Time to have a new Directive in place of the 883/2004 one and other considerations.

WORK IN PROCESS (WIP)

When I read on Linkedin the fascinating comments on Directive 883/2004 I remain doubtful, for a layman it is not easy to follow all this very complex information. However, I wonder if it isn’t time to amend it? I will take an example that should trigger further thoughts.

It concerns a Belgian resident who works eighty to ninety per cent of his time as managing director of a company governed by Belgian law on Belgian territory under the Belgian social security scheme for self-employed persons and the other ten to twenty per cent in Holland as an employee of a Dutch company. According to Directive 883/2004 he will be subject for all his remuneration to the Dutch social security even though he works on Dutch territory only ten to twenty percent of his time. If he worked less than ten percent (six, seven, eight?) in Holland his activity could be considered as accessorily and the executive would then remain subject for all his remuneration to the Belgian social security for the self-employed.

This regime challenges us because "it makes no sense". To make liable an executive to a social security scheme for employees of a Member State, even though he carries out predominantly his activity in another Member State under a social security scheme for the self employed, does not respect any proportionality and is not justified. Admittedly there is the principle of subjection to a single social security system but in the case considered its application leads to an aberration. One may wonder also whether there is not a discrimination against the situation of the same executive resident in Belgium and working there as an employee eighty to ninety percent of his time and ten to twenty percent as an employee in Holland since, in this latter situation, the Dutch remuneration would then fall under the Belgian social security scheme for employees. Why is it different when the executive works mainly in Belgium under the social security system for the self employed being subsidiarily employed in Holland?

Let us also mention the situation of the executive of, say, fifty years old who, in our example, has faced a duality of social schemes under Regulation 1408/71, which was maintained under Directive 883/2004 since the States considered that the transitional regime applied. He learns now from the decision n° C-33/2018 of June, 6th 2019 of the European Court of Justice that, for all his remuneration, he had to be subject to the Dutch social security since 2010 because the transitional regime did not apply. This situation, which is not isolated, is a violation of the right of every European to legal security, a right which is nevertheless recognized by the case law of the same Court of Justice and the European Court of Human Rights as well. Indeed, the Court interprets a clear text entering into force in 2010 and which, according to the reading of the States and the doctrine, falls within a transitional period ending on 1 May 2020 without limiting the effects of its decision as did, in point 58, 3rd paragraph the European Court of Human Rights in the decision "Marckx v. Belgium of 13 June 1979: "Having regard to all these circumstances, the principle of legal certainty, necessarily inherent in both the law of the Convention and Community law, exempts the Belgian State from calling into question acts or legal situations prior to this judgment".

As a conclusion, I would say that not only does this Directive 883/2004 have to be amended, but more generally the modus operandi of European law drafting as well. The lack of preparatory work of the Directives and the position of the Court of Justice in European law lead to a form of arbitrariness with a Court of Justice appropriating a legislative power. It is not healthy for the Court of Justice to make the law in the presence of clear texts, to be at the end of the legal chain, at the top of the pyramid of law, the alpha and omega. We must consider a structure such as the one that exists in France or Belgium where the decisions of the Court of Cassation, when it breaks a decision of a Court of Appel, are referred to another Court, Court of Appeal non-existent in European law.

We must have a "Constitutional Court" allowing everyone to challenge certain measures of a Directive as being contrary to the fundamental texts of the European Union or being discriminatory.

Europe will only be able to move forward if the method of preparing the Directives is more transparent with public preparatory documents that better reflect the will of the European legislator. The European Court of Justice must be more balanced by no longer be allowed to fill in, by sinusoidal decisions, the gaps of the European legislator in a landscape where its decisions do not guarantee the respect for the fundamental principles of legal certainty and non-discrimination in the absence of any possibility of recourse.

Stephen G Hürner