Vander Elst in practice: between exemption and pitfalls

This article originally appeared in the trade journal Grensoverschrijdend Werken.

The “Vander Elst exemption” probably does not immediately ring a bell. However, this exemption is frequently (and increasingly more and more) used, although not always consciously and certainly not always in the right way. [1] The Vander Elst exemption also regularly crops up in the political debate. It is a scheme that critics say opens the door wide to workers from outside the European Union to gain easier access to our labour market. So it’s high time for an update and a state of affairs.

But first a little refresher:

The Vander-Elst exemption can be used by foreign, EEA (or Swiss) employers[2] when they temporarily employ (second) third-country nationals (non-EEA nationals) in another Member State.

In the context of the free movement of services[3], this can be done without applying for a new work permit in the host Member State, provided that the following conditions are met[4]:

1. The third-country national is posted to provide services on behalf of his employer;
2. The third-country national has a valid right of residence in the posting Member State for more than three months;
3. The third-country national is legally employed in the posting Member State and has a valid employment contract with the posting employer;
4. The authorisation to work in the posting Member State shall be valid for at least the duration of the work to be carried out in the host Member State;
5. The third-country national must have a passport and a residence permit valid for at least the duration of the provision of services in the host Member State. In this way, the return to the country of origin or the posting Member State is ensured.

What goes wrong in practice?

As mentioned above, this exemption is often used without the posted third-country national and the posting employer being aware of it. Based on the idea of the free movement of services, foreign employers are often under the assumption that the posted third-country national does not have to put anything in order upon arrival in Belgium, because he already has a work and residence permit in Poland, Portugal, Lithuania, etc.

Unfortunately, this is not true.

What needs to be put in order?

The third-country national must report to the municipality of residence within 3 working days after arrival in Belgium, the so-called ‘declaration of arrival’. [5] If the posted worker stays in Belgium for more than 90 days, he must apply for registration in the register of foreigners. Depending on the municipality, he will also have to submit certain documents (such as his employment contract and, if applicable, the service agreement for the assignment in Belgium, a clean criminal record, medical certificate, A1 certificate and Limosa declaration).  A third-country national who does not comply can be considered to be working illegally here, with all the consequences that entails (which can also extend to the Belgian client).[6]

The bottom line

A third-country citizen who has the permission to work in an EEA Member State (or Switzerland) does not also have to apply for admission to the Belgian labour market when posting to Belgium. He already has this permission on the basis of the work permit issued in the posting Member State. In other words, he is ‘exempt’ from an application for admission to the Belgian labour market. However, he must submit to the Belgian municipality of residence the documents that effectively prove that he is authorised to work in the posting Member State and that the employment in Belgium meets the conditions of a posting.

Despite what an ‘exemption’ suggests, there is still some administration associated with this secondment, and this not only from social security (A1 and Limosa) and labour law (including compliance with the Belgian minimum wages), but also in the field of migration legislation. Unfortunately, the latter is still too often lost sight of.

Other obstacles?

Even if companies are well aware of all the formalities surrounding the Vander Elst exemption, it often turns out to be no easy task to comply with them. In our practice, we often run into the following problems:

• A third-country national who will stay in Belgium for more than 90 days for a temporary project must be registered in the register of foreign nationals. Due to the waiting times at the Immigration Office, it can take months before the registration is ‘complete’. In practice, this means that the third-country national must already submit the application for the A card together with his declaration of arrival, without any guarantee that he will have an A card at the end of the 90-day period …
• Because there is a shortage of housing for third-country nationals in Belgium, many employers seek refuge just across the border. The Netherlands is thus increasingly becoming the place of residence, while people commute back and forth to the Belgian workplace every day.

For the first 90 days[7] , this does not have to be an issue as a declaration of arrival in Belgium can then be made without the requirement of an address in Belgium.

For stays of more than 90 days, this does cause problems because Belgian regulations require an address in Belgium. In principle, the Vander Elst exemption cannot then apply.

Possible solutions?

For third-country nationals with a right of residence in the Netherlands, a solution could already be found in Belgian legislation. If the third-country national is considered a ‘frontier worker’, he can on that basis regulate his residence in Belgium for the duration of the employment. However, a third-country national will generally have a right of residence in the Netherlands only if he is also employed there, which often constitutes a new obstacle.  [8]

Be that as it may, the Immigration Office currently maintains the proposition that a third-country national can only be considered a ‘frontier worker’ if he is employed by a Belgian employer. And that is precisely one of the conditions for the application of the Vander Elst exemption, nl. dat the third-country national is employed by a – non-Belgian – EEA employer.

The result?

Due to the long waiting times and strict interpretations on the one hand, and the shortage of housing on the other, the Vander Elst exemption is gradually becoming unworkable and thus the principle of the free movement of services is seriously curtailed.

Instead of looking for solutions, more and more voices are being raised that the Vander Elst exemption is an all too easy way to access our labor market.

However, erecting additional barriers for third-country nationals is denying the (economic) reality in which third-country nationals have long since earned their place in our labour market.

Authors:

Veerle Nijs and Célien Voets, Social Lawyers at Van Havermaet

Sigrid Vandebroek, Manager Global Mobility at Van Havermaet

[1] CJEU 9 August 1994, no. C-43/93, Vander Elst.

[2] European Economic Area: European Union, Liechtenstein, Norway and Iceland

[3] Art. 56 and 57 Treaty on the Functioning of the European Union.

[4] Art. 16, §2, 2° Decree of the Flemish Government of 7 December 2018 implementing the Act of 30 April 1999 on the employment of foreign workers.

[5] Art. 5, §1 Law of 15 December 1980 on access to the territory, residence, establishment and removal of foreigners.

[7] In a rolling period of 180 days

[8] Art. 106, §1 Royal Decree of 8 October 1981 on the access to the territory, residence, establishment and removal of foreigners.