The CJEU (Court of Justice of the European Union) recently provided its judgement for Case C-743/23, confirming that working time spent outside of the EU/EEA/Switzerland, must be considered as part of the ‘25% substantial working time’ threshold.
National Authorities are now starting to confirm their intentions to follow the CJEU judgement for local implementation, and the respective handling for future cases.
In December last year, the CJEU ruled in the case of C-743/23. This concerned an employee who:
The Multi-State Working rules (Article 13 EU Regulations 883/2004) confirm that an individual spending more than 5% of their time between two or more member states shall be subject to the Social Security rules of:
When all work activities were taken into account, only 16% of the employees total working time was performed in Germany, resulting in Social Security being payable in Switzerland (country of employment)
The judgement removes the unclarity of whether the ‘substantial part’ test should consider total global working time, or just working time spent within the EU/EEA/Switzerland.
The CJEU judgment takes all global work into consideration.
The judgement provides confirmation that the assessments for Multi-State Workers should not be limited to just working time spent within the EU/EEA/Switzerland, but rather extend to working time in any country. Employers should:
It is important to note that national authorities may implement this judgement at different paces. Some authorities have officially indicated that they will follow the CJEU judgement for future applications that relate to situations similar to the case in question, namely: Belgium and Austria.
Our expectation is that other locations will soon follow suit and roll-out guidance confirming the same. To date, many national authorities have been operating on the basis that third-country work should not be considered, so this will represent a considerable change. We will update this insight as and when more countries confirm their stance on this judgement.
Lastly, it remains to be seen if this judgement will have any impact on the Multilateral Framework Agreement for Teleworkers, and how third-country days may impact its validity. More to come on this point as EU level discussions are ongoing.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Craig Smith
Senior Manager
Nadja De Bie
Senior Manager
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