The working conditions of cross-border temporary agency workers on paper and in reality

1 This contribution focuses on the legal position and working conditions of cross-border temporary agency workers. In the context of the relationship between the free movement of workers and the freedom to provide services, the applicability of the Temporary Agency Work Directive (TAWD) and/or of the (revised) Posting of Workers Directive (PWD) to several different arrangements for cross-border temporary agency work is explored. Furthermore, the tools to prevent circumvention and to encourage compliance with and the enforcement of these legal instruments are discussed. With regard to the role of temporary work agencies and other intermediaries in practice, there seems to be an overlap between facilitation and exploitation, with numerous studies and reports underpinning this assertion. Despite the more favourable position of ‘recruited’ transnational temporary agency workers on paper, the gap with ‘posted’ temporary agency workers is not so wide in reality. For all cross-border temporary agency workers in low-waged sectors, significant problems related to non- or semi-compliance with the applicable regulations arise. After discussing the main challenges relating to non-compliance and enforcement, as well as available tools for cross-border cooperation, some potential future solutions to the aforementioned problems are outlined. In this regard, a pragmatic stance is taken as no ‘magic bullet’ solutions exist.


Introduction
This contribution focuses on the rather complex legal and factual situation of cross-border temporary agency workers in the EU.With a focus on the relationship between the free movement of workers and the freedom to provide services, the applicability of the Temporary Agency Work Directive (TAWD) 2 and/or of the (revised) Posting of Workers Directive (PWD) 3 to several different cross-border agency arrangements is explored.Furthermore, (non-)compliance with and the enforcement of these legal instruments in respect of cross-border agency workers and issues related to cross-border monitoring and cooperation are discussed.
The contribution is structured as follows.First, the applicable sources of EU law for specific cross-border agency arrangements are identified (section 2).Next, the relationship between the TAWD and the (revised) PWD is examined (section 3), followed by the main challenges relating to the circumvention and enforcement of the legislation on cross-border temporary agency work (section 4), as well as available tools for cross-border cooperation (section 5).Finally, potential future solutions to the problems discussed are be outlined (section 6).

The EU's legal framework for three cross-border temporary agency work arrangements
Several legal arrangements for cross-border temporary agency work are used in practice.Workers can be recruited in a sending Member State and employed by an agency established in the same host country as the user undertaking (1).Alternatively, workers can be assigned to a user undertaking in the host country by an agency established in the sending country (2), or they may be requested to perform work in a third (different) Member State (3).As a starting point for establishing and discussing the working conditions of cross-border temporary agency workers, this section identifies the applicable primary and secondary sources of EU law for these three specific cross-border agency arrangements.

First arrangement: temporary agency workers recruited in a different Member State than where they are hired and put to work
In the first arrangement, the cross-border element consists of the agency worker being recruited in a 'sending' Member State but hired and placed in a user undertaking in the host Member State by a temporary work agency (TWA) established in the host country.If the recruited temporary agency worker is a national of an EU Member State, 4 the right to free movement of workers applies. 5This implies that the worker will be covered by the right to be treated equally with national workers, enshrined in Art.45 TFEU, and is therefore in principle covered by the host country's labour, social security and tax laws, including its implementation of the TAWD. 6ence, the (national implementation of the) TAWD fully applies to workers who are hired and perform work in a Member State other than their own, i.e., they are treated as if they were national workers.This includes Article 5 TAWD, which stipulates equal treatment for temporary agency workers in relation to 'basic' employment conditions at the user undertaking.The Directive itself actually derogates from the principle of equal treatment in that only the temporary agency worker's basic working conditions must (at least) be equal with those afforded to workers directly hired by the user undertaking.These basic working conditions are described in Article 3(1)(f) TAWD; they refer to workers' working and employment conditions on working time, leave entitlements and pay, 7 which are usually established in a Member State's legislation or in collective agreements.Although the Court of European Justice (CJEU) tends to interpret the term 'working conditions' broadly, 8 Member States are free to interpret what constitutes 'pay', pursuant to Article 3(2) TAWD.Moreover, temporary agency workers' working conditions may change depending on their assignments.
Although the TAWD prescribes equal treatment in relation to agency workers' basic working conditions, several derogations are possible.Member States may exempt temporary agency workers who have a permanent contract of employment with a TWA and continue to receive pay between assignments (Article 5(2) TAWD) from equal pay conditions.Moreover, if a Member State has incorporated this option into its national legal framework, 9 the social partners may introduce derogations in collective agreements, but must respect the 'overall protection' of temporary agency workers in relation to working and employment conditions (Article 5(3) TAWD).Recently, the CJEU clarified the concept of 'overall protection', stating that derogations in a collective agreement to the detriment of temporary agency workers must be compensated by 4. This contribution focuses first and foremost on intra-EU employment situations, although the recruitment and/or posting of temporary agency workers by TWAs established in EU Member States can and does increasingly include third-country nationals (TCN).As established in EU case law (starting with VanderElst), if a third-country national legally resides and works in a Member State, the employer can post that worker to another Member State under the same conditions as a Union citizen. 5.As noted by Schlachter (2014), 'these workers are treated as if they decided independently to move to the country of destination for the purpose of seeking a job there', although in reality the workers have been recruited 'either by a temporary work agency or by a user undertaking co-operating with this agency, to move into the country of destination for contracting with the agency'.See M. Schlachter, 'Equal treatment for transnational temporary agency workers?' in: S. Evju (Ed.), Regulating transnational labour in Europe: the quandaries of multilevel governance, Oslo University 2014, p. 267.6.And the host state's implementation of Directive 91/383/EEC of 25 June 1991 on supplementing measures to encourage improvements in the safety and health at work of workers with a fixed-term employment relationship or who work for a temporary work agency.7. Temporary agency workers must also be given access to the amenities or collective facilities provided at the user undertaking under the same conditions as workers directly employed by the undertaking, unless a difference in treatment is justified by objective reasons, see Article 6(4) TAWD.8. Case C-681/18, KG, EU:C:2020:823; Case C-426/20 Luso Temp, ECLI:EU:C:2022:373 9.According to the European Commission's report on the application of the TAWD (COM(2014) 176 final), p. 7, some ten years ago: 'Ten Member States (Austria, Bulgaria, Denmark, Finland, Germany, Hungary, Ireland, Italy, the Netherlands and Sweden) have adopted provisions allowing collective labour agreements deviating from equal treatment of agency workers.Austria, Ireland and Sweden refer to the need for these collective agreements to be appropriately balanced to ensure that they do not prejudice the overall protection of temporary agency workers.' providing countervailing benefits based on a concrete assessment for a given job of the difference in treatment with comparable workers in the user undertaking.The third arrangement is a variant of the second arrangement.It involves two cross-border elements.Firstly, as in the second arrangement, the temporary agency worker is hired by a TWA established in a 'sending' Member State and is assigned to a user undertaking in the host Member State.The TWA draws on its freedom to provide services in the EU.Secondly, the user undertaking requests the posted agency worker to perform work in a third Member State, i.e., a state other than the sending or host country.The user undertaking draws on its freedom to provide services in the EU.
In contrast to the temporary agency worker in the first arrangement, the agency worker in the second and third arrangements qualifies as a 'posted worker'.Posted workers maintain their employment relationship with their own employer (the TWA), established in the sending country, during their (chain) posting in the host (and third) country.As a starting point, the employment contracts of posted (agency) workers are governed by the laws of their habitual country of work 12 instead of the host country's laws.This contractual perspective reveals an important aspect of the legal position of posted (agency) workers: the employment contract of a posted worker is typically influenced by more than one labour law system, as the employment contract is concluded in one Member State ('sending' or home State), while the performance of the temporary service occurs in another (host State). 13Hence, the arrangements for posted temporary agency 10.Case C-311/21, TimePartner Personalmanagement, EU:C:2022:983, paras 49-50.11.See the contribution of Videbaek-Munkholm to this special issue for a more in-depth analysis of the derogation in Art 5(3) TAWD.12.In many cases (but not always), the 'sending' country refers both to where the posting TWA is established and where the posted temporary agency worker is (supposed to remain) habitually employed.When determining the agency worker's habitual country of work, the interface between the PWD and Article 8 of the Rome I Regulation comes into play.13.Moreover, posted workers who are temporarily employed in other Member States will in principle continue to be taxed and to be affiliated to the social security system of their 'home' Member State for respectively the first 183 days and 24 months.
workers call into question the relationship between the TAWD and the (revised) PWD, an issue that is addressed in more detail below.

Relationship between the TAWD and the (revised) PWD for 'posted' agency workers
As regards the relationship between the TAWD adopted in 2008, and the PWD adopted in 1996, recital 22 TAWD states that the TAWD should be implemented in compliance with the provisions of the Treaty on the Freedom to Provide Services and the Freedom of Establishment, without prejudice to Directive 96/71/EC.Following on from this consideration, it is clear that the TAWD, in principle, has a national scope of application, although it lacks a clear provision on its territorial scope.Moreover, it is clear that the (revised) PWD is specifically aimed at cross-border situations and that its relevant provisions take precedence over those of the TAWD. 14ence, the TAWD fully covers recruited temporary agency workers who are hired and perform work in a Member State other than their own as though they were domestic workers ( first arrangement), while the PWD covers temporary agency workers who, in accordance with Article 2(1) PWD, are posted to a host State for a limited period, carrying out their assignment in the territory of a Member State other than the State they normally 15 work in (second and third arrangements). 16 closer look at what this entails for the latter two arrangements is warranted.

Concept of posting
Three Posting of Workers Directives (PWDs) have been issued to date: the original PWD, amended by the revised PWD of 2018, and the Posting of Workers Enforcement Directive adopted in 2014.The revised PWD (2018) amended the PWD and complements the Enforcement Directive.The PWD covers three different types of postings described in its Article 1(3): apart from (a) postings to perform service contracts in the context of transnational subcontracting, and (b) transnational intra-company transfers, it also covers (c) transnational temporary agency work.In two of the three situations of posting, a service contract must be concluded between the employer and the recipient established or active in the country in which the service is to be performed.This requirement is mentioned in Article 1(3)(a) and (c), but does not seem to be a prerequisite for intracompany postings (Article 1(3)(b) of the Directive).
Hence, pursuant to Article 1(3)(c), the PWD notably applies to a TWA, established in a Member State, that hires out workers to user undertakings that are established or operate in the territory of another Member State, provided there is (or remains) an employment relationship between the TWA and the worker during the period of his or her posting.This provision covers both the second arrangement and the first cross-border component of the third arrangement for posted temporary agency work.As regards the second cross-border component of the third arrangement, the revised PWD clarifies that in cases of so-called 'chain' or 'double' posting, the worker shall be considered to be posted to the territory of the third Member State by the TWA with which the worker is in an employment relationship.The user undertaking shall inform the TWA 'in due time before commencement of the work (…)'. 17As observed by Van Nuffel & Afanasjeva, this text not only clarifies situations of chain posting, but at the same time seems to legitimise this practice. 18As they point out, Article 1(3) PWD requires the continuing existence of an employment relationship between the undertaking posting the worker and the posted worker during the entire duration of the posting.Hence, it could be argued that the second ('chain') posting of the worker abroad is not genuine and should not be considered a posting within the meaning of the Directive.However, according to recital 13 of the revised PWD, the protection of those workers should be ensured as 'experience shows' that workers are sometimes double posted.
To clarify what applies in relation to this rather complex third arrangement, the practical guide on posting provides the following example: 'A temporary work agency established in Member State A hired out a worker to a user undertaking in Member State B. One month later, the user undertaking posts the same worker to Member State C in the context of a contract of services.In such a case, the authorities of Member State C must consider that it is the temporary agency established in Member State A that has made the posting.The temporary agency is responsible for complying with the right terms and conditions of employment, but, for example, also for making the declaration prior to posting.In such a case, the worker is entitled to the more favourable terms and conditions of employment of the two, i.e.,: -either the terms and conditions of employment applicable in the user undertaking in Member State B; -or the terms and conditions of employment applicable in Member State C.' 19 That is, the TWA, as the employer of the 'double' posted agency worker, remains responsible for guaranteeing the rights and protection the respective worker is entitled to under the PWD.Moreover, the user undertaking is made responsible for informing the TWA in due time before the posted worker starts performing his or her tasks in the third Member State.
While some authors contend that these rules will make a genuine difference in practice, as the rules on postings have been further clarified and are enforceable in situations that were formerly in a 'grey zone', 20 others criticise the requirement that the user company must provide information as 'highly insufficient', 21 or state 'that it is highly doubtful that these new provisions on the obligation to provide information are complied with in practice'. 22However, before looking to how the rules are (not) abided by in practice, it is important to establish first what the (revised) PWD stipulates with regard to the terms and conditions of employment for both the second and the third arrangements.

Terms and conditions of employment according to the (revised) PWD
The PWD coordinates Member States' legislation by providing for a set of mandatory rules that employers who post workers to a Member State in which the service will be provided 23 must comply with.According to Article 3(1) PWD, Member States must ensure that undertakings that fall within the scope of the PWD guarantee workers who are posted to their territory the terms and conditions of employment stipulated in mandatory law, including collective agreements that have been declared universally applicable.Hence, Article 3(1) PWD specifies the nature of the employment standards that must be applied in the host Member State, but does not specify the substance of those standards.These 'host State standards', as amended by the revised PWD, include, e.g., the duration of working time; rest periods and holidays; remuneration; health, safety and hygiene at work; the conditions for hiring out workers, in particular the supply of workers by temporary work agencies, 24 as well as equal treatment between men and women.The guarantee of equal remuneration includes all elements of remuneration that are mandatory in the host State (both in statutory law and in mandatory or generally binding collective labour agreements), and applies to both domestic and posted workers. 25This means that employers have a duty to apply all of the host country's rules on pay/remuneration, as stipulated in national laws or in universally applicable collective labour agreements.Moreover, Article 3(8) PWD has been amended to allow for the application of generally applicable agreements or agreements concluded by the most representative organisations not only in the absence of, but also 'in addition to', universally applicable ones. 26The constituent elements of remuneration include thirteenth month allowances, travel expenses, and compensation for work on public holidays or for night work. 27The condition of workers' accommodation and allowances or reimbursements for travel, board and lodging costs for workers who are away from home for professional reasons have been added as matters belonging to the 'hard core' of employment conditions in the host State.These are the 'hard core' of employment conditions all workers posted for less than one (or one-and-a-half) year(s) are entitled to.Special rules for long-term postings were also introduced 23.As explained in a practical guide on posting issued by the European Commission, workers who are temporarily sent to work in another Member State but do not provide services there are not posted workers.Practical Guide on Posting, 2019, p. 10 (answer to question 2.4).24.This provision implies that the PWD does not affect the regulation of the temporary agency industry with respect to aspects such as restrictions to particular sectors or licensing systems in the Member States.At the same time, the TAWD reduces the justifications to restrict the use of TAW with a 'review obligation' for Member States.
According to Article 4(1), TAWD prohibitions or restrictions on the use of TAW shall only be justified on grounds of general interest relating, in particular, to the protection of temporary agency workers; the requirements of health and safety at work; the need to ensure that the labour market functions properly; and the need to ensure that abuse is prevented.As confirmed in COM(2014) 176 final, p. 9, the review 'should cover any measures, for instance, measures laid down by legislation, regulations or administrative provisions, applied in Member States and which aim to, or have the effect of, imposing limitations on temporary agency work.'However, Article 4(4) TAWD determines that national requirements in relation to registration, licensing, certification, financial guarantees or monitoring of TWAs remain outside the scope of the review obligation.by the revised PWD. 28It can be concluded that a ceiling for the protection of posted workers still exists, but it is now at least higher.

Terms and conditions of employment specifically for posted temporary agency workers
The highest ceiling applies to posted temporary agency workers.The revised PWD links the protection of posted agency workers to the TAWD's 'equal treatment provision' (Article 5), which stipulates equal treatment for temporary agency workers in the user undertaking. 29Contrary to other types of posted workers, this implies that the guaranteed terms and conditions of employment for posted agency workers are not limited to those specified in law or in universally applicable collective agreements.If a collective agreement exists at the level of the user undertaking that must be applied to domestic temporary agency workers, it must also be applied to posted agency workers.In addition to the provisions of Article 5 TAWD, Member States are entitled to require posted agency workers to benefit from other terms and conditions that apply to domestic agency workers in the Member State in which the work is being performed. 30Moreover, Article 1(1)(c) of the revised PWD strengthens the protection of agency workers involved in 'chain' or 'double' postings (see above third arrangement).Apart from improving posted agency workers' legal position, the amendments together also contribute to a level playing field for the TWAs involved.Hence, while recital 22 TAWD implies that the relevant provisions of the PWD shall take precedence over the former Directive's provisions, the revised PWD simultaneously links the protection of posted agency workers to the TAWD's 'equal treatment provision', establishing the equal treatment of temporary agency workers in user undertakings. 31This amendment was introduced to improve consistency between the PWD and the TAWD, thereby eliminating any source of uncertainty about the application of the principle of equal treatment to temporary agency workers.Since the purpose of agency workers' posting to host Member States is the provision of services, and considering that they perform tasks under the control and direction of the user undertaking, 32 this 28.Once the actual duration of the posting exceeds 12 months (or 18 months) following a motivated notification by the employer, the posted worker must be guaranteed all of the mandatorily applicable terms and conditions of employment in the host State, with the exception of procedures and conditions of conclusion and termination of employment contracts and the rules on supplementary occupational pension schemes, which remain covered by the law of the worker's habitual country of work, in accordance with Article 8(2) Rome I.As Van Nuffel & Afanasjeva (2020) note, the shift in applicable law seems to be limited (for example, entitlement to leave, such as parental leave, is not included in Article 3( special link with the host Member State's labour market warrants workers who are posted by TWAs benefitting from the principle of equal treatment. As regards the option of Member States to extend equal treatment to other employment conditions that are applicable to domestic agency workers, this could, in principle, include the rights stipulated in Article 6 and in subsequent provisions of the TAWD.Accordingly, posted agency workers would be informed of any vacancies in the user undertaking, opening up to them the same opportunities available to other workers in the undertaking to find permanent employment.Also, they could enjoy equal access to collective facilities such as the canteen, childcare facilities or transport services.Would posted agency workers benefit from national laws or collective agreements that improve temporary agency workers' access to training in TWAs, even during periods between assignments, to pursue career development goals and increase their employability, and to improve access to training for all of the user undertaking's workers?Interestingly, if posted temporary agency workers were granted these rights indeed, it would open up opportunities to them for long-term access to the host Member State's labour market. 33ut what about the other side of the coin?Under what circumstances can the law that applies to the employment contract ('home State') continue to cover posted temporary agency workers?As stated in the Explanatory Memorandum to the PWD's first draft, the designation and application of mandatory rules to be observed by foreign service providers in the host State must be compatible with the temporary nature of the performance of work in the host country and consistent with the PWD's stated aims and objectives.As regards mandatory rules on form, suspension, alteration and termination of the employment contract and workers' rights to information, consultation and participation, the idea is that the posted worker shall continue to 'belong' to the labour market he or she habitually works in. 34This would suggest that posted agency workers are covered by the home State's measures against abuse as stipulated in Article 5(5) TAWD, in particular in relation to successive assignments.From a compliance and enforcement perspective, that is rather problematic.

Difference in the terms and conditions of recruited cross-border agency workers
Finally, considering the distinction between workers' free movement under Article 45 TFEU and the provision of services under Article 56 TFEU, recruited cross-border agency workers ( first arrangement) gain full access to all social and fiscal benefits provided in the host Member State, whereas posted agency workers (second and third arrangement) remain insured and covered by the social security benefits provided in their home State.A recruited cross-border agency worker is thus still entitled to a higher level of protection than a posted agency worker, and perhaps even more importantly, to aligned protection within one legal system.This crucial difference means that the recruited cross-border agency worker is in a less complex legal situation than posted agency workers, which makes a huge difference in terms of monitoring and enforcement, to which we will now turn.

Weak remedies provided by the TAWD
In the first arrangement, recruited cross-border agency workers are dependent on one national legal framework for the enforcement of their rights.Despite the enactment of the TAWD, the regulatory models of EU jurisdictions still differ widely, ranging from traditionally protective systems that promote licensing and implement stringent sanctions, to more liberal approaches that treat TAW as a common form of flexible employment. 35Moreover, besides 'traditional' agency work (whereby the 'staffing agency' matches labour demand and supply for temporary work), there are now also other types of intermediaries active on the labour market that use other types of contracts, such as subcontracting.These forms of triangular employment relationships are not covered by the TAWD, thus undermining its effectiveness. 36part from Articles 5(5) and 10 TAWD, which aim to prevent abuse, 37 the Directive does not provide solid remedies against the abusive use of temporary agency work.Article 5(5) stipulates that appropriate measures must be taken in accordance with national law and/or practice to prevent misuse in the application of Article 5, and in particular, to prevent successive assignments designed to circumvent the Directive's provisions. 38he distribution of responsibilities between the TWA and the 'user undertaking' remains uncertain under the TAWD.As a result, there are major variations from one Member State to another.In contrast with this approach, regarding liability for the protection of workers' health and safety, Directive 91/383/EEC concerning temporary workers' safety and health at work includes provisions on the responsibilities of both the TWA and user undertaking: in addition to the TWA's responsibilities enshrined in national legislation, the user undertaking is responsible for complying with the conditions regulating the performance of work during the agency worker's assignment. 39eyond health and safety, a more favourable solution for temporary agency workers would be recognition at EU level of a rule according to which both the TWA and the user undertaking are jointly responsible for the labour and employment regulations applicable to such workers. 40

A 'balanced approach' to monitoring and enforcement in the PWDs
Both in the second and third arrangement, the TWA must comply with all of the provisions of the Posting of Workers Directives, including the relevant administrative requirements and control measures.That posted workers' employment (and social security and tax) conditions are always linked to more than one legal system creates (additional) obstacles in terms of identifying, applying and/or monitoring and controlling posted workers' rights for employers, intermediaries, workers, trade unions and other worker representatives, as well as for inspectorates.The fluidity in the crossborder context, with firms often disappearing across borders or going out of business, complicates efforts to enforce (and execute) national labour standards.The Enforcement Directive (Directive 2014/67/EU) addresses these salient issues with a 'comprehensive approach to enforcement'.This approach was explained in the proposal for the Enforcement Directive as follows: 'The comprehensive approach to enforcement includes awareness raising (better information), state enforcement mechanisms (inspections and sanctions) and private law enforcement mechanisms (joint and several liability).All aspects are deemed important for a balanced approach.Weakening one of the aspects would imply strengthening other aspects of enforcement in order to achieve a similar result'. 41Measures and tools include: • a non-exhaustive list of indicative factual elements to help competent authorities such as labour inspectorates determine whether the establishment of the posting company in the sending State is genuine (Article 4(2) of the Directive) and to assess whether posted workers are only temporarily performing work in a Member State other than the one they normally work in (Article 4(3) of the Directive); • a framework for improving access to information in host Member States, relevant for the posting of workers (Article 5) in terms of strengthening legal certainty for service providers; • a framework for strengthening administrative cooperation between authorities and other stakeholders across countries (Articles 6 and 7); • a (non-exhaustive) list of justified and proportionate administrative requirements and control measures that can be applied by the Member States (Article 9); • an obligation upon Member States to ensure effective mechanisms for posted workers to lodge complaints and initiate judicial/administrative proceedings (also through trade unions) against their employer (also) in the host Member State (Article 11); • a subcontracting liability arrangement for wages (Article 12).This measure is restricted to the construction sector despite clear evidence that the practice of subcontracting has spread to other sectors such as transport, meat processing, agriculture and other labour intensive sectors (currently Member States are free instead of obliged to expand the scope to these sectors).
Stricter registration rules (such as notification systems, dissuasive penalties for non-compliance with the rules, making service recipients co-responsible for registration) for service providers that post workers are allowed (but are not mandatory) under the Enforcement Directive, and have been introduced in the Member States to improve the quality of data collection on postings and to facilitate the monitoring and enforcement of rights of posted workers.The revised PWD includes some additional surveillance and control measures.To strengthen legal certainty and the enforcement of laws, Member States are required to publish 'without undue delay and in a transparent manner' information on the constituent elements of remuneration on their (single) official national website, in addition to the other information referred to in Article 5 41.COM (2012) 131 final, p. 20.
Enforcement Directive, as well as on any additional terms and conditions of employment applicable to postings that exceed 12 or, where applicable, 18 months.Each Member State must ensure that the information on its (single) official national website is accurate and regularly updated.Failure to comply with this obligation will be taken into account when determining fines for infringement of national provisions adopted pursuant to the (revised) Directive, 'to the extent necessary to ensure the proportionality thereof'. 42The revised PWD complements the Enforcement Directive by introducing an obligation for the host State to create a sanctioning regime.Clearly, the PWDs facilitate and encourage enforcement in some respects, but real commitment with budgetary implications and strong political will at the level of the host Member State is also called for.

Similar vulnerabilities of recruited and posted temporary agency workers in practice
Notably, for both recruited (first arrangement) and posted cross-border temporary agency workers (second and third arrangements), any rights that cannot be enforced are basically useless.Despite the more favourable position of recruited transnational agency workers on paper, the gap to posted agency workers is not so wide in practice.In both situations, significant problems related to non-or semi-compliance with the applicable regulations arise.Despite the differences in terms of their legal status, what all (newly arrived) transnational (temporary agency) workers have in common is that they are unfamiliar with the laws of the host Member State they (temporarily) work in.Therefore, specifically low-wage 43 mobile workers may more easily be cheated out of their rights than their domestic counterparts.Often, transnational (temporary agency) workers lack awareness of their genuine (and sometimes volatile) legal status and of who is their (real) employer.Moreover, such workers are often 44 effectively excluded from the well-established fundamental right of collective representation. 45n some sectors and regions of the EU, intermediaries have become strongly associated with transnational worker abuses and cost-reduction practices.While the majority of labour market intermediaries are formally listed enterprises, some operate informally and without being registered.Complex and non-transparent triangular employment relationships and a chain of subcontractors and intermediaries, often operating in several countries, make the monitoring and detection of fraudulent forms of TAW extremely difficult.According to a recent study by the European Platform tackling undeclared work, '…[t]his is further compounded when there is the involvement of "letterbox" TWAs, unregistered/unlicensed agencies, and "phoenix" activities across long and complex subcontracting chains involving numerous entities, with TWAs employed at the lowest level of the chain.' 46 In addition, labour inspectorates have limited mandates, especially when it comes to cross-border issues, which is another obstacle to effective monitoring.Furthermore, monitoring recruitment and temporary work agencies in the cross-border context involves many other considerable challenges.
One crucial loophole that hampers the enforceability of the regulatory framework is linked to corporate mobility law.Some legal advisers specialise in setting up letterbox companies, which are legal entities with little or no activity in the country of registration.These companies implement strategies across legal areas, 47 while inspectorates are often divided along the lines of legal areas ('silos').One major challenge in fighting exploitative bogus arrangements is that the CJEU has facilitated the establishment of letterbox companies through its case law in a number of judgments, starting with Centros and more recently confirmed in Polbud. 48At the same time, the CJEU has ruled that a TWA can only benefit from the posting provision in Regulation 883/2004 on the coordination of social security systems if it carries out a 'significant part' of its activities of assigning temporary agency workers in the territory of the Member State where it is established. 49he role of these TWAs and recruitment agencies in a cross-border context remains a matter of concern.It is consistently noted that temporary agency workers are at an increased risk of being subject to exploitative working conditions. 50According to Eurofound, although labour market intermediaries have gained importance in facilitating international mobility, there may be an overlap between facilitation and exploitation. 51Exploitative working conditions have been confirmed in many other studies, for example in the EU Fundamental Rights Agency's study entitled 'Severe labour exploitation: workers moving within or into the European Union'. 52All studies mention excessive working time, poor living conditions and hazardous working conditions, and a disregard for occupational health and safety standards.
All these findings reveal the important role TWAs play in helping transnational temporary agency workers find work but also in creating multiple dependencies, thereby contributing to increased vulnerability and exploitation of the (recruited or posted) workers involved.In particular, the sometimes long or complex chains in which labour is subcontracted via the employer or TWA (and/or other intermediaries) to the user company increases transnational (temporary agency) workers' vulnerability. 53 profound difficulties states and enforcement authorities face in terms of controlling wages and other working conditions, such as the occupational safety and health (OSH) of transnational (temporary agency) workers in the EU. 54ecent studies also indicate that transnational recruitment and the posting of (temporary agency) workers is not only on the rise, but now increasingly includes thirdcountry nationals (TCNs).What is concerning is that TCNs tend to be even more vulnerable than other (recruited or posted) workers because they often depend on work visas issued by the sending countries.Losing their employment may result in the automatic loss of their visa and their right to stay in the EU. 55Empirical research confirms that (certain groups of) posted TCNs are among the most vulnerable groups of workers on the EU labour markets.In a recent empirical study on posting and social rights access, the group of TCN workers was found to be 'the most alienated therefore, much more susceptible to exploitation.Their vulnerable labour market position is exacerbated by their lack of host country context specific knowledge, including language, willingness to accept poorer work conditions, and a high level of dependency of the employer.' 56Their work life in the EU consisted of a series of temporary jobs in various countries, without being embedded in a single Member State's labour and welfare system.A recent report shows that fraudulent arrangements and non-compliance issues are exacerbated when TCNs are involved, making enforcement of the rules in relation to TCN posting a barely realistic prospect. 57oreover, the COVID-19 pandemic pronouncedly brought to light the substandard living and working conditions of many mobile workers in the EU.While transnational workers were among the groups most exposed to risks during the pandemic due to their 'essential' jobs, legislative and policy focus on protecting their well-being and health, including access to care, as well as their labour and social rights, remained modest (beyond emergency measures). 58

Tools available for cross-border cooperation
Ensuring that the rights of transnational temporary agency workers are adequately protected requires comprehensive cooperation-such as joint visits to the work sites and increased information exchange-by national actors (depending on the national system, these could be labour inspectorates, other public bodies, social partners).Moreover, although the posting of (temporary agency) workers falls under the scope of the regulations of both the 'sending' and receiving country, enforcers of the rights of posted workers (e.g., trade unions, labour inspectorates) do not have competence to act beyond their own national jurisdictions.Hence, cross-border cooperation is crucial to more effectively monitor and enforce the rights of posted workers.Although cross-border cooperation has increased over the last decade, 59 especially in relation to postings within the framework of the freedom to provide cross-border services, the procedures are lengthy and time-consuming, and no proper sanctions are available.Certain improvements can be expected, as the Enforcement Directive links inspectorates' information exchange to the so-called Internal Market Information (IMI) system.Also, in 2019, the Regulation (EU) 2019/1149 to establish a European Labour Authority (ELA) was adopted.The ELA aims to provide more comprehensive and easily accessible information and services, and to stimulate cooperation between authorities, including joint inspections, across legal areas of, e.g., social security and labour law.
The ELA facilitates collaboration and the exchange of information between Member States and supports effective compliance with cooperation obligations.It aims, in particular, to support national authorities in identifying the relevant contact point of national authorities in Member States, to facilitate follow-ups on requests and information exchange between national authorities, and supports cross-border enforcement procedures. 60One important task of ELA is to coordinate and support concerted and joint inspections at the request of one or more Member States by agreement of the Member State(s) concerned.Notably, ELA does not have a proper mandate to organise such inspections, but depends on the willingness of Member States to participate in them.Such inspections shall be carried out by the inspection services of the Member States concerned in accordance with the law and practices of the Member State in which the inspection takes place.ELA shall provide conceptual, logistical and technical support, including translation and interpretation services, as well as legal expertise. 61ELA has recently launched a 'Posting 360 mutual learning and understanding programme' for the relevant stakeholders, with six priority areas covering relevant topics: (i) implementation of the PWD; (ii) posted TCN workers; (iii) application of social security coordination rules to posted workers; (iv) information exchange and digitalisation opportunities for authorities, employers and workers; (v) effective administrative procedures and control measures; and (vi) facilitation of the collection and quality improvement of data. 62n interesting 'best practice' in cross-border cooperation occurred in Spring 2022, when the Dutch labour inspectorate engaged in enforcing the rules on decent employment and housing conditions for temporary agency workers employed by Dutch TWAs who were residing in the German border region.The German local and regional authorities took the initiative to enforce a new North Rhine-Westphalia law on decent housing for migrant workers (Wohnraumstärkungsgesetz). While the German authorities concentrated on the workers' housing conditions, the Dutch inspectorate investigated the payment of statutory minimum wage and potentially illicit deductions for the workers' deplorable housing conditions.The case was extensively covered in the media, with the TWA's practices named and shamed. 63

Measures to improve national frameworks
As long as EU rules on corporate mobility do not provide for a workable solution for one of the most crucial loopholes in the current legal framework, stronger dissuasive measures can and should be introduced at the national level.One possible way forward towards creating clear, fair and enforceable rules could be to restrict or even prohibit the possibility of using temporary agency workers altogetherat least in certain risk sectors (on a temporary basis), such as in the agriculture, care, meat, construction and road transport sectors. 67In Germany, temporary agency work in the meat industry has been prohibited since April 2021, in response to investigations during the COVID-19 pandemic into claims that agency workers in the meat industry worked in extremely precarious conditions.Also, the use of temporary agency workers in this sector was particularly high. 68The prohibition applies to the core businesses of the meat industry (slaughtering, cutting and meat processing).A possibility of strictly limited exceptions remains for a period of three years, which is dependent on the conclusion of a collective agreement, but has not yet occurred. 69These measures were contested before the German courts for imposing discriminatory restrictions.However, the Constitutional Court rejected the claims brought by several temporary work agencies and a sausage manufacturer. 70ndeed, in accordance with Article 4(1) TAWD, measures to prevent abuse can be justified.This includes measures such as restrictions on the nature of the tasks that may be assigned to temporary agency workers, the possibility for national collective agreements to set quantitative limits on the use of contracts for agency work, or the need in certain cases for the user undertaking to obtain the consent of its union delegation before using agency workers. 71urthermore, there is an urgent need to strengthen national monitoring and enforcement mechanisms. 72Article 4(4) TAWD leaves measures related to registration, licensing, certification and financial guarantees or the monitoring of TAW fully within Member States' remit.So, licensing systems for TWAs could, inter alia, be adopted or improved (and monitored!),which-to prevent the establishment of letterbox companies-should include clear criteria for establishing operating premises, such as a minimum amount of square meters, technical equipment and other 'substantial requirements' relating to, e.g., a minimum percentage of turnover in the country of establishment, in addition to stringent requirements for working conditions, such as adequate health and safety policies, decent accommodation for workers and transport or reimbursement of such costs, equal pay and training.
25. Articles 1(2)(a) of the revised Directive, amending Article 3(1) PWD.The explicit exclusion of supplementary occupational retirement pension schemes remains in place.26.Article 1(2)(d) of the revised Directive, solving problems such as in Germany following the Rüffert judgment (C-346/ 06).27.See recital 18 for considerations on how to compare the actual remuneration paid to a posted worker and the remuneration due in the host Member State.
33.In line with the stepping stone function of the TAWD, as referred to in Case C-681/18 KG, EU:C:2020:823, para 51, namely, 'to bring the conditions of temporary agency work closer to 'normal' employment relationships,'(…) and to 'stimulate temporary agency workers' access to permanent employment at the user undertaking, an objective reflected in particular in Article 6(1) and (2) of that directive.'34.COM(91)230 final, p. 15, under point 25, third indent and p. 13 under point 19, third indent.
35.See e.g.Ratti, 'Agency Work and the Ideal of Dual Employership: A Comparative Perspective' (2009) 30 Comparative Labor Law & Policy Journal, at 835. 36.See, more extensively on this issue, the contribution of Zekic to this special issue.37.At a national level, Article 4(1) TAWD allows for prohibitions or restrictions on the use of TAW justified, e.g., by the need to ensure that abuses are prevented.In addition, requirements related to registration, licensing, certification, financial guarantees or monitoring of TWAs are a national competence (see Article 4(4) TAWD).38.Case C-681/18, KG, EU:C:2020:823.See also Case C-232/20 Daimler EU:C:2022:196.See, more extensively, the contribution of Kullmann on the case law related to the 'temporariness' of agency work assignments.39.Article 7 of Directive 91/383/EC.40.See C. Chacartegui (2013 at p. 213), 'Resocialising temporary agency work through a theory of reinforced employers liability' in: N. Contouris & M. Freedland (eds.),Resocialising Social Europe in a Time of Crisis, Cambridge: Cambridge University Press 2013, pp.213-229.
42. Article 1(2)(a) of the revised Directive.43.A socio-legal PhD thesis based on interviews with white-collar and blue-collar posted workers confirms the vulnerability of the latter group.See M Lasek-Markey (2022), Bridging a Divide: The Relationship between the Evolving Posted Workers Directive and Posted Workers Experience of Precarity, Trinity College Dublin.School of Law, 2022, pp.251-253.44.Despite the ruling of the CJEU in case C-396/13 (Sähköalojen ammattiliitto ry) that trade unions cannot be prevented from representing posted workers who have become trade union members in court, in just the same way as they represent domestic workers.45.K. Kall & N. Lillie (2017, p. 5), Protection of posted workers in the European Union: Findings and policy recommendations based on existing research, PROMO briefing paper, University of Jyväskylä, Finland.46.See I. Pavlovaite, K. Jakubowska, et al. (2021), Tools and approaches to tackle fraudulent temporary agency work, prompting undeclared work, ICF/CSD European Platform tackling undeclared work, p. 2.
10That is, Member States and their social partners must prevent derogations from the principle of equal treatment from being detrimental to temporary agency workers' overall level of protection. 11.2.Second arrangement: temporary agency workers hired in one Member State and posted to a user undertaking in another Member StateIn the second arrangement, the cross-border element consists of the fact that the agency worker is hired by a TWA established in a 'sending' Member State but is placed in a user undertaking established or operating in the host Member State.In this situation, the TWA draws on the freedom to provide services in the EU (Article 56 TFEU).The (revised) PWD, which covers the posting of workers within the framework of freedom to provide services in the EU, explicitly addresses crossborder temporary agency work in its Article 1(3)(c) PWD).Therefore, it applies to the second arrangement, provided that all requirements are met.
2.3.Third arrangement: temporary agency workers hired in one Member State and posted to a user undertaking in another Member State and requested to perform work in a third Member State 17. Revised PWD, Article 1(1)(c)(ii).18. See: Van Nuffel, P. and Afanasjeva, S. (2020), 'The Revised Posting of Workers Directive: Curbing or Ensuring Free Movement?',in: European Citizenship under Stress.Social Justice, Brexit and Other Challenges, Nijhoff Studies in European Union Law, Volume: 16, p. 271-302.19.Practical Guide on Posting, Luxembourg: Publications Office of the European Union, 2019, p. 11. 20.Van Nuffel & Afanasjeva, 2020.
As emphasised by Schlachter (2014, p 278), 'the exception clauses of the TAW Directive nevertheless allow for several ways to derogate from this general principle, so that Member States in transposing the Directive enjoy a wide margin of discretion, just how much equality they will give to (foreign) agency workers', although 'any acceptable exception to the general principle must nevertheless preserve an adequate level of protection, not merely low-key minimum standards'.A case recently decided by the CJEU clarifies the concept of 'overall protection of temporary agency workers' under Article 5(3) TAWD.See section 2 above, fn. 10 referring to Case C-311/21, TimePartner Personalmanagement, EU: C:2022:983.32.The Court held in Rush Portuguesa (para 17) and confirmed in Vicoplus (para 35) that an undertaking engaged in the making available of labour, although a supplier of services within the meaning of the Treaty, performs activities that are specifically intended to enable workers to gain access to the labour market of the host Member State.On this case law and its (potential) consequences, see M.S. Houwerzijl, 'Regime shopping' across blurring boundaries', in S. Evju (Ed.) Regulation of transnational labour in Europe 2014, p 118-123.
Moreover, academic studies highlight the 47.Several studies illustrate how employers and intermediaries repeatedly create such exploitative arrangements, strategically using legal loopholes.See, e.g., M. Houwerzijl, E. Traversa, and F. Henneaux, A hunters game: How policy can change to spot and sink letterbox-type practices, Brussels: ETUC December 2016.48.CJEU, Case C-106/16 (Polbud), ECLI:EU:C:2017:804.49.CJEU, Case C-784/19 (Team Power Europe), ECLI:EU:C:2021:427, para 66. See S. Robin-Olivier (2022), pp.682-683 on this Bulgarian TWA and similar TWAs which have made a business model of hiring temporary agency workers for the purpose of posting them to user companies in Member States with higher labour costs.50.A recent overview is available in Pavlovaite et al. (2021) for the European Platform tackling undeclared work.See pp.22-24, 28-29 of this study for examples of abusive practices of a TWA in its cross-border operations.51.Eurofound, Regulation of labour market intermediaries and the role of social partners in preventing trafficking of labour, Dublin 2016.52.FRA (2015), Severe Labour Exploitation: Workers Moving Within or into the European Union.States' obligations and Victims' Rights, Brussels: FRA; More recently see: International Organization for Migration (IOM), 2022.Mapping risks to migrant workers in supply chains in Europe: Case studies and best practices from the agriculture, foodprocessing, manufacturing and hospitality sectors.IOM, Geneva.53.Hunt (2014), 'Making the CAP Fit: Responding to the Exploitation of Migrant Agricultural Workers in the EU' International Journal of Comparative Labour Law and Industrial Relations 30(2):131-152; Barnard, Ludlow, and Fraser Butlin (2018), 'Beyond Employment Tribunals: Enforcement of Employment Rights by EU-8 Migrant Workers' Industrial Law Journal, Vol.47, Issue 2, 2018, pp.226-262.