Blog

Three Permissible Types of Posting of Workers

Based on Article 1 of the Posted Workers Directive (96/71/EC), posting can be divided into three types: classical posting, intra-group (corporate) posting, and agency posting. Some legal scholars also suggest distinguishing an additional three types of posting. The first would concern workers sent to another Member State temporarily to carry out a specific project, the second would refer to workers who regularly change their place of work within the EU, and the third would involve “rotational workers,” meaning individuals performing work alternately in two countries on a regular basis. This categorization was inspired by the judgment of the Court of Justice of the European Union (CJEU) of 15 March 2001 in case C-165/98 Mazzoleni, which dealt with workers employed by a French security company alternating between working in supermarkets in France and Belgium.

Regardless of the subject matter of the dispute, it should be recognized that the alternating nature of work performed in two Member States does not preclude classifying such mobility as posting under Article 1(3)(a) or (b) of the Directive. However, it is not excluded that, under social security coordination rules, this situation might instead be classified as simultaneous or alternating employment in at least two Member States (see Article 13(1) of Regulation 883/2004).

In conclusion, distinguishing additional posting variants is not justified, as they are not sufficiently distinct to prevent their classification under one of the three main categories outlined above.

Classical Posting

The term “classical posting” is used particularly in Austrian legal literature. As the name suggests, this type of posting refers to the most typical case, where a company operating in one Member State, based on a contract concluded with a service recipient in another Member State, sends its employees to that Member State to provide services on its own account and under its own direction (see Article 1(3)(a) of the Directive).

An example of classical posting may be the provision of subcontracting or outsourcing services, resulting from the fragmentation of production and investment processes as well as increasing specialization among businesses. This model of posting is characteristic of the typical method of providing services, for instance, in the construction sector (see cases C-113/89 Rush Portuguesa, C-164/99 Portugaia Construções, and C-341/05 Laval un Partneri Ltd). To determine whether a given situation constitutes classical posting, the billing arrangements between the contracting parties — as set out in the service contract — may be relevant. If the parties agree that the remuneration should be calculated based on the number of hours worked by the posted workers, this may indicate the provision of temporary agency work.

Intra-Group (Corporate) Posting

Posting under Article 1(3)(b) of the Directive is referred to in the literature as “intra-group posting” or “transfers” and applies when an employer operating in one Member State posts its employees to an establishment or enterprise belonging to a group of undertakings in another Member State. It is worth noting that the Directive itself does not use the term “corporate group” but instead refers to a “group of undertakings,” without further definition.

For further discussion, it is important to clarify what is meant by a “group of undertakings.” Literature indicates that capital links must exist between the companies, arising from one company owning shares or stock in another, regardless of the quantity or ownership rights. Changes in ownership occur particularly through acquisition or buyout, so-called capital outsourcing (spinning off parts of a parent company and transferring them to subsidiaries), or via so-called ownership consolidation (transferring shares or stock to a managing entity).

In Polish law, there are several legal definitions of a capital group, for example in:

• Article 3(1)(44) of the Accounting Act of 29 September 1994,
• Article 2(24) of the Act of 27 May 2004 on Investment Funds and Management of Alternative Investment Funds,
• Article 3(18) of the Act of 29 July 2005 on Trading in Financial Instruments,
• Article 1a of the Corporate Income Tax Act of 15 February 1992.

Importantly, a group of undertakings does not have legal personality and cannot be an employer — only the individual companies within it can hold employer status. This means that posting cannot be carried out by the group as a whole, but only within the group. Therefore, the term “intra-group posting” is a simplification and does not reflect the actual legal situation.

It must be assumed that the term “group of undertakings” as used in Article 1(3)(b) of the Directive should be interpreted autonomously. Its meaning can be explained by the Compendium of Definitions Used in Community Law prepared by the European Commission. According to this document, a “group” consists of a parent company, its branches, subsidiaries or affiliates, and other companies connected within the meaning of Article 12(1) of Directive 83/349/EEC.

Another important issue is distinguishing intra-group posting, seen as a specific form of genuine posting of employees, from cross-border posting by temporary work agencies. The key difference is that intra-group posting is internal — work is performed not for a user employer but for a company related by capital to the employer. In human resources management, special attention is paid to the posting of managerial staff, often referred to as “expats” or “expatriates.” Contracts with such employees often include not only financial terms but also guarantees of additional benefits in the host country, such as cultural and personal support (e.g., organizing local tours or theatre tickets) and business integration (e.g., financing participation in business associations or chambers of commerce).

Agency Posting

Agency posting is regulated in Article 1(3)(c) of the Directive, which refers to the posting employer as a “temporary work agency” or “personnel leasing agency.” According to settled CJEU case law and legal doctrine, employee leasing occurs when the employer’s activity is for-profit and autonomous, and the temporary worker performs duties under the supervision and control of the user undertaking with whom they have no employment contract. The autonomous nature of agency posting lies in the fact that leasing is not an ancillary element of a broader service but constitutes a service in its own right.

An activity does not constitute agency posting if, first, the employer bears responsibility for any non-compliance with the service agreement — i.e., if they are accountable for the quality and quantity of the performed service, and their remuneration is not based on an hourly rate. Secondly, it is also not considered agency posting if the employer independently and freely determines the number of employees assigned to fulfill the contract. For example, in case C-586/13 Martin Meat, the CJEU found that the employer’s remuneration depended on the quantity and quality of processed goods, not on the number of posted employees, and thus agency posting requirements were not met.

Agency posting represents a form of improper deployment of workers, as it involves their regular, paid leasing for financial gain. In contrast, proper deployment, such as intra-group posting, is sporadic, irregular, and non-commercial.

Agency posting must also be distinguished from the cross-border job placement services, which, under Polish law, involve employment agencies directing individuals to foreign employers (see Article 85(2) and (3) of the Act of 20 April 2004 on the Promotion of Employment and Labour Market Institutions). The key difference is that there is no employment relationship between the agency and the worker being placed. Additionally, the purpose of agency posting is not to enable access to the labor market in the host country — unlike job placement services, which are precisely aimed at that. Therefore, attempts to classify cross-border job placement as a form of posting (in the broader sense) have no legal or factual basis.

This text is protected by copyright and is an excerpt from a doctoral dissertation written by Dr. Dominik Matczak.