Indirect Discrimination against Migrant Workers

The free movement of workers precludes the regulation of a member state which makes compensation for loss of earnings in the event of quarantine dependent on the fact that a quarantine measure has been imposed by its own administrative authorities, as such a regulation could lead to indirect discrimination against migrant workers. This was decided by the ECJ in its judgment of June 15, 2023 (C-411/22).

Facts

The ECJ ruling is based on the following facts: at the end of 2020, several employees of an Austrian hotel tested positive for Covid-19 and this was reported to the competent Austrian health authority. Some of the affected employees resided in Slovenia and Hungary. The Austrian health authority did not impose quarantine measures on them according to the applicable Austrian Epidemic Act (EpiG), but instead informed the competent Hungarian and Slovenian authorities. The latter ordered quarantine measures against these workers at their respective residences in accordance with local law. During the quarantine periods, the hotel continued to pay the affected employees their wages on the assumption that its employees' entitlement to remuneration had been transferred to the hotel through the payment of their wages. It subsequently applied under the EpiG for compensation for the loss of earnings incurred by its employees during these periods. These applications were rejected. The appeals filed against these notices were unsuccessful at first instance. The court held that only notices based on an official measure under the EpiG that caused the employees to suffer loss of earnings gave rise to a claim for compensation under that law. The Court of Appeal stayed the proceedings and asked the ECJ for an opinion.

Reasons for Decision

First, the ECJ answered in the negative the question of whether the amount of compensation due to employees during their quarantine is a "sickness compensation benefit" within the meaning of the Regulation on the coordination of social security systems and thus falls within the scope of that regulation. However, the regulation does not apply here, as it only applies to benefits relating to the risks expressly listed in Article 3(1) of that regulation. However, the cumulative requirements were not met. The main objective of "sickness benefits" within the meaning of the provision was to cure the sick person. However, this was not the case with remuneration as provided for in Section 32 of the EpiG.

In addition, the question was submitted to the ECJ whether the principle of free movement of workers precludes the regulation of a member state which makes the granting of remuneration dependent on the fact that the quarantine measure was ordered by the same member state. The Court answered in the affirmative. The Austrian regulation violates the freedom of movement for workers. The remuneration under the EpiG is granted exclusively to persons residing in Austrian territory. Thus, this remuneration is indirectly linked to the condition of residence in Austrian territory. This tends to have an effect on migrant workers and therefore constitutes indirect discrimination. It is true that it is in the interest of public health - which in principle permits the restriction of the free movement of workers - if quarantine measures are ordered and if the payment of an allowance is provided for in order to promote compliance with them. However, it is clearly not appropriate for the achievement of that objective to pay remuneration only to persons who have been quarantined under the national legislation, and not in particular to migrant workers who have been quarantined under the health measures in force in their member state of residence. Accordingly, providing compensation to such migrant workers could equally encourage them to comply with the quarantine imposed on them, to the benefit of public health.

Practise Note

The decision is particularly noteworthy with regard to the second question referred, as the ECJ continues its case law on the right of migrant workers and cross-border commuters, which extends to all areas. It rejects the arguments put forward to justify the differentiated treatment of the employee groups. In the end, the ECJ thus upholds the attempt to obtain a more advantageous legal position in domestic law by claiming that EU citizens are only theoretically disadvantaged. Until EU law is fully harmonized in all member states, however, there will always be different legal positions that could potentially be seen as discrimination. The containment of potential discrimination by state courts would therefore be desirable. German case law leads the way in this respect and does not see, for example, any scope of application in the union law provisions on freedom of movement to a nationally limited set of facts (see, for example, Federal Labor Court (Bundesarbeitsgericht, judgment of January 25, 2018, 6 AZR 791/16, BeckRS 2018, 3898). Accordingly, relevant professional experience acquired in Germany may be taken into account in the application, even if this potentially puts EU foreigners at a disadvantage.