C-101/83

P . B. BRUSSE,

on the interpretation of Article 17 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 ),

THE COURT (First Chamber )

composed of: Lord Mackenzie Stuart , President , T . Koopmans ( President of Chamber ) and G. Bosco , Judge ,

Advocate General : Sir Gordon Slynn Registrar : P . Heim

gives the following

"Two or more Member States of the I — Facts and written procedure competent authorities of those States may, by common agreement, provide for exceptions to the provisions of Articles Title II of Regulation No 1408/71 of the 13 to 16 in the interest of certain Council of 14 June 1971, in the form workers or categories of workers." in force at the time of the facts with which this case is concerned, contains Mr Brusse, a Netherlands national, who provisions which are intended to enable is the plaintiff in the main proceedings the national legislation applicable to at first instance, was employed from employed persons who move within the 1 September 1964 as a foreign corres­ Community to be determined. Article 13 pondent in the United Kingdom by De (1) states as follows: Volkskrant BV, which has its registered office in Amsterdam. "A worker to whom this regulation applies shall be subject to the legislation of a single Member State only." From the beginning of his employment in the United Kingdom Mr Brusse should have been subject to the British social Article 13 (2) provides that: security scheme. Article 4 (1) of the Convention on social security between "Subject to the provisions of Articles 14 the Netherlands and the United to 17: Kingdom of 11 August 1954 (Trac- tatenblad [Collection of treaties and (a) a worker employed in the territory conventions] 1954, No 114) and Article of one Member State shall be subject 13 (2) (a) of Regulation No 1408/71, to the legislation of that State even if which came into force in the United he resides in the territory of another Kingdom on 1 April 1973, both provided to that effect. Member State or if the registered office or place of business of the undertaking or individual employing However, Mr Brusse was never affiliated him is situated in the territoiy of to the British social security scheme. On another Member State; the contrary, he continued to pay ... ." voluntary contributions to the Nether­ lands old-age pension scheme. With

effect from 1 July 1967 he was auth­ by De Volkskrant BV on behalf of Mr orized to pay voluntary contributions to Brusse and, on 1 March 1979, it notified the Netherlands scheme for insurance the company of its decision confirming against unfitness for work. Finally, still that rejection against which an appeal on a voluntary basis and with effect from might lie. The Raad van Arbeid based its 1 January 1972, he became insured refusal primarily on the fact that Mr under the Netherlands scheme for Brusse, as a person resident in the United pensions for widows and orphans. Kingdom during the relevant period, did not fulfil the conditions laid down by the Netherlands legislation relating to It was only in 1977 that the British auth­ family allowances. That legislation pro­ orities discovered Mr Brusse's situation. vides that only persons resident in Contact was immediately made with the the territory of the Kingdom of the relevant authorities in the Netherlands Netherlands or who, not being so and an agreement was concluded by resident, are subject to income tax on exchange of letters. According to that salary earned by working in the territory agreement Mr Brusse was to be re- of the Netherlands within an employ­ garded : ment relationship, are insured. With regard to the agreement concerning Mr Brusse concluded between the British As subject to the Netherlands social and Netherlands authorities, the Raad security scheme from 1 September 1964 van Arbeid considered that it was not up to, and including 31 December 1977; possible to regard it as an agreement within the meaning of Article 17 of Regulation No 1408/71. In the Raad van As subject to the British scheme as from Arbeid's opinion the possibility of dero­ 1 January 1978. gating from Articles 13 to 16 provided for in that 'article was limited to cases where the application of those provisions That agreement was expressly stated to "might lead to undesirable or unintended be based on Article 10 of the afore­ consequences". In fact that was not the mentioned Convention between the case in relation to Mr Brusse since there Netherlands and the United Kingdom was nothing in his situation to indicate for the period up to 1 January 1973 and that he should not be subject to the on Article 17 of Regulation No 1408/71 general rules. The Raad van Arbeid for the period after that date. concluded that payment of the family allowances claimed by Mr Brusse "in this case would conflict both with By letter of 26 January 1978 Mr Brusse's the Netherlands legislation concerning employer, who had been informed of the family allowances and with the . . . agreement which had been concluded mandatory provisions of Community with regard to him, asked the Raad law". van Arbeid, Amsterdam, which is the defendant in the main proceedings at first instance, to award Mr Brusse the family allowances payable to him under Mr Brusse challenged the rejection of his Netherlands legislation up to 1 January claim before the Raad van Beroep, 1978. Amsterdam, which by judgment of 20 May 1981 declared the application to be well founded and consequently annulled By letter of 23 November 1978 the Raad the contested decision. By an appeal van Arbeid rejected the application made from the Raad van Arbeid the case was

brought before the Centrale Raad van Brussels Bar; by the Government of the Beroep. The latter court, by order of 19 Netherlands, represented by J. Verkade, October 1982, stayed the proceedings Secretary General at the Ministry of and referred the following questions to Foreign Affairs, acting as Agent; by the the Court of Justice for a preliminary United Kingdom, represented by R. N . ruling: Ricks, Treasury Solicitor, acting as Agent; and by the Commission of the " 1 . Does Article 17 of Regulation No European Communities, represented by 1408/71 enable two Member States, its Legal Adviser, J. Griesmar, acting as in the case where a worker over a Agent, assisted by F. Herbert of the number of years was not affiliated to Brussels Bar. the social security scheme of one of those Member States which Upon hearing the report of the Judge- was applicable to him pursuant to Rapporteur and the views of the Articles 13 to 16 of Regulation No Advocate General, the Court decided to 1408/71, to declare by agreement open the oral procedure without any that, in respect of those years, the preparatory inquiry. scheme of the other Member State (where the employee resided before moving to the first Member State) is By order of 14 December 1983 the applicable? Court also decided, pursuant to Article 95 (1) and (2)· of the Rules of Procedure, to assign the case to the First Chamber. 2. If the reply to the first question is in the affirmative (and assuming that the Court of Justice has jurisdiction to pronounce by way of a pre­ II — Written observations liminary ruling upon the agreement between two Member States mentioned in the first question) is The Court's jurisdiction the worker concerned entitled to family allowances under the scheme of a Member State indicated in that The Raad van Arbeid notes first that, in agreement even if he does not satisfy respect of the second question, the court the condition for entitlement to making the reference expressed doubts as family allowances laid down in that to the Court's jurisdiction to rule by scheme, namely residence in the means of a preliminary ruling on an territory of that Member State?" agreement concluded by two Member States under Article 17 of Regulation No 1408/71. The order making the reference was registered at the Court of Justice on 31 The Raad van Arbeid maintains that the May 1983. Court has jurisdiction under the first paragraph of Article 177 to declare, by In accordance with Article 20 of the means of a preliminary ruling, the Protocol on the Statute of the Court conditions which an agreement within of Justice written observations were the meaning of Article 17 of Regulation submitted by the Raad van Arbeid, No 1408/71 must fulfil. Amsterdam, represented by its President, L. Opheikens; by P. B. Brusse, Mr Brusse considers that the Court's represented by A. F. de Savornin jurisdiction derives from the fact that the Lohman and J. G. F. Cath, both of the national court, which must assess the

In the opinion of the United Kingdom, before the court making the reference may determine whether the agreement with which it is concerned may validly be The first question relied upon, it is necessary for it to have guidance on the scope of Article 17 and on the effect of an agreement made in pursuance of that article in relation to The Raad van Arbeid recalls that in the the Community rules concerning family Court's judgment of 23 September 1982 allowances. in Case 276/81 Kuijpers ([1982] ECR 3027) it stated that the aim of the provisions contained in Title II of Regu­ lation No 3 and Regulation No 1408/71 The United Kingdom therefore considers was to ensure that the person concerned that the questions referred to the Court was subject, on the basis of the criteria must be understood as seeking an inter­ laid down in the provisions contained in pretation of Article 17 and that the the title, to the social security scheme of Court has jurisdiction to answer them. only one Member State, in order to prevent more than one national system from being applicable simultaneously. The Commission submits that whilst an Consequently it is not open to the agreement concluded between two Member States to determine themselves Member States under Article 17 is not to what extent their own legal rules or one of the Community acts referred to in those of another Member State are to be Article 177 of the EEC Treaty, that does applied. not prevent the Court's defining, in interpreting Article 17, the scope of any restrictions on the power given to the The Raad van Arbeid, repeating the Member States by that provision. arguments already set out in the decision Nevertheless the Court may not actually challenged by Mr Brusse, submits that determine whether the agreement the words "in the interest of" in Article concluded in this case between the 17 cannot be regarded as anything United Kingdom and the Netherlands other than a means of permitting an falls within the scope of Article 17. That adjustment to be made in cases where is a question of the application of the application of Articles 13 to 16 might Community law which the national court lead to undesirable or unintended alone may decide. The Commission consequences. Such consequences do not therefore suggests that the second exist in the case of an employed person question referred by the national court who establishes himself in another should be rephrased as follows : Member State for an indefinite period. In such a case, by virtue of Article 13 (2) (a) the legislation of the State in whose "Should Article 17 of Regulation No territory he is employed is to apply. The 1408/71 be interpreted to mean that effects of the employed person's failure the relevant legislation designated by an to affiliate himself through the relevant agreement between two Member States authority in the new country cannot within the meaning of that article be regarded as undesirable consequences

In Mr Brusse's opinion there is nothing From the aforementioned considerations to prevent an agreement under Article 17 the Raad van Arbeid concludes that an from governing pre-existing situations agreement between two or more since a general prohibition of any Member States according to which the retroactive effect cannot be deduced legislation of the Member State where either from the wording of the provision the employee in question was originally or from its position in the scheme of the resident is declared applicable on the regulation. On the contrary, in view of ground that that person had failed to the time inevitably necessary for the affiliate himself in the other Member conclusion of such agreements Article 17 State where he is employed, is not an would lose much of its significance if an agreement for the purposes of Article 17 agreement could not relate to a period of Regulation No 1408/71. It therefore which had already elapsed. In addition, submits that the first question referred by in this case the retroactive effect of the the national court should be answered in agreement is undeniably in the interests the negative. of the employed person..

Mr Brusse, after recalling the broad The Government of the Netherlands notes outline of the Netherlands social security that the sole criterion on which the system, notes as a preliminary point that Member States may, be means of an the agreement concluded between the agreement, have recourse to Article 17 of United Kingdom and the Netherlands Regulation No 1408/71 in order to was intended to remove uncertainty provide for exceptions to the provisions regarding the application of the United of Articles 13 to 16 of that regulation is Kingdom social security scheme to him, the interest of the employed person. The in view of the fact that he was employed Netherlands Government considers that and resident in the United Kingdom. Article 17 should be used sparingly since The effect of the agreement was to it constitutes an exception to the general "normalize" his situation. rules applicable, and such use is only

The Netherlands Government therefore (ii) There was no evidence that Mr submits that the first question referred by Brusse or his employer was at­ the national court should be answered in tempting to frustrate the aims of the the affirmative. Treaty or to circumvent the Community rules;

After recalling the facts of the case the United Kingdom observes that Article 17 (iii) To make Mr Brusse subject to the is framed in general terms and does not British scheme from 1964 onwards place restrictions on the period which would have involved a considerably may be covered by an agreement. The complicated administrative pro­ sole important criterion contained in that cedure to no particular purpose; provision is that such an agreement must be in the interest of certain workers or categories of workers. (iv) The conclusion of an agreement was clearly in the interest of Mr Brusse.

Yet it would be contrary to the spirit of Article 17 to try to circumscribe too narrowly the cases where an agreement With regard to the last circumstance the may be concluded. The making of such United Kingdom submits that to make agreements should, in the final analysis, Mr Brusse subject to the British be left to the good sense of the relevant legislation from 1964 would have made national authorities. him liable to pay contributions to the

RAAD VAN ARBEID / BRUSSE

British scheme with little advantage where they are no longer appropriate accruing to him as a result of so doing. provided that that is in the interest of certain workers or categories of workers.

The Commission notes that the rules The presence of a provision such as contained in Articles 13 to 16 reflect Article 17 accurately reflects the need to to major considerations, namely an in­ be able to set aside the rules in cases tention to determine a single body of

JUDGMENT OF 17. 5. 1984 — CASE 101/83

legislation applicable to each employed and exercise of the right to freedom of person and the desire for practicability, movement workers." that is to say, in social security matters the determination of the legislation applicable should not amount to an The second question obstacle to the existence or the exercise of the right of free movement of workers If the reply given to the first question by envisaged in Article 51 of the EEC the Court is in the affirmative, the Raad Treaty. Consequently, the interest of the van Arbeid observes that, if the worker referred to in Article 17 should legislation of one Member State is be assessed in the light of, on the one declared applicable, that Member State hand, the practical aspects of affiliation may naturally fix the general conditions to the social security scheme of one to wich the right and duty to be Member State rather than that of affiliated are subject, but far from having another and, on the other hand, the an absolute discretion in fixing those effect of the provisions of Articles 13 to conditions, the Member State must 16 on the right to freedom of movement remain within the limits laid down by of the employee concerned. Regulation No 1408/71.

RAAD VAN ARBEID / BRUSSE

affirmative. Netherlands. Finally, the United King dom states that no claim for family benefits was submitted to the British The Netherlands Government recalls that authorities in respect of the period from the general rule in Article 13 (2) (a) 1 April 1973 to 31 December 1977. provides that the legislation applicable in social security matters is that of the Member State in whose territory the The Commission considers that the fact worker is employed even if he resides that the legislation applicable to a elsewhere or the registered office or particular worker in relation to social place of business of his employer is security has been determined by means situated elswhere.

be required to satisfy conditions of that in Community law conditions residence in order to obtain the benefits relating to nationality and residence to which he is entitled under the governing the recognition of an legislation declared to be applicable to entitlement are incompatible with the him by Article 17. In the opinion of the principle of free movement itself. Netherlands Government such a result Moreover, the application of a condition would be contrary to the spirit and of residence is also contrary to the purpose of the regulation. Consequently purpose of the provisions of Title II of the Netherlands Government submits Regulation No 1408/71.

The United Kingdom takes the view that where the legislation of a Member State "Article 17 of Regulation No 1408/71 is is made to apply in derogation of a rule governing cases of conflict and

JUDGMENT OF 17. 5. 1984 — CASE 101/83

only enables it to be determined which III — Oral procedure legislation is to be applicable. At the sitting on 9 February 1984, oral The question whether and in what argument was presented by the Raad van circumstances a worker acquires an Arbeid, Amsterdam, represented by S. entitlement under the legislation so Van der Zee, acting as Agent, by P. B. determined is to be settled by that Brusse, represented by A. F. de Savornin legislation subject to the provisions of Lohman, and by the Commission of the Article 51 of the EEC Treaty and the European Communities, represented by regulations giving effect to it. A con­ F. Herbert. dition of residence is incompatible in that connection with the very principle of the The Advocate General delivered his free movement of workers." opinion at the sitting on 15 March 1984.

Decision

1 By order of 19 October 1982, which was received at the Court on 31 May 1983, the Centrale Raad van Beroep [Court of last instance in social security matters] referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions relating to the interpretation of Article 17 of Regulation No 1408/71 of the Council of 14 June 1971 on the application of social security schemes tó employed persons and their families moving within the Community (Official Journal English Special Edition 1971 (II), p. 416).

"Two or more Member States or the competent authorities of those States may, by common agreement, provide for exceptions to the provisions of Articles 13 and 16 in the interest of certain workers or categories of workers."

6 According to the agreement relating to Mr Brusse concluded by those auth­ orities he was to be regarded as subject to the Netherlands social security scheme for the period ending on 31 December 1977. However, as from that date the United Kingdom legislation was to be applicable to him.

7 t e basis f that a reement Mr On h o g Brusse's employer asked the Raad van Arbeid, Amsterdam, to award Mr Brusse the family allowances payable to him under Netherlands legislation for the period in respect of which it had been agreed that that legislation would apply to him.

8 h aad van r eid T e R Ab rejectedthat request, contending that the Netherlands legislation provides for payment of family allowances only to workers residing in the Netherlands and that Mr Brusse did not fulfil that condition during the relevant period. In addition the Raad van Arbeid denied that the agreement concerning Mr Brusse was an agreement within the meaning of Article 17 of Regulation No 1408/71.

9 Mr Brusse challenged that decision before the Raad van Beroep [Social Security Court], Amsterdam, which upheld his right to the family allowances in question. The Raad van Arbeid appealed against that decision to the Centrale Raad van Beroep. That court decided to stay the proceedings and to refer the following questions to the Court:

" 1 . Does Article 17 of Regulation No 1408/71 enable two Member States, in the case where a worker over a number of years was not affiliated to the social security scheme of one of those Member States which was applicable to him pursuant to Articles 13 and 16 of Regulation No

The first question

12 The Centrale Raad van Beroep's first question seeks, essentially, to ascertain whether two Member States may, by means of an agreement concluded under Article 17 of Regulation No 1408/71, decide, with retroactive effect, that the legislation of one of those Member States, which is applicable to a worker pursuant to Articles 13 to 16, does not apply to him and that the legislation of the other State is applicable to him in respect of a given period.

RAAD VAN ARBEID / DRUSSE

13 Before a reply is given to that question, Article 17 must be placed in its legal context.

1 4 As the Court has recently pointed out (judgment of 23 September 1982 in Case 276/81 Board of the Sociale Verzekeringsbank v Heirs or assigns of G. T. Knijpers [1982] ECR 3027) the aim of the provisions of Title II of Regu­ lation No 1408/71, which determine the legislation applicable to workers moving within the Community, "is to ensure that the persons concerned shall be subject to the social security scheme of only one Member State, in order to prevent more than one national legislation from being applicable and the complications which may result from that situation".

15 In order to achieve that aim Article 13 (2) (a) lays down the general principle that a worker is to be subject, with regard to social security matters, to the legislation of the Member State in whose territory he is employed.

20 There is nothing in the wording of Article 17 to indicate that recourse to the derogation made available to the Member States by that provision is possible only as regards the future.

21 On the contrary, it follows from the spirit and scheme of Article 17 that an agreement within the meaning of that provision must also be capable, in the interests of the worker or workers concerned, of covering past periods. Since Article 17 provides for an exception intended to mitigate the difficulties resulting from the application of Articles 13 to 16 to special situations not specifically envisaged in Regulation No 1408/71, it may be used not only to ensure that a certain situation does not arise but also to remedy an existing situation the injustice of which appears only after it has arisen.

22 It must also be emphasized that, in view of the time needed for two or more Member States to reach agreement as to whether it is appropriate to derogate from Articles 13 to 16, Article 17 would be deprived of much of its meaning if the agreement could have only prospective effect.

23 It must therefore be concluded that an agreement entered into between two or more Member States pursuant to Article 17 of Regulation No 1408/71 may declare legislation other than that designated in Articles 13 to 16 applicable in respect of past periods provided, of course, that the agreement is in the interests of the worker or workers in question.

RAAD VAN ARBEID / BRUSSE

24 In its observations submitted to the Court the Raad van Arbeid maintains that Member States may not avail themselves of their right to derogate from Articles 13 to 16 in a case such as this where the worker in question has failed to affiliate himself to the social security scheme designated in Article 13 (2) (a).

JUDGMENT OF 17. 5. 1984 — CASE 101/83

of national law applicable by virtue of Articles 13 to 17, provided, however, that those provisions are consistent with the relevant rules of Community law.

29 With regard to entitlement to family allowances, therefore, it is necessary to take account of Article 73 (1) of Regulation No 1408/71 which states that:

"A worker subject to the legislation of a Member State other than France shall be entitled to family benefits provided for by the legislation of the first Member State for members of his family residing in the territory of another Member State, as though they were residing in the territory of the first State."

30 That article creates, in favour of a worker who, as in the case envisaged in the order making the reference, is subject to the legislation of a Member State other than the State in whose territory the members of his family reside, a real entitlement to the family allowances provided for by the applicable legislation. That entitlement cannot be defeated by the application of a provision of that legislation by virtue of which persons not residing in the territory of the Member State in question are not to receive family allowances.

31 It must also be added in connection with Article 73 that it is irrelevant whether the legislation to which the worker is subject was determined by application of Articles 13 to 16 of Regulation No 1408/71 or on the basis of an agreement concluded pursuant to Article 17 of that regulation.

THE COURT (First Chamber)

in answer to the questions referred to it by the Centrale Raad van Beroep by- order of 19 October 1982, hereby rules:

1. Article 17 of Regulation No 1408/71 makes it possible for two Member States, in the case of a worker who for a large number of years has not been affiliated to the scheme of one of those Member States which was applicable to him pursuant to Articles 13 to 16 inclusive of the said regulation, by agreement to declare applicable, in respect of those years, the legislation of the other Member State provided that such agreement corresponds to the interests of the worker concerned;

2. A worker who has been subject, on the basis of an agreement concluded under the terms of Article 17 of Regulation No 1408/71, to the legislation of a Member State other than the one in which the members of his family reside is entitled, by virtue of Article 73 of the said regulation, to family benefits provided for by the legislation designated by that agreement notwithstanding the fact that he does not satisfy the terms of a provision as to residence contained in that legislation.

Mackenzie Stuart Koopmans Bosco

Delivered in open court in Luxembourg on 17 May 1984.