On Tuesday 8 December, the Court of Justice of the European Union (CJEU) dismissed Hungary’s and Poland’s actions for annulment of Directive 2018/957 on the posting of workers (cases C-620/18 and C-626/18).
By way of reminder, these two Member States, who have been fiercely opposed since the beginning to the revision of the directive (see EUROPE 12110/8), believe that the new version goes against the spirit of European treaties, the freedom to provide services (Article 56 of the TFEU) and Regulation 593/2008 on the law applicable to contractual obligations (better known under the name “Rome I”). Moreover, both Member States believe that the chosen legal basis (Articles 53(1) and 62 TFEU) is not adequate.
In the Court's view, the legal basis is correct in light of the pursued objective and the content of the directive, which remains in the spirit of the original directive (Directive 96/71). “Where a legislative act has already coordinated the legislation of the Member States in a given EU policy area, the EU legislature cannot be denied the possibility of adapting that act to any change in circumstances or advances in knowledge”, explains the Court in a statement, also noting the fundamental change in the nature of the European internal market between 1996 and the present day as a result of the eastward enlargement of the European Union.
Furthermore, the Court states that the principle of freedom to provide services does not preclude the pursuit of the cross-cutting objectives laid down in Article 9 TFEU, which provides in particular for requirements linked to the promotion of a high level of employment and the guarantee of adequate social protection. In that regard, the Court upheld that Article 153 TFEU could not constitute a new legal basis for the directive, since that article focuses exclusively on the protection of workers.
In the opinion of the Court, there is no infringement of Article 56 TFEU as the directive does not remove competitive advantages enjoyed by service providers from “certain Member States” (therefore mainly Eastern European countries), since the directive does not bring about the end of competition based on costs. The directive certainly affects pay, but does not affect other competitive elements, such as productivity or efficiency of workers.
Finally, the CJEU considers that there has been no “disregard” of the ‘Rome I’ regulation, since that regulation (in Article 23 thereof) provides for the possibility of derogating from the conflict of laws rules applicable to contractual obligations. However, the directive (in its Article 3§1a) does indeed constitute a special rule of conflict of laws, within the meaning of the ‘Rome I’ Regulation, according to the CJEU.
To consult the judgment: https://bit.ly/37LEKXF and https://bit.ly/33UufjU (Original version in French by Pascal Hansens)