A significant turnover achieved in France, a large number of contracts executed in the territory of France, and of workers posted on the territory of the latter country, constitute criteria determining a regular, stable and continuous activity within the meaning of French article L1262-3 Labor Code (as interpreted by the French labor authority, and often by national courts).
Pursuant to article L8221-1 read in conjunction with article L8221-3, regular, stable and continuous activity triggers the termination of employment concealed by concealment of activity.
Under article L8224-1, such a violation can lead to three years’ imprisonment and a fine of 45,000 euros.
What are the first signs of “establishment” (that is to say, within the meaning of French law)?
The first easily identifiable indicator is the TWA website.
The references to a focus on the French market, and to the number of years of experience in the market, represent an invitation to deepen the file.
Never again, during the hearing of the AFMB Ltd and others (C-610/18) case, the ECJ confirmed that “a website has factual value, if not legal value».
Obviously, the publication history of notifications is the primary source of information.
What are the next steps “?
- Inspection by DIRECCTE (Regional Directorate for Enterprises, Competition, Consumption, Labor and Employment), possibly accompanied by other authorities, in the premises where the activity is carried out. Simultaneous inspections can be carried out in different departments. It is important to keep and make available the mandatory documents in accordance with French law, however, in general, additional documents / information will be required.
- Formal hearing of company representatives at the DIRECCTE office.
- Mail sent by DIRECCTE to the legal representatives of the company, which contains the conclusion of the investigation and the legal reasons, the decision to issue an infringement warrant and the request for communication of the person’s identity can be prosecuted for offenses committed by the company. Pursuant to article L8222-5 of the Labor Code, the user company is informed of the obligation to prohibit the TWA from continuing the infringement.
Annulment of the presumption of “establishment”
It is difficult to overturn this presumption, but not impossible.
According to EU law, the question is when the activity carried out will no longer fall within the scope of the Treaty provisions relating to services and, therefore, will fail within the scope of the provisions dealing with the right of establishment (see context C-55/94 Gebhard, 30 November 1995, ECLI: EU: C: 1995: 411).
The European Court of Justice has provided guidance on the “borderline” between the freedom to provide services and establishment.
In this measurement, ” Nothing in the Treaty makes it possible to determine, in the abstract, the duration or the frequency beyond which the supply of a service or of a certain type of service in another Member State can no longer be considered as the supply of services in the meaning of the treaty”(C-215/01, Schnitzer, December 11, 2003, ECLI: EU: C: 2003: 662).
The provisions of French national law, and mainly national practice, make it possible to determine in a factual manner the border between the freedom to provide services and the establishment. In a case recently brought before the Court of Cassation, several workers and a period of secondment of two months in a calendar year repeated over five years are deemed to constitute an activity carried out in a habitual, stable and continuous manner.
Trying to get to the ECJ? Perhaps, however, nothing could be less certain.
Article L1262-3 of the Labor Code is not in itself in violation of EU law. However, the way it is applied contravenes the principles of equivalence and efficiency.
The first question is which question will be referred to the ECJ for a preliminary ruling. Much depends on the question referred, the ECJ can recall consistent case law and refer the case in question to the referring court for a more in-depth assessment.
In the Bouygues travaux publics et al. Case (C-17/19), the main proceedings mainly concern Article L1261-3 (the definition of “posted worker”) and Article 1262-3 mentioned above. .
The ECJ has chosen to answer the preliminary question (namely whether an E101 certificate, currently Portable Document A1, binds the courts of the host Member State, not only with regard to liability to social security, but also with regard to labor law), and not to “ provide the national court with an interpretation of EU law which may be useful for it to assess the effects of one or other of its provisions”(Ie effects in a specific case-judgment of 16 July 2015, AT Razpredelenie Bulgaria, C – 83/14, EU: C: 2015: 480, paragraph 71).
Finally, material evidence of a substantial activity carried out in the Member State of establishment is essential, but not sufficient to rule out the presumption of regular, stable and continuous activity within the meaning of article L1262-3 of the Labor Code. .
Unless you wish to register the company in the trade and companies register (France), the application of the case law of the ECJ (detailed references and evaluation within the framework of the documents to be kept and made available) would oblige the labor authority to consider EU law as an essential point to be addressed.
Such an assessment will reveal that often the criteria invoked by the labor authority are either irrelevant (in principle) or misinterpreted (as in the case at hand).