OPINION OF ADVOCATE GENERAL

WATHELET

delivered on 7 September 2016 ( 1 )

Case C‑496/15

Alphonse Eschenbrenner

v

Bundesagentur für Arbeit

(Request for a preliminary ruling from the Landessozialgericht Rheinland-Pfalz (Higher Social Court, Rhineland-Palatinate, Germany))

‛Reference for a preliminary ruling — Freedom of movement for workers — Article 45 TFEU — Regulation (EU) No 492/2011 — Article 7 — Principle of non-discrimination — Frontier worker subject to income tax in the Member State of residence — Directive 2008/94/EC — Benefit paid by the Member State of employment in case of the insolvency of the employer — Specific rules of calculation — Notional taking into account of the wage tax of the Member State of employment)’

I – Introduction

1. The present request for a preliminary ruling, lodged at the Court Registry on 22 September 2015 by the Landessozialgericht Rheinland-Pfalz (Higher Social Court, Rhineland-Palatinate, Germany), concerns the interpretation of Article 45 TFEU and Article 7 of Regulation (EU) No 492/2011 of the European Parliament and of the Council of 5 April 2011 on freedom of movement for workers within the Union. ( 2 )

2. This request has been made in the context of a dispute between Mr Alphonse Eschenbrenner, a French national residing in France, and the Bundesagentur für Arbeit (Federal Employment Agency, Germany, ‘the Agency’). That dispute concerns the notional taking into account by the Agency of the tax on German salaries when determining the insolvency benefit payable to Mr Eschenbrenner following the insolvency of his employer in Germany.

II – Legal context

A – International law

3. Article 13 of the Tax Convention, signed in Paris on 21 July 1959, between the French Republic and the Federal Republic of Germany for the avoidance of double taxation and the establishment of rules for mutual legal and administrative assistance in the field of income and wealth tax and in the field of business tax and land tax (‘the Tax Convention’) provides: ‘(1) Subject to the provisions of the following paragraphs, income from dependent work shall be taxable only in the Contracting State in which the personal activity in respect of which it is received is carried out. … … (5) (a) By way of exception [to paragraph 1], income from dependent work earned by persons who work in the frontier area of one Contracting State and who have their permanent home in the other Contracting State, to which they normally return each day, shall be taxable only in that other State; …’

4. Article 14 of the Tax Convention provides: ‘(1) Salaries, wages and similar remuneration, and retirement pensions, paid by one of the Contracting States, by a Land or by a legal person of that State or Land governed by public law to natural persons resident in the other State in consideration for present or past administrative or military services shall be taxable only in the first State. … (2) The provisions of the first sentence of paragraph 1 shall also apply: 1. to amounts paid as statutory social insurance; …’

B – EU law

1. Regulation No 492/2011

5. Article 7 of Chapter I, entitled ‘Employment, equal treatment and workers’ families’, under section 2, entitled ‘Employment and equality of treatment’, of Regulation No 492/2011 is worded as follows: ‘1. A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and, should he become unemployed, reinstatement or re-employment. 2. He shall enjoy the same social and tax advantages as national workers. …’

2. Directive 2008/94/EC

6. Article 1 of Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer ( 3 ) provides as follows: ‘1. This 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). …’

7. Article 2(1) of that directive defines the conditions under which an employer is to be deemed, for the purposes of that directive, to be in a state of insolvency. Paragraph 2 of that article states: ‘This 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”. …’

8. Article 3 of Directive 2008/94 provides as follows: ‘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. The claims taken over by the guarantee institution shall be the outstanding pay claims relating to a period prior to and/or, as applicable, after a given date determined by the Member States.’

9. Article 4 of Directive 2008/94 provides: ‘1. Member States shall have the option to limit the liability of the guarantee institutions referred to in Article 3. 2. If Member States exercise the option referred to in paragraph 1, they shall specify the length of the period for which outstanding claims are to be met by the guarantee institution. However, this may not be shorter than a period covering the remuneration of the last three months of the employment relationship prior to and/or after the date referred to in the second paragraph of Article 3. … 3. Member States may set ceilings on the payments made by the guarantee institution. These ceilings must not fall below a level which is socially compatible with the social objective of this Directive. …’

C – German law

10. Paragraph 3 of the Einkommensteuergesetz (Law on income tax) provides as follows: ‘The following shall be exempt: … 2. … (b) insolvency benefit, …’

11. Paragraph 165(1) of Book III of the Sozialgesetzbuch (German Social Security Code) (‘the SGB III’) provides as follows: ‘Workers are entitled to insolvency benefit where they have taken up employment on national territory and where, as a result of the insolvency of their employer, they have outstanding claims for remuneration for the previous three months of the employment contract. …’

12. Paragraph 167 of the SGB III, entitled ‘Amount’, provides as follows: ‘(1) Insolvency benefit is paid in the amount of net remuneration, which is equal to the gross remuneration, limited to the monthly earnings ceiling laid down in Paragraph 341(4) of the SGB III minus the statutory deductions. (2) If the worker … 2. is not subject to income tax on national territory and the insolvency benefit is not taxable under the rules applicable to him, the taxes which would have been deducted from that remuneration if the worker had been subject to income tax on national territory shall be deducted from the remuneration.’

13. The first sentence of Paragraph 169 of the SGB III, entitled ‘Subrogation’, provides: ‘Claims relating to pay which give rise to entitlement to insolvency benefit shall be transferred by subrogation to [the Agency] when an application for insolvency benefit is made.’

III – The main proceedings and the questions referred for a preliminary ruling

14. Mr Eschenbrenner is a French national residing in France. Since 1996 he had worked in an undertaking located in Germany as a frontier worker within the meaning of the Tax Convention. Consequently, his income paid in Germany was subject to tax in France.

15. On 29 June 2012, insolvency proceedings relating to Mr Eschenbrenner’s employer commenced.

16. Mr Eschenbrenner’s wages and salaries were paid in full until March 2012. In the context of the advance financing mechanism, the provisional liquidator paid Mr Eschenbrenner remuneration of EUR 3550.24 for the period from 1 April to 28 June 2012. According to the insolvency benefit certificate submitted by the liquidator, Mr Eschenbrenner was owed the sum of EUR 5571.88 for the above period. ( 4 )

17. On 13 July 2012, Mr Eschenbrenner applied for insolvency benefit. By decision of 18 July 2012, he was awarded a total amount of EUR 356.77 by way of that benefit. The Agency had calculated that amount by deducting from the gross remuneration of Mr Eschenbrenner the social security contributions, the advance paid in April 2012, and the amount awarded by the provisional liquidator by way of advance financing, as well as a notional amount representing the tax on wages provided for under German law.

18. In his complaint against that decision, Mr Eschenbrenner claimed that the notional taking into account of the German tax on wages was contrary to EU law since he was not subject to tax in Germany. By decision of 18 September 2012, the Agency rejected that complaint on the ground that the amount of the benefit had been correctly calculated by applying the provisions in force in Germany.

19. On 18 October 2012, Mr Eschenbrenner brought an action before the Sozialgericht (Social Court). He claimed that the method for calculating the insolvency benefit laid down in Paragraph 167(2)(2) of the SGB III did not comply with Article 45 TFEU because it had negative consequences for him as a frontier worker. According to Mr Eschenbrenner, German workers receive, as insolvency benefit, an amount corresponding to 100% of their previous net income, whereas, as a frontier worker normally taxed in France, he received an amount significantly below his previous net income owing to the notional taking into account of the tax rate applicable in Germany, which is significantly higher than that applicable in France.

20. The Sozialgericht (Social Court) dismissed the action by judgment of 16 October 2013. On 9 December 2013, Mr Eschenbrenner lodged an appeal against that judgment with the national court.

21. The national court considers that the amount of the insolvency benefit should, in principle, be equal to the net remuneration. However, in accordance with the method of calculation laid down in Paragraph 167(2)(2) of the SGB III, frontier workers specifically cannot receive that benefit in an amount corresponding to their previous net remuneration. It notes that in the judgments of 16 September 2004, Merida (C‑400/02, EU:C:2004:537), and of 28 June 2012, Erny (C‑172/11, EU:C:2012:399), the Court held, respectively, than the notional deduction of income tax due in Germany when calculating, on the one hand, the amount of the increased interim assistance for former civilian employees of the allied forces in Germany and, on the other hand, the top-up amount on wages paid to workers placed under a scheme of part-time working constituted indirect discrimination.

22. However, the national court notes that, unlike the situations at issue in those last two cases, Paragraph 167(2)(2) of the SGB III would not, in fact, entail actual double taxation given that, in the present case, only the tax due in Germany is taken into account notionally in the calculation of the insolvency benefit.

23. The national court has doubts as to the compatibility with EU law of the interpretation of the Sozialgericht (Social Court) that the recipient of the insolvency benefit retains a claim against his employer in relation to the part of his gross remuneration affected by the tax. Even if the frontier worker retained a claim against his employer, a greater effort would be required of him and, on the whole, he would be less protected than a German worker, given that it is not improbable, according to the national court, that his claim would not be paid from the proceeds of the assets in the insolvency. The national court notes that such an interpretation could be contrary to Directive 2008/94, which provides, in principle, for full compensation of outstanding wage claims.

24. In those circumstances, the Landessozialgericht Rheinland-Pfalz (Higher Social Court, Rhineland-Palatinate) decided to stay proceedings and refer the following questions to the Court: ‘(1) Is it compatible with the rules of primary and/or secondary EU law (in particular Article 45 TFEU … and Article 7 of Regulation No 492/2011), in the case of an employee who pursues an occupational activity in Germany, who is resident in another Member State and not subject to income tax in Germany, and for whom insolvency benefit, under the provisions applicable to him, is not taxable, that, in the event of his employer’s insolvency, the remuneration from employment used to calculate his insolvency benefit is subject to the notional taxation that would be charged as a deduction on his remuneration from employment were he subject to income tax in Germany, if he no longer has the possibility of asserting a claim against his employer for his residual gross remuneration? (2) If Question 1 is answered in the negative, can it be considered compatible with the rules of primary and/or secondary EU law if, in the circumstances described, the employee retains the possibility of asserting a claim against his employer for his residual gross remuneration?’

IV – The procedure before the Court

25. Written observations were submitted by the German Government and the European Commission. Those parties presented oral argument at the hearing on 7 July 2016.

V – Analysis

26. By its questions, which, in my view, are best dealt with together, the national court asks, essentially, whether Article 45(2) TFEU and Article 7 of Regulation No 492/2011 must be interpreted as precluding a national provision, such as Paragraph 167(2)(2) of the SGB III, which, contrary to the situation for workers who are subject to income tax in Germany, ( 5 ) does not guarantee insolvency benefit equivalent to their previous net remuneration in the case of frontier workers who are neither subject to income tax in Germany nor liable in France to tax in respect of the insolvency benefit.

27. The national court also asks whether the existence or otherwise of a possibility for a frontier worker to assert a claim against his employer for his residual gross remuneration has an effect on the outcome of the case.

A – Preliminary observations

28. The insolvency benefit paid to Mr Eschenbrenner by the Agency is linked to the wage claims arising from an employment relationship for the period from 1 April to 28 June 2012, that is to say three months.

29. It is clear from the case-file before the Court that, under Paragraph 167(1) of the SGB III, insolvency benefit is paid up to the net remuneration of the worker, equal to his gross pay, ( 6 ) reduced by the income tax applicable in Germany.

30. However, under Paragraph 167(2)(2) of the SGB III, ( 7 ) in the case of a frontier worker such as Mr Eschenbrenner, who is neither subject to income tax in Germany nor liable to tax in respect of insolvency benefit under the provisions applicable to him in France, that benefit is reduced, notionally, by the income tax applicable in Germany.

31. It follows that, although the frontier workers in question are placed in a situation identical to that of workers subject to income tax in Germany as regards the amount of insolvency benefit awarded, they do not, unlike workers subject to tax in Germany, receive insolvency benefit equivalent to their previous net remuneration.

32. The benefit that they receive is not such as to compensate the previous net remuneration of a frontier worker like Mr Eschenbrenner, since the notional portion corresponding to the income tax applicable in Germany is higher than the income tax previously levied in France, ( 8 ) in accordance with the Tax Convention.

B – The absence of double taxation and the fiscal competence of the Federal Republic of Germany

33. It is apparent from the request for a preliminary ruling that, on the one hand, the measures for preventing the double taxation of the insolvency benefit were introduced into the German legal order by Article 14(2)(1) of the Tax Convention, which provides that the right to tax the insolvency benefit of frontier workers such as Mr Eschenbrenner falls exclusively to the Federal Republic of Germany, and that, on the other hand, Paragraph 167(2)(2) of the SGB III ( 9 ) does not entail the risk of actual double taxation.

34. In view of the absence of double taxation, the national court is uncertain as to whether the national legislation at issue constitutes a measure discriminating against the frontier workers in question which is incompatible with Article 45(2) TFEU and Article 7 of Regulation No 492/2011.

35. In the cases giving rise to the judgments of 16 September 2004, Merida (C‑400/02, EU:C:2004:537, paragraph 37), ( 10 ) and of 28 June 2012, Erny (C‑172/11, EU:C:2012:399), ( 11 ) the Court’s reasoning was based, at least in part, on the fact that a frontier worker was exposed to the risk of double taxation.

36. It is settled case-law that, in the absence of any unifying or harmonising European Union measures, Member States retain the power to define, by treaty or unilaterally, the criteria for allocating their powers of taxation, particularly with a view to eliminating double taxation. It is for the Member States to take the measures necessary to prevent situations of double taxation by applying, in particular, the criteria followed in international tax practice. ( 12 )

37. Consequently, in my view, the right of the Federal Republic of Germany to tax the insolvency benefit of frontier workers such as Mr Eschenbrenner in accordance with the Tax Convention and its national legislation may not be called into question. ( 13 ) That conclusion (and particularly the fact that in the present case the Tax Convention has been respected and that there is no double taxation) does not, however, automatically mean that the German legislation is compatible with EU law. ( 14 )

C – The principle of non-discrimination enshrined in EU law forming the subject matter of the first question referred for a preliminary ruling

38. Article 45(2) TFEU prohibits any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. Article 7(1) and (2) of Regulation No 492/2011 constitutes merely the specific expression of the principle of non-discrimination laid down in Article 45(2) TFEU within the specific fields of conditions of employment and work, and the grant of social advantages. Consequently, Article 7(1) and (2) of Regulation No 492/2011 must be accorded the same interpretation as Article 45(2) TFEU. ( 15 )

39. The equal treatment rule laid down in Article 45 TFEU and in Article 7 of Regulation No 492/2011 prohibits not only overt discrimination by reason of nationality but also all covert forms of discrimination which, through the application of other distinguishing criteria, lead in fact to the same result. Unless objectively justified and proportionate to the aim pursued, a provision of national law — even if it applies regardless of nationality — must be regarded as indirectly discriminatory if it is intrinsically liable to affect migrant workers more than national workers and if there is a consequent risk that it will place the former at a particular disadvantage. ( 16 ) In order for a measure to be treated as being indirectly discriminatory, it is not necessary for it to have the effect of placing at an advantage all the nationals of the State in question or of placing at a disadvantage only nationals of other Member States, but not nationals of the State in question. ( 17 )

40. Furthermore, the principle of non-discrimination requires not only that comparable situations must not be treated differently but also that different situations must not be treated in the same way. ( 18 )

41. It should be noted that the national court does not clearly resolve the issue of whether the insolvency benefit constitutes ‘remuneration’ within the meaning of Article 7(1) of Regulation No 492/2011 or a ‘social advantage’ within the meaning of Article 7(2) of that regulation. ( 19 ) However, given that, according to that court and in accordance with Article 14(2)(1) of the Tax Convention, the insolvency benefit is taxable in the country which awards it, ( 20 ) it must be inferred, in my view, that for that court, that benefit is paid ‘as statutory social insurance’ and constitutes a social advantage. I also note that the German Government, in its observations, submits that the insolvency benefit constitutes a social advantage paid with a view to promoting employment.

42. In any event, as the Commission notes in its written observations, it is of little importance whether the insolvency benefit falls under Article 7(1) or Article 7(2) of Regulation No 492/2011, since both those provisions apply the principle of equal treatment enshrined in Article 45(2) TFEU.

43. Leaving aside Article 45 TFEU and Article 7 of Regulation No 492/2011, I think it is appropriate to include Directive 2008/94 in this line of reasoning, even though it is not referred to in the questions referred for a preliminary ruling.

D – Directive 2008/94

44. Since Article 3 of Directive 2008/94 imposes a liability to pay employees’ outstanding claims, ( 21 ) the national court’s question concerning discrimination with regard to the insolvency benefit paid to Mr Eschenbrenner must be assessed in the light of the social objective of that directive.

45. In that regard, the Court has pointed out that payments of claims for salary are, by their very nature, of great importance to the individuals concerned. ( 22 )

46. Furthermore, in the judgment of 17 November 2011, van Ardennen (C‑435/10, EU:C:2011:751, paragraphs 27 and 28), the Court ruled that the objective of Council Directive 80/987/EEC of 20 October 1980 on the protection of employees in the event of the insolvency of their employer, ( 23 ) the provisions of which correspond in essence with the provisions of Directive 2008/94, ( 24 ) was to guarantee employees, at EU level, a minimum of protection ( 25 ) in the event of the employer’s insolvency, through payment of claims for remuneration payable under contracts of employment or employment relationships which have been outstanding for a specific period. It is to that end that Article 3 of Directive 2008/94 requires the Member States to 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.

47. Article 4 of Directive 2008/94 confers on the Member States the power to limit the payment obligation by fixing a reference period or a guarantee period and/or ceilings on payments. ( 26 )

48. Consequently, Member States have the option, under Article 4(1) of Directive 2008/94, to limit the liability to pay to a given period fixed in accordance with the detailed rules laid down in Article 4(2) of that directive. ( 27 ) In that regard, it is clear from the case-file before the Court that the insolvency benefit relates to the last three months of the employment contract, in accordance with Paragraph 165(1) of the SGB III.

49. Furthermore, the first subparagraph of Article 4(3) of Directive 2008/94 provides the Member States with an option to set a ceiling to the liability for employees’ outstanding claims in order to avoid the payment of sums going beyond the directive’s social objective. Nevertheless, the Court has ruled that while the Member States are entitled to set a ceiling to the liability for outstanding claims, they are bound to ensure, within the limit of that ceiling, the payment of all the outstanding claims in question. ( 28 )

50. However, while Article 3 of Directive 2008/94 provides that guarantee institutions are to guarantee payment of employees’ outstanding claims, I endorse the observations of the German Government, according to which ‘that directive, however, contains no provision relating to whether this involves gross or net values, or to the way in which, where appropriate, the insolvency benefit must be treated for tax purposes’. Directive 2008/94 does not govern the tax treatment of the claims at issue. In the absence of harmonisation in accordance with EU law, Member States therefore have the right to choose whether or not to tax the benefit which corresponds to employees’ outstanding claims.

51. In regard to workers resident in Germany, the insolvency benefit is paid in the amount of net remuneration. It follows that, for those workers, the insolvency benefit is, in principle, equivalent to their net wage previously received as active workers. Consequently, for the period in question, the net wage situation of those workers is retroactively restored since they receive their previous net wage.

52. Conversely, in regard to frontier workers in Mr Eschenbrenner’s situation, the notional deduction of German wage tax in determining the insolvency benefit, in accordance with Paragraph 167(2)(2) of the SGB III, does not enable the same result to be achieved. ( 29 )

53. The notional application of the German tax on wages has an unfavourable impact on the situation of frontier workers such as Mr Eschenbrenner and places them at a disadvantage compared with workers resident in Germany. Unlike the situation of those workers, the net wage situation of frontier workers for the period at issue is not restored or re-established retroactively. ( 30 )

54. It thus appears that the national legislation at issue treats frontier workers in the same way as workers residing in Germany, even though they are in situations which are not comparable. ( 31 ) Indeed, before his employer’s insolvency, Mr Eschenbrenner was subject to tax liability in France and received a net income higher than that of an employee in a situation identical to his, but residing in Germany.

55. The German Government considers that the main effect of Paragraph 167(2)(2) of the SGB III is not that of disadvantaging migrant workers and frontier workers. According to that government, on the basis of the specific details of each individual case, in particular the individual tax rates for workers in the various Member States of the European Union, such a provision is likely to have, on a case-by-case basis, a favourable or unfavourable impact on the situation of frontier workers depending on whether the highest tax is the German tax or that of the other Member State.

56. It is important to point out that any unfavourable, or even favourable, consequences entailed by the differences between the tax scales of the Member States, the determination of which, in the absence of any EU legislation in the field, is a matter for the Member States, cannot, as such, constitute discrimination prohibited under EU law. ( 32 )

57. However, where the insolvency benefit paid by a Member State to a resident worker corresponds to his net remuneration previously received from employment and is therefore intended to re-establish the status quo prior to the insolvency of the employer, which is consistent with the objective of Directive 2008/94, that Member State must ensure equal treatment for frontier workers. ( 33 )

58. Consequently, in the case of cross-border workers, the notional application of the German tax on wages prevents the amount of the insolvency benefit from corresponding to the net remuneration previously received, contrary to what is the case for workers residing in Germany, ( 34 ) which constitutes discrimination in infringement of Article 45 TFEU and Article 7 of Regulation No 492/2011. ( 35 ) ( 36 )

59. It is also my view that the national legislation at issue infringes Article 3 of Directive 2008/94, as it does not ensure, within the limit of the ceiling set in accordance with Article 4(3) of that directive, the payment of all the outstanding claims in question. Although the right of the Federal Republic of Germany to tax the benefit paid by virtue of those claims cannot be called into question, the exercise of that right by the notional deduction of the German tax, in the present case higher than the French tax previously applicable, undermines Article 3 of Directive 2008/94 and the minimum protection measures set out in that directive.

60. Moreover, given that, under Article 3 of Directive 2008/94, the payment of outstanding claims must be ensured by guarantee institutions, the Agency must ensure that both resident workers and cross-border workers are paid their net remuneration. It follows that the fact that the recipient of the insolvency benefit potentially retains ( 37 ) a claim against his employer in relation to the part of his gross remuneration affected by the tax is not, in my view, relevant and has no influence on the outcome of the case.

VI – Conclusion

61. In the light of the foregoing considerations, I propose that the Court should reply as follows to the questions referred for a preliminary ruling by the Landessozialgericht Rheinland-Pfalz (Higher Social Court, Rhineland-Palatinate, Germany): Article 45 TFEU, Article 7 of Regulation (EU) No 492/2011 of the European Parliament and of the Council of 5 April 2011 on freedom of movement for workers within the Union and Article 3 of Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer preclude a national provision which, contrary to the situation for workers subject to income tax in the Member State in question, does not guarantee, in the case of frontier workers who are neither subject to income tax in that Member State nor liable to tax in respect of the insolvency benefit under the provisions applicable to them in another Member State, insolvency benefit equivalent to their previous net remuneration.

( 1 ) Original language: French.

( 2 ) OJ 2011 L 141, p. 1.

( 3 ) OJ 2008 L 283, p. 36.

( 4 ) The sum of EUR 1094.57 corresponding to social security contributions, that is to say EUR 379.11, EUR 371.23 and EUR 344.23 respectively for the months of April, May and June 2012, was deducted from the amount specified. Mr Eschenbrenner also obtained an advance of EUR 36.90 for the month of April for expenses, that amount already being included in the EUR 5571.88.

( 5 ) See Paragraph 167(1) of the SGB III.

( 6 ) Limited to the ceiling for calculating contributions referred to in Paragraph 341(4) of the SGB III. That ceiling does not appear to be at issue in the main proceedings.

( 7 ) According to the German Government, that provision constitutes an exception to the rule laid down in Paragraph 167(1) of the SGB III.

( 8 ) That is to say, before his employer’s insolvency.

( 9 ) It should be noted that Paragraph 167(2)(2) of the SGB III, which provides for the deduction of notional taxes, is not part of the German tax code.

( 10 ) In that case, the Court held, essentially, that the principle of non-discrimination precluded national legislation provided for in a collective agreement under which the amount of a social benefit such as interim assistance supplementing unemployment benefits granted to employees in case of dismissal, paid by the Member State of employment to a worker who resides and is taxable in another Member State, is calculated in such a way that the tax on wages payable in the Member State of employment is notionally deducted on determination of the basis of assessment of that benefit, even though, under a double taxation agreement, salaries, wages and analogous emoluments paid to workers not residing in that State are chargeable to tax only in the Member State in which such workers are resident.

( 11 ) In the case giving rise to the judgment of 28 June 2012, Erny (C‑172/11, EU:C:2012:399), a top-up amount paid by employers in the context of a scheme of part-time working for older employees prior to retirement was calculated in such a way that the tax on wages payable by the worker in the Member State of employment was notionally deducted when establishing the basis for the calculation of that top-up amount, even though, under a tax convention for the avoidance of double taxation, analogous salaries, wages and remuneration paid to frontier workers were taxable in their Member State of residence. In paragraph 45 of that judgment, the Court held that ‘in the case of cross-border workers, the notional application of the rate of the German tax on wages prevents the amount paid from corresponding approximately to 85% of the net remuneration previously received in respect of full-time employment, contrary to what is generally the case for workers residing in Germany’.

( 12 ) See judgment of 8 December 2011, Banco Bilbao Vizcaya Argentaria (C‑157/10, EU:C:2011:813, paragraphs 28, 29, 31 and 32, and the case-law cited).

( 13 ) See, to that effect, judgment of 12 May 1998, Gilly (C‑336/96, EU:C:1998:221, paragraph 30).

( 14 ) Moreover, I wonder whether the Federal Republic of Germany truly exercised fiscal competence with regard to the insolvency benefit paid to Mr Eschenbrenner, since Paragraph 3(2)(b) of the Einkommensteuergesetz (Law on income tax) exempts that benefit from all tax and the notional deduction of tax could, in fact, be intended to ensure that the recipient does not receive an amount higher than the net wage which he would have received had his employer not become insolvent, even if the German Government did not admit as much at the hearing. Furthermore, it is paradoxical to deduct from a benefit which is taxable yet exempt from tax in Germany an amount equivalent to the tax on wages applicable in Germany (in fact, only the general tax rate without any deductions resulting from the personal and family situation of the taxable person), whereas if that amount had constituted remuneration, it would be taxable in France!

( 15 ) See judgments of 20 June 2013, Giersch and Others (C‑20/12, EU:C:2013:411, paragraph 35), and of 5 December 2013, Zentralbetriebsrat der gemeinnützigen Salzburger Landeskliniken (C‑514/12, EU:C:2013:799, paragraph 23 and the case-law cited).

( 16 ) See judgment of 5 December 2013, Zentralbetriebsrat der gemeinnützigen Salzburger Landeskliniken (C‑514/12, EU:C:2013:799, paragraphs 25 and 26).

( 17 ) See judgment of 28 June 2012, Erny (C‑172/11, EU:C:2012:399, paragraph 41).

( 18 ) See judgment of 16 September 2004, Merida (C‑400/02, EU:C:2004:537, paragraph 22).

( 19 ) In paragraph 29 of the judgment of 16 July 2009, Visciano (C‑69/08, EU:C:2009:468) the Court ruled that it is for national law to define the legal nature of claims such as those at issue in the main proceedings.

( 20 ) That is to say, in the present case, in Germany.

( 21 ) See judgment of 10 February 2011, Andersson (C‑30/10, EU:C:2011:66, paragraph 22).

( 22 ) See judgment of 16 July 2009 inVisciano (C‑69/08, EU:C:2009:468, paragraph 44).

( 23 ) OJ 1980 L 283, p. 23 as amended by Directive 2002/74/EC of the Parliament and of the Council of 23 September 2002 (OJ 2002 L 270, p. 10).

( 24 ) In paragraph 20 of the judgment of 10 February 2011, Andersson (C‑30/10, EU:C:2011:66), the Court ruled that Directive 2008/94 directive codified Directive 80/987 and contained, in essence, the same provisions.

( 25 ) Recital 3 of Directive 2008/94 states that ‘it is necessary to provide for the protection of employees in the event of the insolvency of their employer and to ensure a minimum degree of protection, in particular in order to guarantee payment of their outstanding claims, while taking account of the need for balanced economic and social development in the Community. To this end, the Member States should establish a body which guarantees payment of the outstanding claims of the employees concerned’.

( 26 ) See, to that effect, judgment of 28 November 2013, Gomes Viana Novo and Others (C‑309/12, EU:C:2013:774, paragraph 22).

( 27 ) See judgment of 14 July 1998, Regeling (C‑125/97, EU:C:1998:358, paragraph 20).

( 28 ) See judgment of 4 March 2004, Barsotti and Others (C‑19/01, C‑50/01 and C‑84/01, EU:C:2004:119, paragraph 36). It follows that Article 4 of Directive 2008/94 must be construed narrowly and in conformity with the social objective of the directive, which is to ensure a minimum level of protection for all workers. See also, by analogy, judgment of 14 July 1998, Regeling (C‑125/97, EU:C:1998:358, paragraph 20).

( 29 ) See, by analogy, judgment of 16 September 2004, Merida (C‑400/02, EU:C:2004:537, paragraph 28).

( 30 ) The Commission considers that it is unlawful to apply deductions which would not have been applied had the employer not become insolvent.

( 31 ) The German Government considers, on the contrary, that frontier workers and workers residing in Germany are in a comparable situation.

( 32 ) See, by analogy, judgment of 12 May 1998, Gilly (C‑336/96, EU:C:1998:221, paragraphs 47 to 50).

( 33 ) In that regard, I note that, given that the objective of the insolvency benefit paid by the Federal Republic of Germany to a worker is to re-establish his net remuneration prior to his employer’s insolvency, that Member State has the right, when determining that benefit, to deduct from the frontier worker’s gross remuneration the amount of tax previously paid by him. Consequently, in my view, the Federal Republic of Germany has the right to deduct from Mr Eschenbrenner’s gross remuneration the amount of tax that he would have paid in France on the same remuneration before his employer was declared insolvent.

( 34 ) See, by analogy, judgment of 28 June 2012, Erny (C‑172/11, EU:C:2012:399, paragraph 45).

( 35 ) It should be noted that the national court has made no reference to any justification for that discrimination. However, the German Government considers that an ‘obligation, even an indirect obligation, to apply the tax provisions of other Member States could lead to refusal decisions as well as a disproportionate increase in administrative charges’. In my view, those objections must be rejected. In paragraph 30 of the judgment of 16 September 2004, Merida (C‑400/02, EU:C:2004:537), the Court ruled that ‘grounds of that kind cannot justify the Federal Republic of Germany’s failure to comply with its obligations under the [FEU] Treaty’. See also judgment of 28 June 2012, Erny (C‑172/11, EU:C:2012:399, paragraph 48) and, by analogy, judgment of 19 June 2014, Specht and Others (C‑501/12 to C‑506/12, C‑540/12 and C‑541/12, EU:C:2014:2005, paragraph 77).

( 36 ) That is all the more true if the objective of the German legislation which does not tax the insolvency benefit is to ensure that that benefit does not exceed what the recipient would have received as wages. See footnote 14 of the present Opinion. That confirms the fact that the Federal Republic of Germany could notionally deduct the tax that the person concerned would have had to pay in France. See footnote 33 of the present Opinion.

( 37 ) I note that it is clear from the request for a preliminary ruling that the chambers of the Bundesarbeitsgericht (Federal Labour Court, Germany) are divided on the issue of whether a frontier worker actually retains a claim in that regard against his employer.