European Union: Court of Justice rules that Hungarian workers aboard an international train are not posted because of lack of sufficient connection to “hosting” Member State

It is not always easy to discern whether employees working in the international transport sector fall under the scope of the Posting of Workers Directive. In the Dobersberger case (C‑16/18), the Court of Justice of the European Union (“CJEU”) ruled, on 19 December 2019, that Hungarian workers aboard an international train from Budapest to Munich and back, should not be qualified as posted workers, as their work does not have a sufficient connection with the territory of another Member State.

In this case, the Hungarian workers, who were living in Hungary, were employed by a Hungarian Company (Henry am Zug Hungary), which was subcontracted by an Austrian company to act as service staff (on-board services, cleaning or food and drink services for passengers) on an international train of the Austrian National Railways (ÖBB) that departs from Budapest (Hungary), runs through Austria and turns around in Munich or Salzburg, after which it returns to Budapest. The place of departure and arrival is Budapest, Hungary where the workers do most of the preparatory work. Following an inspection carried out at Vienna Central Station (Austria), Mr. Dobersberger, the managing director of Henry am Zug, was found guilty by the Austrian inspection and administrative court, in his capacity as employer of Hungarian workers posted by that company to Austrian territory in order to carry out on-board services on certain ÖBB trains, as he had not fulfilled the conditions for posting laid down by Austrian law. However, according to Mr. Dobersberger, his workers were not posted to Austria, as there was no posting of workers in this case.

The CJEU had to answer the preliminary question of the Austrian Verwaltungsgericht (the highest administrative court) whether Article 1(3)(a) of the Posting of Workers Directive must be interpreted as meaning that it covers the provision, under a contract concluded between an undertaking established in a Member State (Hungary) and an undertaking established in another Member State (Austria), which is contractually linked to a railway undertaking established in that same Member State (Austria), of on-board services, cleaning or food and drink services for passengers carried out by salaried employees of the first undertaking, or by workers hired out to it by an undertaking also established in the first Member State (Hungary), on international trains crossing the second Member State (Austria), where those workers carry out a significant part of the work inherent in those services in the territory of the first Member State (Hungary) and where they begin or end their shifts.

According to Article 2(1) of the Posting of Workers Directive, a ‘posted worker’ means a worker who, for a limited period, carries out his or her work in the territory of a Member State other than the State in which he or she ‘normally works’. In that regard, a worker cannot be considered to be posted to the territory of a Member State if the performance of his or her work does not have a sufficient connection with that territory. This interpretation follows in particular from Article 3(2), read in the light of recital 15 of the Posting of Workers Directive, which, in the case of the very limited provision of services in the territory to which the workers concerned are sent, states that the provisions of that directive on minimum rates of pay and minimum paid annual holidays are not applicable.

Workers, such as the Hungarian workers in question, who carry out a significant part of their work in the Member State of establishment of the undertaking (Hungary), which assigned them to provide services on international trains, that is to say all activities falling within the scope of that work with the exception of the on-board service provided during the train’s journey, and who begin or end their shifts in that Member State, do not have a sufficient connection with the territory of the Member State or Member States crossed by those trains to be regarded as ‘posted’, within the meaning of the Posting of Workers Directive.

Therefore, the “sufficient connection with the territory of a (host) Member State” is set to be an important criteria for the application of both the old and the revised Posting of Workers Directive.

For more information on these articles or any other issues involving labour and employment matters in European Union, please contact Chris Van Olmen, Partner at Van Olmen & Wynant (www.vow.be) at chris.van.olmen@vow.be.