JUDGMENT OF 6. 12. 1979 — CASE 47/79 NEHLSEN v BREMEN

In Case 47/79 REFERENCE to the Court under Article 177 of the EEC Treaty by the Oberverwaltungsgericht [Higher Administrative Court] Bremen, for a preliminary ruling in the proceedings pending before that court between

THE COURT, composed of: A. O'Keeffe, President of the First Chamber, Acting as President, A. Touffait (President of the Second Chamber), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco and T. Koopmans, Judges, Advocate General: J.-P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

II — Written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

III — Oral procedure

Decision

Costs

I —. Facts and procedure

1. Städtereinigung K. Nehlsen KG, Bremen, (hereinafter referred to as Nehlsen) is a private undertaking which concluded with the competent public authorities for the City of Bremen and the surrounding district a contract for the removal of refuse in that area as a public service. It was provided that the long-term contract could be extended indefinitely subject to written notice within a specified period.

2. The Oberverwaltungsgericht Bremen observed that Article 4 (4) is based, with regard to the last part of the sentence, on two points:

3. The order of the Oberverwaltungsgericht was received at the Court Registry on 26 March 1979.

II —. Written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

1. The last phrase of the derogative provision contained in Article 4 (4) of Regulation No 543/69 as amended by Regulation No 2827/77 excludes from the scope of the said regulation all vehicles used for public services in the general interest regardless of the means by which such services are administered, whether by the public authority itself or by a private undertaking under contract.

2. A private undertaking can rely on that derogation only if it is established that, pursuant to the powers conferred upon it, such undertaking, using vehicles employed for such public services within the area covered by the contract, excludes actual competition in such a way that all potential competition remains ineffective during the period of the validity of the contract.

III —. Oral procedure

1. By an order of 21 March 1979 which was received at the Court on 26 March 1979 the Oberverwaltungsgericht Bremen submitted to the Court pursuant to Article 177 of the EEC Treaty questions concerning the interpretation of Regulation (EEC) No 543/69 of the Council of 25 March 1969 on the harmonization of certain social legislation relating to road transport (Official Journal, English Special Edition 1969 (I), p. 170) as amended by Council Regulation (EEC) No 2827/77 of 12 December 1977 (Official Journal L 334, 1977, p. 1).

2. Those questions were raised in the course of an action between an undertaking entrusted, pursuant to a contract governed by private law concluded with the competent authorities of the City of Bremen and the surrounding district, with the removal of refuse with its own vehicles in those territories and the officers of the Industrial Inspectorate of the City of Bremen who found in June 1976 that the undertaking was failing to comply with certain provisions of Regulation No 543/69, in particular those of Article 7 concerning driving periods and of Article 14 concerning the requirement that crew members of a vehicle must be in possession of an individual control book, and therefore required the undertaking, by a decision of 29 March 1977, to comply with those provisions, failing which penalties would be imposed. The undertaking concerned contested that decision claiming that since the service which it provided was covered by public law the vehicles which it used to provide that service must be considered as vehicles used for carriage within the meaning of Article 4 (4) of Regulation No 543/69 and thereby outside the scope of the regulation.

3. The objection was dismissed and the undertaking instituted proceedings before the Verwaltungsgericht Bremen. In the course of these proceedings Council Regulation No 2827/77 of 12 December 1977 entered into force. Article 1 of the new regulation amended Article 4 (4) of Regulation No 543/69. The Verwaltungsgericht Bremen considered that, since the contested decision had continuing effect, its validity must be appraised with reference to the amended wording of Article 4 (4) of Regulation No 543/69. It further decided that that provision as amended did not exempt the applicant undertaking from the provisions of Regulation No 543/69. An appeal was lodged with the Oberverwaltungsgericht Bremen which considered that in order to settle the dispute it was necessary to obtain an interpretation of the second part of Article 4 (4) of Regulation No 543/69 as amended by Regulation No 2827/77 and submitted the following questions to the Court of Justice:

4. Article 4 of Regulation No 543/69 of the Council as amended by Regulation No 2827/77 of the Council provides:

5. As may be seen from the preamble, Regulation No 543/69 of the Council has as its essential objective the implementation of the provisions of Council Decision No 65/271/EEC of 13 May 1965 on the harmonization of certain provisions affecting competition in transport by rail, road and inland waterway (Official Journal, English Special Edition 1965-1966, p. 67) in particular Section III thereof concerning social provisions, which provides — Article 10 that … laws, regulations and administrative provisions relating specifically to working conditions in transport by rail, road and inland waterway shall… be approximated …. It was in fact with regard to the implementation of Articles 11 and 12 of that section that it was stated in the preamble to Regulation No 543/69 that priority should be given to necessarv measures dealing with manning, driving-time and rest-periods and that provision was made for establishing a system — control book or suitable mechanical recording equipment [Art. 14] — permitting compliance in individual cases with the provisions on time at work to be checked. In pursuit of these objectives, in the context of approximation of national legislation, the regulation in question falls within the framework of a common transport policy for the purposes of Article 74 of the Treaty and at the same time corresponds to the requirements of a Community social policy which, pursuant to Article 117 of the Treaty, is intended to promote improved working conditions and an improved standard of living for workers, so as to make possible their harmonization while the improvement is being maintained.

6. Furthermore regard should be had to the fact that the provisions in question, as is shown by the said Council decision of 1965, have amongst their objectives the elimination of disparities liable to cause distortion in competition in the transport sector by abolishing trade practices based on the improper use of manpower.

7. The scope of Article 4 (4) of Regulation No 543/69 as amended by Regulation No 2827/77 must thus be established in the light of those objectives. The above-mentioned subparagraph (4), by exempting certain categories of transport from the scope of the general arrangements, covers only the service vehicles mentioned in the first part thereof, and refers with regard to vehicles which are used by other public authorities for public services exclusively to situations where no element of competition can exist. In fact in such cases it is possible to ensure compliance with the requirements of social protection and road-safety by national rules governing the public service in question regard being had to the specific requirements of such service.

8. The above-mentioned Article 4 (4) does not state clearly and explicitly that the exception which it creates from the scope of the general arrangements extends to carriage by vehicles belonging to private undertakings which have competed for a contract to provide a public service, such as the removal of refuse, on behalf of the public authorities. Although the wording of that provision leaves no doubt as to its application to vehicles owned by or under the control of the public authority it is however insufficiently clear and precise to be understood as referring also to vehicles belonging to a private undertaking and used by the latter to perform a public service or a service in the public interest which it has undertaken to provide under a contract governed by private law.

9. For these reasons the reply to be given to the first question at (aa) should be that the words vehicles which are used by other public authorities for public services for the purposes of Article 4 (4) of Regulation No 543/69 of the Council of 25 March 1969 as amended by Regulation No 2827/77 of the Council of 12 December 1977 must be understood as covering only vehicles which are owned by or under the control of the public authority.

10. In view of the reply given to that question consideration of the other questions submitted by the national court is no longer required.

11. The costs incurred by the Government of the Federal Republic of Germany, the Council of European Communities and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, costs are a matter for that court.

On those grounds, THE COURT, in answer to the questions referred to it by the Oberverwaltungsgericht Bremen by an order of 21 March 1979, hereby rules: