On June 20, 2024, the Court of Justice of the European Union (CJEU) considered a preliminary ruling request from the District Court of The Hague (rechtbank Den Haag) in a case (C-540/22) on the compatibility of Dutch legislation with the freedom to provide services in the EU. The case concerned the need for an additional residence permit for Ukrainian citizens posted from one EU country to another when their stay in the country of posting exceeds 90 days.
Exceeding 90 days for Ukrainian citizens
A Slovak employer posted Ukrainian employees to work in the Netherlands, where their stay exceeded 90 days in a 180-day period. Dutch regulations require third-country nationals, including Ukrainians, to obtain a residence permit after such a period. This permit specifies the conditions, length of stay and cost of obtaining it. As a result, the court in The Hague asked the CJEU whether such requirements comply with EU rules on freedom to provide services.
The main issues in dispute:
Obligation to obtain a residence permit: the posting company challenged the requirement to obtain an additional permit after exceeding 90 days of residence in the Netherlands.
Permit duration: the Dutch permits were only valid for the duration of the Slovak permits, making them shorter than the duration of the delegation.
Application fees: the cost of obtaining permits was five times higher than that of certificates of legal residence for EU citizens, which was presented by a posting company as an excessive burden.
The request for a preliminary ruling sought to determine whether EU rules, including Articles 56 and 57 of the Treaty on the Functioning of the EU (TFEU), preclude national legislation that requires third-country national workers posted for more than 90 days in a 180-day period to hold individual residence permits, the validity of which depends on the residence permit of the posting country and cannot exceed two years, and the obtaining of which involves fees.
Limitations on the validity of permits
Dutch regulations stipulate that the duration of the residence permit of posted workers must not exceed the validity of their permits in the home country. The Secretary of State, in extending the duration of the posted workers, issued residence permits of the same length as the Slovak permits. The applicants argued that such restrictions are disproportionate in the context of the freedom to provide services, which is guaranteed by Article 56 TFEU. However, the CJEU held that such regulations can be justified if they are aimed at preventing illegal residence and entry, as well as protecting public order. This means that workers posted for more than 90 days cannot automatically enjoy the right to access the labor market in the country of posting.
Costs of obtaining permits
In terms of the amount of fees, the CJEU said the amounts were comparable to the cost of obtaining a regular work permit for third-country nationals. However, the posting company pointed out that these fees were five times higher than those for EU citizens, which impeded the free provision of services. The Court noted that such fees may be a restriction on the freedom to provide services, but at the same time EU law does not prohibit them as long as they are not disproportionate.
CJEU ruling
The Court ruled that Articles 56 and 57 TFEU do not preclude national legislation that requires workers posted for more than 90 days to obtain a residence permit, provided the conditions are not disproportionate. Permits may be limited to the validity of documents from the posting country, and may require fees comparable to those for work permits for third-country nationals.
Practical conclusions:
The CJEU’s judgment shows that the Dutch regulations regarding the obligation for Ukrainian nationals to obtain an additional residence permit are in line with the EU’s freedom to provide services. Nevertheless, each posting should be evaluated on a case-by-case basis, taking into account the applicability of exceptions to this obligation. If you need assistance with issues related to the posting of citizens of Ukraine or other countries, we invite you to review the law firm’s offer and contact us.