Employment and pensions: Free movement of workers - ECJ decision

United Kingdom
The ECJ has given its ruling on Austrian laws which require that a manager of certain businesses must reside in Austria. The case involved an Austrian company which applied for registration to trade as required by Austrian law, but was rejected on the grounds that the company had appointed as manager a person not resident in Austria.

The Court held that the rule of equal treatment in the context of the free movement of workers enshrined in Article 48 of the EC Treaty could be relied upon by an employer wishing to employ in the Member State in which he is established workers who are nationals of another State, as well as being relied upon by the workers themselves, as is usually the case.

Further, the Court found that the residence requirement contained in the Austrian laws constitutes unjustified indirect discrimination contrary to the EC Treaty rules on freedom of movement. The ECJ observed that, whilst it is true that the Austrian rules apply without regard to the nationality of the person to be appointed as manager, national rules under which a distinction is drawn on the basis of residence are likely to operate mainly to the detriment of nationals of other Member States, as non-residents are in the majority of cases foreigners. (Case C-350/96, Clean Car Auto Service GesmbH and Landeshauptmann von Wien ECJ 7.05.98)