The Court of Justice completes its case-law on Regulation No 1408/71 regarding affiliation of employees to a social security system by recognising the probative nature of an E 101 certificate
Fitzwilliam Executive Search Ltd (FTS), an Irish company established in Dublin, is engaged in the provision of temporary personnel. Pursuant to this activity it places, both in Ireland and in the Netherlands, temporary workers of Irish nationality resident in Ireland.
Their contracts of employment are all governed by Irish law. The workers concerned are registered with the Irish social security system, also during the period of their posting to the Netherlands. An E 101 certificate drawn up by the Irish Department of Social Welfare certifies that they are covered by that system.
However, the Netherlands' authorities asked FTS, in particular because its turnover between 1993 and 1996 was higher in the Netherlands than in Ireland, to pay employer's contributions in the Netherlands for its employees posted to that country.
FTS challenged that decision before the Amsterdam District Court, which asked the Court of Justice to rule on the application of Community law in the matter.
The Community rules on the application of social security schemes to employees provide, as a general rule, that employees are to be subject to the social security system of the Member State in which they are working (even if the employees reside in another Member State or if their employer has its seat in another Member State).
There is an exception to this rule (called the "State of employment" rule) in the case of employees who are posted to another Member State to perform work there for that undertaking and for a specific duration of work not exceeding 12 months.
As regards the conditions to be fulfilled in order for the exception to apply, the Court of Justice first recalls the purpose of the Community legislation: to ensure that workers moving in the Community are subject to a single social security system in order not to impede freedom of movement and to promote the exercise by undertakings of their freedom to provide services.
Apart from the other conditions necessary for the exception to apply, the Court then goes on to reply to the questions which concern in particular the need for the existence of, and the nature, of the links which the undertaking providing temporary personnel must have with the State in which it is based.
In ruling that an undertaking providing temporary personnel must normally carry on significant activities in the Member State in which it is based, the Court has pointed out that the competent administrative authorities of the Member States concerned are responsible for ensuring observance of the criteria for determining that such activity exists (the place where the undertaking has its seat and administration; the number of administrative staff working in the Member State in which it is established and in the other Member State; the place where posted workers are recruited; the turnover during an appropriately typical period in each Member State concerned... ).
In summary, the Court considers that, in order to benefit from the advantage afforded by the Community legislation, an undertaking providing temporary personnel which makes workers available from one Member State to undertakings based in another Member State must normally carry on its activities in the first State, which is the case when it habitually carries on significant activities there.
As regards an E 101 certificate, issued by the competent authority of a Member State certifying that an employee remains subject to its social security legislation, the Court has held that the obtaining of such a certificate creates a presumption that posted workers are properly affiliated to the social security scheme concerned. The Court points out that the principle of sincere cooperation between the administrations of the Member States requires the correctness of the information contained in an E 101 certificate to be guaranteed. In the event of challenge, the other Member States concerned may refer the matter to the Administrative Commission of the European Communities on Social Security for Migrant Workers and, if necessary, bring proceedings before the Court of Justice for failure to fulfil obligations of the Treaty.
The Court therefore considers that an E 101 certificate issued by the institution designated by the competent authority of a Member State is binding on the social security institutions of other Member States in so far as it certifies that workers posted by an undertaking providing temporary personnel are covered by the social security system of the Member State in which that undertaking is established. However, where the institutions of other Member States raise doubts as to the correctness of the facts on which the certificate is based or as to the legal assessment of those facts and, consequently, as to the conformity of the information contained in the certificate with Community legislation, the issuing institution must re-examine the grounds on which the certificate was issued and, where appropriate, withdraw it.
Unofficial document, not binding on the Court of Justice, for use by the media. Languages available: French, German, English, Dutch.
For the complete text of the judgment, please see our Internet site www.curia.eu.int at about 15.00 hrs today.
For further information, please contact Fionnuala Connolly, Tel. (00352) 4303 - 3355 Fax (00352) 4303 - 2731