Court of Justice confirms binding force and retroactivity of A1 Declarations
Which social security system is applicable when an internationally seconded employee is replaced by another internationally seconded employee with an employer from a different Member State?
On 6 September 2018, the Court of Justice issued an important ruling in the case C-527/16, Alpenrind. The Court ruled that equal treatment of employees in the same state is the rule and confirmed the binding force and retroactivity of A1 Declarations for secondment.
A1 Declaration is presumed to be binding
An A1 Declaration which is provided by an EU Member State (in present case Hungary) has a binding force, except in case of fraud or misconduct (C-359/16, Altun). It is binding towards the social security and legal institutions of the EU Member State where the employee will exercise the activities (in present case Austria) for as long as the A1 Declaration is valid and is not withdrawn again. This binding force remains even if the Administrative Commission for the Coordination of Social Security Systems has issued a decision that the A1 Declaration should be withdrawn. The conclusion of the Administrative Commission is after all merely an advice.
A1 Declaration can have a retroactive effect
Secondly, an A1 Declaration has retroactivity, even if the competent institution of the EU Member State where the activities are exercised (in present case Austria) has already decided on the day of the granting of the A1 Declaration that the worker should be submitted to the legislation of that Member State.
Social security legislation of place of employment is in force
Lastly, when a worker, who is set to work in another EU Member State by his employer, is replaced by an employee who has been put to work by a different employer, this new employee will not be submitted to the legislation of the Member State in which his employer usually executes his activities.
The global rule is that an employee is submitted to the social security system of the Member State where he operates. This rule is to guarantee that all employees in the same state are treated equally.
KrisDe SchutterAttorney at law Partner
Kris De Schutter is a partner in our office in Brussels and member of Loyens & Loeff’s Employment & Benefits Practice Group. He has extensive experience in alternative (flexible) remuneration, restructuring and change processes.T: +32 2 700 10 13 E: firstname.lastname@example.org
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