For many UK and EU companies, implications of Brexit have been widespread. One of the consequences of Brexit that shall be analysed in this article is the effect on short-term posting of employees from the UK to the EU, more specifically to Slovenia.
The difference between pre- and post-Brexit arrangement is substantial. Before Brexit UK companies could utilise the regime available under Poster Worker Directive (currently implemented in Slovenia through Transitional Provision of Services Act; in Slovenian: Zakon o čezmejnem izvajanju storitev). Such procedure does not require obtaining any work permits. However, post-Brexit, at the time this article was written, the authorities require that UK based employers obtain a work and residency permit (called single permit), as any other non-EU based employers.
The Trade and Cooperation Agreement (“TCA”) does provide a legal basis for a simplified procedure, however Slovenia has not yet implemented any legislation to make it operational.
We see in practise that for the UK companies the shift from pre-Brexit times to unknown territories of pots-Brexit causes issues, noncompliance or even delay in performance of services agreed with end clients in Slovenia. Being properly informed is thus essential.
By exiting the EU, UK lost the right to the single European market. Amongst others, this means that UK based companies lost their right to free movement of services within the EU. Without this right UK based companies cannot post employees to Slovenia without restrictions.
Brexit relationship between the EU and the UK is governed by the TCA. With the TCA the EU and the UK agreed that both shall allow entry and temporary stay of contractual service suppliers and independent professionals in certain sectors (Article 143 TCA). The TCA also states that for those sectors EU Member states and the UK shall not adopt any limitations on the total number of such service suppliers and independent professionals in the form of numerical quotas or economic needs test and that the treatment of such suppliers and independent professionals shall be no less favourable than the treatment of national suppliers and independent professionals in like situations. The total duration may not exceed 12 months or the duration of the contract, whichever is shorter.
Slovenia did not make significant reservations to the agreement in Article 143 TCA, except for the requirement to perform an economic need test in certain sectors. Therefore, in our opinion, UK employers falling within the scope of Article 143 TCA, should be granted the exceptions agreed with Article 143 TCA.
However, we see in practise that Slovenian Authorities currently do not have any operational procedure available to facilitate the application of Article 143 TCA. At the time this article was written, Slovenian Authorities do not recognize any special procedure for sectors mentioned in Article 143 TCA. This means that all UK based employers should obtain a single permit for their employees before the services are provided in Slovenia. Such requirement may be a violation of Article 143 TCA, however by our experience the employers want to avoid any risks of non-compliance and thus, the single permit is the best option to avoid any possible risks.
In comparison to the registration requirement applicable pre-Brexit, the procedure to obtain single permit is more complicated and more burdensome for both the employers and the employees (who need to at least once visit the Embassy in the UK prior to obtaining the permit). Also, the document collection procedure is lengthier. Due to this, the procedure itself is more expensive for the employers. Moroeover, we see in practise that the employers are unprepared for the change in approach, which can ultimately mean delays in provision of services.
How to prepare and future outlook
Due to the uncertainty surrounding Brexit, we suggest that UK based employers prepare in advance if they will have to post their employers to Slovenia. We suggest getting acquainted with all new requirements in a timely manner to properly collect all relevant documents and apply for the permits. With proper assistance, all risks may be mitigated and the process may be smooth and not burdensome.
Looking into the future we expect that Slovenian Authorities shall make available a procedure to ease restrictions for sectors mentioned in Article 143 TCA. However, it remains to be seen when this will be implemented in practise.