Brussels, 20/09/2013 (Agence Europe) - Payment for maternity and paternity leave (parental leave) under Luxembourg's legal system are not remuneration, but rather “family benefit” under EU rules governing the payment of the cost of a family. Therefore they can be paid to people living in Switzerland and working in Luxembourg.
In a ruling in joined cases C-216/12 and C-217/12) issued on Thursday 19 September, the European Court of Justice was responding to a question raised by the Luxembourg appeals court about a dispute between the Caisse Nationale des Prestations Familiales (CNPF) in Luxembourg and two Swiss passport-holders working in Luxembourg to whom CNPF had refused to grant paternity leave the grounds that they do not meet the rules under Luxembourg law that they have to be registered or reside in Luxembourg on a continual basis or come under EU rules. An agreement between the EU and Switzerland refers to the EU regulation coordinating social security systems (Regulation 1408/71), which is extended to cover Swiss passport-holders. The court in Luxembourg wanted to know whether paid paternity leave is a family benefit under Regulation 1408/71, and therefore payable to people living in Switzerland, but working in Luxembourg.
The Court of Justice said it was, noting that parental leave payment under Luxembourg law are not “remuneration” in the sense of Article 157 of the EU treaty as argued by CNPF, because remuneration means salary, ordinary basic or minimum pay and all perks paid directly in cash or in kind by an employer to a worker under an employment contract. For workers on parental leave, the usual work relationship has been suspended and so have the employer/employee relations. In the case in question, the payment for parental leave is not paid by the employer himself. Under European case-law, parental leave payments can be described as a social security payment in the meaning of Regulation 1408/71, because they are paid irrespective of any individual or discretionary assessments of personal need, based on a legally defined situation and are related to one of the risks laid down in the regulation (those connected with aspects of social security).
Parental leave payments meet these criteria, explains the Court of Justice, and under European case-law, are a family benefit in terms of their aims and eligibility criteria, in other words they are a public contribution to pay for family costs (the cost of bringing up children) and, if necessary, to reduce the financial disadvantages of giving up full-time work for a parent temporarily devoting him or herself to bringing up a child. (FG/transl.fl)