Commission of the European Communities v Grand Duchy of Luxemburg.
Date: 2004-10-21
20. It is settled case-law that Article 49 EC 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‑164/99 Portugaia Construções  [2002] ECR I-787, paragraph 16, and the case‑law cited).
21. 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 in which the service is provided, it may, notwithstanding its restrictive effect on the freedom to provide services, be justified where it meets overriding requirements relating to the public interest 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 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 , cited above, paragraph 19).
23. It is indisputable that the conditions to be satisfied under the Grand Ducal Regulation of 12 May 1972 by a service-providing undertaking intending to deploy in Luxembourg workers who are nationals of non-member countries are liable, by reason of the administrative and financial burdens that they represent, to impede the planned deployment and, consequently, the provision of services by that undertaking (see, to that effect, 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 30).
24. It has already been held with respect to the deployment of workers who are nationals of non-member countries 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 permit constitutes a restriction on the freedom to provide services within the meaning of Article 49 EC (see Case C‑43/93 Vander Elst  [1994] ECR I-3803, paragraph 15).
26. That being so, it is appropriate to consider whether the restrictions on the freedom to provide services arising from the Grand Ducal Regulation of 12 May 1972 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 Finalarte , cited above, paragraph 37).
29. It is true that the overriding reasons 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). It is also true 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 (Joined Cases 62/81 and 63/81 Seco and Desquenne & Giral  [1982] ECR 223, paragraph 14), when it emerges 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 (Case C-272/94 Guiot  [1996] ECR I-1905, paragraphs 16 and 17, and Arblade , cited above, paragraph 51).
31. A measure which would be just as effective whilst being less restrictive than the measure at issue here would be an obligation imposed on a service-providing undertaking to report beforehand to the local authorities on the presence of one or more deployed workers, the anticipated duration of their presence and the provision or provisions of services justifying the deployment. It would enable those authorities to monitor compliance with Luxembourg social welfare legislation during the deployment 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.
32. Moreover, making the granting of a collective work permit subject to the requirement that an employment contract of indefinite duration must have been in existence between the workers and their undertaking of origin for at least six months before their deployment to Luxembourg goes beyond what is required for the objective of social welfare protection as a necessary condition for providing services through the deployment of workers who are nationals of non-member countries.
33. As correctly pointed out by the Commission, that requirement is liable to make considerably more complicated the deployment in Luxembourg of workers who are nationals of non-member countries for the purposes of providing services in sectors where, due to the particular features of the activity in question, frequent use is made of short-term and service-specific contracts. It should be borne in mind in this regard that, according to the information provided by the Luxembourg Government, the national legislation governing employment contracts authorises the use of such contracts for the hiring of Community workers for certain types of tasks.
35. Moreover, it does not take account of the social measures by which the undertaking intending to deploy 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 a possible agreement in place between the European Community and the non-member country concerned, the application of which is likely to eliminate any significant risk of workers being exploited or of competition between undertakings being distorted (see Vander Elst , cited above, paragraph 25).
38. It should in this regard be borne in mind that, although the desire to avoid disturbances on the labour market is undoubtedly an overriding reason of general interest (see, to that effect, Case C-113/89 Rush Portuguesa  [1990] ECR I-1417, paragraph 13), workers employed by an undertaking established in a Member State and who are deployed to another Member State for the purposes 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 Rush Portuguesa , paragraph 15; Vander Elst , paragraph 21; and Finalarte , paragraph 22).
39. It has been held, however, that a Member State must be able to check whether an undertaking established in another Member State and which deploys in its territory workers who are nationals of a non-member country 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 workers or making them available (see Rush Portuguesa , paragraph 17).
40. However, such checks must observe the limits imposed by Community law and in particular those stemming from the freedom to provide services, which cannot be rendered illusory and whose exercise may not be made subject to the discretion of the authorities (see Rush Portuguesa , paragraph 17).
44. With regard to the requirement, in the case of an application for a collective work permit, that an employment contract of indefinite duration must have been in force between the relevant workers and their undertaking of origin for at least six months, it has already been stated in paragraphs 33 and 34 of the present judgment that this is likely to make considerably more complicated the provision of services in Luxembourg by undertakings in a sector in which frequent use is made of short‑term and service-specific contracts, or by newly-created undertakings using workers who are nationals of non-member countries.
45. That requirement is also disproportionate to the objective of ensuring that workers on detachment return to the Member State of origin once their work has been completed.
46. An obligation imposed on a service-providing undertaking to provide the local authorities with information showing that the situation of the workers concerned is lawful as regards matters such as residence, work permit and social coverage in the Member State in which that undertaking employs them would give those authorities, in a less restrictive but just as effective a manner as the requirements at issue here, a guarantee that the situation of those workers is lawful and that they are carrying on their main activity in the Member State in which the service‑providing undertaking is established. Combined with the information provided by that undertaking concerning the anticipated period of deployment (see paragraph 31 of this judgment), that information would enable the Luxembourg authorities to take, as appropriate, the measures necessary at the end of that period.