Basic Principles of European Social Security Coordination based on Regulation (EC) 883/2004

The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities (Art. 2 TEU). It shall have competence, for example, in the areas of customs union, the establishment of competition rules necessary for the functioning of the internal market, monetary policy for the Member States whose currency is the euro, the conservation of marine biological resources under the common fisheries policy and common commercial policy (Art. 3 (1) TFEU). Therefore, it can be concluded that the EU is not only a political and economic union but also a legal community, based on shared values and competencies to ensure the rule of law, human rights and effective cooperation among Member States. The EU is founded on the principle of creating an area of prosperity and social progress. It has set itself the objective of promoting social justice and protection, although this does not imply that there should be a uniform or common social law in the EU (ECJ, 2021 I). There is no European social union (ECJ, 2018 I) and no European welfare state, but rather the responsibility for social policy primarily still lies with the Member States, which have the competence to establish and develop their social protection systems according to Art. 153 (4) TFEU (ECJ, 2020; 2018 I; 2015 I). At a very early stage of this understanding, the ECJ stated that ‘the regulations have not set up a common system of social security granting the recipient of a pension a single entitlement implying the need for the simultaneous settlement of the various pension rights in all the member states; they have allowed separate systems to continue creating separate claims against separate institutions against which the recipient has direct rights either under national law alone or national law supplemented, if necessary, by community law’ (ECJ. 1967 II). The regulation of social law at the EU level is therefore widely limited to the coordination of the various social security systems of the Member States (Janda, 2022, marginal number 73: ‘coordination instead of harmonisation’). Within these limits, the Member States then determine the prerequisites, financing and scope of the benefits granted (ECJ, 2015 I). This coordination aims to ensure that workers who move within the EU are not disadvantaged in terms of social security benefits (ECJ, 2020). The methodology employed for this article encompassed a thorough review of EU legal texts and scholarly sources to establish the foundation of free movement and social security coordination. The analysis involved a detailed examination of key regulations, including Regulation No 883/2004, and relevant European Court of Justice decisions to illustrate practical application. A comparative assessment of the EU's approach, along with speculation on potential future developments, rounded out the study's comprehensive exploration of the coordinating social law's role in upholding social security during free movement within the EU. The methods of legal interpretation were used, and the principles of EU law were taken into account.

The coordination of social security systems is essential for the success of European integration, and the Union has been working towards this objective since the early days of the European Economic Community (see e.g. Council Regulation (EEC) No 3/58 concerning social security for migrant workers). Art. 48 (1) TFEU states that ‘the European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, adopt measures in the field of social security.’ These measures include the coordination of the various national social security systems to facilitate the free movement of workers within the EU. The inclusion of other persons in the coordination system can be based on Art. 352 TFEU (Leopold, 2023, marginal number 2).

The basic regulation (Regulation (EC) No 883/2004) and the implementing regulation (Regulation (EC) No 987/2009) are the main instruments of coordination at the secondary level. The implementing regulation is primarily addressed to the administrations of the Member States and – for example – sets out the procedures for the exchange of information between the national social security institutions. The EU Member States are bound by both self-executing regulations and must apply them uniformly without any room for deviating national rules.

The coordinating social law of the EU primarily applies to the sovereign territory of its Member States. However, it has also been extended to other countries through various agreements. For instance, Iceland, Norway, and Liechtenstein are covered by the coordinating social law of the EU under Art. 29 icw. Annex No 6 of the Agreement on the European Economic Area. Similarly, Switzerland is included in the scope of the coordinating social law through Art. 8 icw. Annex No 2 of the Agreement on the Free Movement of Persons between the European Union and the Swiss Confederation. Following its exit from the EU, the United Kingdom has a separate agreement with the EU, including a protocol on social security that largely adopts the principles of Regulation (EC) No 883/2004.

The coordinating social law of the EU applies to all Union citizens and their relatives and survivors, regardless of their nationality, if the claims can be derived from Union citizens according to Art. 2 of Regulation (EC) No 883/2004. However, the prerequisite is that these persons are or have been subject to the legislation of one or more Member States. The system of coordination also includes refugees and stateless persons residing in an EU Member State. According to Art. 1 of Regulation (EU) 1231/2010, the Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 shall apply to nationals of third countries who are not already covered by those regulations solely on the ground of their nationality, as well as to the members of their families and their survivors, provided that they are legally resident in the territory of a Member State and are in a situation that is not confined in all respects within a single Member State. However, in such cases, the cross-border situation required for the application of the coordination law must exist between two or more Member States (Schreiber, 2019, marginal number 11).

The material scope of the coordinating social law of the EU is defined by Art. 3 of Regulation (EC) No 883/2004. The scope covers classic social security benefits, such as old-age pensions, survivors’ benefits and sickness benefits, as well as modern social benefits, such as family benefits and non-contributory cash benefits. The interpretation of these terms requires an autonomous understanding shaped by European law and independent from national law. The covered risk is decisive for distinguishing between the various categories of social security benefits (Eichenhofer, 2022, marginal number 94; Janda, 2022, marginal number 57; ECJ, 2017; 2006 I). Art. 3 (2) of Regulation (EC) No 883/2004 makes it clear that it is irrelevant whether the social benefit is assigned to the social or tax system under the applicable national law (Schreiber, 2019, Art. 3, marginal number 11). This means that even if a benefit is characterised as a tax reduction, it may still be considered a social benefit under the regulation. An example of this is the German child benefit, which is an anticipated refund to the taxpayers (Mrozynski, 2019). The coordination of social security benefits is closely linked to the free movement of workers, as recognised in primary law. Moreover, the existence of a cross-border situation is always required (Janda, 2022, marginal number 61). Therefore, the relevance of the relation to the labour market is highlighted in the regulation's catalogue of benefits. According to Art. 3 (5), the regulation shall also apply to the special non-contributory cash benefits covered by Art. 70, which are provided under legislation that – due to its personal scope, objectives and/or conditions for entitlement – has characteristics of both the social security legislation referred to in Art. 3 (1) and social assistance. According to Art. 70 (2)(c), the constitutive prerequisite for qualifying a benefit as a special non-contributory cash benefit, in this sense, is its inclusion in Annex X of Regulation (EC) 883/2004.

According to Art. 9 of Regulation (EC) No 883/2004, Member States are required to notify which social benefits they consider to be covered by the coordination system. In connection with the principle of loyal cooperation and mutual support derived from Art. 4 (3) TEU, the obligation to notify results in the requirement of due diligence not only for the declaring state but also for the other Member States in the principle of the protection of their legitimate expectations (ECJ, 2016; 2000). Furthermore, the notification also creates protection of legitimate expectations towards the person affected by the social benefit (ECJ, 2016 I). However, benefits not explicitly named in the notification procedure may still fall under the scope of the regulation if they objectively meet the criteria outlined in Art. 3 of Regulation (EC) No 883/2004 (ECJ, 2013 I; 2001).

According to Art. 3 (5) of Regulation (EC) No 883/2004, the coordination rules shall not apply to social and medical assistance or benefit schemes for victims of war or its consequences. However, if benefits listed in the catalogue of Art. 3 (1) also have a partial (subsequent) compensation character in the sense of Art. 3 (5), these are not covered by the exclusion rule (ECJ, 2007 II).

The coordinating social law of the EU is governed by several basic principles, including non-discrimination, the requirement of aggregation or the harmonisation of facts.

The principle of non-discrimination plays a central role among the fundamental principles of the basic regulation. This principle follows directly from the primary law (Art. 18 TFEU) and is explicitly enshrined in Art. 4 of Regulation (EC) No 883/2004. In the context of the coordinating social law, this primarily results in the ban on making the granting of social security benefits dependent on the existence of a specific nationality. The non-discrimination principle prohibits both direct discrimination (which is directly linked to nationality) and indirect discrimination. In contrast to direct discrimination, indirect discrimination may be justified by objective considerations, which are independent of nationality, provided that they are proportionate to the aim legitimately pursued by the national law (ECJ, 2007 I).

Insofar as national provisions deviate from this principle and are nevertheless linked to a specific nationality, Art. 4 of Regulation (EC) No 883/2004 has the effect that persons residing in the territory of a Member State to which the provisions of that regulation apply are entitled to receive benefits under the legislation of that Member State on the same conditions as that state's nationals (ECJ, 2001). The prohibition of discrimination in Art. 4 also includes regulations of a Member State that – although not expressly linked to nationality – nevertheless make requirements for nationals of other Member States that are not imposed on the nationals of the competent state, such as the need for a formal residence permit issued by domestic administration (ECJ, 1998 I). On the other hand, it is important to understand that there is no discrimination simply because different Member States have different levels of benefits in their social security systems for all concerned. This is an inevitable consequence of the fact that the Member States are still responsible for the largely autonomous structuring of their social systems.

In a recent case from 2021 related to the Latvian healthcare system, the ECJ had to balance the non-discrimination principle with restrictions of the Free Movement Directive (EC) No 2004/38. The case involved an Italian citizen who wanted free access to the Latvian health insurance system after moving to Latvia, which was denied to him due to the directive's provision that a stay of more than three months as a non-active person is linked to the ability to provide for one's own maintenance. The ECJ balanced both principles and found that ‘Article 4 and Article 11(3)(e) of Regulation No 883/2004 and Article 7(1)(b) and Article 24 of Directive 2004/38 must be interpreted as precluding national legislation which excludes from the right to be affiliated to the public sickness insurance system of the host Member State, in order to receive medical care financed by that State, economically inactive Union citizens, who are nationals of another Member State and who fall, by virtue of Article 11(3)(e) of that regulation, within the scope of the legislation of the host Member State and who are exercising their right of residence in the territory of that State under Article 7(1)(b) of that directive’ (ECJ, 2021 II). As a result, the Latvian state was obliged to include the Italian citizen in the health insurance system. However, at the same time, the ECJ stated that the Member State is not hindered from structuring the accession of such Union citizens to this system against payment of a contribution to prevent those citizens from becoming an unreasonable burden on the public finances of the host Member State (ECJ, 2021 II).

A special form of the prohibition of discrimination is the equal treatment of facts, as set out in 5 of Regulation (EC) No 883/2004. The provision distinguishes between legal effects that are triggered by the receipt of benefits or income (Art. 5 (a)) and the equality of facts and events (Art. 5 (b)). In accordance with the case law of the ECJ – based on the fundamental freedoms (e.g. ECJ, 2003) – the provision extends the principle of equivalence for individual benefit areas contained in the previous Regulation (EEC) 1408/71 to the principle that functionally equivalent facts or events that have occurred in another EU Member State are to be treated as if they had occurred domestically. Art. 5 (a) of Regulation (EC) No 883/2004 does not contain any specifics on the question of how the words ‘similar services’ are to be interpreted (ECJ, 2016 I). ‘According to settled case-law of the Court, in determining the scope of a provision of EU law, in this case Article 5(a) of Regulation No 883/2004, its wording, context and objectives must all be taken into account’ (ECJ, 2016 I; likewise 2015 II & 2013 II). The concept of similarity cannot depend on the ‘identity of the services’ since Art. 5 would otherwise be ineffective in many cases (ECJ, 2014). Rather, when examining the equivalence, their essential characteristics, the purpose of the regulation and the regulatory goals pursued by the national legislature must be taken into account (ECJ, 2016 I).

According to Art. 5 (a) of Regulation (EC) No 883/2004, the relevant provisions of the legislation of the responsible Member State shall also apply to the receipt of equivalent benefits acquired under the legislation of another Member State or to income in another Member State if – according to the legislation of the Member State responsible – the receipt of social security benefits and other income has specific legal effects. However, if the legislation of the responsible state does not provide for a reduction or crediting of benefits, Art. 5 (a) of Regulation (EC) No 883/2004 does not constitute an independent legal basis for the Member States to rule out double benefits since the coordination of European social law only has the effect of extending the rights of those affected and never of reducing them (ECJ, 1982).

With regard to the relationship between Art. 5 (b) and the principle of aggregation according to Art. 6, the priority stated in recital 10 of Regulation (EC) No 883/2004 must be taken into account. According to this recital, ‘the principle of treating certain facts or events occurring in the territory of another Member State as if they had taken place in the territory of the Member State whose legislation is applicable should not interfere with the principle of aggregating periods of insurance, employment, self-employment or residence completed under the legislation of another Member State with those completed under the legislation of the competent Member State. Periods completed under the legislation of another Member State should therefore be taken into account solely by applying the principle of aggregation of periods’ (lex specialis), according to Art. 6 of Regulation (EC) No 883/2004.

At the level of primary law, Art. 48 sentence 1 (a) TFEU already provides that periods of insurance, periods of employment or periods of residence and periods of self-employment that have been completed in another EU Member State for the acquisition and maintenance of entitlement to benefits and the calculation of benefits are to be counted together. This is achieved under Art. 6 of Regulation (EC) No 883/2004 by the principle of aggregation of foreign and domestic periods. If – according to the legislation of the competent Member State – the acquisition, maintenance, continuation or renewal of an entitlement to benefits; the application of certain legislation or access to or exemption from compulsory insurance; and voluntary insurance or voluntary continued insurance depend on the completion of periods of insurance, periods of employment, periods of self-employment or periods of residence, the competent institution shall take into account the periods completed under the legislation of another Member State as if they were periods completed under the legislation applicable to that institution. The consequence of this principle is the portability of periods and again the avoidance of disadvantages as a result of moving to another EU Member State. However, in conjunction with the regulatory competence of the Member States, Art. 6 does not determine the requirements for the possibility of taking periods into account, but rather this task remains within the competence of the Member States.

For the interpretation of Art. 6, reference can be made to the decision ‘H6’ (12/16/2010, OJEU 2011 C45, 5) of the Administrative Commission under Art. 71 of Regulation (EC) No 883/2004. The provision is a classic catch-all provision, which is therefore subject to the priority of the special provisions on aggregation (Eichenhofer, 2010, p. 187). Such provisions can be found – for example – in Art. 51 for old-age and survivors’ pensions or in Art 61 of Regulation (EC) No 883/2004 for unemployment benefits. In Art. 66 of Regulation (EC) No 883/2004, the subordination of Art. 6 is even expressly ordered for pre-retirement benefits. Art. 6 does not apply to periods completed in a third country. However, in such cases, the general principle of equal treatment under EU law must be taken into account. In the case of a bilateral agreement being concluded between a Member State and a third country, this means that an obligation to take periods completed in a third country into account that is regulated therein shall also apply to nationals of other EU Member States (ECJ, 2002). Art. 12 of Regulation (EC) No 987/2009 provides for priority rules in cases where several achievements rendered in different Member States – which are in principle taken into account – fall within the same period.

One of the fundamental principles of coordinating social law is the exportability of benefits, which ensures that individuals can take their social security benefits with them when they move across borders. This is initially achieved through Art. 7 of Regulation (EC) No 883/2004 through the so-called ban on place of residence clauses. The portability of benefits must not depend on the question of where the beneficiary or the members of his/her family actually reside. The concept of ‘place of residence’ is specified in further detail for this purpose in Art. 11 of Regulation (EC) No 987/2009. The principle explicitly applies only to cash benefits, but not to benefits in kind. The concept of ‘cash benefits’ under EU law is independent of national categories and must therefore be defined autonomously within the framework of Regulation (EC) No. 883/2004 (ECJ, 2009; 2006 II). Deviations from national law are possible but not compulsory. The concept of ‘cash benefits’ is primarily the negative counterpart to benefits in kind. According to the case law of the ECJ, the defining characteristics of a cash benefit are the periodic nature of the payment, the independence of the payment claim from previous expenses or their verifiability, the payment of a fixed amount independent of actual expenses and the existence of large freedom of use for the beneficiary (ECJ, 2006 II; 2004; ECJ, 1998 II). ‘The concept of “cash benefits” refers to benefits of a periodic nature which procure for persons suffering from illness an income substitute or financial support serving to maintain the overall standard of living of the sick person and of members of his family’ (ECJ, 2006 II). It is a ‘financial aid which enables the standard of living of persons […] to be improved as a whole, so as to compensate for the additional expense brought about by’ (ECJ, 1998 II) the circumstance giving rise to the claim.

Exceptions to the principle of the exportability of cash benefits are only conceivable within narrow limits. In addition to the close connection of special non-contributory cash benefits to the economic and social situation in the Member State concerned (Art. 70 (2) (a) (i)), the protection against a significant threat to the financial balance of the social security system may also be a generally justifying concern (ECJ, 1998 III). Regulation (EC) No 883/2004 itself also provides for restrictions on the portability of cash benefits, for example, in Art. 64 and 65 (unemployment benefits) and Art. 68 (family benefits).

However, the situation is different for benefits in kind, which are not covered by Art. 7, as their provision depends on country-specific systems. For example, in Germany, outpatient medical services with statutory health insurance can only be provided by licensed doctors, which limits the portability of these services. Exporting these benefits would mean that the service providers would also have to be exported. To counteract this problem, the coordinating social legislation is based on the principle that the insured person or members of his/her family who reside in a Member State other than the competent Member State shall receive in the Member State of residence benefits in kind provided, on behalf of the competent institution, by the institution of the place of residence, in accordance with the provisions of the legislation it applies, as though they were insured under the said legislation (see e.g. Art. 17 et seq.). In order to avoid the obligation to export cash benefits – which is often unwelcome from the perspective of the insurance state – Member States try in some way to reclassify types of benefits that are actually cash benefits as benefits in kind. However, the ECJ has repeatedly put a stop to such attempts in recent years. A famous example of this is the German care allowance, which is paid out to the person in need of care as a lump sum instead of the immediate granting of care benefits in kind, so that this person can procure the necessary care services themselves. The German legislature used the term ‘substitute benefits in kind’ – which is not actually intended according to the categories of German social security law – to characterise the intended exclusion of exportability in this way (Bundestag document 12/5262, 112). According to this, the care allowance was not designed as a ‘cash payment in the strict sense [... but was] intended to replace only the actual [...] benefit in kind (so-called surrogate benefit in kind)’ (translated from Bundestag document 12/5262, 112). However, since (as mentioned earlier) the interpretation of the ‘term of payment’ under European law does not depend on the previous national understanding, neither the German Federal Social Court nor the ECJ was impressed by this attempt (ECJ 1998 II; German Federal Social Court, 1997).

Regulation (EC) No 883/2004 already supersedes national conflict-of-law rules due to the principle of the primacy of application of European law (see e.g. ECJ, 1998 IV). Art. 8 (1) (1) expressly regulates the fundamental primacy of Regulation (EC) No 883/2004 (‘replace any social security convention’) for agreements on social security that have already been concluded between the EU Member States.

Deviating from this, according to the so-called Principle of favourability or Petroni principle (see ECJ, 1975) anchored in Art. 8 (1) (2) of Regulation (EC) No 883/2004, individual provisions of these agreements continue to apply if they are more favourable to the beneficiaries or if they arise from specific historical circumstances and their effect is limited in time. However, to be precise, it is not about the actual law of the agreement that is at issue, but rather about the (more favourable) rules that derive from it but which have already been transformed into the national legal systems of the Member States concerned. The background to the principle is the avoidance of situations in which those affected do not make use of the fundamental freedoms of the TFEU, which are actually designed to extend rights, because they are consequently restricted in their rights by the then applicable provisions of EU law. In addition to the afore-mentioned substantive requirements, the continuation of validity according to Art. 8 (1) No. 3 of Regulation (EC) No. 883/2004 is linked to the formal requirement of the inscription in Annex II of the Regulation. This registration has a constitutive character. According to Art. 8 (2) of Regulation (EC) No 883/2004, the Member States are not generally prohibited from concluding bilateral or multilateral agreements on social security in the future. However, these must comply with the principles and the spirit of the Regulation and are also subject to the notification requirement according to Art. 9 (1) (1) of Regulation (EC) No 883/2004.

Art. 10 of Regulation (EC) No 883/2004 prohibits the accumulation of benefits in cases where the coordination principles result in different benefit providers from different states having to grant benefits based on the same period of insurance (cf Vießmann/Merkel, 2012, p. 575). The regulation therefore prevents the double receipt of several benefits of the same kind based on the same period of compulsory insurance from different Member States. However, according to Art. 6 of Regulation (EC) No 883/2004, the aggregation of periods remains possible. The purpose of the regulation is to compensate for disadvantages that may arise from migratory movements and not to place persons who make use of their freedom of movement in a better position. This principle is guaranteed by Art. 10 of Regulation (EC) No 883/2004. The prohibition of cumulation applies only to benefit entitlements that overlap on the basis of the regulation. ‘However, a limitation on the overlapping of benefits which would lead to a diminution of the rights which the persons concerned already enjoy in a member state by virtue of the application of the national legislation alone is incompatible with’ Art. 48 sentence 1 (a) TFEU (ECJ, 1975).

According to the case law of the ECJ, the question of whether benefits of the same kind exist must be primarily based on the fact that ‘their purpose and subject matter as well as the basis on which they are calculated and the conditions for granting them are identical’ (ECJ, 2018 II; 2008; 2006 I; 1983). This characteristic is also to be interpreted autonomously and thus independently of any assessment by the Member State. Art. 10 of Regulation (EC) No 883/2004 explicitly refers only to the same period of compulsory insurance. A possible coincidence with periods of voluntary insurance is not covered by this provision but may, in individual cases, be subject to the restrictions of the provisions of the special part of the regulation (German Federal Social Court, 2018). This applies – for example – to Art. 53 of Regulation (EC) No 883/2004 for old-age and survivors’ pensions. Additionally, the deduction rule in Art. 10 of Regulation (EC) No 987/2009 applies, which is intended to prevent disproportionately high reductions. This is achieved by dividing the benefits portion to be reduced by the number of eligible parallel benefits.

In the absence of a uniform social law statute in European primary law, the basic regulation or the implementing regulation, a central part of coordinating EU social law, is the determination of the applicable national law. The provisions of Regulation (EC) No 883/2004 that apply in this context supersede any conflict-of-law provisions of the social legislation of the Member States, such as the German §§ 4 and 5 of the Social Code IV. The central principle of the conflict-of-law rules is to avoid the simultaneous applicability of several national legal systems (Art. 11 (1) (1) of Regulation (EC) No 883/2004).

Subject to Art. 12 to 16, Art. 11 (3) of Regulation (EC) No 883/2004 provides that a person pursuing an activity as an employed or self-employed person in a Member State shall be subject to the legislation of that Member State for the purpose of determining the applicable law (Art. 11 (3) (a) Regulation (EC) No 883/2004). This is not surprising given the underlying free movement of workers. However, questions have arisen about how to deal with new work phenomena, such as work on digital platforms or the increased demand for home-based work due to the coronavirus pandemic. In addition, a civil servant shall be subject to the legislation of the Member State to which the administration employing him/her is subject, and a person receiving unemployment benefits under the legislation of the Member State of residence in accordance with Art. 65 shall be subject to the legislation of that Member State and a person receiving unemployment benefits under the legislation of the Member State of residence following Art. 65 shall be subject to the legislation of that Member State (Art. 11 (3) (b–d) of Regulation (EC) No 883/2004). Additionally, Art. 11 (3) (e) of Regulation (EC) No 883/2004 contains a catch-all provision, according to which any other person not covered by subparagraphs (a) to (d) shall be subject to the legislation of the Member State of residence, notwithstanding any provision of this regulation to the contrary.

According to Art. 12 (1) of Regulation (EC) No 883/2004, an important deviation from the principle of being bound to the place of work applies in the case of the posting of employees; otherwise, even short-term activities abroad could lead to a change in the applicable law and thus to frequent changes in the social security status. At least as long as the total period of 24 months is not exceeded, the social legislation applicable in the country of posting continues to apply in principle. This also applies (as now expressly confirmed by Art. 14 (1) of Regulation (EC) No 987/2009) even if the employee was hired only for the purpose of the posting (ECJ, 1967 I). According to Art. 14 (2) of Regulation (EC) No 987/2009, for the application of Art. 12 (1) of Regulation (EC) No 883/2004, it is also important that the posting employer habitually carries out significant activities other than purely internal administrative activities on the territory of the Member State in which the company is established. Art. 12 (2) of Regulation (EC) No 883/2004 also creates a regulation comparable to the mentioned posting legislation for self-employed persons, for whom the change of location is based on their own initiative, in contrast to the dependent employee.

With the simultaneous exercise of activities in two or more Member States, Art. 13 of Regulation (EC) No 883/2004 regulates another important conflict of laws situation. To avoid multiple legal relationships, Art. 13 of the basic regulation focuses on the core of the work activity. Art. 14 of Regulation (EC) No. 883/2004 provides for an exception to these principles for the possibility of voluntary insurance or voluntary continued insurance that exists alongside a compulsory insurance scheme, and Art. 15 of Regulation (EC) No. 883/2004 contains a special provision on the applicable law for contract staff of the European Communities.