Opinion of Mr Advocate General
Mr President,
Members of the Court,
1. The Commission seeks a declaration by the Court that, by refusing to grant family allowances to employed persons who have retired early and reside outside the national territory but in accordance with Articles 73 and 75 of Regulation No 1408/71 fall under the Netherlands legislation, has failed to fulfil its obligations under the EEC Treaty.
2. Central to this case is Article 6(1) of the Algemene Kinderbijslagwet (General Law on Child Benefit) which provides as follows:
3. The case turns on whether the residence requirement mentioned in Article 6 of the Law can be relied on as against nonresidents no longer employed in the Netherlands, or any other Member State, who do not satisfy the residence requirement provided for in the Netherlands pension legislation in order to be able to claim an old-age pension. Persons who leave employment in the Netherlands before the pensionable age may, depending on the undertaking or sector in which they were employed, receive early retirement benefit. Early retirement benefit, as the Netherlands Government explained, is not provided for by law but is based on a private arrangement between employers and employees, by way of either a company scheme or a sectorial scheme. The person taking early retirement is not an employed person within the meaning of the Ziektewet (Law on Sickness Assurance), the Wet op de Arbeidsongeschiktheidsverzekering (Law on Assurance against Incapacity to Work), the Werkloosheidswet (Law on Unemployment Assurance) and the Ziekenfondswet (Law on Sickness Funds), and is therefore not insured under that legislation and is not liable to pay contributions. In this connection an exception applies in the case of certain persons taking early retirement with regard to the Ziekenfondswet. Compulsory sickness insurance remains applicable for the period of early retirement in regard to employed persons who were already compulsorily insured for sickness before leaving their employment.
The dispute viewed in a wider context
4. Arrangements similar to the Netherlands scheme for early retirement benefit also exist in other Member States, but those are generally not private schemes but schemes provided for by legislation. As the Court indicated in the Valentini judgment (paragraph 17), these early-retirement schemes were introduced in the context of the Member States' employment policy. They seek to assist workers approaching pensionable age to relinquish their jobs in favour of younger unemployed persons. These schemes give rise to difficult problems of interpretation because they were established only after the entry into force of Regulation No 1408/71 against the background of the economic crisis of the end of the 1970s.
5. The Commission has for some time endeavoured to close this gap. As early as 1980 it submitted a proposal to the Council for the amendment of Regulation No 1408/71 on that point. That proposal sought to make the provisions of Article 74 of Regulation No 1408/71 on family allowances applicable to persons taking early retirement. The proposal was not approved by the Council.
6. In the present case the Court is not asked to form a view on either of the two preceding solutions since neither in its Reasoned Opinion nor in the application has the Commission alleged that the Netherlands infringed either Article 74 or Article 77. On the contrary the Commission is proceeding on the basis that persons who have taken early retirement are to be regarded as employed persons within the meaning of Article 73 of the Regulation and that the refusal to pay family allowances to such persons on the basis of a residence requirement constitutes an infringement of Articles 73 and 75 of the regulation. It is solely in conjunction with those provisions that the present case must be examined.
Alleged infringement of Articles 73 and 75
7. The Commission bases its application for a declaration that Articles 73 and 75 of Regulation No 1408/71 have been infringed on the following threefold reasoning.
8. I am at one with the Netherlands Government in thinking that the Commission's arguments are based on an incorrect interpretation of Regulation No 1408/71.
9. However, the interpretation given to the Ten Holder judgment by the Commission seems to me to be incorrect. It cannot be generally inferred from that judgment, as may be suggested by paragraph 1 of the operative part, that a worker who ceases his employment on the territory of one Member State and does not go to work in another Member State, remains subject to the legislation of the former State. Advocate General Mischo in his Opinion delivered on 14 June 1990 in Case C-245/88 Daalmeijerv Bestuur van de Sociale Verzekeringsbank f 1991] ECR I-555 (particularly paragraphs 12 to 24), convincingly demonstrated that the Court did not thereby wish to introduce an unlimited affiliation in the country of employment for persons who have definitively ceased to be employed. In that judgment the Court was only envisaging the limited situation of a migrant worker who temporarily ceases to be employed, for example on account of sickness or pregnancy, and for the duration of the cessation settles in another Member State. What the Court wished to elucidate in Ten Holder was that such temporary cessation and establishment in another Member State, even if for quite a long period, does not result in the worker losing his affiliation to the social security system of the Member State in which he works (and intends to continue working).
10. The Daalmeijer judgment is relevant in another way to the present case. For in that case the Court answered the question whether a residence requirement laid down in the Nederlandse Algemene Ouderdomswet (Netherlands General Law on Old-age) in order to delimit the category of insured persons may be applied against a nonresident. In that connection the Court inferred the following (paragraphs 14 to 16) from the finding that Article 13(2)(d) of Regulation No 1408/71 does not concern persons who have definitively ceased to be employed :
11. In the light of the Noij and Daalmeijer judgments, it seems to me to be established (i) that the conflict rule contained in Article 13(2)(a) of Regulation No 1408/71 is not applicable to persons who have taken early retirement and have definitively ceased to be employed; (ii) that it is for the national legislature in principle to determine the conditions governing the right or the obligation to be affiliated to a social security system or to such and such a branch of that scheme, without, however, on that occasion discriminating between its nationals and nationals of the other Member States; and (iii) that the national legislature may incorporate in its legislation a residence requirement as a condition of affiliation to one or more branches of the social security system, provided that that legislation is not the legislation determined under Article 13(2).
12. However, in Daalmeijer the Court pointed out that legislation not designated by a conflict rule in Title II may not discriminate between its own nationals and those of other Member States. In its reply to the question asked by the Court, the Commission stated, and repeated at the hearing, that that condition is not satisfied in the present case because the residence requirement is a disguised form of discrimination from the moment when it applies almost exclusively to non-Netherlands nationals, namely former Belgian frontier workers who have continued to reside in Belgium or have returned there.
13. It is true that the prohibition of discrimination at issue in Daalmeijer must be broadly construed as covering all kinds of discrimination, both overt and covert. However, it is clear from paragraph 16 of the judgment in Daalmeijer that a residence requirement — in that case the residence requirement laid down in Article 6(1) of the Algemene Ouderdomswet couched in the same terms as the condition contained in Article 6(1) of the General Law on Child Benefit — cannot be regarded in this case as a disguised form of discrimination. Such a condition is common to social security schemes such as the Netherlands Law on Child Benefit which gives to all residents, irrespective of whether they are employed persons or not, a right to benefit for dependent children financed not by employee and/or employer contributions but by public funds. The fact that nonresidents who have taken early retirement as a result of that condition cannot claim child benefit is not the result of any discrimination against the nationals of other Member States but of the fact that the grant of family allowances is perceived differently in the Member States: in some Member States, such as the Netherlands and Germany, as public assurance schemes; in other Member States, such as Belgium, as a scheme linked to the exercise of occupational activities. In that connection it is significant that the Commission is only alleging disguised discrimination against former Belgian frontier workers and not for example former German frontier workers. The reason for this is that persons who have taken early retirement and reside in Germany can claim child benefit under the German legislation which like the Netherlands system is designed as a public assurance scheme, that is to say one that gives to all residents a right to benefit for dependent children.
14. In the light of all the foregoing, I propose that the Court should dismiss the application and order the Commission to pay the costs.
1 Original language: Dutch.
2 Council Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the version as amended with regard, inter alia, to Articles 73 and 75, by Council Regulation (EEC) No 3427/89 of 30 October 1989 (OJ 1989 L 331, p.1). This version of Regulation No 1408/71 was approved by the Council after the date of the reasoned opinion (30 May 1989) but before lodgment of the application in the present case (28 June 1990). Like the Commission I consider it to be applicable in this case in view of the fact that the provisions of Regulation No 3427/89 relevant to this case were declared to be applicable with effect from 15 January 1986 (that is from the date of the Pinna įudgment). From a substantive point of view it makes no difference to the present case whether this version or the previously applicable version of Articles 73 and 75 of Regulation No 1408/71 is applicable.
3 Judgment in Case 171/82 Valenlim v ASSEDIC [1983] ECR 2157.
4 Proposal submitted by the Commission to the Council on 18 June 1980 for a Council Regulation amending, for the benefit of unemployed workers, Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving within the Community (OJ 1980 C 169, p.22).
5 The proposal concerned solely persons taking early retirement as provided for under the legislation of a Member State. It is not therefore clear whether the proposal also covered the situation of persons in receipt of early retirement benefits under the Netherlands scheme since, according to the Netherlands Government, those payments are not provided for by law but are derived from private arrangements between employers and employees (see also paragraph 5 in fine).
6 In another context, namely the examination of the personal scope of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (OJ 1979 L 6, p. 24), Advocate General Darmon, in his Opinion of 29 May 1991 in Joined Cases C-87/90, C-88/90 and C-89/90 Verholen and Others v Sociale Verzekeringsbank [1991] ECR I-3757, considered that persons who have taken early retirement fall under the scope of that directive in the same way as old-age pensioners.
7 Judgment in Case 129/78 Sociale Verzekeringsbank v Lohmann [1979] ECR 853.
8 Council Regulation (EEC) No 2195/91 of 25 June 1991 amending Regulation (EEC) No 1408/71 on the application of social security schemes to employed fiersons, to self-employed persons and to members of their amilies moving within the Community and amending Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71 (Official Journal 1991 L 206, p.2).
9 Proposal for a Council Regulation (EEC) amending Regualtion (EEC) No 1408/71 on the application of social security schemes to employed persons, self-employed persons and to members of their families moving within the Community, and of Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71 (OJ 1990 C 221, p.3).
10 Judgment in Case 302/84 Ten WoWer[1986] ECR 1821.
11 Written Question No 1481/87 by Lamben Croux to the Commission (19 October 1987) and reply by Mr Marin on behalf of the Commission (12 January 1988) (OJ 1988 C 121, p. 21).
12 Judgment in Case 104/80 Beeck v Bundesanstalt fiir Arbeit [1981] ECR 503.
13 Judgments in Case C-140/88 Noij v Staatssecretaris van Financien [1991] ECR I-387, and Case C-245/88 Daalmeijer v Bestuur van de Sociale Verzekeringsbank [1991] ECR I-555.
14 See in particular the judgment in Case 166/82 Commission v Italy [1984] ECR 459, at paragraph 16.