For directors of a corporation, article 3 § 1 of the Royal Decree no. 38 organising the social security scheme for self-employed persons presumes that they are subject to the social security scheme for the self-employed. However, the question that needs answering is: which social security scheme applies to directors of a non-profit organization?
The text of the Royal Decree dated 28 November 1969 for the implementation of the act of 27 June 1969 provides for the extension of the social security scheme for employees if the following cumulative conditions are met:
- The person concerned is in charge of daily management
- It concerns a mandate in an association that does not engage in any industrial or trade activities and that has a non-profit making objective
- Carrying out this mandate is the main activity of the person concerned
- It concerns a paid mandate (a mandate which only provides room and board is equated with an unpaid mandate)
However, in a judgment dated 25 March 2016, the Ghent Employment Appeal Tribunal, Bruges section, 5 March 2016 found that this article 3 is considered to be an implementation of the Act on the National Social Security Office dated 27 June 1969, yet stretches beyond what the King (in reality, the government) is allowed to do based on this Act on the National Social Security Office. Article 2 of this Act only allows the King to extend the scope of the social security scheme for employees to “people carrying out work in exchange of a salary, without being bound by an employment contract, under the authority of another person or carrying out labour in similar conditions (as those applicable to employees)”. As the Employment Appeal Tribunal correctly observes, with this article the legislator wanted to provide the government with a legal basis in the fight against false self-employment, by enabling people that are self-employed from a labour law point of view, to still be subject to the social security scheme for employees.
People that are directors of a non-profit organization do not fall under the scope of people that are not employees, yet still are under the authority of another person (for example, the interns). As the Employment Appeal Tribunal rightly observes, the mere fact that a person is a director of a non-profit organization does not allow for a clear view on the circumstances under which this mandate was carried out; As such, the Employment Appeal Tribunal concludes that article 3 § 1 of the Royal Decree dated 28 November 1969 is void, since the act of 27 June 1969 only allows the King to extend the scope of the social security scheme for employees to people carrying out work under similar circumstances as employees. An example of this would be article 3 § 5, namely people providing transport for a company, where this company is either the owner of the vehicle, or finances its purchase or rental. Even if these people are self-employed from a labour law point of view, their situation in the field of social security is fairly similar to the situation of employees, as their professional income is fully dependent on 1 person.
On a subsidiary basis, the National Social Security Office argued that, even when disregarding the extension of the social security scheme for employees provided in article 3 § 1, the persons concerned should be considered to be employees, based on the general criteria. However, also based on these criteria, namely (1) the will of the parties, (2) the freedom to organize the working time, (3) the freedom to organize the work and (4) the absence of the possibility to exercise hierarchical supervision, the Employment Appeal Tribunal concluded that the persons concerned were subject to the social security scheme for self-employed persons.
The extension of the social security scheme for employees to certain directors of non-profit organizations, should be considered illegal according to the case-law.