Belgium: posted worker system declared compliant by European Court of Justice
The European Court of Justice has ruled that Belgian legislation cannot circumvent EU law by acting unilaterally against fraudulently acquired A1 declarations. Legislative action of that kind oversteps the limits of what Member States are allowed to do under EU law.
On 11 July 2018, the Court of Justice ruled that Belgium has violated European rules by giving national judges, the National Social Security Office (‘NSSO’) and the social inspectorate the ability to set aside a fraudulently acquired A1 declaration (i.e. the document stating which national social security legislation applies to a worker from another EU Member State in the framework of cross-border employment) in the event of abuse.
In the framework of the fight against fraud in the area of posting of workers, the Belgian legislator has adopted the Act of 27 December 2012, giving national courts, public social security institutions (in particular the NSSO) and the social inspectorate the power to unilaterally subject an employee or self-employed person to the Belgian social security legislation. They can use this power in the event that they believe abuse of the A1 declaration system has occurred (i.e. a fraudulent declaration is wrongfully exempting a worker from the Belgian social security regime) even if another EU Member State issued an A1 declaration for the person concerned and therefore confirmed that this person was subject to its social security regime.
This piece of national legislation permitted unilateral action without initiating any form of dialogue with the other EU Member State. The authority concerned (e.g. the court, the NSSO or the social inspectorate) merely had to prove that the provisions of the regulations on coordination of social security systems were being violated with the aim of evading application of the Belgian social security legislation.
However since the law entered into force, it has given rise to strong criticism because of the fact it is in manifest conflict with regulations governing coordination between EU Member States.
In its judgement of 11 July 2018 the Court set the relevant provisions of the Anti-abuse Act aside and imposed clear limits on unilateral action by a Member State. The court ruled that national regulations which make it possible to undermine the binding force of an A1 declaration by unilaterally subjecting an employee or self-employed person to the Belgian social security regime outside the framework of legal proceedings and without respecting the EU dispute procedure are not compatible with the principle of sincere cooperation between Member States.
The courts of EU Member States can therefore only unilaterally set aside an A1 declaration within the limits set out in the Altun judgement of 6 February 2018 (discussed here).
The Belgian authorities (i.e. the judge, the NSSO and the social inspectorate) cannot simply:
- set a fraudulently acquired A1 declaration aside; or
- subject a posted employee to Belgian social security legislation.
Fraudulently acquired A1 declarations can only be ignored under the conditions set out in the Altun judgement.