Opinion of Mr Advocate General Darmon

Mr President,

Members of the Court,

1. From 1980 Mr Segers, a Netherlands national, ran a commercial undertaking known as Free Promotion International which had its registered office in the Netherlands. Being anxious to extend his activities, inter alia, to brokerage on the financial market, he decided to transform his business into a limited liability company. Since he considered that the time required under Netherlands law for completing such an operation was too long and that the designation Ltd was more attractive than its Netherlands equivalent, BV, he took the following steps:

2. The Ziektewet applies to persons with the status of employees and that status is defined in terms of the existence of a subordinate relationship with an employer. As the Netherlands court points out, in principle such status cannot be attributed to the director of a company who holds 50% of the shares of his undertaking whilst his wife owns the other 50%. Nevertheless, in view of the legislature's desire to coordinate social security law and tax law in that matter, the Centrale Raad van Beroep departed from its previous case-law. By two judgments of 10 December 1968, it held that the director of a company holding 50% or more of the shares of a company was to be regarded as an employee.

3. In order to define the scope of the problem of interpretation before the Court and to provide the Netherlands court with a useful reply, it is necessary to make the following two preliminary observations.

4. The second paragraph of Article 52 of the EEC Treaty provides that:

5. I consider that none of the arguments put forward by the Association in order to establish that Articles 52 and 58 do not apply is tenable.

6. It remains to consider the possibility of fraud.

1 Translated from the French.