Avalanche of preliminary questions to the CJEU on posting of workers to Austria

Avalanche of preliminary questions referred to the Court of Justice in cases concerning posting of workers to Austria and transposition of Directive 2014/67.

Several important preliminary questions from the Austrian Landesverwaltungsgericht in Styria have recently found their way to the Court of Justice of the EU. They all concern Austria and show that the Austrian law and practice of Austrian officials towards entrepreneurs posting workers thereto have protectionist nature and appear incompatible with the free provision of services in the European Union. These questions have a universal common denominator as well – major doubts regarding the harshness and excessive formalism of the national provisions transposing the Enforcement Directive 2014/67 and establishing obligations which go beyond the ones provided for by the Directive.

High fines (including high minimum penalties) for violating formal obligations…

In four cases – C-645/18, C-712/18, C-713/18 and C-227/19, the Austrian court (equivalent to a Polish regional administrative court, WSA) came up with a preliminary question concerning the imposition, by the Austrian authorities, of very high fines, in particular high minimum penalties, imposed cumulatively for violating only formal obligations in posting of workers. The Austrian court indicated that especially the following is penalized by the authorities:

  • failure to make available documents relating to pay and/or social security;
  • failure to report to the Central Coordination Office (the so-called ZKO notifications) the posting of workers.

The Austrian court of Styria disputed the fact that these fines/penalties be imposed cumulatively in respect of each worker concerned, with no absolute upper limit for such offences.

…Notification of changes and requests of additional documents

In four subsequent cases – C-138/19, C-139/19, C-140/19 and C-141/19, in addition to the above-mentioned issues, the following questions also raised doubts of the Styrian Court:

  • obligation to report to the ZKO (without a time limit for carrying it out, therefore subject to risk of free discretion of authorities) in the event of premature termination or interruption of the period of posting to Austria;
  • a provision indicating that submission of appropriate and relevant documents within a reasonable period of time ex post is not sufficient for fulfilling a requirement of ”making documents available” according to the Enforcement Directive;
  • the obligation to submit documents that go beyond those specified in Art. 9 of the Enforcement Directive, that is, e.g., pay statements, payslips, pay lists, tax statements, registrations and deregistrations, health insurance, schedules of notification and allocation of surcharges, documents relating to pay grades, or other types of certificates.

The Styrian Court questioned the compatibility of Austrian legislation with the freedom to provide services in the EU (Article 56 et seq. TFEU) and with the provisions concerning the posting of workers (of the so-called Basic Directive 96/71/EC and the Enforcement Directive 2014/67/EU). The Court challenged in particular the practice of one Austrian authority, that is of Bezirkshauptmannschaft Hartberg-Fürstenfeld, but also – in the latest preliminary question – of the Mayor of the City of Graz.

Many Austrian cases are still pending judgment of the Court of Justice of the EU

In addition to the above-mentioned eight preliminary questions, four other cases are pending decision before the Court of Justice, regarding issues related to posting to Austria. Three of them – also handed by the Court of Styria (C-50/18 Mestrovic, C-64/18 Maksimovic and C-140/18 Köfler), also concern the practices of the Austrian administration, which are disproportionate to offenses and provide for fines/penalties which are not capped by any upper limit. Such practices are inadequate to the alleged offences and can lead to the conviction of a constitutive nature of documents to be submitted, while the law provides for their declarative nature.

The Court of Justice’s answers to the very preliminary questions will be of huge importance for the practice of posting of workers, especially to Austria, but also to other Member States. It will be so especially because of the extended nature of the transposition of the Enforcement Directive to national orders.

The above-mentioned preliminary questions also demonstrate the value of a reasonable impact on the shape of EU legislation. Drawing up good-quality European law simply pays off. It allows to avoid bureaucratic obstacles to legal posting in the EU. In addition, good-quality legislation protects the rights of those who may lose the most as a result of the administrative complications – the posted workers themselves.

Marcin Kiełbasa