Case C-410/21: The managing director of a road transport company in Belgium set up a company in Slovakia and holds a Community license to operate in road transport3 that was issued in Slovakia. The competent Slovak institution issued A1 certificates for Slovak social security coverage to a number of employees employed by the entity in Slovakia.
The Belgian social security inspectorate investigated both companies and concluded that the Slovak entity had no economic activity and was managed from Belgium. The Belgian inspectorate concluded that the set-up in Slovakia was made to access the cheap labour force, and it brought criminal proceedings against that managing director.
While the criminal proceedings in Belgium were underway, the Belgian social security authority requested of the Slovak competent institution that it withdraw its A1 certificates for Slovak social security retroactively. The Slovak institution decided to withdraw the issued A1 certificates provisionally. This meant that the employees in question would remain covered by Slovak social security until the Slovak institution was ready to make the final call on whether to withdraw the certificates definitively.
CJEU established that the Slovak institution was not applying the set conciliation procedure for social security administrations correctly by taking an unreasonably long time to consider whether to withdraw the A1 certificates. Furthermore, CJEU clarified that provisional withdrawal of A1 certificates does not suspend the binding effects of the certificates and it cannot validate the unreasonably long time taken by the Slovak institution in this instance to decide whether to withdraw the certificates.
Case C-661/21: In this second case, the managing director of a road transport company in Belgium is also the owner of a company specialising in transport and logistics services established in Lithuania. The Lithuanian company holds a Community license for road transport issued by the Lithuanian authorities.
The Belgian social security inspectorate investigated both companies and concluded that drivers were recruited in Lithuania only to be sent to Belgium to sign an employment contract with the Belgian company and drive in Belgium and its neighbouring countries. The Belgian authorities brought the managing director and its Belgian road transport company before the criminal court claiming fraud as they had avoided to pay social security contributions in Belgium.
The drivers were covered by social security in Lithuania under a claim that both their residence and the employer’s establishment were in Lithuania and therefore Lithuanian social security should apply. The managing director in Belgium claimed that the employer was established in Lithuania and supported this claim with the fact that the Lithuanian authority had issued a Community license to the Lithuanian company to operate in road transport.
CJEU concluded that a Community license for road transport cannot be used to substantiate an assessment of the employer’s establishment for the purposes of social security. This means that when an employee is working in several EU member states, the employer’s place of establishment must be assessed according to the EU rules for social security.