On March 19, 2015, the European Court of Justice (CJEU) provided guidance on the social security position of employees who are working in different parts of the world on seagoing vessels.
The CJEU had to consider the social security position of a Dutch mariner, Mr. Kik, who was working for a Swiss employer both inside and outside the European continental shelf on a vessel registered under the Panamanian flag. The non-EU elements in this case made it difficult to determine the country where Mr. Kik should have social security coverage. Hence, the following questions were raised by the Dutch Supreme Court to the CJEU:
- is the EU Regulation applicable to Mr. Kik and
- which social security legislation should apply?
The CJEU ruled that:
- the EU Regulation is applicable since the employment relationship of Mr. Kik has sufficient close links with the EU (Swiss employer, Switzerland has adopted the EU-rules for social security, and his employment income is subject to Dutch tax);
- the Swiss legislation applies (being the country where the employer is established). However, if under Swiss domestic legislation, the employee would only have coverage through a voluntary insurance program or have no coverage at all, he would have mandatory coverage by virtue of the Dutch social security system since the Netherlands is his country of residency.
This ruling of the CJEU implies that EU social security legislation may become applicable and the employees have mandatory coverage through the social security system of an EU country, even if the vessel on which these employees are working is registered under a non-EU flag. Therefore, it is recommended that companies in the offshore industry reassess the social security position of mariners working on a seagoing vessels, in order to ensure compliance (especially when it concerns situations in which both EU as well as non-EU elements are involved, such as country of residence/establishment, flag of the vessel, working area, etc.).