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2. The defendant employer is the managing 4. According to the order for reference, the director of 'Inter Surveillance Assistance', a Public Prosecutor's Office takes the view security company with its registered office that Belgian legislation on minimum wages also applies to workers temporarily posted to Belgium due to its character as public- 1 — Original language: German. order legislation. 3 2 — Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ 1996 L 18, p. 1, hereinafter 'the Directive'. 3 — In French: 'loi de police er de sûreté'.

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— Are Articles 59 and 60 of the [EC] 7. In his defence the employer also argues Treaty to be interpreted as being that the employees concerned would have infringed where a Member State, for enjoyed protection under the French system overriding reasons relating to the pub- the same as or substantially comparable to lic interest, requires any undertaking that provided for under the Belgian system. from another Member State employing French minimum wages might be lower, persons, even temporarily, on the terri- but the French taxation system was more tory of the first State to comply with its favourable. The defendant argues that legislation or collective labour agree- regard must be had to the overall position. ments relating to minimum wages, where that interest is already protected by the rules of the State in which the service provider is established and workers there are already in a compar- able or similar position on the basis not 8. The referring court concludes that if the solely of the legislation relating to French regime may or must be considered minimum wages but of the overall

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9. The Belgian labour inspection agency (Auditorat du travail d'Arlon), the Belgian, French, German, Netherlands and Austrian Governments and the Commission all sub- 11. The Belgian Government, on the other mitted observations. I shall return to their hand, is of the view that the applicability of observations during my legal analysis. Articles 59 and 60 of the Treaty in regard to the posting of workers in the framework of the provision of services must be exam- ined in the light of the Directive. The Directive is to be regarded as a continua- tion of the relevant case-law in this area. It encapsulates the compulsory provisions B — Opinion conferring minimum protection which must be observed by employers, and indi- cates the rules adopted in order to protect the interests of employees. Furthermore, the material events occurred partly before and partly after adoption of the Directive. I. Preliminary issue of the admissibility of The referring court has, moreover, the first question referred expressly requested an interpretation of the term 'posting'.

10. The French, German and Netherlands 4 — This is significant in su far as the defendant employer seeks Governments have expressed concern as to rely on the provisions of the Directive; see above, point 5.

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14. Likewise the observations submitted in these proceedings address the referring The Court has made it clear 6 that provi- court's questions in their factual context, sions of national law must be interpreted so that it would seem appropriate to refer and applied already during that period as to them in relation to the individual far as possible in such a way as to be questions at the point in my analysis where compatible with the relevant directives. they become logically relevant. Since the Member States have already adopted the uniform provisions of Com- munity law, such an approach seems only logical. It must be even more so here, since in the present case it is primarily the Treaty provisions on freedom to provide services 15. Generally speaking, the object of exam- which are applicable. It is in this context ination may be described as the evaluation, in regard to Community law, of national rules which require service providers from 5 — Case 148/78 Ratti [1979] ECR 1629, paragraph 41 et seq., another Member State to pay the minimum and Case C-129/96 Inter-Environnemeiit Wallonie [1997] wage applicable at the place where service ECR I-7411. 6 — Inter-Environnement Walonnie, paragraph 42 et seq. is provided. A feature of the present case

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'Without prejudice to the provisions of the 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 18. That may be the case here. An provided, under the same conditions as are imposed by that State on its own nation- employer who runs an undertaking in a als'. 9 border zone and who sends his employees, on an irregular basis, from the Member State in which he is based to another Member State or even a third Member State, would not only be forced to take varying wage rates into consideration when 17. The principle of equal treatment with paying his workers, which itself could nationals thus formulated would seem to involve considerable additional administra- favour, as a rule, the applicability of tive effort, for example when calculating a national minimum-wage provisions in worker's pay, or when carrying out the regard to foreign service providers. Never- accounting, or in regard to complying with theless, it is undisputed in Community law, his fiscal and social security obligations and has been recognised by the Court, that towards various national authorities. He the indiscriminate application of national would also have to accept expenses sub- provisions can in effect constitute, depend- stantially greater than simply the difference ing upon the facts of the case in question, a between minimum rates of pay, because restriction to the freedom to provide ser- taxes and social security contributions must usually be discharged on top of the salary paid out (even if that is done — at least 7 — See Article 56 of the Law of 5 December 1968 on collective partially — on the employee's behalf). labour agreements and joint committees (loi sur les conven- tions collectives de travail et les commissions paritaires, Moniteur belge of 15 January 1969). 8 — See Article 3 of the Convention collective de travail of 10 — Case C-272/94 Cuiot [1996] ECR I-1905, paragraph 10 14 July 1993, declared mandatory by Royal Decree of and Case C-3/95 Reisebüro Broede [1996] ECR I - 6 5 1 1 , 1 March 1995 (Moniteur belge of 4 May 1995). paragraph 25, with further references. 9 — My italics. 11 — Guiot, paragraph 14.

21. As regards the overriding requirements of the general interest the Court has made the following clarification: the freedom to provide services may be restricted only by rules which are justified by overriding reasons in the general interest, in so far as 19. It is true that the Commission, referring that interest is not already safeguarded by to the Court's judgments in Rush Portu- the rules to which the provider of the guesa 12 and Vander Elst, 13 takes the view service is subject in the Member State that minimum-wage provisions should not, where he is established. 17 in themselves, be regarded as restrictions. One must not fail to recognise, however, that in both those cases the issue of compliance with minimum-wage legisla- tion was not decisive for the ruling, and 22. Consideration of the questions raised in that the Court's observations in regard to the present proceedings must be guided minimum-wage provisions were made only always by the need to maintain a balance obiter dictum. In view of the Court's case- between the four conditions outlined law, which qualifies additional financial above. In this regard, Directive 96/71 burdens 14 or provisions which may 'render indicates some of the considerations which less advantageous' 15 the activities of a guided the legislature and which may be service provider established in another seen, to a certain extent, to be the result of Member State as having a restrictive effect, this process of seeking a balance. In any one must assume that the contested case they may be taken into account in the national provisions are capable of restrict- assessment to be carried out by the Court. ing the freedom to provide services.

23. Independently of the Directive's tem- poral effects, however, it is necessary to clarify the preliminary question as to whe- ther the Directive is applicable ratione This Directive shall apply to the extent materiae to facts such as those in the matter that the undertakings referred to in para- at issue before the national court. This graph 1 take the following transnational preliminary question may not be directly measures: relevant to the outcome of the main proceedings — since the period for imple- mentation of the Directive has not expired 18 — but it will ensure that the assessments made here are appropriate to facts such as those at issue in the main (a) post workers to the territory of a proceedings. Member State on their account and under their direction, under a contract concluded between the undertaking making the posting and the party for whom the services are intended, oper- ating in that Member State, provided there is an employment relationship III. Scope of the Directive between the undertaking making the posting and the worker during the period of posting;...'. 24. The scope of the Directive is defined by Article 1. Article 1(1) reads:

25. The facts in the main proceedings fit 'This Directive shall apply to undertakings that definition easily. The security company established in a Member State which, in the is established in France and posts workers framework of the transnational provision on its account and under its direction to of services, post workers, in accordance Belgian territory, and a contract has been entered into between that undertaking and the shopping mall receiving the service and 18 — See Article 7 of the Directive, which provides that the an employment relationship exists between period for implementation expires on 16 December 1999. the security company and the worker. One

(d) to(g)...'. 19

— by law, regulation or administrative provision, and/or

27. However, the activities referred to in the second indent of the article cited above and listed in the Annex only concern those belonging to the construction sector; thir- teen types of construction work are — by collective agreements or arbitration expressly listed. The Annex itself reads: awards which have been declared uni- versally applicable within the meaning of paragraph 8, in so far as they 19 — My italics.

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'The activities mentioned in Article 3(1), scope ratione materiae, either. Nevertheless second indent, include all building work Article 3(10) states in this context: relating to the construction, repair, upkeep, alteration or demolition of the buildings, and in particular the following work:

OPINION OF MR ALBER — CASE C-165/98

which the referring court is required to Thus the Court ruled in Joined Cases 62/81 gauge in accordance with Community legal and 63/81 22 in regard to minimum wage parameters, and the Court has been called levels settled in collective labour agree- upon to define those parameters in more ments that: detail. The four conditions laid down by the Court which must be fulfilled by the national provision in order for it not to be considered a restriction of the freedom to provide services prohibited by Community law are decisive.

'It is well-established that Community law does not preclude Member States from applying their legislation, or collective labour agreements entered into by both sides of industry relating to minimum IV. Examination of the four conditions laid wages, to any person who is employed, down by the Court which national provi- even temporarily, within their territory, no sions must satisfy matter in which country the employer is established, just as Community law does not prohibit Member States from enforcing those rules by appropriate means.' 23

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from enforcing those rules by appropriate system of social security in addition to means.' 25 more favourable taxation legislation in the State where they normally reside? This question touches upon the fact that con- sideration for work carried out encom- passes more than just pay. It may thus be understood as asking whether in the inter- 34. Similar considerations in regard to ests of substantive fairness it is necessary to minimum wages can be found in Directive consider the overall situation. 96/71. In so far as Article 3(1 )(c) includes minimum rates of pay among guaranteed terms and conditions of employment, it recognises in principle that the provisions governing such minimum rates of pay are legislation for the protection of workers, adopted in the public interest. 37. The observations submitted to the Court contain the following arguments:

35. Nevertheless — as has already been mentioned — when the Court has consid- ered whether provisions are justified by the public interest, it has established that any The Auditorat du Travail is of the opinion justification will only apply in so far as the that only wages may be the subject of public interest has not already been taken comparison, regardless of the form they into account by the laws of the State in take (in cash or in kind). which the service provider is established.26

The referring court's position would seem 40. The German Government likewise to indicate, however, that compliance with takes the view that a global comparison minimum-wage legislation might in some of the regimes in question is not possible circumstances constitute a restriction on and that only pay, as such, may be the the freedom to provide services. It is only in subject of comparison. The minimum wage that case that an examination could take applicable in the State in which services place as to whether the national rules might were provided could, however, only be be justified. It is for this reason that the applicable if the worker did not already Belgian Government observes, in the alter- receive equal or more pay under the valid native, that any comparison must be based rate in his home State. What is needed is on the individual elements of the protective thus a comparison of the benefits, compar- provisions at issue. The individual elements ing only like with like. Any comparison of are not interchangeable, which is why a minimum wages by means of criteria not general assessment would not be appropri- already falling within the definition of ate. Moreover, one would encounter insur- terms and conditions of employment must mountable practical difficulties in attempt- be excluded. Employment conditions on ing a general assessment. A comparison of the one hand and social security on the pay is, in itself, difficult enough. other are, as a rule, to be handled sepa- rately. This is also to be inferred from point 21 of the preamble to the Direc- tive. 27

case-law as it stands at present does not which must be compared. Directive 96/71 require a global comparison. The reference is concerned with neither social security to differing social security regimes is not a nor taxation law. The wages which must be reason for denying minimum wages to the taken into consideration are gross earnings. posted worker. When carrying out the required benefits analysis only identical elements may be compared. Besides, it is gross earnings which are decisive. The Austrian Government observes, finally, that provisions of social security and taxation law are excluded from the Directive. 44. It is clear that, as the participants maintain, some sort of benefits analysis is required. 28 In the final analysis, it is common ground that the applicable mini- mum rates of pay must be compared, a 42. The Netherlands Government points view strongly supported by practical con- out that, in accordance with the Court's siderations. In this context it is ultimately case-law, an obligation to comply with gross earnings which are decisive, since net provisions adopted in the general interest earnings are essentially dependent upon the exists only where such interests are not worker's personal situation. already guaranteed by provisions of the State from which the workers are posted. The judgment in Guiot is of particular importance in the present case. The criteria of social security and taxation law as referred to by the national court are 45. However, there seems to be a certain capable of influencing minimum wage amount of uncertainty, expressed, for levels. It is therefore of fundamental impor- example, in the fact that the Commission tance to ascertain whether comparable speaks of wages effectively received 29 protection exists. However, it is necessary whereas the German Government admits to consider every element individually. To that tax and social security law could this extent the present case is concerned also — indirectly — be relevant to mini- only with minimum wages. The term mum wages. These observations result minimum wage is to be understood as from a general problem, also reflected to meaning gross earnings. The Netherlands a certain extent in Directive 96/71. Arti- Government observes finally that the obli- cle 3(1), second paragraph, thereof reads: gation to comply with provisions adopted in the general interest in the State in which services are provided is reasonable only where these interests are not already suffi- ciently guaranteed by the laws of the State of the service provider. 'For the purposes of this Directive, the concept of minimum rates of pay referred

Allowances specific to the posting shall be — the reference to allowances has been considered to be part of the minimum dropped; wage, unless they are paid in reimburse- ment of expenditure actually incurred on account of the posting, such as expenditure on travel, board and lodging.' 30 — point (c) has been made non-applicable to occupational retirement pension schemes.'

47. The following, according to Arti- cle 3(1)(c), are to be guaranteed:

49. All of that reflects a difficulty expressly raised by the Belgian Government when it observed that even a simple comparison of wages is complex. Logically one must 'the minimum rates of pay, including over- assume that social security benefits cannot time rates; this point does not apply to

31 — Common Position (EC) No 32/96 adopted by the Council 30 — Within the framework of a comparison, this may well be on 3 June 1996 with a view to adopting the Directive the minimum wage in the State from which the workers are concerning the posting of workers, Statement of Reasons posted. III(2)(1)(e), second indent (OJ 1996 C 220, p. 1).

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50. It will thus have to be assumed that, when carrying out the benefits analysis 52. In response to the questions referred to prescribed by Community law, only gross the Court it may be stated, at this stage, wage rates are to be compared. In doing so, that the comparison should be confined to it must be borne in mind that, due to the gross earnings. applicable national social security and taxation regimes, it is not possible to attain a level of equal treatment that one could qualify as absolute. One will, however, be able to qualify the result as logically correct as well as being the 'lesser evil'. From the point of view of worker protection the level 53. The third of the four criteria estab- of pay represents an objective quantity as lished by the Court in order to determine well as being an acceptable criterion in whether a national provision adopted in the terms of competitive equality. general interest complies with Community law is that it must be suitable for securing the attainment of the objective which it pursues. That it is so in the present case is quite clear. It is in the interests of the protection of workers for a worker to receive, as a result of the benefits analy- sis, 33 the larger amount, meaning, if applicable, the minimum wage of the place 51. If the preamble to the Directive focuses where the services are provided. The level exclusively on worker protection, it must of pay generally applicable at the place be said that the political discussion which where the services are provided is also to be took place at the time of the Directive's adhered to in order to prevent distortion of competition by wage dumping.

57. The French Government, which con- siders the first question referred to the Court only in the alternative because it considers that it is inadmissible, starts by making it clear that when considering whether the national provisions — parti- cularly penalties — are necessary care must be taken not to deprive the freedom 55. In such circumstances the obligation to to provide services of its ''effet utile'. 35It comply with the minimum-wage legislation goes on to state that, pursuant to the of the place where the services are provided Court's case-law and the contents of the might prove particularly onerous, since Directive, one must, as a rule, assume that when calculating wages for one and the collective wage agreements are applicable. same period, the minimum wage rates of The Directive contains a social component differing Member States could be applic- in that it prescribes an upward harmonisa- able, in addition to the resulting adminis- tion of protective provisions; however, it trative difficulties.

35 — It refers to the Opinion of Advocate General Van Gerven in 34 — See above, point 51. Rush Portuguesa, cited in footnote 12, points 17 and 18.

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62. As has also been pointed out in the 65. Firstly, Article 3(2) of the Directive 37 observations, part-time employment is, in contains a mandatory exemption for mini- any event, not expressly excluded from the mum paid annual holidays and minimum Directive's scope. Such a general exemption rates of pay (for certain kinds of work) would also carry the risk of circumventing where the period of posting does not mandatory provisions, as rightly pointed exceed eight days. The length of the posting out by the Austrian Government. is thus quite clearly decisive in that case as regards the Directive's applicability.

64. The general structure of the Directive 37 — The provision reads: 'In the case of initial assembly and/or first installation of reflects that. The Community legislature goods where this is an integral part of a contract for the supply of goods and necessary for taking the goods certainly recognised this problem and took supplied into use and carried out by the skilled and/or it into consideration in the form of a specialist workers of the supplying undertaking, the first subparagraph 1(b) and (c) shall not apply, if the period of compromise, in the form of the exemptions posting does not exceed eight days. provided for in the Directive for short-term 38 — This provision reads: postings and work which is not significant. 'Member States may, after consulting employers and An analysis of those provisions affords an labour, in accordance with the traditions and practices of each Member State, decide not to apply the first subpar- insight into the considerations of the legis- agraph of 1(c) in the case referred to in Article 1(3)(a) and (b) when the length of the posting does not exceed one lature in regard to these particular situa- month' (my emphasis). tions. 39 — See Article 1(3)(c).

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Pursuant to Article 3(4) 40 Member States minimum wages can be excluded from the may delegate the powers conferred upon Directive's scope, in which case it is for the them by Article 3(3) to employers and Member States alone to define what work labour by empowering them to either is 'non-significant'. The Member States exclude the applicability of minimum thus enjoy a relatively large freedom to wages in cases of postings not exceeding derogate from the Directive. one month, or to derogate from a general exemption made by the Member State.

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as to the background and historical devel- relate to the building industry and the opment of the exemption clauses. Part period of posting does not exceed eight III.2.1(g), concerning non-application of days (Article 3(2)), the provisions on minimum paid annual holidays and minimum rates of pay (Arti- cle 3(2) to (5)), reads as follows:

— optional non-application to the posting of workers on the account of the undertaking and under its direction or within a group:

'On the question of exemption, under certain conditions, from application of the provisions on minimum paid annual holi- days and minimum rates of pay, the Coun- cil struck a compromise between the posi- tion of the Commission and some delega- — of the provisions on minimum tions, which sought mandatory non-appli- rates of pay if the period of posting cation for postings lasting less than a given does not exceed one month, after period, and the positions of the other consultation of employers and delegations, which wanted either manda- labour or on the basis of a collec- tory application from the first day of the tive agreement (Article 3(3) and posting or optional non-application to (4)), short-term postings.

— of the provisions on minimum paid annual holidays and minimum rates of pay, on the grounds that The main points of the compromise worked the amount of work to be done is out by the Council are as follows: not significant (Article 3(5)).'

sions are, as a rule, to be considered as 74. Although it is not for the Court of falling within the Directive's scope. On the Justice to undertake this analysis, several other hand, it must be recognised that only factors speak in favour of the Belgian the construction sector falls mandatorily minimum wage rates being applicable in within the scope of the Directive, that is to the present case, since the defendant under- say that the Member States must first taking regularly provided services during explicitly designate, within the meaning of an extended period of time consisting of Article 3(10), other activities which are to several consecutive months. Furthermore, it fall within the Directive's scope. is established that six or seven of the thirteen workers were employed full-time during the period in question, whilst the other workers were employed in Belgian territory for at least a substantial part of their work hours. 43 Thus, for example, during a site inspection an employee roster was discovered which covered a period of several months. 44

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C — Conclusion

76. In the light of the foregoing considerations I suggest the following answer to the questions referred to the Court for a preliminary ruling:

The term 'duration of the posting' in Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services generally includes the part- time posting of a frontier worker by an undertaking of a Member State, who carries out a part of his work during a period of days, weeks or months in the territory or territories of one or more Member States. In doing so, however, — at least prior to expiry of the period for implementation of the Directive — one must take into account the legislative possibilities and considerations provided for in Article 3(10), as well as in Article 3(3), (4) and (5), in evaluating the particular case, that is to say, the national court must first ascertain whether the national legislature explicitly prescribes national minimum wage provisions for the economic sector in question in the case of service providers established in another Member State and whether application of such provisions is reasonable having regard to the duration and significance of the services provided.

Where a Member State requires an undertaking established in another Member State which, if only temporarily, posts workers to the territory of the first Member State to comply with its statutory provisions or national collective wage agreements in regard to minimum wages on grounds of the public interest, it does not infringe Articles 59 and 60 of the Treaty (now, after amendment, Articles 49 and 50 EC) unless the public interest has already been taken into account by provisions in the State where the service provider is established. Comparison of the benefits of the various national rules to be carried out in this connection must be limited, however, to a comparison of gross minimum wages. Other factors which, although they may be capable of influencing a worker's economic situation, result from the applicable social security and taxation legislation are not to be included in the comparison of wages. I - 2212