Commission of the European Communities v Federal Republic of Germany.
Date: 2006-01-19
30. 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 withou t 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, Case C‑164/99 Portugaia Construções  [2002] ECR I‑787, paragraph 16).
31. 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).
34. It has already been held, with respect to the deployment of workers who are nationals of non-member States by a service-providing undertaking established in the Community, that national legislation which makes the provision of services within national territory by an undertaking established in another Member State subject to the issue of an administrative visa constitutes 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).
35. While it is true, as the German Government submits, that the administrative and financial charges involved in the prior check as practised by the German authorities are not of the order of those considered by the Court in Commission  v Luxembourg , such a procedure may make it more difficult, or even impossible, to exercise the freedom to provide services through posted workers who are nationals of non‑member States, in particular where the services to be provided necessitate a certain speed of action.
36. 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 control measures necessary to verify compliance with requirements which are themselves justified by grounds of public interest ( Arblade and Others , paragraph 38). However, in paragraph 17 of the judgment in Case C-113/89 Rush Portuguesa [1990] ECR I-1417, the Court also held that those controls must comply with the limits imposed by Community law and must not render the freedom to provide services illusory.
37. That being so, it is appropriate to consider whether the restrictions on the freedom to provide services arising from the German authorities’ practice 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 (see Joined Cases C‑49/98, C‑50/98, C‑52/98 to C‑54/98 and C‑68/98 to C‑71/98 Finalarte and Others  [2001] ECR I‑7831, paragraph 37, and Commission v Luxembourg , paragraph 26).
40. It has already been held that a Member State may check that an undertaking established in another Member State, which deploys on the territory of the first-mentioned Member State 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 concerned ( Rush Portuguesa , paragraph 17, and Commission  v Luxembourg , paragraph 39).
41. However, as the Advocate General observed in point 27 of his Opinion, a requirement that the service provider furnishes a simple prior declaration certifying that the situation of the workers concerned is lawful, particularly in the light of the requirements of residence, work visas and social security cover in the Member State where that provider employs them, would give the national authorities, in a less restrictive but as effective a manner as checks in advance of posting, a guarantee that those workers’ situation is lawful and that they are carrying on their main activity in the Member State where the service provider is established (see, to that effect, Commission  v Luxembourg , paragraph 46). Such a requirement would enable the national authorities to check that information subsequently and to take the necessary measures if those workers’ situation was not regular. Such a requirement could in addition take the form of a succinct communication of the documents required, particularly when the length of the posting does not allow such a check to be effectively carried out.
42. It follows that the control measure in advance of the posting resulting from the German authorities’ practice exceeds what is necessary to prevent the abuse to which the implementation of the freedom to provide services may give rise.
44. In that regard, while the Court has already held that the overriding reasons relating to the public interest capable of justifying restrictions on the freedom to provide services include the protection of workers ( Arblade and Others , paragraph 36), it must be observed that 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, just as Community law does not prohibit Member States from enforcing those rules by appropriate means, when it is established 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 ( Commission  v Luxembourg , paragraph 21).
45. However, an obligation imposed on a service provider established in another Member State, at the same time as the requirement referred to in paragraph 41 above, to report beforehand to the local authorities on the presence of one or more deployed workers, the anticipated duration of their presence and the service or services justifying the deployment would be a more proportionate means than the check in advance of positing because it is less restrictive but just as effective. It would enable those authorities to monitor compliance with German social welfare legislation during the deployment while at the same time taking account of the obligations by which that undertaking is already bound under the social welfare legislation applicable in the Member State of origin ( Commission  v Luxembourg , paragraph 31).
48. In that regard, it must be observed that, according to settled case‑law, the Member States can justify control measures which interfere with the freedom to provide services by overriding requirements relating to the public interest, where that interest is not already safeguarded by the rules to which the service provider is subject in the Member State in which it is established ( Portugaia Construções , paragraph 19).
53. It is not disputed that such a requirement is a restriction on the freedom to provide services. That requirement is particularly damaging to undertakings operating in sectors in which frequent use is made of short‑term and service‑specific contracts, or of newly‑created undertakings (see Commission  v Luxembourg , paragraph 44).
55. As a preliminary point, it must be stated that the Federal Republic of Germany cannot, in that regard, rely on the formula used by the Court in paragraph 26 of the judgment in Vander Elst , by arguing that such a requirement of prior employment enables it to verify 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. As the Advocate General noted in point 38 of his Opinion, it is important to put that formula in the context of the question referred by the national court in the case which gave rise to the judgment in Vander Elst . In that regard, 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.
58. In that regard, contrary to the German Government’s submission, it has already been held that legislation imposing a requirement of a period of only six months’ prior employment exceeds what can be required in the name of the objective of the social welfare protection of workers who are nationals of non‑member countries ( Commission  v Luxembourg , paragraph 32).
59. Furthermore, as regards the safeguarding of the Member States’ prerogatives in respect of access to their employment market, it must be noted that posted workers do not aspire to access to the employment market of the Member State where they are posted (see Rush Portuguesa , paragraph 15; Vander Elst , paragraph 21; Finalarte and Others , paragraph 22, and Commission  v Luxembourg , paragraph 38).
60. In addition, it has already been held that such a requirement is disproportionate to the objective of seeking to ensure to that the workers return to the Member State of origin at the end of the posting ( Commission  v Luxembourg , paragraph 45).
61. Finally, as regards the defence based on the prevention of social dumping, the Court has held that the Member States may extend their legislation or collective agreements relating to minimum wages to any person who is employed, even temporarily, within their territory ( Arblade and Others , paragraph 41). That prerogative is also recognised by Article 3 of Directive 96/71.