Overview of recent cases before the Court of Justice of the European Union (September 2020-December 2020)

Abstract

The reporting period (September 2020-December 2020) was a particularly intense time in terms of important judgments on social security with no fewer than four judgments from the Grand Chamber of the Court. This overview reports five cases in total. First, there are three cases on the Posted Workers Directive. The first two are on the dismissal of the annulment procedures regarding the adoption of the new Posted Workers Directive (Directive 2018/957) started by Hungary (C-620/18) and Poland (C-626/18). Then, the FNV case (C-815/18), which is on the application of the Posted Workers Directive (Directive 96/71) to the transnational provision of services in the road transport sector, is discussed. The overview continues onto other subjects, with a follow-up of the Dano and Alimanovic saga in the Job Center Krefeld case (C-181/19), which relates to the access to social assistance for a job-seeker who is the primary carer of a child receiving education in the host Member State. From there, commentary is given on the A v. Veselï bas ministrija case, which deals with the difficult balance between the freedom of religion and the system of prior authorization for planned healthcare. Finally, the Syndicat CFTC case (C-463/19) is reviewed, and it concerns the conditions under which an additional maternity leave can be reserved to female workers without being considered as discriminatory.

Case C-620/18 Hungary v European parliament ¹ and Case C-626/18 Poland v European Parliament ² : the Court rejects the actions for annulment of the Posted Workers Directive

The EU legislature partially amended Directive 96/71 on the posting of workers with the adoption of Directive 2018/957. The new amendment relied on an Impact Assessment, which revealed that there were substantial differences in terms and conditions of employment between posted workers and workers of undertakings established in the host Member States. Hungary (Case C-620/18) and Poland (Case C-626/18) started separated actions for annulment of Directive 2018/957, claiming the use of incorrect legal bases, infringement of the limits of EU competence in social law, infringement of Article 56 TFEU, and an infringement of the ‘Rome I’ Regulation. The Grand Chamber answered both cases on the same day, and rejected the grounds sought for annulment.

First, Hungary and Poland claimed that Directive 2018/957 was based on the incorrect legal bases of Article 53(1) and 62 TFEU. Their main argument was that the Directive concerns the protection of workers and not the freedom to provide services. They considered that the Directive should instead have been adopted on the basis of Article 153 TFEU, which reflects the protection of workers in the field of social law. The Court recalled that the choice of a legal basis must be based on objective factors amenable to judicial review, including the aim and content of the measure. ³ The legal framework within which new rules are situated, hence the fact that Directive 2018/957 is a revision of Directive 96/71, must also be taken into account. ⁴ The Court reminded the Member States that when a legislative act has already coordinated the legislation of the Member States in an EU policy area, the EU legislature should be able to adapt that legislative act to the changes and advances in that field. ⁵ In that regard, the Court referred to the Impact Assessment accompanying the revision of Directive 2018/957, which highlighted the rise of an un-level playing field between undertakings established in a host Member State and undertakings which post workers to that Member State resulting in a structural differentiation of rules on wages. ⁶ Hence, despite the fact that Directive 96/71 was already aimed at ensuring the freedom of services while guaranteeing fair competition and respect for the right of workers in the EU, the changes in circumstances or advances in knowledge allowed the EU legislature to adjust the balance by strengthening the right of posted workers to ensure a more level playing field between the undertakings which post workers to a Member State and those established in that State. ⁷ When defining and implementing its policies, the Court recalled that the EU legislature takes into account the general objectives of the Union such as the promotion of high level of employment and the guarantee of adequate social protection under Article 9 TFEU. ⁸ Overall, the objectives and content of Directive 2018/957, when viewed in the context of the directive it amends, strikes a balance between the interest of ensuring that the undertakings of all Member States have the opportunity to supply services by posting workers and the protection of the rights of those posted workers. ⁹ The Court found that Directive 2018/957 is rightly based on Article 53(1) and 62 TFEU as it develops the freedom to provide services on a fair basis. ¹⁰

Second, Hungary and Poland argued that the contested directive disregarded the limits of EU competence in social law found in Article 153(5) TFEU. The Court considered that the exclusion of the regulation of pay in employment relationship from EU competence under Article 153(5) TFEU is only relevant if Directive 2018/957 was based on Article 153 TFEU. ¹¹ Nevertheless, that directive could not have been based on Article 153 TFEU since that provision is solely on the protection of workers and not the freedom to provide services. Additionally, the type of measures sought by Article 153(2) TFEU do not correspond to the aim and content of the contested Directive. ¹²

Third, Hungary and Poland claimed that Directive 2018/957 was contrary to Article 56 TFEU. The Court recalled that the EU legislature must be allowed broad discretion in areas involving political, economic and social choices. Therefore, the legality of the contested Directive can only be called into question if it is manifestly inappropriate with regard to the objective it ought to pursue. ¹³ Consequently, the Court held that the choices made by the EU legislature, such as the rule on minimum wage in the host Member State or the rule on posting of workers for more than 12 months, were not manifestly inappropriate with regard to the objective of the Directive. ¹⁴ Furthermore, Directive 2018/957 cannot be considered to eliminate all competition based on costs since the Directive does not cover all attached to cost components covers the activities of posted workers (such as the productivity of the workers), but solely the elements of remuneration of those workers. ¹⁵ Finally, the Court held that Directive 2018/957 complied with the principles of equal treatment ¹⁶ and proportionality. ¹⁷

Fourth, Hungary claimed that Article 3(1)(a) of Directive 2018/957 is contrary to Article 8 of the ‘Rome I’ Regulation. The Court held that notwithstanding the general conflict rule enshrined in Article 8 of the ‘Rome I’ Regulation, Article 23 of that Regulation provides for the possibility for other provisions of EU law on specific conflict-of-law rules to derogate from the general conflict-of-law rules established in the ‘Rome I’ Regulation. ¹⁸ The Court considered that the rules provided by Article 3(1) of Directive 2018/957 constitute such specific conflict-of-law rules in respect to workers posted for more than 12 months. ¹⁹

Case C-815/18 Federatie Nederlandse Vakbeweging (FNV) ²⁰ : the Posted Workers Directive applies to the transnational provision of services in the road transport sector

Van den Bosch is group of businesses in the transport sector with branches in the Netherlands, Germany and Hungary. Each have the same director and same shareholders. In 2012, the Dutch branch entered into a collective agreement called the ‘Goods Transport’ with FNV. That collective agreement was not declared universally applicable. Nevertheless, it permitted the exemption from the universally applicable collective agreement the ‘Professional Goods Transport’. FNV started an action against Van den Bosch since the Dutch branch did not apply the ‘Goods Transport’ collective agreement to the workers subcontracted from its sister companies in Germany and Hungary. The case ultimately reached the Dutch Supreme Court. That Court was unsure whether (1) the Posted Workers Directive (Directive 96/71) was applicable to the workers from the German and Hungarian subcontractors who work in the transnational provision of services in the road transport sector, and (2) whether a collective agreement which has not been declared universally applicable could be extended to posted workers according to Article 3(1) and (8) of Directive 96/71.

The Grand Chamber of the Court answered the first question by stating Directive 96/71 does apply to the transnational provision of services involving the posting of workers, irrespective of the economic sector (which would include the road transport sector). ²¹ The Court also took the occasion to clarify its Dodersberger case from December 2019. ²² While Directive 96/71 is based on Article 56 TFEU on the free movement of services and not relevant for transport to which the more specific provision of Article 58(1) TFEU applies, Directive 96/71 is an instrument of general application which is, therefore, also applicable to the transnational provision of services in the sector of road transport. ²³

Then, the Court turned to the second question relating to the conditions under which a driver in international road transport can be considered as a posted worker to the territory of a Member State for the purposes of Article 1(1) and (3) and Article 2(1) of Directive 96/71. The Court referred again to its Dodersberger judgment in that regard by stating that a worker cannot be considered to be posted to the territory of a Member State unless the performance of his or her work has a sufficient connection with that territory. ²⁴ In order to find such a sufficient connection, an overall assessment of all the factors relating to the activity of the worker, such as the characteristics of the provision of services or the nature of the activities carried out by the worker, ²⁵ should be conducted. ²⁶ The Court added that the fact that the undertakings are part of the same group is not, as such, relevant for determining whether there has been a posting of workers. ²⁷ In relation to the case at hand, the Court indicated that the sole fact that a driver, hired by an undertaking for another undertaking established in another Member State, receives instructions related to his or her tasks, starts and finishes them at the place of business of that second undertaking does not suffice to be considered as a posted worker in the territory of that other Member State if the performance of the work does not have a sufficient connection with that territory on the basis of other factors. ²⁸ Finally, the Court noted that cabotage operations, regardless of their duration, can constitute a sufficient connection with the territory of a Member State when they are carried out entirely within the territory of that Member State. ²⁹

With its last question, the referring court wanted to know whether Article 3(1) and (8) of Directive 96/71 required a reference to the applicable national law to determine if a collective agreement has been declared universally applicable. In the case at hand, the FNV considered that the Dutch branch of Van den Bosch entered into the ‘Good Transport’ collective agreement (which was not declared universally applicable) in order to escape from entering into a ‘Professional Good Transport’ collective agreement which would be universally applicable. The Court stated that under Article 3(1) of Directive 96/71, Member States could extend the terms and conditions of employment to posted workers outside the construction sector by collective agreements that have been declared universally applicable within the meaning of Article 3(8). ³⁰ While Article 3(1) does not refer explicitly to national law, the Court considered that it does so implicitly by requiring the collective agreement to be declared universally applicable. Such a declaration can only be done through national law. ³¹ In relation to the case at hand, the Court found that since the content of both collective agreements were identical, and given the exemption from the universally applicable ‘Professional Goods Transport’ collective agreement could only be granted if the undertaking had entered into the ‘Goods Transport’ collective agreement, the ‘Goods Transport’ collective agreement must be considered to fall within the meaning of Article 3(1) and 3(8) of Directive 96/71. ³²

Case C-181/19 Jobcenter Krefel Wilderspruchsstelle v. JD ³³ : social benefits for children of migrant workers

JD is a Polish national residing in Germany since 2013 with his two daughters. JD worked in 2015 and 2016 before becoming sick and then unemployed. Since January 2018, JD works full-time. Between September 2016 and June 2017, JD received supplementary unemployment benefits (Arbeitslosengeld II) and social allowances (Sozialgeld) for his two daughters. In June 2017, JD asked the Jobcenter Krefeld for the continued payment of social assistance benefits for the period June 2017 until December 2017. The Jobcenter Krefeld refused on the basis that JD no longer had the status of a worker and that he resided in Germany as a job-seeker. JD appealed that decision before the Social Court of Düsseldorf. The Jobcenter Krefeld then appealed before the Higher Social Court of North Rhine-Westphalia, which referred two questions regarding the interpretation of the right to receive social assistance under Regulation 492/2011, Regulation 883/2004, and Directive 2004/38.

The first question specifically related to the issue as to whether a national of a Member State and his children, who both have a right of residence under Article 10 of Regulation 492/2011, can be automatically excluded from entitlement to social assistance on the basis of Article 24(2) of Directive 2004/38. The Court first examined the right of residence under Article 10 of Regulation 492/2011. The Court found that a primary carer of a child can rely on a derived right of residence from his or her minor child on the basis of Article 10 of Regulation 492/2011, provided that the child is attending general education in the host Member State. ³⁴ That derived right of residence of the primary carer does not cease to exist when the parent loses his status as a worker as the derived right of residence depends on the child’s education. ³⁵ Then the Court considered that the benefits at issue were social advantages within the meaning of Article 7(2) of Regulation 492/2011. ³⁶ The right to equal treatment for access to social assistance under Article 7(2) of Regulation 492/2011 originally for workers must be maintained after the loss of that status for the same reasons which justify the continuation of the right of residence under Article 10 of Regulation 492/2011, namely making sure that the children have access to education in the host Member State. ³⁷ Hence, the Court held that, where a child has a right of residence under Article 10 of Regulation 492/2011, he or she is also entitled, on the same basis as the parent who is his or her primary carer, to the right of equal treatment in Article 7(2) of that regulation, even where that parent has lost his or her status as a worker. ³⁸

From there, the Court turned to the relationship between Article 10 of Regulation 492/2011 with Article 24(2) of Directive 2004/38. Article 24(2) of Directive 2004/38 provides for an exception to the equal treatment rule for entitlement to social assistance for persons who are resident in the host Member States for less than three months and for persons other than workers, self-employed, or persons retaining that status, and members of their families. In Alimanovic, the Court had previously held that the host Member State can rely on Article 24(2) of Directive 2004/38 to refuse to grant social assistance to a Union citizen who is resident on the sole basis that he or she is a jobseeker under Article 14(4)(b) of the Directive. ³⁹ In the present case, the Court distinguished the situation of JD with the situation of Alimanovic, who could not rely on a right of residence based on Regulation 492/2011. ⁴⁰ According to the Court, the derogation from equal treatment found in Article 24(2) of Directive 2004/38 applies in the context where a person bases his or her right of residence from the Directive. Therefore, the derogation from equal treatment enshrined in Article 24(2) of Directive 2004/38 cannot be applied in situations where that right of residence is based on another independent instrument, namely Article 10 of Regulation 492/2011 in this particular case. ⁴¹ The Court adds that while JD and his daughter also fall within the scope of Article 24 of Directive 2004/38, including its second paragraph, on the grounds that they have a right of residence under Article 14(4)(b) of that Directive, they have an independent right of residence based on Article 10 of Regulation 492/2011. ⁴² The question thus becomes whether the right to equal treatment under Article 24 of Directive 2004/38 and under Article 7(2) of Regulation 492/2011 are different. In that regard, the Court concluded that they simply do not cover the same type of beneficiaries of the right of residence. ⁴³

Finally, the Court discussed the relationship between Article 10 of Regulation 492/2011 and Article 4 of Regulation 883/2004, read together with Articles 3(3) and 70(2) of that Regulation. The Court found that the social assistance benefits sought by JD were special non-contributory benefits within the meaning of Articles 3(3) and 70(2) of Regulation 883/2004, ⁴⁴ to which Article 4 on equal treatment is applicable. ⁴⁵ Furthermore, the Court held that Article 70 of Regulation 883/2004 does not preclude the grant of special non-contributory benefits to Union citizens who are not economically active but who fulfil the conditions of having a right of residence in the host Member State, which was the case for JD and his daughter. ⁴⁶

Overall, the Court concluded that the automatic exclusion of Union citizens having a right of residence under Article 10 of Regulation 492/2011 from entitlement to social assistance is contrary to both Article 4 of Regulation 883/2004 ⁴⁷ and Article 7(2) of Regulation 492/2011. ⁴⁸

Case C-243/19 A v. Veselï bas ministrija ⁴⁹ : refusal to grant prior authorization for planned care and discrimination based on religion

The son of the applicant had to have open-heart surgery. In his Member State of affiliation, Latvia, such operation was only possible with a blood transfusion. The applicant refused that surgery on the basis of religious beliefs as a Jehovah’s Witness. Instead, the applicant planned the heart surgery to be performed in Poland where the operation did not entail a blood transfusion. The applicant asked for a prior authorization for that planned surgery in Poland, but it was refused by the Latvian national health service. The case went from appeal to appeal to finally reach the Latvian Supreme Court, which is sending preliminary ruling questions to the Court of Justice. In the meantime, the son’s applicant had his heart surgery performed in Poland.

In that context, the Supreme Court asked the Court of Justice to interpret the relationship between the system of prior authorization found in Article 20(2) of Regulation 833/2004 and Article 8 of Directive 2011/24 with the prohibition of discrimination based on religion enshrined in Article 21(1) of the Charter of Fundamental Rights.

Concerning the refusal to grant prior authorization based on Article 20(2) of Regulation 883/2004, the Court considered that it constituted an indirect differential treatment based on religion or religious beliefs. ⁵⁰ Nevertheless, that difference in treatment could be justified where it is based on an objective and reasonable criterion, and is proportionate to the aim pursued. Under the conditions set forth in Article 35 of Regulation 883/2004, the Member State of residence of the insured person would have to fully reimburse the costs received in another Member State. ⁵¹ In the present case, the costs of the treatment in Poland were higher than the costs of the treatment in Latvia. Therefore, there were additional costs for the Member State of residence of the insured person. Given the subjectivity of each person’s own religious beliefs, the Court considered that it would be difficult for the Member State of residence of the insured person to foresee those additional costs. ⁵² As a result, and given the potential scale for application for prior authorization due to religious beliefs, the Court considered that the Latvian authorities could rely on the legitimate objective recognized by EU law ⁵³ of protecting the financial stability of the health insurance system. ⁵⁴ Hence, the refusal to grant prior authorization under Article 20(2) of Regulation 883/2004 was a justified measure which did not exceed what was objectively necessary. ⁵⁵

In relation to the refusal to grant prior authorization on the basis of Directive 2011/24, the Court highlighted an important difference with its prior considerations based on Regulation 883/2004. Indeed, under the system of Directive 2011/24, the costs of cross-border healthcare are to be reimbursed or paid directly by the Member State of affiliation up to the level of the costs that would have been assumed by that Member State had that healthcare been provided in its territory. ⁵⁶ Therefore, there is no risk of additional costs for the Member State of affiliation under the system of Directive 2011/24. ⁵⁷ As a result, the Latvian authorities cannot rely on the objective of protecting the financial stability of their social security system to justify the refusal to grant prior authorization on the basis of Directive 2011/24. ⁵⁸ However, the Latvian authorities could justify the refusal on the objective of maintaining treatment capacity or medical competence provided that the refusal is necessary and proportionate for the aim pursued which was ultimately for the national court to verify. ⁵⁹

Case C-463/19 Syndicat CFTC ⁶⁰ : additional maternity leave can be reserved to female workers if the leave relates to the protection of women in relation to the effects of pregnancy and motherhood

Syndicat CFTC started a case on behalf of a male worker concerning the refusal to grant additional leave provided in Article 46 of the national collective agreement on the sole ground that the leave was reserved for female workers. The referring court indicated to the Court of Justice that the case has already been subject to a referral to the French Cour de Cassation where the Cour de Cassation held that the purpose of Article 46 of the national collective agreement is to grant additional maternity leave on the expiry of the statutory maternity leave and thus intends to protect the special relationship between a woman and her child during the period following pregnancy and childbirth. ⁶¹ In that context, the referring court essentially asked the Court of Justice whether Directive 2006/54 precludes a provision of a national collective agreement which reserves access to that additional leave to female workers.

The Court started by recalling that Article 14(1)(c) of Directive 2006/54 prohibits all direct and indirect discrimination based on sex in relation to employment and working conditions. ⁶² Nevertheless, the Court also reaffirmed that Article 28 of the Directive states that the Directive is without prejudice to measures aimed at protecting female workers, in particular in relation to their pregnancy and motherhood, such as Directives 96/34 or 92/85. ⁶³ Considering the particularly vulnerable situation of women, who have recently given birth or who are breastfeeding, the Court had already declared that maternity leave is a special type of leave which is intended to protect a woman’s biological condition during and after pregnancy as well as to protect the special relationship between a woman and her child over the period following pregnancy and childbirth. ⁶⁴ Therefore, a national collective agreement can reserve additional maternity leave to a woman worker if the leave is protecting the woman in relation to the effects of her pregnancy and motherhood. ⁶⁵ The conditions for granting the leave, the duration and the manner in which the leave is exercised must all be linked to the protection of the woman’s biological condition and her special relationship with her child during the period following childbirth. ⁶⁶ Furthermore, the level of legal protection must be in conformity with the minimum protection guaranteed for that statutory maternity leave by Directives 92/85 and 2006/54. ⁶⁷

While it is ultimately up to the referring court to determine whether Article 46 of the national collective agreement meets all those conditions, the Court gave some guidance. The Court pointed out that the mere fact that the additional leave was granted immediately after the end of the statutory maternity leave was not a sufficient factor in itself to consider that the additional leave was meant to protect the woman in relation to the effects of her pregnancy and motherhood. ⁶⁸ The Court also highlighted that the duration of the additional leave differed from the statutory maternity leave duration. ⁶⁹ Furthermore, from the moment the additional leave was more than one year, it became unpaid leave, which did not seem to ensure entitlement to an adequate allowance for the female worker as required for maternity leave under Article 11(2) of Directive 92/85. ⁷⁰

Overall, a provision of a national collective agreement may restrict the grant of additional leave to female workers if the conditions for entitlement and enjoyment of the leave, its duration and its offered legal protection are intended to protect the female workers in relation to the effects of pregnancy and motherhood.