ITC Innovative Technology Center GmbH v Bundesagentur für Arbeit.
Date: 2007-01-11
20. It is necessary, in the first place, to reply to the argument put forward by the German Government that a private-sector recruitment agency, such as ITC, cannot rely either on Article 39 EC or on Regulation No 1612/68, on the ground that, since it acts as an intermediary and not as an employed person, it does not fall within the scope of application   ratione personae of those provisions. It refers in that regard to Case C‑55/96 Job Centre  (‘ Job Centre II ’) [1997] ECR I‑7119, paragraph 13).
22. However, while it is established that the rights to freedom of movement laid down under Article 39 EC benefit workers, including those seeking employment (see, to that effect, Case C-292/89 Antonissen [1991] ECR I‑745, paragraphs 12 and 13), there is nothing in the wording of that article to indicate that those rights may not be relied upon by others (see Case C-350/96 Clean Car Autoservice [1998] ECR I-2521, paragraph 19).
23. As the Court has already held, in order to be truly effective, the right of workers to be engaged and employed without discrimination necessarily entails as a corollary the employer’s entitlement to engage them in accordance with the rules governing freedom of movement for workers ( Clean Car Autoservice , paragraph 20).
29. In the second place, it must be noted, as regards the German Government’s argument that ITC cannot rely on the rights laid down under Article 39 EC because that agency is established in only one Member State, that the Treaty rules governing freedom of movement for persons and measures adopted to implement them cannot be applied to activities which have no factor linking them with any of the situations governed by Community law and which are confined in all relevant respects within a single Member State (Case C-18/95 Terhoeve [1999] ECR I-345, paragraph 26, and Joined Cases C-95/99 to C-98/99 and C‑180/99 Khalil and Others [2001] ECR I-7413, paragraph 69).
30. However, even though a private-sector recruitment agency established in Germany, such as ITC, seeks to rely on the rules relating to freedom of movement for workers against the German authorities, that does not affect the application of those rules. That agency’s complaint is precisely that it was placed at a disadvantage by the system of recruitment vouchers established under the second sentence of Paragraph 421(g)(1) of SGB III, with the result that the person seeking employment for whom it found a job was also, or may also have been, placed at a disadvantage by reason of the fact that that job was in another Member State (see also, to that effect, Terhoeve , paragraph 28).
31. In the third place, as regards the question whether national legislation such as the legislation at issue in the main proceedings constitutes a restriction on freedom of movement for workers, it must be pointed out that all of the Treaty provisions relating to the freedom of movement for persons are intended to facilitate the pursuit by Community nationals of occupational activities of all kinds throughout the Community, and preclude measures which might place Community nationals at a disadvantage when they wish to pursue an economic activity in the territory of another Member State (Joined Cases 154/87 and 155/87 Wolf and Others [1988] ECR 3897, paragraph 13; Case C-415/93 Bosman [1995] ECR I-4921, paragraph 94; Terhoeve , paragraph 37; Case C-190/98 Graf [2000] ECR I-493, paragraph 21; and Case C‑109/04 Kranemann [2005] ECR I-2421, paragraph 25).
32. In that context, nationals of Member States have in particular the right, which they derive directly from the Treaty, to leave their State of origin to enter the territory of another Member State and reside there in order there to pursue an economic activity (see, inter alia, Bosman , paragraph 95, and Terhoeve , paragraph 38).
33. National provisions which preclude or deter a national of a Member State from leaving his country of origin in order to exercise his right to freedom of movement therefore constitute an obstacle to that freedom even if they apply without regard to the nationality of the workers concerned ( Bosman , paragraph 96; Terhoeve , paragraph 39; Graf , paragraph 23; Case C-224/01 Köbler  [2003] ECR I‑10239, paragraph 74; Case C-232/01 Van Lent  [2003] ECR I‑11525, paragraph 16; and Kranemann , paragraph 26).
34. It would be incompatible with the right of freedom of movement were a worker or a person seeking employment, in the Member State of which he is a national, to receive treatment less favourable than he would enjoy if he had not availed himself of the opportunities offered by the Treaty in relation to freedom of movement (see, to that effect, Case C‑224/98 D’Hoop  [2002] ECR I-6191, paragraph 30, and Case C‑224/02 Pusa [2004] ECR I-5763, paragraph 18).
37. A measure which constitutes an obstacle to freedom of movement for workers could be accepted only if it pursued a legitimate aim compatible with the Treaty and were justified by pressing reasons of public interest. But even if that were so, application of that measure would still have to be such as to ensure achievement of the aim in question and not go beyond what is necessary for that purpose (see, inter alia, Kranemann , paragraph 33).
38. It is therefore necessary to consider whether a measure such as the German system of recruitment vouchers can be justified, in the first place, by the fact that such a system represents a new instrument of the national employment policy which aims to improve workers’ recruitment and to reduce unemployment, in the second place, by the fact that its purpose is to protect the national social security system, which can be done only if contributions are paid on a national basis and where contributions would be lost if persons seeking employment were to be recruited in other Member States and, lastly, by the fact that it seeks to protect the national labour market against the loss of qualified workers.
39. With regard to the first of these justifications, it must be pointed out that the Member States are required to choose measures likely to attain the objectives pursued in the field of employment. The Court has recognised that the Member States have a broad margin of discretion in exercising that power. In addition, encouragement of recruitment constitutes a legitimate aim of social policy (see, as regards equal treatment for male and female workers, Case C-167/97 Seymour‑Smith and Perez  [1999] ECR I‑623, paragraphs 71 and 74, and Case C-77/02 Steinicke  [2003] ECR I‑9027, paragraphs 61 and 62).
40. However, the broad margin of discretion which the Member States enjoy in matters of social policy may not have the effect of undermining the rights granted to individuals by the Treaty provisions in which their fundamental freedoms are enshrined (see Terhoeve , paragraph 44; Seymour‑Smith and Perez , paragraph 75; and Steinicke , paragraph 63).
41. Mere general statements concerning the capacity of the system of recruitment vouchers at issue in the main proceedings to improve workers’ recruitment and to reduce unemployment in Germany are not sufficient to establish that the objective of that system justifies restricting the exercise of one of the fundamental freedoms of Community law or to give reasonable support to the conclusion that the means selected are, or could be, appropriate for the purposes of achieving that objective.
43. While it is true that the risk of seriously undermining the financial balance of the social security system may constitute an overriding reason in the general interest (see, inter alia, Case C-158/96 Kohll  [1998] ECR I‑1931, paragraph 41), such a risk has not been established in the present case. The contributions lost to the German social security system can be reduced. First, while a person seeking employment who is recruited in another Member State is no longer required to pay social security contributions in his Member State of origin, that State is no longer required to pay him unemployment benefit. Secondly, it is of the essence of the freedom of movement for workers laid down by the Treaty that the departure of a worker to another Member State may be counterbalanced by the arrival of a worker from another Member State.
44. Even on the assumption that the organisation of the labour market, including the prevention of the loss of qualified workers, could, in some circumstances and subject to certain conditions being complied with, justify restrictions on the freedom of movement for workers, it must in any event be held that national legislation such as the legislation at issue in the main proceedings goes beyond what appears necessary to achieve the objectives pursued. Such objectives do not justify the systematic refusal of the benefit of recruitment vouchers to persons seeking employment who are recruited in other Member States. Such a measure is tantamount to an outright negation of the freedom of movement for Community workers laid down by Article 39 EC, which aims to guarantee to workers and persons seeking employment the right to gain access to employment of their choice and to exercise that activity in the territory of another Member State (see, as regards freedom of establishment, Case C-208/00 Überseering  [2002] ECR I‑9919, paragraph 93).
48. In that regard, it must be noted that, first, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court (see, inter alia, Bosman , paragraph 59).
49. However, the Court has held that it has no jurisdiction to give a preliminary ruling on a question submitted by a national court where it is quite obvious that the ruling sought by that court on the interpretation or validity of Community law bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, inter alia, Case C-36/99 Idéal tourisme  [2000] ECR I‑6049, paragraph 20).
51. Furthermore, although that court has explained, in general terms, how the system of recruitment vouchers at issue in the main proceedings operates, the absence of specific information as to whether or not an advantage exists and the effect of that system on trade between Member States does not allow it to be determined whether it complies with the Community rules relating to State aid (see, to that effect, Case C-379/98 PreussenElektra  [2001] ECR I‑2099, paragraphs 58 to 62, and order in Case C-190/02 Viacom  [2002] ECR I‑8287, paragraph 21).
52. In the absence of sufficient information, it is not possible to discern the specific problem of interpretation which might be raised in relation to each of the provisions of Community law relating to competition in respect of which the national court seeks an interpretation. The need for precision with regard to the factual and legislative context applies especially in the area of competition, which is characterised by complex factual and legal situations (order in Case C-157/92 Banchero  [1993] ECR I‑1085, paragraph 5; Case C-176/96 Lehtonen and Castors Braine [2000] ECR I‑2681, paragraph 22; and order in Case C-116/00 Laguillaumie  [2000] ECR I‑4979, paragraph19).
54. As a preliminary point, it must be noted that the activity of employee recruitment constitutes, in accordance with case-law, the provision of services for the purposes of Articles 49 EC and 50 EC (see Joined Cases 110/78 and 111/78 Van Wesemael  [1979] ECR 35, paragraph 7, and Case 279/80 Webb [1981] ECR 3305, paragraphs 8 and 9).
55. As regards the question whether national legislation, such as the legislation at issue in the main proceedings, gives rise to a restriction which is prohibited by Article 49 EC, it should be pointed out that, according to settled case-law, the freedom to provide services 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, inter alia, Case C-266/96 Corsica Ferries France  [1998] ECR I‑3949, paragraph 56; Joined Cases C-369/96 and C-376/96 Arblade and Others [1999] ECR I‑8453, paragraph 33; and Case C-205/99 Analir and Others [2001] ECR I‑1271, paragraph 21).
56. In pursuance of that rule, the freedom to provide services may, contrary to what the German Government contends, be relied on by an undertaking against the State in which it is established where the services are provided to recipients established in another Member State and, more generally, whenever a provider of services offers services in a Member State other than the one in which he is established (see, inter alia, Case C-381/93 Commission  v France  [1994] ECR I‑5145, paragraph 14).
64. In that regard, it is sufficient to note that Article 18 EC, which lays down generally the right for every citizen of the Union to move and reside freely within the territory of the Member States, finds specific expression in Articles 39 EC and 40 EC in relation to the freedom of movement for workers and the freedom to provide services.
65. Inasmuch as the main proceedings fall within the scope of the lastmentioned provisions, it is not necessary to give a ruling on the interpretation of Article 18 EC (see Case C-100/01 Oteiza Olazabal [2002] ECR I‑10981, paragraph 26, and Case C-92/01 Stylianakis  [2003] ECR I‑1291, paragraph 20).
Question 2(a) and Question 4(a)
67. It should be noted at the outset that the provisions of Articles 39 EC, 49 EC and 50 EC confer on individuals rights which are enforceable by them and which the national courts must protect (see Case 33/74 Van Binsbergen  [1974] ECR 1299, paragraph 26, and Case 41/74 Van Duyn  [1974] ECR 1337, paragraph 7).
68. According to established case-law, it is for the national court, to the full extent of its discretion under national law, to interpret and apply domestic law in conformity with the requirements of Community law (see Case 157/86 Murphy and Others [1988] ECR 673, paragraph 11, and Case C-262/97 Engelbrecht  [2000] ECR I-7321, paragraph 39).
69. Where such an application is not possible, the national court must apply Community law in its entirety and protect rights which the latter confers on individuals, disapplying, if necessary, any contrary provision of domestic law (see, to that effect, Murphy and Others , paragraph 11; Case C-224/97 Ciola  [1999] ECR I‑2517, paragraph 26; and Engelbrecht , paragraph 40).