Limosa gets green light from Europe

Every foreign employer who has one of its employees work in Belgium must first give notice that this is being done by submitting an electronic Limosa report.   Belgian contractors who make use of seconded foreign employees on a subcontracting basis are obliged to verify whether all such employees possess a valid Limosa certificate (L1). If this is not the case, then the contractor himself must submit the Limosa report, and can be penalised with a level 3 sanction under the Social Criminal Code for failure to do so.   A Belgian contractor who was prosecuted for violating the latter obligation argued in his defence that the entire Limosa regulation runs contrary to the free movement of services within Europe.   In a recent decision, the European Court of Justice confirmed its earlier case-law that such a regulation, while admittedly constituting an impediment to free movement, can be justified on condition that it is appropriate, necessary and proportional in light of "compelling reasons of general interest".   According to the Court, protecting seconded employees and combatting social fraud are precisely such compelling reasons of general interest that can justify a limitation on the free movement of services. The Court also had no objection to the imposition of criminal sanctions for non-compliance - so long as they are proportional to the objectives.   Now it will be up to the Belgian judges to examine whether these objectives are actually achieved by means of the Limosa report, and whether the sanctions are proportional to the objectives being sought.   Conclusion: when you make use of foreign workers, prudence remains the watchword. Even if you expressly included the Limosa reporting duty in the subcontracting agreement, in practice you will also have to strictly verify that this obligation has been complied with.