Lucia Brieskova, PhD candidate at Oxford Brookes University

This post examines the new EU Intra-Corporate Transfers Directive (ICTD) concerning legal economic migration. This analysis is divided into three parts. First, it explains the background and motivation behind introducing this Directive and its connection to other EU directives on economic migration. Second, it outlines the key changes this Directive brings. Finally, it highlights potential issues that will be analyzed in future posts.

A. BACKGROUND

The EU Commission presented the ICTD Proposal in July 2010. This was part of a broader set of measures outlined in the 2005 Policy Plan on Legal Migration, the 2008 European Pact on Immigration and Asylum, and the 2009 Stockholm Programme. These initiatives called for a comprehensive European migration policy. Additionally, the Europe 2020 strategy recognized the role of a well-designed legal immigration policy in addressing labor market shortages, boosting EU competitiveness, and tackling demographic challenges faced by many Member States.

Specifically, the 2005 Policy Plan on Legal Migration laid out the EU Commission’s vision for developing a common economic migration policy. It proposed implementing several legislative proposals (directives) on economic migration between 2007 and 2009. The ICTD, adopted as a new legal instrument within the EU’s common policy on legal migration, complements three existing Directives resulting from the 2005 Policy Plan on Legal Migration. These are the 2009 EU Blue Card Directive outlining admission criteria and rights for highly qualified third-country national (TCN) workers, the 2011 Single Permit Directive for TCN workers legally residing in an EU Member State, and the 2014 Seasonal Workers Directive.

The EU Commission, supported by some Member States, had disagreements with the European Parliament on matters like equal treatment rights for intra-corporate transferees (ICTs) and their families. After four years of negotiation, the ICTD text represents a compromise. The EU Parliament conceded to several EU Council proposals, including aspects of ICT equal treatment. Following the EU Parliament’s approval in April, the EU Council adopted the ICTD on May 13, 2014. The ICTD, published in the Official Journal of the European Union on May 27, 2014, came into effect on May 28, 2014. The 25 participating EU Member States have until November 29, 2016, to incorporate this Directive into their national legal systems. The UK, Denmark, and Ireland have opted out of this Directive, as with other EU policies concerning the legal migration of TCNs.

How Member States implement this Directive and whether it will help or hinder the protection of TCNs within the EU and enhance the EU’s competitiveness remain to be seen.

B. NOVELTIES

What are the new elements in EU legislation regarding economic migration following the ICTD’s introduction? First, it addresses a group of TCN migrant workers not previously covered by existing EU economic migration directives. Second, it establishes a “mixed” set of rules concerning equal rights for ICTs. Third, it creates a distinctive intra-EU mobility scheme for ICTs. Finally, it offers favorable rights for family members.

Aims, Scope & Eligibility

The ICTD has three main objectives. Firstly, it aims to simplify and expedite temporarily assigning highly skilled TCNs to subsidiaries within Member States for multinational companies. Secondly, it intends to make it easier for ICTs to move between Member States during their transfer. Thirdly, it establishes a standard set of rights for ICTs working in the EU to prevent their exploitation and distortions of competition.

The ICTD will facilitate transferring managers, specialists, and trainee employees to the EU by creating clear and unified conditions for their admission, residency, and work. To qualify for an intra-corporate transferee permit, managers and specialists must have worked for the multinational company for at least three to twelve consecutive months before the transfer. Trainee employees require three to six months. Member States can still determine the number of ICTs admitted to their territory. The permit’s validity is up to three years for managers and specialists and one year for trainees.

The Directive also aims to implement streamlined application processes. This includes readily accessible information about the new ICT permit and expedited application procedures. Only complex cases should take the maximum allowed review time of 90 days.

Equal Treatment Rights

The ICTD ensures that ICTs receive equal treatment regarding remuneration compared to nationals of Member States. This aims to prevent companies based in third countries from using lower labor standards to gain a competitive advantage. Therefore, Member States must require, as a condition of admission, that the pay offered to ICTs is no less favorable than that given to nationals in comparable roles.

The ICTD aligns ICTs with posted workers regarding employment terms and conditions (excluding pay), such as maximum working hours and workplace safety. Consequently, these terms and conditions in the receiving Member State will be governed by the laws of the ICT’s home country (the sending third country). According to the ICTD, this ensures that companies from sending third countries do not receive preferential treatment over EU-based companies, as per Article 1(4) of the Posted Workers Directive (96/71/EC).

Furthermore, the ICTD outlines specific rights for ICTs. These rights include the freedom to join trade unions, diploma recognition, and access to public goods and services, excluding housing.

Finally, equal treatment for ICTs and nationals extends to social security, specifically benefits related to sickness, disability, and retirement. However, EU Member States can make exceptions if national law or a bilateral agreement with the host Member State dictates that the laws of the ICT’s origin country apply. Member States can also choose not to grant family benefits to ICTs staying less than nine months in the EU.

Intra-EU Mobility Scheme

The ICTD introduces a unique and significant development by enabling intra-EU mobility for ICTs. This provision allows TCNs to work in subsidiaries located in different Member States under specific conditions, a feature absent in national systems. As the first work permit of its kind, it allows TCNs to work in multiple Member States for entities within the same group of undertakings, addressing the mobility needs of this workforce. As part of this scheme, ICTs are exempt from Schengen visa requirements and can, under certain conditions, enter, reside, and work in Member States besides the one they were initially admitted to. The ICTD differentiates between short-term mobility (less than 90 days within any 180-day period) and long-term mobility (more than 90 days).

Family Members’ Rights

During the negotiations, the EU Parliament successfully advocated for important provisions concerning the rights of ICT family members. Aiming to remove a major obstacle to accepting assignments in the EU, the ICTD enables family members to join ICTs from the assignment’s start if they apply simultaneously. Additionally, family members can work or be self-employed in the host Member State throughout the ICT’s transfer.

C. POTENTIAL ISSUES

Over the next two years, it is crucial to observe how Member States will incorporate the ICTD into their national legislation. The ICTD establishes minimum standards and includes several optional clauses (“may” clauses). This means some Member States may need to modify visa procedures, while others might have to create an intra-corporate transfer process from the ground up. Ensuring each Member State uses similar definitions and terms for visas is crucial to avoid discrepancies.

One significant concern is the intra-EU mobility of ICTs. The optional requirements (“may” clauses) within the ICTD allow Member States to impose different conditions, potentially complicating the scheme. Additionally, assignments exceeding 90 days face stricter conditions than short-term transfers under three months.

Moreover, the ICTD could potentially hinder the broader principle of equal treatment, a cornerstone of EU migration legislation. This principle mandates treating TCNs on par with nationals of Member States. Supported by the EU Council and opposed by the EU Parliament, provisions within the ICTD grant TCNs working in the EU under intra-corporate transfers rights similar to those given to posted workers. This limits equal treatment to the core provisions of the controversial Posted Workers Directive (PWD). Consequently, legislation from the sending third country may supersede that of the host EU Member State.

The argument for this approach is that granting ICTs rights equivalent to EU nationals would suggest that intra-corporate transfers and postings are the same. This would afford ICTs more favorable treatment than posted workers. However, the ICTD and PWD operate within different legislative contexts. Postings support the provision of services within the EU single market, while intra-corporate transfers aim to help multinational companies effectively manage their human resources. One could argue that these ICTD provisions might lead to circumventing EU labor legislation and national labor protection, as seen with the PWD (refer to the Laval judgment). Therefore, the equal treatment of ICTs could be compromised. Laws from any sending third country might apply to their situation, potentially exposing TCNs to weaker protection and various forms of exploitation.

Barnard & Peers: chapter 26