JUDGMENT OF 14. 5. 1981 — CASE 98/80 ROMANO v INAMI

In Case 98/80 REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal du Travail [Labour Tribunal], Brussels, for a preliminary ruling in the action pending before that court between

THE COURT (First Chamber) composed of: T. Koopmans, President of Chamber, A. O'Keeffe and G. Bosco, Judges, Advocate General: J.-P. Warner Registrar: H. A. Rühl, Principal Administrator

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

The facts

The relevant regulations

The question referred to the Court

Procedure

II — Written observations submitted to the Court

Decision

Costs

I —. Facts and written procedure

(a). the provisions of Article 107 (6) of Regulation No 574/72 of the Council as amended by Regulation No 639/74 of the Council of 15 October 1974 (Official Journal, L 283, p. 1) upon receiving the payment by the Italian Institution,

(b). Decision No 101 of the Administrative Commission on Social Security for Migrant Workers of 29 May 1975 when determining the Belgian benefit.

II —. Written observations submitted to the Court

1. By order of 6 March 1980 which was received at the Court on 13 March 1980 the Tribunal du Travail [Labour Tribunal], Brussels, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question concerning, first, the interpretation of Regulation No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation No 1408/71 on the application of social security schemes to employed persons and their families moving within the Community (Official Journal, English Special Edition 1972 (I), p. 159) and, secondly, the valditiy of Decision No 101 of the Administrative Commission of the European Communities on Social Security for Migrant Workers (Official Journal, C 44 of 26 February 1976, P 3).

2. That question was raised in the context of a dispute between the plaintiff in the main action, Mr Giuseppe Romano, and the defendant in the main action, the Institut National d'Assurance Maladie-Invalidité [National Sickness and Invalidity Insurance Institution] a Belgian social security institution, hereinafter referred to as the Belgian Institution.

3. From 29 August 1970 to 31 December 1975 the plaintiff in the main action received a full Belgian invalidity pension. Since 1 January 1976 he has been in receipt of a Belgian retirement pension. By a decision adopted on 6 April 1976 and completed on 1 July 1976 the Istituto Nazionale della Previdenza Sociale [National Social Welfare Institution], Palermo, (hereinafter referred to as the Italian Institution) awarded the plaintiff an invalidity pension under Italian legislation as from 1 September 1970.

4. Article 70 (2) of the Belgian Law of 9 August 1963 (in the version contained in the Law of 5 July 1971) instituting and implementing a compulsory sickness and invalidity insurance scheme provides :

5. In reliance on that provision the Belgian Institution took the view that the grant of the Italian invalidity pension should entail a proportionate reduction of the invalidity pension paid in Belgium in respect of the period 1 September 1970 to 31 December 1975. Consequently, by a decision notified to the plaintiff on 24 September 1976, it then amended the decision to grant a Belgian invalidity pension. That decision reduced the amount of the Belgian pension by the amount of the pension provided by the Italian Institution. In addition it specified that a recovery of the provisional advances reckoned at BFR 107848 would be made. It stated that if the payment made to us does not exactly cover the amount of allowance paid on a provisional basis we will instruct your insurance institution to arrange, with your agreement, for the recovery of the difference; if, however, there is a balance in your favour, this will be paid by ourselves.

6. Eventually, on 29 July 1977 the Italian Institution paid the Belgian Institution a sum of LIT 3109670 representing the arrears of Italian pension in respect of the period from 1 September 1970 to 30 June 1977.

7. To calculate the amount to be recovered the Belgian Institution applied the exchange rate obtaining on 1 January 1975, which was LIT 1 = BFR 0.05784, whereas in order to convert the sum of LIT 3109670 paid by the Italian Institution into Belgian francs it used the exchange rate obtaining on the date of payment which was LIT 1 = BFR 0.040355. The amount paid was therefore BFR 125491. Having deducted the amount of BFR 107848, which, it claimed, represented the provisional advances, the Belgian Institution paid the balance of BFR 17643 to the plaintiff.

8. In the result, owing to the difference between the exchange rate used to calculate the amount to be recovered and that used to convert the sum paid by the Italian Institution, the amount retained by the Belgian Institution was higher than the amount of benefits actually paid by the Italian Institution in respect of the period 1 September 1970 to 31 December 1975.

9. The action before the Tribunal du Travail, Brussels, was mainly concerned with the question whether the plaintiff was entitled to be paid by the Belgian Institution the amount transferred by the Italian Institution representing the Italian benefits in respect of the period 1 January 1976 to 30 June 1977. The plaintiff in the main action disputed the validity of the calculation carried out by the Belgian Institution. He contended that, whatever exchange rate had to be applied for the conversion, the amount of provisional benefit which was recovered might never exceed the amount of arrears of pension due under the foreign scheme in respect of the period in which the benefits overlapped.

10. For its part, the Belgian Institution stated that the amount to be recovered had been calculated by applying the exchange rate referred to in Article 107 of Regulation No 574/72 of the Council and Decision No 101 of 29 May 1975 of the Administrative Commission of the European Communities on Social Security for Migrant Workers (hereinafter referred to as the Administrative Commission).

11. Article 107 of Regulation No 574/72 as amended by Regulation No 2639/74 of the Council of 15 October 1974 amending Article 107 of Regulation No 574/72 (Official Journal 1974, L 283, p. 1) provides:

12. The Administrative Commission was established pursuant to the provisions contained in Article 80 of 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 (Official Journal, English Special Edition 1971 (II), p. 416). The duties of the Administrative Commission are stated in Article 81 and include inter alia that of dealing with all administrative questions and questions of interpretation arising from the regulation and subsequent regulations, or from any agreement or arrangement concluded thereunder, without prejudice to the right of the authorities, institutions and persons concerned to have recourse to the procedures and tribunals provided for by the legislation of Member States, by the regulation or by the Treaty.

13. The Administrative Commission, considering that in view of the provisions contained in Regulations Nos 1408/71 and 574/72 of the Council a new decision should be adopted concerning the date to be taken into consideration for determining the rates of conversion to be applied when calculating certain benefits, decided, in its Decision No 101 of 29 May 1975, inter alia, that:

14. In those circumstances the Tribunal du Travail, Brussels, considered that if that decision was applicable in the present case the Belgian Institution was right to take into consideration, for the conversion of the advance payments of benefits, the rate applicable on 1 January 1975 and it referred the following question to the Court for a preliminary ruling:

15. In the oral proceedings before the Court the Belgian Institution stated that the Belgian pension had been calculated according to Belgian legislation alone, which was considered to be more favourable to Mr Romano than the application of Article 46 of Regulation No 1408/71. It pointed out that that method of calculation involves the application of provisions of national law against overlapping benefits. It observed that the Court has said in its judgments of 13 October 1977 in Case 22/77 Mura [1977] ECR 1699 and Case 37/77 Greco [1977] ECR 1711 that when the last sentence of Article 12 (2) of Regulation No 1408/71 is not applicable (that is to say, in the cases in which the provisions contained in Article 46 (3) of the regulation are not applicable because they bring about a reduction in the benefit acquired by virtue of a Member State's national legislation alone), the first sentence applies, with the consequence that national legislative provisions for reduction, suspension or withdrawal of benefit may be invoked.

16. Consequently the Belgian Institution took the view that Article 107 of Regulation No 574/72 applies to the calculation of the Belgian benefit referred to in Article 70 (2) of the Law of 9 August 1963 which is applicable by virtue of Article 12 of Regulation No 1408/71.

17. If, however, as the Commission contended, Article 12 (2) of Regulation No 1408/71 did not apply in this case, then, according to the Belgian Institution, the provisions of Article 107 of Regulation No 574/72 apply by analogy, since, prior to 1 July 1976, the date on which Article 241 bis of the Royal Decree of 4 November 1963 entered into force, there was no provision of Belgian law governing the decision on the amount of the benefit due from Belgium. Although the Belgian Institution's decision was adopted in September 1976, Mr Romano suffered incapacity for work and the Italian benefit took effect well before 1 July 1976.

18. As may be seen from the question referred to the Court, the Tribunal du Travail asks whether the above-mentioned decision of the Administrative Commission is lawful in view of Article 7 of Regulation No 574/72 which provides in effect that sums recovered may not exceed the amount actually received under another legislation.

19. However, Article 7 of Regulation No 574/72 does not contain any provision having such a clearly defined effect as that contemplated by the question so that the article is irrelevant for the purpose of resolving the question submitted to the Court.

20. As regards that question, as framed by the Tribunal du Travail, it follows both from Article 155 of the Treaty and the judicial system created by the Treaty, and in particular by Articles 173 and 177 thereof, that a body such as the Administrative Commission may not be empowered by the Council to adopt acts having the force of law. Whilst a decision of the Administrative Commission may provide an aid to social security institutions responsible for applying Community law in this field, it is not of such a nature as to require those institutions to use certain methods or adopt certain interpretations when they come to apply the Community rules. Decision No 101 of the Administrative Commission does not therefore bind the Tribunal du Travail.

21. It is in these terms, therefore, that the question put by the Tribunal du Travail, Brussels, should be answered.

22. However, it is appropriate to set out a number of further considerations which might help that court to arrive at a decision in the case pending before it.

23. It appears from the papers placed before the Court that the incapacity for work which gave rise to the grant of the benefits in question dates from before 1 January 1973 which is the date on which Regulations No 1408/71 and No 574/72 entered into force. However, the parties to the main action, the Tribunal du Travail, Brussels, and the Commission, which has submitted observations to the Court, appear to have taken the view that those regulations applied in the case in point. In the Court's view, unless the worker asked for the provisions of Regulation No 1408/71 to be applied, the provisions of Regulation No 3 of the Council of 25 September 1958 (Journal Officiel No 30, p. 561) should be applied in this case. In this respect, however, it should be observed that it makes no difference to the outcome of the dispute whichever system is applied.

24. It is appropriate to draw attention to the fact that the application of national rules against overlapping benefits is the outcome of a consistent line of decisions of the Court according to which a provision of the governing regulation having the effect of depriving a migrant worker of a part of the benefit to which he is entitled under the legislation of a single Member State is not in accordance with the objective of Article 51 of the Treaty. In its decisions the Court has held that when the grant of the full national pension upon the application of national rules against overlapping benefits is more favourable to a worker than the rules on aggregation and apportionment contained in the Community regulations, the national legislation is wholly applicable. Although that case-law might entail a reduction in the amount of benefits granted to a worker under the laws of several Member States, the underlying principle is that a worker should receive at least the whole amount of the most favourable pension to which he is entitled under the legislation of a single Member State.

25. Therefore, when a full pension is granted to a worker under the national legislation of Member State A alone and, in implementation of Community rules, he is also awarded a pension in Member State B which is reduced by the amount of the full pension granted by the competent institution in Member State A, it is not compatible with Article 51 of the Treaty for that legislation to be applied in a way which in any given period would allow the amount of the advance payments made to the recipient recovered by the competent institution in Member State A to exceed the amount of pension or arrears of pension transferred to that institution by the social security institution in Member State B and converted into Member State A's national currency on the date of transfer.

26. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT (First Chamber) in answer to the question submitted to it by the Tribunal du Travail, Brussels, by order of 16 March 1980, hereby rules:

1 Whilst a decision of the Administrative Commission of the European Communities on Social Security for Migrant Workers may provide an aid to social security institutions responsible for applying Community law in this field, it is not of such a nature as to require those institutions to use certain methods or adopt certain interpretations when they come to apply Community law. Decision No 101 of the Administrative Commission does not therefore bind national courts.

2 When a full pension is granted to a worker under the national legislation of Member State A alone and, in implementation of Community rules, he is also awarded a pension in Member State B which is reduced by the amount of the full pension granted by the competent institution in Member State A, it is not compatible with Article 51 of the Treaty for that legislation to be applied in a way which in any given period would allow the amount of the advance payments made to the recipient recovered by the competent institution in Member State A to exceed the amount of pension or arrears of pension transferred to that institution by the social security institution in Member State B and converted into Member State A's national currency on the date of transfer.