Case C-177/05

María Cristina Guerrero Pecino

v

Fondo de Garantía Salarial (Fogasa)

(Reference for a preliminary ruling from the Juzgado de lo Social Único de Algeciras)

(Preliminary references – First subparagraph of Article 104(3) of the Rules of Procedure – Social policy - Protection of workers in the event of the insolvency of their employer – Directive 80/987/EEC (amended by Directive 2002/74/EC) –Compensation agreed at the conciliation - Payment guaranteed by the guarantee institution – Payment subject to the adoption of a judicial decision)

Summary of the Order

1. Preliminary rulings – Questions the answer to which may be clearly deduced from the Court’s existing case-law – Application of Article 104(3) of the Rules of Procedure

(Rules of Procedure of the Court, Art. 104(3))

2. Social policy – Approximation of laws – Protection of workers in the event of the insolvency of their employer – Directive 80/987 – Scope – Definition of pay – National legislation including compensation for unfair dismissal awarded by judgment or administrative decision and excluding claims established in a judicial conciliation procedure – Breach of the principle of equal treatment – Duties and powers of the national court

(Council Directive 80/987, as amended by Directive 2002/74, Art. 3(1))

ORDER OF THE COURT (Fourth Chamber)

13 December 2005 ( )

(Reference for a preliminary ruling – First subparagraph of Article 104(3) of the Rules of Procedure – Social policy – Protection of workers in the event of the insolvency of their employer – Directive 80/987/EEC (amended by Directive 2002/74/EC) – Compensation agreed at the conciliation – Payment guaranteed by the guarantee institution – Payment subject to the adoption of a judicial decision)

In Case C-177/05,

REFERENCE for a preliminary ruling under Article 234 EC from the Juzgado de lo Social Único de Algeciras (Spain), made by decision of 30 March 2005, received at the Court on 20 April 2005, in the proceedings

María Cristina Guerrero Pecino

v

Fondo de Garantía Salarial (Fogasa),

THE COURT (Fourth Chamber),

composed of K. Schiemann, President of the Chamber, N. Colneric (Rapporteur), and E. Juhász, Judges,

Advocate General: A. Tizzano,

Registrar: R. Grass,

the Court, proposing to give its decision by reasoned order in accordance with the first subparagraph of Article 104(3) of its Rules of Procedure,

after hearing the Advocate General,

makes the following

Order

1 The reference for a preliminary ruling concerns the interpretation 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 (OJ 1980 L 283, p. 23), as amended by Directive 2002/74/EC of the European Parliament and of the Council of 23 September 2002 (OJ 2002 L 270, p. 10, ‘the Directive’).

2 This reference has been made in the course of proceedings between Ms Guerrero Pecino and the Fondo de Garantía Salarial (Wages Guarantee Fund, ‘Fogasa’) concerning the latter’s refusal to pay the claimant, by virtue of its secondary liability, compensation for her unfair dismissal, the payment of that compensation having been provided for in a judicial conciliation settlement concluded between Ms Guerrero Pecino and her employer.

Legal background

The relevant provisions of Community law

3 Article 1(1) of the Directive provides that ‘[t]his Directive shall apply to employees’ claims arising from contracts of employment or employment relationships and existing against employers who are in a state of insolvency within the meaning of Article 2(1)’.

4 Article 2(2) thereof states that that directive is without prejudice to national law as regards the definition of the terms ‘employee’, ‘employer’, ‘pay’, ‘right conferring immediate entitlement’ and ‘right conferring prospective entitlement’.

5 The first paragraph of Article 3 of that directive provides:

‘Member States shall take the measures necessary to ensure that guarantee institutions guarantee, subject to Article 4, payment of employees’ outstanding claims resulting from contracts of employment or employment relationships, including, where provided for by national law, severance pay on termination of employment relationships.’

6 According to Article 4 of the Directive, Member States have the option to limit the liability of the guarantee institutions referred to in Article 3 thereof by specifying the length of the period for which outstanding claims are to be met by the guarantee institution or by setting ceilings on the payments made by that institution.

7 Under Article 10(a), the Directive ‘shall not affect the option of Member States … to take the measures necessary to avoid abuses’.

The Spanish legislation

8 Article 33(1) and (2) of Legislative Royal Decree 1/1995 of 24 March 1995 approving the amended text of the Workers’ Statute (Estatuto de los Trabajadores, BOE No 75 of 29 March 1995, p. 9654) in the version resulting from Law 60/1997 of 19 December 1997 (BOE No 304 of 20 December 1997, p. 37453, the ‘Workers’ Statute’) provides:

‘1. The Wages Guarantee Fund, an autonomous body answerable to the Ministry of Employment and Social Security, which has legal personality and the capacity to act in order to achieve its objectives, shall pay to workers the remuneration owed to them in the event of insolvency, suspension of payments, bankruptcy or judicial settlement on the part of their employers.

For the purposes of the preceding paragraph, remuneration shall include the amount which the conciliation agreement or the judicial decision recognises as such by virtue of the definition in Article 26(1), and also supplementary compensation in respect of “salarios de tramitación” (wages for the period between dismissal and disposal of the proceedings), awarded where appropriate by the competent court, although the Fund shall in no case pay, jointly or separately, an amount greater than the product of twice the daily interprofessional minimum wage and the number of days of unpaid remuneration, up to a maximum of 120 days.

2. The Wages Guarantee Fund, in the cases referred to in the previous paragraph, shall pay the compensation fixed by a judgment or administrative decision in favour of workers on account of their dismissal or of the cancellation of their contracts in accordance with Articles 50, 51 and 52(c) of this Law, up to a maximum of one year’s pay, it being understood that the daily wage, taken as the basis for that computation, may not exceed twice the minimum interprofessional wage.

The amount of compensation, for the sole purpose of its payment by the Wages Guarantee Fund in cases of dismissal or the cancellation of a contract in accordance with Article 50 of this Law, shall be computed on the basis of 25 days per year of employment and may not exceed the ceiling fixed in the previous paragraph.’

9 Article 56(1) of the Workers’ Statute is worded as follows:

‘1. Where the dismissal is held to be unfair, the employer, within five days of notice of the judgment being served, may choose between reinstatement of the worker together with payment of the “salarios de tramitación”, as prescribed in (b) below, and payment of the following sums, which must be determined by the judgment:

(a) compensation equivalent to 45 days of remuneration per year of service, periods shorter than a year being calculated pro rata on a monthly basis up to 42 monthly payments;

(b) an amount equivalent to the remuneration payable with effect from the date of dismissal up to the date on which is served notice of the judgment holding the dismissal to be unfair or up to the date on which the worker finds another job, if he is recruited before judgment is delivered and if the employer provides evidence of the sums paid in order for them to be deducted from the salarios de tramitación.

The employer shall continue to register the worker with the social security authorities during the period corresponding to the remuneration referred to in (b) above.’

10 Article 84 of Legislative Royal Decree 2/1995 of 7 April 1995 approving the amended text of the Law on Employment Procedure (Ley de Procedimiento laboral, BOE No 86 of 11 April 1995, p. 10695, the ‘LPL’), provides that, if the conciliation before an administrative service, to which the matter must first be referred pursuant to Article 63 of that decree, should fail, it is mandatory for new conciliation proceedings to take place before the competent court.

The dispute in the main proceedings and the question referred for a preliminary ruling

11 Ms Guerrero Pecino, applicant in the main proceedings, was a member of the staff of the company Camisas Leica SL (‘Camisas Leica’) for a period from 9 July 1990 to 27 December 2001, when she was dismissed by that company.

12 On 13 May 2002, in connection with proceedings before the national court, Ms Guerrero Pecino and Camisas Leica reached a conciliation agreement, under which Camisas Leica acknowledged that the dismissal of the applicant in the main proceedings was unlawful and expressly chose to compensate her in accordance with the statutory provisions applicable, that is, by paying her compensation equal to 45 days’ wages for every year of employment and the ‘salarios de tramitación’.

13 By virtue of a temporary insolvency judgment concerning Camisas Leica delivered on 5 March 2003 by the same court at the applicant’s request, Ms Guerrero Leica sought payment from Fogasa of the sum due by way of that compensation and of “salarios de tramitación” that her former employer had not paid to her.

14 Fogasa agreed to pay the applicant in the main proceedings the sum of EUR 3 338.88 as ‘salarios de tramitación’, but took the view that the worker was not entitled to the amount of EUR 8 622.42 that she claimed as compensation for dismissal, on the ground that that compensation had not been awarded by a judgment or another judicial decision.

15 Ms Guerrero Pecino challenged the refusal of Fogasa to pay her that compensation for dismissal before the Juzgado de lo Social Único de Algeciras (Single Social and Employment Law Court, Algeciras).

16 The national court notes that Directive 2002/74, which amended Directive 80/987, was already in force at the time when Camisas Leica was declared insolvent by that court.

17 That court states that it is beyond doubt that domestic Spanish law, in Article 33(2) of the Workers’ Statute, provides for the payment by Fogasa of severance pay on termination of employment relationships, but only ‘following a judgment or administrative decision in favour of the workers by reason of dismissal’. The Tribunal Supremo interpreted that provision as meaning that compensation for dismissal payable pursuant to judicial conciliation effected under the Workers’ Statute does not fall within its scope.

18 The referring court wishes to ascertain whether, despite the wording of that provision, there are valid arguments for making it possible, according to an interpretation in keeping with Community law, to include also within the scope of that provision compensation due to a worker on termination of the employment relationship pursuant to a conciliation agreement.

19 It was in those circumstances that the Juzgado de lo Social Único de Algeciras decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Having regard to the general principle of equality and non-discrimination, is the inequality in treatment created by Article 33(2) of the Workers’ Statute and by the interpretation made of that provision by the Tribunal Supremo objectively justified and, consequently, must compensation for dismissal be excluded where it is payable to a worker pursuant to judicial conciliation within the ambit of [the] Directive … ,

or, on the contrary, having regard to the general principle of equality and non-discrimination, is the inequality in treatment created by Article 33(2) of the Workers’ Statute and by the interpretation made of that provision by the Tribunal Supremo not objectively justified and, consequently, must compensation for dismissal be included where it is payable to a worker pursuant to judicial conciliation within the ambit of [the] Directive …?’

The question referred for a preliminary ruling

20 Given that the answer to the question referred may be clearly deduced from its case-law and, in particular, from Case C-520/03 Olaso Valero [2004] ECR I‑12065, the Court may, in accordance with the first subparagraph of Article 104(3) of its Rules of Procedure, give its decision by reasoned order.

21 The referring court essentially asks whether Community law precludes treatment different from that which is reserved for compensation for dismissal payable to a worker pursuant to the judgment of a court or to an administrative decision being applied to that payable to a worker pursuant to judicial conciliation.

22 By its question, the referring court seeks an interpretation of Directive 2002/74. In that respect, it must be pointed out that, in accordance with Article 3 thereof, that directive entered into force on the date of its publication in the Official Journal of the European Communities, namely on 8 October 2002, and that, in accordance with the first subparagraph of Article 2(1), ‘Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive …’ before 8 October 2005. According to the second subparagraph of Article 2(1) of that directive, the Member States ‘shall apply the provisions referred to in the first subparagraph to any state of insolvency of an employer occurring after the date of entry into force of those provisions’.

23 The following considerations apply only if Directive 2002/74 had already been transposed into national law at the relevant date, which it is for the national court to verify. If that was not yet the case, the case in the main proceedings will have to be assessed in accordance with the principles laid down in Olaso Valero.

24 The ambit of the Directive is defined in Article 1 thereof. A reading of Article 1(1) in conjunction with Article 3(1) thereof makes it clear that the Directive covers those claims made by workers that arise from contracts of employment or employment relationships, including, where provided for by national law, severance pay on termination of employment relationships.

25 It is therefore for national law to specify the compensation which falls within the ambit of the Directive. According to Spanish law, as interpreted by the Tribunal Supremo, only compensation for dismissal awarded by a judgment or administrative decision is to be borne by Fogasa in the event of the employer’s insolvency.

26 However, the Court has held that the right reserved to national law to specify the benefits payable by the guarantee institution is conditional upon observance of fundamental rights, which include inter alia the general principle of equality and non-discrimination. That principle requires that comparable situations should not be treated differently unless such difference in treatment is objectively justified (Olaso Valero, paragraph 34).

27 The Court has also held that workers who have been unfairly dismissed are in a comparable situation in so far as they are entitled to compensation where they are not reinstated (Olaso Valero, paragraph 35).

28 In considering whether the different treatment afforded to those workers under the Spanish legislation could be objectively justified, the Court has held that the cases which gave rise to the judgments in Case C-442/00 Rodríguez Caballero [2002] ECR I-11915 and Olaso Valero, cited above, did not contain any elements which could justify the difference in treatment between claims corresponding to compensation for unfair dismissal awarded by a judgment or administrative decision and claims for compensation for unfair dismissal established in conciliation proceedings (Olaso Valero, paragraphs 36 and 37).

29 As regards this case, the national court has drawn attention, in essence, to the case-law of the Tribunal Supremo, but has not advanced any new argument which the Court may not already have been able to examine.

30 Consequently, the answer to the question referred for a preliminary ruling must be that where, according to the relevant national legislation, compensation for unfair dismissal awarded by a judgment or administrative decision must be considered, under national law, as severance pay on termination of employment relationships which falls within Article 3(1) of the Directive, compensation of the same type, determined by a judicial conciliation procedure such as that at issue in the main proceedings, must also be regarded as severance pay within the meaning of that provision. The national court must leave unapplied legislation which infringes the principle of equality by excluding that compensation from the notion of ‘severance pay’ within the meaning of that directive.

Costs

31 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, the Court (Fourth Chamber) hereby rules:

Where, according to the relevant national legislation, compensation for unfair dismissal awarded by a judgment or administrative decision must be considered, under national law, as severance pay on termination of employment relationships which falls within Article 3(1) 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, as amended by Directive 2002/74/EC of the European Parliament and of the Council of 23 September 2002, compensation of the same type, determined by a judicial conciliation procedure such as that at issue in the main proceedings, must also be regarded as severance pay within the meaning of that provision. The national court must leave unapplied domestic legislation which infringes the principle of equality by excluding that compensation from the notion of ‘severance pay’ within the meaning of that directive.

[Signatures]