The European Court of Justice has delivered its judgment in joined cases C‑64/18, C‑140/18, C-146/18 and C-148/18.

The questions referred to the ECJ are related to fines exceeding in total EUR 13 million (eventually increased by 20%), imposed under the Austrian legislation, for failure to comply with obligations in connection with the posting of workers, notably it compatibility with Article 56 TFEU (freedom to provide services), Directive 96/71/EC, Directive 2014/67/EU, and/or with the Charter of Fundamental Rights of the European Union.

It must be first noted that by operation of law, the defendants in the main proceedings, are given the opportunity to convert the fines, into 1600 to 1736 days imprisonment.

Recalling settled case law, the ECJ observes first that on the one hand, such monitoring measures do not fall within the scope of Directive 96/71 ,and on the other hand, the facts in the main proceedings occurred prior to the transposition of Directive 2014/67/EU into the national law in Austria.

Ruling out the relevance of the Posting of Workers Directive, Directive 2014/67/EU, and Directive 2006/123/EC, the ECJ examines the provisions of the Austrian law, in the light of Article 56TFEU.

Practically, granting the reach of the judgment beyond the case at issue, the ECJ justifies the existence of financial administrative penalties and/or fines (provided for by Chapter VI Directive 2014/67/EU) :“national measures which are liable to restrict or to make less attractive the exercise of the fundamental freedoms guaranteed by the FEU Treaty may nonetheless be permitted where they serve overriding reasons in the public interest, are appropriate for attaining their objective, and do not go beyond what is necessary to attain that objective” With simple words, under Article 56TFEU, and/or under Directive 2014/67/EU, such measures must be proportionate.

The ECJ finds that provisions lay down fines that vary in accordance to the number of workers concerned, do not seem, in principle, to be disproportionate.

However, Article 56 TFEU, must be interpreted as precluding a national legislation, such as that at issue in the main proceedings, from providing for, in the event of non-compliance with obtaining administrative authorizations and keeping salary documents, fines:

• that cannot be less than a predefined amount
• that are imposed cumulatively for each worker concerned and with no upper limit
• supplemented by a contribution to the costs of proceedings up to 20% (in the event of rejection of the appeal against the decision imposing such fines), and
• that are converted into several years’ imprisonment, in case of non-payment