Commission of the European Communities v Republic of Austria.
Date: 2006-09-21
36. At the outset, it must be recalled that it is settled case-law that Article 49 EC requires not only the elimination of all discrimination on grounds of nationality against service providers 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 service provider established in another Member State, where he lawfully provides similar services (see, in particular, Portugaia Construções , paragraph 16 and the case-law cited).
37. However, where national legislation falling within an area which has not been harmonised at Community level is applicable without distinction to all persons and undertakings operating in the territory of the Member State concerned, it may, notwithstanding its restrictive effect on the freedom to provide services, be justified where it meets an overriding requirement relating to the public interest and that interest is not already safeguarded by the rules to which the service provider is subject in the Member State in which he is established and in so far as it is appropriate for securing the attainment of the objective which it pursues and does not go beyond what is necessary in order to attain it (see Joined Cases C‑369/96 and C‑376/96 Arblade and Others  [1999] ECR I-8453, paragraphs 34 and 35, and Portugaia Construções , paragraph 19).
39. It is indisputable that the conditions to be satisfied under Paragraph 18(12) to (16) of the AuslBG by a service provider intending to post in Austria workers who are nationals of non-Member States, by reason of the administrative burdens that they represent, and in particular the six‑week period required in order for the EU Posting Confirmation to be issued, impede the planned posting and, consequently, the provision of services by that undertaking (see, to that effect, Case C‑445/03 Commission  v Luxembourg  [2004] ECR I-10191, paragraph 23 and the case-law cited).
40. It has already been held, with respect to the posting of workers who are nationals of non-Member States by a service provider established in the Community, that national provisions which make the provision of services within national territory by an undertaking established in another Member State subject to the issue of an administrative authorisation constitute a restriction on the freedom to provide services within the meaning of Article 49 EC (see Vander Elst , paragraph 15, and Commission  v Luxembourg , paragraph 24).
41. In that regard, and contrary to what the Austrian Government maintains, the EU Posting Confirmation procedure is an authorisation procedure. Since that confirmation must be issued before the posting can be carried out and is made only after verification by the competent national authorities of compliance with the requirements laid down in Paragraph 18(13) of the AuslBG, it cannot be maintained that it is merely a declaratory procedure.
42. Such a procedure is, in addition, all the more likely to render difficult, if not impossible, the provision of services using posted workers from a non-Member State in that it entails a period of up to six weeks to process the application for that confirmation.
43. The Court has recognised that the Member States have the power to verify compliance with the national and Community provisions in respect of the provision of services. Likewise, it has accepted the justification for the measures necessary to verify compliance with requirements which are themselves justified by grounds of public interest (see Arblade and Others , paragraph 38). However, the Court has also held that those measures must comply with the limits imposed by Community law and must not render the freedom to provide services illusory (see Rush Portuguesa , paragraph 17).
44. That being so, it is appropriate to consider whether the restrictions on the freedom to provide services arising from Paragraph 18(12) to (16) of the AuslBG appear to be justified by a public interest objective and, if so, whether they are necessary in order to pursue, effectively and by appropriate means, such an objective ( Commission  v Luxembourg , paragraph 26, and Case C-244/04 Commission  v Germany  [2006] ECR I-885, paragraph 37).
47. The overriding requirements relating to the public interest which have already been recognised by the Court include the protection of workers (see, inter alia, Finalarte , paragraph 33, and Portugaia Construções , paragraph 20). In addition, 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, within their territory, no matter in which country the employer is established, and it also does not prohibit Member States from enforcing those rules by appropriate means (see Joined Cases 62/81 and 63/81 Seco and Desquenne & Giral  [1982] ECR 223, paragraph 14) when it is found that the protection conferred thereunder is not guaranteed by identical or essentially similar obligations by which the undertaking is already bound in the Member State where it is established (see Commission  v Luxembourg , paragraph 29 and the case‑law cited).
49. Firstly, by requiring that Austrian wage and employment conditions be routinely observed, such a procedure does not take account of the measures for the protection of workers by which the undertaking intending to carry out the posting is bound in the Member State of origin, particularly as regards working conditions and remuneration, under the law of the Member State in question or any agreement between the European Community and the non-Member State concerned, the application of which is likely to eliminate any significant risk of workers being exploited or of competition between undertakings being distorted (see, to that effect, Vander Elst , paragraph 25, and Commission  v Luxembourg , paragraph 35).
50. Secondly, as regards making the issue of the EU Posting Confirmation subject to the requirement that there must be an employment contract of at least one year or of indefinite duration, such a measure goes beyond what is required for the objective of social protection as a necessary condition for providing services through the posting of workers who are nationals of non-Member States ( Commission  v Luxembourg , paragraphs 32 and 33, and Commission  v Germany , paragraph 58).
51. In addition, the Austrian Government cannot rely on the formula used by the Court in paragraph 26 of the judgment in Vander Elst  to argue that such a requirement enables verification to be made that a posted worker who is a national of a non‑Member State has lawful and habitual employment in his employer’s Member State of establishment. It must be observed that the Court did not couple the concept of ‘lawful and habitual employment’ with a requirement of residence or employment for a certain period in the State of establishment of the service provider ( Commission  v Germany , paragraph 55).
52. A measure which would be just as effective whilst being less restrictive than the measure at issue is the obligation imposed, under the AVRAG, on a service provider to report, before the posting, to the local authorities the presence of one or more workers to be posted, the anticipated duration of their presence and the provision or provisions of services justifying the posting. It enables those authorities to monitor compliance with Austrian social welfare and wages legislation during the posting while at the same time taking account of the obligations by which the undertaking is already bound under the social welfare legislation applicable in the Member State of origin.
55. It should be borne in mind in this regard that workers employed by an undertaking established in a Member State and who are posted to another Member State for the purpose of providing services there do not purport to gain access to the labour market of that second State, as they return to their country of origin or residence after the completion of their work (see Commission  v Luxembourg , paragraph 38).
56. It is true that a Member State may check whether an undertaking established in another Member State and which posts in its territory workers who are nationals of a non-Member State is not availing itself of the freedom to provide services for a purpose other than the accomplishment of the service in question, for instance, that of bringing his workers for the purpose of placing them or making them available to others (see Rush Portuguesa , paragraph 17, and Commission  v Luxembourg , paragraph 39). However, the EU Posting Confirmation procedure cannot be regarded as an appropriate means to attain the objective relied on by the Austrian Government.
60. However, the control exercised by a Member State so far as that legislation is concerned cannot affect the freedom to provide services of the undertaking which employs those nationals ( Seco and Desquenne & Giral , paragraph 12).
64. In this respect, it is settled case-law that such a justification may be relied on only if there is a genuine and sufficiently serious threat to a fundamental interest of society (see Case C-114/97 Commission  v Spain  [1998] ECR I-6717, paragraph 46, and Case C-36/02 Omega  [2004] ECR I-9609, paragraph 30).