ECJ hearing in C-610/18 AFMB- Freedom of movement of employment contracts

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1 Case in the main proceedings

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 (alternatively transferred to AFMB), company which by virtue of a fleet management agreement concluded with the transport company, pays wages, and pays social security contributions in Cyprus.

2 AFMB position

The AFMB position can be summarised as follows: the above-mentioned scenario occurs “as a natural consequence of the single market”.

The AFMB invokes the following pleas in law:

  • Article 45TFEU (freedom of movement of workers)-although, in certain cases, only employment contracts have “moved” to Cyprus
  • Article 56TFEU (freedom to provide services)
  • Regulations 883/2004 and 987/2009 coordinate but not harmonise social security systems
  • Low social security contributions are not “equivalent” to low social protection
  • A dual definition of the concept of employer under social security regulations and labour law, would generate legal uncertainty

The employer is AFMB.

3 Other common positions

  • The concept of employer must be given an autonomous definition under the social security coordination regulations
  • Such a definition must consider the actual and factual employment situation, notably the principle of “the closest link”  
  • Regarding the interpretation of Article 13.1 (b) (i) Regulation 883/2004, the Commission recalls Part II point 7 Practical guide The legislation that applies to workers in the EU, the EEA and Switzerland: “How to determine the registered office or place of business”

The employer is the transport company located in the Netherlands.

4 UK written submission

  • The employer is AFMB
  • AFMB’ place of business in the sense of Article 13.1(b) (i) Regulation 883/2004 is the Netherlands.

5 The French ancillary pleading

The French government pleads (as well) for a convergence of the concepts of employer under labour law and social security coordination, while maintaining a clear distinction between these legal instruments.

Where the French government’s position regarding the (suitable) duality of the definition of posted worker was clearly brought by political and judicial means, the ancillary pleading must be considered in its “global context”.

 

 

 

 

 

 

 

 

Tanel Feldman

Senior Partner , Immigration Law Associates

Immigration Law Associates provides in-depth advice on rights and obligations triggered by the cross-border element of a given legal situation. Our know-how is built on an extensive experience in EU law and is supported by a network of partners across the EU. Social security coordination : • Autonomous application of the social security coordination regulations and ECJ case-law, to any situation involves a cross-border element EU Company law : • Establishment -permanent activities • Establishment -self-employment activities International Private Law : • Law applicable to the employment relationship Labour and employment law : • Freedom of movement of workers-equal treatment, access to social benefits • Employment contracts and termination of employment • Working conditions • Employee benefits • Transfer of undertakings • Authorisations of work for third-country nationals Special regimes : • Posted workers • Frontier workers • Highly mobile workers • Employment of record • Intra-EU mobility of third-country nationals

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