C-258/98
ECLI:EU:C:1999:582
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OPINION OF MR RUIZ-JARABO — CASE C-258/98
O P I N I O N OF ADVOCATE GENERAL RUIZ-JARABO C O L O M E R delivered on 2 5 November 1999 *
I — Introduction I I— The facts
2. Giovanni Carra, Alessandra Colombo 1. The Magistrate of a district court in and Barbara Gianassi are charged with a Florence, Italy, seeks clarification concern- criminal offence under Article 110 of the ing the interpretation to be given to the Criminal Code and Articles 1, 11 and 27 of judgment of the Court of Justice on Law No 264 of 29 April 1949 (hereinafter I I December 1997 in the second Job 'the 1949 Law'), 2for acting, jointly and Centre case (hereinafter 'the Job Centre II with a view to profit, as intermediaries judgment'), 1 and also about the conse- between supply of and demand for employ- quences in national law of the doctrine it ment, the first two of the defendants at establishes. least since December 1993, and the third at least since April 1994. The provisions which are alleged to have been infringed confer on public placement offices the exclusive right to undertake the placement of employees.
Specifically, the national court harbours doubts as to whether individuals may rely, in judicial proceedings, on the prohibitions contained in Articles 86 and 90 of the EC Treaty (now Articles 82 EC and 86 EC), so that the national court must disapply 3. At the hearing in the national proceed- national provisions conflicting with them, ings, counsel for the accused contended and as to whether certain national provi- that his clients should be acquitted because sions create a situation which is incompa- the penal sanctions laid down by the tible with Articles 90 and 86 of the EC provisions cited above had ceased to be Treaty, read together. applicable by reason of the judgment of this Court in Job Centre II.
* Original language: Spanish. 1 — Case C-55/96 ECR [1997] I-7119. 2 — Supplement to GURI No 125, 1 June 1949.
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III— Applicable national law interposition in employment relationships. According to those provisions:
4. In Italy, placement is subject to a regime administered exclusively by the public placement offices. That regime is governed ['A]n entrepreneur shall not entrust, by by the Law of 1949. Specifically, Arti- contract or subcontract or otherwise, even cle 11(1) of that law provides: to cooperatives, the mere performance of work by means of labour engaged and remunerated by the contractor or the intermediary, whatever the nature of the work or of the service to which such performance relates. [T]he pursuit of any placement activity, even unremunerated, is prohibited where that activity has been entrusted to the authorised offices.'
In addition, the entrepreneur shall not entrust to intermediaries, whether employ- ees, third parties or companies, even if they be cooperatives, the performance of piece- 5. Any placement activity pursued in work by labour engaged and remunerated breach of that rule, and the engagement by such intermediaries.' of workers otherwise than through the intermediary of the public placement office, is subject, under the 1949 Law, to penal or administrative sanctions. Furthermore, employment contracts concluded in breach of that rule may be annulled by the courts 7. Article 2 of that Law imposes penal fines following a complaint by the public place- for failure to comply with the prohibition, ment office, and at the request of Public without prejudice to the penal sanctions Prosecutor's Office, a complaint which provided for breach of the 1949 Law. must be made within one year from the engagement of the worker.
Law No 196 of 24 June 1997 (hereinafter 'the 1997 Law'), 4which contains provi- 6. The first and second subparagraphs of sions concerning the promotion of employ- Article 1(1) of Law No 1369 of 23 Octo- ment, provides that only undertakings ber 1960, 3 prohibit intermediation and which are registered with the Ministry of
3 — GURI No 289, 25 November 1960. 4 — Supplement to GURI No 136, 4 July 1997.
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Employment and Social Security and hold a Court of Justice for a preliminary ruling permit issued by the Ministry may carry under Article 177 of the EC Treaty (now out activities relating to temporary place- Article 234 EC): ment.
' 1 . Do Articles 86 and 90, as interpreted in the judgment of the Court of Justice of 8. Legislative Decree No 469 of 23 Decem- the European C o m m u n i t i e s of ber 1997 (hereinafter 'the 1997 Decree'), 5 11 December 1997, have any direct which assigns functions and tasks concern- effect in the sense that they require ing the labour market to regions and local Member States not to impose any bodies, entered into force on 9 January general and absolute prohibition on 1998. Article 10(2) of the Decree provides acting as an intermediary between that the activity of acting as an intermedi- supply of and demand for employment ary between demand for and supply of and consequently require the national employment may be pursued, with the court to treat any activity as a private authorisation of the Ministry of Employ- intermediary for the placement of ment and Social Security, by undertakings employees as not being contrary to or groups of undertakings, by cooperatives criminal law, with the consequence that with a subscribed capital of not less than it must refuse to apply the relevant ITL 200 million and by non-commercial provisions of national law which make bodies whose assets are not less than the such activity an offence? same amount. Under paragraph 13 of that article, the provisions of the 1949 Law, as amended and supplemented are not to apply to persons authorised to act as intermediaries between demand for and supply of employment. 2. Are Articles 86 and 90 of the Treaty to be interpreted as meaning that a system like that deriving from the legislative amendments made by Law No 196 of 24 June 1997 and Legislative Decree No 469 of 23 December 1997 consti- tutes an abuse of a dominant position?'
IV — The questions referred for a preli- minary ruling
9. By order dated 20 June 1998, the Pre- V — The observations submitted tore di Firenze decided to stay proceedings and refer the following two questions to the 10. The Italian Government maintains that 5 — GURI No 5, 8 January 1997. both of the questions referred for a pre-
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liminary ruling are inadmissible because The United Kingdom Government submits they are manifestly irrelevant. no observations in respect of the second question.
With regard to the first question, the Italian Government points out that, as a conse- quence of the Job Centre II judgment, the 12. Finally, the Commission states that the national legislation was amended by the three requirements of the Job Centre II 1997 Decree which abolished the absolute judgment have to be considered cumula- prohibition which had been in force until tively. It also states that Article 90(1) and that time. The penal sanctions established Article 86 have direct effect and that the by the 1949 Law no longer apply to primacy of Community law renders con- persons who, like the accused in the main flicting rules of criminal law inapplicable. proceedings, carried on placement activities In relation to the second question, the before the Decree entered into force. Commission contends that Article 90(1) and Article 86 must be interpreted as meaning that the fact that they have direct effect does not automatically imply that every private activity as an intermediary in the employment market is lawful. Further- more, the Commission considers that, as The second question referred for a preli- there is no information about the period of minary ruling is inadmissible, according to time during which the accused carried out the Italian Government, because it is direc- their activities, the Court of Justice must ted to assessing whether the national lega- declare the question inadmissible. lisation is compatible with Community law and, furthermore, because that legislation is not applicable, by reason of the principle of non-retroactivity, to the facts of the case.
VI — Analysis of the first question referred 11. The United Kingdom Government, for for a preliminary ruling its part, points out that the case-law of the Court of Justice has consistently held that Article 90(1), when applied in conjunction with Article 86, may create rights on which individuals may rely before the national courts. Consequently, it is for the national 13. By its first question the Pretore wishes court to ascertain whether the conditions to know, to begin with, whether Articles 90 established by the Court in the Job Centre and 86 of the EC Treaty, interpreted in II judgment are satisfied and, if so, to accordance with the aforementioned judg- disapply the penal provisions in question. ment, have direct effect.
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14. The Court has repeatedly held that, Advocate General Elmer expressed the even within the framework of Article 90, same view in the Opinion he delivered on the prohibition contained in Article 86 has 15 May 1997. More specifically, he stated, direct effect and confers on individuals at point 59: rights which the national courts must safe- guard. 6 .
'Lastly, the national court asks whether Articles 90(1) and 86 of the Treaty have direct effect, the answer to which must be The same conclusion is implicit in several in the affirmative. Accordingly, it is clear from the Court's case-law that the provi- other judgments. 7 sions in question can be relied on by individuals before the national courts, which are therefore bound to set aside any national provision incompatible there- with.'
15. In Job Centre II the third question formulated by the Corte di appello, Milan, was essentially the same as the one I am considering here. 8 Although, in its judgment, the Court of Justice did not deal expressly with the possibility of directly relying on the prohi- 6 — Case 155/73 Sacchi [1974] ECR 409, paragraph 18, relat- ing to the State monopoly of television advertising, in Case bition in question, this was probably C-179/90 Merci convenzionali Porto di Genova [1991] because it considered that an affirmative ECR I-5889, paragraph 23, Case C-242/95 GT-Link [1997] ECR I-4449, paragraph 57, and Case C-22/98 Beat (1999] reply was obvious in the light of the other ECR I-5665, paragraph 21, relating to dock services subject to a monopoly. grounds it had stated and of its own case- 7 — See, for example, the judgments in Case C-163/96 Raso law. 9 [1998] ECR I-533, in Case 260/89 ERT ECR I-2925, and in Case C-320/91 Corbeau [1991] ECR I-2533, in all of which it was acknowledged that a defendant in criminal proceedings may plead, in his defence, that State mono- polies in the sectors of dock services, radio and television 9 — This seems to have been the understanding of the Corte di and postal services, respectively, are compatible with appello in its order of 11 March 1998 ruling, on appeal, on Articles 86 and 90. the application by Job Centre coop.arl. for approval of its 8 — The third question referred by the Corte di appello was: '[I]n constitutive document, the company's object as stated the event mat the abovementioned legislation of the Italian therein — acting as intermediary in the employment mar- State concerning operation of an employment agency or an ket, — being prohibited under Italian law. Even though it employment business is in breach of the principles of confined itself to holding the applicant to have discontinued Community law mentioned in the foregoing question, must its action, it nevertheless holding that 'the judgment of the the judicial and administrative authorities of that Member Court of Justice of the European Communities of State consider themselves bound to apply those principles 11 December 1997 in this case has found these prohibitions directly, allowing public and private bodies and undertak- to be unlawful because, as they are absolute, they are ings to act as intermediaries between those offering and incompatible with Community law, which takes precedence. those seeking employment and temporary work, provided The reasons stated by the [court of first instance] as the basis that the provisions governing employment contracts and for its decision have therefore ceased to be valid. This was mandatory social security are complied with and subject to also the view taken by the Public Prosecutor when he asked the controls provided for by law?' for the application to be allowed'.
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16. In the result, the reply to be given to the 20. I should also point out that Article 86 first part of the first question referred by of the EC Treaty does not prohibit the the Pretore di Firenze is that the prohibition dominant position, as such, but its abuse. imposed by Article 90(1) in conjunction Therefore, within the framework of Arti- with Article 86 has direct effect in that it cle 90(1), what is incompatible with the creates for individuals rights which the common market is not a dominant position national courts must safeguard. arising out of the exercise of exclusive rights but the possibility that an under- taking which enjoys such rights may be compelled, by the applicable legal provi- sions, to abuse it. 12
17. The Pretore then asks — still as part of his first question — whether that direct effect requires the national court to hold any activity as a private intermediary for the placement of employees not to be contrary to criminal law, with the result 21. With regard to the activity with which that the relevant penal provisions of this case is concerned — that of acting as national law must be disapplied. intermediaries between the demand for and supply of employment — the Court of Justice has held that Article 90(1) is infringed if the public placement offices cannot avoid infringing Article 86, which is the case, in particular, when the following 18. The reply to this twofold question is three conditions are present: also to be found in the case-law of the Court of Justice.
— the public placement offices are mani- 19. It must be borne in mind, in this festly unable to satisfy demand on the connection, that an undertaking vested market for all types of activity; with a statutory monopoly occupies a dominant position within the meaning of Article 86 of the EC Treaty, 1 0monopoly extends may constitute a substantial part of the common market, within the meaning of the same provision. 11 — the actual placement of employees by private companies is rendered impossi- 10 — See, for example, the judgment in Case 311/84 CBEM [1985] ECR 3261, paragraph 16 and — specifically in relation to employment placement — the judgment in Case C-41/90 Höfner and Elser [1991] ECR I-1979, para- 12 — See, amongst others, the aforementioned judgments in graph 28. CBEM, paragraph 17, Höfner and Elser, paragraph 29, 11 — See the judgments in Case 322/81 Michelin v Commission Corbeau, paragraph 11 and Job Centre II, paragraph 31 [1983] ECR 3461, paragraph 28 and in Höfner and Elser, and also the judgment in Case C-323/93 Centre d'insémi- cited above, paragraph 28. nation de la Crespelle [1994] ECR I-5077, paragraph 18.
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ble by the maintenance in force of nant position', 'grant of exclusive rights' statutory provisions under which such and 'effect on trade between the Member activities are prohibited and non-obser- States'. vance of that prohibition gives rise to penal and administrative sanctions;
23. If, as seems to be the case, the Italian — the placement activities in question rules which reserve the activity in question could extend to the nationals or to to public placement offices and whose the territory of other Member States. 13 compatibility with Community law the court a quo is required to examine, entail possible penal or administrative sanctions, that court will still have to assess whether the offices holding the statutory monopoly are able to satisfy the demand on the 22. It may therefore be concluded from the market for all types of activity and whether Job Centre II judgment that what is the placement activities in question extend incompatible with Community law is not to the nationals or to the territory of other every reservation to specific public bodies Member States. of the activity of intermediary between demand for and supply of employment by means of the application of legal provisions prohibiting private undertakings from car- rying on such activities, on pain of penal or administrative sanctions, but such reserva- tion in a situation in which the public 24. Assuming that those circumstances placement offices are manifestly unable to exist, the Pretore still wishes to know what satisfy the demand on the market for all are the consequences in national law of the types of activity. Furthermore, for Commu- primacy of Community law. nity law to come into operation, the placement activities in question must be able to extend to the nationals or to the territory of other Member States.
25. It is sufficient to recall the words of the Court of Justice in its judgment of 13 July 1972 in Commission v Italy, 14 according to which the effect of Community law 'is a The three conditions stated by the Court in prohibition having the full force of law on the Job Centre II judgment are, therefore, the competent national authorities against obviously cumulative. They reflect respec- applying a national rule recognised as tively the prerequisites of 'abuse of domi- incompatible with the Treaty and, if the
13 — See the Job Centre II judgment and, mutatis mutandis, the judgment in Höfner and Elser, cited above. 14 — Case 48/71 [1972] ECR 529, paragraph 7.
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circumstances so require, an obligation on sanctions laid down by the 1949 Law are them to take all appropriate measures to not applicable to persons who, like the enable Community law to be fully applied.' accused in the main proceedings, carried on an activity as an intermediary before the 1997 Decree entered into force. For my part, I consider that there is not sufficient evidence in the documents before the Court for the provisions of the 1997 Decree to be The consequences of the primacy of Com- interpreted unequivocally in the decrimina- munity law were expressed particularly lising sense attributed to them by the Italian clearly and unequivocally in the judgment Government. In these circumstances, it is of 9 March 1978 in Simmenthal. 15 The for the national court to assess the applic- Court held that 'a national court which is ability and scope, in national law, of that called upon, within the limits of its juris- systems of sanctions. diction, to apply provisions of Community law, is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provi- sion of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such provisions by legislative or 28. In the light of the above considerations, other constitutional means.' I propose that the Court should state, in reply to the first question referred for a preliminary ruling by the Pretore di Fire- nze, that the prohibition arising under Articles 90(1) and 86 of the EC Treaty are to be interpreted as meaning that it confers 26. In other words, with regard to the on individuals rights which the national present case, the primacy of Community courts must safeguard. It follows that a law requires the national court, if it estab- national court may be called upon to lishes that the three requirements specified disapply a provision of national law incom- in the Job Centre II judgment are satisfied, patible with that prohibition. not to apply any national provision, regard- less of its nature, which proves to be incompatible with Community law.
For the rest, a Member State infringes Article 90(1) when it creates a situation in 27. The Italian Government insists that this which the public placement offices cannot question should be declared inadmissible avoid contravening Article 86. This hap- because — it its opinion — the penal pens, in particular, when the three require- ments stated earlier are satisfied concur- rently, namely: manifest inability to satisfy 15 — Case 106/77 [1978] ECR 629. Set, expressed in similar demand, prohibition on the private pursuit terms more recently, the judgment of 5 March 1998 in Case C-347/96 Solred [1998] ECR I-937, paragraph 30. of the placement activity, and possibility of
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extension to the nationals or to the territory legal context in which the interpretation of other Member States. requested should be placed, 1 6and that it has not been established that a reply to the question corresponds to an objective need for the purpose of deciding the case in the main proceedings. 17
VII —Analysis of the second question referred for a preliminary ruling 32. Notwithstanding this, given that, in any event, it does not seem that the reply to the second question can differ from the reply I propose for the first question, I think it preferable for me to refer to the latter. 18 29. By the second question it has referred In doing so, I have particular regard to the for a preliminary ruling, the national court specific wording of the question, to the wishes to know whether Articles 86 and 90 abstract form which the reply must take, of the EC Treaty preclude rules like those and also to the presumption of relevance introduced by the 1997 Law and the 1997 which the Court ascribes to the questions Decree. referred to it by the national courts for a preliminary ruling. 19
30. The Pretore does not state which spe- 33. National rules such as those introduced cific aspects of the rules are liable to compel by the 1997 Law and the 1997 decree will an undertaking granted exclusive rights to therefore be in breach of the prohibition abuse its dominant position. Nor does he resulting from the combined provisions of indicate the reason why he considers that Articles 90(1) and 86 of the EC Treaty examination of the compatibility of those rules with Community law is relevant for the purpose of deciding the case in the main 16 — Judgments in Case 244/78 Union laitière normande [1979] ECR 2663, paragraph 5, and in Joined Cases 36/80 and proceedings, the facts of which predate 71/80 Irish Creamery Milk Suppliers Association [19811 their adoption. ECR 735, paragraph 6. 17 — See, for example, the judgments in Case 244/80 Foglia [1981] ECR 3045, paragraph 17, Joined Cases 98/85, 162/85 and 258/85 Bertini [1986] ECR 1885, para- graph 6, and in Case C-18/93 Corsica Ferries [1994] ECR I-1783, paragraph 14. 18 — At the hearing, the Commission's representative argued that the principles stated in the Job Centre 11 judgment cannot -be applied to the 1997 rules because these introduce 'rules on competence'. If that is the case — and it is not for the Court of Justice to give a general or 31. In those circumstances, the second hypothetical initial opinion — the national court will reach the conclusion thatthe requirement relating to the question could be declared inadmissible prohibition on the pursuit of placement activities by individuals is not met under any circumstances. on the ground that the national court has 19 — Judgment of 7 September 1999 in Case C-355/97 Beck and not defined with sufficient accuracy the Others [1999] ECR I-4977, paragraph 22.
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when the three aforementioned require- and possibility of extension to the nationals ments are met, namely: manifest inability or to the territory of other Member States. to satisfy the demand, prohibition on the It is for the national court to verify that private pursuit of the placement activity, those requirements are met.
VID — Conclusion
34. In the light of the foregoing considerations, I propose that the Court should reply to the questions referred for a preliminary ruling by the Pretore circondariale di Firenze as follows:
(1) The prohibition resulting from Article 90(1) of the EC Treaty (now Article 86 EC) and Article 86 of the EC Treaty (now Article 82 EC) must be interpreted as meaning that it creates for individuals rights which the national courts must safeguard. It follows that a national court may be called upon to disapply a provision of national law incompatible with that prohibition.
(2) A Member State infringes Article 90(1) when it creates a situation in which the public placement offices cannot avoid contravening Article 86. This happens, in particular, when the following three requirements are concur- rently satisfied:
— the public placement offices are manifestly unable to satisfy demand on the market for all types of activity;
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— the actual placement of employees by private undertakings is rendered impossible by the maintenance in force of statutory provisions under which such activities are prohibited and non-observance of that prohibi- tion gives rise to penal and administrative sanctions;
— the placement activities in question could extend to the nationals or to the territory of other Member States.
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