The Administrative Court of First Instance of Thessaloniki with the no. 2604/2021 Decision of, on a case that our office successfully handled, annulled acts imposing fines (P.E.E and P.E.P.E.E) of EFKA-IKA for 29 catering company employees (cafe – bar) of Thessaloniki, total amount of more than 28.000,00 euros, judging that the IKA audit bodies did not prove their claims as they should, even though they bear the relevant burden of proof.
In this case, the IKA audit bodies, with an unprecedented, unjustified and arbitrary reasoning and on the occasion of a single on-site inspection in the presence of two employees, classified a catering business retroactive fines of more than 28,000.00 euros for all personnel ever employed by the company throughout its entire period of operation, i.e. for 31 employees and for the period of 3 and a half years ago.
Despite the contrary recommendation and decision of the Local Administrative Committee of EFKA, the Administrative Court of First Instance of Thessaloniki justified the business for the first time after a multi-year legal battle.
Specifically, the Court ruled that: “aIt does not appear from the information in the file, nor does the defendant insurance organization claim, that the applicant - employer did not properly comply with the information provided for by the provisions of the insurance legislation and in general with the obligations imposed for the insurance of the other personnel employed by it and, therefore, in view of what was interpreted in the second paragraph, the IKA audit bodies bore the burden of proof that the data resulting from the records kept by the applicant are, in relation to the specialty of the employees in question, fictitious.
In view of these facts, the Court finds that the defendant did not prove, although he bore the relevant burden, that the applicant's other employees were employed, during the relevant period for each of them, in a different specialty than the one for which they were insured ("buffet"), without the findings of the on-site inspection of 3.7.2018 being sufficient to prove this, which concerned exclusively the employees …… and ……. and cannot be extended, without invoking other evidence, to all the personnel employed by the applicant during the period 12/2015 – 8/2018“.
The Judiciary once again acted as a shield against the arbitrariness of the Public Administration.
The full text of No. 1 follows. 2604/2021 Decision of the Administrative Court of First Instance of Thessaloniki.
Decision number 2604/2021
THE
ADMINISTRATIVE COURT OF FIRST INSTANCE OF THESSALONIKI
SECTION 10
SINGLE MEMBERS
It sat in public in its audience on September 25, 2020, with judge Alexandros Mitrakas, First Instance Judge, and secretary Chrysoula Spanou, judicial officer,
to adjudicate the appeal filed on 16.5.2019 (registration number 2727/2019), of the general partnership with the name …….., based in Thessaloniki, legally represented and appeared with a statement of attorney-in-fact of Thomas Kalokyri, according to article 133 par. 2 of the Code of Administrative Procedure, as amended by article 29 par. 1 of Law 2915/2001,
against the legal entity under public law (n.p.d.d.) with the name "Single Social Security Institution" (EFKA) and already "Electronic National Social Security Institution" (e-EFKA) [article 51A par. 1 of law 4387/2016 (A' 85), added by article 1 of law 4670/2020 (A' 43)], which is based in Athens, is legally represented by its Governor and was represented by the power of attorney of its lawyer …………
During the discussion, the party present in the audience developed his claims and requested what is stated in the minutes.
The Court studied the case file and reasoned in accordance with the law.
His judgment is as follows:
1. Because, with the appeal under consideration, for which the legal fee was paid (see the electronic fee blocked with payment code 276582196959 0715 0080 and the proof of its payment dated 16.5.2019), the cancellation, according to the correct assessment of the application, of the decision no. 136/syn.15/20.2.2019 of the Local Administrative Committee (T.D.E.) of the 5th Local Branch of Employees of Thessaloniki of the E.F.K.A. was admissible. With this decision, the objection of the applicant company against the Act of Imposition of Contributions (P.E.E.) no. M723/23.10.2018 and the decision no. M719/23.10.2018 Act of Imposition of an Additional Contribution Charge (P.E.P.E.E.) of an employee of the Regional Insurance Audit Center (P.E.K.A.) of Central Macedonia of the Hellenic Social Insurance Fund, by which contributions of 21,875.37 euros and an additional charge on them of 6,562.94 euros were imposed on her, respectively.
2. Since, according to article 26 par. 1 of the Civil Code 1846/1951 (A' 179), the employer is liable to the Social Insurance Institution for the payment of insurance contributions, and the employer is not understood, according to article 8 par. 5, paragraph a' of the same law, to be the natural or legal person on whose behalf the insured person has actually provided dependent work for remuneration. Thus, in order for a natural or legal person in the capacity of employer to be obliged to pay insurance contributions to the Social Insurance Institution, the competent insurance bodies thereof and, in the event of an appeal, the regular administrative courts must establish, with justification, that the insured person actually provided dependent work for remuneration on behalf of the said person during the period to which the above contributions refer, and the judgment as to the realization of the employment is the responsibility of both the Social Insurance Institution bodies as well as the administrative courts that are subsequently seized can be concluded in any appropriate manner. Moreover, within the meaning of the provisions of article 26 par. 1, 9 and 11 of a.l. 1846/1951, as amended and supplemented, in combination with the provisions of articles 23 - 26 of the Insurance Regulation of the Social Insurance Institution (no. 55575/Ι.479/18.11.1965 decision of the Minister of Labor, B' 816), if the employer duly observes the data provided for by these provisions and in general the obligations imposed for the insurance of the employed personnel, the supervisory bodies of the Social Insurance Institution bear the burden of proof that the data resulting from the data kept by the employer are fictitious. On the contrary, if the employer does not comply with the obligations established by the above provisions for proving the number of insured persons, the type and time of employment and the amount of remuneration, the competent bodies of the Social Insurance Institution may determine the contributions payable based on the elements of the insurance relationship, which they determine at their discretion. In the event, however, of a challenge by appeal of an act imposing insurance contributions, which have been determined based on the discretion granted by these provisions to the bodies of the Social Insurance Institution, or of an act of the Local Administrative Committee, by which an objection of the employer against such an act imposing contributions has been rejected, the administrative courts are obliged, in accordance with the provisions of article 7 par. 1 and 2 of the law. 702/1977 (Α΄ 268) and article 79 of the Code of Administrative Procedure [C.A.P., ratified by article one of law 2717/1999 (Α΄ 97)], to rule on their own judgment on the legality of the judgment of the IKA bodies, in view of the allegations raised in the appeal and the evidence presented in proof thereof (ΣτΕ 152-154/2013 7m., 2259/2012 7m., 127, 1797, 2386/2017, 2546, 2563/2016, 3795, 3896/2014 etc.).
3. Furthermore, Article 1 of Law 2972/2001 (Government Gazette 291) provided for the obligation of every employer who employs persons covered by the IKA insurance to submit and keep a Detailed Periodic Declaration (DPR), which is submitted in the manner and within the time limit specified in Articles 2 to 4 of this law. Furthermore, Article 7 of the same law, as paragraphs 1 to 4 thereof were replaced by paragraph 4 of Article 9 of Law 3232/2004 (Government Gazette 48), stipulated that: “1. To employers who: a. … c. Submit the DPR with inaccurate employment - insurance data, an additional contribution charge is imposed amounting to 30% on the amount of the difference between the contributions declared and the contributions calculated by the service. … 2. … 3. The A.P.D. is considered inaccurate, in which a difference arises between the contributions declared by the employer and the contributions resulting from the audit, from a difference in working days, earnings or insurance sector and other data that determine the correct affiliation to the insurance. The A.P.D. that does not include an employee or employees is considered inaccurate …". Within the meaning of the above provisions, the additional contribution charge, imposed on the employer who submits an A.P.D. with inaccurate employment and insurance data of its employees, has a consequential nature in relation to the contributions imposed for the insurance settlement of these employees (cf. Council of State 1278, 2563/2016, 1320, 2348-2350/2015, 536, 3545, 4734/2014, etc.).
4. Because, in this case, the following emerges from the evidence in the case file: During the on-site inspection carried out on 3.7.2018, Tuesday at 21.07, by employees of the PEKA of Central Macedonia of the EFKA in the business of the applicant company (cafe - bar) on …… in Thessaloniki, ….., with a "bar" specialty, and ……, with a waitress specialty, were found working. In particular, in the relevant report no. 21580/3.7.2018 inspection report of the above employees recorded that …… was found behind the bar, in the production of drinks, while ……….. served, that the first was hired in April 2018 and worked 2 times a week for 4 hours a day, while the second was hired in June 2017 on a part-time basis and worked 3 or 4 times a week for 4 hours a day and that the above “refused to sign the declarations made by them”. Subsequently, a regular inspection was carried out at the company for the period 12/2015 – 8/2018, with the extraction of employment data from the “ERGANI” information system for all of its insured persons (35 employees). From this audit (see in this regard the regular audit report of an employee of the Central Macedonia Public Health Agency dated 23.10.2018) a) for …………… who had been prevented by the applicant in April 2018, had been insured with the specialty of "bartender" and during the above-mentioned on-site audit of 3.7.2018 she was found to be working as a barmaid, within her declared hours (referring to the staff list no. 3391041/2.7.2018 and the work schedule for the period 3.7.2018-7.7.2018), differences emerged from the bartender's presumed daily wage for the period 4/2018 - 8/2018, b) for ……….., who had been prevented by the applicant in June 2017, had been insured with the specialty of "………" for part-time employment of 4 hours per week and during the above-mentioned on-site inspection on 3.7.2018, she was found to be working as a waitress on a different day than the one declared in the relevant work schedule (referring to the staff lists no. 4681075/19.10.2017 and 3391041/2.7.2018 and the work schedule for the period 3.7.2018-7.7.2018), differences arose from an increase in insurance days for the period 10/2017 - 8/2018 and from imputed wages for the period 6/2017 - 8/2018, c) differences arose from the additional A.P.D. from differences in remuneration from the imputed daily wage of the 12th insurance class for all the company's staff (29 people, not including ….. and …….), who had been insured with the specialty of "buffet" and who, as the audit found, should have been insured as bartenders or waiters, for the reason that in the above on-site audit of 3.7.2018, one employee was found to be employed as a barwoman and one as a waitress and d) differences arose in addition to the ADI from an increase in insurance days for the employees….. Subsequently and after the service on the applicant company, on 10.10.2018, of an invitation to present its views and to submit any relevant evidence, to which it did not respond, an employee of the above service issued a) the no. M723/23.10.2018 P.E.E., by which contributions of a total amount of 21,875.37 euros were imposed on her for the above-attributed violations of insurance legislation, for the period 12/2015 - 8/2018 and b) the no. M719/23.10.2018 P.E.P.E., by which an additional charge of 30% on the above contributions was imposed on her, i.e. an amount of 6,562.94 euros. Against the above acts, the applicant filed on 26.11.2018 her objection under no. prot. 531/279/2018, which was rejected by no. 136/syn.15/20.2.2019 decision of the T.D.E. of the 5th Local Branch of Employees of Thessaloniki of the E.F.K.A.
5. Because, with the appeal under consideration, as its grounds are developed in its legally filed memorandum, the applicant requests the annulment of the aforementioned decision of the T.D.E. She claims that her two partners work permanently and on a rotating basis in her business as waiters and that of the 7 staff members she employs on average, 5 work permanently as bartenders, while 2 work as bartenders and waiters only on the days and hours that the partners are unable to work. In view of this, she claims, first of all, that the audit distorted and improperly assessed the evidence and, with unclear and contradictory assumptions, despite the lack of legal findings, was led to the conclusion of alleged violations on her part of the insurance legislation. In particular, she claims that arbitrarily and unjustifiably, based exclusively on the finding, during the on-site inspection of 3.7.2018, of minor violations for only two employees, the defendant's bodies accepted that all the staff who ever worked in her business (31 people) and had been insured with the "buffet" specialty had to be insured, and even retroactively, as bartenders or waiters, and imposed on her the relevant difference in contributions, as well as the corresponding additional burden. Moreover, according to the applicant, it is not clear from the judicial imputation acts and their justifications what observations and special circumstances arose, in order to substantiate the inspection's conclusion that the above employees had to be insured for a different specialty compared to the one for which she herself had insured them. She also claims that the imposition of the total amount of 28,438.31 euros on her is contrary to the principles of proportionality and leniency, as well as to Article 1 of the First Additional Protocol of the ECHR, because it is clearly disproportionate to the violations found during the on-site inspection of 3.7.2018 and will certainly lead to the cessation of operations of her business, due to the inability to pay the above amount. Furthermore, she claims that the judicial acts of imputation lack specific and detailed reasoning, because they do not mention how the employment, on the day of the on-site inspection, of the employees of her enterprise with the specialty of waiter or bartender and not bartender arose, how many and which employees carried out the inspection and which provisions were violated, while, according to her allegations, the contested decision of the T.D.E., by which her objection was rejected without mentioning the reasons for rejecting the allegations made therein, is also unfounded. Finally, she claims that the judicial imputation acts, to the extent that they imposed contributions and an additional burden on her for all the personnel who had worked in her company for the period 2015 - 2018 without proving the inaccuracy of the insurance data kept by her, violate the principles of legitimate expectations of the governed and legal certainty. In support of her claims, the applicant invokes and presents, among others, the affidavit obtained before the Thessaloniki Court of Justice Eleni Kolovou under no. 1514/23.9.2020, for which the provisions of article 185 par. 2 of the Code of Civil Procedure have been complied with. (see the report of service under no. Γ΄8257/10.9.2020 of the bailiff of the Thessaloniki Court of Appeal, Sotirios Lambrou, and the attached extrajudicial statement - invitation) and with which …. and …… declare that during the period in question they were working in the applicant's business as a bartender and in accordance with the terms of their employment contracts.
6. Whereas, the Court takes into account that, according to the information mentioned in inspection report no. 21580/3.7.2018, during the on-site inspection carried out on 3.7.2018 at 21.07 by employees of the Central Macedonia PEKA of the EFKA in the business (cafe - bar) of the applicant company, …… were found working with the specialty “bar” and …….. as a waitress (although both were insured with the specialty “buffet”), and the latter of them was not supposed to work on the day of the inspection, according to the relevant filed work schedule. In view of these facts and, furthermore, of the fact that the appeal under consideration does not raise any specific claim in relation to the differences from the increase in the number of days of insurance of …….., the Court finds that contributions and an additional burden were correctly and legally imposed on the applicant, without violating any constitutional or other supra-legislative provision or principle, for the insurance settlement of the above two employees, and all the claims to the contrary raised in the appeal under consideration must be rejected as unfounded. In particular, the testimony of …….. herself, in which she states that she worked as a bartender, does not appear, in the opinion of the Court, convincing, in view of the above findings of the audit, while the ground of appeal regarding the lack of specific and detailed justification of both the contested P.E.E. and P.E.P.E.E., as well as the contested decision of the T.D.E., regardless of its relevance, given that the courts of the substance cannot annul an administrative act for reasons related to the legality or the adequacy of its reasoning, but must investigate themselves whether the conditions required by law for its issuance are met and to accept or reject in whole or in part, ultimately, at their own substantive discretion, the appeal (Council of State 1818, 1820/2015, 4596/2012, 2170/2003, 1496/1998 7m.), is, in any case, to be rejected as unfounded, because in the aforementioned no. 21580/3.7.2018 inspection report, signed by the three employees who conducted the inspection and on which the above acts are based, it was explicitly recorded that …..was found serving, while ……….was found behind the bar, producing drinks - beverages, i.e. the actions of the two employees were recorded from which, in the auditor's judgment, the specialty in which they worked on the day of the inspection emerged.
Furthermore, however, the Court takes into account that it does not appear from the information in the file, nor does the defendant insurance organization invoke it, that the applicant - employer did not properly comply with the information provided for by the provisions of the insurance legislation and in general with the obligations imposed for the insurance of the other personnel employed by it and, therefore, in view of what was interpretatively accepted in the second consideration, the auditing bodies of the Social Insurance Institution bore the burden of proof that the data resulting from the information kept by the applicant are, in relation to the specialty of the employees in question, fictitious. In view of these facts, the Court finds that the defendant did not prove, although it bore the relevant burden, that the other employees of the applicant were employed, during the relevant period for each of them, in a different specialty compared to the one for which they were insured ("buffet"), without the findings of the on-site inspection of 3.7.2018 being sufficient to prove this, which concerned exclusively the employees …….. and cannot be extended, without invoking other evidence, to all the personnel employed by the applicant during the period 12/2015 – 8/2018. Consequently, on the one hand, differences in the A.P.D. from differences in remuneration from the imputed daily wage of the 12th insurance class, for the other personnel of her business (i.e. for 29 employees), who had been insured with the specialty of "buffet", and on the other hand the corresponding additional burden, and the T.D.E. erred in that, with its contested decision, it accepted the opposite, according to the validly alleged relevant reason for the appeal.
7. Since, in consequence of the above, the appeal under consideration must be partially accepted, the decision no. 136/syn.15/20.2.2019 of the T.D.E. of the 5th Local Branch of Employees of Thessaloniki of the EFKA must be partially annulled, in accordance with the more specific provisions of the operative part, part of the fee paid, amounting to 75.00 euros, must be returned to the applicant company (article 277 par. 9 last paragraph of the Code of Civil Procedure) and the balance must be ordered to be forfeited in favor of the Greek State and, finally, the legal costs must be offset between the parties, due to their partial victory and partial defeat (article 275 par. 1 paragraph c of the Code of Civil Procedure).
FOR THOSE REASONS
The appeal is partially allowed.
Annuls the decision no. 136/syn.15/20.2.2019 of the T.D.E. of the 5th Local Branch of Employees of Thessaloniki of the EFKA, in its chapter concerning a) the contributions imposed on the applicant with the no. M723/23.10.2018 P.E.E. from differences plus A.P.D. from differences in remuneration from the imputed daily wage of the 12th insurance class, for the remaining (except for …….) personnel of her enterprise (i.e. for 29 employees), who had been insured with the specialty of "buffet" and b) the additional burden on the above (under a) contributions, which was imposed on the applicant with the no. M719/23.10.2018 P.E.P.E.E.
It orders the reimbursement to the applicant of part of the fee paid, amounting to seventy-five (75.00) euros, and the forfeiture of the balance in favor of the Greek State.
Set off legal costs between the parties.
Published in Thessaloniki on 4.6.2021, at an extraordinary public session in the courtroom.
THE JUDGE THE SECRETARY
Thomas Steph. Summer
MDE lawyer
Candidate for Doctor of Law, Aristotle University of Thessaloniki
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