Judgment of the Court of 8 November 1990. - Commission of the European Communities v Hellenic Republic. - Member State's failure to fulfil obligations - Non-implementation of Council Directive 80/987/EEC of 20 October 1980 - Protection of employees in the event of the insolvency of their employer. - Case C-53/88.



European Court reports 1990 Page I-03917



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

++++

Social policy - Approximation of laws - Protection of employees in the event of the insolvency of their employer - Directive 80/987 - Scope - Exclusions authorized by the directive

( Council Directive 80/987, Art . 1(2 ) )

Summary

Article 1(2 ) of Directive 80/987 on the protection of employees in the event of the insolvency of their employer confers on the Member States the power to exclude from the scope of the directive, by way of exception, the claims of certain categories of employee .

When the exclusion is authorized by virtue of the special nature of the contract of employment or employment relationship, that exclusion is not conditional on the existence of a form of guarantee other than the one resulting from the directive, offering equivalent protection . However, when the exclusion is authorized precisely because there is such a guarantee, it is possible only if the employee enjoys protection which, while being based on a scheme whose detailed rules differ from those laid down by the directive, affords employees the essential guarantees set out therein .

Parties

In Case C-53/88,

Commission of the European Communities, represented by Dimitrios Gouloussis, Legal Adviser in the Commission' s Legal Department, and by Maria Patakia, a member of its Legal Department, with an address for service in Luxembourg at the office of Guido Berardis, also a member of the Commission' s Legal Department, Wagner Centre, Kirchberg,

applicant,

v

Hellenic Republic, represented by Yannos Cranidiotis, Special Secretary at the Ministry of Foreign Affairs, assisted by Ioanna Galanis-Maragkoudakis, lawyer in the European Community Legal Affairs Department of the Ministry of Foreign Affairs, with an address for service in Luxembourg at the Greek Embassy, 117 Val Sainte-Croix,

defendant,

APPLICATION for a declaration that, by not adopting and notifying to the Commission within the prescribed periods the laws, regulations and administrative measures necessary to comply with all the provisions of Council Directive 80/987/EEC of 20 October 1980 on the protection of employees in the event of the insolvency of their employer ( Official Journal 1980 L 283, p . 23 ), the Hellenic Republic has failed to fulfil its obligations under the EEC Treaty,

THE COURT,

composed of : O . Due, President, J . C . Moitinho de Almeida, G . C . Rodríguez Iglesias and M . Díez de Velasco, Presidents of Chamber, Sir Gordon Slynn, C . N . Kakouris, F . Grévisse, M . Zuleeg and P . J . G . Kapteyn, Judges,

Advocate General : C . O . Lenz

Registrar : D . Louterman, Principal Administrator,

having regard to the Report for the Hearing and further to the hearing on 21 June 1990,

after hearing the Opinion of the Advocate General delivered at the sitting on 11 July 1990,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 18 February 1988, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by not adopting and notifying to the Commission within the prescribed periods the laws, regulations and administrative measures necessary to comply with all the provisions of Council Directive 80/987/EEC of 20 October 1980 on the protection of employees in the event of the insolvency of their employer ( Official Journal 1980 L 283, p . 23 ), the Hellenic Republic has failed to fulfil its obligations under the EEC Treaty .

2 The object of the directive at issue is to approximate the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer and for that purpose it lays down in particular specific guarantees for the payment of employees' outstanding claims .

3 In particular, the Commission complains that, with regard to workers as a whole, the Hellenic Republic has failed to fulfil its obligations under Article 2 ( action to be taken by the national guarantee institution when a request is made for the opening of proceedings to satisfy collectively the claims of creditors ), Article 4 ( ensuring that employees are paid at least three months' wages ), Article 7 ( guaranteeing the benefits to which employees are entitled under statutory social security schemes ) and Article 8 ( guaranteeing old-age benefits under supplementary company schemes ) and that, with regard to the two categories of employee for which the Hellenic Republic requested exclusion from the scope of the directive, it did not adopt measures which are capable of providing protection which is equivalent to that resulting from the directive .

4 Reference is made to the Report for the Hearing for an account of the relevant national legislation, the course of the procedure and the pleas in law and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .

The complaints based on the failure to implement Articles 2, 4, 7 and 8 of the directive

5 The documents before the Court show that during the pre-litigation procedure the Greek Government notified the Commission that, in its view, it had already fulfilled its obligation to implement the directive by adopting Law No 1172/81 ( Official Journal of the Hellenic Republic No 177 of 9.7.1981, Series I ), which guarantees employees' claims if their employer is unable to pay wages owed to them, in particular in the event of insolvency . The Commission expressed the view that the said law was not adequate to implement the directive and in particular Articles 2, 4, 7 and 8 thereof .

6 During the procedure before the Court, the Greek Government did not dispute that the aforementioned law was not adequate to implement the directive . In its defence and rejoinder, it referred to a draft Presidential Decree intended to incorporate the directive in the national legal system . In reply to a question put by the Court, it indicated that that draft had been abandoned but mentioned the adoption of a new law, Law No 1836/89, providing, in particular, for the setting up of a special account with the name "account for the protection of employees against the insolvency of their employer" and containing an enabling provision for the adoption of a presidential decree . Finally, in January 1990, the Greek Government supplied the text of that presidential decree which, in its view, satisfied in full the obligations arising under the directive .

7 There is no need to consider whether the aforementioned presidential decree satisfactorily implements the directive . The Court has consistently held ( see most recently the judgment in Case 76/86 Commission v Germany [1989] ECR 1021, paragraph 8 ) that the scope of an action brought under Article 169 of the Treaty is delimited by the preliminary administrative procedure provided for by that article .

8 Consequently, the scope of these proceedings must be confined to consideration, having regard to the directive, of the legal situation existing in Greece when the time-limit laid down in the reasoned opinion expired .

9 It is not disputed that the measures in existence in Greece before the expiry of that time-limit were not sufficient to fulfil the obligations arising under the directive .

10 It follows from the foregoing that the Commission' s complaints regarding the failure to implement Articles 2, 4, 7 and 8 of the directive must be held to be well founded .

The complaints concerning the categories of employee who may be excluded from the scope of the directive

11 Article 1(2 ) of the directive provides that :

"Member States may, by way of exception, exclude claims by certain categories of employee from the scope of this directive, by virtue of the special nature of the employee' s contract of employment or employment relationship or of the existence of other forms of guarantee offering the employee protection equivalent to that resulting from this directive .

The categories of employee referred to in the first subparagraph are listed in the annex ."

12 The categories listed concern, under point I : "Employees having a contract of employment, or an employment relationship, of a special nature", and under point II : "Employees covered by other forms of guarantee ". In the case of Greece, the list includes, under point I, the master and the members of a crew of a fishing vessel, if and to the extent that they are remunerated by a share in the profits or gross earnings of the vessel, and, under point II, the crews of sea-going vessels .

13 The Commission claims that the Hellenic Republic ought to have provided guarantees for those two categories of employee offering them protection equivalent to that resulting from the directive .

14 That argument cannot be upheld with regard to the first category of employee . It must be pointed out that Article 1(2 ) confers on the Member States the power to exclude from the scope of the directive, albeit it by way of exception, the claims of such workers by virtue of the special nature of the contract of employment or employment relationship, and does not make that exclusion conditional on the existence of another form of guarantee offering them equivalent protection .

15 Consequently, the Commission' s complaint concerning the absence of protection equivalent to that resulting from the directive for the first of the categories of employee referred to above must be rejected .

16 However, with regard to the second category of employee it must be stated that Article 1(2 ) of the directive makes the possibility of excluding them from its scope conditional on the existence of other forms of guarantee offering the employees in question equivalent protection .

17 The Greek Government contends that the crews of sea-going vessels enjoy protection equivalent to that resulting from the directive by virtue of a number of national provisions, namely Emergency Law No 690/1945, Law No 762/1978, Article 16 of Emergency Law No 373/1968, Articles 81, 205 and 207 of the Code of Private Maritime Law and Law No 1220/81 on the Piraeus Port Authority .

18 The Commission claims, however, that the abovementioned provisions do not offer the crews of sea-going vessels protection equivalent to that resulting from the directive .

19 It should be pointed out first of all that it is evident both from the purpose of the directive, which seeks to ensure a minimum of protection for all employees, and from the fact that exclusions under Article 1(2 ) are possible only by way of exception, that the only protection which may be regarded as "equivalent" within the meaning of that provision is that which, while being based on a scheme whose detailed rules differ from those laid down by the directive, affords employees the essential guarantees set out in that directive .

20 With regard to Emergency Law No 690/1945, which provides for terms of imprisonment of up to three months for employers who do not pay the remuneration due to their employees within specified time-limits, it is sufficient to state that that is a criminal law which does not in itself guarantee employees payment of their outstanding claims in the event of their employer' s insolvency, which is the essential objective of the directive, as is clear from the first recital in the preamble thereto .

21 Law No 762/1978 on the civil liability of the representative of an employer who concludes, in Greece, a contract of employment with a seaman does not offer any guarantee in the event that the representative is insolvent .

22 Article 16 of Emergency Law No 373/1968, under which shipowners who have not satisfied the claims of the crew may not be authorized to hire Greek seamen, also fails to safeguard the seamen' s rights in question since it simply forces the shipowner to hire foreign seamen rather than Greek seamen .

23 Article 81 of the Code of Private Maritime Law, which provides that a seaman who has been dismissed is entitled to board and lodging on the vessel until he has been paid, does not guarantee the payment of remuneration in the event of the employer' s insolvency, but offers employees a different type of protection in different circumstances, namely when they are dismissed .

24 Article 205 ( which gives seamen' s claims second priority after, in particular, judicial costs and the Treasury' s claims ) and Article 207 ( which provides that, in the event of a contractual assignment of a vessel, the crew may make their preferential claims within a period of one year ) are, it is true, intended to guarantee the payment of seamen' s claims in the event of their employer' s insolvency . However, as the Commission has correctly pointed out, that guarantee is inadequate because, when vessels are sold by auction, there is not always sufficient money left over to satisfy second-priority claims .

25 Moreover, it must be pointed out that, as the Commission also emphasizes, the protection provided by Article 205 of the Code of Private Maritime Law applies only in the event of sale by auction and therefore not, as the directive requires, from the onset of the employer' s insolvency, which may be much earlier .

26 Consequently, none of the provisions relied on by the Greek Government offers the crews of sea-going vessels protection equivalent to that resulting from the directive .

27 Finally, with regard to Law No 1220/81, it must be pointed out that that law was referred to by the Greek Government for the first time at the hearing . Consequently, that plea in law must be rejected as inadmissible without it being necessary to consider the arguments which the Greek Government bases on that law .

28 The Greek Government also contends that, during the consultations which preceded the adoption of the directive, the Commission had already examined the essential points of the abovementioned legislation and acknowledged that it provided protection equivalent to that resulting from the directive . The Commission denies that allegation .

29 The Greek Government' s argument cannot be accepted . It is sufficient to point out that, although the document submitted by it shows that the EEC-Greece Interim Committee considered the Greek delegation' s request for the inclusion of certain derogations in the annex to the directive and decided to supplement the annex, as was subsequently done, in order to take account of the Hellenic Republic' s accession to the Community with effect from 1 January 1981, the documents before the Court do not show that the Commission carried out, at that time, a detailed examination of the Greek legislation at issue in order to check that it offered equivalent protection to the crews of sea-going vessels .

30 It follows from the foregoing that the complaint concerning the crews of sea-going vessels must be upheld as well founded .

31 Having regard to all the foregoing considerations, it must be stated that, by not adopting and notifying to the Commission within the prescribed periods the laws, regulations and administrative measures necessary to comply with all the provisions of Council Directive 80/987 of 20 October 1980 on the protection of employees in the event of the insolvency of their employer, the Hellenic Republic has failed to fulfil its obligations under the EEC Treaty .

Decision on costs

Costs

32 Under Article 69(2 ) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party' s pleading . Since the Hellenic Republic has failed in its main submissions, it must be ordered to pay the costs .

Operative part

On those grounds,

THE COURT

hereby :

( 1 ) Declares that, by not adopting and notifying to the Commission within the prescribed periods the laws, regulations and administrative measures necessary to comply with all the provisions of Council Directive 80/987/EEC of 20 October 1980 on the protection of employees in the event of the insolvency of their employer, the Hellenic Republic has failed to fulfil its obligations under the EEC Treaty;

( 2 ) Orders the Hellenic Republic to pay the costs .