JUDGMENT OF 12. 7. 1973 — CASE 13/73 ANGENIEUX v HAKENBERG

In Case 13/73 Reference to the Court under Article 177 of the EEC Treaty by the Cour de Cassation of France for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, R. Monaco and P.Pescatore (Rapporteur), Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, C. Ó Dálaigh and M. SØrensen, Judges, Advocate-General: A. Trabucch Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure

II — Observations submitted to the Court

Grounds of judgment

As to the first and second questions (system existing before Regulation No 24/64)

As to the third question (system existing subsequently to Regulation No 24/64

Costs

I —. Facts and procedure

1. to the expression employed in Article 12 of Regulation No 3 and until it shall have decided

2. to the expression duration of employment of 12 months in Article 13 (a) of the said Regulation No 3 before it was amended by Regulation 24/64 of 10 March 1964 and until it shall have decided whether a worker who has been employed for several years in the territory of a Member State by an undertaking having its registered office in the territory of another Member State, for successive periods of 9 months, alternating with periods of 3 months in the latter state, must be regarded as falling within the scope of the said Article 13 (a);

3. to the provisions of Article 1 (h) of the said Regulation No 3 under which the term permanent residence means the place where a person habitually resides and until it shall have decided whether it is necessary to regard as permanent residence any place where a person habitually resides within the frontiers of a Member State, even when habitual residence is not confined to a fixed place and consists of business canvassing tours made by caravan or whether habitual residence implies a certain degree of confinement to a given place and whether, as a result, a worker only has a permanent residence in the Member State in which he has a definite address to which he returns in the intervals between his tours and in which the registered offices of the undertakings which employ him are situated.

II —. Observations submitted to the Court

(a). As regards the first question, it should be pointed out first of all that Regulation No 3 as is stated in Article 4, is of general application to all wage-earners or assimilated workers, and thus also to representatives governed by statut required to travel in the territories of several Member States.

(b). Article 13 (a) of Regulation No 3, in its original version, involves a derogation from the general principle laid down by Article 12; it determines the scope and effect of this derogation and, like all exceptions, is not to be widely and improperly construed. It is obviously irrelevant to Mr Hakenberg's case since it concerns the worker who, while employed by an undertaking situated in the territory of a Member State, is posted temporarily by that undertaking to another State for a period not exceeding 12 months. Now, for decades Mr Hakenberg has pursued his activities as a representative in Germany for nine to ten months each year. Furthermore, it is not possible, except at the risk of violating the restrictive terms of the former paragraph (a) of Article 13, to admit that successive periods of nine months in each year in another Member State may be deemed to be a period of residence of 12 months, particularly since the text expressly provides that the said period of 12 months may only be renewed once at the most, and that with the consent of the competent authority of the latter State or the agency designated by it.

(c). It is necessary to interpret Article 1 (h) of Regulation No 3 in order to assess the scope and purport of Article 13 (1) (c), as re-drawn by Regulation No 24/64. Mr Hakenberg cannot take advantage of the exception which this provision adds to the general principle laid down by Article 12, as he does not, within the meaning of Article 1 of Regulation No 3, have his permanent residence in France, but in Germany.

(d). To conclude, the answers to be given to the questions referred by the Cour de Cassation might be as follows:

(a). In Article 12 of Regulation No 3 the expression (workers) employed in the territory of one Member State stands in contrast to the expression even if they permanently reside in the territory of another Member State. Thus the place where the worker pursues his working activities on behalf of the undertaking which employs him, is decisive for the purposes of the application of Article 12. Although a business representative must periodically make contact with the undertaking he represents, he is obviously employed in the territory of the State in which he pursues the activities appropriate to his professional standing. The very idea of an extension of activities into the territory of the Member State in which the registered offices of the undertakings employing him are situated, of necessity implies that the activities of the representative are in the territory in which he is canvassing business and in which he must therefore be regarded as employed within the meaning of Article 12 of Regulation No 3.

(b). The interpretation of Article 13 (a) of Regulation No 3, in its original version, is governed, as regards the meaning of the term duration of… employment… (of) … 12 months, by the term probable duration of their employment and by the necessity of obtaining the consent of the latter State for the duration of employment to be continued for a further period of not more than 12 months.

(c). Under Article 1 (h) of Regulation No 3 the term permanent residence means the place where a person habitually resides.

(a). Mr Hakenberg's activities are of one kind only. The two aspects, i.e. the administrative and commercial, of the manner in which these activities are pursued are closely dependent upon each other: the activities are pursued in France as well as in Germany.

(b). In view of the wider scope and effect of Article 13 (a) of Regulation No 3 before it was amended by Regulation No 24/64, one can quite properly regard a worker who is permanently resident in a Member State, and employed for successive annual periods of nine months (separated by periods of residence of three months in that State) in the territory of another Member State by a series of undertakings which have in the territory of the former State establishments to which he is normally attached, as coming within the area of application of that provision on the grounds that he had had a series of temporary postings.

(c). Regulation No 3 seeks to avoid any unnecessary plurality or overlapping of charges and liabilities resulting from a simultaneous or alternative application of several legislations. With this in view, business representatives pursuing their activities in the territories of several Member States must be subject to the social security scheme of the country in which they are permanently resident. As for determining his own permanent residence, it should be pointed out that Mr Hakenberg stays alternately in France and Germany in accordance with the requirements of canvassing business and of making contact with his employers. However it is in France that he has his legal domicile, a secondary residence, his family connections, and France is where the administrative centre of his activities is situated and where he pays his taxes and fulfils his duties as a citizen.

(a). From 1950 to 1 January 1959, the date on which Regulation No 3 came into force, Mr Hakenberg's situation was governed by the General Convention of 10 July 1950 between France and the Federal Republic of Germany on social security. The Court has no jurisdiction to interpret a bilateral Convention of this kind.

(b). Since 1 January 1959 the provisions which could govern Mr Hakenberg's case have been contained in Regulation No 3 and especially in Articles 12 and 13.

(c). The third question raised by the Cour de Cassation relates to the third period of Mr Hakenberg's career, i.e. from 1 April 1964. Since that date, Article 13 (1) (c), introduced into Regulation No 3 by Regulation No 24/64, has applied. The question is where does Mr Hakenberg have his permanent residence — in the country in which he stays longest but has no fixed abode, or the country in which he has a definite permanent address to which he returns in the intervals between his tours. The meaning of the words permanent residence, and especially of the expression habitually resides which defines them, is therefore to be sought in the context of Article 13 (1) (c). It would be difficult to interpret the phrase habitually resides in a way which would be applicable to everyone covered by Regulation No 3. The determination of habitual residence is a question of fact and leads to different results in different cases.

(d). If German legislation were declared to be applicable to the party concerned in the circumstances the result would be that he could not be affiliated to any social security scheme and he would thus be deprived of all protection. Indeed, the Federal Republic of Germany recognises only business representatives who are paid a wage or salary as having the status of workers and makes such representatives alone subject to a social security scheme. Mr Hakenberg does not come within this category.

(e). The answers to the questions referred by the Cour de Cassation may be as follows:

1. By a judgment dated 1 February 1973 entered in the Court Registry on 21 February, the chambre sociale of the Cour de Cassation of France referred, under Article 177 of the EEC Treaty, questions relating to the interpretation of Articles 1 (h), 12 and 13 of Regulation No 3 of 25 September 1958 concerning social security for migrant workers (OJ p. 561) as amended, so far as the last of these provisions is concerned, by Regulation No 24/64 of 10 March 1964 (OJ p. 746/64), in order to determine the special situation in relation to social security legislation of a business representative whose working activities extend into the territories of two Member States.

2. It appears from the judgment referring the questions for a preliminary ruling that those questions have been raised in the context of a dispute concerning the affiliation to the social security system of a French citizen having his permanent address in France, acting in the Federal Republic of Germany, as a representative on behalf of various French undertakings and dividing his time between continuous business-canvassing tours in the latter State for nine months in the year, and having no fixed place of abode there, the remainder of the year being used for the purpose of contacting, on French territory, the undertakings which he represents.

3. It is not contested in the national court before which the dispute was brought that the party concerned, the defendant in the main action, although not in a subordinate relationship to the undertakings which he represents, must be regarded as assimilated to wage-earners within the meaning of Regulation No. 3 because he pursues an occupation which, under the French social security Code, is subject to the general social security scheme.

4. The matter of the affiliation of the defendant in the main action to this scheme is only in dispute owing to special circumstances under which he divides the pursuit of his occupation between the territories of two Member States.

5. It appears, moreover, from the order referring the questions that, from the point of view of Community law, the periods of activity to be taken into account for the purposes of the affiliation of the defendant to the scheme are covered by two successive bodies of legal rules, since the provisions of Regulation No 3 applying to the situation giving rise to the dispute were amended in 1964 by Regulation No 24/64.

6. Separate consideration should therefore be given to the first and second questions, which deal with the situation prior to the amendment made by Regulation No 24/64, and to the third question which comes under the new system resulting from the amendment effected by the said Regulation.

7. In the first question an interpretation is sought of the term employed in Article 12 of the Regulation No 3 in order to determine whether

8. The second question seeks an interpretation of the former Article 13 (a) of Regulation No 3 to enable the national court to determine whether an employment involving a regular alternation of making tours for the purpose of canvassing business and making contacts with the undertakings represented fulfils the criteria of the said provision and more particularly that of a duration of employment of 12 months.

9. Article 12 of Regulation No 3 provides that wage-earners or assimilated workers employed in the territory of one Member State shall be subject to the legislation of that State even if they permanently reside in the territory of another Member State or if their employer or the registered office of the undertaking which employs them is situated in the territory of another; Member State.

10. The former Article 13 of the same Regulation made three exceptions to this principle as regards workers on temporary postings (paragraph (a)) workers in transport services (paragraph (b)) and workers employed in undertakings which lie astride the common frontier of two Member States.

11. Paragraph (a) of that Article, in particular, provides that wage-earners or assimilated workers whose permanent residence is in the territory of one Member State and who are employed in the territory of another Member State by an undertaking having in the territory of the former State an establishment to which they are normally attached, shall be subject to the legislation of the former State as though they were employed in its territory, in so far as the probable duration of their employment in the territory of the latter State does not exceed 12 months; which period could be extended once only for a further period of 12 months with the consent of the competent authority of the latter State.

12. It appears from the terms and the general scheme of this provision that its purpose is to govern the situation of wage-earners who are employed on a regular basis by an undertaking situated in the territory of a Member State and are posted temporarily, by the undertaking to which they are attached, to the territory of another Member State.

13. This provision cannot therefore be extended to cover the essentially different situation of business representatives who are not paid a wage or salary.

14. In particular, the strict time limits laid down by former paragraph (a) of Article 13 are not compatible with working activities which involve making regular business-canvassing tours in the territory of a Member State, in the interests of undertakings situated in another Member State.

15. Since it could not be brought within any of the situations referred to in former Article 13, the occupation in question was covered solely by the general principle laid down by Article 12 of Regulation No 3 before the amendment made by Regulation No 24/64.

16. In these circumstances the answer to the second question must be that the employment in question does not come within the scope of Article 13 (a) in its former version, but within that of Article 12 of Regulation No 3.

17. Article 12 adopts as a criterion of attachment for the purposes of determining the social security legislation to be applied, the fact that wage-earners or assimilated workers are employed in the territory of a Member State.

18. It follows both from this Article and an approximation to the exceptions in Article 13 that this provision seeks to ensure that one national legislation is applied and, with this in view, it takes into consideration a worker's employment, assuming that such employment is normally confined to the territory of one and the same Member State.

19. In order to safeguard, given the state of Community legislation at the time in question, the principle that one legislation must apply to an employment which, although of a consistent and continuous nature, extend over the territories of several Member States and comes within the application of Article 12, the features of the activity in question must be analysed in order to establish whether it has a predominant connection with the territory of one or other of the States concerned.

20. For this purpose not only must the duration of periods of activity be considered, but also the nature of the employment in question.

21. As regards the kind of activity described by the Cour de Cassation, the predominant connection is to be sought in the working relationships by which a representative is attached to the undertakings for whose interests he is responsible and not in the occasional contacts which he makes with scattered customers.

22. Thus the answer to the first question must be that a business representative pursuing his working activities in the circumstances mentioned in the order referring the questions must be regarded as being employed in the territories of the two States concerned, the predominating employment, however, for the purposes of determining the legislation to be applied, being that on the territory of the State in which the registered offices of the undertakings which he represents are situated.

23. The third question asks for a definition of the term permanent residence which is stated as meaning the place where a person has his habitual residence in Article 1 (h) of Regulation No 3 and thus for the determination of the question whether there must be regarded as a permanent residence any habitual residence within the frontiers of a Member State even when such habitual residence is not in a fixed place but consists of business-canvassing tours carried out by caravan, or whether habitual residence implies some degree of permanence in a given place and whether therefore a worker can be permanently resident only in the Member State where he returns, in the intervals between his tours, to a fixed permanent address and where the registered offices of the undertakings which employ him are also situated.

24. It apparent from the order referring the questions that this question is raised by reason of the amendment made by Regulation No 24/64 to Article 13 of Regulation No 3 for the purpose of distinguishing and defining the derogations from the principle laid down in Article 12.

25. For this purpose, it must be pointed out in particular that Regulation No 24/64 introduced into Article 13 a new provision — which forms the first section of sub-paragraph (c) of paragraph (1) — under which wage-earners or assimilated workers normally carrying on their activities in the territories of several Member States are subject to the legislation of that State in whose territory they have their permanent residence.

26. The type of activity which is under consideration by the Cour de Cassation comes within the scope of this new provision and therefore, since Regulation No 24/64 came into force, has been subject to the general rule laid down in Article 12.

27. In these circumstances the third question refers to the interpretation in relation to the special type of employment in issue of the concept of permanent residence in Article 13 (1) (c) — first section — in view of the definition which it is given in Article 1 (h) of Regulation No 3.

28. When a worker pursues his working activities in the territories of several Member States, Article 13 (1) (c) (first section), in order to avoid the simultaneous application of several legislations, gives preference to the legislation of the State on whose territory the worker carries on part of his activities and where he has his permanent residence.

29. By using in this way the criterion of permanent residence, to enable a choice to be made between different legislations ascertained by reference to places of employment, Article 13 demonstrates that permanent residence is to be determined by taking into account factors other than those connected with work.

30. To this criterion, the definition in Article 1 (h) adds that of the habitual nature of the residence, from which it is apparent that it is scarcely appropriate to take into consideration, for the purpose of determining permanent residence, itinerant activities for the purpose of canvassing business which are by their nature unstable.

31. On the other hand, the possession of a permanent address in a Member State is, in such a case, to be regarded as a stabilizing factor which can determine permanent residence within the meaning of Article 13 (1) (c) (first section) and there is all the more reason for so regarding it when the permanent address is in the territory of the Member State of which the business representative is a national and in which his interests are centred.

32. The answer to the question must therefore be that by permanent residence, in the sense in which this term is used in Article 13 (1) (c) (first section) and more extensively defined in Article 1 (h) of Regulation No 3, there must be understood, in the case of a business representative pursuing the kind of activities described in the order of reference of a preliminary ruling, the place in which that worker has established the permanent centre of his interests and to which he returns in the intervals between his tours.

33. The costs incurred by the Government of the French Republic and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable.

34. As the proceedings are, so far as the parties to the main action are concerned in the nature of a step in the action before the Cour de Cassation of France it is for that court to make a decision as to costs.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the plaintiff and defendant in the main action and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177; Having regard to Regulation No 3 of the Council concerning social security for migrant workers, especially Articles 1 (h) 12 and 13; Having regard to Regulation No 24/64 of the Council of 10 March 1964 amending Article 13 of Regulation No 3 and Article 11 of Regulation No 4 (Regulation applying to workers on temporary postings and to workers normally carrying on their activities in several countries); Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; THE COURT in answer to the questions referred to it by the chambre sociale of the Cour de Cassation of France by order of that court dated 1 February 1973. Hereby rules:

1 A business representative, covered by Regulation No 3 concerning social security for migrant workers by virtue of national legislation, who for part of the year continously tours the territory of a Member State canvassing business, but whose activities extend into the territory of another Member State in which are situated the registered offices of the undertakings which he represents and with which he returns to make contact outside the time spent in canvassing business, must be regarded as being, prior to the entry into force of Regulation No 24/64 of 10 March 1964, employed in the territories of the said two States within the meaning of Article 12 of Regulation No 3.

2 The working activities described above do not come within the scope of Article 13 (a,) of Regulation No 3 as worded prior to Regulation No 24/64 of 10 March 1964.

3 By permanent residence, in the sense in which that term is used in Article 13 (1) (c) (first section) of Regulation No 3, as amended by Regulation No 24/64, and defined by Article 1 (h) of the same Regulation, there must be understood, in the case of a business representative pursuing the kind of working activities above described, the place in which he has established the permanent centre of his interests and to which he returns in the intervals between his tours.