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National courts may apply a national system of penalties contrary to the Directive concerning the posting of workers as long as it ensures proportionality of the penalties

The company CONVOI s. r. o., established in Slovakia and represented by NE, posted workers to a company established in Fürstenfeld (Austria). By a decision adopted in June 2018, on the basis of findings made during an inspection carried out on 24 January 2018, the Bezirkshauptmannschaft Hartberg-Fürstenfeld (administrative authority of the district of HartbergFürstenfeld, Austria) imposed a fine of EUR 54 000 on NE, for failure to comply with a number of obligations laid down by Austrian employment law, relating, in particular, to the retention and making available of wage and social security records. NE brought an action against that decision before the referring court, the Landesverwaltungsgericht Steiermark (Regional Administrative Court, Styria, Austria).

In October 2018, that court, questioning the conformity with EU law and, in particular, with the principle of proportionality set out inter alia in Article 20 of Directive 2014/67 1 of penalties such as those imposed by the Austrian legislation at issue, had brought the matter before the Court for a preliminary ruling. In its order of 19 December 2019, Bezirkshauptmannschaft HartbergFürstenfeld, 2 the Court had held that the combination of various elements of the Austrian system of penalties imposed for non-compliance with obligations – essentially administrative – to retain documents concerning the posting of workers was disproportionate.

Noting that, following that order, the national legislature did not amend the legislation at issue, and having regard to the solution adopted by the Court in the judgment of 4 October 2018, Link Logistik N&N, 3 the referring court decided to ask the Court whether and, if so, to what extent that legislation may be disapplied. Indeed, in that judgment of 4 October 2018, Link Logistik N&N, the Court had considered that a provision of EU law similar to Article 20 of Directive 2014/67 4 has no direct effect