Posting of workers. A case law all in sinuosity

(B2) The questions raised by the application of the rules to the posting of workers date neither from the proposal for a Directive on Services nor even from the Directive on the Posting of Workers. The Court of Justice, in several judgments dating from the 1980s (Webb, Seco), lays down the general principles. With the accession of Spain, and especially of Portugal, the question becomes more sensitive economically and politically, in particular in the construction sector, a new judgment delivered in relation to a Portuguese company in France (Rush Portuguesa), which can be considered founding, triggers the filing of a proposal for a directive by the European Commission (text proposed in 1991, finally adopted in 1996) whose objective is to strike a balance between several apparently contradictory principles: on the one side, the principle of free competition between companies, the possibility they have of settling in certain Member States in order to benefit from lower costs, on the other hand, the competence of the Member States to "to establish minimum wage levels to ensure an appropriate minimum standard of living".

The Court lays down three fundamental principles.
First, provider equality: "the freedom to provide services provided for in Article (49) of the Treaty implies (…) that the service provider may, for the performance of his service, exercise, on a temporary basis, his activity in the (host) country in the same conditions as those that this country imposes on its own nationals". Second, the prohibition of restrictive measures: the host State (on whose territory the work is to be carried out) "cannot impose restrictive conditions on the service provider (such as a condition of hiring on site or an obligation to obtain a work permit)". Third, the possibility of control: "A Member State can verify that under cover of a provision of services, the company does not circumvent the provisions of the Treaties" (EC and membership).

Objective: the fight against social dumping
Very early on, case law recognized that the social protection of workers constituted a "compelling reason of general interest" which justifies restrictions on the freedom to provide services (Webb judgment). The need to prevent social dumping is recognized (Arblade judgment). "In so far as one of the objectives pursued by the national legislature consists in preventing unfair competition from undertakings remunerating their workers at a level lower than that corresponding to the minimum wage, such an objective may be taken into consideration" (Judgment Wolff & Müller). The objective of preserving fair competition and that of ensuring the protection of workers are not contradictory but "may be prosecuted concurrently" (Judgment Wolff & Müller).
This objective should not be misguided. "Worker protection" does not mean "protection of the national labor market" or mere administrative considerations (Arblade judgment).
The Court of Justice considers that "this regulation (must) entail(s), for the workers concerned, a real advantage which contributes, in a significant way, to their social protection" (Portugaia Construções stop). And the application of such rules "must not go beyond what is necessary", according to the principle of proportionality (Arblade decision).

Six conditions for a legitimate restriction
In several recent judgments (mainly concerning workers who are nationals of third countries), the case law has identified six conditions. A restriction on the freedom to provide services may thus be justified: 1) when it relates to an area which has not been harmonized at Community level; 2) when it applies without distinction to any person or company carrying out an activity on the territory of the host Member State (non-discrimination); 3) when it responds to overriding reasons of general interest (justification); 4) insofar as this interest is not safeguarded by the rules to which the service provider is subject in the Member State where he is established (without double burden); 5) insofar as it is appropriate to guarantee the achievement of the objective they pursue (specificity); 6) and does not go beyond what is necessary to achieve it (proportionality).

Declaration yes, authorization no
The obligation to have a registered office or a branch (Judgment Italy), to hire staff (Judgment Rush Portuguesa) on the spot is considered non-compliant. Similarly, the obligation to obtain prior authorization to carry out certain activities (Vander Elst decision) except "when this measure can be justified by (other) imperative reasons of general interest". On the other hand, the obligation of a prior declaration indicating the presence of one or more posted employees (from third countries), the expected duration of this presence and the provision of services justifying the posting was deemed to be in conformity ( Judgment Luxembourg, Judgment Germany II).

No double administrative obligation
Administrative obligations (labour regulations, special staff register, individual account, etc.) have been deemed non-compliant if "identical obligations, at least comparable, because of their purpose exist" in the country of origin. The keeping of certain documents on a construction site in an accessible and clearly identified place in the host country is, however, compliant, particularly in the construction sector. "in matters of safety and health, or working time" because she "may constitute the only appropriate measure of control ... in the absence of an organized system of cooperation and exchange of information" si "it is necessary to protect effectively and by appropriate means" the workers. But the "the mere fact that there are certain differences in form or content cannot justify the keeping of duplicate documents" (Arblade stop).

No duplicate contributions
The obligation to pay employer contributions under "loyalty stamps" and of "weather stamps"(Arblade judgment, Guiot) while this company is already liable for comparable contributions for the same workers and same periods of activity, in the country of establishment. More generally, any "social charge, to which no social advantage corresponds for these workers, who are moreover exempt from the insurance of the Member State where the service is carried out and remain, moreover, throughout the period of the work carried out, obligatorily affiliated to the social security scheme of the Member State of origin" (Seco decision).

Subcontracting and interim
The obligation for a temporary agency to deposit a guarantee when the company is already subject in its country of origin to a similar system has been judged to be non-compliant (Italy judgment). On the other hand, the Court considered that a whole series of obligations linked to the liability of subcontractors were in conformity: such as the obligation of security in the construction sector for the payment of the minimum wage or contributions to a body established by a collective agreement, limited to the payment of the net salary and social security contributions, as well as the implementation of procedural guarantees to obtain the payment of the minimum salary was judged (Judgment Wolff & Müller).

Visas, work permits for foreigners
The Court considered that the imposition of additional conditions for third-country nationals such as a work authorization or permit, visas (Vander Elst and Luxembourg judgments), a reduced (collective) work permit subject to the existence of employment contracts of a certain duration (Luxembourg judgment), the obligation of a prior period of employment of six
months or a year's work in the company (Luxembourg and Germany II judgments) or a bank guarantee (Luxembourg judgment). The only concession: the injunction to pay the costs actually incurred by a possible repatriation of seconded employees who are nationals of third countries was deemed to be in conformity (Judgment Luxembourg).

Role of collective agreements
The Court recognized very early on (Seco judgment) that "Community law does not preclude Member States from extending their legislation, or the collective labor agreements concluded by the social partners, to any person carrying out salaried work, even of a temporary nature, on their territory, whatever the employer's country of establishment. Nor does it prohibit Member States from enforcing compliance with those rules by appropriate means". At one condition : "the protection conferred by these must not be guaranteed by identical or essentially comparable obligations to which the company is already subject" in the State of origin (Arblade and Luxembourg judgments).

Contrôles
A Member State may check that a company established in another Member State, which posts workers from a third State to its territory, is not using the freedom to provide services for any purpose other than the performance of the service concerned, for example that of bringing in its personnel for the purposes of placing or making available to workers. Such checks must, however, respect the limits imposed by Community law, and in particular those resulting from the freedom to provide services, which cannot be rendered illusory and the exercise of which cannot be subject to the discretion of the administration (judgment Rush Portuguesea).

Minimum wage
Before the rules resulting from the directive, the Court had already considered that the definition of the minimum remuneration belongs to the host country and must be fixed according to "national rules" (Seco judgment). It also considered that the fundamental principle of non-discrimination should apply. Thus "if a national employer can conclude a collective company agreement making it possible to practice a wage lower than the minimum wage, this possibility must be open to the company posting workers" (Seco judgment)

elements
Must be included in the calculation of the minimum wage: bonuses for the thirteenth and fourteenth months of salary, "if they are paid regularly, proportionally, effectively and irrevocably during the period of posting of the worker made available to him on the due date" (Germany I judgment). On the other hand, as elements forming part of the minimum wage, the wages for overtime, contributions to supplementary occupational pension schemes, amounts paid as reimbursement of expenses actually incurred as a result of the posting as well as lump sums calculated on a basis other than the hourly basis It is the gross amount of the salary which must be taken into account (Germany I judgment).

NB: Main stops
- December 17, 1981, Webb (279/80).
- February 3, 1982, Seco and Desquenne & Giral (62/81 and 63/81).
- 27 March 1990, Rush Portuguesa (C-113/89).
- 25 July 1991, Säger (C-76/90).
- 9 August 1994, Vander Elst (C-43/93).
- 28 March 1996, Guiot (C-272/94).
- 23 November 1999, Arblade (C-369/96 and C-376/96).
- 15 March 2001, Mazzoleni and ISA (C-165/98).
- January 24, 2002, Portugaia Construções Lda (C-164/99).
- 7 February 2002, Commission v Italy (C-279/00).
- October 12, 2004, Wolff & Müller GmbH & Co. KG (C-60/03).
- October 21, 2004, Commission / Luxembourg (C-445/03)
- 14 April 2005, Commission v Germany I (C-341/02).
- 19 January 2006, Commission v Germany II (C-244/04).
- (conclusions) 23 February 2006, Commission v Austria (C-168/04).