Adjudication in the Walltopia case and its application to third-country nationals

Adjudication in the Walltopia case and its application to third-country nationals

The most important asset of the Walltopia judgment is the Court’s emphasis on the difference between the two notions, namely, being ‘subject to the legislation’ and ‘subject to social security (legislation)’. The hero of the case, Mr. Petyo Stefanov Punchev, was subject to Bulgarian legislation before being posted, although he was not subject to social security in Bulgaria. Thanks to that, traveling to Great Britain for several days, he was still subject to Bulgarian legislation.

Do the conclusions of this judgment apply to third-country nationals who have the residence in Poland and are posted to another EU Member State? Yes, they do!

Before substantiating this answer, it is necessary to briefly recall the Court’s adjudication in Walltopia and the legal aspects of the dispute.

Walltopia – the facts of the case

Walltopia case concerned P.S. Punchev, a Bulgarian citizen. On September 15, 2016, he was employed for a six-month trial period by a company based in Bulgaria – Walltopia, to be posted to the United Kingdom. Earlier, Mr. P.S. Punchev had worked for several employers, with the last employment relationship terminated on March 1, 2015.

P.S. Punchev was posted by Walltopia to the United Kingdom for the period from 26 September to 6 October, 2016. On 25 October 2016, Walltopia dismissed Mr. Punchev. Walltopia applied to the national authority for an A1 Portable Document (A1 certificate, A1 PD) for the employee. By way of the decision of 27 January 2017, the national authority refused to issue the certificate requested. The refusal was based on the fact that the requirement to comply with the Bulgarian (social security) legislation for at least one month prior to the posting was not met. In the authority’s assessment, since P.S. Punchev did not receive unemployment benefit during this period, he could not be considered insured.

Following the appeal, the authority’s decision was upheld. The employer appealed against the refusal to the court. As part of the dispute, the Bulgarian court has applied to the CJEU for a preliminary ruling pursuant to Art. 267 TFEU. The court asked the CJEU whether art. 14 paragraph 1 of Regulation 987/2009 of the European Parliament and of the Council and Art. 12 paragraph 1 of Regulation 883/2004 of the European Parliament and of the Council should be interpreted as meaning that the employed person referred to therein is not subject to the legislation of the Member State in which his employer is established, having regard to the fact that, in accordance with Article 1 lit. l) of Regulation 883/2004 under national legislation, did that person not have the status of insured person in that Member State immediately before starting work as an employed person?

The position of the CJEU – not being an insured person shall not influence being subject to a given legislation

In its judgment of 25 October 2018, the Court stated that Article 14 (1) of Regulation 987/2009 in connection with Art. 12 (1) of Regulation 883/2004, must be interpreted as meaning that an employee recruited with a view to being posted to another Member State should be considered as being a person ”having been ‘just before the start of his employment … already subject to the legislation of the Member State in which his employer is established’, within the meaning of Article 14(1) of Regulation No 987/2009, even if that employee was not an insured person under the legislation of that Member State immediately before the start of his employment, if, at that time, that employee had his residence in that Member State, which is for the referring court to ascertain”.In the justification of the above, the Tribunal stated that the conditions for the existence of the right to accede a given social security system cannot exclude from the scope of the given legislation such persons to whom, pursuant to Regulation 883/2004, that very legislation applies. The provisions of Regulation 883/2004 are intended in particular to prevent persons falling within the scope of that Regulation from being deprived of social security protection in the absence of legislation that would actually apply to them.

The practical dimension of the CJEU resolution

Such an interpretation adopted by the Court undoubtedly greatly facilitated the process of applying for A1 PDs for workers of entrepreneurs posting them from Poland. The very judgment emphasized above all the importance of the worker’s place of residence. At the same time, the judgment exerted positive influence concerning the lack of necessity to prove that workers were subject to social secuirty in Poland for a month before being sent abroad, on the condition that they would be residents in Poland.

Walltopia and third-country nationals

The legal basis for applying to third-country nationals the provisions governing the EU coordination of social security systems is Article 1 of Regulation 1231/2010 of the European Parliament and of the Council of 24 November 2010 extending Regulation 883/2004 and Regulation 987/2009 to third-country nationals who are not yet covered by those Regulations, simply because of their nationality.

From art. 1 of Regulation 1231/2010, it follows that Regulation 883/2004 and Regulation 987/2009 apply to third-country nationals who are not yet covered by those Regulations solely because of their nationality, as well as to e.g. their family members, provided that they reside lawfully in the territory of a Member State and are in a situation that affects more than one Member State in every respect.

The above clearly shows that the judgment in Walltopia also applies to third-country nationals seconded within the EU. This happens if they are legally resident in a Member State. The regulation uses the term “legal residence” without additional conditions and a more precise definition. The assessment of this condition was left to the courts of the Member States.

Katarzyna Węglarz [LMIA]