Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie.
Date: 1999-09-21
32 Albany challenged that demand before the Kantongerecht, Arnhem.  It contended in particular that the system of compulsory affiliation to the Fund was contrary to Article 3(g) of the Treaty, Articles 52 and 59 of the EC Treaty (now, after amendment, Articles 43 EC and 49 EC), and Articles 85, 86 and 90 of the Treaty.
39 According to settled case-law, the need to provide an interpretation of Community law which will be of use to the national court makes it necessary that the national court define the factual and legal context of the questions it is asking or, at the very least, explain the factual circumstances on which those questions are based.  Those requirements are of particular importance in certain areas, such as that of competition, where the factual and legal situations are often complex (see in particular Joined Cases C-320/90, C-321/90 and C-322/90 Telemarsicabruzzo and Others [1993] ECR I-393, paragraphs 6 and 7, Case C-284/95 Safety High-Tech v S. & T. [1998] ECR I-4301, paragraphs 69 and 70, and Case C-341/95 Bettati [1998] ECR I-4355, paragraphs 67 and 68).
40 The information provided and the questions raised in orders for reference must not only be such as to enable the Court to reply usefully but must also give the governments of the Member States and other interested parties the opportunity to submit observations pursuant to Article 20 of the EC Statute of the Court of Justice.  It is the Court's duty to ensure that the opportunity to submit observations is safeguarded, bearing in mind that, by virtue of the abovementioned provision, only the orders for reference are notified to the interested parties (see, in particular, the order of 30 April 1998 in Joined Cases C-128/97 and C-137/97 Testa and Modesti [1998] ECR I-2181, paragraph 6, and the order of 11 May 1999 in Case C-325/98 Anssens [1999] ECR I-2969, paragraph 8).
43 Furthermore, even though the French and Netherlands Governments may have taken the view in this case that the information provided by the national court was not sufficient to enable them to take a position on certain aspects of the questions submitted to the Court, it must be emphasised that further information was made available in the documents forwarded by the national court, the written observations and the answers given to the questions raised by the Court. All that information, which was included in the Report for the Hearing, was brought to the notice of the governments of the Member States and the other interested parties for the purposes of the hearing, at which they had an opportunity, if necessary, to amplify their observations.
52 It is necessary to consider first whether a decision taken by the organisations representing employers and workers in a given sector, in the context of a collective agreement, to set up in that sector a single pension fund responsible for managing a supplementary pension scheme and to request the public authorities to make affiliation to that fund compulsory for all workers in that sector is contrary to Article 85 of the Treaty.
53 It must be noted, first, that Article 85(1) of the Treaty prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market. The importance of that rule prompted the authors of the Treaty to provide expressly in Article 85(2) of the Treaty that any agreements or decisions prohibited pursuant to that article are to be automatically void.
54 Next, it is important to bear in mind that, under Article 3(g) and (i) of the EC Treaty (now, after amendment, Article 3(1)(g) and (j) EC), the activities of the Community are to include not only a `system ensuring that competition in the internal market is not distorted' but also `a policy in the social sphere'. Article 2 of the EC Treaty (now, after amendment, Article 2 EC) provides that a particular task of the Community is `to promote throughout the Community a harmonious and balanced development of economic activities' and `a high level of employment and of social protection'.
55 In that connection, Article 118 of the EC Treaty (Articles 117 to 120 of the EC Treaty have been replaced by Articles 136 EC to 143 EC) provides that the Commission is to promote close cooperation between Member States in the social field, particularly in matters relating to the right of association and collective bargaining between employers and workers.
56 Article 118b of the EC Treaty (Articles 117 to 120 of the EC Treaty having been replaced by Articles 136 EC to 143 EC) adds that the Commission is to endeavour to develop the dialogue between management and labour at European level which could, if the two sides consider it desirable, lead to relations based on agreement.
57 Moreover, Article 1 of the Agreement on social policy (OJ 1992 C 191, p. 91) states that the objectives to be pursued by the Community and the Member States include improved living and working conditions, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combatting of exclusion.
58 Under Article 4(1) and (2) of the Agreement, the dialogue between management and labour at Community level may lead, if they so desire, to contractual relations, including agreements, which will be implemented either in accordance with the procedures and practices specific to management and labour and the Member States, or, at the joint request of the signatory parties, by a Council decision on a proposal from the Commission.
59 It is beyond question that certain restrictions of competition are inherent in collective agreements between organisations representing employers and workers. However, the social policy objectives pursued by such agreements would be seriously undermined if management and labour were subject to Article 85(1) of the Treaty when seeking jointly to adopt measures to improve conditions of work and employment.
60 It therefore follows from an interpretation of the provisions of the Treaty as a whole which is both effective and consistent that agreements concluded in the context of collective negotiations between management and labour in pursuit of such objectives must, by virtue of their nature and purpose, be regarded as falling outside the scope of Article 85(1) of the Treaty.
61 The next question is therefore whether the nature and purpose of the agreement at issue in the main proceedings justify its exclusion from the scope of Article 85(1) of the Treaty.
62 First, like the category of agreements referred to above which derive from social dialogue, the agreement at issue in the main proceedings was concluded in the form of a collective agreement and is the outcome of collective negotiations between organisations representing employers and workers.
63 Second, as far as its purpose is concerned, that agreement establishes, in a given sector, a supplementary pension scheme managed by a pension fund to which affiliation may be made compulsory. Such a scheme seeks generally to guarantee a certain level of pension for all workers in that sector and therefore contributes directly to improving one of their working conditions, namely their remuneration.
64 Consequently, the agreement at issue in the main proceedings does not, by reason of its nature and purpose, fall within the scope of Article 85(1) of the Treaty.
65 It must also be borne in mind that, as the Court has held, in particular in Case 267/86 Van Eycke v ASPA [1988] ECR 4769, paragraph 16, Article 85 of the Treaty itself concerns only the conduct of undertakings and not legislation or regulations adopted by Member States. However, according to settled case-law of the Court of Justice, Article 85 of the Treaty, read in conjunction with Article 5, requires the Member States not to introduce or maintain in force measures, whether legislative or regulatory, which may render ineffective the competition rules applicable to undertakings.  Such is the case, according to the same case-law, where a Member State requires or favours the adoption of agreements, decisions or concerted practices contrary to Article 85 of the Treaty or reinforces their effects or deprives its own legislation of its official character by delegating to private traders responsibility for taking decisions affecting the economic sphere (see also Case C-2/91 Meng [1993] ECR I-5751, paragraph 14; Case C-185/91 Reiff [1993] ECR I-5801, paragraph 14; Case C-245/91 Ohra Schadeverzekeringen [1993] ECR I-5851, paragraph 10; Case C-35/96 Commission v Italy [1998] ECR I-3851, paragraphs 53 and 54; and Case C-266/96 Corsica Ferries France v Gruppo Antichi Ormeggiatori del Porto di Genova and Others [1998] ECR I-3949, paragraphs 35, 36 and 49).
66 In that connection, the request made to the public authorities by the organisations representing employers and workers to make affiliation to the sectoral pension fund set up by them compulsory is part of a regime established under a number of national laws, designed to exercise regulatory authority in the social sphere.  Since the agreement at issue in the main proceedings does not fall within the scope of Article 85(1) of the Treaty, as is clear from paragraphs 52 to 64 of this judgment, the Member States are free to make it compulsory for persons who are not bound as parties to the agreement.
77 It should be borne in mind that, in the context of competition law, the Court has held that the concept of an undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed (see, in particular, Case C-41/90 Höfner and Elser [1991] ECR I-1979, paragraph 21; Poucet and Pistre, cited above, paragraph 17; and Fédération Française des Sociétés d'Assurance, cited above, paragraph 14).
78 Moreover, in Poucet and Pistre, cited above, the Court held that that concept did not encompass organisations charged with the management of certain compulsory social security schemes, based on the principle of solidarity. Under the sickness and maternity scheme forming part of the system in question, the benefits were the same for all beneficiaries, even though contributions were proportional to income; under the pension scheme, retirement pensions were funded by workers in employment; furthermore, the statutory pension entitlements were not proportional to the contributions paid into the pension scheme; finally, schemes with a surplus contributed to the financing of those with structural financial difficulties.  That solidarity made it necessary for the various schemes to be managed by a single organisation and for affiliation to the schemes to be compulsory.
81 The sectoral pension fund itself determines the amount of the contributions and benefits and the Fund operates in accordance with the principle of capitalisation.
82 Accordingly, by contrast with the benefits provided by organisations charged with the management of compulsory social security schemes of the kind referred to in Poucet and Pistre, cited above, the amount of the benefits provided by the Fund depends on the financial results of the investments made by it, in respect of which it is subject, like an insurance company, to supervision by the Insurance Board.
83 In addition, as is apparent from Article 5 of the BPW and Articles 1 and 5 of the Guidelines for exemption from affiliation, a sectoral pension fund is required to grant exemption to an undertaking where the latter has already made available to its workers for at least six months before the request was lodged on the basis of which affiliation to the fund was made compulsory, a pension scheme granting them rights at least equivalent to those which they would acquire if affiliated to the fund. Moreover, under Article 1 of the abovementioned Guidelines, that fund is also entitled to grant exemption to an undertaking which provides its workers with a pension scheme granting them rights at least equivalent to those deriving from the fund, provided that, in the event of withdrawal from the fund, compensation considered reasonable by the Insurance Board is offered for any damage suffered by the fund, from the actuarial point of view, as a result of the withdrawal.
84 It follows that a sectoral pension fund of the kind at issue in the main proceedings engages in an economic activity in competition with insurance companies.
85 In those circumstances, the fact that the fund is non-profit-making and the manifestations of solidarity referred to by it and the intervening governments are not sufficient to deprive the sectoral pension fund of its status as an undertaking within the meaning of the competition rules of the Treaty.
86 Undoubtedly, the pursuit of a social objective, the abovementioned manifestations of solidarity and restrictions or controls on investments made by the sectoral pension fund may render the service provided by the fund less competitive than comparable services rendered by insurance companies.  Although such constraints do not prevent the activity engaged in by the fund from being regarded as an economic activity, they might justify the exclusive right of such a body to manage a supplementary pension scheme.
87 The answer to the first question must therefore be that a pension fund charged with the management of a supplementary pension scheme set up by a collective agreement concluded between organisations representing employers and workers in a given sector, to which affiliation has been made compulsory by the public authorities for all workers in that sector, is an undertaking within the meaning of Article 85 et seq. of the Treaty.
The third question
90 It must be observed at the outset that the decision of the public authorities to make affiliation to a sectoral pension fund compulsory, as in this case, necessarily implies granting to that fund an exclusive right to collect and administer the contributions paid with a view to accruing pension rights.  Such a fund must therefore be regarded as an undertaking to which exclusive rights have been granted by the public authorities, of the kind referred to in Article 90(1) of the Treaty.
91 Next, it should be noted that according to settled case-law an undertaking which has a legal monopoly in a substantial part of the common market may be regarded as occupying a dominant position within the meaning of Article 86 of the Treaty (see Case C-179/90 Merci Convenzionali Porto di Genova [1991] ECR I-5889, paragraph 14, and Case C-18/88 GB-Inno-BM [1991] ECR I-5941, paragraph 17).
92 A sectoral pension fund of the kind at issue in the main proceedings, which has an exclusive right to manage a supplementary pension scheme in an industrial sector in a Member State and, therefore, in a substantial part of the common market, may therefore be regarded as occupying a dominant position within the meaning of Article 86 of the Treaty.
93 It must not be forgotten, however, that merely creating a dominant position by granting exclusive rights within the meaning of Article 90(1) of the Treaty is not in itself incompatible with Article 86 of the Treaty.  A Member State is in breach of the prohibitions contained in those two provisions only if the undertaking in question, merely by exercising the exclusive rights granted to it, is led to abuse its dominant position or when such rights are liable to create a situation in which that undertaking is led to commit such abuses (Höfner and Elser, cited above, paragraph 29; Case C-260/89 ERT [1991] ECR I-2925, paragraph 37; Merci Convenzionali Porto di Genova, cited above, paragraphs 16 and 17; Case C-323/93 Centre d'Insémination de la Crespelle [1994] ECR I-5077, paragraph 18; and Case C-163/96 Raso and Others [1998] ECR I-533, paragraph 27).
95 It should be remembered that, in Höfner and Elser, cited above, paragraph 34, the Court held that a Member State which conferred on a public employment agency an exclusive right of recruitment was in breach of Article 90(1) of the Treaty where it created a situation in which that office could not avoid infringing Article 86 of the Treaty, in particular because it was manifestly incapable of satisfying the demand prevailing on the market for such activities.
97 Doubtless, some undertakings in the sector might wish to provide their workers with a pension scheme superior to the one offered by the Fund.  However, the fact that such undertakings are unable to entrust the management of such a pension scheme to a single insurer and the resulting restriction of competition derive directly from the exclusive right conferred on the sectoral pension fund.
103 In allowing, in certain circumstances, derogations from the general rules of the Treaty, Article 90(2) of the Treaty seeks to reconcile the Member States' interest in using certain undertakings, in particular in the public sector, as an instrument of economic or fiscal policy with the Community's interest in ensuring compliance with the rules on competition and preservation of the unity of the common market (Case C-202/88 France v Commission [1991] ECR I-1223, paragraph 12, and Case C-157/94 Commission v Netherlands [1997] ECR I-5699, paragraph 39).
104 In view of the interest of the Member States thus defined they cannot be precluded, when determining what services of general economic interest they entrust to certain undertakings, from taking account of objectives pertaining to their national policy or from endeavouring to attain them by means of obligations and constraints which they impose on such undertakings (Commission v Netherlands, cited above, paragraph 40).
105 The supplementary pension scheme at issue in the main proceedings fulfils an essential social function within the Netherlands pensions system by reason of the limited amount of the statutory pension, which is calculated on the basis of the minimum statutory wage.
106 Moreover, the importance of the social function attributed to supplementary pensions has recently been recognised by the Community legislature's adoption of Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community (OJ 1998 L 209, p. 46).
107 Next, it is not necessary, in order for the conditions for the application of Article 90(2) of the Treaty to be fulfilled, that the financial balance or economic viability of the undertaking entrusted with the operation of a service of general economic interest should be threatened. It is sufficient that, in the absence of the rights at issue, it would not be possible for the undertaking to perform the particular tasks entrusted to it, defined by reference to the obligations and constraints to which it is subject (Commission v Netherlands, cited above, paragraph 52) or that maintenance of those rights is necessary to enable the holder of them to perform tasks of general economic interest which have been assigned to it under economically acceptable conditions (Case C-320/91 Corbeau [1993] ECR I-2533, paragraphs 14 to 16, and Commission v Netherlands, cited above, paragraph 53).
108 If the exclusive right of the fund to manage the supplementary pension scheme for all workers in a given sector were removed, undertakings with young employees in good health engaged in non-dangerous activities would seek more advantageous insurance terms from private insurers. The progressive departure of `good' risks would leave the sectoral pension fund with responsibility for an increasing share of `bad' risks, thereby increasing the cost of pensions for workers, particularly those in small and medium-sized undertakings with older employees engaged in dangerous activities, to which the fund could no longer offer pensions at an acceptable cost.
109 Such a situation would arise particularly in a case where, as in the main proceedings, the supplementary pension scheme managed exclusively by the Fund displays a high level of solidarity resulting, in particular, from the fact that contributions do not reflect the risk, from the obligation to accept all workers without a prior medical examination, the continuing accrual of pension rights despite exemption from the payment of contributions in the event of incapacity for work, the discharge by the Fund of arrears of contributions due from an employer in the event of insolvency and the indexing of the amount of pensions in order to maintain their value.
110 Such constraints, which render the service provided by the Fund less competitive than a comparable service provided by insurance companies, go towards justifying the exclusive right of the Fund to manage the supplementary pension scheme.
111 It follows that the removal of the exclusive right conferred on the Fund might make it impossible for it to perform the tasks of general economic interest entrusted to it under economically acceptable conditions and threaten its financial equilibrium.
112 Referring to GB-Inno-BM, cited above, Albany considers, however, that the fact that the Fund fulfils a dual role, as manager of the pension scheme and as the authority vested with the power to grant exemptions, might give rise to arbitrary exercise of the power of exemption.
114 In paragraph 25 of that judgment, the Court stated that the vesting in such a company of powers both to authorise or refuse the connection of telephones to the network and to lay down the technical standards to be met by such equipment and verify whether devices not manufactured by it conformed with the specifications adopted by it was tantamount to conferring upon it the power to determine at will which terminal equipment might be connected to the public network, thereby placing it at an obvious advantage over its competitors.
117 Provided that the abovementioned provision is binding on the sectoral pension fund regarding the exercise of its power of exemption, it cannot be regarded as likely to lead the fund to abuse that power.  In such circumstances, the fund merely checks that the conditions laid down by the competent minister are complied with (see, to that effect, Joined Cases C-46/90 and C-93/91 Lagauche and Others [1993] ECR I-5267, paragraph 49).
122 Finally, as regards Albany's argument that an adequate level of pension for workers could be assured by laying down minimum requirements to be met by pensions offered by insurance companies, it must be emphasised that, in view of the social function of supplementary pension schemes and the margin of appreciation enjoyed, according to settled case-law, by the Member States in organising their social security systems (Case 238/82 Duphar and Others [1984] ECR 523, paragraph 16; Poucet and Pistre, cited above, paragraph 6; and Case C-70/95 Sodemare and Others [1997] ECR I-3395, paragraph 27), it is incumbent on each Member State to consider whether, in view of the particular features of its national pension system, laying down minimum requirements would still enable it to ensure the level of pension which it seeks to guarantee in a sector by compulsory affiliation to a pension fund.