On February 12, 2015, the Court of Justice (“CoJ”) gave its judgment in the Finnish preliminary reference case C-396/13 Sähköalojen ammattiliitto concerning issues on the posting of workers.

On a general note, the judgment restates the purpose of Directive 96/71 concerning the posting of workers (“the Directive”) as well as the objective of a nucleus of mandatory rules for minimum protection guaranteed to posted workers. The purpose of the Directive is to lay down the terms and conditions governing the employment relationship where an undertaking established in one Member State posts workers on a temporary basis to the territory of another Member State (striking also a balance by distributing what the home and host Member State can legislate on). The objective of that minimum protection is dual: first, it seeks to ensure a climate of fair competition between national undertakings and undertakings which provide services transnationally; second, to ensure that posted workers will have the rules of the host Member State as minimum protection as regards the terms and conditions of employment when they work in the territory of the host Member State.

The first issue dealt with in the CoJ’s judgment is procedural concerning the possibility of posted workers to assign their claims in relation to minimum rates of pay to a trade union in the host State. The issue arose because the law which governed the employment contract between the posted workers and their employer in that case was Polish law and under Polish law employees cannot assign or transfer their employment rights to anyone else. The CoJ found that questions concerning the minimum rates of pay are to be dealt with pursuant to the law of the host State, i.e. Finland. Since such assignment is possible under Finnish procedural law, the Polish rule barring such assignment is irrelevant.

The CoJ moved then to examine the issue of the constituent elements of the minimum wage. Article 3(7) of the Directive makes clear the extent to which allowances constitute part of the minimum wage: Allowances specific to the posting are to be considered part of the minimum wage unless they are paid in reimbursement of expenditure actually incurred on account of the posting, such as expenditure on travel, board and lodging.

In particular, as regards the daily allowance intended to ensure the social protection of workers, making up for the disadvantages of the posting, the CoJ finds that it must be classified as an “allowance specific to the posting” and thus it is part of the minimum wage. Similarly, Article 3(1) of the Directive, read in the light of Articles 56 and 57 TFEU, must be interpreted as meaning that the minimum pay which a worker must receive for the minimum paid annual holidays corresponds to the minimum wage to which that worker is entitled during the reference period. Thus, holiday pay constitutes parts of the minimum wage.

On the contrary, the coverage of the cost of accommodation and the meal voucher, the CoJ reaches the conclusion that Article 3(7) of the Directive does not permit expenditure connected with the posted workers’ accommodation and meals to be taken into account in the calculation of their minimum wage. Consequently, expenditure for accommodation and meals is to be dealt with by the law of the home State, not the law of the host State.

Finally, as regards the compensation for daily travelling time, the CoJ made a distinction based on the Finnish collective agreement: compensation for travelling time must be regarded as part of the minimum wage of the posted workers on condition that their daily journey to and from their place of work is of more than one hour’s duration.