A national court may, in the event of fraud, disapply the social security certificate of a posted worker in the European Union in the case of fraud linked to the issue of the E101 certificates of posted workers if the certificate was obtained or used fraudulently.
Such fraud is a threat to the coherence of the Member States’ social security schemes and use of a fraudulent E101 is a form of unfair competition undermining the equality of working conditions.
This is the gist of conclusions issued on Thursday 9 November to EU Court of Justice (ECJ) judges by advocate general Henrik Saugmandsgaard Øe in case C-359/16 in which the Belgian appeals court asks about the possibility of a court in a member state refraining from applying the E101 for seconded workers when it finds the certificate has been fraudulently obtained or used.
In formal conditions, under ECJ case law, the host member states’ authorities are required to apply the E101 and courts in that member state are not entitled to scrutinise the validity of that certificate if it has not been withdrawn or declared invalid by the worker’s member state.
In the case in question, the Belgian authorities sent a request for invalidation of the certificate to the Bulgarian authorities when it found that a Belgian construction company was using Bulgarian subcontractors who did virtually no business in their home country for employing Bulgarian seconded workers in Belgium who had E101 certificates for periods of more than three months.
The Bulgarian authorities did not respond so the Antwerp appeals court who found the managers of the construction company guilty as the E101 certificates had been obtained fraudulently using false declarations to wriggle out of the conditions laid down in EU rules and thus obtain a competitive advantage that they could not have obtained without fraud. The appeals court asks whether ECJ case law on the binding nature of the E101 applies in these circumstances.
The advocate general says it does not as the same case law says that individuals cannot make use of EU law fraudulently or abusively. Since fraud was detected, the workers in question could not make use of the E101 but must be subject to Belgian law and register with Belgian social security.
The Advocate General says that the opposite solution would result in an unacceptable outcome because courts would have to tolerate or even condone fraud, and the use of fraudulent E101 certificates is a form of unfair competition and calls into question the equality of working conditions on national labour markets.
The advocate general notes, however, that the fraud must be established in the context of adversarial proceedings and the court must prove to the requisite legal standard, that the conditions under which the certificate was issued are not satisfied and that the persons concerned intentionally concealed the fact that those conditions were not met.
Øe observes that the power of the court of the host member state is limited to disapplying the certificate and that a finding of fraud can produce effects only in respect of the competent authorities of that member state. (Original version in French by Francesco Gariazzo)