OPINION OF ADVOCATE GENERAL

RUIZ-JARABO COLOMER

delivered on 6 June 2006 1( )

Case C‑339/05

Zentralbetriebsrat der Landeskrankenhäuser Tirols

v

Land Tirol

(Reference for a preliminary ruling from the Landesgericht Innsbruck als Arbeits- und Sozialgericht (Austria))

(Agreement with Switzerland on the free movement of persons – Jurisdiction of the Court – Direct effect of the principle of non-discrimination with regard to employment conditions – Whether periods of employment completed in Switzerland before the entry into force of the Agreement may be taken into account in Austria)

I – Introduction

1. The Landesgericht Innsbruck als Arbeits- und Sozialgericht (Regional Court, Innsbruck, sitting as labour and social court) has referred to the Court for a preliminary ruling under Article 234 EC a question on the interpretation of Article 9(1) of Annex I to the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, concluded in Luxembourg on 21 June 1999 (‘the Agreement’). ( )

2. In the question submitted, the referring court asks whether periods of employment completed in Switzerland before the entry into force of the Agreement may be taken into account as previous periods of employment currently pursued in Austria.

3. The question requires a consideration of the powers of the Court in relation to the Agreement, an analysis of the direct effect of a number of the provisions of the Agreement, and a delimitation of its temporal scope.

II – The legal framework

A – The agreements between the Community and Switzerland

4. Despite the close historical, cultural and economic ties between the European Community and Switzerland, it was only following the agreement on free trade of 1972 ( ) that a tentative relationship began, which was partially strengthened by the agreements on scientific cooperation ( ) and trans-Alpine transport. ( )

5. As a result of political, financial and social demands, on 21 June 1999, agreements were concluded in seven fields: ( ) scientific and technological cooperation, air transport, the carriage of goods and passengers by road and rail, trade in agricultural products, mutual recognition in relation to conformity assessment, public procurement, and the free movement of persons.

6. The agreements fall into three categories: integration (air transport), cooperation (scientific and technological cooperation), and liberalisation (the remainder). In the latter case, the agreements are founded on the principle of the equivalence of the legal systems of the signatories. ( )

7. The agreements entered into force on 1 June 2002. ( )

B – The Agreement on the free movement of persons

8. The Agreement on the free movement of persons is distinguished by the fact that, unlike the other agreements, the restricted powers of the Community in the field concerned meant that each Member State was required to be a party ( ) and therefore the Agreement must be classified as a mixed agreement. ( )

9. Pursuant to Article 1(d), the Agreement aims ‘to accord the same living, employment and working conditions’ to Community nationals and Swiss nationals.

10. Article 2 attaches overriding importance to the principle of equality by providing that ‘[n]ationals of one Contracting Party who are lawfully resident in the territory of another Contracting Party shall not, in application of and in accordance with the provisions of Annexes I, II and III to this Agreement, be the subject of any discrimination on grounds of nationality’. ( )

11. With that aim in mind, Article 7 stipulates that ‘[t]he Contracting Parties shall make provision, in accordance with Annex I, for the following rights in relation to the free movement of persons:

(a) the right to equal treatment with nationals in respect of access to, and the pursuit of, an economic activity, and living, employment and working conditions;

…’

12. Article 16 refers explicitly to Community law, providing that:

‘1. In order to attain the objectives pursued by this Agreement, the Contracting Parties shall take all measures necessary to ensure that rights and obligations equivalent to those contained in the legal acts of the European Community to which reference is made are applied in relations between them.

2. Insofar as the application of this Agreement involves concepts of Community law, account shall be taken of the relevant case-law of the Court of Justice of the European Communities prior to the date of its signature. Case-law after that date shall be brought to Switzerland’s attention. To ensure that the Agreement works properly, the Joint Committee ( ) shall, at the request of either Contracting Party, determine the implications of such case-law.’

13. That article must be read in conjunction with the joint declaration on the application of the Agreement, contained in the final act, which provides that the Contracting Parties must ensure that Swiss nationals may rely on the acquis communautaire in accordance with the terms of the Agreement.

14. There are also three annexes ( ) which concern the free movement of persons (Annex I), the coordination of social security systems (Annex II), and the mutual recognition of professional qualifications (Annex III).

15. More specifically, Annex I contains general provisions (Articles 1 to 5) and specific provisions for employed persons (Articles 6 to 11), self-employed persons (Articles 12 to 17), the provision of services (Articles 17 to 23), persons not pursuing an economic activity (Article 24), and the purchase of immovable property (Article 25). Annex I also includes transitional provisions and provisions for the development of the agreement (Articles 26 to 34).

16. Article 9 of Annex I lays down rules for the equal treatment of employed persons:

‘1. An employed person who is a national of a Contracting Party may not, by reason of his nationality, be treated differently in the territory of the other Contracting Party from national employed persons as regards conditions of employment and working conditions, especially as regards pay, dismissal, or reinstatement or re-employment if he becomes unemployed.

…

4. Any clause in a collective or individual agreement or in any other collective arrangements concerning access to employment, employment, pay and other terms of employment and dismissal, shall be automatically void insofar as it provides for or authorises discriminatory conditions with respect to foreign employed persons who are nationals of the Contracting Parties.

…’

C – Austrian law

17. The Republic of Austria and the Land Tirol (Province of Tyrol) implemented the Agreement with Switzerland by means of the Vertragsbedienstetengesetz (Law on contractual public servants; ‘VBG’), ( ) the Gehaltsgesetz (Law on salaries; ‘GHG’) ( ) and the Tiroler Landes- Vertragsbedienstetengesetz (Law of the Land Tirol on contractual public servants; ‘L-VGB’). ( )

18. Under Paragraph 26(2)( f), point 3, of the VBG, for the purposes of setting the date of advancement, periods of service or periods in the teaching profession must be taken into account in full in Austria where such periods were completed ‘… after 1 June 2002 in a comparable Swiss institution’.

19. The same rule is laid down in Paragraph 12(2)(f), point 3, of the GHG and in Paragraph 41(8)(3) of the L-VGB.

III – The facts, the main proceedings and the question referred for a preliminary ruling

20. A number of employees of the Land Tirol were previously employed in Swiss health institutions, but periods of service prior to 1 June 2002 were not taken into account for the purposes of determining their dates of advancement in their current posts, a fact which was reflected in their salaries. Ms Waltraud Kostner was employed for over 22 years as a theatre nurse in the St. Gallen cantonal hospital; Ms Christine Bieri-Spori for 9½ years as a nurse in Swiss public hospitals; and Ms Andrea Lawatsch for almost 2 years as a specialist care nurse at the Oberengadin Hospital in Samedan.

21. On 28 February 2005, the Zentralbetriebsrat der Landeskrankenhäuser Tirols (central works council for the hospitals of the Land Tirol) brought an action before the Landesgericht Innsbruck als Arbeits- und Sozialgericht seeking full recognition of all periods of service in Switzerland, citing the cases of the three women.

22. The Austrian court stayed the proceedings and, before delivering judgment, referred the following question to the Court of Justice for a preliminary ruling:

‘Must a Member State or one of a Member State’s regional or local authorities take account, when calculating the remuneration of contractual public servants, of periods of employment in certain institutions in Switzerland, which are comparable to institutions listed in Paragraph 41(2) of the Tiroler Landesvertragsbedienstetengesetz (or in Paragraph 26(2) of the Vertragsbedienstetengesetz 1948), without temporal limitation, or is the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, in particular Article 9(1) of Annex I thereto, rather to be interpreted as meaning that it is permissible to take account only of periods of employment by contractual public servants in Switzerland after the entry into force of that agreement on 1 June 2002?’

IV – The procedure before the Court of Justice

23. Written observations were submitted, within the period laid down in Article 23 of the Statute of the Court of Justice, by the Zentralbetriebsrat der Landeskrankenhäuser Tirols, the Italian Government and the Commission.

24. On conclusion of the written stage, none of the parties requested a hearing; accordingly, after the general meeting of 25 April 2006, the case became ready for the preparation of this Opinion.

V – Analysis of the question referred

25. It is common ground in these proceedings that periods of employment completed by a Community national in Switzerland after the entry into force of the Agreement with that country count as previous periods of service in employment subsequently completed by that Community national in a Member State.

26. The Landesgericht Innsbruck als Arbeits- und Sozialgericht asks whether, under Article 9 of Annex I to the Agreement, the same approach must be applied to periods of employment completed before the entry into force of the Agreement.

27. In that connection, although the order for reference refers only to the temporal scope of the provision, it is first of all necessary to determine whether the Court has jurisdiction to interpret the provision and, in the event that it does, to consider whether the provision has direct effect.

A – Does the Court have jurisdiction to reply to the question referred for a preliminary ruling?

28. A preliminary, but nevertheless important, consideration arises from the fact that, as I pointed out above, both the Community ( ) and the individual Member States concluded the Agreement on the free movement of persons with Switzerland because the agreement covers certain fields which do not fall within the powers of the Community.

29. In Demirel, ( ) the Court held that it had jurisdiction to interpret the provisions of mixed agreements relating to powers under primary law since such powers form an integral part of the Community legal system. ( ) In the absence of a specific statement, that jurisdiction is based on Article 220 EC, ( ) which provides that the Court is charged with ensuring that Community law is observed.

30. Article 9 of Annex I to the Agreement provides for equal treatment of employed persons, thereby laying down a commitment in a Community field, from which it follows that, because the provision relates to the free movement of workers, the Court has jurisdiction to carry out an interpretation. ( )

31. Furthermore, the establishment of a special institutional framework – the Joint Committee – does not preclude the intervention of the Court since, in accordance with the Kupferberg case-law, ( ) the duties of that committee, which are to take responsibility for ‘the management and proper application of the Agreement’ ( ) and to hear disputes concerning the application of the Agreement, ( ) are not adversely affected when a court of one of the contracting parties relies, in proceedings, on an unconditional and precise provision or refers a question for a preliminary ruling. ( )

B – Does Article 9 of Annex I to the Agreement have direct effect?

32. Having established that the Court is required to reply to the Austrian court, it is necessary to ascertain whether the principle of non-discrimination in employment, as laid down in Article 9 of Annex I to the Agreement, may be invoked before the courts of the Member States. ( )

33. In Demirel, which reflects settled case-law, the Court held that ‘an agreement concluded by the Community with non-member countries must be regarded as being directly applicable when, having regard to its wording and to the purpose and nature of the agreement itself, the provision contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure’. ( )

34. That rule applies the criteria which govern internal Community acts to international agreements, ( ) albeit with the inclusion of an additional requirement since, pursuant to Article 31 of the Vienna Convention on the Law of Treaties of 23 May 1969, ( ) account must also be taken of the wording, purpose and nature of the treaty, which implies an acceptance of the singularity of those cases. ( )

35. A study of the Agreement with Switzerland reveals that it aims to prohibit discrimination on grounds of nationality between Community nationals and Swiss nationals, in particular with regard to living, employment and working conditions (Articles 1(d) and 2), by calling on the signatories to make provision for the right to equal treatment in those fields in relation to the free movement of persons (Article 7(a)).

36. Article 9 of Annex I lays down the principle in respect of employed persons, by prohibiting different treatment on grounds of nationality with regard to ‘conditions of employment and working conditions, especially as regards pay, dismissal, or reinstatement or re-employment’ (paragraph 1), and providing that any legislation which provides for or authorises clauses which are contrary to that rule are void (paragraph [2]).

37. Thus, Article 9 creates a precise obligation which does not require any further measures, since the parties have no degree of latitude with regard to transposition in the fields referred to and must prohibit all discrimination on grounds of nationality, a requirement which may not be subject to any conditions or limitations.

38. It is clear from the foregoing that Article 9 of Annex I to the Agreement prohibits all discrimination and confers on Community and Swiss nationals certain rights which the courts of the Member States are automatically required to protect.

39. It is also important to recall that the Court has frequently upheld the direct effect of provisions of agreements with non-member countries which prohibit discrimination in employment in terms similar to those used in the Agreement with Switzerland. Thus, with regard to mixed agreements, ( ) in Pokrzeptowicz-Meyer, ( ) the Court acknowledged the direct effect of Article 37(1), first indent, of the association agreement with Poland, ( ) which provides that ‘the treatment accorded to workers of Polish nationality legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals’ (paragraphs 19 to 30). In Simutenkov, ( ) the Court upheld the direct effect of Article 23(1) of the mixed Partnership Agreement with Russia, ( ) which is similar to Article 37(1), first indent, of the association agreement with Poland (paragraphs 20 to 29).

40. Moreover, the Agreement with Switzerland has the same objective as Article 39 EC, which lays down the principle of the free movement of workers within the Community through the abolition of ‘any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment’. The wording of Article 9(1) and (4) of Annex I to the Agreement accords substantially with that of Article 7(1) and (4) of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community. ( )

41. That similarity is explained, first, in the short preamble to the Agreement, where the parties state their resolve to bring about the free movement of persons between them ‘on the basis of the rules applying in the European Community’, and, second, in Article 16 of the Agreement which contains two references to Community law with a view to ensuring that the legal acts and case-law of the Community serve as a guide in the attainment of the objectives pursued.

42. In those circumstances, it is necessary to establish whether the case-law of the Court concerning the direct effect of Article 39 EC ( ) and the direct effect of regulations may be applied to Article 9(1) and (4) of Annex I to the Agreement. ( )

43. In Metalsa, ( ) the Court held that the extension of the interpretation of a provision in the Treaty to a similarly worded provision of an agreement concluded by the Community with a non-member country depends on the aim pursued by each provision in its particular context and that ‘a comparison between the objectives and context of the agreement and those of the Treaty is of considerable importance’.

44. As I have noted, the relevant provisions of the Agreement with Switzerland and of the EC Treaty share the same aim, namely, the abolition of discrimination in employment on grounds of nationality for the purposes of securing freedom of movement for workers in the States involved.

45. Accordingly, to my mind, there is no reason why the case-law of the Court on the direct effect of Article 39 EC and Article 7(1) and (4) of Regulation No 1612/68 may not be applied to Article 9 of Annex I to the Agreement with Switzerland. ( )

C – The temporal scope of the principle of equal treatment

1. Introduction

46. ‘Everyone feels that we occupy a space whose dimensions in time are constantly increasing and this universality brought me great joy because I needed to clarify that truth which everyone suspects’. ( )

47. The Agreement on the free movement of persons and Annex I thereto contain transitional provisions but none of those provisions refer to the principle of equal working conditions.

48. Thus, Article 10 of the Agreement provides that: (a) for five years after the entry into force of the Agreement, Switzerland may limit access to an economic activity in cases of residence for a period of more than four months (paragraph 1); (b) for a maximum period of two years, the Contracting Parties may maintain the controls on the priority of workers lawfully integrated into the labour market (paragraph 2); (c) likewise, for five years following the entry into force of the Agreement, Switzerland shall reserve, within its overall quotas, specified minimum quantities of new residence permits for Community workers (paragraph 3) from certain categories (paragraph 4); (d) such provisions do not apply to employed persons who, at the time of the Agreement’s entry into force, are authorised to pursue an economic activity in the territory of the Contracting Parties or to holders of valid residence permits, since such persons enjoy certain rights from the outset (paragraph 5); and (e) no quantitative limits may be applied to frontier workers (paragraph 7). ( )

49. The transitional provisions of Annex I refer to: (a) restrictions on access to employment in the public service (Article 26); (b) the residence, right to return, and geographical and occupational mobility of employed persons (Articles 27, 29 and 30) and of self-employed persons (Articles 31, 33 and 34); and (c) employed (Article 28) and self-employed frontier workers (Article 32).

50. Thus, the provisions concerned do not contain any specific statements to guide the reply to the question referred by the Landesgericht Innsbruck als Arbeits- und Sozialgericht.

2. The solution proposed

51. For the purposes of replying to the question submitted, it is necessary to assess both the direct effect of Article 9 of Annex I to the Agreement and two basic principles, namely the principle that an agreement only creates obligations between the parties with effect from its entry into force (tempus regit actum), ( ) at which point it forms an integral part of Community law, ( ) and the principle that, although the will of the parties constitutes an interpretative guide (the subjective construction), ( ) an overall approach, ( ) which takes account of the purpose and scheme, is essential.

52. In the light of those criteria, the question referred must be answered in the affirmative by declaring that periods of employment completed in Switzerland before the entry into force of the Agreement must be taken into account in Austria for the purposes of advancement in comparable employment which is subsequently pursued in the latter State. That solution is founded on a number of arguments.

53. First, it is settled case-law that refusal to take into consideration previous periods of employment completed in the public service of another Member State constitutes unjustified indirect discrimination. ( )

54. Second, with regard to the issue of the effect of the principle of non-discrimination on grounds of nationality today, in other words, the application of a new rule in a current employment relationship, leaving aside the question of hypothetical respect for rights presumed to have been acquired in the past, from the time when the Agreement entered into force, the principle of equal treatment with regard to employment conditions has been fully applicable to ongoing legal situations.

55. Third, in order to make it easier for nationals of the Member States and Switzerland to gain access to and pursue activities and to provide services, Article 9 of the Agreement governs the mutual recognition of diplomas, certificates and other qualifications by reference to Annex III, but does not make acceptance conditional on the qualification having been awarded after the entry into force of the Agreement. That approach is also essential with regard to periods already completed. ( )

56. Fourth, if the proposed method of calculation were not accepted in the case before the Court, it would lead to individuals who have worked in Switzerland and who, after June 2002, look for a post within the territory of the Community being placed, without justification, in a less favourable situation vis-à-vis individuals who have been working in the Member States. Length of service in previous comparable employment would only benefit the latter, thereby discouraging the former from exercising the right to freedom of movement.

57. There is a further argument which bolsters the preceding ones and requires a more detailed analysis, namely that the Agreement with Switzerland entails the incorporation of the acquis communautaire, ( ) which is also the case when a State enters the Community.

58. That similarity enables the application by analogy of the case-law on the temporal scope of Community provisions in new Member States, which confirms my view.

59. In Saldanha and MTS, ( ) the Court examined whether the first paragraph of Article 6 of the EC Treaty precludes a Member State from requiring provision of security for costs by a person who is not resident and has no assets in Austria and has brought an action against a company established in that Member State, even though such a requirement is not imposed on its own nationals in the same situation and where the plaintiff is a national of another Member State and of a non-member country. However, since the facts occurred before the accession of Austria to the Community, the Court analysed the temporal scope of the provision and, in view of the fact that the Act of Accession contained no specific conditions in that regard, the Court held that it was ‘immediately applicable’ and binding on the Republic of Austria from the date of its accession, including ‘the future effects of situations arising prior to’ its accession (paragraph 14).

60. Furthermore, in Österreichischer Gewerkschaftsbund, ( ) a case with factual and legal similarities to those of the main proceedings, the Court examined the situation where, in Austria, for the purposes of calculating teachers’ remuneration, periods worked in other Member States were taken into account in full only when the public interest so required and with the approval of the competent authorities, whereas periods of employment completed in Austria were not subject to those formalities, and held that it was contrary to Community law (paragraph 51). Furthermore, when considering whether such periods included periods prior to the accession of Austria to the European Union, the Court held that ‘periods of employment in certain institutions in other Member States comparable to the Austrian institutions listed in Paragraph 26(2) of the VBG … must be taken into account without any temporal limitation’ (paragraph 56).

VI – Conclusion

61. In the light of the foregoing considerations, I propose that the Court reply to the question referred for a preliminary ruling by the Landesgericht Innsbruck als Arbeits- und Sozialgericht by declaring that:

In accordance with Article 9 of Annex I to the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, periods of service in Switzerland before the entry into force of the Agreement must be taken into account for the purposes of advancement in comparable employment subsequently pursued in one of the Member States.