1.

During intervening periods of time in which a worker is not working and no employment contract is in effect, is the law applicable to a temporary worker residing in a different Member State from the one in which he or she normally works, the law of the State of employment, pursuant to Article 11(3)(a) of Regulation No 883/2004, ( 2 ) or the law of the State of residence, pursuant to Article 11(3)(e) of that regulation?

2.

That, in essence, is the question to be answered by the Court of Justice in the present case, which is the subject of a request for a preliminary ruling from the Centrale Raad van Beroep (Social Security and Civil Service Court of Appeal, Netherlands) in two joined cases involving the Raad van bestuur van de Sociale Verzekeringsbank (Board of Directors of the Netherlands Social Security Bank; ‘the SVB’) versus X and Y.

3.

This case gives the Court of Justice the opportunity to clarify the meaning of the provision contained in Article 11(3)(a) of Regulation No 883/2004 and to make a further contribution to the definition of the system of conflict rules provided for in Title II of that regulation.

4.

Regulation (EC) No 883/2004 (‘Regulation No 883/2004’) repealed, with effect from 1 May 2010, Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (‘Regulation No 1408/71’). ( 3 )

5.

Article 1(a) and (b) of Regulation No 883/2004 provides:

‘For the purposes of this Regulation:

6.

Title II of Regulation No 883/2004, entitled ‘Determination of the legislation applicable’, comprises Articles 11 to 16.

7.

Under the heading ‘General rules’, Article 11 of that regulation provides:

‘1.   Persons to whom this Regulation applies shall be subject to the legislation of a single Member State only. Such legislation shall be determined in accordance with this Title.

2.   For the purposes of this Title, persons receiving cash benefits because or as a consequence of their activity as an employed or self-employed person shall be considered to be pursuing the said activity. This shall not apply to invalidity, old-age or survivors’ pensions or to pensions in respect of accidents at work or occupational diseases or to sickness benefits in cash covering treatment for an unlimited period.

3.   Subject to Articles 12 to 16:

8.

Articles 12 to 16 of Regulation No 883/2004 lay down special rules applicable to persons who have been posted (Article 12), persons pursuing an activity in two or more Member States (Article 13), persons who elected voluntary insurance or optional continued insurance (Article 14), contract staff of the European institutions (Article 15) and exceptions to Articles 11 to 15 of that regulation (Article 16).

9.

Article 6 of the Algemene Ouderdomswet (General Law on Old-Age Pensions; ‘AOW’) provides:

‘1.   In accordance with the provisions of this law, a person shall be insured provided he or she has not yet reached retirement age and

…

3.   By derogation from paragraphs 1 and 2, the category of insured persons may be extended or limited by a general administrative measure’.

10.

Article 6a of the AOW states:

‘If necessary, by derogation from Article 6 and the provisions based thereon,

11.

Article 13(1)(a) of the AOW provides that a reduction of 2% is to be applied to the pension amount for every calendar year during which the person entitled to the pension was not insured after the age of 15 years but before the age of 65 years.

12.

Article 6 of the Algemene Kinderbijlagwet (General Law on Child Benefits; ‘AKW’) reproduces the exact wording of Article 6 of the AOW.

13.

Article 6a of the AKW states:

‘If necessary, by derogation from Article 6 and the provisions based thereon:

14.

Under Article 11(1) of the AKW:

‘Only a person who is insured on the first day of a calendar quarter shall be entitled to child benefit pursuant to this law.’

15.

Article 6 of the Besluit uitbreiding en beperking kring van verzekerden volksverzekeringen 1999 of 24 December 1998 (Decree of 1999 on the extension and restriction of the category of persons insured in respect of national insurance; ‘the BUB’), entitled ‘Temporary interruption of work in the Netherlands’, provides:

‘A person who does not reside in the Netherlands but who works exclusively in the Netherlands shall remain covered by social insurance if their work is temporarily interrupted:

16.

X, a Dutch national, moved to Germany in 2012. Since 2013, X has intermittently carried out temporary agency work in the Netherlands. She has never worked in Germany. ( 4 )

17.

According to the documents before the Court, this activity was carried out under fixed-term temporary agency contracts containing an ‘agency clause’ ( 5 ) – that is to say, a clause under which the employment relationship with the agency began when the worker started working for the user undertaking and terminated upon the cessation of that activity.

18.

During the intervening periods between the different employment contracts – which varied in duration from six days to five months – X remained registered with various temporary employment agencies in the Netherlands. She also did voluntary work in the Netherlands and domestic work for her son in return for a minimum wage.

19.

On 6 July 2015, the SVB provided X with a pension statement. The statement showed that in accordance with the AOW, her pension had been reduced to 82%, since X had been deemed to be insured under Netherlands social security legislation only during the periods when she actually worked there as a temporary agency worker. Conversely, in the intervening periods between employment, because there was no employment relationship and no actual work, the legislation of the State of residence, namely Germany, should have applied.

20.

It also emerges from the order for reference that X is not entitled to receive a pension in Germany because she has not completed any periods of insurance there.

21.

X filed a complaint, asking the SVB whether the intervening periods between the work carried out on the basis of the temporary agency relationship were considered insured periods under the AOW.

22.

After her complaint was rejected, X brought the same claim before the Rechtbank Amsterdam (District Court, Amsterdam, Netherlands), which, by judgment of 3 October 2016, granted it. The Rechtbank Amsterdam (District Court, Amsterdam), relying on the judgment in Franzen and Others in support of its findings, ( 6 ) held that the intervening periods had to be regarded as periods of leave or unemployment within the meaning of national legislation, and in particular Article 6 of the BUB. Accordingly, those were periods during which X was insured under Netherlands legislation.

23.

The SVB appealed that judgment before the Centrale Raad van Beroep (Social Security and Civil Service Court of Appeal) (the referring court).

24.

Y lives permanently with his family in Poland. Since 2007, he has worked in the Netherlands, with some interruptions, under various temporary employment contracts with a temporary employment agency.

25.

More importantly for the purposes of this case, Y entered into a fixed-term temporary employment contract with the agency for a period of eight months, effective as of 20 July 2015. However, Y did not work during the period between 1 January 2016 and 7 February 2016 and, on 8 February 2016, entered into a new employment contract with the same temporary employment agency.

26.

By decision of 29 March 2016, the SVB informed Y that, under the AKW, he was not entitled to child benefit for the months of January and February 2016, as he had not been working in the Netherlands on the first working day of those months. ( 7 )

27.

Y filed a complaint, asking the SVB to pay child benefit for January and February 2016, arguing that he had been on leave during that time and therefore the employment relationship still existed.

28.

After the complaint was rejected, Y submitted the claim before the Rechtbank Amsterdam (District Court, Amsterdam) which, by judgment of 5 January 2017, dismissed it, confirming the SVB’s assessment.

29.

Y appealed that judgment before the Centrale Raad van Beroep (Social Security and Civil Service Court of Appeal) (the referring court).

30.

The Centrale Raad van Beroep (Social Security and Civil Service Court of Appeal), after joining the two cases at the hearing of 29 May 2020, issued the order for reference on 17 December 2020.

31.

In the case of X, the referring court states that – since the employment contract included the abovementioned agency clause, according to which the employment relationship ceased automatically as soon as she stopped working for the user undertaking – no employment relationship existed in the intervening periods when she was not working.

32.

The referring court further notes that the work done by X on a voluntary basis and for her family in return for a minimum wage were non-economic and were not intended to generate an income. Therefore, they could not be regarded as activities as an employed person or equivalent.

33.

In the case of Y, the Centrale Raad van Beroep (Social Security and Civil Service Court of Appeal) observes that Y did not contest the non-payment of his salary during the period from 1 January 2016 to 7 February 2016, and that the new employment contract was signed before the previous contract was due to expire. From those circumstances, it can be inferred that from 1 January 2016 to 7 February 2016, no employment relationship existed between Y and the temporary employment agency.

34.

The referring court states that both disputes hinge on the question of whether X and Y – both of whom normally work in the Netherlands but reside in another Member State – continued to be insured under Netherlands social security legislation during the intervening periods between the abovementioned temporary employment relationships.

35.

The question asked is therefore whether those intervening periods represent equivalent situations to the activities as employed or self-employed persons provided for in Article 11(3)(a) of Regulation No 883/2004, and therefore justify the application of Netherlands legislation.

36.

Since it is clear that the cases in question do not fall within the scope of Article 11(3)(b), (c) and (d) of Regulation No 883/2004, a negative answer to that question would lead me to conclude that during the intervening periods, the applicable legislation was that of the State of residence within the meaning of Article 11(3)(e) of that regulation, namely Germany as regards X and Poland as regards Y.

37.

In emphasising the problematic nature of the question, the referring court cites the abovementioned judgment of 23 April 2015 in Franzen and Others, which, although it concerns the interpretation of Regulation No 1408/71, is also considered applicable to Regulation No 883/2004.

38.

According to one possible reading of that judgment – essentially based on the wording of paragraph 50 ( 8 ) – it would appear that persons who normally work in a Member State are covered by Article 11(3)(a) of Regulation No 883/2004, so long as they have not definitively or temporarily ceased that activity. However, the existence of an employment contract is irrelevant for establishing whether that activity has ceased. Instead, other criteria should be identified relating to the nature of the work, the duration of the person’s employment, the duration of the intervening periods, and the orientation towards a single national labour market.

39.

However, according to another possible interpretation of that judgment, for the law of the State of employment to apply, an employment relationship must exist. Thus, a person would automatically be subject to the legislation of the State of residence if the employment relationship ceased, even if only temporarily, regardless of for how long it was interrupted.

40.

The referring court also points out that the solution limiting the applicability of Article 11(3)(a) of Regulation No 883/2004 to cases where an employment relationship exists means that the applicable legislation can be identified with certainty at the time of the events. Nevertheless, that solution, applied to cases such as those at issue here, can lead to a frequent change in the applicable legislation and cause substantial administrative complications, thus proving to be a potential obstacle to the free movement of workers.

41.

According to the referring court, irrespective of whether an employment relationship exists, there is an advantage and disadvantage to the solution requiring a decision – based on criteria such as those referred to in point 38 above – on whether the activity was actually interrupted. The advantage would be that a change in the applicable legislation could be avoided if the employment relationship was interrupted only for a short time. The disadvantage would be that it would lead to a greater degree of uncertainty, since it would be based on a retrospective assessment of the facts.

42.

In the light of those circumstances, the Centrale Raad van Beroep (Social Security and Civil Service Court of Appeal) stayed the proceedings pending a ruling from the Court of Justice on the following questions:

43.

I believe that the three questions referred for a preliminary ruling can be dealt with together, since they essentially boil down to the same question.

44.

It is common ground that, in the present case, both X and Y are covered by Regulation No 883/2004 and that the benefits in question – namely the old-age pension and child benefit – fall within the material scope of that regulation.

45.

In the case of X, as mentioned in points 31 and 32 above, it is worth noting that the employment contracts with the temporary employment agency contained an ‘agency clause’, according to which the employment relationship ceased automatically as soon as she stopped working for the user undertaking. For that reason, according to the Centrale Raad van Beroep (Social Security and Civil Service Court of Appeal), the employment relationship did not exist in the intervening periods between one period of employment and another. The referring court also ruled that the work done by X on a voluntary basis and for her family in return for a minimum wage could not be considered an activity as an employed person or equivalent.

46.

With regard to Y, as mentioned in point 33 above, the referring court held that no employment relationship existed between 1 January 2016 and 7 February 2016.

47.

The cases involving X and Y can be joined, since both relate to periods when no employment relationship existed and the persons concerned – residing in a State other than the one in which they were normally employed – did not have any work.

48.

It is therefore reasonable to assert that, by its questions for a preliminary ruling, to be dealt with jointly, the referring court is essentially asking the Court of Justice to clarify whether – in the intervening periods when they did not work and those employment relationships had ceased – the law of the State of employment, within the meaning of Article 11(3)(a) of Regulation No 883/2004, or the law of the State of residence, within the meaning of Article 11(3)(e) of that regulation, applies to X and Y, as persons resident in a Member State other than the one in which they normally worked on the basis of temporary agency contracts. The European Commission has expressed its support for the first option, whereas the SVB and the Netherlands Government favour the second option.

49.

To answer this question, a brief background to Regulation No 883/2004 is required.

50.

The purpose of that regulation – which modernised and simplified the requirements laid down in Regulation No 1408/71 while pursuing the same objective – is to coordinate the social security systems of Member States in order to guarantee that the right to free movement of persons can be exercised effectively. ( 9 )

51.

It does not set up a common scheme of social security, but allows different national social security schemes to exist, ( 10 ) laying down a series of common principles which the social security legislation of all the Member States must observe. This is designed to ensure that persons exercising their right to free movement and residence within the Union will not be adversely treated by the various national systems because they have exercised that right. ( 11 )

52.

In that context, Title II of Regulation No 883/2004 – entitled ‘Determination of the legislation applicable’ – lays down the conflict rules by which it is possible to determine the legislation applicable to cases falling within the scope of the regulation.

53.

Those conflict rules are based on rules of attachment analogous to those applying in private international law. Their purpose is to determine the legislation applicable to cases in which there is a link to various Member States, since relating to employed or self-employed persons who make use of their right of freedom of movement. ( 12 )

54.

The Court has explained on several occasions that the provisions of Title II of Regulation No 883/2004 constitute a complete and uniform system of conflict of law rules. Those provisions are intended to prevent the simultaneous application of a number of national legislative systems and to ensure that persons falling within the scope of one of those regulations are not left without social security protection because there is no legislation which is applicable to them. ( 13 ) In other words, the aim is to prevent migrant workers from being left without social security protection owing to a negative conflict between national laws, or alternatively from accumulating the same benefits or being subject to the same contributions under the legislation of several Member States because of a positive conflict between national laws.

55.

However, the provisions in question are not intended to lay down the conditions for becoming affiliated to a social security scheme or for the existence of the right to social security benefits. It is in principle for the legislation of each Member State to lay down those conditions. ( 14 )

56.

The conflict rules laid down by Regulation No 883/2004 are mandatory for the Member States and the latter do not therefore have the power to determine to what extent their own legislation or that of another Member State is applicable. ( 15 ) Therefore, they may not exclude from the scope of their legislation persons to whom it should apply pursuant to the regulation. ( 16 )

57.

In order to resolve the potential conflicts – whether positive or negative – between national laws, the provisions of Title II of Regulation No 883/2004 seek to ensure that the persons concerned are subject to the social security scheme of only one Member State.

58.

Article 11 of Regulation No 883/2004, which is entitled ‘General rules’ and is the ‘cornerstone’ of the system, lays down in paragraph 1 the principle of the single nature of the applicable legislation.

59.

Accordingly, provided that a person falls within the scope ratione personae of Regulation No 883/2004, as that scope is defined in Article 2 of the regulation, the legislation of a single Member State is applicable, determined in accordance with the provisions of Title II of that regulation. ( 17 )

60.

More importantly for this case, Article 11(3)(a) of Regulation No 883/2004 sets out the principle of lex loci laboris, stating that ‘a person pursuing an activity as an employed or self-employed person in a Member State shall be subject to the legislation of that Member State’. ( 18 )

61.

The terms ‘activity as an employed person’ and ‘activity as a self-employed person’ are defined in Article 1(a) and (b) of Regulation No 883/2004. That provision establishes that, for the purposes of that regulation, ‘activity as an employed person’ and ‘activity as a self-employed person’ both mean ‘any activity or equivalent situation treated as such for the purposes of the social security legislation of the Member State in which such activity or equivalent situation exists’.

62.

It follows, therefore, from the combined reading of those provisions, that the application of the lex loci laboris is subject to the condition that the person is pursuing an activity ‘as an employed or self-employed person’, according to the social security legislation of the State in question. ( 19 ) I therefore consider the existence of an employment relationship – deemed as such under the legislation of the Member State where it takes place – to be essential for the application of the legislation of the State of employment.

63.

The existence of an employment relationship becomes irrelevant only in the exceptional case referred to in Article 11(2) of Regulation No 883/2004, according to which persons receiving cash benefits because or as a consequence of their activity as an employed or self-employed person are considered to be pursuing that activity.

64.

The referring court has already expressly stated that under Netherlands law, the situation of X and Y during the intervening periods between temporary employment is not regarded as an activity as an employed or self-employed person. ( 20 )

65.

It is not disputed that, during the periods in question, the individuals concerned did not receive the benefits provided for in Article 11(2) of Regulation No 883/2004.

66.

In the light of the previous points, the applicability of the law of the State of employment, within the meaning of both Article 11(3)(a) of Regulation No 883/2004 and Article 11(2) of that regulation, must be excluded in the present case.

67.

This would appear to be the most appropriate solution for pursuing the objectives of Regulation No 883/2004. Indeed, by anchoring the competence of the State of employment to the existence of an employment relationship, it is immediately possible to determine with the requisite certainty the national law applicable at the time of the events.

68.

This maintains legal certainty, which is an essential value in a system that, as mentioned earlier, seeks to allow coordination and to avoid conflicts between national rules according to the typical schemes of private international law.

69.

Moreover, as previously mentioned, the purpose of this regulation is not to ensure the existence of rights to social security and welfare benefits, the rules of which are left to the Member States.

70.

EU law does not guarantee to a worker that moving to a Member State other than his Member State of origin will be neutral in terms of social security: given the disparities between the Member States’ social security schemes and legislation, such a move may be more or less advantageous for the person concerned in that regard. ( 21 )

71.

Therefore, the fact that the persons concerned are not entitled to the relevant social security benefits in their Member State of residence is entirely immaterial for the application of the conflict rules provided for in Title II of Regulation No 883/2004. However, in the abstract, the law of the State of residence may well be more favourable than that of the State of employment.

72.

An interpretation based on the criteria – such as those proposed by the Commission in its observations – relating to the nature of the employment relationship, the duration of the period during which the individuals concerned worked, the duration of the intervening periods and the orientation towards a single market, would lead to more debate and uncertainty and could result in conflict between national rules.

73.

Moreover, the duration of the intervening periods and any return to the previous State of employment are circumstances that can only be determined retrospectively. Therefore, during those periods, it would not be possible to determine the applicable national legislation. This would have practical implications, particularly for the payment of benefits (such as child benefit) that are not contingent on the employment definitively ceasing.

74.

In view of the foregoing, it seems to me that the need to avoid unnecessary fragmentation of the legislation applicable to a worker ( 22 ) is secondary to the need for there to be legal certainty underpinning the legislative system in question.

75.

In that regard, I also note that the EU legislature, where it wanted to prevent such fragmentation, did so expressly.

76.

The reference is to the rules laid down in Article 12 of Regulation No 883/2004 on posted workers, according to which the person pursuing an activity as an employed person in a Member State on behalf of an employer ‘which normally carries out its activities there and who is posted by that employer to another Member State to perform work on that employer’s behalf shall continue to be subject to the legislation of the first Member State, provided that the anticipated duration of such work does not exceed 24 months and that he/she is not sent to replace another posted person’.

77.

That provision – which is intended to prevent an undertaking established in a Member State from being obliged to register its workers, normally subject to the social security legislation of that State, with the social security system of another Member State where they are sent to perform work of short duration ( 23 ) – clearly constitutes an exception and a derogation, and therefore cannot be applied by analogy outside the cases expressly provided for. It also refers to cases that – unlike those at issue in the main proceedings – are characterised by the existence of continuous employment relationships.

78.

In my view, the judgment in Franzen provides no evidence to support the application of the legislation of the Member State of employment, even after the employment relationship ceases.

79.

Paragraph 50 of that judgment states that the legislation of the Member State of employment continues to be applicable for as long as the person concerned is ‘employed in the territory of that Member State’.

80.

Furthermore, in paragraphs 51 and 52 of that judgment, the Court distinguished the case at issue from those which were the subject of certain earlier judgments, ( 24 ) in which the employment relationship had definitively or temporarily ceased.

81.

In particular, paragraph 52 states that ‘the period during which the activities of casual employment are pursued cannot be regarded as a temporary suspension of the activity’, and that ‘according to the documents before the Court, the employment relationship … continued without interruption for five years’.

82.

It follows that the Court regarded the continued existence of an employment relationship to be essential, while considering the practical employment arrangements to be irrelevant – as in the judgment of 3 May 1990, Kits van Hejningen ( 25 ) – since the law of the State of employment can also apply to casual and part-time employment.

83.

It is understandable therefore that on that occasion, the Court held that Article 11(3)(a) of Regulation No 883/2004 was applicable, even on days when casual work was not carried out, given that the case before it, unlike the one at issue here, was characterised by an employment relationship that still existed.

84.

Further confirmation of my argument can be found in the judgment of 13 September 2017, X ( 26 ) – also relating to Regulation No 1408/71 but applicable, as already mentioned, to Regulation No 883/2004 – concerning a person who worked in the Netherlands, who had agreed a period of unpaid leave with his employer and who, while he was on leave, had worked in another Member State.

85.

In paragraph 24 of that judgment, it is stated that ‘in so far as a person retains the status of employed person during the period of unpaid leave granted to him by his employer, it is possible to regard him as a person who is employed within the meaning of Title II of Regulation No 1408/71, notwithstanding the suspension of the main obligations arising from that employment relationship during that specific period’.

86.

This statement, in my opinion, confirms that, for the purposes of the application of the lex loci laboris, the existence of an employment relationship is always necessary, regardless of any suspension of the practical obligations that arise from it. ( 27 )

87.

To conclude, I consider that the situations of X and Y during the intervening periods cannot be considered within the scope of Article 11(3)(a) of Regulation No 883/2004 (or equivalent to the situation referred to in Article 11(2) of that regulation), and that therefore the law of the State of employment cannot apply to them.

88.

It is also common ground that the individuals concerned were not in the situations provided for in Article 11(3)(b), (c) and (d) of Regulation No 883/2004, which refer to civil servants, persons receiving unemployment benefits and persons called up or recalled for service in the armed forces or for civilian service.

89.

On that basis, it must be concluded that the cases in question fall within the scope of the residual provision contained in Article 11(3)(e), which applies to all persons not covered by subparagraphs (a) to (d) of that article, ( 28 ) and in particular, both to persons who have definitively ceased all occupational activity and to those who have merely temporarily ceased their occupational activity. ( 29 )

90.

That conclusion is compatible with the objective of Title II of Regulation No 883/2004, which is to ensure that the persons concerned are subject to the social legislation of only one Member State, and not to guarantee the provision of social security and welfare benefits, which remains subject to the substantive conditions laid down by the Member State whose legislation is applicable in the present case.

91.

In practice, it will of course be for the national court to give effect to those principles by applying them to the present case and interpreting the national legislation in accordance with EU law.

92.

On the basis of all the foregoing considerations, I propose that the Court answer the questions referred for a preliminary ruling by the Centrale Raad van Beroep (Social Security and Civil Service Court of Appeal, Netherlands) as follows.

Article 11(3)(a) of Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, as amended by Regulation (EU) 2019/1149 of the European Parliament and of the Council of 20 June 2019, must be interpreted as meaning that a worker who resides in a Member State but who normally works in another Member State does not remain subject to the legislation of the State of employment during periods when, under the social security legislation of that State, he or she does not have a valid employment contract and does not do any work which may be considered, under the legislation of the Member State, as an activity as an employed person or as a self-employed person. During those intervening periods, in accordance with Article 11(3)(e) of Regulation No 883/2004, the legislation of the State of residence shall apply.