ECJ 7 June 2012, case C-106/11 (M.J. Bakker - v - Minister van Financiën), Free movement, Social insurance

Facts

In 2004 Mr Bakker, a Dutch national, lived in Spain and was employed by a Dutch company for whom he worked outside the EU on board a dredging vessel that carried the Dutch flag. Under Dutch law he was not insured compulsorily for social insurance, because the Dutch social insurance legislation applies only to residents of The Netherlands and non-residents  who  work  there.  Nevertheless,  the  Dutch  authorities took  the  position  that  Mr  Bakker  was  compulsorily  insured  and therefore owed contributions. This position was based on Regulation 1408/71.  Article  2(1)  of  this  Regulation  provides  that  it  applies  to “employed persons” who are subject to the legislation of one or more Member States and Article 13(2)(c) provides that a person employed on board a vessel flying the flag of a Member State shall be subject to the legislation of that State.

National proceedings

Mr  Bakker  challenged  the  assessment  sent  to  him  in  respect  of national  insurance  contributions  but  lost  his  case  in  two  instances. He brought the case to the Supreme Court. This court noted that the definition of “employed person” in Article 1(a) of Regulation 1408/71 requires  the  interested  party  to  be  insured,  compulsorily  or  on  an optional basis, for one or more of the contingencies referred to in that provision (disability, old age, etc.). The Supreme Court queried whether it is possible for someone in Mr Bakker’s situation, who, in the light solely of national legislation, is not compulsorily insured because he does not reside in The Netherlands, to nonetheless have the status of an “employed person” within the meaning of Regulation 1408/71.

ECJ’s findings

1.   The ECJ rejects Mr Bakker’s arguments (i) that a dredging vessel moored off a coast is covered by the concept of “vessel” in Article 13(2)(c) and (ii) that pursuant to the UN Convention on the Law of the  Sea,  work  carried  out  on  board  a  dredger  comes  under  the jurisdiction of the relevant coastal State and not under that of the flag Member State (§ 24-30).
2.   The  effect  of  Article  13(2)(c)  is  that  a  provision  of  the  applicable national legislation pursuant to which cover by the social security scheme established by that legislation is conditional on residence in the Member State concerned, may not be relied on against the persons referred to in Article 13(2)(c) (§ 31-35).

Ruling

Article  13(2)(c)  of  Regulation  1408/71  […]  must  be  interpreted  as precluding  a  legislative  measure  of  a  Member  State  from  excluding from  affiliation  to  the  social  security  scheme  of  that  Member  State, a person […] who holds that Member State’s nationality but does not reside in it and is employed on board a dredger flying the flag of that Member  State  and  operating  outside  the  territory  of  the  European Union.