Artists from outside the european economic area, community directives and presumption of salaried st

From 1 November 1998 to 30 June 1999, a company running a casino organized cabaret shows on its premises, using South African and Brazilian performers provided by an Italian company under a show transfer contract.

Following an URSSAF audit, the CPAM (French Social Security department in charge of medical insurance) decided that these artists had to be registered in the general social security system as performers employed by the company running the casino.

When the court of appeal upheld this decision, the casino company contested the requirement to register the artists in the general social security system by advancing the two following key arguments:

• The employer based in another member state, Italy in this instance, was not required to pay social security contributions in France.
  Indeed, the Italian company was performing a one-off service in France using workers who were nationals of non-EEA states and for whom E101 forms had been filed by the Italian authorities;
• No relationship of subordination with the French company could be proved because the artists were performing in the casino under a show transfer contract.
  Under the said contract, the Italian company undertook to provide a “turnkey” show, including the provision of its salaried performers whom it paid to perform the agreed choreographic service in accordance with applicable regulations in the casino.
  

That notwithstanding, the court of cassation dismissed these arguments.

During the period in question (1998-1999), only nationals from a member state came under article 14 of EC regulation 408/71/EC dated 14 June 1971, which provides for the posting (secondment) of a salaried worker.

The company running the casino could thus not cite the filing of form E101 as grounds for using South African and Brazilian performers because, at the time in question, nationals from non-EEA countries did not benefit from community provisions governing secondment.

Moreover, the court of cassation judged that there was no need to prove a relationship of subordination between these artists and the company organizing shows in France. The court of appeal was thus justified in upholding the presumption of salaried status, as provided for in article L.762-1 of the labour code.

In this instance, the court of appeal deemed that the presumption of salaried status was applicable because the artists performed in shows organized by the French company, which paid their expenses during their stay and financed their pay.
The French company was therefore required to register the artists in the French social security system, even though it had entered into a show transfer contract with an Italian company.

Since EC regulation 859/2003 dated 14 May 2003 came into force on 1 June 2003, nationals from countries outside the European Economic Area may under certain conditions benefit from the provisions of regulations 408/71 and 574/72 (secondment, etc.), provided their papers are in order.

Nb > The conditions governing the application of secondment procedures to non-EEA nationals can be checked, on a case-by-case basis, at the European and international social security liaison centre (www.cleiss.fr ).
 
Currently, artists from non-EEA countries can be seconded by their employer if he is based in an EEA country. Exemption from registration in France is subject to filing E101 forms for these artists with the competent authorities of the EEA state.

However, this decision is still of interest because of the court of cassation’s strict application of the presumption of salaried status (article L.762-1 of labour code).

For instance, when artists benefit from community provisions, the court of cassation has unequivocally stated that the presumption of salaried status cannot be refuted, even for self-employed freelance artists. (See European artists and paid leave )

On the other hand, in its ruling the court confirms that in cases where community regulations do not apply, the presumption of salaried status remains applicable. In that case, the organizer based in France is presumed to be the employer, even if he has entered into a transfer agreement with a producer based abroad.