Opinion of Advocate General Wahl delivered on 8 May 2018.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• ECLI: ECLI:EU:C:2018:311
• Date: 08 May 2018
• Docket Number: C-33/17
• Procedure Type: Reference for a preliminary ruling

Provisional text

OPINION OF ADVOCATE GENERAL

WAHL

delivered on 8 May 2018(1)

Case C‑33/17

Čepelnik d.o.o.

v

Michael Vavti

(Request for a preliminary ruling from the Bezirksgericht Bleiburg/Okrajno sodišče Pliberk (District Court, Bleiburg) (Austria))

(Freedom to provide services — National legislation requiring a recipient of services to provide security in order to secure a fine that might be imposed on a service provider established in another Member State — Articles 16 and 19 of Directive 2006/123/EC — Labour law exception — Justification — Article 56 TFEU — Proportionality — Right of defence — Right to an effective judicial remedy — Directive 2014/67/EU)

1. In the present case — a preliminary reference from the Bezirksgericht Bleiburg/Okrajno sodišče Pliberk (District Court, Bleiburg, Austria) — the Court is asked to rule on whether EU law precludes a Member State from requiring a recipient of services provided by workers posted by an undertaking established in another Member State to provide security and suspend payments to that undertaking. According to the relevant provisions of national law, the outstanding fee for such services must be paid to the authorities of the host Member State to secure the payment of a fine that could possibly, in the future, be incurred by the provider for breaching certain provisions of the national labour legislation.

2. In order to determine whether the national measure at issue is contrary to EU law, the Court will have to examine the interaction between the EU rules on freedom to provide services laid down in Article 56 TFEU, Directive 2006/123/EC (2) and Directive 2014/67/EU (3) on the one hand, and national rules that the relevant Member State claims are part of its labour legislation, on the other.

I. Legal framework

A. EU law

3. Article 1(6) (‘Subject matter’) of the Services Directive provides:

‘This Directive does not affect labour law, that is any legal or contractual provision concerning employment conditions, working conditions, including health and safety at work and the relationship between employers and workers, which Member States apply in accordance with national law which respects [EU] law. Equally, this Directive does not affect the social security legislation of the Member States.’

4. Article 3(3) (‘Relationship with other provisions of [EU] law’) of the same directive states:

‘Member States shall apply the provisions of this Directive in compliance with the rules of the Treaty on the right of establishment and the free movement of services.’

5. Article 16 (‘Freedom to provide services’) provides:

‘1. Member States shall respect the right of providers to provide services in a Member State other than that in which they are established.

The Member State in which the service is provided shall ensure free access to and free exercise of a service activity within its territory.

Member States shall not make access to or exercise of a service activity in their territory subject to compliance with any requirements which do not respect the following principles:

(a) non-discrimination: the requirement may be neither directly nor indirectly discriminatory with regard to nationality or, in the case of legal persons, with regard to the Member State in which they are established;

(b) necessity: the requirement must be justified for reasons of public policy, public security, public health or the protection of the environment;

(c) proportionality: the requirement must be suitable for attaining the objective pursued, and must not go beyond what is necessary to attain that objective.

2. Member States may not restrict the freedom to provide services in the case of a provider established in another Member State by imposing any of the following requirements:

(a) an obligation on the provider to have an establishment in their territory;

(b) an obligation on the provider to obtain an authorisation from their competent authorities including entry in a register or registration with a professional body or association in their territory, except where provided for in this Directive or other instruments of [EU] law;

(c) a ban on the provider setting up a certain form or type of infrastructure in their territory, including an office or chambers, which the provider needs in order to supply the services in question;

(d) the application of specific contractual arrangements between the provider and the recipient which prevent or restrict service provision by the self-employed;

(e) an obligation on the provider to possess an identity document issued by its competent authorities specific to the exercise of a service activity;

(f) requirements, except for those necessary for health and safety at work, which affect the use of equipment and material which are an integral part of the service provided;

(g) restrictions on the freedom to provide the services referred to in Article 19.

3. The Member State to which the provider moves shall not be prevented from imposing requirements with regard to the provision of a service activity, where they are justified for reasons of public policy, public security, public health or the protection of the environment and in accordance with paragraph 1. Nor shall that Member State be prevented from applying, in accordance with Community law, its rules on employment conditions, including those laid down in collective agreements.

…’

6. Article 17 of the Services Directive provides a list of ‘Additional derogations from the freedom to provide services’. In accordance with point 2 of that list, ‘Article 16 shall not apply to … matters covered by Directive 96/71/EC’.

7. Section 2 of Chapter IV of the Services Directive concerns the ‘Rights of recipients of services’. Under the terms of Article 19:

‘Member States may not impose on a recipient requirements which restrict the use of a service supplied by a provider established in another Member State, in particular the following requirements:

(a) an obligation to obtain authorisation from or to make a declaration to their competent authorities;

(b) discriminatory limits on the grant of financial assistance by reason of the fact that the provider is established in another Member State or by reason of the location of the place at which the service is provided.

...’

B. Austrian law

8. Paragraph 7m of the Arbeitsvertragsrechts-Anpassungsgesetz (Law adapting the law on employment contracts) of 1993 (BGBl. 459/1993, ‘the AVRAG’) provides as follows:

‘1. In the event of reasonable suspicion of an administrative offence under Paragraphs 7b(8), 7i or 7k(4), and in the event that, owing to certain circumstances, it must be assumed that prosecution or enforcement of the penalties will be impossible or substantially more difficult for reasons relating to the person of the employer (contractor) or the company providing labour, the organs of the tax authorities, in combination with investigations under Paragraph 7f and the Fund for Paid Holidays and Dismissals of Building Workers, may in writing require the employer, in the event of the provision of labour, not to pay the price of the work still due or the remuneration for the provision of the work still due or part thereof (suspension of payments) … The bodies of the tax authorities and the Fund for Paid Holidays and Dismissals for construction workers may impose suspension of payments only where a provisional security under Paragraph 7l could not be fixed or collected.

...

3. In the event of a reasonable suspicion of an administrative offence under Paragraphs 7b(8), 7i or 7k(4), and in the event that, owing to certain circumstances, it must be assumed that prosecution or enforcement of the penalties will be impossible or substantially more difficult on grounds relating to the person of the employer (contractor) or the company providing labour, the regional administrative authority may by decision require the client or employer, in the event of the provision of labour to the employer, to pay the price of the work still due or the remuneration for the provision still due or part thereof as security within a reasonable period of time ...

...

5. The payment under subparagraph 3 shall have the effect of relieving the client or employer of his debt to the contractor or company providing labour.

...’

9. Subparagraphs 3 and 8 of Paragraph 7b of the AVRAG provide:

‘3. Employers within the meaning of paragraph 1 must declare the employment of workers who are placed at their disposal in Austria for the purpose of carrying out work there not later than one week before the start of the work at the Central Office for the Control of Unlawful Employment in accordance with the Employment of Foreign Nationals Act (Ausländerbeschäftigungsgesetz) and the [AVRAG] of the Federal Finance Minister …

...

8. Whoever, as an employer within the meaning of paragraph 1

1. fails to make, or fails to make, in good time or completely, in breach of paragraph 3, the initial declaration or the declaration relating to ex-post changes (declaration of amendment) ...

...

commits an administrative offence and must be fined by the regional administrative authority for each worker concerned from EUR 500 to 5 000, and in the event of a second or subsequent offence from EUR 1 000 to 10 000. ...’

10. Paragraph 7i(4) of the AVRAG reads as follows:

‘Whoever

1. as an employer within the meaning of Paragraphs 7, 7a(1), or 7b(1) and (9), does not make wage documentation available in breach of Paragraph 7d.

...

commits an administrative offence and must be fined by the regional administrative authority for each employee concerned from EUR 1 000 to 10 000, in the event of a repeat offence of EUR 2 000 to 20 000 and if more than three workers are involved, for each worker from EUR 2 000 to 20 000, in the event of a repeat offence of EUR 4 000 to 50 000.’

11. The provisions of Paragraphs 7b(3), 7b(8), 7i(4) and 7m of the AVRAG portray the legal situation pertaining until 31 December 2016. On 1 January...