A Supreme Court decision of February 2016 reminds host Member States of the evidential value of A1 certificates with regard to the applicable social security legislation, something that the Belgian authorities seem to have overlooked in the past few years.
In the case at hand, eleven Polish nationals were seconded in Belgium to work on a construction site as self-employed subcontractors. All of them held valid A1 secondment certificates issued by the Polish administration certifying the application of Polish social security.
Following an inspection on the working site by the labour inspectorate, Belgian authorities considered that the Polish individuals should instead be subject to Belgian social security under the employees regime (sham self-employment). As a result, the principal contractor was accused of not having lodged the immediate declaration of employment (DIMONA) – as required for all employees paying social security contributions in Belgium – which is considered a criminal offence under Belgian criminal labour law.
The contractor was sentenced in first instance. On appeal, the Labour Court of Ghent reversed the judgment and found the contractor not guilty. The reasoning of the Court was based on Regulation no. 883/2004, the Posting Worker Directive no. 96/71, and the case law of the European Court of Justice. In essence, the Court ruled that:
- the authorities of the host Member State (Belgium) are bound by the A1 certificate issued by the Member State of origin (Poland), unless such certificate is declared null by the latter;
- it is up to the Member State of origin (Poland) to decide whether an individual must be subject to the social security regime for employees or for the self-employed.
It follows that, in the present case, the Belgian authorities were not authorized to set aside the A1 certificates issued by the Polish administration nor to decide that the Polish workers should be subject to the Belgian social security regime for employees, with all the obligations arising from it (including the DIMONA obligation).
The decision of the Labour Court of Ghent was confirmed by the Supreme Court in February 2016 and sets the cat among the pigeons. It reminds the host Member States of the evidential value of A1 certificates with regard to the applicable social security legislation, something that the Belgian authorities seem to have overlooked in the past few years.
This being said, it must be stressed that the decision of the Supreme Court does not in any way preclude the local authorities from reclassifying a self-employed relationship as an employment one so far as employment law is concerned (minimum wage, indexation, vacation, holiday pay, etc.). Yet, such reclassification shall not have any direct consequences with regard to the applicable social security regime within the EU.
Loïc Delhaye, Associate (loic.delhaye@cms-db.com)
Gaël Chuffart, Partner (gael.chuffart@cms-db.com)
