Finalarte (Freedom to provide services) [2001] EUECJ C-70/98 (25 October 2001)

Judgment By orders dated 10 February 1998 (C-49/98), 16 February 1998 (C-50/98) and 17 February 1998 (C-52/98 to C-54/98), received at the Court on 24 February 1998, and 27 February 1998 (C-68/98 to C-71/98), received at the Court on 13 March 1998, the Arbeitsgericht (Labour Court) Wiesbaden has submitted four questions to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) on the interpretation of Articles 48 and 59 of the EC Treaty (now, after amendment, Articles 39 EC and 49 EC), and of Article 60 of the EC Treaty (now Article 50 EC), and of subparagraph (b) of the second indent of the first paragraph of Article 3(1) of Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ 1997 L 18, p. 1). Those questions arose in the context of nine actions, all concerning the paid leave funds scheme established to finance holiday entitlement for construction workers. Three of those actions (C-49/98, C-70/98 and C-71/98) involve claims for a declaration of the non-existence of a legal relationship. The Urlaubs- und Lohnausgleichskasse der Bauwirtschaft (Paid leave fund for the construction industry, the fund) is the defendant in those actions. The applicants are employers established in a Member State other than the Federal Republic of Germany who posted workers to Germany, and who received demands from the fund to pay contributions and to provide information for the calculation of those contributions pursuant to the Verfahrenstarifvertrag (Collective Agreement on the social fund scheme, the VTV). The other actions (C-50/98, C-52/98 to C-54/98, C-68/98 and C-69/98) involve claims by the fund, against employers established in a Member State other than the Federal Republic of Germany who posted workers to Germany, for the payment of contributions and the disclosure of information. National rules The scheme of paid leave for workers in the construction industry is governed, in Germany, by the Mindesturlaubsgesetz für Arbeitnehmer - Bundesurlaubsgesetz (Law on minimum holiday entitlement for workers) and by the Bundesrahmentarifvertrag für das Baugewerbe (Collective framework agreement for the construction industry, the BRTV-Bau). It is implemented by means of a system of funds for paid leave governed, in all essential respects, by the VTV. The State Secretary, Federal Ministry of Labour and Social Affairs, extended the scope of the VTV and the BRTV-Bau to the whole of the construction industry. In the construction industry workers change employers frequently. For that reason, the BRTV-Bau provides that the various employment relationships entered into by the worker during the reference year are to be treated as if they were a single employment relationship. This fiction enables the worker to accumulate holiday entitlement acquired with different employers in the course of the reference year and to claim that full entitlement from his current employer, irrespective of the duration of the employment relationship with that employer. The ordinary consequence of that system would be to impose a heavy financial burden on the current employer because he is required to pay the worker holiday pay even for holiday acquired with other employers. The fund was established in order to overcome this drawback and to ensure an equitable distribution of the financial burden between the employers concerned. To this end, employers established in Germany pay contributions to the fund amounting to 14.45% of their total gross wages. In return the employers are entitled, inter alia , to full or partial reimbursement of the benefits paid to workers in respect of holiday pay and additional holiday allowance. Every month employers must disclose certain information to the fund to enable it to ascertain their total monthly gross wages and to calculate the amount of contributions due. The Arbeitnehmerentsendegesetz (Law on the posting of workers) of 26 February 1996 (BGBl. I, p. 227, the AEntG) applies the provisions of the collective agreements concerning entitlement to paid leave in the construction industry, with effect from 1 March 1996, and, subject to certain conditions, to employment relationships between undertakings whose registered office is situated outside Germany and workers they send to carry out construction work on sites in Germany. In this context, Paragraph 8 of the BRTV-Bau on holiday entitlement was amended and the VTV was supplemented, with effect from 1 January 1997, by a third part entitled Holiday scheme for employers established outside Germany and their employees working in Germany. Employers established outside Germany are thereby required to contribute to the holiday pay funds scheme, which means, inter alia , that they must pay 14.82% of the total gross wages of workers posted to Germany into the fund up to 30 June 1997, and 14.25% thereafter. None the less there are differences between the scheme applying to employers established in Germany and that applying to other employers. First, in contrast to the scheme for employers established in Germany, the employer established abroad is not entitled to claim reimbursement from the fund. It is always the posted worker himself who is entitled under the VTV to receive holiday pay from the fund. Second, employers established outside Germany must disclose more information to the fund than those established in Germany. Third, business is given a different meaning depending on whether the employer is established in Germany or not. Paragraph 1(4) of the AEntG provides: For the purposes of classification as a business to which a collective agreement under subparagraphs 1, 2 and 3 applies, the workers deployed in Germany by the employer established abroad shall, in their entirety, be treated as a business. By contrast, it appears from Paragraph 7 of the BRTV-Bau that, to ascertain whether an employer established in Germany is subject to the collective agreements of the construction industry, a construction site or even the workers deployed exclusively on a construction site are not regarded as a business. It is the organisational entity from which workers are posted to a construction site that constitutes the business. The main proceedings and the questions submitted for a preliminary ruling Of the employers who are parties to the main proceedings, eight are established in Portugal and one in the United Kingdom. During 1997 they each posted workers to Germany to carry out construction work. The fund requires that these employers contribute to the scheme to finance the holiday entitlement of construction workers. It relies, in this respect, on the VTV and Paragraph 1(1) and (3) of the AEntG. In order to prepare the collection of contributions due, as laid down by those provisions, it requests these employers to provide certain information set out in the VTV. The Arbeitsgericht Wiesbaden decided that the determination of the main proceedings depended on the interpretation of Community law, and so decided to stay proceedings and submit the following questions to the Court for a preliminary ruling: 1. On a proper construction of Articles 48, 59 and 60 of the EC Treaty, are those provisions infringed by a provision of national law - the first sentence of Paragraph 1(3) of the AEntG - which extends the application of provisions of collective agreements which have been declared generally binding concerning the collection of contributions and the grant of benefits in connection with workers' holiday entitlements by joint bodies of parties to collective agreements, and thus the provisions of those agreements concerning the scheme to be complied with in that regard, to employers established abroad and their workers who have been posted to the area within which those collective agreements apply? 2. On a proper construction of Articles 48, 59 and 60 of the EC Treaty, are those provisions infringed by the second sentence of Paragraph 1(1) and the first sentence of Paragraph 1(3) of the AEntG which result in the application of provisions of collective agreements declared to be generally binding which: (a) provide for leave which exceeds the minimum length of annual leave laid down by Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time; and/or (b) allow employers established in Germany to claim the reimbursement of expenditure on holiday pay and holiday allowances from joint bodies of the parties to the collective agreements whereas, in the case of employers established abroad, they do not provide for such a claim but instead for a direct claim by the posted workers against the joint bodies of the parties to the collective agreements; and/or (c) in connection with the social fund scheme to be complied with under those collective agreements, impose on employers established abroad obligations to provide the joint bodies of the parties to the collective agreements with more information than that required from employers established in Germany? 3. On a proper construction of Articles 48, 59 and 60 of the EC Treaty, are those provisions infringed by Paragraph 1(4) of the AEntG under which - for the purposes of classifying businesses as covered by a collective agreement which has been declared generally binding and which, under the first sentence of Paragraph 1(3) of that Law, also applies to employers established abroad and their workers who have been posted to the area within which that collective agreement applies - all workers posted to Germany, but only those workers, are treated as a business, while a different definition of a business applies to employers established in Germany which in certain cases results in different businesses falling within the scope of the generally binding collective agreement? 4. Is Article 3(1)(b) of Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services to be interpreted as in any event, having regard to the correct interpretation of Articles 48, 59 and 60 of the EC Treaty, neither requiring nor permitting the rules at issue in Questions 1, 2 and 3? Preliminary observations The questions submitted by the national court concern the interpretation of Articles 59 and 60 of the Treaty on the freedom to provide services as well as the applicability of Article 48 of the Treaty on the free movement of workers. It is common ground that the main proceedings concern businesses established in Member States other than the Federal Republic of Germany who have posted their own workers for a fixed period to construction sites in Germany for the purposes of providing services, a situation which falls within Articles 59 and 60 of the Treaty. However the national court, Finalarte Sociedade de Construção Civil Ld. a and Portugaia Construções Ld. a consider that Article 48 of the Treaty also applies to the cases in the main proceedings, in that the chances of workers being taken on and posted abroad are reduced to the extent that an employer may be deterred, as a result of the extension of the paid leave scheme, from exercising its freedom to provide services by pursuing activities in the Federal Republic of Germany. The Court has held that workers employed by a business established in one Member State who are temporarily sent to another Member State to provide services do not, in any way, seek access to the labour market in that second State if they return to their country of origin or residence after completion of their work (Case C-113/89 Rush Portuguesa [1990] ECR I-1417 , paragraph 15, and C-43/93 Vander Elst [1994] ECR I-3803 , paragraph 21). It follows that Article 48 of the Treaty does not apply in the circumstances of the main proceedings. Consequently, it is not necessary to consider the questions submitted in the light of that provision. The fourth question concerns the applicability of Directive 96/71. On this point it should be noted that the time-limit for implementing the directive, 16 December 1999, had not been reached at the time of the facts in the main proceedings. There is therefore no need to interpret the directive or to give a reply to the fourth question for the purposes of the main proceedings. It follows that the rules in issue in the main proceedings should be considered solely in the light of Articles 59 and 60 of the Treaty. By the first question, the national court essentially asks whether Articles 59 and 60 of the Treaty in principle preclude a Member State from imposing national rules, such as those laid down by the first sentence of Paragraph 1(3) of the AEntG guaranteeing entitlement to paid leave for posted workers, on a business established in another Member State, which provides services in the first Member State by posting workers for that purpose. The second and third questions ask whether particular aspects of those rules render their extension to such a business incompatible with Articles 59 and 60 of the Treaty. First question According to settled case-law, Article 59 of the Treaty requires not only the elimination of any discrimination on grounds of nationality against providers of services who are established in another Member State but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit, impede or render less advantageous the activities of a provider of services established in another Member State where he lawfully provides similar services (see, in particular, Joined Cases C-369/96 and C-376/96 Arblade and Others [1999] ECR I-8453, paragraph 33, and Case C-165/98 Mazzoleni and ISA [2001] ECR I-2189 , paragraph 22). In particular, a Member State may not make the provision of services in its territory subject to compliance with all the conditions required for establishment and thereby deprive the provisions of the Treaty whose object is, precisely, to guarantee the freedom to provide services, of all practical effect (see Case C-76/90 Säger [1991] ECR I-4221 , paragraph 13, and Mazzoleni and ISA , cited above, paragraph 23). In that regard, the application of the host Member State's national rules to providers of services is liable to prohibit, impede or render less attractive the provision of services to the extent that it involves expense and additional administrative and economic burdens ( Mazzoleni and ISA , paragraph 24). The freedom to provide services, as one of the fundamental principles of the Treaty, may be restricted only by rules justified by overriding requirements relating to the public interest and applicable to all persons and businesses operating in the territory of the State where the service is provided, in so far as that interest is not safeguarded by the rules to which the provider of such a service is subject in the Member State where he is established (see Arblade , cited above, paragraph 34, and Mazzoleni and ISA , paragraph 25). The application of the national rules of a Member State to providers of services established in other Member States must be appropriate for securing the attainment of the objective which those rules pursue, and must not go beyond what is necessary in order to attain it ( Arblade , paragraph 35, and Mazzoleni and ISA , paragraph 26). Overriding reasons relating to the public interest already recognised by the Court include the protection of workers (see, in particular, Arblade , paragraph 36, and Mazzoleni and ISA , paragraph 27). In order to be able to apply the rules of the host Member State to providers of services established in another Member State, it is for the competent authorities, or the courts of the former Member State as the case may be, to determine whether, having regard to the principles set out at paragraphs 28 to 33 of this judgment, those rules may result in restriction of the freedom to provide services, and if so, whether they are nevertheless justified. The national court points out that the application of the rules in question in the main proceedings to providers of services established outside Germany has the effect of increasing their costs and administrative and economic burdens, which implies a restriction of the freedom to provide services. In particular, it appears that the providers of services must comply with administrative formalities, including the duty to provide information to the fund. Such a restriction of the freedom to provide services is justifiable only if it is necessary in order to pursue, effectively and by appropriate means, an objective in the public interest. In this respect, the national court points out that it appears from the explanatory memorandum of the AEntG that the declared aim of that law is to protect German businesses in the construction industry from the increasing pressure of competition in the European internal market, and thus from foreign providers of services. The national court adds that, from the start of discussions on the draft of that law, it had been pointed out on numerous occasions that such a law would, above all, combat the allegedly unfair practice of European businesses engaged in low-pay competition. According to settled case-law, measures restricting the freedom to provide services cannot be justified by economic aims, such as the protection of national businesses (see, to that effect, Case 352/85 Bond van Adverteerders and Others [1988] ECR 2085, paragraph 34, and Case C-398/95 SETTG [1997] ECR I-3091 , paragraph 23). However, whilst the intention of the legislature, to be gathered from the political debates preceding the adoption of a law or from the statement of the grounds on which it was adopted, may be an indication of the aim of that law, it is not conclusive. It is, on the contrary, for the national court to check whether, viewed objectively, the rules in question in the main proceedings promote the protection of posted workers. In this respect, it is necessary to check whether those rules confer a genuine benefit on the workers concerned, which significantly adds to their social protection. In this context, the stated intention of the legislature may lead to a more careful assessment of the alleged benefits conferred on workers by the measures it has adopted. As the Advocate General pointed out at points 82 to 107 of his Opinion, it is possible to identify potential benefits that the German rules might confer on workers posted by providers of services established outside Germany. In particular, it may be that under the German rules the worker is entitled to more holidays and a higher daily allowance than under the law of the Member State where his employer is established. Furthermore, it seems that the paid leave funds scheme at issue in the main proceedings has advantages for workers wishing to transfer to the employment of a business established in Germany, since it allows them to keep their holiday entitlement. It is for the national court to consider whether such potential benefits confer real additional protection on posted workers. That assessment must take account, first, of the protection as to paid leave that workers already enjoy under the law of the Member State where their employer is established, since the rules at issue in the main proceedings cannot be regarded as conferring real additional protection on posted workers if the latter enjoy the same protection, or essentially similar protection, under the legislation of the Member State where their employer is established. Second, for the purposes of this assessment, the national court must ascertain whether workers posted to Germany to carry out a specific task do, in practice, leave their employer to work for a business established in Germany. In this respect, it will be recalled that, as noted at paragraph 22 of this judgment, workers who are temporarily posted to another Member State in order to supply services are not to be regarded as belonging to the job market in that State. Third, the national court must check that, when they have returned to the Member State where their employer is established, the workers concerned are genuinely able to assert their entitlement to holiday pay from the fund, having regard, in particula , to the formalities to be observed, the language to be used and the procedure for payment. If the national court considers that the rules at issue in the main proceedings in fact pursue the public interest objective of protecting workers employed by providers of services established outside Germany, it will have to go on to assess whether those rules are proportionate to the attainment of that objective, having regard to all relevant factors. In doing so, the national court should balance the administrative and economic burdens that the rules impose on providers of services against the increased social protection that they confer on workers compared with that guaranteed by the law of the Member State where their employer is established. In this respect, it would be necessary to consider whether the objective of granting workers posted to Germany more holidays and a higher daily allowance than under the law of the Member State where their employer is established may be achieved by means less restrictive than the rules at issue in the main proceedings, for example by a duty imposed on employers established outside Germany to pay directly to the worker, during the period of the posting, the holiday allowance to which he is entitled under the German rules. As for the objective of protecting posted workers who leave their employer to work for a business established in Germany, it would be for the national court to consider whether that objective might be achieved by requiring the first employer to compensate the worker who leaves his employment without having taken the holiday to which he is entitled. Consequently, the reply to the first question is that Articles 59 and 60 of the Treaty do not preclude a Member State from imposing national rules, such as those laid down by the first sentence of Paragraph 1(3) of the AEntG guaranteeing entitlement to paid leave for posted workers, on a business established in another Member State which provides services in the first Member State by posting workers for that purpose, on the two-fold condition that: (i) the workers do not enjoy an essentially similar level of protection under the law of the Member State where their employer is established, so that the application of the national rules of the first Member State confers a genuine benefit on the workers concerned, which significantly adds to their social protection, and (ii) the application of those rules by the first Member State is proportionate to the public interest objective pursued. Second question By the second question, the national court asks whether Articles 59 and 60 of the Treaty preclude three specific aspects of the rules at issue in the main proceedings. First, by Question 2(a) the national court asks whether the German rules, which provide for 30 days worked, or 36 working days, of paid leave per year, are disproportionate having regard, first, to the fact that the public interest objective pursued is already safeguarded by Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time (OJ 1993 L 307, p. 18) and, second, that they provide for a longer period of paid leave than does the directive. Article 7(1) of Directive 93/104 provides that Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice. On this point, it should be noted that Directive 93/104 only lays down minimum requirements as to the period of paid leave. Article 15 provides that [t]his Directive shall not affect Member States' right to apply or introduce laws, regulations or administrative provisions more favourable to the protection of the safety and health of workers or to facilitate or permit the application of collective agreements or agreements concluded between the two sides of industry which are more favourable to the protection of the safety and health of workers. It is therefore for each Member State to determine the period of paid leave which is necessary in the public interest. Since the Federal Republic of Germany has determined that a period of paid leave equal to 30 days worked per year is necessary for the social protection of construction workers Articles 59 and 60 of the Treaty do not, in principle, prevent that Member State from extending this level of protection to workers posted by providers of services established in other Member States. Consequently, the reply to Question 2(a) is that Articles 59 and 60 of the Treaty do not preclude the extension of the rules of a Member State which provide for a longer period of paid leave than that provided for by Directive 93/104 to workers posted to that Member State by providers of services established in other Member States during the period of the posting. Second, the national court points out that the scheme in issue in the main proceedings allows employers established in the Federal Republic of Germany to claim the reimbursement of expenditure on holiday pay and holiday allowances from the fund, whereas it does not provide for such a claim in the case of employers established in other Member States, but instead confers a direct claim against the fund on the posted workers. It therefore asks, by Question 2(b), whether that difference in treatment is an infringement of Articles 59 and 60 of the Treaty. The fund and the German Government deny that that difference makes the scheme incompatible with Community law. They emphasise that it is advantageous to the business established outside Germany because it is exempt from having to calculate and effect the payments itself. On the basis of the information before the Court, which the national court must verify, it does not appear that the difference in treatment is disadvantageous to businesses established in other Member States, thereby giving rise to discrimination contrary to Articles 59 and 60 of the Treaty. In any event, there are, clearly, objective differences between businesses established in the Federal Republic of Germany and those established in other Member States as regards the effective implementation of the obligation to give holiday pay. Accordingly, where a business established outside Germany ceases to provide services there, the German authorities are no longer able to ensure that it has, in fact, given holiday pay to the posted workers. It follows that it is more efficient if the fund gives holiday pay directly to the posted workers. The difference in treatment may be explained by those objective differences, and does not therefore constitute discrimination contrary to Articles 59 and 60. Consequently, the reply to Question 2(b) is that Articles 59 and 60 of the Treaty do not preclude national rules from allowing businesses established in the Federal Republic of Germany to claim reimbursement of expenditure on holiday pay and holiday allowances from the fund, whereas it does not provide for such a claim in the case of businesses established in other Member States, but instead provides for a direct claim by the posted workers against the fund, in so far as that is justified by objective differences between businesses established in the Federal Republic of Germany and those established in other Member States. Third, by Question 2(c) the national court asks whether Articles 59 and 60 of the Treaty preclude the national rules in issue in the main proceedings from requiring employers established outside the Federal Republic of Germany to provide more information to the fund than employers established in Germany. The national court considers that the additional obligations thereby imposed on businesses established outside the Federal Republic of Germany not only constitute inequality of treatment but also make it considerably more difficult to provide services in Germany. It therefore considers that those obligations are incompatible with Articles 59 and 60 of the Treaty. The German Government for its part contends that those different procedural requirements are dictated by practical considerations. It is very difficult to monitor businesses having their registered office outside the Federal Republic of Germany, and in any event they cannot be monitored as effectively as can businesses established in Germany. In this respect, it should be accepted that rules designed to provide effective protection of workers in the construction industry, in particular as regards their entitlement to paid holiday, does require that certain information be supplied. More specifically, such a requirement may be the only appropriate measure of control having regard to the objective pursued by those rules. Nevertheless, an obligation of the kind imposed by the rules at issue in the main proceedings, to disclose certain information to the authorities of the host Member State, gives rise to additional expense and administrative and economic burdens for businesses established in another Member State (see, to that effect, Arblade , paragraph 58). The fact that businesses established outside the Federal Republic of Germany are given additional burdens in terms of the information to be disclosed therefore, a fortiori , constitutes a restriction on the freedom to provide services within the meaning of Article 59 of the Treaty (see, to that effect, Arblade , paragraph 59). Such a restriction may be justified only if it is necessary in order to safeguard, effectively and by appropriate means, the overriding public interest of the social protection of workers. Furthermore, the fact that businesses established outside the Federal Republic of Germany are not subject to the same obligations to provide information may be attributed to objective differences between those businesses and businesses established in Germany. By contrast, the duty to disclose specific documents to the Member State cannot be justified if that State can perform the necessary checks on the basis of the documents required by the rules of the Member State of establishment (see, to that effect, Arblade , paragraph 64). In the light of the foregoing, the reply to Question 2(c) is that it is for the national court to determine the type of information that the German authorities may reasonably require of providers of services established outside the Federal Republic of Germany, having regard to the principle of proportionality. For this purpose, the national court should consider whether the objective differences between the position of businesses established in Germany and that of businesses established outside Germany objectively require the additional information required of the latter. Third question By its third question the national court asks whether Articles 59 and 60 of the Treaty preclude a national provision such as Paragraph 1(4) of the AEntG, which essentially provides that all workers posted to Germany by an employer established outside Germany, and only those workers, are to be treated as a business, whereas a different definition of a business applies to employers established in Germany, which may, in certain cases, result in different businesses falling within the scope of the collective agreements. The national court points out that those two concepts of business may have different practical consequences in the case of so-called mixed businesses, that is, businesses only part of whose activities are associated with the construction industry. Mixed businesses established in Germany are subject to construction industry collective agreements only where the working time of workers engaged in that industry is greater than the working time of workers engaged in other industries. It therefore considers that Paragraph 1(4) of the AEntG entails discrimination based on the place where the business is established, contrary to Articles 59 and 60 of the Treaty. The German Government contends that the third question is inadmissible because it has no bearing on the outcome of the main actions. The national court has not shown that the foreign businesses involved in those actions would not be subject to the collective agreements if the meaning of business under the AEntG were different. That argument cannot be upheld. It is sufficient, as regards admissibility, to note that it is for the national court alone to determine the relevance of the question submitted and that only the obvious lack of any connection with the main action can render a question inadmissible (Joined Cases C-332/92, C-333/92 and C-335/92 Eurico Italia [1994] ECR I-711 , paragraph 17). Such is not, however, the case here. As to the substance, in contrast to businesses established in the Federal Republic of Germany, those established in other Member States who provide services to the construction industry in Germany are always subject to the collective agreements applicable in that industry and therefore, inter alia , to the obligation to pay contributions to the fund. It follows that Paragraph 1(4) of the AEntG gives rise to inequality of treatment which, in the absence of any justification recognised by the Treaty, is contrary to Article 59 of the Treaty. Consequently, the reply to the third question is that Articles 59 and 60 of the Treaty preclude the application of a Member State's scheme for paid leave to all businesses established in other Member States providing services to the construction industry in the first Member State where businesses established in the first Member State, only part of whose activities are carried out in that industry, are not all subject to that scheme in respect of their workers engaged in that industry. Costs 84. The costs incurred by the German, Belgian, French, Netherlands, Austrian and Swedish Governments and the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main actions, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. On those grounds, THE COURT (Fifth Chamber), in answer to the questions referred to it by the Arbeitsgericht Wiesbaden by orders of 10, 16, 17 and 27 February 1998, hereby rules: 1. Article 59 of the EC Treaty (now, after amendment, Article 49 EC) and Article 60 of the EC Treaty (now Article 50 EC) do not preclude a Member State from imposing national rules, such as those laid down by the first sentence of Paragraph 1(3) of the Arbeitnehmerentsendegesetz (German law on the posting of workers) guaranteeing entitlement to paid leave for posted workers, on a business established in another Member State which provides services in the first Member State by posting workers for that purpose, on the two-fold condition that: (i) the workers do not enjoy an essentially similar level of protection under the law of the Member State where their employer is established, so that the application of the national rules of the first Member State confers a genuine benefit on the workers concerned, which significantly adds to their social protection, and (ii) the application of those rules by the first Member State is proportionate to the public interest objective pursued. 2(a) Articles 59 and 60 of the Treaty do not preclude the extension of the rules of a Member State which provide for a longer period of paid leave than that provided for by Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time to workers posted to that Member State by providers of services established in other Member States during the period of the posting. 2(b) Articles 59 and 60 of the Treaty do not preclude national rules from allowing businesses established in the Federal Republic of Germany to claim reimbursement of expenditure on holiday pay and holiday allowances from the fund, whereas it does not provide for such a claim in the case of businesses established in other Member States, but instead provides for a direct claim by the posted workers against the fund, in so far as that is justified by objective differences between businesses established in the Federal Republic of Germany and those established in other Member States. 2(c) It is for the national court to determine the type of information that the German authorities may reasonably require of providers of services established outside the Federal Republic of Germany, having regard to the principle of proportionality. For this purpose, the national court should consider whether the objective differences between the position of businesses established in Germany and that of businesses established outside Germany objectively require the additional information required of the latter. 3. Articles 59 and 60 of the Treaty preclude the application of a Member State's scheme for paid leave to all businesses established in other Member States providing services to the construction industry in the first Member State where businesses established in the first Member State, only part of whose activities are carried out in that industry, are not all subject to that scheme in respect of their workers engaged in that industry. Jann Edward Sevón Delivered in open court in Luxembourg on 25 October 2001. R. Grass P. Jann Registrar President of the Fifth Chamber 1: Language of the case: German. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII