Opinion of Advocate General Tesauro
Mr President,
Members of the Court,
1. These proceedings relate to an issue already considered by the Court in previous decisions on the subject of the provision of services. The situation is that an undertaking is established in one Member State and provides services in another Member State, using for that purpose its own workers who are nationals of nonmember countries. In such a case, the provision of services necessarily involves the temporary posting of workers from nonmember countries to the Member State in which the services are to be provided. It follows that if, pursuant to its own employment legislation, the host country imposes conditions which may in some way hinder the posting of workers, those conditions will also come indirectly to hinder the provision of services by the undertaking which employs the workers.
The national legislation concerned
2. That is the background to the questions referred by the national court in these proceedings. The problem raised concerns specific aspects of the French legislation on the taking up of employment in France by nationals of nonmember countries. That legislation — part of which was earlier considered by the Court in its judgment in Rush Portuguesa — is set out below.
3. Article L.341-2 of the French Labour Code provides that:
4. A specific obligation imposed on employers forms the counterpart to those obligations imposed on foreign workers intending to work in France, as provided for in the first paragraph of Article L.341-6:
5. The application of those provisions is a matter for the Office des Migrations Internationales (OMI). The task of the OMI, a body governed by public law, which is closely connected to the Ministry of Employment, is essentially to oversee the employment of foreign workers wishing to come and work in France and of workers, whether or not French, already resident in France and wishing to go and work abroad. The law confers on the OMI a monopoly on such operations. Article L.341-9 of the Labour Code provides as follows:
6. Under Article R.341-25, to fund its activities the OMI has at its disposal, in addition to public grants and gifts, fees in respect of expenses incurred (redevances representatives de frais) or lump-sum contributions (contributions forfaitaires) paid by employers using workers engaged through the intervention of the OMI.
7. The penalty for breach of those provisions is, inter alia, an administrative fine. According to Article L.341-7 of the Labour Code:
Facts of the case
8. Mr Vander Elst, a Belgian national, owns an undertaking in Belgium specializing in demolition work. In addition to Belgians, the workforce of the undertaking includes some workers who are Moroccan nationals and who have been continuously employed by Vander Elst for some years; they are lawfully resident in Belgium, have been issued with proper work permits in that country and possess proper contracts of employment.
9. In April 1989 Mr Vander Elst sent a team of eight workers, comprising four Belgians and four Moroccans, to carry out work in Reims, France.
10. When French employment inspectors made a check at the Reims site, they found that those four Moroccan workers did not hold the work permits required under Article L.341-6 of the Labour Code and had been engaged to provide services in France without complying with the special employment procedures laid down in Article L.341-9 of the Code.
The question submitted
11. In the action brought by Mr Vander Elst challenging that measure, the Tribunal Administratif, Châlons-sur-Marne, France, decided to stay the proceedings and refer to the Court two questions for a preliminary ruling which may be formulated as follows:
Summary of the case-law relating to the free movement of services
12. It is clear that the issue in this case is the provision of services within the meaning of Article 59 et seq. of the Treaty. The economic activity in question is performed for consideration by an undertaking established in a Member State other than that in which the services are to be provided.
13. Having said that, and before I consider whether the contested French legislation constitutes a barrier incompatible with the rights conferred on individuals by Article 59 et seq., it would be appropriate to outline the essential points of the relevant case-law.
14. In accordance with that purpose, the Court then gradually determined the scope of the rights arising from Article 59 et seq. of the Treaty. According to settled case-law, Article 59 of the Treaty prohibits not only overt discrimination on grounds of nationality but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result.
15. Moreover, the Court — restating in relation to the provision of services the principles of mutual recognition and proportionality long since established in relation to the free movement of goods — has held that the free movement of services guaranteed by Article 59 et seq. also implies the abolition of restrictions ensuing from the application to a person providing services who is established in another Member State of legislation, applicable without distinction, in force in the Member State in which the services are to be provided.
16. In the light of the criteria referred to, it may be stated by way of summary that a given national rule is applicable to services provided by an undertaking established in another Member State on condition that:
Restrictions on the free movement of services arising from the contested legislation
17. In the present case, it is clear that the effect of the national legislation at issue is to restrict freedom to provide services within the Community. As I said earlier, in its Rush Portuguesa judgment the Court has already considered the French rules which require undertakings established in other Member States and intending to provide services in France, posting their own workers there, to approach the OMI and apply for work permits for the employees posted. In that regard, the Court stated that:
18. Those restrictive effects can only be increased by the fact — which was not considered by the Court in the Rush Portuguesa judgment — that, according to Article R.341-25 of the French Labour Code, employers must pay the OMI a fee in respect of the engagement procedure and that Article L.341-7 of the Code imposes an administrative fine on those employers who employ workers without the required work permits, in breach of the OMI's monopoly on employment.
19. The Governments which have intervened in these proceedings have nevertheless argued that the express findings of the Court in the Rush Portuguesa judgment cannot be extended to this case. In Rush Portuguesa the workers posted to France were in fact Portuguese and, although at the material time under a specific transitional system Portuguese workers did not yet enjoy all the rights conferred on Community workers, the mere fact that they were nationals of a Member State could justify broader protection of the right of the business by which they were employed freely to provide services.
20. Having said that, let me now add for the sake of completeness that examination of the French legislation at issue reveals no real difference between the situation of the Portuguese workers involved in the Rush Portuguesa case and that of the Moroccan workers involved in these proceedings: with regard to the application of the contested legislation — in particular, the requirement that foreign workers should be recruited through the OMI and the prohibition on engaging staff without work permits — each group is in fact in the same position.
The reasons relied on to justify the contested legislation
21. The Governments which have intervened in these proceedings have also claimed that the application of the French rules at issue is in any event necessary in order to safeguard certain requirements in the public interest connected in particular with controlling the movements of nationals of nonmember countries, the proper operation of the labour market, the protection of workers and competition between undertakings.
Controlling the movements of nationals of nonmember countries
22. Here it should be noted that the contested French legislation requiring the OMI to act as intermediary and work permits to be obtained (as well as the relevant fee to be paid and penalties for noncompliance with those requirements to be imposed) falls within the scope of the rules governing the conditions for taking up employment and does not seem to be aimed at controlling the entry into France of nationals of nonmember countries or their stay there.
23. However, even if we leave that consideration aside, the point is that the Member States do have at their disposal other means of controlling on their own territory the movements of nationals of nonmember countries. The requirements of public policy and public security — expressly provided for by Articles 48(3) and 56(1) of the Treaty — allow the Member States to subject the movements of those individuals to specific controls and permits, particularly by requiring them to be issued with entry visas and residence permits. Moreover, that was what the French authorities had in view in providing for the compulsory issue of visas for nationals of various nonmember countries, including in particular Moroccan nationals (in the case in point, moreover, it has been established that the Moroccan workers employed by Vander Elst had applied for, and obtained from the competent consular authorities, the visas required to enter France and remain there as long as was necessary to carry out the work).
The need to protect the national labour market
24. Both the French and German Governments have argued that to permit an undertaking established in one Member State to post its own workers, who are nationals of nonmember countries, to other Member States to provide services there could lead to disruption of the host country's labour market.
25. Still in that connection, it has also been argued that if Article 59 et seq. is seen as granting an undertaking established in one Member State the right to send its own workers temporarily to other Member States in order to provide services there, the authorities of the host country should in any event have the right to ensure that the undertaking concerned is not abusing the right conferred on it by the Treaty. In particular, the authorities of the host country should be able to ascertain whether the undertaking is availing itself of that right solely in order to transfer its own employees to another Member State for purposes of employment or to make them available to other businesses.
26. In that regard, it should be borne in mind that in Rush Portuguesa the Court acknowledged that checks for such purposes were lawful. The Court stated that:
27. In this case, it seems to me that Court can develop further the implications of the statement just quoted, along the following lines:
Protection of workers and of competition
28. Finally it has been claimed that the national legislation is necessary to protect workers and prevent competition between undertakings from being distorted since, in the absence of checks carried out by bodies such as the OMI, there would be a risk of undertakings from other Member States making use of workers from nonmember countries, allowing their remuneration and other working conditions to be less favourable than those normally guaranteed by the laws of the host country.
29. The first point to note is that that objection has already been considered and rejected by the Court in its judgments in Seco and Rush Portuguesa. In particular, the Court ruled in Seco that:
30. Secondly, I must point out, for the sake of completeness, that the problem should not in any event arise in this particular case, since the Moroccan workers employed by Vander Elst have valid employment contracts governed by Belgian law and, in accordance with Articles 40 and 41 of the Cooperation Agreement between the European Economic Community and the Kingdom of Morocco, workers of Moroccan nationality are entitled in the Member States to equal treatment vis-à-vis Community workers as regards conditions of work or remuneration, and also as regards social security arrangements. It follows that, irrespective of the possibility of applying national rules of public policy governing the various aspects of the employment relationship to workers sent temporarily to France, the application of the Belgian system should in any event be considered to exclude any substantial risk of workers being exploited or of competition between undertakings being distorted.
Conclusion
31. In the light of those considerations, I propose that the Court give the following answers to the questions referred by the national court:
1 Original language: Italian.
2 It should be borne in mind that the temporary posting of (Community) workers has been taken into consideration by the Community legislature with regard to social security. Article 14(1) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (see the consolidated version in Council Regulation (EEC) No 2001/83 of 2 June 1983, OJ 1983 L 230, p. 6) provides on this subject that:(1)(a) A person employed in the territory of a Member State by an undertaking to which he is normally attached who is posted by that undertaking to the territory of another Member State to perform work there for that undertaking shall continue to be subiect to the legislation of the first Member State, provided that the anticipated duration of that work does not exceed 12 months and that he is not sent to replace another person who has completed his term of posting.
3 Case C-113/89 Rush Portuguesa v Office National d'Immigration [1990] ECR I-1417.
4 See Lamy Social, 1994, paragraph 29: In principle, all foreigners wishing to work in France must follow the so-called introduction procedure organized by the OMI. That body has in effect a monopoly on the recruitment of foreigners and on bringing them into France. Infringement of that monopoly is a punishable offence. As to the consequences, including the financial ones, of infringing the OMI's monopoly, see ibid., paragraph 52 et seq.
5 On the concept of services within the meaning of Article 59 et seq., see most recently the judgment in Case C-275/92 Schindler [1994] ECR I-1039.
6 See the judgments in Case 279/80 Webb [1981] ECR 3305; in Case 143/87 Stanton v Institut National d'Assurances Sociales pour Travailleurs Indépendants [1988] ECR 3877 and in Case C-106/91 Ramrath [1992] ECR I-3351.
7 See the judgments in Case C-360/89 Commission v Italy [1992] ECR I-3401 and in Case C-3/88 Commission v Italy [1989] 4035. Both judgments concerned cases of indirect discrimination, that is to say based on criteria which, although the nationality of the provider of services was not a direct factor, none the less led to the same result; in the first case, a quota in regard to public works contracts was reserved for undertakings having their registered office in the region where the work was carried out, while in the second case a quota in regard to public procurement contracts was reserved for mainly or wholly state-controlled companies.
8 See, in particular, the judgments in Case C-28S/89 Stichting Collectieve Antenuevoorzienung Gouda and Others v Commissanat voor de Media [1991] ECR I-4007 and in Case C-353/89 Commission v Netherlands [1991] ECR I-4072.
9 See the judgments in Case C-154/89 Commission v Frunce [1991] ECR I-659, in Case C-180/89 Commission v Italy [1991] ECR I-709 and in Case C-159/89 Commission v Greece [1991] ECR I-691.
10 See the judgment in Joined Cases 62/81 and 63/81 Seco and Desquenne & Girai v Établissement d'Assurance contre la Vieillesse et l'Invalidité [1982] ECR 223.
11 OJ, English Special Edition 1968 (II), p. 475.
12 Agreement signed at Rabat on 27 April 1976 and approved on behalf of the Community by Council Regulation (EEC) No 2211/78 of 26 September 1978 (OJ 1978 L 264, p. 1).
13 See the judgment in Webb, cited above.