C-171/82

VALENTINI v ASSEDIO

In Case 171/82

REFERENCE to the Court under Artide 177 of the EEC Treaty by the Tribunal de Grande Instance [Regional Court]; Lyon, for a preliminary ruling in the action pending before that court between

BIAGIO VALENTINI

and

ASSEDIC, ASSOCIATION POUR L'EMPLOI DANS ĽINDUSTRIE ET LE COMMERCE [Association for Employment in Industry and Trade], LYON,

JUDGMENT

Facts and Issues

The facts of the case, the procedure and daily earnings, calculated on the same the written observations submitted under basis as that of the special unemployment Article 20 of the Protocol on the Statute benefit, that is to say in general on the of the Court of Justice of the European basis of the average daily earnings of the Community may be summarized as preceding three months. follows :

It appears from the papers and infor- mation submitted by the parties to the proceedings that "the system of guaranteed income" derives from a joint I — Facts and written p r o c e d u r e scheme, established by agreements between management and labour in France.

VALENTINI v ASSEDIO

amounting to 70% of the former Fifthly, he must not be in receipt of his earnings, to be paid to recipients of social security retirement pension. benefits under the unemployment insurance scheme if they were made redundant after 60 years of age and if, in addition, they satisfied certain special Article 2 (2) of the agreement provides conditions. The agreement of 13 June that workers who are in receipt of an 1977 temporarily extended that scheme old-age pension before the contract of to workers over 60 who retired and employment has been terminated are temporarily altered certain provisions of entitled to benefits, but that the amount the earlier agreement and of the regu- of such benefits is reduced by the lation annexed to it. The agreement of old-age allowances which they have 13 June 1977 came into force on 11 July acquired so that the ceiling of 70% of 1977. Initially its duration was limited to the former wage is not exceeded. In 31 March 1979, but it was subsequently accordance with that provision, Article extended. 38 of the above-mentioned amendment provides, in the version of 21 September 1979, that workers who are in receipt of According to that agreement, in order an old-age benefit for life before their to qualify for the guaranteed income contract of employment has been allowance, a worker must satisfy five terminated, receive a daily allowance conditions: under the guaranteed income scheme which is reduced so that, when added to the old-age allowance for one day, the In the first place, his contract of total of the two benefits represents a employment must be terminated, either maximum of 70% of the reference daily as a result of redundancy or following earnings. retirement;

Italian old-age pension at a daily rate of "Until the Court of Justice of the FF 15, and that his daily earnings European Communities, interpreting amounted to FF 84.90, the Association Article 46 of Regulation No 1408/71 of calculated his daily benefit during his 14 June 1971 and Article 51 of the period of initial entitlement, taking into Treaty of Rome, has declared whether, consideration subsequent revalorizations in application of those provisions, a in accordance with the regulation at FF worker of Italian nationality residing in 47.05 (from 23 September 1977) increas- France, who has been in receipt of an ing to FF 57.60 (from 1 April 1978). old-age pension paid in Italy since the age of 60 and who receives in France the guaranteed income of 70% of his daily earnings as provided for in the On 14 May 1980, Mr.Valentini brought amendment of 13 June 1977 to the annex an action against the Association before to the regulation on allowances for the Tribunal de Grande Instance, Lyon, unemployed workers, may claim to have and asked the court to declare "that the his Italian pension paid concurrently reduction in his guaranteed income with the French allowance of 7 0 % of his benefit was unjustified" and "to order daily earnings or whether, on the other the Association to pay him the sums hand, the French organization which which had been unduly deducted since pays him that allowance, namely the 23 September 1977". He claimed that the Association pour l'Emploi dans l'In- fact that his Italian pension had been dustrie et le Commerce, is entitled to taken into account for the calculation of deduct from that allowance the sums his benefit constituted an infringement of paid by the Italian institution." Articles 7, 48 and 51 of the EEC Treaty.

Adviser in the Legal Department, acting trade Agreement of 13 June 1977 and as Agent. the amendment of the same date. It notes that the benefit paid by it to Mr Valentini is not an old-age benefit but an unemployment allowance awarded to Upon hearing the report of the Judge- Rapporteur and the views of the unemployed workers over 60 years of Advocate General, the Court decided to age. As regards the legal character of the open the oral procedure without a benefits in question, it observes that the preparatory inquiry. However, it re- allowances are financed and paid by quested the French Government to the institutions of the unemployment provide the Court, before 1 March 1983, insurances scheme, bodies which are with additional information relating to entirely distinct from the retirement the French system of early retirement pension institutions. Furthermore, the applicable in this case, in particular the acquisition of entitlement is conditional text of the Agreement of 31 December upon registration of the receipt at the 1958 and of the inter-trade agreements offices of the Agence Nationale pour relating to the "guaranteed income l'Emploi [National Employment Office]. scheme", namely the National Inter- The entitlement to and calculation of the trade Agreement of 27 March 1972 and allowance are not determined on the the amendment of 13 June 1977 to the basis of years of service as is the case annex to the regulation governing special for retirement pensions. Moreover, allowances relating to the situation of entitlement is calculated in the same unemployed workers over 60 and the manner and on the same conditions as amendments thereto. In addition, it for other unemployment allowances. In requested the Commission to submit, addition, the latter are of limited before 1 March 1983, an analytical table duration and payment thereof must cease of the early retirement schemes in force as soon as the recipient reaches normal in Member States and to make a retirement age. It observes that the comparative study of the principles of guaranteed income allowance is "an old-age insurance. The Commission and unemployment allowance which is totally the French Government lodged their different in character from an old-age replies to the Court's request on 24 pension", so that the provisions auth- February and 2 March 1983 respectively. orizing, in certain conditions, the over- lapping of old-age, invalidity, or survivors' pensions, referred to in Article 46, are not applicable in this instance.

2. Observations of the French Govern- exclude old-age pensions. The charac- ment teristics of the guaranteed income scheme show that it is an integral part of the unemployment benefit scheme, of which it represents only a variation. On the other hand, the provisions concerning the non-overlapping of old- The French Government does not deny age, invalidity and death benefits and the that the unemployment insurance scheme case-law of the Court relating thereto set up by the agreements falls within the are not applicable inasmuch as they are scope of Regulation No 1408/71 of the set out in Chapter 3 of Regulation No Council inasmuch as the Agreement of 1408/71, whilst the provisions on 31 December 1958 was notified to the unemployment come under Chapter 6 President of the Council of the European and lay down no rule requiring the Communities and published on 6 April aggregation of such benefit. Indeed they 1973, in accordance with Articles 1 (j) exclude it, inasmuch as they offer the and 96 of Regulation N o 1408/71. worker the choice of either joining the However, it takes the view that Article scheme of unemployment benefits of the 46 of that regulation cannot apply in this State in which he was last employed, or instance, since the benefit in question is of claiming the benefits of the State in not an old-age pension but an unem- which he resides. ployment benefit, which comes under Chapter 6 of the regulation. That follows from the fact that the benefit is paid and financed by the institutions of the Finally, it maintains that in respect of the unemployment insurance scheme which, overlapping of an unemployment benefit in France, are separate from the social with benefits paid under the legislation security institutions, which administer of another Member State, the relevant old-age pensions. provisions of Article 12 (2), which are the only provisions applicable in this instance, show that Community law does In addition, the rules for awarding the not preclude the adoption by a Member benefit are identical to those applicable State of legislative provisions for for unemployment benefit and its reduction, suspension or withdrawal of recipients must be registered with the benefits, as has recently been confirmed Agence Nationale pour l'Emploi. In that by the Court. respect, the Court has expressly held that such registration was necessary in the context of unemployment, in particular in its judgments of 9 July 1975 (Case It would therefore be appropriate for the 20/75 Gaetano d'Amico [1975] ECR 891) Court to rule that Article 46 of Regu- and of 17 May 1982 (Case 227/81, lation No 1408/71 cannot apply to Aubin v Union National Inter- unemployment benefits referred to in professionnelle [1982] ECR 1991). Chapter 6 of that regulation and that it follows, both from the case-law of the Court on the overlapping of unemployment benefits and from the The French Government refers also to Court's interpretation of the first the fact that the payment of the benefit sentence of Article 12 (2) of the regu- ceases on the day on which the recipient lation, which concerns the overlapping of recommences an occupation, whether for different categories of benefit, that a an employer or not — which does not Member State is justified in applying its

The Italian Government, on the other hand, suggests that the question be The Commission takes the view that it is answered in the affirmative on the not possible to exclude the possibility ground that Regulation No 1408/71 that, in principle, Regulation No should be interpreted in a manner 1408/71 may be applicable to the French favourable to the migrant worker, as the provisions relating to the guaranteed Court had laid down in its previous income allowance, despite their con- decisions. Moreover the Court has tractual nature, because they are covered established the definite principle that by a declaration of the French strict limits must be imposed on the Government, made in accordance with conditions in which measures against Article 1 (j) of that regulation by letter overlapping are permissible and has of 23 March 1972 (Official Journal of 6 interpreted the provisions of Regulation April 1973, L 90, p. 1). However, the No 1408/71 to the effect that, and to the Commission too concludes that the extent to which, they implement the award of a guaranteed income allowance objectives laid down in the Treaty, in of the type provided for under the particular those referred to in Article 51 French system of early retirement does not fall within the sphere of application (a) and (b). It has decided, in particular, of Article 46 of Regulation No 1408/71. that if the application of national legislation proves to be less favourable than that of the scheme of aggregation and apportionment provided for in Neither the provisions concerning Article 46 (1) of Regulation No old-age benefits (Articles 44 to 51 of 1408/71, the latter scheme must be Regulation No 1408/71) nor those applied (judgment of 14 March 1978, concerning unemployment benefits Case 98/77 Schaap [1978] ECR 707). (Articles 67 to 71) are relevant to a The conditions in which it is permissible consideration of the specific character of to reduce social security benefits benefits such as the guaranteed income determined in pursuance of Article 46 (1) allowance. Those provisions were based and (2) are defined in Article 46 (3). The on a traditional view of the benefits in Court has limited the application of that question and the rules laid down in provision exclusively to cases in which it accordance therewith are not entirely appears necessary to have recourse to the appropriate. It was for that reason that arrangement for aggregation of periods the Commission proposed to the Council of insurance for the purpose of acquiring specific rules for the coordination of the right to social security benefits. In early retirement schemes (Official any other circumstances, the reduction Journal of 9 July 1980, C 169, p. 22).

On the one hand, the effect of applying concept of benefits of the same kind has the provisions relating to the coordinated been interpreted broadly by the Court, award of old-age pensions might alter but that for such an interpretation to be the relationship between the benefits paid possible a sufficient degree of and the guaranteed income scheme as it comparability is required between the was conceived and organized by the benefits which are to be paid jointly. In national provisions, as an extension of this instance there is no such unemployment insurance. In particular it comparability. might weaken the link between the amount of the allowances actually paid, the amount of the income which it is intended to guarantee and the taking into account of benefits of a different As regards Article 51 of the EEC Treaty, type. Practical considerations such as the Commission takes the view that the relatively short duration of the Community law does not preclude guaranteed income allowances, which Member States from taking into are paid only until the award of old-age consideration for the application of their benefits properly so called, must also be provisions against overlapping benefits taken into account. payable to the persons concerned in other Member States such as the determination of the conditions for the acquisition, retention, loss or suspension of the right to social security benefits. On the other hand, the application of the Such conditions therefore apply without provisions relating to unemployment discrimination to nationals of all the benefits would imply a close connection Member States. The rule laid down in between their grant and the availability Article 38 of the regulation governing of the person concerned on the special allowances for unemployed employment market of the relevant State, workers over 60, in pursuance of which whilst the purpose of the guaranteed the guaranteed income allowance was income scheme is to remove recipients reduced by the amount of the old-age from the employment market. There is benefits, applies equally to French therefore no justification for maintaining nationals who are in the same position in respect of those recipients the and the benefit paid is not reduced by a residence requirements which may be sum which is more than proportional to imposed as a condition for the payment that of the foreign benefit on the basis of of unemployment benefits. which the reduction is effected. In this instance there has therefore been no discrimination.

I I I — S u m m a r y of t h e w r i t t e n The French Government submitted to the o b s e r v a t i o n s s u b m i t t e d in Court the provisions concerning the r e p l y to t h e q u e s t i o n s p u t French system of early retirement by the C o u r t applicable in this instance. At the Court's request, the Commission submitted an analytical table of early retirement schemes in force in the IV — O r a l p r o c e d u r e Member States and presented a comparative study of the schemes of early retirement and old-age insurance. It concludes on the basis of that exam- The defendant in the main proceedings, ination that the early retirement schemes the French Government, the Italian are distinguished from the unem- Government and the Commission ployment insurance schemes by the fact presented oral argument at the sitting on that recipients are no longer required to 20 April 1983. On the question of make themselves available on the labour the availability of recipients of the market as they are required to do for the guaranteed income allowance on the grant of traditional unemployment labour market, the representatives of the allowances. That is because the very defendant in the main proceedings, of purpose of the grant of early retirement the French Government and of the pensions is to remove such persons from Commission stated that the recipients that market. Moreover, in the must be registered as unemployed at the Commission's view, such schemes may Agence Nationale pour l'Emploi. How- also be distinguished from old-age ever they are not required to sign on, insurance benefits by numerous features, and they are under no obligation to for example by their temporary nature accept work under threat of losing the and dependence on the economic benefit in question. Furthermore they are situation, by the calculation of the not registered as seeking work for the amount payable under them and, except purposes of national statistics. in the case of the early retirement pension introduced in Belgium, by their financing. The Advocate General delivered his opinion at the sitting on 18 May 1983.

5 The guaranteed income retirement scheme was temporarily set up in France by the national inter-trade agreement of 13 June 1977 which supplemented and amended the national inter-trade agreement of 27 March 1972 on the guaranteed income retirement scheme, which in turn supplemented the regu- lation annexed to the agreement of 31 December 1958 setting up the national inter-trade scheme of unemployment insurance and based on Article L 351-5 of the Code de Travail. That scheme is administered by the offices of the Association, which also administer the scheme's funds and which operate as members of the Union Interprofessionnelle pour l'Emploi dans l'Industrie et le Commerce [Inter-trade Organization for Employment in Trade and Industry].

6 The allowances paid under the guaranteed income scheme are granted to workers over 60 years of age who retire on the condition that they have been affiliated for 10 years to a workers' social security scheme by reason of an occupation within the field of application of the unemployment insurance scheme and that in principle they can provide evidence of one year's continuous employment in one or more undertakings in the five years preceding retirement.

VALENTINI v ASSEDIO

7 The allowances represent a daily proportion of 70% of the average daily earning during the last three months of employment. They may however be reduced in pursuance of Article 38 of the amendment of 13 June 1977 to the annex to the regulation governing the scheme of special allowances relating to the situation of unemployed workers over 60. That provision, which is part of the above-mentioned inter-trade agreement of 13 June 1977, seeks to limit the allowances in question "so that when added to the old-age benefits for one day, the sum of the two benefits amounts to a maximum of 70% of the reference daily earnings".

JUDGMENT OF 5. 7. 1983 — CASE 171/82

No 1408/71 in such a way as to exclude the application of national provisions against overlapping. More precisely, there are two parts to the question: the first is intended to establish whether an allowance of the type paid under the guaranteed income scheme is of the same kind as ari old-age pension within the meaning of the above-mentioned regulation; the second part seeks to ascertain whether, in view of the nature of the benefits in question and in the light of Article 51 of the EEC Treaty, either national or Community provisions against overlapping may be applicable.

11 As regards a reply to the first part of the question, the defendant in the main proceedings, the French Government and the Commission point out that benefits such as those arising under the guaranteed income retirement scheme in France may not be regarded as old-age benefits, either because, as the Association, Lyon, and the French Government maintain, the benefits in question are unemployment benefits, or because, as the Commission suggests, the benefits fall into a special category which is as yet not covered by Regulation N o 1408/71, so that such benefits may not be regarded as being of "the same kind" as old-age pensions.

i2 On the other hand, the Italian Government maintains that such benefits must be regarded as being of "the same kind" as old-age benefits, in view of all their constituent elements, in particular the factor of age.

1 3 According to the established case-law of the Court, social security benefits must be regarded, irrespective of characteristics peculiar to the various national laws, as being of the same kind when their purpose and object together with the basis on which they are calculated and the conditions for granting them are identical. On the other hand, characteristics which are purely formal must not be considered relevant criteria for the classification of the benefits.

i7 The retirement allowances also differ in so far as they pursue an object related to employment policy inasmuch as they help to release posts held by workers who are near the age of retirement for the benefit of younger unemployed persons, an object which has only become apparent after the implementation of Regulation No 1408/71, in the context of the economic crisis which has affected the Community for a number of years.

is I n addition it should be noted that the Commission has submitted to the Council a proposal for supplementing Regulation No 1408/71 in order to take into account the specific features of benefits of the type in question.

JUDGMENT OF 5. 7. 1983 — CASE 171/82

i9 It must therefore be stated that the benefits in question may not be regarded as being of the same kind as the old-age benefits referred to in Article 46 of Regulation No 1408/71.

20 As regards the second part of the question, relating to the applicability of national provisions against overlapping, it should be recalled that, according to Article 12 (2) of Regulation No 1408/71, legislative provisions of a Member State for the reduction, suspension or withdrawal of benefit in cases of overlapping of two or more social security benefits may be applied to the recipient even though the right to such benefits was acquired under the legislation of another Member State, in so far as those benefits are not benefits of the same kind as benefits received in respect of invalidity, old-age, death or occupational disease.

2i In those circumstances, it is no longer necessary to consider the question which of the provisions against overlapping are applicable if the benefits in question are of the same kind as old-age benefits within the meaning of the second sentence of Article 12 (2) of Regulation No 1408/71.

On those grounds

T H E COURT,

in answer to the question referred to it by the Tribunal de Grande Instance, Lyon, by order dated 2 June 1982, hereby rules:

Benefits such as allowances under the guaranteed income retirement scheme provided for in the relevant French provisions do not fall within the scope of Article 46 of Regulation No 1408/71, and where such benefits overlap with old-age pensions of other Member States, Community law does not prevent the national rules against overlapping from being applied.

Mertens de Wilmars Pescatore O'Keeffe

Everling Mackenzie Stuart Bosco Koopmans