Judgment of the Court of Justice of July 16 2020: which social security law applies to lorry drivers employed internationally?

On July 16 2020, the Court of Justice handed down an important judgment on the question of which social security law applies to lorry drivers employed internationally.

The preliminary question was asked in a case in which a Cypriot transport company carried out several international transport assignments for Dutch companies. The lorry drivers hired by the Cypriot company for this purpose never worked or lived in Cyprus, but in the Netherlands. However, the wages were paid by the Cypriot company.

The Court had to rule on who should be considered an "employer" within the meaning of Regulation 1408/71 and Regulation 883/2004. Both Regulations provide that workers (here: the drivers) who carry out their activities in two or more Member States without essentially working in the territory of the Member State where they reside are subject, for social security purposes, to the legislation of the Member State in which the registered office or place of business of the employer is situated.

In the end, the Court ruled that, in order to define the concept of "employer", it is necessary to determine who exercises effective control over the workers rather than where the employment contract was concluded. One has to take into account the objective situation in which the employee concerned finds himself, as well as all the factual circumstances of his employment. This includes the question of who actually bears the wage costs and who is actually authorised to dismiss the employees.

In the dispute brought before the Court of Justice, the Court of Justice ruled that the Dutch undertakings exercised de facto authority over the employees, with the result that Dutch social security law applies to the drivers in question.