61985CC0375_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
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Mr President,
Members of the Court,
A - Facts
1 . The plaintiff in the case pending before the Bundessozialgericht which gave rise to this reference for a preliminary ruling is an Italian national; he worked in the Federal Republic of Germany from 1964 in the television repair business and from July 1975 as a skilled radio and television technician, having passed his apprentice' s examination . From February 1977 to June 1980 he worked in the same field in Italy - where he paid compulsory insurance contributions - and subsequently he worked once more in the Federal Republic of Germany in August and September 1980 . From 6 October 1980 he took a course in Germany in preparation for the master craftsman' s examination ( radio and television ), which he passed in July 1981 .
2 . Under the Arbeitsfoerderungsgesetz ( Law on the promotion of employment opportunities, hereinafter referred to as "the employment law ") ( as last amended by the fifth amending law of 23 July 1979 ) assistance for such vocational training - extension of professional knowledge and adaptation of such knowledge in the light of technical progress - is provided in the form of the payment of expenses and the grant of an allowance ( Articles 41, 43, 44 and 45 of the employment law ). In July 1980, the plaintiff submitted an application for such assistance . That application was, however, rejected by the competent authority, the Bundesanstalt fuer Arbeit ( Federal Employment Office, hereinafter referred to as "the Bundesanstalt "), the defendant in the main proceedings . The application was rejected on the ground that the plaintiff had not - contrary to the requirements of Article 46*(1 ) of the employment law - exercised an activity subject to compulsory contributions within the meaning of the employment law for a minimum of two years during the three ( or five ) years prior to the beginning of the course . Nor clearly did the plaintiff satisfy the alternative requirements contained in Article 46*(2 ), namely receipt of unemployment benefit or of benefit under an unemployment assistance scheme prior to the course; on the other hand, he did satisfy - according to the evidence he submitted in these proceedings - the other conditions for obtaining assistance such as the necessary aptitude, personal prospects of success and opportunities opened up by the qualification sought . That was, moreover, confirmed by his success in the master craftsman' s examination .
3 . The plaintiff was unsuccessful in his objection to the Bundesanstalt, in the action he brought before the Sozialgericht ( Social Court ) and in proceedings brought before the Landessozialgericht ( Higher Social Court ). The Landessozialgericht expressly emphasized that it was inconceivable to state that the conditions could be satisfied by relying on provisions of Community law and thus taking into account periods of employment completed in Italy . In that connection the Landessozialgericht considered that no support was to be derived from Article 67 of the chapter of Regulation No 1408/71 ( 1 ) dealing with unemployment, which provides for periods of insurance or employment completed in another Member State to be taken into account, because Article 67 applies - as is shown by the definition of the scope of the regulation in Article 4*(1)*(g ) (" unemployment benefits ") - only to benefits paid in respect of existing unemployment and not to vocational training measures for persons who are not unemployed . Similarly it is not possible to rely on Article 7 of Regulation ( EEC ) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community ( 2 - which provides for equality of treatment with national workers with regard to access to training in vocational schools and retraining centres - because no provision is made in this context for the calculation of periods of employment .
4 . On appeal by the plaintiff the matter is now pending before the Bundessozialgericht . In that court' s view, it is clear that in the plaintiff' s case the conditions laid down in Article 46*(1 ) of the employment law are not satisfied according to German law because only activities carried on in the Federal Republic of Germany are relevant for these purposes . The Bundessozialgericht also takes the view that the plaintiff cannot rely - for the purpose of having his period of employment in Italy taken into account - on Article 7 of Regulation No*1612/68 because he is not in fact treated differently from German workers, the sole criterion in relation to Article 7 .
5 . The Bundessozialgericht nevertheless has doubts as to whether Article 67*(1 ) of Regulation No 1408/71 may not be applicable in this case . It is inclined to conclude, having regard primarily to Article 4*(1)*(g ) of the regulation, that the provision applies solely to rights arising from existing unemployment . However, it considers it defensible to interpret the provision as applying also to preventive measures - when there is a risk of unemployment . In that regard it refers in the first place to the fact that the employment law - as is expressly stated in the official explanatory memorandum on that law - is concerned in large part with the prevention of unemployment in the future . Secondly, the Bundessozialgericht refers to the Court' s judgment in Case 16/72, ( 3 ) in which it held that in view of the objective of Article 51 of the EEC Treaty ( which is to establish the most favourable conditions for achieving the freedom of movement and employment for Community workers ) the concept of social security must be regarded as including preventive measures .
6 . In view of this problem of interpretation, the Bundessozialgericht, by an order of 15 October 1985, stayed the proceedings and, under Article 177 of the EEC Treaty, referred the following question to the Court for a preliminary ruling :
"Does Article 67 ( 1 ) of Regulation ( EEC ) No 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, in conjunction with Article 4*(1)*(g ) of that regulation, also apply to benefits which are accorded by a Member State not in respect of present unemployment but with a view to preventing future unemployment, so that for the purposes of vocational training assistance under Article 46*(1 ) of the Arbeitsfoerderungsgesetz insurance periods completed in other Member States are also to be regarded as periods of 'activity subject to compulsory contributions' ? "
7 . Written observations on that question were submitted by the plaintiff in the main proceedings, the government of the Federal Republic of Germany, the government of the Italian Republic and the Commission of the European Communities . Since those observations have been summarized in an excellent manner in the Report for the Hearing, I may, in order to simplify matters, refer to that report . After a detailed study of all the arguments submitted to the Court I consider that the request for a preliminary ruling calls for the following comments .
B - Substance
1 . 8 . In view of the way in which the Bundessozialgericht drafted its question, the sole question for the Court to consider is whether Regulation No 1408/71 is applicable solely to benefits granted in respect of existing unemployment or whether it may be interpreted more widely so as also to cover benefits of a preventive nature, intended to avoid the onset of unemployment ( in which case it may be necessary to determine precisely what relationship such benefits must have with unemployment ). We are not, on the other hand, called upon to decide whether all the vocational training measures covered by Articles 41 to 46 of the employment law, for which the explanatory memorandum on the draft legislation to which the Bundessozialgericht referred may be of significance, must be regarded as falling within the field of unemployment insurance ( as the plaintiff in the main proceedings appears to think ). Nevertheless, the objectives of certain measures ( I am thinking, for example, of measures for promoting occupational advancement, for the organization of a professional examination or for the training of instructors - Article 43*(1 ), ( 4 ) and ( 5 ) of the employment law ) strongly support the view that, precisely because they are concerned mainly with training policy and have only a tenuous link with protection against unemployment, they should not be taken into account where the latter is the principal concern .
9 . That impression is further reinforced by the well-known commentary on the employment law by Mr Gagel and others, for example where it is emphasized, in relation to Article 41 ( which defines vocational training ), that it is irrelevant whether or not a beneficiary of one of the measures is already established in a permanent position, or in relation to Article 44 ( which deals with the payment of training allowances ), that it is not necessary for persons seeking a professional qualification to be under the threat of unemployment .
10 . Conversely, it is clear that no decisive weight can be given to the reference made by the plaintiff to the importance, emphasized by the Council, of vocational training ( see the Council' s general guidelines for a Community programme on vocational training - Official Journal, English Special Edition, Second Series, Vol . IX, p . 50 ) or his reference to the principle of freedom of movement and its objective of improving living and working conditions, from which a worker may be prevented from benefiting where periods of work abroad are not taken into account in calculating periods of employment for the purposes of measures such as those provided for by the employment law . I think it is clear that such general considerations are insufficient, of themselves, to justify the application of the social insurance provisions contained in Regulation No 1408/71 . On the contrary, the need for their application must follow, in the first place, from an interpretation of the provisions of Community law adopted under the EEC Treaty . Only if there are doubts must recourse be had, in the interpretation of that law, to the principles and objectives of freedom of movement laid down by that treaty .
2 . 11 . In addition to the points discussed above, a variety of considerations were put forward - as the Court will recall - regarding the resolution of the problem raised in this case . A number of those considerations are of so little assistance in this case that I should like to discard them at the outset .
12 . ( a ) That is true of the reference to Article 5 of Regulation No*1408/71 ( according to which the Member States are to specify the legislation and schemes referred to in Article 4*(1 ) and ( 2 ) in declarations which are then published ) and to the declaration of the Federal Republic of Germany pursuant to that provision published in Official Journal 1973, C 12, p . 12, which refers, under the heading "Laws, regulations and administrative provisions governing the unemployment insurance", to the "Law on the provision of employment ( Arbeitsfoerderungsgesetz ) of 25 June 1969, with amendments and supplements, in the applicable version ".
13 . The declaration merely indicates - although it does not exclude any part of the law, which might have been possible - that the provisions relating to unemployment insurance are included in the law and not that all the contents of the law must be regarded as falling within that field . That is apparent from the diversity of the measures falling within the expression "vocational training" ( included in which are measures for the management of the labour market, namely adjustment to changes in the pattern of demand ); it becomes absolutely clear on reading the summary of the contents of the law, which shows - in this connection it is sufficient to refer to the passages relating to placement, vocational counselling and training, vocational assistance for handicapped persons - that the law does not consist solely of rules relating to the "branch of social security" concerned with unemployment insurance .
14 . ( b ) The same may be said in relation to the plaintiff' s reference to two judgments of the Court, those in Cases 187/73 ( 4 ) and 171/82, ( 5 ) which, on closer inspection, do not in fact provide any convincing support for his point of view .
15 . It is certainly important, according to the first of those judgments, to know whether a legally defined position has been conferred on the person concerned and whether periods of employment, of membership or of contributions have been completed . However, in the light of the question of delimitation in that case those considerations were relevant only in order to establish whether the case was not one of social assistance, for which need is an important criterion . The question of delimitation with which this case is concerned was not at issue in Case 187/73 and it certainly cannot be assumed that the presence of criteria which are generally characteristic of social security justify the conclusion that the matter falls within the field of unemployment insurance .
16 . In the second of those judgments ( concerned with allowances paid according to French law under a guaranteed-income early retirement scheme ), the sole question at issue was whether the situation in question fell within the scope of Regulation No 1408/71 regarding old-age pensions . Even though the judgment emphasized the importance of the fact that the relevant rules pursued an objective related to employment policy ( in that they helped to release jobs for the benefit of younger unemployed persons ), that certainly does not justify the conclusion that benefits involving the voluntary relinquishment of employment and paid with the aim of maintaining order in the labour market always fall within the concept of unemployment insurance for the purposes of Regulation No 1408/71 .
17 . ( c ) Finally, an equally negative approach must be adopted towards two of the considerations put forward by the Federal Republic of Germany relating, in the first place, to the origins of Regulation No*1408/71 and, secondly, to the general definition of the purpose of the regulation ( namely to provide protection against risks which are beyond the wishes and powers of control of the individual ).
18 . In that respect it must be acknowledged that the wording of Article 4 of Regulation No 1408/71 repeats virtually word for word the corresponding provision of Regulation No 3 ( Article 2 ); that when Regulation 1408/71 was adopted it was not intended to extend the list of benefits ( as is shown by the passage in the preamble thereto which states that the aim is to bring together all the basic provisions for implementing Article 51 of the EEC Treaty ); and that - as is indicated in the remainder of the preamble - the main focus at the time, in the field with which this case is concerned, was without doubt benefits paid in respect of actual unemployment . It must not be forgotten, however, that changes have been taking place in that field for a number of years with a view to combating the risk of unemployment also by means of preventive measures .
19 . In those circumstances I think the Commission is correct to say that in the context of Community law on training ( as is shown, for example, by Article 49 of the EEC Treaty ) a static method of interpretation is inadequate; a dynamic interpretation is necessary . Such an interpretation must make it possible to apply existing provisions in a flexible manner - provided there are no unequivocal reasons to the contrary; in safeguarding freedom of movement from the point of view of social legislation it must avoid, if at all possible, constant express amendment of the rules and, by means of reasonable and forward-looking interpretation, ensure that the coordination provisions are applied so as to implement that important Treaty principle in the most effective manner .
20 . On the other hand, as regards the general definition of the purpose of Regulation No 1408/71 and, therefore, of the law relating to social insurance as a whole, there are doubts whether the factors referred to are well-founded, which doubts arise from the question whether - for example, in the fields of sickness and maternity - the situations really are beyond the wishes and powers of control of the individual . Moreover, the Commission has rightly drawn attention more generally to the ambiguous nature of the concept of a voluntary act, which is not really justified in connection with measures to which a person subjects himself in order to avoid the risk of detrimental consequences . It is therefore hard to approve of appeal to considerations of that kind in order to establish criteria for defining the matters covered by Regulation No 1408/71 unless - and this remains to be seen - there are other important reasons for proceeding in that manner .
3 . 21 . It is clearly Article 4 of Regulation No 1408/71, which defines the matters covered by the regulation, that lies at the heart of the problem of interpretation in this case .
22 . In examining Article 4 - and this is the objection which must be made to the plaintiff' s submission - it is certainly not possible to focus on the expression "branches of social security" as the decisive factor in order to conclude that all the provisions relating to such a "branch" automatically fall within the scope of the regulation . On the contrary, what is important is the list of benefits contained in that provision and, as regards this case, the reference in subparagraph ( g ) to unemployment benefits . If attention is focused on that term, there is clearly considerable support for that assumption that it refers to benefits in respect of existing unemployment; that assumption is further supported by other language versions ( such as the Italian, French, English and Dutch versions ) and is consistent with the fact that in Chapter 6, headed "Unemployment benefits", Articles 68 to 71 deal expressly with unemployed persons .
23 . There are, however, strong reasons not to persist in such an assumption but to recognize, on the contrary, that it is not completely clear that such an approach will lead to the exclusion of preventive benefits granted with a view to future unemployment from the scope of Regulation No 1408/71 . That is also true of the references made by the German Government : to the heading of Chapter 6 in Regulations Nos*1408/71 and 574/72, "Unemployment benefits"; to the fact that according to Article 80 of Regulation No 574/72, on the application of Article 67 of Regulation No 1408/71, the person concerned must submit to the competent institution in unemployment matters a certified statement specifying the periods of insurance or employment; and to the fact that Annex II to Regulation No 574/72, under the heading "Unemployment and family benefits", refers to the Bundesanstalt as the competent institution for Germany - as we have seen that body is also responsible for the vocational training measures provided for by the employment law .
24 . One reason for a broad interpretation of Article 4*(1)*(g ) - quite apart from the fact that provisions for ensuring compliance with the important principle of freedom of movement cannot in general be interpreted strictly - can be seen in the fact that Article 67 of Regulation No 1408/71, to which the Bundessozialgericht attached particular importance and which provides for the aggregation of periods of insurance and employment, does not refer to existing unemployment but in a very general manner to the "right to benefits ".
25 . It must also be noted that Article 4*(1)*(a ) uses wording - in respect of sickness and maternity - which corresponds to that of subparagraph ( g ). However, it appears clear that in the field to which subparagraph ( a ) relates it is not necessary for the relevant risk to have materialized but that - even if it is not stated expressly, as in subparagraph ( b ) - this field includes preventive measures ( vaccinations, prophylactic treatment and, in the case of maternity, treatment during pregnancy ).
26 . In addition, as regards the Court' s judgments concerning Regulation No 1408/71 and the regulations it replaced, it may be observed that in the Court' s judgment in Case 16/72 ( to which the order for reference expressly refers ) the Court emphasized in a general manner that Regulation No 3 must be interpreted with regard to the fundamental aim of Article 51 of the EEC Treaty and that it was therefore possible to regard "the concept of social security ... as including the aim of preventing the spread of disease" (*(( 1972 )) ECR 1150, paragraph 4 ).
27 . I should also mention in this context that the Court ruled in Case 249/83 ( 6 ) that legislation falls within the field of social security covered by Regulation No 1408/71 only if it satisfies "in particular, the condition of covering one of the risks specified in Article 4*(1 ) of the regulation ".
28 . Moreover, it may be thought significant that, according to the Court' s judgment in Case 171/82, social security benefits must be classified primarily according to their purpose and object and according to the basis on which they they are calculated and the conditions for granting them, whilst characteristics which are purely formal are not considered relevant criteria .
29 . As regards the structure of the employment law - which provides for a preferential right to benefit from vocational training measures for unemployed persons in the process of retraining and for persons who are under an individual and direct threat of unemployment ( Article 44, in the case, for example, of a person who has already been declared redundant or where insolvency proceedings have been commenced in respect of the undertaking concerned ) - the unavoidable conclusion is that preventive measures must be regarded as falling within the benefits referred to in Article 4*(1)*(g ) of Regulation No 1408/71 and that, conversely, it would be absurd to exclude, for example, measures in respect of imminent unemployment ( within the meaning of Article 44 of the employment law ) for workers who have not completed sufficient periods of employment in Germany and therefore to grant benefits in such a case only once the person has become unemployed ( in which case Article 67 of Regulation No 1408/71 clearly provides for the aggregation of periods of insurance and employment ). The interpretation of a provision should not, if it can possibly be avoided, lead to such absurd - it might even be said, unjust - consequences . However, such consequences can be avoided in this case precisely because Article 4*(1)*(g ) does not unequivocally exclude benefits in respect of imminent unemployment .
30 . That means that as a matter of principle, in any event, it can be said that Regulation No 1408/71 does not apply solely to benefits arising after the commencement of unemployment but also to those intended to prevent unemployment in the future . That conclusion is, moreover, the one which follows from the Bundessozialgericht' s discussion of the matter .
31 . I am of course inclined to the view that that statement of principle is not in itself sufficient and that it is necessary to add some clarification, in particular with regard to the question of demarcation raised by the German Government . In reality it is undeniable that every training measure ( even schooling or general education ) can be said to reduce the risk of unemployment on an ever more demanding labour market . However, it is also clear - and has been from the outset - that not all such measures can be held ( as preventive measures ) to fall within the field of unemployment insurance even though it may be argued that they are partially financed from unemployment insurance contributions ( which is, according to the employment law, one of the conditions for the grant of benefits ). It is entirely reasonable and proper to require that - in a case where the person concerned is in employment - vocational training assistance must have a clear, specific and close link with the struggle against unemployment when it is proposed to rely upon the provisions adopted for that purpose .
32 . That seems also to be the view of the representative of the Italian Government, who stated during the hearing that there must be a close relationship between the benefit and the risk to be avoided and that unemployment must therefore be the legal basis for the benefit sought if it is to be classified as falling within the employment field . That must be assessed in each case and it may be assumed that the conditions are satisfied when there is a high likelihood of unemployment specifically for the applicant ( for example, when he has been given notice or his contract is for a fixed term - as stated in the aforementioned commentary on Article 44 of the employment law ) or when the applicant belongs to an occupational group which is considered to be in particular danger because the business sector in question has no future .
33 . In my view an affirmative reply, as a matter of principle, to the question posed by the Bundessozialgericht is possible only subject to that restriction, the scope of which will have to be defined gradually .
4 . 34 . The Commission went on to discuss Article 7 of Regulation No*1612/68, which was not, of course, referred to by the Bundessozialgericht in its question and according to which a worker who is a national of a Member State has access, by virtue of the same right and under the same conditions as national workers, to training in vocational schools and retraining centres . It discussed that provision in response to the view expressed by the Bundessozialgericht that Article 7 was of no assistance in this case because the relevant provision of the employment law, namely Article 46, did not make any distinction on grounds of nationality ( so that it was unnecessary to pursue the matter further ).
35 . In view of the interpretation of Regulation No 1408/71 which I have proposed, and which should permit a satisfactory solution to the question raised in the main proceedings, it is not in fact necessary also to consider Article 7 of Regulation No 1612/68 . I will nevertheless do so briefly since it is clear that if Article 7 operated in the manner assumed by the Commission it would have much more far-reaching consequences for the application of the employment law than those which would arise from reliance merely on Article 67 of Regulation No 1408/71 as outlined above, because according to the Commission' s approach periods of employment completed abroad would always be treated in the same manner as periods completed in Germany for the purposes of vocational training measures .
36 . Let me state my conclusion immediately : I do not consider it possible to agree with the Commission' s viewpoint .
37 . It must, of course, be recognized that according to the Court' s judgment in Case 152/73 ( 7 ) ( on which the Commission placed much emphasis ) the rules on equality of treatment contained in Article 7 of Regulation No 1612/68 forbid not only overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result (*(( 1974 )) ECR 164, paragraph 11 ).
38 . There is, moreover, something to be said for the conclusion that that applies to the criterion laid down by Article 46 of the employment law ( contribution to German unemployment insurance for two years ), since that criterion is, as a rule, more easily satisfied by German workers, who will have completed periods of employment abroad only in rare cases .
39 . On the other hand, it must be acknowledged that equality of treatment by means of the taking into account of contribution periods abroad is precisely an objective which cannot be attained by means of Article 7 of Regulation No 1612/68 . That is the clear result of the Court' s judgment in Case 110/79, ( 8 ) which concerned the question whether - as regards the requirement of affiliation to a retirement pension scheme - insurance in another Member State may be regarded as equivalent . It was emphasized in particular in that judgment that the principle of equality of treatment with national workers laid down in Regulation No 1612/68 is not intended to create rights by virtue of insurance periods completed in another Member State if such rights, in the case of nationals of the host State, do not derive from national provisions (*(( 1980 )) ECR 1456, paragraph 6 ). Consideration must also be given to the fact that if periods of insurance completed abroad are taken into account and if the right to benefits is founded on that basis, mechanisms for financial equalization between social security institutions in the various Member States are necessary . Such mechanisms are included in the structure of Regulation No 1408/71, but nothing similar is provided for in connection with Article 7 of Regulation 1612/68 .
40 . Contrary to the Commission' s view, therefore, it does not seem possible to deduce from Article 7 of Regulation No 1612/78 an obligation to interpret the employment law and in particular Article 46 thereof in such a manner that periods of contribution completed abroad are also a sufficient basis for an entitlement to benefits .
C - Conclusion
5 . 41 . In view of all the foregoing I propose that the reply to the question posed by the Bundessozialgericht should be as follows :
Article 67*(1 ) of Regulation ( EEC ) No 1408/71, read in conjunction with Article 4*(1)*(g ), is also applicable to a right to benefits granted by a State with a view to avoiding a specific and imminent risk of future unemployment . If the benefits are dependent upon the pursuit of a specific activity subject to compulsory contribution, account must consequently also be taken of periods of employment completed in other Member States .
(*) Translated from the German .
( 1 ) Regulation ( EEC ) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving with the Community ( Official Journal, English Special Edition 1971 ( II ), p.*416 ).
( 2 ) Official Journal, English Special Edition 1968 ( II ), p . 475 .
( 3 ) Judgment of 16 October 1972 Allgemeine Ortskrankenkasse Hamburg v Landesversicherungsanstalt Schleswig-Holstein (( 1972 )) ECR 1141 .
( 4 ) Judgment of 28 May 1974 Callemeyn v Belgium (( 1974 )) ECR 553 .
( 5 ) Judgment of 5 July 1983 Valentini v Assedic (( 1983 )) ECR 2157 .
( 6 ) Judgment of 23 March 1985 Hoeckx v Openbaar Centrum voor Maatschappelijk Welzijn (( 1985 )) ECR 982, paragraph 12 .
( 7 ) Judgment of 12 February 1974 Sotgiu v Deutsche Bundespost (( 1974 )) ECR 153 .
( 8 ) Judgment of 24 April 1980 Coonan v Insurance Officer (( 1980 )) ECR 1445 (" Sickness insurance for the elderly ").