OPINION OF ADVOCATE GENERAL

delivered on 26 May 2005 1

(Failure of a Member State to fulfil its obligations – Directive 96/67/EC on access to the groundhandling market at Community airports – Incorrect transposition)

1. In the present action the Court is asked once again to consider a national measure transposing Council Directive 96/67/EC of 15 October 1996 on access to the groundhandling market at Community airports. 2

4. In addition, the Court has already interpreted Article 16(3) of the Directive in a judgment of 16 October 2003, 4 which states that the article in question ‘precludes the managing body of an airport from making access to the groundhandling market in the airport subject to payment by a supplier of groundhandling services or self-handler of an access fee as consideration for the grant of a commercial opportunity, in addition to the fee payable by that supplier or self-handler for the use of the airport installations’.

I – The legal context

A – Community law

10. Second, the Community legislature considered that ‘Member States must retain the power to ensure an adequate level of social protection for the staff of undertakings providing groundhandling services’. 6

11. Articles 16 and 18 of Directive 96/67 amplify these two aspects of the Community provisions.

12. Article 16 of the directive, entitled ‘Access to installations’, is worded as follows:

‘1. Member States shall take the necessary measures to ensure that suppliers of groundhandling services and airport users wishing to self-handle have access to airport installations to the extent necessary for them to carry out their activities. If the managing body of the airport or, where appropriate, the public authority or any other body which controls it places conditions upon such access, those conditions must be relevant, objective, transparent and non-discriminatory.

…

13. Article 18 of Directive 96/67, entitled ‘Social and environmental protection’, reads as follows:

‘Without prejudice to the application of this Directive, and subject to the other provisions of Community law, Member States may take the necessary measures to ensure protection of the rights of workers and respect for the environment.’

14. Finally, as both parties have submitted observations on Article 1(1) of Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses, 7 I note that that provision states that:

‘(a) This Directive shall apply 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.

(b) Subject to subparagraph (a) and the following provisions of this Article, there is a transfer within the meaning of this Directive where there is a transfer of an economic entity which retains its identity, meaning an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.’

15. The first subparagraph of Article 3(1) of Directive 2001/23 provides that ‘[t]he transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee’.

B – National law

16. In Germany, Directive 96/67 was transposed principally by the Law on Airport Groundhandling Services of 11 November 1997 (Gesetz über Bodenabfertigungsdienste auf Flughäfen), 8 and by the Regulation on Airport Groundhandling Services of 10 December 1997 (Verordnung über Bodenabfertigungsdienste auf Flugplätzen, ‘the BADV’). 9

17. Paragraph 8 of the BADV is entitled ‘Conditions’, and subparagraph 2 thereof provides as follows:

‘(2) The airport operator may require a supplier of groundhandling services or a self-handling user to take over workers according to the groundhandling services transferred to that supplier or user. Such workers shall be chosen on the basis of relevant criteria, in particular according to the function that they perform. The third sentence of Paragraph 9(3) shall apply. Article 613a of the Civil Code is not affected.’ 10

18. Paragraph 9 of the BADV, entitled ‘Access’, is worded as follows:

‘(1) The airport operator and the supplier of groundhandling services or self-handling user are required to enter into a contract concerning the use of the requisite and available part of the airport and its infrastructures as well as the fees to be paid under this regulation to the airport operator, and the conditions to be fulfilled by suppliers of groundhandling services or self-handling users under Paragraph 8.

(2) The airport operator shall ensure that access to airport installations by suppliers of groundhandling services and self-handling users authorised on the basis of this regulation is not wrongfully impeded so far as access is necessary for carrying on their activities. If the airport operator imposes conditions on such access, they must be relevant, objective, transparent and non-discriminatory.

(3) The airport operator is entitled to charge suppliers of groundhandling services and self-handling users a fee for the access to and availability and use of its installations. The amount of such remuneration shall be determined after a hearing of the users’ committee in accordance with relevant, objective, transparent and non-discriminatory criteria and may in particular contribute, in the sense of a commercial fee, to the self-financing of the airport. In setting the fee, the airport operator may take into account to a reasonable extent the costs necessarily incurred by him as a result of the transfer of groundhandling services to suppliers of groundhandling services or self-handling users, in particular as a result of not taking over workers.’

II – The pre-litigation procedure

19. After examining the German legislation, the Commission concluded that Paragraphs 8(2) and 9(3) of the BADV were not a correct transposition into national law of Articles 16 and 18 of Directive 96/67. It therefore sent the German Government a letter of formal notice dated 28 February 2000.

21. The Commission was not persuaded by this reply and, by letter of 21 March 2002, it sent the German Government a reasoned opinion, repeating its complaint.

22. Finding the reply to the reasoned opinion unsatisfactory, the Commission brought the present action under Article 226 EC, by application registered at the Court Registry on 12 September 2003.

III – The action

23. In this action the Commission asks the Court to rule that the Federal Republic of Germany has failed to fulfil its obligations under Directive 96/67 in so far as, in Paragraphs 8(2) and 9(3) of the BADV, it has adopted measures incompatible with Articles 16 and 18 of that directive. The Commission also asks that Germany be ordered to pay the costs.

24. The Commission thus claims that Germany has breached two articles of Directive 96/67, namely Articles 16 and 18. I shall begin by examining the complaint concerning Article 18 and then the complaint concerning Article 16.

A – The complaint of breach of Article 18 of Directive 96/67

1. Arguments of the parties

25. First of all, the Commission observes that the general protection measures adopted by the Member States for transposing Directive 2001/23 apply also to groundhandling services. So, where the opening-up of the market provided for by Directive 96/67 leads to the transfer of an undertaking or business within the meaning of Article 1(1)(b) of Directive 2001/23, the transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of the transfer are, by reason of the transfer, transferred to the transferee.

27. The national provisions in question enable the managing body of the airport to pass on to new entrants to the market all or, at least, part of the costs connected with the employees whom it can no longer employ because of the loss of market shares inherent in the opening-up of the market, thus increasing the cost of access to the market for the new entrants. It is also clear from the wording of those provisions that the opportunity to pass on costs is available only to the managing body of the airport, whereas other service suppliers and self‑handling users who lose market shares because of the opening-up of the market cannot avail themselves of similar rights, and must therefore themselves meet all the ‘social costs’ arising from any loss of business.

28. The Commission adds that Paragraph 8(2) of the BADV has the effect of imposing on operators entering the market for groundhandling services at airports a disguised obligation to take on staff, which is not permitted by Article 18 of Directive 96/67.

29. Finally, the Commission observes that the system introduced by the German legislation promotes the financial interests of the managing body of the airport more than the protection of employees.

30. In response to these submissions, the German Government observes that its national rules comply with the aim of the Directive in so far as they permit the liberalisation by stages of access to the market for groundhandling services under equal conditions of competition in that market while taking account of the special position of airport managing bodies as former State undertakings.

31. The German Government also observes that, by introducing a system based on negotiation between the former airport managing body and the new operator, Paragraph 8(2) of the BADV creates a system aiming so far as possible to safeguard contracts of employment when the activity is transferred.

32. According to the German Government, the combined provisions of Paragraphs 8(2) and 9(3) of the BADV seek to establish a fair balance between the protection of employees and the aim of liberalisation, that is to say, between the interests of the managing body of the airport, those of employees and those of new operators in the market. Furthermore, the managing body would be at a disadvantage in competition from new service suppliers if it had to bear alone the costs that arise where employees are not taken on by those suppliers.

33. Moreover, Paragraph 8(2) of the BADV only requires the new competitor and the managing body of the airport to consult each other with regard to taking on employees, and not to take them on, as was the case in Italy in the case of Commission v Italy, cited above. That is why that judgment, upon which the Commission seeks to rely, is not relevant in the present case.

34. The German Government also observes that the national measures only lay down an alternative in providing that the managing body of the airport may share out fairly and proportionately among the market operators, in accordance with relevant, objective, transparent and non-discriminatory criteria, the ‘social costs’ arising from liberalisation and the refusal to take on employees.

35. In addition, the disputed provisions of the BADV are not discriminatory barriers to access to the market, because all service suppliers make a proportionate contribution to the costs incurred by not taking on employees.

36. Finally, the German Government admits that the legislative machinery in question goes further than the situations governed by Directive 2001/23. It states that the fact that the managing body of the airport transfers only a certain percentage of the groundhandling services business may rule out a transfer of an economic entity within the meaning of that directive, in the absence of an organised grouping of persons and assets facilitating the exercise of an economic activity pursuing a specific objective.

37. To begin with, I find that the parties agree that the German system arising from Paragraphs 8(2) and 9(3) of the BADV goes beyond the scope of Directive 2003/23 and can therefore, to that extent, be examined by reference solely to the relevant provisions of Directive 96/67. (11)

39. In that action against the Italian Republic for failure to fulfil its obligations, the Commission complained that, on the transfer of any business concerning categories of groundhandling services, Italy required the staff of the previous service supplier to be transferred to its successor, in proportion to the share of traffic or business taken over by the latter.

40. In determining whether the complaint was well founded, the Court observed (12) that the Member States’ power to guarantee an adequate level of social protection for the staff of undertakings supplying groundhandling services ‘does not confer an unlimited jurisdiction and must be exercised in a manner that does not prejudice the effectiveness of Directive 96/67 and the objectives it pursues’. The Court noted that ‘the aim of the directive is to ensure the opening-up of the groundhandling market which, according to the fifth recital in the preamble to the directive, must help, in particular, to reduce the operating costs of airlines’. (13)

41. In that context, the Court considered that the interpretation that an obligation on the part of new suppliers of services in groundhandling markets to take over the staff employed by the previous supplier falls within the framework of what is permitted by Article 18 of Directive 96/67 ‘would make the entry of new suppliers of services in the groundhandling market unduly difficult’. This would result in impairing the rational use of airport infrastructures and the reduction of the cost of the services charged to users. (14)

42. The Court added that ‘the obligation imposed … on the undertakings concerned to take over the staff of the previous supplier puts potential new competitors at a disadvantage in relation to established undertakings and jeopardises the opening-up of the groundhandling markets, thereby undermining the effectiveness of Directive 96/67’. (15) It followed that ‘the disputed legislation prejudices the aim of that directive, namely the opening‑up of the markets concerned and the creation of appropriate conditions for intra-Community competition in the sector’. (16) Such legislation was therefore found by the Court to be incompatible with Directive 96/67.

43. Can the Court’s reasoning concerning a national measure requiring employees to be taken over by new entrants to the groundhandling market be applied to determine whether the German system in the BADV is compatible with Directive 96/67? I think the answer must be in the affirmative so far as, first, Paragraph 8(2) of the German legislation is concerned.

44. Even if the obligation to take over employees appears less obvious in the German system than in the Italian, it comes to light on careful examination of the German provisions.

45. Consequently, on reading these provisions, I am not persuaded by the German Government’s argument in its defence that new entrants to the groundhandling market are required only to consult with the managing body of the airport regarding the question of taking over employees. On this point it must be observed that Paragraph 8(2) of the BADV expressly provides that the managing body of the airport ‘may require a supplier of groundhandling services or a self-handling user to take over workers according to the groundhandling services transferred to that supplier or user’. (17)

46. Therefore I think there is no doubt that this provision of German law expressly and generally, that is to say, beyond the particular situation of a transfer of an undertaking within the meaning of Article 1 of Directive 2001/23, permits an airport managing body to impose an obligation on suppliers of services and self-handling airport users to take over employees according to the groundhandling services transferred to them.

47. Consequently, a national provision of that kind should, in conformity with the Court’s ruling in the case of Commission v Italy, be found incompatible with Article 18 of Directive 96/67. The reason is that, where the national provision is put into effect by an airport managing body, it seems to me likely to make the entry of new suppliers of services in the groundhandling market in question unduly difficult, to put potential new competitors at a disadvantage in relation to established undertakings and, finally, to jeopardise the opening-up of the groundhandling markets, thereby undermining the effectiveness of Directive 96/67.

48. If we now consider, in the light of Article 18 of Directive 96/67, the whole of the system set up by the German legislation, as the Commission does, it must be stressed that it has two aspects: first, as we have just seen, the managing body of the airport has the option of requiring suppliers of services and self-handling airport users to take over employees according to the groundhandling services transferred to those suppliers and users and, second, that body has the option, laid down in Paragraph 9(3) of the BADV, to ‘take into account to a reasonable extent the costs necessarily incurred by [it] as a result of the transfer of groundhandling services to suppliers of groundhandling services or self–handling users, in particular as a result of not taking over workers’.

49. The two parts of the German system are connected; if Paragraph 8(2) and the last sentence of Paragraph 9(3) of the BADV are read in conjunction, it may be inferred that, if one or more suppliers of services or self-handling airport users refuse to take over employees according to the groundhandling services transferred to them, the managing body will still have the option of sharing out among the operators in the market in question the financial burden arising from the fact that the employees are not taken over. Consequently, the airport managing body will not have to bear alone the ‘social cost’ caused by the opening-up of the market in groundhandling services.

50. For this reason I consider that the option given to the airport managing body by Paragraph 9(3) of the BADV is likely to further that body’s financial interests rather than the protection of the employees. In my opinion, it follows that this German provision is contrary to Article 18 of Directive 96/67.

51. It is true that the German Government considers that Paragraph 9(3) of the BADV should be regarded as having the effect of encouraging new operators in the market to negotiate with the managing body of the airport the conditions for taking over the activity in the interest of the employees. (18) However, I think this assessment cannot refute the conclusion that the main aim of the provision in question is to safeguard the financial interests of the managing body of the airport. Furthermore, the effect of that provision on the protection of employees seems to me too uncertain and too indirect to justify the conclusion that it correctly transposes Article 18 of Directive 96/67 which, let me repeat, refers to ‘the necessary measures to ensure protection of the rights of workers’.

52. In other words, I consider that Paragraph 9(3) of the BADV does not meet the criterion of necessity in Article 18 of Directive 96/67. The option given by German law to the airport managing body to apportion among the operators in the market in question the financial burden arising from the fact that employees are not taken over cannot be regarded as a measure likely to protect the rights of workers. In my view, therefore, the disputed German provision is in any case not necessary for ensuring the protection of the rights of those workers.

53. Consequently, I think that the second part of the German legislation is also contrary to Article 18 of Directive 96/67.

54. The Commission’s first complaint must therefore be judged well founded.

B – The complaint of breach of Article 16 of Directive 96/67

1. Arguments of the parties

55. The Commission considers that the last sentence of Paragraph 9(3) of the BADV also disregards Article 16(3) of Directive 96/67. The reason is that the fee which may be charged to suppliers of groundhandling services and self-handling airport users must, in accordance with Article 16(3), be set according to relevant, objective, transparent and non-discriminatory criteria.

56. In this connection the Commission considers that the Flughafen Hannover-Langenhagen judgment confirms the argument that the amount of a fee charged under Article 16(3) can be relevant and objective only if it is based on the costs borne by the managing body of the airport in order to guarantee access to its infrastructure for the other service suppliers and self-handlers (plus an adequate profit). Therefore the costs to be met by the managing body where employees are not taken over are not among the costs which may be taken into account to determine the fee referred to in Article 16(3).

57. In the opinion of the German Government, on the other hand, Article 16(3) cannot be inconsistent with the national law disputed by the Commission, because Article 16(3) governs the right of the managing body of the airport to require a fee in consideration of access to the airport installations. However, Paragraph 9(3) of the BADV is not intended to govern such access, but should constitute an incentive to new operators in the market to negotiate with the managing body the conditions for taking over the activity in the interest of the employees.

58. In addition, the German Government considers that the fee referred to by Article 16(3) of Directive 96/67 should not be limited to covering the costs of the airport installations alone. If the fee may include a profit margin, there is all the more reason for permitting it to include an apportionment of the costs caused by not taking over employees.

59. In my view, the Commission’s complaint of a breach by the Federal Republic of Germany of Article 16(3) of Directive 96/67 is well founded.

60. First of all, it must be observed that, in the Flughafen Hannover-Langenhagen judgment, the Court held that Directive 96/67, in particular Article 16(3) thereof, ‘precludes the managing body of an airport from making access to the groundhandling market in the airport subject to payment by a supplier of groundhandling services or self-handler of an access fee as consideration for the grant of a commercial opportunity, in addition to the fee payable by that supplier or self-handler for the use of the airport installations’. The Court added that ‘[o]n the other hand, that body is entitled to collect a fee for the use of airport installations, of an amount, to be determined according to the criteria laid down in Article 16(3) of the Directive, which takes account of the interest of that body in making a profit’.

61. In reaching this conclusion, the Court stressed the following factors. First, the Court deduced from the wording of Article 16(1) and (3) of Directive 96/67 that the managing body of the airport is authorised to collect a fee in return for granting access to airport ‘installations’. According to the Court, ‘[t]he reference to installations clearly relates to the infrastructure and the equipment made available by the airport’. (19)

62. Second, the Court observed that ‘[n]ot only would the possibility for the managing body of an airport to charge an access fee in addition to the fee for use of the airport installations not facilitate access to the market concerned, it would also run directly counter to the objective of reducing the operating costs of airline companies and, in certain cases, would even lead to an increase in those costs’. (20)

63. Third, the Court stated that ‘[t]he argument … that the Community legislature’s intention was to permit the collection of an access fee as consideration for the additional costs to the managing bodies of airports of opening up the groundhandling market, in order to ensure the self-financing of those airports, is inconsistent with the broad logic of the Directive’. (21)

64. Finally, regarding the opportunity for the managing body of the airport to make a profit, the Court observed that Article 16(3) of Directive 96/67 ‘does not prevent the fee from being determined in such a way that the managing body of the airport is able not only to cover the costs associated with the provision and maintenance of airport installations, but also to make a profit’. (22)

65. It seems to me that the foregoing considerations in the Court’s reasoning in interpreting Article 16(3) must also apply to a large extent in the present case.

66.In that connection, it must first be observed that the purpose of the German provision to which the Commission objects, namely Paragraph 9(3) of the BADV, is to lay down the rules concerning the fee which the managing body of the airport is entitled to demand from service suppliers and airport users wishing to self-handle ‘for the access to and availability and use of its installations’.

67.Thus the second sentence of Paragraph 9(3) provides that the fee is to be determined ‘in accordance with relevant, objective, transparent and non-discriminatory criteria’. This conforms rigorously with the wording of Article 16(3) of Directive 96/67 which, let me repeat, provides that ‘[w]here access to airport installations gives rise to the collection of a fee, the latter shall be determined according to relevant, objective, transparent and non-discriminatory criteria’.

68.On the other hand, what seems to me open to criticism with regard to what is authorised by Article 16(3), as interpreted by the Court, is the provision that the amount of the fee which, according to Paragraph 9(3) of the BADV, is in consideration of access to and availability and use of the airport installations, may include a proportion intended to offset the costs arising from a failure to take over employees.

69.This provision shows that the fee provided for in German law goes beyond the bounds envisaged by the Community legislature, namely that the fee is exclusively a payment for access to airport installations by service providers or self-handling airport users.

70.However, the German Government attempts to use the Court’s reasoning that the managing body of the airport is authorised to make a profit when it sets the fee for access to the installations in order to support the conclusion that that body should, a fortiori, be able to include in the fee the costs incurred as a result of employees not being taken over.

71.In my opinion, it is wrong to make this inference from the Court’s judgment. I think the Court only wished to make it clear that the fact that airports have no right to charge a fee for access to the market certainly does not mean that they must give up any profit on the economic services which they provide. The Court accordingly took the view that the inclusion of a reasonable profit margin in the fee for access to installations fulfilled the requirement that, in the words of Article 16(3) of Directive 96/67, the fee be ‘determined according to relevant, objective, transparent and non-discriminatory criteria’.

72.On this point I share the view of Advocate General Mischo in his Opinion in the Flughafen Hannover-Langenhagen case, where he observes that he is convinced by the argument that, in order for the fee to meet ‘relevant criteria’, it must be ‘linked to the costs incurred by the airport in making available those installations which it requires to provide to the providers of groundhandling services and to users wishing to self-handle’. (23)

73.It is clear that the costs arising from not taking over employees are in no way connected with the costs incurred by the airport in making its installations available. Consequently the inclusion of such costs in the fee for access to airport installations under Article 16(3) of Directive 96/67 does not seem to me to fulfil the criterion of relevance referred to in that provision.

74.In determining the amount of the fee, it is essential that the criterion of relevance is complied with so as to ensure that the fee is actually in consideration of access to airport installations, as required by Article 16(3). To allow the fee to include costs unconnected with the cost to the airport managing body of granting access to its infrastructures (24) could lead to the fee being converted into a disguised fee for access to the market, which would be contrary to Article 16(3), as interpreted by the Court in the Flughafen Hannover-Langenhagen judgment.

75.More generally, as Advocate General Mischo observed in his Opinion in that case, the terms of Directive 96/67 show that the Community legislature did not consider that ‘the opening-up of access to the market is a burden imposed on airports, for which they would have the right to be compensated by the suppliers of groundhandling services’. (25) In support of this assertion, I may point out that, for example, according to recital 9 in the preamble to the directive, the Community legislature started from the premiss that ‘free access to the groundhandling market is consistent with the efficient operation of Community airports’.

76.Finally, I think the option given to the managing body of an airport to require, in the calculation of the fee provided for by Article 16(3) of Directive 96/67, account to be taken not only of the costs connected with the use of the airport installations, but also of other costs connected with the takeover of groundhandling services by service suppliers or self-handling airport users, such as those incurred as a result of not taking over employees, runs counter to the aim of reducing the operating costs of airline companies, mentioned by the Community legislature in recital 9 of that directive.

IV –Conclusion

77.Having regard to the foregoing observations, I propose that the Court:

(1)declare that the Federal Republic of Germany has failed to fulfil its obligations under Council Directive 96/67/EC of 15 October 1996 on access to the groundhandling market at Community airports, in particular Articles 16(3) and 18 thereof:

–by permitting, pursuant to Paragraph 8(2) of the Regulation on Airport Groundhandling Services of 10 December 1997 (Verordnung über Bodenabfertigungsdienste auf Flugplätzen), the managing body of an airport to require a supplier of services or a self-handling airport user to take over employees according to the groundhandling services transferred to him,

–by providing, in Paragraph 9(3) of that national regulation, that, in setting the fee for the access to and availability and use of its installations, the managing body of an airport may take into account the costs necessarily incurred as a result of the taking-over of groundhandling services by service suppliers or self–handling users, in particular costs incurred as a result of not taking on employees;

(2)order the Federal Republic of Germany to pay the costs.

1 – Original language: French.

2 – OJ 1996 L 272, p. 36.

3 – Case C-460/02 Commission v Italy [2004] ECR I‑0000. See also my Opinion in that case.

4 – Case C-363/01 Flughafen Hannover-Langenhagen [2003] ECR I-11893.

5 – Recital 25.

6 – Recital 24.

7 – OJ 2001 L 82, p. 16.

8 – BGBl. 1997 I, p. 2694.

9 – BGBl. 1997 I, p. 2885.

10 – By way of information, I would mention that the purpose of Article 613a of the German Civil Code (Bürgerliches Gesetzbuch) is to implement Directive 2001/23 in national law.

11 – However, it is important to bear in mind that, as the Commission observes, where the opening-up of the market provided for by Directive 96/67 leads to a transfer of an undertaking or business within the meaning of Article 1(1)(b) of Directive 2001/23, the transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer are, by reason of such transfer, transferred to the transferee by virtue of the first subparagraph of Article 3(1) of the latter directive. Therefore, in the sector of groundhandling services, the protection of employees’ rights is guaranteed primarily by the relevant provisions of Directive 2001/23 if a transfer falls within its ambit.

12 – In accordance with what I suggested in paragraph 33 of my Opinion in that case.

13 – Commission v Italy, paragraph 32.

14 – Ibidem, paragraph 33.

15 – Ibidem, paragraph 34.

16 – Ibidem, paragraph 35.

17 – Emphasis added.

18 – Rejoinder, paragraph 15.

19 – See paragraphs 39 and 40.

20 – Paragraph 44.

21 – Paragraph 47.

22 – Paragraph 56.

23 – Paragraph 24.

24 – The cost of granting access may, in particular, include the cost of maintaining the infrastructures.

25 – Paragraph 49.