C-202/97

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OPINION OF ADVOCATE GENERAL JACOBS delivered on 28 January 1999 *

1. Under Regulation (EEC) No 1408/71, · of Regulation No 574/72 (an E 101 certi- the general rule is that a worker is subject ficate). 3 Questions have also been posed to the social security system of the State in concerning the extent to which such certi- which he is employed (Article 13(2)(a)). If, ficates bind other Member Slates. however, the 'undertaking to which he is normally attached' sends him to work temporarily in another Member State, the worker remains subject to the social secur- ity system of the first State (Arti- cle 14(l)(a)). 2 The facts

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Although it also has two representatives in contributions in relation to those workers. the Netherlands, Fitzwilliara maintains that Fitzwilliam appealed against that decision they serve merely as a contact point and and in the course of that appeal the have no power to bind the company. Arrondissementsrechtbank (District Court), Amsterdam, referred the questions set out below to this Court.

5. In the Netherlands Fitzwilliam supplies staff mainly to the agricultural and horti- cultural sectors. In Ireland it is active in other sectors. Fitzwilliam maintains that the work carried out in both States is 7. Fitzwilliam maintains that it has been similar since it requires little skill. It adds harassed by the number of visits and that the work carried out in the Nether- enquiries made by LISV and that unan- lands does not appear to be popular with nounced visits made by LISV to its clients Netherlands nationals and that it is often have caused the latter to question the performed by illegal labour from third legality of Fitzwilliam's manner of doing countries. According to the Dutch social business. Fitzwilliam has complained to the security institution which is the respondent Commission to that effect. in the main action, now called the Bestuur van het Landelijk instituut sociale verzeker- ingen ('LISV'), the personnel provided by Fitzwilliam in Ireland work primarily in the computer industry.

8. The questions referred by the Arrondis- sementsrechtbank are as follows:

6. The Irish Department of Social Welfare 4 issued E 101 certificates stating that the workers sent by Fitzwilliam to the Nether- lands remained subject to the Irish social security legislation. However, LISV dispu- ted the validity of those certificates. In its view workers sent by Fitzwilliam do not fall within the posted workers rule. With- out consulting the Irish Department of ' 1 . (a) May the words "undertaking to Social Welfare, it claimed social security which he is normally attached" in Article 14(1)(a) of EC Regulation N o 1408/71 be supplemented by 4 — Now called the Department of Social, Community and other terms or conditions not Family Affairs. expressly mentioned therein?

2. (a) Is a certificate issued by the com- petent institution of a Member State in accordance with Arti- cle 11(1)(a) of EC Regulation (iv) If the conditions mentioned in No 574/72 binding on the autho- (ii) a n d (iii) c a n n o t be rities of another Member State in imposed, what conditions all circumstances as regards the may be imposed? legal consequences it determines?

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(b) If not, The Community provisions

1 0 . A r t i c l e 1 3 ( 1 ) of Regulation N o 1408/71 lays down the general rule that persons to w h o m that regulation applies shall be subject to the legislation (i) In what circumstances is it of a single Member State only. The legisla- not? tion applicable is determined according to Title II of the regulation.

11. The general rule provided in Regula- tion N o 1408/71 concerning the determi- (ii) Can the evidential value of the nation of the social security legislation certificate be rebutted by the applicable to migrant workers is contained authorities of a Member State in Article 13(2)(a). That article provides as without involving the institu- follows: tion which issued the certifi- cate?

12. Thus the legislation applicable is nor- rather than Regulation No 1408/71. Arti- mally that of the State of employment. cle 13(a) of Regulation No 3/58 was wor- However, Article 14 establishes 'special ded as follows: rules applicable to persons, other than mariners, engaged in paid employment'. Paragraph 1(a) of that Article, which is at issue in the present case, lays down rules for posted workers. It provides as follows: 'Wage-earners and assimilated workers whose permanent residence is in the terri- tory of one Member State and who arc employed in the territory of another State by an undertaking, having in the territory of the former State an establishment to 'A person employed in the territory of a which they are normally attached, shall be Member State by an undertaking to which subject to the legislation of the former State he is normally attached who is posted by as though they were employed in its that undertaking to the territory of another territory, in so far as the probable duration Member State to perform work there for of their employment in the territory of the that undertaking shall continue to be latter State does not exceed 12 months.' subject to the legislation of the first Mem- ber State, provided that the anticipated duration of that work does not exceed 12 months and that he is not sent to replace another person who has completed his term 15. That provision was later amended by of posting.' Regulation No 24/64 6 and became Arti- cle 13(1 )(a) of Regulation No 3/58. The amended provision was to the following effect:

exceed 12 months and that such a worker (b) the undertaking normally carries out its be not sent to replace another worker who activities in the first Member State, that has reached the end of his term of posting.' is to say, in the case of an undertaking whose activity consists in making staff temporarily available to other under- takings, ... 8 that it normally makes staff available to hirers established in that State for employment in that 16. Article 14(1)(a) of Regulation State.' No 1408/71 has been the subject of inter- pretative decisions issued by the Adminis- trative Commission of the European Com- munities on Social Security for Migrant Workers ('the Administrative Commis- sion'). Those decisions are issued pursuant to Article 81 of Regulation No 1408/71 (previously Article 43 of Regulation No 3/58). Paragraph 1 of Decision 17. That Decision has since been replaced No 128 7of the Administrative Commis- by Decision No 162. 9The latter Decision sion, which was in force at the relevant is in similar terms, although it is notewor- time, provided that: thy that in the English version the phrase 'normally makes staff available' was replaced by the phrase 'usually makes staff available'. It also provides that, in the case of an undertaking whose activity consists in something other than making staff tem- porarily available to other undertakings, 'The provisions of Article 14(1)(a) ... of the undertaking must carry out 'substantial Regulation (EEC) No 1408/71 shall also activities' in the territory of the first apply to a worker subject to the legislation Member State and 'usually' employ staff of a Member State who is engaged in that there. Member State in which the undertaking has its registered office or place of business with a view to his posting ... to another Member State ..., provided that:

security institutions responsible for apply- 2 1 . It is clear that the provisions of a ing Community law, they are not of such a regulation cannot be supplemented other nature as to require those institutions to use than by further Community legislation. If a certain methods or adopt certain interpre- Member State were free to impose further tations when they come to apply Commu- terms or conditions, that would plainly nity law (Sociale Verzekeringsbank v van defeat the uniform application of the reg- der Vecht; 10 Romano v INAMI 11). ulation in question, and would prejudice the very purpose of the regulation. That is particularly clear in relation to Title II of Regulation No 1408/71 which is in issue in the present case. The Court has consistently held that the provisions of Title II consti- tute a complete and uniform system of 19. As stated above, the applicability of the conflict rules, the aim of which is to ensure posted workers rule to a particular worker that workers moving within the Commu- is attested by a certificate issued pursuant nity shall be subject to the social security to Article 11 of Regulation No 574/72. scheme of only one Member State, in order That article provides that, at the request to prevent more than one legislative system of the employed person or his employer, the from being applicable and to avoid the 'institution designated by the competent complications which may result from that authority of the Member States whose situation. 12 The present case provides an legislation is to remain applicable shall illustration of how that aim could be issue a certificate stating that an employed frustrated if a Member State were to person shall remain subject to that legisla- impose supplementary conditions: if those tion up to a specific date'. conditions were not consistent with the Regulation, that could have the result that a worker would be simultaneously subject to more than one social security system.

23. However, as Fitzwilliam observes, the 26. The original version of Regulation first question, taken as a whole, can be No 3/58 did not include the term 'posted'. regarded as asking in substance how Arti- According to Advocate General Dutheillet cle 14(1)(a) should be interpreted: i.e. what de Lamothe in his Opinion in Manpower, criteria are to be applied in order to that term was included to avoid abuse of establish whether a worker is normally the system. He explained that certain attached to an undertaking. I shall accord- undertakings had Opened sites outside ingly deal with the remainder of the first their country of origin and made such question on that basis. rotations of the personnel posted as were necessary so that this personnel might remain subject to the legislation of the country of origin where the social charges were less than in the country where they were employed; these practices were found in particular in France in the building and timber industry'. 16 In addition it may be noted that the amended version of Regula- 24. In answering that question, guidance tion No 3/58 also added the stipulation can be obtained from the Court's previous that Article 13(1)(a) would not apply if the case-law. worker had been sent to replace another worker who had reached the end of his term of posting.

posted by that undertaking to another established (van der Vecht, p. 354; Member State to perform work there for Manpower, paragraph 14); or that undertaking, provided that the antici- pated duration of the work did not exceed 12 months and that the worker was not sent to replace another worker who had reached the end of his term of posting. — on the ground that the work in ques- tion differs from that normally carried out by the undertaking in question (van der Vecht, p. 354). 2 8 . Article 14(1)(a) of Regulation No 1408/71 provides for the continuation of the legislation of the Member State in which a person is employed by an under- taking to which he is normally attached 30. The Court has staled that the posted when he is posted by that undertaking to workers rule aims at 'overcoming the the territory of another Member State, obstacles likely to impede freedom of provided that the anticipated duration of movement of workers and at encouraging the work does not exceed 12 months and economic interpenetration whilst avoiding that he is not sent to replace another person administrative complications for workers, who has completed his term of posting. undertakings and social security organisa- tions' (Manpotver, paragraph 10). The Court has also observed that, if it were necessary to apply the social security sys- tem of the State in which short periods of work were carried out by the posted 29. The case-law mentioned above estab- worker, the worker would suffer more lished that the posted workers rule does not often than not because national legislative cease to apply: systems generally exclude short periods from certain social benefits (Manpower, paragraphs 1 1and 12).

of the regulation and which is designed to 33. However, the Court has also stated in further the freedom of movement for work- the context of Regulation No 3/58 that the ers — and indeed another fundamental posted workers rule is limited to workers freedom of the Treaty, namely the freedom engaged by 'undertakings normally pursu- to provide services. The terms of Arti- ing their activity in the territory of the State cle 14(1)(a) should not therefore be con- in which they are established' (Manpower, strued restrictively but should be given their paragraph 16). It is noteworthy that the normal meaning. requirement that the undertaking should carry on business in the Member State concerned was laid down by the Court on the basis of the requirement in Regulation No 3/58 that the undertaking should have an establishment in that Member State. Nevertheless, in my view, the Court sought by that condition, as the Commission points out, to exclude from the posted workers rule cases where the undertaking had a merely notional presence in the first State. Hence the requirement that the undertaking should carry on business 'nor- mally' in the State of establishment. The use of the term 'normally' does not seem 32. The Court has also provided guidance intended to imply that the first State is the on the meaning of the phrase 'undertaking principal place of business of the under- to which he is normally attached' in taking. Nor is there scope for any quanti- Article 14(1)(a). In order to determine tative requirement concerning, for exam- whether a worker has been posted to the ple, the proportion of turnover generated in host State by an undertaking to which he is a particular Member State. All that is normally attached, it is necessary to deduce required is that there is genuine business from all the circumstances of his employ- activity in the first State. ment whether he remains under the author- ity of that undertaking throughout the period of his posting (van der Vecht, p. 354). The fact that a worker posted abroad retains his relationship with his employer can be proved in particular by the fact that it is the employer who pays the 34. There is clearly no basis for any more salary and can dismiss him for any mis- demanding conditions in the case of Reg- conduct by him in the performance of his ulation No 1408/71 since Article 14(1)(a) work with the hiring undertaking; it is also imposes no conditions in that respect and, relevant that the hiring undertaking is unlike Article 13 of Regulation No 3/58, indebted not to the worker but only to his does not even require that the agency 'has employer (Manpower, paragraphs 18 and an establishment' in the Member State 19). Fitzwilliam concludes from the empha- concerned. Nevertheless, since Arti- sis on the connection between the posted cle 14(1)(a) must be regarded as intended worker and the undertaking in the first to cover only bona fide cases of posting, it State that the nature of the undertaking's can be understood, in particular by virtue link with the first State is not relevant. of the expression 'undertaking to which he I - 894

37. Although that general policy decision postdates the specific decision taken in respect of Fitzwilliam which is in issue in this case, it appears that LISV applied similar criteria in reaching its decision in respect of Fitzwilliam, at least as regards 36. Indeed such criteria are applied by the proportion of Fitzwilliam's turnover in LISV. In a decision dated 13 June 1997 the Netherlands as a proportion of its LISV stated that it would interpret Decision overall turnover, the number of staff sup- No 162 of the Administrative Commis- plied in the Netherlands and the type of sion 17 in the following way. The words employment in the Netherlands. 'normally carries out its activity' means that the centre of gravity of the activity of the undertaking must be in the sending State. Whether or not that is so must be determined in the light of all the facts and circumstances of each case. The following facts and circumstances may, inter alia, be taken into account: where the undertaking 38. The applicability of such criteria is was founded and by whom; since when the supported, to varying degrees, by the undertaking has been active in the sending Dutch, German, and Belgian Governments. However it is impossible in my view to read such requirements into the terms of Arti- 17 — See paragraph 16 above. cle 14(1 )(a).

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18— Manpower, cited in note 15, paragraph 10 of the judgment. 19 — At paragraph 32.

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tion of its own social security rules, and the system since it is the State which continues undertaking conducts at least some busi- to receive the contributions which foots the ness in that State. bill for any treatment or benefits payable in respect of the posted worker in the host State. 23

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undertaking must usually, in the sense of Question 2 mainly, pursue its activity in that State but rather simply that it must genuinely pursue some activity there. That view appears to be supported by the Irish, French and 4 9 . The second question posed by the United Kingdom Governments. The Com- national court concerns the extent to which mission states that the undertaking must Member States are bound by E 101 certi- have substantial activities in the first State ficates issued by other Member States. As and not simply a formal, administrative mentioned earlier, such certificates are link with that State. issued pursuant to Article 11 of Regulation N o 574/72; 25 they certify that a particular worker has been posted to another Member State and that the legislation of the State from which he was posted continues to apply.

50. The question of the status of such certificates has already been discussed at length by Advocate General Lenz in his Opinion in Calle Grenzshop Andresen26 and by Advocate General Ruiz-Jarabo Colomer in his Opinion in Barry Banks v Theatre Royal de la Monnaie.27

effect of such certificates is accordingly 54. It is clear in my view that it is unlawful impossible. The only common principle for the authorities of a Member State may be that, as the Court stated in unilaterally to refuse to give effect to an Knoeller, 30 the legal significance of the E 101 certificate issued by the authorities form in question must be assessed in the of another Member State. In particular I light of Articles 48 to 51 of the EC Treaty, consider it essential that any dispute upon which Regulation No 1408/71 is between national authorities as to the based. applicable legislation should be resolved as between those authorities. It should not be possible for each State to require con- tributions from the worker in question and to leave it up to him to resolve the matter, perhaps even by means of litigation. As Fitzwilliam observed at the hearing, even if 52. Articles 48 to 51 are of course aimed at contributions unduly paid may be securing freedom of movement for work- reclaimed, such a solution is likely to be ers. It is clear that the simultaneous appli- impracticable, lengthy and expensive. It is cation of more than one social security thus contrary to the aim of the posted system to migrant workers would discou- workers rule of 'overcoming the obstacles rage the movement of workers and one of likely to impede freedom of movement of the basic principles of Regulation workers and ... encouraging economic inter- No 1408/71 (set out in Article 13(1)) is penetration whilst avoiding administrative that only one Member State's legislation complications for workers, undertakings should be applicable. and social security organisations'. 32

56. The obligations of Member States in this field derive not only from Regulation 58. It has been argued that the host State No 574/72 but also more generally from may nevertheless refuse to recognise a Article 5 of the Treaty, which requires certificate where it is based on a manifest Member States to take all appropriate error and that Advocate General Lenz measures, whether general or particular, himself recognised that type of exception. to ensure fulfilment of the obligations In my view, however, in such cases the host arising out of the Treaty or resulting from State must still contact the issuing authority action taken by the Community institu- and may not unilaterally ignore the certifi- tions. Article 5 must be regarded as obli- cate. If the error really is manifest or the ging Member States and their social secur- host State can show that the certificate was ity institutions in particular to cooperate in obtained by means of fraud, the issuing good faith to give full effect to the Com- authority should have no problem in with- munity provisions on social security and to drawing its certificate. If the issuing author- ensure fulfilment of the objectives of Arti- ity does nevertheless refuse to withdraw its cles 48 to 51 of the Treaty. The authorities certificate then the dispute should be of the Member State which issue the E 101 resolved between the competent authorities certificate must ensure that the conditions in the manner discussed above since the for its issue are fulfilled, and the authorities worker should in no circumstances be of the host State must not unilaterally subjected to two social security systems disregard a certificate which has been simultaneously. issued.

60. On the view I take of the principles That division of jurisdiction is consistent governing Article 14(1 )(a) of the Regula- with the normal principle that the decisions tion and the effect of an E 101 certificate, of a Member State's authorities should be only the courts of the issuing State can reviewed by the courts of that State. It is review the decision to issue the certificate. also a solution which is better suited to The jurisdiction of the courts of the host avoid the risk of conflicting decisions, to State will be limited, in my view, to setting give full effect to the E 101 certificate, and aside any decision of the host State which to ensure that the worker is not simulta- fails to recognise the certificate and pur- neously subject to two social security ports to treat the worker as subject to the systems contrary to the objective of Reg- social security system of the latter State. ulation No 1408/71.

Conclusion

6 1 . Accordingly the questions referred by the Arrondissementsrechtbank, Amsterdam, should in my opinion be answered as follows:

(1) The authorities of Member States are not entitled to supplement the provisions of Article 14(1)(a) of Council Regulation (EEC) N o 1408/71 of 14 June 1971 by other terms or conditions not expressly mentioned therein.

(2) Those provisions apply where a worker is employed by an undertaking in order to be posted to another Member State provided that the worker remains subject to the authority of that undertaking throughout the period of posting and that the undertaking carries on genuine business activity in the Member State from which the worker is posted. I - 901