It may happen that it becomes necessary to derogate from the general rules for determining the applicable legislation in the field of social security. In such cases, insurance corporations of two or more Member States may conclude the exceptional agreement to modify the general rules.
1. What is an exceptional agreement?
An exceptional agreement is an accord which sets out derogations from the general rules for determining the applicable legislation in the field of social security. It is concluded when the posting employer or entrepreneur doesn’t meet the conditions for issuing the A1 certificate, e.g. the period of posting exceeds 24 months, the economic activity in Poland is marginal.
The exceptional agreement is concluded by two or more institutions dealing with matters related to social security in the countries involved. In Poland, The Social Insurance Institution (Zakład Ubezpieczeń Społecznych – ZUS) is such an organization.
2. Conditions for concluding an exceptional agreement
The possibility of concluding an exceptional agreement results from Article 16(1) of the Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (Text with relevance for the EEA and for Switzerland) (OJ L 166, 30.4.2004, p.1). It stipulates: Two or more Member States, the competent authorities of these Member States or the bodies designated by these authorities may by common agreement provide for exceptions to Articles 11 to 15 in the interest of certain persons or categories of persons.
The content of the quoted provision clearly shows that, when entering into a reciprocal agreement, national institutions should be guided primarily by the interests of the persons affected by that accord. Therefore, this condition should be of paramount importance when making a decision to conclude an agreement.
Administrative facilities may arise as a result of the conclusion of a mutual agreement. However, they cannot constitute the sole reason for its conclusion.
3. Application
The mutual agreement is issued at the request of the interested entity. The application is submitted on the US-36 form. It includes the following data:
- designation of the applicant – indication whether the applicant is: an employer, a self-employed person, an insured person;
- details of the employer – name, and in the case of individual economic activity, the first name and surname, address, identification numbers (NIP, REGON, PESEL);
- data concerning the activity conducted in Poland – date of commencement of the economic activity, information on the actually conducted activity;
- reason for the application – the form indicates as reasons for submitting the request:
- exceeding the period of 24 months of posting a worker / transferring an activity to a given country
- it is known in advance that the period of posting a worker / transferring an activity will exceed 24 months,
- non-fulfilment of the criteria for the posting a worker / the transferring an activity – they should be described,
- other reasons – it should be clarified what they are;
- details of the posting employer – number of employees working in Poland and number of posted workers, number of contracts performed in Poland and abroad, information about the company’s turnover in Poland and in other countries;
- information about the worker’s employment – whether the employee is declared to social security in Poland, whether the worker is on unpaid leave, whether the remuneration claim under the employment contract is directed to the Polish employer, whether the employee agrees to continue being subject to Polish legislation while working abroad;
- details of the person for whom the agreement is to be concluded – the first name and surname, PESEL number, residence address;
- data on work or activity abroad – date of commencement of the work / activity abroad, period or periods for which the certificates have been issued so far, period or periods for which the exceptional agreement is to be issued, job position;
- company name and address of the place of work or business address abroad.
The application shall be accompanied by the necessary annexes. If the employee wants to continue to remain subject to the Polish social security system during the secondment, it’s obligatory to attache the worker’s statement on that point.
The application should be addressed to the ZUS Branch in Kielce. This ZUS unit is the only one that deals with the processing of requests for issuing an exceptional agreement.
4. Conclusion of an agreement
The procedure for concluding an exceptional agreement takes several months. It is related to the necessity of examining the application by ZUS, sending it to the competent institution in the field of social security in the other state, and its response to the submitted request.
The foreign institution may consent or refuse to conclude the agreement. If it agrees, both institutions conclude the relevant accord. And if the national institution refuses to authorise an exceptional agreement, the person concerned will be insured according to the rules applicable in the country to which the posting takes place.
The exceptional agreement may be made for a maximum period of 5 years. In particularly justified cases, it may exceptionally be concluded for a period of 8 years.
5. Application for the issue of an A1 certificate following an exceptional agreement
After the conclusion of the exceptional agreement by the competent national institutions, the person concerned should apply for an A1 certificate. For this purpose, the request for an A1 certificate must be submitted on the US-36 form to the ZUS branch with jurisdiction over the applicant’s head office, after the conclusion of this agreement. The application should include:
- designation of the applicant – indication whether the request is submitted by: an employer, a self-employed person, an insured person;
- details of the employer – name, and in the case of individual economic activity, the first name and surname, address, identification numbers (NIP, REGON, PESEL);
- data of the person to whom the application relates – PESEL number, the first name and surname, residence address;
- period for which the A1 certificate is to be issued.
The request must be accompanied by a letter in which the foreign institution has consented to the conclusion of the exceptional agreement.
6. Possibility to bring an appeal before the court againts the DVKA’s decision to refuse to conclude an exceptional agreement
In the discussion of the institution of the exceptional agreement, reference should be made to the judgment of the German Social Court of 16 august 2017, ref. B 12 KR 19/16 R. This ruling allowed Polish employers to appeal before the German courts against the DVKA’s decision to refuse to conclude an exceptional agreement.
The Polish company applied to ZUS for issuing exceptional agreements. The application indicated that the enterprise didn’t conduct sufficient activity in Poland at the time of posting employees to Germany and therefore didn’t meet the conditions for issuing A1 certificates. ZUS granted the request and applied to the German institution – DVKA – with a proposal to conclude exceptional agreements. However, DVKA rejected it. For that reason, Polish entrepreneur brought a lawsuit against DVKA to the social affairs court. The claim was dismissed at first instance. The grounds of the judgment indicated that the DVKA’s decision wasn’t subject to judicial review. The judgment was appealed before the Social Court. After examining the case, the Court found that DVKA’s decision on the conclusion of the exceptional agreement was subject to review by the German courts and the Polish employer could apply to a court in Germany for the DVKA’s consent to conclude the exceptional agreement.
The decision of the Social Court is binding on the lower courts. This means that, relying on it, the Polish employer will be able to file a lawsuit against DVKA in the social affairs court for consent to the conclusion of an exceptional agreement. So far, he could only bring an action before the Polish court against the decision of ZUS which, due the negative position of DVKA, refused to grant the request for the conclusion of an exceptional agreement.
7. Legal notice
The study is a work within the meaning of the Act of 4 February 1994 on Copyright and Related Rights (OJ 2006, No. 90, item 631, consolidated text, as amended). Publishing or reproducing this study or its part, quoting opinions, as well as disseminating in any other way the information contained therein without the written consent of Crede sp. z o.o. is prohibited.
