C-57/96

MEINTS v MINISTER VAN LANDBOUW, NATUURBEHEER EN VISSERIJ

OPINION OF ADVOCATE GENERAL LENZ delivered o n 16 September 1997*

A — Introduction benefit in the form of a single payment on the basis of the 'Compensation Rules for Workers Leaving Farming'. 3 His application was refused and he initiated proceedings. On appeal, the national court has referred the following questions to the Court: 1. This reference for a preliminary ruling concerns the scope ratione materiae of Regu- lation (EEC) N o 1408/71 > or of Regulation (EEC) N o 1612/68 2 in relation to a benefit under Netherlands law, which takes the form of a single payment to agricultural workers made redundant following the setting-aside '1. Does Regulation N o 1408/71 apply to a of land. benefit such as that provided for in the Ver- goedingsregeling voor Uittreding van Werknemers in de Landbouw (Compensa- tion Rules for Workers Leaving Farming) which does not depend on the duration of unemployment and forms part of a scheme 2. The Netherlands Raad van State has of measures for the structural improvement requested a preliminary ruling from the of the agricultural sector which emphasizes Court concerning the following situation. the promotion of the complete or partial ces- The plaintiff in the main proceedings is a sation of farming and the abandonment of German national who worked on a farm in farming by farmers? 4 the Netherlands. He had followed his employer there, but continued to reside in Germany. Following set-aside measures taken by his employer, he was made redun- dant and subsequently received unemploy- ment benefit in Germany. He applied for a

5. The national court shares the plaintiff's 3. In the reasoning of the order for refer- doubts as to whether this result is compat- ence, the national court observes that the ible with Community law. It states that strict grant of the benefit depends on various con- application of the abovementioned provi- ditions, such as the age of the claimant, the sions may be contrary to Regulations Nos minimum conditions under social insurance 1408/71 and 1612/68. law, the duration of the preceding employ- ment relationship, registration with the employment office and a right to unemploy- ment benefits under the (new) Werkloos- heidswet (Unemployment Law). 5 The appli- cation must be lodged within a certain period, which depends on the date of termi- nation of the employment relationship. 6

6. Relying on the Saivner judgment, 7 the national court addresses Regulation N o 1408/71 first. It doubts seriously whether the benefit in question falls within the scope ratione materiae of the regulation. If it does, the plaintiff in the main proceedings, as a 4. The requirement that there must be a frontier worker who is wholly unemployed, right to unemployment benefit under Neth- is prevented by Article 71(l)(a)(ii) of Regu- erlands law is an obstacle to the grant of lation N o 1408/71 from receiving Nether- benefit under the Compensation Rules in so lands unemployment benefit because, under far as Article 19(l)(f) of the Werkloos- that provision, in the event of unemploy- heidswet provides that an employed person ment he is covered by German legislation as the legislation of the place where he resides.

8. The benefit which the national court is However, should the benefit in question not called upon to assess could potentially fall fall within the scope of Regulation N o within the scope of both Regulation N o 1408/71, it would be necessary to consider 1408/71 and Regulation N o 1612/68. whether Regulation N o 1612/68 precludes adhering to the residence requirement laid down in the Rules by reference to the Werk- loosheidswet. The national court considers that it is not unreasonable for the term 'social advantage' in Article 7(2) of Regu- 9. In its judgment in Castelli, 8 which con- lation N o 1612/68 to be interpreted to cover cerned a similar problem of classification of a a benefit under the Compensation Rules. minimum guaranteed income for aged per- Then the residence requirement could be sons, the Court gave an exhaustive assess- regarded as indirect discrimination by reason ment of Article 7(2) of Regulation N o of nationality, which is prohibited by Article 1612/68. As the Court considered that its 7(1). rulings in that regard enabled the national court to decide the dispute in the main pro- ceedings, it found it unnecessary to examine the questions referred in the. light of Regu- lation N o 1408/71. 9

7. The Netherlands Government and the 10. Only eight months later, in Scrivner,10 Commission have intervened in the written which also concerned a benefit of mixed procedure. Written replies have been given character, the 'minimum means of subsis- by the Netherlands Government to ques- tence' under Belgian law, the Court found tions from the Court concerning the rules of that it was necessary first to examine the body granting benefits and its power to adopt rules. The French Government has also intervened in the oral procedure. Refer- 8 — Case 261/83 Castelli v ONPTS [1984] ECR 3199. ence will be made to their submissions in the 9 — Ibid., paragraph 13. course of the following analysis. 10 — Case 122/84, cited in footnote 7.

(a) - (f) ... 11 — Ibid., paragraph 16. 12 — See Article 71(lXa) of Regulation No 1408/71. 13 — Case C-lll/91 Commission v Luxembourg [1993] ECR1-817. 14 — Ibid., paragraph 21. 15 — Case 122/84, cited in footnote 7.

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(g) unemployment benefits; 2 b. — 3. ...

4. This Regulation shall not apply to social (h) ... or medical assistance, to benefit schemes for victims of war or its consequences, or to spe- cial schemes for civil servants and persons treated as such.' 1 6

2. This Regulation shall apply to all general and special social security schemes, whether contributory or non-contributory, and to 15. The parties which have submitted obser- schemes concerning the liability of an vations are of the unanimous opinion that employer ... in respect of the benefits the benefit in question is not a social security referred to in paragraph 1. benefit within the meaning of Regulation N o 1408/71.

Referring to the Court's case-law, 18 the that the Compensation Rules do not lay Netherlands Government observes that the down such a condition. It is also important scope of Regulation N o 1408/71 is deter- to note that the Court has held that it is a mined essentially by the constituent elements characteristic of unemployment benefit that of the particular benefit, in particular its pur- it is intended to replace the remuneration poses and the conditions on which it is lost by reason of unemployment and thereby granted. The Netherlands Government provide for the maintenance of the unem- doubts whether the Compensation Rules on ployed person. 20 Under the Compensation which the benefit is based are 'legislation' Rules, however, these elements are not deci- within the meaning of Article 4 of Regu- sive. The wages previously received, the lation N o 1408/71. It adds that the Raad van duration of the employment relationship and State correctly pointed out that, according to the duration of unemployment are all irrel- the customary Netherlands terminology, the evant. The only decisive factor is the work- Rules do not constitute a statutory provi- er's age. The purpose of the Compensation sion, but a set of guiding principles. Rules is a matter of agricultural policy. Therefore the compensation cannot be regarded as an unemployment benefit. The Netherlands Government observes that, should its views in this respect not be Furthermore, as the funds available are accepted, the plaintiff, as a wholly unem- inherently limited, it is doubtful whether the ployed frontier worker for the purpose of benefit is a social security benefit. When the Article 71(l)(a)(ii) of Regulation No funds have been used up, the president of the 1408/71, would have to rely on German leg- organization may decide that no further islation. applications can be considered. Finally, what is involved is an aid scheme and not a social insurance benefit.

does not have to repay all or any of the com- the final analysis, whether a benefit is classi- pensation if he enters into another contract fied as a social security benefit by national of employment and consequently ceases to legislation is not the decisive factor. 22 be unemployed. The compensation would only have to be repaid if he were re-employed by his previous employer within 12 months of applying for compensa- tion, which shows its true purpose, namely to make it easier for an agricultural employer to lay off employees on the complete or par- 19. As the Court has held in numerous tial cessation of farming. According to the cases, 'a benefit may be regarded as a social Commission, this direct connection with the security benefit in so far as it is granted, objectives of agricultural policy is made clear without any individual and discretionary by the terms in which the conditions of assessment of personal needs, to recipients entitlement to compensation are formulated. on the basis of a legally defined position and provided that it concerns one of the risks expressly listed in Article 4(1) of Regulation N o 1408/71'. »

17. At the hearing the French Government supported the views of the Commission and 20. Consequently the first question here is the Netherlands Government. whether the benefit in the present case is 'a legally defined right',24 and the second is whether it relates to the risk of unemploy- ment.

22. It is also doubtful whether the nature of the legal measure regulating compensation meets the requirements of a 'legally denned right'. In essence this question is to a large extent the same as the definition of 'legisla- tion' 25 within the meaning of Article 4(1) of Regulation N o 1408/71. 23. In so far as implementing measures are adopted on a statutory basis and confer rights on those concerned, they meet the requirements of a 'legally defined right'. 27 According to the Netherlands Government, the Compensation Rules in the present case were adopted to implement Community The national court has described the legal regulations in the agricultural sector, namely basis of the compensation payments as a 'set Council Regulation (EEC) N o 1094/88 of 25 of guiding principles'. 2 6 It is common April 1988 amending Regulations (EEC) N o ground that the Compensation Rules do not 797/85 and (EEC) N o 1760/87 as regards the constitute a formal statute. In reply to the set-aside of arable land and the extensifica- Court's question concerning the legal nature tion and conversion of production, 28 and the of the Compensation Rules, the Netherlands related Commission Regulation (EEC) N o Government explained that they constitute 1272/88 of 29 April 1988 laying down delegated legislation. Legal rules of this type detailed rules for applying the set-aside are usually measures for implementing stat- incentive scheme for arable land. 2 9 In my utes. With regard to their binding effect, it opinion, a legal basis of Community law, in must be observed that a right to compensa- the form of regulations, corresponds for this tion exists (subject to the funds being avail- purpose to a legal basis in national law. able) if the applicant fulfils the conditions laid down by the Compensation Rules. The 27 — This conforms with the definition of 'legislation' in Article l(i) of Regulation N o 1408/71: 'legislation' means in respect of each Member Sute statutes, regulations and other provi- 25 — See Article l(j) of Regulation N o 1408/71. In principle, this sions and aü other implementine measures, present or future, relating to the branches and schemes of social secu- term must be construed widely (see Joined Cases 82/86 and rity covered by Article 4(1) and (2) (emphasis added). 103/86 Laborero and Sabato v OSSOM [1987] ECR 3401, paragraph 23 et seq.). 28 — OJ 1988 L 106, p. 28. 26 — Beleidsregeling. 29 — OJ 1988 L 121, p. 36.

29. According to the Court's case-law, one of the characteristics of unemployment ben- efit is that it provides substitute income. This is not so with regard to the compensation in question as it takes the form of a single pay- 26. However, it is not typical for the funds ment which is not related to previous remu- available for a social security benefit to be neration or to the duration of the employ- limited to a particular amount, so that it ment relationship or of unemployment. It is appears doubtful whether the legislation as this last factor which most strongly suggests such concerns 'branches of social security' that the compensation is not an unemploy- within the meaning of Article 4(1) of Regu- ment benefit, in so far as the Court has lation N o 1408/71. This criterion could pre- stated that the continuance of unemploy- clude classification of the Compensation ment M is the basis of benefit and is therefore Rules as 'legislation concerning branches of a constituent element of an unemployment social security'. benefit.

30. If the applicant is subsequently 27. Pursuant to Article 4(2)(a), however, the employed by another employer, he is abso- Regulation also applies to special non- contributory benefits which are provided for under schemes other than those referred to 30 — However, Article 10a of the Regulation indicates that the in paragraph 1, where such benefits are Member State of residence is responsible for granting spe- intended to provide supplementary, substi- cial non-contributory cash benefits in accordance with its legislation. tute or ancillary cover against the risks cov- 31 — See Case C-66/92, cited in footnote 19.

32. In the Mouthaan case 3 2 there was a similar close connection between the discon- tinued contract of employment and the ben- efits available in the event of unemployment. The Court found that the benefits claimed could not be regarded as unemployment 35. In this context, the existence of a right to benefits within the meaning of Regulation unemployment benefit has only a limited N o 1408/71. In that case, the benefits were function. According to the Netherlands partly paid by a trade association as compen- Government, in this way it is possible to sation for the loss of rights which had arisen ensure that it is the employer who takes the during the period of employment as against initiative in terminating the contract of the employer, who had subsequently become employment. If the employee does so, he insolvent. Nevertheless, the Mouthaan case will not be entitled to unemployment benefit and the present case are similar in so far as under the Werkloosheidswet. As this con- the particular contract of employment, not dition is only intended to ensure that the the condition of unemployment in general, contract of employment is terminated in a formed the basis of the benefit. certain way, it would be wrong to conclude

32 — Sec Case 39/76 Metaalnijverheid v Mouthaan [1976] ECR 33 — Article 5(a) of the Compensation Rules. 1901. 34 — Article 7(2) of the Compensation Rules.

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from this link that the compensation claimed complete or partial cessation of farming or is an unemployment benefit 'within the the abandonment of farming by farmers. meaning of Regulation N o 1408/71.

35 — Case 1/85 Miabe v Bundeumsult für Arbeit [1986] 1837, paragraph 9. 37 — See Case 122/84, cited in footnote 7. 36 — Ibid., paragraph 19. 38 — Case C-lll/91, cited in footnote 13, paragraph 21.

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OPINION OF MR LENZ — CASE C-57/96

40. Article 7(1) and (2) of Regulation N o within the meaning of the Regulation as it 1612/68 provides as follows: fulfils the requirements laid down by case- law for such a benefit. However, it is clear from the Court's case-law that a worker can claim a social advantage within the meaning of the provision only if he also resides in the ' 1 . A worker who is a national of a Member Member State where he claims the benefit, State may not, in the territory of another although a certain minimum period of resi- Member State, be treated differently from dence cannot be required of a frontier national workers, by reason of his national- worker. Entitlement to social advantages is ity in respect of any conditions of employ- only intended to make the worker's integra- ment and work, in particular as regards tion in the Member State where he is remuneration, dismissal, and should he employed easier. A frontier worker who become unemployed, reinstatement or consciously chooses to reside in another re-employment. Member State does not need special assis- tance of that kind.

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speaking, be construed as setting up a resi- 46. As the Netherlands scheme in question dence requirement for compensation. The is based on an objective distinction, it does purpose of the reference is to obtain proof not result in direct discrimination. The situ- that the termination of the contract of ation of an unemployed frontier worker dif- employment was not attributable to the fers objectively from that of an unemployed worker. The Werkloosheidswet provides for migrant worker who has settled in the State machinery whereby an employee can resist of employment. dismissal. The reference to a right to benefit under that law aims to ensure that all those possibilities are exhausted. Consequently the receipt of unemployment benefit in another Member State cannot take the place of an entitlement to benefit under the Werkloos- heidswet, because unemployment benefits paid in other Member States are subject to 47. According to the French Government, other conditions. the fact that frontier workers are mentioned in the preamble to Regulation N o 1612/68 although there are no provisions concerning them in the operative part justifies the con- clusion that the regulation does not lay down specific rules relating to them. In addi- tion, the special rules of Regulation N o 1408/71 cannot be called into question by Regulation N o 1612/68.

49. The Commission contends that, by refer- granted to the worker because of his objec- ence to the Court's relevant case-law, 40 the tive status as a worker. If the applicant had compensation is a social advantage within not been a worker fulfilling certain condi- the meaning of Article 7(2) of Regulation N o tions, there would have been absolutely no 1612/68. The Commission also considers reason for granting the benefit. A worker that the Netherlands Rules in question give residing in the State of employment and a rise to covert indirect discrimination, con- frontier worker are objectively in the same trary to Article 7 of the said regulation. In situation in that respect. 42 In so far as the the Commission's view, there appear to be compensation may mitigate, at least partly, no circumstances which would justify this the economic consequences for a worker unequal treatment. who has been made redundant involuntarily, it is also likely to facilitate mobility within the Community. The economic risk of impending unemployment may very well stand in the way of taking up employment in another Member State. Any measure which is capable of mitigating the consequences of 50. The Court has consistendy held that unemployment therefore promotes mobility, social advantages are 'all those which, in my view. The knowledge that one will not whether or not linked to a contract of be faced with economic ruin even in the employment, are generally granted to event of unemployment may certainly national workers primarily because of their encourage a person to take up employment objective status as workers ... and whose in another Member State. extension to workers who are nationals of other Member States therefore seems likely to facilitate the mobility of such workers within the Community'. 41

even a right, as I have shown above. There- presumed that the Community legislature fore it follows that the advantage linked to had frontier workers in mind when Regu- objective status as a worker is likely to facili- lation N o 1612/68 was adopted. The pre- tate the mobility of workers. amble to the Regulation expressly mentions frontier workers 4 é as being entitled under the Regulation.

53. When the Netherlands Government claims that participation in social advantages only has the purpose of promoting integra- tion in the Member State of employment ** and cannot therefore be granted to a frontier worker who necessarily resides in another Member State, I consider this to be a one- 56. In my view, this can only lead to the sided and simplistic approach. conclusion that frontier workers are also to have all the rights conferred upon migrant workers by Regulation N o 1612/68. This seems proper because a frontier worker is also unquestionably a migrant worker who travels to work in another Member State. In so far as there is no objective ground for giv- 54. It may be presumed that the 'average ing him special treatment, such as provided migrant worker', who could also be called for by Regulation N o 1408/71, the rights the prototype migrant worker, will take up conferred by Community law must be avail- residence in the State of his employment. able to him in their entirety. Consequently, facilitating his integration in his new place of residence also contributes to promoting his mobility.

55. The structure of Regulations Nos 1408/71 and 1612/68 shows that the Com- 57. It seems to me that there is no justifica- munity legislature took as its starting point tion for the fears of the Netherlands and the this 'average type' of migrant worker. In this French Governments that, given this assess- respect the frontier worker is an exception ment of the position of frontier workers, expressly taken into account by Regulation social assistance benefits would become N o 1408/71.« Regulation N o 1612/68 does exportable, a result which Regulation N o not make special exceptions of that kind for 1408/71 seeks to prevent expressly 47 and frontier workers. Nevertheless it must be Regulation N o 1612/68 implicitly.

60. The Compensation Rules do not contain an express residence condition, but it arises from the combination of the Rules with the Werkloosheidswet.. Nevertheless, the resi- dence requirement is mandatory. It is an indispensable condition for a subjective right 63. When the Netherlands Government under the Werkloosheidswet and without it a states that the reference to the Werkloos- right to compensation under the Rules can- heidswet does not, in the final analysis, not be acquired. Because of this mandatory allude to the place where the worker resides, connection it is correct to regard the resi- but that it is explained by the need to ensure dence requirement as a condition of entitle- that certain substantive conditions relating to ment to compensation under the Rules. the method of termination of the contract of employment are fulfilled, reasons of that

48 — Sec Case 152/73, cited in footnote 39, paragraph 11; also, to the same effect, Case C-175/88 Biehl v Administration des 61. The residence requirement, for its part, Contributions [1990] ECR 1-1779, paragraph 13. 49 — See Case C-lll/91, cited in'footnotc 13, paragraph 10. expressly makes no distinction according to 50 — See in that regard Case C-279/89, cited in footnote 39, the applicant's nationality. However, as the paragraph 42.

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MEINTS v MINISTER VAN LANDBOUW, NATUURBEHEER EN VISSERIJ

kind may very well be regarded as a justified excluding compensation if the worker does concern. not reside in the Netherlands, must therefore be disregarded in the case of a frontier worker.

(2) A benefit based on the Compensation Rules must be classified as a social advantage within the meaning of Article 7(2) of Regulation (EEC) N o 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community. In this connection, the condition that the worker con- cerned must reside in the Netherlands is to be regarded as a distinction by reason of nationality, which is prohibited under Article 7 of that Regulation.

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