Virginia, US
The Court of Justice of the European Union (hereafter CJEU) has re-confirmed its position regarding the validity of a Certificate of Coverage also commonly known as a CoC or an A1 certificate. The CJEU has stated that in case the host country has reasonable and concrete doubts regarding the conditions under which the A1 certificate was issued and the country that issued the A1 certificate refuses to reconsider these concerns the courts of the host country may decide to disregard the certificate.
The request for a Certificate of Coverage (commonly known as a CoC, or an A1 certificate amongst the countries that apply the EU Regulations on social security coordination) is fundamental to ensure full compliance with social security obligations for employees that are assigned to work abroad in another EU country on a temporary basis. The A1 certificate indicates in which country social security contributions are being paid and it should be kept available to be presented to the competent institution in the country where the assignee is temporarily working, to confirm the social security position of the employees concerned.
What is interesting about this judgement is that, on the one hand, it emphasizes again, as per consolidated case law, that an A1 certificate is binding to the host country’s authorities, as long as the certificate is not withdrawn by a competent institution of the issuing country.
On the other hand, however, as it also was stated in a recent CJEU decision of last February, that the national courts of the host country may disregard an A1 certificate in case it was issued fraudulently and the issuing institution of the home country is not willing to withdraw it. Please find more details about the recent CJEU decision regarding this particular judgement in one of our previous blogs here.
With the judgment of July 11th, 2018 (case C-356/15), the CJEU has ruled that Belgium infringed the EU Regulations on social security by introducing rules in national legislation that do not meet the principles and requirements of the EU Regulations.
According to current Belgian legislation, where the national court, a public social security institution or a social inspector establishes there has been an abuse in the issuance of an A1 certificate by a given home country, the worker involved should be made subject to Belgian social security legislation.
What is notable about this judgment is that the CJEU has clearly stated that if a host Member State adopts legislation authorizing its own institutions to unilaterally declare an A1 certificate invalid, the principle of sincere cooperation between the competent institutions of the Member States would be jeopardised.
Consequently, the power to make a finding of fraud and to disregard an A1 certificate is limited to the national courts alone, only after the whole procedure of dialogue and conciliation, as laid down in the EU Regulations, has been followed and executed.
The Fragomen Social Security team is prepared to guide clients to optimise their social security programs and reduce related costs. Our strategic approach will help you plan ahead and ensure social security compliance from day one. For any social security related question, please feel free to contact us at fragomensocsec@fragomen.com .