In a recent judgement, the Court of Justice of the EU (CJEU) again confirmed the binding nature of an A1 form – even when issued retroactively – for both the competent authorities and the courts of the host Member State to which an employee is posted. In addition, the Court clarified that, if a posted employee is replaced by an employee who is posted by another employer, this last employee cannot be validly posted whilst remaining subject to the home Member State social security scheme, as the condition of non replacement – required for a valid posting – is not complied with.
Binding nature of A1 form
The CJEU starts by confirming its previous case law on the binding nature of A1 forms. Indeed, the CJEU has a longstanding and extensive body of case law on the validity of A1 forms in which the guiding principle is the fact that, in case of posting in application of article 12 of the Regulation (EC) n° 883/2004, an A1 form issued by the home Member State has a binding effect on both the competent authorities and the courts of the host Member State, as long as it has not been retracted or declared invalid by the latter. The only exceptions to this principle are cases of fraud or abuse of right, as detailed by the CJEU in its Altun case.
The Court continues by declaring that the fact that an A1 form is issued retroactively by the home country Member State has no impact whatsoever on its binding nature, even if the A1 form was only issued after the host Member State declared the posted employee to be subject to its social security scheme, based on its national legislation. In such event, the A1 form’s binding nature will take precedence over the host Member States decision.
In addition, the CJEU reiterates that, when Member States bring a dispute regarding the validity of an A1 form before the Administrative Commission, the Commission will only try to reconcile the points of view of both Member States, without their conclusion having any normative power. As such, an A1 form will continue to be binding for the authorities and courts of the host Member State as long as it has not been retracted or declared invalid by the home Member State, even if the Administrative Commission would have concluded that the certificate was incorrectly issued and should be redrawn.
Non replacement condition
Based on article 12 of the Regulation (EC) n° 883/2004, an employee who is posted to work in another Member State will remain subject to the social security scheme of the home Member State if the posting does not exceed 24 months and the employee is not sent to replace another posted worker (i.e. non replacement condition).
In the case at hand, the CJEU elaborated on the interpretation of this non replacement condition. More specifically, the Court ruled that, if an employee who is posted to work in another Member State is replaced by an employee who is posted by another employer, this last employee should be considered as “sent to replace another posted worker” and will therefore not be able to remain subject to the home Member State social security scheme. Whether or not the different employers are located in the same Member State has no impact in this respect, nor would the fact that the employers have personal or organisational links. The Court substantiates this interpretation by stating that the possibility of posting should be seen as a “special rule” which constitutes a derogation from the “general rule” of the work-state principle and should therefore be strictly interpreted.
This interpretation is in line with the Administrative Commission’s Practical Guide, which reads that the ban on replacing a posted worker by another posted worker must indeed be considered not only from the perspective of the home Member State but also from the perspective of the host Member State. A posted worker can therefore not immediately be replaced in the host Member State by a posted worker from the same undertaking of the home Member State A, nor by a posted worker from a different undertaking based in Member State A or a posted worker from an undertaking based in Member State C.
It is however important to point out that a posting employer might not be aware that the activity its posted worker exercises in the host Member State was immediately prior exercised by another posted worker from another employer, thereby inadvertently not fulfilling the conditions for a valid posting. Some diligence is therefore required in this respect.