Transnational worker transfers will be subject to verification by the Labor Inspectorate
The recent technical criteria of the Labor and Social Security Inspectorate ( CT 97/2016[MM1] ) on verification actions regarding the posting of workers within the framework of a transnational provision of services , has addressed the practical problems posed by labor issues relating to the posting of workers from the Member States of the European Union (EU) or the European Economic Area (EEA) to Spain, as well as from Spain to these States.
The aforementioned technical criterion places particular emphasis on the requirement for a genuine business to exist in the Member State of establishment (or origin) in order for a true provision of services, protected by the freedom to provide services within the Internal Market, to be considered valid. This aims to combat so-called "letterbox" companies, fictitious or sham companiescreated solely to transfer workers to other Member States. To this end, the Labor Inspectorate intends to verify the actual establishment of the service provider, which implies that it has the necessary physical and organizational infrastructure and carries out substantive activities, not merely administrative or internal management tasks.
Furthermore, the Inspection will also verify that a genuine provision of services is actually taking place and that it is not a cover for the illegal transfer of workers through a sham contract or subcontract. The aim, therefore, is to establish the existence and operation of the service provider, using assessment criteria such as the existence of its own assets, the actual registered office, the existence of a business organization and personnel structure, and the general activity carried out. Even if a real company exists in the Member State of establishment, it will also be necessary to consider the activity carried out in the host Member State, ensuring that the service provider is not merely supplying labor without utilizing the personnel and resources that make up its business structure. This assessment will be based on criteria such as the assumption of business risk, the capacity for management and personnel selection, and whether the work is performed on the premises of the main company under the exclusive orders of the service provider.
Furthermore, the aforementioned technical criterion also specifies the concept of posted worker, requiring the concurrence of the following requirements:
1. A pre-existing employment contract must exist before the posting, even if the purpose of the posting is to perform work in another Member State. Therefore, nothing prevents the company from entering into a new solely for the purpose of posting this new employee. What is legally relevant for a posting to be considered a true transnational assignment is the physical act of the employee traveling from the Member State where they usually work or where they were hired to the host Member State.
2. The employment relationship must be maintained throughout the entire period of the secondment. This means that the service provider retains managerial authority over its seconded workers in both organizational and disciplinary aspects. In addition to paying wages, fulfilling its employer obligations regarding registration and social security contributions, and covering accommodation, food, transportation, and other compensatory expenses, the service provider must also provide tools, clothing, and work equipment, and define the details of the work, including how it is to be carried out and the final result to be achieved. To this end, it is essential that the service provider have designated personnel to perform managerial, organizational, and disciplinary tasks with its seconded workers.
3. The posting must be temporary. While neither Spanish law nor the European Directive establishes a maximum limit, the Labor Inspectorate will assess several factors to determine the temporary nature of the posting. These factors include whether the employer provides the worker's travel, subsistence, and/or accommodation; the nature of the activities carried out by the worker; and, especially, whether the worker is expected to return to the Member State from which they were posted once the assignment that prompted their posting has been completed. In the very common scenario where the worker has been posted to a branch or workplace of their own company, or of another company within the same group, their work must have a certain degree of substantive importance within the overall activity of the branch, workplace, or company within the same group receiving their work. If the temporary nature of the posting is not met, it will be considered a case of the worker's full integration into the labor market of the host Member State, and its legislation will apply.
Therefore, according to the aforementioned technical criteria of the Inspection, only when there is a real company in the Member State of establishment and the above requirements of the posted worker are met, the service provider company that posts its workers to another host Member State (or destination) may choose to keep them under the Social Security legislation of the Member State of establishment for a maximum of two years (extendable under certain conditions), for which purpose the Social Security will issue form A1 (formerly form E101), certifying the applicable legislation.
Martí Milán Romera,
Labor Law Area
Àmbit Assesor
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