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ECJ: penalties against foreign companies in Austria

In its ruling dated September 12th, 2019, the European Court of Justice found in the joined cases C 64/18, C 140/18, C 146/18 and C 148/18, that essential provisions of the Austrian Law on Wage and Social Dumping are incompatible with the law of the European Union. The ECJ ruled, that Article 56 of the Contract on the functioning of the European Union must be interpreted as precluding the national regulations which provide for the imposition of fines, which may not be less than an amount determined in advance, in respect of formal offences relating to the obligation to keep wage records available and to compliance with administrative permits, which are imposed cumulatively and without limitation on each worker concerned, which provide for additional procedural costs in the amount of 20% of the fine imposed in the event of the rejection of appeals against first instance penal orders, and which may be converted into custodial sentences in the event of the uncollectibility of the fines imposed.
The dispute arose from the imposition of penalties amounting to millions of euros on the executive bodies of an Austrian company and on the responsible officers of the contracting Croatian company in connection with repair work at a pulp mill in Austria. The exorbitantly high fines were imposed only because for the 217 Croatian employees not all wage documents were kept available and the employment permits had not been obtained on account of a legal classification which deviated from the opinion of the authorities. The attorneys of the companies involved (Oberhammer Rechtsanwälte for the Austrian company, Grilc Vouk Škof for the Croatian company) have lodged complaints against this, and the Styrian Regional Administrative Court (Landesverwaltungsgericht Steiermark) has fortunately initiated the preliminary ruling procedure at the ECJ.
The attorneys Mag Ewald Oberhammer and Mag Rudolf Vouk, who represented their clients before the European Court of Justice, declare that today’s ruling of the European Court of Justice is a landmark decision. The existing Austrian legal situation has been unanimously criticised for years; it has been repeatedly argued that the absurdly high penalties that Austria imposes for formal offences are contrary to the European freedom to provide services. Unfortunately, the Austrian Supreme Courts have so far not been willing to accept this criticism and to initiate preliminary rulings or to conclude that the penalties are incompatible with the principle of proportionality of the sanctions.
The ruling has far-reaching consequences for all pending proceedings in connection with the Austrian Law on Wage and Social Dumping, since according to the findings of the European Court of Justice, essential provisions of this law are inapplicable as of today. These proceedings also concern many foreign companies, including Czech ones. The law firms Oberhammer and Grilc Vouk Skof are very pleased with this judgement, as it sets a clear course for the future understanding of the common market in Austria and fully confirms the opinion that has been expressed by the attorneys in numerous proceedings.
https://volksgruppen.orf.at/slov…/meldungen/stories/3012550/
https://steiermark.orf.at/stories/3012523/
https://www.sgz.at/…/sodishche-eu-ovrglo-protidumpinshke-ka…

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The commemorative publication in english translation - download here >>

Border crossers. Grenzgänger. Malo čez. This motto briefly and concisely describes what distinguishes the grilc vouk škof law firm and what it stands for. Border crossers. Grenzgänger. Malo čez. It is not only to be understood from a geographical point of view. The grilc vouk škof law firm is active in Austria as well as in Slovenia and the other successor states of the former Yugoslavia. Border crossers. Grenzgänger. Malo čez. It also stands for the approach with which the grilc vouk škof law firm is tirelessly seeking solutions to the legal problems of its clients.

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The commemorative publication in english translation - download here >>

​The commemorative publication has been published in printed form in Slovene and German. The English translations of the individual contributions can be found here as pfd file to download.

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The Beginnings and the Early Development of Grilc & Partner

On July 1st, 1979, the law firm now called GRILC-VOUK-ŠKOF started to operate. On that day and at the same address where the law firm still has its premises today, Dr Matevž Grilc opened the law firm in a small room. Through time the lawyers Dr Ronald Grilc, Mag. Rudolf Vouk and finally Dr Marija Škof joined the firm and it became the widely known law firm it is today. With every new partner, the field of activity and the radius of action increased.

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The Beginnings and the Early Development of Grilc & Partner

In the coming weeks and months we are going to present important events from the 40-year-old history of the firm, significant rulings, key achievements, as well as the development of the legal firm, which is anchored in the small minority of Carinthian Slovenes, and which does not only work on both sides of the border in Austria and Slovenia, but literally throughout Europe. We kindly invite you to join us.

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