CELEX: 61985CC0001
Language: en
Date: 1986-02-27
Title: Opinion of Mr Advocate General Lenz delivered on 27 February 1986. # Horst Miethe v Bundesanstalt für Arbeit. # Reference for a preliminary ruling: Bundessozialgericht - Germany. # Regulation no. 1408/71 - Unemployment benefits. # Case 1/85.

OPINION OF MR ADVOCATE GENERAL LENZ
      delivered on 27 February 1986 (
            *1
         )
      
         Mr President,
      
      
         Members of the Court,
      
      
               A — 
            
            
               In a reference for a preliminary ruling in which the grounds are set out in an exemplary manner, the Bundessozialgericht [Federal Social Court] has asked the Court of Justice to interpret Article 71 of Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community. That article provides as follows :
               
                        ‘(1)
                     
                     
                        An unemployed person who was formerly employed and who, during his last employment, was residing in the territory of a Member State other than the competent State shall receive benefits in accordance with the following provisions :
                        
                                 (a)
                              
                              
                                 
                                          (i)
                                       
                                       
                                          a frontier worker who is partially or intermittently unemployed in the undertaking which employs him, shall receive benefits in accordance with the provisions of the legislation of the competent State as if he were residing in the territory of that State; these benefits shall be provided by the competent institution;
                                       
                                    
                                          (ii)
                                       
                                       
                                          a frontier worker who is wholly unemployed shall receive benefits in accordance with the provisions of the legislation of the Member State in whose territory he resides as though he had been subject to that legislation while last employed; these benefits shall be provided by the institution of the place of residence at its own expense;
                                       
                                    
                           
                                 (b)
                              
                              
                                 
                                          (i)
                                       
                                       
                                          an employed person, other than a frontier worker, who is partially, intermittently or wholly unemployed and who remains available to his employer or to the employment services in the territory of the competent State shall receive benefits in accordance with the provisions of the legislation of that State as though he were residing in its territory; these benefits shall be provided by the competent institution;
                                       
                                    
                                          (ii)
                                       
                                       
                                          an employed person, other than a frontier worker, who is wholly unemployed and who makes himself available for work to the employment services in the territory of the Member State in which he resides, or who returns to that territory, shall receive benefits in accordance with the legislation of that State as if he had last been employed there; the institution of the place of residence shall provide such benefits at its own expense. However, if such an employed person has become entitled to benefits at the expense of the competent institution of the Member State to whose legislation he was last subject, he shall receive benefits under the provisions of Article 69. Receipt of benefits under the legislation of the State in which he resides shall be suspended for any period during which the unemployed person may, under the provisions of Article 69, make a claim for benefits under the legislation to which he was last subject.
                                       
                                    
                           
                                 (2)
                              
                              
                                 An unemployed person may not claim benefits under the legislation of the Member State in whose territory he resides while he is entitled to benefits under the provisions of paragraph 1 (a) (i) or (b) (i).’
                              
                           
                  The interpretation is being sought in connection with the following facts.
               The plaintiff and respondent in the main proceedings, a German national who was educated in Germany and who has never worked outside that country, was employed from November 1975 to September 1979 as a sales representative in the Aachen area by a German company and thus paid contributions to the German unemployment insurance scheme. In November 1976 the plaintiff, who until then had always lived in Germany, moved to Belgium for the sole purpose of enabling his children, who were at a Belgian college, to travel daily to school from their parents' home. The plaintiff registered his and his wife's departure from Germany and their arrival in Belgium with the police.
               From the end of 1976, the plaintiff also had an office at his mother-in-law's home in Aachen. There was also a divan bed and a spare room for him in that apartment. He generally made use of those facilities once or twice a week. Later, after he became unemployed in the autumn of 1979 and was seeking work in Germany, he made more frequent use of them. He was also able to share the use of the telephone in the apartment, and could always be reached there. At the end of 1977 the plaintiff once again registered with the German police in order to obtain a commercial traveller's licence.
               When his employment with a German company came to an end, the plaintiff, on 3 October 1979, registered as unemployed at the Arbeitsamt [Employment Office] in Aachen and claimed unemployment benefits (but did not register at the employment office in Belgium and did not claim any benefits there).
               Payment of unemployment benefits was initially refused in Germany on the ground that the plaintiff did not have his residence or habitual abode there. The objection lodged by the plaintiff against that decision was dismissed, as was his appeal to the Sozialgericht [Social Court] Aachen. However, the Landessozialgericht [Higher Social Court] awarded the plaintiff German unemployment benefits as from October 1979. It held that the conditions laid down in Paragraph 100 of the German Arbeitsförderungsgesetz [Law to Promote Employment] had been satisfied at the date on which the plaintiff submitted his claim because he had made himself available for work to the employment services and, although resident in Belgium, had his habitual abode in Germany. The Landessozialgericht also stated that although the plaintiff was entitled to claim benefits from the Belgian insurance institution under Article 71 (1) (a) (ii), that did not mean that German law could not apply to his case.
               The Bundesanstalt für Arbeit [Federal Employment Office] does not agree with that interpretation. It considers that under the aforementioned provision, which is applicable in this case, benefits may be claimed only in the State of residence and that no claim for benefits lies under German law. In particular, no right to choose where to draw benefits, such as is granted to the class of persons mentioned in Article 71 (1) (b), exists in this case. The Bundesanstalt therefore appealed to the Bundessozialgericht against the decision of the Landessozialgericht.
               The Bundessozialgericht decided first of all that the plaintiff (who had found employment again as from 1 August 1980) satisfied the conditions for claiming benefits laid down in German law because he had a habitual abode in Germany. It then turned its attention to Article 71 of Regulation No 1408/71. It explained in the first place that Germany should be regarded as the ‘competent State’ within the meaning of Article 71 (in conjunction with Article 1 (q)) because the plaintiff was required to pay contributions in Germany under Article 13 of Regulation No 1408/71 and the Bundesanstalt was therefore the competent institution. Secondly, it pointed out in that regard, with reference to the definition of the terms ‘residence’ and ‘frontier worker’ in Article 1 (h) and (b), that the plaintiff was a frontier worker resident in Belgium and could therefore claim benefits from the Belgian institution because he exhibited the characteristics set out in Article 71 (1) (a) (ii). That was tied to the question whether Article 71 was actually to be interpreted as meaning that benefits may be claimed only from the competent institution of the State of residence even where a claim already lies under the national law of the State in which the claimant was employed. A further question which arose was whether the exclusion of entitlement to benefits in the State of employment (if that is what Article 71 actually means) also applied in the case of an atypical frontier worker such as the plaintiff (who had a special connection with the State in which he was employed and who transferred his residence to another country solely for family reasons), or whether in such a case it was more appropriate to apply Article 71 (1) (b) (i). Since the national court considered itself unable to give an unequivocal answer to those questions, it stayed the proceedings by order of 25 October 1984 and referred the following questions to the Court of Justice for a preliminary ruling:
               
                        ‘(1)
                     
                     
                        Does Article 71 (1) (a) (ii) of Regulation (EEC) No 1408/71, which provides that the institution responsible for paying benefits to a frontier worker who is wholly unemployed is to be the institution of his place of residence, mean that benefits may not be claimed from the competent institution of the place where he was last employed, even if he is entitled to them under the legislation of that State despite his residence abroad, in particular because the unemployed frontier worker is available to the employment services of that State?
                     
                  
                        (2)
                     
                     
                        If so:
                     
                  
                        (a)
                     
                     
                        Does the institution of the place of residence still retain exclusive competence under Article 71 (1) (a) (ii) of Regulation (EEC) No 1408/71 even if the frontier worker:
                        has hitherto worked only in the State in which he was last employed, of which he is a national, and was also resident there until a few years ago;
                        maintains an office at the place of his last employment, which he used during his employment and uses in seeking employment whilst unemployed, which he has done only in that State;
                        besides his office, has sleeping facilities which he regularly used once or twice a week when employed and which he uses even more often while seeking employment;
                        during his absence from the office, is kept informed by another person by telephone of inquiries from clients or from the Arbeitsamt [Employment Office];
                        from both the office and his apartment close to the frontier, maintains his business and private contacts only in the State in which he was last employed, and all his friends and acquaintances are also in that State?
                     
                  
                        (b)
                     
                     
                        Is it possible for Article 71 (1) (b) (i) of Regulation (EEC) No 1408/71 to be applied by analogy to such an “atypical” frontier worker?’
                     
                  
         
               B — 
            
            
               Having taken note of the arguments advanced by the Bundesanstalt and the Commission during the proceedings, my opinion on those questions is as follows:
            
         1. First question
      
               (a)
            
            
               In so far as the inference is to be drawn that the Bundessozialgericht's basic proposition is that the conditions for claiming benefits in Germany were satisfied, the Bundesanstalt takes issue with that court for failing to apply German law correctly. Clearly it takes the view that, in reality, not all the conditions for claiming benefits under German law are satisfied; as it was put during the oral procedure, German law takes no account of situations involving the crossing of a frontier.
               We do not have to tackle that issue in proceedings under Article 177 because it involves a question of national law. I shall adhere to the views expressed in that regard by the Bundessozialgericht; if it is of the opinion that the existence of a claim to benefits under German law cannot as such be denied, that must be taken as an authoritative statement forming the basis of this Court's assessment.
            
         
               (b)
            
            
               With regard to the core of the first question, namely whether the fact that the institution of the place of residence is responsible for paying the benefits means that they may not be claimed from the institution of the State of employment, it is clear that both the Bundesanstalt and the Commission consider that the answer should be in the affirmative. It is not difficult to see that that is in fact the correct response to the problem raised by the Bundessozialgericht.
               The decisive factor in that regard is the system on which the said article is clearly based. As the Court is aware, that article is concerned with unemployed persons, who, when last employed, did not live in the State in which they were employed (and which, under Article 13, is normally the competent State, with the result that only the provisions of its legislation are applicable). It is important in that connection to distinguish between two groups of persons: on the one hand, frontier workers who, according to the definition in Article 1 (b), are characterized by the fact that they return to the Member State in which they reside ‘as a rule daily or at least once a week’, and on the other, workers who do not satisfy that condition.
               It is clear from Article 71 (1) (b) that, with regard to the latter group, no Member State is exclusively responsible for the payment of benefits; instead such workers have a right to choose where to draw benefits, the crucial factor being the State in which they make themselves available for work to the employment services. That provision was adopted because in the case of such workers a relationship primarily with the State in which they reside is not always decisive in the sense that the worker leads his entire life, other than his working life, in that country and it is thus the real centre of his interests. Instead, there is a strong possibility of a close relationship with the State in which he is employed and for that reason he may not necessarily have an interest in returning to the State in which he resides when his employment comes to an end.
               Frontier workers have no such option; moreover, it is significant that a distinction is drawn between those who are partially or intermittently unemployed and those who are wholly unemployed. In the case of the former, benefits are provided by the State of employment whereas in the case of the latter, the State of residence is required to provide benefits. The only conclusion which can be drawn from that distinction is that in the case of a frontier worker who is wholly unemployed, according to the system established by Article 71, the institution of the State of residence retains exclusive competence. That can be explained by the consideration that such persons do not usually have a close relationship with the State of employment, that they remain in that State only because they are employed there and, if they cease to be so employed, see no further reason to stay there, preferring to return to the place which is the centre of their interests. It seems wholly appropriate that the worker should concentrate his efforts to solve his employment problems there since that is the most suitable place for ascertaining whether the conditions governing entitlement to benefits have been fulfilled and for taking the essential accompanying measures, such as finding employment and registering with the employment office.
            
         2. Second question
      This question is concerned with whether account can also be taken of ‘atypical’ frontier workers and whether Article 71 (1) (b) should be applied to them, that is to say, whether they should be accorded a right to choose where to draw benefits.
      The question arises because the court making the reference apparently found a strict application of Article 71 unsatisfactory and also because it appears to be impossible to arrive at a satisfactory result either by disregarding Regulation No 1408/71 (notwithstanding the fact that it was adopted precisely to deal with situations involving the crossing of a frontier) or by simply regarding the more favourable provisions of national law as applicable (a principle which, however, is not compatible with the scope of Article 71 and which, moreover, would be difficult to apply to unemployment insurance since such insurance is concerned not merely with pecuniary benefits but also with other services provided by the employment office).
      Opinions evidently differ as to the solution to the second question. The Commission favours an affirmative answer on the ground that Article 71 envisages typical situations. However it considers that when an individual case clearly departs from the norm (in regard to which, with reference to Article 71 (1) (a) and notwithstanding the fact that the conditions laid down in Article 1 (b) have been satisfied, the circumstances indicated by the Bundessozialgericht are relevant as is the fact that the plaintiff in the main proceedings sought new employment exclusively in Germany), then this must be taken into account and care must be taken to apply the rules in a way which most closely conforms to the meaning and purpose of Regulation No 1408/71 and to the principle laid down in Article 51 of the EEC Treaty. The Bundesanstalt disagrees with that argument inasmuch as it adheres to the wording of, and the system established by, Article 71. In its view, as Article 71 provides for an exception, it should in principle be interpreted restrictively and since it does not distinguish between typical frontier workers and other frontier workers, no such distinction should be drawn. It also fears that the broader interpretation advocated by the Commission may give rise to problems in regard to the administrative application of the system and to a danger of abuse, with the result that an excessive financial burden might be placed on the institution of the State of employment, if it offered higher benefits.
      I find the Commission's point of view more persuasive than that of the Bundesanstalt.
      It is a common feature of legislation to lay down rules by reference to typical cases, which frequently leads merely to the creation of rough-and-ready categories. It is not always possible to fit situations which actually arise into such categories with ease. As the Commission has stated, that can lead to strain and if, from the point of view of doing justice in an individual case, the limits of what is permissible are exceeded, the only solution is to depart from predetermined typical cases, not least in order to ensure by appropriate means that the purpose pursued by the rules in question is achieved. With regard to the type of frontier workers at issue in this case, one of their characteristics is, no doubt, that they lead their lives essentially in the State in which they reside and have the centre of their interests there. The few indications to be found in the definition contained in Article 1 (b) of Regulation No 1408/71 point in that direction.
      Article 71 seeks to take account of that factor with regard to unemployment. In laying down that provision, the legislature started from the premise that the most appropriate place in which to seek new employment is that on which the worker's life is centred. If in a specific case, such as that which is the subject of the main proceedings, the identifiable interests of the worker concerned are clearly situated elsewhere (because he received his training in the State in which he was employed, had always worked there and had the centre of his interests there until he went to live in another Member State solely in order to enable his children to go to school there), the only possible conclusion is that this must be taken into account in order to arrive at a just solution. To apply Article 71 (1) (a) (ii) to such an atypical case and thereby require the plaintiff to apply for benefits and make himself available for work to the employment services in State in which he resides would clearly be contrary to the meaning and purpose of that rule, namely to provide benefits in the place where it is in the worker's best interests to do so. It could make his search for new employment more difficult (thereby affecting his freedom of movement) and that cannot be obscured either by the rules in Article 69 (which, as the Court will be aware, provide only for the temporary retention of entitlement to benefits outside the competent State) or by the circumstance that the employment services in the State of employment, as the Bundesanstalt has assured the Court, are prepared to help in the search for work even though the worker may not be entitled to benefits. If, therefore, the person concerned is an atypical frontier worker, although he exhibits the characteristics described in Article 1 (b) of Regulation No 1408/71, the rules laid down in Article 71 (1) (a) (ii) for dealing with a different situation should not be applied; instead, according to the system established by that article, paragraph 1 (b) should be applied, which entails recognition of the unemployed person's right to choose where to draw benefits, with emphasis on the place where he has made himself available for work to the employment services.
      The Commission is also right to state that authority for such a solution is to be found in the tendency which may be discerned in the Court's decisions to prevent rights arising under national law from being restricted by Community law.
      Moreover, closer examination reveals that the Bundesanstalt's objections to that argument are not particularly persuasive.
      That is certainly true with regard to the fear that the broad interpretation of Article 71 advocated by the Commission might give rise to a danger of abuse (submission of claims either simultaneously or successively in several Member States or avoidance of penalties imposed under one legal system by submitting a claim under another legal system). As the national court itself stated, that problem can be avoided without difficulty by contacts between the institutions paying the benefits,, since a claimant is required to provide information concerning his living conditions. That also applies to the assumption that the interpretation advocated by the Commission poses considerable problems for the administration, which has to verify the details concerning the applicant's living conditions, and could lead to the imposition of an excessive financial burden on the insurance institutions of the State of employment. In that regard reference may be made in the first place to the Court's judgment in Case 76/76 1 setting out the matters of which account should be taken for the purpose of applying Article 71 (1) (b) (ii); consideration of those matters clearly does not overstrain the employment services (the matters mentioned are the family situation of the worker and the reasons which led him to move — paragraphs 17 to 20 — as well as the length and continuity of residence before he moved, the length and purpose of his absence, the nature of the occupation found in the other Member State and the intention of the worker as it appears from all the circumstances— paragraphs 21 and 22). Secondly, it must be remembered in this connection that the plaintiff also paid contributions in the State in which he was employed, which constitutes a relatively rare departure from the typical situation. Finally, the same conclusion can also be drawn with regard to the Bundesanstalt's contention that, according to the Court's case-law, Article 71 must be interpreted restrictively, and that in reality its own interpretation of Article 71 is more European (because, according to that interpretation, no more importance is attached to the frontiers between two Member States of the Community than to regional boundaries within a Member State, where unemployment benefits are also provided automatically in the place of residence). It must not be forgotten that the aforementioned requirement of a restrictive interpretation (in Case 76/76, (
            1
         ) paragraphs 11 to 13 of the decision) is mentioned only in connection with the concept of residence in Article 71 (b) (ii) (which is characterized by ‘close ties’). Comparison with the situation within a Member State however gives a distorted picture because, generally, in a situation of that kind there are no language problems to hinder the search for employment and there is no difference in the benefits provided. In fact, it is quite impossible to say that the Bundesanstalt's interpretation is more European and more favourable as regards freedom of movement precisely because it must be assumed that it is more likely to complicate the search for employment in the State in which the person concerned was previously employed, which is of paramount importance for that person in a case such as this.
      
               C —
            
            
               In conclusion, I propose that the Court should answer the questions referred to it by the Bundessozialgericht in the following terms:
               
                        (a)
                     
                     
                        Article 71 (1) (a) (ii) of Regulation No 1408/71 which provides that the institution responsible for paying benefits to a frontier worker who is wholly unemployed is to be the institution of his place of residence means that benefits may not be claimed from the competent institution of the place where he was last employed, even if he is entitled to them under the legislation of that State despite his residence abroad, in particular because the unemployed frontier worker is available to the employment services of that State.
                     
                  
                        (b)
                     
                     
                        The institution of the place of residence does not retain exclusive competence under Article 71 (1) (a) (ii) in the case of an atypical frontier worker where the centre of his interests is not in fact situated in the State in which he resides. Instead Article 71 (1) (b) is to be applied to him by analogy.
                     
                  
         (
            *1
         )	Translated from the German.
      (
            1
         )	Judgment of 17 February 1977 in Case 76/76 Silvana Di Paolo v Office national de l'emploi [1977] ECR 315 at p.325.