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EU Adopts Directive Easing Corporate Transfers
 

By Roy Maurer  6/11/2014
 

The Council of the European Union adopted legislation in May 2014 making it easier for multinational companies to temporarily assign high-skilled employees to subsidiaries situated within the European Union (EU). The council is the 28-member union’s legislative upper house. The lower house—the European Parliament—voted in favor of the directive in April.

The policy will ease the transfer of managers, specialists and trainees from international companies to a branch in the EU, as well as facilitate mobility of transferees between member states during their assignments. The law also sets down a bill of rights for intra-corporate transferees when working in the EU in order to prevent their exploitation.

According to the European Commission, 15,000 to 20,000 transferees will be admitted annually under the policy.

“We’re really pleased to see the EU adopt this directive. It’s something that the business community has been advocating on for a number of years,” said Lynn Shotwell, executive director of the Council for Global Immigration, an affiliate of the Society for Human Resource Management and an organization dedicated to advancing high-skilled employment-based immigration. “It’s a natural progression of the harmonization of EU rules regulating the movement of people,” she added. “Hopefully, the directive will provide more transparency and predictability for companies transferring third-country national, non-EU citizens within the EU, and allow them to move across internal borders more easily.”

Federico Soda, head of Labour Migration and Human Development at the International Organization for Migration, based in Geneva, Switzerland agreed that the directive will improve the global attractiveness of the EU as a place to do business. “However, it remains to be seen how the member states implement the directive in the national laws in the next two years given that the directive only sets minimum standards and includes some optional clauses.”

Member states now have up to 30 months to integrate the directive into their national legislation.

Of particular concern is the area of intra-EU mobility for transferees where the directive includes a number of optional requirements that member states may impose, Soda said.

“It’s been a long time in coming, since 2005,” remarked Elizabeth Collett, director of the Migration Policy Institute Europe, based in Brussels. “But it’s not really a game-changer for Europe,” she added. “Many of those countries already have some form of intra-company transfer system in place, and this will only affect a very select category of worker.”

Collett doesn’t expect much debate to take place about implementation among the member states. “The process will vary from country to country, but it’s no longer political; it’s bureaucratic,” she said. In some countries, the integration will mean tweaking visa processes, while other countries will have to create an intra-corporate transfer process where none existed, she said.

“The challenge will be making sure that each member state agrees to very similar definitions and terms for visas, so that we don’t have a wide variation among EU members,” Shotwell said.

Eligibility

To be eligible for an intra-corporate permit, managers and specialists must have worked at least three and up to 12 uninterrupted months for the multinational company immediately preceding their transfer. For trainee employees this period is three to six uninterrupted months. Member states retain the right to set the volumes of admission of intra-corporate transferees who apply to be admitted to their territory. The permit will be valid for a maximum of three years in the case of managers and specialists, and one year for trainees.

Intra-EU Mobility

The intra-EU mobility aspect of the directive “signifies a major innovation compared to existing national schemes which do not allow intra-corporate transferees to work in subsidiaries established in another member state,” according to the Council of the European Union. Subject to a number of conditions, they can enter, stay and work in member states other than the one to which they were initially admitted with little or no interruption to their assignments. However, the conditions for assignments lasting longer than 90 days are stricter than those for short-term transfers lasting less than three months. The changes can’t come soon enough for employers, who currently face 28 different sets of work-permit regulations.

Family Mobility

A transferee’s family members will be able to accompany the employee from the start of the assignment if they apply at the same time, removing an important obstacle in accepting an international assignment. Family members also have the right to be employed or self-employed in the host member state throughout the duration of the transfer.

Soda views this provision enabling family reunification and access to employment for family members “one of the most positive outcomes of the negotiations.” This is a crucial element to promote attractiveness of the EU postings for skilled professionals, he said.

“One of the biggest challenges companies face when transferring employees abroad is that most midlevel and senior executives have spouses with careers, and when they move around they want their spouses to be able to continue to work,” Shotwell said.

One of the biggest reasons for assignment failure is an unhappy family, she added.

“It’s easier for a highly qualified employee to accept a transfer if their partner doesn’t have to give up their own career aspirations,” said Kathleen van der Wilk, executive director of Permits Foundation, an organization campaigning to make it easier for partners of expatriate staff to gain employment during an international assignment. “That’s good for the family, good for business and good for the European economy.”

The Permits Foundation, based in the Netherlands, spent years working to make sure that family mobility was included in this directive.

Labor Standards

To ensure that intra-corporate transferees are not exploited for their labor, member states must require that companies pay transferees comparably to nationals in similar positions. Transferees may join trade unions and use public goods and services. Additionally, they are entitled to treatment equal to that of national workers regarding the terms and conditions of employment, such as maximum work periods or safety conditions. Finally, equal treatment between transferees and nationals applies to social security benefits related to health, disability and age.

Member states can make an exception where the national law or a bilateral agreement with the host member state establishes that the laws of the country of origin of the transferee will apply. Member states have the option to deny family benefits to employees who stay less than nine months in the EU.

The directive on intra-corporate transferees complements three recently passed EU migration policies aimed at positioning Europe as an attractive region for highly skilled talent: the 2009 EU Blue Card directive allowing high-skilled non-EU citizens to work and live in the EU; the 2011 Single Permit directive establishing a simplified procedure for immigrants to the EU to obtain work and residence permits within the EU; and the 2014 Seasonal Workers directive on the conditions of entry and stay of third-country nationals for the purpose of seasonal work. A proposal easing the conditions of entry and residence of foreign nationals for the purposes of research, studies, pupil exchange, training, voluntary service and au pairing is still under negotiation.

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy

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