Opinion of Mr Advocate general reischl

Mr President,

Members of the Court,

The parties to the three main actions pending before the German courts are in dispute concerning the re-granting of unemployment benefit pursuant to Article 69 of Regulation (EEC) 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 (Official Journal, English Special Edition 1971 (II), p. 416).

According to Article 69 (1) (c) an unemployed worker who satisfies the conditions for entitlement to benefits under the legislation of a Member State and who goes to another Member State in order to seek employment there shall retain his entitlement to such benefits for a maximum period of three months from the date when he ceases to be available to the employment services of the State which he has left. Article 69 (2) is worded as follows:

According to Article 100 taken together with Article 103 of the German Arbeitsförderungsgesetz [Law on the promotion of employment, hereinafter referred to as the AFG] of 25 June 1969 (Bundesgesetzblatt I, p. 582), on the other hand, the payment of unemployment benefit is interrupted if an unemployed worker leaves the Federal Republic of Germany, thereby becoming unavailable on the German employment market. But if he returns his right is revived for the remainder of the entitlement period, which is computed in accordance with Articles 106 and 110 (3) of the AFG. Under Article 125 (2) of the AFG entitlement to unemployment benefit can no longer be claimed once three years have elapsed since it arose.

The following facts and circumstances of the cases must be viewed against the legal background just described.

1. After pursuing an occupation in the Federal Republic of Germany, Mr Testa, an Italian national from Salerno and the plaintiff in the main action in Case 41/79, registered as unemployed, on 14 April 1975 at the Hagen Arbeitsamt [employment office]. The Arbeitsamt granted him unemployment benefit for 234 days from 12 April 1975.

2. Mr Maggio, also an Italian national and the plaintiff in the main action in Case 121/79 obtained unemployment benefit on 19 February 1974 for a period of 195 working days.

3. Finally, Mr Vitale, another Italian national and the applicant in the main action which led to Case 796/79, was granted unemployment benefit on 2 June 1975 by the employment authority for a period of 306 working days. On 7 July 1975 he was issued with form E 303 stating that in accordance with Article 69 of Regulation No 1408/71 and for the purpose of seeking employment in Italy he would continue to receive German unemployed benefit from 12 July 1975 to 11 October 1975. The plaintiff thereupon went to Cava dei Tirreni in Italy where he fell ill on 30 September 1975. On 20 October 1975 he returned to the Federal Republic of Germany and on the same day registered as unemployed at the competent Arbeitsamt and applied for the resumption of unemployment benefit.

The common factors in the cases which I have described and which gave rise to the questions for a preliminary ruling with which I shall deal hereafter are that the unemployed persons returned to the Federal Republic of Germany from looking for work in another Member State after the three month period laid down in Article 69 (1) (c) of Regulation No 1408/71 had expired and that the German employment authorities refused to resume payment of unemployment benefit as requested in reliance on the second half of the first sentence of paragraph (2) of that provision. The provision in question provides that the unemployed person concerned shall lose all entitlement to benefits under the legislation of the competent State if he does not return there [that is, to the Member State responsible for payment of benefits] before the expiry of that period.

1. The doubts felt by the courts referring the questions are understandable once one knows that the German legislature uses the word entitlement [Anspruch] in the law on the promotion of employment in two senses, first, in the sense of an immediate and concrete right to benefit, but then also in the sense of a right arising from the fulfilment of the qualifying period in accordance with the first sentence of Article 104 (1) of the AFG, which is called a contingent entitlement [Anwartschaft].

2. I can now turn to the next question, namely whether the meaning and purpose of the provision require that it be given another meaning going further than the interpretation propounded here. In this regard the Commission and the Government of the Federal Republic of Germany correctly point out that the provision in question represents an important innovation in the field of social law in comparison both with the previously applicable Regulation No 3 of the Council on social security for migrant workers of 25 September 1958 (Journal Officiel 1958, p. 561), which did not provide for any possibility of benefits accompanying an unemployed person into another Member State to assist him in his search for work, and with the corresponding rules in the Member States. The latter rules basically make the granting of unemployment benefits dependent upon the presence of the unemployed person at the place where the competent employment authority is situated, his availability to take up work and his being subject to supervision by the competent authorities. This close connexion between the granting of unemployment benefit and the duty to keep oneself available to the competent employment services was also noted in particular in the judgment of the Court of Justice of 20 March 1979 in Case 139/78 (Giovanni Coccioli ν Bundesanstalt ßir Arbeit [1979] ECR at p. 999) in which the Court of Justice stressed that the duty to keep oneself available to the employment services of the competent State and to be subject to their supervision is the counterpart to the grant of unemployment benefits. The exception created by Article 69 therefore constitutes an independent rule which goes further than simply co-ordinating national provisions. For the duration of the three month period the Member States competent to grant benefits waive the conditions concerning availability and supervision. Because of the different conditions prevailing on the respective labour markets the supervision over the unemployed person in the State where he seeks work is necessarily no proper substitute for keeping the unemployed person available to the employment office in the competent State. The unemployed person is given the opportunity to go to another Member State for a stipulated period in search of work while still being able to draw unemployment benefit without being available to the competent institution. Furthermore, his entitlement to the resumption of payment of unemployment benefit on his punctual return to the competent Member State is laid down in Community law in such form that entitlement even exists where, for example, under domestic law there would be no such entitlement on account of the interruption in the drawing of unemployment benefit occasioned by the absence of the person concerned in another State.

I can now turn to the next question raised by the courts making the reference and by the parties engaged in the proceedings, which concerns the compatibility of the rules in question, as interpreted here, with higher-ranking Community law.

1. The Bundessozialgericht, the plaintiff Testa and the Italian Government first express doubts as to whether Article 69, interpreted as described, is compatible with Article 51 of the EEC Treaty and capable of being valid. In their view, it is incompatible with the meaning and purpose of Article 51 of the EEC Treaty which is to promote freedom of movement for workers, for the contingent entitlement acquired by reason of contributions to be extinguished irrespective of national rules, because a worker has exercised his rights to freedom of movement for a period of longer than three months. This consideration is said to emerge from the settled case-law of the Court of Justice, especially in Cases 24/75 (Petroni) and 112/76 (Manzoni), in which it was made clear that a migrant worker who exercises his right to freedom of movement should not lose the social security advantages which he has under the rules of a single Member State. Moreover, if the rules were to stipulate that national entitlements or contingent entitlements should be extinguished, a migrant worker would in fact be treated less favourably when going to another Member State in order to look for work than if he went to a non-member State, since in the latter case his national entitlement would revive on his return. In the opinion of the Italian Government the requirement that a worker must return within a short time and for good not only deliberately conflicts with the general structure of Regulation No 1408/71 and with the principle that the place of residence plays no part; the requirement to return, taken in this sense, also recreates the very discrimination between national and migrant workers which the EEC Treaty was intended to abolish.

2. Finally, the Bundessozialgericht and the plaintiff Testa have raised the further question of the compatibility of Article 69 (2), as interpreted here, with Article 14 of the German Basic Law, whilst the Hessisches Landessozialgericht and also the Italian Government have pointed to a possible conflict with the right to property as protected by Community law. They argue that on account of his contingent entitlement to unemployment benefit a worker possibly acquires an advantage akin to a right to property which cannot be rendered nugatory by the rules in question.

3. To conclude my discussion it only remains for me to say a few words on the question raised by the Bundessozialgericht as to whether the legislative powers of the Community institutions take account of the principle of the sovereignity of the people laid down in Article 20 of the German Basic Law. As we know, that question refers to the constitutionality of Article 1 of the German Law ratifying the EEC Treaty of 27 July 1957 (Bundesgesetzblatt II, p. 753) which has been repeatedly affirmed in the case-law of the highest German courts and on which the Court of Justice need not pronounce.

Since there is no ground for placing a restrictive interpretation on the provision in question, even having regard to fundamental rights worthy of protection, I therefore propose that the questions of the national courts be answered as follows:

The first sentence of Article 69 (2) of Regulation No 1408/71 excludes all entitlement to benefits of the type described in the first sentence of Article 69 (1) if the unemployed person returns to the competent State only after the period laid down in paragraph (1) (c) has expired and if that period has not been extended in accordance with the second sentence of paragraph (2). Where, however, in an individual case, special circumstances prevent a person's returning before the three-month period has expired and a loss of all further entitlement would be disproportionate, account must be taken of the principle of proportionality by extending the period pursuant to the second sentence of Article 69 (2), having regard to all aspects of the case, in particular the seriousness of the legal consequences in the event of late return, the reason for the delay in returning and the length of time by which the three-month period is exceeded.

1 Translated from the German.