• INDUSTRY
  • TRANSPORT
  • POLITICS
  • AGRI-FOODSTUFFS
  • INTERNATIONAL RELATIONS
  • SCIENCE
  • EMPLOYMENT AND WORKING CONDITIONS
  • PRODUCTION, TECHNOLOGY AND RESEARCH
  • AGRICULTURE, FORESTRY AND FISHERIES
  • EUROPEAN UNION
  • LAW
  • TRADE
  • EDUCATION AND COMMUNICATIONS
  • GEOGRAPHY
  • BUSINESS AND COMPETITION
  • INTERNATIONAL ORGANISATIONS
  • ENERGY
  • ENVIRONMENT
  • FINANCE
  • SOCIAL QUESTIONS
  • ECONOMICS
YOUR NOTES ON '61994CC0111'
NEW NOTE
Cases based on similar legal acts(0)
Jurisprudence cited by this Case(36)

CASE-LAW

61994C0111

OPINION OF ADVOCATE GENERAL

ELMER

delivered on 8 June 1995 ( *1 )

Introduction

1.

In this case the Court is asked to answer a number of questions about the relationship between various provisions of the Treaty and the Italian legislation prohibiting private employment procurement and the hiring of temporary labour. The questions have been raised by the Tribunale Civile e Penale di Milano (Civil and Criminal District Court, Milan) in connection with that court's hearing of the special form of proceedings known as ‘Giurisdizione volontaria’ (voluntary jurisdiction) regarding an application for approval of the articles of association for Job Centre Coop, a r. 1. Before it is possible to decide the questions raised it is necessary to decide whether the Court can answer questions referred to it by a national court in the context of this special form of proceedings.

2.

Article 11(1) of Italian Law No 264 of 29 April 1949 prohibits mediation and other activities as an intermediary between demand for and supply of paid work by any other than the public employment agency even if such activities are carried out free of charge. Various bureaux organized under the Italian Minister of Labour thus have an exclusive right to undertake employment procurement in Italy. ( 1 )

Employers must not in general make appointments except through an employment bureau. There are however exceptions to this rule, inter alia for management positions or for staff selected on the basis of open competitions, and domestic help. ( 2 ) Originally employers had only the opportunity to inform the employment bureau what qualifications and so forth employees should possess (‘richiesta numerica’), whereupon the employment bureau would assign to them the employees who were selected by objective criteria, inter alia on the basis of their relevant family or financial situation, length of unemployment and so on. However, by Article 25(1) of Law No 223 of 23 July 1991, employers were also given the opportunity of choosing the employee they wished to appoint, from a list drawn up by the employment bureau (‘richiesta nominativa’).

Employers with more than 10 employees (excluding management and apprentices) must moreover reserve 12% (at present) of new appointments for employees who have become unemployed as a result of their previous employers' bankruptcy or the like, or have been unemployed for more than two years.

According to the Law of 1949 employment procurement contrary to those rules and appointment of employees otherwise than through the employment bureau is punishable by criminal or administrative penalties. Moreover, on the application of the ‘pubblico ministero’ (an authority with special duties in civil and criminal proceedings) the courts may within a year of the appointment declare labour contracts entered into contrary to the rules to be void.

It is not clear from the order for reference whether, and if so what, penalties under public or private law are attached to a refusal by the employer to appoint the person seeking work assigned to him by the employment bureau and vice versa.

3.

Articles 1(1) and 2 of Law No 1369 of 23 October 1960 provides as follows:

‘The management of an undertaking shall not arrange for the performance of normal working tasks by means of labour appointed and paid by a contractor or by an intermediary, by contract or subcontract or otherwise, or by cooperative companies, whatever the nature of the work or services concerned.

In addition the management of an undertaking shall not entrust to intermediaries, whether employees, third persons or companies, even cooperative companies, work to be performed as piecework by employees appointed and paid by such intermediaries.’

Infraction of these rules is punishable by criminal penalties and in law the person hiring the labour is regarded under Article 1(5) of the Law in all respects as the employer.

These rules are, according to the information available, aimed at protecting employees against exploitation and loss of rights when the real employer is different from the person formally described as the employer, but who in reality is a mere intermediary.

4.

Job Centre Coop, a r. 1. is a cooperative company now being set up, with its head office in Milan, Italy, and with a capital of LIT 1300000, corresponding at present to some ECU 600. According to Article 4(c) and (d) of its articles of association, its objects are inter alia as follows:

‘(c)

Setting up a permanent office to collect, store, process, select and deliver for members of the company or third parties who may be interested — free of charge in the case of members of the company or third parties who are employees — the greatest possible quantity of information regarding demand for or supply of employment on the labour market in Italy and the Community with a view to bringing employers and employees into contact with one another.

(d)

Setting up an office for finding and selecting Italian or foreign staff for Italian or foreign employers interested in appointing such staff.’

5.

In pursuance of Article 2330(3) of the Italian Codice Civile Job Centre Coop, a r. 1. applied to the Tribunale Civil e Penale di Milano for approval of the company's articles of association. According to the provision, if it is found that the company's articles meet the conditions laid down by the Law, and after hearing the Pubblico Ministero, the Tribunale shall decide that the company be entered in the register. Article 2331(1) provides that the company is to acquire the status of a legal person (only) upon entry in the register.

6.

The Tribunale Civile e Penale di Milano dealt with the application in the special form of proceedings designated in Italy by the expression ‘giurisdizione volontaria’. I understand that expression to refer to cases in which the court deals with applications for approval and registration of companies, adoption and the like. ( 3 )

Cases concerning status under the law of persons are dealt with according to the rules in Article 706 et seq. of the Codice di Procedura Civile (Code of Civil Procedure) in camera. Under Article 738 the Pubblico Ministero is to be heard after being apprised of the documents in the case, and under Articles 740 and 2330 of the Codice Civile the Pubblico Ministero may bring decisions of the Tribunale before the Corte d'Appello. Procedure before that court is governed by the same rules as before the Tribunale, the case being heard in camera and on the basis of written observations from the applicant and the Pubblico Ministero.

The questions referred to the Court

7.

After hearing the Pubblico Ministero, the Tribunale took the view, in dealing with the application for approval of the articles of association of Job Centre Coop, a r. 1., that the case raised several problems with regard to the content and scope of a number of provisions of Community law, and with a view to its decision in the case the Tribunale therefore referred the following questions to the Court for a preliminary ruling:

‘(1)

May the national laws on employment procurement and temporary work, which relate to matters of public policy because their purpose is to protect the interests of workers and of the national economy, be considered as instances of the exercise of official authority within the meaning of the combined provisions of Articles 66 and 55 of the EEC Treaty?

(2)

May the Community rules relied upon by the applicants, in the absence of specific implementing provisions in that area, be considered directly applicable (calling into question the public policy aims of the Italian laws currently governing employment procurement and temporary work) and do they permit any person subject to public or private law to pursue, without specific supervision or authorization, any activity as an intermediary between supply and demand on the employment market and/or as provider of labour on a temporary basis for third persons, in the event that a Member State is not able through its own administrative apparatus fully to meet the demand for services on the labour market?’

Admissibility

8.

The Commission and the Italian Government have raised objections to the Court's answering the questions referred to it on the ground that the decision in a case of ‘giurisdizione volontaria’ is not in the nature of a judicial settlement of a legal dispute after prior hearing inter partes but rather of an administrative decision. In that respect the Commission has contended that the position would be different if the reference had been made in dealing with an appeal from a decision of the Tribunale in such a case.

9.

I shall first stress that according to the Court's consistent case-law the procedure under Article 177 is open to ‘any national court or tribunal’ if it considers it essential in arriving at a decision. ( 4 ) The Court will also so far as possible provide national courts with all the relevant elements of Community law which are necessary to enable them to give judgment. ( 5 )

10.

The case-law of the Court makes no requirement that the procedure before the court of reference must be inter partes. ( 6 )

The Court has thus declared itself to have jurisdiction to answer a reference for a preliminary ruling in a case in which a judge combined the functions of public prosecutor and examining magistrate in criminal proceedings against persons unknown. ( 7 )

Similarly in the judgment in Case 110/76 Pretore di Cento [1977] ECR 851 the Court answered questions referred to it by an Italian court in criminal proceedings against persons unknown. The purpose of the questions was to clarify the question whether the national court had a duty to inform the Court of Justice of the criminal case pending. Advocate General Warner stressed in his Opinion that the case was unusual inasmuch as there were no parties, but neither the Advocate General nor the Court regarded that as a reason for refusing to answer the questions referred to it.

11.

In an order in Case 138/80 Borker ( 8 ) the Court declared that it could only be requested to give a preliminary ruling under Article 177 by a court or tribunal which was called upon to give judgment in proceedings intended to lead to a decision of a judicial nature. In that case a member of the Paris Bar had requested the French Bar Council for a declaration regarding a lawyer's right to appear before German courts and the Bar Council therefore did not have before it a case which it was under a legal duty to try. ( 9 ) The decisive point was therefore that the body in question did not have to give a ruling which mandatorily determined a person's legal status.

12.

In this case the Tribunale Civile e Penale di Milano has to give a ruling which will mandatorily determine the legal status of Job Centre Coop, a r. 1. Depending upon the answers which the Court might give, the Tribunale will have to decide whether this company, as its objects are laid down in the articles of association, may be registered and thereby acquire legal personality under Italian law.

If the relevant Community law is to be interpreted as not precluding the Italian legislation on employment procurement and the hiring out of temporary labour, it may naturally be said that it will not be of great consequence if the Court, taking account of the fact that this is a case of ‘giurisdizione volontaria’, does not answer the questions and if the national court, in view of national law, therefore refuses registration of the company and thus prevents it from acquiring legal personality.

However, if, on the other hand, the relevant Community law is to be interpreted as precluding wholly or partly the Italian legislation on employment procurement and the hiring out of temporary labour, problems may arise in the application of Community law if the Court decides that it ought not to answer the questions. In such a case it is logical to think that the national court will apply the national legislation since in that case the Court of Justice would not have given any guidance to the effect that it was incompatible with Community law. The outcome of the case might well therefore be that the company will not be registered, will not acquire legal personality and will therefore not have the opportunity to carry out the activity which the company in this case is assumed to be entitled to do under Community law.

13.

The Court does not seem previously to have given judgment as to whether it may answer questions referred to it by a court in the context of proceedings under the Italian ‘giurisdizione volontaria’.

On the other hand, in Case 32/74 Haaga, ( 10 ) the Court answered a question referred to it by the Bundesgerichtshof in relation to a case with which that court was dealing in the context of German ‘non-contentious proceedings’. That case, like this one, concerned questions regarding the content of a company's articles of association. Advocate General Mayras called the Court's attention in his Opinion to the details of the proceedings in the court of reference and stated inter alia the following:

‘The Bundesgerichtshof has referred this question to the Court in the context of non-contentious proceedings. The Federal Court was not seised of the case by a party in the strict sense of the term but by a subordinate court, for the purpose of ascertaining the correct legal decision at national law on a particular point.

Could it therefore be inferred that in so doing the Bundesgerichtshof is not fulfilling a true jurisdictional function? In my opinion it could not; it is sufficient briefly to recall that the Companies Register is kept, in Germany, by the Amtsgericht, a court of first instance, pursuant to Article 125 of the Gesetz über die Angelegenheiten der freiwilligen Gerichtsbarkeit, according to a procedure set out in detail in that legislative text.

Moreover, that procedure is not peculiar to the keeping of the Companies Register, but also applies in certain other matters such as guardianship, adoption, control of registration of associations, succession, etc. These are, it appears, not so much contentious matters as “administrative matters executed in judicial form”, that is to say, comprising the guarantees of a true jurisdictional procedure. As regards in particular the Companies Register, a comparison may be made between the competence of the Amtsgericht and that of the French Tribunal de Commerce. We may therefore be sure that the Amtsgericht, in the same way of course as the appeal courts and in particular the Oberlandesgericht, does indeed exercise a jurisdictional function in this case; the case-law of the Bundesverfassungsgericht (the Federal Constitutional Court) confirms this. The provisions of the Basic Law concerning the guarantees enjoyed by the citizen before the courts, that is to say the right of audience and the right to trial before the lawful judge, apply also to procedures of this kind.

For my part therefore I would have no hesitation in stating that the Bundesgerichtshof was entitled to refer to this Court the preliminary question at issue, pursuant to Article 177 of the Treaty.’

The Court agreed with the foregoing considerations and answered the questions referred to it, which concerned the interpretation of a rule in the First Council Directive on company law regarding compulsory disclosure of information relating to companies' rules as to bodies authorized to represent them.

14.

It seems to me that there are many important points of similarity between the Haaga case and that now before the Court. In both cases the courts of reference had to decide questions as to the content of company articles of association, in both cases national legislation had assigned to the courts for a decision questions on the approval of company articles of association according to the rules of non-contentious proceedings, and in both cases an interpretation of Community law was decisive as to whether the company could be registered and acquire legal personality.

15.

In my view, the fact that the case now before the Court concerns the interpretation of basic Community rules in contrast to the Haaga case in which the Court of Justice had to decide a question of a more technical nature makes it no less appropriate to examine the substance of the case.

16.

Nor do I think that there is a relevant difference in the fact that the Tribunale's decision in this case is subject to appeal, whereas in the Haaga case it was the Bundesgerichtshof which had referred the question to the Court. There may indeed be reason to be more cautious in recognizing the jurisdiction of a national court of law to raise questions for a preliminary ruling when that court delivers the final judgment in a case, ( 11 ) but the Treaty starts from the basis that national courts whose decisions are subject to appeal also have the opportunity to raise preliminary questions under Article 177. The procedure before the national court is, moreover, according to my information, the same whether questions of personal legal status are being dealt with by the Tribunale or the appeal court, and in that connection it may be stressed that the Pubblico Ministero was heard in this case before the Tribunale, so that there was a procedure inter partes.

17.

In Case 244/80 Foglia v Novello, ( 12 ) the Court emphasized that ‘the duty assigned to the Court by Article 177 is not that of delivering advisory opinions on general or hypothetical questions but of assisting in the administration of justice in the Member States. It accordingly does not have jurisdiction to reply to questions of interpretation which are submitted to it within the framework of procedural devices arranged by the parties in order to induce the Court to give its views on certain problems of Community law which do not correspond to an objective requirement inherent in the resolution of a dispute ...

Furthermore it should be pointed out that, whilst the Court of Justice must be able to place as much reliance as possible upon the assessment by the national court of the extent to which the questions submitted are essential, it must be in a position to make any assessment inherent in the performance of its own duties in particular in order to check, as all courts must, whether it has jurisdiction. Thus the Court, taking into account the repercussions of its decisions in this matter, must have regard, in exercising the jurisdiction conferred upon it by Article 1 77, not only to the interests of the parties to the proceedings but also to those of the Community and of the Member States. Accordingly it cannot, without disregarding the duties assigned to it, remain indifferent to the assessments made by the courts of the Member States in the exceptional cases in which such assessments may affect the proper working of the procedure laid down by Article 177.’ ( 13 )

18.

Against the background of the Foglia v Novello case, the view may be taken that a reference to the Court of questions for a preliminary ruling in a case regarding the approval of the statements of objects in a company's articles of association is of a general and hypothetical nature. Even though the founder members of Job Centre Coop, a r. 1. give the company the object of performing certain stated activities, it is by no means certain that such activities will actually be performed when the company starts its operations. The statement of objects is frequently framed as widely as possible. There is therefore a certain risk that a system like that in Italy, in which a court is to approve the legality of a company's articles, may be misused by means of a reference for a preliminary ruling in order to get the Court of Justice to perform in reality an advisory function concerning general or hypothetical questions on Community law. That that is a real risk is emphasized by the fact that it is seemingly possible to form a company such as Job Centre Coop, a r. 1. with such a small capital as ECU 600.

19.

In my view that abstract risk of misuse of the reference procedure ought not in itself to lead to the Court's refusal to answer the questions raised. The decisive question must be on the other hand whether it may be assumed that in this case there is a real lawful interest in approval of the company's articles in order to enable it to start operations in the way stated. According to what is stated in this case, the founder members of the company consist in the first place of workers of different nationalities who are interested in as broad a spread as possible of possibilities of employment on the labour market within the European Union and in particular on the Italian labour market. Moreover there are among the founders various multinational companies which have for years been active in employment procurement and the hiring out of temporary labour. Even though an assessment of the situation gives reason for significant doubt, particularly on the ground of the modest company capital, the Court has not, in my view, sufficient ground for refusing to answer the questions raised.

Substance

20.

The questions from the court of reference may be divided into two groups. First the court of reference asks the court to interpret Article 48 of the Treaty on freedom of movement for workers and Articles 59 and 60 on freedom to provide services in relation in particular to employment procurement and the like. Only to the extent to which these rules are applicable will it be appropriate to decide whether employment procurement and the like are excluded from freedom of movement on the basis of the provisions on activities connected with the exercise of official authority in Articles 48(4), 55 and 66 of the Treaty. The court of reference then asks for an appraisal of a system of employment procurement such as the Italian system, from the point of view of the rules in Article 90 of the Treaty, in conjunction with Article 86.

The rules on freedom of movement

21.

I cannot see how Article 48 of the Treaty on freedom of movement for workers can be relevant in this case. Job Centre Coop, a r. 1. is not an employee but a company, which according to its articles is to engage in the activity of employment procurement and the like. The fact that there are workers amongst the company's founders cannot make any difference in that respect, since the company, when it is formed and working, will be an independent legal person. There has been no information to suggest that Job Centre Coop, a r. 1., whether independently or from the point of view of assignment or agency, could take advantage of the rights which the worker must acquire once the procurement has taken effect.

22.

It is relevant instead to discuss the activities which Job Centre Coop, a r. 1. is to pursue according to its articles as regards the rules on freedom to provide services, set out in Articles 59 and 60 of the Treaty.

23.

The first paragraph of Article 60 of the Treaty defines the concept of services as services which are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons. Under the second paragraph of Article 60, services in particular include activities of an industrial and commercial character together with the activities of craftsmen and of the professions. The Court of Justice has accepted that activity as an employment bureau, against remuneration, for artistes, and activity consisting in hiring out labour, against remuneration, without the conclusion of contracts of employment between the hirer and the employee constitutes commercial activity of the kind mentioned in Article 60 of the Treaty. ( 14 ) In Case C-41/90 Höfner and Elser ( 15 ) Advocate General Jacobs accepted that the provision of management personnel by personnel consultant firms or recruitment agencies is covered by Article 60, but the Court did not have occasion to take a decision on that point since the case concerned an internal situation in the relevant Member State to which the rules of the Treaty on freedom to provide services are not applicable. ( 16 )

24.

There is no doubt that in special fields such as those mentioned there is commercial procurement inter alia of employment which may be regarded as covered by the rules of the Treaty on the provision of services. It does not follow, however, that employment procurement outside such special fields may also be said to have such a commercial character that it is appropriate to apply to it the rules on freedom to provide services. However, as in the Höfner and Eher case there is no need to take a view as to the precise scope of the concept of services if the case concerns a situation which the rules on provision of services will not in certain circumstances preclude.

25.

As regards the rules on the hiring out of temporary labour, the Italian Government explained at the hearing that Italian legislation does not prevent a firm established in Italy — as Job Centre Coop, a r. 1. would be — from hiring out labour to employers in other Member States. The Italian prohibition of hiring out temporary labour thus concerns in this case a domestic situation to which Article 59 does not apply.

26.

As regards employment procurement, Italian law prevents private companies established in Italy from acting as intermediaries for contact between an employer in Italy and a person in search of work. According to my information that prohibition applies generally and without distinction as to whether the person seeking work is in Italy or in some other Member State. The information does not make it possible to say with any certainty that the Italian rules do not prevent firms in Italy from acting as intermediaries for contact between a person seeking work in Italy and an employer in another Member State, but in that situation too the ban on employment procurement, where applicable, is general and without distinction as to whether it concerns an employer in Italy or in another Member State.

27.

In its more recent case-law the Court has interpreted the rules of the Treaty on provision of services on the basis of the same principles as those it has applied in relation to the rules on free movement of goods.

Most recently in Case C-3 84/93 Alpine Investments ( 17 ) the Court has considered whether the principles in the judgment in Joined Cases C-267/91 and C-268/91 Keck and Mithouard, ( 18 ) according to which national rules prohibiting or restricting certain forms of sale fall outside the scope of Article 30 of the Treaty, may be carried over to Article 59 of the Treaty. The Alpine judgment concerned national rules prohibiting a certain form of marketing, referred to as ‘cold calling’, of a ‘product’ which was otherwise completely lawful, namely a financial service. Even though the prohibition was general and had neither the object nor the effect of giving domestic undertakings an advantage over providers of services from other Member States, the Court attached importance to the fact that the prohibition originated in the Member State of the provider of services and concerned not only offers to recipients established in that State or who had come there to receive the services, but also offers addressed to recipients in the territory of another Member State. The prohibition therefore affected direct access to provision of services in the other Member States and was therefore such as to prevent provision of services between Member States. It was therefore covered by Article 59.

In this case, on the other hand, the national legislation at issue contains a general ban on private persons' producing a given ‘product’ at all, namely the service of employment procurement. A comparison with the rules on free movement of goods is also, I think, appropriate in considering this case. The Court has consistently held that Article 34 of the Treaty concerning restrictions on exports does not prevent a national prohibition of production of a given product even if the export of the product in question is thereby made impossible. ( 19 ) Article 34 ‘concerns national measures which have as their specific object or effect the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade, in such a way as to provide a special advantage for national production or for the domestic market of the State in question’. ( 20 ) The Italian prohibition of ‘production’ of the service of employment procurement is correspondingly general and does not have the object in particular of preventing export of the service in question or of establishing a difference in treatment between the provision of such services on the domestic market of the Member State in question and its export of such services. I should also like to stress that in employment procurement there will always be two recipients of the service, namely an employer and a person seeking work. In the situations covered by the Italian prohibition the provider of services and at least one of the recipients of the services will be on Italian territory. The fact that the ‘production’ of services in the form of employment procurement in certain situations also affects a recipient in another Member State should be of no importance because in all circumstances the prohibition will first and foremost have effect on the relevant Member State's own territory.

28.

In these circumstances it is appropriate to conclude that Article 59 does not in general prevent a Member State from prohibiting the practice of employment procurement in its territory when the prohibition applies irrespective of whether the service is provided for recipients in the Member State concerned or is also provided for a recipient in another Member State. ( 21 )

29.

The Court should therefore in my view answer the question regarding the rules on freedom of movement by stating that Articles 59 and 60 of the Treaty do not prevent a Member State from prohibiting firms within the Member State from practising employment procurement provided that that prohibition applies generally and without distinction according to whether the service is provided for recipients in the Member State in question or also for a recipient in another Member State.

The relation between Article 90 of the Treaty and Article 86

30.

Job Centre Coop, a r. 1. has claimed that an exclusive right with regard to employment procurement is contrary to Article 90 in conjunction with Article 86, since the public employment procurement is not in a position to supply the needs of the market.

31.

The Italian Government has contended on the other hand that the performance of employment procurement activities cannot be regarded as covered by the competition rules of the Treaty.

32.

The Commission and the German Government have stated that an exclusive right with regard to employment procurement must be considered on the basis of Article 90 of the Treaty but that the Italian prohibition of hiring out of temporary labour is not covered by the competition rules of the Treaty.

33.

Let me point out first of all that according to my information the Italian Republic does not itself offer the hiring out of temporary labour and has not granted special rights to any undertakings to perform such services. Article 90 applies only if special or exclusive rights are granted to one or more undertakings. In those circumstances I agree with the Commission that Article 90 of the Treaty does not preclude a national rule such as that in Article 1 of Law No 1369 of 23 October 1960.

34.

In the Höfner and Eher case ( 22 ) the Court defined the circumstances in which public employment procurement may involve an infringement of Article 90 of the Treaty in conjunction with Article 86. In its judgment the Court declared inter alia as follows: ( 23 )

‘Having regard to the foregoing considerations, it is necessary to establish whether a public employment agency ... may be regarded as an undertaking within the meaning of Articles 85 and 86 of the Treaty.

It must be observed, in the context of competition law, first that the concept of an undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed and, secondly, that employment procurement is an economic activity.

The fact that employment procurement agencies are normally entrusted to public agencies cannot affect the economic nature of such activities. Employment procurement has not always been, and is not necessarily, carried out by public entities. That finding applies in particular to executive recruitment.

It follows that an entity such as a public employment agency engaged in the business of employment procurement may be classified as an undertaking for the purpose of applying the Community competition rules.

It must be pointed out that a public employment agency which is entrusted, under the legislation of a Member State, with the operation of services of general economic interest ... remains subject to the competition rules pursuant to Article 90(2) of the Treaty unless and to the extent to which it is shown that their application is incompatible with the discharge of its duties (see judgment in Case 155/73 Sacchi [1974] ECR 409).

As regards the manner in which a public employment agency enjoying an exclusive right of employment procurement conducts itself in relation to executive recruitment undertaken by private recruitment consultancy companies, it must be stated that the application of Article 86 of the Treaty cannot obstruct the performance of the particular task assigned to that agency in so far as the latter is manifestly not in a position to satisfy demand in that area of the market and in fact allows its exclusive rights to be encroached on by those companies.

Whilst it is true that Article 86 concerns undertakings and may be applied within the limits laid down by Article 90(2) to public undertakings or undertakings vested with exclusive rights or specific rights, the fact nevertheless remains that the Treaty requires the Member States not to take or maintain in force measures which could destroy the effectiveness of that provision (see judgment in Case 13/77 Inno [1977] ECR 2115, paragraphs 31 and 32). Article 90(1) in fact provides that the Member States are not to enact or maintain in force, in the case of public undertakings and the undertakings to which they grant special or exclusive rights, any measure contrary to the rules contained in the Treaty, in particular those provided for in Articles 85 to 94.

Consequently, any measure adopted by a Member State which maintains in force a statutory provision that creates a situation in which a public employment agency cannot avoid infringing Article 86 is incompatible with the rules of the Treaty.

It must be remembered, first, that an undertaking vested with a legal monopoly may be regarded as occupying a dominant position within the meaning of Article 86 of the Treaty (see judgment in Case 311/84 CBEM [1985] ECR 3261) and that the territory of a Member State, to which that monopoly extends, may constitute a substantial part of the common market (judgment in Case 322/81 Michelin [1983] ECR 3461, paragraph 28).

Secondly the simple fact of creating a dominant position of that kind by granting an exclusive right within the meaning of Article 90(1) is not as such incompatible with Article 86 of the Treaty (see Case 311/84 CBEM, above, paragraph 17). A Member State is in breach of the prohibition contained in those two provisions only if the undertaking in question, merely by exercising the exclusive right granted to it, cannot avoid abusing its dominant position.

Pursuant to Article 86(b), such an abuse may in particular consist in limiting the provision of a service, to the prejudice of those seeking to avail themselves of it.

A Member State creates a situation in which the provision of a service is limited when the undertaking to which it grants an exclusive right extending to executive recruitment activities is manifesdy not in a position to satisfy the demand prevailing on the market for activities of that kind and when the effective pursuit of such activities by private companies is rendered impossible by the maintenance in force of a statutory provision under which such activities are prohibited and nonobservance of that prohibition renders the contracts concerned void.

It must be observed, thirdly, that the responsibility imposed on a Member State by virtue of Articles 86 and 90(1) of the Treaty is engaged only if the abusive conduct on the part of the agency concerned is liable to affect trade between Member States. That does not mean that the abusive conduct in question must actually have affected such trade. It is sufficient to establish that that conduct is capable of having such an effect (see Case 322/81 Michelin, above, paragraph 104).

A potential effect of that kind on trade between Member States arises in particular where executive recruitment by private companies may extend to the nationals or to the territory of other Member States.

In view of the foregoing considerations, it must be stated in reply to the fourth question that a public employment agency engaged in employment procurement activities is subject to the prohibition contained in Article 86 of the Treaty, so long as the application of that provision does not obstruct the performance of the particular task assigned to it. A Member State which has conferred an exclusive right to carry on that activity upon the public employment agency is in breach of Article 90(1) of the Treaty where it creates a situation in which that agency cannot avoid infringing Article 86 of the Treaty. That is the case, in particular, where the following conditions are satisfied:

the exclusive right extends to executive recruitment activities;

the public employment agency is manifesdy incapable of satisfying demand prevailing on the market for such activities;

the actual pursuit of those activities by private recruitment consultants is rendered impossible by the maintenance in force of a statutory provision under which such activities are prohibited and nonobservance of that provision renders the contracts concerned void;

the activities in question may extend to the nationals or to the territory of other Member States.’

35.

The Court has thus, in my view, taken a very general decision with regard to the question of how far the performance of public employment procurement activities involves an infringement of Article 90 of the Treaty, in conjunction with Article 86. The information available in the case now before the Court cannot, in my view, result in any other assessment and I shall therefore propose that the Court answer the question on the interpretation of Articles 86 and 90 of the Treaty in the same way as in the case referred to above. It is for the national court to decide whether the conditions mentioned are met.

36.

One question, however, deserves special consideration. In the Höfner and Eher case the Court mentioned that there was an infringement of Articles 86 and 90 of the Treaty in particular where the exclusive right to employment procurement extended to executive activities. ( 24 ) By the use of the expression ‘in particular’ the Court must have implied that there may also be infringements of Article 86 and 90 in the case of employment procurement covering groups of employees other than executives. The abovementioned case, however, concerned only employment procurement affecting executives and the Court therefore had no occasion to express itself more generally as to when an exclusive right of employment procurement on the part of the State may involve an infringement of the provisions in question.

It is my view that the activity of employment procurement is nowadays pursued, or may be pursued, on a commercial basis in relation to a series of groups of employees other than business executives. It is presumably as a result of considerations of that kind that the majority of Member States have either never ratified or in recent years have denounced that part of ILO Convention No 96 of 1949 which prohibits the pursuit of private employment procurement. ( 25 ) It is hardly possible or appropriate to undertake a more detailed delimitation of the groups of employees which may be covered by the commercial activity of employment procurement, as the market is constantly evolving. I shall therefore propose that the Court should omit that part of the grounds of judgment in the Höfner and Eher case which relates in particular to the employment procurement of business executives.

Conclusion

37.

In view of the foregoing considerations I shall propose that the Court answer the questions referred to it as follows:

(1)

Articles 59 and 60 of the Treaty do not prevent a Member State from prohibiting firms within the Member State from practising employment procurement, provided that that prohibition applies generally and without distinction according to whether the service is provided for recipients in the Member State in question or also for a recipient in another Member State.

(2)

A public employment procurement agency engaged in employment procurement activities is subject to the prohibition contained in Article 86 of the Treaty, so long as the application of that provision does not obstruct the performance of the task entrusted to it. A Member State which has conferred an exclusive right to carry on that activity upon the public employment agency is in breach of Article 90(1) of the Treaty where it creates a situation in which that agency cannot avoid infringing Article 86 of the Treaty. That is the case, in particular, where the following conditions are satisfied:

the public employment agency is manifestly incapable of satisfying demand prevailing in the market for such activities;

the actual pursuit of those activities by private recruitment consultants is rendered impossible by the maintenance in force of a statutory provision under which such activities are prohibited and nonobservance of that prohibition renders the contracts concerned void;

the activities in question may extend to the nationals or to the territory of other Member States.


( *1 ) Original language: Danish.

( 1 ) Certain occupations (in particular, entertainment businesses and the hotel industry, bakeries and shipping) come under a special system with various special offices for the provision of labour.

( 2 ) For the agricultural sector the rules are to be found in Law No 83 of 11 March 1970.

( 3 ) The concept of voluntary jurisdiction presumably comes from Roman Law and is known today ül several European legal systems. According to the First Book of Justinian, Chapter xvi, all proconsuls had jurisdiction, outside the bounds of their district, but only as regards voluntary matters (that is, where there was consensus) and thus not in disputes. The jurisdiction covered inter alia approval of adoption and of manumission of slaves, and minors, cf. Digest of Justinian, Vol. 1, edited by Mommsen and others, p. 31 et seq.

( 4 ) See Case 162/73 Birra Dreher v Amministrazione delle Finanze dello Stato [1974] ECR 201, paragraph 3.

( 5 ) See Case 126/80 Salonia v Poidommni and Giglio [1981] ECR 1563, paragraph 8.

( 6 ) See Case 162/73, previously cited, at paragraphs 2 and 3, and most recently Case C-18/93 Corsica Ferries [1994] ECR I-1783, paragraph 12.

( 7 ) See Case 14/86 Pretore di Salò v Persons unknown [1987] ECR 2545 and see the analogous judgment in Case 228/87 Criminal proceedings against X [1988] ECR 5099.

( 8 ) [1980] ECR 1975, paragraph 4.

( 9 ) See also Case 318/85 Greis Unterweger [1986] ECR 955, paragraph 4, concerning questions from a consultative commission for currency offences.

( 10 ) [1974] ECR 1201.

( 11 ) See Case 246/80 Broekmenlen v Huisarts Registratie Commissie [1981] ECR 2311, paragraphs 16 and 17.

( 12 ) [1981] ECR 3045.

( 13 ) Abovementioned judgment, paragraphs 18 and 19.

( 14 ) See Joined Cases 110/78 and 111/78 Ministère Public v Von Wesemael [1979] ECR 35 and Case 279/80 Webb [1981] ECR 3305 respectively.

( 15 ) [1991] ECR I-1979.

( 16 ) See, for example. Case C-154/89 Commission v France [1991] I-659, paragraph 9.

( 17 ) [1995] ECR I-1141.

( 18 ) [1993] ECR I-6097.

( 19 ) See, for example, Case 15/79 Groenveld [1979] ECR 3409.

( 20 ) See, most recently, Case C-80/92 Commission v Belgium [1994] ECR I-1019, paragraph 24.

( 21 ) In my view support for this may be found in Case C-379/92 Peralta [1994] ECR I-3453, paragraph 50.

( 22 ) See footnote 15.

( 23 ) Paragraphs 20 to 34.

( 24 ) See paragraph 34 of the judgment.

( 25 ) According to my information, Belgium, France, Ireland, Italy, Spain and Luxembourg acceded to the second chapter of the Convention, according to which employment procurement for remuneration was to be progressively eliminated. Finland, Germany and Sweden have denounced the Convention.

interpreted legal acts(0)
Other related legal acts(0)
legislations cited by this case(0)
This case cited by other legislations(0)
Citations - Legislation Articles
This legal data is being offered to you free of charge. High-Browse collects EU law directly from official sources and uses AI and analytics to create legal links and case synthesis. To find out more click here