C-41/79

and

BUNDESANSTALT FÜR ARBEIT [Federal Employment Office], Nuremberg,

on the interpretation of Article 69 (2) of Regulation No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (Official Journal, English Special Edition 1971 (II), p. 416),

T H E COURT,

composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges,

Advocate General: G. Reischl Registrar: A. Van Houtte

I — Facts and p r o c e d u r e appealed, stayed the proceedings and referred the following question for a preliminary ruling under Article 177 of 1. Mr Testa, an Italian national resident the EEC Treaty to the Court of Justice in Salerno, the plaintiff in the main of the European Communities : action, worked in the Federal Republic of Germany and then registered at the “Does the second half of the first labour office (Arbeitsamt) in Hagen on sentence of Article 69 (2) of Regulation 14 April 1975. The labour office granted (EEC) No 1408/71 of the Council of 14 him unemployment benefit for 234 days June 1971 on the application of social from 12 April 1975. security schemes to employed persons and their families moving within the At his request the labour office issued the Community (Official Journal, English plaintiff on 11 July 1975 with a certi- Special Edition 1971 (II), p. 416) ficate in accordance with Form E 303 to preclude an unemployed person from enable him to seek employment in Italy. entitlement to unemployment benefits in The plaintiff left for Italy on 12 July the competent Member State if he 1975 and continued to receive benefits returns to that Member State after more from the competent Italian institution, than three months, even if he still has a the Istituto Nazionale della Previdenza residual claim under the domestic Sociale, under Articles 69 (1) and 70 (1) legislation of that Member State?.” of Regulation No 1408/71 (Official Journal, English Special Edition 1971 In this respect the Bayerisches Landes- (II), p. 416). sozialgericht relied in particular on the judgment given by the Court of Justice on 10 July 1975 in Case 27/75 Bonaffini On 13 October 1975 the plaintiff ([1975] ECR 971) to the effect, returned from Italy to the Federal according to the German court, that Republic of Germany and applied to the failure to comply with the condition of a Hagen labour office to grant him once waiting period of four weeks under more unemployment benefit. The labour Article 69 (1) (a) of Regulation (EEC) office rejected the application on the No 1408/71 does not preclude ground that the right which the plaintiff entitlement to national benefits. The would otherwise have had to Bayerisches Landessozialgericht seeks unemployment benefit was extinguished clarification on whether failure to under Article 69 (2) of Regulation No observe the condition in the second half 1408/71 since he had not registered at of the first sentence of Article 69 (2) the competent office by 12 October 1975 (return within three months to the at the latest. The objection and action competent Member State) rules out the brought by the plaintiff were unsuc- residual right to unemployment benefit cessful. under the national legislation. By order dated 15 February 1979 the Bayerisches Landesozialgericht, as the 2. Mr Maggio, who had been in receipt court of appeal to which the plaintiff of unemployment benefit in the Federal

Republic of Germany since 19 February being acquired is revived. The 1974, left for Italy on 11 May 1974 and wording or Article 69 (2) of Regu- returned to the Federal Republic on 17 lation No 1408/71 is not clear on this August 1974. He explained that he was point. delayed by illness and hospital treatment. The Bundesanstalt für Arbeit refused to 2. If "entitlement" within the meaning grant him any further unemployment of the second part of the first benefit since it took the view that as a sentence of Article 69 (2) means also result of Article 69 (2) of Regulation No the right which is in the process of 1408/71 Mr Maggio had lost his being acquired, it is not apparent entitlement to unemployment benefit. whether the words "under the The actions brought by Mr Maggio legislation of the competent State" are against this decision before the Sozial- an explanation of the term entitlement gericht Karlsruhe and the Landessozial- (to benefits) or a reference to the gericht Baden-Württemberg were unsuc- conditions under which the person cessful. concerned loses his entitlement under the legislation of the competent State. By order dated 19 June 1979 the Bun- 3. In the view of the Bundessozialgericht dessozialgericht, to which the plaintiff the spirit and purpose of the had appealed on a point of law, stayed provision, that is the promotion of the proceedings and referred the freedom of movement for European following question to the Court of workers, seem rather to plead in Justice for a preliminary ruling: favour of an interpretation to the "Does an unemployed person who effect that the unemployed person's returns to the 'competent State' after the entitlement (to benefit) is revived if he expiry of a period longer than three makes himself again available to the months lose, in pursuance of Article 69 labour market in the competent State. (2) of Regulation (EEC) No 1408/71, 4.

1. In the German legislation on the liament and put into effect. Since the promotion of employment the word plaintiff's entitlement, which is in the "entitlement" ("Anspruch") may have process of being acquired, to the meaning of a concrete and unemployment benefit is based on his immediate right to benefits as well as payment of contributions, it may be the meaning of a right which is in regarded as an individual property the process of being acquired right governed by public law which ("Anwartschaft").

JUDGMENT OF 19. 6. 1980 — JOINED CASES 41, 121 AND 796/79

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Justice that it considers the appeal well After hearing the report of the Judge- founded in so far as the decision of the Rapporteur and the views of the Bundesanstalt für Arbeit not to extend Advocate General the Court decided to the time-limit does not seem to it to be a open the oral procedure without any misuse of the discretion which it has preparatory inquiry. in the application of Article 69 (2). However the court making the reference to the Court of Justice requires clari- fication on the extent of the loss of entitlement to benefits under Article 69 II — W r i t t e n o b s e r v a t i o n s s u b - (2) caused by a delayed return of the m i t t e d u n d e r A r t i c l e 20 of worker. the P r o t o c o l on the S t a t u t e of the C o u r t of J u s t i c e

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2. After re-registering in the competent studying abroad for three months. If at State the conditions must be judged the expiry of the leave the worker does solely according to municipal law. not return to his employment the employer may terminate the employment without prior notice. If at the beginning he were to contemplate that the worker 3. There is no entitlement during the might not return, he would make the period between the date of expiry of grant of leave subject to a clause to the the period of three months and that effect that the employment would auto­ of re-registration since even under matically cease if at the expiry of the municipal (German) law the period agreed the worker did not return conditions are not fulfilled. to work.

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The Court has already had occasion to expiry of the aforementioned period, he find in the judgments in Petroni [1975] once again makes himself so available. ECR 1149 and Manzoni [1977] ECR 1647 that the aim of Articles 48 to 51 of the Treaty would not be attained if, as a If Article 69 (2) of Regulation (EEC) No consequence of the exercise of their right 1408/71 is interpreted as meaning that to freedom of movement, workers were all entitlement to benefits is irrevocably to lose advantages in the field of social lost simply as a result of the expiry of the security guaranteed to them by the period provided in Article 69 (1) (c), it is legislation of a Member State. The invalid". principle laid down by the Court in the two other aforementioned cases is also applicable in the present case. D — Observations submitted by the Government of the Federal Article 69 (2) of Regulation No 1408/71 Republic of Germany must therefore be interpreted as meaning that the period of three months provided in Article 69 (1) (c) is the maximum The Government of the Federal Republic period (subject to any extension) during of Germany is of the opinion that the which the unemployed person may questions put call for an answer in the continue to be entitled to unemployment affirmative. The aforementioned Article benefits without being "avaifable to the 69 (2) of Regulation No 1408/71 must employment services of the [competent] be interpreted as meaning that after the State". The Government of the Italian expiry of the period of three months Republic considers that if the provision provided for therein all entitlement to in question were interpreted as meaning unemployment benefits from the that all entitlement to benefits is lost competent Member State is lost and this after the expiry of the period of three is so independently of the question how months, this would make the provision such a case should be judged with regard invalid. to the national provisions of the State concerned.

the same for all Member States. This is adopted was the result of a proposal by why it is impossible to adopt the opinion the French Delegation which made the put forward in the order making the following suggestion on 29 May 1969: reference to the effect that the second part of the first sentence of Article 69 (2) refers to the terms of municipal law. The country in which the person was last employed should pay unemployment benefit for three months; once that The interpretation favoured by the period has expired the worker will no Federal Government is likewise the only longer have any entitlement in the one which accords with the purpose of country where he was last employed (cf. Article 69 (2). Only a sufficiently serious Council Document No 916/69 (Soc. 83) penalty such as the loss of "all" of 27 June 1969 — Annex 4). entitlement is capable of encouraging the unemployed person to return to the competent State on the expiry of the period of three months. This must be so' In its present form Article 69 (2) is the in the view of the Federal Government, implementation of that decision by the which stresses that if such aim were not legislative draftsman. In order to make guaranteed all the rules in Article 69 clear that entitlement to the benefits in would be undermined. question takes effect as against the country of employment there were added in the final version the words "under the legislation of the competent State". The aim of the obligation to return is to allow the re-integration of the unemployed person by measures On the question of the compatibility of promoting employment (offers of work, Article 69 (2) with Article 51 of the retraining and so forth). Such measures Treaty the Federal Government adopts can be taken only in respect of workers the arguments put forward by the resident in the country. An unlimited Commission. It adds that, contrary to the extension of the opportunity provided position in the case of Petroni ([1975] for in Article 69 would considerably ECR 1149), Article 69 is not an unlawful increase the costs of unemployment restriction on the free movement of insurance without the Member State in workers. The whole system relating to question being able to terminate its the retention of entitlement to benefits, burden by taking policy measures in of which the second sentence of Article relation to the labour market. 69 (2) is an integral part, is directly intended to ensure freedom of move- ment for workers. That constitutes a considerable advantage, unknown until Such interpretation is also the only one Regulation No 1408/71 was adopted, in consistent with the origin of Article 69. the interests of freedom of movement for That provision, which was not contained workers within the Community (cf. the in Regulation No 3, was proposed by the judgment of the Court of 20 March 1979 Council Secretariat on 29 April 1969. in Case 139/78 at paragraph 7). The The Member States which had a large duration and extent of that advantage is percentage of migrant workers expressed restricted by the second part of the first reservations because of the considerable sentence of Article 69 (2). There is no risk of abuse. The solution ultimately cause to see in this an infringement of

In the opinion of the Federal "Article 69 (2) of Regulation (EEC) No Government it is unnecessary to answer 1408/71 must be interpreted as meaning the question whether and how far that the unemployed person who returns entitlement to social security benefits, to the 'competent State' after a period of and in particular the contingent more than three months loses all entitlement, which is at issue here, entitlement to benefits of the kind relating to unemployment benefits, are referred to in the first sentence of Article covered by the protection of property 69 (1)." guaranteed by Community law. In any event, it is not possible to regard the restriction which the Community E — Observations submitted by the legislature adopted in the second part of Commission the first sentence of Article 69 (2) as adversely affecting pre-existing property The observations submitted by the rights. Rights arising from insurance Commission may be divided into four against unemployment are possible only parts: within the limits provided by the social security legislation. In place of the (1) Interpretation of the second part of requirement of availability to the the first sentence of Article 69 (2) of employment services of the competent Regulation No 1408/71 State, which is the condition for the retention of the entitlement to benefit The Commission observes in this respect normally laid down in municipal law, the that Article 69 (2) of Regulation No Community legislature has substituted 1408/71 guarantees to the unemployed another requirement, namely return to person who returns to the competent the competent State within the period State at the end of a stay in another provided for. That provision does not Member State for the purpose of looking lead to the abolition of any property for work the right to continue to receive right. benefits under the national legislation of the competent State. The obligation to The loss of rights as a result of Article 69 continue to provide benefits exists (2) does not violate the principle of pro- nevertheless only in respect of the portionality. The period prescribed by unemployed person who returns before the legislature is not unreasonable, for it the expiry of the period during which he may be thought that it would generally is entitled to benefits under Article 69 (1) have been possible to find the (c). Consequently, the unemployed unemployed person other employment person must return to the competent within that period if he had been State before the expiry of the period of available to the competent employment three months laid down by that services. Further, in special circumstances provision.

If the unemployed person returns late, (2) The compatibility of the second part the competent State is no longer bound of the first sentence of Article 69 (2) to continue to pay him benefits. This of Regulation No 1408/71 with clearly appears from the wording of the Article 51 of the EEC Treaty first part of the first sentence of Article 69 (2), to the effect that the return of the unemployed person within the prescribed Although this question has not been period is a necessary condition for him raised by the courts making the to continue to be entitled to the benefits. references the Commission considers next how far the fact that the effect of the provisions of Regulation No 1408/71 may stand in the way of benefits The fist part of the sentence may provided for by municipal law in relation nevertheless leave doubts on the question to social security may be regarded as whether the loss of entitlement relates incompatible with Article 51 of the EEC solely to the period of absence exceeding Treaty. the prescribed period or to the whole of the time during which the legislation of the competent State recognizes that he is In the view of the Commission the entitled to benefits. In so far as there answer to this question must decidedly may be any doubt it is removed by the depend on the answer to the question second part of the first sentence of whether the rules contained in Article 69 Article 69 (2), to the effect that the (2) on residual rights are to be unemployed person who does not return considered separately or in conjunction before the expiry of the period stipulated with the other provisions of that article. in the first part of the said sentence loses If Article 69 is regarded as a whole it is all entitlement to benefits. apparent that the first two paragraphs form a coherent unit.

Landessozialgericht. That case related to No 1408/71 is an innovation which goes entitlement to unemployment benefit beyond the co-ordination of national claimed against an insurance institution social security systems and was enacted of the State to which the unemployed to encourage the free movement of person had gone to find work. Such workers. The question of the loss of entitlement is not governed either residual entitlement in the event of directly or indirectly by Article 69. Initial returning late cannot be considered entitlement, its maintenance or recovery outside this context. If the advantages depend directly on the legislation of the and disadvantages of the rules in State where the unemployed person has question were balanced the conclusion

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possibility created by Article 69 may within the national legal order and must easily be abused in that the unemployed be applied by the German courts. 2 person may not use the opportunity to look for work. Further, by giving an opportunity to extend the prescribed (4) Compatibility of Article 69 (2) of period the second sentence of Article 69 Regulation No 1408/71 with Article (2) offers a remedy where the complete 14 of the Basic Law loss of entitlement after the expiry of the period would be unreasonable. In the view of the Commission the legal provisions decided by the institutions of the European Communities on the basis In the Commission's view the above of the legislative powers which have been considerations reveal no ground likely to given to them cannot be examined for make the first sentence of Article 69 (2) their compatibility with the constitutional of Regulation No 1408/71 incompatible rules of the Basic Law. Community law with Articles 48 to 51 of the EEC is an independent legal order, that is, it is Treaty. independent of the national legal order and has its own institutions and system of legal remedies. In this respect it should be observed that the loss of (3) Compatibility of the German law entitlement provided for by Article 69 (2) ratifying the EEC Treaty with is in any event a necessary restriction in Article 20 of the Basic Law the interests of a wider freedom of movement for workers.

JUDGMENT OF 19. 6. 1980 — JOINED CASES 41, 121 AND 796/79

the question referred for a preliminary of Germany, represented by Martin ruling could be as follows: Seidel, and the Commission of the European Communities, represented by "The first sentence of Article 69 (2) of Norbert Koch, presented oral argument Regulation No 1408/71 rules out any at the sitting on 22 January 1980 in other entitlement to unemployment Cases 41 and 121/79. benefit under the national provisions of the competent State where the unemployed person returns to that State after the expiry of the period provided The Government of the Italian Republic, for in Article 69 (1) (c) and that period represented by M. Favara, and the has not been or is not extended under Commission of the European Com- the second sentence of Article 69 (2)." munities, represented by Norbert Koch, presented oral argument at the sitting on 20 March 1980 in Case 796/79. III — Oral procedure

Mr Testa, represented by Helga Niesei, The Advocate General delivered his the Government of the Federal Republic opinion at the sitting on 27 March 1980.

Decision o

1 By orders of 15 February, 19 June and 30 August 1979, which were received at the Registry of the Court on 12 March, 31 July and 8 November 1979 respectively, the Bayerisches Landessozialgericht (Case 41/79), the Bun- dessozialgericht (Case 121/79) and the Hessisches Landessozialgericht (Case 796/79) referred questions to the Court under Article 177 of the EEC Treaty on the interpretation and the validity of Article 69 (2) of Regulation No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (Official Journal, English Special Edition 1971 (II), p. 416).

As to the i n t e r p r e t a t i o n of A r t i c l e 69 (2)

4 Article 69 of Regulation No 1408/71 enables an unemployed worker to be exempt for a specific period, for the purpose of seeking employment in another Member State, from the obligation imposed by the various national laws to make himself available to the employment services of the competent State without thereby losing his entitlement to unemployment benefits as against the competent State.

5 That provision is not simply a measure to co-ordinate national laws on social security. It establishes an independent body of rules in favour of workers claiming the benefit thereof which constitute an exception to national legal rules and which must be interpreted uniformly in all the Member States

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irrespective of the rules laid down in national law regarding the continuance and loss of entitlement to benefits.

6 Under paragraph (1) the right given to the worker by Article 69 is restricted to a period of three months from the date on which he ceases to be available to the employment services of the competent State.

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10 Nor is it possible to accept the argument that the phrase "under the legislation of the competent State" occurring in Article 69 (2) must be taken as referring to national law for the determination of the circumstances in which entitlement to benefit is lost. That phrase, which follows the words "he shall lose all entitlement to benefits", is merely intended to explain that a worker shall lose, in the event of his returning late, all entitlement to benefits as against the competent State, irrespective of any entitlement to benefits which he may have as against other Member States.

1 1 There are therefore grounds for replying to the questions referred to the Court that a worker who returns to the competent State after the three month period referred to in Article 69 (1) (c) has expired may no longer claim entitlement, by virtue of the first sentence of Article 69 (2), to benefits as against the competent State unless the said period is extended pursuant to the second sentence of Article 69 (2).

As to the c o m p a t i b i l i t y of A r t i c l e 69 (2) w i t h A r t i c l e s 48 to 51 of the T r e a t y

12 It has been alleged that if Article 69 (2) must be interpreted in the manner set out above it is invalid in that it is incompatible with the provisions of the Treaty on freedom of movement for workers and, in particular, with Article 51 which obliges the Council to adopt such measures in the field of social security as are necessary to provide freedom of movement for workers.

13 As the Court has already observed in its judgment of 20 March 1979 in Case 139/78 Coccioli ν Bundesanstalt fik Arbeit [1979] ECR 991, in giving a worker the right to go to another Member State to seek employment there, Article 69 of Regulation N o 1408/71 confers on a person availing himself of that provision an advantage as compared with a person who remains in the competent State inasmuch as, by the effect of Article 69, he is freed for a period of three months of the duty to keep himself available to the employment services of the competent State and to be subject to the control procedure organized therein, even though he must register with the employment services of the Member State to which he goes.

18 As the Court has repeatedly emphasized, the question of a possible infringement of fundamental rights by a measure of the Community institutions can only be judged in the light of Community law itself, since fundamental rights form an integral part of the general principles of the law,

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the observance of which it ensures. One of the fundamental rights which is accordingly protected under Community law in accordance with the constitutional concepts common to the Member States and in the light of international treaties for the protection of human rights on which Member States have collaborated or to which they are signatories is the right to property, as the Court has recognized, notably in its judgment of 13 December 1979 in Case 44/79 Hatter.

19 In order to determine whether Article 69 (2) might infringe the fundamental rights guaranteed in this manner by Community law consideration should first be given to the fact that the system set up by Article 69 is an optional system which applies only to the extent to which such application is requested by a worker, who thereby foregoes his right of recourse to the general system applicable to workers in the State in which he became unemployed. The consequences laid down by Article 69 of failing to return in good time are made known to the worker, in particular by means of the explanatory sheet E 303/5 written in his own language which is handed to him by the competent employment services, and his decision to opt for the system under Article 69 is therefore made freely and with full knowledge of the consequences.

Costs

23 The costs incurred by the Government of the Italian Republic, the Government of the Federal Republic and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main actions are concerned, in the nature of a step in the actions pending before the national courts, the decision as to costs is a matter for those courts.

On those grounds,

T H E COURT

in answer to the questions referred to it by orders of 15 February, 19 June and 30 August 1979 by the Bayerisches Landessozialgericht, the Bundes- sozialgericht and the Hessisches Landessozialgericht, hereby rules:

A worker who returns to the competent State after the three month period referred to in Article 69 (1) (c) of Regulation No 1408/71 has

OPINION OF MR ADVOCATE GENERAL REISCHL DELIVERED O N 27 MARCH 1980 1

Mr President, and who goes to another Member State Members of the Court, in order to seek employment there shall retain his entitlement to such benefits for The parties to the three main actions a maximum period of three months from pending before the German courts are in the date when he ceases to be available dispute concerning the re-granting of to the employment services of the State unemployment benefit pursuant to which he has left. Article 69 (2) is Article 69 of Regulation (EEC) No worded as follows: 1408/71 of the Council of 14 June 1971 on the application of social security "If the person concerned returns to the schemes to employed persons and their competent State before the expiry of the families moving within the Community period during which he is entitled to (Official Journal, English Special Edition benefits under paragraph (1) (c), he shall 1971 (II), p. 416). continue to be entitled to benefits under the legislation of that State; he shall lose According to Article 69 (1) (c) an all entitlement to benefits under the unemployed worker who satisfies the legislation of the competent State if he conditions for entitlement to benefits does not return there before the expiry under the legislation of a Member State of that period. In exceptional cases, this

1 — Translated from the German.