61994CC0243_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
1. The Sozialgericht (Social Court) Stuttgart has in this case referred to the Court for a preliminary ruling a question on the interpretation of Article 74 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (hereinafter
" the regulation" ). (1) Article 74 provides that:
" An unemployed person who was formerly employed or self-employed and who draws unemployment benefits under the legislation of a Member State shall be entitled, in respect of the members of his family residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State ..." .
2. The question has arisen in a case in which Alejandro Rincón Moreno, a Spanish national resident in Germany, agreed to the termination of his contract of employment with effect from 15 December 1992 in return for payment to him of compensation by his employer.
3. Under German law, an employee insured against unemployment is in principle entitled to unemployment benefit by virtue of his unemployment insurance if he should become unemployed.
Paragraph 117 of the German Arbeitsförderungsgesetz (Law on Employment Promotion, hereinafter
" the AFG" ), (2) however, contains a rule providing for temporary suspension of payment of unemployment benefit to an unemployed person who has, by virtue of the termination of the employment relationship, received, for instance, compensation from his employer.
Paragraphs 119 and 119a of the AFG set out more detailed provisions on the suspension of payment of benefit during a temporary exclusion period in cases where the unemployment is attributable to the unemployed person himself.
During suspension periods, the unemployed worker remains in principle entitled to support from unemployment insurance, but in fact no benefit is paid out.
Suspension periods are subtracted from the total period for which an unemployed worker is entitled to unemployment benefit.
4. Paragraph 19(2) of the Sozialgesetzbuch V (3) and Paragraphs 155 and 155a of the AFG provide that an unemployed worker is covered by sickness insurance during temporary exclusion periods.
According to the information provided in this case, an unemployed worker is also covered during the temporary exclusion period by accident insurance in respect of certain specified accidents. (4)
5. In view of the fact that Mr Moreno received the abovementioned amount in compensation from his employer as a result of the termination of their employment relationship on 15 December 1992, the German Bundesanstalt für Arbeit (Federal Labour Office) suspended Mr Moreno ' s unemployment benefit for the period from 16 December 1992 to 21 February 1993.
The Bundesanstalt also decided that there was a temporary exclusion period from 16 December 1992 to 9 March 1993.
Mr Moreno did not for that reason receive any unemployment benefit until 10 March 1993.
6. The Bundesanstalt also refused, by decision of 6 April 1993, to pay family benefits for January and February 1993 in respect of Mr Moreno ' s children, who were living in Spain, on the ground that Mr Moreno had not for those two months been drawing
" unemployment benefits under the legislation of a Member State", as required under Article 74 of the regulation.
Mr Moreno contested that decision.
The Bundesanstalt rejected his complaint on 27 May 1993.
7. Mr Moreno thereupon brought the matter before the courts on 14 June 1993.
By order of 29 August 1994, the Sozialgericht Stuttgart referred the following question to the Court of Justice for a preliminary ruling:
" Must Article 74 of Regulation (EEC) No 1408/71 be interpreted as meaning that unemployed persons who were formerly employed and who draw unemployment benefits under the legislation of a Member State include unemployed persons registered with the Arbeitsamt (Labour Office) whose entitlement to unemployment benefit is suspended because compensation was paid to them by their employer on termination of their employment, under Paragraph 117 of the Arbeitsförderungsgesetz (Law on Employment Promotion, AFG), or because of a temporary exclusion under Paragraph 119 of the AFG?"
Observations submitted to the Court
8. Mr Moreno takes the view that the payment of compensation must be regarded as an unemployment benefit, since the purpose of the compensation is to replace unemployment benefit during the suspension period.
An unemployed worker also continues to receive unemployment benefits during a temporary exclusion period in so far as he is in receipt of employment provision services and professional advice, as well as being insured against sickness.
9. The Spanish Government argues that it is sufficient, in order to assume that Mr Moreno has drawn
" unemployment benefits under the legislation of a Member State", that he has in principle an entitlement to receive unemployment benefit.
In order to avoid discrimination, the suspension of unemployment benefit for a period cannot have any relevance in this regard.
10. The German Government contends that an unemployed worker who has received compensation must be placed on a par with someone who
" draws unemployment benefits"
within the meaning of Article 74.
During a temporary exclusion period, however, an unemployed worker receives neither unemployment benefit, benefits from his employer nor any other financial benefits, and therefore no
" unemployment benefits"
are drawn once a period of temporary exclusion has begun.
11. The Commission submits that a benefit cannot be excluded from the scope of the regulation simply because it is paid by the employer.
Compensation in respect of termination of an employment relationship must be regarded as constituting an
" unemployment benefit"
in view of the fact that it is granted as a result of unemployment and replaces unemployment benefit.
During a temporary exclusion period, unemployed workers are insured, under German legislation, against sickness and accidents, and the provision of such insurance must be regarded as an unemployment benefit.
Analysis
12. It must, in my view, follow from the words
" draws unemployment benefits"
in Article 74 of the regulation that there must have been a substantive transfer of assets in favour of an unemployed person.
The fact that a person is in principle affiliated to an unemployment scheme cannot in itself suffice to satisfy this requirement if in fact no benefits are drawn and there is consequently no substantive transfer of assets.
13. Mr Moreno can therefore be deemed to be entitled to family benefits in respect of his children only if he has, under German legislation, drawn benefits other than unemployment benefit during the periods for which unemployment benefit was suspended.
14. Compensation paid by an employer in connection with the termination of an employment contract may be regarded as reflecting a range of different circumstances.
It may constitute recognition of the services rendered, it may be designed to provide the person concerned with a financial basis for further training and so forth, and it may also be regarded as intended as
" a plaster on the wound"
for the colleague who is thus required to leave his job.
In all circumstances, however, what is involved is a sum of money granted because of the termination of the employment relationship, the level of which is determined by discussions between the parties.
In accordance with this, such compensation in Germany is subject to special fiscal- and social-law rules, such that within certain limits tax need not be paid on the amount of the compensation, just as social contributions need not be subtracted from it.
15. Paragraph 117(3) of the AFG contains rules as to what portion of the compensation must be taken into consideration in calculating the period for which unemployment benefit is suspended.
Under the German rules, the amount of compensation may therefore be regarded as consisting of two parts: one part which can be attributed to the previous employment relationship and another covering the period after cessation of that relationship.
The underlying reason for the rules on the suspension of unemployment benefit in cases where compensation has been paid appears to be that it is unreasonable to provide unemployment benefit during a period of unemployment in which the upkeep of the person in question is guaranteed through other means, namely through part of the compensation sum.
Since, therefore, the compensation sum has to be regarded as a benefit in connection with unemployment over the period for which payment of unemployment benefit is suspended, it is necessary to address the question whether any significance attaches to the fact that it is the employer who pays the benefit.
16. Article 74 of the regulation does not, however, appear to contain any requirement that the benefit must be paid by the State, by an unemployment fund, or suchlike.
According to the Court ' s consistent case-law, the manner in which a benefit is financed has no bearing on whether it is a social security benefit covered by the regulation.
Thus, in a judgment of 3 June 1992 (5) concerning benefits from an employer as a result of sickness, the Court held that:
" ... the fact that the financial burden of those benefits rests on the employer cannot remove those benefits from the scope of Regulation No 1408/71 since, according to the Court ' s case-law ..., the classification of an allowance as a social security benefit covered by the regulation does not depend upon the manner in which it is financed."
17. The true delimitation of the benefits covered by Article 74 rests on the fact that this provision refers to
" benefits under the legislation of a Member State" .
Payment of compensation by an employer cannot of course in itself be deemed to occur under the legislation of a Member State. If, however, that payment is to be regarded under German legislation as replacing for a certain period the payment of unemployment benefit, it strikes me as perfectly logical to treat receipt of such compensation as analogous to the receipt of a benefit under the legislation of a Member State.
18. The question then arises as to what significance attaches to the fact that the unemployed person is insured against illness and accidents during the temporary exclusion period ─ after expiry of the suspension period resulting from the compensation.
Both Articles 4(1)(g) and 74 of the regulation use the general term
" unemployment benefits" .
Those provisions do not specify whether this expression covers only financial benefits or whether it may also cover other benefits associated with unemployment.
None of the provisions appears to impose requirements regarding the nature of the unemployment benefits or to lay down minimum requirements regarding the benefits drawn.
As mentioned above, the crucial consideration must be regarded as being whether a substantive transfer of assets has taken place.
Thus, there may be nothing to prevent benefits which do not consist in the disbursement of money from satisfying the requirement in Article 74 if it is necessary to assume only that there has been a substantive transfer of assets in favour of the unemployed person.
The fact that under German legislation unemployed persons enjoy insurance cover against sickness and accidents implies, in the first place, expenditure for the unemployment fund or the State, which meet the expenditure associated with those risks, and, secondly, an economic advantage for the unemployed person, who does not himself have to spend money for that purpose.
There is thus a substantive transfer of assets in favour of the unemployed person, and it must therefore be assumed, in my view, that the person is drawing unemployment benefits under the legislation of a Member State.
19. In support of this conclusion, it may also be mentioned that the Court has held, in a case (6) concerning the interpretation of the expression
" unemployment benefits"
in Articles 67(1) and 4(1)(g) of the regulation, that since the wording of those provisions did not exclude benefits to promote vocational training for employed workers,
" in order to interpret Article 4(1)(g) in conjunction with Article 67(1) of Regulation No 1408/71 of the Council it is therefore necessary to have regard to the fundamental aim of Article 51 of the Treaty, which is to establish the most favourable conditions for achieving freedom of movement and employment for Community workers within the territory of each Member State."
20. I for that reason take the view that Article 74 of the regulation must be interpreted as meaning that the provision of sickness and accident insurance is also covered by the expression
" unemployment benefits" .
21. I accordingly consider it unnecessary in the present case to address the question whether employment promotion services provided, for instance, in the form of advice can be regarded as constituting
" unemployment benefits" .
22. The reply to the question submitted ought therefore in my view to be that Article 74 of the regulation must be interpreted as meaning that the expression
" unemployed person who ... draws unemployment benefits under the legislation of a Member State"
includes unemployed persons registered with the labour office whose entitlement to unemployment benefit has, under rules such as those laid down in German legislation, been suspended because compensation was paid to them by their employer on termination of their employment or because of a temporary exclusion period, if, under rules such as those laid down in German legislation, they are covered by sickness and accident insurance during that temporary exclusion period.
23. Mr Moreno and the Spanish Government also submit that the rule in Article 73 of the regulation, in conjunction with Article 1 thereof, concerning members of an employed or self-employed person ' s family, may also be applied in this case, since cover by sickness and accident insurance must mean that an unemployed worker satisfies the regulation ' s definition of a
" worker"
during a temporary exclusion period.
Against this, the German Government and the Commission argue that such insurance cannot bring Mr Moreno within the scope of Article 73.
The Commission adds that Article 74 constitutes a
lex specialis
in relation to Article 73.
The Commission also questions whether Mr Moreno can come within the definition of the term
" employed person"
used in both Article 73 and Article 74 of the regulation.
24. It is clear from the order for reference that the national court did not have any doubt that Mr Moreno must be included within the group of persons covered by the regulation, just as it has based itself on the assumption that Mr Moreno is to be regarded as an unemployed worker such that the justification of his claim falls to be determined under Article 74 of the regulation.
The national court is for that reason seeking only an interpretation of the expression
" draws unemployment benefits under the legislation of a Member State"
featuring in Article 74.
It follows from the Court ' s case-law (7) that:
" Article 177 of the Treaty, based on a clear separation of functions between national courts and the Court of Justice, does not permit the latter to take cognizance of the facts of the case or to pass judgment on the reasons for requests for interpretation.
The question whether the provisions or concepts of Community law, whose interpretation is requested, are in fact applicable to the case in question, lies outside the jurisdiction of the Court of Justice and falls within the jurisdiction of the national court.
Where a court or tribunal requests the interpretation of a Community provision or of a legal concept connected with it, it must be assumed that that court or tribunal considers such interpretation necessary to the solution of the dispute before it."
25. I do not for that reason find it necessary to consider whether Mr Moreno can be regarded as being an employed person within the meaning of the regulation, or whether Article 73 of the regulation concerning persons in employment may be applicable to the present case.
Conclusion
26. I accordingly propose that the Court reply as follows to the question which has been submitted to it:
Article 74 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as amended by Council Regulation (EEC) No 3427/89 of 30 October 1989, must be interpreted as meaning that the expression
" unemployed person who ... draws unemployment benefits under the legislation of a Member State"
includes unemployed persons registered with the labour office whose entitlement to unemployment benefit has, under rules such as those laid down in German legislation, been suspended because compensation was paid to them by their employer on termination of their employment or because of a temporary exclusion period, if, under rules such as those laid down in German legislation, they are covered by sickness and accident insurance during that temporary exclusion period.
(1) .
(1) As amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6) and Council Regulation (EEC) No 3427/89 of 30 October 1989 (OJ 1989 L 331, p. 1).
(2) Bundesgesetzblatt
I, p. 582.
(3) Sozialgesetzbuch ─ Fünftes Buch, Gesetzliche Krankenversicherung (Social Security Code ─ Book V, Statutory Sickness Insurance).
(4) See Paragraph 165 of the AFG.
(5) Case C-45/90
Paletta
[1992] ECR I-3423, paragraph 18.
(6) Judgment in Case 375/85
Campana
v
Bundesanstalt für Arbeit
[1987] ECR 2387.
(7) See, for example, the judgment in Case 10/69
Portelange
v
Marchant
[1969] ECR 309.