Posting workers

16 Mar 2018

The CJEU limits the binding effect of fraudulently issued A1 certificates

Dorothée David

The Court of Justice of the European Union (CJEU) recently ruled on a case involving the posting of workers and the scope of the A1 certificate issued by the social security institutions in the sending member state.

The case involved a Belgian construction company to which Bulgarian employees were posted. An investigation conducted by the Belgian authorities revealed that the company was subcontracting all of its work to Bulgarian companies who were therefore posting their employees to Belgium, but not carrying out any significant undertakings in Bulgaria. However, the posted employees had A1 certificates issued by Bulgarian institutions confirming that they were registered for social security in Bulgaria. They had therefore not been declared to the Belgian institutions responsible for collecting social security contributions.

Based on the results of the investigation, the Belgian authorities submitted a reasoned request to the competent Bulgarian authorities to review or withdraw the A1 certificates issued fraudulently to the posted workers. In fact, according to European Regulation 987/2009, which is applicable in this case, A1 certificates issued by a member state are binding for other member states, as long as they are not withdrawn or declared invalid by the member state that issued them.

In response, the Bulgarian authorities confirmed the A1 certificates issued, and their period of validity, without taking into account the facts raised by the Belgian authorities, specifying that when the A1 certificates were issued, the conditions for posting had been fulfilled for administrative purposes by the Bulgarian companies in question.

The Belgian authorities then took legal action against the companies in question in their capacity as employers. Within this context, the Belgian courts referred the following question to the CJEU for a preliminary ruling: can a national court decide that it is not bound by the A1 certificate issued to a posted worker by institutions in the sending member state, if it observes that this certificate was obtained or relied on fraudulently? Yes, was the CJEU’s response. The principle of prohibiting fraud and the abuse of rights is a general principle of EU law. The principles imposed by European Regulation 987/2009, namely the binding nature of the A1 certificate and the exclusive competence of the issuing institution when it comes to assessing the certificate’s validity, implies the latter’s sincere cooperation within a reasonable time if any doubts are expressed by the institutions in the hosting member state about the accuracy of the facts mentioned on the A1 certificate. Failing this, a judge in the host member state must be able to disregard the A1 certificate if it establishes that it is indeed fraudulent, with due regard to the safeguards associated with the right to a fair trial. In particular, the CJEU observed that the European regulation governing the A1 certificate is designed to facilitate freedom of movement of workers and freedom to provide services, stipulating in particular that employees temporarily posted to another member state shall continue to be registered to a single social security scheme, more specifically, the one in place in the member state where they usually work. The application of this principle does not however cover transactions carried out for the purposes of fraudulently obtaining advantages provided for by EU law.

CJEU, judgement of 6 February 2018 C-359/16