Information;Order — ECLI:EU:C:2023:976
Date: 2023-12-07
Language of the case: French
Court formation: Eighth Chamber
Subject matter: Freedom to provide services
Procedure: Reference for a preliminary ruling - inadmissible
Origin: France

Summary C-311/23 – 1 
Case C-311/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
22 May 2023 
Referring court:  
Tribunal de commerce de Nantes (France) 
Date of the decision to refer:  
15 May 2023 
Applicant:  
Caisse CIBTP du Grand Ouest (CGO) – Association 
Defendant:  
D.V.M. RENOV SARL 
  
1 Subject matter of the main proceedings 
2 The Caisse du réseau Congés Payés Intempéries des Bâtiments et Travaux Publics 
(CIBTP) du Grand Ouest (the fund within the Western France network of bad 
weather paid leave funds for the building and public works sector (CIBTP); ‘the 
CGO’) is an association approved by order of the Minister for Labour, the purpose 
of which is to pay holiday pay and unemployment benefits resulting from bad 
weather for employees of construction companies. 
3 DVM RENOV (‘DVM RENOV’) is a company operating in the building sector. 
As such, it is subject to an obligation to join a paid leave fund for the building 
industry, in accordance with Article D 3141-12 of the French Labour Code. It 
therefore joined the CGO on 1 September 2001. 
4 Until 2017, DVM RENOV always paid its contributions, and holiday pay was 
therefore paid out to its employees by the CGO. However, several late payments 
caused late payment penalties to accrue. The CGO then stated that DVM 
RENOV’s payments would be allocated in the first instance to settle the late 
payment penalties, which would have had the effect of depriving the company’s 
employees of their holiday pay. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-311/23 
 
2  
5 From June 2017, as a result of the dispute over contribution arrears and late 
payment penalties, DVM RENOV stopped paying its holiday pay contributions to 
the CGO, and decided to pay holiday pay directly to its employees. 
6 On 15 June 2018, the CGO served DVM RENOV with a summons to appear 
before the tribunal de commerce de Nantes (the Commercial Court, Nantes; ‘the 
Commercial Court’) to be ordered to pay the CGO the contribution arrears and 
ancillary charges. The total claimed as of 23 December 2022 amounted to 
EUR 299 617.35 million. 
7 DVM RENOV is contesting the claim and, more fundamentally, is challenging the 
CGO’s legally defined task and, in particular, its compliance with the freedom to 
provide services guaranteed by the TFEU. 
8 Legal framework 
A. Provisions of European Union law relied on 
9 Article 56 TFEU provides:  
‘Within the framework of the provisions set out below, restrictions on freedom to 
provide services within the Union shall be prohibited in respect of nationals of 
Member States who are established in a Member State other than that of the 
person for whom the services are intended.’ 
10 Article 57 TFEU defines services as follows: 
‘Services shall be considered to be “services” within the meaning of the Treaties 
where they are normally provided for remuneration, in so far as they are not 
governed by the provisions relating to freedom of movement for goods, capital 
and persons. 
“Services” shall in particular include: 
(a) activities of an industrial character; 
(b) activities of a commercial character; 
(c) activities of craftsmen; 
(d) activities of the professions. 
Without prejudice to the provisions of the Chapter relating to the right of 
establishment, the person providing a service may, in order to do so, temporarily 
pursue his activity in the Member State where the service is provided, under the 
same conditions as are imposed by that State on its own nationals.’ 
CAISSE CIBTP DU GRAND OUEST 
 
3 
B. Provisions of national law relied on 
The Labour Code 
11 Under Article L. 3141-32 of the Labour Code: 
‘Decrees shall determine the professions, industries and trades for which the 
application of the provisions relating to paid leave involves special arrangements, 
such as the setting up of paid leave funds to which the employers concerned must 
belong. 
…’ 
The first paragraph of Article D 3141-12 of the Labour Code states that: 
‘In companies carrying out one or more activities falling within the scope of the 
extended national collective agreements for building and public works, holiday 
entitlement is provided, on the basis of those agreements, by funds set up for this 
purpose. 
…’ 
12 The essential arguments of the parties in the main proceedings 
A. DVM RENOV 
13 To oppose the CGO’s claim for payment of its contributions, DVM RENOV puts 
forward a number of pleas, relying primarily on domestic law. Conflict with 
Union law, and hence the request that the matter be referred to the Court of Justice 
for a preliminary ruling, is raised only in the alternative. DVM RENOV also 
argues, in the further alternative, that the establishment of paid leave funds is 
contrary to the European Convention for the Protection of Human Rights and 
Fundamental Freedoms (‘the ECHR’), based on freedom of association, the 
prohibition of discrimination and the protection of property rights. 
14 DVM RENOV therefore requests, in the alternative, that the Commercial Court 
refer two questions to the Court of Justice (‘the Court’) for a preliminary ruling on 
the freedom to provide services and the abuse of a dominant position. It submits 
that the system of paid leave funds is contrary to Article 56 TFEU, relating to the 
freedom to provide services, and Article 102 TFEU, relating to abuses of a 
dominant position. The question of abuse of dominant position was rejected by the 
Commercial Court. 
The economic activity carried out by the CGO within the meaning of the TFEU 
15 Article 56 TFEU applies to entities carrying out an economic activity. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-311/23 
 
4  
16 The CGO can be considered to be carrying out an economic activity, as it does not 
operate on the basis of the principle of solidarity. The principle of solidarity is 
characterised in particular by the fact that ‘benefits paid are statutory benefits and 
are independent of the amount of contributions paid’. So, if the employer has not 
paid the holiday pay contribution to the paid leave fund, the CGO does not 
support the employee in covering the payment of the holiday pay, but rather 
suspends the payment of holiday pay to the employees of the defaulting employer 
in proportion to the unpaid amount. The benefits to which employees are entitled 
based on the contributions to the funds seem to depend solely on the amount of 
contributions paid and the financial performance of the investments made by the 
funds. 
17 Thus, in the absence of an underlying principle of solidarity, the CGO does indeed 
engage in an economic activity within the meaning of Article 56 TFEU. 
The question as to whether the system of paid leave funds is contrary to 
Article 56 TFEU 
18 The first question to be answered is whether the management of employees’ paid 
leave can be considered a service within the meaning of the provisions of the 
TFEU. 
19 Under Article 57 TFEU, services are to be considered to be ‘services’ where they 
are normally provided for remuneration. The decisive factor which brings an 
activity within the ambit of the TFEU provisions on the freedom to provide 
services is its economic character, that is to say, the activity must not be provided 
for nothing. 
20 The services provided by paid leave funds to employers and workers are paid for 
by contributions from employers, and the investment of those contributions has 
long been used to finance the operation of the funds. The fact that the proceeds of 
those investments have been used to provide additional benefits to workers and 
employers is not sufficient, as the Court has held, to alter the nature of the activity 
in question. 
21 DVM RENOV is asserting that by establishing that this service may only be 
provided by paid leave funds, French legislation excludes the possibility of this 
service being provided by other service providers, which may be established in 
other Member States or even in France – as the TFEU does not distinguish 
between these two situations – and that this undeniably constitutes an 
infringement of the freedom to provide services. 
22 The Court’s case-law requires a measure restricting the freedom to provide 
services to be proportionate to the public interest objective pursued and to be 
considered necessary and proportionate to the objective of protecting employees. 
This requirement would not be met in the present case in so far as, if this 
obligation did not exist, the health of employees could in any case be guaranteed 
CAISSE CIBTP DU GRAND OUEST 
 
5 
by the application of the common paid leave system, or by the use of a service 
provider chosen by the employer. 
23 As a result, the French legislation requiring employers in the building sector to 
join certain funds on a compulsory basis does not constitute a necessary and 
proportionate measure. 
24 Since there is a system under ordinary law that allows employers to manage paid 
leave entitlements without the intermediary of paid leave funds, there is a need to 
demonstrate how the paid leave funds for the building sector offer additional 
protection to workers in that sector, which they would not benefit from under the 
ordinary system, and above all why this specific system should be imposed on 
them. 
25 Even if it can be accepted that collecting contributions in advance from employers 
can help to control how leave entitlements are managed, DVM RENOV argues 
that the funds do not guarantee the effective payment of benefits. In fact the 
opposite is true, in so far as the CGO can suspend the payment of benefits in 
proportion to unpaid amounts, and it is not certain that workers have an additional 
interest in having the payment of paid leave benefits managed exclusively by 
these funds, a situation that does not guarantee them effective payment of their 
benefits if their employer fails to pay the necessary contributions to the funds. 
26 As for the portability of benefits if the employment relationship ends, while DVM 
RENOV admits that it supports the need for the measure with regard to the 
objective of protecting workers, it submits that it has not, however, been 
demonstrated that this portability should necessarily be centralised within a single 
body and that it could not be guaranteed by means of software or a single 
application to which employers, chartered accountants or any other self-employed 
person wishing to provide such a service could have access. 
27 The need for the measure therefore appears weak and, in any event, has not been 
demonstrated. 
28 As regards the appropriateness of the measure, and thus its ability to achieve the 
stated objective, the prorata rule, under which paid leave funds only pay holiday 
pay to employees in proportion to the payments made by the employer, could once 
again be a reason to question the proportionality of the measure. 
29 Given that the CGO cannot fully guarantee an employee’s right to paid leave, 
even in the event of default by the employer, the requirement for affiliation – 
which is, moreover, compulsory – with paid leave funds inevitably raises the 
question as to whether that requirement is consistent with the objective of 
guaranteeing social welfare protection for workers. 
30 DVM RENOV asserts that it might, in this context, seem surprising that other 
sectors that also experience the same instability of employment – if this is the 
justification for this specific scheme – do not have a requirement for compulsory 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-311/23 
 
6  
affiliation with paid leave funds. If it were proven 1) that the precariousness of 
employment is no greater in the building sector than in other sectors, 2) that the 
payment of benefits would not be any more guaranteed by the paid leave funds 
due to the prorata rule than it already is by other regulations and welfare 
organisations, and 3) that the portability of rights is no longer necessary or could 
be managed outside those funds with the same efficiency, then such a measure 
could be set aside. 
31 In the light of the foregoing, the obligation to contribute to a paid leave fund can 
therefore be challenged on the basis of the freedom to provide services, which is 
protected by Articles 56 et seq. TFEU. 
32 To date, the question as to whether the system of paid leave funds in the building 
sector complies with Article 56 TFEU has never been referred to the Court. 
B. The CGO 
The question as to whether Union law applies in this case 
33 The CGO submits that the present dispute does not raise any questions of Union 
law. 
34 It adds that, in accordance with settled case-law, the Treaty rules governing 
freedom of movement and the measures adopted to implement them cannot be 
applied to activities which have no factor linking them with any of the situations 
governed by EU law and which are confined in all relevant respects within a 
single Member State. 
35 In this case, the activities in question are purely domestic and do not have a cross-
border dimension. DVM RENOV is a French company operating in France. It 
pays contributions to the CGO, a French association that provides DVM RENOV 
employees working in France with various benefits, including holiday pay. The 
CGO is approved by the French Government and carries out a social mission of 
public interest in France, as defined by French law. As all the elements of the 
dispute are located in France, EU law cannot be applied. Indeed, the Court’s case-
law makes it clear that, where all the elements of a legal situation are confined 
within a Member State, it declares that it has no jurisdiction to answer the 
question, which is considered inadmissible. 
36 The CGO therefore asks the Commercial Court not to grant DVM RENOV’s 
request for a preliminary ruling in so far as the situation at issue is not of a cross-
border nature and remains a purely domestic situation. 
The freedom to provide services 
37 The CGO maintains that, if the Commercial Court were to consider that Union 
law is indeed intended to apply, DVM RENOV’s application would run up against 
other obstacles. 
CAISSE CIBTP DU GRAND OUEST 
 
7 
38 First, it argues that the issue raised by DVM RENOV falls within the scope of 
social law, an area in which the Union does not have exclusive competence, but 
rather shared competence with the various Member States, as stated in Article 4 
TFEU. 
39 According to Article 2(2) TFEU, when the Treaties confer on the Union a 
competence shared with the Member States in a specific area, the Member States 
shall exercise their competence to the extent that the Union has not exercised its 
competence. 
40 Social policy is defined in Articles 151 et seq. TFEU. More specifically, the first 
paragraph of Article 151 states that ‘the Union and the Member States … shall 
have as their objectives the promotion of employment, improved living and 
working conditions, so as to make possible their harmonisation while the 
improvement is being maintained, proper social protection, dialogue between 
management and labour, the development of human resources with a view to 
lasting high employment and the combating of exclusion’. 
41 As paid leave falls under working conditions, if the Union has not made any 
specific provision in this area, competence lies with the Member States. The only 
EU legislation adopted in this area is Directive 2003/88/EC of the European 
Parliament and of the Council of 4 November 2003 concerning certain aspects of 
the organisation of working time, which states in Article 7 that ‘Member States 
shall take the measures necessary to ensure that every worker is entitled to paid 
annual leave of at least four weeks in accordance with the conditions for 
entitlement to, and granting of, such leave laid down by national legislation and/or 
practice’. 
42 Union law therefore clearly leaves it to national legislation, such as French law, to 
take the measures that appear necessary to ensure that employees are granted paid 
leave. This is precisely what France has done, along with other Member States 
such as Germany, Austria and Italy, by organising a range of paid leave schemes, 
including the one set up in the building sector, to which the CGO belongs. 
43 The CGO concludes that French law, having taken the measures that appear 
necessary to ensure that employees are granted paid leave, and having organised a 
range of paid leave schemes, including the one set up in the building sector, to 
which the CGO belongs, is therefore fully compatible with EU law. 
44 Consequently, the Commercial Court cannot rule on the basis of the freedom to 
provide services, even though this is a matter of social law and therefore, under 
EU law, a matter for the Member States, and therefore France. 
45 Second, the activities of paid leave funds, which are non-profit-making 
associations, do not constitute the provision of services within the meaning of 
Article 56 TFEU. Paid leave funds do not carry out any of the activities listed in 
Article 57 TFEU, and therefore do not fall within the scope of the chapter relating 
to the freedom to provide services. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-311/23 
 
8  
46 In this respect, the CGO argues that the payment of holiday pay by paid leave 
funds in the building sector is not a service provided in return for remuneration, 
since it is provided through the contributions of its members. The contributions 
paid make it possible for the funds to pool the cost of leave among contributing 
companies and to pay holiday pay to employees. 
47 The contributions payable to the funds are dictated by law. These funds apply the 
provisions of the Labour Code and of the collective agreements in the building 
sector to calculate and pay holiday pay to employees of companies in that sector. 
48 For example, holiday pay paid by paid leave funds includes specific entitlements 
under collective agreements in the building sector (a 30% holiday bonus 
calculated based on the principal holiday pay amount, and additional paid leave 
based on length of service). 
49 Consequently, the CGO is asking the Commercial Court to rule that the provisions 
of the TFEU relating to the freedom to provide services (Articles 56 et seq.) are 
not applicable because the CGO’s activities do not constitute the provision of 
services within the meaning of those provisions. 
50 Third, the CGO maintains that its activities are based on the public interest. In the 
context of the application of Articles 56 et seq. TFEU, if a restriction on the 
freedom to provide services is found to exist, it may be justified on grounds of 
public interest. 
51 If the Commercial Court were to consider that Article 56 TFEU is applicable, it 
would then have to take into account the justifications for a restriction on services. 
52 The Court has, in particular, accepted as justification the public interest 
requirement based on the protection of workers. 
53 The management of paid leave entitlements by the funds frees companies from 
sometimes complex administrative tasks and ensures compliance with legal and 
regulatory provisions. Through the guarantees they provide, paid leave funds in 
the building sector play an essential role in providing legal certainty and social 
regulation within the sector. 
54 Compulsory membership of paid leave funds in the building sector is a necessary 
measure in ensuring that employees’ health is protected and is a prerequisite for 
the application of the EU social law principle of the right to rest. 
55 In a ruling delivered on 22 February 2006, the Court of Cassation held that the 
purpose of the funds was ‘to protect the rights and health of employees by paying 
them not only holiday pay but also unemployment benefits payable in the event of 
absence from work due to bad weather’. In a ruling delivered on 25 May 2022 in a 
case between the parties to the present proceedings, the Court of Cassation once 
again held that the legislature ‘has provided the actions of paid leave funds with 
sufficient legal guarantees, and that the infringement of the right to property, [of] 
CAISSE CIBTP DU GRAND OUEST 
 
9 
the freedom to conduct business and the freedom of association is justified by the 
public interest mission entrusted to paid leave funds, the performance of which is 
such as to guarantee the protection of the right to rest and of the health of the 
employees concerned …, and is not manifestly disproportionate to the objective 
pursued’. 
56 The CGO therefore asks the Commercial Court to rule that its activity is in the 
public interest and that, if a restriction is accepted by that court under Article 56 
TFEU, it is justified by overriding public interest reasons relating in particular to 
the protection of workers and the social protection system, such that the French 
legislation is not contrary to EU law. 
57 Fourth, the CGO maintains that the French law on paid leave is legitimate and 
proportionate. Indeed, in its ruling of 25 May 2022, the Court of Cassation held 
that ‘the infringement of the right to property, [of] the freedom to conduct 
business and the freedom of association is justified by the public interest mission 
entrusted to paid leave funds …, and is not manifestly disproportionate to the 
objective pursued’. 
58 Contrary to the position asserted by DVM RENOV, the objective of paid leave 
funds in the building sector is in no way to protect workers in precarious 
employment, but to protect employees in the building sector who are in a 
particular situation due specifically to the natural constraints that might affect 
their work. It is the specific nature of their situation that has justified, and 
continues to justify, a system of exemptions that fully meets its objective. 
Moreover, by adopting a range of different schemes, French law fully realises its 
objective of protecting employees. The specific provisions introduced by law in 
the building sector are intended solely to protect employees in that sector. They 
are therefore completely consistent from this point of view and fully legitimate. 
59 The funds therefore have a real role to play in protecting employees, and this 
legitimate objective is achieved through measures that are entirely proportionate. 
60 The CGO therefore asks the Commercial Court to rule that, if it were to allow a 
restriction on the basis of Article 56 TFEU, that restriction is legitimate and 
proportionate to the aim pursued, in terms of the protection of workers and the 
social protection system, and that the French legislation is able to guarantee that 
the objective sought will be achieved in that it responds to the need to achieve that 
objective in a consistent manner. 
61 Findings of the Commercial Court 
62 In the grounds for its decision, the Commercial Court focuses essentially on the 
arguments put forward by DVM RENOV to the effect that the system of paid 
leave funds is contrary to EU law (Articles 56 and 102 TFEU) and, in the final 
alternative, contrary to the ECHR. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-311/23 
 
10  
63 As regards EU law, the Commercial Court rejected the plea under Article 102 
TFEU, on the grounds that it considered that CGO was not abusing a dominant 
position. 
64 In terms of the conflict with the ECHR, and in particular with freedom of 
association, the prohibition of discrimination and the right to property, the 
Commercial Court considers that only the question of the discriminatory nature of 
the system of paid leave funds in the building sector compared with the common 
system could be submitted to the European Court of Human Rights. 
65 Nevertheless, the Commercial Court believes that this question is linked to the 
question it has decided to refer to the Court concerning the conflict with the 
principle of freedom to provide services on the basis of Article 56 TFEU. 
Consequently, having decided to stay the proceedings pending the Court’s reply to 
that question, it will reserve its decision on this point. 
66 As regards the freedom to provide services, DVM RENOV submits that the 
system of paid leave funds is contrary to Article 56 TFEU. 
67 The first question to be answered on this point is whether the management of paid 
leave can be considered a service within the meaning of the TFEU. 
68 The decisive factor which brings an activity within the ambit of the TFEU 
provisions on the freedom to provide services and, accordingly, of those relating 
to the freedom of establishment, is its economic character, that is to say, the 
activity must not be provided for nothing. 
69 The Commercial Court considers first and foremost that the management of paid 
leave, as carried out by paid leave funds in general and the CGO in particular, is a 
service activity in that it is of an economic nature. 
70 In return for the benefits they pay out, whether in the form of holiday pay or 
compensation for bad weather, paid leave funds receive contributions paid by 
companies that are required to join the scheme. Because these schemes exclude 
the possibility for companies in the building sector to use other service providers 
established in other Member States or even in France, the Commercial Court 
considers that this undeniably infringes the freedom to provide services. 
71 The Commercial Court also considers that the justification for using paid leave 
funds based on the unstable nature of employment in the building sector is not 
specific to that sector, and that companies in other sectors also experiencing such 
instability of employment are not subject to this obligation to sign up to the 
system of paid leave funds. 
72 As for the portability of paid leave entitlements for an employee who changes 
company, there is no need for a fund to provide this, as the company can very 
easily pay the benefits relating to holiday days earned and not used to the 
CAISSE CIBTP DU GRAND OUEST 
 
11 
employee concerned, having set these amounts aside for the purpose of final 
settlement of all accounts. 
73 The Commercial Court notes the discriminatory nature of this measure imposed 
on companies in the building sector, compared with the possibility offered to 
companies in other sectors to use the common system enabling them to manage 
their employees’ paid leave entitlements themselves. 
74 The Commercial Court considers – as argued by the CGO – that the French 
system of paid leave funds complies with EU law, in that it guarantees paid annual 
leave of at least four weeks. However, the debate is not at this level, but rather in 
terms of a restriction on the freedom to provide services. 
75 A company in the building sector that was free to join the common paid leave 
system would also be required to comply with EU law, as are all companies 
subject to that common system. 
76 Accordingly, the Nantes Commercial Court hereby refers the question of whether 
paid leave funds in the building sector comply with Article 56 TFEU to the Court 
for a preliminary ruling. 
Question referred for a preliminary ruling 
77 The Commercial Court refers the following question to the Court for a preliminary 
ruling: 
Is Article 56 of the Treaty on the Functioning of the European Union to be 
interpreted as meaning that legislative and regulatory provisions such as those in 
place in France, which require companies in a particular economic sector, to the 
exclusion of other sectors, to use an association set up for that purpose to pay 
holiday pay to its employees and therefore prevent the use of a European service 
provider for payment of such benefits, should be regarded as contrary to the 
principle of freedom to provide services guaranteed by that provision?