According to an approach advocated by some, the German legislative act laying down the minimum wage rate of 8.5 euros before taxes per hour also applies to work performed during transit through Germany.
Such a view cannot be supported, and it can be fairly easily demonstrated. Most comments posted during recent weeks at a number of websites or in the media merely centred around a simple and obvious assumption that if a standard is in place (Article 9.3 of the Regulation (EC) 593/2008) that permits Germany to apply exclusive jurisdiction of the German law (with the exclusion of Polish jurisdiction), then most likely this standard applies to all the imaginable circumstances. As you might expect, the devil is in the details, while the German legislative act is full of holes like a Swiss cheese and has more exceptions than rules that make it practically ineffective in certain areas. This is the case with transit as well.
The German arguments relating to the alleged requirement of adjusting the minimum wage rates in Germany by, for instance, Polish employers are based on the assumption that this obligation arises out of the content of Article 9.3 of the Regulation (EC) No 593/2008 which is usually called ‘The Rome I Regulation’. Basically, according to Articles 3 and 8 of the said Regulation, with regard to employees posted to carry out work beyond the territory of one EU Member State (for instance beyond Poland) in another country (for instance in Germany) or in several EU countries (such as Germany, France, or Spain), the parties to the employment contract (that is the employer and the employee) can individually determine (select) in the specific contract (that is not in the employment by-laws) the applicable law (the legal regime) of any of these countries.
According to Article 8.2 of the cited Regulation, however, if the law of a specific country (such as for instance Poland) applicable to the individual employment contract has not been chosen by the parties to the employment contract (the employer and the employee), then such contract shall be governed by the law of the country in which the employee (the driver) habitually carries out his work in performance of this contract. Hence, a driver working in Germany would be subject to the German law, unless the content of the contract (as well as several other additional circumstances specified both in Article 3 and Article 8) would imply that the parties agreed otherwise.
The main issue here is that the German legislator sought to safeguard that the parties to a contract of employment would not be able to exclude the German law in favour of the Polish law by way of including such specific clauses in a contract.
To this end, Germany invoked (in my opinion unsuccessfully, which I am going to substantiate in my next memo) the principle of overriding mandatory provisions. These rules operate in such a way that if a country (in this case Germany) invokes the cited rule (conflict of law rule) of overriding mandatory provisions, then it has the right to exclude all and any agreements between the parties and recognize the exclusive application of its own law (rather than for example the Polish law).
However, it is worth noting that an indiscriminate and arbitrary statement on the application of the aforementioned rule of overriding mandatory provisions is not acceptable. Strict preconditions must be fulfilled for a country to be able to successfully invoke the exclusive supremacy of that country’s applicable law (for instance, the German law).
What are these preconditions?
To begin with, the first precondition has a non-normative nature, yet is firmly rooted in the literature on private international law. According to this precondition, the principle of overriding mandatory provisions can be invoked a casu ad casum only (refer to: Bartłomiej Gliniecki – “Umowa deweloperska: Konstrukcja prawna i zabezpieczenie wzajemnych roszczeń” [Developer Contract: Legal Structure and Securing Mutual Claims] page 222). Meanwhile, Germany turned the application of overriding mandatory provisions into a rule, a practice progressively enveloping successive sectors of the economy over the years. This, as it seems, violates the ratio legis of the exceptional nature of the cited norm’s application. This is the sketch of the necessary background for comprehending the issue of transit through Germany.
Further reasons are purely normative and arise directly out of the content of Article 9.3 of the aforementioned Regulation (EC) No 593/2008, according to which effect may be given to the overriding mandatory provision only when it is substantiated by the need to safeguard the country’s public interests, such as:
political organization (disorganization) of the state,
social organization (disorganization) of the state,
economic organization (disorganization) of the state.
The puzzles seem to fit now. Germany has introduced the principle of applicability of their labour law claiming that, amongst others, Polish transportation companies disorganize the German labour market, thus contributing to disorganization at an economic level.
An important aspect of transit transportation should, however, be raised at this point. Namely, transit does not even in a slightest degree adversely impact the German labour market, particularly the transportation market. Quite the reverse, it does have a positive effect on the German economy.
Transit by means of transport from Poland via Germany (not to be confused with cabotage) is entirely neutral for the condition of the German labour market or for the freight rates or values in Germany. Means of transport in transit only pass through Germany without loading or unloading cargos in Germany. Another issue altogether is that by raising the labour costs of Polish entrepreneurs, Germany is probably aiming at reducing Poland’s cabotage potential in Europe (the highest in Europe anyway) by undercutting its competitive edge and perhaps indirectly intending to take over a share of the market. Without going into speculations, it is sufficient to highlight at this point that invoking overriding mandatory provisions in the German law is legally ineffective with regard to transit, since it does in fact protect the German economy.
On the contrary, transit through Germany is one of the sources of reinforcing the German economy given that a massive stream of cash is ‘pumped’ into the economy also (or mostly) by Polish entrepreneurs on account of:
tolls charged for national highways and motorways,
purchases of vehicle fuels and fluids,
payment of parking fees,
booking of hotels while traveling,
purchase of foodstuffs.
Clearly, it becomes apparent that, with regard to transit through Germany, none of the preconditions of Article 9 of the Regulation (EC) 593/2008 conditioning the admissibility of the overriding mandatory provisions in the German labour law with respect to the minimum wage have been met.
As a result, these provisions cannot apply if the parties to the employment contract (the employer and the employee) expressly indicated the applicability of the Polish law in the specific contract of employment.
This conclusion gives rise to a number of diverse consequences.
Firstly: a practical inference is that transit through Germany need not be included in the working time of the driver, which basically (favourably) affects the settlement of payments for drivers’ work in a given month, because it reduces the total number of hours in a given month, which (under a contrary assumption) would have to be multiplied by a coefficient of 8.5 euros before taxes.
Secondly: it does not alter the fact that it seems that under § 16 of the German Minimum Wage Act, employers are still obliged to report drivers passing in transit through Germany.
Thirdly, the cited example of transit reveals a dubious proficiency in assessment of the scope of application of international regulations by Germany, since the Federal Ministry of Labour in an official notice of December 2014 addressed to the Polish Embassy unjustly declared that transits are also covered by the scope of application of the Minimum Wage Act, which is contrary to the content of Article 9.3 of the Regulation (EC) 593/2008.
The case of transit through Germany under discussion is so clear-cut and explicit that it cannot raise even the slightest doubt as to the validity of the argument that transit through Germany should be excluded from the scope of the legislative act in question, of course if the parties to the contract of employment did select the Polish law as the applicable law. It is one of the aspects that should be raised in talks with Germany.
President of the Viggen sp.j. Law Office
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