A1 posting form no longer untouchable

A1 posting form no longer untouchable

In a recent controversial ruling, the Court of Justice decided that a national court of the member state of receipt may overrule the A1 form that was issued by the posting state under certain circumstances in the event of fraud.

In principle the A1 form constitutes the proof that a certain foreign (EU) employee is subjected to the social security of the country from where he is employed. The A1 form is issued by the social security office of the country of origin.

The “Altun” case related to Bulgarian companies who posted employees to Belgium in the construction sector. The Belgian social security office had requested the Bulgarian social security office to revoke the A1 form because the contractors in question did not have any real activities in Bulgaria. Although the posting conditions had clearly not been respected because of this, the Bulgarian government refused this request and confirmed the validity of the A1 forms it had issued.

The European Court of Justice decided in the Altun ruling that in these circumstances the Belgian court can overrule the A1 forms and decide that Belgian social security applies. However, the Court does lay down a number of conditions:

1. the competent authority in the receiving state (in Belgium the social security office) must send a request to the competent authority in the posting state (in this case the Bulgarian social security office) to reconsider and revoke the issued A1 forms.

2. the request of the receiving state must be based on specific facts of a judicial inquiry that point to posting fraud.

3. the competent authority in the posting state (in this case the Bulgarian social security office) must have refused the request of the receiving state or not have replied within a reasonable period of time, as a result of which the A1 forms were not revoked.

The Court of Justice attaches its opinion to the fraus omnia corrumpit principle. The conclusion of fraud requires both an objective (the conditions for the posting have not been met) and a subjective element (intention to use the A1 form improperly).

This ruling is remarkable, as the Court of Justice to date has always repeatedly confirmed the binding nature of the issued A1 forms. This meant the Belgian inspection departments always had to rely on the goodwill of the foreign social security office to revoke the A1 forms they had issued.

Former legislation whereby former Secretary of State for fraud prevention John Crombez enabled Belgian courts to overrule A1 forms in the event of fraud[1], was (rightfully so) strongly criticised because of this case law of the Court of Justice.

The Altun ruling gives the inspection departments more opportunities to deal with posting fraud, albeit that the aforementioned conditions will have to be taken into account, which have currently not yet been laid down in Belgian legislation.

To be continued for sure.

For more information about this specific subject, please contact Sébastien van Damme (author) and Sara Cockx (author and unit head).

[1] Art. 24 Programme Act 27 December 2012