Lithuania: Gamechanger for cross-border employee leasing?

Since 1 August 2022, employees from third countries can once again be hired as temporary employees in Lithuanian companies.

Since 2018, Lithuanian temporary employment agencies could in principle no longer employ third-country nationals. Although there was no direct prohibition on concluding a temporary employment contract with a third-country national, nevertheless prohibition followed from interpreting the legal norms of Lithuanian Law on the Legal Status of Aliens.

Amendments to the Law on the Legal Status of Aliens which entered into force on 1 August 2022 mean that employment is now possible again under narrow conditions.

If a foreign national is employed under a temporary employment relationship, the temporary employment agency must undertake to employ the foreign employee full-time for at least six months and to pay them a monthly salary during their period working in Lithuania which is not less than the average gross monthly wage in Lithuania (as set by the Lithuanian Statistical Office), as well as not less than the Lithuanian minimum wage during periods between assignments.

What enables hiring third-country nationals as employees again within Lithuania, however, has its limits in terms of cross-border assignments (e.g. when posting to Germany). The background to this is restrictions on granting so-called Vander-Elst visas.

In principle, third-country nationals require a visa for Germany – the so-called Vander-Elst visa – for entry and residence in the context of cross-border provision of services. The Vander-Elst visa is a type of visa or work permit for third-country nationals who are employed by and work for a company in a member state (EU/EEA/EFTA). The visa allows the employee to work for that company in another member state as well, provided they meet certain requirements. More information on the Vander-Elst visa can be found here: https://bnt.eu/legal-news/posting-of-third-country-nationals-from-lithuania-to-germany/

However, according to the case law of the Berlin-Brandenburg Higher Administrative Court of 9 November 2018, confirmed by the Federal Administrative Court, the precondition for the issuance of a Vander-Elst visa must be „temporary exercise“ of the cross-border service pursuant to Article 57 sentence 3 TFEU. According to the case law of the ECJ, the temporary nature of the activity depends not only on its duration but also on its frequency, regular recurrence, or continuity. Provision of a service can extend over a longer period of time, even up to several years. If overall assessment shows the existence of a long-term rotation system for consolidated and permanent supply of employees to the host state, the basis for issuing a Vander-Elst visa no longer applies.

According to ECJ ruling of 11.09.2014 -C-91/13-, temporary assignment of third-country national employees can also fall under Vander-Elst case law. However, insofar as only temporary assignment of third-country national employees to the hirer in Germany itself constitutes temporary provision of services, posted employees must carry out their main activity in the EU/EEA state of domicile of the undertaking where they are duly employed, which, in the present case, means in Lithuania.

Blanket rejection of the issuance of a Vander Elst visa simply because it is a question of temporary employment is thus not possible. However, as is so often the case, whether cross-border hiring of workers by third-country nationals would be feasible must be examined on a case-by-case basis.

These new regulations will therefore rather help to combat the shortage of skilled employees in Lithuania itself. However, the great hope of foreign, especially German, companies to finally be able to use temporary employed third-country nationals from Lithuania on a large scale again has not been fulfilled.

Source:

Law of the Republic of Lithuania on the Legal Status of Aliens

Prenumeruoti naujienlaiškį

By pressing 'Subscribe' you consent to our duomenų tvarkymo terminai