News - Poland

Poland - June 2012

Poland - Social security - posting or multistate employment?

This article should be considered where an application for an A1 certificate is being made on the basis of EC-regulation 883/2004.

Where an employee has only one employer and is sent by that employer to work outside the country of residence, it should be considered whether this is a posting or is a multi-state employment. The answer will determine the country in which the employee is subject to social security. In turn, this is likely to have a significant impact on the cost of the employment for the employer.

Under the previous EC-Regulation 1408/71, an employee being posted by his employer to temporarily work outside his home country could remain covered under his home country social security system (under certain conditions), even if he became resident in the country to which he is posted. Where the employee exercised his employment in multiple member states he would be subject to the social security system of the state of residence only if he carried out part of his employment there. If not, he would be subject to the legislation of the state of the employer’s residence.

Facts

A Polish employer sent its employee, a Polish resident, to work outside Poland. Initially, the Polish social security authorities issued an E101 based on article 14-2b of the EC-Regulation 1408/71. Thus, the employee remained subject to Polish social security because he was considered to have a multi- state employment.

Subsequently, the Polish authorities refused to issue a new E101 on the grounds that a multi-state employment exists only if the employee is regularly moving between the two member states in order to perform the employment duties, that is, he works in two or more member states simultaneously.

The authorities also took the view that since he had not been working for his employer in Poland prior to the posting, the employee was not eligible for continuing coverage in Poland. This view is accepted by the Supreme Court.

However, the Advocate-General's view is that Article 14-2-b can apply if an employee exercises his employment for one employer subsequently in two or more Member States and not just concurrently. This conflicts with the view of the Polish authorities and the Supreme Court. The Advocate-General also expressed the view that the period spent working in either of those member states should not exceed 12 months and that when determining whether it is correct to issue an E101, the authorities must take into account all relevant factors and these would include whether the employee had been working in Poland prior to the assignment in the other member states.

A preliminary ruling of the European Court of Justice is awaited and this should provide guidance with regard to multi-state employments.

The new current EU agreement on social security explicitly states that an employee may perform his employment in two or more Member States either simultaneously or subsequently.

For further information or to discuss any of the issues raised, please contact Jaroslaw Bieronski on +48 22 608 70 52.