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The ECJ (European Court of Justice) has ruled that the fines applied for failure to comply with the obligations for posted workers under Austrian national legislation (over 13M EUR) are quite unbalanced.

The Austrian national legislation was considered to be incongruous with article 56 of the Treaty on Functioning of the European Union (TFEU), meaning that the ECJ ruling could have extensive consequences, beyond Austrian borders.

The ECJ argues for the application of financial administrative fines, at the same time articulating the importance that these should be proportional and balanced. Therefore, while fines which differ according to the number of workers are not disproportionate, those fines for non-compliance pertaining to the administrative permits and payroll documentation should:

• be higher than or equivalent to a predetermined amount;
• not be imposed in an aggregate manner, without a limit, for each worker;
• not be supplemented with further cost (e.g. litigation costs);
• not be transformed into years of prison sentence in case the fines are not paid.
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This present case might pave the way for superior levels of compliance for foreign workers, which both host and home countries must abide by.The ECJ (European Court of Justice) has ruled that the fines applied for failure to comply with the obligations for posted workers under Austrian national legislation (over 13M EUR) are quite unbalanced.