Case C‑540/22

SN
and
AS
and
RA

v

Staatssecretaris van Justitie en Veiligheid

(Request for a preliminary ruling from the Rechtbank Den Haag)

Judgment of the Court (Fifth Chamber) of 20 June 2024

(Reference for a preliminary ruling – Freedom to provide services – Articles 56 and 57 TFEU – Posting of third-country workers by an undertaking of one Member State to carry out works in another Member State – Duration exceeding 90 days in a 180-day period – Obligation for the posted third-country workers to be holders of residence permits in the host Member State in the event that services are provided for more than three months – Limitation of the period of validity of the residence permits issued – Amount of the fees relating to the application for a residence permit – Restriction on the freedom to provide services – Overriding reasons in the public interest – Proportionality)

1. Freedom to provide services – Provisions of the Treaty – Scope – Limits – Right of employers to the freedom to provide services – Derived right of residence of posted third-country workers – Not permissible

   (Arts 56 and 57 TFEU)

   (see paragraphs 49-55, operative part 1)

2. Freedom to provide services – Provisions of the Treaty – Scope – Third-country workers legally employed in one Member State and posted to another Member State in order to carry out a supply of services – National legislation concerning the right of residence of such workers – Included

   (Arts 56 and 57 TFEU; Council Regulation No 1030/2002, Art. 1(2)(a); European Parliament and Council Directives 96/71, recital 20, and 2006/123, Art. 17(9); Council Directive 2003/109, Art. 3(2)(e); Convention implementing the Schengen Agreement, Art. 21(1))

   (see paragraphs 59-66)

3. Freedom to provide services – Restrictions – Undertaking established in one Member State and carrying out a supply of services, the duration of which exceeds three months, in another Member State – Legislation of the Member State in which the service is provided imposing an obligation on such an undertaking to obtain a residence permit for each third-country worker posted to the territory of that Member State by that undertaking – Permit concerned requiring the prior declaration to the competent authorities, by that undertaking, of the supply of services concerned by the posting and requiring the communication of certain supporting documents – Not permissible – Justification – Increasing legal certainty for posted workers and enabling checks by administrative authorities – Protection of public policy – Proportionality – Verification by the referring court

   (Art. 56 TFEU)

   (see paragraphs 67-76, 78-103, operative part 2)

4. Freedom to provide services – Restrictions – Legislation of a Member State limiting the period of validity of the residence permit which may be granted to a third-country worker posted to its territory – Period which may be shorter than the period needed to perform the supply of services which has given rise to the posting – Period limited to the period of the work and residence permit held by the person concerned in the Member State in which the service provider is established – Issuing of that permit requiring the payment of fees in an amount greater than the amount of the fees payable for the issuing of a certificate of lawful residence to a Union citizen – Whether permissible – Conditions

   (Art. 56 TFEU)

   (see paragraphs 112-122, operative part 3)

Résumé

Hearing a request for a preliminary ruling from the rechtbank Den Haag, zittingsplaats Middelburg (District Court, The Hague, sitting in Middelburg, Netherlands), the Court of Justice specifies the conditions under which, regarding their right of residence in the host Member State, third-country nationals may be posted to a Member State by an undertaking established in another Member State.

The applicants, who are Ukrainian nationals, are holders of temporary residence permits issued by the Slovak authorities. They work for ROBI spol s.r.o., a company governed by Slovak law, which posted them to a company governed by Netherlands law in order to carry out work in the port of Rotterdam (Netherlands). To that end, ROBI declared the nature of the activities carried out during the posting and the duration of that posting to the competent Netherlands authorities.

Subsequently, ROBI informed those authorities that those activities would continue beyond the right of circulation – 90 days in a 180-day period – enjoyed by a foreign national who holds a residence permit issued by a Member State, as laid down in Article 21(1) of the Convention implementing the Schengen Agreement. ( 1 ) For the duration of that supply of services, ROBI therefore lodged applications with the Netherlands authorities for residence permits for each applicant. Fees were collected for the processing of those applications. The competent authority, acting in the name of the Staatssecretaris van Justitie en Veiligheid (State Secretary for Justice and Security, Netherlands), issued the residence permits applied for, while limiting their period of validity to the period of validity of the Slovak temporary residence permits, that is to say, a period shorter than the duration of the posting.

In April 2021, the objections lodged by the applicants in respect of each of the decisions granting them residence permits were dismissed by the State Secretary for Justice and Security. Hearing an action challenging the decisions taken in April 2021, the referring court questions the Court of Justice as to whether a piece of national legislation imposing an obligation, in the context of a cross-border supply of services, for a third-country worker employed by a service provider established in a Member State to hold, in addition to a residence permit in that Member State, a residence permit in the Member State in which the supply is carried out after the expiry of the 90-day period referred to in the above provision of the CISA (it being possible for the period of validity of that permit to be limited in time) is consistent with the freedom to provide services enshrined in Articles 56 and 57 TFEU. It also asks the Court to examine whether imposing fees for each application for a residence permit in the Member State in which the supply is carried out is in line with EU law.

Findings of the Court

By its judgment, in the first place, the Court rules that Articles 56 and 57 TFEU do not call for the automatic recognition of a ‘derived right of residence’ for third-country workers posted to a Member State, either in the Member State where they are employed or in the Member State where they are posted.

In the second place, regarding the obligation, imposed on the service provider undertaking by the contested piece of legislation, to declare the supply of services to the competent national authorities and to obtain a residence permit for each third-country worker which it intends to post to the territory of that Member State, the Court finds, first of all, that, in the present case, the piece of legislation at issue, although it applies without distinction, imposes, in the case of supplies of services performed by undertakings established in another Member State which exceed three months, formal requirements on those undertakings in addition to those to which they are already made subject in the Member State in which they are established, pursuant to Directive 2009/52, ( 2 ) in order that they may employ third-country nationals. Such a piece of legislation therefore introduces a restriction on the freedom to provide services for the purposes of Articles 56 and 57 TFEU.

Next, examining whether that restriction may be justified by an overriding reason in the public interest, the Court notes, inter alia, that the desire to avoid disturbances on the labour market is undoubtedly an overriding reason in the public interest. However, such a reason cannot justify a piece of national legislation which applies to third-country nationals posted by a service provider undertaking established in another Member State with a view to their carrying out, under the supervision and authority of that undertaking, a supply of services other than the loan of manpower, given that those posted workers are not considered to be active on the labour market of the Member State to which they are posted.

That being said, the Court recalls that the objective of ensuring that posted workers have legal certainty by enabling them easily to establish that they are posted lawfully to the territory of the Member State in which the service is being provided and, accordingly, that they are staying there legally also constitutes an overriding reason in the public interest. Regarding the proportionality of such a measure, obliging service providers established in another Member State to apply for a residence permit for each posted third-country worker, in order that those workers may have a secure document, constitutes a measure appropriate for attaining the objective of increasing legal certainty for such workers, as that permit proves that they have a right of residence in the host Member State. In addition, the legislation at issue does not appear to go beyond what is necessary for the purpose of attaining such an objective, as the obligations imposed on the service provider undertaking are, inter alia, necessary in order to prove that the posting is lawful. Accordingly, the legislation at issue in the main proceedings may be justified by the objective of increasing legal certainty for posted workers and of facilitating checks by the administrative authorities and must be regarded, in the present case, as being proportionate.

The Court also acknowledges that the objective consisting in the need to check that the worker concerned does not represent a threat to public policy must be regarded as capable of justifying a restriction on the freedom to provide services. In the present case, the contested measure appears appropriate for attaining that objective and, moreover, cannot be regarded as going beyond what is necessary for that purpose, provided that it entails refusing residence only to persons who represent a genuine and sufficiently serious threat to one of the fundamental interests of society. As the assessment of the threat which a person may represent for public policy may vary from one country to another, the fact that a similar check may exist in the Member State in which the service provider undertaking is established cannot render irrelevant the carrying out of such a check in the Member State in which the supply of services is to be carried out. Furthermore, unlike the declaration procedure, which is based on checks based on information received or already possessed, the residence permit procedure, inasmuch as it requires the person concerned to report to the premises of a competent authority in person, may enable the identity of that person to be verified in detail, which is particularly important in combating threats to public policy.

Thus, the objective of protecting public policy is capable of justifying a Member State requiring service providers who are established in another Member State and who wish to post third-country workers to obtain – after a three-month period of residence in the first Member State – a residence permit for each of those workers. Such an objective is also capable of justifying that first Member State, at that time, making the issuing of such a permit subject to verifying that the person concerned does not represent a threat to public policy or public security, provided that the checks carried out to that end could not reliably be carried out on the basis of the information the communication of which is required or could reasonably have been required by that Member State during the declaration procedure, which it is for the referring court to verify.

Consequently, the Court states that Article 56 TFEU does not preclude a piece of legislation of a Member State which provides that, where an undertaking established in another Member State carries out, in that first Member State, a supply of services the duration of which exceeds three months, that undertaking is obliged to obtain in the host Member State a residence permit for each third-country worker which it intends to post to that first Member State, and which provides that, in order to obtain that permit, that undertaking is to declare beforehand to the competent authorities of the host Member State the supply of services in respect of which those workers are to be posted and is to communicate to those authorities the residence permits which those workers hold in the Member State where it is established, as well as their employment contracts.

In the last place, as regards the fact that the fees payable for the grant of a residence permit to a third-country worker posted to one Member State by an undertaking established in another Member State are greater than the amount of the fees payable for the grant of a certificate of residence to a Union citizen, the Court recalls that, in accordance with the principle of proportionality, in order for a measure requiring the payment of fees in exchange for the issuing, by a Member State, of a residence permit to be capable of being regarded as compatible with Article 56 TFEU, the amount of those fees cannot be excessive or unreasonable. The proportionate nature of the fees payable must be assessed in the light of the costs generated by the processing of that application which must be borne by the Member State concerned. In that regard, the Court notes that the fact that the fees requested for the issuing of a residence permit to a posted third-country worker are greater than those requested for a certificate of residence for a Union citizen cannot, in principle, be sufficient to establish, in itself, that the amount of those fees is in breach of Article 56 TFEU. However, that fact may constitute a compelling indication of the disproportionate nature of that amount if the tasks which the administrative authorities must complete in order to grant such a residence permit, as well as the costs of producing the corresponding secure document, are equivalent to those needed for the grant of a certificate of residence to a Union citizen, which it is for the referring court to determine.

Accordingly, the Court concludes that Article 56 TFEU does not preclude a piece of legislation of a Member State pursuant to which the period of validity of the residence permit which may be granted to a third-country worker posted to that Member State may not, in any event, exceed a period determined by the piece of national legislation in question, which may thus be shorter than the period needed to perform the service for which that worker is posted. That article also does not preclude the period of validity of that residence permit being limited to the period of validity of the work and residence permit held by the person concerned in the Member State in which the service provider is established. Lastly, according to that article, the issuing of that residence permit may require the payment of fees in an amount greater than the amount of the fees payable for the issuing of a certificate of lawful residence to a Union citizen, provided that: first of all, the initial period of validity of that permit is not manifestly too short to meet the needs of the majority of service providers; next, it is possible to renew the residence permit without having to meet excessive formal requirements; and, lastly, that amount approximately corresponds to the administrative costs generated by the processing of an application for such a permit.

( 1 ) Convention implementing the Schengen Agreement of 14 June 1985 between the Governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders, which was signed in Schengen on 19 June 1990 and entered into force on 26 March 1995 (OJ 2000 L 239, p. 19), as amended by Regulation (EU) No 265/2010 of the European Parliament and of the Council of 25 March 2010 (OJ 2010 L 85, p. 1), and by Regulation (EU) No 610/2013 of the European Parliament and of the Council of 26 June 2013 (OJ 2013 L 182, p. 1) (‘the CISA’). Under Article 21(1) of the CISA: ‘aliens who hold valid residence permits issued by one of the Member States may, on the basis of that permit and a valid travel document, move freely for up to 90 days in any 180-day period within the territories of the other Member States, provided that they fulfil the entry conditions referred to in Article 5(1)(a), (c) and (e) of Regulation (EC) No 562/2006 of the European Parliament and of the Council of 15 March 2006 establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) … and are not on the national list of alerts of the Member State concerned’.

( 2 ) Directive 2009/52/EC of the European Parliament and of the Council of 18 June 2009 providing for minimum standards on sanctions and measures against employers of illegally staying third-country nationals (OJ 2009 L 168, p. 24).