Case C-359/09, Donat Cornelius Ebert

This was an interesting case on the relationship between the Professional Qualification Directive and the Lawyers Directive

  

The European Professional Qualification Directive (Directive 89/48) established a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three years’ duration. Directive 98/5, generally known as the Lawyers Directive, provides a comprehensive framework for attorneys wishing to practice in an EU Member State other than the one in which they were formally trained.

The reference had been made in the course of proceedings between Mr Ebert, a German national and lawyer registered as a “Rechtsanwalt” at the Düsseldorf Bar (Germany), and the Budapesti Ügyvédi Kamara (Budapest Bar Association, Hungary) as to the right claims by Mr Ebert to use the title “ügyvéd” (lawyer in Hungary) without being a member of the Bar Association.

The national court asked first of all whether Directive 98/5 excluded the application of Directive 89/48, as the detailed rules laid down in Art. 10(1) and (3) of Directive 98/5 were the only means for lawyers from other Member States to gain access to the title of lawyer of a host Member State, or whether the two directives complement one another by establishing, for lawyers from Member States, two ways to gain admission to the profession of lawyer in a host Member State under the professional title of the latter State.

The Court held Directive 98/5 did not deprive a lawyer, in particular where he had not yet effectively and regularly pursued a professional activity for a period of at least three years in the host Member State, of the possibility of applying to take up the profession of lawyer under the title of that Member State by relying on Directive 89/48.

The holder of a “diploma’, within the meaning of Art. 1(a) of Directive 89/48, such as Mr Ebert, enjoyed, in accordance with Art. 3, first paragraph, subparagraph (a) thereof, access to the regulated profession of lawyer in the host Member State. The Court however held that, since the profession was one whose practice required a precise knowledge of national law and an essential and constant element of which was the provision of advice and/or assistance concerning national law, Art. 3 of Directive 89/48 as amended did not prevent the host Member State from requiring, pursuant to Art. 4(1)(b) thereof, that the applicant take an aptitude test, provided that that Member State first verified whether the knowledge acquired by the applicant in the course of his professional experience was capable of covering, in whole or in part, the substantial difference referred to in the first subparagraph of that latter provision (see Case C‑118/09 Koller [2010]).

It followed that a lawyer from a Member State might gain admission to the profession of lawyer, in a host Member State where that profession was regulated, and practise under the professional title awarded by it, either under Directive 89/48 or Art. 10(1) and (3) of Directive 98/5.

Therefore, the Court found that Directives 89/48 and 98/5 complemented one another by establishing, for lawyers from Member States, two means for gaining admission to the profession of lawyer in a host Member State under the professional title of that State.

Furthermore, the national court asked, in essence, whether Directives 89/48 and 98/5 precluded national rules laying down the requirement to be a member of a body such as a Bar Association in order to practise the profession of lawyer under the title of lawyer of the host Member State.

The Court reiterated that even lawyers practising under their home-country professional title in a host Member State were subject to the same rules of professional conduct as lawyers practising under the professional title of that State (see, to that effect, Case C-225/09 Jakubowska [2010]).

The Court held that neither Directive 89/48 nor Directive 98/5 precluded the application, to any person practising the profession of lawyer in a Member State, particularly as regards the taking up or pursuit thereof, of national provisions laid down by law, regulation or administrative action justified by the general good, such as rules relating to organisation, qualifications, professional ethics, supervision and liability.

It was for the national court to ascertain whether the Budapesti Ügyvédi Kamara had applied those rules in accordance with the rules of European Union law and, in particular, the principle of non-discrimination (see, to that effect, Case C-19/92 Kraus [1993]; Case C-564/07 Commission v Austria [2009]).

The Court therefore held that neither Directive 89/48 nor Directive 98/5 precluded national rules laying down the requirement to be a member of a body such as a Bar Association in order to practise the profession of lawyer under the title of lawyer of the host Member State.

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Case C-463/09, CLECE SA

This reference for a preliminary ruling concerned the interpretation of Art. 1(1) of the (revised) Transfer of Undertakings Directive (Directive 2001/23).

The question had arisen in the course of legal proceedings brought by CLECE SA against Mrs Martín Valor and the Ayuntamiento de Cobisa (municipal authority of Cobisa (pictured right)) concerning Mrs Martín Valor’s dismissal.

On 27 May 2003, CLECE, a company that supplies cleaning services, entered into a contract with the Ayuntamiento de Cobisa for the cleaning of schools and premises belonging to the council.  

Pursuant to that contract, Mrs Martín Valor was employed by CLECE as a cleaner from 25 March 2004. On 9 November 2007, the Ayuntamiento de Cobisa informed CLECE that it was terminating its contract with that company with effect from 31 December 2007.

On 2 January 2008, CLECE informed Mrs Martín Valor that, as of 1 January 2008, she would become a member of the staff of the Ayuntamiento de Cobisa, since that body would henceforth carry out the cleaning of the premises in question. According to CLECE, pursuant to Art. 14 of the Collective Agreement concerning workers employed in the cleaning of buildings and premises in Toledo, the Ayuntamiento de Cobisa had taken over from that company all the rights and obligations relating to the employment relationship forming the subject of the dispute in the main proceedings.

On the same day, Mrs Martín Valor presented herself for work at the premises of the Ayuntamiento de Cobisa, but was not permitted to carry out her work there. CLECE, for its part, did not offer her an alternative job.

On 10 January 2008, the Ayuntamiento de Cobisa hired five workers to clean its premises, through an employment agency.

Mrs Martín Valor then brought an action  against CLECE and the Ayuntamiento de Cobisa, seeking a founding of unlawful dismissal.

The referring court asked, in essence, if Art. 1(1)(a) and (b) of Directive 2001/23 must be interpreted as meaning that that directive applied to a situation in which a municipal authority which had contracted out the cleaning of its premises to a private company decided to terminate its contract with that company and to undertake those cleaning services itself, by hiring new staff for that purpose.

The Court first of all pointed out that, pursuant to Art. 1(1)(c) of Directive 2001/23, that directive applied to public undertakings engaged in economic activities whether or not they were operating for gain.

The Court reiterated that the mere fact that the person to whom the activity was transferred was a public-law body, in this case a municipal authority, could not be a ground for excluding the existence of a transfer within the scope of that directive (see Case C-175/99 Mayeur [2000] and Case C-151/09 UGT-FSP [2010]).

Therefore, the fact that, as in the dispute in the main proceedings, one of the parties was a municipal authority did not, of itself, prevent Directive 2001/23 from applying.

Pursuant to Art. 1(1)(a) of Directive 2001/23, that directive applied to any transfer of an undertaking, business or part of an undertaking or business to another employer as a result of a legal transfer or merger.

The Court reiterated the scope of that provision could not be determined solely on the basis of a textual interpretation, primarily because  of the differences between the language versions of that directive and the divergences between the laws of the Member States with regard to the concept of legal transfer (see, inter alia, Case C-458/05 Jouini and Others [2007]).

The Court therefore found that it could not automatically be excluded that Directive 2001/23 might apply in circumstances such as those of the dispute in the main proceedings, where a municipal authority unilaterally decided to terminate a contract with a private undertaking and to carry out itself the cleaning work it used to contract out to that undertaking.

Nonetheless, according to Art. 1(1)(b) of Directive 2001/23, a condition for the application of that directive was that the transfer must concern an economic entity which retained its identity after the change of employer.

In order to determine whether such an entity retained its identity, it was necessary to consider all the facts characterising the transaction in question, including in particular the type of undertaking or business concerned, whether or not its tangible asset, such as buildings and movable property, were transferred, the value of its intangible asset at the time of the transfer, whether or not the majority of its employees were taken over by the new employer, whether or not its customers were transferred, the degree of similarity between the activities carried on before and after the transfer, and the period, if any, for which those activities were suspended. However, all those circumstances were merely single factors in the overall assessment which must be made and could not therefore be considered in isolation.

The Court held that it was of no consequence whether the majority of employees were taken on following a legal transfer negotiated between the transferor and the transferee, or whether it was the result of a unilateral decision made by the former employer to terminate the employment contracts of the transferred employees, followed by a unilateral decision made by the new employer to take on the majority of the same employees to carry out the same work.

The Court held that the mere fact that the activity carried out by CLECE and that carried out by the Ayuntamiento de Cobisa were similar, even identical, did not lead to the conclusion that an economic entity had retained its identity. An entity could not be reduced to the activity entrusted to it. Its identity emerges from several indissociable factors, such as its workforce, its management staff, the way in which its work was organised, its operating methods or indeed, where appropriate, the operational resources available to it. The Court held that, in particular, the identity of an economic entity, such as that forming the subject of the dispute in the main proceedings, which was essentially based on manpower, could not be retained if the majority of its employees were not taken on by the alleged transferee.

The Court concluded that notwithstanding any national protection rules, the mere taking over by the Ayuntamiento de Cobisa, in the dispute in the main proceedings, of the cleaning work that was previously carried out by CLECE, could not, of itself, indicate the existence of a transfer pursuant to Directive 2001/23.

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Case C‑155/09, Commission v Greece

An interesting case on Arts 12 EC, 18 EC, 39 EC and 43 EC regarding a tax exemption granted solely to persons residing in Greece and to persons of Greek origin not residing in Greece at the date of purchase. The Commission argued that Greece had failed to fulfil its obligations under these provisions by, first of all, granting exemption from a Greek tax on the transfer of immovable property solely to persons permanently resident in Greece but not to non-residents who intended to settle in Greece in the future, and, secondly, by granting, on certain conditions, exemption from the tax solely to Greek nationals on the purchase of a first home in Greece, expressly discriminating against persons resident abroad who were not Greek nationals.

The Court first of all reiterated its – famous wording - that although direct taxation fell within their competence, the Member States must none the less exercise that competence consistedently with EU law (see, inter alia, C-347/04, Rewe Zentralfinanz [2007] on which I wrote this post).

The Court of Justice has – since 1974 – rather consistently held that the rules regarding equal treatment forbade not only overt discrimination by reason of nationality but also all covert formed of discrimination which, by the application of other criteria of differentiation, led in fact to the same result (see, inter alia, Case 152/73 Sotgiu [1974]; or, more recently, Case C‑103/08 Gottwald [2009]).

In the present case, the national provision concerned reserved entitlement to the tax exemption solely to permanent residents in Greece. Although it applied irrespective of the nationality of the purchaser of immovable property, the requirement that a person be resident in Greece in order to be eligible for the tax exemption was, according to the Court of Justice, liable to operate particularly to the detriment of persons who were not Greek nationals – the reason being that in most cases those were the persons whose residence would be outside Greece.

According to the Court, the provision concerned therefore placed at a disadvantage persons not residing in Greece who purchased a first home with a view to settling in Greece in the future, since it did not admit that such persons were entitled to the exemption from the tax due on the purchase of a first home, whereas persons already residing in Greece who purchased a first home there might benefit from the exemption.

The Court held that, in those circumstances, the provision had a deterrent effect in relation to persons not residing in Greece who wished to purchase a first home there.

However , as is well known, national measures which are liable to hinder or made less attractive the exercise of fundamental freedoms guaranteed by the Treaty may nevertheless be allowed provided that they pursue an objective in the public interest, are appropriate for attaining that objective and do not go beyond what is necessary to attain the objective pursued (see inter alia: Case C‑345/05 Commission v Portugal [2006])

In the present case, Greece argued that the permanent residence requirement was justified inter alia by objectives consisting, on the one hand, in facilitating the purchase of a first home by individuals and preventing any property speculation and, on the other, in restricting tax evasion and preventing abuse. Furthermore, it argued that such a requirement was part of the more general context of Greece’s social policy, in relation to which the national practices pertaining to the implementation of social objectives were covered by the discretion which Member States retained in determining their social policy, with regard to the nature and extent of social protection which they applied, provided that their actions were proportionate to the objective pursued.

The Court, however, held that even supposing that such arguments might be relied on to justify an obstacle to the freedom of movement of persons, the requirement for residence on Greek territory laid down in the provision concerned did not, in any event, secure the objectives which that law purportedly pursued and, in addition, went beyond what was necessary to attain those objectives.

The Court furthermore held that there were other less restrictive methods which would allow the Greek authorities to ensure that a purchaser of immovable property complied with all the conditions for entitlement to the tax exemption by satisfying themselves that he did not own another property in Greece. They included entry on the tax register or the land register, a requirement for declarations as to tax or accommodation or the implementation of checks by the tax authorities, supplemented by statements under oath by purchasers, the latter being criminally liable for the content and accuracy of their statements.

The Court furthermore held that as regards persons who were not resident in Greece and who were not carrying out any economic activity there, the same conclusion applied, for the same reasons, to the complaint relating to Art. 18 EC (see Case C‑522/04 Commission v Belgium [2007])

As regards the Commission’s second complaint concerning the fact that the tax exemption was granted only to Greek nationals or persons of Greek origin, the Court held that the provision concerned drew a distinction based on the criterion of nationality.

The Court reiterated that  Article  12 EC or Arts 39 EC or 43 EC, required that comparable situations must not be treated differently and that different situations must not be treated in the same way. Such treatment might be justified only if it was based on objective considerations independent of the nationality of the persons concerned and was proportionate to the objective being legitimately pursued (see, to that effect, Case C-164/07 Wood [2008] and Case C‑524/06 Huber [2008]).

In the present case, Greek nationals and nationals of Member States other than Greece who intended to settle in Greece were, so far as the purchase of a first residence in that Member State was concerned, in a comparable situation. Only Greek nationals or persons of Greek origin were entitled to the exemption. Thus, that different treatment, expressly and solely based on nationality, constituted direct discrimination. It followed that the exemption constituted discrimination prohibited by the first paragraph of Art. 12 EC and by Arts 39 EC and 43 EC.

The Court concluded that by granting, on certain conditions, exemption from the tax solely to Greek nationals or persons of Greek origin on the purchase of a first residence in Greece, Greece had failed to fulfil its obligations under Arts 12 EC, 39 EC and 43 EC.

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C‑239/09 Seydaland Vereinigte Agrarbetriebe v BVVG

This case concerned the interpretation of the  Commission Communication on State aid elements in sales of land and buildings by public authorities (OJ 1997 C 209, p. 3), which inter alia provides that land and buildings are to be sold by public authorities following either a sufficiently well-publicized, open and unconditional bidding procedure or 'an independent evaluation … carried out by one or more independent asset valuers prior to the sale negotiations in order to establish the market value on the basis of generally accepted market indicators and valuation standards’.

In order to adapt the system of ownership over agricultural and forestry land of the new Länder to Germany’s legal system, Germany adopted the Indemnification and Compensation Act of 27 September 1994. That law included a programme for the acquisition of land, subsequently implemented by the Land Purchase Order, Art. 5(1) of which provided that:

‘The market value of agricultural land under Paragraph 3(7) … of the AusglLeistG shall be determined in accordance with the Land Valuation Order of 6 December 1988 … Where there are regional reference valuations of arable and pasture land, the market value shall be determined according to them. The regional reference valuations shall be published by the Federal Finance Minister in the Bundesanzeiger [Federal Gazette]. The potential purchaser or the Privatisation Authority may seek a determination of the market value which differs from those valuations by means of an expert report prepared by the competent regional valuation committee, established under Paragraph 192 of the Federal Law on Construction, where there is genuine evidence that the regional reference valuations are not a suitable basis for determining market value.’

Seydaland was a company operating in the agro‑industrial sector. BVVG was a wholly‑owned subsidiary of the Bundesanstalt für vereinigungsbedingte Sonderaufgaben (the federal body responsible for special tasked connected with German reunification), responsible for the privatisation of agricultural and forestry land.

By contract dated 18 December 2007, BVVG sold land for agricultural used to Seydaland. The total selling price was EUR 245 907.91, of which agricultural land accounted for EUR 210 810.18.

As it considered that the price it paid was excessive, Seydaland sought reimbursement of part of the selling price of the land, claiming that, calculated on the basis of the regional reference valuations, that selling price was only EUR 146 850.24. According to Seydaland, BVVG ought to have calculated the selling price of the land at issue on the basis of the regional reference valuations, or to have referred to the valuation committee pursuant to Paragraph 5(1) of the Land Purchase Order. Seydaland also claimed that, in any event, it was not permissible to determine that selling price on the basis of the prevailing market situation, as BVVG did.

Seydaland brought an action before the Landgericht Berlin seeking reimbursement. The Landgericht Berlin asked the Court of Justice whether Art. 87 EC must be interpreted as precluding national legislation laying down calculation methods for determining the value of agricultural and forestry land, being offered for sale by public authorities in the context of a privatisation programme, such as those laid down in the second and third sentences of Paragraph 5(1) of the Land Purchase Order.

The Court first of all reiterated that the notion of aid might include not only positive benefits such as subsidies, loans or direct investment in the capital of undertakings, but also interventions which, in various forms, mitigated the charges which were normally included in the budget of an undertaking and which therefore, without being subsidies in the strict sense of the word, were of the same character and had the same effect (see, inter alia, Case C‑156/98 Germany v Commission [2000] and Joined Cases C-341/06 P and C-342/06 P Chronopost and La Poste v UFEX and Others [2008]).

The Court furthermore reiterated that in relation to the sale by public authorities of land or buildings to an undertaking or to an individual involved in an economic activity, such as agriculture or forestry, such a sale might include elements of State aid, in particular where it was not made at market value, that was to say, where it was not sold at the price which a private investor, operating in normal competitive conditions, would have been able to fix (see, to that effect, Case C‑290/07 P Commission v Scott [2010] on which I wrote this post).

The Court held that where the national law established rules for calculating the market value of land for their sale by public authorities, the application of those rules must, in order to comply with Art. 87 EC, led in all cases to a price as close as possible to the market value. As that market value was theoretical, except in the case of sales accepting the highest bid, a margin for variation on the price obtained as compared with the theoretical price must be tolerated.

As regards the provision at issue in the present case, the Court held that in cases in which the method based on the regional reference valuations did not include a mechanism for updating those valuations which would allow the selling price of the land to reflect in so far possible, the market value of that land, especially when prices were rising sharply, that method was not suitable for reflecting the actual market prices in question.

The Court held that it was therefore for the referring court to examine whether Paragraph 5(1) of the Land Purchase Order could be interpreted in a manner consistent with Art. 87 EC, in particular, in the light of other provisions of national law which might be applicable. The Court added that even if the referring court were to find that Paragraph 5(1) of the Land Purchase Order was consistent with Art. 87 EC, it could not be ruled out that, in certain instances, the method laid down in that provision of national law might lead to a result far removed from market value.  

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