CJEC, April 4, 1974, No 167-73

The court

1 By an application filed on 14 september 1973, the commission, under article 169 of the treaty establishing the european economic community, brought an action before the court for a declaration that by not repealing, insofar as it affects the nationals of other member states, the provision of article 3 (2) of the french code du travail maritime of 13 december 1926 as amended by order n°58-1358 of 27 december 1958, the French Republic has not complied with its obligations under the provisions of the treaty relating to freedom of movement for workers and in particular articles 1, 4 and 7 of regulation n°1612-68 of the council of 15 october 1968 (oj l 257, 19. 10. 1968, p. 2) on freedom of movement for workers within the community.

2 Under article 3 (2) of the aforementioned law such proportion of the crew of a ship as is laid down by an order of the minister of the merchant fleet must be of french nationality.

3 By ministerial order of 21 november 1960 (oj of the French Republic of 1 december 1960, p. 10 770) as amended by that of 12 june 1969 (oj of the French Republic of 13 june 1969, p. 5923) it was decided that, apart from special exemptions granted by the competent local administrative authorities, employment on the bridge and in the engine and wireless rooms on board merchant ships or fishing vessels or pleasure cruisers was reserved to persons of french nationality, and employment generally was so limited in the ratio of three to one.

4 In so far as it applies to nationals of other member states, article 3 (2), according to the commission, is incompatible with article 48 of the treaty, under which freedom of movement for workers entails the abolition of any discrimination based on nationality between workers of the member states as regards employment, remuneration and other conditions of work and employment.

5 The continuance of the provision in question is likewise said to be incompatible with regulation n°1612-68 and, in particular, with article 4 thereof under which provisions laid down by law, regulation or administrative action of member states which restrict by number or percentage the employment of foreign nationals in any undertaking, branch of activity or region, or at a national level, shall not apply to nationals of the other member states.

6 The government of the French Republic contends that the commission has not established a legal interest because, in spite of the continuance of the provision in question, there is no discrimination in its application between french nationals and those of other member states, taking into account that the directions given verbally to the naval authorities requires that the 'nationals of the community shall be treated as french nationals', so that these nationals are not 'obliged to comply with any formalities nor to suffer any delay in obtaining the right to employment by way of exemption '.

7 The government of the French Republic, however, considers that although it exempts the nationals of member states from the disparity in treatment provided for by the said law, it is not bound to do so by the provisions of the treaty.

8 It maintains that the rules of the treaty regarding freedom of movement for workers do not apply to transport and, in any event, not to sea transport so long as the council has not so decided under article 84 (2) of the treaty.

9 It follows (it is said) from articles 3 (e) and 74 of the treaty that the rules of the treaty relating to the complex of economic activities covered by it, and in particular articles 48 to 51, apply to transport only within the framework of a common policy.

10 It is for the council alone to decide the implementation of this policy in accordance with the procedure provided for this purpose by article 75.

11 This is even more so as regards sea transport since it is excluded by reason of article 84 (2) from the application of articles 74 to 84 to the treaty, since article 84 (2) provides only that the council may, acting unanimously, decide whether, to what extent and by what procedure appropriate provisions may be laid down for sea and air transport.

12 Finally the special aspects of transport, which article 75 requires to be taken into account, make it impossible to apply a large number of the provisions of the treaty relating to economic activities as a whole to transport, and, a fortiori, to sea and air transport.

A - admissibility of the action

13 The government of the French Republic challenges the existence of a legal interest on the part of the commission.

14 This plea may be understood either as aimed at the admissibility of the action or as denying the existence of the alleged default.

15 The commission, in the exercise of the powers which it has under articles 155 and 169 of the treaty, does not have to show the existence of a legal interest, since, in the general interest of the community, its function is to ensure that the provisions of the treaty are applied by the member states and to note the existence of any failure to fulfil the obligations deriving therefrom, with a view to bringing it to an end.

16 The action is admissible.

B - the interpretation of article 84 (2) of the treaty

17 To determine whether, in the sphere of transport, member states are bound by the obligations provided in articles 48 to 51 of the treaty, it is proper to consider the place of title iv of part two of the treaty, relating to transport, in the general system of the treaty, and the place of article 84 (2) within title iv.

18 Under article 2 of the treaty, which is placed at the head of the general principles which govern it, the community has as its task to promote throughout the community a harmonious development of economic activities by establishing a common market and progressively approximating the economic policies of member states.

19 The establishment of the common market thus refers to the whole of the economic activities in the community.

20 The basic object of part two of the treaty, devoted to foundations of the community, is to establish the basis of the common market, i.e. Free movement of goods (title i) and free movement of persons, services and capital (title iii).

21 Conceived as being applicable to the whole complex of economic activities, these basic rules can be rendered inapplicable only as a result of express provision in the treaty.

22 Such exemption is provided, in particular, by article 38 (2) under which the rules laid down for the establishment of the common market shall apply to agricultural products save as provided in title ii of this part of the treaty.

23 As regards transport, which is the subject of title iv of this part, it is proper to enquire, viewing article 84 (2) in the framework of this title, whether the provisions of the title contain a similar exemption.

24 When article 74 refers to the objectives of the treaty, it means the provisions of articles 2 and 3, for the attainment of which the fundamental provisions applicable to the whole complex of economic activity are of prime importance.

25 Far from involving a departure from these fundamental rules, therefore, the object of the rules relating to the common transport policy is to implement and compliment them by means of common action.

26 Consequently the said general rules must be applied insofar as they can achieve these objectives.

27 Since transport is basically a service, it has been found necessary to provide a special system for it, taking into account the special aspects of this branch of activity.

28 With this object, a special exemption has been provided by article 61 (1), under which freedom to provide services in the field of transport 'shall be governed by the provisions of the title relating to transport', thus confirming that the general rules of the treaty must be applied insofar as they are not excluded.

29 Article 84 (1) provides that the provisions of the title relating to transport shall by to transport by rail, road and indland waterway.

30 Article 84 (2) provides that as regards sea transport, the council may decide whether, to what extent and by what procedure appropriate provisions may be laid down.

31 Far from excluding the application of the treaty to these matters, it provides only that the special provisions of the title relating to transport shall not automatically apply to them.

32 Whilst under article 84 (2), therefore, sea and air transport, so long as the council has not decided otherwise, is excluded from the rules of title iv of part two of the treaty relating to the common transport policy, it remains, on the same basis as the other modes of transport, subject to the general rules of the treaty.

33 It thus follows that the application of articles 48 to 51 to the sphere of sea transport is not optional but obligatory for member states.

C - existence of a default

34 In challenging the legal interest of the commission the government of the French Republic has also sought to deny that a default exists in the case in question solely as a result of the maintenance in the national legal system of the law in dispute without taking into consideration the application which is made of it in practice.

35 A correct assessment of the legal position should have led the french authorities to find that since the provisions of article 48 and of regulation n°1612-68 are directly applicable in the legal system of every member state and community law has priority over national law, these provisions give rise, on the part of those concerned, to rights which the national authorities must respect and safeguard and as a result of which all contrary provisions of internal law are rendered inapplicable to them.

36 In reply to a formal notice under the first paragraph of article 169 dated 8 october 1971 by the commission to the french government, the latter stated in a letter of 30 november 1971 that it had already on several occasions indicated its intention of amending article 3 (2) of the code du travail maritime.

37 In the same letter the government declared itself ready to put the necessary draft law before the 1972-1973 parliamentary session.

38 Following the reasoned opinion from the commission dated 15 december 1972 the french government stated that it had submitted the draft law in question to parliament and that it would do all in its power to have it adopted.

39 It appears from the grounds of the draft law submitted to the national assembly on 7 december 1972 that the government 'wishes... To amend the code du travail maritime in order to abolish the discrimination which exists against nationals of member states of the community '.

40 It appears both from the argument before the court and from the position adopted during the parliamentary proceedings that the present state of affairs is that freedom of movement for workers in the sector in question continues to be considered by the french authorities not as a matter of right but as dependent on their unilateral will.

41 It follows that although the objective legal position is clear, namely, that article 48 and regulation n°1612-68 are directly applicable in the territory of the French Republic, nevertheless the maintenance in these circumstances of the wording of the code du travail maritime gives rise to an ambiguous state of affairs by maintaining, as regards those subject to the law who are concerned, a state of uncertainty as to the possibilities available to them of relying on community law.

42 This uncertainty can only be reinforced by the internal and verbal character of the purely administrative directions to waive the application of the national law.

43 The free movement of persons, and in particular workers, constitutes, as appears both from article 3 (c) of the treaty and from the place of articles 48 to 51 in part two of the treaty, one of the foundations of the community.

44 According to article 48 (2) it entails the abolition of any discrimination based on nationality, whatever be its nature or extent, between workers of the member states as regards employment, remuneration and other conditions of work and employment.

45 The absolute nature of this prohibition, moreover, has the effect of not only allowing in each state equal access to employment to the nationals of other member states, but also, in accordance with the aim of article 177 of the treaty, of guaranteeing to the state's own nationals that they shall not suffer the unfavourable consequences which could result from the offer or acceptance by nationals of other member states of conditions of employment or remuneration less advantageous than those obtaining under national law, since such acceptance is prohibited.

46 It thus follows from the general character of the prohibition on discrimination in article 48 and the objective pursued by the abolition of discrimination that discrimination is prohibited even if it constitutes only an obstacle of secondary importance as regards the equality of access to employment and other conditions of work and employment.

47 The uncertainty created by the maintenance unamended of the wording of article 3 of the code du travail maritime constitutes such an obstacle.

48 It follows that in maintaining unamended, in these circumstances, the provisions of article 3 (2) of the code du travail maritime as regards the nationals of other member states, the French Republic has failed to fulfil its obligations under article 48 of the treaty and article 4 of regulation n°1612-68 of the council of 15 october 1968.

49 Under article 69 (2) of the rules of procedure, the unsuccessful party shall be ordered to pay the costs, if a submission has been made to that effect.

50 The French Republic has failed in its pleas;

51 The French Republic must therefore be ordered to pay the costs.

The court

Hereby:

1. Declares that in maintaining unamended the provisions of article 3 (2) of the code du travail maritime as regards the nationals of other member states, the French Republic has failed to fulfil its obligations under article 48 of the treaty and article 4 of regulation n°1612-68 of the council of 15 october 1968.

2. Orders the French Republic to pay the costs.