***Update 30.07.2024 DG HR position [1] on the payment of unemployment insurance by CAs on permanent (‘indeterminate duration’) contracts (3A)***
Generation2004 believes that the regulation governing social security contributions and pensions can be tricky, to say the least. Unlike officials, contract and temporary agents find themselves subject to additional deductions labelled as CCA ‘Unemployment insurance (personal contribution)’ code on their payslip [2], referring specifically to unemployment insurance for the EU unemployment allowance: a complement to the unemployment benefit received from national authorities.
Under current guidelines, both categories of staff become eligible for unemployment allowance after completing six months of uninterrupted service, provided they have not resigned, had their contract terminated on disciplinary measures or refused a contract renewal [3][*] (yes, that last one is not explicitly stated, but it’s applied nevertheless).
Can contracts be permanent?
While some non-permanent staff can get permanent contracts e.g. Contract Agents [4] 3a can convert their fixed-term contracts into indefinite ones after the second renewal (at least on paper this option does exist [5] [**]) and we do have permanent temporary agents [6] (yes, the mental gymnastics there are significant) they do not become officials.
Nevertheless, with permanent contracts should colleagues still be obliged to pay for the additional EU unemployment allowance? While there is always the need to have the safety net of unemployment allowance, as the 2020 closure of the Chafea [7] agency after 15 years in Luxembourg showed, should it always be necessary to make contributions for the EU allowance complement?
‘Gifted’ contributions and gifted health cover: no and yes
It’s been some time now (in many cases decades) since it became possible to have pension contributions made on your behalf in many Member States while you are not working. These ‘gifted’ contributions might cover periods of long-term sickness, of unemployment, military service or of caring responsibilities, depending on the national authority. The Commission has failed to keep up with this change [8]: it does not recognise these contributions and it does not make them.
So, during a period of unemployment (e.g. between contracts), former colleagues might qualify for the EU supplementary sickness insurance but not to have pension contributions paid to the EU pension scheme on their behalf. We bring to your attention that an uninterrupted history of pension contributions was needed for Mr Picard to win his case at court [9] on the original retiring age from his original contract being the one that counted: any interruption in contributions can make colleagues subject to the latest version of the rules and not the rules in force when they were first recruited. Vulnerable staff lose out once again!
We contacted the administration [10] requesting that they reassess the unemployment allowance policy: is it up to date and is it fair?
Generation 2004 believes that non-permanent staff who manage to secure a permanent contract (e.g. CA 3a) should have an option to opt out of contributing to this additional payment to an additional unemployment insurance. This would eliminate unnecessary contributions for complementary cover which may not be a priority for those colleagues at that moment. For example, look at how the Parliament has had to introduce an allowance in Luxembourg [11] in order to have many Contract Agent staff reach the minimum wage there.
Indeed, this is part of a bigger picture where we have non-permanent staff finding themselves working alongside staff in other categories and both are executing exactly the same tasks, but they are being remunerated [12] differently. Generation 2004 is convinced that contract agents on indeterminate contracts should not be expected to assume additionally the financial burden for an additional unemployment allowance that might not be a priority for them at this moment when they already have month left at the end of their salary.
As always, if you have questions or comments, feel free to contact us [13].
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[*] While it is always possible to formally request the reversal of a decision [14], even a resignation/refusal, there are no guarantees of success, as was unfortunately the case for the former colleague in T‑271/18 [15].
| Formal extension request exists? | Your response | Outcome |
| Yes | Yes | Employment continues |
| Yes | No | Loss of entitlement to EU unemployment allowance |
| No | Not applicable | Entitlement to EU unemployment allowance remains |
[**] Though the vast majority of contract agent (CA) and temporary agent (TA) colleagues will never get that permanent contract. Check out the 7-year rule [16]. Note that there are no guarantees that anyone will be offered the full 6 (or 7) years and there is no written right for them to have the full 6 (or 7) years.
New recruits will not know whether this is to be their future since it is unusual to be offered a 1 x 6-year contract. Some are not even offered a 1 x 3-year contract. They may have the ‘will they, won’t they?’ worry every single year with several 1-year contracts. This means that CA and TA colleagues must remain in ‘interview mode’ and giving their very, very best at all times.
Consider not just the strain of this and the impact on mental health, but also the financial hit of perhaps not getting the accommodation deposit back due to insufficient notice (how much notice does the Commission give on whether the contract will be renewed?).
The 7th ‘unicorn’ year: colleagues may have to redo the 9-month probation period [17]. Yes, after 6 years of employment they might have to repeat this step. So 9 of their last 12 months in a 7-year career will be spent (again) on probation. Consider how this impacts requests for annual leave or the ability to push back when workload exceeds what is humanly possible.