To execute a contract with the Austrian Federal Railway (ÖBB), an Austrian company (‘D GmbH’) used a Hungarian company (‘H Kft’) to provide on-board dining services on its cross-border services to Germany and Hungary. The workers began and ended shifts in Hungary and were domiciled and affiliated with the social insurance system in Hungary. All work that did not take place on trains took place in Hungary (receiving and loading goods, stock checking, turnover calculation).
Following an inspection, the managing director of H Kft was found guilty of not declaring employees as posted workers to the competent Austrian authority and not having the appropriate employment and social security documentation for them as posted workers. A fine was imposed on him.
He challenged this decision in court and on appeal, the Austrian Supreme Administrative Court referred a preliminary question to the European Court of Justice asking whether the Posted Workers Directive (96/71/EC) applied to workers providing on-board food and cleaning services on international trains, and whether the Posted Workers Directive applied in the particular circumstances of this case.
The Court’s ruling
On 19 December 2019, the European Court of Justice ruled that the Posted Workers Directive does not apply to on-board services, cleaning or food services on international trains that cross various Member States, by workers of an undertaking established in a Member State where those workers carry out a significant part of the work inherent in those services in the territory of that Member State and where they begin or end their shifts there (i.e. Hungary in this case). The Court held that these workers did not have a ‘sufficient connection’ with the Member State or Member States crossed by the train in the course of its journey.