Opinion of the Advocate General — ECLI:EU:C:2007:516
Date: 2007-09-13
Language of the case: French
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Freedom to provide services
Procedure: Action for failure to fulfil obligations - successful
Origin: Luxembourg

Summary of the Judgment 1. Freedom to provide services – Posting of workers in the framework of the provision of services – Directive 96/71 – Terms and conditions of employment – Public policy provisions – Definition (European Parliament and Council Directive 96/71, Art. 3(10)) 2. Freedom to provide services – Posting of workers in the framework of the provision of services – Directive 96/71 – Terms and conditions of employment – Public policy provisions (European Parliament and Council Directive 96/71, Art. 3(10)) 3. Freedom to provide services – Posting of workers in the framework of the provision of services – Directive 96/71 – Terms and conditions of employment – Public policy provisions (European Parliament and Council Directive 96/71, Art. 3(10)) 4. Freedom to provide services – Posting of workers in the framework of the provision of services – Directive 96/71 – Terms and conditions of employment – Public policy provisions – Provisions resulting from collective agreements declared to be universally applicable (European Parliament and Council Directive 96/71, Art. 3(10)) 5. Actions for failure to fulfil obligations – Examination of the merits by the Court – Situation to be taken into consideration – Situation on expiry of the period laid down in the reasoned opinion (Art. 226 EC) 6. Freedom to provide services – Restrictions – Posting of workers in the framework of the provision of services – Monitored by the host Member State (Art. 49 EC) 7. Freedom to provide services – Restrictions – Posting of workers in the framework of the provision of services – Monitored by the host Member State (Art. 49 EC) 1. The first subparagraph of Article 3(1) of Directive 96/71 concerning the posting of workers in the framework of the provisions of services provides that Member States are to ensure that, whatever the law applicable to the employment relationship, undertakings established in another Member State which post workers to their territory in the framework of a transnational provision of services, guarantee the posted workers the terms and conditions of employment, covering the matters set out in that article, which are laid down in the Member State in which the work is carried out. For that purpose, Article 3(1) sets out an exhaustive list of the matters in respect of which the Member States may give priority to the rules in force in the host Member State. Nevertheless, the first indent of Article 3(10) of Directive 96/71 recognises that it is open to Member States, in compliance with the EC Treaty, to apply, in a non‑discriminatory manner, to undertakings which post workers to their territory terms and conditions of employment on matters other than those referred to the first subparagraph of Article 3(1), in the case of public policy provisions. In that connection, the classification of national provisions by a Member State as public‑order legislation applies to national provisions compliance with which has been deemed to be so crucial for the protection of the political, social or economic order in the Member State concerned as to require compliance therewith by all persons present on the national territory of that Member State and all legal relationships within that State. Therefore, the public policy exception is a derogation from the fundamental principle of freedom to provide services, which must be interpreted strictly and the scope of which cannot be determined unilaterally by the Member States. In the context of Directive 96/71, the first indent of Article 3(10), constitutes a derogation from the principle that the matters with respect to which the host Member State may apply its legislation to those undertakings are set out in an exhaustive list in the first subparagraph of Article 3(1) thereof and must therefore be interpreted strictly. That provision does not exempt the Member States from complying with their obligations under the EC Treaty and, in particular, those relating to the freedom to provide services. (see paras 25-31, 33) 2. A Member State which declares that a national law transposing Directive 96/71 which requires the undertakings concerned, first, to post only staff linked to the undertaking by a written contract of employment or another document deemed analogous thereto under Directive 91/533 on an employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship and, second, to comply with national rules on part-time and fixed-term work, to be mandatory provisions falling under national public policy, fails to fulfil its obligations under the first indent of Article 3(10) of Directive 96/71 concerning the posting of workers in the framework of the provision of services. Such provisions have the effect of making undertakings which post workers to the host Member State subject to an obligation to which they are already subject in the Member State in which they are established. Moreover, the aim of Directive 96/71, which is to guarantee compliance with a nucleus of rules for the protection of workers, renders the existence of such an additional obligation all the more redundant since, having regard to the procedures involved, it is likely to dissuade undertakings established in another Member State from exercising their freedom to provide services. Although Community law does not preclude Member States from applying their legislation or collective labour agreements entered into by both sides of industry to any person who is employed, even temporarily, no matter in which Member State the employer is established, nevertheless such a possibility is subject to the condition that the workers concerned, who are temporarily working in the host Member State, do not already enjoy the same protection, or essentially comparable protection by virtue of obligations to which their employer is already subject in the Member State in which it is established. In particular, the freedom to provide services, as one of the fundamental principles of the Treaty, may be restricted only by rules justified by overriding requirements relating to the public interest and applicable to all persons and businesses operating in the territory of the State where the service is provided, in so far as that interest is not safeguarded by the rules to which the provider of such a service is subject in the Member State where he is established. (see paras 41-44, 60, operative part) 3. A Member State, which imposes on undertakings posting staff on its territory the requirement relating to the automatic adjustment of wages other than minimum wages to reflect changes in the cost of living, in so far as it has not shown to the required legal standard that that national law is a public policy provision within the meaning of the directive, fails to fulfil its obligations under the first indent of Article 3(10) of Directive 96/71 concerning the posting of workers in the framework of the provisions of services. That provision of Directive 96/71 gives the host Member State an opportunity to apply to undertakings posting workers to its territory terms and conditions of employment on matters other than those referred to in the first subparagraph of Article 3(1) of Directive 96/71, provided that they are public policy provisions. That proviso in the first indent of Article 3(10) of Directive 96/71 constitutes an exception to the system put in place by that directive and a derogation from the fundamental principle of freedom to provide services on which the directive is based and must be interpreted strictly. Thus, while the Member States are still, in principle, free to determine the requirements of public policy in the light of their national needs, the notion of public policy in the Community context, particularly when it is cited as justification for a derogation from the fundamental principle of the freedom to provide services, must be interpreted strictly, so that its scope cannot be determined unilaterally by each Member State without any control by the European Community institutions. It follows that public policy may be relied on only if there is a genuine and sufficiently serious threat to a fundamental interest of society. The reasons which may be invoked by a Member State in order to justify a derogation from the principle of freedom to provide services must be accompanied by appropriate evidence or by an analysis of the expediency and proportionality of the restrictive measure adopted by that State, and precise evidence enabling its arguments to be substantiated. Therefore, in order to determine whether the measures at issue are necessary and proportionate to the objective of safeguarding public policy, a Member State is required to submit evidence to establish whether and to what extent the application to workers posted to its territory of the rule concerning automatic adjustment of rates of pay to the cost of living is capable of contributing to the achievement of that objective. (see paras 49-52, 54-55, operative part) 4. A Member State which declares that measures resulting, in particular, from collective agreements which have been declared universally applicable constitute mandatory provisions falling under national public policy fails to fulfil its obligations under the first indent of Article 3(10) of Directive 96/71 concerning the posting of workers in the framework of the provision of services. Such a national rule cannot constitute a public policy exception within the meaning of the first indent of Article 3(10) of Directive 96/71. First, there is no reason why provisions concerning collective agreements, namely provisions which encompass their drawing up and implementation, should per se and without more fall under the definition of public policy. Second, such a finding must be made as regards the actual provisions of such collective agreements themselves, which in their entirety and for the simple reason that they derive from that type of measure, cannot fall under that definition either. Third, since the second indent of Article 3(10) of Directive 96/71 relates exclusively to the terms and conditions of employment laid down in collective agreements which have been declared universally applicable, a national law which expressly covers ordinary collective labour agreements cannot properly claim to reflect the discretion granted to Member States under that article. (see paras 64-67, operative part) 5. The question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in that Member State at the end of the period laid down in the reasoned opinion and the Court cannot take account of any subsequent changes. (see para. 72) 6. A Member State which sets out in rules of national law establishing a prior notification procedure when workers are posted conditions relating to access to the basic information necessary for monitoring purposes by the competent national authorities with insufficient clarity to ensure legal certainty for undertakings wishing to post workers to the territory of that Member State fails to fulfil its obligations under Article 49 EC The obligation for all undertakings to make available to the national authorities on demand and within as short a period as possible the basic information necessary for monitoring purposes is not without ambiguities which are likely to dissuade undertakings wishing to post workers to that Member State from exercising their freedom to provide services. On the one hand, since the extent of the rights and obligations of those undertakings is not clearly apparent from that provision and, on the other hand, since undertakings which have failed to comply with the obligations laid down in that provision incur not inconsiderable penalties, such a national law is, by its lack of clarity and the ambiguities that it contains, incompatible with Article 49EC. (see paras 80-82, operative part) 7. A Member State, which requires undertakings whose registered office is outside its national territory and which post workers there to deposit, before the start of the posting, with an ad hoc agent residing in that State, the documents necessary for monitoring compliance with their obligations under national law and to leave them there for an indeterminate period after the provision of services has ceased, fails to fulfil its obligations under Article 49 EC. As such requirements constitute a restriction on freedom to provide services they cannot be justified where effective monitoring of compliance with employment legislation may be achieved by less restrictive measures. (see paras 90-95, operative part)