Gide Brussels & Paris, counsel on a landmark judgment issued by the CJEU on the posting of workers within the European Union (Vueling case)

The rules on posted work within the European Union are an important component of the free movement of workers. Compliance by Member States with the amended Council Regulation no. 1408/71 of 14 June 1971 on the application of social security schemes is essential to ensure that this free movement is effective.

On Thursday 2 April, the Grand Chamber of the EU Court of Justice handed down a judgment of principle in Joined Cases C-370/17 & C-37/18 Vueling v. CRNPAC and Vueling v. Poignant, which reminds the French courts of the primacy of European law over national provisions on the posting of workers.

As part of an investigation carried out at Paris Roissy-Charles de Gaulle airport and going back to 2007/2008, the French Labour Inspectorate (inspection du travail) had drawn up a report of concealed work against Vueling, on the grounds that flight crews based at that airport were affiliated to Spanish social security rather than to French social security. Vueling availed itself of A1 (ex-E101) certificates issued by the Spanish social security body, authorising the continued affiliation of its flying personnel to Spanish social security throughout the period of posting, in accordance with EU Internal Market rules.

Vueling was nevertheless prosecuted before French courts and was convicted for concealed work by the Paris Court of Appeal in January 2012, confirmed by the Criminal Division of the Court of Cassation in March 2014.

In its ruling of 2 April, the Court of Justice of the European Union set the record straight, stating that the French judge cannot unilaterally rely on alleged fraud to set aside certificates validly issued by the authorities of another Member State (issuing MS) without first having implemented the European procedure for dialogue between the institutions provided for this purpose.

In the operative part of its judgment, the CJEU rules that :

“A court or tribunal of a Member State seised in the course of legal proceedings (…), of facts that might indicate that E101 certificates issued under Regulation 1408/71, were fraudulently obtained and relied on, can make a finding of fraud and consequently disregard those certificates only if it has satisfied itself that :

• first, the procedure laid down in Article 84a(3) of that regulation was promptly initiated and the competent institution of the issuing Member State was put in a position to review the grounds for the issue of those certificates, and
• second,  the competent institution of the issuing Member State failed to undertake such a review and failed to make a decision within a reasonable time.”

In the case of Vueling, the CJEU states that French courts disregarded this procedure, since they rejected the posting certificates held by the company’s flight crews prior to the URSSAF (French organisations for the payment of social security and family benefit contributions) referring the matter to the Spanish competent body having issued the said certificates.

The Grand Chamber judgment also rules on another major principle of EU law :  the principle of the primacy of European Union law precludes a court of a Member State from convicting a civil litigant in application of the res judicata effect of criminal judgments over civil proceedings (as is the case in France), where the criminal conviction at issue is based on a definitive finding of fraud, made in breach of European Union law.  

Vueling was advised by a multi-disciplinary team of Gide Paris and Gide Brussels, comprising partners Benoit Le Bret and Foulques de Rostolan, senior counsel Francis Kessler, counsel Yan-Eric Logeais and senior associate Diana Calciu.