C-47/79

JUDGMENT OF THE COURT OF 6 DECEMBER 1979 <apnote>1</apnote>

Städtereinigung K. Nehlsen KG v Freie Hansestadt Bremen

(prelimiinary ruling requested by the Oberverwaltungsgericht Bremen)

"Road safety"

Case 47/79

Transport — Common policy — Social provisions — Regulation No 543/69 of the Council — Material scope — Vehicles of public authorities — Exclusion — Vehicles ofa private undertaking used to perform a public service — Inclusion (Regulation No 543/69 of the Council, Art. 4 (4), as amended by Regulation No 2827/77)

and

Freie Hansestadt Bremen [Free Hanseatic City of Bremen]

on the interpretation of Article 4 (4) of Regulation (EEC) No 543/69 of the Council of 25 March 1969 on the harmonization of certain social legislation relating to road transpon (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),

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

Nehlsen was failing to comply in its telegraph or telephone service, by Operations with the provisions of Regu- the postal authorities for the carriage lation (EEC) No 543/69 of the Council of mail, by radio or television of 25 March 1969 (Official Journal, services or for the detection of radio

English Special Edition 1969 (I), p. 170) or television transmitters or

concerning length of working periods. receivers, or vehicles which are used They threatened Nehlsen with penalties by other public authorities for public for any infringement of the provisions of services and which are not in

Regulation No 543/69. competition with professional road hauliers."

Nehlsen was unsuccessful in challenging that decision and lodged an application with the Verwaltungsgericht [Admin- 2. The Oberverwaltungsgericht Bremen istrative Court] Bremen against the City observed that Article 4 (4) is based, with of Bremen. That court dismissed its regard to the last part of the sentence, application in a judgment of 12 July on two points: 1978. Nehlsen then appealed against that judgment to the Oberverwaltungsgericht Bremen. — The vehicles in question must be those used by public services.

In its appeal Nehlsen maintains that since the service which it performs is covered — There must be no competition by public law, the vehicles which it between the persons using these employs to perform that service must be vehicles and "professional" road considered as "vehicles which are used hauliers.

JUDGMENT OF 6. 12. 1979 — CASE 47/79

to establish whether such competition 3. The order of the Oberverwaltungs- must be considered to exist where the gericht was received at the Court public authority remains free to Registry on 26 March 1979. terminate the contract with the under-

taking in question if another private undertaking offers the use of its vehicles In pursuance of Article 20 of the on more favourable terms. Protocol on the Statute of the Court of Justice of the EEC written observations were lodged by the Freie Hansestadt In view of these doubts the Oberverwal- Bremen, represented by its Agent, Mr tungsgericht decided, by an order of 21 Rumler, by the Government of the March 1979, to stay the proceedings and Federal Republic of Germany, rep- in pursuance of Article 177 of the EEC resented by its Agent, Mr Seidel, by the Treaty to refer the following questions Council of the European Communities, to the Court of Justice: represented by its Legal Adviser, Mr Sacchettini, acting as Agent, and by "(a) (aa) Do the words 'vehicles which the Commission of the European are used by other public auth- Communities, represented by its Legal orities for public services' for Advisers Mr Bebr and Mr Lasnet, acting the purposes of the provisions as Agents. referred to in 2 above cover

only vehicles which are owned by or in the control of the The Court, after hearing the repon of public authority; or the Judge-Rapporteur and the views of the Advocate General, decided to open the oral procedure without any pre- (bb) do they also cover the vehicles liminary inquiry. of private persons or under- takings which are used by them for public services on behalf of public authorities II — Written observations sub- under an agreement governed by private law ('Werkvertrag' mitted pursuant to Article 20 of the Protocol on the [contract for services]) ? Statute of the Court of

In its view Article 4 (4) of Regulation (EEC) No 543/69 as supplemented by Regulation (EEC) No 2827/77 in fact The entrusting of certain public tasks to constitutes a derogative provision and private undertakings which do not form must accordingly be interpreted nar- part of the public sector thus falls rowly. Regulation (EEC) No 543/69 is entirely under the rules on competition intended to implement the social and there is thus no exemption from provisions of Decision No 65/271/EEC Community measures intended to create of the Council of 13 May 1965 "on the uniform conditions of competition within harmonization of certain provisions the framework of the common transport affecting competition in transport by rail, policy. road and inland waterway". Its objective is accordingly to eliminate, both between the various forms of transport and within Finally, it must in addition be each of those forms, differences which emphasized that a private undertaking might distort conditions of competition carrying out work on the basis of a to a significant extent and not, at any contract governed by private law in rate initially, to enact general measures order to attain public objectives is of social policy as such. In the light of certainly not a "public service licensee" that objective the derogative provisions exercising the powers of a public embodied in the said Article 4 are authority. It is thus possible to disregard justified by reason of the fact that the the question whether the operations of a fields to which they relate do not include "public service licensee" may fall within competition. The exception is, never- the exception provided for by Article 4 theless, to be interpreted as narrowly as (4) of Regulation No 543/69. possible since only the "public authority" as such is not in competition with the private sector. With regard to the second question the Government of the Federal Republic of Germany observes first of all that it is Even if Regulation No 543/69 is viewed only submitted in case, contrary to its from the standpoint of social policy it view, the reply to the first question is none the less remains true that the given in terms of the second paragraph exception laid down by Article 4 (4) thereof. It nevertheless wishes, in order cannot apply to vehicles belonging to to make provision for all eventualities, to private undertakings. It is in fact give its view on the second question to acceptable that the regulation should not which it suggests an affirmative reply apply to vehicles owned by a public should be given.

providing public services compete with competition in transport. The provisions "professional road hauliers" the point at of the regulation concerning driving issue is whether the competition in periods in fact ensure the simultaneous question is for the provision of a public attainment of these three objectives. service and not competition during the provision of that service. It is in fact clear that during the duration of the contract concluded with the public The above-mentioned regulation made administration there is no competition provision for a number of exceptions, since the performance of public duties is in principle entrusted to one private including those relating to vehicles used for performing a public service. Since an undertaking alone for a particular field. exhaustive list of exceptions proved too On the other hand such competition revives when the contract is to be inflexible in view of the different ways in which the public services are organized concluded since at that point the public in the Member States, Regulation (EEC) authority has the opportunity of choosing the most advantageous of the No 2827/77 supplemented that list by a various offers submitted by the private general provision referring to "vehicles undertakings. Competition would be which are used by other public auth- orities for public services and which are distorted if a particular tenderer were not in competition with professional road enabled at that point to enjoy a competitive advantage simply because he hauliers". That general provision is not a provided less favourable working supplementary exception but rather a clause including all vehicles other than conditions for his employees. It is thus those expressly indicated in the indispensable in order to maintain equal conditions of competition on the preceding list, which, by reason of their common market in transport to have use, are excluded from the scope of Regulation No 543/69. regard only to competition for "use" by the public authority. Any other interpre- tation — in particular with regard to the wide interpretation of the word "use" which is assumed for this argument — The exception provided for in the said would jeopardize the common policy in Article 4 (4) is based on two criteria: (a) a considerable part of the transport the use of the vehicles for a purpose in sector. the general public interest and (b) the absence of any competition with pro- fessional road hauliers.

competition which revives each time the contract with the private undertaking is to be extended or terminated. 2. A private undertaking can rely on that derogation only if it is established that, pursuant to the Which of those two factors must thus be powers conferred upon it, such considered as taking precedence: the undertaking, using vehicles em- possibility of potential competition or ployed for such public services the temporary exclusion of actual within the area covered by the competition? contract, excludes actual competition in such a way that all potential competition remains ineffective According to the Commission a private during the period of the validity of undertaking cannot rely on the dero- the contract". gative provision in Article 4 (4) unless the contract, by excluding actual competition in a specified field, also prevents all potential competition from other professional road hauliers during the period of validity of the contract.

III — Oral procedure The Commission emphasizes finally that, as the file makes clear, the Industrial Inspectorate and the Verwaltungsgericht At the sitting on 26 September 1979 the Bremen applied the original version of Freie Hansestadt Bremen, represented by Article 4 (4) since the new version Fritz Rumler, acting as Agent, the entered into force only on 1 January Government of the Federal Republic of 1978. It thus follows that at the time in Germany, represented by Martin Seidel, question, persuant to the narrower acting as Agent, and the Commission of definition appearing in that article, the European Communities, represented

2 Those questions were raised in the course of an action between an under- taking 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

NEHLSEN BREMEN

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.

JUDGMENT OF 6. 12. 1979 — CASE 47/79

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

"This regulation shall not apply to carriage by:

(4) vehicles used by the police, gendarmerie, armed forces, fire-brigades, civil defence, drainage or flood-prevention authorities, water, gas or electricity services, highway authorities and refuse collection, telegraph or telephone services, by postal authorities for the carriage of mail, by radio or television services or for the detection of radio or television transmitters or receivers, or vehicles which are used by other public auth- orities for public services and which are not in competition services and which are not in competition with professional road hauliers.

"

Since the provision in question creates an exception to the general arrangements established by Regulation No 543/69 of the Council relating to road transport its scope must be determined with regard to the objectives of that regulation and to the legal context in which it is situated.

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 Regu- lation 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

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:

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

NEHLSEN BREMEN

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.

My Lords, Opinion. The questions raised by the Oberverwaltungsgericht of Bremen are This case comes to the Court by way of however novel.

a reference for a preliminary ruling by the Oberverwaltungsgericht of Bremen. The Appellant before that Court is the The Order for Reference raises questions Firma Städtereinigung . Nehlsen KG, of interpretation of Council Regulation which I shall call "Nehlsen". The

(EEC) No 543/69 of 25 March 1969 Respondent is the City of Bremen. "on the harmonization of certain social

legislation relating to road transport". Nehlsen is a privately-owned commercial The Court has had occasion to consider undertaking which has contracts with that Regulation in a number of Cases, local authorities in Bremen under which

the latest being, I think, Case 97/78 it carries out refuse collection in the

Schumalla's case [1978] ECR 2311, areas for which those authorities are