BRUSSELS, March 8 — Fines on companies that send workers from low-pay EU states to richer member states and fail to comply with the latter’s red-tape should be proportionate, Europe’s top court said today.

The issue of so-called ‘posted’ workers employed on contracts that need only guarantee the host country’s minimum wage has divided EU states for years.

The case before the Luxembourg-based Court of Justice of the European Union (CJEU) arose after an Austrian court sought guidance on a €54,000 (RM245,575) fine levied by an Austrian administrative authority on a Slovakian company that had sent workers to Austria.

The administrative body said the Slovakian company had failed to comply with Austrian labour law obligations to retain wage and social security documents for the posted workers.

CJEU judges said penalties should not be disproportionate.

"Posting of workers: national courts must ensure that penalties for non-compliance with administrative obligations are proportionate,” the Court said.

"National courts may apply a national system of penalties contrary to the directive concerning the posting of workers as long as it ensures proportionality of the penalties.”

The case is C-205/20 Bezirkshauptmannschaft Hartberg-Fürstenfeld.

A rich-poor divide over the issue of posted workers prompted the European Commission to adopt rules four years ago that limit the right of citizens from poorer member states to work in richer ones on a low salary. — Reuters