European Court of Justice- Portable Documents A1 issued under Article 13-Interoperability between social security coordination regulations and labour law

In Bouygues travaux publics and Others C-17/19, the ECJ is called upon to respond a question related to the interoperability between the labour law and the social security coordination regulations.

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Mar 31, 2019
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In Bouygues travaux publics and Others C-17/19, the ECJ is called upon to respond a question related to the interoperability between the labour law and the social security coordination regulations.

By its question, the French Cour de cassation, essentially seeks to know whether an E101 certificate (PDA1) ” binds the courts of the Member State in which the work is carried out when it comes to determining the legislation applicable, not only as regards the social security system but also as regards labour law, where such legislation defines the obligations of employers and the rights of employees”, and in context, whether the ruling in Altun and Others C‑359/16 EU:C:2018:63 can be extended to such situations (i.e. presumably but not clearly addressed, the objective and subjective elements of a fraud are established in relation to certain  rules provided for by national labour law- strictly considering the wording of the question, widely non-compliance with certain provisions of labour law are addressed, and not exclusively situations of fraud).

The complexity of the case at issue, is determined inter alia by the fact that certain E101 certificates were issued pursuant to Article 14 (2)(b) Regulation 1408/71, in the version amended and updated by Regulation 118/97, as amended by Regulation 647/2005, notably work in two or more Member States (currently Article 13 Regulation 883/2004).

It appears from the judgment of the Court of Appeal (Cour d’Appel de Caen 20 March 2017 case 15/01327) that the E101 certificates issued to cover work in alternance (two Member States), are invoked by Atlanco Limited (one of the defendants) In view of ruling out the relevance of the posting rules (provided for by the national legislation).

It also appears that the court does not object to the allegation that work in two Member States would rule out the relevance of the posting rules, however, finds that the genuine situation fails under the posting regime and not under the situation of work in two MS (the court invokes inter alia declarations of posting sent by Atlanco).

Obviously, a confusion between the concept of posting under the social security coordination regulations, and the same concept under labour law.

The social security coordination regulations on the one hand, and Directive 96/71/EC as transposed into the national legislation of different MS on the other hand, are hermetic legal instruments.

To facilitate the assessment, will refer to Article 13 Regulation 883/2004, covers work in two or more Member States.

It must be first observed that prima facie, non compliance with three out of five constitutive conditions determine a genuine posting under Article 12 Regulation 883/2004, would also rule out a situation of genuine posting under Directive 96/71/EC, and its enforcement Directive 2014/67/EU (although the way of assessing similar criteria is different).

In regard to Article 13 Regulation 883/2004, the interoperability between the social security coordination regulations and the labour law (posting rules under Directive 96/71/EC) is rather complex.

The situation of work in two or more Member States in the meaning of Article 13 Regulation 883/2004, can be determined by different labour law scenarios:

1 Coordinating contract of employment (commonly referred to as global employment contract), or employment by different undertakings established in two or more Member States. Such situations do not fail under the scope of the Posting of Workers Directive.

2 A person employed by an undertaking located in one MS, held to perform work irregularly in different Member States.  “This situation would be covered by Article 13 insofar as working in different Member States is an intrinsic part of the work pattern and the interval between periods of work is not of such a length or nature to modify the work pattern in a way that a person would no longer be "normally" working in two or more Member States” (Practical guide- The legislation that applies to workers in the EU, EEA and Switzerland- European Commission).

Such a situation fails under the scope of Article 1.3 Directive 96/71/EC: “the directive applies to a wide array of situations in which workers are transferred from one Member State to another in the context of cross-border provision of services”( Danieli & C. Officine Meccaniche SpA, C-18/17 EU:C:2018:288, Opinion of AG Wahl , paragraph 40).

Were it can be alleged that the criteria determine whether or not a posted worker temporarily carries out his or her work in a Member State other than one in which he or she normally works( under Article 4.2 Directive 2014/67/EU) , are not necessary relevant for situations in which the person works in two or more MS (in the sense of Article 13 Regulation 883/2004), it cannot be alleged that the terms and conditions of employment pursuant to Article 3 Directive 96/71/EC  are irrelevant if the employee is posted to work in two or more MS : “Directive 96/71 is designed to protect workers by affording posted workers certain minimum rights in the particular context of the cross-border provision of services”.

The Court of Appeal of Caen should not have slipped into the laborious interoperability between the social security coordination regulations and the labour law, but could instead :

  • In regard to labour law, find the employment contracts concluded with an undertaking not having a genuine economic activity in the country of employment, void. By finding the employment contract void, the concealed employment offense would be established. The workers deprived of their rights, could then enforce Article 8.2 Regulation 593/2008 (Rome I) read in conjunction with the ruling in Koelzsch C-29/10.
  • In regard to social security coordination, enforce the ruling in Altun and Others (prima facie, the E101 certificates were fraudulently obtained and relied on).

It must be observed that a PDA1 can be lawfully obtained and relied on, in situations in which the national labour law is infringed.

In Danieli & C. Officine Meccaniche SpA, Advocate General Wahl emphasised that the ECJ has always attached a little importance to the fact that workers are hired out by undertakings that are not temporary employment or placement agencies referred to in Article 1(3)(c) Directive 96/71/EC. The AG took the view that “it has done so for good reason” (Danieli & C. Officine Meccaniche SpA C-18/17 EU:C: 2018:288 paragraph 50).

A more detailed assessment of such a reason, was provided by Advocate General Saugmandsgaard ØE in Betriebsrat der Ruhrlandklinik gGmbH C-216/15 EU:C: 2016:518 (see inter alia paragraph 45).

Hiring out of workers by undertakings that are not temporary employment agencies, is generally banned by national legislations (unless certain conditions are met).

We take the view that in such cases, a PDA1 produces its effect (in regard to the applicable legislation for social security).

In the light of the above considerations, we take the view that:

  • An E101 certificate (PDA1) binds the courts of the Member State in which the work is carried out when it comes to determining the legislation applicable, only as regards the social security system.
  • The ruling in Altun and Others relies on the principle of prohibition of fraud and abuse of right under the EU law, and can be enforced only in its strict context.

 

Go to the profile of Tanel Feldman

Tanel Feldman

Managing Partner, Immigration Law Associates

Corporate Immigration Law/Employment Law/Social Security Law/European Law

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