ECJ rules on applicable social security legislation for flight and cabin crew
28 Jun 2022
Last month, the European Court of Justice (ECJ) rendered its judgment in the ‘Ryanair’ case. The judgment serves as a good reminder to make sure companies have the necessary A1 forms in place for their cross-border workers and also gives some pointers on determining the applicable social security legislation for cabin and flight crew.
Facts
From 2006 to 2013, Irish-based airline Ryanair employed a total of 219 flight and cabin crew members at the airport of Bergamo, Italy. These employees, who resided in Italy, concluded Irish employment agreements with Ryanair and were assigned to work at the Bergamo airport. They worked approx. 45 minutes per day at Ryanair’s premises at the Bergamo airport (the ‘crew room’) and, for the remaining time of their workday, found themselves on board Ryanair's aircrafts.
Following an inspection by the Italian social security authorities, the latter claimed that the Ryanair employees were subject to the Italian social security legislation, based on the working state principle of Regulations (EEC) no. 1408/71 – for the period until May 2010 – and (EC) no. 883/2004 for the period after May 2010.
In the ensuing proceedings before the Italian courts, Ryanair was able to present E101 - and A1 forms for some employees, detailing their subjection to the Irish social security legislation. For others, however, no such forms could be produced and – for it to be able to determine the applicable legislation for these employees – the Italian Supreme Court of Cassation saw fit to file a request for preliminary ruling in this respect with the ECJ.
The ECJ’s findings
Considering the period involved, i.e. 2006-2013, and the fact that Regulation (EEC) no. 1408/71 on the coordination of social security systems was replaced by Regulation (EC) no. 883/2004 with effect from 1 May 2010, the ECJ started by stating that the applicable social security legislation for the employees in question required a combined application of both regulations.
With respect to the application of Regulation (EEC) No 1408/71 (for the period 2006-2010), the Court recalled art. 14 (2)(a)(i). This article states that flight and cabin crew employed by a branch or permanent representation owned by an airline in the territory of a Member State other than that in which the airline has its registered office or place of business, is subject to the social security legislation of the Member State in which the branch or permanent representation is located.
The Court reiterated that the notion of branch or permanent representation in this respect means a form of secondary establishment, with an appearance of stability and continuity, intended for carrying out an actual economic activity and having, for that purpose, organised material and human resources and a certain autonomy in relation to the main establishment. The Court found that Ryanair’s Bergamo airport crew room fit this definition. The ECJ also ruled that Ryanair’s flight and cabin crew were employed by this branch or permanent representation, since that was the place where they principally discharged their obligations to their employer (where they started their work, received instructions and returned to after their tasks, where they organise the work and where the work tools are situated), even though they only found themselves at the crew room for 45 minutes per day.
As a result of the above, the ECJ ruled that the employees for whom no E101 forms were available for the period from 2006 to 2010 were subject to the Italian social security legislation.
As far as Regulation (EC) no. 883/2004 was concerned (for the period from 2010 to 2013), the Court pointed out that the Regulation initially didn’t contain a specific conflict-of-law rule for flight and cabin crew. Only in 2012, the Regulation was amended to include article 11(5), which states that the activity of a member of the flight or cabin crew performing air passenger services is deemed to be an activity pursued in the Member State where the home base is located. Between the entry into force of the Regulation in May 2010 and its flight and cabin crew amendment in 2012, the applicable legislation for this group of employees had to be determined based on the general principles for multi-state workers. However, the ECJ found that it didn’t have sufficient information to analyse the workers’ social security position during said time frame.
As of 2012, with the introduction of article 11(5) of Regulation (EC) no. 883/2004, the concept of ‘home base’ became the determining factor when analysing the social security position of flight and cabin crew. This concept stems from the European legislation laying down technical requirements and administrative procedures related to air operations and concerns the location, assigned by the airline operator to the crew member, from where the latter normally starts and ends a duty period or a series of duty periods and were – under normal circumstances – the operator is not responsible for the accommodation of the crew member.
Considering the fact that the flight and cabin crew started and completed their working day at Ryanair’s Bergamo airport crew room and had to reside within one hour of those premises, the Court stipulated that the crew room had to be regarded as the flight and cabin crew’s home base. As a result, the ECJ ruled that – for the period as of 2012 – the Ryanair flight and cabin crew in the case at hand, for whom no A1 forms could be presented, were subject to the Italian social security legislation.
Key takeaways
This judgment is, first and foremost, a prime example of the binding nature of an A1 form (or its predecessor; the E101 form) and the need for companies to make sure that the necessary A1 forms are in place for their mobile workers. Indeed, there was only a dispute with respect to the employees for whom no A1 forms could be presented; the subjection to the Irish social security legislation of the employees for whom A1 forms were available was not questioned. The Court has a longstanding and extensive body of case law in this respect, in which the guiding principle has always been the fact that an A1 form has a binding effect on the social security administration, as well as the courts of the host Member State, as long as the issuing home Member State has not retracted the A1 form or declared it invalid. The only exception to this principle is the possibility for national courts to disregard the application of an A1 form in case of demonstrated fraud, determined after adversarial legal proceedings. This exception, as well as the conditions under which it can be applied, was first established by the ECJ in 2018, in the ‘Altun’-case (no. C-359/16).
The Court’s findings also serve as a good overview of which social security legislation is applicable to flight and cabin crew members performing air passenger or freight services. Notably interesting in this respect, is the way the Court considered Ryanair’s crew room – located at Bergamo airport – to constitute a home base in the sense of article 11(5) of Regulation (EC) no. 883/2004.
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