Judgment of the Court of 4 October 1991. - David Maxwell Middleburgh v Chief Adjudication Officer. - Reference for a preliminary ruling: Court of Appeal - United Kingdom. - Social security - Status as an employed person - Regulation Nº 1408/71 - Child benefit - Residence clause - Articles 48 and 52 fo the EEC Treaty. - Case C-15/90.



European Court reports 1991 Page I-04655



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. Social security of migrant workers - Employed person - Meaning within the terms of Article 73(1) of Regulation No 1408/71 - Self-employed person having paid contributions as employed person - Treatment as an employed person - Not permissible

(Regulation No 1408/71 of the Council, Article 1(a), (i) and (ii), and Article 73(1) ) )

2. Free movement of persons - Freedom of establishment - National of a Member State having the status of self-employed person in the territory of that State after having had that of employed person in another Member State - Refusal to pay child benefit for a child not residing on the territory of the State - Whether permissible

(EEC Treaty, Art. 52)

Summary

1. A self-employed person who, in the event of his involuntarily ceasing to work, is entitled to unemployment benefits by virtue of contributions paid or credited as an employed person is not an "employed person" for the purposes of Article 73(1) of Regulation No 1408/71, as amended by Regulation No 1390/81, read in conjunction with Article 1(a)(i) and (ii) of that regulation.

2. Article 52 of the Treaty does not preclude the application to one of its nationals of legislation of a Member State which restricts child benefits to children residing in the territory of that State, during a period where, after having been employed in another Member State and had a child there, that person returns alone to his Member State of origin and works there as a self-employed person.

Parties

In Case C-15/90,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Court of Appeal of England and Wales for a preliminary ruling in the proceedings pending before that court between

David Maxwell Middleburgh

and

Chief Adjudication Officer

on the interpretation of Articles 1 and 73 of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, as amended by Council Regulation (EEC) No 1390/81 of 12 May 1981 extending to self-employed persons and members of their families Regulation (EEC) No 1408/71 (Official Journal 1981 L 143, p. 1), and Articles 48 and 52 of the EEC Treaty,

THE COURT,

composed of: G.F. Mancini, President of Chamber, acting as President, T.F. O' Higgins, J.C. Moitinho de Almeida, G.C. Rodriguez Iglesias and M. Diez de Velasco (Presidents of Chambers), Sir Gordon Slynn, R. Joliet, F.A. Schockweiler, F. Grévisse, M. Zuleeg and P.J.G. Kapteyn, Judges,

Advocate General: J. Mischo,

Registrar: J.A. Pompe, Deputy Registrar,

after considering the written observations submitted on behalf of:

- the appellant in the main proceedings, by Richard Drabble, QC,

- the Chief Adjudication Officer, by David Pannick, Barrister,

- the Commission of the European Communities, by Karen Banks and Nicholas Khan, Members of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of represented by Richard Plender QC, the Chief Adjudication Officer, represented by David Pannick, Barrister, and the Commission at the hearing on 26 February 1991,

after hearing the Opinion of the Advocate General at the sitting on 16 April 1991,

gives the following

Judgment

Grounds

1 By order of 25 July 1989, which was received at the Court on 19 January 1990, the Court of Appeal of England and Wales referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty three questions on the interpretation of Articles 1 and 73 of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, as amended by Council Regulation (EEC) No 1390/81 of 12 May 1981 extending to self-employed persons and members of their families Regulation (EEC) No 1408/71 (Official Journal 1981 L 143, p. 1), and Articles 48 and 52 of the EEC Treaty.

2 Those questions were raised in the course of proceedings between David Maxwell Middleburgh and the Chief Adjudication Officer.

3 Mr Middleburgh, who is a British national, worked in Ireland between January 1981 and August 1982. During that period he entered into a relationship with an Irish national, and a child was born of that relationship. In October 1983 he returned alone to the United Kingdom, where he was employed in hospitals from 15 November 1983 to 13 April 1984. Between 16 April and 29 April 1984 he was unemployed, and from 30 April until 29 July 1984 he was self-employed. He was employed once again from 30 July to 19 August 1984, and from 20 August until 25 November 1984 he took a vocational training course.

4 The Adjudication Officer refused to pay child benefit from 16 April 1984 onwards on the ground that Mr Middleburgh' s son was not in Great Britain, and Mr Middleburgh appealed against that decision to the Social Security Appeal Tribunal. That appeal and the subsequent appeal to the Social Security Commissioners were dismissed with regard to the period during which Mr Middleburgh was self-employed and the period during which he pursued a vocational training course; Mr Middleburgh therefore appealed to the Court of Appeal, which stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

"1. Where

(1) a person is self-employed, and

(2) is entitled (under national law) to unemployment benefit upon the involuntary cessation of such self-employment, and

(3) is so entitled by reason of contributions paid or credited as an employed person,

2. If a national of Member State A resides in Member State B for a period and, whilst there, (a) works as an employed person and (b) cohabits with and has a child by a national of Member State B, is it a breach of either Article 48 or Article 52 of the Treaty for Member State A to refuse to pay family benefit in respect of the child on the sole ground of the child' s absence from Member State A during a period when the national has returned to Member State A and is self-employed there, but the child remains in Member State B?

3. If the answer to the second question is in the affirmative, does Article 48 or Article 52 have direct effect in the circumstances of the present case?"

5 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the applicable legislation and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

The first question

6 According to Article 73(1) of Regulation No 1408/71, as amended by No 1390/81, "an employed person subject to the legislation of a Member State other than France shall be entitled to the family benefits provided for by the legislation of the first Member State for members of his family residing in the territory of another Member State, as though they were residing in the territory of the first State".

7 Mr Middleburgh submits that during the period from 30 April to 29 July 1984 he was an "employed person" for the purposes of Article 73(1), since he was insured under a compulsory unemployment insurance scheme to which he had paid contributions as an employed person and he may be identified as such by virtue of the manner in which that scheme is administered or financed, in accordance with Article 1(a)(i) and (ii) of the regulation. He observes in that regard that the concept of an "employed person" under Article 73(1) is identical to the concept of "worker" under the same provision in the original version of the regulation, and that the Court has held the latter concept, under certain conditions, to include persons who do not have the status of employed persons from the point of view of labour law.

8 During the period in issue it was only as a self-employed person that the appellant contributed to a social security scheme. The simple fact that if a person in such a situation had then ceased to work he would have been entitled to unemployment benefits by virtue of contributions paid during an earlier period when he was an employed person is not sufficient to justify the conclusion that during the period when he worked as a self-employed person he was insured, compulsorily or on an optional continued basis, for one or more of the contingencies covered by the branches of a social security scheme for employed persons or compulsorily insured for such contingencies under a social security scheme in which he can be identified as an employed person by virtue of the manner in which such scheme is administered or financed, as provided for respectively in Article 1(a)(i) and Article 1(a)(ii) of Regulation No 1408/71 as amended.

9 Nor, in a case such as that before the national court, where child benefits are not linked to contributions paid as an employed person, does the scheme granting entitlement to such benefits permit the appellant to be identified as an employed person for the purposes of Article 1(a)(ii) of the regulation.

10 The answer to the first question must therefore be that a self-employed person who, in the event of his involuntarily ceasing to work, is entitled to unemployment benefits by virtue of contributions paid or credited as an employed person is not an "employed person" for the purposes of Article 73(1) of Regulation No 1408/71, as amended, read in conjunction with Article 1(a)(i) and (ii) of the same regulation.

The second question

11 In its second question the national court seeks in substance to determine whether Articles 48 and 52 of the EEC Treaty preclude the application to one of its nationals of legislation of a Member State which restricts child benefits to children residing in the territory of that State, during a period where, after having been employed in another Member State and had a child there, that person returns alone to his Member State of origin and works there as a self-employed person.

12 Mr Middleburgh submits that such legislation constitutes indirect discrimination against nationals of other Member States or in any event an obstacle to freedom of movement of workers and to the right of establishment, contrary to Articles 48 and 52 of the Treaty respectively. These provisions, he says, are also applicable to nationals of the Member State which enacted the legislation if they fall within the scope of application of the Treaty. The Commission shares that point of view but restricts its observations to the interpretation of Article 52.

13 It must first be observed that a person who has worked only in a self-employed capacity in the Member State in question before becoming unemployed cannot be regarded as a "worker" within the meaning of Article 48 of the Treaty and cannot therefore rely on that provision.

14 Secondly, it must be noted that at the material time the Community legislature had not yet adopted the necessary measures, in the area of freedom of establishment, to ensure the payment of child benefits to persons residing in the territory of the Member States. Such measures, which were essential, especially in order to ensure that benefits are in fact used for the upkeep of dependent children and to avoid overlapping payments, were subsequently adopted by Council Regulation (EEC) No 3427/89 of 30 October 1989 amending Regulation (EEC) No 1408/71 and Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation No 1408/71 (Official Journal 1989 L 331, p. 1), which brought self-employed persons within the scope of application of Article 73 of Regulation No 1408/71.

15 It follows that Member State legislation which precluded the payment of child benefit in respect of the children resident in another Member State of a self-employed person was not incompatible with Article 52 of the Treaty so long as those measures had not been adopted by the Council.

16 Consequently, it is not necessary to examine the arguments raised by Mr Middleburgh; the answer to the second question must be that Article 52 of the EEC Treaty does not preclude the application to one of its nationals of legislation of a Member State which restricts child benefits to children residing in the territory of that State, during a period where, after having been employed in another Member State and had a child there, that person returns alone to his Member State of origin and works there as a self-employed person.

The third question

17 Having regard to the foregoing there is no need to reply to the third question.

Decision on costs

Costs

18 The costs incurred by the Commission of the European Communities, which submitted observations to the Court, are not recoverable. 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.

Operative part

On those grounds,

THE COURT,

in answer to the questions submitted to it by the Court of Appeal of England and Wales of 25 July 1979, hereby rules:

1. A self-employed person who, in the event of his involuntarily ceasing to work, is entitled to unemployment benefits by virtue of contributions paid or credited as an employed person is not an "employed person" for the purposes of Article 73(1) of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, as amended by Council Regulation (EEC) No 1390/81 of 12 May 1981 extending to self-employed persons and members of their families Regulation (EEC) No 1408/71, read in conjunction with Article 1(a)(i) and (ii) of that regulation.

2. Article 52 of the EEC Treaty does not preclude the application to one of its nationals of legislation of a Member State which restricts child benefits to children residing in the territory of that State, during a period where, after having been employed in another Member State and had a child there, that person returns alone to his Member State of origin and works there as a self-employed person.