Case C-60/03

Wolff & Müller GmbH & Co. KG

v

José Filipe Pereira Félix

(Reference for a preliminary ruling from the Bundesarbeitsgericht)

(Article 49 EC – Restrictions on freedom to provide services – Undertakings in the construction sector – Subcontracting – Obligation on an undertaking to act as guarantor in respect of the minimum remuneration of workers employed by a subcontractor)

Summary of the Judgment

Freedom to provide services – Posting of workers in the framework of the provision of services – Directive 96/71 – National rules providing that an undertaking using the services of another undertaking established in another Member State is to act as a guarantor in respect of the minimum remuneration of workers employed by the other undertaking – Restriction on freedom to provide services – Whether justified on grounds of public interest – Social protection of workers

(Art. 49 EC; European Parliament and Council Directive 96/71, Art. 5)

Article 5 of Directive 96/71 concerning the posting of workers in the framework of the provision of services, under which the Member States are to take appropriate measures in the event of non-compliance with the terms of that directive and, in particular, are to ensure that the workers and/or their representatives have available to them adequate procedures for the enforcement of obligations under that directive, interpreted in the light of Article 49 EC, does not in principle preclude a national system whereby, when subcontracting the conduct of building work to an undertaking established in another Member State, a building contractor established in the Member State concerned becomes liable, in the same way as a guarantor who has waived the defence of prior recourse, for the obligation on that undertaking or that undertaking’s subcontractors to pay the minimum wage to a worker employed by the latter or to pay contributions to a joint scheme for parties to a collective agreement where the minimum wage means the sum payable to the worker after deduction of tax, social security contributions, payments towards the promotion of employment or other such social insurance payments (net pay), even if the safeguarding of workers’ pay is not the primary objective of the national legislation concerned or is merely a subsidiary objective.

If entitlement to minimum rates of pay constitutes a feature of worker protection, which is one of the overriding reasons relating to the public interest which may justify a restriction on freedom to provide services, procedural arrangements ensuring observance of that right, such as the liability of the guarantor, must likewise be regarded as being such as to ensure that protection, since that provision benefits posted workers on the ground that, to the advantage of the latter, it adds to the primary obligant in respect of the minimum rate of pay, namely the employer, a further obligant who is jointly liable with the first debtor and is generally more solvent.

(see paras 28, 34-35, 37, 40, 45, operative part)

JUDGMENT OF THE COURT (Second Chamber) 12 October 2004 (1)

(Article 49 EC – Restrictions on freedom to provide services – Undertakings in the construction sector – Subcontracting – Obligation on an undertaking to act as guarantor in respect of the minimum remuneration of workers employed by a subcontractor)

In Case C-60/03,

REFERENCE for a preliminary ruling under Article 234 EC

from the Bundesarbeitsgericht (Germany), made by decision of 6 November 2002, received at the Court on 14 February 2003, in the proceedings

THE COURT (Second Chamber),,

composed of: C.W.A. Timmermans (Rapporteur), President of the Chamber, C. Gulmann and R. Schintgen, F. Macken and N. Colneric, Judges,

Advocate General: D. Ruiz-Jarabo Colomer,

after considering the written observations submitted on behalf of:

having regard to the decision, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

‘any such promotion of the transnational provision of services requires a climate of fair competition and measures guaranteeing respect for the rights of workers’.

‘1. This Directive shall apply to undertakings established in a Member State which, in the framework of the transnational provision of services, post workers, in accordance with paragraph 3, to the territory of a Member State.

…

3. This Directive shall apply to the extent that the undertakings referred to in paragraph 1 take one of the following transnational measures:

…’.

‘1. Member States shall ensure that, whatever the law applicable to the employment relationship, the undertakings referred to in Article 1(1) guarantee workers posted to their territory the terms and conditions of employment covering the following matters which, in the Member State where the work is carried out, are laid down:

…

…’

‘Member States shall take appropriate measures in the event of failure to comply with this Directive.

They shall in particular ensure that adequate procedures are available to workers and/or their representatives for the enforcement of obligations under this Directive.’

‘The rules of the Tarifvertrag zur Regelung eines Mindestlohnes im Baugewerbe im Gebiet der Bundesrepublik Deutschland (collective agreement regulating the minimum wage in the building trade within the territory of the Federal Republic of Germany, hereinafter the “collective agreement on the minimum wage”) of 26 May 1999, contained in Annex 1 hereto ..., shall apply to all employers and workers not bound by it who come within its scope on 1 September 1999 where the principal activity of the establishment is the provision of building services within the meaning of Paragraph 211(1) of the third book of the Sozialgesetzbuch (Social Security Code, hereinafter the ‘SGB III’). The rules contained in the collective agreement shall also apply to employers established abroad and their workers employed within the scope of the Regulation.’

‘An undertaking which appoints another undertaking to provide building services within the meaning of Paragraph 211(1) of the third book of the Sozialgesetzbuch (hereinafter ‘SGB III’) is liable, in the same way as a guarantor who has waived the defence of prior recourse, for the obligations of that undertaking, of any subcontractor and of any hirer of labour appointed by that undertaking or subcontractor concerning payment of the minimum wage to a worker or payment of contributions to a communal scheme for parties to a collective agreement under the second and third sentences of Paragraph 1(1), Paragraph 1(2)(a), the second and third sentences of Paragraph 1(3) or the fourth and fifth sentences of Paragraph 1(3)(a). The minimum wage for the purposes of the first sentence, means the sum payable to the worker after deductions in respect of tax, social security contributions, payments towards the promotion of employment or other such social insurance payments (net pay).’

‘Does Article 49 EC (formerly Article 59 of the EC Treaty) preclude a national system whereby, when subcontracting the conduct of building work to another undertaking, a building contractor becomes liable, in the same way as a guarantor who has waived the defence of prior recourse, for the obligation on that undertaking or that undertaking’s subcontractors to pay the minimum wage to a worker or to pay contributions to a joint scheme for parties to a collective agreement where the minimum wage means the sum payable to the worker after deduction of tax, social security contributions, payments towards the promotion of employment or other such social insurance payments (net pay), if the safeguarding of workers’ pay is not the primary objective of the legislation or is merely a subsidiary objective?’

On those grounds,

THE COURT (Second Chamber) hereby rules:

Signatures.