C-117/96

MOSBÆK v LØNMODTAGERNES GARANTIFOND

OPINION OF ADVOCATE GENERAL COSMAS delivered on 29 M a y 1997 *

I Preliminary observations 3. More particularly, Article 1 of the direc- tive provides:

1. In the present case the Østre Landsret (Eastern Regional Court) has referred to the ' 1 . This Directive shall apply to employees' Court for a preliminary ruling under Article claims arising from contracts of employment 177 of the EC Treaty a question on the inter- or employment relationships and existing pretation of Council Directive 80/987/EEC against employers who are in a state of insol- of 20 October 1980 on the approximation of vency within the meaning of Article 2(1). the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer ' (hereinafter 'the directive').

2. Member States may, by way of exception, exclude claims by certain categories of employee from the scope of this Directive, II Legal framework by virtue of the special nature of the employee's contract of employment or employment relationship or of the existence of other forms of guarantee offering the employee protection equivalent to that resulting from this Directive. 2. The purpose of the directive is to guaran- tee employees a minimum Community pro- tection in the event of the insolvency of their employer, but without preventing Member States from establishing more favourable sys- tems. To that end it requires that the Mem- ber States create bodies which will ensure The categories of employee referred to in the that employees are paid part of their out- first subparagraph are listed in the Annex. standing claims against employers who have become insolvent.

— either that of the onset of the employer's insolvency;

— either decided to open the proceed- ings,

— or that of the notice of dismissal issued to the employee concerned on account of the employer's insolvency;

— or established that the employer's undertaking or business has been definitively closed down and that the available assets are insufficient to — or that of the onset of the employer's •warrant the opening of the proceed- insolvency or that on which the contract ings. of employment or the employment rela-

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MOSBÆK y LØNMODTAGERNES GARANTIFOND

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O P I N I O N O F MR COSMAS — CASE C-117/96

Mosbæk, who resides in Denmark, with claims against the company for wages, com- effect from 1 July 1993 as 'commercial man- mission and expenses came to DKR 471 996. ager' with responsibility for promoting sales in Denmark, Norway, Sweden, Finland and, subsequently, Germany.

11. In the same month Mrs Mosbæk declared that claim to the Lønmodtagernes Garantifond, the guarantee institution in Denmark responsible for ensuring payment 9. Throughout the employment relationship of the claims covered by the directive, and Colorgen was never registered as an under- also to Colorgen's receivers in England. taking in Denmark, where it was neither established nor represented other than by Mrs Carina Mosbæk. Under the contract of employment Mrs Mosbæk was paid a fixed salary plus commission. Throughout the employment relationship she was paid directly by Colorgen, from England, without Furthermore, by letter of 22 August 1994 deduction of Danish tax or social security Mrs Mosbæk declared the same claim to the contributions, which, according to Danish National Insurance Fund, the United King- law, are normally deducted at source by dom guarantee body, which had not reached employers in Denmark, including foreign a definitive decision by the date of the order employers which have set up a branch or for reference. 2 other permanent establishment there.

12. The Danish body refused to settle Mrs Mosbæk's claim on the ground that During the initial months Mrs Mosbæk payment was the responsibility of the United worked at home; from 6 September 1993, Kingdom guarantee institution. Conse- however, Colorgen rented an office for her in quently, on 19 December 1994 Mrs Mosbæk the premises of another Danish undertaking. brought proceedings against the defendant before the Hillerød court, which, because of the importance of the principle involved, referred the case to the Østre Landsret.

13. Before the Østre Landsret the plaintiff, tiff's. It is for that reason that the Østre relying on the purpose of the directive, Landsret has asked the Court to provide it maintained that the institution responsible with the interpretation of the directive which for settling her claim was the Danish guaran- will enable it to resolve the issue before it. tee institution, owing, in particular, to the To that end, it has referred the following fact that her place of residence and the place question to the Court for a preliminary rul- where she had provided services were Den- ing: mark, where her employer had also rented premises to enable her to perform her work, but also owing to the difficulties which she would have in pursuing her claim before the guarantee institution and the courts in the United Kingdom. 'In a situation where the employer is not established in the Member State in which the employee is resident and is solely repre- sented in the State of the employee's resi- dence by way of the said employee's work, 14. The Danish institution, on the other which inter alia is carried out in office pre- hand, contended that responsibility for the mises rented by the employer for the guarantee lay with the institution of the State employee's use, is it the guarantee institution in which the employer was established and in the country where the employer is estab- whose legislation governed the employer's lished or the guarantee institution in the insolvency, that is in the present case the country where the employee is resident United Kingdom guarantee institution. Fur- which, on the employer's insolvency, accord- thermore, pursuant to Article 5 of the direc- ing to Article 3 of Directive 80/987/EEC is tive only the State in which the employer is to guarantee payment of the employee's out- established can require the employer to con- standing claims resulting from the employ- tribute to the financing of the guarantee ment relationship in question?' institutions so that those institutions are in a position to compensate employees in the event of the employer's insolvency. Finally, the Danish institution pointed out that it could not, even in the interest of economy, compensate the plaintiff and then seek reim- IV Substance bursement from the English guarantee insti- tution, since the directive made no provision for such an arrangement.

(b) For the purpose of determining whether an employer is insolvent, Article 2 of the directive refers to the legislation and the 18. However, the parties differ in their views competent authority of the Member as to which guarantee institution is eventu- State 'concerned', that is, normally those ally required to setde employees' claims. of the State where the employer is estab- More particularly, the French and United lished. Since the guarantee institution Kingdom Governments and the Commission assumes the obligations of a defaulting maintain that in the particular circumstances employer it is normally the guarantee it is the guarantee institution of the State in institution of the Member State where which the employer is established that is the employer is established which must competent, or in the present case the United assume that obligation. Furthermore, Kingdom institution. The plaintiff in the that institution is better placed to ascer- main proceedings and the German Govern- tain the existence and extent of the ment, on the other hand, claim that the com- employer's liabilities. petent institution is the institution of the Member State in which the employee resides and/or works, or in the present case the Danish institution.

the institution of the employee's State of 13(2)(a) or Article 14(2)(b) of that regu- residence and/or employment that insti- lation is applied by analogy, the guaran- tution would be unprepared for liabili- tee should in this case be provided by ties in respect of which it would have the Danish institution. been unable to require a statutory con- tribution on the part of the employer. That would upset the financial equilib- rium of the guarantee organizations, however, which cannot have been the Community legislature's intention. Fur- thermore, the directive does not provide (b) At the hearing the plaintiff in the main for an action for indemnity between proceedings, who did not submit written national guarantee institutions. observations, repeated the arguments which she had put forward before the national court. She further stated that under a clause in her contract of employ- ment Danish labour law was also to be taken into account when interpreting (d) In the case of migrant workers the body that contract. Furthermore, the plaintiff responsible for paying their claims is not argued that the Danish institution was known, which leads to legal uncertainty competent as the institution of the place and even provides the opportunity for where the work was carried out and the abuse on the part of those workers, again place whose law was applicable, on the owing to the abovementioned absence of basis of Regulation N o 1408/71 and an action for indemnity between national Articles 4(1) and 3(3) of the Rome Con- institutions. vention of 19 June 1980 (80/934/EEC, OJ 1980 L 266, p. 1) and also Article 5(1) of the Brussels Convention of 27 Sep- tember 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters.

First, the premiss that the concepts of 'employer' and 'employee' derive from the 23. I shall argue that none of those premisses directive and are valid for all Member States. corresponds with the letter and spirit of the directive. The lacuna found in the directive as regards the question before the national court is intentional and cannot be filled by the interpretation proposed by either of the parties. In a case such as that before the national court it is in the final analysis for Secondly, the concept that the scope ratione the competent authorities and the competent personae of the directive includes all employ- courts of each of the Member States con- ees, within the above meaning, of all insol- cerned to determine, on the basis of the vent employers, within the meaning of the national provisions, whether the employee is directive, within the Community, irrespec- entitled to the protection of the directive. tive of their attachment to a Member State. The resultant lacuna in the protection of employees, or any other unfavourable conse- quence for them, is the necessary conse- quence of the limited objectives of the gradual harmonization which the Commu- nity legislature has chosen at the current stage in the development of Community law. Thirdly, the concept that the provisions of the directive are sufficiently clear, as regards the determination of the national institution required to provide the guarantee and the scope of that obligation, for employees to be able to rely on them directly, even in the absence of national implementing provisions, The purpose of the directive indeed in spite of any national provisions to the contrary.

13 April 1978 6 with the version eventually Article 2 of the proposal provided that an adopted by the Council. employer was to be 'deemed insolvent' 9 where proceedings 'have been opened under by the laws, regulations and administrative provision of the Member States to satisfy jointly the claims of creditors,' etc. (Article 2(a)), or where 'an application for the open- ing of such proceedings has been rejected on the grounds of lack of assets' (Article 2(b)) or where 'his business has been closed down due to insolvency'. 10 25. After referring to Article 100 of the Treaty in the citations, the proposal observes in the sixth recital of the preamble that "... increasing economic interdependence across national boundaries imposes the requirement that employees' claims arising from the employment relationship in the event of the insolvency of their employer should receive equal protection in all Member States ...'. In the following recital it is stated that it is nec- essary to promote the approximation of the laws, regulations and administrative provi- sions of the Member States while maintain- ing the improvement described in Article 117 As regards the content of the guarantee, the of the Treaty. 7 proposal provided in Article 3 for payment of salary claims arising before the onset of the employer's insolvency (Article 3(a)) and also for payment of certain social benefits (Article 3(b)). It also allowed the Member States to limit the guarantee to three months' remuneration, irrespective of any reference period (Article 4(a)), while the payment of claims for social benefits could be limited to those which had arisen during the 12 months As regards the scope of the directive, more- preceding the onset of insolvency. n over, Article 1 of the proposal provided that the directive was to apply 'to claims arising from employment or training relationships against insolvent employers whose undertak- 9 — The expression 'deemed insolvent' was replaced in the actual directive by 'in a s u t e of insolvency'. ing or business is situated within the territo- 10 — It will be observed that the proposal failed to establish pre- rial jurisdiction of the Treaty'. 8 cisely which authority was to determine, and according t o what rules, that the relevant proceedings had been opened or that an application to open them had been rejected, etc. 1 1 — The Parliament 'regret[ted] in particular' that the Commis- sion had merely adopted minimum rules of protection (paragraph 4 of the preamble to its opinion) and considered 6 _ OJ 1978 C 135, p. 2. it 'wholly unacceptable' that the guarantee was not 7 — It should be pointed out that the preamble to the proposal extended to claims arising after the employer's insolvency for the directive was accepted without amendment by the (paragraph 5); finally, taking the view that it was 'quite European Parliament (see its opinion, published in OJ 1979 unreasonable' that the guarantee should be limited to three C 39). Nor did the Economic and Social Committee raise months' wages (paragraph 6), it proposed a guarantee of six any objections to the preamble. months (see Article 4(a) of the proposal as amended by the 8 — The Parliament abo adopted the proposal on this point. Parliament).

Furthermore, it follows from the overall wording of the proposal, read in conjunction with the opinion of the Parliament, that at As the Court has observed, 'whilst the legis- the preparatory stage the objectives of the lature considered, in general, that it was nec- directive were just as ambitious as regards essary to provide for the protection of the extent of the protection guaranteed to employees in the event of the insolvency of employees, which, it was envisaged, would their employer, it also limited the specific be the same in all Member States. purpose of its action to reducing the remain- ing differences between the Member States as regards the protection of employees in that respect'. 1 4 12 — In paragraph 7 of the preamble to its resolution, the Parlia- ment considered 'that under no circumstances [could] there be any question of asking employees to contribute to the financing of a guarantee fund to cover their legally justified claims against their employer' and, accordingly, it proposed that employers should pay the necessary contributions t o 13 — The Commission had already pointed that out when it cover the expenditure of tne fund, including administrative referred to the absence of appropriate institutions in certain expenditure (see the amended version of Article 5(b)). T h e Member States (see the fifth recital in the preamble to the Council agreed to a certain extent, since the directive p r o - proposal for a directive). vides that the guarantee institutions are to be financed b y 14 — Case C-479/93 Franawich v Italian Republic [1995] ECR employers and Dy the Member States (Article 5(b)). 1-3843, paragraph 20; hereinafter 'Francovich / / ' .

33. In the fight, evidently, of the financial burden for employers and States resulting 31. That the Community legislature opted in from the creation and functioning of such favour of partial or gradual harmonization is institutions, the directive leaves Member States the option, after evaluating domestic economic and social conditions, of substan- tially restricting the scope of the guarantee. 15 — The Court hid already held in Case 135/83 Abels Thus Member States may: (a) choose a date v Bedrijfsvereniging voor de Metaalindustrie en de Electrotechnische Industrie [1985] ECR 469 that 'the before which they will guarantee employees' specificity of insolvency law, encountered in all the legal systems of the Member States, is confirmed in Community outstanding claims (Article 3 of the direc- law .„[and] was reflected in [inter alia] the adoption of tive); (b) establish, in relation to that date, a Council Directive N o 80/987 ...' (paragraph 16), before going on to observe that '... the rules on liquidation reference period by determining that cover is proceedings and analogous proceedings are very different in the various Member States' (paragraph 17). to apply to the proportion of outstanding 16 — See paragraph 28 of the Francovich 11 judgment, cited in claims relating to that period (Article 4(2)); footnote 14. and (c) set a ceiling where that guarantee, 17 — Ibid., paragraph 20, cited in paragraph 41 above. 18 — Ibid., paragraph 27. already limited as indicated above, may

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35. The partial or gradual harmonization sought by the directive is even clearer, how- ever, if reference is made to the manner in which its scope is defined. The scope ratione 37. In the following passage in the same personae of the directive and, as we shall see judgment the Court defines the conditions in what follows, its scope ratione territoriae, under which national courts are to consider which is what interests us most here, are that a person comes within the scope of the incompletely defined in the directive by directive. More particularly, the Court states direct or indirect reference to the national that in order to determine whether or not a provisions of each Member State. person is intended to benefit from the guar- antee a national court must verify whether the person concerned is an employed person under national law and whether he is excluded from the scope of the directive in accordance with Article 1(2) and the Annex, 36. The scope ratione personae of the direc- and then ascertain whether a state of insol- tive, that is to say, the circle of persons vency as provided for in Article 2 of the directive exists. 21

19 — See Case C-53/88 Commission v Greece [1990] ECR 1-3917, paragraph 19; Joined Cases C-6/90 and C-9/90 Francovich and Others v Italian Republic [1991] ECR 1-5357, paragraph 3, hereinafter 'Francovich ľ; and Joined 20 — Paragraph 13 of the Francovich I judgment (emphasis Cases C-140/91, C-141/91, C-278/91 and C-279/91 Soffriti added). and Others v Instituto Nazionale deüa Previdenza Sociale 21 — See Francovich I, paragraph 14, and Francovich II, para­ [1992] ECR 1-6337, paragraph 3. graph 17 (cited in footnotes 19 and 14 respectively).

39. According to paragraph 14 of the Fran- covich I judgment (cited in paragraph 38 '... under Article 2(2) of the directive the above), however, a finding to that effect is definition of "employee" is a matter of not sufficient to bring a person within the national law' (paragraph 11), the Court category of persons entitled to the guarantee. observed: As I have already had occasion to point out, 2 4 it constitutes a first step by the national court in bringing the person con- cerned within the scope of the directive. To follow its reasoning to a conclusion the court will also have to take account of the employ- er's situation. Therefore, since 'Article 2(2) [of the directive] refers to national law for 'It follows that the directive on the insol- the definition of the concepts of "employee" vency of employers is intended to apply to and "employer"', 25 the national court will all categories of employee defined as such by also have to determine, first, whether the the national law of a Member State, with the employer actually referred to is regarded as exception of those listed in the Annex to the an 'employer' in national law and, secondly, directive' (paragraph 12). whether the employer is insolvent within the meaning of the directive.

22 — Case C-334/92 Wagner Miret v Fondo de Garantía Satarial [1993] ECR 1-6911. 23 — In his Opinion in that case, Advocate General Lenz pointed 24 — See paragraph 22 of my Opinion in the Francovich / / case, out (footnote 8) that, according to the information supplied cited in footnote 14. by the court making the reference, under Spanish law 25 — See paragraph 13 of the Francovich I judgment, cited in higher management staff were regarded as employees. paragraph 36 above.

'It is clear from the terms of Article 2 that in 41. On that basis, the Court rejected an order for an employer to be deemed to be in argument advanced by the Commission, a state of insolvency, it is necessary, first, that among others, to the effect that the directive the laws, regulations and administrative pro- was intended to protect all employees with visions of the Member State concerned pro- the sole exception of those referred to in the vide for proceedings involving the employ- annex. 27 More precisely, the Court held that: er's assets to satisfy collectively the claims of creditors; secondly, that employees' claims resulting from contracts of employment or employment relationships may be taken into consideration in such proceedings; thirdly, that a request has been made for the pro- ceedings to be opened; and, fourthly, that the authority competent under the said national provisions has either decided to open the 'Although the literal interpretation of Article proceedings or established that the employ- 2 of the directive may mean that the protec- er's undertaking or business has been defini- tion afforded by the directive varies from tively closed down and that the available one Member State to another as a result of assets are insufficient to warrant the opening differences between the various national of the proceedings. rules governing proceedings to satisfy collec- tively the claims of creditors, it cannot be rebutted by arguments based on the aim set out in the first recital in the preamble. Whilst the legislature considered, in general, that it was necessary to provide for the protection of employees in the event of the insolvency of their employer, it also limited the specific It thus appears that the Community legisla- purpose of its action to reducing the remain- ture has expressly limited the scope of the ing differences between the Member States as directive so that the rights which it intro- regards the protection of employees in that duces cannot be relied upon by employees respect. That literal interpretation is thus whose contract of employment or employ- consistent with the partial harmonization ment relationship is with an employer who pursued by the directive.' 28 cannot, under the provisions in force in the Member State concerned, be subject to pro- ceedings to satisfy collectively the claims of 26 — See the Francovich II judgment, paragraphs 18 and 19. creditors. Such an employer cannot be in a 27 — See my Opinion in Francovich II, at paragraph 21 et seq. "state of insolvency" within the specific 28 — The Francovich II judgment, paragraph 20.

29 — Ibid., paragraph 21. 30 — This technique is common in secondary Community legis- lation. See Case C-340/94 de Jaeck v Staatssecretaris van Financiën [1997] ECR 1-461, where the Court held that the concepts of 'employed person' and 'paid employment' as used m Regulation N o 1408/71 on social security for migrant workers are to be regarded as referring to the defi- nitions given them by Member States' social security legis- lation, that they are independent of the nature of the activ- 43. Is the fact that an individual employee ity for the purposes of employment law (paragraphs 19 and comes within the scope of the directive suf- 23) and, furthermore, that they do not refer to the Commu- nity concept of worker as used in Article 48 of the Treaty ficient to allow him to rely on the guarantee (paragraph 24 et seti.). The question arises tn the present case whether the directive as against the guarantee institution or, at refers to a particular branch of national law for the defini- least, the Member State? tion of the words 'employer' and 'employee'. The directive concerns the protection of employees in the event of the insolvency of the employer. Consequently, the rules on insolvency must be taken into consideration. Owing to the specificity of the corresponding provisions, however, it is probable that insolvency law has not established its own particular concepts of 'employer' and 'employee' but has borrowed them from labour law. The national court will therefore also have to refer to labour law. Finally, in Articles 6 and 7 the directive contains provisions which relate to employees' statutory and supplementary social security schemes. Consequently, the corresponding provi- 44. The answer is that it is not. For the sions of social security law will also have to be taken into employee to be able to do so, it is at least account. In those circumstances, I consider that it is for the national court, which has an overall picture of the various necessary, according to the case-law of the branches of domestic law, to define the concepts of 'employer' and 'employee', taking into account the aims of Court, that the directive has been transposed the directive. into national law.

47. I would observe in that regard that in Wagner Miret, cited above in paragraph 38, the Spanish court asked whether the person concerned can, on the basis of the directive, 'Accordingly, even though the provisions of take direct action against the national guar- the directive in question are sufficiently pre- antee institution, or indeed claim reparation cise and unconditional as regards the deter- from the State, where he is an employee mination of the persons entitled to the guar- within the meaning of national law but not antee and as regards the content of that within the meaning of the provisions govern- guarantee, those elements are not sufficient ing the guarantee institution. to enable individuals to rely on those provi- sions before the national courts. Those pro- visions do not identify the person liable to provide that guarantee, and the State cannot be considered liable on the sole ground that it has failed to take transposition measures After referring to Member States' discretion within the prescribed period.' 32 with regard to the general organization of the guarantee institutions and after observing that Article 3(1) leaves it to the Member 31 — Paragraph 25. States to adopt the measures necessary to 32 — Paragraph 26. ensure that guarantee institutions guarantee

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48. The Wagner Miret case, like the Fran- covich I and II cases, concerned claims by employers who were subject to the jurisdic- tion of the same Member State as their 49. Consequently, where it is impossible to determine on the basis of the directive alone whether an institution (which I shall pre- sume has already been constituted) is obliged 33 — Paragraphs 17 to 19 of Wagner Miret, cited in footnote 22 above. to ensure the guarantee where both 34 — In his Opinion in that case. Advocate General Lenz employer and employee come within the observed that in Francovich I the Court took the view that despite being sufficiently precise and unconditional as jurisdiction of the same Member State, it is a regards determining the categories of persons entitled to the fortiori impossible to determine whether that guarantee and as regards the content of the guarantee, the provisions of the directive did not identify the person liable institution is required to provide the guaran- to provide the guarantee and, accordingly, the persons con- cerned could not rely directly on those provisions in the tee where the competence of the Member absence of transposition measures. The Advocate General therefore considered whether the existence of a guarantee State extends only to the employer or only institution in Spain conferred direct effect on the provisions to the employee. Accordingly, •where of the directive. He came to the conclusion that it did not, since direct effect must derive from the rule itself, having employer and employee are subject to the regard to its context, and not from the law of a Member jurisdiction of different Member States, as State (paragraphs 12 to 16 of the Opinion). I support that argument. I also believe that in the Wagner appears to be the case here, it is also impos- Miret judgment tne Court clearly supported it, albeit by implication, since it did not consider that the national pro- sible to say which of the institutions vision which excluded the person concerned from the pro- involved is required to provide the guarantee tection could or should be set aside on the basis of the directive. provided for in the directive.

50. O n the basis of those considerations, if 52. As thus reformulated, the question, if I the question referred for a preliminary ruling interpret it properly, raises the problem of were to be strictly interpreted, it would be the scope ratione territoriae of the directive. necessary to give a reply such as: 'In a situa- tion such as that in the main proceedings, the employee's claim must be paid by the guar- antee institution of the Member State o n which the obligation to do so is imposed by national law'. According to the provisions of the directive, in the light of its purpose, its scope ratione territoriae to my mind corresponds with the limits of the jurisdiction of each Member State. In other words, the directive is addressed to each Member State and requires it to guarantee, by means of institutions envisaged for that purpose, payment of employees' claims against insolvent employ- ers in so far as employees and employers come within its jurisdiction. 36 Anything going beyond this is not a requirement but is authorized by the directive as a measure 51. Clearly, such a reply would be neither which is 'more favourable to employees', useful nor satisfactory to the national court, within the meaning of Article 9. since it would immediately beg the following question: 'Where there is no body which is competent, which Member State must, to apply the directive properly, ensure payment of the claim in circumstances such as those in the main proceedings?' Consequently, the question referred by the national court is in 53. It should be pointed out at the outset substance as follows: 'In a situation such as that the reference to 'increasing economic that in the main proceedings, where the interdependence across national boundaries' employer is established and has been in the preamble to the proposal disappeared declared insolvent in one Member State, from the wording of the directive, as did the while the employee resides and works in criterion in Article 1 of the proposal, which another Member State, does the directive provided that the scope of the directive was require one of the two Member States — and to be determined by reference to whether the if so, which — to guarantee, by means of the undertaking or business was 'situated within measures adopted to transpose it, payment of the territorial jurisdiction of the Treaty'. 37 If the employee's claims?' 35 it may therefore be inferred from its wording that the proposal sought also to cover claims arising under employment relationships of 35 — In all logic, this question consists of two parts: the first concerns Danish law and the answer must be such that the court making the reference is able to determine the main dispute, and the other concerns English law and there is no need to answer it from that point of view. Since, however, 36 — That is to say, in principle, but not necessarily, employers the question in its entirety lends itself better to a complete and employees established in the territory of the Member interpretation of the directive, I shall consider both parts Sute. together. 37 — See paragraph 25 above.

an international nature, as I maintained in tee institutions' obligations to pay in various paragraph 26 above, then the removal or ways presupposes an evaluation of the econ- amendment of the corresponding points nec- omic and social conditions and the employ- essarily means that the Community legisla- ment relationships which as a rule develop ture abandoned that intention. within a single State. If the directive had intended to require Member States also to cover claims arising from employment rela- tionships with transfrontier characteristics it would undoubtedly have established a sys- tem for the coordination of the correspond- ing provisions of the Member States, and in particular a scheme for the adaptation of the guarantee which took account of the condi- 54. Secondly, it should be observed that in tions in force in the place where the guaran- Articles 1 and 2 of the directive the scope tee is actually to be provided. ratione materiae (employees' outstanding claims, etc.) is defined in conjunction with its scope ratione personae. Moreover, to deter- mine whether an employee comes within the scope ratione personae of the directive, the national court must examine, as we have seen, first, whether the employee is regarded as such by national law and does not come within one of the categories excluded by the Annex to the directive and, secondly, whether there is an employer within the meaning of national law and whether that 56. Fourthly, the method of financing the employer is in a state of insolvency within guarantee institutions, within the meaning of the meaning of the directive. 38 In so far as Article 5, leads to the same conclusion. both these questions fall to be resolved on There is no doubt that the Community leg- the basis of the same national law, it is logical islature had in mind financially balanced to conclude that the Community legislature organizations, that is to say organizations had in mind employees and employers sub- whose income would cover expenditure, so ject to the same national law. that they would be in a position to meet their obligations. Income also includes financing by employers and/or the Member State, while the principal expenditure and obligation consist in providing the guarantee to employees. Furthermore, the financial bal- ance of any system of this type depends to a large extent on being able to foresee the date and amount of income and expenditure and 55. It should be observed, thirdly, that the also, of course, their implementation. Member States' option, pursuant to Articles Clearly, such a balance can only be struck in 4 and 10 of the directive, to limit the guaran- the context of one and the same national law. In fact, in the absence of express provisions in the directive, in a case such as this 38 — See paragraph 42 above. employers subject to the jurisdiction of

57. Finally, it is necessary to consider Articles 6 to 8 of the directive, which form part of Section III, entitled 'Provisions con- cerning social security'. Those articles estab- lish a link between the guarantee institutions' obligation to pay and the national social security or provident schemes. They thus require coordination between the guarantee institutions and the national social security Were a contrary solution, that is one or other schemes which is only practicable in the con- of those proposed by the parties, to be text of the national law of each Member adopted, even adapted to the true meaning of State. It follows from Article 6, for example, the question referred as reformulated, that that the obligation imposed on the guarantee would presuppose a coordination of Member institutions under Articles 3 and 5 of the States' insolvency laws, labour laws and directive also generally extends to the contri- social security laws, not to mention private butions payable by employees to national international law, which is completely extra- social security or provident schemes. All that neous to the purposes of the directive.

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59. That, moreover, is the solution which the territory, 42 although it is true that it does Court has adopted in the case of other direc- not prevent them from doing so. 43 tives designed to approximate national laws.

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O P I N I O N O F MR COSMAS — CASE C-117/96

61. I shall now examine the consequences of 62. The order for reference does not say the solution which I propose to the Court in clearly whether Mrs Mosbæk is subject to the present case. That solution implies that Danish law and whether she is to be every Member State must ensure the guaran- regarded as an 'employee' for the purposes tee to all employees coming within its juris- of Danish law. It follows from the terms of diction, provided that they come within the the order, however, read in conjunction with scope of the directive. The directive does not the written and oral submissions of the rep- require States to extend the guarantee to resentative of the Danish institution, which other categories of employees over and have not been challenged, that Colorgen, the above those who, strictly speaking, are sub- plaintiff's employer, does not come under ject to its jurisdiction, but it does not prevent Danish law and cannot therefore be regarded them from doing so. The national courts of as an 'employer' for the purposes of Danish each Member State are responsible, where law. If that is so the Kingdom of Denmark necessary, for determining whether the per- cannot be regarded as having infringed the son concerned satisfies the conditions which directive on the ground that it did not make bring him within the scope of the directive provision for Mrs Mosbæk's claim to be from the point of view described above. settled by the Danish guarantee institution. Consequently, the plaintiff has no right under Danish law to the guarantee or to reparation.

46 — It is possible, of course, that in a case such as the present one the national provisions of a Member State will not regard as 'employees' persons employed in another Mem- ber State in situations such as that of the plaintiff, while the I do not know to what extent that statement provisions of the State in which the employee carries out is binding on the United Kingdom guarantee his activity will not regard an undertaking such as Colorgen as an 'employer'. In that case the employee will not benefit institution and the courts in the United from the guarantee, since in each of the legal orders involved he will fail to satisfy a substantive condition of the Kingdom which may be called upon to directive. That should come as no surprise. Such an eventu- resolve the plaintiff's case. In any event, the ality may arise even in the context of a single national legal order (as in the Francovich II case) and is explained by the answer to that question is not necessary for limited objectives of the directive. It may also happen that both States offer to provide the guarantee. That eventuality the solution to be provided to the dispute falls outside the framework of tne directive, however, and where necessary must be examined in the context of the before the national court and, consequently, national legislation of each State. the Court need not concern itself with it.

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MOSBÆK v LØNMODTAGERNES GARANTIFOND

V Conclusion

64. I therefore propose that the question referred to the Court be answered as fol- lows:

Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer is to interpreted as meaning that it does not require a Member State to provide an employee with the guarantee provided for in the directive where the employee or his employer is not subject to its jurisdiction or where the employer or the employee is not recognized as such by national law.