JUDGMENT OF 29. 9. 1976 — CASE 17/76 BRACK v INSURANCE OFFICER
In Case 17/76 Reference to the Court under Article 177 of the EEC Treaty by the National Insurance Commissioner for a preliminary ruling in the action pending before him between
THE COURT composed of: R. Lecourt, President, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore and M. Sørensen, Judges, Advocate-General: H. Mayras Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts
I — Facts and procedure
Annex V, point I (headed United Kingdom), paragraph 1
II — Written observations submitted to the Court
1. Observations submitted by the applicant in the main action
A — The first question
B — General submissions on the second, third and fourth questions
C — The second question
D — The third question
E — The fourth question
2. Observations of the Insurance Officer, the defendant in the main action
As to (a)
As to (b)
3. Observations of the British Government
A — General observations
(a) British legislation
(b) The case-law of the Court relevant to the application of Regulation No 3
(c) Relevance of this case-law to the interpretation of Regulation No 1408/71
Article 1 (a)
The Recitals
Article 34
Annex V, Point A (1)
(d) Conclusion
B — The first question
C — The second question
D — The third question
E — The fourth question
4. Observations submitted by the Danish Government
5. Observations of the Commission
A — The admissibility of the request for interpretation
B — General considerations
C — The first question
D — The second question
E — The fourth question
F — The third question
Law
The first question
The third question
The second and fourth questions
Costs
I —. Facts and procedure
1. Mr Brack was born on 5 April 1906 and was at all material times a British national resident in Great Britain. He has been insured under the British national insurance scheme since 1948. Until 1957 he paid contributions as an employed person; he subsequently became self-employed and paid contributions as a self-employed person. On 23 September 1974 the claimant went on holiday to France where he fell seriously ill on 30 September and had to receive immediate medical attention. On 25 October 1974 he returned home to England.
2. A — Having failed in his appeal from this decision to a local tribunal, Mr Brack appealed further to the National Insurance Commissioner. The latter took into consideration in particular the following provisions of Regulation No 1408/71: Article 1 For the purpose of this regulation: (a) worker means: (i) subject to the restrictions set out in Annex V, any person who is insured, compulsorily or on an optional continued basis, for one or more of the contingencies covered by the branches of a social security scheme for employed persons; (ii) any person who is compulsorily insured for one or more of the contingencies covered by the branches of social security dealt with in this regulation, under a social security scheme for all residents or for the whole working population if such person: can be identified as an employed person by virtue of the manner in which such scheme is administered or financed, or (iii) failing such creiteria, is insured for some other contingency specified in Annex V under a scheme for employed persons, either compulsorily or on an optional continued basis; (iii) Any person who is voluntarily insured for one or more of the contingencies covered by the branches dealt with in this regulation, under a social security scheme of a Member State for employed persons or for all residents or for certain categories of residents if such person has previously been compulsorily insured for the same contingency under a scheme for employed persons of the same Member State.Article 4 1. This regulation shall apply to all legislation concerning the following branches of social security: (a) sickness … benefits …Article 22 [forming part of Chapter 1 — headed Sickness and Maternity — of Title III] 1. A worker who satisfies the conditions of the legislation of the competent State for entitlement to benefits … and: (a) whose condition necessitates immediate benefits during a stay in the territory of another Member State… (c) … shall be entitled: … (ii) to cash benefits provided by the competent institution in accordance with the legislation which it administers …Article 89 Special precedures for implementing the legislations of certain Member States are set out in Annex V. Annex V, point I (headed United Kingdom), paragraph 1 All persons required to pay contributions as employed workers shall be regarded as workers for the purposes of Article 1 (a) (ii) of the regulation. (Point I was inserted into Annex V by virtue of the combined provisions of Article 29 of the Act concerning the Conditions of Accession and the Adjustments to the Treaties and of paragraph 1 Chapter IX of Annex I to that Act.) By an interim decision adopted on 12 February 1976 the National Insurance Commissioner decided to submit the following questions to the Court: 1. Whether the provisions of paragraph 1 of Point I of Annex V to Regulation (EEC) No 1408/71 in any way limit or restrict or merely supplement the definition of the term worker in Article 1 (a) of the regulation or any branch of that definition? 2. Whether a social security scheme for employed persons and others is for the purposes of subparagraph (i) of the above definition of worker a social security scheme for employed persons, so that, consistently with Articles 48 to 51 of the EEC Treaty, any person or any self-employed person (not being an employed person) insured under such scheme against one or more of the contingencies covered by the scheme is, either generally or in relation to the contingencies so insured against, a worker in terms of that subparagraph? 3. Whether for the purposes of subparagraph (ii) of the above definition of worker, a person notwithstanding that he is self-employed at the relevant time can be identified as an employed person by virtue of the manner in which a social security scheme is administered or financed, either generally or in relation to any contingency for which he is insured under this scheme, by reason of the fact that his title to benefit on the happening of such a contingency is constituted to a material extent by his having paid, or been credited with, contributions as an employed person? 4. Whether, for the purposes of subparagraph (iii) of the above definition of worker a person is to be regarded as voluntarily insured for any contingency under a scheme, so as to be a worker for the purpose of that subparagraph either generally or in relation to such contingency, either (i) because that person though ordinarily compulsorily insured has at the material time temporarily an option whether to pay contributions or not, or (ii) because that person is at the material time required to pay contributions only because he has exercised an election not to retire; and in either case notwithstanding that the scheme under which he was previously compulsorily insured as an employed person was a scheme for employed persons and others? B — The National Insurance Commissioner's reference contains the following explanations: (a) As regards British legislation on social security This legislation provides for a single system of national insurance, first governed by the National Insurance Act 1946 and subsequently by the 1965 Act, including in each case various regulations having effect thereunder. After the events giving rise to the claim occurred, the 1975 Act was replaced by the Social Security Act 1975. The 1965 Act and its implementing regulations included the following provisions and brought about the following principal results: 1. The persons subject to the scheme established by that Act were divided into three classes, namely employed persons, self-employed persons and non-employed persons. (Section 1 (2)). Broadly, it was compulsory for most of the population between the age of 16 and normal retirement age — fixed at 65 for men under Section 114 (1) — to pay contributions by way of insurance in one of these classes which entitled them to certain contributory benefits appropriate to the class in question. Conversely, a person who was under no obligation to pay contributions was in general not permitted to do so, subject to certain exceptions. By exercising a power conferred on him by the 1965 Act, the Minister responsible modified the classification resulting from the sub-division referred to above, with the result that certain categories of persons were classified as employed persons notwithstanding that there existed no contract of employment, while others, for whom a contract of employment existed, were classified as self-employed persons. 2. An important distinction between the three classes lay in the cash benefits for which the various categories of contribution qualified them. Referring each time to contributions of the appropriate class, Schedule 2 to the 1965 Act established the minimum amount of the contributions which the person concerned had to pay or had to have credited to him for entitlement to the benefits payable by way of the various risks referred to in that Schedule, including the risk of sickness. Section 18 of the 1965 Act defined the term contributions of the appropriate class by providing that, as regards unemployment benefit, only employed persons' contributions were contributions of the appropriate class (and gave rise to a right to unemployment benefit) whilst in relation to all other contributory benefits either employed persons' contributions or self-employed persons' contributions were contributions of the appropriate class. Finally, under the same provision, in relation to retirement pension, any contributions were regarded as contributions of the appropriate class. 3. A person over pensionable age who had not retired from employment was not required to satisfy the special contribution conditions provided for in relation to unemployment and sickness benefit in order to be able to make a claim but was entitled to unemployment benefit or sickness benefit at the weekly rate at which a retirement pension would have been payable if he had retired (section 19 (3)). Accordingly, in effect, the contribution conditions applicable to these benefits were, in the case of such a person, those applicable to retirement pensions. 4. The contribution conditions appropriate to retirement pension in force at the time of the present claim were, by virtue of section 30 (1) of the 1965 Act and paragraph 4 (1) of Schedule 2 thereto as follows: that not less than 156 weekly contributions of any class had been paid (not merely credited) between the date of entry into insurance and the date of attaining normal pensionable age; and that the yearly average of contributions (paid or credited) as at the date of attaining normal pensionable age was not less than 50. 5. Regulation 7 of the National Insurance (Widow's Benefit and Retirement Pensions) Regulations 1972, which was adopted under the 1965 Act, provided for entitlement to pension at a reduced rate where the first of the abovementioned conditions was satisfied, but where the yearly average of weekly contributions, though less than 50, was not less than 13. 6. These facts and other provisions in force at the time of the present claim show that the rate of retirement pension, and therefore unemployment and sickness benefit for those over pensionable age, was thus determined once and for all by reference to the contribution record as it stood as at attaining normal pensionable age. More particularly, any subsequent increase in pension, which was possible in certain cases, did not affect the rate of sickness benefit. 7. Provided that the person concerned had actually retired, he was entitled to retirement pension from the date on which he had attained normal pensionable age (section 30 of the 1965 Act). As from that date liability to pay contributions ceased (section 3 and Part I of Schedule 1). Any person who exercised his right not to retire at that date could not claim a pension but continued to be liable to pay contributions until he actually retired or until the expiration of five years from pensionable age, when he was deemed in any case to have retired (cf., section 30 (4)). (b) The position of Mr Brack with regard to this legislation 1. At the material time Mr Brack was between the ages of 65 and 70 and had not retired. Therefore, the rate at which sickness benefit was payable depended on the rate at which the retirement pension would have been payable if he had retired (cf., Point 3 above). 2. This latter rate in turn depended on his having satisfied to the extent necessary the contribution conditions referred to under Point 4. In this respect the following factors must be taken into account: (aa) Mr Brack satisfied the first of those conditions, once he actually paid 156 contributions, either with employed persons' contributions exclusively or with self-employed persons contributions exclusively or partly in one way and partly in the other. (bb) The claimant could satisfy the second of those conditions only by combining his employed persons' contributions and his self-employed persons' contributions. (cc) Nevertheless, either his employed persons' contributions or his self-employed persons' contributions by themselves would have been sufficient to entitle him to a retirement pension (or, at the time of the claim, to sickness benefit) at a reduced rate. (dd) Mr Brack paid, or was credited with, full contributions in the contribution year in which the present claim arose, at least down to the day preceding the first day of the claim. (c) Matters raised in argument 1. The first question asks whether the relevant provision of Annex V to Regulation No 1408/71 — which had the effect of including in the term worker any person classified by the Secretary of State as an employed person, even if not in fact an employed person — restricts or limits the scope of the term as defined in Article 1 of the regulation. 2. The second question concerns the fact that the 1965 Act sets up a single social security scheme for employed, self-employed and non-employed persons. It is thereforce necessary to decide whether, as a self-employed person at the material time, Mr Brack falls within the definition set out in Article 1 (a) (i) of Regulation No 1408/71, either for all purposes of the regulation or in relation to the contingencies for which he was insured. 3. As regards the third question it must be remembered that the National Insurance Commissioner has already held that a claimant in another case was a worker for the purposes of Article 1 (a) (ii) of Regulation No 1408/71. In that case, however, the facts were stronger in favour of the claimant in that at the material time he had so recently been an employed person that according to British legislation and although he was currently paying the contributions of a self-employed person, he was still, when entitled to be credited with contributions, entitled to those of an employed person. 4. As regards the fourth question, it must be remembered, first, that the contributions which Mr Brack in theory paid while he was abroad were optional and, secondly, that he could have retired at a date before the material time, in which event his liability to pay contributions would have ended.
3. The decision referring the case to the Court was received at the Registry on 16 February 1976.
II —. Written observations submitted to the Court
1. Observations submitted by the applicant in the main action
A —. The first question
B —. General submissions on the second, third and fourth questions
C —. The second question
D —. The third question
E —. The fourth question
2. Observations of the Insurance Officer, the defendant in the main action
(a). that if a person is a worker within the definition in Article 1 (a) of Regulation No 1408/71, he is such a worker for the purposes of the regulation generally;
(b). that, in determining, on the happening of a contingency as a result of which benefit is claimed, whether a person is a worker within the definition in Article 1, it is not necessary to consider the nature or extent of the contributions by virtue of which entitlement to the benefit claimed, or to some other benefit, has been acquired.
3. Observations of the British Government
A —. General observations
(a). British legislation
(b). The case-law of the Court relevant to the application of Regulation No 3
(c). Relevance of this case-law to the interpretation of Regulation No 1408/71
1. Every person who is a worker within the meaning of Article 51 of the Treaty, as already defined by the Court, satisfies the conditions set out in one or more of subparagraphs (i) to (iii).
2. The definition contained in the provision is not exclusive, but merely sets out three particularly important examples.
3. This definition excludes certain groups of persons who had, on the basis of Regulation No 3, been accepted by the Court as being covered by the regulation.
(d). Conclusion
B —. The first question
C —. The second question
D —. The third question
E —. The fourth question
4. Observations submitted by the Danish Government
5. Observations of the Commission
A —. The admissibility of the request for interpretation
B —. General considerations
C —. The first question
D —. The second question
E —. The fourth question
F —. The third question
1. By a decision of 12 February 1976 which was received at the Court Registry on 16 February 1976 the National Insurance Commissioner submitted, pursuant to Article 177 of the EEC Treaty, four questions concerning the interpretation, on the one hand, of paragraph 1 of Point I (United Kingdom) of Annex V to Regulation No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, as amended by the Act of Accession and, on the other hand of Article 1 (a) (i) (ii) and (iii) of this regulation.
2. Those questions were raised within the framework of a dispute between a British national born in 1906 — the claimant in the main proceedings — who had always resided in Great Britain and who had paid contributions under the British national insurance scheme since 1948, initially as an employed person and subsequently as a self-employed person, and the competent British social security institution. The dispute arose because the claimant fell ill during a stay in France, where he had gone for reasons of health, and he had therefore to receive immediate medical treatment.
3. By virtue of a provision of national law which lays down the principle that a person shall be disqualified for receiving any benefit … for any period during which that person … is absent from Great Britain … the said institution refused him — and now refuses his widow who is continuing with the proceedings — sickness benefits in cash for the period during which he stayed in France.
4. Under Article 22 (1) of Regulation No 1408/71 relating inter alia to sickness benefits, a worker — a word defined in Article 1 (a) of the regulation — who satisfies the conditions of the legislation of the competent State for entitlement to benefits … and: (a) whose condition necessitates immediate benefits during a stay in the territory of another Member State … shall be entitled: … (ii) to cash benefits provided by the competent institution in accordance with the legislation which it administers.
5. Since that provision precludes the application to a worker of such a provision of national law the essential purpose of the questions of the National Insurance Commissioner is to ascertain whether persons in the position of the claimant in the main proceedings have the status of a worker within the meaning of Article 1 (a) of Regulation No 1408/71.
6. In the first question the Court is asked whether paragraph 1 of Point I of Annex V to Regulation No 1408/71 (a point relating exclusively to the United Kingdom) restricts or in fact supplements the definition of the term worker appearing in Article 1 (a) of the regulation or any limb of that definition.
7. Under paragraph 1 of Point I (United Kingdom) of Annex V all persons required to pay contributions as employed workers shall be regarded as workers for the purposes of Article 1 (a) (ii) of the regulation.
8. Since the said paragraph 1 thus refers exclusively to subparagraph (ii) of Article 1 (a) it is clear from the outset that it cannot relate to the scope of subparagraphs (i) and (iii).
9. For its part subparagraph (ii), as distinct from subparagraph (i), does not expressly refer to restrictions which Annex V may apply to the definition of the term worker.
10. The explanation for the provision in question in Annex V is that the British system, which distinguishes between contributions from employed persons, self-employed persons and non-employed persons, also requires certain categories of persons who do not have this status under the law of employment to pay contributions as employed persons.
11. The said provision is thus intended to ensure that Article 1 (a) (ii) is applied broadly in that it makes it clear that any person who is required to pay contributions as an employed person can be identified as such by virtue of the manner in which the British system is administered or financed in the sense of the first indent of this subparagraph.
12. Accordingly the answer to the national tribunal must be that, far from restricting the definition of worker as it emerges from Article 1 (a), the provision in paragraph 1 of Point I (United Kingdom) of Annex V to Regulation No 1408/71 is solely concerned to clarify the scope of subparagraph (ii) of this paragraph vis-à-vis British legislation.
13. In the third question the Court is asked whether a person in the situation of the claimant in the main proceedings is a worker within the meaning of Article 1 (a) of Regulation No 1408/71 because he comes within the scope of subparagraph (ii) of that paragraph.
14. For the purposes of the reply to this question it is necessary to set out, in addition to the circumstances previously mentioned, the following facts and aspects of national law which are peculiar to the situation of the claimant and which have been set out by the national tribunal:
15. A person in such a situation fulfils the first two conditions set out in subparagraph (ii) in that he is compulsorily insured for one or more of the contingencies covered by the branches of social security dealt with in this regulation … under a social security scheme … for the whole working population.
16. More particularly, with regard to the first condition, the insurance is compulsory, since the person concerned is insured under the relevant scheme irrespective of his wishes and the insurance does not cease to be compulsory because of the fact that during certain limited periods, such as a stay abroad, payment of contributions is optional for him.
17. Consequently the point to be settled amounts to whether the persons concerned also fulfil the conditions set out in the first indent of subparagraph (ii) namely whether [such a person] can be identified as an employed person by virtue of the manner in which such scheme is administered or financed, always bearing in mind that, having regard to the facts of the present case, this question need only be considered in relation to the contingency of sickness.
18. It is impossible to disregard the fact that Regulation No 1408/71, which was adopted before the accession of the new Member States, was not formulated in such a way as to take account of the special features of the respective legislations of the said States.
19. The regulation must be interpreted above all in the light of the spirit and of the objectives of the Treaty.
20. In this connexion it must be borne in mind that, as the Court has previously held, the Community rules on social security follow a general tendency of the social law of Member States to extend the benefits of social security in favour of new categories of persons by reason of identical risks (Judgment of 19 December 1968, De Cicco, Case 19/68, [1968] ECR 473; Judgment of 27 October 1971, Janssen, Case 23/71, [1971] ECR 864).
21. Lastly, although Regulation No 1408/71, unlike Regulation No 3 which preceded it, no longer employs the expression wage-earners or assimilated workers and merely refers, in the terms of its heading, to employed persons, certain of the provisions of this regulation nevertheless show clearly that it also applies to certain categories of persons who, when the contingency occurs, do not have the status of employed persons within the meaning of the law of employment.
22. First, according to Article 2 (1) which determines the persons covered by the regulation, the regulation shall apply to workers who are or have been subject to the social security legislation of one or more Member States.
23. Secondly, under Article 34 of the regulation, for the purposes of Chapter 1 of Title III (the chapter devoted inter alia to the contingency of sickness) a pensioner who is entitled to benefits in kind under the legislation of a Member State as the result of pursuing a professional or trade activity shall … be considered as a worker.
24. Whilst the regulation thus covers certain persons who have lost the status of worker and who are indeed no longer insured under a social security scheme in one of the Member States it cannot be excluded that the regulation may be applicable, where appropriate, to persons who, although they have lost the status as employed persons, remain compulsorily insured under the same scheme which covered them previously when they had that status.
25. Finally, as paragraph 1 of Point I (United Kingdom) of Annex V to Regulation No 1408/71 states clearly, the regulation also applies to persons who, in accordance with the relevant national legislation, that is British legislation, are obliged to pay contributions as employed persons although in fact they do not have this status.
26. Article 1 (a) (ii) of the regulation must be interpreted in the light of these considerations.
27. This provision refers to the case in which, in order to identify as an employed person a person who is insured under a social security scheme for the whole working population, reference must be made to the manner in which such scheme is administered or financed.
28. Consequently the provision must be understood as referring also to persons who are not employed persons within the meaning of the law of employment but who must be treated as such for the purposes of applying Regulation No 1408/71, taking account on the one hand of the objectives and of the spirit of this regulation and of Articles 48 to 51 of the Treaty which form its basis and, on the other hand, of the special features of the administration or financing of the scheme to which such persons are affiliated and of the changes which have taken place in the nature of such affiliation.
29. Those conditions are fulfilled in cases like the present which are distinguished by the fact that on the one hand the person concerned also paid contributions as an employed person to the financing of the relevant scheme and on the other hand that his entitlement to sickness benefits in cash at the full rate depends upon taking account of those contributions.
30. Accordingly the reply to the National Insurance Commissioner must be that persons in the situation described by that tribunal are, under British legislation, workers within the meaning of Article 1 (a) (ii) of Regulation No 1408/71 for the purposes of the application of the first sentence of Article 22 (1) (ii) of that regulation.
31. In the second and fourth questions the Court is asked whether the persons in the abovementioned situation constitute workers within the meaning of paragraph (a) of Article 1 in that they come within the scope either of subparagraph (i) or of subparagraph (iii) of that paragraph.
32. In view of the reply to be given to the third question it is unnecessary to consider these questions.
33. The costs incurred by the British Government, the Danish Government and the Commission of the European Communities which submitted observations to the Court are not recoverable.
34. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the case pending before the National Insurance Commissioner costs are a matter for him to decide.
On those grounds, THE COURT in answer to the questions submitted to it by the National Insurance Commissioner by decision of 12 February 1976, hereby rules:
1 The provision in paragraph 1 of Point I (United Kingdom) of Annex V to Regulation No 1408/71, far from restricting the definition of the term worker which appears in Article 1 (a) of the regulation, is solely intended to clarify the scope of subparagraph (ii) of this paragraph vis-à-vis British legislation.
2 A person who: