Report 2011 - EFTA Court

Regulation No 1408/71 and Article 5 of the Posting Act
106. For the sake of completeness, iceland considers it necessary to
assess whether the right under Article 5 of the Posting Act must
be considered as one of the “terms of employment” within the
scope of Article 3 of the PWD or a social security “benefit” under
Regulation No 1408/71.
107. in iceland’s view, it is clear both from the provisions of
Regulation No 1408/71 and from the rulings of the ECJ that
once consideration or a payment is based on an employment
relationship, whether by virtue of a collective agreement or
legislation, it is considered to constitute “pay” and not a “social
security benefit”. it submits
also that no other conclusion can be drawn from Paletta, cited
above.
108. iceland refers to Article 1(j) of Regulation No 1408/71, claiming
that this provision excludes schemes established under collective
agreements from the scope of the Regulation. iceland further
asserts that the said provision recognises the freedom of the EEA
States to organise their social security systems in accordance
with national policy objectives, without harmonisation. iceland
thus considers the entitlement to maintenance of wages in the
event of illness or accidents provided for by icelandic labour
law, from the outset, to fall outside the scope of Regulation
No 1408/71. Further, it argues that since iceland has made
no declaration to the contrary, it remains the case that this
entitlement cannot be classified as a benefit under Regulation
No 1408/71. According to iceland, Paletta, cited above, does not
serve to bring the entitlement to wages during illness or accidents
under Regulation No 1408/71, contrary to the wording of Article
1(j).
109. in iceland’s view, classification of the rights afforded to workers
under Article 5 of the Posting Act as a social security benefit and
not a minimum entitlement under national collective agreements
is liable to undermine the autonomy of national labour standards
to the detriment of the protection of workers built up in the
Case E-12/10 EFTA Surveillance xxxxxxxxxxxxxxxxxxxxxxxxx
Authority v iceland
Summary Report
CAse Case
e-12/10
e-xx/x
177