Good Practices in Social Law

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This book has been published in the framework of the R&D project financed by the Spanish Economy Ministry “best legal-procedural practices in the field of labour and European law to reduce labour litigation expenditure at zero cost (I+D DER 2012-32111). In memoriam Dr. Bernd Schulte, a great jurist and mentor 16 GOOD PRACTICES IN SOCIAL LAW Page IV.2. Requirements for reimbursement: authorization ......................... 150 IV.3. Reimbursement ............................................................................. 152 v. conclusions ....................................................................................... 153 ChAPTER IX particular aspects reGardinG illeGal iMMiGration in the national healthcare systeM . 157 DR. FuENCISLA RuBIO vELASCO i. healthcare before the spanish organic law 4/2000 on rights and freedoms of foreigners in spain and their social integration ......................................................................................... 157 ii. foreigners´ healthcare in the organic law and its subsequent reforms of december 2000 and 2003 ...................... 158 A. Foreigners registered in the municipality census ......................... 159 B. Accident or serious illness of foreigners that are not registered ... 161 1. Foreigners under eighteen ................................................. 161 2. Pregnant foreigners ............................................................. 161 iii. the organic law/2009 and registration in the census as a condition for access to healthcare ................................................ 162 iv. the royal decree-law 16/2012, of 20 april, of urgent Measures for Guaranteeing the sustainability of the national health dystem and improve the quality and security of its benefits 162 A. Condition of the insured person .................................................... 163 1. Registration in the census ................................................... 163 2. Considerations to the Royal Decree-law ......................... 164 3. Special agreement on healthcare ....................................... 165 4. Constitutional appeals against the Royal Decree-law 16/2012 .................................................................................. 166 17 Index Page ChAPTER X oBesity, disaBility and the court of justice in the european union ................................................................................. 167 JOSé JOAquíN PéREz-BENEyTO ABAD i. introduction ..................................................................................... 167 ii. disability models ............................................................................ 169 iii. disability and fordism ................................................................... 170 iv. social model for disability ............................................................ 171 v. the disability model until the ecj 18-12-2014 sentence (case c-354-13) .............................................................................................. 173 vi. the model of disability in the ecj 18-12-14 sentence (case c-354/13) .............................................................................................. 174 vii. review ................................................................................................ 176 ChAPTER XI the eu MiniMuM incoMe scheMe two decades later ........................................................................................................... 177 Mª DOLORES RAMíREz BENDALA i. introduction ...................................................................................... 177 ii. poverty and social exclusion ......................................................... 178 iii. eu minimum income background .............................................. 180 iv. the proposal of directive .............................................................. 184 v. adequacy of a framework directive as instrument for reaching the minimum european income .................................. 185 ChAPTER XII Good practices at health and safety at work ........ 189 PROF. DR. MARíA TERESA IGARTuA MIRó i. what are good practices and why are they useful in safety and health in work? ........................................................................ 189 18 GOOD PRACTICES IN SOCIAL LAW Page ii. Momentum to good practices at eu occupational safety and health (osh) strategic framework (2014-2020) and spanish strategy (2015-020) ............................................................................ 190 iii. objectives: continuous improvement of work and life conditions .......................................................................................... 192 iv. Broad lines of good practices in health and safety at work ..... 193 v. Good practices: towards its diffusion and exchange ............... 197 ChAPTER XIII Good practices to proMote the equal opportunities in coMpanies in the orGanization of workinG tiMe ................................................................................ 199 DR. Mª TERESA vELASCO PORTERO i. introduction ...................................................................................... 199 ii. the right of the employer to establish an irregular distribution of the working day (article 34.2. et) ...................... 200 A. Limits to the right of the employer: regulation under et and collective agreements practice ....................................................... 200 iii. holidays fixing (art. 38.2 et) and reconciling the personal and family life ................................................................................. 204 iv. determination of the dates for spending and the time concretion of suspensions and leaves related to conciliation. particular case of the accumulation in nursing leave .............. 206 v. timing concretion and determination of the date to spend the working day reduction due to family reasons ................... 208 vi. timing concretion and turn of work ........................................... 211 vii. the right of workers to the adaptation and distribution of the working day (art. 34.8 et): time flexibility and work shift election ............................................................................................... 213 viii. the flexibility in the collective bargaining ................................ 215 19 Index Page ChAPTER XIv proceedinGs for interiM Measures Before the european court of justice ........................................................ 217 PROF. DR. ANA MARíA ChOCRóN GIRáLDEz i. introduction ...................................................................................... 217 ii. provisional measures and the right to an effective remedy ... 218 iii. characteristics of measures ........................................................... 219 iv. types of measures that may be adopted .................................... 221 A. The interim measure suspending the contested act ...................... 221 B. Other measures for guaranteeing the effectiveness of the future decision on the substance of the matter ........................ 222 v. requirements ................................................................................... 223 vi. proceeding ......................................................................................... 225 ChAPTER Xv court fees and the riGht to an effective judicial wardship ................................................................................................. 229 DR. TERESA MEANA CuBERO i. the mother of all battles ................................................................ 229 ii. constitutional doctrine: the sentence of constitutional court 20/2012, from the 16th february ......................................... 234 iii. final reflection .................................................................................. 237 ChAPTER XvI “Good practices” and crisis of the laBour proceedinG principles .................................................................. 239 PROF. DR. EDuARDO GONzáLEz BIEDMA i. classic principles of the labour proceeding .............................. 239 A. Orality .......................................................................................... 241 20 GOOD PRACTICES IN SOCIAL LAW Page B. Judicial intervention ...................................................................... 242 iii. “principle of concentration” ......................................................... 242 iv. principle of urgency ........................................................................ 242 v. free-of-charge proceedings (for the worker) ............................. 242 vi. “Greater formal flexibility” ........................................................... 243 vii. the current crisis of these principles .......................................... 243 A. Orality ........................................................................................... 244 B. “Principle of concentration” ......................................................... 245 C. Principle of urgency ...................................................................... 246 D. Free-of-charge proceedings ............................................................ 247 E. “Greater formal flexibility” ........................................................... 247 viii. why has this crisis occurred? ........................................................ 248 ChAPTER XvII reception of social security coordination in the iBero-aMerican reGion. a process followinG the european experience ...................................................................... 251 PROF. DR. PABLO ARELLANO ORTIz i. introduction ..................................................................................... 251 ii. the Multilateral ibero-american agreement on social security .............................................................................................. 254 iii. final thoughts ................................................................................... 263 SELECTED BIBLIOGRAPhy ................................................................... 265 21 . Introduction This book brings together the experience of a group of researchers with a high level of specialisation in social law. It has been published in the framework of the R&d project “Good Legal Practices in the Field of Labour and european Law to Reduce Labour Litigation expenditure at Zero Cost (deR 2012-32111). The first objective of this project is to detect and analyse, based on the experience and professional background of the research team, best legal and procedural practices in due process of law allowing for a reduction of labour litigation costs without detriment, inasmuch as possible, to the rights of nationals and eU citizens and of foreigners with legal residence in the european Union. In order to achieve such goal the first step will be to identify those cases in which either the Central Government or the Regions do not strictly apply the legal regulations or the administrative process is clearly subject to improvement, being the main impact of all of it unnecessary economic costs. Second, after indentifying the situations in which the application or management of labour regulations is neither effective nor efficient, we will discuss the consequences and implications of the preservation of such status quo in legal and economic terms. Third, complying in all cases with the legal source system, specific measures will be proposed to adopt the necessary legal reforms or implement administrative best practices that would lead to the suppression or reduction of labour litigation costs. Moreover, a further objective of this project is to analyse the labour market and Social Security reforms carried out in other eU countries, allowing them to tackle the economic crisis more successfully. The book is dedicated to dr. Bernd Schulte, who I met at the MaxPlanck Institute in Munich at the end of the 90s. He was member of the committee 22 InTROdUCTIOn who evaluated my doctoral thesis. during years we worked together on several projects funded by the european Commission. I have only words of gratitude for everything I learned with him. Cristina Sánchez-Rodas navarro 23 I. GOOd LeGAL PRACTICeS In SPAnISH LAW? CLAUSeS GOVeRnInG ReSIdenCe... Chapter I Good legal practices in spanish law? Clauses Governing residence and the export of Spanish Social Security Benefits1 Prof. dr. Cristina Sánchez-Rodas navarro University of Seville I. IntroductIon In order to prevent the coexistence of many different social protection regimes from becoming an insurmountable obstacle to the exercise of the right of free movement of persons, the current Article 48 of the Treaty on the Functioning of the european Union proclaims that the european Parliament and the Council shall adopt such measures in the field of Social Security as are necessary to provide freedom of movement for workers. This precept has been developed in Regulation 883/2004, whose scope of personal application is delimited in Article 2, from which it can be inferred that it is applicable to the nationals of States in which european Union Law is applied and who are or have been subject to the legislation of one or several Member States, as well as their family members and survivors. Article 7 of Regulation 883/2004 carries the heading “Waiving of residence rules” and provides that “Unless otherwise provided for by this Regulation, cash benefits payable under the legislation of one or more Member States or under this Regulation shall not be subject to any reduction, amendment, suspension, withdrawal or confiscation on account 1. This report has been published in the framework of the R & d project “Good Legal Practices in the Field of Labour and european Law to Reduce Labour Litigation expenditure at Zero Cost (I+d deR 2012-32111). 24 CRISTInA SÁnCHeZ-ROdAS nAVARRO of the fact that the beneficiary or the members of his/her family reside in a Member State other than that in which the institution responsible for providing benefits is situated”. The principle of the waiving of residence rules is better known as the principle of export of benefits. Regulation 1231/2010 widens the application of Regulation 883/2004 to the nationals of third countries legally residing in eU territory, and so this group also comes under community provisions on the export of Social Security benefits coordinated in the territory in which eU Law is applicable. II. the reform of resIdence rules In spanIsh law The Fourth Final Provision —section seven— of Law 22/2013, of 23 december, on the General State Budget for 2014, incorporated a new Sixty-Fifth Additional Provision of the Revised Text of the General Social Security Law of 19942. Although the Preamble to Law 22/2013 makes no mention of the purpose of this reform, it can be deduced that it is none other than to prevent the export of non-contributory Social Security benefits and to avoid payment of the healthcare costs generated by those persons who spend over 90 days outside Spain in each calendar year. And, at the same time, it introduces into our Social Security legislation the concept of “habitual” residence, which is mentioned in the articles of Regulation 883/2004 on the coordination of Social Security systems. III. materIal scope of the reform It should first be noted that, pursuant to Article 7 of the Revised Text of the General Social Security Law, residence in Spanish territory is a general requirement of Spanish citizens for their inclusion in the contributory or non-contributory level of the Social Security system. With respect to foreigners, Article 14.1 of Basic Law 4/2000 requires that they reside legally or are legally in Spain. But it is one thing that, as a translation of the principle of territoriality, one of the requirements for Spanish Social Security legislation to be applicable is to work, reside (or be) in Spain, and another very different thing for residence in Spain, or proven periods of residence in Spain, to be 2. After the new Revised Text of the General Social Law of 2015 came in force, the references to the former Sixty-Fifth Additional Provision should be made to the new article 51. 25 I. GOOd LeGAL PRACTICeS In SPAnISH LAW? CLAUSeS GOVeRnInG ReSIdenCe... specifically required for the recognition and maintenance of certain Social Security benefits. Article 51 of the Revised Text of the General Social Security Law would only be applicable to the latter. From the drafting of the article 51, it can be inferred that it affects two types of benefits: the second section is devoted to monetary Social Security benefits which require residence in Spanish territory: “For the purposes of the maintenance of the right to monetary Social Security benefits for which residence in Spanish territory is a requirement, it shall be understood that the beneficiary of said benefits, including supplementary benefits, has his/her habitual residence in Spain, even though he/she has spent periods abroad, provided these do not exceed 90 days in each calendar year, or when the absence from Spanish territory is caused by duly certified illness. not with standing the provisions of the preceding paragraph, for the purposes of unemployment payments and benefits, the specific regulations governing said benefits shall be applicable”. The third section affects healthcare benefits for which residence in Spanish territory is required: “For the purposes of the maintenance of the right to healthcare benefits for which residence in Spanish territory is required, it shall be understood that the beneficiary of said healthcare benefits has his/her habitual residence in Spain even though he/she has spent periods abroad, provided that these do not exceed 90 days in each calendar year”. To make the acquisition and maintenance of the right to a Social Security benefit conditional upon residence in Spain is a requirement that has traditionally been one of the typical features that configure the noncontributory benefits of the Social Security system (and Social Assistance benefits provided by Regional Governments), and this is also required of Spanish citizens. A. HAS LAW 22/2013 RePeALed THe PReVIOUS exCePTIOnS ReLATInG TO THe ReSIdenCe ReqUIReMenT? Absence from Spanish territory for reasons of illness, which must be duly certified, is the only cause contemplated under article 51 of the Revised Text of the General Social Security Law that would not be counted to determine whether or not the absences exceed 90 days in each calendar year. But, scattered throughout the regulations governing Foreign Residents and the Social Security system, there are other cases in which absence 32 CRISTInA SÁnCHeZ-ROdAS nAVARRO non-contributory unemployment benefits), non-contributory retirement and invalidity pensions ceased to be exportable to other States in which european Union law is applicable, from the moment in which they were notified by the Spanish Government as special non-contributory benefits12 (currently included in Annex x of Regulation 83/200413). It must be taken into account that, for the purposes of Annex x of Regulation 883/2004, Social Assistance benefits provided by Spanish regional governments to complement non-contributory state Social Security pensions are also classified as special non-exportable cash benefits. With respect to non-contributory Social Security invalidity and retirement pensions, it must be noted that the wording of Article 51.2 of the Revised Text of the General Social Security Law substantially coincides with Article 10.2 of Royal decree 357/1991: “residence subsequent to the recognition of the right shall not be considered interrupted by absence from Spanish territory of less than 90 days in each calendar year, or when the absence is due to duly certified illness”. The new Article 51 of the Revised Text of the General Social Security Law contains no novelties, then, with respect to the legal regime governing non-contributory Social Security invalidity and retirement pensions. B. LOSS OF ReSIdenCe And SUPPLeMenTARy BeneFITS 1. the non-extinction of the right to supplementary benefits due to the loss of “habitual” residence in spain when regulation 883/2004 is applicable Article 59 of the Revised Text of the General Social Security Law regulates supplements to contributory pensions which are lower than the minimum. The recognition of the right to these benefits is conditioned by the residence requirement, though only with respect to pensions originating from events occurring since 1 January 2013. The thesis proposed here is that the residence requirement is not applicable to subjects protected by Regulation 883/2004 who exercise their right of freedom of movement. This is justified by the fact that although these supplementary benefits 12. Article 70.3 of Regulation 883/2004 expressly excludes the application of Article 7 (suppression of residence clauses) to special non-contributory cash benefits. 13. Article 3.3 of Regulation 883/2004 provides that said Regulation shall also be applied to the special non-contributory cash benefits contemplated in Article 70. From the reading of the latter Article, it can be inferred that the term “special non-contributory benefit” is reserved for benefits which the States notify in Annex x. 33 I. GOOd LeGAL PRACTICeS In SPAnISH LAW? CLAUSeS GOVeRnInG ReSIdenCe... are non-contributory according to Article 109.3.b) of the Revised Text of the General Social Security Law, they have not been notified as special non-contributory cash benefits in Annex x of Regulation 883/2004. And it must be taken into account that only non-contributory benefits included in said Annex are non-exportable according to european Union Law, all of which is without prejudice to the fact that the Court of Justice in Luxembourg can pronounce on whether or not the governmental notification complies with european Union Law. Since, for the purposes of Regulation 883/2004, contributory pensions are exportable, the supplements to those pensions must also be exported when Regulation 883/2004 can be invoked by pensioners benefiting from said supplements. Therefore, the new Article 51 of the Revised Text of the General Social Security Law does not modify, and much less repeal, the right to the exportation of benefits enshrined in the Treaty on the Functioning of the european Union, further developed by Regulation 883/2004. In conclusion, pensioners with a recognised right to supplementary benefits and who are included in the scope of personal application of Regulation 883/2004 have a recognised right to export not only their contributory pensions but also the supplementary benefits provided that they are resident in one of the States in which the coordination Regulations are applied. Mutatis mutandi, nationals of third countries also have the right to export the supplementary benefits when Regulation 1231/2010 is applicable. 2. other cases of the non-extinction of the right to supplementary benefits for absences of more than 90 days in the calendar year Firstly, absences from Spanish territory which are due to duly certified illness are not counted for the purposes of the loss of the right to receive supplementary benefits, as this is expressly established under Article 51.2 of the Revised Text of the General Social Security Law. Secondly, it must be borne in mind that Spanish legislators have explicitly laid down that, even in the case of stays of more than 90 over the calendar year, the interested party can “certify by other means that his/her habitual residence is in Spain. For these purposes, the family situation, the existence of professional reasons which oblige him/her to travel frequently, the fact of holding a stable job in Spain or his/her intention of holding such a job may be taken into account” (Article 10.3 of Royal decree 1716/2012, of 28 december). That is, there is a rebuttable presumption of the loss of habitual 34 CRISTInA SÁnCHeZ-ROdAS nAVARRO residence when the beneficiary of the supplementary benefits is absent from Spain for more than 90 days in a calendar year, without prejudice to the fact that proof of the contrary may be accepted and, therefore, the recipient may resort to other means of proof to certify that he/she continues residing habitually in Spain, such as, for example, still being registered as a municipal resident in Spanish territory and having the obligation to pay personal income tax as a habitual resident. C. UneMPLOyMenT BeneFITS Article 51.2 of the Revised Text of the General Social Security Law establishes that “for the purposes of unemployment payments and benefits, the provisions established in the regulations shall be applicable”. This is, then, a block referral to Title III of the Revised Text of the General Social Security Law, which regulates contributory and non-contributory unemployment benefits and, specifically, the causes of the extinction and suspension of the right to said benefits, among which are “the transfer of residence or stay to a foreign country” (Articles 271 and 272 of said law) and which were reformed prior to the inclusion of the new Article 51. Today, therefore, in accordance with points f) and g) of Article 271.1 of the Revised Text of the General Social Security Law, the payment of the benefit is suspended “in cases of the transfer of residence to a foreign country in which the beneficiary declares that the purpose is to seek or perform work, professional training or international cooperation, for a continuous period of less than 12 months, provided that the departure to the foreign country is previously communicated to and authorised by the managing body, without prejudice to the application of the provisions regarding the export of benefits under european Union rules. In cases of a stay abroad for a maximum period, whether continuous or not, of up to 90 days in each calendar year, provided that the departure to the foreign country is previously communicated to and authorised by the managing body14. departure to a foreign country for a period of not more than fifteen calendar days once per year shall not be considered a stay abroad or a transfer of residence, without prejudice to the fulfilment of the obligations established in Article 299”. In the final analysis, the non-application of Article 51 to unemployment payments and benefits is an expression of the will of the legislators to maintain the recent reform of these benefits under Royal decree-Law 14. Given that competence for passive employment policies has not been transferred to the Regional Governments, the competent Managing Body is the State Public employment Service. 35 I. GOOd LeGAL PRACTICeS In SPAnISH LAW? CLAUSeS GOVeRnInG ReSIdenCe... 11/2013 (later, Law 1/2014, of 28 February) under which legislators adopted the new case law of the Supreme Court regarding the effects of temporary absence from Spain on unemployment payments and benefits. This case law, which is found, among others, in the sentences of the Supreme Court of 18.10.2012, 30.10.2012, and 3.6.2014, addresses the question of where to draw the “dividing line between a stay and residence, something which the Social Security legislature or the holder of regulatory powers in this field could have established, but which neither have done”... “the aforementioned regulatory vacuum could be filled by... systematic interpretation, bearing in mind that legislation governing foreign residents offers a delimitation which is quite strictly adjusted to the requirements of social order. Under Article 31.1 of the Basic Law on Foreign Residents, temporary residence is distinguished from a stay, beginning as from 90 days of presence. And, as has already been stated, this threshold is practically the same as that of the three months’ stay outside the territory of the member state which pays the benefit used in Regulation 883/2004”. Although this legal reasoning may be correct with respect to the specific cases presented to the Supreme Court, to generalise and extrapolate them to all of the benefits subject to the residence requirement, as does Article 51 of the Revised Text of the General Social Security Law, is much more questionable. Firstly, because it is not true that Basic Law 4/2000 sets the threshold between a stay and residence in all cases as over 90 days’ presence in Spain; there are exceptions. Specifically, Article 30.1 of Basic Law 4/2000 provides that: “a stay is presence in Spanish territory for a period of not more than 90 days, without prejudice to the provisions of Article 33 for admission for the purposes of study, student exchange, non-work practice or volunteer services”. Likewise, Basic Law 4/2000, for example, does not consider the absence of foreigners from Spanish territory to be cause for the extinction of long-term residence if the absence is “of up to six months continuously, providing that the sum of these [absences] does not exceed a total of ten months within the five years referred to in section 1, unless the corresponding departures were irregular. In the case of absence for professional reasons, the continuation of residence shall not be affected by absences from Spanish territory of up to six months continuously, provided that sum of these does not exceed a total of one year within the five years required” (Article 148.2 of Royal decree 557/2011). More exceptions can be found in Article 152 of Royal decree 557/2011. Secondly, since the Supreme Court correctly invokes Regulation 36 CRISTInA SÁnCHeZ-ROdAS nAVARRO 883/2004 with respect to the export of unemployment benefits, it should have taken into account that the most remarkable difference between the new coordination Regulation and its predecessor (Regulation 1408/71) in the field of the coordination of unemployment benefits lies precisely in the fact that, currently, unemployment payments and benefits are exportable in the territory in which european Union Law is applicable for a period of up to 6 months (Article 64.1.c) of Regulation 883/2004). This article is equally applicable to the Active Integration Income (regulated under Royal decree 1369/2006) for unemployed persons with special economic needs and who face difficulty in finding employment. Regarding its legal nature, it has been said that it forms part of the public Social Security regime’s duty to protect against unemployment, though it has a specific nature differentiated from the contributory and non-contributory level. It is a “tertium genus”. In accordance with Spanish legislation, it is a non-exportable benefit, since departure to another country to seek or perform work or for professional training or international cooperation for a period of less than six months are grounds for temporary cancellation (Article 9.3 d) Rd 1369/2006). Given, though, that all Spanish unemployment benefits are coordinated by Regulation 883/2004 and given that the Active Integration Income has not been notified in Annex x of said Regulation as a non-exportable, noncontributory special benefit, the only solution that can be reached is that it may be exported for up to a maximum of six months to the territory in which european Union Law is applicable (Article 64.1.c) Regulation 883/2004). d. BeneFIT FOR THe TeRMInATIOn OF ACTIVITy And ARTICLe 51 OF THe ReVISed TexT OF THe GeneRAL SOCIAL SeCURITy LAW Article 15.1.b) of Royal decree 1541/2011, which develops Law 32/2010, establishes that by virtue of the provisions of Article 11.1.f) of Law 32/2010, of 5 August —currently Article 340 of the Revised Text of the General Social Security Law— the right to protection for the termination of activity shall be suspended in cases of the transfer of residence to a foreign country when the beneficiary declares that it is for the purpose of seeking or performing work, for professional training or for international cooperation, for a continuous period of less than twelve months, without prejudice to the application of the provisions on the export of benefits contained in european Union rules. In other cases, the transfer of residence to a foreign country which does not comply with the 37 I. GOOd LeGAL PRACTICeS In SPAnISH LAW? CLAUSeS GOVeRnInG ReSIdenCe... above requirements will suppose the extinction of the right. Occasional departure to a foreign country for a period of not more than 30 calendar days once a year, provided that this departure is previously communicated to and authorised by the managing body, will also suspend this right. If we compare the transcribed text with the wording of the new sections f) and g) of Article 271.1 of the Revised Text of the General Social Security Law, we see that they are very similar, but not identical. The fact that, furthermore, Article 51 of the Revised Text of the General Social Security Law does not establish any specific provision for this benefit (unlike the case of unemployment payments and benefits) raises important questions. We should not forget the fact that, for the purposes of Regulation 883/2004, the regime for the export of unemployment benefits is applied equally to benefits for the termination of activity, and so these will be exportable for a period of up to six months. e. nOn-COnTRIBUTORy FAMILy BeneFITS And ReSIdenCe ABROAd non-contributory family benefits are regulated by Chapter I of Title VI of the Revised Text of the General Social Security Law. The beginning and maintenance of the right to these benefits is subordinate to the requirement of legal residence in Spain which is demanded of both the beneficiaries and of the person who gives rise to the right to the benefit. Before Law 52/2003 reformed the regulations on family benefits, the Spanish courts had been giving a flexible interpretation to the requirements for residence and cohabitation between the person giving rise to the right to the benefits and the beneficiary, in application of Convention 157 of the ILO, requiring residence only of the beneficiary. Currently, the general rule is the exclusion of children who do not reside in Spain (or in the territory of the european Union when the coordination regulations are applicable). This rule also has other exceptions based on bilateral Social Security conventions. With respect to internal legislation, the only exceptions to the requirement for cohabitation contained in Royal decree 1335/2005, of 11 november, which regulates family Social Security benefits, are the following: Pursuant to Article 9.1.2: “temporary separation for reasons of study, work of parents or foster parents, medical treatment, rehabilitation or other similar causes does not interrupt the cohabitation”. 38 CRISTInA SÁnCHeZ-ROdAS nAVARRO The concept of “temporary” separation is a vague legal concept which depends on the duration, which may be longer or shorter, of the studies or of the medical treatment and rehabilitation, concluding with a final clause which is a catch-all: “other similar causes”. The sloppy drafting of this clause raises the question of whether or not these justified causes of temporary separation which do not interrupt cohabitation absolve both the beneficiaries and the persons giving rise to the right to the benefit from the requirement to maintain their legal residence in Spain. At all events, and in accordance with the provisions of Article 10.1.a) of Royal decree 1335/2005, the residence requirement in Spain is considered to be fulfilled even when there is an interruption of cohabitation for reasons of the work of the beneficiaries “in the case of workers transferred by their company outside Spanish territory, who are in a situation similar to that of being registered and contributing under the corresponding Spanish Social Security regime”. As regards european Union Law, it should be recalled that provisions on the coordination of family benefits are contained in Chapter 8 of Regulation 883/2004. The purpose of the chapter is, fundamentally, to prevent a Member State from making the concession or amount of family benefits depend on a residence requirement placed on members of the family of the worker in the State which grants said benefits, thereby guaranteeing the exercise of the right of freedom of movement. For the purposes of Regulation 883/2004, co-ordinated Spanish family benefits (those regulated under Article 351 of the Revised Text of the General Social Security Law) are classified as non-contributory Social Security benefits and are not included in Annex x of Regulation 883/2004 (and they are not, therefore, special non-contributory benefits for the purposes of Regulation 883/2004, unlike non-contributory Spanish Social Security retirement and invalidity benefits). The principle of the export of benefits enshrined in Regulation 833/2004 has never been applicable to family benefits. The explanation is very simple: in the case of the payment of family benefits for children who do not reside in the State competent for their payment, the beneficiary does reside in the territory of the competent State; and so this is a case of the equal treatment of the residence of family members. This is the reason why Article 67 of Regulation 883/2004 states that “a person shall be entitled to family benefits in accordance with the legislation of the competent Member State, including for his family members residing in another Member State, as if they were residing in the former Member State”. 39 I. GOOd LeGAL PRACTICeS In SPAnISH LAW? CLAUSeS GOVeRnInG ReSIdenCe... Although there may be entitlement to family benefits for family members who do not reside in the territory of the Member State which pays the benefit, it must be underlined that, at all events, the residence must be in one of the States where european Union Law is applicable, as has already been established by the Court of Justice in the Fahmi case15. To conclude, it should be noted that the national Social Security Institute published its Circular 4/2006, of 11 October, on the application of rules on Social Security family protection, “which has not been modified since the entry into force of Community Regulations 883/2004 and 987/2009, however they continue to be applied, though the references to Regulations 1408/71 and 574/72, are understood to be made to the new Regulations”. F. InTeRnATIOnAL SOCIAL SeCURITy COnVenTIOnS And SPAnISH FAMILy BeneFITS: exCePTIOnS TO THe ReqUIReMenT OF THe ReSIdenCe OF FAMILy MeMBeRS In SPAIn OR In THe eUROPeAn UnIOn To resolve the question of whether it is possible to receive family benefits without meeting the requirement laid down in internal regulations regarding residence in the national territory of the persons giving rise to the right to the benefit, national Social Security Institute Circular 4/2006, 11 October, is a key text. This Circular is headed “Instructions for the application of the rules on family protection under the Social Security system” and it contains specific provisions with respect to family members resident in other countries by which Spain is bound by international rules, with two cases being contemplated: Community Regulations (already analysed in the previous section) and bilateral conventions. It is with respect to the latter, developed in section 14 of the Circular, where the surprises arise and, specifically, section 14.2 not only lists the bilateral conventions signed by Spain which include family benefits within their scope of application, but on page 43 of Circular 4/2006, it is explicitly stated that “in the application of these Conventions, except that with Australia, the residence of the child or, if applicable, the foster child, in the other signatory State of the bilateral regulation shall be considered 15. Judgement of the CJeC of 20.3.2001, –33/99, (Fama y esmorís Cerdeara-Pinedo Amado) Rec.; p.I-2452: “if the children of a Moroccan worker do not reside in the Community, neither the Moroccan worker concerned nor his children can rely, in regard to benefits such as those which constitute the object of the main procedure, on the principle of the prohibition of discrimination established in Article 41, sections 1 and 3 of the Cooperation Agreement”. 40 CRISTInA SÁnCHeZ-ROdAS nAVARRO residence in national territory”, and it adds “it is important to highlight that these international rules only refer to the residence of the person giving rise to the right to the benefits, not to the beneficiaries...”. In other words, failing to meet the residence requirement in Spain of the children or foster children contained in Article 182.1.b) of the Revised Text of the General Social Security Law, the workers covered by the scope of application of the international conventions which so provide, may be beneficiaries of the monetary benefits with respect to the children or foster children in their care, even though these may reside in Brazil, Canada, Chile, the dominican Republic, Morocco, Paraguay, Peru, Russia, Tunisia, the Ukraine or Uruguay. And the new Article 51 of the Revised Text of the General Social Security Law cannot, in any way, repeal or even modify an international convention which is in force. G. HeALTHCARe Article 51.3 of the Revised Text of the General Social Security Law provides that: “for the purposes of the maintenance of the right to health benefits for which residence in Spanish territory is required, it shall be understood that the beneficiary of said benefits has his/her habitual residence in Spain even though he/she has spent periods abroad, provided that these do not exceed 90 days in the calendar year”. The first criticism that this clause attracts is its confusing wording, since it uses the term “beneficiary” without taking into account that Article 3 of Law 16/2003, on the Cohesion and quality of the national Health Service, when describing its scope of application, differentiates between the “insured” and the “beneficiary of an insured”. And so, interpreting this third section of Article 51 of the Revised Text of the General Social Security Law strictly, the group of persons to whom the reform is applicable is substantially restricted, even though that was certainly not the intention of the legislators. Secondly, it is evident that Article 51.3 of the Revised Text of the General Social Security Law cannot be applied literally, since the Informative note of the Sub-directorate General for Legal Assistance and Organisation of the national Social Security Institute of 30.1.2014 “On the Regulatory Changes Contained in Law 22/2013” recalls the existence of an important exception: “however, in application of Article 7.2a of Royal decree 1192/2012 and of Regulation 883/2004, it shall be understood that the beneficiaries of an insured meet the residence requirement when they reside in the territory of any Member State of the european Union, the european economic Area or in Switzerland”. 41 I. GOOd LeGAL PRACTICeS In SPAnISH LAW? CLAUSeS GOVeRnInG ReSIdenCe... Given that Article 7.2 of Royal decree 1192/2004 lays down that the fact of ceasing to reside in the territory does not carry with it the loss of status as a beneficiary when this is established under applicable “international rules”, together with the fact that the Informative note of the national Social Security Institute states that, in these cases, residence has to be in territories in which european Union Law is applicable, we are obliged to conclude that the legislators have erroneously classified european Union Law as International Law, which it is not. 1. health benefits which require residence in spanish territory Article 51.3 of the Revised Text of the General Social Security Law is not intended to apply to all of the insureds and beneficiaries of health benefits in Spain, as its scope of application is much more restricted: the “health benefits for which residence in Spanish territory is required”. In other words, the 65th Additional Provision of the Revised Text of the General Social Security Law is not applicable to the insureds and the beneficiaries listed in Article 3.2 of Law 16/2003, on the Cohesion and quality of the national Health System, whose right to health benefits is not dependent on residence, which is the case of “employed or selfemployed workers affiliated with the Social Security system and who are registered as active or in a similar situation; Social Security pensioners; and recipients of any other periodical Social Security benefit, including unemployment payments and benefits”. With regard to the situations which are similar to being registered as active for the purposes of the right to healthcare, we must consider the Ministerial Order of 27.1.1982, on the scope of situations similar to registration as active in the case of workers employed by Spanish companies—and their family members—who are transferred abroad. With regard to this particular case we must cite Article 3.3.b) of Royal decree 1192/2012, which waives the requirement to have authorised, effective residence in Spain for “those persons who temporarily come to Spain and are in the charge of workers transferred by their company outside Spanish territory, provided that they are in a situation similar to being registered as active, and are contributing under the corresponding Spanish Social Security regime”. In another line of thinking, and as a hypothesis, the possibility is put forward that the legislators’ objective was to apply the new Article 51.3 of the Revised Text of the General Social Security Law to a single case: the unemployed who have exhausted their unemployment payments or benefits and other similar benefits. This conclusion is reached on the basis that it is Law 22/2013, the 48 FRAnS PennInGS persons concerned should be activated to make as little use of the benefit as possible by taking responsibility for themselves4. Additionally, disability benefits were being paid more generously than intended5. In order to find a solution for the mass redundancies in dutch workplaces in the 1970s and 1980s, in a considerable number of cases disability benefits were awarded to persons who otherwise would have been terminated6. Of course, such workers had to be disabled to some extent, but in practice they received full benefits even in cases of a minor degree of disability. Since often the assessing doctors of the benefit administration made the decision on the basis of the file of the person only, access was made very easy7. These examples demonstrate how sometimes the costs of particular decisions were shifted to the benefit system. Of course it was undertaken to change the rules, lower benefits, put fines on abuse etc., but in fact claims to the system kept growing continuously. Therefore it was thought that the problem had to be approached in a different way: it was better to re-arrange the responsibilities in the total system8 and those who could influence the risk of becoming ill or disabled should be given incentives to reduce that risk9. Since up until then the employer and employee associations, with regard to benefit administration, did not have the necessary incentives to reduce recourse to the benefit system, they were completely removed from benefit administration10. After a short period in which it was thought that the system should be 4. Parliamentary papers proposing the obligation of the employer to pay wages during sickness, Papers 1992/93, 22899, no 3. 5. L.J.M. Aarts & R.V. Burkhauser, Curing the dutch disease: an international perspective on disability policy reform. Avebury: Aldershot, 1996. 6. Kamerstukken II 1992/93, 22 730 (Parliamentary Report of a Parliamentary Investigation Committee). 7. Kamerstukken II 1992/93, 22 730 (Parliamentary Report of a Parliamentary Investigation Committee). 8. See Social economic Council, Verantwoordelijkheidsverdeling sociale zekerheid (distribution of Responsibilities in Social Security), The Hague: SeR, 1994. The Social economic Council is a tripartite (i.e. consisting of representatives of employers and employees organizations and independent experts appointed by the minister of social affairs) with the task (inter alia) to advice the government on socio-economic issues. 9. WRR-rapport Belang en Beleid. naar een verantwoordelijke uitvoering van de werknemersverzekeringen, (Scientific Council for Government Policy, Interest and policy, towards a responsible administration of the employees insurance schemes). den Haag: SdU-uitgeverij, 1994. 10. Act Suwi (Act on the administration of work and income), OJ 2001, 264. 49 II. THe dUTCH APPROACH TO RedUCe CLAIMS On SOCIAL SeCURITy BeneFITS privatized (private insurance companies should have the responsibility to administer some acts, e.g., disability, sickness), the government decided that the system should remain public, with strict supervision and control by the Ministry of Social Affairs11. One major rationale for this conclusion was that assessing incapacity for work is such an essential element of the benefit system that public responsibility should be maintained12. It cannot be left to private companies, the more so since they have a conflict of interest in wishing to reduce benefit costs13. With this objective the Uitvoeringsinstituutwerknemersverzekeringen (Benefit administration employees’ schemes), abbreviated as Uwv, was finally established. This is now a national organization that administers the disability, sickness and unemployment benefit schemes (plus some minor schemes)14. Thus the conditions for benefits are still governed by the law and the rights of the beneficiaries are not changed in comparison to the previous situation. Instead, the way the responsibilities are organized varies according to the type of benefit. II. protectIon In case of sIckness In the area of sickness, the new approach materialized in the introduction of the statutory obligation for employers to continue to pay wages when an employee falls ill. It started with the introduction in 1994 of the rule that employers had to continue to pay wages during the first six weeks of illness (for small enterprises, as defined by the Law, i.e. having fewer than 15 employees, the period was two weeks)15. The assumption underlying the new Act was that if employers were responsible for the income provision during sickness, they would check more carefully whether an employee was rightfully absent16. Another effect that was expected from the new Law was that employers would take measures to reduce the risk 11. R.J. van der Veen, ‘L’histoire se répète? Honderd jaar uitvoeringsorganisatie sociale verzekeringen’, (The history is repeated? 100 years of administration of social insurance schemes), in: A. Jaspers et al(ed.), ‘de Gemeenschap is aansprakelijk…’. 100 jaar sociale verzekering 1901-2001’, den Haag: Koninklijke Vermande, 2001. 12. Idem, p. 78 P. Fluit, Verzekeringen van solidariteit. (Insurances of solidarity). deventer: Kluwer, 2001.See for a general overview of the system also F. Pennings, dutch Social Security Law in an International Context. The Hague: Kluwer Law International, 2002. 13. Idem. 14. It is regulatedby a new Act, Structuuruitvoeringsorganisatie werk en uitkomen (Suwi). 15. Sickness Absence (Reduction) Act, Law of 22 dec. 1993, Stb. 750. 16. B. Hofman and F. Pennings, Privatisering en activering in de nederlandse sociale zekerheid en solidariteit – een internationaal perspectief, deventer, 2013, p. 37 ff. 50 FRAnS PennInGS of injury or sickness caused by dangerous conditions17. The construction sector, in particular, was an area where many measures could be taken to reduce the number and effects of accidents18. even though there was a separate Health and Safety Act, the new sickness provisions encouraged additional efforts to prevent accidents and sickness. Although it was not clear whether the Sick Pay Law really had the desired effect, two years later the employers’ responsibility to pay wages to their ill employees was extended to a period of fifty-two weeks19. This extension occurred through a law that amended, inter alia, the Civil Code in order to give ill employees the legal right to 70% of their wages for up to fifty-two weeks20. In collective agreements,the parties often stipulated that this statutory minimum was to be supplemented to make up the full wage21. How this was done varied from one collective agreement to another22. This process of replacing the right to sickness benefit with an obligation on the part of the employer to pay wages to ill employees (sick pay) is sometimes called the privatization of the Sickness Benefits Act—although it is not a real privatization, since the Acts clearly defined the obligations of the employer and the rights of employees23. Still, the employer is entirely responsible for the costs and, although the Civil Code provides strict standards,the employer can supplement these laws by additional rules in order to carry out his responsibilities24. However, these rules must fit within the framework of the statutory obligations, and can be tested in court. employers can buy private insurance to cover their risk, but they are not obliged to do so. In order to allow a smooth introduction of the act and to gain a new, vast market, the joint insurance companies decided to make no assessment of the health condition of the employees when an 17. Idem. 18. For instance by stronger enforcement of the rules, such as wearing helmets, safety shoes and protection barriers when working on high level sites. Also a policy to avoid sickness due to stress or conflicts at work could contribute to lower costs. 19. Continued Payment of Salary (Sickness) Act, Law of 8 Feb. 1996, Stb. 134. 20. Cite. 21. See also W. Fase et al, Sociale zekerheid: privaat of publiek? (Social security: private or public?) deventer: Kluwer, 1994. 22. Because of these variations it is difficult to say how many workers were thus guaranteed 100% of their former wage. 23. See on the concept of privatization also U. Becker, and F. Pennings, ‘Privatization and Activation: Introduction’, in: U. Becker, F. Pennings and T. dijkhoff, International Standard-Setting and Innovations in Social Security, Alphen a/d Rijn: Wolters Kluwer, 2013, p. 381. 24. See article 7:629 of the Civil Code. 51 II. THe dUTCH APPROACH TO RedUCe CLAIMS On SOCIAL SeCURITy BeneFITS employer took out insurance (these insurances cover all employees, so the employer cannot choose who he wishes to be insured).25 When the risk was only six weeks, employers often bore the risks themselves, but when the fifty-two-week period was introduced, they bought insurance on a larger scale26. In the insurance rules, there still often is a risk period borne by the employer himself, e.g., for the first six weeks, or when the absence for leave is for longer than a certain period (‘stop loss insurance’) The Sickness Benefit Act has not been abolished and still applies to those who do not, or no longer, have an employer. An example of the first group is flexible workers, the other group is the unemployed27. For them, the Act serves as a safety net. As the new rules may have the effect that employers would be unwilling to employ persons who may have a higher risk of becoming ill, the Act on Medical examinations was introduced in 1997, restricting medical examinations in recruitment procedures. It prohibits medical examinations as a standard routine; only if the job has specific health requirements (e.g., pilots), is medical examination permitted28. The purpose of this Act was to reduce the risk that chronically ill persons may never get work in the future. In addition to this change in benefit rules, the Law on Conditions at the Workplace was amended in order to introduce more stringent obligations on the part of employer to improve working conditions29. Better working conditions were meant to reduce the number of accidents. In addition, the employer had to develop a policy with the aim of reducing sickness in the work place30. To this end, employers are obliged to make an inventory of all situations that could potentially endanger the health and safety of their employees31. However, the mere obligation of the employer to continue to pay the wages of his ill employees still did not, in the view of the government, 25. Appendix to advice of Social economic Council, Advieskabinetsvoornemens ZW, AAW en WAO, The Hague, 1995, p. 267. 26. T. Veerman and J. Besseling, Prikkels en privatisering.den Haag: elsevier, 2001, p. 27. 27. Unemployed persons are also covered for sickness, even though that may not lead to a different income, since they may be disqualified for unemployment benefit during sickness. In addition, in case of long-term sickness, when they are not able to work again full-time, these persons may qualify for disability benefits. These benefits are financed by contributions paid to the sickness and disability funds. 28. See e. de Vos and others, evaluatie wet op de medische keuringen, (Assessment of the Act on medical examinations), den Haag: Zon, 2001. 29. Article 685 of the Civil Code. 30. Health and Safety Act. 31. Health and Safety Act, Article 5. 52 FRAnS PennInGS result in sufficient reintegration efforts by employers.32 One reason was that private insurance compensated the financial effects of the employer’s obligation to pay wages. Another reason was that employers sometimes considered the reintegration measures to be more expensive or bothersome than continuing to pay an ill employee’s wages. This led to the Gatekeepers Act.33. The Gatekeepers Act’s purpose was to narrow access to the disability Benefits Act.34. This Act requires employers and ill employees to undertake reintegration efforts if illness is expected to last for a long period (of course, in most cases of illness, such as colds, no measures are necessary)35. Thus, if an employee is expected to be ill for more than six weeks, both the employee and the employer are obliged to make a plan for reintegration.36 The plan can entail, for instance, that the workplace of the employee is adjusted to his or her impairments, and/or that training or work experience in another position have to be tried. Subsequently, the employer and employee have to meet on a regular basis to see how the reintegration efforts are progressing and if the reintegration plan has to be adjusted37. each party can oblige the other to cooperate; if necessary, cooperation can also be enforced by legal means38. Three months before the employee applies for disability benefits, the benefits administration, i.e. the Uwv mentioned above, assesses whether the reintegration activities have been sufficient39. For this purpose, the employee has to produce a report on the reintegration activities that have been undertaken40. If the employer’s actions are considered insufficient by the benefit administration, itextends the employer’s obligation to pay wages (for a maximum of twelve months)41. Thus, the employer may have to pay wages for three years in total. If the employee has not cooperated satisfactorily, he or she can be refused disability benefits for a certain period, which is regulated in the disability Benefits Act.42. 32. Memorandum to Wet Verbetering poortwachter, (Gate keepers Act). 33. OJ 2001, 628. 34. Memorandum to Wet Verbetering poortwachter, (Gate keepers Act). 35. Article 658a Civil Code. 36. Regeling procesgang eerste en tweede ziektejaar (rules on requirements in the first and second year of sickness), Stcrt. 2002, nr. 60, as amended. 37. Idem. 38. Article 658a Civil Code. 39. Regeling procesgan geerste en tweede ziektejaar (rules on the requirements in the first and second year of sickness), Stcrt. 2002, nr. 60, as amended. 40. Idem. 41. Article 7:629(11) Civil Code. 42. Article 30 of Wet werk en inkomen naar arbeidsvermogen, (the disability Act). 53 II. THe dUTCH APPROACH TO RedUCe CLAIMS On SOCIAL SeCURITy BeneFITS A disadvantage of organizing social protection at a lower level and in various places (such as employers) is that it is difficult to compile good research data on the present situation. However, in general, few problems are reported on the actual payment of sick pay by employers. Strict labour laws and dismissal law shave narrowed the employers’ possibilities of escaping obligations to a minimum. We mentioned already the Act on medical assessment during recruitment that is meant to reduce risk selection. Another example is that of the dismissal law, which includes the rule that notice, in principle, cannot be given during an employee’s first two years of sickness43. Still, employers can try to reduce their risks by carefully selecting employees and dismissing persons who are often ill during a period in which they have reportedly recovered. To what extent this happens is difficult to identify and to research. If such behaviour amounts to discrimination, this is forbidden by provisions that prohibit discrimination of the disabled44. However, in practice it is difficult to prove that in a particular situation the treatment was grounded on disability. In addition, the risk of having to continue to pay wages to sick employees has often led employers to offer contracts for a finite period instead of an indefinite period, or to make use of engaging agencies for temporary work45. As a result of the Gatekeepers Act, larger firms developed comprehensive policies for ill employees to make them employable in other work46. Still,very many employers are obliged by the benefit administration to pay an extended period of sick pay beyond the first two years, since they were considered to have undertaken insufficient activities to re-integrate a sick employee into work47. In any case, this new system strictly encourages sick employees and employers to undertake re-integration into work, and the sanctions are quite severe in cases of negligence. Since the success of re-integration is greatest when an employee is still employed by his employer (which is 43. Article 7:670 Civil Code. 44. Wet gelijke behandeling op grond van handicap of chronische ziekte (Act on equal treatment on grounds of disability or chronic disease), OJ 2003, 206. 45. A new law since 2014 requires employers whose former employees become ill or disabled to pay a contribution that is based on the costs of the benefits for these employees. This was introduced to make it less attractive to make use of flexible workers (see Parliamentary Papers, Wet beperking ziekteverzuim en arbeidsongeschiktheid vangnetetrs) (Act to restrict sick leave and disability of persons in the Sickness Benefits Act), TK 2011-2012 33.241, nr 3. 46. F. A. Reijenga and others, evaluatie wet verbetering poortwachter (poortwachter Assessment research of gate keepers act), The Hague: Astri, 2006. 47. See previous note. 54 FRAnS PennInGS the case during the first two years of sickness, where labour law gives a general prohibition to dismiss the ill employee), this is a cornerstone of present day dutch social security policy48, where the idea of “activation” has become much more important. In all, employers have been made fully responsible for sick pay for a period of up to two years. The minimum rules are provided in the Civil Code, from which no exception is possible. III. the new dIsabIlIty benefIts act of 2004 Since the WAO (the disability Benefit Act) continued to have problems with high numbers of new entrants and only a few beneficiaries leaving the benefit scheme, a new structural approach was followed in the new disability Benefits Act (2004)49. In this approach, the priority of work above benefit was stressed, and for this purpose, the Act introduced several new instruments50. The Act makes a distinction between groups of claimants: (A) who are permanently disabled to at least 80%; and (B) who are either not permanently disabled, or who are permanently disabled to a lesser extent than 80%51. The former group (Group A) deserves, in the view of the legislature, a generous disability benefit; measures to help them to get back to workare not considered relevant to this group52. Persons belonging to this group receive a benefit of 75% of their former wage53. Those who are permanently 48. We can describe the main points only, and cannot describe all dimensions of this new approach. It should only be noted here that committees supervising international instruments (like ILO convention 121 and the european Social Charter) have been very critical of this paradigm shift from general solidarity to the individual responsibility of the employer, see F. Pennings, ‘Privatization and Activation in the netherlands’, in U. Becker, F. Pennings and T. dijkhoff (ed), International Standard-Setting and Innovations in Social Security, Alphen a/d Rijn: Kluwer Law International, p. 443- 456. 49. This Áct was preceded by a report by a parliamentary committee, Adviescommissie arbeidsongeschiktheid (Commission donner), Werk maken van arbeidsgeschiktheid. den Haag: SdU, 2001. 50. See on the Act also B. Barentsen, Arbeidsongeschiktheid: aansprakelijkheid, bescherming en compensatie. Kluwer: Kluwer, 2003. 51. The assessment is done by a comparison of the physical and psychological deficiencies due to medical conditions and a database of job descriptions (whether there are vacancies is irrelevant) with the purpose of determining how much a person can still earn; see Schattingsbesluitarbeidsongeschiktheidswetten (Assessment decree for disability benefit acts). The more a person can earn, the lower the disability rate. 52. These are often called re-integration measures. 53. Up to a ceiling, currently 4137 euro a month. The maximum benefit is 75% of 55 II. THe dUTCH APPROACH TO RedUCe CLAIMS On SOCIAL SeCURITy BeneFITS disabled to at least 80% (the incapacity rate) are entitled to the benefit for the permanently disabled. The second group (Group B) is made subject to conditions and rules meant to reinforce their activation back into the workplace54. In order to be eligible for disability benefits, claimants must be disabled more than 35%55. These persons receive a wage-related benefit if they satisfy conditions relating to their employment history, and the duration of benefits depends on their employment history56. The rules for entitlement and duration of this benefit follow those of the Unemployment Benefits Act, which is discussed in more detail below. The benefit for Group B claimants is 70% of the previous wage57. After the right to this benefit has expired (or if the claimant is not entitled to this benefit because of an insufficient work record), a so-called‘wage supplement benefit’ is payable, on condition that the claimant earns an income of at least half the residual earning capacity58. This is a provision that until this point had not been found in disability schemes. Thus, if a person is supposed to have an earning capacity of 1,000 euro per month, he or she must have an income from work of at least 500 euro per month in order to be eligible for the wage supplement. The idea behind this rule is that it must be made as attractive as possible for the person concerned to (re)start or to continue working59. The level of the wage supplement is 70% of the difference between the individual’s previous earnings and his residual earning capacity60. Thus, if a person earned 2,000 euro a month and is now able to earn1,000 euro, the wage supplement is 700 euro. This is payable regardless of how much he earns (at least up until the amount of 1,000 euro, the residual earnings capacity)61, again making it attractive to take up as much work as one can. this amount (which is gross income), Article 17 of the Wet financiering Sociale verzekeringen (Act on financing of social insurance). 54. Wet werk en inkomen naar arbeidsvermogen, (the disability Act). 55. Idem. 56. Idem. 57. Up to a ceiling, currently 4137 euro a month. The maximum benefit is 75% of this amount (which is gross income), Article 17 of the Wet financiering sociale verzekeringen (Act on financing of social insurance). 58. Wet werk en inkomen naar arbeidsvermogen, (the disability Act), article 59 and following. 59. Memorandum to Wet werk en inkomen naar arbeidsvermogen, (the disability Act). 60. Wet werk en inkomen naar arbeidsvermogen, (the disability Act), Article 59. 61. If one earns more than this amount for more than a year, the assessment of disability will be adjusted, and thus also the benefit will be adjusted, Wet werk en inkomen naar arbeidsvermogen, (the disability Act), Article 56(3). 56 FRAnS PennInGS In other words, it is beneficial to work as much as possible, since income is not deducted from the benefit received. The claimant who, upon expiry of his wage-related benefit, does not satisfy the condition that he or she earns at least 50% of his or her remaining earning capacity, is eligible instead for a low benefit, which, in the case of full disability, is 70% of the statutory minimum wage62. In cases of partial disability, the level depends on the incapacity rate63. Persons who are incapacitated to a level of less than 35% are not eligible for benefits64. It was the view of the legislature that their incapacity rate is so low that they should be able to work65. Thus, there is now a consistent approach, elaborated in specific (and for each type of scheme) new rules for reducing the claims to sickness and disability. Under this approach, during the sickness period, employer and employee must do everything possible for the latter to stay in or return to work. The hope is that most workers can still do adjusted or other types of work in a modified workplace if necessary. If after two years the employee is not able to earn at least 65% of his or her pre-sickness income, the disability benefit scheme encourages keeping and/or seeking work as this leads to a higher benefit. From evaluations of this program66, it appears that the number of new entrants for benefits has been much lower than under the old disability Act, although whether those who are disqualified actually find work is not so clear. The Act is still rather young, so there are no clear research results yet available. employers have the possibility to opt out of the disability scheme, but are not obliged to do so67. ‘Opting out’ is maybe not a good term, since opting out here is limited to no longer having to pay contributions to the scheme. Therefore,the term ‘own risk bearer’ is used. Instead of paying (the major part of) contributions, the employer bears the financial risks of the disability benefits (for the partially disabled and not permanently fully disabled, or group B mentioned above) for the first ten years of disability68. The decision on granting and terminating the right to benefits is still in the hands of the public benefit administration, and the statutory 62. Wet werk en inkomen naar arbeidsvermogen, (the disability Act), Article 62. 63. Idem. 64. Article 61(6) Wet werk en inkomen naar arbeidsvermogen, (the disability Act). 65. See on the Act also B. Barentsen, Arbeidsongeschiktheid: aansprakelijkheid, bescherming en compensatie. Kluwer: Kluwer, 2003. 66. B. Cuelenaere and others, Onderzoek evaluatie Wia (Assessement of the Wia Act), Leiden: Astri, 2011. 67. Chapter 9 of Wet werk en inkomen naar arbeidsvermogen, (the disability Act). 68. Article 82 WIA. 57 II. THe dUTCH APPROACH TO RedUCe CLAIMS On SOCIAL SeCURITy BeneFITS rules on benefits also apply69. The employer pays the benefit, and this has the advantage for the employer of paying lower contributions. After the first ten years of benefit payment to a person, the benefit administration takes over the costs of the benefit for that person70. An employer may buy private insurance for the costs of the first ten years of benefit. Usually, employers buy private insurance when they decide to bear their own risk. These insurance policies are often adjusted to the individual enterprise concerned, and little is known to outsiders on the conditions, price and use.Own risk bearers are responsible for reintegration activities of the persons for whom they bear the risk71. Thus, they can influence their risk and if they succeed in getting a person back to work, they have the ‘profit’ of this work. Remarkably, own risk bearers have the statutory power to impose a sanction, i.e., to reduce benefits in level during a certain period, if the beneficiary does not sufficiently cooperate with the re-integration activities72. Since this measure is an element of public law, the employer can, for this purpose, be seen as a body of public law and subject to the rules of the General Act on Administrative Law73. This causes a rather strange effect, but these powers fit in a system whereby the employer administers (partly) an act of administrative law. This means that the system for motivating decisions and the possibilities of asking for review and appeal to the administrative court also apply (even though generally private law —labor law— is applicable to the relationship between employer and employee)74. In conclusion, disability benefits provide strong financial incentives for beneficiaries to return to work. employers are not directly involved (except when a claim is made), but they can be involved by deciding to bear their own risk. In that case, the decisions on benefits are still made by the public benefit administration. IV. dutch unemployment benefIts The current Unemployment Benefits Act was adopted in 198675. It 69. See F. Pennings, ‘Kunnen eigenrisicodragers wel hun eigen risico beïnvloeden?’, (Can own risk bearers really bear their risk?), Tijdschrift recht en arbeid, 2014, nr. 52. 70. Article 82 WIA. 71. Article 27(6) WIA. 72. Article 89 WIA. 73. This follows from the fact that the power is given by an Act and that the own risk bearer in fact replaces the Uwv. 74. Idem. 75. See for the history also F. Pennings, Benefits of doubt. A comparative study of the 64 FRAnS PennInGS not included in the basic insurance. These supplementary insurances are not compulsory, but for the companies they are attractive, as they are often much more profitable than the statutory insurances. Insurance companies are allowed to refuse applicants for supplementary insurance. For supplementary insurance, many companies require that the basic insurance is also accepted from their company, so that selection of the supplementary scheme can thus influence the possibility of moving to another insurance company. As we have already seen, the insured person has to pay the contribution of the insurance contract s/he has chosen; this contribution is the same for all those who have bought this insurance from this insurance company. no differences are allowed, e.g., for risk level or for age. Between companies, however, the contribution rates may vary. The contribution is a flat-rate one, so it does not depend on income. The contribution can, however, be lower if the applicant has opted for a higher risk to be borne by him or herself (up to 500 euro a year) in addition to the compulsory statutory own risk borne by the insured (350 euro a year). Some insurance companies provide for a so-called collective contract. Under this approach, which applies to employees of a particular firm, for members of a football club or trade union, or for an association of patients,there is no limit to the type of unit with which an insurance company can make an agreement. On the basis of the contract, reductions to the contribution can be offered to the members of the collective contract up to a maximum of 10%. Persons under 18 years of age do not have to pay contributions, and persons on a low income can receive a compensation for paying the contribution, paid by the Tax office. In addition, a wage-related contribution is paid by the employer to a risk equalization fund. This fund compensates an insurance fund if it has persons of higher than average risk. It was feared that otherwise particular funds would try to discourage persons of high risk, such as the chronically ill, from buying insurance. In 2012, the government announced that it would gradually reduce the sums payable under the system, as it appears that it does not sufficiently encourage insurance companies to buy care efficiently, since they are compensated anyway. For this reason, the equalization will take place ex ante only, i.e., on the basis of specified characteristics of the clients. The contents of the health care to be provided are still defined by statutory rules, but the administration of the health benefits is by private organizations. Thus, this system maintains a tight balance between solidarity and room for making profit. Its purpose is to introduce efficiency 65 II. THe dUTCH APPROACH TO RedUCe CLAIMS On SOCIAL SeCURITy BeneFITS into the system (with market instruments) and still provide a sufficient and affordable system for all residents. VI. conclusIons regardIng dutch benefIt system In this description of the dutch system, we have not described all the benefits (e.g., family benefits and survivor benefits are not mentioned), but a major part. Sickness and disability benefits have been refocused in the past decade to encourage persons to stay or reintegrate into work. For sickness benefits this has been done by giving the full responsibility to the employer (while carefully defining the statutory framework for the powers and obligations of the employer). Although employees certainly feel the effects of this change and have clear obligations for cooperating in re-integration themselves, the major focus is on the employer, who no longer benefits from the solidarity of other employers that was previously organized in the Sickness Benefits Act. With disability, the focus is more on the employees. After the wagerelated period, they are encouraged by financial incentives to take up work. These persons will first have had a period during which they and their employer had to undertake re-integration activities. After this, the employee can, as long as there is an employment relationship, require the employer to plan for reintegration, which may cause the employer to feel the effects of the disability act. As a result of this system, disabled persons with better chances on the labour market receive a higher benefit. Thus, the system does not merely respond to differences in disability, but other factors —such as having a (cooperative) employer, having a network, being ‘employable’, being motivated and sufficiently qualified— play an important role. Unemployment benefits have also undergone an important change in terms of prevention. Since 2006, after a decision of the employer to dismiss an employee, the latter is admitted to the benefit system if the other conditions are fulfilled. Here, the benefit system is used to serve as “oil for the labor market”— workers should be encouraged to go where they are needed, and may make use of the benefit in the intermediary period. Currently, the Government has asked the Social-economic Council to investigate whether incentives, such as for sick pay, can be introduced as well for employers to keep their employees fit for work (‘employable’) during their employment relationship, so that they can more easily find a job when they are dismissed. In case of unemployment, it is more difficult to impose measures on employers which dismiss employees, since these include companies with economic problems. With respect to the Health Care Insurance Act, one must acknowledge 66 FRAnS PennInGS that, first of all, solidarity has increased, since until this Act only employees up to a certain wage were compulsorily insured. The present system covers all residents. Since the companies compete with each other, it is not a solidarity system as such. However, the government keeps a strict control on maximum contributions and rises in premiums. By having lower contributions for those who accept their own high risks, by making special insurance products for those with academic degrees, and by means of special supplementary insurances, companies try to select more attractive clients. The prohibition of risk selection (even in the case of a new choice for a company) and the obligation to charge the same contributions of all buyers of the same insurance product are also important elements of solidarity. Furthermore, the obligation of the employer to pay a wagerelated contribution and the risk equalization fund achieve solidarity, this time between the companies, as they share responsibility for the heavy risks. Here we see a tension, however, since the question is whether it hinders effective working of the insurance market, as such a fund does not fit well with profit-making companies. Thus the approach does not lie in continually changing the rules, or applying the rules more strictly or less strictly in order to be more efficient and to save money, since the actors in society will try to shift their costs to the collective funds if such a possibility exists. This must not be seen as immoral behaviour, but as a rational approach —at least at an individual level— so therefore a rational response is required. Such a rational response can lie in putting the responsibilities at the most basic level, with those who are directly concerned. Thus they will organize an adequate approach. This can differ from benefit to benefit: i.e. the approach in case of sickness differs from unemployment, disability and health care. It is important that employees not be negatively affected and that thus, for instance in the case of sickness, the method of assessing sickness, the level and duration of sick pay, the grounds for exclusion and sanction, and the exceptions to the obligation to pay sick pay are strictly defined. In addition, labour law should not allow escape routes (such as dismissal), and there must be a quick and accessible court system. If this exists, the system does not deprive employees from their rights, but it encourages employers to do much more to prevent sickness and help people back to work. In this respect the outcome is positive overall: it does not rely on public finances, and people find work that they can still do. There may still be problems in some areas, especially in case of persons who are often ill who may be dismissed during periods of recovery. There is also a tendency for employers to avoid permanent employment contracts and 67 II. THe dUTCH APPROACH TO RedUCe CLAIMS On SOCIAL SeCURITy BeneFITS to prefer short-term contacts of temporary agency workers instead. The government has now introduced a system where employers have to pay a higher contribution for sick pay if their former employees become sick or disabled. In this way it is hoped that the share of flexible work is reduced. The last example shows that the system will never be perfect. It is also quite uncertain whether it can be exported to other countries, as systems vary immensely and also the system of labour law is decisive for its success, which system may be different from country to country. The last issue is that detailed data on income effects, on people returing to work, on the quality of work, etc., are missing. Still, I hope that developments in the netherlands are useful for a discussion on how a system can be shaped in terms of distributing responsibilities, and thus influencing costs, while basically leaving the rights of the claimants intact. 69 III . dOeS THe BULGARIAn LABOUR And SOCIAL SeCURITy LeGISLATIOn... Chapter III does the Bulgarian Labour and Social Security Legislation help to combat the economic crisis?1 Prof. dr. Krassimira Sredkova Sofia University “St. KlimentOhridski”(Bulgaria) I. IntroductIon The development of the law as a regulator of social relations is a dynamic phenomenon, which is determined by changes in socio-economic, social and political relationships. Legal reform is an ongoing process aimed primarily at changes in the legal framework, in the implementing institutions and authorities, the interaction between them, the provision of resources for the law enforcement, and the professional qualification of staff. Bulgarian labour legislation has more than a century of history. Slightly shorter is the history of social security legislation. during this time, there were times of both advances and setbacks. The new economic and social conditions in Bulgaria—globalisation, eU membership—called for new requirements for the regulation primarily of the employment relation ships, which must be met by modern legislative procedure. It is very unfortunate that in the recent years, it revealed a number of problems both in the content of the labour legislation and in the legal instruments. More over, what is particularly worrying–instead of being addressed, these problems are exacerbated. To the traditional 1. This report has been published in the framework of the R&d project “Good Legal Practices in the Field of Labour and european Law to Reduce Labour Litigation expenditure at Zero Cost (I+d deR 2012-32111). 70 KRASSIMIRA SRedKOVA explanation of these with the eU membership2, one current explanation was added — the economic crisis. It indeed has serious consequences in labour law as well. Among these are substantially increased unemployment, lower living standards, rising inflation, increasing poverty and aggravation of social inequality in the society between a small group of the very rich and a majority of the very poor3. naturally, the solution of economic problems should be accomplished via development of the economy. However, the law must find its place as well. This is especially relevant to labour law4. The law regulates employment relationships, which are the means of implementing the production process. That is why the importance of the law in overcoming the adverse effects of the crisis is invaluable; however, it must be balanced to take into account the interests of both parties to the employment relationship, to look for the most efficient combination of the protective and the economic functions of labour law. II. labour legIslatIon In bulgarIa Unfortunately, labour legislation in Bulgaria in recent years has shown less and less success in this regard. It is first and foremost unstable —new regulations are being adopted, those in force are constantly changing— and this creates difficulties in their implementation. For example, since the democratic changes at the end of 1989 the Labour Code (LC) has been amended 82 times, and the Social Insurance Code, adopted in 1999, 109 times! Short-sighted and unstable legislation is being created, which undermines its enforcement. This extends the collisions in the relevant legal act, since too often the movers do not take into account other aspects of the law under amendment or the impact of proposed amendments on the general legal framework. Such an approach, besides the harm it causes, suggests that there is only a rush to implement rather populist purposes than to trace the path for a serious, professional legislative process with a clear long-term strategy. The lack of proper consideration of the draft legislation creates frequent and hasty changes of newly adopted laws, which in turn creates serious difficulties for law enforcement authorities, 2. See on these issues Средкова, Кр. Пореднинедоразумениявтрудовотозаконодателствос европейскооправдание. – Съвременноправо, 2006, № 2, 7-21; Средкова, Кр. Икономиче скатакризалиепричиназакризатавтрудовотозаконодателство? – In: Съвременнотоправо: проблемиитенденции. Ред. Кр. Средкова. С.: Сиби, 2011, 330-346. 3. See Хесел, Ст. Възмутетесе. С.: Колибри, 2011, 12-24; Мръчков, В. Трудовоправо. 8. изд. С.: Сиби, 2012, 30-31. 4. See in particular Simitis, S. Is there still a Future for employment Law? – In: 5th european Regional Congress for Labour Law and Social Security. General Reports. Leiden, 1996, 1-24. 71 III . dOeS THe BULGARIAn LABOUR And SOCIAL SeCURITy LeGISLATIOn... uncertainty in turnover, and instability in the present legal order. This gives rise to mistrust in the Bulgarian legal system between the effected persons and the legal entities. III. problems of the bulgarIan legIslatIVe process One of the biggest problems of the Bulgarian legislative process in general, and of the legal regulation of employment and social insurance relationships in particular, is the transposition of eU law5. The unfounded copying of word for word (and very often inaccurate) translations of eU directives continues. This word for word copying underestimates the national legal tradition and its achievements. This often leads to a reversal from traditional Bulgarian legal solutions not being required by the eU law. It does not take into account the fact that every eU directive states that the provisions of this Act shall not affect national legislative decisions, collective agreements, national practice or others, establishing more favourable legal decisions. On the other hand, the fact that the transposition of an act of eU law into the domestic legal system does not necessarily require a separate, specific national act is not sufficiently taken into account. For example, the transposition of Council directive 94/45/eC of 22 September 1994 on the establishment of a european Works Council or a procedure in Communityscale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees could have been done with amendment to the general legal act on regulating employment relationships —the Labour Code— rather than with the adoption of a wordy separate act— the Informing and Consulting employees In Cross- Border Undertakings And Groups Of Undertakings And european Companies Act. Another example. Often due to lack of other serious arguments the movers of draft legislation use the circular argument: ”It is required by the eU law”, without specifying what is required by which eU act. A typical example is a series of amendments to the Social Insurance Code, given that eU law only deals with the coordination of social schemes systems, and does not establish binding standards to be set in the context of the national legal framework. 5. See Средкова, Кр. Пореднинедоразумения, 7-21; Средкова, Кр. ТрудовотоправонаЕвроп ейскиясъюзибългарскатаправнасистема. – In: Актуалнипроблеминатрудовотоиосигури телнотоправо. Т. ІІІ. С.: УИ „Св. Кл. Охридски“, 2009, 11-37. 72 KRASSIMIRA SRedKOVA IV. the process of oVercomIng the adVerse effects of the economIc crIsIs yet one must render an account of the efforts, more or less successful, that the Bulgarian legislation is making to reconcile the interests of the parties to employment relationships which are in the process of overcoming the adverse effects of the economic crisis. Bulgarian labour legislation primarily regulates work under the standard employment relationships: for an indefinite, and for a definite period. The rule deals with work under employment contract for an indefinite period. It is derived from the provision of Article 67, para. 2 LC, in which “the employment contract is deemed established for an indefinite period, unless expressly agreed otherwise. ”In addition, Article 327, para. 1, sub-para 7 LC, entitles the employee who works under fixed-term employment contract for a definite period or as a substitute, to terminate it without notice if taking up employment elsewhere under a contract of employment for an indefinite period. It is not necessary to point out the benefits of this form of employment. The establishment of fixed-term employment contracts is permitted. As referred to in Article 68, para. 1 LC, these may be: for a definite period which shall not be longer than 3 years, insofar as a law or an act of the Council of Ministers do not provide otherwise; until completion of some specified work; for substitution for an employee who is absent from work; for working at a job, which is to be filled through a competitive examination, for the time until it is taken on the basis of the competitive examination; for a certain mandate, where such has been specified for the respective body. This range of options for fixed-term employment contracts allows for both satisfying the specific needs of the employer as well as employment (albeit temporary) of more citizens. However, because often fixed-term employment contracts were used to circumvent the law (mostly for ease of termination), some restrictions have been introduced since 2001. For example, Article 67, para. 3 LC provides that an employment contract established for an indefinite period may not be transformed into a fixed-term employment contract, except where explicitly desired by the employee, and stated so in writing. The scope of fixed-term employment contracts for a definite period was also limited. As referred to in Article 68, para. 3 LC, such contracts may be established for execution of temporary, seasonal or short-term jobs and activities, as well as with newly hired employees in enterprises that have been declared bankrupt or in liquidation. Only as an exception, they can be established for works and activities that are not temporary, seasonal or of short-term nature, for not less than one year (Article 68, para. 4 LC). 73 III . dOeS THe BULGARIAn LABOUR And SOCIAL SeCURITy LeGISLATIOn... The exception, as provided in § 1, p. 8 SP LC should be linked to specific economic, technological, financial and other objective reasons that exist at the time of the execution of the contract of employment. They shall be stated in the contract. These changes in the statutory regulation have produced good results. V. the new economIc condItIons The new economic conditions imposed a framework that allows more flexibility and which takes into account the interests of both parties to the employment relationship. In this regard, the current legal framework of standard employment relationships was upgraded and a new one was established. Here are some examples: A. PART-TIMe eMPLOyMenT6 The option to establish a part-time employment contract has existed since the adoption of the Labour Code in 1986. However, it was not as widely used as in the recent years. Both the advantages and the disadvantages of this working arrangement are known. Unfortunately, in our country it is used not only to meet the objective needs of the employee and employer, but also to circumvent labour legislation—mostly for reducing the due social insurance contributions. Furthermore, the General Labour Inspectorate has revealed cases of full-time work declared as part-time work, where the remuneration paid is not the amount fixed in the contract, but an amount based on a verbal agreement between the parties; and in the worst cases the contract is established for part-time employment, while actually the work is done at normal full-time working hours, without the full remuneration due in such cases. To combat such offenses, in 2012 a new compulsory administrative measure was introduced (Article 404, para. 1 sub-para. 9 LC). When such a violation is identified, authorities in charge of compliance with the labour law may issue a mandatory direction to employers to amend the employment 6. See Банова, Ем. Трудовдоговорпринепълноработновреме. –Трудиправо, 2000, № 7; Микова, В. Можелиработодателятедностранносъсзаповеддавъведешестчасовработ енден. – Трудиправо, 2001, № 2; Средкова, Кр. Трудовоправо. Специалначаст. ДялІІ. Индивидуалнотрудовоправо. С.: УИ „Св. Кл. Охридски“, 2011, 173-174; Средкова, Кр. – In: Мръчков, В., Кр. Средкова, Ат. Василев. КоментарнаКодексанатруда.11. изд.С.: Сиби, 2013, 463-476; Мръчков, В. Op. cit., 331-337; Sredkova, Kr. Work ingtime and the principle off lexicurity in Bulgarian Labour Law. – In: Current issues of busines law, 2011, 6(2); Нинева, См. Правнарегламентациянавъзможноститезагъвкаваорганиза циянаработнотовремевбългарскототрудовозаконодателство – предимстваинедостатъци. – Информационенбюлетинпотруда, 2013, № 4. 80 KRASSIMIRA SRedKOVA VII. work wIthout an employment relatIonshIp One major problem of the Bulgarian labour law is that of work without an employment relationship. despite the imperative requirement of Article 1, para. 2 LC that relations for providing labour are regulated only as employment relationships, in our country it still occurs that employment relationships are disguised by entering into so-called “civil contracts”, and even work without any legal basis. The reasons are clear. For the employer, this is related to the relaxing of any protective measures for the employees, and for the latter, the need for remuneration. To overcome this phenomenon, the Labour Code (Article 405a) provides a specific remedy. It specifies that the labour inspectorate shall be entitled to announce the existence of an employment relationship, should it ascertain the provision of labour force in violation of Article 1, para. 2. In these cases, the existence of an employment relationship may be established by any means of evidence. The rule mentioned above is a legal remedy not against the use of civil contracts in general, but against their unlawful use, which hides employment relationships and harms the interests of employees17. Among other things, the employer saves payment of social insurance contributions, has no problems with the termination of the legal employment relationships, and the employee is not entitled to unemployment benefits. There are even phenomena such as the request of the employee him/herself to work without a contract, so that during the relevant period he/she could continue to receive unemployment benefits if prior employment was terminated. The measure of Article 405a LC has produced certain results. For example, in 2013 the General Labour Inspectorate established 2993 violations, which is 1182 less compared to the violations in the previous year 2012. VIII. socIal Insurance contrIbutIons One of the many problems of Bulgarian social security law is related to the payment of social insurance contributions due from the employers. On one hand, the remuneration fixed in the employment contracts is low, and is used as a basis for determining social insurance contributions, and on the other, the delayed payment of those contributions. They are the main source of income for social insurance funds. Unfortunately, their share in this budget in recent years keeps reducing. According to the national 17. See for more details Мръчков, В. Трудово право, 968-972; Мръчков, В. – In: Коментар, 1166-1174. 81 III . dOeS THe BULGARIAn LABOUR And SOCIAL SeCURITy LeGISLATIOn... Social Security Institute, their share since 2010 has fallen by 15%. One of the measures to remedy the situation was the establishment of a minimum level of insurable income on which contributions are due (Article 6 para. 2 of the Social Insurance Code). It is determined annual lyin the State Social Insurance Budget Act through the so-called minimum social insurance thresholds introduced in 200318. These thresholds establish minimum levels of remuneration (which is the insurable income of employees) on which are determined the social insurance contributions, irrespective of whether exactly the same remuneration is set, and whether it is paid to the insured employee. The purpose of these thresholds is to stop the common practice, to which some employers resorted, of setting in the contracts minimum wages on which minimum social insurance contributions are due, and to pay actual wages in cash. Insurance thresholds are determined based on the sector of economic activity of the employer, and on the qualification group of professions to which the insured person belongs. Their introduction is beginning to deliver the expected results. IX. conclusIons In this report, it is neither necessary nor possible to analyse the entire Bulgarian labour and social security legislation in view of their contribution to overcoming the adverse effects of the economic crisis. It turns out that in our country the problem is not so much with the content of the law, but with its implementation. Of course, the objectively difficult economic situation and the on going political instability do not encourage strict compliance with the laws, and ultimately weaken faith in them. 18. See Мръчков, В. Осигурително право. 6. изд. С.: Сиби, 2014, 145-146. 83 IV. SPAnISH PenSIOn, COnTRIBUTIOnS FOR HeALTH CARe In GeRMAny... Chapter IV Spanish pension, contributions for health care in Germany and european law – a poisonous mixture Prof. dr. Hans-Joachim Reinhard Max Planck Institute (Munich)/ Fulda Sciences University of Applied I. IntroductIon Bernd Schulte was my colleague at the Max-Planck Institute for Foreign and International Social Law for almost 30 years, and as a young researcher I benefited very much from his profound experience in european law, namely in the field of the regulations that coordinate the benefits of social security systems in case of transnational migration. For the commemorative book I selected a case that has recently been decided by a German court1, a case that shows that coordination rules do not always work in favour of the person involved, in particular if a contributory system like the German one and a tax-financed system like the Spanish one collide. I chose the Spanish example because my last meeting with Bernd was at a conference in Madrid where he gave a lecture on transnational health care and its implications for national health care systems. I could also have chosen the British example because at the Institute Bernd’s task had been to work on the British social security system — on which he made plenty of publications2. Since the British 1. Landessozialgericht (Superior State Social Court) Baden-Württemberg, Judgement 19 June 2015, L 4 KR 2901/12 published in BetrAV 2015, 616-621 2. einführung in das Recht der sozialen Sicherheit von Großbritannien; in: Igl, Gerhard/ Schulte, Bernd/Simons, Thomas, einführung in das Recht der sozialen Sicherheit von Frankreich, Großbritannien und Italien. Berlin: Schweitzer (Vierteljahresschrift für Sozialrecht [VSSR] Beiheft 1), 1977, pp. 149-337; Alterssicherung im Vereinigten 84 HAnS-JOACHIM ReInHARd health care system is also tax-financed the findings of the German court would also apply to a British pensioner. II. the facts The claimant was born in 1947 and has at least one daughter. She is a Spanish citizen and lives in Germany. The German statutory pension scheme pays a survivor’s pension. She is insured with defendant 1) for health care benefits and defendant 2) covers her long-term care benefits3. Since April 2012 the claimant has also drawn a survivor’s pension from the Spanish system payable 14 times a year. On 29 September 2012 the claimant informed defendant 1) that she received a Spanish pension of 90 €. She signed a form assuring that she was liable to report to the defendants immediately any changes in the pension amount. She attached a notification of the Spanish pension administration stating that in 2011 a 15.82 € payment of arrears for the fiscal year of 2010 had been due, too. III. the admInIstratIVe proceedIngs On 21 October 2011 defendant 1) — acting also in the name of claimant 2) — stipulated, on the basis of 90 €, contributions for health care benefits that amounted to 7.38 € (contribution rate 8.2 per cent) and contributions Königreich, in: Zeitschrift für ausländisches und internationales Arbeits– und Sozialrecht (ZIAS) 1999; Landesbericht Vereinigtes Königreich, in: Reinhard, Hans-Joachim/Kruse, Jürgen/von Maydell, Bernd (Hrsg.), Invaliditätssicherung im Rechtsvergleich, Baden-Baden: nomos, 1998, pp. 595-657; Großbritannien – das ende des Wohlfahrtsstaats?, in: Sozialer Fortschritt (SF) 46 (1997), pp. 30-33; Großbritannien. Zur Reform der Medizinhaftung in Großbritannien, in: In: Köhler, Peter A./von Maydell, Bernd (Hrsg.), Arzthaftung – „Patientenversicherung“ – Versicherungsschutz im Gesundheitssektor, Baden-Baden: nomos, 1997, pp. 125-146; Vereinigtes Königreich, in: Zacher, Hans F. (Hrsg.), Alterssicherung im Rechtsvergleich, Baden-Baden: nomos, 1991, pp. 497-547; Sozialversicherung in Großbritannien, in: Internationale Wirtschafts-Briefe (IWB) 21 (1991), pp. 841-852; Alterssicherung in Großbritannien, in: die Angestelltenversicherung (dAngVers) 38 (1991), pp. 369-377; Grundzüge der Reform der Alterssicherung in Großbritannien: Zur neugestaltung der britischen Rentenversicherung durch den Social Security Pensions Act 1975, in: In: deutsche Rentenversicherung (dRV) 1981, pp. 521-531; Familienlastenausgleich durch monetäre staatliche Sozialleistungen in Großbritannien, in: Zeitschrift für Bevölkerungswissenschaft 1978, pp. 89-96. 3. Formally, in Germany the health care system (sickness insurance) and the system providing long-term care benefits are two schemes with independent budgets and different legislations (SGB V and SGB xI, respectively). However, they are jointly administered. The member of a sickness insurance (Krankenversicherung) is compulsorily affiliated to the long-term care scheme (Pflegekasse) that administrates his or her health care benefits. 85 IV. SPAnISH PenSIOn, COnTRIBUTIOnS FOR HeALTH CARe In GeRMAny... of 1.76 € for long-term care benefits (contribution rate 1.95 per cent) payable as from 1 July 2011. The defendant referred to a new law that had come into force on 1 July 2011. According to this new law, pensions from abroad are taken into account for the calculation of contributions to the health care system and the system for long-term care, respectively. The claimant objected to this order. Her representative was an employee of the Spanish Consulate General alleging that this order and the respective German law as its legal basis were against european law because the claimant made her social security contributions for the pension in Spain. The defendants rejected the intervention stating that they did not share the claimant’s opinion. In nikula4 the european Court of Justice (eCJ) had decided that it was contrary to Art. 39 of the Treaty establishing the european Community (TeeC)5 for contributions on pensions paid by another Member State to be deducted when contributions have already been paid on salaries in the respective Member State. However, this conclusion is only relevant if contributions are effectively paid in another Member State. The claimant is compulsorily insured in the German health care system for pensioners. She is residing in Germany and receives both a Spanish pension and a German pension. Therefore, the competence lies with the German health care system and not with the Spanish health care system. Thus, the eCJ decision is not applicable on the claimant’s situation. The committee on opposition proceedings rejected the disagreement. It stated that Regulation no. 883/20046 and Regulation no. 987/20097 allowed the possibility to levy contributions on foreign pensions if the pensioner is compulsorily insured for health care benefits. The German legislator had transferred this rule into national law8. The cited eCJ judgement does not apply for the reasons mentioned above. IV. the claIm On 4 April 2012 an employee of the Spanish Consulate General at 4. eCJ judgement 18 July 2006 (C-50/05 – nikula) 5. Treaty establishing the european Community (nice consolidated version) Official Journal C 325, 24/12/2002 P. 0033 – 0184Official Journal C 340, 10/11/1997 P. 0173 – Consolidated version 6. Regulation (eC) no 883/2004 ofthe european Parliament and of the Council of 29 April 2004 on the coordination of social security systems, OJ L 166/1 7. Regulation (eC) no 987/2009 ofthe european Parliament and of the Council of 16September 2009laying down the procedure for implementing Regulation (eC) no883/2004 on the coordination of social security systems, OJ L 284/1 8. Gesetz zur Koordinierung der Systeme der sozialen Sicherheit in europa und zur Änderung anderer Gesetze vom 22. Juni 2011, BGBl. 2011 I 1202 86 HAnS-JOACHIM ReInHARd Frankfurt filed a claim with the Social Court in the city of Ulm demanding the annulment of the administrative order. He referred again to the eCJ decision mentioned above and argued that there was an infringement against the principle of free movement because according to Member State law the claimant has to contribute to another social security system without receiving the respective social protection. She receives two pensions and according to art. 23 Regulation (eC) no 883/2004 she is entitled to benefits in kind provided by the German health care system. However, she is also affiliated to the Spanish contributory health care system for pensioners. It is true that she does not contribute at the moment. But the reason for this is the fact that she had already contributed in the past to the health care system when contributing to the pension system during employment. According to art. 23 Regulation (eC) no 883/2004 the health care system of the state of residence prevails and the health insurance of the other Member State, here Spain, is inactive. Also, the fact that the Spanish health care system for pensioners does not prescribe a deduction of contributions distinguishes her from those pensioners who receive only a German pension which is subject to contributions. Her opinion does not discriminate anybody. §§ 228 and 249a SGB V9 (Social Security Code Book V) are contrary to european law. In addition, the Spanish pension is not a comparable pension in the sense of § 228 SGB V. The defendants argued that pensioners receiving only a German pension would be treated unequally if the foreign pension was not taken into account. They would have to pay the full contribution rate for health care benefits and long-term benefits whereas pensioners who receive a pension from Germany and from abroad would have to pay contributions only on part of their income, namely the German pension. The court of first instance rejected the claim. It is uncontested that the Spanish pension is comparable to a German pension. German law is not contrary to european law. When implementing § 228 Para. 1 S. 2 SGB V the German legislator only wanted to clarify Regulation (eC) no 883/2004 and Regulation (eC) no987/2009. The claimant cannot refer to the eCJ judgement of 18 July 2006 in nikula because in that case the foreign pension being paid had already been subject to contributions abroad. Consequently, a further subjection to contributions was not admitted. The new German law makes sure that the liability to contribute takes into account the financial capability which is a principle of the German system. Foreigners who have migrated to Germany also take advantage of the German health care system, which is more extensive than other health care systems in europe. If a person is entitled to the advantages 9. Social Security Code Book 5 (SGB V) regulates the German statutory health care system 87 IV. SPAnISH PenSIOn, COnTRIBUTIOnS FOR HeALTH CARe In GeRMAny... the liability to contribute has to be equal to the obligation of a national resident. There is no reason to discriminate national residents. even the european Parliament and the european Council had realized that they are not competent to regulate the contribution matter if a national and a foreign pension coincide. Moreover, art. 5 Regulation (eC) no 883/2004 stipulates that the effects of the law with regard to income should be equal for all persons residing in a Member State. The court could not see an obstacle against the right to free movement if contributions have to be paid on both pensions. V. appeal On 6 July 2012 the employee of the Spanish Consulate General lodged an appeal against the judgement of first instance. He indicated again that the Spanish pension was not comparable to a German pension. In Spain, the Spanish pension is not subject to contributions because the contributions for health care benefits are presumed as having been paid in the context of the contributions to the pension system during the time of employment. In addition, the Spanish pension authority is — other than the German pension authority — part of the state administration. defendant 1) is only an entity of the state of residence and solely competent for providing benefits in kind according to the eC regulation. In addition, the modification in the German SGB V constitutes a discrimination of Spanish pensioners who receive two pensions in comparison with Spanish pensioners residing in Germany who receive only one pension. This is a restriction to the right of free movement. According to art. 6 Regulation (eC) no 883/2004 contributory periods in another Member State are only taken into account if they are necessary to fulfill the prerequisites for an entitlement. The claimant fulfills all prerequisites for the German health care system for pensioners. Thus, the Spanish pension must not be taken into account. The former art. 33 sec. 1 Regulation (eeC) no 1408/71 is equal to the current art. 30 sec. 1 Regulation (eC) no 883/2004. This article has to be interpreted in such a manner that the Member State of residence may only levy contributions for health care and long-term care on the basis of the pension being paid by the Member State of residence in case the pensioner receives two pensions. This is also the interpretation of the eCJ10 concerning art. 33 Regulation (eeC) no. 1408/71. The claimant provided a supplemental notification of the european Commission confirming that in Spain,until a reform in 1999, employees had to contribute 2.5 per cent of their income for health care and non-work-related accidents; employers had to pay 7.5 per cent, respectively. The relatively high contribution rate 10. eCJ 10 May 2001 (C-389/99 – Rundgren). 88 HAnS-JOACHIM ReInHARd compared with the contribution rate to the pension system (employee 1 per cent; employer 3 per cent) was justified with the guarantee that health care would be completely free of charge for persons once they have reachedthe pensionable age. The court of second instance admitted the claim formally. In particular, it explained that the employee of the Spanish Consulate General was competent to file a claim according to european law. According to art. 45 sec. 2 Convention between the Federal Republic of Germany and the Spanish State11 diplomatic employees and employees of the Consulate are entitled to represent their own citizens before authorities and courts concerning social matters of the other contracting state. There is no need to certify officially the power to represent the claimant. This legal rule is still in force because it was transferred to Annex II Regulation (eC) no 883/2004 by virtue of Regulation (eC) no 988/2008. However, the court held that the administrative bodies of the health care system and the long-term care system were allowed to levy contributions on the claimant`s Spanish pension12. That court stated that until 30 June 2011 only foreign occupational pensions were subject to contributions but not pensions paid by a foreign statutory pension scheme13. By inserting § 228 Para. 1 S. 2 SGBV the German legislator wanted to close this legislative gap for reasons of equal treatment of national and foreign pensioners14. This modification affects pensions from eU Member States as well as pensions from countries outside the eU. The considerations in the draft show that the modification of art. 5 Regulation (eC) no 883/2004 was not the exclusive incentive for changing the German law. The legislator generally intended to incorporate all foreign pensions into the German contributory system for health care and long term care. The Spanish pension is regarded as a payment comparable to the German pension. It does neither matter that —according to the claimant’s explanations —employee contributions for the Spanish health care systemare also used for financing social assistance benefits, nor is it of importance that contributions for pensioners’ health care are presumed as having been paid, nor is it relevant that the Spanish pension system is part of the state administration. “Comparability” does not mean full identity. It is sufficient if the foreign benefit equals in its crucial points the 11. Convention between the Federal Republic of Germany and the Spanish State of 4 december 1973 (BGBl. II 1977, 687) 12. § 237 Para. 1 S. 1 nr. 1, § 228 Para. 1 S. 2 SGB V (health care); § 57 Abs. 1 S. 1 SGB xI (long-term care) 13. Cf. BSG (Federal Social Court), Judgement 10 June 1988 –12 KR 39/87 14. Cf. Legislative considerations in the draft of the act, Bundestags-drucksache 17/4978 p. 20 and Bundesrats-drucksache 17/846/10 p. 30 89 IV. SPAnISH PenSIOn, COnTRIBUTIOnS FOR HeALTH CARe In GeRMAny... typical and essential characters of the German benefit. For this case to be decided by the court it is sufficient that the claimant receives a survivor’s pension which is paid by a public pension system. The defendants calculated the contribution rate correctly when distributing the annual two extra payments (and the payment of arrears) over twelve months. As per 1 January 2015 the contribution rate for health care (sickness insurance) is 7.3 per cent plus an extra 0.9 percent. For longterm care the contribution rate is at present fixed at 2.35 per cent. The extra payment of 0.25 per cent for childless persons is not due because the claimant has given birth to at least one child. The German provisions are not contrary to european law. The court had no reason to forward the case to the european Court of Justice15 because the matter had already been clarified and decided in a former judgement16. In particular, the contested § 228 Para. 1 S. 2 SGB V does not infringe Regulation (eC) no 883/2004. Art. 30 Regulation (eC) no 883/2004 does not prevent Member States from levying contributions for health care and long-term care benefits on pensions paid from a Member State that is not the state of residence. Art. 30 Regulation (eC) no 883/2004 had replaced Art. 33 Regulation (eeC) no 1408/71 but has —contrary to the claimant’s opinion— a broader legislative impact. This is why the claimant cannot refer to the eCJ case mentioned above which dealt with Art. 33 Regulation (eC) no 1408/71.17 Art. 33 sec. 1 Regulation (eeC) no 1408/71 stipulated that the authority of a Member State that owes a pension payment may levy contributions on the basis of the due pension amount in order to cover the costs for health care benefits and motherhood if this Member State has to bear the costs of the benefits according to arts. 27, 28, 28a, 29, 31 and 32 Regulation (eeC) no 1408/71. Art. 30 Regulation (eC) no 883/2004, however, now stipulates that the Member State may only charge and levy contributions according to its national rules for the costs of health care, motherhood and fatherhood if this Member State has to bear the costs according to arts. 23 to 26 Regulation (eC) no 883/2004. Whereas according to the precedent regulation it had only been allowed “to charge contributions on the pension being owed”, art. 30 Regulation (eC) no 883/2004 states instead that contributions may be charged and levied without any restriction to the pension being owed. Therefore, nowadays foreign statutory pensions of other Member States may be subject to compulsory contributions according to the law of the Member State that 15. Art, 267 TFeU 16. LSG Baden-Württemberg, Judgement 10 december 2014 – L 5 KR 2498/13 17. eCJ 10 May 2001 (C-389/99 – Rundgren) 96 STAMATIA deVeTZI IV. goals, prIncIples and benefIts of the rehabIlItatIon system Under Section 4 (1) of Book Ix of the Social Code, integration assistance includes all social security benefits which are necessary, regardless of the cause of a person’s disability: — To avert, eliminate, or alleviate a disability, to prevent its aggravation or to reduce its effects — To avoid, overcome or alleviate reductions in earning capacity or the need for long-term care, or prevent an aggravation and to avoid the early receipt of other social benefits or reductions in social benefits already paid — To secure permanent participation in working life in accordance with a person’s leanings and abilities — To promote an individual’s personal development in a holistic approach, enable their participation in the life of society and facilitate a life as autonomous and self-determined as possible. The most important principles of the German rehabilitation system are: — The priority of prevention — The right of the beneficiaries to express wishes and to make choices — The speedy, efficient and economic provision of integration assistance — The cooperation between the different rehabilitation funds Many different social security benefits and services are provided by the rehabilitation system. These can be categorized as following: — Medical rehabilitation assistance — Occupational integration assistance — Assistance to cover living expenses and other supplementary assistance — Social integration assistance V. the duty for cooperatIon between the rehabIlItatIon funds due to the differentiated system of social insurance in Germany, integration assistance is not provided by only one insurance scheme, but can be provided by different schemes or funds. The system of medical, 97 V. “RedUCInG SOCIAL COSTS“ By THe ReHABILITATIOn SySTeM In GeRMAny... occupational and social rehabilitation is a joint responsibility of pension insurance, health insurance, accident insurance, Federal employment Agency and social welfare bodies. The question as to which integration assistance is provided by which rehabilitation fund and under which conditions depends on the laws applicable to the individual rehabilitation funds8; this takes account of the fact that the established system consists of various branches. Thus, pension insurance assistance may only be granted to persons who are covered by that scheme and social assistance only to those who meet the requirements of that particular scheme; the relevant regulations are laid down in the respective Books of the Social Code and in other laws on the provision of assistance. In contrast, regulations on the nature and objectives of integration assistance are to be found in a single piece of legislation — in Book Ix of the Social Code. This is meant to illustrate that the common objective of integrating disabled persons and persons who are at risk of becoming disabled into society to the greatest possible extent is generally pursued in the same way by all rehabilitation funds responsible in individual cases9. The rehabilitation funds are under obligation to cooperate. Under Section 13 of Book Ix of the Social Code, ambiguous responsibilities between the various rehabilitation funds should be resolved by mutual agreement and wherever possible in the form of joint recommendations. The coordinating body is the Federal Committee for Rehabilitation, which not only consists of the various (public) rehabilitation funds, but also of trade unions, employers’ organizations, organizations representing the disabled, and rehabilitation service providers. At a regional revel, public rehabilitation funds are obliged to have common service units10 for persons and employers. They also involve disability organizations in the counselling11. When assistance from different rehabilitation funds is necessary, Section 10 (1) of Book Ix of the Social Code provides that, in consultation with the persons, the rehabilitation funds involved are required to combine the benefits that are likely to be necessary to meet the individual’s needs in such a way that a smooth process is ensured. In fact, the rehabilitation 8. Section 7, Clause 2, of Book Ix of the Social Code. 9. BMAS, Rehabilitation and Integration of People with disabilities, 2014, p. 41. 10. “GemeinsameServicestellen”: R.F. Shafaei, die gemeinsamenServicestellenfür Rehabilitation (nomos 2008). 11. F. Welti/H. Groskreutz, The Role of non-Public Actors in Social Security in Germany, in: F. Pennings/Th. erhag/ S. Stendahl (eds.), non-public Actors in Social Security Administration (Wolters Kluwer 2013), p. 16. 98 STAMATIA deVeTZI funds have to ensure a continuous process in line with the respective needs (integration management). The responsible rehabilitation fund assesses, when medical rehabilitation is initiated, whether the earning capacity of a person may be maintained, improved or restored by means of appropriate integration assistance. If it becomes evident during the provision of the medical rehabilitation assistance that it may be difficult for a person to keep his or her current job, the question of whether occupational integration assistance is necessary must be clarified without delay, both in consultations with the person concerned and with the responsible rehabilitation fund12. VI. preVentIon, early InterVentIon and the role of employers A step before rehabilitation is prevention: According to the objective enshrined in Section 3 of Book Ix of the Social Code, the primary aim is to avoid as far as possible the manifestation of chronic diseases and disabilities by implementing targeted prevention in all age groups and areas of life. Key areas include health and safety at work, accident prevention, workplace integration management, environmental protection, and health protection-especially with regard to chronic, degenerative diseases. Under Section 23 of Book V of the Social Code, members of statutory health insurance funds are entitled to medical prevention services. Also of relevance for prevention are the regulations regarding the prevention of work-related accidents and occupational diseases (Book VII of the Social Code) and numerous statutory and collectively agreed-upon provisions on health and safety at work. new approaches to prevention at company level are laid down in Section 84 of Book Ix of the Social Code. Since 2004, all employers are required to introduce integration management measures into their company policy, i.e. they must provide targeted assistance and support services for employees who fall ill for a longer time. This is called “incompany” or “workplace integration management process” (Betriebliches eingliederungs management”)13. Through early intervention, the objectives of prevention and rehabilitation result in employees retaining their employability rather than facing dismissal or early retirement. If employees are unfit for work for more than six weeks in a given year, either 12. BMAS, Rehabilitation and Integration of People with disabilities, 2014, p. 51. 13. K. nebe, Prävention und Rehabilitation – erhaltung und Wiederherstellung der erwerbsfähigkeitalsSchnittstellenproblem, in: deutscherSozialrechtsverband (ed.), das SozialrechtfüreinlängeresLeben (erich Schmitt 2013), p. 57 f., 63. 99 V. “RedUCInG SOCIAL COSTS“ By THe ReHABILITATIOn SySTeM In GeRMAny... continuously or repeatedly,employers must assess how an employee’s inability to work can best be overcome and must identify the type of assistance or support needed to prevent a recurrence so that the position can be retained. Section 84 (2) of SGB Ix intentionally does not prescribe in detail how this is to be done. An appropriate solution must be found at each workplace to meet individual needs. The law merely requires (with the agreement of the individual concerned) the involvement of the responsible employee representative (works or employee council) and, if the individual is severely disabled, the severely disabled employee’s representative, in order to identify ways to overcome the employee’s unfitness to work and the type of assistance or aids needed in doing so. Where participation-oriented benefits or employment support are considered in overcoming an inability to work and preventing a repeat episode of ill health, the local joint rehabilitation services office—or, in the case of severely disabled persons, the integration office—must be involved. Their know-how and support is often very helpful and constructive, particularly for smaller companies. employers who introduce workplace integration management measures may receive incentives from rehabilitation funds in the form of awards or grants for financing technical aids or work assistance. Besides these payments, workplace integration management can also be supported by the “gradual re-integration” (“stufenweise Wiedereingliederung”). Those who are being gradually reintegrated still have the status of being unable to work, but nevertheless start working (again), often part-time or with a reduced workload. They are supported by medical rehabilitation and are still entitled to (temporary) incapacity benefits from health insurance or pension insurance14. While failure to introduce integration management measures is not subject to sanctions, employers who fail to meet this requirement will find it significantly more difficult to enforce illness-related terminations of employment against the will of the employee concerned: The Federal Labour Tribunal has stated that if the employer fails to complete proper integration management, his right to dismiss the employee in the particular case can be affected15, following the case law of the european Court of Justice on disability discrimination16. Workplace integration management can be described as a cooperative 14. K. nebe, (Re–)Integration von Arbeitnehmern: StufenweiseWiedereingliederung und Betrieblicheseingliederungsmanagement – einneuesKooperationsverhältnis, dB 2008, p 1801 f. 15. Bundesarbeitsgericht, 12.7.2007, 2 AZR 716/06, BAGe 123, 134. 16. eCJ C-13/05 (Chacónnavas), eCR 2006, I-06467. 100 STAMATIA deVeTZI approach to mobilising internal and external knowledge. The aim is to prevent job loss by restoring the employability of employees who have fallen ill and safeguarding their employability for the long term. It has become an important tool of social responsibility in German companies, being subject to many agreements between company management and works councils. Politically it is not only meant to help long-term ill employees, but also to relieve the pressure on health care insurance and pension insurance budgets, and not least to retain a qualified workforce in the labour market which itself is necessary due to the demographic change in Germany17. VII. conclusIon Retaining and restoring employability is a major goal in the German social security system. The main tool to achieve this is rehabilitation. “Rehabilitation before benefits” is one of the most important principles of the social security law. Although not new, this principle has gained more importance since the codification of all rehabilitation provisions in one single chapter of the Social Book in the year 2001. In particular, prevention and early intervention have been strengthened. To this end, the role of employers and their responsibilities were made clearer. With the “workplace integration management,” an important step towards retaining and restoring employees’ health and employability has been taken. By maintaining employability, integration management becomes a key part of mitigating the effects of demographic change. 17. F. Welti/H. Groskreutz, The Role of non-Public Actors in Social Security in Germany, in: F. Pennings/Th. erhag/ S. Stendahl (eds.), non-public Actors in Social Security Administration (Wolters Kluwer 2013), p. 27. 101 VI. COMMITMenT TO WORK, JOB-SeeKInG And UneMPLOyeMenT PROTeCTIOn... Chapter VI Commitment to work, job-seeking and unemployement protection in the european Union1 Andrés Ramón Trillo García Chief of Central Delegated Legal Services of the Social Security Institute (INSS) I. the commItment to work as an oblIgatIon on the unemployed worker. orIgIn and JustIfIcatIon A. ORIGIn OF THe COMMITMenT TO WORK The first precedent of the demand of a commitment to work as a requirement to obtain unemployment benefits was established in Article 219 of the General Law of the Social Security2 (herein and following the Spanish acronym, LGSS) stating that “in order to grant the extension of the unemployment benefit, the Institution may demand that, upon submission of the application for the extension, the beneficiaries of such benefits subscribe to an agreement for undertaking actions for job reinsertion in the public employment service”. The Royal decree 236/2000, of 18 February, regulating the 2000 Scheme for job reinsertion of long-term unemployed workers over the 1. This report has been published in the framework of the R&d project “Good Legal Practices in the Field of Labour and european Law to Reduce Labour Litigation expenditure at Zero Cost (I+d deR 2012-32111). 2. García García, José María. “el compromiso de actividad”. Revista Laboral Legislación 17/2003. Lex nova. 102 AndRÉS RAMÓn TRILLO GARCÍA age of forty-five and in need (in force until 1 January 2000, transposing eU Work and Social Security directives) was intended to combine active and passive individualized actions pursuing job reinsertion. In this sense, a commitment to work was established as an essential requirement for the provision of economic protection to the unemployed worker, by which different actions oriented to the reinsertion of the unemployed worker, in agreement with the public employment service, will be developed as long as the unemployed worker continues to be part of the Scheme. This requirement was maintained in successive annual royal decrees regulating reinsertion Schemes. The aforementioned commitment to work was included in the Royal decree-Law 5/2000, which reforms the content of Articles 209.1, 212.3, 219 and 231 LGSS. Article 209.1 LGSS, when regulating the creation of the right to unemployment benefits, required that at the time of applying for the benefit, the commitment to work had been already subscribed. Furthermore, article 212.3 LGSS foresaw that in cases were the right to unemployment benefits was suspended, in order to resume the right it was required to resume the commitment to work, unless the Institution demanded the subscription of a new commitment. Also, as aforesaid, Article 219.1.b) LGSS, when regulating the dynamic of the unemployment benefits, demanded signing a commitment to work as a condition of the extension of the right to benefits. Finally, Article 231.1.h) LGSS described the signature of commitment to work as an obligation of the employed worker receiving the benefits, in the second paragraph of that Article: “For the purposes of this Title, the commitment to work is to be understood as the commitment of the applying or beneficiary unemployed worker to actively seek employment, to accept adequate employment and to participate in specific actions related to motivation, information, orientation, formation, reconversion or professional reinsertion, in such a way that his or her opportunities to find employment are increased, as well as to comply with all remaining obligations of this Article”. After the Law 42/2002 of 12 december, the commitment to work is introduced in other Articles of the LGSS. Article 1.1. of the Law 42/2002 includes such a commitment in Article 207.c) LGSS, establishing as a requirement for obtaining unemployment benefits “to be in a lawful unemployment situation, to certify availability to be actively seeking employment, and to accept adequate employment through the signature of a commitment to work regulated in Article 231 of this Law”, and in article 208.2 LGSS when determining what situations are not to be considered a lawful unemployment situation when “the worker does not certify his or her availability to actively seek employment or to accept 103 VI. COMMITMenT TO WORK, JOB-SeeKInG And UneMPLOyeMenT PROTeCTIOn... adequate employment, through the commitment to work”. On the other hand, the derogating provision suppresses the last paragraph of Article 219.4 LGSS—that is, the requirement to sign the commitment to work to qualify for the extension of unemployment benefit. Surely, the commitment to work has its origin in Community law3, and in particular, after the european Council in Copenhagen of 21 and 23 June 1993, in which the need of the creation of a White Paper on a medium-term strategy to promote economic growth, competitiveness and employment in the Community is raised (delors´ White Paper). In such a strategy, the approval of yearly guidelines for employment was laid out; these guidelines would be approved by the Council under the Commission´s proposal which would begin after the extraordinary european Council meeting on employment, held in Luxembourg, 20-21 november 1997. At that time, the Guidelines for 1998 and those in the following two years set the goal to improve employment reinsertion policies. To achieve this end,the need was recognized to substitute passive protective actions by active ones4,5. After this, Schemes on employment Reinsertion Incomehave been marked since their outset by the requirement to sign a commitment to work in order to be part of the Scheme. B. THe COMMITMenT TO WORK UndeR THe LAW 56/2006, OF 16 deCeMBeR, On eMPLOyMenT Article 27.1 of the Law on employment (herein and following the Spanish acronym, Le) establishes that applicants and recipients of unemployment benefits shall register and remain registered as a person seeking work with the public employment service, in accordance with Article 231 LGSS. This involves the registration in the service of the commitment to work, and the duty to fulfil the commitment’s requirements, which will be introduced in the document for renewing the employment request. As well, the 2nd paragraph of this Article establishes that the registration as a person seeking work shall be carried out with full willingness to 3. Mella Méndez, Lourdes. “el compromiso de actividad del desempleado”. ediciones estudios Financieros. 2005. Pags. 18 y ss. 4. quintero Lima, Mª Gema y Blázquez Agudo, eva María. La protección por desempleo: ¿La ocupabilidad como contrapartida?. Revista doctrinal Aranzadi Social nº 7/2012. 5. Council decision of 18 February 2002 (2002/177/Ce-dOCe 60/60 de1 de marzo: Council Recommendation of 18 February 2002 (2002/178/Ce-dOCe L60/70 de 1 de marzo); Council decision of 22 de julio de 2003 (2003/578/Ce-dOCe L60/70 1 March). 104 AndRÉS RAMÓn TRILLO GARCÍA accept an adequate placement offer and to fulfill the rest of requirements of the commitment to work. This commitment shall be considered to be signed from the date of the application for unemployment benefit. The third paragraph of this Article states that the competent public administrations in job-matching and in management of the active employment policies, shall guarantee its application to recipients of unemployment benefits. This mandate shall be performed within the frame of the appropriate actions that may be established in the application of the Spanish employment Activation Strategy. In this way, these actions shall be addressed to the volume of recipients proportional to the actions’ impact on the total number of unemployed persons in the territory. Thus, once they have signed the commitment to work, beneficiaries of unemployment benefit registered with the public employment service shall participate in the active employment policies established in the labour integration itinerary. The public employment service will thereby verify the compliance of the obligations derived from the unemployment benefit. The service shall report, where applicable, the sanction when imposing it, to either the State Public employment Service (SPeS) or the ISM (Social Marine Institute), as appropriate, for its enforcement. The competent public employment service shall verify as well the fulfilment of the beneficiary´s obligation to remain registered as a person seeking work. These persons must inform the non-compliance of this obligation to the SPeS or ISM, when appropriate, at the time it is arisen or known. This communication can be done electronically, and will constitute a sufficient document for initiating the appropriate infringement procedure by the SPeS or the ISM, as appropriate. C. OBLIGATIOnS In THe COMMITMenT TO WORK Article 231.2 LGSS clarifies the concept of commitment to work,stating that “the recipient of the benefit has the legal obligation to make an active job search, to accept a suitable job, and to participate in specific actions of motivation, information, orientation, training, vocational retraining or labour integration in order to improve his/her employability and to fulfil the remaining obligations established in this Article.” The State Public employment Service and the Regional Public employment Services shall require recipients of the unemployment benefit to certify in the form required in the framework of mutual collaboration, the performance of those actions directed toward labour integration or the improvement of his/her employability. non-accreditation shall be considered as the failure of the commitment to work. 105 VI. COMMITMenT TO WORK, JOB-SeeKInG And UneMPLOyeMenT PROTeCTIOn... In order to apply what is stated above, the competent State Public employment Service shall take into consideration the condition of a victim of gender-based violence, for the purposes of relaxing the obligations arisen from the commitment. In this sense, the commitment to work is configured as a requirement for obtaining the unemployment benefit, both at the contributory and care levels. Thus, when signing the commitment, certain contractual protection is provided, and consequently the recognition of the right depends on whether the worker accepts future actions directed toward labour integration. This commitment is never assumed, as it must be evidenced in writing. Where the legal nature of the institution is concerned, this commitment is apparently contractual but certainly, as Mella points out6, is configured as a requisite for obtaining and maintaining benefits, even when the willingness and subjective conditions of the beneficiary are, to some extent, relevant. On the other hand, Mercader believes in the strictly administrative nature of the commitment, as he states that it is configured as a sort of “collateral modal clause, legally established, and which involves a declarative administrative resolution of rights, being in this case the one that recognises the unemployment benefit7”. The commitment is required just once, at the time of formally applying for the unemployment benefit. It therefore is configured as a necessary requirement for the entitlement and retention of the right to this benefit8. The obligations incurred by this commitment can be omitted without sanction only when circumstances beyond the worker’s willingness have unexpectedly arisen9, 10, 11. In this sense, in case of suspension of the right to benefit, the 6. Mella Méndez, Lourdes. “el compromiso de actividad del desempleado”. ediciones estudios Financieros. 2005. Pags. 66. 7. Mercarder Uguina, J.R. “Reformas y contrarreformas en el sistema de protección por desempleo. La Ley 45/2002 como telón de fondo”. Tirant lo Blanch. 2002. Pag. 66. 8. Ruling of the Tribunal Superior de Justicia (TSJ) of Asturias of 9 January 2009 (appeal 2000/2008). The right to unemployment benefit is dismissed on grounds of not signing the commitment to work. 9. Ruling of the Tribunal Superior de Justicia (TSJ) of the Comunidad Valenciana of 25 October 2005 (appeal 2440/2005). non-fulfilment of the obligation to go to work as an extra worker because of gastroenteritis. 10. Ruling of the TSJ of Madrid of 24 June 2014 (appeal 223/2014). The defective notification is not a due cause when the recipient participates in the ineffectiveness of the notification. 11. Ruling of the TSJ of Madrid of 5 May 2005 (appeal 1806/2005). The commitment to work is consistent with the perception of a non-contributory invalidity pension. 112 AndRÉS RAMÓn TRILLO GARCÍA he/she retains his/her entitlement to benefits under the conditions laid down in Article 64.1.a) of the eC Regulation 883/2004. The SePeS shall inform the person concerned of his obligations and shall provide the above mentioned document that shall include the following information: a) the date on which the unemployed person ceased to be available to the employment services of the competent State; b) the period granted in order to register as a person seeking work in the Member State were the unemployed person has gone; c) the maximum period during which the entitlement to benefits may be retained; d) circumstances likely to affect the entitlement to benefits. The unemployed person shall register as a person seeking work with the employment services of the Member State to which he goes, and shall provide the document referred to in paragraph 1 to the institution of that Member State. If he has informed the SePeS but fails to provide this document, the institution in the Member State to which the unemployed person has gone shall contact the SePeS in order to obtain the necessary information. The employment services in the Member State to which the unemployed person has gone to seek employment shall inform the unemployed person of his obligations. The SePeS shall immediately send a document to the competent institution containing the date on which the unemployed person registered with the employment services, and his new address. From this moment, the institution in the Member State to which the recipient of the unemployment benefit has gone shall carry out or arrange for checks to be carried out if any circumstance affects to the right to benefits, and it shall send immediately to the competent institution and to the person concerned a document containing the relevant information. At the request of the SePeS, the institution in the Member State to which the unemployed person has gone shall provide relevant information on a monthly basis concerning the situation, in particular whether the latter is still registered with the employment services and is complying with organised checking procedures. In this respect, the institution in the Member State to which the unemployed person has gone shall carry out or arrange for checks to be carried out, as if the person concerned were an unemployed person obtaining benefits under its own legislation. Where necessary, it shall immediately inform the SePeS of any change 113 VI. COMMITMenT TO WORK, JOB-SeeKInG And UneMPLOyeMenT PROTeCTIOn... of circumstances which might affect the right to benefits. The competent authorities or competent institutions of two or more Member States may agree among themselves on the specific procedures and time-limits concerning the follow-up of the unemployed person’s situation, as well as other measures to facilitate the job-seeking activities of unemployed persons who go to one of those Member States. As we can see, the principle of equal treatment determines that the worker who goes to another State is going to be subject to the same control and follow-up measures established for unemployed persons in the State where the worker goes. This is applied even when the State of origin (in this case the SePeS) pays the benefit at its own expense. These same reasons are why nationals of other eU States who are recipients of unemployment benefits and who go to Spain to seek work must compulsorily sign the commitment to work. Also because of these reasons, if the beneficiary does not fulfill these obligations, the SePeS shall immediately inform the employment service of the State of origin of any change of circumstances and any sanction determined by the latter, where applicable. However, if the person goes, for example, to United Kingdom or France, the worker shall sign a document similar to the commitment to work; this document being necessary for providing the unemployment benefit20. In other States this condition is not required for providing the benefit. In the present day the number of unemployed workers travelling to other eU States has significantly increased. For this reason, it appears logical that under Article 55.6 of the eC Regulation 987/2009, the SePeS and the eU States’ public employment services may agree among themselves upon specific procedures and time-limits concerning the follow-up of the unemployed person’s situation, as well as other measures to facilitate the job-seeking activities of unemployed persons who go to one of those Member States. These measures could include, on one hand, the provision of the labour integration itineraries that were drafted in Spain, and on the other, the communication between the involved institutions through the appropriate channels about all actions performed, evaluating as well to what extent the beneficiary of the benefit has fulfilled them. In this sense, despite the brief period allowed for exporting the benefit and particularly because of this reason, the involved institutions shall share information on the displaced worker’s labour integration and the evolution of the integration itinerary. It is also recommended to continue the activities included in this itinerary in the host State. 20. Mella Méndez, Lourdes. “el compromiso de actividad del desempleado”. ediciones estudios Financieros. 2005. P. 57. 114 AndRÉS RAMÓn TRILLO GARCÍA IV. protectIon of frontIer workers and of those resIdIng In other states than the competent one causIng unemployment and commItment to work Article 65 of the eC Regulation 883/2004, which is regulated under the title of “Unemployed persons who resided in a Member State other than the competent State”, talks about the co-ordination between States in order to provide the unemployment benefit to frontier workers and distinguishes between partial and wholly unemployed persons21. First, Article 65.1 establishes that a person who is partially or intermittently unemployed and who, during his last activity as an employed or self-employed person, resides in a Member State other than the competent Member State, shall make himself available to his employer or to the employment services in the competent Member State. He shall receive benefits in accordance to the legislation of the competent Member State as if he were residing in that Member State. These benefits shall be provided by the institution of the competent Member State. Thus, for example, the Portuguese frontier worker whose working day has been reduced or suspended will have the right to receive the unemployment benefit from the SePeS in accordance with the Spanish legislation, and have the same obligations than Spanish workers. Secondly, a wholly unemployed person who, during his last activity as an employed or self-employed person, resided in a Member State other than the competent Member State and who continues to reside in that Member State or returns to that Member State shall make himself available to the employment services in the Member State of residence. Without prejudice to the obligation of registering with the employment services within the period of 7 days as states in Article 64 of the eC Regulation 883/2004, a wholly unemployed person may, as a supplementary step, make himself available to the employment services of the Member State in which he pursued his last activity as an employed or self-employed person. As we say, he shall register as a person seeking work with the competent employment services of the Member State in which he resides, shall be subject to the control procedure organised there, and shall adhere to the conditions laid down under the legislation of that Member State. nevertheless, if he chooses also to register as a person seeking work in the Member State in which he pursued his last activity as an employed or self-employed person, he shall comply with the obligations applicable 21. Ayuso Mozas, Raúl. “La prestación por desempleo en la normativa y en la jurisprudencia comunitarias”. Revista del Ministerio de Trabajo y Asuntos Sociales” nº 72. 115 VI. COMMITMenT TO WORK, JOB-SeeKInG And UneMPLOyeMenT PROTeCTIOn... in that State, even when the retention of the entitlement to benefits is not affected. Rather, an unemployed person, other than a frontier worker, who does not return to his Member State of residence, shall make himself available to the employment services in the Member State to whose legislation he was last subject. This person shall register as a person seeking work with the competent employment services of this Member State, shall be subject to the control procedure organised there, and shall adhere to the conditions laid down under the legislation of that Member State. A wholly unemployed person who, during his last activity as an employed or self-employed person, resided in a Member State other than the competent Member State and who continues to reside in that Member State or returns to that Member State shall receive benefits in accordance with the legislation of the Member State of residence as if he had been subject to that legislation during his last activity as an employed or selfemployed person. This shall be applied even where, as a supplementary step, this person makes himself available to the employment services of the Member State in which he pursued his last activity. Those benefits shall be provided by the institution of his place of residence. However, a worker other than a frontier worker who has been provided benefits at the expense of the competent institution of the Member State to whose legislation he was last subject shall firstly receive, on his return to the Member State of residence, benefits in accordance with Article 64, receipt of the benefits in accordance with (a) being suspended for the period during which he receives benefits under the legislation to which he was last subject. The benefits provided by the institution of the place of residence shall continue to be at its own expense. The competent institution of the Member State to whose legislation he was last subject shall reimburse to the institution of the place of residence the full amount of the benefits provided by the latter institution during the first three months. The amount of the reimbursement during this period may not be higher than the amount payable, in the case of unemployment, under the legislation of the competent Member State. However, benefits received by the frontier worker in the terms established for displaced workers seeking a job shall be deducted from those that have been reimbursed. The reimbursement period of three months shall be extended to five months when the person concerned has, during the preceding 24 months, completed periods of employment or self-employment of at least 12 months in the Member State to whose legislation he was last subject, where such periods would qualify him for the purposes of establishing entitlement to unemployment benefits. For the purposes of benefits co-ordination, two or more Member 116 AndRÉS RAMÓn TRILLO GARCÍA States, or their competent authorities, may provide for other methods of reimbursement or waive all reimbursement between the institutions falling under their jurisdiction. Article 56 of the eC Regulation 987/2009 establishes that, where the unemployed person decides to make himself/herself also available to the employment services in the Member State not providing the benefits, by registering there as a person seeking work, he/she shall inform the institution and the employment services of the Member State providing the benefits. Therefore, at the request of the employment services of the Member State not providing the benefits, the employment services in the Member State that is providing the benefits shall send the relevant information concerning the unemployed person’s registration and his/ her search for employment. Thus, where the legislation applicable in the Member States concerned requires the fulfilment of certain obligations and/or job-seeking activities by the unemployed person, the obligations and/or job-seeking activities by the unemployed person in the Member State providing the benefits shall have priority. This means that the non-fulfilment by the unemployed person of all the obligations and/or job-seeking activities in the Member State which does not provide the benefits shall not affect the benefits awarded in the other Member State. If the unemployed person resides in a State other that the one in which he pursued his last activity, the institution of the place of residence shall request reimbursement of unemployment benefits pursuant to Article 65 of the eC Regulation 883/2004 from the institution of the Member State to whose legislation the beneficiary was last subject22. The request shall be made within six months of the end of the calendar half-year during which the last payment of unemployment benefit, for which reimbursement is requested, was made. The request shall indicate the amount of benefit paid during the three or five month-period referred to in Article 65(6) and (7) of the eC Regulation 883/2004, the period for which the benefits were paid and the identification data of the unemployed person. The claims shall be introduced and paid via the liaison institutions of the Member States concerned. However, there is no requirement to consider requests introduced after the time-limit of six months. These requests shall be under the Common provisions concerning the reimbursement 22. García Viña, Jordi. “La coordinación de prestaciones de desempleo en el Reglamento 883/2004. La Coordinación de los Sistemas de Seguridad Social. VVAA, dirigido por Sánchez-Rodas navarro, Cristina. Laborum 2010. Pag. 285. 117 VI. COMMITMenT TO WORK, JOB-SeeKInG And UneMPLOyeMenT PROTeCTIOn... between institutions when health-care is concerned. Thus, from the end of the 18-month period for performing the payment, interest may be charged by the creditor institution on outstanding claims. Finally, the maximum amount of reimbursement is in each individual case the amount of the benefit to which a person concerned would be entitled according to the legislation of the Member State to which he was last subject, if registered with the employment services of that Member State. However, in relations between the Member States listed in Annex 5 to the implementing Regulation, the competent institutions of one of those Member States to whose legislation the person concerned was last subject shall determine the maximum amount in each individual case on the basis of the average amount of unemployment benefits provided under the legislation of that Member State in the preceding calendar year. As far as the commitment to work is concerned, the application of the principle of equal treatment leads us to the same conclusion as mentioned in relation to beneficiaries of unemployment benefits who export their benefit in order to seek work in another eU State. In general terms, the worker shall be subject to the obligations established by the legislation of the employment services in the State of residence. In the case of Spain, he will be required to sign the commitment to work. In France and United Kingdom similar obligations will be demanded. As stressed above, appropriate reporting protocols should be put in place so the employment services of the State of residence can closely follow up the unemployed person’s labour integration itinerary, as well as his chances of employability. 119 C. GOOd PRACTICeS ReGARdInG THe COnCePT OF THe FROnTIeR WORKeR... Chapter VII Good practices regarding the concept of the frontier worker and his unemployment protection under eU coordinating regulations1 Prof. dr. dolores Carrascosa Bermejo Universidad Pontificia Comillas (ICADE). Madrid I. IntroductIon The lack of harmonization in Social Security rules among eU Member States have a highly negative impact on frontier workers. Those rules are intrinsically territorially based; national lawmakers use “territorial elements for defining its scope of application, the requirements that define its beneficiaries, and the payment conditions of those benefits that are recognised2. In effect, Social Security rules are based on the wrong idea that beneficiaries were born, reside and work within the national territory. These elements are precisely the basis for the entitlement to benefits or the obligation of insurance. These premises do not reflect migrant workers’ reality. Further, they do not even correspond to the situation of frontier workers, who obtain their professional income from one country and maintain their residence in a different one, to which they return regularly. In this paper we propose some good practices related to frontier workers regarding their own identification and focusing on their unemployment 1. This report has been published in the framework of the R & d project “Good Legal Practices in the Field of Labour and european Law to Reduce Labour Litigation expenditure at Zero Cost” (I+d deR 2012-32111). 2. Cornelissen, Rob. “The principle of territoriality and the Community Regulations on Social Security (Regulations 1408/71 and 574/72)” Common Market Law Review 1996, p. 441. 120 dOLOReS CARRASCOSA BeRMeJO protection within the framework of eU Regulations on coordination of national Social Security systems in force since 1-5-2010 (Ce/883/2004 and Ce 987/2009 Regulations). According to previous studies regarding coordinating Regulations3 or free movement of workers4 and taking into account eCJ recent rulings, we note that unemployment is still the most controversial and complex benefit; this is the reason why we focus our interest on this topic. In general terms, also regarding frontier workers, coordinating Regulations prioritise the application of the Social Security Law of the country of employment (lex loci laboris), ban, any discrimination on grounds of nationality, permit the aggregation of insurance periods and allow exportation of cash benefits5. Thus, frontier workers’ insurance and contribution payments must be made in the State where they are employed, in application of coordinating Regulations. In this way, the affected national administration cannot invoke non-performance of the residence requirement by the frontier worker as a ground for barring his entrance or registration in its Social Security System. This mandatory rule also affects employers that have to fulfil the obligation of contributing, regardless of whether the worker resides in a different Member State6. Consequently, 3. Considering all kind of benefits can be consulted these previous studies . desdentado Bonete, A. “Trabajadores desplazados y trabajadores fronterizos en la Seguridad Social europea: del Reglamento 1408/1971 al Reglamento 883/2004” Revista del Ministerio de Trabajo Asuntos Sociales nº 64 p. 33 a 37. Carrascosa Bermejo, dolores. “Los trabajadores fronterizos presente y futuro en la norma de coordinación comunitaria (Rgto 1408/71/Cee y Rgto 883/2004/Ce)” / en/ VV.AA (dir Correa Carrasco, M.) Protección social en las relaciones laborales extraterritoriales. Madrid. Universidad Carlos III y BOe (Col Monografías nº 57). 2008. 412-461. Also available at the Spanish Ministry of Labour website (dG for Social Security Organisation; pages 147-192 http://www.seg-social.es/stpri00/groups/public/ documents/ binario/097537.pdf. Miranda Boto, J.Mª. /en/ VVAA Sánchez-Rodas navarro, C. (director) La Coordinación de los Sistemas de Seguridad Social. Murcia. Laborum. 2010. 4. The 2015 report on eU Commission’s FreSsco network regarding free movement of frontier workers, on one hand, identifies the major and classic barriers to free movement of this target group. On the other, it discusses problems of their attention and registration at the employment service of the country where they work but do not reside. Finally it is highlighted that the lack of access to tax advantages and the existing problems related to access to social security; which are not co-ordinated areas and they operate with non-common criteria See Jorens, y., Mindehoud, P. y de Coninck, J. Comparative Report: frontier workers in the eU. FreSsco european Commission. January 2015. 123 p. 5. An approach to coordinating Regulations in Carrascosa Bermejo, d. “Seguridad Social de los trabajadores migrantes (I): Rasgos y principios generales” /en/ VV.AA (dir. nogueira Guastavino, M.; FotinopoulouBasurko, O. y Miranda Boto, J.Mª.) Lecciones de derecho Social de la Ue. Valencia. Tirant lo Blanch. 2011. 6. See the eCJ ruling 24-6-75, Case Football Club d’Andlau 8/75. 121 VII. GOOd PRACTICeS ReGARdInG THe COnCePT OF THe FROnTIeR WORKeR... they should be treated on the same basis as national employers from the State of employment. Prioritising the “lex loci laboris” rule, a uniform treatment by this State of frontier workers in comparison with their coworkers is more easily achieved. Any distortion in the labour market is also avoided by this rule, as well as double ontributions, because of its exclusive character. even when a national legislation wrongly considers a kind of Social Security contribution a tax burden alien to its Social Security system. Besides, as the Court of Justice has recognised, migrant and frontier workers, once they have gained access to the labour market of a particular State, have created, in principle, a fundamental “link of integration” with that State. This has allowed them to benefit from the principle of equal treatment in relation to national and resident workers, respectively. This link of integration could specifically derive from the following facts: with the social contributions payed in the employment Member State by frontier workers by means of the professional activity that they carry out there, and considering that they also contribute with their taxes to the funding of social policies of that State7. As we will see, the Regulations include an ad-hoc conflict rule for the protection of frontier workers who have become wholly unemployed. This specific rule exclusively identifies the State of residence Law as the one that must be applied for the recognition and in such a case the calculation of this benefit. On the other hand, the exportation of the unemployment benefits workers it is not going to be examined in detail in this paper as far as there is not a specific treatment by coordinating Regulations for frontier workers8. Indeed, the frontier worker, in the same way as a regular migrant worker is subject to strict requirements established by those Regulations in order to have the right to the temporarily limited exportation of unemployment benefits9. This regime seems to prioritise the administrative control and 7. See eCJ ruling 13-12-12 Case Caves Krier C-379/11 paragraph 53, and particularly eCJ ruling 14-6-12, Case Commission vs the netherlands, C542/09, paragraphs 63, 65 and 66 and the case-law mentioned in it. 8. See eCJ ruling of 6-11-03, about the Commission vs. the netherlands case C-311/01. This ruling confirmed the non-fulfillment of this State when it prevented Mr. Lorenz from exporting its benefit to France with the aim of seeking employment. Mr. Lorenz was a frontier worker residing in the netherlands and working in Germany. This impediment, which has a noticeably negative effect on the frontier worker, is not justified in the protective purpose demonstrated by the coordinating Regulations (as this target group is not excluded). Therefore, Mr. Lorenz would have the right, on the one hand, to go to France for three months to seek employment, and on the other, to receive the unemployment benefit paid by the State of residence, being in this case the netherlands. 9. See Regulation Ce/883/2004 Article 64. 128 dOLOReS CARRASCOSA BeRMeJO example, a Graduate in Labour Relations, for the purposes of notification and worker’s contributions, and the worker should register in the Spanish Social Security system30. The development of technology will continue to bring up such cases, which should be treated or addressed by the coordinating Regulations in force. 4. other issues related to the differences between the frontier worker and other specific types of migrant workers can also arise, such as the following: a) The posted worker is the one temporarily sent or posted by the employer to another Member State but —thanks to ad-hoc coordination rules— maintains his insurance link with the Social Security system of the State of origin and the new and actual “lex loci laboris” is not temporarily applied. Frontier workers are indeed insured in the State of employment but they maintain their residence or centre of interest in a different State31. The latter circumstance may occur with respect to posted workers that maintain their residence in the State of origin, as happens in many cases. The relevant difference lies in the temporary nature of the condition of the posted person, which does not have to be the case with frontier workers (there is no legal obstacle to be be considered a frontier worker in a permanent basis). The possibility of a frontier worker to be simultaneously a posted worker is not considered by current Regulations32. In principle, an employer could easily post a frontier worker. However in order to maintain his frontier worker status It seems he could not be posted to the Member State of residence as far as in this case his residence and employment would be placed in the same Member State. nevertheless considering that this coincidence is just temporary, it could be sustained that the fixed legal connexion (being insured in the place of employment) prevailed over the factual link (temporary posting in the place of residence). In all other cases, when the 30. General Social Security Law (Ley General de la Seguridad Social) Article 99 (Since 2nd of January 2016 Royal decree Legislative 8/2015 art. 138); Royal decree 84/1996 Article 5. 31. See eCJ ruling 7-11-02, Case Maaheimo C-333/00, related to the residence of the displaced worker’s children and his right to family benefits. 32. Regulation 1408/71/eeC Article 1.b): “(…) a frontier worker who is posted elsewhere in the territory of the same or another Member State by the undertaking to which he is normally attached and is prevented on account of such posting from returning daily or at least once a week to the place where he resides shall nevertheless retain the status of frontier worker for a period not exceeding four months”.. 129 VII. GOOd PRACTICeS ReGARdInG THe COnCePT OF THe FROnTIeR WORKeR... frontier worker it is posted to a different State the problem may arise with fulfilling the requirement of returning to the place of residence within the required periodicity (daily or weekly). This problem was already addressed under the previous Regulations, that solved it by eliminating this requirement but only during a maximum period of 4 months. b) Also, frontier workers may be simultaneously mobile workers. These workers would perform their professional activity in the territory of two or more Member States different from their State of residence and where they could return at least once a week. In principle, this type of worker could be considered frontier workers if they do not carry out their professional activity in the State of residence. As in this case, in general terms and under the ad-hoc established Community conflict rules, they would be obliged to reside, affiliate and contribute there, since the place of employment and residence are the same; even if this coincidence is partial33. In order to better target the specific issues mentioned in this paper, the eCJ 16-2-95 ruling, Calle Grenzshop C-425/93 case, can be very useful. This ruling was about a German food retail company (Calle Grenzshop) located close to the border with denmark. Mr. Wandahl, who was resident in denmark and affiliated to the danish Social Security system, worked for this company as manager. He also performed professional activities for this company in denmark, 10 hours per week, on a permanent basis for several years. The question referred to the preliminary ruling arises from the claim brought by the German Social Security Administration as it considered that Mr. Wandahl should be affiliated in Germany and pay his contributions there. nevertheless, the eCJ considered that the worker was correctly affiliated to the danish Social Security system under the coordinating Regulation, which is provided for those who are workers in the territory of two or more Member States. Also, this rule’s application binds the worker involved to be subject to the legislation of the Member State of residence if he pursues a substantial part of his activity in that Member State, or if he is employed by various companies or employers whose registered offices or places of business are in different Member 33. Broadly speaking, different connections are provided by the Community conflict rule depending on whether the worker is member of the travelling or the flying personnel. The first group are in principle addressed by the Law of the State where the registered office of the company is (lex domicilii). The not-travelling personnel is required to be insured in the State of residence when part of the activity is performed there too. If this is not possible, they will remain affiliated in the Member State where the registered office of the company is. 130 dOLOReS CARRASCOSA BeRMeJO States34. Whether he did not work in the State of residence and the company had its registered office in a Member State, this State’s Social Security system would specifically be the one of insurance. The eCJ also rejected the idea that Mr. Wandahl was a posted worker, as the absence of a time limit on the professional activity he performed in denmark was confirmed. II. unemployment protectIon guaranteed to the frontIer worker This section analyses two key areas. First, the national applicable Law for entitlement to this benefit; second, the benefits’ calculation rules and their partial reimbursement by the State of employment, if possible. II-A. THe LAW APPLICABLe TO THe UneMPLOyed FROnTIeR WORKeR A specific conflict rule has not been established on eU coordinating Regulation for etermining the competent State to provide unemployment benefit to “common” migrants. In this case, the Social Security system of the last State of employment should be applied; therefore, this is the competent State. This can be considered a legal connection that actually gives preference to the latest State of insurance (is the State of the latest employment or where insurance/contribution periods have been covered). As we will see, frontier workers are under the general rule when partial unemployment is considered. However, in cases of total unemployment, the Law of the State of residence is exclusively applied. This change appears to be based on the strong links that allegedly exist between the frontier worker and this latter State to which he periodically returns. It is true that in some cases a frontier worker can feel more confortable applying for benefits in the State of residence. He can also be easily monitored by the employment services if he chooses this option. nevertheless, this is by no means a neutral solution for frontier workers, because migrations usually come from less-developed States towards more developed countries, where salaries and Social Security systems are often more generous. The receipt of unemployment benefits within these States, despite being the States of employment, are banned in the frame of the new Regulations. The exclusive submission to the law of the State of residence appears to only benefit the State of employment of the frontier worker, as it could 34. See the previous Regulation 1408/71/eeC Article 14.2.b).i); at present Regulation 883/2004/eC Article 13.1. 131 VII. GOOd PRACTICeS ReGARdInG THe COnCePT OF THe FROnTIeR WORKeR... involve substantial savings for this State. The State of residence only receives a partial reimbursement from the latter. This means that these States of employments will almost always pay less than they should pay in cases of recognising their own unemployment benefits. Thus the legislature distinguishes between the two following unemployment situations of frontier workers35 (Regulation 883/2004/eC art. 65): 1. partIal UneMPLOyMenT. This is when there is a contractual link between the parties. Thus the worker who is partially unemployed is one whose contract has been suspended and can be restarted at any time36. Also in this situation is the frontier worker who starts a part-time job in the Member State where his previous full-time job ended and is hired by a new employer37. In such a situation, the worker has to apply for unemployment benefits under the State of employment. He must apply as if he were residing in that State, that is, at the expense of the competent institution. In this case, the general rule has priority, and as far as the employment relationship is only suspended, the law of the State of employment “lex loci laboris” continues to apply. 2. total UneMPLOyMenT. This is when the work relationship is withdrawn or terminated38. In this case a frontier worker, according to paragraph 13 of the Preamble to Regulation 987/2009, and as the eCJ has confirmed39: a) Is exclusively subject to the State of residence Social Security Law for guaranteeing the unemployment benefit, the same as the worker would have been subject to the legislation of that State while performing his latest job. It is a legal fiction that the general rule is exempt from the competence of lex loci laboris. 35. Article 65 bis establishes a specific rule for self-employed frontier workers who have become wholly unemployed in order to avoid a lack of insurance protection and foreseeing that not every State grants unemployment benefits. 36. See the ACCSSS’s decision (Administrative Commission for the coordination of social security systems) no. U3 OJeU C-106 24-4-10, paragraphs 1 and 2. This decision follows the approach of the CA.SS.TM’s decision (Administrative Commission on Social Security for Migrant Workers) delivered in the frame of the previous Regulations in force and that included the doctrine expressed in the eCJ ruling 15-3- 01 ruling, Case Laat C-444/98. 37. See eCJ ruling 5-2-15, Case Mertens C-655/13. 38. See ACCSSS’s decision no. U3 OJeU C-106 24-4-10, paragraph 3. 39. See eCJ ruling 11-4-13, Case Jeltes C-443/11. 132 dOLOReS CARRASCOSA BeRMeJO b) May make himself available to the employment services of the State where he has been last employed. This is envisaged in the frame of active employment policies, as applying for unemployment benefit in the State of employment is not possible. The first element, the exclusive competence of the State of residence, binds this State to check if the migrant meets the access requirements established in its own legislation to be entitled to unemployment benefits using the aggregation of foreing insurance periods if they are needed. If he does meet them, he may receive benefit from the State where he posbecomes ibly never contributed. For this reason a reimbursement system between the institutions involved is established. We must emphasize that not every worker residing in a Member State which is not the State of employment is in the situation of being under the exclusive competence of the State of residence. Rather, this special rule can only be applied where frontier workers are concerned, as in other cases the legislature offers the option for workers to decide to apply to the employment services of the State of employment and to receive those benefits from that country in the first place if they established their residence in the employment State. In this case, those benefits they are entitled to receive in the State of residence are suspended while workers collect benefits from the former40. This right of option has been extended in the frame of the previous coordinating Regulation related to the socalled “false frontier workers”. In effect, the designation of the State of residence suspended the State of employment’s competence, if the frontier worker is not registered in the employment offices of this State, or even if he changes his residence to this state. The interpretation of the eCJ in the Miethe ruling configured a special conflict rule, an exception to the exception considered under the ad-hoc rule for wholly unemployed frontier workers. The ad-hoc frontier worker conflict rule was not applicable when demonstrating that this worker exceptionally maintained personal and professional links with his latest State of employment, and also when those links were of such a nature that it could be assumed that it was in this State where the worker had better 40. non-frontier workers residing in a different Member State from the one of employment or the State that is competent subjected to the referred conflict rule are identified in the ACCSSS’s decision no. U2 OJeU C-106 24-4-10. This is addressed to workers concerned by the following Articles of the Regulation 883/2004/eeC: Article 11§4 (sea workers on board of ships with flags of a Member State); Article 13 (people that perform activities in two or more Member States) and Article 16 (workers submitted to any existing agreement between institutions which exempt Community conflict rules). 133 VII. GOOd PRACTICeS ReGARdInG THe COnCePT OF THe FROnTIeR WORKeR... opportunities for reintegration41. In fact, in these cases, it can be understood that the centre of interest was located in the State of employment. For this reason, his residence, under the coordinating Regulations, was also located there. Thus he was not actually a frontier worker. This is what is called “false frontier, pseudo-frontier or denaturalised workers”. nevertheless, observing the preparatory works of the eCJ, and under the coordinating Regulation in force, it was not desireable to follow the doctrine settled in the Miethe ruling, as confirmed by the eCJ42. On the contrary, opting for benefits from the State of employment is no longer possible, and access to its active employment policies is only granted complementarily. However, in my opinion, this eCJ ruling is not entirely consistent. If the frontier worker demonstrates that his centre of interest is in the State of employment, actually he would be proving that this is his State of residence in terms of coordinating rule (ex Regulation 987/2009 article 11). In this case, he would hardly be considered a frontier worker. Strictly speaking, as an “ordinary migrant worker”, he would benefit from the general rule, this is, the lex loci laboris principle. In fact, if the State of residence is actually the one of his employment, we could consider that his right to free movement is infringed, as he is being discriminated against because of his migrant condition compared to workers resident in the State of employment (TFeU Article 45)43. Administrations or national courts should examine the existence of these links. In cases of conflict when analysing the concurrent details, it is recommended to turn to SOLVIT and to solve this point before going to court. Whether the unemployed frontier worker decides to change his residence to the Member State of employment it is worth highlighting that this option should not be understood as an exportation of the benefit provided by the State of residence, as recognised as recognised by the eU case-law (eCJ judgement 7-3- 85, Case Cochet 145/84; eCJ judgement 13-3-97, Case Huijbrechts C-131/95). In previous Regulations, the conflict rule creates the legal fiction that the wholly unemployed frontier worker last worked in the State of residence. This fiction suspends but not cancels the obligations of the State of employment, provided that the frontier worker maintains his residence in another Member State. If the worker changes his residence to the territory of the State of employment, the rules 41. eCJ ruling 12-6-86, Case Miethe 1/85, paragraphs 16, 17 and 18; this objective is recently reiterated, among others, in the eCJ ruling 6-11-03, Commission vs the netherlands C-311/01, paragraph 46. 42. See Considerandum no. 13 of the Regulation of development and the eCJ ruling 11- 4-13, Case Jeltes C-443/11, paragraphs 32ff. 43. See the contrary analysis provided when the residence is not in the State of employment in paragraphs 41ff. of the eCJ ruling 11-4-13, Case Jeltes C-443/11 134 dOLOReS CARRASCOSA BeRMeJO on exportation of unemployment benefit should not be applied. In fact, we are actually returning to the general rule, the lex loci laboris rule, as these persons would lose their condition of frontier workers. In this context, the State of the most recent employment, shall assume the unemployment benefit, discounting those benefits that have been previously paid by the former State of residence, as if they were paid by itself. The exclusive application of the Law of residence to the wholly unemployed frontier worker could be justified, as it facilitates the anti-fraud control of unemployed persons. Also, it mainly rests on the requirement to adapt benefit levels to the living standards of the State of residence. Indeed, a disproportionate benefit may lead to a lack of motivation in job-seeking. The same argument can be used for justifying the temporary limitation of unemployment benefits, or for prohibiting the complete exportation of non-contributory special benefits. However, it is also important to highlight that the State of residence takes into consideration the last foreign salary of the applicant when calculating the wholly unemployed frontier workers’ benefit, instead of considering the living standards of the State of residence. But this should always be done within the quantitative limits usually established in the Social Security legislation applied in the State of residence. We should also consider that the Law of the State of residence is applied regarding unemployment exclusively. This means that the remaining benefits are still under the Law of the State of employment. This alleged simplicity (the irrelevance of the denaturalised character of the frontier worker) results in a very confusing situation when different eventualities concur. This happens, for example, when the unemployed frontier worker has a child or falls ill. In these cases a maternity or paternity benefit or a temporary incapacity benefit in cash should be provided by the State of employment. Logically the State of residence could suspend the unemployment benefits. Managing these situations appropriately appears to require an administrative collaboration at the highest level44. The second issue analysed is the worker’s right to register in the employment offices of the latest State of employment where he worked— in order to benefit from a retraining programme, for example. Regarding this, it must be pointed out that this is an important measure for this target group of frontier workers. Certainly, many of them would want to remain employed in the State where they work. nevertheless, it seems 44. See eCJ ruling 15-10-91, Case napoleón and Jocelyn Faux C-302/90. In this case the frontier worker is allowed to apply for the temporary incapacity benefit in the State of employment while receiving unemployment benefit from the State of residence. Here the period of unemployment would be calculated in the same way as if the worker had performed it in that State. 135 VII. GOOd PRACTICeS ReGARdInG THe COnCePT OF THe FROnTIeR WORKeR... that States have not assumed this clear requirement by adapting their national legislation. This is why relevant administrative burdens appear to exist that are, in practice, obstacles preventing these workers from exercising their rights. One such obstacle is the requirement of residing in the State of employment or at least having a domicile in its territory in order to proceed with registration. This is evidenced by the eCJ case law 45 and a recent study of the Commission46, where it is highlighted that, for example in Spain and France, having a domicile/residence in their territory is de facto required for registration (in Spain, it is even required to have it in the specific area covered of the employment office where the worker applies for registration). This requirement de facto prevents frontier workers from getting access to the benefit. This is a bureaucratic and unacceptable obstacle that frustrates the free movement of workers and undermines their basic rights. These administrative national barriers are against the Community’s effort to enhance this freedom, for example by promoting job search across national borders, as shown in the recently signed Royal decree 4379/2015, BOe 10-6-15. This rule contains the “your eUReS-eSF job” action, founded by the european Social Fund with the aim of boosting labour mobility within europe. As the eCJ recognised in the 90’s, the purpose of the coordinating Regulations concerning this issue is to promote the unemployed person’s reintegration; adding that the worker is “who is in the best position to know what the possibilities of finding new employment are”47. This is the conclusion that should also be applied to frontier workers who should be able to register according to their interests and without legal or administrative barriers. The legislature does not rule out that frontier workers who reside in a different Member State than the one that is competent, could simultaneously be put at the disposal of the employment services of both States involved (employment and residence). In this way, their opportunities of finding a new job are optimised. To this end, the worker must firstly report his intention to the institution and to the employment services of his place of residence,since this state is the one which provides, where appropriate, the unemployment benefit. At the request of the employment services of the Member State in which he pursued his last activity, the employment services in the place of residence shall send the relevant information concerning the unemployed person’s registration and search for employment. 45. eCJ ruling 13-12-12, Case Caves Krier Frères C-379/11. 46. See Member States’ sheets included in Jorens, y., Mindehoud, P. y de Coninck, J. Comparative Report: Frontier workers in the eU. FreSsco european Commission. January 2015. 123 p. 47. See eCJ ruling 29-6-95, Case Joop Van Gestel C-454/93. 136 dOLOReS CARRASCOSA BeRMeJO Logically, the State which pays the benefit —the one of residence— can force the unemployed person to first fulfill certain obligations and/ or activities related to a job search. If the worker does not meet those obligations or activities related to the job search in the State of employment, his benefit recognised by the State of residence cannot be jeopardised because of this non-compliance. II-B. CALCULATIOn And ReIMBURSeMenT OF BeneFITS The rule in force assumes the previous case law and allows the State of residence to take into consideration “the income received by the person involved in respect of his last employment” (Regulation 883/2004/eeC Article 62.3)48. The Regulation of development clears the two following issues from which a reinforced administrative collaboration is again deduced (Regulation 987/2009/eC Article 55): — Firstly, the competent institution of the latest State of employment or professional activity shall report, at the request of that of the State of residence, all required data for calculating the unemployment benefit, and particularly the amount of the salary or professional incomes received. — Secondly, the applicable legislation provides that the calculation of benefits varies depending on the number of family members, even if they reside in another Member State they should also be taken into account as if they resided in the competent Member State. In the same way that the rule in force tries to prevent the overlap of benefits, this provision shall not be applied when another family member is entitled to unemployment benefits in the same State of residence. This shall be foreseen in those States where the number of family members determines the amount of the benefit, avoiding unjustified overprotection. It should not be forgotten that the foreign salary is applied in the framework of the Social Security legislation of the State of residence. For example, the Spanish legislation reduces the top limits, and therefore the amount of the unemployment benefit decreases, moving away from the replacement rate desirable for job loss. As a new feature, the Regulation 883/2004/eC includes a limited reimbursement between the affected institutions. This enables the State of residence to obtain some financial compensation from the State of employment for the benefits that have already been paid, considering that the frontier worker was contributing to the State of employment as a result of his professional activity. Accordingly, the Social Security 48. See eCJ ruling 28-2-80 on Fellinger (67/79) case; see also eCJ ruling 1-8-92 on Grisvard y Kreitz case. 137 VII. GOOd PRACTICeS ReGARdInG THe COnCePT OF THe FROnTIeR WORKeR... system of the State of residence has to reimburse the unemployment benefit that has already been paid to the frontier worker in the first three months, up to the maximum paid in his own State. If the unemployment benefit has been payed or even exported, it should be deducted from those three months (Regulation 883/2004/eC Article 65.6). This period of reimbursement shall be extended to five months when the person concerned has performed his activity in the preceding 24 months, during a period of at least 12 months in the latest State of employment, where such periods would be taken into account for generating unemployment benefits (Regulation 883/2004/eC Article 65.7). In any case, “for the purposes of paragraphs 6 and 7, two or more Member States, or their competent authorities, may provide for other methods of reimbursement or waive all reimbursement between the institutions falling under their jurisdiction” (Regulation 883/2004/eC Article 65.8). Throughout the decision no. U4 (OJeU C-57 of 25-2-2012), the ACCSSS has tried to clarify the complex reimbursement procedure between institutions. The bureaucratic burden imposed on the State of residence and the limitation of the entitled amount (hardly understandable in the frame of a contributive model) may discourage its use. As we pointed out, the rules in force seem to only favour the host States of frontier workers. III. conclusIons On one hand, it is not appropriate to apply the legislation of the State of residence, enabled by the ad-hoc conflict rule, to the wholly unemployed frontier worker. Also, it is even more complex than invoking the general rule applicable to the common migrant, which allows him the option to choose between benefits by placing himself at the disposal of the employment services of either State. The coordinating Regulations should be amended in order to remove this ad-hoc conflict rule. At least the wholly unemployed frontier workers should be entitled to decide whether they want to receive the unemployment benefit in the State of employment, after establishing their residence in said State, just as any other migrant that works and resides in different Member States. The Regulation in force does not seem to envisage this possibility. Following case Jeltes C-43/11, fully unemployed frontier workers are entitled to unemployment benefit only in the Member State of residence, while the Member State of employment just permits the registration as unemployed person and provides access to “active employment policies” in force regarding the registered frontier workers. However, in this connection, it is worth highlighting that even if there is not such an amendment, it could be sustained —under in-force 144 dOLOReS CARRASCOSA BeRMeJO of general interest. In this case, the Spanish legislature has chosen the most restrictive option regarding the right to reimbursement for Spanish insured persons when the directive was implemented. In fact, it requires previous authorization in all the cases permitted in the directive, and incluyes every possibility for denial established in its articles (Rd 81/2014 art. 10.5 y 15). Thus, previous authorization is required for any hospital healthcare, including an overnight stay, as well as for a controversial list of non-hospital or non-ambulatory treatments mentioned in the Rd 81/20147. The insured shall apply for previous authorization from the health service corresponding to his place of residence, which will not be deniable in the cases in which it would be granted under the same Regulations through the application form e-112 or portable document S2. However, a denial is permitted when there are several concurring circumstances which involve risks to the patient´s safety or to the population in general, or when the health supplier does not provide enough guarantees (Rd 81/2014 art. 17). The patient shall be notified regarding the allowance or rejection of the authorization, and of the reason for the decision, within 45 days after the reception of the application. Silence by the administration is considered a positive response (Rd 81/2014 art. 16). Besides the authorization, Spain demands, as an administrative additional requirement for reimbursement, that the insured person comply with the same applicable conditions for access to public healthcare provided in Spain. This requirement is so ambiguous that it seems to be possible that the national Health System is demanding of the insured person the presentation of a previous evaluation justifying the health benefit described in his application—a previous requirement prior to both the treatment and the authorization. The evaluation shall be performed by a Primary care doctor when done in Spain, but if the patient is already abroad it is unclear who would be responsible for that evaluation. even the Royal decree establishes that these evaluations cannot constitute an obstacle or discrimination to the free movement of patients, services or goods in any case, except for objective justification (Rd 81/2014 art.10.4). 7. The Royal decree even recognizes that some health treatments mentioned were selected because they require the use of highly specialised medical procedures or equipment, the need to provide care to patients suffering complex problems or due to their cost-intensiveness. Some of its categories have aroused controversy regarding the case-law supporting the authorization in some cases. All of them have to overcome the reasonableness and proportionality control for not being considered unjustified obstruction to the freedom to provide services. There are also some doubts regarding the exhaustive character of the listed treatments of the Annex, in this sense see Lousada Arochena, F. “Reembolso en el Real decreto 81/2014: la implementación de la directiva 2011/24/Ue” /en/ VV.AA Reembolso de gastos por asistencia sanitaria… op. cit. p. 120 s. 145 VIII. GOOd PRACTICeS ReGARdInG THe COSTS ReIMBURSeMenT OF CROSS-BORdeR... The reimbursement applied for at the Autonomous service shall be presented according to the established format, together with the documents mentioned in Rd 81/2014 Annex I. Chief among the requirements is that the invoice be as detailed as possible, identifying the different benefit concepts provided, the cost of each one, and the date of its performance. Any medical prescription or medical report of the healthcare provided is also compulsory, with special mention of the clinical explanation of the diagnostic and therapeutic healthcare provided, preferably using an identifying code already approved (CIe9-MC or similar). All these requirements aim to help evaluate the origin of the health benefit and to continue follow-up treatments and medical supervision when back in Spain. Finally, it is worth noting that the patient who wishes to receive or has already received healthcare in another member State has the right, among others, to (Rd 81/2014 art. 5): a) Availability of a copy of their clinical reports on appropriate media, along with the results of diagnostic tests and/or therapeutic procedures, providing information on the procedure to gain access to them. Public administrations shall promote access to clinical documentation by means of the information systems laid down for such purpose by the legal system. b) Medical follow-up in Spain after the healthcare is delivered, in the same way as if the care received in another Member State had been delivered in Spain. Also the recognition and dispensation of the prescriptions issued in the other member State, corresponding to the established community standard (Rd 1718/2010 art.15 bis phrased by Rd 81/2014; dir 2012/52/Ue and dir 2011/24/Ue). — reImbursement by the directive 2011/24/ue and rd 81/2014. The insured person must always pay the initial health costs, and afterwards apply for reimbursement to the competent health service (or the InGeSA in the cases of Ceuta and Melilla). Unfortunately, as some have criticized, this method is only available to people with economic resources that will permit them to assume these initial payments. The reimbursement by this means is limited to the amount established by the Autonomous or national health service rates (public prices) for the treatment provided (always up to the limit of the total cost paid). This rate does not necessarily cover the entire foreign health cost, and it is not always economically neutral for the insured. Furthermore, it will only cover the copayment totally or partially in the case that the foreign health cost is lower than the rate in the State of insurance (in this study, in Spain)8. 8. For example, in the case of a person insured by the Spanish system who goes to 146 dOLOReS CARRASCOSA BeRMeJO Regarding the Social Security systems, this method of reimbursement is considered economically neutral because they introduce the health costs in the prices reimbursed, even saving costs if the foreign rate is far lower9. This evident assertion regarding the national systems that reimburse healthcare costs internally, could be controversial regarding other national systems, like the Spanish one, offering healthcare to all their insured persons at their own expense and means, which causes in the end very high and fixed expenses. Under these latter systems the directive reimbursement is considered an additional cost to others already assumed. II-3.—reimbursement by means of the european court of Justice case-law on single market rules, mainly concerning freedom to provide health services10. One of the main objectives of the directive 2011/24 was to gather all the principles established by eU case-law together, aiming to provide legal certainty. However, this third process exists even without it, because the case-law is applicable even in the cases where the directive or the national implementing norm differ from the case-law and can be considered contrary to the Treaties. It must also be considered that the Court of Justice is still active, and could evolve or clarify differently from the case-law currently in force11. a private Portuguese gynecologist that charges 80 euros per visit, and the public prices of the Autonomous health system establish a rate of 130 euros for visit, the insured will receive a total reimbursement. If she goes to a French gynecologist that will charge 120 euros plus 20 euros for copayment, the reimbursement will not be total and the patient will assume a cost of 10 euros. See Carrascosa Bermejo, d. “Reembolso de gastos por asistencia sanitaria transfronteriza en la Ue. novedades en el Rd 81/2014…” op. cit. 9. See Carrascosa Bermejo, d. “Cross-borderhealthcare in the eU…” op cit. p. 375. 10. eCJ 28-4-98 decker C-120/95; eCJ 28-4-98 Kohll C-158/96; eCJ 12-7-01 Vanbraekel C-368/98; eCJ 12-7-01 Smits y Peerbooms C-157/99; eCJ 13-5-03 Müller-Fauré y Van Riet C-385/99; eCJ 23-10-03 Inizan C-56/01; eCJ 18-3-04 Leichtle C-8/02; eCJ 16- 5-06 Watts C-372/04; eCJ 19-4-07 Stamatelaki C-444/05; eCJ 15-6-10 Commission against Spain C-211/08; eCJ 5-10-10 Commissionag ainst France C-512/08; eCJ 5-10-10 elchinov C-173/09; eCJ 27-1-11, Commissionag ainstLuxemburg C-490/09. See an extended study of part of this case-law in Hierro Hierro, F.J. Problemas de coordinación de la asistencia sanitaria en el derecho europeo. Ministerio del Trabajo e Inmigración. Madrid. 2009. Garcia de Cortazar y nebreda, C. “¿Libre circulación de pacientes en la Unión europea? La atención de los dependientes y la tarjeta sanitaria europea” RMTAS nº 47/2003 y “Movilidad de pacientes en la Ue y atención sanitaria transfronteriza” /en/ VV.AA La gestión del sistema de Seguridad Social. Laborum. Murcia 2009. 11. See Carrascosa Bermejo, d. and Carrillo Márquez, d. “Jurisprudencia del Tribunal de Justicia sobre asistencia sanitaria y libre prestación de servicios. Su recepción en 147 VIII. GOOd PRACTICeS ReGARdInG THe COSTS ReIMBURSeMenT OF CROSS-BORdeR... — reImbursement under the case-law. The reimbursement obtained by means of this process is identical to the one pointed out in the previous paragraph regarding the directive and the Rd 81/2014. II-4.—reimbursement by means of the national law regarding vital urgency (law 16/2003 article 9 and royal decree article 4.3). This reimbursement method is only applicable when it is recognized that the foreign treatment, included in the Spanish basket of services, was provided in very exceptional cases of vital urgency that requires immediate healthcare12. This method is established not only in life and death cases but also when the lack of inmediate treatment may lead the patient to unacceptable loss of functionality of important organs, for instance, the retinal detachment when it generates vision loss13. — reImbursement under national law. This reimbursement method by means of this process is the most comprehensive one, as it covers all the health costs envisaged by the Spanish basket of services, including the foreign copayment. This fourth, method when granting additional coverage compared to the above mentioned, shall be of preferential application. It has been accepted as such regarding the coordinating Regulations as far as, due to their totally protective nature, its application cannot imply a loss of the rights that assist the insured person in the framework of the Autonomous or exclusive application of his own national law (eCJ 15-6-06, case Acereda Herrera C-466/04edJ 2006/80750 regarding the denial of reimbursement of some health transport cost; TSJ Cantabria 5-10-06, AS 2620Rec 150/04edJ 296010)14. III. artIculatIon of the dIfferent reImbursement methods Briefly15, it is remarkable that when the two first processes are applicable, la directiva 2011/24/Ue y el riesgo de una tercera vía.” /en/ VV.AA Reembolso de gastos por asistencia sanitaria… op. cit. p. 77 s. 12. See a detailed study of this method of reimbursement in Sempere navarro, A.V and Carrascosa Bermejo, d. “el reintegro de gastos sanitarios: una visión general” /en/ VV.AA. derecho Farmacéutico Actual. eupharlaw. Aranzadi. 2009. p. 32 s. 13. See the following supreme court judgements TS 4-7-2007, Rec 2215/2006 and TS 20- 10-2003 Rec 3043/2002. 14. See Supreme Court Judgements TS 4-3-2010, Rec 1504/09 and TS 13-7-2010, Rec 2194/09). In this sense Carrascosa Bermejo, d. “novedades normativas y jurisprudenciales en el reembolso de gastos por asistencia sanitaria transfronteriza en la Ue: entre la coordinación de los sistemas nacionales y la libre prestación de servicios” /in/ VV.AA. (Sánchez-Rodas navarro, C. dir.) Inmigración mujeres y menores. Laborum. Murcia. 2010. 15. See an extended study under Carrascosa Bermejo, d. “Cross-border healthcare in the 148 dOLOReS CARRASCOSA BeRMeJO the insured person shall be informed previously by the national Point of Contact of the rights contained in the coordinating Regulations and the ones envisaged under the national law implementing the directive (Rd 81/2014 art. 9). Once properly informed, the process of freedom to provide services, i.e., the one established in the Rd 81/2014, is only applicable if the insured person choses expressly this option. In effect, if there is no explicit decision, the Regulation shall apply as far as they are considered “a priori” more beneficial to the insured person. They allow a complete reimbursement of the health cost (although not always of the copayment), in many cases without requiring upfront payment (dir 2011/24/Ue art.5.b) and Rd 81/2014 art. 1.2º y 5.1). Specifically, it is established that if authorization via Rd 81/2014 is required, and the requirements for applying for assistance through the Regulations concur (presenting the application form e-112 or the document S2), the process of reimbursement by means of the Regulation shall apply, except if the patient expressly asks for reimbursement under Rd 81/2014. When authorization is not necessary under Rd 81/2014, the Spanish insured person can also choose this less demanding method compared to planned healthcare under the Regulations, which always requires authorization. IV. good practIces and proposals for ImproVement of the legIslatIon In force Based on the current situation outlined above, we propose some good practices and possible improvements de lege ferenda. All of them have been grouped in the following three sections: 1. Information. 2. Authorization. 3. Reimbursement. IV.1. InFORMATIOn a) The national and the Autonomous Points of Contact should inform the insured person about all the possible methods of reimbursement mentioned in this study, as well as the one under national law in case of vital urgency. even if one process can be more costly for the national healthcare system than others, objectivity obligates the Contact Points to give the patient a complete overview of his reimbursement options. eU: Interaction between directive 2011/24/eU and the Regulations on social...” op. cit. p. 359 s. 149 VIII. GOOd PRACTICeS ReGARdInG THe COSTS ReIMBURSeMenT OF CROSS-BORdeR... b) It is necessary to improve transparency and to facilitate access to information regarding: — The basket of services (the national Portfolio and the Portfolio of each Autonomous Service). — The charges (public prices) established for each treatment. Both should be available on the web sites of the national Point of Contact and of the Autonomous points of information. Furthermore, the charges (public prices) established by the different Autonomous Communities should not differ widely. At least a minimum amount and common standards for establishing the prices should be agreed at a national level. The current differences can lead to unequal situations among the insured persons in Spain. Besides, it is remarkable that even a simple change of residence or census registration would enable the access to a specific Services Portfolio eventually broader or providing a higher reimbursement amount. c) The national Point of Contact should also inform patients whether it is possible to obtain reimbursement without authorization. In effect, the authorization on its own cannot be considered a constitutive element of the right to reimbursement. Under the existing eU case-law on this question, it is arguable that the following patients are entitled to reimbursement despite not having obtained a previous authorization16: c.1) When authorization is granted after treatment, due to a judicial or administrative review ruling that its denial was unjustified; and the affected person had already received treatment in another member State (Vanbraekel art. 34 and elchinov 48, 77 y 78), for instance if the delay was controversial and subsequently proven to be medically unacceptable by the court or the administration. A patient cannot be obliged to wait until the end of a trial or a claim, often unjustly, as eU law would lose its effectiveness. c.2) A right to reimbursement can also derive from the above mentioned elchinov case-law. When the patient -—despite fulfilling all the requirements— does not apply for authorization or does not wait until it is granted, due to the need for urgent hospital care, specialized treatment, or outpatient assistance that 16. See Carrascosa Bermejo, d. and Carrillo Márquez, d. “Jurisprudencia del Tribunal de Justicia sobre…” op. cit. p. 10. 150 dOLOReS CARRASCOSA BeRMeJO cannot admit a delay by the competent service, the authorization becomes a limitation to the freedom to provide services that is not justified by overriding reasons of general interest. c.3) Under the process of the directive and the Rd 81/2014, it is implicitly understood that reimbursement could be granted after the denial of authorization —even if it is justified (for example, when the treatment can be provided within a medically acceptable time-limit)— if the requirement for authorization is contrary to the existing eU case-law. For instance, in case of reimbursement of non-expensive outpatient treatment, since in that case the authorization can not be required so whether it is granted or denied is irrelevant. d) It would be useful to have an “eU point of contact”, even if it were only accessible via internet a kind of official healthcare “Tripadvisor” that would include all the national information and would allow patients to compare parameters among the different member States. Since managing large amounts of information coherentely in various official languages would be problematic, all information should be translated, at least, into english. IV.2. ReqUIReMenTS FOR ReIMBURSeMenT: AUTHORIZATIOn a) In order to avoid unnecessary litigation Rd 81/2014 should be modified clarifying whether the list contained in Annex II is a closed one or not. Besides, this list should be amended, not only to make it more specific, but also to adapt it to the case-law of the eU Court of Justice, which seemed to consider authorization to be required only in cases of specialized and expensive outpatient treatment (eCJ 5-10-10 Commission against France C-512/08). Can a treatment over 1.500 euros be considered expensive under this interpretation? Could there be an authorization requiremente in case of a treatment provided to patients referred to centers for specialized care as the Rd 81/2014 Annex establishes? b) An effort needs to be made to unify procedures for granting authorization through different channels. Although the authorization established in the Rd 81/2014 is issued by the Autonomous health services, and that based on the Regulation is issued by the InSS, this later institution only grants authorizations based on the preceptive report issued by the Autonomous health services. Therefore, the procedure followed by the Autonomous service should be exactly the same in both cases. In the sense of this unification, it should be taken into account 151 VIII. GOOd PRACTICeS ReGARdInG THe COSTS ReIMBURSeMenT OF CROSS-BORdeR... that article 15 of the Rd 81/2014 envisages the following measures. The Benefits, Insurance and Funding Comisión (Comisión de Prestaciones, Aseguramiento y Financiación) will propose (and the Interterritorial Council of the national Health Service —Consejo Interterritorial del Sistema nacional de Salud— shall subsequently issue a favourable report) common criteria to be applied by all regional authorities, the national Institute for Healthcare Management (InGeSA) and by mutual societies for civil servants (mutualidades de funcionarios) in order to grant the relevant prior authorisations. Said criteria should apply at least for all the health services issuing the authorizations under both the directive and the Regulations. c) According to the above mentioned requirements, authorization can only be denied when the healthcare treatment is not mentioned in the basket of services, or when there is an acceptable waiting list on medical grounds for the specific case. This makes it incomprehensible that some Autonomous communities are still authorizing, for instance, planned births in other member States when there is no waiting list regarding this specific procedure. The voluntary granting of these authorizations implies assuming an unjustifiably high economic cost when other patients rights are being undermined because of the economic crisis. On the other hand, considering the statements from the recent ruling by the eU Court of Justice from 9-10-14, case Petru C-268/13, it could be said that previous authorization shall only be granted when none of the Autonomous health services can provide the necessary treatment within a time limit that can be justified on medical grounds. This requirement can save costs to the Autonomous services, since the coverage in another Autonomous Community will have a lower cost compared to the one in a different Member State. Besides, it could also be an advantage for the patient who perhaps prefers to stay in the national territory and to use his mother tongue. In addition, it would be convenient to establish a mandatory procedure —a step prior to any cross-border healthcare authorization— that would determine the possibility of providing the treatment within Spain. That would require an adequate and reasonable national reimbursement between the Autonomous health services involved, avoiding restrictions on the internal circulation of patients17. This 17. http://www.europapress.es/madrid/noticia-comunidad-no-firmara-ningun-acuerdoatender- pacientes-lm-si-no-pagan-asistencia-recibida-20140910122931.html. 152 dOLOReS CARRASCOSA BeRMeJO coordinating requirement, according to the above mentioned ruling, implies the existence of an actual right for nationally insured persons to receive coverage in all Spanish territories, eliminating the current restrictions established by the different Autonomous services on the mobility of patients. d) other requirements It is necessary to illustrate the cases in which, in order to obtain reimbursement, it is compulsory to receive primary care clinic (visit the family doctor) before receiving a treatment abroad. Is there such requirement when the insured person has recently seen a specialist in Spain, or has been receiving continuous treatment in another Member State for some time? It is also necessary to clarify what happens when the insured person is already abroad or when the need for health care is urgent. Is it then necessary to visit a Primary care doctor or a similar service in the State where the patient is? IV.3. ReIMBURSeMenT a) Given the existance of an eU model for prescriptions (Rd 1718/2010 art.15 bis redacted by Rd 81/2014), an eU model of invoice should also be established. Considering that this proposal was already offered by the Spanish authorities and rejected by the eU, Spain should establish a model invoice, at least in Spanish and english, to be filled in by the foreign supplier. This would guarantee to the Spanish insured person that the documentation presented later for obtaining the reimbursement is not defective difficult to rectify once back in Spain. b) The maximum term for demanding the reimbursement established by the Rd 81/2014 —3 months after the date of payment for the healthcare received in another member State— needs to be modified and aligned with the LGSS (Social Security General Law). In effect, this term is not acceptable since healthcare, like all the benefits provided by the Social Security, is bound to a longer prescription term (5 years) and the LGSS is hierarchically superior to those lower terms18. c) Some of the reimbursement norms contained in the developing 18. See Carrascosa Bermejo, d. “Reembolso de gastos por asistencia sanitaria transfronteriza en la Ue. novedades en el Rd 81/2014…” op. cit. 153 VIII. GOOd PRACTICeS ReGARdInG THe COSTS ReIMBURSeMenT OF CROSS-BORdeR... Regulation —specifically the ones established by the Regulation Ce/ 987/2009 26.B.6 y 7— needs clarifying of their scope by the Administrative Commission19. V. conclusIons As already highlighted in this study, there is a lot of work to be done regarding reimbursement, founded on the freedom to provide services established in the directive and its national norm of implementation, which try to be a reasonably accurate reflection of the eU case-law. There are several aspects to be improved, coordinated and clarified in the area of reimbursement of costs due to healthcare received in another member State. The situation is extremely complex and full of uncertainty, discouraging its use. nevertheless, thanks to the directive and its implementation (although that was not its purpose) there is an increase in citizens’ knowledge about their rights to obtain healthcare in a different member State —also according to the Regulations— and the reimbursement of the paid costs20. In the end, it is worth noting that this subject is closely connected with another matter that can be considered the other face of this reality. In effect, on one hand, we have the subject matter of this study, i.e., the reimbursement of the healthcare costs incurred by the insured persons in Spain; however, on the other hand, we have the invoicing, that is, the charge to other member States of the healthcare cost due for the coverage or treatment given to their insured persons in Spain. On this subject, we can mention that there are constant problems associated with the defective invoicing of the actual expenditure (or real costs) by the Autonomous services regarding the unplanned healthcare provided to patients insured in other Member States according to the public prices established for the treatment or medicines received (especially outpatient and pharmaceutical costs) 21. Although the situation has improved compared to previous years, especially regarding hospital costs, it does not make any sense, for example, that Spain received during 19. See Carrascosa Bermejo, d. “Cross-border healthcare in the eU: Interaction between directive 2011/24/eU and the Regulations on social.” op. cit. p. 375. 20. See Carrascosa Bermejo, d. “Cross-border healthcare in the eU: Interaction between directive 2011/24/eU …. “ op. cit. p. 359. 21. See on this matter the demolishing report of the Spanish Court of Auditors (Tribunal de Cuentas) Issued in 2012 “Informe de fiscalización de la Gestión de las Prestaciones de Asistencia Sanitaria derivadas de la aplicación de los Reglamentos Comunitarios y Convenios Internacionales de la Seguridad Social”. 256 PABLO AReLLAnO ORTIZ system. Also, it is expressively stated that mechanisms of fund transfer may be established in order to perceive benefits in the case of disability, old age of death. It should be seen with satisfaction that different types of social security systems indeed can be coordinated, wether they are based on capitalisation or redistribution. It is difficult to deny that the wording of the Multilateral Ibero- American Agreement on Social Security has been influenced by european regulations. For example Sánchez-Rodas reminds us that its wording and articles resemble or even improve the european version (Sánchez- Rodas, 2011). The contents of the Multilateral Ibero-American Agreement on Social Security are the result of the effort and collaboration of representatives from all countries as well as the technical cooperation of the OISS. Clearly there is a european effort to regulate the protection of migrant workers in Iberoamerica. There is a clear intention to cover citizens from Portugal and Spain who realize part of their active life in Latin America countries and vice versa. Adolfo Jiménez, ex Secretary General of the OISS states that “it is interesting to remember that the Multilateral Ibero-American Agreement on Social Security, which coordinates but does not modify or substitute national legislations, constitutes a totally new experience, as it assumes an agreement in terms of social security between states with very different models, in an environment without previous political association, facilitating the juridical basis which might support it, which is why it has demanded the participation of all parts and its ratification —or adherence— requires the incorporation as internal legislation of each of the states” (Jiménez, 2011, p. 19). In this sense the intention of the Multilateral Ibero-American Agreement on Social Security is the same as the one of the european regulations, not to alter the national social models and provide protection against social risks of migrant workers. Coordination contained in international instruments has become the basis for a series of internationally accepted principles. These form the general framework for the celebration of bilateral or multilateral agreements, regulating the coordination of Social Security systems5. 5. About the principle see Arellano Ortiz (2015) Marco teórico de la coordinación de seguridad social: Comparación Unión europea e Iberoamérica, Thomson Reuters, Santigo de Chile; Servais, Jean-Michel (2013), International social security, Wolter Kluwer Law& Business, Holanda, pp. 105-109; Thouvenin, Jean-Marc, &Trebilcock, Anne (2013), droit international social. droits économiques sociaux et culturels, Tome 2 Règles du droit international social, Cedin, Bruylant, Bruselas, Bélgica, pp. 1519- 1549; Pennings, Frans (2012), european social security law, Wolter Kluwer Law & Business, Holanda 2012; Carrascosa Bermejo, dolores (2012), “Seguridad social de los trabajadores migrantes (I): rasgos & principios generales” en nogueira Guastavino, Magdalena, Fotinopoulou Basurko, Olga & Miranda Boto, José María, Lecciones 257 xVII. ReCePTIOn OF SOCIAL SeCURITy COORdInATIOn In THe IBeRO-AMeRICAn... Coordination as established within the Multilateral Ibero-American Agreement on Social Security is built over four fundamental pillars (Sánchez-Rodas, 2011) which are: Uniqueness of applicable legislation; equality of treatment; Totalisation of periods; Suppression of residence clauses. In this it follows the same principles as the european instruments. The standards of the Multilateral Ibero-American Agreement on Social Security containing these principles will be described briefly in the following. The principle of equality in treatment is contained in Article 4 of the Agreement. It states that all those to whom the Agreement is applied have a right to its benefits and are subject to the obligations established in the legislation of the State Party where they develop their activity under the same conditions as the citizens of the State, unless otherwise provided for in the Agreement. The principle of Totalisation of periods is established in Article 5 of the Agreement, where it is stated that, unless otherwise provided for in the Agreement, the Competent Institution of a State Party, the legislation of which predetermines the coverage by legislation, acquisition, conservation, duration or recovery of benefits, the access or exemption from compulsory or voluntary insurance, the requirement of having covered determined periods of insurance, contribution or employment, will, if necessary for the determination of benefits, take into account the periods of insurance, contribution or employment accredited by the legislation of any other State Party as if they were periods covered under the legislation of the Institution in question, but only if they do not overlap. When determining applicable legislation, the general principle of lex loci laboris is followed, meaning law of the territory where the services are provided. This is laid down in Article 9, stating a general rule on this matter by providing that: all those to whom the Agreement is applied are subject exclusively to the Social Security legislation of the State Party where they exercise their activity, no matter if in a dependent or independent work relationship, and where they are included within the application of the relevant legislation, unless otherwise provided for in de derecho Social de la Unión europea, ediciones Tirant lo Blanch, Valencia, pp. 187-215; Servais, Jean-Michel (2011) drILO social de l’Union européenne, Bruylant, Bruselas, Bélgica, 2011; Hirose, Kenichi; nikac, Milos & Tamagno, edward (2011), Social security for migrant workers. A right-based approach, International Labour Organization, decent Work Technical Support Team, and Country Office for Central and eastern europe-Budapest, ILO; Cifuentes Lillo, Hugo (1998), “Tratados internacionales de seguridad social: Convenios bilaterales” in estudios en Homenaje al profesor William Thayer, Sociedad Chilena de derecho del Trabajo & Seguridad Social, Santiago, 1998, p. 22 & social security; ILO (1984), Introducción a la seguridad social, Oficina Internacional del Trabajo, Ginebra. 258 PABLO AReLLAnO ORTIZ the following article. In Articles 10, 11 and 12 special rules, exceptions and standards for voluntary insurance respectively are established, altering the general rule. It is important to mention that the Convention includes rules on the conservation of acquired rights and the payment of benefits abroad in Article 6, and on the revalorization of pensions in Article 7. The above mentioned principles are also the basis for the coordination regulation of social security systems in those states, where european Union Law is applicable, namely: Regulation 883/2004 and its Application Regulation 987/2009. Here again it becomes clear that the Multilateral Ibero-American Agreement on Social Security follows the european example in terms of coordination through a multilateral coordination instrument. But this is not the end of the comparison. When it comes to the personal application of the Agreement, Article 2 of the Agreement determines that “the Agreement will be applied to all those who are or have been subject to the legislation of one or several State Parties, as well as their family beneficiaries and right holders”. The latter are defined in Article 1 e) of the Agreement e) “family beneficiary or right holder”, the person defined or admitted as such by the legislation under which the benefits are granted. The Agreement does not expressively deal with the question whether the family beneficiaries and right holders of the protected subjects may invoke the rights recognized by this international instrument as own rights or rights derived from the condition of being family beneficiaries or right holders (Sánchez-Rodas, 2011). despite this observation the scope of the personal application of the instrument clearly is the person as such without any further definition. Other coordination instruments limit the personal application to workers only. In this aspect, the Agreement goes beyond the scope of the european regulations. The material application, meaning the risks covered, of the Multilateral Agreement is contained in Article 3, establishing that the Agreement will apply to all legislation relevant to the related Social Security branches with: a) economic benefits for disability; b) economic benefits for pensioners; c) economic benefits for widowhood, and d) economic benefits for work-related injuries and occupational diseases. The Agreement gives preference to periodical benefits, which are those implying the payment of a regular amount of money, such as different kinds of pensions. Rules about the coordination of each of these branches are established it Title II: Special dispositions for the different categories of benefits, which contains three chapters, namely: Chapter 1: Benefits for disability, old age and survival; Chapter 2: Coordination of systems and legislations 259 xVII. ReCePTIOn OF SOCIAL SeCURITy COORdInATIOn In THe IBeRO-AMeRICAn... based on savings and capitalisation, and Chapter 3: Benefits for workrelated injuries and occupational diseases. notwithstanding the foregoing, in relation to medical benefits not envisaged in the Agreement, the possibility is contemplated to include them in the future, extending material coverage to benefits or systems excluded in the first place. Bilateral or multilateral agreements dealing with this extension and its effects are included in Annex III. Rules corresponding to systems and benefits subject to extension will only affect those states which have signed the Agreement, causing no effects whatsoever to the other State Parties of the Agreement. Chapter 3.2 determines that the Agreement is applied to general and special contribution-based Social Security systems. However, in relation to the latter, some exceptions are considered, which are included in Annex I. Chapter 3.4 mentions expressively that the Agreement does not apply to non-contribution-based systems, nor to social assistance, nor to benefit systems for victims of war or its consequences. This is of major importance for Latin America, as recent extension efforts of Social Security are taking the form of non-contribution-based benefits. Also, it is important to mention that many migrant workers are beneficiaries of non-contribution-based or welfare benefits and their exclusion may cause them serious prejudice when obliged to migrate. Finally, the Agreement allows the State Parties to exclude certain benefits in terms of material application. This can be concluded from Article 3.3, which states that the Agreement is not to be applied to economic benefits detailed under Annex II, which under no circumstance may include any of the Social Security branches mentioned in Article 3.1. Hence, as to the material application the european model is followed, but only to a limited degree, as european regulation contemplate the possibility of including the protection against social risks through noncontribution-based benefits. A relevant aspect of the Agreement is the regulation established in Article 8 on the relation of the agreement to other Social Security coordination instruments, determining that the Agreement is fully applied in all those cases, where there are no existing bilateral or multilateral Social Security agreements between the State Parties. For the case of existing bilateral or multilateral agreements those dispositions are to be applied which are more favourable for the beneficiary. In this context, each State Party must inform the Ibero-American General Secretariat through the Secretary General of the Ibero-American 260 PABLO AReLLAnO ORTIZ Social Security Organization (OISS) of the existence of any bilateral or multilateral agreements between the State Parties, which would be registered in Annex IV of the Agreement then. After the entry into force of the Agreement the State Parties must determine which of the dispositions are more favourable and communicate them to the Secretary General of the OISS. This rule favours coordination mechanisms and encourages the countries to expand their Social Security agreements. On the other hand, countries with different economic levels will not be affected by the coordination rule in the Agreements. Adopting this rule does not really mean adopting the european standards, as there is no direct relation with them, but we consider it constitutes a great step forward in comparison with european standards. One last thing we would like to point out is the control mechanism established in Title IV of the Agreement, referring to the Administrative Technical Committee. The composition of the Committee is laid down in Article 23 of the Agreement, determining that it is to be made up by a government representative of each of the State Parties, assisted, if necessary, by technical counsellors. The committee has its own statutes defined by common agreement of the committee members. decisions made on topics of interpretation must be adopted in accordance with the stipulations of the Application Agreement of the Convention. The functions of the Committee are described in Article 24 as follows: a) enable the fair application of the Agreement, in particular through the encouragement of exchanging experiences and best administrative practices. b) Solve issues related to the administration or interpretation of the Agreement or its Application Agreement. c) Promote and develop the collaboration among the State Parties and their institutions in the field of Social Security, in particular facilitate measures leading to cross-border cooperation in the field of Social Security system coordination. d) encourage the use of new technologies, in particular through the modernization of the necessary procedures for the exchange of information and the adaptation to the electronic exchange of information between the Competent Institutions. e) Any other function which may be part of their competences under the Agreement and its Application Agreement, or any other agreement or convention which may be celebrated within the framework of these instruments. 261 xVII. ReCePTIOn OF SOCIAL SeCURITy COORdInATIOn In THe IBeRO-AMeRICAn... It is very interesting to note that only one administrative committee is in charge of solving problems of administration and interpretation. It would seem more adequate for this type of mechanism to have established a court or tribunal, as in the european case. A jurisdictional organism seems more appropriate to solve conflicts between two or more legislations or between national legislations and rules of International law. We share what Sánchez-Rodas expressed when saying: “There is no similar possibility like the one in the legal framework of the european Union where judicial bodies are the ones to solve a dispute in which supranational dispositions are applied by placing a preliminary ruling before the Court of Justice seated in Luxembourg” (Sánchez-Rodas, 2011). no doubt, the fact of contemplating an authority to solve arising conflicts seems a wise decision, but this is not comparable to a judicial body. Also, this committee has functions which do not only have to do with purely solving a conflict of interpretation, but also the promotion and collaboration in the field of Social Security among the signing countries. Clearly, in this aspect something was pretended to be done but never received the necessary force. It seems to us that in this matter things still need to be improved, there should be some kind of jurisdictional control over possible coordination conflicts. notwithstanding the foregoing, we believe that there may be a jurisdictional way out through regional standards related to Human Rights. These are being watched by the Inter- American Court of Human Rights seated in San José de Costa Rica. By choosing this option we would have a similar procedure as the european Court in Strasbourg and the existing regional Human Rights instruments of that region. Also, we believe that involving the Inter-American Court of Human Rights can give rise to a process of dialogue between this Court and national courts of justice with the aim of solving and correcting deficiencies related to coordination, something which is also existing in europe (Arellano, 2015). It may be worth noting that the relationship and influence between both regions does not seem to be reduced to similarities between the Multilateral Agreement and the european regulations. It is also worth considering the evolution of the european standards and their recent tendency to be extended to other regions. In this context we would like to mention some recent rules and their most relevant considerations. directive 2011/98/eU from 13.12.2011, establishes one application procedure for living and working in a member State for third country nationals, leading to one common set of rights for workers coming from third countries legally residing in a member State. However, this directive has been regarded as insufficient, but on the other hand it is essential for 262 PABLO AReLLAnO ORTIZ legal migration and facilitates the way for future regulations (Pascouau & Mcloughlin, 2012). Although this directive certainly can be seen as progress, the issue of protecting irregular migrants is still to be dealt with. directive 2014/36/eU from 26.2.2014 on the conditions of entry and stay of third country nationals as seasonal workers. Without any doubt this directive will allow regularising the protection of seasonal workers coming from third countries, a situation ever more common all over the world. The directive creates a combined framework of immigration rules and labour protection ones. In the short time since its adoption, it is difficult to draw any analysis or criticism, although some studies have compared the initial proposal with the finally adopted version (Fudge & Herzfeld Olsson, 2014). Another important legal instrument to be considered is Regulation nº 1231/2010 from 24.11. 2010, by which the dispositions of Regulation nº 883/04 are extended to third country nationals with legal residence in a european Union member State (with the exception of denmark and the UK). This Regulation nº 1231/2010 extending coordination benefits to third country nationals has received a lot of attention6. But this is not the only aspect of this Regulation. A very importance sentence was pronounced some time ago by the eU Court of Justice, namely the Gottardo case from 15.1.2002, –55/00 Rec.; p. I-413134, modifying the previously existing criterion (Pérez yáñez, 2002; Sánchez-Rodas, 2010 c), pp. 98 a 100; Vonk, 2013; Pennings, 2012; Pieters & Schoukens, 2009). doubtlessly, the extension of benefits through Regulation nº 1231/2010 and the Gottardo precedent constitute a clear manifestation that european coordination is in the process of extension onto other nationalities. This extension may occur with citizens belonging to the Maghreb countries, who spend part of their active life in the eU, as for instance nationals from Morocco (Vonk, 2013).But what has been more interesting is the establishment of a principle which allows third country nationals to benefit from european regulation. In this context, the creation of bonds between european coordination regulations and the Multilateral 6. On this subject see: Vonk, Gijsbert (2013), “Social Security Rights of Migrants: Links between the Hemispheres”, in Roger Blanpain, Pablo Arellano, Marius Olivier & GisjbertVonk (eds.), Bulletin of Comparative Labour Relations vol. 84, Social Security and Migrant Workers, Selected Studies of Cross-Border Social Security Mechanisms, Kluwer, 2013, pp. 47-68; Pennings, Frans (2013 a) “Coordination of Social Security within the eU Context”, in Roger Blanpain, Pablo Arellano, Marius Olivier & GisjbertVonk (eds.), Bulletin of Comparative Labour Relations vol. 84, Social Security and Migrant Workers, Selected Studies of Cross-Border Social Security Mechanisms, Kluwer, 2013, pp. 117-132; Pieters, danny & Schoukens, Paul (eds.) (2009), The social security Co-ordination between the eU and non– eU countries, Intersentia, Metro, Antwerp, Cambridge, Portland. 263 xVII. ReCePTIOn OF SOCIAL SeCURITy COORdInATIOn In THe IBeRO-AMeRICAn... Agreement CMISS certainly has been a wise decision. Some kind of euro- Ibero-American Social Security agreement (Vonk, 2013, p. 68), which would also positively enshrine the principle contained in the Gottardo sentence (Vonk, 2013, p. 66). The political will for its realisation and the conflict regulations to be applied are issues to be determined. III. fInal thoughts We would like to end this report with some reflections. The first idea to be pointed out is that these two regions constitute the part of the world where Social Security is most developed, despite their different levels of coverage (RyS, 2010; eCLAC, 2006; ILO 1994, ILO 2011), as shown above. Also, it is important to bear in mind that the migrant worker typically finds himself in a situation of insecurity (Fudge, 2011). Hence, in a parallel movement both regions —first europe and then Iberoamerica— have started coordination processes of their social security systems. On the other hand, in Latin America globalisation and changes in the labour structure are beginning to have effects, leading to a situation of a serious lack of protection of the more vulnerable layers (eCLAC, 2006). In order to face this problem, a form of protection for workers crossing borders looking for better opportunities has been developed, like in the developed countries (eCLAC, 2011). new, complex and more protective mechanisms are becoming ever more important. Here the european influence is necessary. doubtlessly, an aspect shared between the two regions is the fact that agreements and regulations have allowed both the rise and further evolution of coordination. We can only confirm here that there is an influence of the european regulations onto Social Security coordination instruments in the Ibero-American region. This becomes clearly visible in the wording of the Multilateral Ibero-American Agreement on Social Security. nevertheless it is the prevailing political union between the member States of each region which has made coordination possible. Here the political union of the eU is much stronger than in the Ibero-American context. This aspect leads to the conclusion that although there is some influence, it is limited and in some aspects insufficient. The Multilateral Ibero-American Agreement on Social Security is an important step in the right direction, but does not cover all the risks; it does not include noncontribution-based benefits and lacks jurisdictional control. On the other hand the european Union continues trying to cover new situations, be 264 PABLO AReLLAnO ORTIZ applied to more people and is possibly extending its application scope to other regions7. We share the thesis proposed by Professor Vonk in order to create an instrument to unify the european regulations with the Multilateral Social Security Agreement. According to our understanding this would create a coordination framework of major dimensions and would allow remedying the deficiencies existing within the Multilateral Ibero- American Agreement on Social Security. 7. It is convenient to consider: COM (2012)153 final, 30 March 2012. 265 . SeLeCTed BIBLIOGRAPHy Selected Bibliography AReLLAnO ORTIZ, Pablo (2015) Marco teórico de la coordinación de seguridad social, Comparación Unión europea e Iberoamérica, Thomson Reuters Legal Publishing AbeledoPerrot, Santiago de Chile. AReLLAnO ORTIZ, Pablo (2013), “Características y desafíos de la migración para la seguridad social en la región latinoamericana”, Revista Chilena de derecho y Ciencia Política, Universidad Católica de Temuco, (Volume 4, n. 1. AReLLAnO ORTIZ, Pablo y BRIGAnTI, Francesco (2012) “europa y América Latina: encuentros y desencuentros en la búsqueda de la coordinación de los sistemas de seguridad social”, in Programa de estudios europeos UdeC, europa y América Latina. dos caminos, ¿un destino común?, Programa de estudios europeos Universidad de Concepción, (RIL editores). AWAd, I. (2009) The global economic crisis and migrant workers: Impact and response, International Labour Office, International Migration Programme. – Geneva: ILO. BeVeRIdGe, William,Social insurance and allied services, London, HM Stationery Services, 1942. CARRASCOSA BeRMeJO, dolores (2012), “Seguridad social de los trabajadores migrantes (I): rasgos & principios generales” en nogueira Guastavino, Magdalena, Fotinopoulou Basurko, Olga & Miranda Boto, José María, Lecciones de derecho Social de la Unión europea, ediciones Tirant lo Blanch, Valencia. CICHOn, Michael, SCHOLZ, Wolfgang, VAn de MeeRendOnK, Arthur, HAGeMeJeR, Krzysztof., BeRTRAnOU, Fabio, y PLAMOndOn, Pierre (2006) Financiación de la protección social, Colección Informes OIT, Ministerio de Trabajo y Asuntos Sociales, Madrid. CIFUenTeS LILLO, Hugo (1998), “Tratados internacionales de seguridad social: Convenios bilaterales” in estudios en Homenaje al profesor William Thayer, Sociedad Chilena de derecho del Trabajo & Seguridad Social, Santiago, 1998.