C-274/81

BESTUUR VAN DE NIEUWE ALGEMENE BEDRIJFSVERENIGING [Board of the New General Trade Association],

on the interpretation of Article 46 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, in order to enable that court to rule on the compatibility with that provision of the legislation in the Netherlands concerning the calculation of invalidity benefits,

T H E C O U R T (Second Chamber)

composed of: O. Due, President of Chamber, A. Chloros and F. Grévisse, Judges,

Advocate General: P. VerLoren van Themaat Registrar: L. Grønning-Nielsen, Legal Secretary

gives the following

The facts of the case, the course of pensions apply by analogy pursuant to the procedure and the observations Article 40 of Regulation No 1408/71. submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized Article 43 (3) in that chapter provides as follows: that where under a distributive system such as that in the Netherlands the granting of benefits is conditional upon a worker's being subject to it at the time when the risk materializes, any worker who is no longer subject to that system I — Facts and procedure before shall be deemed to be still so subject if he the national court is subject to the legislation of another Member State at the time when the risk materializes. On the facts described above, therefore, Mr Besem is entitled to receive benefits on the basis of the Wet 1. Mr Besem, an EEC citizen, op de Arbeidsongeschiktheidsverzekering commenced his employment and his [Law on insurance against incapacity for periods of insurance in the Netherlands work, hereinafter referred to as "the in 1934. Apart from the five years from 1966 Law"]. 1948 to 1953 during which he was unemployed, Mr Besem was employed and insured for 26 years in the Netherlands and for nearly 13 years in Anicie 46 of the regulation concerns the the Federal Republic of Germany where, award of benefits and provides, in in 1978, he was declared unfit for work. particular, that the competent institution The number of periods of insurance in each Member State shall proceed first completed by him thus totalled 39 years to calculate the theoretical amount of out of a possible maximum of 44. benefit, taking into account all the periods of insurance completed in the Member States as if they had been completed in that Member State. If the amount of benefit does not depend on 2. Since Mr Besem was subject first to the length of the periods of insurance Netherlands legislation on incapacity for completed then thai amount is to be work, under which the amount of the taken, pursuant to the second sentence benefit is independent of the length of of Article 46 (2) ia), as the theoretical the completed periods of insurance (the amount. Next, the actual amount of the distributive svstem). and then to the benefit is established on the basis of the scheme in force in the Federal Republic theoretical amount in the ratio which the of Germany, where the amount of lenpth oi the periods of insurance benefit depends on the length of such completed in the Member State in periods (the accumulative system), the question bears to the total length of the provisions of Chapter 3 on old-age periods oi insurance completed.

3. That calculation apan, the com- insurance means that under such systems petent institution in the Netherlands, the the length of completed periods of Nieuwe Algemene Bedrijfsvereniging, insurance does notjaffect the calculation applied a reduction to the daily wages "of — the theoretical amount, since which formed the basis for calculating otherwise the sentence would be of no Mr Besem's benefits in the Netherlands effect. In addition Article 46 (2) (b), based on the gaps in his completed which prescribes that the actual amount periods of insurance to which reference is to be determined on the basis of the theoretical amount, limits definitively the

The President of Dagloonbesluit, the reduction was the Raad van Beroep concludes that the calculated as a proportion of the daily regulation was specifically designed to wages under the general rules obtaining enable the advantages of a distributive under Netherlands legislation by multi- system to be extended, at least in part, plying those wages by a fraction, of by virtue of Article 46 (2), to a worker which the numerator represents the total whose entitlement to benefits derives periods of insurance completed in the exclusively from Article 45 (3). Netherlands or in other Member States

institution must apply Article 45 (3) of the regulation in order to grant The second sentence of Article 46 (2) (a) entitlement to the benefit and whose concerning distributive systems of legislation considered to be of the kind

I I — Procedure before the Court 2. The Nieuwe Algemene Bedrijfs- vereniging submits that a theoretical amount determined in accordance with the second sentence of Article 46 (2) (a) The order making the reference was may include a factor which takes lodged at the Court Registry on account of the periods of insurance. The 19 October 1981. sentence in question serves to indicate that the provisions relate to distributive systems and the only rule which may be Pursuant to Article 20 of the Protocol on inferred from it is that under a distri- the Statute of the Court of Justice butive system the theoretical amount written observations were submitted by must be established according to the the Government of the Netherlands, rules of that system, that is to say, in the represented by F. Italianer, Secretary- present instance, in accordance with General at the Ministry of Foreign Article 8 of the Dagloonbesluit. Affairs; by C G . Besem, in person; by the Nieuwe Algemene Bedrijfsvereniging, represented by W. M. Leveh-Overmars, In the opinion of the Bedrijfsvereniging Head of the Legal Department for social the system established by the 1966 Law security matters; and by the Commission, takes the form of insurance against loss represented by J. Amphoux, Legal of wages. The amount of benefit must Adviser, assisted by A. Haagsma, a therefore be determined in each member of its Legal Department, both particular case on the basis of the acting as Agents. amount of wages which have been lost. That is why the law itself contains a number of provisions to adjust the daily On hearing the report of the Judge- wages when in the light of the claimant's Rapporteur and the views of the working life, in particular the relation- Advocate General the Court decided to ship between periods of employment and periods of unemployment or partial open the oral procedure without any employment, the daily wages if fixed in preparatory inquiry. However, the Court accordance with the general rules would put a number of questions to the not provide an accurate indication for Commission and the Nieuwe Algemene determining the amount of wages which Bedrijfsvereniging, requesting them to would in fact be earned were the reply at the hearing.

The provision is likewise compatible with the provisions in Article 46 (2) (b) of the regulations which concerns the calcu- 4. The Commission points out that the lation of the actual amount of benefit Dagloonbesluit applies only to workers based on the theoretical amount, the who are entitled to benefits solely by determination of which is governed virtue of Article 45 (3) of the regulation. exhaustively by Article 46 (2) (a). For that category of persons Article 8 of the Dagloonbesluit links calculation of benefit to the length of completed periods of insurance, a factor which is 3. The Government of the Netherlands not taken into account for any other concedes that according to the second category covered by the 1966 Law. sentence of Article 46 (2) (a) the amount of benefit established under a distributive system constitutes the theoretical amount The theoretical amount must be within the meaning of the regulation, but calculated as if the claimant had always it maintains that the regulation contains lived and worked in the same Member no provisions concerning the method of State. If that Member State is the calculating the amount of the national Netherlands, Article 8 of the Dagloon- benefit. It is for national legislation to besluit does not apply. If it is applied determine that method where entitlement none the less, the amount which is fixed to benefit under a distributive system is not the true theoretical amount of the exists only as the result of applying benefit but the theoretical amount which Article 45 (3) of the regulation. In this has already been adjusted. Article 8 instance the Netherlands legislation has of the Dagloonbesluit is therefore endeavoured to harmonize as much as incompatible with Article 46 (2) of the possible the method of calculation under regulation. the 1966 Law, whereby the amount of benefit corresponds to the theoretical amount referred to in the second sentence of Article 46 (2) (a), with the method of calculation prescribed in the IV — Oral procedure first sentence of Article 46 (2) (a) for determining the theoretical amount of benefit under accumulative systems of insurance. The last-mentioned method At the sitting on 29 April 1982, C. G. also disregards uninsured periods. In Besem, appearing in person, the Nieuwe addition the calculation of daily wages is Algemene Bedrijfsvereniging, represented left, in principle to national legislation to by F. W. M. Keunen and I. C. van regulate. Alderwegen, acting as Agents, and the Commission, represented by A. Haagsma, acting as Agent, presented The Government of the Netherlands oral argument. concludes that the reply to the question raised by the Raad van Beroep should be in the affirmative, and adds that the The Advocate General delivered his rights of migrant workers to which opinion at the sitting on 17 June 1982.

JUDGMENT OF 23. 9. 1982 — CASE 274/81

5 It was in application of the Bijzonder Dagloonbesluit that the Bedrijfs- vereniging reduced Mr Besem's daily wage, calculated under the general rules for applying the 1966 Law, on the basis of the ratio of the uninsured period to the periods of insurance completed in the two Member States in question. The daily wage thus reduced was adopted by the Bedrijfsvereniging as the basis for calculating the benefit in accordance with the provisions of Article 46 (2) of Regulation No 1408/71.

6 The President of the Raad van Beroep, Amsterdam, allowed Mr Besem's appeal on the ground that such a reduction in the daily wage was contrary to Regulation N o 1408/71. The Nieuwe Algemene Bedrijfsvereniging lodged an appeal against that decision with the Raad itself, which referred the following question to the Court for a preliminary ruling:

"Is it compatible with the method of calculating benefits provided for by Anicie 46 (2) of Regulation No 1408/71 for the amount of the benefit from a Member State, whose competent institution must apply Article 45 (3) of the regulation in order to grant entitlement to the benefit and whose legislation is considered to be of the kind mentioned in Anicie 37 (1) of the regulation, to be determined by the extent to which the period between the date on which the person concerned was first insured in any one Member State and the date on which the incapacity for work occurred is completed by periods of insurance in accordance with the legislation of the Member States or by vinue of the regulation, with the result that the rights only of those workers who have moved to another Member State are restricted?"

n Article 46 (2) lays down the method of calculation to be used where conditions for entitlement to benefits are not satisfied unless account is taken of the provisions of Article 45. According to Article 46 (2) (a) the competent institution must, before calculating the amount of the apportioned benefit, calculate the theoretical amount of benefit which the person could claim if all the periods completed under the legislation of the Member States to which he has been subject had been completed in the State in question and under the legislation administered by it on the date on which the benefit is awarded. It is expressly added that "if, under that legislation, the amount of the benefit does not dépend on the length of the periods completed then that amount shall be taken as the theoretical amount referred to in this sub- paragraph".

i: It is thus apparent that the situation which is the subject-matter of the main proceedings is governed by a comprehensive set of Community rules which contain all that is necessary to enable the theoretical amount to be determined bv considering those rules in conjunction with the national provisions laying down the amount of benefit which would be received by a worker entitled to such benefit under the national legislation alone.

JUDGMENT OF 23. 9. 1982 — CASE 274/81

1 3 It is not compatible with those rules for a Member State to adopt for the purpose of determining the amount of benefit in such circumstances provisions designed to alter the way in which the theoretical amount is calculated so as to make that amount less than that which would result from the general provisions in force under the national legislation.

It is not compatible with the method of calculating benefits provided for by Article 46 (2) of Regulation No 1408/71 of the Council of 14 June

BESEM v NIEUWE ALGEMENE BEDRIJFSVERENIGING

1971 on the application of social security schemes to employed persons and their families moving within the Community for the competent institution of a Member State whose legislation is considered to be of the kind referred to in Article 37 (1) of the regulation to determine the theoretical amount of the invalidity benefit on the basis of the extent to which the period between the date on which the person concerned was first insured in any one Member State and the date on which the incapacity for work occurred comprises periods of insurance completed under the legislation of the Member States or by virtue of the above- mentioned regulation.

Due Chloros Grévisse

Delivered in open court in Luxembourg on 23 September 1982.

For the Registrar H.A. Rühi O. Due Principal Administrator President of the Second Chamber