Report for the Hearing in Case C-102/91
I — Facts and legislation
1. Background to the dispute
1. Miss Knoch, who is single and of German nationality, was employed from 1 October 1982 to 30 June 1983 and from 1 October 1983 to 30 June 1984 as an assistant in German language and literature at the University of Bath in the United Kingdom. When she was employed at the university she was affiliated to the social-security scheme; she also paid unemployment-insurance contributions in the United Kingdom. She obtained her post through the Deutscher Akademische Austauschdienst (German Academic Exchange Service, hereinafter the DAAD). Over the period of her employment in the United Kingdom, the DAAD paid her a compensatory allowance, which she also received during the vacations from 1 July to 30 September 1983 and from 1 July to 30 September 1984. In addition, the DAAD paid her, on cessation of that compensatory allowance, an interim allowance amounting to some DM 1500 per month until 30 November 1984.
2. Miss Knoch had rented a house in Bath but had not had her name removed from the register of residents in Bruchsal, where she was registered with the police authorities as living at her parents' address. She stayed in Bruchsal during the 1983 summer vacation and also in July 1984. At the beginning of August 1984 she left Bruchsal for three months in order to look for work in England, but was unsuccessful. In November or December 1984 she returned to Germany and in September 1985 commenced a period of practical training for secondary-school teachers.
3. Following the termination of her employment, Miss Knoch registered in Bath as unemployed and received unemployment benefit between the beginning of July and 21 August 1984. After returning to Bruchsal, she registered as unemployed on 19 December 1984 with the Bundesanstalt für Arbeit (employment office) in Karlsruhe and applied for unemployment benefit. The employment office turned her application down on the ground that she had not yet completed her qualifying period.
4. By judgment of 28 January 1987 the Sozialgericht (Social Court) set aside that decision. Subsequently, by judgment of 16 August 1988, the Landessozialgericht (Higher Social Court) dismissed the employment office's appeal, taking the view that the qualifying period required by the relevant German legislation had, by virtue of Community law, been satisfied by Miss Knoch's employment in the United Kingdom.
5. In its appeal on a point of law to the Bundessozialgericht (Federal Social Court), the employment office contended that Articles 12 and 71 of Regulation No (EEC) 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 (OJ, English Special Edition 1971 (II), p. 416) had been infringed, and in particular that Article 71(l)(b) offered a choice to an employed person who was not a frontier worker: he could receive unemployment benefit either in the State in which he last worked — as the plaintiff had done in the United Kingdom — or in the State in which he resided. In any event, it argued, the overlapping of those benefits was prohibited by Article 12(1) of Regulation No 1408/71 and consequently the plaintiff could only have claimed entitlement, by virtue of Article 69 of that regulation, under the United Kingdom legislation.
2. Legislative background
6. Article 12 of Regulation No 1408/71 provides:
7. According to Article 67,
8. Article 71 provides:
II — The questions
9. By order of 21 February 1991, the Seventh Senate of the Bundessozialgericht stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:
10. In its order for reference, the Bundessozialgericht states:
III — Procedure
The order from the Bundessozialgericht was received at the Court Registry on 2 April 1991.
Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the German Government, represented by E. Roder, by the French Government, represented by P. Pouzoulet and C. Chavance, and by the Commission of the European Communities, represented by P. Patakia, of its Legal Service, acting as Agent, assisted by B. Schulte.
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 and to assign the case to the Fourth Chamber.
IV — Summary of the observations submitted to the Court
1. The observations of the German Government
The German Government proposes, for the reasons set out by the Bundessozialgericht, that the first question be answered in the affirmative.
With respect to questions 2(a) and 2(b), the German Government observes that Article 12 of Regulation No 1408/71 does not prevent an unemployed worker from receiving benefits first from the State of his employment and subsequently from his State of residence. Those benefits are for different periods and must not be regarded as benefits of the same kind. The German Government considers that the second alternative mentioned in question 2(c) applies. Article 12 does not prevent a worker from receiving, for different periods of his unemployment, benefits under Article 71(l)(b)(i) and (ii). In the two States in question, however, the period for which unemployment benefits are granted is different, a fact which must be taken into account when it is considered whether the two benefits are benefits of the same kind within the meaning of Article 12. If, for example, in the second Member State the amount of the benefits falls progressively over the period for which they are paid, the amount of the benefits that must be paid in the second State is calculated by reference to the period for which the person concerned received benefits in the first Member State. This ensures that benefits of the same kind are not awarded twice for the same period of unemployment and that the full amount thereof is not paid twice. In the same way, it is necessary to deduct from the total period for which the insured person receives benefits under the law of the second Member State the periods for which he received benefits of the same kind from the first Member State.
With respect to question 3(a), the German Government shares the views of the Bundessozialgericht. It adds that practical reasons also militate in favour of that approach. Where such certified statements are issued, it is impossible to avoid errors. The present case provides an example of an incorrect certified statement. As regards question 3(b), the German Government observes that an unemployed worker cannot claim benefits under the legislation to which he was last subject unless all the conditions laid down by Article 69 for the export of that right are fulfilled.
As regards question 3(c), the German Government refers to its answer to question 2(c). The actual receipt of benefits under the legislation of the State of employment must in all cases be set against the duration of the entitlement to benefits in the State of residence. That view is in conformity with both the wording and the meaning of the third sentence of Article 71(b)(ii) of Regulation No 1408/71.
2. The observations of the French Government
According to the French Government, the present case raises an issue of principle which calls in question the very scheme of the provisions concerning payments in respect of unemployment contained in chapter 6 of Regulation No 1408/71. It briefly describes the system and purpose of the provisions in question and maintains that it cannot be contended that Article 67 could allow one and the same period of insurance or employment to be used as a basis for rights granted by Community law to a worker seeking the application successively of the legislation of two or more Member States under which payments might be available to him. The problems inherent in the coordination of social-security systems are generally resolved by reliance on the rule that only one legislation is to apply, laid down in Article 13(1), which the principle of aggregation laid down in Article 67 is intended to reinforce, whereas Article 12 sets out in general terms the rule against overlapping benefits. Article 71 constitutes an exception to the principle laid down in Article 67(3) as well as an application of the rule prohibiting overlapping benefits.
The French Government then sets out its observations on the decision as to the plaintiff's residence made by the Landessozialgericht. It first refers to the judgment in Case 76/76 Di Paolo v Office National de l'Emploi [1977] ECR 315. In the French Government's opinion, the facts of the present case display certain features which make it necessary to impose certain limits upon the concept of habitual residence. As far as the plaintiff is concerned, the Landessozialgericht took the view that her habitual residence continued to be in Germany. In the present case, that interpretation is open to discussion. The French Government states in that connection that in its judgment in Case 33/88 Allué and Coonan v Università degli Studi di Venezia [1989] ECR 1591, the Court held that Artide 3 requires compliance with the principle of equal treatment in matters of social security. The circumstances of the plaintiff's employment were fully covered by Regulation No 1408/71. It is difficult to see how, in circumstances such as those of the present case, Community law could, in the context of freedom of movement, grant a right of residence to a non-frontier migrant worker from another Member State without his residing in the State of his employment. The French Government wonders whether the legal problems raised are not in fact confined to the sphere of German domestic law. Moreover, the present case differs from the Reibold case. An excessively broad interpretation of the concept of residence, based on that judgment, would be difficult to reconcile with the current Community tax provisions. In that regard, the French Government points out that in its judgment in Case C-297/89 Ryborg [1991] ECR I-1943 the Court gave its views on the meaning of residence for the purposes of Council Directive 83/182/EEC of 28 March 1983 on tax exemptions within the Community for certain means of transport temporarily imported into one Member State from another. The French Government refers in particular to Article 7 of that directive. It considers that the condition as to duration of residence laid down in that directive is satisfied in the present case. With a view to ensuring consistency between the various branches of Community law, it is necessary to conclude that the plaintiff was habitually resident in the United Kingdom and not in Germany.
As regards the right to unemployment benefit, the French Government observes that, by registering as unemployed in Bath, the plaintiff exercised the rights conferred on migrant workers and, by so doing, clearly opted for the United Kingdom scheme. Since the plaintiff received benefit, under Article 67, from the scheme of the State of her last employment, it follows that the answer to the first question must be that she could not in principle pursue any claim against the competent institution in another Member State. In accordance with the case-law of the Court, the plaintiff, on transferring her residence to Germany, could thereafter be covered only by the provisions of Article 69. Only in the event of entitlement not being exhausted could the question arise of the appropriateness or otherwise of maintaining rights acquired under the United Kingdom legislation until the definitive exhaustion of such rights or the question of new rights arising in the new State of residence. According to the French Government, no such possibility derives from the provisions in question. The questions in the present case may be important, in so far as no provision of Regulation No 1408/71 at present facilitates appraisal of the situation of unemployed persons who have received benefits in a given Member State and, on transferring their residence successively to one or more other Member States, are likely to rely on the same period of insurance under Article 67. That may apply to unemployed frontier workers covered by Article 71(l)(a)(ii) and (b)(ii), and to unemployed persons who have received benefits in a given Member State and successively transfer their residence to one or more other Member States and, after resuming work for a very short period, seek the application of Article 67. In those three situations, the same period of insurance could be taken into account successively by the competent authorities of two or more Member States in order to grant an unemployment benefit to an unemployed migrant worker who successively makes himself available to the public employment services each time that he changes residence.
Alternatively, the French Government states that the same period of insurance could confer entitlement under the legislation of more than one Member State. The relevant provisions of Chapter 6 of Regulation No 1408/71 cannot be dissociated from the other provisions applicable to social-security benefits as a whole, in particular Article 12(1), which prohibits the overlapping of benefits of the same kind for one and the same period of compulsory insurance. Any other interpretation would conflict with the very purpose of Regulation No 1408/71. The principle of nondiscrimination as between Community nationals justifies, at the very least, the application of a rule requiring deductions from the period for which benefits are paid, in order to ensure equality of treatment for persons covered by Article 71, in so far as frontier workers covered by Article 71(l)(a)(ii) can receive benefits only from the State of residence whereas non-frontier workers covered by Article 71(l)(b)(ii) have a choice according to the case-law of the Court of Justice. Consequently, any answer to the second question should take account of the scheme of Regulation No 1408/71 and of the purpose pursued by its provisions, which seek both to coordinate the national social-security legislation of the Member States and to preclude overlapping and duplicated benefits in the application of such legislation.
3. The Commission's observations
According to the Commission, Article 67(1) of Regulation No 1408/71 provides that the unemployment insurance schemes -which make the acquisition of entitlement to benefits conditional upon the completion of periods of employment take account of periods of insurance or employment completed under the legislation of any other Member State. However, under Article 67(3), that obligation affects only the State under whose legislation the unemployed person completed periods that qualify for that purpose. Periods of insurance or employment are taken into consideration only where the person concerned is already a member of the scheme when the application is submitted. Article 71 of Regulation No 1408/71 provides for an exception to that rule. A non-frontier worker who does not reside in his State of employment is entitled, if he becomes wholly unemployed, to decide which legislation is to apply to his case in respect of benefits. Under Article 71(l)(b)(ii), that choice becomes exercisable by his making himself available to the employment services either of the State where he had a job or of the State where he resides. Thus, that provision derogates from Article 13(2)(a) of Regulation No 1408/71, according to which a worker is subject to the legislation of the territory in which he is employed. The Court has given a restrictive interpretation of Member State in which the worker resides by limiting it to the State where the worker, although occupied in another Member State, continues habitually to reside and where the habitual centre of his interests is also situated (judgment in Case 76/76 Di Paolo, cited above). That strict interpretation is justified, in view of the purpose of Article 71 which, by way of exception, requires, for certain categories of worker who have maintained close links with the country where they have established themselves and habitually stay, transfer of the responsibility for paying unemployment benefits from the State of last employment to the State of residence. In view of the criteria expounded in the judgments in Di Paolo, cited above, and Case C-216/89 Reibold [1990] ECR I-4163, a worker who, for the purposes of vocational training, goes, for a limited period and with the assistance of a competent authority, from his Member State of residence to another Member State to undertake an activity for a limited period, spends his holidays in his State of residence and maintains his centre of interest there may be regarded as a worker who, within the meaning of Article 71(l)(b)(ii) of Regulation No 1408/71, resides in a Member State other than his State of employment. In the Commission's view, the Community rules certainly do not suggest that once a choice has been made it becomes binding. On the contrary, the worker concerned may perfectly well first seek benefits in the State of employment and subsequently take advantage of the availability of benefits in his State of residence. That follows from Article 71(l)(b)(ii) of Regulation No 1408/71, the third sentence of which makes the position clear. The fact that under that provision the payment of benefits may be suspended implies that the unemployed person is able first to claim benefits from the State of his last employment and then from his State of residence.
The Commission proposes that it be stated in reply to the first question that an employed person other than a frontier worker who is wholly unemployed and who, when last employed, resided in a Member State other than the competent Member State, may receive the unemployment benefits provided for in Articles 71(l)(b)(ii) and 67 of Regulation No 1408/71 under the legislation of the Member State in which he resides or to which he returns, even where he previously received unemployment insurance benefits from the institution in the competent Member State.
The Commission then observes that the principle that benefits of the same kind for the same period of insurance under the legislation of two or more Member States is general in scope and thus also applies to unemployment benefits. The only benefits that are not covered by that principle are those that are paid by the institutions of two or more Member States in the cases mentioned in the second sentence of Article 12(1). According to the Commission, the German and United Kingdom unemployment benefits are similar in so far as their aim is the same, namely to provides income in the event of involuntary unemployment, subject to certain conditions as to duration and contributions. It follows from the rule against overlapping benefits in the first sentence of Article 12(1) and from the exception provided for in the second sentence of that provision that the choice offered by Article 71(l)(b)(ii) of Regulation No 1408/71 to unemployed persons residing in a Member State other than the State of employment cannot lead to any overlapping of unemployment benefits.
Article 71 of Regulation No 1408/71, which creates a special scheme applicable to unemployed persons who were employed in one Member State and reside in another, provides that a worker other than a frontier worker, who is wholly unemployed and who makes himself available for work to the employment services in the territory of the State in which he resides, is to receive benefits in accordance with Article 69 of the regulation if he has become entitled to benefits in the Member State of his last employment. Receipt of benefits from the State in which he resides is suspended for any period during which the unemployed person may, under Article 69, make a claim for benefits from the State where he was last employed. Those rules imply that a wholly unemployed worker who has received benefits from the competent institution in the State where he was last employed continues initially, even if he makes himself available for work to the employment services in the State where he resides, to receive benefits from the State where he was last employed, under the conditions and within the limits imposed by Article 69. At the same time, the reference to that provision implies that all the conditions for the export to the State of residence of the right to claim from the competent institution in the State of last employment must be satisfied. If they are not, the-precondition for the application of the second sentence of Article 71(l)(b)(ii) of Regulation No 1408/71 is likewise not satisfied and it follows that suspension of entitlement to benefits in the State of residence cannot be envisaged.
As regards the certified statement issued by the competent institution in the State of last employment under Article 84(2) of Regulation No 574/72, the Community legislation did not provide that it was to be binding. It follows both from Article 155 of the EEC Treaty and from the Community judicial system that a body such as the Administrative Commission on Social Security for Migrant Workers cannot be authorized by the Council to adopt measures of legislative status. In its judgment in Case 98/80 Romano v INAMI [1981] ECR 1241, the Court held that a decision of the Administrative Commission, although providing assistance to social-security institutions responsible for applying Community law in that sphere, is not of such a nature as to require those institutions to follow certain methods or to adopt certain interpretations when they come to apply Community law. The obligation of the scrutineer institution to send the form to the other institutions concerned does not mean that any other supporting documents thereby lose all probative value. According to the Court, the form is not exhaustive (judgment in Case 93/81 INAMI v Knoeller [1982] ECR 951).
Moreover, under the third sentence of Article 71(l)(b)(ii), an unemployed person can, under Article 69, receive benefits under the legislation of the Member State of his last employment, so that entitlement to benefits under the legislation of his State of residence is temporarily suspended if the conditions and time-limits laid down in the latter provision are observed. Suspension of receipt of benefits in the State of residence implies that, for so long as they are awarded under Article 69, they cannot be awarded under the legislation of the State of residence. Thereafter, the right to benefits under the legislation of the State of residence is maintained to the extent to which the relevant national provisions allow.
The Commission proposes that the questions submitted by the Seventh Senate of the Bundessozialgericht be answered in the following terms:
1 Language of the case: German.