Loyens & Loeff

EU 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?

Today, the EU 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employee will exercise the activities (in present case Austria) for as long as the A1 Declaration is valid and is not withdrawn again.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of Social Security Systems has decided that the A1 Declaration was unfair provided and believes it should be withdrawn.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.