In Alperind GmbH and Others (C-527/16) the European Court of Justice ruled on the “non-replacement condition”, in the sense of Article 12(1) Regulation 883/2004.

The Supreme Court of Austria referred to the ECJ as regards to the applicability of the “non-replacement condition”, in the case of different undertakings, successively posting workers, to the same undertaking established in another Member State.

The ECJ recalled that in view of granting the equality of treatment of all persons occupied in the territory of a Member State, the legislation applicable as a general rule, is that of the Member State in which the person concerned pursues his activity.

The exemption provided for by Article 12(1), cannot be justified in case of recurrent use of posted workers to fill the same post, even though the employers are different.

Directive 2018/957/EU amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services, lays down as well a restrictive replacement condition.

Pursuant to Article 3.1a Directive 96/71/EC as amended, «Where an undertaking as referred to in Article 1(1) replaces a posted worker by another posted worker performing the same task at the same place, the duration of the posting shall, for the purposes of this paragraph, be the cumulative duration of the posting periods of the individual posted workers concerned”.

Pursuant to Article 1(1) Directive 96/71/EC, the said directive applies to undertakings established in a Member State post worker to the territory of another Member State. Pursuant to Article 3.1a Directive 96/71/EC as amended, where the effective duration of a posting exceeds 12 months (eventually extended to 18 months),posted workers must be granted, on the basis of equality of treatment, all the applicable terms and conditions of employment which are laid down in the Member State where the work is carried out (with the exception of provisions related to conclusion and termination of the employment contract, including non-competition clauses and supplementary occupational retirement pension schemes).

The social security coordination regulations on the one hand, and Directive 96/71/EC on the other hand, are hermetic legal instruments. The “non-replacement condition” provided for by Regulation 883/2004, and the replacement condition laid down by Directive 96/71/EC as amended, are cumulative.

The question is whether in determining the cumulative duration of the posting periods (in the sense of Article 3.1a Directive 96/71.EC as amended), a “replacement occurs not in the form of a posting by the same employer but instead by another employer must be considered” (question referred to the ECJ in Alperind GmbH and Others, in the context of Article 12(1) Regulation 883/2004).

Recital (11) Directive 2018/957/EU and Article 3.1a Directive 96/71/EC as amended, leave room to interpretation. Recital (11), “____should also cover workers who are posted to replace other posted workers performing the same task at the same place”, does not contain the wording “by the same undertaking” (i.e. workers who are posted by the same undertaking).

In Alperind GmbH and Others, the ECJ recalled that “in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs, and the objectives pursued by the rules of which it is part”.

It follows from recital (4) Directive 2018/957/EU, that the revision of Directive 96/71/EC, should grant the right balance between the freedom to provide services, and the need to protect the rights of posted workers.

To determine the extent of the replacement condition provided for by Directive 96/71/EC as amended, the principle of equal treatment can be invoked.

However, it must be observed that the deprivation of posted workers’ rights is merely a consequence of social dumping (and not the cause).

Social dumping can be defined as “the practice, undertaken by self-interested market participants, of undermining or evading existing social regulations with the aim of gaining competitive advantage” (Magdalena Bernaciak -Social dumping and the EU integration process-2014). No distinction is made between provider and recipient of services.

Recital (16) Directive 2018/957/EU, underlines that “In a truly integrated and competitive internal market, undertakings compete on the basis of factors such as productivity, efficiency, and the education and skill level of the labour force, as well as the quality of their goods and services and the degree of innovation thereof”

The restrictive replacement condition should aim to prevent situations which consist in the fact that undertakings are circumventing the condition related to the duration of the posting, by making rotations of their posted staff.

It must be observed that regardless of whether the rotation is sourced by the same or by different employers, its effect on the EU single market economy is the same.

The overriding reason of public interest can be invoked to justify the replacement condition (which constitutes a restriction of the freedom to provide services), should apply equally to both situations in discussion.