Judgment;Summary — ECLI:EU:C:2023:109
Date: 2023-02-16
Language of the case: German
Court formation: Seventh Chamber
Subject matter: Social Policy
Procedure: Reference for a preliminary ruling
Origin: Austria

Anonymised version 
Translation C-710/21 – 1 
Case C-710/21 
Request for a preliminary ruling 
Date lodged: 
25 November 2021 
Referring court: 
Oberster Gerichtshof (Austria) 
Date of the decision to refer: 
14 September 2021 
Appellant on a point of law and original defendant: 
IEF Service GmbH 
Respondent in the appeal on a point of law and original applicant: 
HB 
  
The Oberster Gerichtshof (Supreme Court, Austria), sitting as the court ruling on 
appeals on points of law in matters of employment and welfare law […], in the 
welfare law dispute between the applicant, HB […], and the defendant, IEF 
Service GmbH […], Graz, […] concerning EUR 19 363 […] (insolvency 
remuneration), regarding the appeal on a point of law brought by the defendant 
against the judgment of 18 June 2020, GZ 7 Rs 7/20h-11, of the 
Oberlandesgericht Graz (Higher Regional Court, Graz), sitting as the court ruling 
on appeals in matters of employment and welfare law, by which the judgment of 
the Landesgericht für Zivilrechtssachen Graz (Regional Court for Civil Matters, 
Graz), sitting as a court in matters of employment and welfare law, of 14 October 
2019, GZ 7 Cgs 35/19f-7, was confirmed, […] has made the following 
O r d e r: 
  
EN 
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1. The following questions are referred to the Court of Justice of the European 
Union for a preliminary ruling pursuant to Article 267 TFEU: 
Is Article 9(1) of Directive 2008/94/EC of the European Parliament and of the 
Council of 22 October 2008 on the protection of employees in the event of the 
insolvency of their employer to be interpreted as meaning that an undertaking 
within the meaning of that article carries out activities in the territories of at least 
two Member States where it offers its services in another Member State, employs 
a freelance sales engineer there for that purpose and an employee employed at the 
registered office of the undertaking regularly works every second week in his or 
her home office in the other Member State? 
2. If Question 1 is answered in the affirmative: 
Is Article 9(1) of Directive 2008/94/EC to be interpreted as meaning that an 
employee of such an undertaking who is resident in the second Member State and 
is subject to compulsory social insurance there, but alternately works for one week 
in the Member State in which the employer has its registered office and then the 
next week in the Member State in which he or she is resident and is subject to 
compulsory social insurance, ‘habitually’ works in both Member States within the 
meaning of that article? 
3. If Question 2 is answered in the affirmative: 
Is Article 9(1) of Directive 2008/94/EC to be interpreted as meaning that the 
guarantee institution responsible for meeting the outstanding claims of an 
employee who works or habitually works in two Member States is 
a) the guarantee institution of the Member State to the legislation of which he 
or she is subject in the context of the coordination of social security (social 
insurance) systems where the guarantee institutions pursuant to Article 3 of 
Directive 2008/94/EC in both States are structured in such a way that the 
employer’s contributions to the financing of the guarantee institution are payable 
as part of the compulsory social insurance contributions; or 
b) the guarantee institution of the other Member State in which the undertaking 
which is in a state of insolvency has its registered office; or 
c) the guarantee institutions of both Member States, with the result that the 
employee can choose which one he or she wants to claim from when submitting 
his or her application? 
2. […] [stay of proceedings] 
G r o u n d s: 
A. Facts 
IEF SERVICE 
 
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1 The applicant has been employed by the insolvency debtor, having its registered 
office in Graz, as head of strategic business development since 1 July 2017. The 
applicant’s employer also offers its services in Germany and employs a freelance 
sales engineer in that country, but no other employees. 
2 According to the applicant’s employment contract, the place where he primarily 
and habitually works is Austria. He manages two departments and is responsible 
for the employees in the office in Graz. The applicant in fact worked alternately 
for one week at the office in Graz and one week at his home office in Germany, 
where his main place of residence is situated. The work performed by the 
applicant in his home office is not significantly different from the activity that he 
carries out at the company’s registered office. 
3 The applicant has a certificate pursuant to Article 13(1)(a) of Regulation (EC) 
No 883/2004 on the coordination of social security systems (A1 certificate), 
according to which he is subject to German legislation. 
4 By order of the insolvency court of 4 June 2019, restructuring proceedings 
without self-administration were instituted in respect of the employer’s assets. 
5 The applicant submitted an application for insolvency benefit to both the 
defendant and the German guarantee institution. The proceedings are still 
ongoing. 
B. Forms of order sought and arguments of the parties 
6 The action seeks payment of insolvency remuneration for the applicant’s claims 
for remuneration that were outstanding when the restructuring proceedings were 
instituted. According to the applicant, the Insolvency Directive (Directive 
2008/94/EC) provides that the additional criterion of the employee’s place of 
activity should be used to determine the competent guarantee institution only if 
the employer has a number of establishments in various Member States. The 
debtor has no other establishment in another Member State, with the result that the 
competent guarantee institution is that in the place where the registered office is 
situated and the insolvency proceedings were instituted. Therefore, the applicant’s 
location and agreed place of work in Austria is decisive. The fact that the 
applicant is subject to compulsory social insurance in Germany does not change 
the defendant’s competence. In so far as it might be inferred from Paragraph 1(1) 
of the Insolvenz-Entgeltsicherungsgesetz (Law on the guarantee of remuneration 
in the event of insolvency; ‘the IESG’) that the defendant’s obligation to pay 
benefits requires that the employee is subject to compulsory social insurance in 
Austria, the provision contradicts Article 9(1) of Directive 2008/94/EC and must 
be disapplied. 
7 In the proceedings, the defendant contended that it was bound by the A1 
certificate that the German umbrella organisation DVKA issued to the applicant 
on the basis of Article 12(1) of Regulation (EC) No 883/2004, as amended by 
Regulation No 1244/2010. The defendant submitted that, according to the 
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requirements of Paragraph 1(1) of the IESG, which refers to the insurance 
obligation under Paragraph 3(1) and (2)(a) to (d) of the Allgemeines 
Sozialversicherungsgesetz (General Law on social security; ‘the ASVG’), the 
requirements for the defendant’s responsibility to pay benefits are not met. 
C. Procedure to date 
8 The court of first instance granted the form of order sought. It concluded that the 
applicant’s A1 certificate is relevant only within the scope of Regulation (EC) 
No 883/2004, as amended by Regulation (EU) No 1244/2010, which regulates the 
issuance of such certificates and does not cover the guarantee of employees’ 
claims in the event of insolvency of their employer. Rather, the scope of Directive 
2008/94/EC is decisive, and, within that scope, the Member State in which the 
employee was or is subject to compulsory insurance is irrelevant in cross-border 
situations. 
9 The appellate court dismissed the appeal brought by the defendant. 
10 The court stated that, in accordance with Regulation (EC) No 883/2004, in the 
case of cross-border employment, the legislation of the Member State in which the 
employer has its registered office is to be applied, provided that the employees do 
not pursue a substantial part of their activity in the Member State of residence. 
According to those principles, the applicant, who was tasked with the 
management of two departments at the undertaking’s registered office in Austria, 
pursued a substantial part of his activity in Austria. According to the facts of the 
case, he fulfils the criteria of employment in Austria, because even the activity 
that he pursued in his home office ultimately had an effect at the undertaking’s 
registered office in Graz. The binding nature of a valid A1 certificate does not 
preclude an independent examination of the requirements of Paragraph 1(1) of the 
IESG. 
11 The Supreme Court is called upon to rule on the appeal on a point of law brought 
by the defendant, by which it seeks the dismissal of the action. 
12 […] [stay of proceedings] 
D. Legal basis 
1. EU law 
1.1. Directive 2008/94/EC: 
Article 9 
1. If an undertaking with activities in the territories of at least two Member 
States is in a state of insolvency within the meaning of Article 2(l), the institution 
responsible for meeting employees’ outstanding claims shall be that in the 
Member State in whose territory they work or habitually work. 
IEF SERVICE 
 
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2. The extent of employees’ rights shall be determined by the law governing the 
competent guarantee institution. 
1.2. Regulation (EC) No 883/2004: 
Article 11 
General rules 
1. Persons to whom this Regulation applies shall be subject to the legislation of 
a single Member State only. Such legislation shall be determined in accordance 
with this Title. (…) 
3. Subject to Articles 12 to 16: 
(a) a person pursuing an activity as an employed or self-employed person in a 
Member State shall be subject to the legislation of that Member State (…) 
Article 12 Special rules 
1. A person who pursues an activity as an employed person in a Member State 
on behalf of an employer which normally carries out its activities there and who is 
posted by that employer to another Member State to perform work on that 
employer’s behalf shall continue to be subject to the legislation of the first 
Member State, provided that the anticipated duration of such work does not 
exceed 24 months and that he/she is not sent to replace another posted person. 
Article 13 
Pursuit of activities in two or more Member States 
1. A person who normally pursues an activity as an employed person in two or 
more Member States shall be subject to: 
(a) the legislation of the Member State of residence if he/she pursues a 
substantial part of his/her activity in that Member State or if he/she is employed 
by various undertakings or various employers whose registered office or place of 
business is in different Member States, or 
(b) the legislation of the Member State in which the registered office or place of 
business of the undertaking or employer employing him/her is situated, if he/she 
does not pursue a substantial part of his/her activities in the Member State of 
residence. 
13 1.3. Regulation (EC) No 987/2009 laying down the procedure for 
implementing Regulation (EC) No 883/2004 on the coordination of social security 
systems: 
Article 5 
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Legal value of documents and supporting evidence issued in another Member 
State 
1. Documents issued by the institution of a Member State and showing the 
position of a person for the purposes of the application of the basic Regulation 
and of the implementing Regulation, and supporting evidence on the basis of 
which the documents have been issued, shall be accepted by the institutions of the 
other Member States for as long as they have not been withdrawn or declared to 
be invalid by the Member State in which they were issued. 
2. National law: 
2.1. Insolvenz-Entgeltsicherungsgesetz (Law on the guarantee of remuneration in 
the event of insolvency; ‘the IESG’) 
Paragraph 1(1) Employees, independent contractors within the meaning of 
Paragraph 4(4) of the Allgemeines Sozialversicherungsgesetz (General Law on 
social security; ‘the ASVG’), BGBl. No 189/1955, home workers and their 
survivors and successors in law on death (entitled claimants) shall have a claim to 
insolvency guarantee money in respect of the claims secured under subparagraph 
2 where they are or have been in an employment relationship (independent 
contractor relationship, agency relationship) and are (were) deemed to be 
employed in the national territory in accordance with Paragraph 3(1) or (2)(a) to 
(d) of the ASVG and insolvency proceedings are instituted within the national 
territory in respect of the assets of the employer (principal) pursuant to the 
Insolvenzordnung (Insolvency Code) (…). 
(…) 
Paragraph 12(1) Expenditure from the Insolvency Remuneration Fund shall be 
met from: 
(…) 4. a supplement, to be borne by the employer, to the share of the 
unemployment insurance contribution to be paid by the employee (…) 
2.2. Allgemeines Sozialversicherungsgesetz (General Law on social security; 
‘the ASVG’) 
Paragraph 3(1) Employed persons whose place of employment (subparagraph 4) 
is in the national territory shall be deemed to be employed in the national 
territory, and self-employed persons shall be deemed to be employed in the 
national territory if the registered office of their business is in the national 
territory. 
(2) The following shall also be deemed to be employed in the national territory 
a) employees who are members of the travelling personnel of a shipping company 
carrying out international transport operations on rivers or lakes, (…); 
IEF SERVICE 
 
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d) employees whose employer has its registered office in Austria and who are 
posted abroad, provided that their employment abroad does not exceed a period 
of five years; (…) 
Paragraph 4(1) Persons are covered by sickness, accident and retirement 
insurance schemes (full cover) on the basis of this Federal Law where the 
employment in question is neither exempt from full cover pursuant to 
Paragraphs 5 and 6 nor gives rise to only partial cover pursuant to Paragraph 7: 
1. employees employed by one or more employers; (…) 
3. Germany: 
3.1. Sozialgesetzbuch (Social Security Code; ‘the SGB’) Viertes Buch (Book IV) 
(‘SGB IV’) 
Paragraph 3 Personal and territorial scope of application 
The provisions on the insurance obligation and the insurance entitlement shall 
apply: 
1. to the extent that they require employment or a self-employed activity, to all 
persons who are employed or self-employed within the area in which this code 
applies; (…) 
Paragraph 9 Place of employment 
(1) The place of employment is the place where the employment is actually carried 
out. (…) 
(6) In the case of postings, the place of employment prior to the posting is 
deemed to continue to be the place of employment. If no such place exists, the 
place of employment is deemed to be the place where the undertaking from which 
the employee is posted has its registered office. 
(7) Where German social security legislation applies to an employee on the 
basis of supranational or intergovernmental law and the employee does not carry 
out the employment within the scope of this code, subparagraph (6) applies 
mutatis mutandis. If there is no place of employment within the scope of this code 
on that basis either, the employee is deemed to be employed in Berlin (East). (…) 
Part Two, Contributions 
Paragraph 20 Raising of funds, Transitional area 
(1) Social insurance funds, including funds for the promotion of employment, shall 
be raised by contributions of the insured persons, employers and third parties, by 
State subsidies and by other revenue, in accordance with the special provisions 
for the individual insurance branches. (…) 
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Paragraph 28d Overall insurance contribution 
Contributions to health and pension insurance (…) as well as the contribution 
from remuneration from employment subject to compulsory insurance under the 
law on the promotion of employment shall be paid as an overall social insurance 
contribution (…) 
3.2. Sozialgesetzbuch (Social Security Code; ‘the SGB’) Drittes Buch (Book III) 
(‘SGB III’) 
 – Promotion of employment 
Section 2 – Insolvency benefit 
Paragraph 165 Entitlement 
(1) Employees are entitled to insolvency benefit if they were employed in the 
national territory and if, in the event of insolvency, they have outstanding claims 
for remuneration for the previous three months of employment. (…) 
Employees employed in the national territory are also entitled to insolvency 
benefits in the case where insolvency occurs abroad. (…) 
E. Grounds for the questions referred 
14 In Case C-527/16, Alpenrind, the Court of Justice of the European Union held that 
a valid A1 certificate, issued by the competent institution of a Member State under 
Article 12(1) of Regulation (EC) No 883/2004 on the coordination of social 
security systems (as amended by Regulation No 1244/2010) binds not only the 
institutions of the Member State in which the activity is carried out, but also the 
courts of that Member State. 
15 Therefore, with regard to social security (see Article 3 of Regulation 883/2004 – 
sickness benefits, invalidity benefits, old-age benefits, amongst others), the 
Supreme Court must proceed on the assumption that the applicant fulfils the 
requirements for compulsory insurance in his Member State of residence, 
Germany, and that the German legislation is applicable to him, despite the fact 
that his employment contract was concluded in Austria and half of the working 
time of his employment was spent at the undertaking’s registered office in 
Austria. Thus, in accordance with Paragraph 9(7) of the SGB (IV), it would 
appear that his place of employment is also in Germany (at least notionally). 
16 According to recitals 15 and 16 of Regulation (EC) No 883/2004, it is necessary 
to subject persons moving within the Community to the social security scheme of 
only one single Member State in order to avoid overlapping of the applicable 
provisions of national legislation and the complications which could result 
therefrom. Within the Community there is in principle no justification for making 
social security rights dependent on the place of residence of the person concerned; 
IEF SERVICE 
 
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nevertheless, in specific cases, in particular as regards special benefits linked to 
the economic and social context of the person involved, the place of residence 
could be taken into account. According to recital 17, it is appropriate to determine 
as the legislation applicable, as a general rule, that of the Member State in which 
the person concerned pursues his/her activity as an employed or self-employed 
person. 
17 With regard to the regulatory area of remuneration guarantees in the event of 
insolvency, Article 9(1) of Directive 2008/94/EC provides that, in cross-border 
cases, the guarantee institution responsible for meeting employees’ claims is that 
in the Member State in whose territory they work or habitually work. This also 
applies in the case where the employees were employed in a Member State by a 
branch of an insolvent company incorporated under the laws of another Member 
State, in which that company has its registered office (CJEU, Case C-198/98, 
Everson). The ‘stable economic presence’ of the undertaking in a Member State is 
considered to be a decisive factor (CJEU, Case C-310/07, Holmqvist; see also 
CJEU, Case C-477/09, Defossez, concerning the significance of the employer’s 
registered office and the obligation to contribute to financing). 
18 The Austrian legislature has transposed the provisions of Directive 2008/94/EC in 
Paragraph 1(1) of the IESG to the effect that employment is deemed to be in the 
national territory if there is an employment relationship within the meaning of 
Paragraph 3(1) or (2)(a) to (d) of the ASVG. Under those conditions, that 
employment relationship is subject to compulsory insurance in the national 
territory. 
19 In accordance with the case-law of the Supreme Court, there is no entitlement to 
insolvency remuneration under Paragraph 1(1) of the IESG where an employee 
employed abroad is not subject to compulsory insurance in Austria on the basis of 
his or her activity (8 ObS 13/14s). 
20 In the present case, in which the applicant works in both Austria and Germany for 
equal periods of time, but is subject to German social security, the question that 
first arises is whether Article 9 of Directive 2008/94/EC, relating to cross-border 
situations, applies at all. The Supreme Court takes the view that the answer to that 
question depends on whether the offering of the undertaking’s services, the 
established employment of a freelance sales engineer and the applicant’s regular 
work in his home office in Germany are sufficient as connecting factors to find 
that the employer has a ‘stable economic presence’ in Germany. 
21 If that is the case, it is necessary to ascertain – in view of the equal distribution of 
working time and the identical content of the activity and the criteria of the 
applicant’s residence and compulsory insurance – the Member State in which he 
‘habitually’ worked within the meaning of Article 9(1) of Directive 2008/94/EC in 
order subsequently to be able to determine the competence of the national 
guarantee institution. 
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22 In circumstances such as those in the present case, it would ultimately be 
conceivable for an employee in the applicant’s situation to have a habitual place 
of work in both Member States and to be able to choose which of the two 
guarantee institutions in question he or she wishes to claim from in accordance 
with the principle of pre-emption. The Supreme Court takes the view that the 
objective of Directive 2008/94/EC, as expressed in recital 6 thereof, to state 
expressly which guarantee institution is responsible for employees in cross-border 
situations, militates against such an outcome. Even assuming that there does not 
have to be a link between the obligation to contribute and the entitlement to 
guarantees (CJEU, C-292/14, Elliniko Dimosio, paragraph 68), it would appear to 
be in line with the objective of the fundamental freedoms to avoid a double burden 
for employers whose employees work in two Member States with an insolvency 
remuneration guarantee financed by means of contributions and to make it 
possible for the provision on responsibility in Article 9 of Directive 2008/94/EC to 
be interpreted in line with such coordination. 
[…] 
23 […] [statements regarding matters of procedural law] 
24 […] [stay of proceedings] 
[…] 
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