the Official Journal of the European Union no. 159 of 28 May 2014.
Law 16/2017 incorporates almost in full the provisions of 344/2016 on posting of workers in the framework of the provision of services.
In addition, as per the purpose of the transposed European directive, the new law provides, inter alia, (i) clarifications regarding the concept of post workers to an establishment or to an undertaking owned by a group of undertakings, (ii) novelties regarding the employers’ obligations in relation to the posting of workers, (iii) mechanisms of administrative cooperation between national authorities competent in the field of posting of workers, (iv) clarifications with respect to the protection of the posted employees’ rights, (v) mechanisms to recover cross-border administrative penalties and/or fines, (vi) improved access to information both for the posted workers and the posting undertakings, (vii) novelties in what concerns subcontracting liability, (viii) novelties in what concerns the administrative liability.
Clarifications regarding the concept of posting workers to an establishment or to an undertaking owned by a group of undertakings
As a novelty, Law 16/2017 defines the group of undertaking as two or more undertakings known as affiliated. As per the law, an undertaking is assessed as directly or indirectly affiliated to another undertaking if it complies with at least one of the following conditions:
- a) owns the majority of the subscribed share capital of the other undertaking
- b) controls the majority voting rights attached to the shares issued by the other undertaking
- c) may appoint at least half of the members of the board of directors, of the management board or of the supervisory board of the other undertaking
- d) is managed on a common base with the other undertaking by a third undertaking
The law clarifies the situation when an employee is posted to an establishment or to an undertaking owned by a group of undertakings regardless whether it concerns workers posted from Romania to another member state /on the territory of the Swiss Confederation or vice versa.
Novelties regarding the employers’ obligations in relation to the posting of workers
The undertakings established in member states other, than Romania, or in Swiss Confederation, which, in the framework of the provision of services, are posting in Romania employees within the terms and conditions of Law 16/2017, have the following obligations:
- a) to submit a declaration in Romanian language to the territorial labor inspectorate competent in the geographical area where the posted employee will carry out his/her activity, no later than the business day previous to the date when the employee starts his/her activity
Note: Previously, the term for submitting the declaration was of minimum 5 days previous to the date the posted employee commenced his/her activity in Romania, but no later than the first day of activity.
- b) to keep or make available towards the labor inspectors, upon their request, and/or retain within an accessible and clearly identifiable place on the Romanian territory, during the posting period, copies in paper or electronic form, or copies of the equivalent documents regarding:
- the employment contract or an equivalent
- the salary and the evidence for payment
- the working time and the timesheet
- c) to keep the documents mentioned at letter b), for 3 years after the termination of the posting period and provide them upon the request of the Labor Inspection or of the territorial labor inspectorates, within maximum 20 business days as of the receipt of the request
Note: Previously, the methodological norms provided that these documents were to be kept only for the posting period.
- d) to provide a Romanian translation of the documents mentioned at letter b) above
- e) to appoint a contact person in relation to the competent national authorities authorized to submit and receive documents and/or consents, as the case may be.
Note: Previously, the methodological norms talked about a legal representative in Romania of the undertaking with competencies in what concerns the inspections performed by the labor inspectors. In the absence of a legal representative, the undertaking had to appoint one of the employees posted in Romania as contact person in relation to the inspection authorities.
Mechanisms of administrative cooperation between national authorities competent in the field of posting of workers
For the purpose of applying Law 16/2017, the Labor Inspection is the competent authority acting as liaison office which ensures the administrative cooperation with the competent authorities from the member states or the Swiss Confederation.
The administrative cooperation is defined as the collaboration activity between the competent authorities of the member states or between the competent authorities of the member states and of the European Commission, through exchange and processing of information, including by sending notifications and alerts or by providing mutual assistance, including for solving the problems, for the purpose of a better applicability of the EU law, in accordance with the provisions of art. 5 letter b) of the Regulation (EU) No 1024/2012.
The European Commission provided the member states with an internal market information system which is meant to facilitate the administrative cooperation between the competent authorities of the member states and between the competent authorities of the member states and the European Commission, defined in accordance with the provisions of the Regulation (EU) No 1024/2012 and called IMI System.
Clarifications with respect to the protections of the posted employees’ rights
Law 16/2017 grants the Labor Inspection, through the territorial labor inspectorate, the possibility to carry out a general evaluation of all de facto elements which describe the positing for the purpose of identifying the posting situations and for preventing the abuses and the breaches of the legal provisions. These de facto elements will be detailed by methodological norms.
The Labor Inspection, through the territorial labor inspectorates, may perform inspections to assess the compliance with the rights of the posted employees on the Romanian territory in the framework of the provision of services and an annual evaluation of the risks. The risks evaluation procedure will be detailed by methodological norms.
Similar to the former legal provisions, the workers posted on the Romanian territory which consider that their rights were breached may submit a complaint to the Labor Inspection and/or to the competent courts. In this case, they are protected against any negative treatment from the part of the employer. As a novelty, Law 16/2017 sanctions with fines from RON 3,000 to RON 100,000 the unilateral amendment from the part of the employer of the labor relationships and conditions, including the dismissal of the posted employee who has filed an administrative claim or a complaint with the competent courts for the purpose of applying the legal provisions, including after the court decision becomes final.
Specifically, Law 16/2017 provides that the employer of the posted employee (i) is liable for granting all the rights of the employee as such are provided by the individual labor agreement and/or by the applicable collective labor bargaining agreement, (ii) has the following obligations towards the employee:
- a) to pay the outstanding net remuneration owed as per the legal provisions
- b) to pay any back-payments or refund of taxes or social security contributions unduly withheld from his/her salary
- c) to refund the excessive costs in relation to net remuneration of the posted employee or to the quality of the accommodation, withheld or deducted from wages for accommodation provided by the employer
- d) to pay the contributions due to common funds or institutions of social partners unduly withheld from the salary of the posted employee, as the case may be
Mechanisms to recover cross-border administrative penalties and/or fines
Law 16/2017 appoints:
- the Labor Inspection as the competent national authority responsible for the administrative submission of the requests for notification of the minutes ascertaining and sanctioning a minor offence, respectively for the administrative receipt of the requests for notification of a decision imposing a financial administrative penalty
- the National Agency for Fiscal Administration as competent national authority responsible for administrative submission of the request for recovery of the administrative fines and for the administrative receipt of requests for recovery of the amounts resulting from an administrative financial penalty
Chapter VI of Law 16/2017 establishes the measures and procedures applicable in what concerns the cross-border recovery of the amounts resulting from applying the financial administrative penalties and/or fines. These aspects will be detailed by methodological norms.
The National Agency for Fiscal Administration, through the central fiscal subordinated entities, recovers the owed amounts in the national currency of Romania, in accordance with the provisions of Law no. 207/2015 regarding the Fiscal Procedure Code. These recovered amounts become income to the state budget.
Improved access to information both for the posted workers and the posting undertakings
As a novelty, the law establishes the obligation of the Labor Inspection to provide information on a large scale in relation to the clauses and employment conditions for the posted employees on the Romanian territory as per the conditions provided by Law 16/2017.
Law 16/2017 regulates for the first time this type of liability in order to ensure a better protection of the rights of the posted employees, in the framework of the transnational provision of services, which do construction works, as such are detailed in the annex to Law 16/2017.
In subcontracting chains, for the construction activities, the contractor in relation to which the foreign undertaking (i.e., the undertaking established in a member state which, other than Romania, or on the territory of the Swiss Confederation, which, in the framework of the transnational provision of services, posts workers in Romania within the conditions of Law 16/2017) is a direct subcontractor is jointly liable with the latter or instead of the latter for the outstanding net salary rights related to the minimum salary granted as per the law and /or the contributions owed to the common funds or institutions of social partners as per the provisions of Law 16/2017.
The above-mentioned liability is only limited to the rights of the posted employee obtained on the basis of the contractual relationship between the contractor and its subcontractor.
The contractor is no longer liable if it proves that it has requested the subcontractor the documents which evidence the compliance by the latter with the working conditions provided by Law 16/2017 for the posted workers.
The methodological norms for the applicability of the law will detail the sanctions for failure to comply with the obligations established by Law 16/2017 for the undertakings established on the territory of a member state / Swiss Confederation which post employees on the Romanian territory (ex., maximum working time, minimum salary, the obligation to submit to the territorial labor inspectorate a statement, in Romanian language, with respect to the posting of its employees).
The labor inspectors are the ones appointed to ascertain and apply sanctions and they are to send the minutes within 5 days as of its issuance date.
The administrative penalties applied for the minor offences committed within the conditions of the Law 16/2017 will no longer have to be executed if the minutes ascertaining and sanctioning the minor offence is not communicated to the offender within 4 months as of the date the sanction is applied.