C-15/90

MIDDLEBURGH

OPINION OF MR ADVOCATE GENERAL MISCHO delivered on 16 April 1991 *

Mr President, (2) is entitled (under national law) to Members of the Court, unemployment benefit upon the invol- untary cessation of such self- employment, and 1. The applicant in the main proceedings is a British national who worked in Ireland between January 1981 and August 1982. In (3) is so entitled by reason of contributions October 1983 he left his son in Ireland and paid or credited as an employed person, returned to the United Kingdom, where he is that person to be regarded as an was employed from 15 November 1983 to employed person for the purpose of 13 April 1984. Following a period of unem- Article 73 read together with Article 1 ployment between 16 and 29 April 1984, he of Council Regulation N o 1408/71 of was self-employed from 30 April to 29 July 14 June 1971 on the application of of that year. social security schemes?'

2. The competent national authorities 5. The problem raised has its origin in refused to award him child benefit in respect Article 73(1) of Council Regulation (EEC) of his son for that period, on the ground N o 1408/71 of 14 June 1971 on the that the child was not in the United application of social security schemes to Kingdom at that time. The matter was employed persons and their families moving finally brought before the Court of Appeal within the Community (Official Journal, in London, which has referred three English Special Edition 1971 (II), p. 416), questions to the Court of Justice for a which, in the version applicable at the preliminary ruling. relevant time, ' provides that

July 1984, the fact that his son was not not constitute proof that he is to be residing in the territory of the United regarded as an employed person. Kingdom could not be relied on as a reason for refusing to pay him family benefits in respect of that period. 11. During the period in question, the applicant was insured as a self-employed person, and this is borne out by the fact that 7. It is, however, not disputed that Mr he paid his contributions as a self-employed Middleburgh was, during the period in person, quite irrespective of the fact that he question, a self-employed person within the meaning of the relevant national law. He also had certain rights by virtue of his would nevertheless have been entitled to previous status as an employed person. It is receive unemployment benefit, had he found thus not possible to conclude that he was, himself out of work, not by virtue of his during the relevant period, insured under a status as a self-employed person, since such scheme administered or financed in such a persons were not so entitled, but by virtue way as to identify him as an employed of contributions which he had previously person. made as an employed person.

12. The applicant's second textual argument 8. The question to be addressed is therefore comes up against a similar objection. H e whether that circumstance is sufficient to contends that if he does not come under enable the applicant in the main proceedings subparagraph (ii) of Article 1(a) of Regu- to be regarded as an employed person lation No 1408/71 he must come under within the meaning of Article 73. subparagraph (i), which states that 'employed person' and 'self-employed person' mean any person

14. The applicant also relies on the 17. It is, however, inconceivable that a judgment in Brack, in which the Court gave person may, during one and the same a broad interpretation of the concept of a period, be both a self-employed person and worker within the meaning of Article 1 of an unemployed person. Since Mr Regulation No 1408/71. It must be recalled, Middleburgh was clearly not unemployed, however, that that case differed from the he cannot rely on Article 74. Furthermore, present one in several respects. he cannot rely on Article 73 either, since that article applied only to employed persons, as the Court expressly confirmed at paragraph 8 of its judgment in Delbar.1 I have just shown that the applicant was a self-employed person, even though he was insured against the risk of unemployment by 15. In the first place, that case did not virtue of contributions which he had paid concern a distinction within the scope of earlier as an employed person. Article 1, but rather the demarcation of that scope in relation to persons who are not entitled to claim benefits under the regu- lation. Furthermore, the Court explicitly stated that its interpretation of Article 1 was 18. I would therefore suggest that the valid for the purposes of the application of Court answer the first question as follows: Article 22 of the regulation, which deals with sickness insurance, a benefit linked to contributions which Mr Brack had paid but the benefit of which he risked losing by virtue solely of the place in which the risk materialized. In contrast, the family benefit 'Where a person is self-employed and is entitled (under national law) to unem- at issue in the present case is not linked to ployment benefit upon the involuntary such contributions. cessation of such self-employment, and is so entitled by reason of contributions paid or credited as an employed person, that person is not to be regarded as an employed person for the purpose of Article 73 read together with Article 1 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the 16. Finally, the applicant in the main application of social security schemes.' proceedings relies on a combined reading of Articles 73 and 74 of Regulation N o 1408/71. In his opinion, those articles show that an applicant ought to be entitled to family benefit if he is employed and pays the appropriate contributions, or if he is The second question unemployed but entitled to benefits paid on the basis of such contributions. In those circumstances, he says, it is unreasonable to refuse such benefit to an applicant who satisfies one condition under the former 19. The second question is worded as supposition, namely, that he has work, and follows : another under the latter supposition, namely, that he is entitled to draw unem- 2 — Judgment of 5 December 1989 in Case C-114/88 Delbar v Caisse d'Allocations Familiales de Roubaix-Tourcoing [1989] ployment benefit. ECR 4067.

'If a national of Member State A resides in Part 1 Member State B for a period and, whilst there, (a) works as an employed person and (b) co-habits with and has a child by a national of Member State B, is it a breach 22. In Delbar, which I have just cited, the of either Article 48 or Article 52 of the Court was faced with the situation of a Treaty for Member State A to refuse to pay Belgian lawyer who carried on his family benefit in respect of the child on the profession in France but whose children sole ground of the child's absence from remained in Belgium and were, for that Member State A during a period when the national has returned to Member State A reason, refused French family benefits.

I share the view taken by the extended to cover self-employed persons, Commission and the defendant in the main the scope of Article 73 of that regulation proceedings that since the question referred had not yet been amended at the time of the makes it clear that the applicant returned to relevant facts and it remained applicable to the United Kingdom in a self-employed employed persons alone. Since the judgment capacity, it is not necessary to examine the in Delbar is more recent than the two Pinna problem with particular reference to judgments, 3 if the Court had had any Article 48. doubts regarding the compatibility of Article 73 of the regulation in its previous form with Article 52 of the Treaty (since the applicant was a self-employed person) it would certainly have made any such doubt apparent in an obiter dictum, in order to prompt the national court to refer a further

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MIDDLEBURGH

allowances by reason of the fact that his does not grant to its own nationals, in the children reside in a country other than that present case that of 'exporting' family in which he works as a self-employed benefits. I think we can use this expression person. Indeed, the applicable legislation with regard to family benefits granted to a leaves no room for any doubt, regarding worker in respect of his child residing in either interpretation or possible illegality' another State. Since family benefits are (paragraph 4 of the Opinion, [1989] ECR intended to be used for the maintenance of 4067, at p. 4073). the child, they must be transferred to the State in which that child resides. We thus find ourselves in the type of situation referred to in Article 51(b) of the Treaty, 23. I believe that this view of the matter which requires the Council to adopt was and remains correct in every respect. In measures to secure view of the fact that Article 51 applies only to employed persons and there is no parallel provision with regard to self-employed persons, the measures which the Council was required to adopt by virtue of that 'payment of benefits to persons resident in article, which became the subject in turn of the territories of Member States'. Regulations N o 3/58 and No 1408/71, could deal only with employed persons. The situation did not change until the Council observed that it was necessary to coordinate social security schemes applicable to self- 25. I cannot believe that Articles 48 and 52, employed persons in order to attain one of in the context of a problem as complicated the objectives of the Community, and that it as that of the 'exportation' of social security could therefore invoke Article 235 in order benefits, can be regarded as precise and to extend Regulation N o 1408/71 to self- unconditional provisions. Admittedly, they employed persons. do lay down the rule that nationals of other Member States must be treated in the same way as nationals of the host State, which

'it may be seen from the provisions of senefits are in fact applied for the main- Articles 54 and 57 of the Treaty that :enance of the members of the family freedom of establishment is not completely intended to benefit from them (Article ensured by the mere application of the rule 75(l)(b) of Regulation No 1408/71) and to of national treatment, as such application ivoid overlapping family benefits in the case retains all obstacles other than those where, by virtue of the pursuit of an occu- resulting from the non-possession of the pational activity by the mother, who has nationality of the host State and, in remained in the worker's State of origin, particular, those resulting from the disparity family benefits are also payable by virtue of of the conditions laid down by the different the legislation of the Member State on national laws for the acquisition of an whose territory the children are residing appropriate professional qualification . . . (Article 76). Where a worker becomes With a view to ensuring complete freedom entitled at a particular moment to a pension of establishment, Article 54 of the Treaty under the legislation of a number of provides that the Council shall draw up a Member States, it is necessary to determine general programme for the abolition of under which State's legislation family existing restrictions on such freedom and benefits are to be paid (Article 77 of the Article 57 provides that the Council shall regulation). Similar problems arise after the issue directives for the mutual recognition death of the worker or person entitled to a of diplomas, certificates and other evidence pension (Article 78 of the regulation). of qualifications'. 5 Indeed, the problem of aggregation of periods completed under the legislation of two or more States may arise even in the sphere of family benefits. The law of the 26. I believe that Regulation N o 1408/71 State of establishment may make the plays the same role in relation to the acquisition of the right to benefits subject to obstacles arising from differences in national the completion of periods of insurance, social security legislation as directives on the employment or self-employment, and it may mutual recognition of diplomas play in be vital to provide for a system which respect of differences in national law permits account to be taken in a reliable regarding the acquisition of professional way of periods completed in another qualifications. Member State (Article 72 of Regulation No 1408/71).

'Article 73 of Regulation N o 1408/71 31. The judgment in Pinna I, on which M r creates two different systems for migrant Middleburgh has placed particular reliance, workers depending on whether they are does not justify any different conclusion. In subject to French legislation or to the legis- that judgment the Court ruled that Article lation of another Member State. 73(2) of Regulation No 1408/71 was invalid Accordingly, it adds to the disparities caused because it provided that employed persons by national legislation and, as a result, from other Member States employed in impedes the achievement of the aims set out France could receive benefit from the in Articles 48 to 51 of the Treaty' French authorities only in the amount granted under the legislation of the State in which the children were resident. The Court 34. Consequently, the Court merely did take the view that such a rule concluded that the criterion set out in constituted covert discrimination because Article 73(2), which provides for payment of benefits at the rate in force in the State of residence of the children and is not of such a nature as to secure equal treatment as 'the problem of members of the family required by Article 48, residing outside France arises essentially for migrant workers'. 'therefore may not be employed within the context of the coordination of national legis- 32. However, it was not the French legis- lation which is laid down in Article 31 of the lation that the Court was criticizing. On the Treaty with a view to promoting the free contrary, it held that movement of workers within the Community in accordance with Article 48'. (paragraph 24)

36. The Commission has also attached a the Treaty did not require the British auth- great deal of importance to the judgment in orities to grant to a national of another Segers 6 and to those in Stanton and in Member State who had established himself Wolf. 7 However, I do not believe that these in the United Kingdom or, a fortiori, to a judgments have any value as precedents British national returning to his country with regard to the case now before the child benefit in respect of a child residing in Court. The Segers case concerned a simple another Member State. request for admission to the general scheme of sickness insurance in the State of estab- lishment. In the Stanton and Wolf cases the applicants sought, on the contrary, to be exempted from the insurance scheme Part 2 for self-employed persons in the State concerned. In none of those cases was there a problem concerning the 'exportation' of social security benefits, aggregation of 39. The Court will now of course have periods, etc. realized that in my view the concept of covert discrimination, which it has applied in a number of other contexts, cannot play 37. It remains for me to say a few words any role with regard to a problem of concerning the argument which Mr 'exportation' of social security benefits. Middleburgh draws from Article 53 of the Treaty, which provides that Member States shall not introduce any new restrictions on the right of establishment in their territories 40. The applicant and the Commission of nationals of other Member States. In my nevertheless rely on the Court's case-law to view that provision is not applicable to the the effect that Article 52, as a specific present case, since the British measure falls expression of the principle of equal within the sphere of social legislation. This treatment, is not a sphere in which harmonization is prescribed by the Treaty, and the Member States are therefore free to amend their legislation so long as they comply with coordination measures adopted at 'prohibits not only overt discrimination by Community level. With regard to the reason of nationality but also covert forms problem at present before the Court, the of discrimination which, by the application legislation was coordinated only in 1989, 8 of other criteria of differentiation, lead in that is to say, after the amendment to the fact to the same result' (judgment of 5 British legislation. December 1989 in Case C-3/88, Commission v Italy [1989] E C R 4035, at paragraph 8). 38. For those reasons, I am of the opinion that during the material period Article 52 of

Article 52 is a national of the State in which State of origin: it is in that State that he he or she settles after having worked intends to exercise his right of establishment abroad. which forms the basis for his claim. It is not obvious that the right of a national of a Member State to return to his or her State of origin after having worked in another 42. It is true that in its judgment of 3 Member State is one which derives from the October 1990 in Case C-61/89, Bouchoucha, rules of Community law relating to freedom at paragraph 13, the Court reiterated that of movement; nor is it evident that the conditions under which such a right must be exercised are governed by those rules. 'the scope of Article 52 of the EEC Treaty cannot be interpreted in such a way as to exclude from the benefit of Community law 45. In any case, the Court, in the Knoors, the nationals of a given Member State Broekmeulen and Bouchoucha cases, made where the latter, owing to the fact that they the right of a national to be treated in the have lawfully resided on the territory of same way as any other person enjoying the another Member State and have there rights and liberties guaranteed by the Treaty acquired an occupational qualification subject to the condition not only that the which is recognized by the provisions of national had resided in the territory of Community law, are, with regard to their another Member State, but also that he or Member State of origin, in a situation which she had there acquired rights recognized by may be regarded as equivalent to that of the provisions of Community law: the any other persons enjoying the rights and persons involved in those cases wished to liberties guaranteed by the Treaty'. 9 make use in their State of origin of rights thus acquired in another Member State as a result of the exercise of their right to freedom of movement.

44. It may first be observed that what, in Article 52 of the Treaty, rights acquired by the context of Article 52 of the Treaty, him in Ireland while residing and working ought to form the basis of Mr there which are recognized by Community Middleburgh's entitlement to British family law. benefits is not the fact that he went, as a British national, to work in another Member State, but rather the fact that on completion of his work in Ireland, he returned to his 47. Mr Middleburgh is asserting in the United Kingdom a right which he could not 9 — Sec also the judgment of 7 February 1979 in Case 115/78 Knoors v Secretary of State for Economic Affairs [1979] ECR have acquired in Ireland merely by virtue of 399, at paragraph 24, and that of 6 October 1981 in Case being employed there: in the United 246/80 Broekmeulen v Huisarts Registratie Commissie [1981] ECR 2311, at paragraph 20. Kingdom he is claiming British family

49. In its judgment in Stanton, which I have already cited, the Court held that national legislation which is applicable without 52. Is the British legislation likely to hinder distinction to all self-employed persons in a the pursuit of occupational activities outside Member State but places at a disadvantage British territory? In other words, might a those of such persons whose principal occu- British national forgo his right to pursue an pation is employment in another Member occupational activity in another Member State does not result in indirect discrimi- State by reason of the fact that when he nation on grounds of nationality and is returns to his country he will not be entitled therefore not in breach of Article 7 of the to British child benefit if the child born Treaty, provided it has not been established during his period of residence abroad does that the persons disadvantaged are exclus- not return with him? ively or mainly foreign nationals.

53. It seems to me that if that were the case, the resultant impediment to the pursuit of occupational activities outside the United 50. This, however, did not prevent the Kingdom would be so indirect and hypo- Court from ruling that such legislation is thetical that it could only with great contrary to Articles 48 and 52 of the Treaty, difficulty amount to a restriction on the since its effect is to place at a disadvantage freedom of movement prohibited under the pursuit of occupational activities outside Community law. It would depend on the the territory of the Member State in occurrence of events following the exercise question (paragraph 14). of the right of freedom of movement,

58. For all the reasons set out above, I propose that the Court reply as follows to the questions referred by the Court of Appeal, London:

' 1 . Where a person is self-employed and is entitled (under national law) to unem- ployment benefit upon the involuntary cessation of such self-employment, and is so entitled by reason of contributions paid or credited as an employed person, that person is not to be regarded as an employed person for the purpose of Article 73 read together with Article 1 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes.

2. If a worker from Member State A resides in Member State B for a period and during that period (a) works as an employed person and (b) lives with and has a child by a national of Member State B, it is not a breach of Article 52 of the Treaty for Member State A to refuse to pay family benefit in respect of the child on the sole ground of the child's absence from Member State A during a

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period when the national has returned to Member State A and is self- employed there, but the child remains in Member State B.