OPINION OF ADVOCATE GENERAL

delivered on 5 March 1996 (*1)

Table of Contents

I —The legal background to the dispute

A —The Community provisions

B —The Community case-law

C —The relevant national law

(1)Situation as at the date of the reasoned opinion

(a)Sociétés intercommunales

(b)Distribution companies operating under the auspices of the public authorities

(c)Private distribution companies

(2)Subsequent changes to the rules

II —The existence of a failure to fulfil obligations

1. In its action to establish a failure to fulfil obligations, commenced on 22 June 1994, the Commission claims that the Court should:

—declare that, by maintaining a nationality requirement in relation to workers who are nationals of other Member States as regards access to employment as officials or public employees of the public bodies responsible for the distribution of water, gas and electricity (for example, Compagnie Intercommunale Bruxelloise des Eaux (hereinafter ‘CIBE'), Vlaamse Maatschappij voor Watervoorziening — Société Flamande de Distribution des Eaux (hereinafter ’VMW'), Unerg, Sibelgaz, etc.), the Kingdom of Belgium has failed to fulfil its obligations under Article 48 of the EEC Treaty (1) and Articles 1 and 7 of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community, (2)

—order the Kingdom of Belgium to pay the costs.

2. The present proceedings must be considered in conjunction with two other cases before the Court. (3)

3. The three actions are essentially concerned with definition of the scope of the exception to the free movement of workers provided for by Article 48(4) of the Treaty, as far as ‘employment in the public service’ is concerned.

4. In the other two cases, the defendants object to the finding against them, contending in particular that, for the purposes of Article 48(4) of the Treaty, a post-by-post analysis should take precedence over any analysis of entire sectors of activity.

5. The Kingdom of Belgium, on the contrary, accepts by implication the sectoral approach proposed by the Commission as a logical development of the present case-law of the Court.

6. In view of its position on the substance of the case, I can be brief in (I) my description of the legal background to the dispute and in (II) my appraisal of the merits of the action for failure to fulfil obligations. For a broader approach and more detailed references, I shall refer to my Opinions of today's date in the other two cases mentioned. (4)

I — The legal background to the dispute

7. After briefly outlining (A) the Community provisions relied on by the Commission, I shall briefly summarize (B) the relevant case-law of the Court. I shall then describe (C) the allegedly unlawful situation under national law.

A — The Community provisions

8. Article 48(1) to (3) of the Treaty lay down the principle of freedom of movement for workers and its corollary, the abolition of any discrimination on grounds of nationality between workers of Member States as regards employment, remuneration and other conditions of work and employment.

9. Article 48(4) provides:

‘The provisions of this article shall not apply to employment in the public service’.

10. Article 1 of Regulation No 1612/68 provides, with regard to access to employment:

‘1. Any national of a Member State shall, irrespective of his place of residence, have the right to take up an activity as an employed person and to pursue such activity within the territory of another Member State in accordance with the provisions laid down by law, regulation or administrative action governing the employment of nationals of that State.

2. He shall, in particular, have the right to take up available employment in the territory of another Member State with the same priority as nationals of that State.’

11. Article 7(1) and (2) of the same regulation, concerning employment and equality of treatment, provide:

‘1. A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and, should he become unemployed, reinstatement or reemployment.

2. He shall enjoy the same social and tax advantages as national workers’.

B — The Community case-law

12. According to the case-law of the Court, the concept of public service is a matter of Community law and must be strictly interpreted.

13. A purely *organic* definition of that concept is excluded.

14. The Court has laid down a *functional* definition of employment in the public service, stating that it comprises *a series of posts which involve direct or indirect participation in the exercise of powers conferred by public law and duties designed to safeguard the general interests of the State or of other public authorities.*

15. Consequently, posts not falling within the Court's definition must be accessible to the nationals of other Member States.

C — The relevant national law

16. I shall first describe (1) the legal situation as at the date of the reasoned opinion, and then go on to deal with (2) the subsequent changes to the rules.

(1) Situation as at the date of the reasoned opinion

17. The distribution of water, gas and electricity is undertaken by (a) *sociétés intercommunales,* which are legal persons governed by public law, or (b) distribution companies operating under the auspices of the public authorities or (c) private companies.

(a) Sociétés intercommunales

18. These are associations of communes engaged in activities of a commercial nature.

19. A distinction is drawn between associations made up solely of decentralized public authorities and those with a mixed composition of decentralized public authorities and private companies.

20. The workforce of *sociétés intercommunales* is subject to staff regulations which *de facto* follow the pattern of those applicable to employees of the Federal State, which still impose the requirement of Belgian nationality.

21. The supervision of *sociétés intercommunales* is a matter for the regional governments.

22. In the particular case of the CIBE, Articles 6 and 11 of the staff regulations make Belgian nationality a precondition for recruitment.

(b) Distribution companies operating under the auspices of the public authorities

23. These companies fall within category B of the Law of 16 March 1954 on control of certain bodies operating in the public interest.

24. Pursuant to Article 11(1) of that Law, the regional governments lay down the staff regulations and other provisions applicable to their staff.

25. The VMW is covered by that system, pursuant to Article 17 of the Decree of 28 June 1983 which established it.

26. Belgian nationality is a precondition for access to posts in the VMW since the staff regulations follow the pattern of those governing State employees.

(c) Private distribution companies

27. In certain cases, distribution is undertaken by private companies operating either independently or in association with mixed inter-communal associations. In the latter case, they make their staff available to the *sociétés intercommunales.*

(2) Subsequent changes to the rules

28. Two royal orders of 26 September 1994 were published on 1 October 1994, (5) the first amending various rules applicable to State employees and the second laying down general principles governing the administrative and pecuniary status of State employees, applicable to departmental staff of Community and Regional Governments and the Boards of the Common Community Commission and the French Community Commission and to the legal persons operating their auspices.

29. Both remove the condition of Belgian nationality for access to posts which do not involve direct or indirect participation in the exercise of powers conferred by public law or duties designed to safeguard the general interests of the State, Community or Region. (6)

30. According to the Belgian Government, (7) the second order does not apply to inter-communal associations because they do not meet the criterion of organizational dependence laid down in it.

31. However, the defendant State points out that the staff regulations for employees of *sociétés intercommunales* are still *de facto* aligned with those governing employees of the Federal State, which (first royal order of 26 September 1994) no longer impose any nationality requirement.

32. As regards the water distribution companies in category B of the Law of 16 March 1954, such as the VMW, the Belgian Government states that they fall within the scope of the second royal order of 26 September 1994, in so far as they are dependencies of regional governments. They should therefore no longer impose Belgian nationality as a precondition for access to employment.

II — The existence of a failure to fulfil obligations

33. In the other two cases to which I referred earlier, (8) I set out in detail the reasons for which I consider that, for the purposes of applying Article 48(4) of the Treaty, it is permissible to carry out an analysis, by whole sectors, of the activity of the State, public authorities or legal persons governed by public law.

As already stated, the Kingdom of Belgium does not object to such an analysis.

Like the Commission, I consider that activities such as those of water, gas and electricity distribution are remote from the activities specific to the public service.

It must therefore be considered that most posts in the sectors concerned do not fulfil the conditions of the Community definition of public service. Consequently, those sectors fall a priori within Article 48(1) to (3) of the Treaty. The Kingdom of Belgium should therefore grant access to those posts to Community workers, subject only to exceptions positively laid down by reference to the Community definition of public service.

The defendant State has not denied (9) that, when the period of four months laid down by the reasoned opinion of 6 August 1992 expired, a requirement of Belgian nationality was still applied for the recruitment of the staff of inter-communal associations, such as the CIBE, and distribution companies in category B of the Law of 16 March 1954, such as the VMW.

By letter of 19 January 1996, it gave notice of a resolution of the Board of Directors of the CIBE dated 20 December 1995 removing the requirement of Belgian nationality from the staff regulations of that company.

At the hearing, it conceded that that resolution had yet to be published.

Moreover, as far as the Flemish region is concerned, it stated that the VMW had submitted to the Flemish Government draft staff regulations conforming with Article 48 of the Treaty and that the draft was due to be approved by the end of February 1996. With regard to sociétés intercommunales, mixed and otherwise, in the same region, it recognized that the staff regulations of both companies still imposed a discriminatory nationality requirement.

Finally, describing the situation in the Walloon region, the Kingdom of Belgium admitted at the hearing that the staff regulations of about 15 sociétés intercommunales still contained a nationality requirement.

The two royal orders of 26 September 1994, published about 22 months after expiry of the period laid down by the reasoned opinion, are not relevant having regard to the date by reference to which the existence of an infringement must be appraised. Furthermore, according to the defendant itself, they have not to date made it possible for the contested nationality requirement to be generally eliminated.

The finding sought by the Commission must therefore be made as regards the requirement of Belgian nationality relied on against the nationals of other Member States regarding access to posts within the staff of public legal entities responsible for the distribution of water, gas and electricity, since those entities are subject to the public authorities.

On the other hand, that cannot be the position as regards other companies referred to by the Commission.

In that connection, the Kingdom of Belgium contends that:

Powerfin Société Anonyme (formerly Unerg) is a purely private company over the organization of which the public authorities exercise no powers;

Sibelgaz is a mixed inter-communal association whose staff is made available by private companies, over which, similarly, the public authorities have no powers;

There is no national, regional or local provision imposing a Belgian nationality requirement on private companies.

Although the burden of proof falls on the Commission on that point, it has not established either that Powerfin is a legal person governed by public law or a private company on which the public authorities impose a nationality requirement or that Sibelgaz employs staff of its own under discriminatory conditions regarding nationality or imposes a nationality requirement on the private companies which make staff available to it. Neither has it established the existence of any national, regional or local provision imposing a Belgian nationality requirement on private companies.

As matters stand, therefore, the finding of a failure to fulfil obligations may be made only with respect to legal persons such as Powerfin and Sibelgaz.

Conclusion

Consequently, I suggest that the Court give judgment in the following terms:

By not, in relation to nationals of other Member States, limiting the requirement of Belgian nationality so as to apply only to access to posts involving direct or indirect participation in the exercise of powers conferred by public law and duties designed to safeguard the general interests of the State or of other public authorities, within the staff of public legal entities in the water, gas and electricity distribution sectors, the Kingdom of Belgium has failed to fulfil its obligations under Article 48 of the EEC Treaty and Articles 1 and 7 of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community.

The Kingdom of Belgium is ordered to pay the costs.

*1

Original language: French.

The application correctly refers to Article 48 of the EEC Treaty and not the EC Treaty, since the reasoned opinions were issued before 1 November 1993, the date on which the Treaty on European Union entered into force, and the existence of any failure to fulfil obligations under Article 48 must, in principle, be appraised with reference to the time when those Opinions were issued. The difference of wording involved is merely formal, in so far as Article 48 has not been amended. Such a difference might, on the other hand, entail consequences for questions of substance if the provisions referred to in the application had been amended.

2

OJ, English Special Edition 1968 (II), p. 475.

Sec my separate Opinions of today's date in Case C-473/93 Commission v Luxembourg [1996] ECR I-3207, I-3209 and Case C-290/94 Commission v Greece [1996] ECR I-3285, I-3287.

Footnote 3.

Moniteur Belge, pp. 25027 and 24948 respectively.

See, respectively, Articles 5(a)(1) and 1(3)(1) of those two orders.

Rejoinder, p. 2.

8

Footnote 3.

Defence, p. 1.