The judges of the European Court of Justice (CJEU) ruled that national legislation which requires the recipient of a service to suspend payments and provide security against a fine which could be imposed on a service provider established in another Member State for breach of national labour legislation is contrary to EU law, in a judgement delivered on Tuesday 13 November in Case C-33/17.
A Slovenian company provided services to an Austrian citizen through posted workers. In 2016, the Austrian financial police found that the company had committed two administrative offences concerning the declaration and pay slips of posted workers.
It then asked the individual to suspend payments to the supplier and to provide a bond to guarantee a potential fine on the Slovenian company, which he provided.
The Slovenian company was fined in October 2016. It then asked the individual, once the work was completed, to pay it an amount to settle the accounts, which the Austrian national refused to do.
The company therefore brought an action before the Austrian court to recover the balance due. The Bleiburg District Court then referred the matter to the CJEU for a preliminary ruling to determine whether a State could order a person who ordered work on its territory to suspend payments and provide security in order to guarantee a possible fine that could subsequently be imposed on a service provider from another State.
In his Opinion of 8 May, Advocate General Nils Wahl replied in the negative to this question (see EUROPE 12018), which the Judges confirm here.
First, they argue that Directive 2006/123/EC (known as the 'Services Directive'), contrary to what some interested parties claim, does not apply in this case in so far as it does not apply to labour law.
The judges then consider that the Austrian legislation constitutes a restriction on the freedom to provide services within the meaning of Article 56 of the Treaty on the Functioning of the European Union. And if a restriction on the freedom to provide services can be accepted on imperative grounds of public interest, the ECJ considers here that it is disproportionate in relation to the stated objectives. (Original version in French by Lucas Tripoteau)