2017/36 A Dutch insight into the applicability of the Posted Workers Directive on international road transport. But still: a long and winding road ahead? (NL)

First proceedings: the Dutch trade union FNV – v – VdB

The FNV demanded application of the core employment conditions deriving from CLA Goederenvervoer to the employment agreements of the foreign employees working under charter agreements and brought an action against both VdB and its sister companies. VdB refused to apply these conditions, arguing that the Posted Workers Directive 96/71/EC did not apply to this situation and that therefore the charter provision did not apply either. VdB explained that many Dutch companies have acquired or established Eastern European companies in countries such as Poland, Hungary and the Baltic states and that this is having an impact on road transport throughout the EU. If VdB were to apply Dutch employment conditions to its dealings with its sister company, it could not make a profit and would not be able to retain the work. It felt that these kinds of issues are something that will need to be remedied on an EU level.

Second proceedings: the employees of Silo-Tank – v – VdB and Silo-Tank

In the second case – running in parallel with the first – the employees took proceedings against both VdB and Silo Tank. They stated that they were in fact employed by VdB, rather than of Silo Tank, but in any event, their employment terms were subject to the laws of the Netherlands. The employees argued that the contract with Silo-Tank was a sham. A third company, situated in the Netherlands, Compagny Services B.V., gave the employees their instructions and performed planning and administrative activities. The employees had to ask for permission to take leave in the Netherlands. Newsletters were sent to them from the Netherlands. The tank passes of the drivers were registered in the name of VdB. The sister companies rented their equipment from a Dutch company. After taking legal proceedings, the employees were fired by Silo Tank. They claimed against VdB that their termination was void and also claimed for payment of wages. They then did the same against Silo Tank in Hungary.

VdB and Silo Tank challenged the claims. They stated that VdB had acquired Silo Tank in order to be able to transport goods using cheaper Hungarian drivers, as is permitted in the EU under free market rules. They said the arrangement was not a sham, as Silo Tank was a genuinely independent legal entity, employing 60 employees. Silo Tank entered into employment agreements with the employees concerned. The termination of the employment agreements is the subject of litigation in Hungary, and should not be pursued in the Netherlands. There is no employment relationship between the employees and VdB. The fact that the on-board computers were registered in the name of VdB was because VdB owns the licence for the entire group, the group has one training facility and that happens to be in the Netherlands, and the fact that entire group uses the same branding is perfectly logical. These factors do not indicate that the employment agreements are with VdB. Although VdB did give instructions to the employees when performing their charter activities, this was logical, but also insufficient to indicate employment agreements were in place. Further, the employment agreements between the employees and Silo-Tank are subject to Hungarian law. Dutch law simply does not apply: neither on the basis of the Rome I Regulation nor through the Posted Workers Directive. According to VdB and Silo-Tank, the employees did not habitually perform their work in or from the Netherlands.

First proceedings: the Dutch trade union FNV – v – VdB

According to the District Court, the activities performed by the sister companies fell within the definition of a transnational secondment. In other words, the sister companies were seconding their employees to VdB.

District Court, ’s Hertogenbosch 8 January 2015 (FNV Bondgenoten – v – Van Den Bosch Transporten B.V.), ECLI:NL:RBOBR:2015:19.

This meant that Article 1(3)(a) of the Posted Workers Directive (‘posting based on a contract between the service provider and the service recipient, the service provider not being a temporary work agency’) applied. Further, the situation referred to in subsection (b) (‘posting within multinational groups’) might also apply. The Court found that VdB’s statement that the Posted Workers Directive would only apply if a foreign driver performed his or her work exclusively or mainly within the Netherlands was false and therefore rejected it.

The District Court further assessed whether the secondments were genuine, by applying the Enforcement Directive (2014/67). It concluded that the sister companies performed substantial activities. Whether the work was temporary needed to be assessed on a case-by-case basis for each employee, although, in the case at hand, the outcome would be the same either way. If the work was performed on a permanent basis in the Netherlands, Dutch law – including the core employment conditions set out in the collective labour agreement – would apply in accordance with Rome I. If the work was temporary, the core employment conditions in the collective labour agreement would apply based on the Posted Workers Directive. In both cases, the core employment conditions in the CLA Goederenvervoer applied.

The Court of Appeal took another view.

Court of Appeal ’s Hertogenbosch 2 May 2017 (Van Den Bosch Transporten B.V. c.s. – v – FNV), ECLI:NL:GHSHE:2017:1873.

Firstly, referring to the Rüffert case (C-346/06), it held that the charter provision may be in violation of the EU freedom to provide services, as that provision is not part of a collective labour agreement that has been declared to be generally applicable. However, the Court of Appeal observed that the provision was identical to a provision laid down in a collective labour agreement that has been declared generally applicable. CLA Goederenvervoer was exempted from the collective labour agreement that was declared to be generally applicable. Both agreements therefore combine to create a level playing field. The Court held that Article 3(8) of the Posted Workers Directive ought in such a situation to be interpreted in a way that means it applies to the CLA Goederenvervoer. This would mean there was no breach of the EU freedom to provide services.

The next question was whether the Posted Workers Directive applied. The Court of Appeal held that the case could fall within the ambit of Article 1(3)(a) of the Posted Workers Directive. VdB, but disputed that the Posted Workers Directive could apply if the work was not performed in the Netherlands, but rather from the Netherlands. It found that although this last criterion may apply when establishing which is the applicable law under Rome I, this does not apply to the Posted Workers Directive. Articles 1.1 and 1.3 of the Posted Workers Directive stipulate that the posting needs to take place ‘to the territory of a Member State’, not from the territory of a Member State. The same applies to Article 2 of the Posted Workers Directive, where it clarifies that a ‘posted worker’ carries out his or her work in the territory of a Member State other than the State in which he or she normally works, as opposed to from another Member State.

The same wording can be found in the opinion of Advocate General Wahl in case C-396/13. The Posted Workers Directive therefore does not apply to situations such as this. A broad interpretation of the Posted Workers Directive that would not only include working in another Member State but also working from another Member State, would not do justice to the aim of the Posted Workers Directive, which is to promote the freedom to provide services and to protect the internal market of the Member State involved.

Which Member State should be protected when ‘working from’ would apply? The country of the party that instructed the company performing the charter agreement? Or the country in which most time is spent driving? Or the country in which the goods are loaded and unloaded?

Moreover, the original proposal of the Commission of the Posted Workers Directive referred to Com 91, 230 def 346 providing services in another Member State, and deemed it unnecessary to add a list of exceptions. The combination of Article 1 and 2 of the Directive already make it clear that the Directive does not apply to, inter alia, international road transport.

Second proceedings: the employees of Silo-Tank – v – VdB and Silo-Tank

According to the District Court, there is no choice of law clause in the contract.

District Court ‘s-Hertogenbosch 8 January 2015 (employees – v – Van den Bosch Transporten B.V.), ECLI:NL:RBOBR:2015:18.

The applicable law should therefore be determined by Article 6 of the Rome Convention/Article 8 of the Rome I Regulation. This is typically the country in or from which the employees perform their work. But which that is, is debatable. Employees need to prove that they perform their work habitually in or from the Netherlands.

Meanwhile, the District Court noted that part of the wage claim of the employees was based on CLA Goederenvervoer, and that this document was generally binding (although, in the event, this turned out to be erroneous). The District Court ruled that the core employment terms of the CLA Goederenvervoer applied in any event, through the Posted Workers Directive. Therefore, regardless whether Dutch law applied, those terms must be adhered to. With regard to the applicability of the Posted Workers Directive, the same line of reasoning as mentioned above was applied. The litigating parties were allowed to comment on exactly which provisions of CLA Goederenvervoer they considered to be core.

Again, the Court of Appeal took a different approach.

Appellate Court ‘s-Hertogenbosch 2 May 2017 (Silo-Tank – v – 10 Hungarian employees), ECLI:NL:GHSHE:2017:1874.

It ruled that the employment agreements did not contain a choice-of-law clause. It acknowledged that the ECJ ruled in the Koelzsch case (C-29/10) that in international road transport, the employee is considered to habitually work in the country of the place from which the employee (i) carries out his or her transportation tasks; (ii) receives instructions concerning those tasks and organises the work; and (iii) has his or her work tools. The Court of Appeal did not mention that the agreement must also determine the place where the work is principally carried out, where the goods are unloaded and the place where the employee returns after completing the work. According to the Court of Appeal, the employees habitually worked in or from Hungary, and their employment agreements were more closely connected to that country. The Court of Appeal held in that regard that:

• Silo-Tank is situated in Hungary and also performs work unrelated to VdB;

• the employees are domiciles in Hungary, pay their taxes and are insured under social security law in that country;

• the employees received pay from the moment they left Hungary;

• the transportation tasks only partially took place in the Netherlands (both in mileage and in time);

• under these circumstances, the mere fact that the transportation started in the Netherlands and ended there, and the employees received instructions from VdB in the Netherlands, were insufficient to lead to the conclusion that the Netherlands was the country of habitual work.

This meant, according to the Court of Appeal, that Dutch law did not apply on the basis of the Rome Convention/Rome I.

In line with this reasoning, the Court of Appeal also held that the Posted Workers Directive did not apply. The effect was that the employees’ claims were denied.