OPINION OF ADVOCATE GENERAL

TESAURO

delivered on 26 October 1995 ( *1 )

1. The Tribunal Correctionnel, Arion, is seeking a ruling from the Court of Justice on the compatibility with Community law of certain contributions and, more specifically, a collective agreement made binding by Royal Decree, imposed, under Belgian law, on undertakings established in other Member States — in this instance Luxembourg — which provide services in Belgian territory, using their own workers. The issue is thus whether the conditions laid down by the host country, in accordance with its own employment legislation, have the effect of impeding the activity of providing a service engaged in by the undertaking employing the workers, and are consequently incompatible with Community legislation on the provision of services.

2. The problem raised concerns certain aspects of Belgian legislation governing the conditions of pay of construction sector workers, particularly in relation to certain wage supplements for which employers are liable because of the particular nature of the activity in question. The rules at issue may be described thus: Article 2 of the Collective Labour Agreement of 28 April 1988 (hereinafter ‘the agreement’), concluded by the Construction Sector Joint Committee and made binding by Royal Decree of 15 June 1988, ( 1 ) requires all undertakings in that sector to pay to the Construction Workers Subsistence Fund (hereinafter ‘the Fund’) a contribution of 9.12%, 9% of which is to cover ‘loyalty stamps’ for the workers and 0.12% to cover running costs. Certain categories of undertaking in the sector, namely those whose workers are exposed to the risk of being laid off because of weather conditions, are further required to pay to the Fund, pursuant to Article 3 of the agreement, an additional contribution of 2.1%, 2% of which is to cover ‘bad-weather stamps’ for the workers and 0.1% to cover running costs. The contributions under Articles 2 and 3, calculated on the basis of 100% of the gross wages payable to each worker (Article 4(1) of the agreement), are paid by the employer to the Office Patronal d'Organisation et de Contrôle des Régimes de Sécurité d'Existence (hereinafter ‘OPOC’), the office that levies and collects contributions on behalf of the Fund. At the end of each financial year, OPOC issues the employer with stamped cards (Article 14 of the agreement), which the employer, in turn, distributes to workers (Article 15 of the agreement). Workers then obtain payment of the exchange value of the stamps affixed to the card directly from the trade union organizations or OPOC.

3. It is perhaps useful to point out here, with a view to the considerations that follow, that the Luxembourg legislation, that is the law of the Member State in which the undertaking in question is established, although not exactly the same as the Belgian legislation, none the less provides for mechanisms the purpose of which is to protect construction sector workers against the risk of being laid off as a result of bad weather and to reward them for their loyalty to the sector in question. For that purpose, the Law of 28 June 1971 ( 2 ) in fact provides for compensatory wages to be paid in the event of unemployment consequent on bad weather during the period from 16 November to 31 March (Article 1). Compensatory wages are payable both for single hours and for whole or consecutive days not worked (Article 5). The gross amount of the compensatory wages that the employer is required to pay workers amounts to 80% of gross normal wages (Article 15). Furthermore, as of 1 January 1989, employers are also required to pay their workers, with their December pay, an end-of-year premium amounting to 3% of gross pay, provided the worker has been in the employ of the undertaking for at least one year. ( 3 ) As of 1 January 1993, the end-of-year premium was increased to 4% of gross pay. ( 4 )

4. I come now to the — straightforward and undisputed — facts that have given rise to this case. Climatec SA, a construction undertaking established in Luxembourg, carried out work between March 1992 and March 1993 on the site of the Ferrerò factory in Arlon, Belgium, and employed four of its own workers for that purpose. When Climatec refused to pay contributions in respect of the four workers, those contributions being required under Belgian law to cover loyalty stamps and bad-weather stamps and amounting to a total of BFR 98153, the Ministère Public brought criminal proceedings against Mr Guiot in his capacity as the administrator of Climatec SA.

5. It was in the context of that action that the Tribunal Correctionnel, Arion, decided to stay the proceedings and refer the matter to the Court of Justice. The request for a preliminary ruling is worded as follows: ‘Are Articles 7, 7a, 59 and 60 of the Treaty on European Union to be interpreted as meaning that the fact that a Member State makes it obligatory, by means of a collective agreement made binding by Royal Decree on all undertakings operating or coming to operate within its territory in exercise of the freedom to provide services, for employers to pay contributions in respect of “timbres de fidélité” and “timbres-intempéries” (loyalty and bad-weather stamps) which duplicate the obligations to contribute in the countries of origin of those undertakings, where they cover the same risks and have in practice a similar, if not identical purpose, constitutes an Infringement of the abovementioned articles inasmuch as the measure is de facto discriminatory, creating a serious obstacle to the achievement of freedom to provide services within the large internal market without frontiers as a result of the fact that that obligation gives rise to additional costs for Community undertakings, thus making them less competitive in the territory of the Member State in question? More specifically, is the obligation for a construction undertaking established in another Member State and providing services in the construction sector in Belgium to pay timbres de fidélité and timbres-intempéries by virtue of the Collective Labour Agreement of 28 April 1988, made binding by the Royal Decree of 15 June 1988, compatible with Article 59 of the EEC Treaty (restrictions on freedom to provide cross-frontier services)?’

6. The question, which is in two parts, asks essentially whether Articles 59 and 60 are to be interpreted as meaning that they preclude a Member State from requiring an undertaking established in another Member State, which comes to the first Member State to provide services in its territory, using for that purpose workers in its employ, to pay in respect of those workers contributions the purpose of which is to compensate such workers if they have to be laid off because of bad weather, as well as to reward them with a loyalty bonus for the sector in question. Before I address the substance of the question, I should like to point out that the referring court itself stressed (in specific terms) in the first part of the question that the effect of the obligation to pay contributions imposed on the undertaking by the Member State in which the service is being provided is to ‘duplicate the obligations to contribute’ imposed upon that same undertaking in the Member State in which it is established: in the view of that court, the contributions at issue cover the same risks and have a similar, if not identical, purpose.

7. It is clear that this case involves the provision of services within the meaning of Article 59 et seq. of the Treaty. The activity at issue is in fact an economic activity provided for remuneration by a construction undertaking established in a Member State other than that in which the service was actually provided. The special feature of this case is that the provision of services is accompanied by the temporary assignment of workers to the State in which the service is provided, ( 5 ) a circumstance already considered by the Court of Justice in earlier decisions. ( 6 ) It is specifically because those workers are present, albeit only temporarily, on Belgian territory that the undertaking providing the service is required to pay the contributions at issue.

8. That being said, I would first point out that the case-law on the provision of services has now made it absolutely clear, applying an approach akin to that well-established in relation to the free movement of goods, that Article 59 requires ‘the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit or otherwise impede the activities of a provider of services established in another Member State where he lawfully provides similar services’. ( 7 ) It follows that, even in the absence of harmonization in this field, the freedom to provide services — a fundamental principle established by the Treaty — may be restricted only by rules justified by overriding requirements of public interest and applicable to all persons or undertakings 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 and, of course, provided the same result cannot be achieved by less restrictive rules. ( 8 )

9. It is clear, however, that although the national provisions at issue ( 9 ) are applicable without distinction to national providers of services and those established in other Member States, they have the effect of restricting the free movement of services within the Community. Undertakings like Climatec SA, which are established in one Member State but wish to provide services in another Member State and send their own workers to that State for that purpose, are in fact already liable, in their country of establishment, for social security contributions and wage costs in respect of their own workers. In short, the undertakings are already bound to comply (and do) with the requirements laid down under the legislation of the State in which they are established.

10. It is true that, as the Court of Justice has ruled on a number of occasions, Community law does not preclude Member States from extending their legislation, or collective labour agreements relating to minimum salaries entered into by both sides of industry, to any person who is employed, even temporarily, within their territory, no matter in which country the employer is established; similarly, Community law does not prohibit Member States from enforcing those rules by appropriate means. ( 10 ) That finding clearly implies that Community law recognizes that rules on minimum social security contributions pursue an aim of public interest that must be protected. In the absence of harmonization or at least coordination in this field, ( 11 ) compliance with such rules may therefore be required even of providers of services established in other Member States, thereby justifying some restrictions on the freedom in question, but only by appropriate means. This means that even in such cases it must be ascertained that the requirement of proportionality is satisfied.

11. In particular, on the point at issue here, the Court of Justice has explained that it is not possible to describe as an ‘appropriate means any rule or practice which imposes a general requirement to pay social security contributions, or other such charges affecting the freedom to provide services, on all persons providing services who are established in other Member States and employ workers who are nationals of non-member countries, irrespective of whether those persons have complied with the legislation on minimum wages in the Member State in which the services are provided, because such a general measure is by its nature unlikely to make employers comply with that legislation or to be of any benefit whatsoever to the workers in question’. ( 12 ) Setting aside the question whether in this case the workers assigned to work in another country derive real benefit as a result of the obligation to pay contributions imposed on the employer — a point disputed by the Luxembourg Government — the fact remains that this is a general measure and, as such, inappropriate to achieve the object pursued. It is, in fact, quite clear that the obligation to pay contributions which the Belgian legislation imposes on all undertakings that provide services in Belgian territory, sending their own workers to Belgian territory for the purpose, fail to take into account the minimum pay received by the workers of those undertakings. In other words, the rules at issue are intended to apply in all cases, including therefore those cases in which the workers concerned ought, in theory, to enjoy a higher level of minimum social remuneration than is received by workers covered by the legislation of the State in which the service is provided.

12. In those circumstances, it is necessary to ascertain, in the light of the aforementioned case-law to the effect that the provider of services must not already be subject to similar conditions in the State in which he is established, ( 13 ) whether the requirements laid down by the legislation of the State of establishment, in this instance Luxembourg, are similar to or at any rate comparable with those laid down under the legislation of the State in which the service is provided, in this instance Belgium. Given that, in the context of proceedings for a preliminary ruling, it is not for the Court of Justice to undertake a comparative analysis of the two sets of rules at issue, it is appropriate to point out once again that the referring court stated in the order for reference that the contributions at issue duplicated those required under the relevant Luxembourg legislation. For the purposes of this case, it must be made clear that the statutory obligation to pay contributions in the two States in question need not be absolutely identical or equivalent: they have merely to be contributions of a similar nature, in particular having the same purpose.

13. Moreover, the relevant case-law argues for that approach. The Court of Justice has in fact ruled, in a case in some respects similar to this case, that making providers of services established in another Member State subject to the same obligations imposed on national providers of services represents an additional burden which is in principle incompatible with the rules on the freedom to provide services. More specifically, it has deemed that there is covert discrimination where ‘the obligation to pay the employer's share of social security contributions imposed on persons providing services within the national territory is extended to employers in another Member State who are already liable under the legislation of that State for similar contributions in respect of the same workers and the same periods of employment. In such a case the legislation of the State in which the service is provided proves in economic terms to be more onerous for employers established in another Member State, who in fact have to bear a heavier burden than those established within the national territory.’ ( 14 ) Drawing on that approach, the Court of Justice has also held that undertakings providing services in another Member State which send their own workers to the latter State for that purpose are not required to use manpower agencies in the host State or be subject to the relevant procedures, provided, of course, that they have already complied, in their country of establishment, with the legal procedures applicable to the hiring of workers (whether or not foreign) and have already met the relevant administrative and financial charges. ( 15 )

14. As is apparent from the case-file and as became clear in the course of the hearing, Climatec SA is already required in the State in which it is established to pay contributions with a similar purpose to that of the Belgian rules at issue and to pay those same contributions for workers temporarily assigned to another country, and in particular for the same periods of work performed by those workers in the Member State in which the service is provided. Furthermore, although stressing the differences between the two sets of national rules at issue here, the Belgian Government itself has failed to demonstrate that the two schemes have different purposes and has in fact acknowledged the need for mechanisms enabling contributions already made by the undertaking for similar purposes in the State in which it is established to be taken into account. In those circumstances, the compulsory contributions required of undertakings providing services in Belgian territory constitute an additional burden that may be regarded as duplicating those contributions already required and paid in the State of establishment; there is no justification for that duplication, which is likely to disadvantage the undertaking in question in competition with national providers of services. Furthermore, the workers in question are Community citizens, with the result that the application of the relevant Luxembourg legislation is in any event such as to exclude any risk of workers being exploited or competition between undertakings distorted. ( 16 )

15. In conclusion, it is clear from the above considerations that, as regards the elements I have considered here, the rules at issue constitute an unjustified obstacle to undertakings providing services in Belgian territory and, as such, are incompatible with the rules on the provision of services, in particular Articles 59 and 60 of the Treaty.

16. In the light of the foregoing considerations, I propose that the Court of Justice give the following answer to the question referred to it by the national court: Articles 59 and 60 of the Treaty are to be interpreted as meaning that they preclude a Member State from requiring of an undertaking established in another Member State and coming to the former Member State to provide services the payment of contributions to cover loyalty and bad-weather stamps for workers assigned to work in another country in the context of the provision of services, where that undertaking is already liable for comparable contributions, with respect to the same workers and for the same period of work, in the State where it is established.

( *1 ) Original language: Italian.

( 1 ) Moniteur Belge of 7 July 1988, p. 9897.

( 2 ) Mémorial A 1971, p. 36.

( 3 ) Grand Ducal Regulation of 21 July 1989 (Mémorial A 1989, p. 975).

( 4 ) See Article 18 and Annex IV of the Grand Ducal Regulation of 16 October 1993 (Mémorial A 1993, p. 1668).

( 5 ) It is appropriate to point out here that temporary assignment of workers abroad has been considered by the Community legislator in the field of social security, more specifically in Article 14(1) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and their families moving within the Community [see the version codified by Council Regulation (EEC) No 2001/83 of 2 June 1983, OJ 1983 L 230, p. 6J. That provision is not applicable to this case, however, given that Article 1(j) of the regulation excludes from its scope industrial agreements, even where they have been made binding by law. At any event, at issue here are not social security contributions but contributions the purpose of which is to supplement wages.

( 6 ) See Joined Cases 62/81 and 63/81 Seco v EVI [1982] ECR 223; Case C-113/89 Rush Portuguesa [1990] ECR I-1417; and Case C-43/93 Vander Elst [1994] ECR I-3803. In contrast to the present case, in winch the workers concerned are Community nationals, those cases concerned citizens of third countries or countries still covered by transitional arrangements (Rush Portuguesa).

( 7 ) Case C-76/90 Säger v Dennemeyer [1991] ECR I-4221, paragraph 12.

( 8 ) See, for example, Case C-154/89 Commission v France [1991]ECR I-659, paragraphs 14 and 15; Case C-180/89 Commission v Italy [1991] ECR I-709, paragraphs 17 and 18; and Case C-198/89 Commission v Greece [1991] ECR I-727, paragraphs 18 and 19.

( 9 ) I would point out for the sake of completeness that those provisions are the subject of an infringement procedure initiated by the Commission against the Belgian State in a letter of formal notice of 7 January 1993. The Commission has explained that it has suspended that procedure, however, in view of these proceedings.

( 10 ) See, to that effect, Case C-43/93 Vander Elst, cited above, paragraph 23; the earlier Case C-113/89 Rush Portuguesa, cited above, paragraph 18, and Joined Cases 62/81 and 63/81 Seco ν EVI, cited above, paragraph 14.

( 11 ) I would point out here that a proposal for a Council directive, put forward by the Commission, and actually concerning workers assigned to work abroad in the context of the provision of services, is currently under discussion (sec the amended proposal in OJ 1993 C 187, p. 5). The purpose of that proposal is specifically to coordinate the laws of the Member States in order to lay down a nucleus of mandatory rules for minimum protection to be observed in the host country by an employer who assigns workers to perform temporary work in the territory of a Member State where the services are provided (see lue 17th recital of Unamended proposal).

( 12 ) Joined Cases 62/81 and 63/81 Seco ν EVI, cited above, paragraph 14.

( 13 ) A condition of that nature, the object of which is clearly to prevent (pointless) duplication of controls and charges from unjustifiably impeding the movement of services, is another instance (a different one) of the application of the principle of proportionality. The Court has thus ruled, for example, that observance of the principle of the freedom to provide services requires that the Member State receiving the service should take ‘into account the evidence and guarantees already furnished by the provider of the services for the pursuit of his activities in the Member State of his establishment’ (Case 279/80 Webb [1981] ECR 3305). The same response is to be found in Joined Cases 110/78 and 111/78 Van Wesemael [1979] ECR 35, as well as in Case 205/84 Commission ν Germany [1986] ECR 3755, paragraph 27.

( 14 ) Joined Cases 62/81 and 63/81 Seco ν EVI, cited above, paragraph 9.

( 15 ) See to that effect Case C-113/89 Rush Portuguesa, cited above, paragraph 12, as well as Case C-43/93 Vander Elst, paragraphs 18 to 21.

( 16 ) See to that effect Case C-43/93 Vander Elst, cited above, paragraph 25.