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04.06.2019

THE BUREAUCRATIC MONSTER OF BRUSSELS

Registration obligations for staff working abroad for even very short periods are getting out of hand. A businessman reports on the madness he experiences every day.

By Eike Radszuhn

LT Gasetechnik from Dortmund sells its systems all over the world. But when CEO Alexander C. Hanf posts staff to other countries in Europe, he regularly despairs in light of the bureaucracy he faces.

The EU has a common market that also guarantees freedom of movement. So, what is the problem?

This might © LT Gasetechnikbe true on paper, but in reality, it is simpler to post staff to countries like Russia and China than to EU countries. That is because, in the EU, periods of work abroad have to be registered with the national authorities - regardless of the common market. These registration obligations vary from country to country and often involve complex procedures. You could say that the implementation of the EU Posted Workers Directive in the member states has created a bureaucratic monster.

Can you give us a specific example?

We manufacture gas mixers and one of our systems is installed at a steel corporation in Luxembourg. We conduct maintenance on this system once a year, sending two members of staff to Luxembourg for three days.

Recently, our customer began to demand that we register these employees properly. The first time we registered them, the process took almost three months.

Pardon?

Do you know what an apostille is?

No.

Neither did I. One thing we had to do was to apply for a Luxembourgian VAT number for the posting. As part of this, the Chambre de Commerce in Luxembourg demanded notarized confirmation that I exist. We also had to submit verification that our solicitor, who had confirmed my existence, actually exists. This is done through an apostille. In our case, the document was issued by Aachen District Court. My first though was, "This can’t be right, I must have done something wrong." But the lady from the Chambre de Commerce in Luxembourg assured me that this is how the system works.

What other documents did you have to submit?

In order to get a VAT tax number, you have to apply for a social insurance number. To register online, you have to buy a little device called a code generator, which costs 30 euros. For your staff, you of course need an A1 form to confirm that they are employed and subject to social insurance contributions. And you need some documents that your employees carry with them throughout the posting - the employment contract and certificates of their professional qualifications, for example. The staff have to make sure they do not enter Luxembourg via Belgium, for example - otherwise they would need an A1 registration there, too. Luxembourg also requires an occupational health check-up to confirm their ability to work.

How much time and money did this take?

In the specific case of Luxembourg, we charged 7,000 euros for the maintenance trip including travel and ancillary costs, plus another 2,000 euros for the administrative aspects. However, firstly, you are not always in a position to pass these costs on to the client. And secondly, time is a factor. What can I do if my customer has an emergency and the system stops working? I can’t really say, "My staff are ready and we could be there in three hours, but we will have to wait until next week, when we have all the paperwork. Until then, your production line will have to be shut down."

Are the rules for posting to Luxembourg an exceptional case?

The registration obligations for Luxembourg take things to a whole new level, but other countries are not far behind. Posting to Austria or Poland takes me half a day. And every country does things slightly differently. In Spain, I have to understand and complete the forms in Spanish; in Italy, in Italian. The forms look different in different countries, too.

The EU and its member states argue that the registration obligations protect against social dumping. Can you understand that view?

In our case, we are talking about maintaining systems for flammable, high-pressure gases. There is only a handful of experts able to conduct this kind of work. I cannot help but wonder how my posting my highly-qualified staff, who are employed and pay social and health insurance in Germany, to Luxembourg for a few days would distort competition in Europe. I don’t want to see social dumping in Europe either, but I think we're throwing the baby out with the bathwater here.

What solution would you like to see?

There are so many approaches. It would be good to have a central registration authority in Europe, or at least consistent registration obligations in all EU states. Instead of registering every short posting individually, registrations could apply for a longer period, such as three years. Do I really need to demand all the documents from a highly qualified employee? An engineer or foreman is unlikely to be suspected of working at wage dumping level. Policymakers should also think about the kind of postings for which registration obligations really make sense. Is it really worth the effort for a few days of work abroad? Although the Posted Workers Directive already includes an exception for postings of just a few days, our customers still demand registration - probably because the Posted Workers Directive does not differentiate precisely enough.

You are actively campaigning for simplification of posting. MEP Dennis Radtke even visited your company recently. Do you think policymakers understand your concerns?

I would like to give some praise to my MEP Mr. Radtke here. I sent him an email explaining my problems with the Posted Workers Directive. Just a week later, he visited our company in Dortmund in person. He was very surprised at what we had to say - he only knew about the issues with posting workers from the point of view of workers coming from low-wage countries to Germany. I think he understood my point and intends to address it at EU level. But I don’t know whether he can really change anything.

Further Information

VDMA European Office   |   VDMA Foreign Trade Department   |   LT Gasetechnik

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Contact
Yvonne Heidler, VDMA Foreign Trade Department.