Inside the Commission: recent developments in the determination of the applicable legislation

Ms Fleur Veltkamp is a seconded national expert in the Unit ‘Free movement of workers and coordination of social security systems’ of DG Employment, Social Affairs and Inclusion. She took up this post in 2010. Before, she worked at the Ministry of Social Affairs and Employment in the Netherlands. She was prepared to give us in-depth information about the recent update of the ‘Practical Guide on the legislation that applies to workers’ and the Commission’s recent initiatives in the area of highly mobile workers.

trESS: Ms Veltkamp, thank you for your time. Your personal field of specialisation in the European Commission is the chapter on the determination of applicable legislation in the EU Regulations on social security coordination. Can you enlighten the reader why this is an important aspect of social security coordination?

Fleur Veltkamp (FV): Well, when you decide to work, study or live in another EU country, this has an impact on your social security coverage. The rules on applicable legislation are a set of conflict rules that determine which Member State is responsible for your social security coverage. They appoint one Member State which is responsible for your social security coverage and where you will have to pay your social security contributions. Their aim is to avoid difficulties which could arrive if two social security systems apply, or none apply as a result of a move to another State. Moreover, they lie at the basis of the other coordinating provisions of the Regulations concerning specific benefits.

trESS: To people working in the domain of EU social security coordination and specifically with the rules on the determination of the applicable legislation, the ‘Practical Guide on the legislation that applies to workers’ is a well-known instrument. However, why was such a guide necessary for ‘Title II’ of the Regulation and not for the other chapters? In other words, where does the initiative come from?

FV: Institutions, employers and citizens can be faced with many questions when they have to decide which legislation is applicable in a specific situation as it has important consequences for a person’s social security rights. Until 1 May 2010 they could consult the so-called ‘Posting Guide’, a practical working tool to assist these stakeholders in applying the rules on applicable legislation. When Regulation 883/2004 replaced Regulation 1408/71, the Administrative Commission for the coordination of social security systems decided that a new practical working tool was needed to explain the amended rules on posting and working in two or more Member States. With the new Practical Guide, we are trying to ensure that all institutions across the Member States apply the rules on applicable legislation in a uniform manner. As for other chapters, we have explained the basic rules in the ‘Small Guide’ and in the so-called ‘Explanatory notes’ which are available at the Commission’s website.

trESS: The ‘Practical Guide’ was updated in 2012. What has changed?

FV: The reason for updating the Practical Guide in 2012 was that on 28 June of that year, a number of changes to the rules on applicable legislation that were made with Regulation 465/2012 came into force. For example, it was clarified that a posted person cannot be replaced by another posted person. Secondly, when a person is working in two or more Member States, the institution in the Member State of residence should always assess if a person works a ‘substantial part’ of his/her activity in that Member State. And last but not least, the social security situation of members of air or cabin crew will be attached to their ‘home base’, that is to say the place where they normally start and end their duties.

trESS: These are indeed the most recent legislative changes in the rules on the determination of the applicable legislation, but how were these changes then translated in the ‘Practical Guide’?

FV: In order to explain the new rules in a comprehensive manner, we illustrated the new rules with specific examples. For instance, when we were discussing the changes to the Practical Guide, the Court of Justice issued a judgement in the Format case, in which it clarified that the institution that needs to decide if a person works in two or more Member States must not only look at the employment contract, but alternatively also at the actual anticipated work situation. We have established guidelines in the Practical Guide on how to interpret the rules on working in two or more Member States in the light of that judgement. Also, the ‘home base’ concept is new to the Regulations and all new employment contracts that were concluded for flying personnel after 28 June 2012 will have to be assessed on the basis of the new rules. In the ‘Practical Guide’ it is explained how to apply the ‘new rule’, but also what to do in exceptional and transitional situations.

trESS: The Regulations and the Practical Guide cannot deal with every specific case and there will always be cases for which the EU instruments do not produce a solution. An example illustrates this. A pensioner lives in Egypt, but has director’s mandates in a Belgian company (self-employed activity), a Swiss company (employed activity) and a Spanish company (employed activity). According to the coordination rules, he would be subject to the legislation of his Member State of residence. However, in his case this is a non-Member State (Egypt). How should such a case be solved and which role should the national administrations play?

FV: That’s a complex situation indeed. The application of the rules on applicable legislation is, as the Regulation itself, restricted to the EU territory, the EEA-EFTA States and Switzerland. When we apply the rules for working in two or more Member States in this case, normally the Member State of residence should be competent. In this situation, however, there is no ‘Member State of residence’, as the person is living in Egypt. In order to avoid that the person will be subject to the social security legislation of Belgium, Switzerland or Spain simultaneously, the competent institutions of all the Member States involved can reach an agreement on which legislation should apply in the interest of the person concerned. To that end, the Member States will actively have to work together to find a common agreement.

trESS: Another area in which the coordination rules are sometimes difficult to apply in practice is the area of ‘highly mobile workers’. The Commission wants to address this topic. Who are these ‘highly mobile workers’ and how will their issues be tackled?

FV: ‘Highly mobile workers’ are workers for whom high and frequent levels of mobility are an integral part of their profession or career. Their high and frequent levels of mobility combined with factors such as low predictability of work assignments, different employment statuses, and the use of short-term contracts could keep them back from establishing their international professional career. Legal, administrative and practical barriers to high levels of mobility have been recognised in different domains, such as the artistic and cultural sector, research and international transport. So far, a common EU approach to address and tackle these barriers has, however, not been taken. What the Commission now plans to do is to collect evidence from all the domains in which barriers to their mobility exist and to start a collective process of reflection on how to address the challenges that they are facing.

trESS: How will the concerned workers and their employers be involved in the process of reflection?

FV: In the first instance, an internal ‘Task Force’ of the Commission will identify what the legal, administrative, practical and information barriers are from the evidence that already exists. On the basis of this inventory and analysis, the Task Force will produce an internal discussion paper. In the second phase, a public consultation could be launched on the basis of this paper.

trESS: What would your advice be to all mobile workers who are confronted with problems concerning the applicable legislation?

FV: I would advise them to always contact the competent institution. There is a special procedure at EU level for situations where the institutions in different Member States cannot agree on the legislation that needs to be applied. Moreover, they can always contact the European problem solving tools such as Solvit or Your Europe or write a complaint to the Commission if the problems continue to persist.

trESS: That is very clear. Thank you, Ms Veltkamp!

FV: My pleasure!

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