ECJ hearing in the “Cyprus route” -who is the employer??

Sep 08, 2019
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On 17 September, the ECJ’ grand chamber will hear the parties in AFMB and Others (C-610/18).

AFMB is a” flexible and internationally operating organization based in Cyprus”. AFMB assists “internationally operating road hauliers in improving their competitive position”, by means of ” working with them to see how European regulations can be applied as favorably as possible for their company” (http://www.afmb.eu).

Drivers are recruited in the Netherlands, by a transport company located in the latter country. That transport company exercises effective control over the drivers and bears the wage cost. However, employment contracts are concluded with AFMB Cyprus, company which by agreement with the transport company located in the Netherlands, pays wages, and pays social security contributions in Cyprus.

Where the drivers carry out an activity in two or more Member States, but do not carry out a substantial part of their activity in the Member State of residence, pursuant to Article 14(2)(a) Regulation 1408/71 or Article 13(1)(b) Regulation 883/2004,the applicable legislation for social security is the one of Cyprus (country where the company that had concluded the employment contract, has its registered office).

By its first question, the referring court (Centrale Raad van Beroep), asks whether the employer is AFMB Cyprus, the transport company located in the Netherlands, or eventually both companies.

Furthermore, in the event that the employer is regarded as being AFMB Cyprus, the referring court seeks to know whether the criteria laid down by  Article 14(1)(a) Regulation 1408/71 and Article 12 Regulation 883/2004, for determining the right to invoke the exemption to the country of employment principle, “also apply by analogy, wholly or in part, to the cases in the main proceedings for the purposes of Article 14(2)(a) of Regulation (EEC) No 1408/71 and of Article 13(1)(b) of Regulation (EC) No 883/2004” (the second question).

A  response to that question, would bring clarity in regard to the application of Article 14(1) Regulation 1408/71 and Article 13.1 Regulation 883/2004 (multi-state activity), in situations in which the person is employed by one undertaking which has its registered office or place of business in only one Member State.

Lastly, in the event that the employer is regarded as being AFMB Cyprus, and the exemption to the country of employment principle may be invoked, the referring court asks whether the facts and circumstances such as those of the cases in the main proceedings, constitute a situation of abuse of EU law and/or an abuse of EFTA law (the third question).

 

 

 

Tanel Feldman

Managing Partner, Immigration Law Associates

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

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