C-67/79

BUNDESANSTALT FÜR ARBEIT [Federal L a b o u r Office], N U R E M B E R G ,

on t h e interpretation of Article 68 (1) of Regulation ( E E C ) N o 1408/71 of the Council of 14 J u n e 1 9 7 1 ,

T H E C O U R T (First C h a m b e r )

composed of: A. O'Keeffe, President of Chamber, G. Bosco and T. K o o p m a n s , J u d g e s ,

Advocate G e n e r a l : H . M a y r a s Registrar: A. V a n H o u t t e

gives t h e following

I — Facts a n d w r i t t e n p r o c e d u r e of Article 68 (1) of Regulation No 1408/71 which provide that: 1. Waldemar Feliinger, a German national, a plasterer by trade, was "The competent institution of a Member employed in the Federal Republic of State whose legislation provides that the Germany until 10 October 1974 at a calculation of benefits should be based gross wage which amounted to DM on the amount of the previous wage or 3 872 in the last month of his salary shall take into account exclusively employment (1 to 30 September 1974). the wage or salary received by the person From 11 October 1974 until 10 No- concerned in respect of his last vember 1974 Mr Fellinger was un- employment in the territory of that State. employed and received unemployment However, if the person concerned has benefit calculated on the basis of a been in his last employment in that standard wage of DM 815 from the territory for less than four weeks, the Employment Office, Saarlouis. benefits shall be calculated on the basis of the normal wage or salary On 11 November 1974 Mr Fellinger corresponding, in the place where the took up employment as a frontier worker unemployed person is residing or in Luxembourg. Having again become staying, to an equivalent or similar unemployed, he received unemployment employment to his last employment in benefit until 12 January 1975 calculated the territory of another Member State". on the basis of the wages received in his last employment in the Federal Republic In that regard he claimed that the first of Germany from the German sentence of that provision applied and employment office. contended that the "last employment", which was decisive for the calculation of Between 13 January and 2 August 1975 benefits within the meaning of the Mr Fellinger was again employed in provision, was the employment which he Luxembourg but having become last had in the Federal Republic of unemployed as from 3 August 1975 he Germany and that consequently the received from the Employment Office, calculation of his unemployment benefit Saarlouis, benefit calculated on the basis ought to be based on the amount of the of a standard wage in the place of wage received in that employment. residence of DM 395. Having worked for a further period in Luxembourg, The Bundesanstalt für Arbeit dismissed from 20 August to 20 November 1975, the said objection on the ground that, in he was again unemployed after the latter this case, the words "last employment" date and as from 21 November 1975 he referred to a period of employment in was paid benefit amounting to the same the Federal Republic of Germany sum. immediately preceding the unem- ployment. Since Mr Fellinger had not Mr Fellinger lodged an objection to worked in the Federal Republic the last-mentioned award with the of Germany but in Luxembourg Bundesanstalt für Arbeit in Nuremberg, before registering as unemployed on founding in particular on the provisions 21 November 1975, the second sentence

of Article 68 fell to be applied so that the employment in the country of unemployment benefit to be paid as from residence was decisive irrespective of 21 November 1975 was to be calculated the time at which that last period on the basis, not of the wage or salary of employment occurred. That received in the last employment in the conception appeared particularly Federal Republic of Germany, but of the appropriate in the case of frontier normal wage or salary corresponding in workers who, by virtue of Article 71 the place of residence — that is to say, in (1) (a) (ii) of the regulation are to the Federal Republic of Germany — to receive benefit in accordance with the an equivalent or similar employment to legislation of the State of the place of his last employment in the territory of residence, even though they were not Luxembourg. Under German legislation, last employed there; the wage or salary thus to be taken into consideration was that laid down by — that, however, a literal interpretation collective agreement in the place of of the first sentence of Article 68 (1) residence of the person concerned, raised doubts. Since Article 68 sets no namely D M 9.93 per hour for a working limit to the period between the time period of 40 hours per week. of the last employment in the country of residence and the date when unemployment occurred, that in- 2. Proceedings contesting that decision terpretation had the result that the before the Sozialgericht [Social Court] wage or salary received in the for the Saarland were dismissed by last employment would also be taken judgment of 17 February 1977. Mr into account in calculating the Fellinger appealed to the Landessozial- unemployment benefit even if that gericht [Regional Social Court] which, employment were many years past. by judgment of 26 October 1977, So interpreted, the first sentence of reversed the judgment of the Sozial- Article 68 (1) could have unfa- gericht and ordered the social security vourable effects in the case where an authorities to calculate the disputed unemployed person was employed in unemployment benefit as from the country of residence only at the 21 November 1975 on the basis of the start of his career and subsequently claimant's last employment in the Federal advanced in his career in another Republic of Germany. Member State; it would furthermore give rise to considerable disad- The dispute having been finally brought vantages in Member States whose before the Bundessozialgericht, that legislation on unemployment benefits court found: did not automatically update them.

1408/71 of the Council of 14 June II — W r i t t e n o b s e r v a t i o n s s u b - 1971 take into account the wage or m i t t e d in a c c o r d a n c e w i t h salary in respect of his 'last A r t i c l e 20 of t h e P r o t o c o l employment' in the territory of that on t h e S t a t u t e of t h e C o u r t institution only if that employment of J u s t i c e of t h e E E C was the last employment before he registered as unemployed?

ployed? that employment for at least four weeks. In all other cases the calculation of (3) Has a person (still) been in benefits must be made in accordance employment of less than four weeks with the second sentence of Article 68 within the meaning of the second (1) of the regulation. sentence of Article 68 (1) even if, in the territory of the State of It is submitted that the soundness of that residence, he has no employment at approach is confirmed by Article 81 of all or, in any event, no employment Regulation (EEC) No 574/72 underwhich such as may be taken into account a worker seeking unemployment benefit is in the light of the answers to obliged to submit a certified statement for Questions 1 or 2?" the calculation of benefit, where his last occupation has not been followed for at least four weeks in the territory of the

JUDGMENT OF 28. 2. 1980 — CASE 67/79

It ment going further back in time. is accordingly right to attempt a different approach to the problem, which approach consists in considering Article That view of the issue accords with the 68 in conjunction with the other letter of the provision cited above. It provisions of Regulation No 1408/71. corresponds, moreover, with one of the principles of Regulation No 1408/71 whereby the competent institution of a Under a general rule of jurisdiction, set State does not take account of wages or out in Article 13 (2) (a) of the regu- salaries as such received in the territory lation, a worker is subject to the of another Member State. legislation of the State in which he is

That em- ployment is thus deemed to have been By definition, frontier workers have their subject to the legislation of the State last employment before unemployment where the unemployed person resides, outside the territory of their State of which leads to the wage or salary residence. In their case it is therefore received in the course of that impossible to apply the first sentence of employment being regarded as if it had Article 68 (1) in its proper sense. Only been received within the area of the second sentence of that provision application of the said provisions.

FELLINGER v BUNDESANSTALT FÜR ARBEIT

JUDGMENT OF 28. 2. 1980 — CASE 67/79

Decision

1 By an order of 15 February 1979, which was received at the Court on 25 April 1979, the Bundessozialgericht put certain questions to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty on the interpretation of Regulation N o 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) and, in particular, the provisions of Article 68 of that regulation.

"(1) In the case of an unemployed frontier worker must the competent institution of the place of residence under the first sentence of Article 68 (1) of Regulation (EEC) N o 1408/71 of the Council of 14 June

FELLINGER v BUNDESANSTALT FÜR ARBEIT

1971 take into account the wage or salary in respect of his 'last employment' in the territory of that institution only if that employment was the last employment before he registered as unemployed?

(2) If Question 1 is answered in the negative: must the wage or salary in respect of the 'last employment' in the State of residence be taken into account even if, as here, that employment terminated 14 months before he last registered aś unemployed?

(3) Has a person (still) been in employment of less than four weeks within the meaning of the second sentence of Article 68 (1) even if, in the territory of the State of residence, he has no employment at all or, in any event, no employment such as may be taken into account in the light of the answers to Questions 1 or 2?"

4 Since these questions are closely related it is convenient to consider them together.

6 These provisions occur amongst the "common provisions" of Chapter 6 of Title III of the regulation, relating to "unemployment", and are of general application and do not relate to particular situations peculiar to certain cate- gories of worker. They clearly refer to the ordinary case of the worker who is normally employed in the territory of the competent State in which he is residing or staying and they provide, in the second sentence, the special rule there laid down only for the exceptional case in which that worker has been in his last employment in the territory of the said State "for less than four weeks". In the form in which they are drawn up these provisions do not therefore allow of a definition of the criteria of calculation applicable to unemployment benefit due to a frontier worker who, since he resides in a Member State different from that in which he is employed, can never, by very reason of his status as a frontier worker, be employed in the territory of the State which provides his unemployment benefit. The application of the said provisions to such a worker would produce the result that, since by definition he is in the position contemplated by the second sentence of Article 68 (1), the rules which that provision lays down by way of an exception would normally be applied to him and he would never be able to receive unemployment benefit based on the wage or salary actually received in his last employment. Such treatment in regard to unemployment benefit would place him in an unfavourable situation compared with workers in general, for whom the State of employment where they reside or stay is normally the competent State and would, moreover, conflict with the requirements of the free movement of workers. Since daily movements often take place from countries with low wages to countries with higher wages the fact that unemployment benefit paid to frontier workers could never be calculated on the basis of the higher wages would in fact be such as to discourage those movements and thus the mobility of workers within the Community.

No 1408/71 "in order to secure mobility of labour under improved conditions", seeks to ensure the worker without employment of "the unemployment benefit provided for by the legislation of the Member State to which he was last subject". Such an objective clearly implies that in Regu- lation No 1408/71 unemployment benefit is regarded in such a manner as not to impede the mobility of workers, including frontier workers, and to that end seeks to ensure that the persons concerned receive, benefits which take account so far as possible of the conditions of employment, and in particular of the remuneration, which they enjoyed under the legislation of the Member State of last employment. Moreover it appears from the first sentence of Article 68 (1) that, apart from the special case contemplated in the second sentence, the "previous" wage or salary which normally constitutes the basis of calculation of unemployment benefit, is, according to that regulation, the wage or salary "received" in the last employment of the worker and that it is only by way of exception and derogation that the basis of calculation of those benefits may in certain cases be the notional and not the actual wage or salary in the last employment.

s Having regard to all these factors, it follows that Article 68 (1) of Regulation N o 1408/71 is founded on the general principle that the previous wage or salary to be used in calculating unemployment benefit is normally the wage or salary actually received by the worker in the last employment held by him immediately before his becoming unemployed. Such a principle accords not only with the demands of free movement of workers laid down in Article 51 of the Treaty but also with the requirement underlying Regulation N o 1408/71 of granting workers unemployment benefit proportional to the conditions of remuneration which they enjoyed at the time of their becoming unemployed.

T H E C O U R T (First Chamber),

in answer to the questions referred to it by the Bundessozialgericht by order of 15 February 1979, hereby rules:

Article 68 (1) of Regulation No 1408/71, viewed in the light of Article 51 of the Treaty and the objectives which it pursues, must be interpreted as meaning that, in the case of a frontier worker, within the meaning of Article 1 (b) of that regulation, who is wholly unemployed, the competent institution of the Member State of residence, whose national legislation provides that the calculation of benefits should be based on the amount of the previous wage or salary, shall calculate those benefits taking into account the wage or salary received by the worker in the last employment held by him in the Member State in which he was engaged immediately prior to his becoming unemployed.

O'Keeffe Bosco Koopmans

Delivered in open court in Luxembourg on 28 February 1980.

A. Van Houtte A. O'Keeffe Registrar President of the First Chamber