By Ted L Badoux of Everaert Advocaten
At a time when borders are emphasised rather than opened up, and the mobility of people is controlled rather than liberalised, a revolutionary scheme is under construction in the European Union.
By the end of this year there will be a major change to the mobility of third-country nationals in the EU: it will be possible to not only move from one state to another, but also to work in these member states under a single permit.
The 26 member states of the EU have committed themselves to Directive 2014/66/EC of 15 May 2014 on the conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer (ICT).
They must communicate the text of their measures to the European Commission in Brussels by 29 November 2016 at the latest. Failing the timely implementation of these measures into national law, the articles of the ICT Directive conferring rights to applicants will have a direct and binding effect.
Once the ICT Directive is implemented, third-country nationals with an ICT permit issued in any member state of first residence will be exempted from the Schengen visa obligations. They can enter, stay and work in their assigned ICT role in one or several additional member states – ie, member states other than the one to which they were initially admitted – with little or no interruption to their assignments.
The grand novelty for Europe is the innovative scheme for intra-EU mobility, as the existing national schemes do not allow intra-corporate transferees to work in subsidiaries established in another member state.
The Directive sets up a specific intra-EU mobility scheme whereby the holder of a valid intra-corporate transferee permit issued by a member state is allowed to enter, stay and work in one or more subsequent member states. In this way the administrative burden associated with work assignments in several member states may be greatly reduced.
However, as with any measure of such magnitude there are challenges on the way, and the harmonising effect on intra-company transfer migration in Europe may be relative.
The Directive introduces a single-permit procedure providing legal stay and work authorisation for employment in a first, and then a subsequent, member state by a third-country national who is transferred for employment within a group of companies that has a corporate establishment both in the European Union and elsewhere in the world.
Subject to the national permit conditions transposed from the Directive, corporate management, technical specialists and employee trainees will be entitled to work in one or several EU member states for their parent company or one of its subsidiaries. The maximum duration of the ICT permit is three years for managers and technical specialists, and one year for employee trainees.
A short-term mobility permit covers stays in member states, other than the one that issued the ICT permit, for a period of up to 90 days per member state in any 180-day period. Assignments under the EU short-term mobility scheme may be set by notification in a timely manner, as well as the issuance of any documents required by the receiving second member state.
A long-term mobility permit covers stays in member states, other than the one that issued the ICT permit, for more than 90 days per member state. The receiving second member state may require documented notification or alternatively, the issuance of a long-term mobility permit prior to the new transfer. Where the need for long-term mobility arises after the short-term mobility of the intra-corporate transferee has started, the second member state may request that the long-term mobility application be submitted at least 20 days before the end of the short-term mobility period. It will not be possible to simultaneously submit a notification for short-term mobility and an application for long-term mobility.
In the first place it may be worth mentioning that the ICT Directive does not cover ICT transfers of up to 90 days. This leaves open the wide range of existing national work permits. The specific and generic waivers for incidental work in the member states that have signed up to the Directive (business meetings, installation and implementation of IT systems, repair and maintenance of hardware products, training, international secondment placements, to name but a few) fall out of the scope of the Directive if these activities – performed intra-concern – are limited to less than 90 days in any period of 180 days. In other words, there is no harmonisation in EU law for short-term intra–corporate business activities in a single member state.
However, when it comes to labour migration in the European Union, the ICT Directive is far more harmonising in character than the Blue Card Directive, which contains an escape clause for member states that – within the scope of the Directive – want to continue a more beneficial and flexible national ICT scheme. This is not possible under the new ICT Directive.
Clearly, this means that committed member states cannot continue applying an ICT scheme of their own with more favourable conditions and less requirements as instructed in the Directive.
However, the overriding factors (as per article 4 of this Directive) are the bilateral and multilateral agreements that are part of the law of the Union: these contain a clause allowing for the most favourable provisions made under these agreements to prevail.
Particularly noteworthy here are the standstill clauses in the association treaties with Turkey and Croatia, which may prevent a member state from exercising a stricter ICT policy under the Directive as regards the companies and the nationals from those countries.
The more favourable provisions in bilateral and multilateral agreements that are part of the law of a singular member state may also override the ICT conditions of the new Directive. You may think not only of the uniformly formatted Friendship Treaties that the US concluded with several European states as part of the 1948 Marshall Agreement, but also of establishment treaties with Switzerland and trade agreements with Japan.
This last clause may be particularly relevant for US companies and Japanese nationals who, by treaty privilege, enjoy the most favourable treatment in labour migration to the Netherlands. US companies with a group establishment in the Netherlands may benefit twice from the Directive: easy access and mobility in the European continent; and the Netherlands’ best national policies involving the most lenient qualification criteria for transferees.
Japanese transferees to the Netherlands must still be treated as Swiss nationals for in-country employment; at any point during their assignment, they can be transferred to another EU member state to exercise mobility rights under the Directive.
The European Commission had to keep in consideration the most-favoured nation provisions for intra-concern services in the WTO’s General Agreement on Trade in Services, and that Norway, Iceland and Switzerland are bound to EU law development in their EEA relationship with the European Union.
Taking account of these treaties and agreements, one may conclude that the harmonising effect of ICT migration in Europe from the new Directive may be relative.
Under the Directive, the Immigration and Naturalisation Service (IND) and the Employee Insurance Agency (UWV), both Dutch government bodies, may have to submit to an effective and flexible national ICT scheme of salary-based adjudication, applying the same thresholds as the Dutch programme for highly skilled migrant programme (HSMP).
The ICT Directive only requires that the ICT salaries are at market level. Applying lower labour standards, thereby distorting competition, cannot be countered by setting exclusive salary thresholds; companies applying for ICT work permits can only be required to demonstrate, as a ground for admission, that the remuneration granted to the intra-corporate transferee is no less favourable than the remuneration granted to nationals occupying comparable positions.
To resolve this, Dutch officials are considering marking the annual HSMP salary thresholds as a remuneration at market level for an ICT permit.
Other conditions considered lenient by international standards, such as the absence of requirements concerning a previous job record or academic degree, must be replaced by the far stricter criteria for admission laid down in the Directive. They are, inter alia:
Granted, the Dutch ICT policy includes a €50 million global turnover criterion; but the Dutch government will happily forego this, as it cannot be upheld for American companies who remain the number-one users of the Dutch ICT scheme.
Another issue for the Dutch implementation of the ICT Directive is the single-permit requirement. The national ICT permit process is still double-tracked and does not comply with the Single Permit Directive 2011/66/EU, adopted in May 2014. Work authorisation and legal residence are decided in separate applications by two separate government agencies, resulting in the issuance of two separate documents. The IND and the UWV will have to bring these together over the coming months.
To comply with the Directive, the Dutch ICT scheme will have to improve the labour market access of the transferee’s family members. The Directive confers the right to be employed or self-employed in the host member state for the duration of the transfer.
This is not currently the case in the Netherlands. These rights are still conditional on a regular work permit, including job market validation, which must be applied for by the employer of the transferee. For self-employment a separate permit will have to be applied for, which will be adjudicated on the basis of a points system. So in this respect, the ICT Directive will really improve the Dutch ICT practice.
The intra-EU mobility scheme signifies a major innovation compared to existing national schemes, which do not allow intra-corporate transferees to work for subsidiaries established in another member state.
However, the success of the intra-EU mobility scheme will greatly depend on the willingness and effort of the member states to organise an effective intra-mobility information system and robust enforcement to warrant against abuse, just as the ICT Directive has stipulated.
But with some European cities having faced murderous attacks, we cannot but recognise that the future of this hopeful new element of free movement may be far from bright. ICT mobility in Europe can only flourish with open Schengen borders.