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Latest developments at EU level concerning social security coordination

Latest developments at EU level concerning social security coordination. trESS seminar Rome 30 May 2012 Rob Cornelissen Magdalena Ciesielska. LATEST DEVELOMENTS IN EU LEGISLATION. 2010 Commission proposal to modify Reg 883/2004 and 987/2009

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Latest developments at EU level concerning social security coordination

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  1. Latestdevelopmentsat EU levelconcerning social security coordination trESS seminar Rome 30 May 2012 Rob Cornelissen Magdalena Ciesielska

  2. LATEST DEVELOMENTS IN EU LEGISLATION • 2010 Commission proposal to modify Reg 883/2004 and 987/2009 • First importance of proposal: legal basis for changing the rules. First time that coordination rules are changedafter entry into force of LisbonTreaty on 1 December 2009

  3. Situation beforeLisbonTreaty • Twolegal bases: • Art 42 EC for employedpersonsand theirdependents (familymembers and survivors): co-decision Council and Parliament. Unanimity in Council required • Art 308 EC for all otherpersonscovered by Reg (self-employed, students, non-active people). Council legislator. Unanimity in Council required

  4. Situation underLisbonTreaty • Art 48 TFEU: legal basis for employedand self-employedpersons and theirdependents. Co-decision Council and Parliament. Qualifiedmajorityin Council (with a brake system) • Art 21 (3) TFEU: competence for all EU citizens not covered by Art 48 TFEU. Council islegislator. Unanimity in Council required.

  5. 2010 Commission proposalbased on Art 48 TFEU only • Court: dual legal basis isexcluded if one Treaty provision requiresordinarylegislativeprocedure, whereas the otherrequires Council to actunanimously. In that case: determineappropriatelegal basis in light of general scope of Treaty • Commission: Art 48 TFEU isadequate and sufficientlegal basis

  6. Whyis Art 48 TFEU adequate and sufficientlegal basis? • Overwhelmingmajority of EU citizenscovered by Art 48 TFEU: • Wide meaning of "employed" and "self-employed" • Art 48 TFEU coversalsoretired "employed" and "self-employed" • Art 48 TFEU coversalsofamilymembersand survivors of "employed" and "self-employed" • Khalil judgment: inclusion of refugees (a"veryrestrictedcategory of persons") in scope of Reg based on Art 51 EC valid

  7. Council and Parliamentagreewith Commission • Commission proposal, based on Art 48 TFEU, adopted on 23 May 2012 (entry into force: 20 daysafter publication) • Art 48 TFEU isadequate and sufficientlegal basis for future EU social security coordination legislation

  8. Changes on content in BR (=Basic Regulation: Reg 883) 1. Postedworkers • Minor change in Art 12 BR • One of conditions for postingundercurrent Art 12 BR: "thathe/sheis not sent to replace anotherperson" • New version of Art 12: "thathe/sheis not sent to replace anotherpostedperson" • New wordingreflectsbetterpurpose of provision: to prevent successive posting of employees

  9. 2. Aircrewmembers • Currentrules of Title II BR: no specific provisions for specificcategories of people • New Art 11 (5) BR: "An activity as an aircrewmemberperforming air passenger or freight services shallbedeemed as an activitypursued in the Member State where the home base as defined in Annex III to Council Regulation (EEC) No 3922/91 islocated"

  10. Aircrewmembers • Notion of "home base" for flying personnel iswelldefined in existing EU law. Eachaircraft has duty to nominate a home base for eachaircrewmember • Home base: place fromwhichaircrewmemberhabitually carries out work in performance of his/hercontract

  11. Aircrewmembers • "Home base" iscloselylinked to actual place of work of personconcerned and the lexlocilaborisprinciple • Constitutes a more suitableelement for determination of applicable legislationthan "registered office" or "place of business" of employer

  12. 3. Change of rules for working in two or more MS • Current Art 13 BR: if person normally works in two or more MS for one employer, person is subject to legislation of residence only if he/she pursues "substantial part of activities" there. • Current Art 13 BR: if person normally works in two or more MS for two or more employers situated in different MS, person is subject to MS of residence, even when no "substantial part of activities" there

  13. Change of rules for working in two or more MS • Art 13 BR as amended: personnormallyworking in two or more MS issubject to legislation of MS of residenceonly if he/shepursues "substantial part of activities" there, regardless if person has one or variousemployers

  14. Change of rules for working in two or more MS • If no substantialactivities in MS of residence: • MS in whichregistered office issituatedif personisemployed by one employer or by two or more employerswho have registered office in a single MS only; or • MS in whichregistered office issituatedoutsideMS of residence if he/sheisemployed by two or more employerswhich have registered office in two MS, one of themis MS of residence; or • MS of residence if he/sheisemployed by two or more employers and at least two of them have registered office in different MS otherthan MS of residence

  15. Change of rules for working in two or more MS: marginal activities • Current Art 14 (5) IR: a personpursuing "activities of marginal extent" in one MS and alsoworking for same employer in another MS is NOT covered by Art 13 BR. (Idea: prevent abuse). Suchpersonis, for purpose of determining applicable legislation, treated as working in one MS • Art 14(5) and 14(5a) IR amended: sameprincipleapplies for personpursuingmain activity in one MS for one employer and another "activity of marginal extent" in another MS for another employer

  16. Marginal activities • No definition in Regulations of notion "marginal activities" • Pratical Guide on applicable legislation: activitiesthat are permanent but insignificant in terms of time and economic return. As an indicator,activitieslessthan 5% of worker'sregularworking time and/or lessthan 5% of overallremuneration are marginal activities. Alsonature of activitiescanbeindicator. • Not alwayseasy to implement

  17. Working in two or more MS. Clarification of notion"registered office" or "place of business" • New Art 14 (5a) IR (= ImplementingRegulation= Regulation 987/2009): for purpose of application of Title II BR the notion "registeredoffice or place of business" refers to place where the essential decisions of the undertaking are adopted and where the functions of its central administration are carried out

  18. 4. Unemploymentbenefits for cross border self-employed • New Art 65a BR: solution for formerlyself-employedfrontierworkerswhowerecovered in MS of last activity, but whose MS of residencedoes not have anyunemploymentbenefitscheme for self-employed

  19. 5. Transitional provision concerning applicable legislation • If, as a result of the new Regulation, a personissubject to the legislation of a MS otherthan the one determined in accordance with the oldrules, the oldrules continue to apply (for a maximum of 10 years) as long as relevant situation remainsunchanged, unlesspersonconcernedrequests the immediate application of the new rules

  20. EEA and Switzerland • EEA Joint Committee Decision No 76/2011 • adopted on 1 July 2011 (OJ L 262, 6.10.2011, p. 33) • not yet entered into force (pending approval by IS parliament) – possibly on 1 June 2012 • Regulations (EEC) Nos 1408/71 and 574/72 still apply in relation to IS, LI and NO • EC-CH Joint Committee Decision No 1/2012 • OJ L 103, 13.4.2012, p. 51 • Regulations (EC) Nos 883/2004 and 987/2009 apply in relation to Switzerland since 1 April 2012

  21. CASE-LAW • Opinion of the AG of 3 May 2012 in case C- 115/11 Format (pending before the Court) The concept of a "person normally employed in the territory of two and more Member States"

  22. ADMINISTRATIVE COMMISSION 1. Practical Guide on applicable legislation • Replaces the "Posting Guide" (chapter on applicable legislation when working in two or more Member States) • Working instrument to assist institutions, employers and citizens in the area of determining the applicable social security legislation • An update is scheduled for the 2nd half of 2012 • Available on the Commission's website: http://ec.europa.eu/social/main.jsp?catId=851&langId=it

  23. ADMINISTRATIVE COMMISSION 2. Current discussions: • Interpretation of the term "posted person sent to replace another posted person" (Art 12(1) BR) Practical examples: • slaughter house • Alpes resorts • Applicable legislation in case of parental leave

  24. EXTERNAL DIMENSION Communication on the External Dimension of EU Social Security Coordination (COM(2012) • sets out ways in which the EU rules currently impact on social security coordination with third countries • describes existing components of common EU approach to social security coordination with third countries • calls for strengthening cooperation between Member States to achieve a more coherent approach to social security coordination with third countries

  25. REVISION OF COORDINATION REGULATIONS • Scope: • coordination of long-term care benefits (LTC) • coordination of unemployment benefits • Planning • 2009-2011 Evaluation • 2012-2013 Impact assessment • 2014 Proposal from the Commission

  26. Thank you very much for your attention! Questions??

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