Are foreign employers who post workers to Belgium obliged to proceed with a DIMONA obligation: what has the Belgian Supreme Court said (or rather not said)?
In a ruling of 19 April 2022, the Belgian Supreme Court decided that an A1-certificate issued by a competent foreign authority to a posted worker does not exclude compliance with the DIMONA obligation. Does this mean that all foreign employers posting employees to Belgium must now file both a LIMOSA and a DIMONA declaration? This article sheds some light on the scope of the Supreme Court’s decision and the particular context in which it was taken.
- A short recap of the formalities to be complied with by foreign employers posting workers to Belgium
Before examining the Supreme Court’s decision, the table below summarises some administrative formalities that employers posting workers should know.
Apart from some specific exceptions, a foreign employer temporarily employing a worker in Belgium must file a LIMOSA-declaration. The purpose of this declaration is to provide different information to the Belgian authorities about: the identity of the foreign employer and its posted workers, the nature of the activities/services provided in Belgium, and the working place and working schedule of the posted workers while in Belgium.
Subject to different requirements being met, posted workers can continue to remain covered by their home social security system. The Belgian social security regime does not then apply. To prove the continued affiliation to the home social security system, an A1-certificate can be applied for with the foreign Social Security Office.
Once issued, such an A1-certificate in principle binds the Belgian authorities, as long as it has not been withdrawn or declared invalid in the framework of a contestation procedure.
According to the Belgian Social Security Office’s instructions, a DIMONA declaration is not required if the posted worker remains subject to the home social security system.
If the posted worker is subject to the Belgian social security system, then the employer must file a DIMONA declaration.
Therefore, legal practitioners often consider these formalities as an “either - or” and not as an “and” obligation as:
- Either the posted worker can remain subject to the home social security system, and then the foreign employer must proceed with a LIMOSA declaration;
- Or the posted worker becomes subject to the Belgian social security system, and then the foreign employer must proceed with a DIMONA declaration.
Although this “either – or” position is valid most of the time, there might be situations where a foreign employer posting a worker to Belgium has to comply with both the DIMONA and the LIMOSA declarations. Indeed, when the requirements are not met for remaining subject to the home social security system, then a foreign employer has to file both a DIMONA and a LIMOSA declaration.
- The Supreme Court’s decision
In its ruling of 19 April 2022, the Belgian Supreme Court decided that an A1-certificate issued by a competent foreign authority to a posted worker “does not exclude” having to proceed with the DIMONA declaration.
To understand the exact scope of the Supreme Court’s decision it is crucial to have an understanding of the underlying facts.
➢Gent Court of Appeal (Criminal division)’s decision, 2 September 2021
FONAK EOOD, a Bulgarian-established company with its registered seat in Bulgaria, executed transport and logistics services in Belgium. FONAK EOOD only had one client, the Belgian based company, NV Fonteyne and CIE. FONAK EOOD’s director was employed by NV Fonteyne and CIE as a driver. FONAK EOOD, NV Fonteyne and CIE, as well was their respective directors were prosecuted for several serious infringements, including human trafficking. They were also prosecuted (and convicted) for non-compliance with the DIMONA obligation.
Following investigations, social inspectors observed that the drivers were working predominantly in Belgium and were only returning periodically and for short periods of time to Bulgaria to take rest and leave. The drivers did not carry out any substantial activities in Bulgaria. Furthermore, the vehicles were permanently parked in Belgium, FONAK EOOD had a Belgian bank account, FONAK EOOD permanently kept its vehicles in Belgium, the employment contracts with the Bulgarian drivers were executed in Belgium, the Bulgarian drivers resided in a space that was leased by FONAK EOOD in Belgium, etc.
The Gent Court of Appeal’s judgment found, after a long and elaborate explanation, that the conditions for an employment posting were not met and that FONAK EOOD merely acted as a ‘letterbox’ company in Bulgaria to circumvent the provisions of the Belgian Posting Act of 5 March 2002. Indeed, the employees were employed permanently (rather than temporarily) in Belgium. The Gent Court of Appeal concluded that Belgium could be considered as their habitual place of work, making Belgian law the objectively applicable law governing the employment contract.
This meant that, despite the choice of law for Bulgarian law, the mandatory provisions of Belgian law (i.e. the provisions that cannot be derogated from by agreement) applied to the employment relationships in question, including the obligation to proceed with a DIMONA declaration at the latest when the workers in question started their work.
On the other hand, the Gent Court of Appeal had to observe that the Bulgarian drivers, allegedly posted to Belgium, were in the possession of A1-certificates. The Bulgarian administration who issued the A1-certificates was never requested to reconsider its decision to issue the A1-certificates or to withdraw them. According to the defendants, the Gent Court of Appeal had thus to respect the binding nature of these A1-certificates. They argued that, as a consequence, they did not have to file any DIMONA declarations before the workers started to work in Belgium.
In a very lengthy court decision, the Gent Court of Appeal reasoned that the DIMONA declaration obligation is in fact hybrid in nature and does not only serve purposes relating to the social security laws but it is also an instrument of personnel policy and enforcement as it seeks to ensure the effectiveness of the checks carried out by the competent national authorities. By introducing the DIMONA declaration requirement, the legislator intended not only to ensure that the workers concerned were affiliated to the Belgian social security regime but also to guarantee the effectiveness of control carried out by the social inspection services.
In other words, being in the possession of an A1-certificate did not necessarily exclude FONAK EOOD from complying with the DIMONA declaration obligation.
The parties involved challenged the Gent Court of Appeal’s reasoning by arguing that the Court could not validly rule that the A1-certificates of their workers were not binding when assessing compliance with other (non-social security-related) obligations imposed by national law, such as the DIMONA obligation.
➢Supreme Court decision of 19 April 2022
The Belgian Supreme Court confirmed the Gent Court of Appeal’s decision. This ruling, in a way, reversed the previous jurisprudence of the Supreme Court of 2 February 2016 in which it had decided that the DIMONA regulations were aimed at applying the Belgian social security provisions and thus only applied to persons to whom those provisions applied (and so excluded persons holding an A1-certificate from an EU member state).
- A1-certificates do have binding effects, but solely in the area of social security;
- A1-certificates have no binding force regarding obligations imposed by national law in fields other than social security, such as obligations concerning the employment relationship between employers and workers, and in particular, the terms and conditions of employment;
- It is up to the national court to determine whether an obligation to register workers prior to the start of employment, imposed by national legislation, is solely to ensure that the workers concerned are affiliated to one of the branches of the social security system and is therefore limited to ensuring compliance with the legislation in question (in which case, the A1-certificates issued by the home country would preclude such an obligation) or whether that obligation is also intended, even partially, to guarantee the effectiveness of the checks carried out by the national social inspection services of the host state (to verify compliance with the terms and conditions laid down in the host state’s employment legislation).
Applying the Elco case, the Supreme Court confirmed the assessment made by the Gent Court of Appeal and also concluded that the binding value of an A1-certificate issued by the home country’s Social Security Office must be limited to ensuring adherence to a social security system (i.e. that of the home country) but does not exclude that a DIMONA declaration must be made.
- What does this mean for foreign employers posting workers to Belgium?
To simply conclude that the Supreme Court ruled that foreign employers posting workers to Belgium now systematically have to file both a DIMONA ánd a LIMOSA declaration would be too hasty.
The Gent Court of Appeal only ruled, and as the Supreme Court then confirmed, that the Belgian DIMONA obligation applies to foreign employers when there is an habitual employment in or from Belgium, and this is regardless of whether the conditions for a social security posting have been met (which was not the subject of the criminal investigation in this case).
By specifying that the DIMONA obligation is compulsory when there is an habitual employment in or from Belgium (as opposed to a temporary posting), it can be concluded that the scope of the Court of Appeal’s dictum, as confirmed by the Supreme Court, must, at least at this time, remain limited to situations where there is no genuine posting under European and Belgian law and where Belgian labour law must be considered to apply in full, even if there are valid and non-retracted A1-certificates.
ALTIUS’ employment team is available to assist foreign employers considering posting workers to Belgium, including providing further guidance regarding any additional employment-related formalities, registrations and obligations triggered by a posting set-up. Furthermore, ALTIUS’ employment team can provide practical advice on the applicable working and employment conditions, taking into account the Posting Act’s requirements.
 For EU nationals or non-EU nationals working in an EU country.
 Or the Certificate of Coverage, for workers working in a non-EU country.
 Court of Justice of the European Union.
 Bouyges travaux publics, Elco construct Bucarest, Welbond armatures, C-17/19, 14 May 2000.