CELEX: 62007CC0415
Language: en
Date: 2008-11-27
Title: Opinion of Mr Advocate General Ruiz-Jarabo Colomer delivered on 27 November 2008. # Lodato Gennaro & C. SpA v Istituto nazionale della previdenza sociale (INPS) and SCCI. # Reference for a preliminary ruling: Tribunale ordinario di Nocera Inferiore - Italy. # State aid for employment - Guidelines on aid to employment - Guidelines on national regional aid - Regulation (EC) No 2204/2002 - Notion of ‘job creation’ - Calculation of the increase in the number of jobs. # Case C-415/07.

OPINION OF ADVOCATE GENERAL
      RUIZ-JARABO COLOMER
      delivered on 27 November 2008 1(1)
      
      Case C‑415/07
      Lodato Gennaro & C. SpA
      v
      Istituto nazionale della previdenza sociale (INPS)
      and
      SCCI
      (Reference for a preliminary ruling from the Tribunale ordinario di Nocera Inferiore (Italy))
      (State aid for employment – Guidelines on aid to employment – Verifying compliance with conditions for receiving aid – Calculation of ‘job creation’ indicator)I –  Introduction 
      1.        The question referred for a preliminary ruling from the Tribunale ordinario di Nocera Inferiore (District Court, Nocera Inferiore)
         (Italy) requests the Court of Justice to choose between two alternative methods for calculating the ‘growth in employment’
         in an undertaking, which must be a positive figure in order to qualify for employment aid. The first method compares two annual
         workforce averages, one for the year preceding the recruitment likely to benefit from such aid, and another for the year following
         it; the second method deducts the average workforce for the previous year from the specific figure for employment on the day
         of recruitment. 
      
      2.        One of the distinctive features of this case, which appears highly technical, is the fact that the Italian court’s only references
         for the interpretation sought are to provisions that do not have legislative force (guidelines on aid to employment (2) and guidelines on national regional aid (3)) and legislation not yet in force at the time of the relevant facts (Commission Regulation (EC) No 2204/2002 (4)).
      
      3.        Lastly, there is the Treaty: Articles 87 EC and 88 EC represent the hard law applicable in that area, and the guidelines the
         soft law for its interpretation. Comparing both methods of calculation with the Treaty itself is not particularly useful,
         since the fact that one method is compatible with primary law does not always imply that the other is not. 
      
      4.        In less polarised terms, the national court wishes to determine the most appropriate interpretation consistent with the general
         purpose of the employment aid scheme, some of the principles of which are included in the guidelines mentioned above and in
         the exemption regulations.
      
      II –  The legal framework
      A –    Community law
      1.      The Commission guidelines 
      5.        The relevant legal framework comprises two communications by which the Commission made public the guidelines to assist it
         in determining whether the aid schemes notified by the Member States under Article 88 EC (formerly Article 93 of the EC Treaty)
         are compatible with the Treaties. These are the guidelines on aid to employment and the guidelines on national regional aid
         respectively.
      
      a)      The guidelines on aid to employment
      6.        The aim of those guidelines is to ensure a degree of consistency between the rules on competition and the implementation of
         the policies necessary to combat unemployment in Europe, with a ‘sympathetic view towards aid intended to create jobs’. This
         is because while such policies pose risks for intra-Community competition, they improve the employment content of growth (point
         20). 
      
      7.        Point 17 of the guidelines on aid to employment states that ‘job creation’ refers to net job creation, that is to say, ‘an
         additional job in relation to the (average) workforce (over a period of time) for the firm concerned’.
      
      b)      The guidelines on national regional aid
      8.        This second set of guidelines is concerned with the grant of aid in specific geographical areas, and unlike the guidelines
         on aid to employment, link the new jobs created to the carrying-out of an initial investment project (point 4.11).
      
      9.        The guidelines also refer to ‘job creation’. This is defined at point 4.12 as the net increase in the number of jobs in an
         establishment ‘compared with the average over a period of time’, thus deducting ‘any jobs lost during that period ... from
         the apparent number of jobs created during the same period’. Footnote 33 (at point 4.12) provides that ‘the number of jobs
         corresponds to the number of annual labour units (ALU), i.e. the number of persons employed full time in one year’, part-time
         and seasonal work being ALU fractions.
      
      2.      The exemption regulations
      10.      Exercising its powers under Council Regulation (EC) No 994/98, (5) the Commission has approved two block exemption regulations, under which it is possible in certain circumstances to derogate
         from the requirement for the prior notification of aid under Article 88(3) EC. Hence, Commission Regulation (EC) No 70/2001 (6) applies to aid to small and medium-sized enterprises, and Regulation No 2204/2002 to State aid for employment.
      
      a)      Regulation No 70/2001
      11.      Under Article 4(6) of Regulation No 70/2001, a scheme of aid for small and medium-sized enterprises must fulfil two requirements
         in order to qualify for the derogation, that is to say, the investment project must lead to a net increase in the number of
         employees in the establishment concerned, compared with the average over the previous 12 months, and the employment created
         must be maintained during a minimum period of five years (subparagraphs (b) and (c)).
      
      12.      Article 2(g) of the regulation defines ‘number of employees’ as the number of annual labour units (ALU). 
      
      b)      Regulation No 2204/2002
      13.      Under Article 4(4) of Regulation No 2204/2002, the employment created must represent a net increase in the number of employees,
         both in the establishment and in the enterprise concerned, compared with the average over the past 12 months, and be maintained
         ‘for a minimum period of three years, or two years in the case of SMEs [(small and medium-sized enterprises)]’ (subparagraphs
         (a) and (b)).
      
      14.      Article 2(e) of that regulation reproduces the definition of ‘number of employees’ in Article 2(g) of Regulation No 70/2001.
      
      B –    Italian legislation and the Commission’s decisions
      15.      Article 3(5) of Italian Law No 448/98 of 23 December 1998 (7) provides that in respect of new employees recruited in 1999, 2000 and 2001 by way of increase in the number of units actually
         filled as at 31 December 1998, all private employers and public economic entities operating in the regions of Campania, Basilicata,
         Sicily, Apulia, Calabria and Sardinia are to be granted for a period of three years from the date on which the individual
         worker is recruited full relief from the contributions due from them to the Istituto nazionale della previdenza sociale (INPS)
         in respect of remuneration subject to contributions to the Fondo pensioni lavoratori dipendenti (Employees’ Pension Fund).
         In the regions of Abruzzi and Molise, the provisions of this paragraph are to apply only to new employees recruited in 1999.
      
      16.      Article 3(6) of that law as originally drafted made the grant of such aid conditional on a number of requirements, inter alia
         that an undertaking, even where it was newly established, should increase the number of full-time permanent employees. For
         undertakings that were already established by 31 December 1998, the increase had to be commensurate with the number of employees
         as at 30 November 1998 (subparagraph (a)). It was a further requirement that ‘the level of employment achieved following the
         engagement of new employees does not fall during the period in which the relief applies’ (subparagraph (c)).
      
      17.      On 16 December 1998, the Italian Republic notified the Commission that the above aid scheme had been established. 
      
      18.      Following the exchange of views between the Italian and the Community authorities, the requirement to increase the number
         of employees was revised as follows: an undertaking, even where newly established, had to increase its number of full-time
         employees. Job creation was to be calculated by reference to the average number of employees in an undertaking during the
         12 months before recruitment. The average for that number of employees was to be expressed in annual working units (AWU).
         
      
      19.      On 10 August 1999, the Commission decided not to contest the aid scheme enshrined in Italian Law No 448/98, with the result
         that, for aid not linked to an initial investment project, ‘the scheme fulfils the requirement for the net creation of jobs,
         since the aid is granted for additional employees in comparison with the number of employees in the undertaking during the
         previous 12 months’.
      
      20.      By its decision of 6 December 2002, the Commission also approved Article 44 of Italian Law No 448/01 of 28 December 2001, (8) which extended the aid available under Law No 448/98.
      
      III –  The dispute in the main proceedings and the question referred
      21.      Lodato Gennaro & C. SpA (‘Lodato’) is an undertaking whose main activity is the production of tinned tomatoes in the Campania
         region of Italy. Its business peaks sharply during the months in which tomatoes are ripe and may be canned, (9) when it has to recruit many seasonal workers.
      
      22.      Lodato benefited from the employment aid scheme under Italian Laws Nos 448/98 and 448/01, and received relief from social
         security contributions for seven employees initially, and later in respect of a further two.
      
      23.      On 21 November 2005, the INPS produced a report alleging that Lodato had infringed Italian Laws Nos 448/98 and 448/01. It
         considered that Lodato did not satisfy the aid criteria, since it had allegedly failed to ‘take into consideration’ seasonal
         workers when determining whether it had increased employment.
      
      24.      The inspectors in the case decided that none of the employees recruited in respect of whom Lodato claimed relief from social
         security contributions had led to an increase in the workforce. For each new worker concerned, the inspectors calculated the
         increase in employees by comparing the average AWU figure for the year preceding the date of recruitment with the total number
         of employees on that same date.
      
      25.      Lodato has challenged the INPS’s decision at the Sezione Lavoro (Employment Division) of the Tribunale ordinario di Nocera
         Inferiore, on the ground that the Italian administration used unlike terms in its calculations instead of comparing the average
         AWU for the year preceding recruitment and average AWU for the year following. Lodato further maintains that it did include
         seasonal workers as AWU fractions.
      
      26.      The order for reference asserts that the INPS’s allegation that seasonal workers ‘had not been counted’ is incorrect, and
         criticises the method used by the INPS as discriminatory against undertakings engaged in seasonal activity. The order further
         states that ‘a comparison between the AWU for the year preceding the employment of new workers and the AWU for the following
         year is more consistent with the underlying purpose of the aid, which is to promote the creation of new employment for a specified
         period’. The order does, however, stress the possible difficulty as to the precise interpretation of the relevant Community
         law, referring the following question to the Court of Justice for a preliminary ruling:
      
      ‘Is the Community law laid down in the guidelines on aid to employment, the guidelines on national regional aid and Commission
         Regulation (EC) No 2204/2002 of 12 December 2002 on the application of Articles 87 and 88 of the EC Treaty on State aid for
         employment to be interpreted as meaning that, in order to determine whether there has been an increase in employment, a comparison
         must be made between the average AWU for the year preceding the recruitment of new workers and the average AWU for the year
         following their recruitment, or are those provisions to be interpreted instead as meaning that a comparison must – or may
         – be made between the average AWU for the year preceding the recruitment of new workers and the exact number of workers present
         in the undertaking on the specific day on which those new workers were recruited?’ 
      
      IV –  The procedure before the Court of Justice
      27.      The request for a preliminary ruling was lodged at the Court Registry on 10 September 2007.
      
      28.      Written observations have been lodged by Lodato, the INPS, the Commission and the Italian Government.
      
      29.      At the hearing, held on 21 October 2008, the representatives of Lodato, the INPS, the Italian Republic and the Commission
         presented their oral arguments.
      
      V –  Analysis of the question referred
      A –    Admissibility of the question referred
      30.      The dispute before the Tribunale ordinario di Nocera Inferiore centres on an administrative measure requiring Lodato to return
         the employment aid it received pursuant to Laws Nos 448/98 and 448/01, for allegedly failing to increase its workforce as
         required under those laws.
      
      31.      The scheme for relief from social security contributions contained in Laws Nos 448/98 and 448/01 was approved by the Commission.
         Thus, although it will not be necessary to analyse whether those laws are compatible with Community law, the type of calculation
         for assessing whether there has been employment growth will need to be determined, which will require reference to the European
         rules. 
      
      32.      Accordingly, the Italian court has referred a question for a preliminary ruling to the Court of Justice, requesting an interpretation
         of measures that lack legislative force (guidelines on aid to employment and guidelines on national regional aid) and a provision
         not then in force at the time of the relevant facts (Regulation No 2204/2002).
      
      33.      There can be no objection to reference being made to the guidelines on aid to employment and guidelines on national regional
         aid: the Commission was guided by both sets of guidelines when approving Italian Law No 448/98. The Tribunale ordinario di
         Nocera Inferiore must therefore have recourse to those guidelines in order to determine whether an administrative decision
         complies with Community law.
      
      34.      In Grimaldi, (10) the Court of Justice confirmed its jurisdiction, in preliminary rulings, to interpret soft law provisions adopted on the
         basis of the Treaty, (11) stating that such measures are not lacking in legal effects. Accordingly, national courts must ‘take into consideration’
         soft law provisions when deciding cases before them, in particular where such provisions clarify the national rules enacted
         in order to implement them, or where they supplement legally binding Community rules. (12)
      
      35.      However, guidelines are not a source of Community law stricto sensu. As the Court has consistently held, the Commission may adopt a policy as to how it will exercise its discretion, in the
         form of measures such as guidelines, in so far as those measures contain rules indicating the approach it is to take, do not
         depart from the rules of the Treaty, and contribute to the transparency, consistency and legal certainty of the Commission’s
         actions. Although not binding on the Court, such guidance is a useful tool for developing its reasoning. (13)
      
      36.      Case-law has also held that the Commission imposes a limit on its discretion by publishing such guidelines, and may not depart
         from them without good reason. Otherwise, it might be found to be in breach of general principles of law such as equal treatment
         and the protection of legitimate expectations. It cannot therefore be excluded that, ‘on certain conditions and depending
         on their content, such rules of conduct, which are of general application, may produce legal effects’. (14)
      
      37.      The guidelines on aid to employment and guidelines on national regional aid are thus an essential interpretative tool for
         determining the method of calculation most consistent with the underlying purpose of employment aid.
      
      38.      In addition to the Commission’s guidelines, the Tribunale ordinario di Nocera Inferiore refers to a block exemption regulation
         that entered into force after the scheme of aid at issue was approved (Regulation No 2204/2002). Consequently, the Commission
         submits that the question referred is inadmissible in so far as it concerns the interpretation of that regulation, which it
         argues is irrelevant in deciding the action in the main proceedings.
      
      39.      The contested regulation, which removes the notification requirement under Article 88(3) EC for various types of State aid
         for employment, was in force from the beginning of 2003 until 31 December 2006 (Article 11). There is therefore no doubt that
         it did not apply to the relief from social security contributions between 1998 and 2001 under consideration here. The Italian
         authorities therefore lodged copies of Laws Nos 448/98 and 448/01 with the Commission for its scrutiny.
      
      40.      Only the Treaty and the guidelines, subject to the points made above with regard to their nature, may be used to determine
         the validity of the decisions adopted at the time by the Commission. However, the Court of Justice may, when ascertaining
         the calculation formula most consistent with the aims of the Treaty in this area, use the interpretative criteria contained
         in secondary legislation enacted on the basis of Articles 87 EC and 88 EC, even though not in force at the time of the relevant
         facts. 
      
      41.      Moreover, it is settled case-law that it is for the national court, considering the facts of the individual case, to determine
         whether to refer a question for a preliminary ruling, and also the relevance of the questions at issue. (15) A reference should only be rejected where it is quite obvious that the interpretation of Community law sought bears no relation
         to the actual facts of the main action or its purpose, which in my view is not the case here.
      
      B –    Method of calculating ‘job creation’
      42.      The concept of ‘aid’ in Article 87(1) EC covers the advantages conferred by public authorities which, in various forms, mitigate
         the charges which are normally included in the budget of an undertaking. (16)
      
      43.      In particular, the Court has made clear that a reduction in social security contributions payable by the undertakings in a
         particular industrial sector constitutes aid within the meaning of the Treaty, provided that it is intended partially to exempt
         these undertakings from the financial charges of the social security system, without there being any justification on the
         basis of the nature or general scheme of the system, or on the basis of its social character. (17)
      
      44.      Employment aid in the form of reductions in social security contributions is therefore caught by Article 87(1) EC and is deemed
         incompatible with the common market, since it distorts or threatens to distort competition. However, aid that is intended
         to create jobs may benefit from one of the derogations in Article 87(3) EC.
      
      45.      In order to clarify Articles 87 EC and 88 EC, the Commission drew up the guidelines referred to in the question for a preliminary
         ruling, ensuring greater transparency in the notification of aid, and consistency between the rules on competition and the
         implementation of suitable policies to combat unemployment in Europe. 
      
      46.      Both the guidelines on aid to employment and the guidelines on national regional aid set out the requirements for such employment
         aid to be authorised by the Commission. (18) Both texts require a net increase in the number of jobs and use averages for the comparative calculations. 
      
      47.      As explained, the referring court has submitted to the Court of Justice alternative methods for calculating the ‘job creation’
         rate. The first method, proposed by Lodato, compares the average AWU for the year before recruitment that is attributable
         to the aid with the same average for the year following; the second method, advocated by the Italian INPS, compares the average
         AWU for the previous year with the exact number of employees working for the undertaking when the new worker triggering the
         relief from contributions is recruited.
      
      1.      The guidelines, exemption regulations and mathematical logic favour Lodato’s formula 
      48.      A cursory analysis of the guidelines makes it clear that the formula applied by the INPS is unsuitable. 
      
      49.      Point 17 of the guidelines on aid to employment provides that net job creation occurs where there is ‘an additional job in
         relation to the (average) workforce (over a period of time) of the firm concerned’. 
      
      50.      The guidelines on national regional aid, which are somewhat more precise, state that the average calculated refers to an annual
         period, by introducing the concept of ‘annual labour units’ (ALU). This corresponds to the number of full‑time employees over
         a year, taking into account that ‘part-time and seasonal work are ALU fractions’ (footnote 33). 
      
      51.      Point 4.12 of those guidelines defines job creation specifically as the ‘net increase in the number of jobs in a particular
         establishment compared with the average over a period of time’, which means ‘deducting the apparent number of jobs created
         over a given period of time from the jobs lost during the same period’.
      
      52.      To my mind, the calculation is straightforward. In order to ascertain the possible increase in workforce, it would suffice
         to subtract the total number of employees ceasing to be employed over ‘a given period of time’ from the total number of employees
         recruited over that same period. However, the guidelines on national regional aid themselves suggest that those calculations
         should be performed for a yearly average (ALUs) that also includes part-time and seasonal workers as fractions. That nuance
         complicates the calculation, since strict mathematical logic demands that any subtraction must involve like values, in this
         case of values linked to symmetrical periods of time of equal length, in order to avoid a distorted result, which would not
         reflect reality at all reliably.
      
      53.      In short, as the Commission has correctly indicated in its written observations, the guidelines provide for a comparison between
         the data from two successive periods: one before the recruitment of new workers and another after such recruitment. Accordingly,
         it would be against the spirit and purpose of the guidelines, as well as arithmetically absurd, to compare the average level
         of employment for a period of time with the figure for a fixed calendar date. 
      
      54.      Regulation No 2204/2002 supports that reasoning, although not applicable ratione temporis to the aid in question. Article 4(4)(a) of that regulation has clarified the issues examined in this Opinion, stating that
         ‘the employment created must represent a net increase in the number of employees … compared with the average over the past
         12 months’. The first term of the equation is the figure for the average employment in the previous year, which, together
         with the use of AWU (also required by Article 2(e) of that regulation) supports the idea that yearly averages must be used
         to determine whether employment has increased. 
      
      55.      Thus, if the term ‘number of employees’ in Article 4(4)(a) of Regulation No 2204/2002 is replaced by its equivalent ‘number
         of annual working units (AWU)’ (formerly Article 2), the text is free from doubt: ‘the employment created must represent a
         net increase in the number of annual working units (AWU) … compared with the average over the past 12 months’. (19)
      
      56.      Lodato’s method of calculation is more consistent with the rules of mathematics and the increasingly clear intention of the
         institutions of the Community, evidenced initially in the Commission guidelines, and subsequently in the block exemption regulations.
         
      
      2.      INPS’s solution may marginalise undertakings involved in seasonal work 
      57.      Without prejudice to the foregoing, there is a further argument in Lodato’s favour which relates to the potentially discriminatory
         nature of INPS’s formula. 
      
      58.      As the Court of Justice has recognised in its recent judgment in Nuova Agricast, (20) the procedure in Article 88 EC must not lead to a result that conflicts with the Treaty. Accordingly, the Commission may
         not declare as compatible with the common market State aid that infringes general principles of Community law, such as the
         principle of equal treatment. 
      
      59.      Nevertheless, case-law has consistently approved the traditional ‘Aristotelian concept of discrimination’, (21) so that the principle of equality is infringed where there is dissimilar treatment of comparable situations or different
         situations are treated alike. (22) An objective justification is then sought for any inequalities. 
      
      60.      As indicated in the question referred by the Italian court, comparing the average AWU for the year preceding recruitment with
         the figure for the actual number of employees as at the exact date of recruitment clearly disadvantages undertakings such
         as Lodato whose activity is seasonal, and which therefore have very sharp peaks in their employment curves coinciding with
         the periods when they are busiest. Under the mechanism advocated by the Italian authorities, the time of recruitment is of
         little relevance for an undertaking with a more or less constant level of employment throughout the year. However, for an
         undertaking whose workforce varies greatly between different months, the chance of qualifying for aid diminishes appreciably
         where the recruitment of a new worker occurs on a day on which its workforce is lower than the previous year’s average (which
         is rather frequent outside the busiest months). 
      
      61.      The Italian Government submits in its written observations that such limited access to the relief in question for those engaged
         in seasonal work is consistent with the rationale of the system of aid, since both the Commission’s authorisation at the time
         and Regulation No 2204/2002 are based exclusively on stable employment. 
      
      62.      I do not share that opinion. In my view, the INPS practice creates an inequality that runs counter to the aim of employment
         aid and may hinder the economic growth that aid seeks to promote. 
      
      63.      As is apparent from Regulation No 2204/2002, that type of State aid aims to promote employment within the economic and social
         policy of the Community and that of the Member States. On the basis of Article 87(3) EC, the regulation asserts that it is
         justified for public authorities to ‘apply measures providing incentive to enterprises to increase their levels of employment’
         (fifth recital), reactivating the economy by stimulating the employment factor. 
      
      64.      In order to assess whether the unfavourable treatment of seasonal workforces is lawful, it must be decided whether the aim
         of such aid is to promote employment generally (in which case it would not be correct to exclude undertakings with seasonal
         work) or permanent employment only. The Italian Government advocates the latter, relying on Article 4(4)(b) of Regulation
         No 2204/2002, which provides that, in order to qualify for relief, the employment created must be maintained for a minimum
         period of three years, or two years in the case of small and medium-sized enterprises. 
      
      65.      However, to my mind, that factor in not determinative. The Community institutions have always made it a condition of employment
         aid that the employment created lasts for a certain amount of time. Point 21 of the guidelines on aid to employment referred
         to the need to maintain ‘newly created jobs for a minimum period’, and point 4.14 of the guidelines on national regional aid
         provides more specifically that such jobs must be maintained for five years. (23)
      
      66.      In any event, Lodato could only apply the relief validly by providing evidence that the new employees would continue to be
         employed for a minimum period of time (five years in the case of national regional aid). Only those permanent jobs would form
         part of the calculation of the net increase in employment that is a prerequisite for the grant of aid. 
      
      67.      Any type of new employment serves to promote growth, provided that it enjoys a certain degree of stability and the true value
         of its contribution can be appreciated. This can be seen from the third indent of point 21 of the guidelines on aid to employment,
         in which the Commission reveals its intention to favour contracts for an indefinite period, those entered into for a sufficiently
         lengthy term, and those where newly created jobs must be maintained for a minimum period, criteria which guarantee the stability
         of the employment created. 
      
      68.      Sometimes the work of an undertaking cannot but be seasonal. This is true of many agricultural undertakings and other undertakings
         in the food industry (such as canning undertakings), but also in some undertakings in the tourist sector, where often the
         same individuals are recruited each year during the high season. It would not appear to be the aim of the Community legislature
         to punish that type of undertaking, which is the major driver of economic progress in a number of Member States, by excluding
         it from employment aid. (24)
      
      69.      There is no reason therefore why seasonal work should not benefit from relief, provided that such work is clearly on a continuous
         basis, and is counted as an AWU fraction. 
      
      70.      Accordingly, in my opinion, the guidelines contained sufficient safeguards to ensure that the employment created by Lodato
         was adequately assessed, and the method of calculation advocated by the Italian authorities distorted the workings of that
         mechanism.
      
      71.      The previous line of reasoning also makes clear the irrelevance of the level of employment on the day of recruitment already
         alluded to. For it is not the purpose to determine whether on that precise date the number of employees is greater than the
         average for the previous year, but rather to ascertain whether the system of relief from social security contributions enables
         the undertaking to increase its employment rate, which, first, is measured annually and, second, includes both full-time permanent
         employees and (in the relevant proportions) permanent employees employed on discontinuous, seasonal and part-time bases. 
      
      VI –  Conclusion
      72.      In light of the foregoing considerations, I propose that the Court of Justice reply as follows to the question referred for
         a preliminary ruling by the Tribunale ordinario di Nocera Inferiore: 
      
      The Community law laid down in the guidelines on aid to employment, the guidelines on national regional aid and Commission
         Regulation (EC) No 2204/2002 of 12 December 2002 on the application of Articles 87 and 88 of the EC Treaty on State aid for
         employment is to be interpreted as meaning that, in order to determine whether there has been an increase in employment, a
         comparison must be made between the average annual working units for the year preceding the recruitment of new workers and
         the average annual working units for the year following their recruitment. 
      
      1 –	Original language: Spanish.
      
      2 –	Information from the Commission (OJ 1995 C 334, p. 4).
      
      3 –	Information from the Commission (OJ 1998 C 74, p. 9).
      
      4 –	Commission regulation of 12 December 2002 on the application of Articles 87 and 88 of the EC Treaty to State aid for employment
         (OJ 2002 L 337, p. 3).
      
      5 –	Council regulation of 7 May 1998 on the application of Articles 92 and 93 of the Treaty establishing the European Community
         to certain categories of horizontal State aid (OJ 1998 L 142, p. 1). 
      
      6 –	Commission regulation of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small
         and medium-sized enterprises (OJ 2001 L 10, p. 33).
      
      7 –	Ordinary Supplement to GURI (the Official Gazette of the Italian Republic) No 302 of 29 December 1998. 
      
      8 –	Ordinary Supplement to GURI No 332 of 29 December 2001.
      
      9 –	Normally from July to October. 
      
      10 –	Case C-322/88 [1989] ECR 4407, paragraphs 8 and 18.
      
      11 –	Grimaldi concerned a Commission recommendation, containing no reference to other relevant legislation, unlike several previous cases
         such as Case 113/75 Frecassetti [1976] ECR 983, and Case 90/76 Van Ameyde [1977] ECR 1091. Despite the views of some commentators (for example, Senden, L., Soft law in European Community Law, Portland, Oxford, 2004, p. 391), there is no serious impediment to extending this case-law to other forms of soft law such
         as guidelines.
      
      12 –	On this requirement to ‘take into consideration’ soft law measures of the Community and abide by its proper interpretation,
         see Alonso García, R., ‘El soft law comunitario’, Revista de Administración Pública No 154, January-April 2001, and Sarmiento, D., El soft law administrativo, Thomson-Civitas, Madrid, 2008, p. 86.
      
      13 –	Case C-313/90 CIRFS and Others v Commission [1993] ECR I-1125, paragraphs 34 and 36; Case C-288/96 Germany v Commission [2000] ECR I-8237, paragraph 62; Case C-310/99 Italy v Commission [2002] ECR I-2289, paragraph 52; and Case C-387/97 Commission v Greece [2000] ECR I-5047, paragraphs 87 and 89. 
      
      14 –	Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-5425, paragraph 211; Joined Cases 181/86 to 184/86 Del Plato and Others v Commission [1987] ECR 4991, paragraph 10; Joined Cases 80/81 to 83/81 and 182/82 to 185/82 Adam and Others v Commission [1984] ECR 3411, paragraph 22; and Case C‑171/00 P Liberós v Commission [2002] ECR I-451, paragraph 35.
      
      15 –	Case 126/80 Salonia [1981] ECR 1563, paragraph 6; Case C-186/90 Durighello [1991] ECR I‑5773, paragraph 9; Case C-343/90 Lourenço Dias [1992] ECR I-4673, paragraph 18; Case C‑18/93 Corsica Ferries [1994] ECR I-1783 paragraph 14; Case C-297/93 Grau-Hupka [1994] ECR I-5535 paragraph 19; Case C-415/93 Bosman [1995] ECR I-4921 paragraph 61; Case C‑291/96 Grado and Bashir [1997] ECR I-5531, paragraph 12; and Case C-36/99 Idéal tourisme [2000] ECR I‑6049, paragraph 20.
      
      16 –	Case C-75/97 Belgium v Commission [1999] ECR I-3671, paragraph 47; Case C‑251/97 France v Commission [1999] ECR I-6639, paragraph 35; Case C-256/97 DM Transport [1999] ECR I‑3913, paragraph 19; Case C-241/94 France v Commission [1996] ECR I-4551, paragraph 34; Case C-387/92 Banco Exterior de España [1994] ECR I-877 paragraph 13; and Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 1.
      
      17 –	Belgium v Commission, paragraph 48; Case C-251/97 France v Commission, paragraphs 36 and 37; Case C-241/94 France v Commission, paragraph 21; and Case 173/73 Italy v Commission [1974] ECR 709, paragraphs 28 and 33. 
      
      18 –	They differ in that, in addition to being reserved for specific regions and their development, the guidelines on national
         regional aid also require that the jobs created are linked to the carrying‑out of an initial investment project. 
      
      19 –	The same course is followed by Regulation No 70/2001, which also uses the ALU/AWU concept and makes a comparison with the
         ‘average over the previous 12 months’ (Article 2(g) and Article (4)(6)(b)). 
      
      20 –	Case C-390/06 [2008] ECR I-0000. See, to that effect, Case C-204/97 Portugal v Commission [2001] ECR I-3175, paragraph 41, and Case C-456/00 France v Commission [2002] ECR I‑11949, paragraph 30. 
      
      21 –	Craig, P., EU Administrative Law, Oxford University Press, Oxford, 2006, p. 579.
      
      22 –	Case 14/59 Société des fonderies de Pont-à-Mousson v High Authority [1959] ECR 215.
      
      23 –	Regulation No 2204/2002 removes that five-year rule, reducing it to three years or two for small and medium-sized enterprises
         (recital 18 and Article 4(4)(b)).
      
      24 –	Employment aid is a basic instrument in the fight against undeclared work, which is highly prevalent in sectors with a
         tendency for seasonal recruitment. See, to that effect, the communication from the Commission of 7 April 1998 on undeclared
         work (COM(1998) 219 final).