Report for the Hearing delivered in Case 375/85
I — Facts and procedure
Mr Campana, who is an Italian national born in 1941, worked in the television repair business as follows:
In order to take part, in the Federal Republic of Germany, in a preparatory course beginning in October 1980 for the master craftsman's examination in radio and television technology (which he passed on 14 July 1981), Mr Campana applied in July 1980 to the Bundesanstalt für Arbeit (Federal Employment Office, hereinafter referred to as the Bundesanstalt ), Nuremberg, for vocational training assistance.
The Bundesanstalt rejected Mr Campana's application on the ground that he did not satisfy one of the conditions for the grant of such assistance laid down in the first sentence of Article 46 (1) and in Article 46 (2) of the Arbeitsförderungsgesetz (Law on the promotion of employment opportunities, hereinafter referred to as the employment law ) of 25 June 1969 inasmuch as during the last three or five years prior to the commencement of his course at the institution providing the vocational training he had neither carried on an activity subject to compulsory contributions within the meaning of the employment law for a minimum of two years nor received unemployment benefit or benefits under an unemployment assistance scheme.
Mr Campana's action against that decision before the Sozialgericht (Social Court) was dismissed, as was his appeal to the Landessozialgericht (Higher Social Court) against that judgment.
The Landessozialgericht based its judgment on the fact that the plaintiff's activity in Italy did not constitute employment subject to compulsory contributions within the meaning of Article 46 (1) of the employment law and that the provisions of Community law do not require the activity to be treated as such since vocational training is not one of the fields covered by the Council regulation. The Landessozialgericht referred in particular to Article 4 of Regulation No 1408/71 of the Council of 14 June 1971 ön the application of social security schemes to employed persons and their families moving within the Community.
In its view that provision, which relates to the scope ratione materiae of the regulation, refers in matters of employment only to unemployment benefits and not to national legislation adopting measures to assist employment.
According to the Landessozialgericht the same conclusion must be drawn from Regulation No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community (Official Journal, English Special Edition 1968 (II), p. 475), Article 7 of which relates to circumstances which are not at issue in this case. Article 7 (1) and (3) provides as follows :
By an order of 15 October 1985 the Bundessozialgericht, to which Mr Campana had appealed on a point of law, referred the following question to the Court for a preliminary ruling under the third paragraph of Article 177 of the EEC Treaty:
It appears from the order for reference that the Bundessozialgericht considers that Mr Campana cannot rely on Article 7 (3) of Regulation No 1612/68 because he has not been treated differently from German workers, since periods of employment completed by the latter in other Member States are not taken into account either. In addition, the Bundessozialgericht refers to the Court's judgment of 24 April 1980 (Case 110/79 Coonan v Insurance Officer [1980] ECR 1445), according to which the purpose of Regulation No 1612/68 is not to create rights by virtue of insurance periods completed in another Member State if such rights do not derive from national provisions.
The Bundessozialgericht therefore takes the view that Mr Campana's contentions can be based only on the provisions of Article 67 of Regulation No 1408/71, which relates to the method of aggregating periods of insurance or employment for the purpose of calculating unemployment benefits. The Bundessozialgericht is inclined to agree with the view of the Landessozialgericht that Article 67, in the light of its context, that is to say Article 4 of the regulation, is intended to protect persons who have lost their employment and not those who may lose their employment in the future.
In view, however, of the Court's judgment of 16 November 1972 (Case 16/72 Allgemeine Ortskrankenkasse Hamburg v Landesversicherungsanstalt Schleswig-Holstein [1972] ECR 1141), concerned with sickness benefits, according to which the concept of social security includes the objective of protection (in that case prophylactic measures), the Bundessozialgericht asks whether the expression unemployment insurance should not be given a wide interpretation so as to include benefits of a preventive nature in this field. The Bundessozialgericht emphasizes the fact that the Bundesanstalt is responsible, by virtue of the employment law, both for the payment of unemployment benefits and for vocational training assistance. That is a result of the fundamental change which has taken place in employment policy, the objective of which is, according to the preamble to the employment law, to prevent unemployment in the interests both of the worker and of the economy of the country in general.
The request for a preliminary ruling was registered at the Court on 27 November 1985.
In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by:
Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.
II — Summary of the written observations submitted to the Court of Justice
Mr Campana contends that the expression unemployment benefits as used in Article 4 (1) (g) of Regulation No 1408/71 of the Council covers not only benefits of a remedial nature granted to persons who are now unemployed but also preventive vocational training assistance intended to improve the vocational qualifications of persons who may in the future become unemployed. That interpretation is confirmed, according to Mr Campana, by the following elements.
(1) The wording of Regulation No 1408/71 itself
The plaintiff in the main proceedings emphasizes in the first place that vocational training assistance is not contained in the list of benefits formally excluded from the scope of Regulation No 1408/71 by Article 4 (4).
He goes on to contend that by virtue of Article 4 (1) the regulation does not apply to well-defined types of benefit but to branches of social security covering the different types of benefit referred to in subparagraphs (a) to (h) of that provision. For Mr Campana there is no doubt that preventive vocational training assistance falls within the branch of social security relating to the employment market.
(2) The aim of Article il of the EEC Treaty and of Regulation No. 1408/71 of the Council, namely to ensure that the mobility of workers is protected from the point of view of social security
In the view of the plaintiff in the main proceedings, relying on paragraph 11 of the Court's judgment of 13 July 1983 (Case 152/82 Forcheriv Belgium [1983] ECR 2323 at p. 2335), the exclusion of preventive vocational training assistance from the concept of unemployment benefits would significantly limit the possibility for a Community national of improving his vocational qualifications, and consequently his opportunities for social advancement, under the same conditions as a worker who is a national of the host State, since such an exclusion would be based on the employment, if only temporarily, of the Community national in another Member State. Such exclusion as a matter of principle could lead many workers to renounce their right to freedom of movement in order not to be obliged to forgo any assistance to which they might be entitled.
Mr Campana also contends that preventive benefits and remedial unemployment benefits constitute measures forming part of a single employment policy intended to check the problem presented by unemployment in relation both to individuals and to the national economy. Vocational training assistance is to be granted both to unemployed persons and to employed persons precisely in order to counteract the effects of diminishing qualifications and to prevent inappropriate qualifications from becoming a lasting cause of unemployment.
In the view of the plaintiff in the main proceedings, the exclusion of measures of assistance from the expression unemployment benefits would:
(3) The requirements of legal certainty and uniformity in relation to Regulation No 1408/71
This means that the regulation must be interpreted in the light of the Court's judgments in those cases which are considered to be borderline cases, in particular its judgments of 28 May 1974 (Case 187/73 Callemeyn v Belgium [1974] ECR 553) and of 16 November 1972 (Case 16/72, cited above). Those judgments are based on a two-fold concern: to prevent borderline cases from being used, on the one hand, to exclude various benefits from the scope of Regulation No 1408/71 by means of an abstract interpretation of its provisions which fails to take account of developments in the structural framework and policies or, on the other hand, to extend the scope of the regulation to benefits which have only a distant connection with social security, by means of a wide interpretation going beyond the decision-making power of the Community institutions.
Mr Campana proposes that the reply to the preliminary question should be as follows:
The government of the Federal Republic of Germany proposes that the reply to the preliminary question should be in the negative, having regard to the wording of Articles 4 and 67 of Regulation No 1408/71 and to the spirit, purpose and origins of the regulation.
The German Government emphasizes in the first place that Article 4 (1) (g) and Article 67 (1) of Regulation No 1408/71 apply to benefits due as a result of unemployment and lay down the method for calculating benefits and, secondly, that Articles 68 and 71 of the regulation refer to unemployed persons as recipients of benefits. The German Government also refers to the heading of Chapter 6 and to the wording of Article 80 and of Annex II to Council Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation No 1408/71 (Official Journal, English Special Edition 1972 (I), p. 159), which use the expressions unemployment benefits and competent institutions in unemployment matters and thus relate to existing unemployment.
Such a literal interpretation is confirmed, in its view, by the spirit and purpose of Regulation No 1408/71, which is to protect workers, at the Community level, against the risks which may, independently of their wishes and powers of control, lead to a loss of income, whether as a result of sickness, maternity, invalidity, old age, industrial accident or unemployment. Consequently, benefits provided by Member States on the basis of a voluntary decision made by an individual, such as vocational training assistance, fall outside the scope of Regulation No 1408/71.
According to the German Government, the interpretation proposed by it is consistent with the origins of the regulation which, replacing Regulation No 3 on social security for migrant workers (Journal Officiel 1958 No 30, p. 561), did not extend but adopted virtually word for word the list of benefits covered by Regulation No 3.
In the German Government's opinion, any other interpretation of the aforementioned provisions would lead to considerable problems of delimitation since any measure of vocational training, schooling or general education has some relationship with unemployment in so far as it is capable of reducing the risk of future unemployment.
Finally, the German Government contends that no conclusions should be drawn from the fact that the Bundesanstalt is responsible both for unemployment matters and for vocational training. That circumstance arises from a decision of the German legislature which is free to decide whether or not to concentrate different powers in a single institution. The exercise of that sovereign power can in no event determine the scope of a Community regulation.
The Italian Government proposes that the reply to the preliminary question should be in the affirmative, on the basis of the following observations.
In order to decide whether or not a benefit falls within the scope ratione materiae of Regulation No 1408/71, it is necessary to define the nature of the benefit in question without taking into account the qualifications and classifications of national law, which according to the Court are irrelevant in this connection. Consequently, as the Bundessozialgericht observed, the mere fact that the employment law does not make the grant of vocational training assistance dependent upon actual unemployment does not enable such a benefit to be excluded from the scope of Regulation No 1408/71.
On the contrary, according to the Italian Government, the following matters must be taken into account:
In view of all those factors it must be accepted that such assistance constitutes one of the instruments for combating unemployment.
The Italian Government goes on to emphasize that the provisions of the employment law make the grant of vocational assistance dependent upon an unemployment insurance relationship. The basis of any insurance relationship is the risk against which the insured person is protected. In the Italian Government's opinion there is no justification for the view that a social security relationship is exclusively intended to ensure compensation for damage resulting from the materialization of the risk. The development of social benefits shows that the risk in matters of employment includes all the risks existing on the labour market, given the redeployment necessary in periods of crisis. The risk therefore consists not only of unemployment but also of the inability to respond to the requirements of the market because of inappropriate qualifications.
In the Italian Government's view, such an interpretation is consistent with the Court's judgment of 5 July 1983 (Case 171/82 Valentini v Assedic [1983] ECR 2157) where it held that a guaranteed income payable in France on early retirement was an unemployment benefit. Such a benefit is not, however, based on unemployment in the accepted sense, namely the involuntary loss of employment, but, as is stated in paragraph 17 of the decision, on objectives which became apparent only after the implementation of Regulation No 1408/71.
Finally, the Italian Government contends that according to the employment law the fact of having been in receipt of unemployment benefit during the relevant period is regarded as a sufficient condition for obtaining vocational training assistance. That shows the existence of a link between vocational assistance and unemployment benefits. The legal nature of a benefit cannot vary according to which of the two conditions laid down for its grant is satisfied, that is to say the making of compulsory contributions or the receipt of unemployment benefit.
According to the Italian Government it follows from those observations that the benefit in question is in the nature of unemployment insurance.
The Commission considers that unemployment benefits for the purposes of Article 4 (1) of Regulation No 1408/71 include not only benefits provided in respect of present unemployment but also those intended to prevent unemployment in the future.
In support of that proposition the Commission begins by making a comparison with the other benefits referred to in Regulation No 1408/71. It emphasizes in particular that sickness benefits include measures such as preventive examinations and vaccinations and that maternity benefits include measures relating to pregnancy. It must therefore be acknowledged that Regulation No 1408/71 does not restrict the grant of benefits to situations where the risk has already materialized. Such an interpretation is confirmed, in its view, by Article 4 (1) (b) of Regulation No 1408/71 from which it is clear that the regulation applies to benefits for the maintenance or improvement of earning capacity.
The Commission goes on to contend that the expressions used in Article 51 of the EEC Treaty (acquiring and retaining the right to benefit ) are very wide and give rise to two conclusions: Community law seeks to encompass all existing benefits provided for by the relevant law and to include all future developments in the field since it covers the continuation of existing benefits and any future extension of the existing range of benefits.
The Commission therefore submits, relying on the fourth paragraph of the Court's judgments of 16 November 1972 (Case 15/72 Land Niedersachsen v Landesversicherungsanstalt [1972] ECR 1127 and Case 16/72 Allgemeine Ortskrankenkasse Hamburg v Landesversicherungsanstalt Schleswig-Holstein, cited above), that any restrictive interpretation of legal provisions derived from Article 51 of the EEC Treaty is inadmissible.
The Commission also states that, as the Court has held, the distinction between benefits which are excluded from the scope of Regulation No 1408/71 and benefits which come within it is determined essentially by the basic characteristics of the benefit, its purpose and the conditions for its grant (judgment of 25 March 1985 in Case 249/83 Hoeckx v Openbaar Centrum voor Maatschappelijk Welzijn [1985] ECR 982). It is clear from the wording of the order of the national court that the benefit in question is in fact linked to the risk of unemployment.
Finally, the Commission submits observations on the reasons for which the Bundessozialgericht considered that Article 7 (3) of Regulation No 1612/68 of the Council was not applicable.
Contrary to the view adopted by the Bundessozialgericht, the Commission considers that in the case of Community nationals periods of employment completed in another Member State cannot be excluded from the calculation of the two-year period laid down by the employment law. In its view the argument that German workers are treated in the same way cannot be accepted, since such cases will be very rare and consequently can neither serve as a comparison nor conceal the discrimination implicit in such a comparison. In that connection the Commission makes reference to the Court's judgment of 12 February 1974 (Case 152/73 Sotgiu v Deutsche Bundespost [1974] ECR 153, in particular paragraph 11 at p. 164).
According to the Commission it follows from the foregoing that the correct interpretation of Article 7 of Regulation No 1612/68 requires that in the case of Community nationals periods of employment completed in another Member State during the period of two years laid down by the employment law must be taken into account.
The Commission therefore proposes that the reply to the question referred by the national court should be as follows:
1 Language of the Case: German.