Commission of the European Communities v Kingdom of the Netherlands.
Date: 2003-11-06
29. First, as the Commission has correctly stated, it is clear from the very wording of Article 71(1)(a)(ii) of Regulation No 1408/71 that a wholly unemployed frontier worker is to receive benefits in accordance with the provisions of the legislation of the Member State in whose territory he resides. It is also clear from its wording that the competent institution for the provision of unemployment benefits is that of the State of residence (Case 67/79  Fellinger  [1980] ECR 535, paragraph 5).
30. As the Commission observes, the Court has previously stated that that provision, in derogation from the general rule of attachment to the legislation of the State of employment, established a specific attachment to the social security system of the Member State of residence as regards unemployment benefits, for reasons of practicality and efficacy rendering such an attachment more appropriate and more in conformity with the interests of frontier workers (see Case 58/87  Rebmann  [1988] ECR 3467, paragraphs 13, 14 and 15, and Case C-102/91  Knoch  [1992] ECR I-4341, paragraph 32). The Court has also pointed out that that provision clearly requires the legislation of the Member State of residence alone to be applied and not, therefore, the legislation of the State of employment (Case C-201/91  Grisvard and Kreitz  [1992] ECR I-5009, paragraph 16), and the frontier worker concerned may therefore claim unemployment benefits only from the State in which he resides (see Case 1/85  Miethe  [1986] ECR 1837, paragraph 12).
32. Nor is that conclusion affected by the fact that the Member State where the unemployed person was last employed, the obligations of which are suspended and not extinguished for so long as he continues to reside in another Member State, recovers its fundamental competence in the matter should the worker concerned take up residence there ( Cochet , cited above, paragraphs 15 and 16, and  Huijbrechts , cited above, paragraph 24). It is moreover to be remembered that in such a situation the factor which determines whether Article 71 of Regulation No 1408/71 applies at all, namely the residence of the person concerned in a Member State other than that to whose legislation he was subject during his last employment (see, in particular, Case C-454/93  Van Gestel  [1995] ECR I-1707, paragraph 24), necessarily no longer pertains, so that Article 71(1)(a)(ii) ceases to be applicable ( Huijbrechts , paragraph 28).
35. Such an interpretation would first of all fail to have regard to the purpose of Article 71(1)(a)(ii) of the regulation, which, as the Commission correctly points out, consists in particular in equating the system of unemployment benefits for frontier workers with that of workers whose last employment was in the State of residence ( Grisvard and Kreitz , cited above, paragraph 17).
39. As the Court has previously stated, Article 69 of Regulation No 1408/71 thus has the aim of encouraging the mobility of persons seeking employment and helping to ensure the free movement of workers in accordance with Article 42 EC (Case C-163/89  Di Conti  [1990] ECR I-1829, paragraph 13, and Case C-215/00  Rydergård  [2002] ECR I-1817, paragraph 25).
40. It is clear that an interpretation of Article 69 of Regulation No 1408/71 which had the consequence of excluding from the benefit of that provision wholly unemployed frontier workers covered by Article 71(1)(a)(ii) of the regulation would be incompatible with such an objective. Treatment of that kind with regard to unemployment benefits would place those workers at a disadvantage compared with workers in general, for whom the State of employment, where they reside or stay, is normally the competent State and would accordingly conflict with the requirements of freedom of movement for workers (see, to similar effect,  Fellinger , cited above, paragraph 6). Not only would those frontier workers be deterred, or even prevented, from going to another Member State in order to find employment there as they would then be unable to carry on drawing unemployment benefit, but they would in addition find themselves penalised for having exercised the right of freedom of movement which the Treaty guarantees to them because, unlike workers who have been employed in the Member State in which they reside, they would not be able to rely on the rights established by Article 69.
46. As to the fact, pointed out by the Netherlands Government, that the interpretation upheld in paragraph 42 of this judgment allows frontier workers to receive unemployment benefits from a Member State to which they did not pay contributions during their last employment, suffice it to state that that is a consequence intended by the Community legislature which meant to increase workers ' chances of finding new employment (see, to similar effect,  Van Gestel , cited above, paragraph 26).