International labour mobility

Every time an employee crosses the border – no matter whether it be for a single day or for five years – this affects both the employer and the employee, in terms of migration law, social security, labour law and employment conditions, taxes and pensions. It will not suffice to simply deal with these issues on an individual basis in the run-up to deployment abroad; they must be viewed in the context of international cooperation.   

Further information on the various sub-topics involved in cross-border deployment:
migration law
social security
labour law and employment conditions
fiscal issues

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​AWVN advises and supports companies in the process of forming a European works council. AWVN has amassed a lot of practical experience in the field of international employee participation, at international companies big and small. AWNV’s consultancy services focus on the value added of the EWC. Our services are by no means limited to providing legal advice, but also encompass negotiation processes, labour relations and employee participation in the member states, operational support and process supervision.
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Migration law

The Netherlands applies stringent policies when it comes to access to the Dutch labour market. Employers of foreign workers who come to work in the Netherlands without proper permission or in breach of the official notification procedure may be fined severely. It is essential that employers making use of non-EU workers or workers from Eastern European EU countries act in strict compliance with Dutch law. However, this legislation is complex and subject to constant change. Schemes related to the employment of foreign workers in the Netherlands include:
• labour migrants scheme
• inter-company transfer
• knowledge workers scheme
• notification procedure.
There may also be certain exceptions (where no employment permit or residence permit is required).
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Social security
Every time an employee moves to another country, social security law also transcends the geographical border. When an employee goes to work in another country, his or her social security entitlements must then be determined on the basis of international regulations. In some cases, it may be possible to simply maintain the employee’s social security status in his or her county of origin for the period of foreign deployment. If the preconditions have not been met in full, however, the worker may be subject to fines or retroactive assessments in the country in which he or she is temporarily employed.
Following the introduction of the Health Care Act, a great many changes took place in terms of employees’ insurance status during foreign deployment as well as the extent and scope of claims. It is essential that both employer and employee fully understand their position in terms of insurance abroad, as well as the related financial consequences.
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Labour law and employment conditions
Working abroad generally takes one of three forms: business trips (generally shorter than a month), short-term deployment (generally for a period of between 1 to 12 months, the employee is not accompanied by family members) and long-term deployment, also known as expat deployment (longer than a year, the employee is generally accompanied by his or her family members. These three forms are generally featured in the employer’s deployment policy, which specifies standards for deployment abroad, as well as agreements on labour conditions.
Every employer that sends an employee to work abroad will have to consider the legal implications of this deployment with regard to their professional relationship with the employee and the company itself. In the event of incapacitation during the period of deployment, will the employee be subject to local regulations on illness and reintegration, or those in his or her country of origin? Which collective agreement applies? That of the country of origin, the country of deployment or both? All these questions result from the fact that internationally deployed workers are subject to multiple legal systems. It is often unclear which system takes priority and to which areas each applies.
In practice, contracts often specify that the employee and the contract under which he or she is working are subject to local laws for the duration of the deployment. However, such decisions are often not final, as mandatory provisions in the (other) country of employment may apply.
The most important issues include the European Convention on Contractual Obligations, the EG Directive 96/71 regarding temporary work abroad (the Deployment Directive), the Cross-Border Labour Conditions Act and EU Directive 44/2001 on the issue of jurisdiction.
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Fiscal issues
In the event of temporary detachment abroad, employees often become subject to taxation abroad. However, they also remain subject to taxation in their country of origin in many cases, resulting in double taxation.
It is important to establish in which country the employee is expected to pay payroll and income tax in the event of deployment abroad. Naturally, this will require a clear insight into international tax law as well the various taxation principles involved and the relevant issues of double taxation. This will ensure no extra costs are incurred, and allow you to make optimal use of the available tax facilities.
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Supplementary – or extra-statutory – pensions and international deployments are often difficult to combine. The various nations apply different pension schemes, so that cross-border deployment often gives rise to conflicts as to whether or not pension premiums and payments are subject to taxation or the transferability of pension rights. These problems are mainly caused by the diverse tax systems applied by the various member states.
With a view to the shared principle of free movement of employees, an EU-wide effort is currently underway to coordinate the various European pension systems. The 98/49/EG Directive on the protection of supplementary pension rights for employees and self-employed persons moving within the community is especially relevant in this regard. This directive specifies that member states must take the necessary measures to ensure that employees who have participated in supplementary pension schemes are not worse off when they leave the country after their deployment than those that stay. The directive also establishes that supplementary pensions can be paid out in other member states. It also obliges member states to ensure that employees deployed abroad can continue to participate in existing pension schemes in their country of origin during the period of their employment abroad. Provisions were also made to ensure that employees cannot be obligated to take part in pension schemes in their country of deployment. The directive does not entitle employees to transfer of value.
The guideline removes a number of pension-related stumbling blocks, thus further facilitating deployment within the EC. The greatest bottleneck – taxation – remains, however. The various nations apply such divergent tax systems and assess pensions in such a different manner that it is impossible to implement a single international policy when it comes to the fiscal aspect of pensions. As a result, the fiscal implications in terms of pensions will have to be assessed on a case-by-case basis.
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