This article originally appeared in the October 2018 edition of Mobility Magazine.
Intra–European Union (EU) mobility, or the right of free movement, is one of the four fundamental freedoms upon which the European Common Market was based. The European Union is undoubtedly the most distinctive regional union in the world—with the principle of freedom of movement being key to its integration.
The EU has continuously sought to guarantee and improve the right of free movement. Initially, intra-EU mobility was thought to apply only to EU workers, and only later was the right of free movement extended to any EU citizen. Presently, EU, European Economic Area (EEA), and Swiss nationals do not require work permits to work in an EU member state. No employment restrictions are applied to them, as they are considered to have equal rights to work as local employees.
However, this still leaves unanswered the questions of how intra-EU mobility is applied to third-country nationals and what challenges are involved in intra-EU mobility. Over the years, the EU has made huge progress toward freedom of movement through directives that encourage intra-EU mobility for both EU nationals and third-country nationals. The key processes include the Vander Elst visa, the Intracompany Transfer permit, and the Blue Card—all of which are vital for employers, employees, and global mobility professionals to understand when working within the European market.
Simply understanding the basics of these processes is not sufficient to ensure successful mobility within the EU. These processes, while appearing straightforward in theory, are not always easily implemented in practice. This is due to the various differences in enforcement and regulation among the EU member states, which can hinder the ability of employees to perform work activities freely throughout the EU. Thus, employers with needs for frequent intra-EU mobility of employees must understand the challenges of these processes and how they can be improved.
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In 1994, the Vander Elst visa process was derived from a European Court ruling giving EU companies the right to provide services within the EU under the principle of freedom of services. The Vander Elst ruling allowed third-country, non-EEA nationals legally employed by a company within one EU country to provide services on a temporary basis to a company in another EU country on behalf of their employer without requiring a work permit.
While this process was meant to improve the ability of an employee to provide services to other companies within the EU, authorities in some EU countries are still not sufficiently knowledgeable about this work permit exemption. In turn, this causes the authorities in some countries to fail to recognize the Vander Elst process and to still require the employee to obtain a work permit. Without knowledge of which countries are familiar with and recognizing the Vander Elst visa and which are not, employees may face the surprise of suddenly being asked for a work permit and not being prepared to obtain one.
In addition to the lack of knowledge of the Vander Elst by some authorities in some EU countries, another major issue is the fact that there are different interpretations of the law throughout the EU. These interpretations vary in aspects such as duration of time the employee may spend in the EU country, whether or not dependents are permitted to accompany the employee, whether the exemption applies to all assignments or only to assignments between nonaffiliated companies, and whether it applies within the EU, the EEA, and/or Switzerland. These variations can have a major impact on an employee’s ability to accept assignments in other EU countries and frustrate EU employers unaware of these differences.
Another cause for concern under Vander Elst is the fact that intra-EU assignments require posted worker notifications in the countries to which the employee is assigned. Posted worker rules will be discussed in further detail below, but suffice it to say that the Vander Elst process is not as uniform as one might hope and doesn’t necessarily fully achieve the EU’s goal of free movement of services.
Real-world examples help to illustrate the complications that can arise due to this lack of uniformity. Take the example of an employer needing to send a U.S. citizen currently working in Germany to various other countries within the EU to perform work activities at various subsidiaries. While some of the nations will have implemented the process to include assignments between affiliated companies, others, such as Italy, require the assignment to be between nonaffiliated companies to deliver services as part of a contract. This variation in the interpretation of the law forces the employer to rethink its assignment of the employee and find an alternative process through which the employee can be placed on assignment with an affiliated company. As a better option, the employer should consider using the intracompany transfer route discussed below.
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The EU Intracorporate Transfer (ICT) Directive was adopted by the European Council in 2014 to permit third-country nationals in certain positions to be assigned from a company outside the EU to an affiliated company inside the EU for up to three years. The directive further aimed to facilitate and ease intra-EU mobility requirements by allowing transferred employees to work in more than one EU member state without obtaining additional permits.
While the ICT Directive is an attractive option for non-EU employers to assign their employees to their company in the EU, there are several issues with the actual implementation of the directive of which employers should be aware. Thus far, the directive’s implementation has been spotty. Where the directive has been implemented, it has been with national variations in the qualifying criteria and benefits—such as requirements on seniority and experience, the ability to work at client sites, and maximum length of assignment limitations.
Some EU nations have broader qualifying criteria and have retained their national ICT permits, which have not been replaced by the new EU ICT permit. Take, for example, the Netherlands, which had its own national route for intracompany transfers. The national route allows transferees to stay in the Netherlands for up to five years, with the ability to extend beyond that. However, with the new EU ICT permit in place, transferees are now limited to just three-year stays without the possibility to extend.
The ICT permit does not benefit applicants already resident in the EU, as it applies only to third-country nationals being posted from outside the EU to companies within the same corporate group. This limits the transferee’s ability to be assigned to an unrelated company or client site and limits the employer’s ability to transfer employees already residing within the EU to assignments in other EU nations.
Read the rest of this article in the October 2018 edition of Mobility Magazine.