C-45/90

PALETTA

OPINION OF ADVOCATE GENERAL MISCHO delivered on 4 June 1991 *

Mr President, continued payment of his wages for a period Members of the Court, of six weeks. At no point in its order for ref- erence does the national court doubt that continued payment of wages as provided for by the LFGZ constitutes a cash benefit paid 1. The case pending before the Arbeitsger- in the event of illness within the meaning of icht (Labour Court) Lörrach, (Germany), Council Regulation (EEC) N o 1408/71 of brought by Vittorio Paletta, his wife and 14 June 1971 2 and that it accordingly comes their children, against their employer, Bren- within the scope of Article 18 of Regulation net AG, raises the problem of the applicabil- (EEC) N o 574/72, either directly or by anal- ity of Article 18(1) and (5) of Council Regu- ogy, pursuant to Article 24 of that regula- lation (EEC) N o 574/72, * as interpreted by tion. The national court even expressly states the Court in its judgment in Case 22/86 Rin- that dotie v Allgemeine Ortskrankenkasse Bad Urach-Münsingen [1987] ECR 1339, to legis- lation such as the Lohnfortzahlungsgesetz (German Law on the continued payment of 'cash benefits in the event of sickness, as reg- wages) of 27 July 1969 (BGBl. I, p. 946, ulated by Regulation N o 1408/71 of the hereinafter referred to as 'the LFZG'), under Council on the basis of Article 51 of the which the employer, and not the competent EEC Treaty, include both cash benefits paid social security institution, must pay to the by a social security institution and those paid worker concerned the cash benefits provided by an employer.' for.

'consideration in the nature of social security Applicability of Regulation N o 1408/71 benefits is not in principle alien to the con- cept of pay.'

5. O n e might be tempted to give a very brief answer to this question. In its judgment in Case C-171/88 Rinner-Kühn v FWW Therefore, it is not ruled out ab initio that Spezial-Gebäudereinigung GmbH&Co. KG those same benefits may be social security [1989] ECR 2743, paragraph 7, the Court benefits whilst still falling within the concept expressly stated that of ' p a y ' within the meaning of Article 119 of the Treaty.

hand, the fact that under German law, as the benefit, in particular its purpose and the con- Commission acknowledges, the benefits pro- ditions for its grant.' vided for by the LFZG are not regarded as social security benefits is not so decisive as to exclude them, under Community law, from the substantive scope of Regulation N o It is true that those rulings were made in 1408/71. 5 As the Court stated in its judg- cases in which it had to be ascertained ment in Case 69/79 Jordens-Voorster v Bedr- whether a given social security benefit came ijfsvereniging voor de Leder-en Lederwerk- within the category of benefits expressly ende Industrie [1980] ECR 75, paragraph 6: excluded from the scope of Regulation No 1408/71 by virtue of Article 4(4) thereof, such as medical and social assistance bene- 'It is well established that the requirement fits 7 or those in favour of victims of war or that Community law be applied uniformly its consequences. 8 Nevertheless, the fact within the Community implies that the con- remains that owing to its general nature it cepts to which that law refers should not also applies to a case such as the present in vary according to the particular features of which it has to be determined whether a cer- each system of national law but rest upon tain benefit falls within one of the branches objective criteria defined in a Community of social security referred to in Article 4(1). context.'

7 — See, in addition to the judgments in the Piscitello, Hoeckx and Scrivner cases mentioned above, the judgments in Case 'the distinction between benefits which are 1/72 Frilli v Belgium [1972] ECR 457, Case 187/73 Callem- excluded from the scope of Regulation N o eyn v Belgium [1974] ECR 553, Case 24/74 Caisse Régionale d'Assurance Maladie v Biason [1974] ECR 999, Case 1408/71 and benefits which come within it 39/74 Costa v Belgium [1974] ECR 1251, Joined Cases 379 to 381/85 and 93/86 CRAM Rhône-Alpes v alletti rests entirely on the factors relating to each [1987] ECR 955. In its judgment in the latter cases (at para- graph 9) the Court stated that 'the possibility cannot be excluded that by reason of the persons covered, its objectives and its methods of application, national legislation may, at one and the same time, have links to both those categories' (emphasis added). 5 — See, for example, the judgment in Case 139/82 Piscitello v INPS [1983] ECR 1472, at paragraph 9. 8 — See the judgments in Case 9/78 Directeur Régional de la 6 — See in particular the judgments in Case 249/83 Hoeckx v Sécurité Sooale de Nancy v GilUrd [1978] ECR 1661 and Openbaar Centrum voor Maatschappelijk Welzijn [1985] Case 207/78 Even [1979] ECR 2019. ECR 973, paragraph 11, and Case 122/84 Scrivner v Centre 9 — See paragraphs 12 and 19 respectively of the abovemenúoned Public d'Aide Social de Chastre [1985] ECR 1027. judgments ul the Hoeckx and Scrivner cases.

I - 3439

OPINION OF MR MISCHO — CASE C-45/90

10. O n the basis of the foregoing this case may be distinguished from Case 39/76 Metaalnijverheid v Mouthaan [1976] 11. The fact that the benefits paid under the E C R 1901 which at first sight might be LFGZ are of an amount equal to the con- thought to show certain similarities with it. tractual remuneration and greater than the The Mouthaan case concerned Netherlands daily sickness allowances would not, how- legislation on unemployment which, besides ever, seem to me to be bound to alter their providing for the grant of unemployment nature as sickness benfits. O n the one hand, benefit, provided for payment by the compe- daily sickness benefits are similarly directly tent social security institution of arrears of dependent on the remuneration usually paid. wages owed by the insolvent employer; this O n the other hand, it is not unusual during occurred through the institution's subroga- the initial period of payment for certain tion to the obligations owed by the insolvent social security benefits to be higher than employer to the worker under the contract they are subsequently. of employment. The question to be decided was whether the latter benefits were 'unem- ployment benefits' within the meaning of Article 4(1 )(g) of Regulation N o 1408/71. At paragraph 20 of its judgment the Court 12. Similarly, the fact that it is the employer answered that question in the negative o n the who finances the benefits provided for by ground that the LFGZ, whereas the daily sickness allow- ances are financed by employers' and employees' contributions, is immaterial in this context, since the Court has held that 1 0

13. Finally, it is perhaps also useful to point '(1) Can the principles contained in the out that the expression 'benefit', as defined judgment of the Third Chamber of the in Article l(t) of Regulation No Court of Justice of 12 March 1987 in 1408/71 'must be understood in its widest Case 22/86 Rindone regarding the inter- sense' u , so that in order to bring continued pretation of Article 18(1) and (5) of payment of wages, as provided for by the Council Regulation (EEC) No LFZG, within that definition it is not neces- 574/72 be applied in whole or in part to sarily a question of finding in that provision cases in which payment of cash benefits an express element warranting its inclusion, in the event of illness is made by the but it is sufficient if there is nothing there to employer and not by the social security require its exclusion, as the Commission institution, as for example under Para- argues. graph 1 et seq. of the German Lohn- fortzahlungsgesetz of 27 July 1969 (BGBl I, p. 946, as amended most recendy by the Law of 20 December 14. It may therefore be concluded from the 1988, BGBl I, p. 2477)? foregoing that continued payment of wages by the employer when the worker is pre- vented from carrying on his - activity .owing to incapacity for work caused by illness, as provided for in the LFZG, constitutes a In particular: 'sickness benefit' within the meaning of Arti- cle 4(l)(a) of Regulation N o 1408/71. Accordingly, it is necessary to examine the questions raised by the national court with (2) Is the body responsible for continued regard to the applicability of Article 18 of payment of remuneration in the event of illness under the law of the Federal Republic of Germany in accordance with Paragraph 1 et seq. of the Lohn- 11 — See paragraph 10 of the judgment in Callemeyn v Belgium, cited above. fortzahlungsgesetz required to base its

16. It should be recalled that in its judgment in Rindone the Court held that Since Annex 2 to the said Regulation, which mentions the competent institutions of each Member State (see Article 4(2)), does not 'Article 18(1) to (4) of Regulation No moreover contain under 'B. Germany' at 57'4/72 must be interpreted as meaning that if point ' 1 . Sickness Insurance' any statement the competent institution does not exercise to the contrary, it must be concluded that the option provided for in paragraph (5) of Article 18 of Regulation N o 574/72 which having the person concerned examined by a uses without distinction the expression doctor of its choice, it is bound, in fact and 'competent institution' is also applicable in a in law, by the findings made by the institu- case such as the present one in which the tion of the place of residence as regards the employer is the competent institution. commencement and duration of the incapac- ity for work.'

18. Consequently, and even if the competent institution in the Rindone case was a sickness By its first two questions the national court fund, the solutions adopted by the Court in therefore seeks to know whether the princi- its judgment in that case are also valid in ple thus established is also applicable to a sit- such a situation. That seems to me all the uation in which the competent institution is more so since the interpretation given by the the employer. Court in Rindone, as it pointed out at para- graph 13 of its judgment,

17. The reply, it seems to me, may be brief. According to Article l(o)(iv) of Regulation 'is also made necessary by the purpose of N o 1408/71, 'competent institution' means Article 18 of Regulation N o 574/72 and of Article 19 of Regulation N o 1408/71.'

made by the institution of the place of resi­ 21. The Arbeitsgericht Lörrach thus draws dence, a worker who in the meantime had our attention to the different kinds of diffi­ once again become fit for work could, as the culties facing an employer when he wishes to national court emphasizes, have difficulty in have the occurrence of incapacity for work producing the necessary proof. However, it verified by a doctor of his choice within the is precisely those difficulties which the Com­ meaning of Article 18(5) of Regulation N o munity rules at issue are designed to elimi­ 574/72. Like the German and Netherlands nate. Such a situation would be unacceptable Governments and the Commission, I am because it would interfere with "the estab­ very aware of those difficulties, and I appre­ lishment of the greatest possible freedom of ciate the efforts made by the Commission to movement for migrant workers, which is one reconcile the solution it arrives at in princi­ of the foundations of the Community" ple, which I share, with the particular aspects (judgment of 25 February 1986 in Case of the employer's situation, of which Article 284/84 L. A. Spruyt v Bestuur van de Sociale 18 takes no account. Amendment of that Verzekeringsbank [1986] ECR 693).' provision would be appropriate. But in the meantime one may take the view, as the Commission does, that in certain exceptional cases when 'serious well-founded doubts 19. I therefore propose that the Court exist as to the incapacity for work estab­ should reply in the affirmative to the first lished by institution at the place of resi­ two questions submitted by the national dence', it is not appropriate to regard the court. examination provided for in Article 18(5) as the only possibility for an employer to call in question the evidentiary value of the cer­ tificate of incapacity for work issued by the The third question submitted for a prelimi­ institution of the place of residence? I hesi­ nary ruling tate to accept the Commission's suggestion in that form.

N o 1408/71. Moreover, in its judgment in communicate to each other all information Case C-228/88 Bronzino [1990] ECR 1-531, regarding measures taken to implement the paragraph 14, the Court held that regulation, and that the authorities and the institutions of the Member States are, for the purposes of implementing the regulation, to lend each other their good offices. 'disadvantages . . . which result from the application of Regulation N o 1408/71 cannot call in question the interpretation, based on its wording and purpose, of one of the pro- 25. Secondly, as regards the costs incurred in visions of that regulation.' the examination of the person concerned by a doctor chosen by the employer — the 'competent institution', which, it should be recalled, must be carried out in the State of the institution of residence (see paragraph In addition, provided that Community law is 21 of the Rindone judgment) — they are observed, a Member State may also, unilater- inherent in the system and clearly may not ally, adopt the necessary administrative deprive the individual of his right under measures so that under sickness insurance Article 18 of Regulation N o 574/72, as inter- schemes in which the employer is the 'com- preted by the Court, not to be obliged to petent institution', the employer is placed in return to the State of the competent institu- a position to exercise the rights available to tion in order there to undergo a medical him under Article 18 of Regulation No

It may therefore be supposed 24. First, if Article 18(3) is correctly applied, that the sickness fund will also have the the employer should be informed, within the responsibility of having the examination period provided, of the occurrence and likely mentioned in Article 18(5) carried out, so duration of the incapacity for work. In fact, that only larger undertakings will bear exam- since the employer is also the 'competent ination costs themselves. institution' vis-à-vis the institution of the place of residence, it is to him that the latter must forward the report of the examining doctor within three days of the date of the 26. Finally, in order to overcome the prob-

I - 3444

PALETTA

It may also be noted that by the findings of the institution of the place under the LFZG, when the worker is resid- of residence: the system of Article 18 is in ing outside the territory in which the legisla- fact such that it is precisely when there are tion is applied at the time when the incapac- doubts as to the accuracy of the findings of ity for work occurs, which was the case with the institution of the place of residence that the members of the Paletta family, he must the competent instituion will avail itself of indicate that fact without delay not only to the possibility afforded to it by paragraph (5) his employer but also to the sickness fund of that provision to have the person con- with which he is insured. This simultaneous cerned examined by a doctor of its choice. notification could be the basis for such coop- eration, which should enable the employer to make effective use of the possibilities afforded to him by Article 18(5) of Regula- 29. Therefore, the findings of the institution

27. This leaves the question as to whether tion under the Article 18 system) it would the foregoing is also valid even if there are continue to be bound by those findings even 'serious and well-founded doubts concerning if they turn out without the slightest doubt the incapacity for work established by the to be incorrect and have been obtained by institution of the place of residence.' In that fraud. Would it be acceptable, for example, connection it may may be stated first of all for the competent institution to remain that if such doubts could in exceptional cases bound even if, during the period of incapac- justify the competent institution's not being ity for work as certified by the institution of bound, in fact and in law, by the medical the place of residence, the person concerned findings made by the institution of the place were involved in a road accident at a place of residence as to the occurrence and dura- where his alleged state of ill health would tion of the incapacity for work, that should not normally have allowed him to be, or if be the case both where the competent insti- it were shown that he had engaged in an

activity inconsistent with such ill health? I the findings of the institution of the place of must admit that an affirmative reply to that residence do not accord with reality and question would disturb me. The question is, must have been obtained by fraud. however, whether Article 18 of Regulation N o 574/72, as interpreted by the Court, or Community law in general permit such exceptional situations to be taken into 32. Secondly, the Court's case-law on free- account. dom of movement for workers contains pre- cedents in which the Court has expressly ensured that the interpretation it has just given of a provision of Community law is 30. My reply to this question will be posi- not to be applicable to situations constituting tive, first because it does not appear to me to abuse or fraud. For example, in its judgment conflict with the principles established by in Case 39/86 Lair v Universität Hannover the Court in the Rindone judgment and, sec- [1988] ECR 3161, the Court first held that ondly, because the Court's case-law has pre- Community law precludes a Member State cedents to that effect. from making the award of a grant for univer- sity studies conditional upon a minimum period of prior occupational activity within its territory. It then went on to state that 31. First of all, the reason why the Court, in the Rindone judgment, limited the way in which the competent institution can chal- lenge the findings of the institution of the place of residence to examination by a doc- 'certain abuses, for example where it may be tor of its choice is that: established on the basis of objective evidence that a worker has entered a Member State for the sole purpose of enjoying, after a very short period of occupational activity, the 'If the competent institution was free not to benefit of the student assistance system in recognize the finding of incapacity for work that State ... are not covered by the Commu- made by the institution of the place of resi- nity provisions in question' (paragraph 43 of dence, a worker who in the meantime had the judgment). once again become fit for work could ... have difficulty in producing the necessary proof' (paragraph 13 of the judgment). 33. Then there was Case 130/88 Van de Bijl v Staatssecretaris van Economische Zaken [1989] ECR 3039, which concerned a system However, in the present context it is neither dependent on production of certificates a question of leaving the competent institu- which bore certain resemblances to that tion 'free' not to recognize the findings of operating under Article 18 of Regulation N o the institution of the place of residence nor a 574/72. One of the problems to be resolved question of requiring a worker who has once was that of whether, in accordance with the again become fit for work to produce proof relevant provisions of Council Directive of his previous incapacity for work. O n the 64/427/EEC of 7 July 1964 laying down contrary, it is for the competent institution detailed provisions concerning transitional to provide practically undeniable proof that measures in respect of activities of self-

-employed persons in manufacturing and of the competent authority of the Member processing industries falling within ISIC State of origin. It held that Major Groups 23 to 40 (Industry and small craft industries (OJ, English Special Edition 1963-64, p. 148), the host Member State was required to grant the authorization necessary 'the host Member State cannot be obliged to for the pursuit of the occupation of a self- overlook matters which occurred within its employed painter and decorator within its own territory and which are of direct rele- territory on the strength of a certificate vance to the real and genuine character of the issued by the State of origin, although the period of professional activity completed in certificate contained manifest inaccuracies or the Member State from which the benefi- omissions relating in particular to the actual ciary comes' (paragraph 26 of the judgment), duration of the occupational activity carried on in the Member State of origin. In its judg- ment in that case the Court first stated that and concluded in reply to the question referred to it that 'the host Member State ... is ... in principle bound by the declarations contained in the certificate issued by the Member State from which the beneficiary comes, as that certifi- 'the competent authority in the host Member cate would otherwise be deprived of its State ... is not bound to grant the application effectiveness' (paragraph 22), automatically if the certificate produced con- tains a manifest inaccuracy inasmuch as it states that the person covered by the direc- tive has completed a period of professional and then went on to state that activity in the Member State from which he comes, when it is clear that during the same period the person in question has pursued 'where there are objective factors which lead his activities in the territory of the host the host State to consider that the certificate Member State' (paragraph 27). produced contains manifest inaccuracies, that State may, if it so wishes, approach the Mem- ber State from which the beneficiary comes with a view to requesting additional infor- 34. Certainly, the Court was very restrictive mation' (paragraph 24). concerning the possibility of challenging the status of the certificate issued by the Mem- ber State of origin, which in principle is As in the present case, the competent author- binding. That, it seems to me, may be ity of one of the Member States is therefore accounted for by the fact that it gave a reply bound by the findings of the authority of the based on the actual facts of the case and by other Member State, except that it may the specific nature of the rules in question request additional checks to be carried out. which do not provide for direct supervision Nevertheless, and although the relevant pro- by the competent authority of the host visions of Directive 64/427 do not expressly Member State within the territory of the so provide, the Court has acknowledged that Member State of origin. N o r did the Court in certain quite exceptional cases the host expressly base its reasoning on the general Member State is not bound by the certificate principle fraus omnia corrumpit, as suggested

(2) The answer is the same even where the employer has no possibility in fact or in law to check the finding that incapacity for work has occurred, except to request the competent sickness fund to have the person concerned examined by a doctor of its choice in accordance with the aforementioned provision.'

I - 3448