C-369/96

ARBLADE AND OTHERS

OPINION OF ADVOCATE GENERAL RUIZ-JARABO COLOMER delivered on 25 June 1998 *

Table of contents

I — The facts in the main proceedings I - 8458 A — The charge against Mr Arblade and Arblade et Fils SARL I-8458 B — The charge against Messrs Leloup and Sofrage SARL I - 8460 II — The formulation of the questions referred for a preliminary ruling I-8461 III — The national provisions I - 8462 A — The Belgian legislation I - 8462 B — The French legislation I - 8464 IV — The Community provisions I - 8466 V — Course of the proceedings before the Court of Justice 1-8468 A — Observations I - 8468 B — The answers to the first written question put by the Court of Justice I - 8474 C — The answers to the second written question put by the Court of Justice . . . I - 8475 D — The answer to the third written question put by the Court of Justice I - 8476 VI — Examination of the questions referred I - 8476 A — Preliminary observations I - 8476 B — The Court's statement of the law as it applies to restrictions on the freedom to provide services within the Community I - 8477 C — The obligation to pay posted workers the minimum wage in force in the host Member State and to pay, for each worker, contributions in respect of loyalty stamps and bad-weather stamps (obligations Nos 2 and 6 in the first question) I - 8480 D — Monitoring, by the authorities of the host Member State, of compliance with its labour legislation (obligations Nos 1, 3, 4, 5, 9 and 10 in the first question) I - 8490 E — The obligation for undertakings to cooperate with the labour inspectorate in the host Member State (obligations Nos 7 and 8 in the first question) I - 8494 F — The second question I - 8494 VII— Conclusion I-8495

I — The facts in the main proceedings

2. It appears from the documents before the Court that, in 1990, Sucrerie Tirlemon- A — The charge against Mr Arblade and toise de Wanze (Belgium) entered into a Arblade et Fils SARL contract with the French company Atelier de Construction Métallique du Bocage (ACMB) for the construction of a 40 000 tonne capacity silo complex for the storage of white crystallised sugar. ACMB subcon- 4. The Ministère Public accuses Jean tracted the assembly of the metallic struc- Claude Arblade and Arblade itself, residing ture of the complex to various French and established respectively in France, of

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having committed various offences both in 23 October 1978 concerning the docu- France and elsewhere in the judicial district ments required by social legislation, of Huy from 1 January to 31 May 1992 and the Royal Decree of 8 March 1990 and from 26 April to 15 October 1993. Mr concerning the keeping of the indivi- Arblade is charged, in his capacity as dual record; employer, servant or agent, with having:

— failed to keep the documents required by social legislation (staff register and — failed to appoint an agent or servant individual account for each worker), in responsible for keeping individual the absence of a company seat in accounts in Belgium; Belgium, at the Belgian residence of a natural person responsible for keeping those documents in his capacity as the employer's agent or servant;

B — The charge against Messrs Leloup and Sofrage SARL — failed to keep a special staff register at the place of employment; 7. The Ministère Public accuses Bernard Leloup and Serge Leloup, in their capacity as director and manager respectively, and Sofrage itself, residing and established respectively in France, of having committed various offences both in Wanze and else- where in the judicial district of Huy, from 1 January 1991 until 31 August 1991, — failed to draw up working regulations; from 1 July 1991 until 31 December 1991, from 1 March 1992 until 31 July 1992, and from 1 March 1993 until 31 October 1993. The first and second defendants are charged with having:

— failed to keep the documents required by social legislation (staff register and — failed to appoint an agent or servant individual account for each worker), in responsible for keeping the individual the absence of a company seat in accounts in Belgium; Belgium, at the Belgian residence of a natural person who is to keep those documents in his capacity as the employer's agent or servant;

— obstructed the inspection conducted under Royal Decree No 5 of 23 Octo- ber 1978 on the keeping of the docu- ments required by social legislation;

— failed to issue to his nine workers the individual record referred to in Arti- — obstructed the inspection conducted cle 4(3) of Royal Decree No 5 of under the Law of 16 November 1972 23 October 1978 concerning social concerning labour inspections; documents, and the Royal Decree of

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OPINION OF MR RUIZ-JARABO — JOINED CASES C-369/96 AND C-376/96

that State relating to the keeping of III — The national provisions social documents;

8. not to obstruct inspections orga- A — The Belgian legislation nised pursuant to the legislation of that State relating to social inspec- tions;

11. The obligations relating to the keeping and storage of social documents are laid down in Royal Decree No 5 of 23 October 1978, which was amended by the Royal 9. to draw up an individual account Decree of 8 August 1980 and the Royal for each worker; Decree of 8 March 1990. That legislation is intended to protect the individual rights of workers and imposes on the employer an obligation to keep the following documents at the undertaking's registered office or company seat, if located in Belgium, or, if 10. to draw up working regulations; not, at the Belgian residence of a natural person who is to keep them in his capacity as the employer's agent or servant:

where that undertaking is already sub- ject to obligations which, while not identical, are at least comparable on account of their aim in respect of the — the main staff register, which must same workers and for the same period contain information on both the under- of activity in the State where it is taking and its employees. In addition, established? the employer must have at each place of work a special staff register relating to the workers employed there. In the case of construction undertakings, the special staff register is replaced by an individual document for each employee working at a particular site. The Royal (2) Can Articles 59 and 60 render inop- Decree of 8 March 1990 required erative the first paragraph of Article 3 employers to issue each worker with of the Civil Code on Belgian public an individual record. The individual order legislation?' record for 1990 was treated in the same

The Inspection des Lois Sociales is respon- 15. The loyalty stamp scheme consists of a sible for verifying that employers comply payment made to workers in the construc- with the rules on the keeping and storage of tion industry once a year to reward them social documents, failure to observe which for having worked in that industry for a can lead to the imposition of criminal given period of time. The bad-weather penalties. stamp scheme was introduced by construc- tion undertakings to compensate employees for wage losses incurred when they are prevented them from starting work or are laid off because of bad weather. Both schemes are administered by the Fonds de sécurité d'existence des ouvriers de la 12. Employers are also required to draw up construction (Construction Workers Sub- working regulations. sistence Fund) (hereinafter the 'Fund') and

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17. At the end of each financial year, which, in the case of loyalty stamps, runs from 1 July to 30 June and, in the case of bad-weather stamps, from 1 January to 31 December, the Office Patronal d'Orga- nisation et Contrôle des Régimes de Sécur- ité d'Existence (hereinafter 'OPOC'), the — To keep a single staff register which body responsible for collecting contribu- must contain the names and personal tions to the Fund, sends cards showing that details of all employees listed in order the contributions have been paid. The of engagement. That register is to be loyalty stamp cards must be issued to each kept at the company seat and at each worker no later than 30 September, while place of business and must be available

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purchasing power for the lowest-paid and IV — The Community provisions to enable them to participate in the eco- nomic development of the country. Sec- ondly, an employer must observe the industry-wide minimum wage laid down 21. Freedom to provide services in the in the collective agreement applicable to his Community is governed by the provisions undertaking, which, in the case of Arblade of Title III, Chapter 3, of the Treaty, which and Sofrage, is that relating to the con- concerns the free movement of persons, struction industry. services and capital. The relevant provi- sions for the purposes of these two cases are Articles 59 and 60, which are worded as follows:

'Article 59

Furthermore, the Labour Code requires employers in the construction industry to pay their employees compensation when adverse weather conditions prevent normal Within the framework of the provisions set working. Payment of that compensation, out below, restrictions on freedom to which the employer makes directly, is provide services within the Community charged to the 'Caisses des Congés Payés' shall be progressively abolished during the (Paid Leave Funds), which are financed transitional period in respect of nationals of exclusively from employers' contributions. Member States who are established in a State of the Community other than that of the person for whom the services are intended.

The Construction Sector Collective Agree- ment likewise provides for the payment of a 'holiday' bonus, which is granted on the basis of length of service, ie to employees who, at the end of the year, have completed Article 60 more than six months' or 1 675 hours' work, depending on their occupational category. Under the provisions of the chapter on paid leave, employees are also entitled to between two and four extra Services shall be considered to be "ser- days, depending on their length of service vices" within the meaning of this Treaty with the undertaking. where they are normally provided for

...'

(d) activities of the professions.

Without prejudice to the provisions of the 'Article 58 Chapter relating to the right of establish- ment, the person providing a service may, in order to do so, temporarily pursue his activity in the State where the service is provided, under the same conditions as are imposed by that State on its own nationals.' Companies or firms formed in accordance with the law of a Member State and having their registered office, central administra- tion or principal place of business within the Community shall, for the purposes of 22. Article 66 of the Treaty states that this Chapter, be treated in the same way as Articles 55 to 58, which appear in the natural persons who are nationals of Mem- Chapter relating to the right of establish- ber States.

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"Companies or firms" means companies or by the national court given that it had not firms constituted under civil or commercial even been adopted at the time of the facts in law, including cooperative societies, and the main proceedings. In any event, Mem- other legal persons governed by public or ber States have until 16 December 1999 to private law, save for those which are non- adapt their legislation. profit-making.'

24. At the end of December 1996, the 26. At the end of the written procedure, the European Parliament and the Council President of the Court of Justice decided, adopted Directive 96/71/EC concerning by order of 6 June 1997, to join the two the posting of workers in the framework cases for the purposes of the oral procedure of the provision of services 2 ('Directive and the judgment. 96/71'), which governs some of the situa- tions at issue in these two disputes. How- ever, no direct reliance can be placed on the interpretation of its provisions for the purposes of resolving the questions raised 27. At the hearing, which took place on 19 May 1998, representatives of the defen- 1 — Council Directive 91/533/EEC of 14 October 1991 (OJ dants in the main actions, the Belgian L 288, p. 32). Government, the Government of the Fed- 2 — Directive 96/71/EC of the European Parliament and of the Council of 16 November 1996 (OJ 1997 L 18, p. 1). eral Republic of Germany, the Government

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of the Netherlands, the Finnish Govern- is already safeguarded by similar require- ment, the Government of the United King- ments imposed on them by the legislation dom, and the Commission, appeared before of the Member State in which they are the Court in order to present their observa- established. In the alternative, they contend tions orally. that the Belgian provisions are inconsistent with the principle of proportionality, since the same results could be achieved by less restrictive measures.

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argue, is not intended primarily to protect fulfils his obligations vis-à-vis the Fund, workers, who are already adequately pro- which are to join it, to pay to it a sum of tected in France, but pursues a purely BEF 250 per worker, and to make the economic objective, as is clear from the relevant contributions to it. They go on to reports of the inspections which gave rise to say that the employer is likewise required the charges at issue, which refer to the to submit a copy of Form E 101 to show 'unlawful attitude of a foreign employer that he is still paying social security con- who threatens the opportunities for Belgian tributions in the Member State where he is employers in the same industry to compete established, which exempts him from hav- in that industry'. ing to pay them in Belgium also.

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the obligation to adopt working regula- the same purpose, and that the social tions. With regard to the first group, it protection of workers is guaranteed in the observes that, as Community law now same manner and to the same degree. It stands, the practical problems which make states finally that the purpose of the it difficult for a host Member State to regimes must be assessed with regard not accept the documents issued by a Member only to their nature, but also to the State of origin as proof of compliance with importance of the rights which those pro- the former State's social legislation are visions grant to workers. insurmountable. First of all, the labour inspectorate's jurisdiction in respect of infringements of social legislation is terri- torial. Secondly, it is practically impossible for the authorities of the host Member State to have accurate knowledge of the nature and effects of the working condi- 35. The obligation to draw up working tions laid down in the legislation of the regulations, which is intended to ensure State of origin, given that there is as yet no that workers are informed of their rights o r g a n i s e d system of c o o p e r a t i o n or and obligations and to enable the Inspec- exchange of information between States. tion des Lois Sociales to monitor working In those circumstances, compliance with conditions, cannot be deemed to be dis- the host State's legislation relating to docu- charged by the production of working ments concerning workers, which is also regulations adopted abroad, since these the State whose conditions of work and will not be capable of providing workers employment are applicable to the employer, posted for the purpose of providing services is the only means of ensuring proper with information regarding the working verification. conditions in force in the host Member State, such as the procedure to be followed in the event of an accident at work, or the work schedule, in particular local public holidays or leave in lieu of public holidays falling on a Sunday.

38. The Austrian Government considers that Articles 59 and 60 of the Treaty do not preclude a host Member State from requiring a foreign employer to comply with provisions laid down by law or 37. The Finnish Government states that in agreement relating to the payment of the Finland, as in Belgium, conditions relating minimum wage to workers posted to its to pay laid down in collective agreements territory; that employers' contributions in are also applicable to work performed in respect of loyalty and bad-weather stamps Finland by foreign workers, irrespective of form part of the minimum wage in so far as the system of law which the parties to the they are a form of remuneration for work contract have chosen. At the request of the performed; and that, if the Court of Justice Labour Inspectorate, an employer who has has recognised that Member States are posted workers to Finland is required to entitled to restrict the freedom to provide supply information regarding the working services for overriding reasons relating to conditions applicable to them. In its sub- the public interest, they must by implica- mission, there is no reason why the obliga- tion be entitled to monitor compliance with tion for the employer to pay the minimum measures to protect that public interest. wage in force in the Member State in which the service is provided, or any other equivalent benefit which the worker receives directly from the employer, should constitute a twofold burden for the employer; in any event, it contends, the provisions enacted by a Member State in order to guarantee a minimum level of protection in respect of working condi- tions, in particular minimum pay condi- 39. According to the Commission a worker tions, are compulsory at national level and who has been posted by his employer to the are not contrary to Community law, irre- territory of another Member State in order

to carry out work there must receive the sion maintains that undertakings which minimum wage established in that State for post workers to another Member State workers in the same sector, without losing must submit to the measures taken by the his entitlement to the more favourable public authorities to monitor compliance conditions which he enjoyed in the Mem- with the legislation relating to working ber State of origin. As regards the obliga- conditions. tion to pay contributions in respect of loyalty and bad-weather stamps, it states that undertakings which post workers to Belgium must be exempt from paying contributions in that State only if they are already liable in their State of origin for contributions, in respect of the same work- ers and the same risks, to schemes which, in practice, serve the same purpose. It will be for the national court to compare the wage which an employee would earn if he worked in the country of origin with that which he would receive under the applic- able Belgian provisions, and to compare the contributions payable in both States. In the Commission's submission, the host Mem- ber State has competence to monitor the application of social law, but that it must in any event observe the principle of propor- tionality. More specifically, the requirement 40. At the end of the period laid down in to issue an individual record to each Article 20 of the EC Statute of the Court of worker, and to keep the remaining social Justice for submitting observations, the documents, should not increase the admin- Court decided to put certain questions to istrative burden or create additional finan- the parties which did so. By the first, the cial costs for the employer. As regards the Court asked them all whether performance requirement to draw up working regula- of the obligations laid down by the Belgian legislation — namely to appoint an agent tions, the Commission states that the or representative responsible for keeping information which they must contain under individual accounts in Belgium, and to keep the Belgian rules is considerably more the staff register and the individual detailed than that required of the equiva- accounts at the Belgian residence of a lent regulations in France. There, however, natural person — could amount to the such information is largely contained in setting up of an agency, branch or subsidi- other documents such as the employee's ary, within the meaning of Article 52 of the pay statement and the staff register, which Treaty. The second, which was addressed to must be made available for use by the the Member States and the Commission, Belgian authorities. Finally, the Commis- referred to the same obligations and asked whether they constitute overt discrimina- tion on grounds of nationality. The third was addressed to the Belgian Government and asked it to specify the legislation or practice by virtue of which the loyalty and

bad-weather stamps form part of the mini- of an establishment within the meaning of mum wage. Article 52 of the Treaty and that, in practice, an employer who does not have a registered office in Belgium normally goes to a manpower agency, a trust company or an accountancy firm and gives it authority to keep the staff register and documents relating to employees. The function of the agent in this capacity is confined to physi- B — The answers to the first written cally storing the documents and acting as a question put by the Court of Justice depositary; it has no power to represent the employer vis-à-vis third parties. The condi- tions necessary for the setting up of an establishment within the meaning of Arti- cle 52, namely permanence and the capa- 41. The defendants in the main proceedings city to represent, are not therefore fulfilled. state in reply that the term 'establishment' within the meaning of Article 52 of the Treaty is not confined to the setting up of a branch, subsidiary or agency, but includes other, less defined forms of establishment, provided there is a degree of permanence. They take the view that the characteristic features of an establishment are present in this case — namely: there are physical At the hearing, the representative of the premises, i.e. the place where the docu- Belgian Government went on to say that, ments concerning workers is kept; there is a while the work is in progress, the staff degree of permanence, in so far as the register and workers' individual accounts obligation for the employer to keep such can be kept on site, the site manager documents for a period of five years assuming responsibility for making them extends to the agent or representative available to the Inspection des Lois resident in Belgium; and there is depen- Sociales. Once the work is completed, dence on a principal place of business however, those documents must be kept situated in another Member State. They for five years at the Belgian residence of a go on to say that the representative in natural person. It is therefore necessary to Belgium of an employer established in appoint an agent or servant to be respon- another Member State must of necessity sible for keeping them. be vested with such legal and administra- tive powers as to engage the liability of that employer in the event of failure to fulfil the obligations laid down by Belgian law.

cle 59 of the Treaty, in the light of the undertaking without a registered office in principle of proportionality. Belgium is not empowered to enter into contracts on the undertaking's behalf, its role being confined to storing certain documents relating to employees, the requirement to appoint such an agent does not amount to an obligation to set up an establishment. 44. The Finnish Government states that the answer to this question will depend on whether the Belgian legislation requires the staff register and workers' individual accounts to be kept in Belgium or whether they can simply be made available to the Inspection des Lois Sociales as and when it so requests, and also on how long those 47. At the hearing, the representative of the documents have to be kept, details which United Kingdom argued that the obligation are not contained in the order for reference imposed on foreign undertakings to from the national court. appoint a person in Belgium to be respon- sible for keeping certain documents at his residence does not mean that those under- takings are pursuing an economic activity through that person, and cannot therefore be construed as an obligation to set up a branch or an agency within the meaning of 45. The Austrian Government maintains Article 52 of the Treaty. that an agent or servant can be charged with keeping the staff register and indivi- dual accounts simply by means of a con- tract. While an establishment may need to be set up, depending on the circumstances, this is not necessarily the case. It will, in any event, depend on the duration of the activity engaged in by the provider of services in the host Member State, and on the overall conduct of the employer, that is C — The answers to the second written to say whether, for example, he has busi- question put by the Court of Justice ness premises for a sufficient period of time at the place where the services are provi- ded, and whether he joins the professional organisations of the host State.

50. By the first question in both cases, the Tribunal Correctionnel, Huy, wishes to 49. In reply to this question, the Belgian ascertain whether the obligations which Government merely points out that both Belgian legislation imposes on construction the loyalty stamp and bad-weather stamp undertakings which post their workers to schemes were set up in 1988 under a Belgium in order to carry out particular collective agreement made binding by works there, constitute restrictions which Royal Decree of 15 June 1988; that the are contrary to the principle of freedom to loyalty stamps, which amount to 9% of provide services where the undertakings in gross remuneration, amount in fact to an question are established in another Mem- end-of-year bonus for construction sector ber State in which they are already subject workers; that the bad-weather stamps, to obligations serving a similar purpose in which amount to 2% of the gross wages respect of the same workers and for the payable to each worker, represent a reim- same periods of employment. bursement by the Fund of 50% of the wages which an employer has not duly paid to an employee for days on which the employee attended work but was unable to start work or was laid off because of bad weather. It accordingly concludes that both 51. I do not think there is any doubt at this loyalty stamps and bad-weather stamps stage that the obligations which the Belgian undoubtedly constitute remuneration to authorities wish to impose on the defendant which the worker is entitled by virtue of undertakings do, in practice, constitute the employment relationship, and form restrictions on the freedom to provide part of the annual income payable to services in so far as they are liable to add construction workers pursuant to provi- to the expenditure and administrative bur- sions of public policy, while the contribu- den of undertakings established in another tions intended to finance both schemes are Member State, thereby making it more a method of paying part of the remunera- difficult and less appealing for them to

55. The obligation to abolish restrictions on the freedom to provide services was interpreted by the Court of Justice, first, as B — The Court's statement of the law as it the prohibition of all discrimination against applies to restrictions on the freedom to the person providing the service by reason provide services within the Community of his nationality or the fact that he is

3 — Case 33/74 Van Binsbergen v Bedrijfsvereniging Metaalnij- verheid [1974] ECR 1299, paragraphs 24 and 27. 4 — Case 143/87 Stanton v Inasti [1988] ECR 3877; Joined 53. The first paragraph of Article 59 of the Cases 154/87 and 155/87 RSVZ v Wolf and Others [1988] ECR 3897, paragraph 13; and Case C-106/91 Ramrath v Treaty imposes on Member States the Ministre de la justice [1992] ECR 1-3351, paragraph 28.

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5 — Van Binsbergen, cited at footnote 3 above, paragraph 25. See also Joined Cases 110/78 and 111/78 Ministère Public 8 — Bond van Adverteerders v Netherlands State and Others, and ASBL v van Wesemael [1979] ECR 35, paragraph 27; cited at footnote 7 above, paragraph 34. and Case 279/80 Webb [1981] ECR 3305, paragraph 14. 9 — Case C-288/89 Collectieve Antennevoorziening Gouda 6 —Case C-3/88 Commission v Italy [1989] ECR 4035, [1991] ECR I-4007, paragraph 12; and Joined Cases paragraph 8; and Case C-360/89 Commission v Italy C-34/95, C-35/95 and C-36/95 KO v De Agostini and [1992] ECR II-3401, paragraph 11. TV-Shop [1997] ECR I-3843, paragraph 51. 7 — Case 352/85 Bond van Adverteerders v Netherlands State 10 — Case C-76/90 Säger [1991] ECR I-4221, paragraph 12; and Others [1988] ECR 2085, paragraph 32; and Case and Case C-398/95 SETTG v Ypourgos Ergasias [1997] C-260/89 ERT [1991] ECR II-2925, paragraph 24. ECR I-3091, paragraph 16.

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13 — Case 62/79 Coditei [1980] ECR 881, paragraph 18. 14 — Ministere Public and ASBL v van Wesemael, cited at (2) are necessary to ensure that the objec- footnote 5 above, paragraph 28. 15 — Webb, cited at footnote 5 above, paragraph 19; Joined tive which they pursue is attained; and Cases 62/81 and 63/81 Seco v EVI [1982] ECR 223, paragraph 14; Case C-113/89 Rush Portuguesa [1990] ECR I-1417, paragraph 18; Case C-43/93 Vander Elst v Office des Migrations Internationales [1994] ECR I-3803, paragraph 23; and Case C-272/94 Guiot [1996] ECR I-1905, paragraph 16. 16 — Case 220/83 Commission v France [1986] ECR 3663, p aragraph 20; Case 252/83 Commission v Denmark 1986] ECR 3713, paragraph 20; Commission v Germany, cited at footnote 12 above, paragraph 30; Case 206/84 Commission v Ireland [1986] ECR 3817, paragraph 20; (3) do not go beyond what is necessary in Case C-198/89 Commission v Greece [1991] ECR I-727, paragraph 21; and Case C-222/95 Parodi v Banque order to attain that objective. 12 H. Albert de Bary [1997] ECR I-3899, paragraph 32. 17 — KO v De Agostini and TV-Shop, cited at footnote 9 above, paragraph 53. 18 — Collectieve Antennevoorziening Gouda, cited at footnote 9 11 — Case C-381/93 Commission v France [1994] ECR I-5145, above, paragraphs 23 and 25; Case C-353/89 Commission paragraph 17. v Netherlands [1991] ECR I-4069, paragraph 30; and 12 — Case 205/84 Commission v Germany [1986] ECR 3755, Case C-148/91 Vereniging Veronica v Commissariaat voor paragraph 27; Case C-180/89 Commission v Italy [1991] de Media [1993] ECR I-487, paragraph 15. ECR I-709, paragraphs 17 and 18; and Ramrath, cited at 19 — Case C-3/95 Reisebüro Broede v Sandker [1996] ECR footnote 4 above, paragraphs 29 to 31. I-6511, paragraph 36.

60. The Court has likewise held that, while C — The obligation to pay posted workers the principal aim of Articles 59 and 60 of the minimum wage in force in the host the Treaty is to enable the provider of the Member State and to pay, for each worker, service to pursue his activities in the contributions in respect of loyalty stamps Member State where the service is given, and bad-weather stamps (obligations Nos 2 without suffering discrimination in favour and 6 in the first question) of the nationals of that State, it does not mean that all national legislation applicable to nationals of that State and usually applied to the permanent activities of undertakings established therein may be similarly applied in its entirety to the temporary activities of undertakings which are established in other Member States. 25 It has also made clear that conditions 61. This is the first time that a national imposed by the host Member State may court has referred to the Court of Justice a not duplicate equivalent statutory condi- question relating to the effects which the tions which have already been satisfied in obligation to pay the minimum wage in force in the host Member State has on the freedom to provide services of undertakings established in another Member State which 20 — Case C-204/90 Bachmann v Belgium [1992] ECR 1-249, paragraph 28; Case C-300/90 Commission v Belgium post their workers to the first State. Stran- [1992] ECR 1-305, paragraph 21; and Case C-484/93 gely enough, however, there is in this Svensson and Gustavsson v Ministre du Logement et de l'Urbanisme [1995] ECR 1-3955, paragraph 16. respect settled case-law to the effect that 21 —Case C-384/93 Alpine Investments [1995] ECR 1-1141, Community law does not preclude Member paragraph 44. 22 — Commission v Italy, cited at footnote 12 above, paragraph States from applying their legislation, or 20. collective labour agreements entered into 23 — Case C-154/89 Commission v France [1991] ECR 1-659, paragraph 17; and Commission v Greece, cited at footnote by both sides of industry, relating to 16 above, paragraph 21. 24 — Case C-158/96 Kohll [1998] ECR I-1931, paragraph 41. 25 — Webb, cited at footnote 5 above, paragraph 16; and Case C-294/89 Commission v France [1991] ECR 1-3591, 26 — Commission v Germany, cited at footnote 15 above, paragraph 26. paragraph 14.

The Luxembourg social security institution contended that the obligation imposed on employers should be deemed justified in so far as it was intended to offset the eco- nomic advantages which the employer might have gained by not complying with the national legislation on minimum wages. It maintained that Luxembourg was a country with high wages and that, despite 62. In the case which gave rise to the the fact that, under Luxembourg law, the judgement in Seco, the plaintiff undertak- minimum wage was a matter of public ings were established in France and had policy and applied to everyone in paid posted workers who were nationals of non- employment in Luxembourg, it was in member countries to Luxembourg in order practice difficult for the authorities of the to carry out construction and maintenance host State to enforce those rules in relation work on the railway network there. While to undertakings which post their staff there the work was in progress, the posted for relatively short periods. In order there- workers were compulsorily affiliated to fore to prevent a distortion of competition French social security. The disputes pend- to the detriment of providers of the same ing before the Cour de Cassation, Luxem- services established in Luxembourg, provi- bourg, the referring court, concerned the ders of services established in other Mem- obligation under Luxembourg law for ber States were not to be exempt from the undertakings temporarily carrying out aforementioned contributions. work in Luxembourg and using workers of its own who are nationals of non- member countries to pay the employer's share of contributions to old-age and invalidity insurance in respect of those workers. Other factors were also present in that case: the employers were still liable under French legislation for similar contri- butions in respect of the same workers and for the same periods of employment; and 63. In its reply, the Court held that Com- the contributions for which they were liable munity law precludes a Member State from requiring an employer who is in the same situation as Seco, as described above (that 27 — Cited at footnote 15 above, paragraph 14. is to say where the employer is already

65. The Court reiterated that statement of the law in Rush Portuguesa. 29 The dispute, in the course of which the Tribunal Admin- istratif, Versailles, referred several ques- tions for a preliminary ruling, arose from reports made by the French Inspection du Travail (Labour Inspectorate), which, while carrying out verifications on the sites at which Rush was working in France, noted a number of infringements of French labour legislation. Those infringements lay in the fact that the workers did not have the work 64. The judgment in Seco therefore makes permits prescribed for nationals of non- it quite clear that Community law does not member countries employed in France, and preclude Member States from applying had not been recruited through the Office their legislation, or collective labour agree- national d'immigration, on which the law ments entered into by both sides of indus- confers the exclusive right to recruit nation- try, relating to minimum wages, to any als of non-member countries. Rush, which person who is employed, even temporarily, is established in Portugal, had posted its within their territory, no matter in which own workers to France; those workers country the employer is established, and were Portuguese nationals who, at the that it likewise does not prohibit Member material time, were covered by the transi- States from enforcing those rules by appro- tional measures agreed between the Com- priate means. In the light of that statement munity and Portugal in the Act of Acces- of the law, it might seem that answering the sion 30 relating to the free movement of questions referred by the Tribunal Correc- tionnel, Huy, ought not to present major 29 — Cited at footnote 15 above, paragraph 18. 30 — Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments 28 — Ibidem, paragraph 15. to the Treaties (OJ 1985 L 302, p. 23).

67. The question whether or not workers who are not entitled to freedom of move- ment (in this instance, nationals of non- member countries) could work in France in the context of the provision of services by a Belgian undertaking specialising in demoli- 66. The legislation which Rush was tion work which had posted them there, accused of infringing related to matters of arose once again in Vander Elst. 32 The public policy and, as such, was applicable Tribunal Administratif, Châlons-sur- to all persons within the national territory. Marne, referred to the Court for a pre- The Court of Justice none the less inter- liminary ruling two questions by which it preted Article 60 of the Treaty, which sought to ascertain whether Community provides that the person providing a service law precludes a Member State from requir- may temporarily pursue his activity in ing undertakings which are established in another Member State under the same another Member State and enter the first conditions as are imposed by that State on Member State in order to provide services, its own nationals, as meaning that the and which lawfully and habitually employ imposition on a provider of services from nationals of non-member countries, to another Member State of conditions which obtain work permits for those workers restrict the movement of his staff, such as from a national immigration authority, the requirement to engage staff in situ or and to pay the attendant costs, with the the obligation for employees to be in imposition of an administrative fine as the possession of a work permit, discriminates penalty for infringement. against that person in relation to his competitors established in the host country, who are able to use their own staff without restrictions, and moreover affects his ability to provide the service. 31 Again, in response to the concern expressed by the French Government, which had contended that the workers were receiving very low pay, the Court reiterated that Community law does 68. The Court's reply was of course in the not preclude Member States from extend- affirmative and, although the judgment ing their legislation relating to minimum does not add anything new to the earlier wages to any person who is employed, even case-law on the subject, it contains two temporarily, within their territory, no mat- clarifications which are of special relevance to this case.

First, the Court infers from the judgment in tries possessed valid employment contracts Seco that legislation of a Member State governed by Belgian law. which requires undertakings established in another Member State to pay fees in order to be able to employ in its own territory workers in respect of whom they are already liable, for the same periods of employment, to pay similar fees in the State in which they are established entails an additional financial burden which is more onerous for those undertakings than 69. The latest judgment in this series to for providers of services within the national contain the same statement of the law is territory. 33 that in Guiot, 34delivered by the Court in 1996 in reply to a question referred for a preliminary ruling by the Tribunal Correc- tionnel, Arlon (Belgium). That judgment is interesting in two respects. First, because in it the Court reiterates its settled case-law to the effect that Community law does not preclude Member States from extending their legislation, or collective labour agree- ments entered into by both sides of indus- try, relating to minimum wages, to any person who is employed, even temporarily, within their territory, no matter in which country the employer is established, nor from enforcing those rules by appropriate means. Secondly, because the case con- cerned the restrictive effects on the freedom to provide services resulting from the obligation under Belgian law for employers Secondly, the Court once more refuted the established in another Member State and argument that the French legislation was temporarily carrying out works in Belgium necessary in order to prevent undertakings to pay, for each worker, contributions in from other Member States using workers respect of loyalty stamps and bad-weather from non-member countries, making their stamps. remuneration and other working condi- tions less favourable than those normally guaranteed by the laws of the host State. It reiterated that any Member State may extend its legislation on the minimum wage to any person who is employed within its territory, no matter in which country the employer is established, and emphasised that the workers employed by Vander Elst 70. In that judgment, the Court held that who were nationals of non-member coun- national legislation which requires an

employer, as a person providing a service lation of the State where the service is within the meaning of the Treaty, to pay provided. 36 employer's contributions in the host Mem- ber State in addition to the contributions already paid by him in the Member State where he is established places an additional financial burden on him, so that he is not, as far as competition is concerned, on an equal footing with employers established in The Court also pointed out that, since the the host State. Accordingly, the Court social protection of workers is the only continued, such legislation, even if it consideration of public interest capable of applies without distinction to national justifying restrictions on the freedom to providers of services and to those of other provide services such as those at issue in Member States, is liable to restrict the that case, any technical differences in the freedom to provide services within the operation of the two schemes could not meaning of the Treaty. 35 justify such a restriction. Accordingly, Arti- cles 59 and 60 preclude a Member State from requiring an undertaking established in another Member State and temporarily carrying out works in the first-mentioned State to pay employer's contributions in respect of loyalty stamps and bad-weather stamps with respect to workers assigned to carry out those works, where that under- taking is already liable for similar contri- butions, with respect to the same workers and for the same periods of work, in the State where it is established. 37 The Court went on to acknowledge that, while it is true that the public interest relating to the social protection of workers in the construction industry may, because of circumstances specific to that sector, constitute an overriding requirement justi- fying such a restriction on the freedom to 71. I can say here and now that, in my provide services, this is not the case where view, there is no reason for any change in the workers in question enjoy the same that case-law. The issue in this case will be protection, or essentially similar protection, to decide, given that the Belgian rules by virtue of employer's contributions imposing restrictions on the freedom to already paid by the employer in the Mem- provide services may be justified by over- ber State of establishment. It concluded riding reasons relating to the public inter- that it was for the national court to est, such as the social protection of work- determine whether the requirements ers, and apply to any person or undertaking imposed by the legislation of the State of pursuing an activity in the construction establishment are similar, or in any event sector, if that interest is already safeguarded comparable, to those imposed by the legis-

72. I shall proceed from the premise that the term 'wage' is to be understood as Secondly, there are industry-wide minimum meaning all the economic advantages wages, laid down for each industry by received by workers, whether in cash or in collective agreements which generally kind, for the performance of services of introduce pay rises on the basis of the work as an employee, whether in respect of multi-industry minimum wage, often actual work, however remunerated, or of applicable throughout the national terri- rest periods reckonable as work. It excludes tory, and are binding on all undertakings amounts received by a worker by way of within the industry. The industry-wide compensation for expenses incurred in minimum wage, arrived at through collec- connection with the performance of his tive bargaining between employers and work. workers, usually has a complex structure, for which there are frequently historical reasons, but which is explained above all by the power relationships prevailing dur- ing the negotiations. A wage therefore usually includes basic pay, which is calcu- lated exclusively on the basis of working 73. It follows from the case-law of the time, and wage supplements, which may Court which I have examined that, for the relate to: the employee personally, e.g.

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length of service; the job, e.g. night work obtains in consideration of his work, and I and work in highly toxic, physically am in no doubt that the definition of demanding or dangerous conditions; the industry-wide minimum wages which I quality or quantity of work, e.g. bonuses, have given necessarily encompasses incentives, bonuses for exceptional duties amounts to which workers are entitled or attendance, and overtime; special under those two schemes. bonuses such as Christmas pay, end-of-year premiums, profit-sharing, holiday supple- ments, etc.; and holiday pay.

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sector to take over those wage-related pay employer's contributions to those two liabilities in his place. 38 The fact that it is schemes with respect to workers assigned remuneration which the worker receives to carry out those works, where that from his employer indirectly does not undertaking is already liable for compar- deprive it of its status as a wage component able contributions, with respect to the same and, in this case, as a component of the period and for the same periods of work, in industry-wide minimum wage. the State where it is established?

38 — Setting up a fund to finance the payment of wages not paid 80. And how is it to be determined whether in the event of stoppages due to bad weather is not of the social protection of workers is already course the only option. There are alternatives: the employer could, for example, remunerate periods not guaranteed to an equal or greater extent worked as normal, with the outstanding hours being made up, at a rate of say an hour per day, on the following working days; or hours not worked for the above reason could be deducted from annual leave, up to a limited number of days. 39 — Principle cited in paragraph 60.

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81. I should like to lay particular emphasis on the need for national courts — for it is they which will generally be responsible for dealing with situations such as those at issue in these cases — to ensure, when determining which legislation is more ben- eficial to a worker, that they conduct the examination of the emoluments to which he would be entitled in one situation as compared with another on an overall annual basis. 82. I therefore believe that Articles 59 and 60 of the Treaty do not preclude the authorities of a host Member State from requiring employers established in another Member State who post their workers to the territory of the first State in order to Given the disparity between national col- provide services there to pay the industry- lective agreements in the construction wide minimum wage applicable in its industry as regards wage components, territory to the sector or field of activity forms of remuneration, and amounts and in question, and in particular to pay frequency of payment of special bonuses, contributions to a fund set up by the and the differences in the way the latter are undertakings in that sector in order to take financed, the aforementioned approach over some of the employers' wage-related seems to me to be the only way to provide liabilities, provided that, under the legisla-

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tion of the Member State of establishment, taking in France who move to Belgium in those employers are not already subject, for order to provide services there. the same periods and in respect of the same workers, to wage-related liabilities which mean that the remuneration payable to a worker, viewed on an overall annual basis, is the same as or greater than that which he would receive for working all year in the host Member State.

All those obligations are, to a greater or 40 — Opinion delivered in Vander Elst, cited at footnote 15 above, I-3805 et seq., in particular I-3816 and I-3817. lesser extent, intended to make it easier for 41 — Ibidem, paragraphs 24 and 25. the authorities of the host Member State to

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monitor compliance with its social legisla- be shown that the same result cannot be tion. achieved by less restrictive rules.

86. The obligation to issue an individual record to each worker is directly linked to the obligation for employers in the con- 85. There is no doubt that, in the Member struction sector to pay contributions in States, a substantial part of the legislation respect of loyalty stamps and bad-weather comprising social law relates to matters of stamps for each worker. It is in my view an public policy and is, as such, applicable to ancillary obligation which must be treated all persons within the territory of the State in the same way as the principal obligation in question and, of course, to undertakings in so far as it serves to verify that the latter established in another Member State which has been discharged. More specifically, if it go with their workers to the first State in is shown that the remuneration payable to order to provide services there. I am a construction sector worker in the host thinking, for example, to cite some of the Member State, viewed on an overall annual most obvious, of provisions on safety and basis, is better than that which he receives hygiene at work, provisions laying down under the rules of the Member State of minimum wages, provisions recognising the establishment, the employer may be principle of freedom of association or the obliged to pay contributions in respect of principle of equal pay for men and women. loyalty stamps and/or bad-weather stamps, and he may also be required to comply with the obligation to issue the worker with an individual record. If this is not shown to be the case, he will be exempt from the latter obligation.

With regard to the first of those obliga- tions, given that officials from the Labour Inspectorate visit sites to verify compliance with social legislation, it might be suffi- cient, for example, for the site manager to Nor do I consider them to be obligations make available to it the staff register and which give rise to discrimination based on workers' individual accounts, or any nationality or on the fact that the providers equivalent documents which the undertak- of services have established themselves in ing is required to keep under the legislation another Member State. In actual fact, they of the Member State of establishment. apply without distinction since the obliga- tion imposed on all employers generally requires them to keep the staff register and workers' individual accounts at the under- taking's registered office or company seat. The reason for the distinction drawn (whereby an employer who does not have I take the same view with respect to the a registered office or a company seat in obligation to appoint an agent or servant Belgium must keep the staff register and resident in Belgium to be responsible for workers' individual accounts at the Belgian keeping workers' individual accounts for residence of a natural person and appoint five years once the work is completed. The an agent or servant in Belgium to be individual account is a document contain- responsible for keeping the individual ing details of the services performed by a accounts) lies in my view in the fact that worker for an employer in the course of a the two situations are different; it is not year, listed by period of paid employment, that there are special provisions applicable and the remuneration received. It provides

I therefore consider those two obligations, as they stand, to be disproportionate, since the same objective can be attained by procedures which are less onerous for 90. In any event, it should be borne in mind undertakings. that, by 30 June 1993, Member States were required to have incorporated into their domestic legislation Directive 91/533, which lays down the information which employers must provide to employees, by means of a contract of employment or other written document. Such information 89. It remains for me to analyse a series of includes the identities of the parties, the obligations the imposition of which on category of the work, a description of the undertakings established in one Member work, the date of commencement of the State which temporarily post their workers employment relationship and its duration, to another Member State in order to the amount of paid leave, periods of notice, provide services there is not in principle initial basic pay and other component prohibited by Community law. They are: elements, the periodicity of payment, the the obligation to keep a special staff length of the working day or week and register; the obligation to draw up an details of the collective agreements govern- individual account for each worker; and ing the employee's conditions of work. the obligation to adopt labour regulations. Where the employee concerned is usually

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93. As I indicated earlier, the provisions of social law, even if they relate to matters of 91. As I have already said, Community law public policy and are, as such, applicable to does not prohibit Member States from all persons within the territory of the State enforcing compliance with the rules of in question, do not fall outside the princi- social law by appropriate means. One of ples governing the freedom to provide the most effective ways of monitoring services within the Community.

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that, under the legislation of the Member State of establishment, the undertaking in question is not already subject, for the same periods and in respect of the same workers, to wage-related liabilities which mean that the remuneration payable to a worker, viewed on an overall annual basis, is the same as or greater than that which he would receive for working the entire year in the host Member State. If the minimum wage in force in the host Member State is applicable, other obligations, such as the issue of an individual account to each worker, for the purpose of monitoring compliance with the obligation to pay contributions, may be called for.

(2) Articles 59 and 60 of the Treaty preclude a Member State from imposing on an undertaking established in another Member State which temporarily moves with its workers to the first State in order to carry out works there obligations such as those set out under points 1 and 5 of the first question, because, in going beyond what is necessary in order to attain the objective which they pursue, namely to ensure that information relating to the workers whom an undertaking employs or has employed on a construction site is available to the national authorities, they infringe the principle of propor- tionality.

(3) Articles 59 and 60 of the Treaty do not preclude a Member State from monitoring the application of its social legislation by all appropriate means. In the case of an undertaking established in another Member State which temporarily moves with its workers to the first State in order to carry out works there, obligations such as those described under points 3, 4, 9 and 10 of the first question may be imposed only if that undertaking does not already satisfy similar obligations under the legislation of the Member State of establishment, having regard not so much to the names of the various documents as to their content and the purpose they serve; that undertaking may be required to comply with the legislation of the host Member State only in so far as it supplements the legislation of the Member State of establish- ment, but not if the two overlap. I - 8496