C-344/87

BETTRAY v STAATSSECRETARIS VAN JUSTITIE

OPINION OF MR ADVOCATE GENERAL JACOBS delivered on 8 March 1989 *

My Lords, 3. On 10 February 1983 the plaintiff obtained a decision from the Netherlands Ministry of Social Affairs and Work Oppor­ tunities assimilating him, for the purpose of the law on the provision of work for social reasons (Wet Sociale Werkvoorziening, which I shall refer to as the Social Employment Law), to a Netherlands national, the scheme set up by that law 1. In this case referred from the Council of being normally confined to Netherlands State (Raad van State) of the Netherlands nationals. The decision was expressly stated for a preliminary ruling, the Court is asked to be without prejudice to the provisions of to decide, in essence, whether a person the law on the residence and employment of becomes a worker for the purposes of aliens. On 18 April 1983 the plaintiff Community law by virtue of undertaking a commenced temporary employment with the form of paid employment under the State's Ergon undertaking in Eindhoven under the social policy programme of training and auspices of the Social Employment Law and rehabilitation for work of those who, by that temporary employment tacitly became a reason (usually) of physical or mental contract of employment of indefinite disability, are unable to compete in the duration as from 18 June 1983. His counsel normal labour market. stated at the hearing that he was still employed there.

5. The question referred is: employment actually made, to move freely within the territory of Member States for this purpose, to stay in a Member State for the purpose of employment and to remain 'Is Article 1(1) of Regulation (EEC) there after the termination of that No 1612/68 of 15 October 1968 —laying employment. down the right of a national of a Member State, irrespective of his place of residence, to take up an activity as an employed 7. Pursuant to Article 49 of the Treaty, person, and to pursue such activity, within those provisions were implemented inter alia the territory of another Member State — to by Regulation (EEC) No 1612/68 of the be construed as meaning that that right is Council of 15 October 1968 on freedom of also enjoyed by a national of another movement for workers within the Member State who is carrying out work in Community (Official Journal, English the territory of the Netherlands within the Special Edition 1968 (II), p. 475) and framework of the Wet Sociale Werkvoor­ Council Directive 68/360/EEC of the same ziening in a case where: date on the abolition of restrictions on movement and residence within the Community for workers of the Member States and their families (Official Journal, (a) he cannot be regarded as having English Special Edition 1968 (II), p. 485). previously been a worker within the meaning of Article 48(1) of the Treaty establishing the European Economic Community, other than in the context 8. Regulation (EEC) No 1612/68 has four of such a social job scheme; and parts. Part I is headed 'Employment and workers' families' and Part II 'Clearance of vacancies and applications for employment'. Title I of Part I is headed 'Eligibility for employment', and Article 1 reads as (b) he is not one of the persons referred to follows : in Title III of Regulation (EEC) No 1612/68 of 15 October 1968?'

9. Directive 68 / 360 / EEC , which makes ployed, whether short-term or long-term. It detailed provision for the exercise of the is intended only for those suffering from right of residence, is expressed by Article 1 such a disability, whether physical or to apply to nationals of Member States to mental, that they cannot, at least for the whom Regulation (EEC) No 1612/68 time being, work normally. Mr Bettray applies. The effect of the question referred himself, a person who had undergone is therefore whether a national of a Member treatment for drug addiction, is perhaps a State has the right of residence in another very good example of the sort of person for Member State exclusively by virtue of his whom the programme was designed. employment under a scheme such as that provided for by the Social Employment Law. If he does have that right, then by the provisions of Article 4 of the directive he is entitled to the residence permit provided for by that article on production of the document with which he entered the territory and a confirmation of engagement 12. The scheme is implemented in the from the employer or a certificate of Netherlands by the local authorities, or employment. communes. It emerged at the hearing that in order to do so groups of communes in each area in the Netherlands have created a total of about 108 projects to provide 'social' employment in the context of the law. The Ergon undertaking in Eindhoven (set up by 10. In order fully to comprehend the the commune of Eindhoven and neigh­ purport of the question it is necessary to bouring communes) at which the plaintiff consider in some detail the scheme set up by works is one such. Those undertakings, it the Social Employment Law. It is a social appears, are established solely for the programme designed to maintain, restore or benefit of persons unable to work normally, develop the capacity for work of persons although there is also in each undertaking who are able to work but who, owing to an administrative staff of persons who do personal circumstances, are (perhaps only not suffer from any disability and who are temporarily) unable to work normally. It responsible for the management of the became clear at the oral hearing that the undertakings. scope and purpose of the Social Employment Law was narrower than appeared from the order for reference and the written observations submitted to the Court. In particular it is not the same as schemes which enable disabled persons to be employed in normal commercial concerns. The agent of the Netherlands Government 13. The purpose of each undertaking is not made it clear at the oral hearing that such a to make profits but to meet the social need scheme existed in the Netherlands but under of providing work for those who would separate legislation. otherwise be unable to do so. The scheme is very largely financed by central government and by the communes. However, while not actually profit-making, it appears to be the aim of each undertaking to provide 11. Neither is the Social Employment Law participants, within the limits imposed upon designed for fit workers who are unem­ it by the law which I will turn to below,

14. Each undertaking is circumscribed by the Social Employment Law (and regu­ lations made thereunder) as to the activities 16. The criteria governing the level of it may carry out. In particular, the wages are based, provided that the conditions of both the labour market and participant receives a certain minimum to the market in the goods made may not be provide for his own needs and those of his improperly affected, and the marketing of dependants, on the level of the work carried the goods produced must not be carried out out and as far as possible reflect equivalent in such a way as to bring 'social wage levels for similar work in an under­ employment' into disrepute. taking operating on the open market but do not reflect the actual amount of work done. The law provides for two categories of participants: A and B. The majority of participants are classified A (as is Mr Bettray) and from them about one-third of the output of a normal worker is expected. The small remainder classified as B are not subject to any such expectation; they are 15. A person wishing to participate in the asked to carry out only so much work as is scheme applies to the local commune which consistent with their well-being. will consider whether he is suitable. If he is accepted, he undergoes a period of two months' probation after which his place is confirmed if he has performed his duties satisfactorily. The employment relationship is with the commune (Article 19), which can also terminate the relationship (Article 28). The commune pays him his wages and it is 17. In a nutshell, the Social Employment to the commune he turns in the case of any Law provides a framework for retraining dispute arising out of his placement on the people whose personal difficulties prevent scheme or the work he performs. However, them from seeking normal employment, the contractual relationship is specifically with a view to their entry or re-entry into governed by the Social Employment Law the normal labour market. For itself thereby excluding the participant from those — usually in category B — who are the status of employee in the public service unlikely ever to enter the normal labour or 'ordinary' employee (Article 19). The market it provides a useful therapeutic obligations of the participant include the function.

21. In the judgment of 21 June 1988 in Case 197/86 Brown v Secretary of State for 19. The criteria laid down in Levin have Scotland [1988] paragraph 23, the Court been clarified and amplified in a series of ruled as follows: subsequent decisions. In Case 139/85 Kempfv Staatssecretaris van Justitie [1986] ECR 1741, which was again a reference from the Council of State of the Netherlands, it will be recalled that Mr Kempf worked as a part-time music teacher giving 12 lessons a week and that the Netherlands Government expressed doubts ' ... a national of another Member State in that case as to whether such work could who enters into an employment relationship be regarded as constituting in itself effective in the host State for a period of eight and genuine work within the terms of the months with a view to subsequently under­ judgment in Levin. The Court, however, taking university studies there in the same found that there was no need to consider field of activity and who would not have that question since the Council of State had been employed by his employer if he had itself found that Mr Kempf's work was not not already been accepted for admission to on such a small scale as to be purely a university is to be regarded as a worker marginal and ancillary activity. The Court, within the meaning of Article 7(2) of Regu­ in the light of that finding, held that a lation (EEC) No 1612/68'.

OPINION OF MR JACOBS —CASE 344/87

The Court went on, however, to hold 24. Secondly, the Netherlands Government (paragraph 27) that the status of worker points out that the productivity of does not in such circumstances confer the participants in the scheme is too low to right to an educational grant under Article enable them to be employed in the normal 7(2) of Regulation (EEC) No 1612/68, way, that their pay is not dependent on since the employment relationship is then their productivity, and that a very high merely ancillary to the university studies. proportion of the cost of the scheme is met by the public authorities. Again, that does not in my view affect the issue, since it is a commonplace that work schemes of many kinds are subsidized out of public funds — and indeed out of Community funds — for a variety of social and economic purposes.

23. First, the activity is intended to maintain, restore or develop the capacity for work of persons who cannot work under normal conditions. However, it seems to me that, for example, a disabled or handicapped worker who by reason of his disability 26. That consideration, which was stressed cannot work under normal conditions but by the agent of the Netherlands who is none the less engaged by way of Government at the hearing, does, in my employment in an effective and genuine view, raise the central issue in this case. If it activity must be regarded as a worker for is right that the elements of the normal the purposes of Community law, so that this employment relationship are indeed merely first feature does not take a person outside incidental to the social aims of the scheme, the scope of the relevant Community then the activity in question might be provisions. That may well be so, in my view, regarded as purely 'ancillary', to cite the even if the person in question were perma­ term used in the Levin judgment, to those nently disabled and so unlikely to work social aims. True, it still could not be said again, even with rehabilitation and therapy, that the 'activities themselves [were] on such under normal conditions. a small scale as to be regarded as purely

BETTRAY v STAATSSECRETARIS VAN JUSTITIE

OPINION OF MR JACOBS —CASE 344/87

scope of the legislation. Mr Bettray, a man for its beneficiaries to do — and those same who had undergone treatment for drug beneficiaries are also given the chance to addiction, was not able to work normally. feel that they are contributing to their own He was accepted into the scheme provided upkeep. But the work done by the benefi­ by the Social Employment Law, and this ciaries is not intended to contribute to the fact shows that he was prevented from economic activities of the Community, nor working normally. He was not in compe­ to raise the standard of living; it is purely tition with other workers for employment social and deliberately kept away from the on the normal labour market. After his open market. Although the scheme provided retraining is complete, he will, under the under the Social Employment Law is terms of the Social Employment Law, be managed by the State and not by a charity, discharged from the scheme and will then it is nevertheless fulfilling an essentially be in the position of an ordinary citizen of social objective to which the fact that work the Communities, entitled to enter any is done and goods are provided is purely Member State in order to seek work (see ancillary. Although, in such schemes, goods the judgment of 18 June 1987 in Case may be produced and sold, and the work 316/85 Centre public d'aide sociale de carried out, in conditions designed to reflect Courcelles v Lebon [1987]) and entitled to normal working conditions, such activities reside in that State if he finds effective and are not, in my view, of a kind which genuine employment. constitute an effective and genuine activity as envisaged in the Levin judgment or in Article 48 of the Treaty.

created to provide simulated conditions of services which are normally provided for employment for the benefit of the remuneration, so that those provisions do participants. not seem applicable here. Moreover those provisions do not contemplate stays of a very lengthy or indefinite duration. In its judgment of 5 October 1988 in Case 196/87 U. Steymann v Staatssecretaris van Justitie [1988] ECR 6159, the Court held that an activity pursued on a permanent basis or without any foreseeable 35. Before concluding, I should mention the limit in time cannot be governed by the plaintiff's alternative submission that he Community provisions regarding the must be regarded, if not as a worker, then provision of services, and ruled that Articles as benefiting from a privileged status as a 59 and 60 of the Treaty do not cover the recipient of services. Although no question situation where a national of a Member upon that issue has been referred by the State goes to reside in the territory of national court, it may be appropriate to another Member State and establishes his point out that an issue might arise whether principal residence there in order to provide the plaintiff falls within the Chapter of the or receive services there for an indefinite Treaty on services (Articles 59 to 66) by period. For those reasons, the plaintiff's reason of being a recipient of services and alternative submission would in my view so has, if not a right of residence as a have to be rejected. worker, at least the rights provided for by Article 4(2) of Council Directive 73/148/EEC of 21 May 1973 on the abolition of restrictions on movement and residence within the Community of nationals of Member States with regard to establishment and provision of services (Official Journal 1973, L 162 p. 14), which 36. Reverting to the central issue, I would reads as follows: emphasize that the facts of this case are unusual and that the conclusion which I reach is therefore of limited scope. It is not decisive, in my view, whether a person is unable, by reason of some disability, to work in a normal working environment since if he were enabled to work in such an environment by the necessary facilities being 'The right of residence for persons provided there, he might still be regarded as providing and receiving services shall be of a worker. Nor is it decisive whether the equal duration with the period during which scheme is a voluntary one or whether it is the services are provided.' substantially financed by the public auth­ orities. It is not decisive whether the participant is employed by the concern itself or whether the employment relationship is with the public authorities, since what counts is the substance of the arrangements, not their legal form. The sole decisive criterion in my view is that the concern However, the Treaty provisions on services exists solely and specifically to give those are confined by the terms of Article 60 to who are unable to work in normal