C-243/94

3. Under German law, an employee insured against unemployment is in principle entitled to unemployment benefit by virtue of his unemployment insurance if he should 'An unemployed person who was formerly become unemployed. Paragraph 117 of the employed or self-employed and who draws German Arbeitsförderungsgesetz (Law on unemployment benefits under the legislation Employment Promotion, hereinafter 'the of a Member State shall be entitled, in AFG'), 2 however, contains a rule providing respect of the members of his family residing for temporary suspension of payment of in another Member State, to the family ben- unemployment benefit to an unemployed efits provided for by the legislation of the person who has, by virtue of the termination former State, as if they were residing in that of the employment relationship, received, for State ...'. instance, compensation from his employer. Paragraphs 119 and 119a of the AFG set out more detailed provisions on the suspension of payment of benefit during a temporary exclusion period in cases where the unem- ployment is attributable to the unemployed person himself. During suspension periods, the unemployed worker remains in principle entitled to support from unemployment 2. The question has arisen in a case in which insurance, but in fact no benefit is paid out. Alejandro Rincón Moreno, a Spanish Suspension periods are subtracted from the total period for which an unemployed worker is entitled to unemployment benefit. * Original language: Danish. 1 — As amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6) and Coun- cil Regulation (EEC) No 3427/89 of 30 October 1989 (OJ 1989 L 331. p. I). 2 — Bundesgesetzblatt I, p. 582.

5. In view of the fact that Mr Moreno received the abovementioned amount in compensation from his employer as a result of the termination of their employment rela- tionship on 15 December 1992, the German 'Must Article 74 of Regulation (EEC) Bundesanstalt für Arbeit (Federal Labour No 1408/71 be interpreted as meaning that Office) suspended Mr Moreno's unemploy- unemployed persons who were formerly ment benefit for the period from 16 Decem- employed and who draw unemployment ber 1992 to 21 February 1993. The Bunde- benefits under the legislation of a Member sanstalt also decided that there was a State include unemployed persons registered temporary exclusion period from 16 Decem- with the Arbeitsamt (Labour Office) whose ber 1992 to 9 March 1993. Mr Moreno did entitlement to unemployment benefit is sus- not for that reason receive any unemploy- pended because compensation was paid to ment benefit until 10 March 1993. them by their employer on termination of their employment, under Paragraph 117 of the Arbeitsförderungsgesetz (Law on Employment Promotion, AFG), or because of a temporary exclusion under Paragraph 119 of the AFG?' 6. The Bundesanstalt also refused, by decision of 6 April 1993, to pay family ben- efits for January and February 1993 in respect of Mr Moreno's children, who were living in Spain, on the ground that Mr Observations submitted to the Court Moreno had not for those two months been drawing 'unemployment benefits under the legislation of a Member State', as required

3 — Sozialgesetzbuch — Fünftes Buch, Gesetzliche Krankenver- 8. Mr Moreno takes the view that the pay- sicherung (Social Security Code — Book V, Statutory Sick- ment of compensation must be regarded as ness Insurance). 4 — See Paragraph 165 of the AFG. an unemployment benefit, since the purpose

13. Mr Moreno can therefore be deemed to be entitled to family benefits in respect of his children only if he has, under German legis- 11. The Commission submits that a benefit lation, drawn benefits other than unemploy- cannot be excluded from the scope of the ment benefit during the periods for which regulation simply because it is paid by the unemployment benefit was suspended.

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OPINION OF MR ELMER — CASE C-243/94

14. Compensation paid by an employer in unemployment over the period for which connection with the termination of an payment of unemployment benefit is sus- employment contract may be regarded as pended, it is necessary to address the ques- reflecting a range of different circumstances. tion whether any significance attaches to the It may constitute recognition of the services fact that it is the employer who pays the rendered, it may be designed to provide the benefit. person concerned with a financial basis for further training and so forth, and it may also be regarded as intended as 'a plaster on the wound' for the colleague who is thus required to leave his job. In all circum- stances, however, what is involved is a sum of money granted because of the termination 16. Article 74 of the regulation does not, of the employment relationship, the level of however, appear to contain any requirement which is determined by discussions between that the benefit must be paid by the State, by the parties. In accordance with this, such an unemployment fund, or suchlike. Accord- compensation in Germany is subject to spe- ing to the Court's consistent case-law, the cial fiscal-and social-law rules, such that manner in which a benefit is financed has no within certain limits tax need not be paid on bearing on whether it is a social security the amount of the compensation, just as benefit covered by the regulation. Thus, in a social contributions need not be subtracted judgment of 3 June 1992 5 concerning bene- from it. fits from an employer as a result of sickness, the Court held that:

19. In support of this conclusion, it may also be mentioned that the Court has held, in a case 6concerning the interpretation of the 18. The question then arises as to what sig- expression 'unemployment benefits' in Arti- nificance attaches to the fact that the unem- cles 67(1) and 4(1)(g) of the regulation, that ployed person is insured against illness and since the wording of those provisions did accidents during the temporary exclusion not exclude benefits to promote vocational period — after expiry of the suspension training for employed workers, period resulting from the compensation. Both Articles 4(1)(g) and 74 of the regulation use the general term 'unemployment bene- fits'. Those provisions do not specify whether this expression covers only financial benefits or whether it may also cover other 'in order to interpret Article 4(1)(g) in con- benefits associated with unemployment. junction with Article 67(1) of Regulation None of the provisions appears to impose No 1408/71 of the Council it is therefore requirements regarding the nature of the necessary to have regard to the fundamental unemployment benefits or to lay down min- aim of Article 51 of the Treaty, which is to imum requirements regarding the benefits establish the most favourable conditions for drawn. As mentioned above, the crucial con- achieving freedom of movement and sideration must be regarded as being whether employment for Community workers within a substantive transfer of assets has taken the territory of each Member State.' place. Thus, there may be nothing to prevent benefits which do not consist in the dis- bursement of money from satisfying the requirement in Article 74 if it is necessary to assume only that there has been a substantive transfer of assets in favour of the unem- ployed person. The fact that under German 20. I for that reason take the view that Arti- legislation unemployed persons enjoy insur- cle 74 of the regulation must be interpreted ance cover against sickness and accidents implies, in the first place, expenditure for the unemployment fund or the State, which meet the expenditure associated with those risks, 6 — Judgment in Case 375/85 Campana ν Bundesanstalt für Arbeit [1987] ECR 2387.

24. It is clear from the order for reference that the national court did not have any 22. The reply to the question submitted doubt that Mr Moreno must be included ought therefore in my view to be that Article within the group of persons covered by the 74 of the regulation must be interpreted as regulation, just as it has based itself on the meaning that the expression 'unemployed assumption that Mr Moreno is to be person who ... draws unemployment benefits regarded as an unemployed worker such that under the legislation of a Member State' the justification of his claim falls to be deter­ includes unemployed persons registered with mined under Article 74 of the regulation. the labour office whose entitlement to unem­ The national court is for that reason seeking ployment benefit has, under rules such as only an interpretation of the expression those laid down in German legislation, been 'draws unemployment benefits under the suspended because compensation was paid to legislation of a Member State' featuring in them by their employer on termination of Article 74. their employment or because of a temporary exclusion period, if, under rules such as those laid down in German legislation, they are covered by sickness and accident insur­ ance during that temporary exclusion period. It follows from the Court's case-law 7 that:

'Article 177 of the Treaty, based on a clear separation of functions between national 23. Mr Moreno and the Spanish Govern­ ment also submit that the rule in Article 73 of the regulation, in conjunction with 7 — See, for example, the judgment in Case 10/69 Portelange ν Article 1 thereof, concerning members of an Marchant [1969] ECR 309.

Article 74 of Council Regulation ( E E C ) N o 1408/71 of 14 June 1971 on the appli- cation of social security schemes t o employed persons, to self-employed persons and to members of their families moving within the C o m m u n i t y , as amended by Council Regulation ( E E C ) N o 3427/89 of 30 O c t o b e r 1989, must be interpreted as meaning that the expression ' u n e m p l o y e d person w h o ... draws u n e m p l o y m e n t benefits under the legislation of a M e m b e r State' includes u n e m p l o y e d persons registered with the labour office w h o s e entitlement to u n e m p l o y m e n t benefit has, under rules such as those laid d o w n in G e r m a n legislation, been suspended because compensation was paid to t h e m by their employer o n termination of their e m p l o y - ment or because of a t e m p o r a r y exclusion period, if, u n d e r rules such as those laid d o w n in G e r m a n legislation, they are covered by sickness and accident insurance during that temporary exclusion period.

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