Information;Order — ECLI:EU:C:2021:895
Date: 2021-10-22
Language of the case: Portuguese
Court formation: Ninth Chamber
Subject matter: Right of establishment;Anti-discrimination
Procedure: Reference for a preliminary ruling
Origin: Portugal

Summary of the question referred for a preliminary ruling: the applicant argues 
that the exclusion from the subjective scope of Article 334 of the Código de 
Trabalho (Employment Code; ‘CT’) of companies established in other Member 
States results in discriminatory treatment of workers on the basis of the personal 
status of companies which exercise control over their respective employers, 
prohibited by Article 18 TFEU; defendant N submits that there is no unjustified 
differentiation between the rules governing the liability of foreign companies and 
O AND OTHERS 
 
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those governing Portuguese companies since these are rules laid down in national 
legislation and Article 18 TFEU prohibits any discrimination in the context of the 
application of the Treaties, adding that Article 54 TFEU is applicable to Part [III] 
of the TFEU and not to liability in matters related to employment claims. 
II. Relevant facts established after the judgment 
7 On 22 December 2004, the applicant was hired by the first defendant, O (at that 
time called OPC), on a fixed-term employment contract to work as a security 
technician under the first defendant’s instructions, direction and supervision and 
in return for remuneration. 
8 On 14 June 2016, the first defendant, O, and the second defendant, P, concluded, 
with the applicant’s consent, a temporary worker placement agreement for the 
period 1 July 2016 to 31 January 2017, renewable for periods of six months up to 
a maximum of five years; the applicant was still in that situation on the date of 
termination of his employment contract. [Or. 2] 
9 Towards the end of his contract, the applicant had the position of senior security 
technician and received a monthly basic salary of EUR 910.00 (nine hundred and 
ten euros), the sum of EUR 227.50 (two hundred and twenty-seven euros and fifty 
cents) in respect of exclusion from the application of the rules on the limitation of 
working time, a performance bonus of EUR 220.00 (two hundred and twenty 
euros) and a variable additional payment for night work. 
10 The applicant worked in a number of places throughout the country, in particular 
Abrantes, Setúbal, the IP 3 in Penacova, and Entroncamento, to which he travelled 
from his home in Paços de Ferreira and from which he returned at least once a 
week, and he received daily subsistence and travel allowances of EUR 26.75 
(twenty-six euros and seventy-five cents) for each actual day worked. 
11 The applicant received a sum corresponding to 50% of holiday pay and the 
Christmas bonus which were apportioned respectively into 12 monthly payments 
of EUR 47.40 each. 
12 The remuneration for the month of May 2018 was the last full remuneration paid 
to the applicant by the first defendant. 
13 Of the remuneration for June 2018, the applicant received only the sum of 
EUR 1 050.00 on 21 August 2018, from the second defendant. 
14 Since then, neither the defendants nor any other company in the group to which 
they belong have made any further payments to the applicant. 
15 The applicant was not paid the full amount of remuneration for June 2018, or any 
amounts in respect of his salary, the supplement for exclusion from the application 
of the rules on the limitation of working time, the performance bonus or the daily 
subsistence and travel allowances for July, August and September 2018. 
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16 In June 2018, the applicant worked 20 working days, one of which was on night 
shift, and he took one day’s holiday. 
17 In July 2018, he worked every working day (22). 
18 In August 2018, he worked 10 working days and took 12 days’ holiday. 
19 In September 2018, he worked every working day (20). [Or. 3] 
20 In October 2018, he worked one working day. 
21 The failure to pay the applicant remuneration, in addition to the expenses he had 
to incur in order to carry on the activity of senior security technician at the various 
works in progress in the country, created in the family unit of the applicant, who is 
married with two children, a precarious financial situation which meant that 
members of the family were short of money to cover ordinary costs and had to 
make sacrifices, in the light of their income and expenses. 
22 At that time, the applicant’s family unit was paying school fees for the son at 
school A and the daughter at school N, the monthly amounts of which came to 
EUR 1 400.00 and EUR 430.00 respectively, in addition to a home loan in the 
amount of EUR 274.05 per month and various expenses associated with the 
responsibilities of family life which came to around EUR 600.00. 
23 The applicant’s wife is a teacher and she received a salary of EUR 1 241.00. 
24 On 1 October 201[8], the applicant sent the first defendant a letter informing it 
that, since it had failed to pay his remuneration, it was no longer tenable to 
maintain the employment relationship, having regard to the fact that, as at that 
date, the payment of remuneration for June and July was more than 60 days […] 
late, and that, therefore, he was terminating the employment contract with good 
cause. 
25 The first defendant replied to the applicant by letter of 10 October 2018, 
informing him, essentially, that, in its opinion, ‘the legal requirements for the 
existence of good cause to terminate the employment contract, and for the 
obligation to pay the compensation provided for in Article 396(1) of the 
Employment Code, have not been satisfied’. 
26 The applicant took only 17 days’ holiday in 2018. 
27 During the last three years that the employment contract was in force, the first 
defendant provided the applicant with only 47 hours of vocational training. 
28 The fourth defendant, N, holds all the share capital in OP which, in turn, holds 
4 892 672 shares in the first defendant, O, representing 97.82% of that company’s 
share capital, [and] the second defendant, P, is wholly owned by the first 
defendant, O. 
O AND OTHERS 
 
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29 The first and second defendants hold stakes with nominal values of EUR 300.00 
and EUR 200.00, respectively, in the capital [Or. 4] of the fifth defendant, G, 
representing 60% and 40%, respectively, of the latter’s share capital. 
30 The defendants have a common organisational structure, since some of them hold 
stakes in the share capital of others, as indicated above, although the fourth 
defendant owns the rest of the companies and has the power to make decisions 
regarding their futures. 
31 The applicant should have been paid the following amounts in respect of 
remuneration: 
32 […] 
[…] [Or. 5] 
[…] 
[…] [detailed description of the claims at issue] 
33 In 2015, the first defendant went into administration and during that procedure it 
agreed a recovery plan with its creditors which included conditions for 
regularising its debts to its suppliers, financial institutions and other creditors; that 
plan was ratified by [Or. 6] final judgment on 29 July 2016 […] [identification of 
the court which gave the judgment]. 
34 On 20 August 2018, the applicant was paid the sum of EUR 1 050.00. 
III. Wording of the national provisions which may be applicable to this case; 
summary of the relevant national case-law 
35 Pursuant to Article 334 of the Employment Code (CT), claims arising from an 
employment contract, or the breach or termination of that contract, which are 
more than three months overdue shall be met jointly and severally by the 
employer and any company which is in a cross-shareholding, control or group 
relationship with it, in accordance with the provisions of Article 481 et seq. of the 
Código das Sociedades Comerciais (Code on commercial companies). 
36 Article 481 of the Code on commercial companies (CSC) provides as follows: 
‘1. This title shall apply to relations between limited liability companies, public 
limited companies and partnerships limited by shares. 
2. This title shall apply only to companies having their registered office in 
Portugal, except in the following situations: 
(a) the prohibition laid down in Article 487 shall apply to the acquisition of 
shareholdings in companies established abroad which, according to the criteria 
laid down herein, are classified as dominant; 
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(b) the obligations regarding publication and declaration of shareholdings, 
incumbent on companies established in Portugal, include shareholdings held by 
those companies in companies having their registered offices abroad, and vice-
versa; 
(c) a company established abroad which, according to the criteria laid down 
herein, is classified as being dominant over a company having its registered office 
in Portugal, shall be liable vis-à-vis the latter and its shareholders, pursuant to 
Article 83 and, where appropriate, Article 84; 
(d) the incorporation of a public limited company, in accordance with 
Article 488(1) and (2), by a company which does not have its registered office in 
Portugal.’ 
37 For its part, Article 482 of the CSC provides that, ‘for the purposes of this law, the 
following shall be regarded as connected companies: 
(a) companies in a simple shareholding relationship; [Or. 7] 
(b) companies in a cross-shareholding relationship; 
(c) companies in a control relationship; 
(d) companies in a group relationship.’ 
38 In accordance with 483 of the CSC: 
‘1. A company shall be regarded as having a simple shareholding relationship 
with another company where one of them holds units or shares in the other 
representing an amount equal to or greater than 10% of that company’s share 
capital but there is no other form of relationship between them of the kind set out 
in Article 482. 
2. For the purposes of the amount referred to in the previous paragraph, the 
ownership of units or shares by one company which is directly or indirectly 
controlled by another company or has a group relationship with it, and of shares 
held by a person on behalf of either of those companies, shall be considered to be 
the same as the ownership of units or shares by the latter company.’ 
39 Further, in accordance with Article 486 of the CSC: 
‘1. Two companies shall be regarded as being in a control relationship where 
one of them, classified as dominant, is able to exercise, either directly or via 
companies or persons who fulfil the criteria laid down in Article 483(2), a 
dominant influence over the other which is classified as dependent. 
2. A company shall be deemed to be dependent on another company where the 
latter, directly or indirectly: 
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(a) holds a majority stake in its share capital; 
(b) holds more than half of its voting rights; 
(c) has the power to appoint more than half the members of the management 
board or supervisory board.’ 
40 Article 3(1) of the CSC, which provides that companies are governed by the law 
of the State in which their administration has its effective principal place of 
business, is the main national conflict rule in matters relating to commercial 
companies. 
41 Portuguese case-law and legal literature have questioned whether those rules are 
also applicable to companies established in foreign countries. 
42 According to Rui Lopes Loureiro in ‘Da responsabilidade por créditos emergentes 
de contrato de trabalho, da sua violação ou cessação, no âmbito [Or. 8] de 
coligações societárias internacionais’ (Liability for claims arising from contracts 
of employment, and from breach or termination thereof, in respect of international 
groups of undertakings), Universidade Católica Portuguesa, May 2017, 
https://repositorio.ucp.pt/, p. 33, that limitation is criticised by academic lawyers 
because it creates discrimination between national groups and international 
groups, in all likelihood contrary to the principle of equality enshrined in 
Article 13 of the Constituição da República Portuguesa (Constitution of the 
Portuguese Republic; ‘CRP’) and the principle of non-discrimination on grounds 
of nationality enshrined in Article 18 TFEU. 
43 Romano Martinez argues that, under Article 481(2)(c) of the CSC, a worker can 
demand payment of his or her employment claims from a dominant company 
established abroad if his or her employer has its registered office in Portugal, 
provided that the conditions laid down in Article 83 of the CSC, cited by Rui 
Lopes Loureiro in the abovementioned work, are satisfied. 
44 M. Rosário Ramalho takes the view that the statutory approach excludes workers 
whose employer is part of an international group; that approach conflicts with ‘the 
increasing prevalence of the cross-border movement of workers’. That author 
proposes the application by analogy of the rules laid down by Article 334 of the 
CT ‘to other groups of undertakings in which there is shown to be a de facto 
situation where one undertaking has control over another’. Closure of the legal 
vacuum, in this case under Article 10 of the Código Civil (Civil Code; ‘CC’), 
appears possible since, according to the main school of thought, Article 334 of the 
CT contains a special rule, and the analogy is not applicable only in the case of an 
exceptional rule (Article 11 of the CC) (quotation from Rui Lopes Loureiro, op. 
cit., p. 34). 
45 Lastly, Luís Correia Araújo considers that no legal vacuum exists which would 
justify application of the analogy, arguing that the legislature decided to ensure 
that the rules laid down in Article 334 of the CT are compatible with other 
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employment rules relating to groups of undertakings by avoiding the creation of a 
system of liability which diverges too much from the system applicable to 
companies. Accordingly, the legislature provided an exhaustive list of the forms 
of connection between companies which it was intending to include and used 
company law concepts (quotation from Rui Lopes Loureiro, op. cit.). 
46 In judgment No 227/2015, the Tribunal Constitucional (Constitutional Court, 
Portugal) decided to ‘declare that the interpretation of Article 334 of the 
Employment Code in conjunction with the first part of Article 481(2) of the Code 
on commercial companies is unconstitutional, since it precludes a company 
established [Or. 9] outside national territory, which is in a cross-shareholding, 
control or group relationship with a Portuguese company, from being jointly and 
severally liable for claims arising from an employment relationship entered into 
with the latter company, or from the termination of that relationship, on the 
ground that it breaches the principle of equality enshrined in Article 13 of the 
CRP’ (judgment No 227/2015, published in Diário da República No 111/2015, 
Series II, 9 June 2015). 
IV. Reasons which have led the referring court to question the interpretation or 
the validity of certain provisions of EU law and the connection established by the 
referring court between those provisions and the national legislation applicable to 
the main proceedings 
47 In view of the fact that defendant N is a commercial company having its registered 
office in Luxembourg, which exercises control over the other defendants, in 
particular the first defendant, O, which has gone into administration; the fact that 
the applicant has an employment claim against the first defendant; the fact that 
Article 334 of the CT provides that claims arising from an employment contract, 
or the breach or termination of that contract, which are more than three months 
overdue shall be met jointly and severally by the employer and any company 
which is in a cross-shareholding, control or group relationship with it, in 
accordance with the provisions of Article 481 of the CSC; and the fact that the 
latter provision stipulates that it applies solely to companies established in 
Portugal, the referring court asks whether such a provision is compatible with 
Article 18 of the Treaty on the Functioning of the European Union, which 
prohibits any discrimination on grounds of nationality. More specifically, the 
referring court asks whether the provision included in Article 481 of the CSC, in 
conjunction with Article 334 of the CT, discriminates against undertakings which 
have their registered office in Portugal as compared with undertakings established 
in another Member State of the European Union. 
V. Question to be referred to the Court of Justice for a preliminary ruling 
48 Is it contrary to EU law, specifically Article 18 TFEU, to exclude from the 
application of the rules laid down in […] Article 334 of the Código de Trabalho 
(Employment Code) undertakings established in another Member State, in 
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accordance with the rules laid down in Article 481(2) of the Código das 
sociedades comerciais (Code on commercial companies)? 
Penafiel, 17 December 2020. [Or. 10]