Court of Justice confirms binding force E101 certificate | Deloitte


Court of Justice confirms binding force E101 certificate

Recently, the Court of Justice of the EU confirmed that once an E101 certificate has been issued it continues to be valid until it is withdrawn, even if it turns out afterwards that the grounds on which a certificate has been issued are incorrect.

31 May 2017

Dutch version

Staff on French cruise ships

A Swiss employer had employed staff on ships sailing on the French inland waterways. The Swiss authorities had issued an E101 certificate (now: A1/certificate of coverage), showing that the staff had continued to be insured in Switzerland. The E101 certificate, as it turned out afterwards, should not have been issued because it was based on incorrect assumptions. The staff involved was not covered by the scope of the European Coordination Regulation 1408/71 (now: 883/2004), based on which the E101 certificate had been issued. Thus, the French authorities had also collected social security contributions from the salary of this staff, even though the E101 certificate stated that solely Swiss social security legislation was applicable.

The question was submitted to the Court of Justice for the EU (CJEU) as to whether an E101 certificate retains its validity if it turns out it should not have been issued because the staff involved is not covered by the scope of Regulation 883/2004.

Binding force E101 certificate

First of all, the CJEU refers to its settled case law. It shows that an E-101 certificate issued by a Member State binds the authorities of other Member States. Still, if those authorities are uncertain about the facts underlying the certificate, or about the legal assessment of those facts, then the issuing authorities should once again examine the validity of that certificate and, if necessary, withdraw it. Solely the Member State that has issued the certificate thus has the competence to assess its validity. It would be contrary to the principle of cooperation in good faith between the Member States, laid down in the Treaty on European Union, if the receiving Member State had the competence to declare an E101 certificate to be invalid.

What’s more, the CJEU stated that if Member States disagree to the validity of E101 certificate they cannot collect contributions of their own accord, as this would result in a double contribution burden. The European Coordination Regulation contains a procedure according to which a Member State can request another Member State to reconsider the certificate issued. Should this be unsuccessful, the Member States may submit the case to the Administrative Commission. If necessary, they may even institute infringement proceedings at the CJEU. France and Switzerland had failed to do so in this case.

Consequences for Regulation 883/2004

The previous Regulation 1408/71 was replaced by Regulation 883/2004 on May 1, 2010. Nevertheless, the judgment by the CJEU applies without prejudice to A1/certificates of coverage issued under the current regulation. Once an A1/certificate of coverage has been issued it continues to be binding for other Member States, even if they are uncertain about its validity. Member States are not permitted to ignore a certificate and decide to still collect contributions.

Source: Court of Justice EU, April 27, 2017, no. C-620/15

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