Due to an increasing number of inspections, the PDA1 for business travellers debate resurfaces.
The debate is over whether or not, a Portable Document A1 (PDA1), must be obtained regardless:
- the nature of the activity carried out by a salaried worker posted to another Member State.
- the length of the period during which the activity will be carried out.
The new wave of interpretation given to the (same) social security coordination rules, is generated inter alia by the relatively recent implementation of Directive 2014/67/EU, and notably by the derogation from the obligation to send the declaration of posting, in particular circumstances. Such a derogation is wrongly extended to the application of the social security coordination rules.
The debate is however useful. The Administrative Commission Recommendation No A1 concerning the issuance of Portable Documents A1, has entered into force on 18 June 2018. The recommendation introduces new application forms for the PDA1. Practically, a distinctive form is available for each relevant article determines the applicable legislation (Articles 11 to 15 Regulation 883/2004). The forms contain a set of common questions and certain questions specific to the different relevant articles. The new application forms are yet to be in use.
Will address the situations in which a PDA1 must be obtained, and whether any period of employment in another Member State, gives rise to the obligation to obtain a PDA1.
Situations in which a Portable Document A1 must be obtained
The applicability of Article 12.1 Regulation 883/2004 is determined by the following cumulative conditions [see in context Article 12.1 Regulation 883/2004, Article 14 Regulation 987/2009, the Administrative Commission Decision No A2 of 12 June 2009 and M. Morsa Le Droit européen de la sécurité sociale (Le travail détaché face au droit européen p.108].
- The person pursues an activity as an employed person in the sending Member State, on behalf of his/her employer.
- The employer normally carries out its activities (substantial activities) in the sending Member State.
- The person is sent by the employer to another Member State, to perform work on that employer’s behalf, and remains subjected to the social security system of the sending Member State.
- The anticipated duration of such work does not exceed 24 months.
- The person is not sent to replace another posted person.
It must be first observed that the PDA1 does not represent a condition determines the applicability of Article 12.1. Where the conditions above addressed are met, a posted worker shall remain subject to the social security system of the sending Member State, and as a consequence, a PDA1 must be obtained.
The question is whether any situation in which the criteria above mentioned are met, gives rise to the obligation to obtain a PDA1 (i.e. one of the frequently asked questions is whether salaried workers sent on business trips, are bound by the obligation to hold the PDA1).
Article 12.1 Regulation 883/2004 applies to salaried workers who are posted to another Member State.
It must be observed that the Regulation 883/2004, does not contain a definition of the concept of “posted worker”.
It is important to upheld that the social security coordination regulations and the posting of workers directive, are hermetic legal instruments.
However, in the proposal amendment of Article 12 Regulation 883/2004, the Commission seeks to clarify that: “the term of “posted worker” shall be given the meaning given within the Directive 96/71/EC. However, this clarification does not change the personal scope of this Article, but only aligns the notions used in these legal texts” [COM (2016)815final].
Where the clarification is meant to make an existing situation less confused and more comprehensible, it can be alleged that the term of salaried posted worker, in the sense of Article 12.1 Regulation 883/2004, is given the meaning given within the Directive 96/71/EC.
Pursuant to Article 2 Directive 96/71/EC, a posted worker “means a worker who, for a limited period, carries out his work in the territory of a Member State other than the State in which he normally works”
Pursuant to Article 1.3(a), the said directive shall apply inter alia to the extent that an undertaking “post workers to the territory of a Member State on their account and under their direction, under a contract concluded between the undertaking making the posting and the party for whom the services are intended, operating in that Member State, provided there is an employment relationship between the undertaking making the posting and the worker during the period of posting”
It must be observed that a business visitor, on the one hand, carries out his work, for a limited period of time in the territory of a Member State other than the State in which he normally works, and on the other hand, business activities can be related to a contract concluded between the undertaking making the posting and the party for whom the services are intended (although not necessary).
In any circumstances, the very reason of a business trip is to immediately or ultimately provide a service in the sense of Article 57 TFEU.
Having regard to the above considerations, a business visitor fails under the scope of Directive 96/71/EC, and cannot be excluded from the scope of Article 12.1 Regulation 883/2004 (provided that the criteria laid down by the latter are met).
The European Parliament proposal for a regulation amending Regulations 883/2204 and 987/2009, rules out the obligation to obtain a PDA1 “where the work concerns a business trip” (A8-0386/2018).
It must be recalled that the concept of business activity is not an autonomous concept of EU law. The concept is defined by Member States’ national legislation and practice.
The nature of the activities permitted and it duration, vary from one Member State to another. More ever, certain national legislations are silent in this regard.
National legislations provide for certain activities that due to it nature and/or duration, give rise to an exemption from the obligation to send a posting declaration.
Such exemptions are limited to the application of the Directive 96/71/EC and its enforcing Directive 2014/67/EU, and do not impact the application of the social security coordination regulations.
Unless the amendment proposed by the European Parliament will be adopted, the nature of the activity does not affect the application of Article 12.1 Regulation 883/2004, not even by virtue of the interpretation given to the term of posted worker, in the sense of Directive 96/71/EC.
To what extent (very) short posting periods gives rise to the obligation to obtain a PDA1
The headline can be rephrased to (e.g.) whether business trips are excluded from the application of the social security coordination rules, due to it very short duration.
With simple words, whether or not, sending a salaried worker on short business trips, a PDA1 must be applied for.
It must be first observed that in general, workers sent on business trips are often frequent business travellers, and in principle, they resume working in the “home” country (before eventually attending other meetings, training sessions in another Member State).
Article 13.1 Regulation 883/2004 lays down the rules for determining the legislation applicable where the activity is pursued in two or more Member States.
Pursuant to Article 14.5 Regulation 987/2009, “For the purposes of the application of Article 13(1) of the basic Regulation, a person who “normally pursues an activity as an employed person in two or more Member States” shall refer to a person who simultaneously, or in alternation, for the same undertaking or employer or for various undertakings or employers, exercises one or more separate activities in two or more Member States.”
Pursuant to Article 14.5b the said Regulation, “Marginal activities shall be disregarded for the purposes of determining the applicable legislation under Article 13 of the basic Regulation”
Article 14.5 Regulation 987/2009 covers “all possible cases of multiple activities with a cross-border element” and distinguishes “activities which, as a rule, habitually extend over the territory of several Member States from those that are exercised exceptionally or temporarily” (EU Commission Guide in regard to the legislation that applies to workers in the EU, the EEA and Switzerland p.22)
Pursuant to settled European Court of Justice’ case law, codified by the EU Commission Guide in regard to the legislation that applies to workers in the EU, the EEA and Switzerland:
- A person held to perform work irregularly in different Member States, fails under the scope of Article 13 Regulation 883/2004;”insofar as working in different Member States is an intrinsic part of the work pattern and the interval between periods of work is not of such a length or nature to modify the work pattern in a way that a person would no longer be “normally” working in two or more Member States”
- The assessment shall consider the following 12 calendar months.
- “Activities accounting for less than 5% of the worker’s regular working time and/or less than 5% of his/her overall remuneration should be regarded as marginal activities”.
- “Marginal activities have to be assessed for each Member State separately and cannot be aggregated”.
A worker employed in Germany and sent on business trips to France, five times within the year 2019, each time for five working days, will be spending in France close to 10% of his/her working time, and as a consequence, is deemed to be pursuing an activity in two Member States. The PDA1 must be applied for under Article 13.1 Regulation 883/2004.
In general; regular business trips, give rise to the application of Article 13.1 Regulation 883/2004. The salaried worker is deemed to be normally pursuing activities in two or more Member States.
It must be observed that in any circumstances, pursuant to Article 16 Regulation 987/2009, a person who pursues activities in two or more Member States, shall inform the institution designated by the competent authority of the Member State of residence, regardless the working pattern (i.e. regardless if marginal activity is carried out in one of the Member States involved).
Practically, each case must be assessed considering its circumstances.
More ever, extremely complex cases, must be eventually addressed under Article 16 Regulation 883/2004 (i.e. exemptions to Articles 11 to 15 Regulation 883/2004).
The present article recalls only a few basic rules govern the coordination of social security systems, and in particular, the case of salaried workers sent on business trips.
To assess complex cases, a good understanding of the legal ground is required : the coordination Regulations 883/2004 and 987/2009 both as amended, the decisions and recommendations of the Administrative Commission for the Coordination of Social Security Systems,the practical guidance released by the European Commission, the interoperability between the social security coordination regulations and the posting of workers directive, and last but not least, the relevant ECJ case-law.