On 19 December 2019, in joined cases EX (C-140/19 and C-141/19), OK (C-492/19), PL (C-493/19) and QM (C-494/19), the ECJ ruled by reasoned order, on the compatibility with the EU law of certain mechanisms of fines, imposed for non-compliance with administrative requirements and control measures under Article 9 Directive 2014/67/EU, and meant to result in very high amounts due by the undertaking making the posting, regardless the seriousness of the breach.

Cases in the main proceedings

EX, OK, PL and QM have posted workers, to provide services, in the framework of a construction project, carried out in Austria.

Failure to comply with certain national law provisions transposing Directive 2014/67/EU, the administrative authority has fined EX a total of EUR 169.000. OK, PL and QM were fined EUR 58.500 each, in respect of similar breaches.

Questions referred for preliminary ruling

The first two questions, identical to questions referred in Maksimovic and Others (joined cases C‑64/18, C‑140/18, C-146/18 and C-148/18), are concerned with the compatibility with EU law of “very high fines, in particular high minimum penalties, which are imposed cumulatively in respect of each worker concerned”, and “have no absolute upper limits”.

The third question is concerned with the compatibility with Article 56TFEU (freedom to provide services), of the requirement to submit a declaration of amendment, “in the event that the temporary activity in the host country is concluded prematurely and/or interrupted”.

By its fourth question, the referring court asks whether the failure to provide for a reasonable delay to submit a declaration of amendment, is compatible with Art56TFEU.

The fifth question addresses the compatibility with EU law of the obligation to make available certain documents upon demand (immediately), and not subsequently within a reasonable delay.

By its sixth question, the referring court asks in essence, whether the obligation to provide documents other than those specified in Article 9 Directive 2014/67/EU, and that “are neither relevant nor appropriate and are not clearly defined under national law”, is compatible with Article 56TFEU and with Article 9 the said directive.

The ECJ reasoned order

As regards the first two questions, the ECJ Registry had communicated to the referring court, the ruling in Maksimovic and Others, however, the latter decided not to withdraw the request for preliminary ruling.

Pursuant to Article 99 Rules of Procedure of the Court of Justice, on a proposal from the Judge-Rapporteur, and after hearing the Advocate General, the ECJ decided to rule by reasoned order.

The merit of the order is to uphold non-compliance in relation to a mechanism of fines meant to result in very high amounts due, regardless the seriousness of the breach. Such a mechanism is based on the combination of high fines, and the accumulation of these fines without upper limit,when the infringement concerns several workers (see to that context paragraph 38).

The expected conclusion:

Article 20 Directive 2014/67/EU, 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),

Pursuant to Article 53 second paragraph Rules of Procedure of the Court of Justice, read in conjunction with Article 94 c) the said rules, the ECJ declared manifestly inadmissible the third and the sixth questions.

It appears that the referring court failed to clearly bring the reasons which prompted it to refer the questions, and the nature of its doubts on the relationship between those provisions and the national legislation applicable to the main proceedings.

The fourth question is disregarded (should have been considered if the answer to the third question is in the negative).

However, the fifth question, prima facie not (necessary) related to the fourth question, is disregarded as well.

In any circumstances, we take the view that the questions are of relevance, and not only in the particular Austrian context.

The same day, the ECJ ruled by reasoned order in NE (C-645/18). The questions referred to the ECJ are identical to the first two questions referred in the cases above cited. The ECJ conclusion, obviously the same.

Conclusion (?)

Ten cases referred to the ECJ, should persuade Austria to amend its national legislation (unless the judicial costs incurred by the defendants, are intrinsic to the game).