CELEX: 62005CJ0002
Social security for migrant workers
Determination of the legislation applicable
Workers posted to another Member State
Scope of E 101 certificate

The reference for a preliminary ruling concerns the interpretation of Article 14(1)(a) of Regulation (EEC) No 1408/71 of the
Council of 14 June 1971 on the application of social security schemes to employed persons, self‑employed persons and members
of their families moving within the Community, and of Article 11(1)(a) of Regulation (EEC) No 574/72 of the Council of 21
March 1972 laying down the procedure for implementing Regulation No 1408/71, in the versions amended and updated by Council
Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6), as amended by Council Regulation (EEC) No 2195/91 of 25
June 1991 (OJ 1991 L 206, p. 2, hereinafter, respectively, ‘Regulation No 1408/71’ and ‘Regulation No 574/72’).
That reference was made in the course of proceedings between the Rijksdienst voor Sociale Zekerheid (National Social Security
Service, hereinafter ‘the Rijksdienst’) and the Belgian company Herbosch Kiere NV (hereinafter ‘Herbosch Kiere’) concerning
the repayment of social security contributions it paid for certain posted Irish workers.

Legal framework

Community legislation
Regulation No 1408/71
Title II of Regulation No 1408/71, which comprises Articles 13 to 17a, contains rules determining the legislation applicable
in respect of social security.
Article 13(2) of the regulation provides:
‘Subject to the provisions of Articles 14 to 17:
(a)      a person employed in the territory of one Member State shall be subject to the legislation of that State even if he resides
in the territory of another Member State or if the registered office or place of business of the undertaking or individual
employing him is situated in the territory of another Member State;
…’
Article 14 of the regulation provides:
‘Article 13(2)(a) shall apply subject to the following exceptions and circumstances:
(1)(a) A person employed in the territory of a Member State by an undertaking to which he is normally attached who is posted by that
undertaking to the territory of another Member State to perform work there for that undertaking shall continue to be subject
to the legislation of the first Member State, provided that the anticipated duration of that work does not exceed 12 months
and that he is not sent to replace another person who has completed his term of posting.
…’
Decision No 128 of the Administrative Commission on Social Security for Migrant Workers
Under Article 81(a) of Regulation No 1408/71, the Administrative Commission on Social Security for Migrant Workers (hereinafter
‘the Administrative Commission’), established under Title IV of that regulation, which is responsible, in particular, for
dealing with all matters of administration or interpretation arising from the provisions of the regulation, adopted for those
purposes Decision No 128 of 17 October 1985 concerning the application of Articles 14(1)(a) and 14b(1) of Regulation No 1408/71
(OJ 1986 C 141, p. 6), which was in force at the time of the facts of the main proceedings. That decision was replaced by
Decision No 162 of 31 May 1996 (OJ 1996 L 241, p. 28), which entered into force after those events and was itself replaced
by Decision No 181 of 13 December 2000 (OJ 2001 L 329, p. 73).
According to paragraph 1 of Decision No 128, the provisions of Article 14(1)(a) of Regulation No 1408/71 are also to apply
to ‘a worker subject to the legislation of a Member State who is engaged in that Member State in which the undertaking has
its registered office or place of business with a view to his posting … to another Member State ... provided that:
(a)      there exists a direct relationship between that undertaking and the worker during his period of posting;
(b)      the undertaking normally carries out its activities in the first Member State, that is to say, in the case of an undertaking
whose activity consists in making staff temporarily available to other undertakings, that it normally makes staff available
to hirers established in that State for employment in that State’.
Regulation No 574/72
Article 11(1) of Regulation No 574/72, which forms part of Title III thereof entitled ‘Implementation of the provisions of
the regulation for determining the legislation applicable’, provides:
‘The institution designated by the competent authority of the Member State whose legislation is to remain applicable shall
issue a certificate stating that an employed person should remain subject to that legislation up to a specific date:
(a)      at the request of the employed person or his employer in cases referred to in Article 14(1) ... of the Regulation;
…’
The certificate mentioned in the provision set out above is known as a ‘posting certificate’ or an ‘E 101 certificate’.

Belgian legislation
Article 31(1) of the Law of 24 July 1987 on temporary employment, provisional employment and the making of workers available
to hirers (
Moniteur belge
of 20 August 1987, p. 12405) provides:
‘A natural or legal person may not, otherwise than in accordance with the rules laid down in Chapters I and II, carry on any
activity which consists in making workers recruited by that person available to third parties who hire those workers and exercise
in relation to them any part of the authority normally vested in an employer, except for certain non‑profit‑making associations
designated by Royal Decree decided upon in the Council of Ministers.’

The main proceedings and the questions referred for a preliminary ruling
During the period from April to September 1991, Herbosch Kiere was responsible for carrying out shuttering and concreting
work and the installation of reinforced concrete frames on two construction sites in Belgium. To do so, it had recourse to
the Irish undertaking ICDS Constructors Ltd (hereinafter ‘ICDS Constructors’). Two subcontracts were concluded for the sites
in question.
Herbosch Kiere checked, among other things, that ICDS Constructors’ workers employed in Belgium had a valid posting certificate,
issued in accordance with Article 11 of Regulation No 574/72 by the competent Irish authorities, and that the social security
contributions due in respect of those workers had been paid in Ireland. According to the Court of First Instance, all the
workers concerned, with a single exception, were in possession of E 101 certificates.
On 12 October 1992, the Social Legislation Inspectorate of the Belgian Ministry of Employment and Labour drew up a report
stating that Herbosch Kiere had been hiring the Irish workers who had been made available by ICDS Constructors and that the
real employer of those workers was therefore not the latter company but Herbosch Kiere.
In the light of the conclusions of that report, the Rijksdienst found that Herbosch Kiere exercised a part of the authority
vested in an employer with the result that the workers must be regarded as being bound by a contract of employment with Herbosch
Kiere. Consequently, the Rijksdienst required Herbosch Kiere to pay the contributions due under the Belgian social security
regime.
Herbosch Kiere paid, conditionally, the sum claimed by the Rijksdienst in respect of those contributions, BEF 3 647 567 (EUR 90 420.82),
and claimed repayment thereof in an action brought before the Arbeidsrechtbank te Brussel (Brussels Labour Court), which in
large measure upheld that claim.
The Arbeidshof te Brussel (Brussels Higher Labour Court), to which the Rijksdienst appealed, harbours some doubts concerning
the interpretation to be given to the relevant provisions of Regulation No 1408/71. In the light of the judgments in Case
C‑202/97
FTS
[2000] ECR I-883 and Case C-178/97
Banks and Others
[2000] ECR I‑2005, the national court is uncertain as to the legal value to be accorded to an E 101 certificate, by the competent
institution and the national courts of the host Member State of the workers concerned. Having regard to the Rijksdienst’s
submissions before the national court, according to which such certificates are merely a statement of the position as it stands
or is supposed to stand at the time of the posting, the national court is unsure as to the circumstances in which the maintenance
of a direct relationship, during the period of posting, between the worker and the undertaking which posted him can be scrutinised.
It was in those circumstances that the Arbeidshof te Brussel decided to stay the proceedings and to refer the following questions
to the Court of Justice for a preliminary ruling:
‘(1)      May a court of the host State examine and/or determine whether a direct relationship exists between the undertaking which
has posted a worker and the posted worker himself, in view of the fact that the term “undertaking to which he is normally
attached” in Article 14(1)(a) of Regulation (EEC) No 1408/71 requires (pursuant to Decision No 128) that there be a direct
relationship throughout the period of posting?
(2)      May a court of a Member State other than that which issued the abovementioned certificate (E 101 certificate) disregard and/or
annul that certificate if it appears from the factual circumstances presented for its consideration that the direct relationship
between the undertaking which posted the worker and the posted worker himself did not exist during the period of posting?
(3)      Is the competent institution of the State of origin bound by a decision of a court of the host State which, in circumstances
such as those set out above, disregards and/or annuls the abovementioned certificate (E 101 certificate)?’

The questions referred
The questions referred concern only the interpretation of Articles 14(1)(a) of Regulation No 1408/71 and 11(1)(a) of Regulation
No 574/72. There is therefore no need to take into account Directive 96/71/EC of the European Parliament and of the Council
of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ 1997 L 18, p. 1),
the 19th recital in the preamble to which states that, ‘without prejudice to other provisions of Community law, this Directive
does not entail the obligation to give legal recognition to the existence of temporary employment undertakings, nor does it
prejudice the application by Member States of their laws concerning the hiring‑out of workers and temporary employment undertakings
to undertakings not established in their territory but operating therein in the framework of the provision of services’.

The first and second questions
By its first and second questions, the national court asks in essence whether, and to what extent, an E 101 certificate issued
under Article 11(1)(a) of Regulation No 574/72 is binding in the internal legal order of the host State as regards the existence,
during the period of posting, of a direct relationship between the undertaking which has posted the worker and the posted
worker himself.
In that regard, it must be noted that, according to the Court’s settled case‑law, referred to in Decision No 128 of the Administrative
Commission, the maintenance during the period of posting of those workers of a direct link between the undertaking established
in a Member State and the workers which it has posted to another Member State is one of the requirements for the application
of Article 14(1)(a) of Regulation No 1408/71 (see to that effect
FTS
, paragraph 24). The declaration contained in an E 101 certificate is based upon the existence of such a link.
That certificate is – like the substantive rules in Article 14(1)(a) of Regulation No 1408/71 – aimed at facilitating freedom
of movement for workers and freedom to provide services (see to that effect
FTS
, paragraph 48).
In an E 101 certificate, the competent institution of the Member State in which an undertaking providing temporary personnel
is established declares that its own social security system will remain applicable to the posted workers for the duration
of their posting. By virtue of the principle that workers must be covered by only one social security system, the certificate
thus necessarily implies that the other Member State’s social security system cannot apply (
FTS
, paragraph 51).
The principle of cooperation in good faith, laid down in Article 10 EC, requires the issuing institution to carry out a proper
assessment of the facts relevant for the application of the rules relating to the determination of the legislation applicable
in the matter of social security and, consequently, to guarantee the correctness of the information contained in an E 101
certificate (
FTS
, paragraph 51).
As regards the competent institutions of the Member State to which workers are posted, it is clear from the obligations to
cooperate arising from Article 10 EC that those obligations would not be fulfilled – and the aims of Article 14(1)(a) of Regulation
No 1408/71 and Article 11(1)(a) of Regulation No 574/72 would be thwarted – if the institutions of that Member State were
to consider that they were not bound by the certificate and also made those workers subject to their own social security system
(
FTS
, paragraph 52).
Consequently, in so far as an E 101 certificate establishes a presumption that posted workers are properly affiliated to the
social security system of the Member State in which the undertaking which posted those workers is established, such a certificate
is binding on the competent institution of the Member State to which those workers are posted (see to that effect
FTS
, paragraph 53).
The opposite result would undermine the principle that workers are to be covered by only one social security system, would
make it difficult to know which system is applicable and would consequently impair legal certainty. In cases in which it was
difficult to determine the system applicable, each of the competent institutions of the two Member States concerned would
be inclined to take the view, to the detriment of the workers concerned, that their own social security system was applicable
to them (
FTS
, paragraph 54).
Consequently, as long as an E 101 certificate is not withdrawn or declared invalid, the competent institution of a Member
State to which workers are posted must take account of the fact that those workers are already subject to the social security
legislation of the State in which the undertaking employing them is established and that that institution cannot therefore
make the workers in question subject to its own social security system (
FTS
, paragraph 55).
However, it is incumbent on the competent institution of the Member State which issued that certificate to reconsider the
grounds for its issue and, if necessary, withdraw the certificate if the competent institution of the Member State to which
the workers are posted expresses doubts as to the correctness of the facts on which the certificate is based and, consequently,
of the information contained therein, in particular because the information does not correspond to the requirements of Article 14(1)(a)
of Regulation No 1408/71 (
FTS
, paragraph 56).
Should the institutions concerned not reach agreement on, in particular, the question how the particular facts of a specific
case are to be assessed, and consequently on the question whether it is covered by Article 14(1)(a) of Regulation No 1408/71,
it is open to them to refer the matter to the Administrative Commission (
FTS
, paragraph 57).
If the Administrative Commission does not succeed in reconciling the points of view of the competent institutions on the question
of the legislation applicable, the Member State to which the workers concerned are posted may, without prejudice to any legal
remedies existing in the Member State to which the issuing institution belongs, at least bring infringement proceedings under
Article 227 EC in order to enable the Court to examine in those proceedings the question of the legislation applicable to
those workers and, consequently, the correctness of the information contained in the E 101 certificate (
FTS
, paragraph 58).
If it were accepted that a competent national institution could, by bringing proceedings before a court of the posted worker’s
host Member State to which that institution belongs, have an E 101 certificate declared invalid, there would be a risk that
the system based on the duty of cooperation in good faith between the competent institutions of the Member States would be
undermined.
As long as it has not been withdrawn or declared invalid, an E 101 certificate takes effect in the internal legal order of
the Member State in which the workers concerned are posted and, therefore, binds its institutions.
It follows that a court of the host Member State is not entitled to scrutinise the validity of an E 101 certificate as regards
the certification of the matters on the basis of which such a certificate was issued, in particular the existence of a direct
relationship between the undertaking which posted the worker and the posted worker himself.
Having regard to all the foregoing considerations, the reply to the first and second questions must be that, as long as it
has not been withdrawn or declared invalid by the authorities of the Member State which issued it, an E 101 certificate issued
under Article 11(1)(a) of Regulation No 574/72 binds the competent institution and the courts of the Member State in which
the workers are posted. Consequently, a court of the host Member State of such workers is not entitled to scrutinise the validity
of an E 101 certificate as regards the certification of the matters on the basis of which such a certificate was issued, in
particular the existence of a direct relationship, within the meaning of Article 14(1)(a) of Regulation No 1408/71, read in
conjunction with paragraph 1 of Decision No 128, between the undertaking established in a Member State and the workers which
it has posted to another Member State, during the period of their posting.

The third question
In the light of the reply given to the first and second questions, it is unnecessary to reply to the third question.

Costs
Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court,
the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs
of those parties, are not recoverable.
On those grounds, the Court (Fourth Chamber) hereby rules:
As long as it has not been withdrawn or declared invalid by the authorities of the Member State which issued it, an E 101
certificate issued under Article 11(1)(a) of Regulation (EEC) No 574/72 of the Council of 21 March 1972 laying down the procedure
for implementing Regulation No 1408/71, in the version amended and updated by Council Regulation (EEC) No 2001/83 of 2 June
1983, as amended by Council Regulation (EEC) No 2195/91 of 25 June 1991, binds the competent institution and the courts of
the Member State in which the workers are posted. Consequently, a court of the host Member State of such workers is not entitled
to scrutinise the validity of an E 101 certificate as regards the certification of the matters on the basis of which such
a certificate was issued, in particular the existence of a direct relationship, within the meaning of Article 14(1)(a) of
Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons,
self‑employed persons and members of their families moving within the Community, in the version amended and updated by Regulation
No 2001/83, as amended by Regulation No 2195/91, read in conjunction with paragraph 1 of Decision No 128 of the Administrative
Commission on Social Security for Migrant Workers of 17 October 1985 concerning the application of Articles 14(1)(a) and 14b(1)
of Regulation No 1408/71, between the undertaking established in a Member State and the workers which it has posted to another
Member State, during the period of their posting.
[Signatures]
*
Language of the case: Dutch.