Referring to the EU law principle of free movement of services, the Danish High Court, in a judgment on 15th of May 2019, acquitted the Polish company BIC Electric Sp. z o.o. (“BIC”) of not having registered information in the Danish Register of Foreign Service Providers (the “RUT register”).
The RUT register – an anti-competitive tool?
The purpose of the RUT register is, among other things, to ensure that the Danish authorities and labour inspection have the tools that are required for checking efficiently and in a focused manner that foreign posted employees from foreign service-providers in Denmark fulfil the Danish salary conditions and employment terms.
When foreign companies perform work in Denmark, the companies must, among other things, register information about the company name, registered address, industry code and contact details as well as the place of provision of the service, the period in which the work is to be performed, the type of work and the contact person in Denmark with respect to each project.
Since the same rules do not apply to Danish companies, and since the publication of such information may be used by competitors for market monitoring and competitor analyses (as the information actually makes it possible to identify a foreign service-provider’s customer relations and projects), and because making such information publicly available for anyone to see is not necessary for achieving the purpose of the applicable legislation, BIC claimed that the rules in the RUT register are contrary to the EU law principle of free movement of services.
At the same time, BIC claimed that it would be possible for the Danish authorities, etc. to safeguard the purpose of the act by implementing less invasive measures. It must be borne in mind that when this is possible, EU law requires the application of such less invasive measures (the principle of proportionality).
The decision of the High Court
The High Court found that the general public’s access to the RUT register with respect to the information on, for instance, the place of provision of the service is beyond what is necessary for achieving the purpose of the act. In this respect, the High Court noted that in view of the purpose of the act, there were no grounds for the general public’s access to the information on the place of provision of the service.
As a result, the High Court agreed with BIC that the RUT register goes beyond what is necessary and that the Danish rules are contrary to the EU requirements on free movement of services.
Jens-Christian Møller, CEO of BIC group, states:
“Being a CSR-certified group, we obviously support the requirement that all foreign service-providers working in Denmark work in compliance with collective agreements, pay taxes and observe health & safety regulations to avoid social dumping. As a result, it is necessary for Denmark that the foreign companies working in Denmark are registered, for the monitoring purposes of the Danish Labour inspection and the Danish tax authorities. But we do not want to disclose sensitive information about our customers to anyone in a public system, thereby giving our Danish competitors access to highly confidential data. Apart from Denmark, we work in more than 30 countries. Most of these countries have registers which give the authorities access to relevant information on the foreign businesses but no other register in any other country allows public access in the same way as the Danish RUT register. As a result, it is gratifying that the High Court now finds that the RUT register is illegal – and as a result we are no longer required to make commercially sensitive information publicly available.”
Jens-Christian Møller can be contacted by e-mail jcm@BIC-electric.com or by telephone +45 21 77 25 10 for further comments.
The case had been brought before the court under the provisions of the former Danish Act concerning the Posting of Workers etc. from 2010 but the current act contains similar rules and as result the decision is important to all cases relating to the RUT register.
Attorneys Frederik Brocks, Vivi Klink Larsen and Louise Horn Aagesen represented BIC before the High Court. For further comments, please contact Frederik Brocks by e-mail email@example.com or by telephone +45 50 60 31 01.
22nd May 2019