Unita Socio-Sanitaria Locale no 47 di Biella (USSL); v Istituto nazionale per l'assicurazione contro gli infortuni sul lavoro (INAIL). [1997] EUECJ C-134/95 (16 January 1997)

Judgment 1 By order of 30 March 1995, received at the Court on 24 April 1995, the Pretura Circondariale (District Magistrate's Court), Biella, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty two questions on the interpretation of the Community principles referred to in Articles 48, 49, 54 and 90 of the EC Treaty. 2 Those questions were raised in proceedings between Unità Socio-Sanitaria Locale No 47 di Biella (`USSL') and Istituto Nazionale per l'Assicurazione contro gli Infortuni sul Lavoro (`INAIL', National Insurance Fund for Accidents at Work) concerning the payment of social security contributions. 3 Article 1(1) of Law No 1369 of 23 October 1960 (`the 1960 Law') prohibits employers from entrusting to an intermediary or subcontractor, or any other type of body including a cooperative society, the mere provision of labour using workers taken on and paid by the intermediary or subcontractor, whatever the nature of the work or service to which the provision of labour relates. 4 USSL concluded a contract for the provision of welfare services with the cooperative La Famiglia for 1987. 5 On 21 December 1993 INAIL issued a formal demand to USSL for payment of LIT 9 200 105, representing social security contributions on wages paid to workers employed under that contract during the period from 1 January to 31 December 1987. 6 INAIL considered that the contract concluded between USSL and La Famiglia constituted a fictitious procurement of labour, prohibited by Article 1(1) of the 1960 Law, inasmuch as workers who were members of the cooperative in reality carried on their activities under the auspices of USSL staff. According to INAIL, those workers should have been regarded as employees of USSL, which would then have been bound, as their actual employer, to pay insurance contributions in respect of accidents in the workplace and occupational diseases. 7 By application lodged on 21 January 1994 before the Pretore di Biella, USSL raised an objection to INAIL's formal demand for payment. 8 In his order for reference, the Pretore di Biella refers to Article 1(1) of the 1960 Law and to Article 11(1) of Italian Law No 264 of 29 October 1949 (`the 1949 Law'), according to which the procurement of labour and any other activity as an intermediary in the demand for and supply of workers, apart from public placement services, are prohibited even if the activity is carried on free of charge. 9 The Pretore di Biella notes that the protection provided for under Italian law operates independently of any expression by the worker of a contrary intention and that the consequence of its application, in the current economic and political climate, is to reduce opportunities on the employment market still further, by rendering illegal forms of association which specifically ensure greater competitiveness on the market itself. 10 Consequently, Article 1(1) of the 1960 Law in conjunction with Article 11 of the 1949 Law, which provide that the procurement of labour is to be a monopoly of the State, appear to the Pretore di Biella to be contrary to the fundamental principles of European Community law on freedom in relation to work, business enterprise, establishment, the interplay between supply and demand, and competition, as laid down in Articles 48, 49, 54 and 90 of the EEC Treaty, in view of the fact that in any case the Italian State is incapable of satisfying demand in the labour market. 11 Taking the view that, in the circumstances, the outcome of the case depended on an interpretation of the abovementioned provisions of Community law, the Pretore di Biella stayed the proceedings and referred the following questions to the Court for a preliminary ruling: `1. Is Article 1(1) of Law No 1369 of 23 October 1960, read in conjunction with Article 11(1) of Law No 264 of 29 October 1949, compatible with the Community principles laid down in Articles 48, 49, 54 and 90 of the EEC Treaty? 2. Do those principles have direct effect, with the result that the Italian legislation has to be set aside?' 12 Given the context in which the national court made the reference to the Court, it should be pointed out at the outset that, according to settled case-law, the Court has no jurisdiction to give a preliminary ruling on a question submitted by a national court where it is quite obvious that the interpretation of Community law sought by that court bears no relation to the actual facts of the main action or its purpose or where the problem is hypothetical and the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (Case C-415/93 Bosman [1995] ECR I-4921 , paragraph 61). 13 In this case, it appears from the case-file that the specific context of the dispute before the national court is defined by Article 1(1) of the 1960 Law, which prohibits persons from acting as intermediaries or middlemen in employment relations. 14 The questions referred to the Court for a preliminary ruling are broader in scope, inasmuch as they also raise the problem of the compatibility with Community law of Article 11(1) of the 1949 Law, which lays down the principle that any mediation, even if free of charge, is prohibited where the placement is entrusted to authorized offices. 15 Although it is true that the national court expresses doubts as to whether the effect of the combined application of the two provisions cited above on the Italian employment market is compatible with Community law, neither the order for reference nor the written observations provide the factual and legal information that would enable the Court to interpret Community law, in particular in the field of competition, having regard to the situation thus created on the Italian market. 16 Since the national court has also omitted to explain in what way Article 11(1) of the 1949 Law is to be applied as such in the case before it, a ruling need only be given on the question in so far as it concerns Article 1(1) of the 1960 Law and raises, in this connection, a problem concerning the interpretation of the Treaty provisions relating to freedom of movement for persons and freedom to provide services. 17 Secondly, it follows from settled case-law that, within the framework of proceedings brought under Article 177 of the Treaty, the Court does not have jurisdiction to give a ruling on the compatibility of a national measure with Community law. However, it does have jurisdiction to supply the national court with a ruling on the interpretation of Community law so as to enable that court to determine whether such compatibility exists in order to decide the case before it (see, in particular, Case 223/78 Grosoli [1979] ECR 2621, paragraph 3). 18 In view of the reference made by the Pretore di Biella to the principles of freedom of movement for persons and freedom to provide services, the questions submitted to the Court must be understood as seeking, essentially, to ascertain whether Articles 48, 52 and 59 preclude a national provision which prohibits persons from acting as intermediaries or middlemen in employment relations (Question 1) and whether those provisions have direct effect (Question 2). Question 1 19 According to settled case-law, Articles 48, 52 and 59 of the Treaty cannot be applied to activities which are confined in all respects within a single Member State (Case C-41/90 Höfner and Elser [1991] ECR I-1979 , paragraph 37; Case C-332/90 Steen [1992] ECR I-341 , paragraph 9; and Joined Cases C-29/94 to C-35/94 Aubertin and Others [1995] ECR I-301, paragraph 9). 20 It is clear from the order for reference that La Famiglia, a cooperative, is a supplier of services which has its seat in Italy, and that it has provided services to a public body, the USSL, which is also established in Italy. 21 Moreover, as the Advocate General stated in point 24 of his Opinion, there is nothing in the file to indicate that the services concerned were provided by workers from other Member States, or even that that was envisaged. 22 That situation has no connection whatsoever with any of the situations envisaged by Community law in the area of freedom of movement for persons and services. 23 In the circumstances, the answer to the first question referred to the Court must be that Articles 48, 52 and 59 of the EC Treaty do not apply to a situation, such as that in the main proceedings, which is confined in all respects within a single Member State. Question 2 24 In view of the answers given to the first question referred to the Court, there is no need for a ruling on the second question. Costs 25 The costs incurred by the Italian and German Governments and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, 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 (Sixth Chamber), in answer to the questions referred to it by the Pretura Circondariale, Biella, by order of 30 March 1995, hereby rules: Articles 48, 52 and 59 of the EC Treaty do not apply to a situation which is confined in all respects within a single Member State. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII