62015CC0454
OPINION OF ADVOCATE GENERAL
BOBEK
delivered on 8 September 2016 (
1
)
Case C‑454/15
Jürgen Webb-Sämann
v
Christopher Seagon (acting as liquidator in the insolvency of Baumarkt Praktiker DIY GmbH)
(Request for a preliminary ruling from Hessisches Landesarbeitsgericht (Higher Labour Court, Hessen, Germany))
‛Social policy — Directive 2008/94 — Protection of employees in the event of the insolvency of their employer — Provisions related to social security — Scope — Obligation on Member State to ensure the necessary measures are taken to protect immediate or prospective entitlements of employees under supplementary pension schemes’
I – Introduction
1.
Mr Webb-Sämann (the applicant) was employed on a part-time basis by Baumarkt Praktiker DIY GmbH and its predecessors in law (‘the general debtor’). Certain amounts of money were withheld from the applicant’s salary by his employer and converted into pension contributions. In October 2013, insolvency proceedings were opened against the general debtor. It became apparent that for the period between January and September 2013 the general debtor had not paid the applicant’s pension contributions over to the relevant pension fund.
2.
The issue raised by the present request for a preliminary ruling is whether, when an employer becomes insolvent, Article 8 of Directive 2008/94/EC (
2
) requires that monies deducted by the employer from an employee’s salary in order to be deposited in a supplementary pension fund, but which were not in fact paid by the employer into a separate account, be ring-fenced and excluded from the insolvency proceedings.
II – Legal framework
A – EU law
1. Directive 2008/94
3.
Recital 3 of Directive 2008/94 states that ‘it is necessary to provide for the protection of employees in the event of the insolvency of their employer and to ensure a minimum degree of protection, in particular in order to guarantee payment of their outstanding claims, while taking account of the need for balanced economic and social development in the Community. To this end, the Member States should establish a body which guarantees payment of the outstanding claims of the employees concerned’.
4.
Article 1 outlines the scope of the directive indicating that it applies to ‘employees’ claims arising from contracts of employment or employment relationships and existing against employers who are in a state of insolvency …’.
5.
Articles 3 to 5 of the directive are found in Chapter II entitled: ‘Provisions concerning guarantee institutions’. Article 3 of the directive requires Member States to set up guarantee institutions to pay ‘employees’ outstanding claims resulting from contracts of employment or employment relationships …’. Such institutions must be independent of an employer’s operating capital and inaccessible in insolvency proceedings pursuant to Article 5(a) of the directive.
6.
Article 4 states that Member States may opt to limit the liability of the guarantee institutions regarding employees’ outstanding claims. The Member State can do so by specifying the length of the period for which outstanding claims are to be met by the guarantee institution. Article 4 goes on to outline minimum thresholds below which limitations on the liability of the guarantee institutions should not fall.
7.
Articles 6 to 8 make up Chapter III of the directive which contains the provisions on social security. Article 6 gives Member States the option to ‘stipulate that [the articles relating to the obligations of the guarantee institutions] shall not apply to contributions due under national statutory social security schemes or under supplementary occupational or inter-occupational pension schemes outside the national statutory social security schemes’.
8.
Article 8 provides that ‘Member States shall ensure that the necessary measures are taken to protect the interests of employees and of persons having already left the employer’s undertaking or business at the date of the onset of the employer’s insolvency in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors’ benefits under supplementary occupational or inter-occupational pension schemes outside the national statutory social security schemes’.
2. Directive 2003/41/EC
9.
Recital 9 of Directive 2003/41 (
3
) states that ‘Member States should retain full responsibility for the organisation of their pension systems …’. Recital 18 recognises that ‘in the event of the bankruptcy of a sponsoring undertaking, a member faces the risk of losing both his/her job and his/her acquired pension rights. This makes it necessary to ensure that there is a clear separation between that undertaking and the institution and that minimum prudential standards are laid down to protect members’.
10.
Article 8 requires that each Member State ensures that ‘there is a legal separation between a sponsoring undertaking and an institution for occupational retirement provision in order that the assets of the institution are safeguarded in the interests of members and beneficiaries in the event of bankruptcy of the sponsoring undertaking’.
B – German law
11.
Paragraph 47 of the Insolvenzordnung (German Insolvency Regulation (
4
)) permits property to be excluded from insolvency proceedings where a person demonstrates a real or personal right to that property and establishes that that property should not be part of the insolvency proceedings.
12.
According to the written answer provided by the German Government in this case, Article 165(1) of the Sozialgesetzbuch, Drittes Buch (Social Security Code, Book III (
5
)) states that employees of insolvent companies have a right to compensation if they were employed on the national territory and if, when the insolvency proceedings were opened, they still had rights to remuneration during the previous three months of employment.
13.
Under Article 165(2), third sentence, if the employee converted part of his or her salary into pension contributions, that conversion is deemed not to have taken place for the calculation of compensation for employees of insolvent companies in so far as the employer has not paid those contributions over to the relevant pension fund or insurance organisation.
14.
In its written answer to the Court, the German Government also invokes Article 7 of the Betriebsrentengesetz (Law on Improvement of Occupational Retirement Pensions (
6
)). Article 7 protects employees’ acquired rights to benefits under occupational pension schemes by giving them a right to claim from the Pensions-Sicherungs-Verein (pension guarantee association) a sum which corresponds to the amount that the employer would have paid to their pension or insurance fund if the insolvency proceedings had not been opened.
III – Facts, national proceedings and the question referred
15.
The applicant had been employed since 18 November 1996 on a part-time basis by the general debtor.
16.
As it appears from the file before the court, pursuant to a collective agreement, the employees of the general debtor were offered four options in terms of deductions from their salary for pension contributions: (i) conversion of a meal allowance into a contribution to the supplementary pension scheme amounting to EUR 275 per year; (ii) a single annual payment of EUR 300 (EUR 160.08 for part-time workers); (iii) conversion of wages of up to EUR 50 per month; and (iv) conversion of holiday pay of EUR 500 per year.
17.
The employees could choose one or more of these options. The corresponding amounts would then be withheld from employees’ salaries and converted into pension contributions with a view to their transfer to a pension fund.
18.
From the applicant’s written submissions it appears that he chose all four options.
19.
On 1 October 2013, insolvency proceedings were initiated in respect of the assets of the general debtor. Mr Christopher Seagon (the defendant) was appointed as the liquidator.
20.
The applicant claims before the referring court that for the period from January to June 2013, (
7
) the monies deducted from his salary and converted into pension contributions, amounting to EUR 1017.56, ought to have been paid by the general debtor into the account of his occupational pension fund with the Hamburger Pensionskasse (‘the Hamburg Pension Fund’). (
8
)
21.
The applicant submits that because the general debtor did not transfer the money to the pension fund, he is entitled to have those amounts excluded from the scope of the insolvency proceedings pursuant to Paragraph 47 of the German Insolvency Regulation. He claims that those amounts are held on trust (on the basis of a fiduciary agreement) for him.
22.
In the event that those amounts are not excluded from the scope of the insolvency proceedings, the applicant claims that this would amount to an infringement of Article 8 of Directive 2008/94.
23.
The liquidator claims that no fiduciary agreement had been entered into between the applicant and the general debtor. Furthermore, as the disputed amounts never left the employer’s assets, the liquidator claims that they cannot be excluded from the insolvency proceedings pursuant to Paragraph 47 of the German Insolvency Regulation.
24.
The Arbeitsgericht (Labour Court) dismissed the applicant’s action. It took the view that because the applicant did not have a claim for payment to himself, but only a claim that payment be made to his pension fund account, he did not have a cause of action. It further held that the applicant had not proved that he had entered into a fiduciary agreement with the general debtor. And, even if that could be proved, a right to exclusion would fail on the basis that the monies to be excluded were not identifiable from other monies in the insolvency proceedings.
25.
The applicant appealed against that judgment before the referring court. He maintains that there was a fiduciary agreement with the general debtor in relation to the amounts deducted from his salary for payment to the pension fund.
26.
In the light of the arguments raised by the applicant, the Hessisches Landesarbeitsgericht (Higher Labour Court, Hessen) stayed the proceedings before it and referred the following question to the Court of Justice:
‘Is a national understanding of a rule under which outstanding salary claims which were deposited with the employer in order to be paid over to a pension fund by a particular date but which were not paid by that employer into a separate account and therefore did not come within the scope of a right to have those claims excluded from insolvency proceedings in respect of the employer’s assets (Aussonderungsrecht) pursuant to Paragraph 47 of the German Insolvency Regulation contrary to Article 8 of Directive 2008/94/EC or to other EU law?’
27.
Written observations were submitted by the applicant, the defendant and the Commission. In accordance with Article 61(1) of its Rules of Procedure, the Court sent the German Government a question to be answered in writing before the hearing. The applicant, the defendant, the Commission, and the German Government all presented oral arguments at the hearing held on 4 July 2016.
IV – Assessment
28.
The issues raised by the question referred by the national court will be approached in three parts in this Opinion.
29.
First, in reaction to the observations submitted by the parties, I will start by discussing which specific EU law provisions are pertinent to answer the question posed. I conclude, in agreement with the referring court, that Article 8 of Directive 2008/94 is indeed the most relevant provision in the present case.
30.
Second, I will propose an answer to the precise question asked by the referring court. In my view, Article 8 of Directive 2008/94 does not require that monies deducted by an employer, who is now insolvent, from an employee’s salary in order to be deposited in a supplementary pension fund (
9
) but which were not in fact paid by the employer into a separate account or over to the pension fund, be excluded from the insolvency proceedings.
31.
Third, in order to provide a full and useful response to the national court, I shall add a few concluding suggestions on what outcome Member States are required to realise under Article 8. I will also make some practical observations on the importance of the means chosen by the Member States actually being capable of achieving that outcome.
A – Identification of the relevant EU law(s) and provisions
1. Relevant secondary EU law
32.
In his observations, the applicant refers to Directive 2003/41. In particular, he focuses on the requirement in Article 8 of that directive under which Member States must ensure that there is a legal separation between an employer (
10
) and a pension fund so that the assets of the pension fund are protected in the event of the bankruptcy or insolvency of the employer.
33.
Whilst the separation of an employer from a pension fund goes some way towards protecting the pension entitlements of employees, that alone is not sufficient to address the issue raised by the present case. (
11
) The existence of a legal separation between the pension fund and the employer does not resolve the problem that arises when the employer does not actually pay the pension contributions of employees over to the pension fund, unless the requirement of a legal separation between the employer and the pension fund were interpreted in a rather extreme way so as to amount to a requirement of immediate and automatic separation of their assets. That more extreme interpretation does not follow from the wording of Article 8 of Directive 2003/41. Therefore, it is my view that the separation between the employer and the pension fund only has significance if the money is actually in the pension fund.
34.
That is highlighted by the facts as presented in this case. It appears that the requirement of a legal separation between the general debtor (the employer) and the Hamburg Pension Fund for the purposes of protecting the assets of the latter has in fact been complied with. The monies actually in the Hamburg Pension Fund are safe from the insolvency proceedings against the employer. (
12
) However, the question remains as to what happens to the monies still with the employer but which should have been paid over to the pension fund.
35.
Thus, in agreement with the referring court, I am of the opinion that Directive 2003/41 is of limited relevance to resolve the practical problem posed by the present case. The proper analysis of the problem ought to be carried out under Directive 2008/94.
2. The relevant provisions of Directive 2008/94
36.
One of the arguments the Commission raises in their written submissions is that the relevant provision for the present case is Article 3 of Directive 2008/94 and not Article 8. Although the Commission departed from that argument at the hearing, a similar argument was also made by the defendant and the German Government at the hearing. I therefore consider it necessary to delineate the boundaries between Article 3 and Article 8 of the directive in general, and then, on that basis, determine under which of those provisions the present case falls.
a) The boundary between Article 3 and Article 8 of Directive 2008/94
37.
I am of the view that there is a certain degree of overlap between Articles 3 and 8. Both articles provide complementary forms of protection. They can apply in parallel, as suggested by the Commission at the hearing.
38.
Article 6 of Directive 2008/94 states that a Member State may stipulate that the obligations of guarantee institutions shall not extend to contributions due under statutory or supplementary pension funds. This indicates that, unless excluded by the Member State, in principle, pension contributions do fall within the scope of Article 3.
39.
Article 8 deals with the interests of employees as regards their entitlements to old-age benefits under supplementary pension schemes. Logically speaking, pension contributions ultimately fund an employee’s future pension entitlements. There is therefore a natural link between Articles 3 and 8.
40.
However, that being said, Article 3 and Article 8 do appear to have slightly different aims and objectives. As such, their scope and content are not entirely interchangeable. After all, that explains why a single article was not used in the directive, but rather two separate provisions and why Articles 3 and 8 feature in different chapters of the directive. The differences between the two provisions are the following:
41.
First, Article 3 aims at guaranteeing, through an independent guarantee institution, the payment of employees’ outstanding claims arising from their employment relationships. One such claim may be for pension contributions, earned as part of an employee’s salary that ought to have been paid over by the employer to a pension fund. This is evident from the wording of Article 6 as explained in point 38 of this Opinion which indicates that, in principle, Article 3 does cover pension contributions. However, Article 3 refers to ‘outstanding claims’ generally. It thus includes various other pay claims arising from employment contracts such as severance pay (where provided for under national law) and wages, not only pension contributions.
42.
On the other hand, Article 8 has a narrower material scope. Unlike Article 3, the material scope of Article 8 is confined to supplementary pension funds, as opposed to any outstanding claims in general.
43.
Second, what Article 3 essentially guarantees is that employees receive what they have already earned. This is evident by the use of the term ‘outstanding claims’ which indicates that the claims it refers to arose in the past while the employment relationship was ongoing and still remain to be settled.
44.
By contrast, Article 8 focuses on a different point in time. It imposes an obligation on Member States to ensure the protection of the interests of employees in relation to ‘immediate or prospective entitlement to old-age benefits’ under supplementary pension schemes. The use of the words ‘immediate’ and ‘prospective’ indicate that Article 8 is concerned with entitlements that arise in the present or will arise in the future. (
13
)
45.
Third, the aims of Articles 3 and 8 are to be achieved in different ways. Whereas Article 3 is to be realised by making payments to employees, Article 8 allows Member States to take ‘the necessary measures’ without stipulating what those measures are. It can be carried out in numerous ways, not just by making payments to employees. (
14
)
46.
Fourth and finally, the interests being protected by Article 3 and by Article 8 are different. Article 3 arguably caters for the short-term ‘shock’ that an employee faces in the event of the insolvency of their employer. This is alluded to in the Opinion of the Economic and Social Committee on the Commission Proposal for Directive 80/987 in which the Committee refers to the fact that during insolvency proceedings in relation to their employer ‘workers … urgently need their wages in order to meet their day-to-day expenses and those of their families’. (
15
) Similarly, Advocate General Kokott also recognised in Robins that non-payment of wages under Article 3 is likely to be something of relatively ‘brief duration’ and employees ‘can react to such matters relatively quickly’. (
16
)
47.
On the other hand, Article 8 seeks to protect the long-term pension entitlements of employees. The Commission Report on the Transposition of Council Directive 80/987 confirms this distinction between Articles 3 and 8 by stating that under Article 8 ‘it is no longer a question of guaranteeing pay but entitlement to old-age benefits’. (
17
) As Advocate General Kokott stated in Robins‘a reduction in pension entitlements will have a bearing on the entire period for which the pension will be drawn’ (
18
) and an employee is unlikely to be in a position to do much to make up that shortfall. (
19
) That is why merely returning pension ‘contributions’, as envisaged under Articles 6 and 3 of the directive is not sufficient to comply with the protection of ‘entitlements’ provided by Article 8, as that does not ‘safeguard the liability to pay current or future benefits’ for the long-term. (
20
)
b) The relevant provision for the present case
48.
In spite of there being some differences between Articles 3 and 8 in their scope, design, and focus as outlined in the previous section, I also readily acknowledge that a case might fall under both of those provisions at the same time. That is precisely the situation with regard to pension contributions, which may be qualified as ‘outstanding claims’ in the sense of Article 3, but also ultimately fund immediate and prospective entitlements to old-age benefits under supplementary pension schemes in the sense of Article 8.
49.
Therefore, I am of the opinion that the present case falls within the scope of both Article 3 and Article 8 of Directive 2008/94. As Germany has apparently not opted, pursuant to Article 6 of the directive, to exclude pension contributions from the scope of the obligations of its guarantee institutions established under Article 3, the applicant has a right to payment of his outstanding pension contributions for the period of time stipulated under the German law implementing Articles 3 to 5. (
21
) Under the German law referred to in the written answer of the German Government to the question posed by the Court, that period is three months.
50.
In addition, as the present case concerns a supplementary pension fund which has been underfunded as a result of the employer not paying over the applicant’s contributions to the fund, the applicant’s interest in respect of his future pension entitlements will be affected and so the case does fall within the scope of Article 8. That the underfunding of a pension fund falls within the scope of Article 8 of the directive is something that has already been confirmed by the Court in Hogan. (
22
)
51.
I understand that the applicant in this case has already received payment, inclusive of his pension contributions, for the three months preceding the opening of insolvency proceedings against the general debtor, under the German law implementing Articles 3 to 5 of the directive. (
23
) However, the general debtor in the present case did not pay the applicant’s pension contributions over to his pension fund for a period of nine months. The issue therefore is whether Article 8’s protection of immediate and prospective pension entitlements has any bearing on or relevance for the remaining six months of the applicant’s unpaid pension contributions. That is the issue that the remainder of this Opinion will consider.
B – Answer to the precise question posed by the referring court
52.
The national court’s question is whether, when an employer goes insolvent, Article 8 of Directive 2008/94 mandates that monies deducted by the employer from an employee’s salary in order to be deposited in a supplementary pension fund but which were not in fact paid by the employer into a separate account, be excluded from the insolvency proceedings in respect of the employer’s assets. In other words, the question is whether Article 8 reaches so far as to require the modification or setting aside of the relevant provisions of national insolvency regulations which do not contain any specific rules dealing with that particular situation.
53.
My short answer to that precise question is ‘no’. It comes, however, with a qualifying caveat. The chief reason for the negative answer is simple: I find it difficult to construe an instrument of minimum harmonisation, such as Directive 2008/94, and in particular a deliberately loose provision of that directive, such as Article 8 (which leaves considerable discretion to the Member State as regards the means by which it is to be implemented), in a way that effectively necessitates the introduction of a very specific provision into a Member State’s legal order, such as a rule requiring the exclusion of unpaid pension contributions from the insolvency proceedings of an employer.
1. Directive 2008/94 is an instrument of minimum harmonisation
54.
Directive 2008/94 can hardly be seen as a panacea for all of the negative effects of the insolvency of an employer on its employees. It merely sets minimum EU standards, below which Member States’ protection of employees cannot fall, but beyond which Member States are free to regulate as they see fit. (
24
)
55.
Two aspects of the directive confirm this. First, recital 3 of Directive 2008/94 makes it clear that its aim is to ‘ensure a minimum degree of protection’ for employees in the event of the insolvency of their employer. It goes on to say that account should be taken of ‘the need for balanced economic and social development in the Community’.
56.
Second, Article 11 of Directive 2008/94 states that it does not affect the option of Member States to apply or introduce laws, regulations or administrative provisions which are more favourable to employees. In other words, Directive 2008/94 sets a floor of protection for employees in the event of the insolvency of their employer above which Member States are free to build or extend that protection if they so choose. (
25
) This is supported by the original Proposal of the Commission for Directive 80/987 and the Report from the Commission on the Transposition of Council Directive 80/987. Both of those documents, when discussing (what is now) Article 11 of Directive 2008/94, state that that article is indicative of the fact that the directive offers only minimum protection of employees. (
26
)
57.
The fact that the directive is one of minimum harmonisation means that interpreting the provisions of the directive should not be done in an overly prescriptive way. Rather the interpretation of Directive 2008/94 calls for a balanced approach which reflects the minimum protections for employees it seeks to achieve. With that in mind, I shall now turn to the interpretation of Article 8 itself.
2. The loose drafting of Article 8 of Directive 2008/94
58.
Article 8 is drafted in particularly nebulous terms. It imposes an obligation on Member States to achieve an outcome: to ensure that the interests of employees are protected in respect of rights conferring on them immediate or prospective entitlement to old-age benefits. However, that provision notably does not prescribe the way in which that protection is to be guaranteed.
59.
This appears to be a deliberate move on the part of the legislator, as is evident from the travaux préparatoires to Directive 2008/94 and its predecessor, Directive 80/987. The original directive, Directive 80/987, was one of three directives adopted as part of the 1974 to 1976 social action programme aimed at addressing the social consequences of restructuring of businesses brought about by increased competition as barriers to trade were removed. The other two directives were Directive 77/187/EEC on employees’ rights on the transfer of undertakings (
27
) (now Directive 2001/23/EC (
28
)) and Directive 75/129/EEC on collective redundancies. (
29
)
60.
All three directives form part of the same legislative package. Therefore, consulting Directives 77/187 and 75/129 provides useful contextual information when it comes to the interpretation of Directive 80/987, and now Directive 2008/94.
61.
The Commission Proposal for Directive 80/987, discussing (what is now) Article 8 of Directive 2008/94, makes specific reference to Directive 77/187. The Commission states that Article 8 follows the solution to the same problem already adopted in Directive 77/187 on the transfer of undertakings. (
30
) In fact, the wording of Article 8 of Directive 80/987 is almost identical to the wording of Article 3(3) of Directive 77/187 (now Article 3(4)(b) of Directive 2001/23).
62.
When adopting Directive 77/187 the Commission abandoned its initial attempt to legislate for the transfer of supplementary pension rights in a harmonised way under Article 3. The stated reason for that was because: ‘the requirements, forms and nature of [pension] obligations differ so greatly and the ways in which they are organised are so varied, that it is not possible to lay down specific Community rules in [the] Directive. Nor are these necessary to the attainment of the objectives of the Directive. For this reason, the proposed Directive confines itself to requiring Member States to ensure that employees do not lose rights and leaves to them the choice of ways and means.’ (
31
)
63.
What this indicates is that the Commission left a wide margin of discretion to the Member States as regards the means by which employees’ entitlements under supplementary pension schemes were to be protected under Directive 77/187. The same approach was taken to Article 8 of Directive 80/987 (now Article 8 of Directive 2008/94).
64.
That conclusion is also supported by the change in the wording of Article 8 of Directive 80/987. The Commission’s proposal initially stated that ‘Member States shall adopt the measures necessary …’. (
32
) This wording was then amended by the Council to read in the final version of Directive 80/987 ‘Member States shall ensure that the necessary measures are taken …’. Arguably this gives Member States an even wider range of options to achieve the protection of employees’ pension schemes. (
33
) For example, under the latter wording, they do not have to adopt the measures themselves but can require another body or even the employer to do it. (
34
)
65.
Finally, the Court has also recognised the ‘considerable latitude’ that Article 8 gives to Member States in determining the means by which the objective of Article 8 is to be achieved. (
35
)
3. Interim conclusion
66.
In sum, Directive 2008/94 is an instrument of minimum harmonisation. Article 8 has been drafted in a particularly broad way, intentionally granting ‘considerable latitude’ to Member States. For these reasons, I do not think that the Court should prescribe the particular means by which Member States achieve the objective of Article 8.
67.
A Member State can certainly choose to achieve the objective of Article 8 by introducing a ring-fencing rule that separates pension contributions from insolvency proceedings as suggested by the applicant in the present case. But a Member State is not obliged to do so, provided that it realises the protection envisaged by Article 8 in another way.
68.
This is also supported by the Commission’s Report on the Transposition of Directive 80/987 which gives the following examples of ways in which the objective of Article 8 can be met: introducing the obligation to establish reserve funds, supervision of investments, actuarial supervision, independence of the fund come what may, insurance, etc. (
36
) That indicates that Article 8 can be fully achieved using a variety of different methods, but no one method is obligatory.
69.
This answer to the referring court also makes practical sense. Directive 2008/94 does not seek to fully regulate and harmonise national pension law or insolvency law. Furthermore, insolvency and pension law are highly complicated and technical at the national level. Member States thus retain control over how insolvency proceedings are to be organised and creditors are to be ranked. (
37
) Reading Article 8 so as to require the exclusion of money in order to guarantee employees’ pension contributions is likely to interfere significantly with how Member States prioritise creditors in insolvency proceedings. (
38
) There is nothing to suggest that Article 8 or Directive 2008/94 was designed to have such far reaching effects. (
39
)
70.
As such, I propose to the Court to respond to the precise question referred as follows: Article 8 of Directive 2008/94 does not require that outstanding salary claims which were deposited with the employer in order to be paid over to a pension fund by a particular date but which were not paid by that employer into a separate account be excluded from insolvency proceedings in respect of that employer’s assets.
C – An Article 8 postscript
71.
Beyond the answer already provided to the specific and precise question asked by the referring court, I am of the view that this case merits several closing remarks. These remarks concern the outcome intended under Article 8 and the effectiveness of the methods chosen by the Member States to realise that outcome.
1. The outcome required by Article 8
72.
In the light of the discussion of Directive 2008/94 as an instrument of minimum harmonisation above, it is my view that Article 8 does not require Member States to provide complete protection of employees’ pension entitlements in the event of the insolvency of their employer. (
40
) Due to its genesis, wording and interpretation by this Court, it is clear that not everything is fully recoverable under Article 8.
73.
However, it is my view that under Article 8 Member States do have a responsibility to ensure protection of the interests of employees in respect of their immediate or prospective pension entitlements as far as possible in a manner and amount that is reasonable and proportionate.
74.
What is reasonable and proportionate can, however, not be stated abstractly. The particular context and facts of a case matter greatly. What can be indicated in this Opinion are general, illustrative criteria for carrying out the assessment of what is reasonable and proportionate. Such an assessment may include considerations such as the amount the employee(s) have already contributed to the pension fund, the amount by which their pension entitlements will be reduced as a result of the insolvency, the length of time the pension fund has been underfunded, the likelihood of an employee being re-employed and being able to make further contributions to a pension fund.
75.
In Hogan, the Court concluded that the Member State was responsible for protecting at least 50% of the value of the employees’ accrued old-age benefits. (
41
) This figure should perhaps not be regarded as being carved in stone for all potential future cases. Instead, it might be understood as a certain minimal threshold arrived at in that particular context.
76.
The application of these guidelines and the assessment of proportionality and reasonableness in the present case is a matter for the national court. From the information submitted to the Court, it would appear that the amount of pension contributions missing from the applicant’s pension fund covers a period of nine months. The German Government has submitted that it fully compensated the applicant for three of those months. According to the submissions of the applicant his monthly pension entitlements are going to be reduced by an amount of between EUR 5 and EUR 7 per month, out of a pensionable insurance period running back to (presumably at least) 1996, when the applicant started working for the general debtor. Against that background, it would appear, but remains nonetheless for the national court to verify, that the situation of the applicant is far above the minimal threshold set by the Court in Hogan.
2. The effectiveness of the methods chosen by the Member States
77.
Whilst having a large degree of liberty, it would appear that the Member States use two main methods of protecting the employees’ pension entitlements pursuant to Article 8. (
42
)
78.
The first method is setting up essentially insurance institutions which take over the insolvent employer’s liabilities in relation to their employees’ pension contributions. The second method consists of enforcing a strict legal separation between the assets of the employer and the assets of the pension fund and ensuring that the assets held by the pension fund are adequate.
79.
At the hearing, the German Government stated that Germany uses both of those methods depending on the type of pension fund an employee has subscribed to. The applicant’s pension fund in the present case is a ‘Pensionskasse’. Under German law, it appears to be protected by the second method. (
43
)
80.
For the reason stated above at point 76 of this Opinion, a case such as the present does not appear to fall below the requirements of Article 8. However, the following concluding statement ought to be made in general in relation to the second method.
81.
The separation of the assets of the employer and the pension fund alone is not sufficient to achieve the objective of Article 8. This has been alluded to above in relation to Directive 2003/41 where I pointed out that simply keeping the assets of the employer and the pension fund separate does not solve the problem presented in the present case. Advocate General Lenz, in Commission v Italy, also stated that ‘protection which is confined to the inviolability of funds … and is not concerned with the adequacy of payments into such funds is obviously insufficient’. (
44
)
82.
In order to properly execute its obligations, a Member State must ensure that the assets held by the pension fund are adequate to meet its liabilities and that repetitive underfunding in unmanageable amounts is avoided. (
45
) That requires close supervision of, and the provision of adequate insurance for, pension funds. That supervision can be achieved in a variety of ways. Employees could be given access to information relating to the payment of their pension contributions into the pension fund on a regular (say monthly or quarterly) basis. Alternatively, the State itself could provide regular public oversight of pension funds, or the employer or pension fund could be positively obliged to report on the payment of pension contributions.
83.
In sum, Member States retain considerable discretion in the way they wish to implement their obligation under Article 8. However, once they choose a way, that method must be effectively observed and enforced. The latter enforcement must include regular supervision preventing cases of serious and longer-lasting underfunding.
84.
In conclusion, Article 8 of Directive 2008/94 does not require that outstanding salary claims which were deposited with the employer in order to be paid over to a pension fund by a particular date, but which were not paid by that employer into a separate account, be excluded from insolvency proceedings in respect of that employer’s assets. However, and at the same time, the objective of Article 8 must be adequately and effectively achieved by other means.
V – Conclusion
85.
In the light of the foregoing considerations, I propose to the Court to answer the question referred by Hessisches Landesarbeitsgericht (Higher Labour Court, Hessen) as follows:
—
Article 8 of Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer does not require that outstanding salary claims which were deposited with the employer in order to be paid over to a pension fund by a particular date, but which were not paid by that employer into a separate account, be excluded from insolvency proceedings in respect of that employer’s assets. However, and at the same time, the objective of Article 8 must be adequately and effectively achieved by other means.
(
1
)	Original language: English.
(
2
)	Directive of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer (OJ 2008 L 283, p. 36).
(
3
)	Directive of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision (OJ 2003 L 235, p. 10).
(
4
)	Insolvency Regulation of 5 October 1994 (BGBl. 1994 I, p. 2866), last modified by Article 16 of the Law of 20 November 2015 (BGBl. 2015 I, p. 2010).
(
5
)	Book III of the Social Security Code, Article 1 of the Law of 24 March 1997, BGBl. 1997 I, pp. 594, 595, last modified by Article 3 of the Law of 3 March 2016 (BGBl. 2016 I, p. 369).
(
6
)	Law on Occupational Retirement Pensions of 19 December 1974 (BGBl. 1974 I, p. 3610), last modified by Article 1 of the law of 21 December 2015 (BGBl. 2015 I p. 2553).
(
7
)	Although this is a question of fact for the national court, for clarity’s sake, I understand that the employer had not paid over contributions for nine months (that is, from January to September 2013). However, the applicant is only claiming for six months of unpaid contributions. This is because, according to the written answer given by the German Government to the Court’s question, he received three months’ compensation (including unpaid pension contributions) for the months of July to September 2013 pursuant to Article 165 of the Social Security Code. This was also confirmed by the defendant at the hearing.
(
8
)	Final amount based on pro-rata calculations of the applicant’s pension contributions from January to June 2013, as indicated by the referring court.
(
9
)	Throughout this Opinion I use the terms ‘pension fund’ and ‘pension scheme’ interchangeably and in a general way. I am aware that under German law the term ‘Pensionskasse’ (or ‘pension fund’ in English) has a particular legal meaning. My use of those terms is not intended to solely address that kind of fund in German law but all kinds of supplementary pension scheme, unless otherwise stated.
(
10
)	The term used in Article 8 of Directive 2003/41 is ‘sponsoring undertaking’. ‘Sponsoring undertaking’ is defined in Article 6(c) as encompassing ‘one or more legal or natural persons, which acts as an employer or in a self-employed capacity or any combination thereof and which pays contributions into an institution for occupational retirement provision’. I am using the shorter term ‘employer’ here as it is the most directly relevant term for the present case in the context of Directive 2003/41.
(
11
)	See also point 81 et seq. of this Opinion below.
(
12
)	Again, this is ultimately to be confirmed by the national court.
(
13
)	This is also confirmed by the Report from the Commission on the Transposition of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer (Directive 80/987 being the predecessor to Directive 2008/94: OJ 1980 L 283, p. 23). The text of Article 8 remains unchanged under Directive 2008/94. The Report stated in relation to Article 8 that the essential aim was ‘to protect future claims’, COM(95) 164 final, p. 48.
(
14
)	See point 67 et seq. of this Opinion below.
(
15
)	Opinion on the proposal for a Council Directive on the approximation of the laws of the Member States concerning the protection of employees in the event of the insolvency of their employer (OJ 1979 C 105, p. 14, paragraph 1.3).
(
16
)	Opinion of Advocate General Kokott in Robins and Others (C‑278/05, EU:C:2006:476, point 61).
(
17
)	Report from the Commission on the Transposition of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, COM(95) 164 final, p. 46.
(
18
)	Opinion of Advocate General Kokott in Robins and Others (C‑278/05, EU:C:2006:476, point 65).
(
19
)	Indeed, as it has been suggested in academic literature, the loss of occupational pension rights may, for many employees, be the most serious consequence of an employer’s insolvency: Watson, P., EU Social and Employment Law, Oxford University Press, Oxford, 2014, at 13.45.
(
20
)	Report from the Commission on the Transposition of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, COM(95) 164 final, p. 52, discussing Greek laws which only protected (at least at the time of the report) the return of contributions.
(
21
)	Article 165 of the Social Security Code, Book III as identified by the German Government in its written answer and at the hearing.
(
22
)	Judgment of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraphs 37 to 40). See also Opinion of Advocate General Lenz in Commission v Italy (22/87, EU:C:1988:500, point 49).
(
23
)	That is for the months of July to September 2013. That was pursuant to Article 165 of the Social Security Code, Book III, which the German Government confirmed at the hearing implements Article 3 of Directive 2008/94.
(
24
)	See judgment of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 40) in the context of Directive 80/987 which was the predecessor to Directive 2008/94. See also judgments of 11 September 2003, Walcher (C‑201/01, EU:C:2003:450, paragraph 38); of 18 October 2001, Gharehveran (C‑441/99, EU:C:2001:551, paragraph 26); of 14 July 1998, Regeling (C‑125/97, EU:C:1998:358, paragraph 20); of 10 July 1997, Maso and Others (C‑373/95, EU:C:1997:353, paragraph 56); of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428, paragraph 3); and of 2 February 1989, Commission v Italy (C‑22/87, EU:C:1989:45, paragraph 23).
(
25
)	See among others: judgments of 10 July 2014, Julian Hernández and Others (C‑198/13, EU:C:2014:2055, paragraphs 44 and 45), and of 18 April 2013, Mustafa (C‑247/12, EU:C:2013:256, paragraph 42 and the case-law cited).
(
26
)	See Commission Proposal for Council Directive on the approximation of the laws of the Member States concerning the protection of employees in the event of the insolvency of their employer, COM(78) 141 final, p. 7 and Report from the Commission on the transposition of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, COM(95) 164 final, p. 59.
(
27
)	Council Directive of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses (OJ 1977 L 61, p. 26).
(
28
)	Council Directive of 12 March 2001 (OJ 2001 L 82, p. 16).
(
29
)	Council Directive of 17 February 1975 on the approximation of the laws of the Member States relating to collective redundancies (OJ 1975 L 48, p. 29).
(
30
)	Commission Proposal for Council Directive on the approximation of the laws of the Member States concerning the protection of employees in the event of the insolvency of their employer, COM(78) 141 final, p. 7.
(
31
)	Amended Proposal for a Council Directive on harmonisation of the legislation of Member States on the safeguarding of employees’ right and advantages in the case of mergers, take-overs and amalgamations, COM(75) 429 final, p. 8.
(
32
)	Commission Proposal for Council Directive on the approximation of the laws of the Member States concerning the protection of employees in the event of the insolvency of their employer, COM(78) 141 final, Article 7 of initial draft.
(
33
)	See Opinion of Advocate General Lenz in Commission v Italy (22/87, EU:C:1988:500, paragraph 50).
(
34
)	See a similar observation in the judgment of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 37).
(
35
)	See, for example, judgments of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 36), and of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraph 42).
(
36
)	See also Report from the Commission on the Transposition of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, COM(95) 164 final, p. 48.
(
37
)	See a similar point made in my Opinion in ENEFI (C‑212/15, EU:C:2016:427, point 28).
(
38
)	For example, in certain States employees will be treated as preferential creditors but behind secured creditors.
(
39
)	See also recital 9 of Directive 2003/41.
(
40
)	Judgments of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 57), and of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraphs 43 and 51 et seq.).
(
41
)	Judgment of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraphs 43 and 51 et seq.).
(
42
)	See generally the Report from the Commission on the Transposition of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, COM(95) 164 final, p. 46 et seq. and Commission Staff Working Document on implementation of Article 8 and related provisions of Council Directive 80/987 concerning supplementary company or inter-company pension schemes outside the national statutory social security schemes (SEC(2008) 475 final).
(
43
)	As confirmed by the German Government at the hearing, which is in addition to the compensation under Article 165 of the Social Security Code, Book III. For other types of pension fund, Article 7 of the Law on Improvement of Occupational Retirement Pensions, which is the first method, may apply.
(
44
)	Opinion of Advocate General Lenz in Commission v Italy (22/87, EU:C:1988:500, point 48).
(
45
)	Underfunding is permitted on a temporary basis under Article 16 of Directive 2003/41 but the Commission has stated that should a Member State allow temporary underfunding of pension schemes, it should adopt further measures to satisfy the immediate and prospective old-age pension entitlements of employees should their employer go into insolvency: Commission Staff Working Document on implementation of Article 8 and related provisions of Council Directive 80/987 concerning supplementary company or inter-company pension schemes outside the national statutory social security schemes (SEC(2008) 475 final).