If the laws of the country where the work is actually being carried out applied even for short stays, a company wishing to offer its services in the whole of the EU would have to be aware of 27 different sets of rules.
To counter this phenomenon, the European Court of Justice has developed a balancing mechanism on the basis of the Treaty that determines which country's rules apply in a given situation.
In this context there is the abovementioned mechanism of 'justified restrictions for the protection of essential requirements in the general interest', that the Court of Justice of the European Union has developed on the basis of the Treaty.
The Directive came to prominence during the 2009 Lindsey Oil Refinery strikes after British workers at the Lindsey Oil Refinery in North Killingholme, North Lincolnshire claimed that they were being undercut by skilled foreign labour when the Italian construction contractor IREM appointed several hundred European (mainly Italian and Portuguese) contractors on the site at a time of high unemployment in the local and global economy.
It is a question of the right to free movement for services itself, which is handled directly by the Treaty itself, since the contractor wished to use its own staff rather than hiring external subcontractors.