CELEX: 61994CJ0272
Language: en
Date: 1996-03-28 00:00:00
Title: Judgment of the Court (First Chamber) of 28 March 1996. # Criminal proceedings against Michel Guiot and Climatec SA, as employer liable at civil law. # Reference for a preliminary ruling: Tribunal correctionnel d'Arlon - Belgium. # Employer's contributions - Loyalty stamps - Bad-weather stamps - Freedom to provide services. # Case C-272/94.

Case C-272/94 Criminal proceedings againstMichel Guiot(Reference for a preliminary rulingfrom the Tribunal Correctionnel, Arlon)
         
            «(Employer's contributions – Loyalty stamps – Bad-weather stamps – Freedom to provide services)»
            
               
                  Opinion of Advocate General Tesauro delivered on 26 October 1995 
                     
                
               
            
                   
               
               
            
               
                  Judgment of the Court (First Chamber), 28 March 1996  
                     
                
               
            
                   
               
               
            
            Summary of the Judgment
         
         
                  
                  Freedom to provide services – Restrictions – Obligation for undertakings in the construction industry providing services to pay employer's contributions which duplicate
                     contributions paid in the place of establishment – Not permissible – Justification – None
                  (EC Treaty, Arts 59 and 60)Articles 59 and 60 of the Treaty preclude a Member State from requiring an undertaking in the construction industry established
         in another Member State and temporarily carrying out works in the first-mentioned Member State to pay employer's contributions
         in respect of  loyalty stamps and bad-weather stamps with respect to workers assigned to carry out those works, where that
         undertaking is already liable for comparable employer's contributions, with respect to the same workers and for the same period
         of work, in the State where it is established.Such an obligation, even if it is applicable without distinction to undertakings established in the national territory and
         those established in another Member State which make use of the freedom to provide services, constitutes, in so far as the
         competitiveness of the latter is affected since it must pay contributions in two Member States, a restriction on that freedom.
          Such restriction could be justified by the public interest in the social protection of workers in the construction industry,
         although in that event the workers in question should not enjoy the same protection or essentially similar protection in the
         Member State where their employer is established.It is for the national court to determine whether, apart from the technical differences between the schemes protecting employees
         in the two Member States in question, the workers concerned do not already benefit, in the Member State where the undertaking
         which employs them is established, from a mechanism, maintained by the contributions of their employer, which offers them
         protection essentially comparable to that financed by the contributions provided for in the State where the service is provided.
          If it is confirmed that such is indeed the case, the restriction on the freedom to provide services is not permissible.
      

      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
            
            JUDGMENT OF THE COURT (First Chamber)28 March 1996  (1)
         
         
            
         
               ((Employer's contributions – Loyalty stamps – Bad-weather stamps – Freedom to provide services))
               
            In Case C-272/94, 
            REFERENCE to the Court under Article 177 of the EC Treaty by the Tribunal Correctionnel, Arlon (Belgium), for a preliminary
            ruling in the criminal proceedings before that court against 
            
            
            
             Michel Guiot,  Climatec SA,  as employer liable at civil law,
            
            
            
            
            
            
            
            on the interpretation of Articles 59 and 60 of the EC Treaty,
            
            THE COURT (First Chamber),,
            
            composed of: D.A.O. Edward (Rapporteur), President of the Chamber, P. Jann and L. Sevón, Judges, 
            
            Advocate General: G. Tesauro, Registrar: H.A. Rühl, Principal Administrator, 
            
            
            after considering the written observations submitted on behalf of:
               
               
               ─
               the Public Prosecutor's Office, by Philippe Naze, deputy representing the public interest in labour matters before the Tribunal
               de Première Instance (Court of First Instance), Arlon, 
               
               
               ─
               the Belgian Government, by Jan Devadder, Director of Administration at the Ministry of Foreign Affairs, acting as Agent, 
               
               
               ─
               the German Government, by Ernst Röder, Ministerialrat at the Federal Ministry of Economic Affairs, acting as Agent, 
               
               
               ─
               the Luxembourg Government, by N. Schmit, Conseiller de Légation (1
               ère classe) in the Ministry of Foreign Affairs, acting as Agent, 
               
               
               ─
               the Commission of the European Communities, by Marie-José Jonczy, Legal Adviser, and Hélène Michard, of its Legal Service,
               acting as Agents, 
               
               
            
            
            having regard to the Report for the Hearing,
            
            after hearing the oral observations of Mr Guiot and Climatec SA, represented by André Bosseler, of the Arlon Bar; the Belgian
               Government, represented by Jan Devadder; the Luxembourg Government, represented by Luc Frieden, Avocat-Avoué, of the Luxembourg
               Bar; and the Commission, represented by Marie-José Jonczy and Hélène Michard, at the hearing on 28 September 1995,
            
            
            after hearing the Opinion of the Advocate General at the sitting on 26 October 1995, 
         gives the following
         
         
         Judgment
         1
            
         By judgment of 1 September 1994, received at the Court on 29 September 1994, the Tribunal Correctionnel (Criminal Court),
         Arlon, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation
         of Articles 59 and 60 thereof. 
         
         
         2
            
         That question was raised in the context of criminal proceedings against Mr Guiot, in his capacity as managing director of
         Climatec SA (
         Climatec), a company governed by Luxembourg law, and against Climatec itself, as employer liable at civil law, who are accused of
         having failed to pay, during the period from March 1992 to March 1993, contributions in respect of  
          timbres-fidélité   and  
          timbres-intempéries  (loyalty and bad-weather stamps), payable under Belgian legislation by reason of the employment of four workers by Climatec
         at a site in Arlon (Belgium).  The principal amount due for the period in question is BFR 98 153. 
         
         
         3
            
         Pursuant to the Belgian Collective Labour Agreement of 28 April 1988 (
         the agreement), concluded in the context of the Construction Sector Joint Committee, regarding the grant of loyalty stamps and  bad-weather
         stamps and made obligatory by the Royal Decree of 15 June 1988 (
          Moniteur Belge  of 7 July 1988, p. 9897), loyalty stamps and bad-weather stamps were payable in respect of those four workers employed in
         Belgium. 
         
         
         4
            
         Article 2 of the agreement provides that all undertakings subject to the Construction Sector Joint Committee are liable to
         the Fonds de Sécurité d'Existence des Ouvriers de la Construction (Construction Workers' Subsistence Fund, hereinafter  
         the Fund) for a total contribution of 9.12%, of which 9% is to cover loyalty stamps for their workers and 0.12% is to cover running
         costs.  Pursuant to Article 3 thereof, certain categories of undertaking are moreover liable to the Fund for a contribution
         of 2.1%, of which 2% is to cover bad-weather stamps for their workers and 0.10% is to cover running costs.  Under Article
         4(1) of the agreement, those contributions  
         shall be calculated on the basis of the gross remuneration (100%) of the worker. 
         
         
         5
            
         Furthermore, Climatec is liable in the Grand Duchy of Luxembourg for two types of contributions to that State's social security
         scheme in respect of all the workers it employs, including those sent to work temporarily in another Member State. 
         
         
         6
            
         In the first place, Article 1 of the Law of 28 January 1971 concerning compensatory wages for workers laid off during bad
         winter weather (
          Mémorial  A, 1971, p. 36), provides that, in the event of lay-offs during bad winter weather occurring during the period from 16 November
         to 31 March, workers employed in the construction industry are entitled to an allowance to compensate for loss of wages (
         compensatory wages).  Under Article 13, compensatory wages are payable both for single hours and for whole or consecutive days not worked. 
         Under Article 15, the gross hourly rate is usually 80% of the normal gross hourly salary of the worker. 
         
         
         7
            
         Secondly, the Grand Ducal Regulation of 21 July 1989 giving general binding effect to the 14th and 15th supplements to the
         Collective Labour Agreement for the construction industry between the Fédération des Entrepreneurs de Nationalité Luxembourgeoise
         and the Groupement des Entrepreneurs du Bâtiment et des Travaux Publics, on the one hand, and the Confédération Luxembourgeoise
         des Syndicats Chrétiens and the Confédération Syndical Indépendante, on the other (
          Mémorial  A, 1989, p. 975), introduced, with effect from 1 January 1989, a requirement for the employer to pay an end-of-year premium
         in the amount of 3% of the gross salary.  From 1 January 1993, Article 18 of and Annex IV to the Grand Ducal Regulation of
         16 October 1993 giving general binding effect to the Collective Labour Agreement for the construction industry between the
         Onofhängege Gewerkschaftsbond Letzebuerg (OGB-L) and the Letzebuerger Chreschtleche Gewerkschaftsbond (LCGB), on the one hand,
         and the Groupement des Entrepreneurs du Bâtiment et des Travaux Publics and the Fédération des Entrepreneurs de Nationalité
         Luxembourgeoise, on the other (
          Mémorial  A, 1993, p. 1668), increased that premium to 4% of the gross salary.  The premium is paid with the salary for December, on
         condition that the employee has been with the undertaking for a year when the premium falls due (31 December), and it may
         be reduced progressively by up to 100% for absences. 
         
         
         8
            
         The Tribunal Correctionnel, Arlon, considered that the outcome of the criminal proceedings depended on the interpretation
         of the Treaty provisions on freedom to provide services and therefore decided to stay the proceedings and refer the following
         question to the Court of Justice for a preliminary ruling: 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)?
         
         
         9
            
         In that question the national court seeks in essence to ascertain whether Articles 59 and 60 of the Treaty preclude a Member
         State from requiring an undertaking established in another Member State and temporarily carrying out works in the first Member
         State to pay employer's contributions in respect of  
          timbres -
          fidélité  and  
          timbres -
          intempéries  for employees assigned to those works, where that undertaking is already liable for comparable employer's contributions with
         respect to the same employees and for the same period of work in the State where it is established. 
         
         
         10
            
         Article 59 of the Treaty requires not only the elimination of all discrimination on grounds of nationality against providers
         of services who are established in another Member State but also 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, impede or
         render less advantageous the activities of a provider of services established in another Member State where he lawfully provides
         similar services (see, in this respect, Case C-76/90  
          Säger  v  
          Dennemeyer  [1991] ECR I-4221, paragraph 12, and Case C-43/93  
          Vander Elst  v  
          Office des Migrations Internationales  [1994] ECR I-3803, paragraph 14). 
         
         
         11
            
         Even if there is no harmonization in the field, the freedom to provide services, as one of the fundamental principles of the
         Treaty, may be restricted only by rules justified by overriding requirements of public interest and applicable to all persons
         and 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 (see,
         in particular, Case C-180/89  
          Commission  v  
          Italy  [1991] ECR I-709, paragraph 17, Case C-198/89  
          Commission  v  
          Greece  [1991] ECR I-727, paragraph 18, and  
          Vander Elst , referred to above, paragraph 16). 
         
         
         12
            
         In this respect, the Court held in Case C-113/89  
          Rush Portuguesa  ([1990] ECR I-1417, paragraph 18), that Community law does not preclude Member States from extending their legislation, or
         collective labour agreements entered into by both sides of industry, relating to minimum wages, to any person who is employed,
         even temporarily, within their territory, regardless of the country in which the employer is established; Community law also
         does not prohibit Member States from enforcing those rules by appropriate means. 
         
         
         13
            
         In the circumstances, the questions to be considered are, first, whether the requirements imposed by the Belgian legislation
         have a restrictive effect on the freedom to provide services; second, if so, whether overriding requirements of the public
         interest in that area justify such restrictions on the freedom to provide services; and third, if so, whether that interest
         is already protected by the rules of the State where the service provider is established and whether the same result can be
         achieved by less restrictive rules. 
         
         
         14
            
         National legislation which requires an employer, as a person providing a service within the meaning of the Treaty, to pay
         employer's contributions to the social security fund of the host Member State in addition to the contributions already paid
         by him to the social security fund of the State where he is established places an additional financial burden on him, so that
         he is not, so far as competition is concerned, on an equal footing with employers established in the host State. 
         
         
         15
            
         Such legislation, even if it applies without distinction to national providers of services and to those of other Member States,
         is liable to restrict the freedom to provide services within the meaning of Article 59 of the Treaty. 
         
         
         16
            
         The public interest relating to the social protection of workers in the construction industry may however, because of conditions
         specific to that sector, constitute an overriding requirement justifying such a restriction on the freedom to provide services.
         
         
         
         17
            
         However, that is not the case where the workers in question enjoy the same protection, or essentially similar protection,
         by virtue of employer's contributions already paid by the employer in the Member State of establishment. 
         
         
         18
            
         In those circumstances, it is for the national court to determine whether the requirements imposed by the legislation of the
         State of establishment, in this case the Grand Duchy of Luxembourg, are similar or in any event comparable to those imposed
         by the legislation of the State where the service is provided, in this case the Kingdom of Belgium. 
         
         
         19
            
         In this respect, it should be noted that, in the question submitted for a preliminary ruling, the national court pointed out
         that the Belgian and Luxembourg contributions at issue in practice cover the same risks and have a similar, if not wholly
         identical, purpose. 
         
         
         20
            
         That finding is borne out by the case-file and the information provided in response to the written questions put by the Court,
         as well as by the arguments presented at the hearing.  It appears that although the Luxembourg legislation differs from the
         Belgian legislation, in particular as regards the percentage of the premiums and the procedure for their payment, they both
         provide mechanisms intended, on the one hand, to protect workers in the construction industry against the risk of suspension
         of the work and, therefore, of loss of remuneration because of bad weather and, on the other hand, to reward their loyalty
         to the sector in question. 
         
         
         21
            
         Since social protection of workers constitutes the only consideration of public interest capable of justifying restrictions
         on the freedom to provide services such as those at issue, any technical differences in the operation of the two schemes cannot
         justify such a restriction. 
         
         
         22
            
         The reply to the question put by the national court must therefore be that Articles 59 and 60 of the Treaty preclude a Member
         State from requiring an undertaking established in another Member State and temporarily carrying out works in the first-mentioned
         Member State to pay employer's contributions in respect of  
          timbres -
          fidélité  and  
          timbres -
          intempéries  with respect to workers assigned to carry out those works, 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. 
         
         Costs
         23
            
         The costs incurred by the Belgian, German and Luxembourg Governments and the Commission of the European Communities, which
         have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings,
         a step in the proceedings pending before the national court, the decision on costs is a matter for that court. 
         
         On those grounds, 
         
         
         
            
            THE COURT (First Chamber),
         
         
         in answer to the question referred to it by the Tribunal Correctionnel, Arlon, by judgment of 1 September 1994, hereby rules:
         
         Articles 59 and 60 of the EC Treaty preclude a Member State from requiring an undertaking established in another Member State
            and temporarily carrying out works in the first-mentioned Member State to pay employer's contributions in respect of  
             timbres -
             fidélité  and  
             timbres -
             intempéries  with respect to workers assigned to carry out those works, 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.
                  Edward
               
               
                  Jann 
               
               
                  Sevón 
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
            
            
            
            
            
            
            
         
         
         Delivered in open court in Luxembourg on 28 March 1996. 
         
         
         
         
                  R. Grass 
               
               
                  D.A.O. Edward  
               
            
         
         
         
                  Registrar
               
               
                  President of the First Chamber
               
            
      
      
          1 –
            
             Language of the case: French.