Commission of the European Communities v Federal Republic of Germany.
Date: 2007-07-18
9. Paragraph 2(3) of the AEntG states:
‘Every employer established abroad is required to retain in Germany the necessary documents, in German, for the monitoring of compliance with the legal obligations arising from the second sentence of Paragraph 1(1), from the second sentence of Paragraph 1(2a) and from the fifth sentence of Paragraph 1(3a), throughout the whole period for which the employee remains within the scope of the present law and for at least the duration of the building project, without, however, exceeding a period of two years, so as to be able to present those documents at the building site at the request of the supervisory authorities.’
18. Thus, the first subparagraph of Article 3(1) of that directive stipulates that Member States are to ensure that, whatever the law applicable to the employment relationship, those undertakings guarantee the posted workers the terms and conditions of employment, involving those matters covered by that article, which are established in the Member State in which the work is carried out.
19. Nevertheless, Directive 96/71 did not harmonise the material content of those national rules (see, to that effect, the Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions, of 25 July 2003, on the implementation of Directive 96/71 in the Member States, COM(2003) 458 final, p. 7). That content may accordingly be freely defined by the Member States, in compliance with the Treaty and the general principles of Community law, including therefore, for the purposes of the present case, Article 49 EC.
25. In this regard, it should however be recalled that the objective of the pre-litigation proceedings provided for in Article 226 EC is to give the Member State concerned an opportunity to comply with its obligations under Community law or to avail itself of its right to defend itself against the complaints made by the Commission (Case C-475/98 Commission v Austria [2002] ECR I-9797, paragraph 35).
26. It should also be recalled that according to the Court’s case-law the rules of Article 226 EC must be applied and the Commission is not obliged to act within a specific period, save where the excessive duration of the pre-litigation procedure in that provision is capable of making it more difficult for the Member State concerned to refute the Commission’s arguments and of thus infringing the rights of the defence. It is for the Member State concerned to provide evidence that it has been so affected (Case C-96/89 Commission v Netherlands [1991] ECR I-2461, paragraphs 15 and 16; Case C-207/97 Commission v Belgium  [1999] ECR I-275, paragraph 25, and Commission v Austria , cited above, paragraph 36).
30. In this regard, it should be noted that Article 38(1)(c) of the Rules of Procedure state that any application must contain, in particular, the subject-matter of the proceedings and a summary of the pleas in law on which the application is based. Accordingly, in any application made under Article 226 EC, the Commission must set out the complaints coherently and precisely to enable the Member State to prepare its defence and the Court to determine whether there is a breach of obligations as alleged (see, to that effect, Case C-347/88 Commission v Greece [1990] ECR I-4747, paragraph 28, and Case C-98/04 Commission v United Kingdom  [2006] ECR I-4003, paragraph 18).
36. In this regard, it is true that, according to the case-law of the Court, the subject-matter of an application under Article 226 EC is circumscribed by the pre-litigation procedure provided for by that article, and that the Commission’s reasoned opinion and the application to the Court must therefore be based on the same objections (Case C-105/91 Commission  v Greece  [1992] ECR I-5871, paragraph 12, and Case C-11/95 Commission  v Belgium  [1996] ECR I-4115, paragraph 73).
37. However, that requirement cannot be carried so far as to mean that in every case the statement of complaints in the letter of formal notice, the operative part of the reasoned opinion and the form of order sought in the application must be exactly the same, provided that the subject-matter of the proceedings has not been extended or altered (Case C-191/95 Commission  v Germany  [1998] ECR I-5449, paragraph 56 and Case C-358/01 Commission  v Spain  [2003] ECR I-13145, paragraph 28).
46. It should also be noted that the Court has already ruled on the compatibility with the Treaty of that provision of the AEntG in the Finalarte and Others  case, cited above. Specifically, at paragraphs 45, 49 and 53 of that judgment, the Court emphasised that the consistency of Paragraph 1(3) of the AEntG with Community law depends on two conditions, and it is for the national court to determine whether they have been fulfilled. That court must also consider whether the German law relating to paid leave confers real additional protection on workers, posted by service providers established outside Germany, and whether the application of that law is proportionate to the attainment of the objective of the social protection of those workers.
48. According to settled case-law, in the context of an action for failure to fulfil obligations brought under Article 226 EC the Commission is required to prove the allegation that the obligation has not been fulfilled. It is the Commission which must provide the Court with the necessary evidence for the Court to establish that the obligation has not been fulfilled, and it may not rely on any presumption (see, in particular, Case C-62/89 Commission  v France  [1990] ECR I-925, paragraph 37, and Case C-341/02 Commission v Germany  [2005] ECR I-2733, paragraph 35).
49. Furthermore, it is necessary to recall that, according to settled case-law of the Court, the scope of national laws, regulations or administrative provisions must be assessed in the light of the interpretation given to them by national courts (see, in particular, Case C-382/92 Commission  v United Kingdom  [1994] ECR I-2435, paragraph 36 and Case C-300/95 Commission  v United Kingdom  [1997] ECR I-2649, paragraph 37).
50. It must be stated that in the present action the Commission has not provided the necessary evidence to prove that Paragraph 1(3) of the AEntG is not consistent with Article 49 EC. It restricted itself to a literal interpretation of the first paragraph of that provision of the AEntG without taking a view on the fulfilment of the two conditions laid down in the Finalarte  judgment, mentioned at paragraph 46 of this judgment. Moreover, in support of its action, the Commission put forward no line of argument and made no reference to national court decisions or any other evidence to show that, contrary to what the German authorities contend, Paragraph 1(3) of the AEntG is, in practice, applied or interpreted in a manner that is not consistent with Community law.
53. In addition, while it is true that the requirement of legal certainty prevents the exercise of individual rights arising from Community law from being subject to conditions and limits set by national administrative rules (see, to that effect, Case C-306/91 Commission  v Italy  [1993] ECR I-2133, paragraph 14 and Case C-354/98 Commission  v France  [1999] ECR I-4927, paragraph 11), the fact remains that, in the context of transnational posting of workers, the difficulties likely to arise when comparing national paid-leave schemes cannot be resolved – in the absence of harmonisation in that area – without effective cooperation between the authorities of those Member States (see, to this effect, the Commission Communication to the Council, the European Parliament, the Economic and Social Committee and the Committee of Regions of 25 July 2003). The conclusion of administrative agreements aimed at ensuring the mutual recognition of such schemes is part of that cooperation, and more generally, part of the need for cooperation in good faith between Member States in the areas covered by Community law.
63. It is settled case-law that Article 49 EC requires not only the elimination of all discrimination against service providers on the ground of their nationality 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, when it is liable to prohibit or otherwise impede the activities of a service provider established in another Member State where it lawfully provides similar services (Case C-76/90 Säger  [1991] ECR I-4221, paragraph 12; Case C-272/94 Guiot [1996] ECR I-1905, paragraph 10 and Case C-244/04 Commission  v Germany  [2006] ECR I-885, paragraph 30).
64. Even in the absence of harmonisation on the issue, the freedom to provide services, as a fundamental principle of the Treaty, can be limited only by legislation justified by overriding requirements relating to the public interest, and applicable to all individuals and undertakings carrying on business in the territory of the host State, to the extent that that interest is not safeguarded by the rules to which such a service provider is subject in the Member State in which it is established (see, in particular, Arblade and Others , paragraphs 34 and 35; Case C-164/99 Portugaia Construções  [2002] ECR I-787, paragraph 19, and Case C-445/03 Commission  v Luxembourg  [2004] ECR I-10191, paragraph 21).
65. Finally, the application of the national rules of a Member State to service providers established in another Member State must be appropriate for ensuring attainment of the objective they pursue and must not go beyond what is necessary for that purpose (see, in particular, Säger , paragraph 15; Case C-19/92 Kraus  [1993] ECR I-1663, paragraph 32, and Case C-55/94 Gebhard [1995] ECR I-4165, paragraph 37).
66. In this case, it is clear from Paragraph 2(3) of the AEntG that when an employer established outside of Germany employs workers in Germany it is required to retain specific documents, in German, for the duration of the posted worker’s stay and for, at least, the duration of the building project, without, however, this obligation running beyond a period of two years, so that the documents can be presented at the building site at the request of the supervisory authorities. As the German Government explained at the hearing, without being contradicted by the Commission, the relevant documents are the employment contract, the pay slips and time-sheets and proof of payment of wages.
67. Given that there are no Community harmonisation measures in this area, in order to examine the merits of the Commission’s second head of claim, it is necessary to first of all examine if the requirements imposed by the relevant provision of the AEntG have a restrictive effect on the freedom to provide services and then, if necessary, in the relevant business sector, whether overriding requirements in the public interest justify those restrictions on the freedom to provide services. If so, then it is finally necessary to ascertain whether the same result could not be obtained using less stringent measures.
68. Firstly, it must be stated that, by requiring the relevant documents to be translated into German, the disputed provision constitutes a restriction on the freedom to provide services.
69. The obligation thus imposed involves additional expenses and an additional administrative and financial burden for undertakings established in another Member State, so that those undertakings do not find themselves on an equal footing, from a competitive point of view, with employers established in the host Member State and may thus be dissuaded from offering the services in that Member State.
70. Secondly, it is nevertheless necessary to recall that Paragraph 2(3) of the AEntG pursues a general-interest objective linked to the social protection of workers in the construction industry and the monitoring of that protection. The Court has already recognised this objective as among the overriding requirements which justify such restrictions on the freedom to provide services (Joined Cases 62/81 and 63/81 Seco and Desquenne & Giral [1982] ECR 223, paragraph 14; Case C-113/89 Rush Portuguesa  [1990] ECR I-1417, paragraph 18; Guiot , paragraph 16, and Arblade and Others , paragraph 51).
71. By requiring the relevant documents in the language of the host Member State to be kept on the building site, Paragraph 2(3) of the AEntG is designed to enable the competent authorities of that Member State to carry out the monitoring, at the building site, necessary to ensure compliance with the national provisions regarding worker protection, in particular those relating to pay and working hours. This type of on-site supervision would become extremely difficult, even impossible, in practice, if those documents could be presented in the language of the Member State in which the undertaking is established, as that language would not necessarily be understood by the civil servants of the host Member State.
83. It is clear from settled case-law that the freedom to provide services implies, in particular, the abolition of any discrimination against a service provider on account of its nationality or the fact that it is established in a Member State other than the one in which the service is provided (Case C-288/89 Collectieve Antennevoorziening Gouda  [1991] ECR I-4007, paragraph 10; Case C-353/89 Commission v Netherlands [1991] ECR I-4069, paragraph 14, and Case C-17/92 Distribuidores Cinematográficos  [1993] ECR I-2239, paragraph 13).
86. The Court has already held that national rules that, whatever their origin, are not universally applicable to service providers are not consistent with Community law unless they fall within an express derogating provision such as Article 46 EC, replacing Article 55 EC (Case C-260/89 ERT [1991] ECR I-2925, paragraph 24; Collectieve Antennevoorziening Gouda , paragraph 11; and Case C-451/99 Cura Anlagen [2002] ECR I-3193, paragraph 31). It follows from Article 46 EC, which must be interpreted strictly, that discriminatory rules may be justified only on grounds of public policy, public security or public health.