EFBWW News

Ground breaking and important conclusion on the applicable country for the payment of social security contributions.

26/11/2019

Today, Advocate General Pritt Pikamäe of the ECJ concluded that workers of letterbox, are not employed by the letterbox companies, but by the company which actually recruited the workers for an indefinite period, exercises effective control over the workers, and actually bears wages costs » (Case C-610/18)

The case concerns the employment of Dutch lorry drivers via a Cypriot letterbox company. The Cypriot letterbox company was set-up to evade the payment of Dutch social Security contributions.

According the Advocate General the genuine employer and the applicable social security legislation should be indified on the basis of the factual employment situation and not on the basis of fictitious elements.  As such, even a contractual relationship between the workers and the letterbox company and the payment of the wages by the letterbox company are only “indicative” elements.

The EFBWW welcomes the approach of the Advocate General, because it obliges the national authorities to pucture fictive business models and to scratch the surface of fraudulent social dumping practices. However, as fraudulent posting companies have an unlimited imagination to evade and circumvent their social obligations, national labour (labour) authorities should be well equiped, staffed, trained and have the needed competences to act swiftly to secure the rights of the exploited workers.

Much needs to be done eradicate cross-border social dumping!