High-frequency cross-border workers -the law is not an exact science

In his Opinion delivered on 29 July in Michael Dobersberger (C-16/18 ECLI:EU:C: 2019:638), Advocate General Szpunar, has suggested a logical interpretation of Directive 96/71/EC in regard to “high frequency” cross-border workers.

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In his Opinion delivered on 29 July in Michael Dobersberger (C-16/18 ECLI:EU:C: 2019:638), Advocate General Szpunar, has suggested a logical interpretation of Directive 96/71/EC in regard to “high frequency” cross-border workers.

Where “there is a great diversity among authors in the modes which they have adopted of defining logic” (A System of Logic John Stuart Mill), the ECJ ruling is keenly awaited.

The case in the main proceedings

In performance of a contract entered with the Austrian Federal Railways (OBB), D GmbH an Austrian company provides on-board services (such as preparation and sale of food and drink), in trains operated by the OBB, departing from Budapest (Hungary) to Salzburg (Austria) or Munich (Germany). The trains stop in Vienna (Austria) and after reaching the terminus station return to Budapest.

By way of a subcontracting chain, via another Austrian company, D GmbH has passed on the contract to Henry am Zug a Hungarian company. To provide the service, Henry am Zug used its own workers, and workers employed by another Hungarian undertaking, which were hired out to the former in the posting country.

Mr Dobersberger, managing director of Henry am Zug, was found guilty on the basis of the fact that,  Henry am Zug, in its capacity as employer, (i) had not notified the posting to the competent Austrian authority  (ii) had not retained at the place of deployment the portable documents A1 (i.e. the social security subjection is not in question, but the obligation under the Austrian labour law to retain such documents), and (iii) had not retained at the place of deployment the employment contracts, proof of payment of wages and documents relating to the wage categories, in German.

The questions referred for a preliminary ruling

The questions referred to the ECJ by the Supreme Administrative Court of Austria, can be summarised as follows:

Whether the cross-border provision of services, such as the provision of food and drink to passengers, on-board service or cleaning services, on international trains, fails under the scope of Article 1(3) (a) Directive 96/71/EC (the first question).

Whether the rather laborious posting scenario, as the case at issue, fails under the scope of Article 1(3) (a) Directive 96/71/EC (the second and the third question).

Irrespective of the answer to the other questions, whether as the case at issue, the EU law, in particular the freedom to provide services (Article 56 and 57 TFEU) precludes national legislations from imposing obligations similar to these provided for in Directive 96/71/EC and its enforcement Directive 2014/67/EU (the fourth question).

Summary of  the Opinion delivered by AG Szpunar

In regard to the first question, the AG observes that the wording of Article 1 of Directive 96/71 is inconclusive for the problem at hand, and underlines the difficulty to assume that the workers are genuinely posted to the territory of Austria. The AG takes the view that the workers are rather posted “‘to the territory’ of the train which, as it happens, passes through Austria.”

The AG concludes that the situation of “highly mobile workers” does not fit the logic of Directive 96/71/EC, merely because there is no country of destination of the service (or the country of origin and destination of the service is the same-Hungary).

AG Szpunar introduces in context the concept of immaterial place of work.

In regard to the second and the third question, and regardless the response to the first, the AG recalls that on the one hand, the posting takes place under a contract between a posting undertaking located in Hungary, and a recipient of services operating in Austria (it is thus irrelevant that there is no direct contract concluded between ÖBB the final recipient of services, and Henry am Zug the  company making the posting), and on the other hand, it is irrelevant that there is no employment relationship between Henry am Zug and the workers posted to Austria (see in the same context the Opinion delivered by Advocate General Wahl in Danieli & C. Officine Meccaniche SpA C-18/17 ECLI:EU:C: 2018:288).

The laborious posting situation fits the logic of Directive 96/71/EC, although does not fit its wording. The ratio decidenti is Article 56TFEU.

In regard to the fourth question, the measures imposed by the Austrian national legislation constitute a restriction to the freedom to provide services.

Considering the presumption that Directive 96/71/EC is not applicable in the case at issue, AG Szpunar takes the view that such a restriction cannot be justified by an overriding reason relating to the public interest. The logic is the “missing link with the territory of Austria”. With simple words, except for the duty to retain portable documents A1, the obligations laid down by the Austrian law, are in breach of Article 56 TFEU.

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Tanel Feldman

Senior Partner , Immigration Law Associates

Immigration Law Associates provides in-depth advice on rights and obligations triggered by the cross-border element of a given legal situation. Our know-how is built on an extensive experience in EU law and is supported by a network of partners across the EU. Social security coordination : • Autonomous application of the social security coordination regulations and ECJ case-law, to any situation involves a cross-border element EU Company law : • Establishment -permanent activities • Establishment -self-employment activities International Private Law : • Law applicable to the employment relationship Labour and employment law : • Freedom of movement of workers-equal treatment, access to social benefits • Employment contracts and termination of employment • Working conditions • Employee benefits • Transfer of undertakings • Authorisations of work for third-country nationals Special regimes : • Posted workers • Frontier workers • Highly mobile workers • Employment of record • Intra-EU mobility of third-country nationals

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