C-248/96

GRAHAME AND HOLLANDERS v BESTUUR VAN DE NIEUWE ALGEMENE BEDRIJFSVERENIGING

OPINION OF ADVOCATE GENERAL COSMAS delivered on 17 July 1997 *

I — Preliminary observations II — The Netherlands legislation

2. It appears from the file that compulsory 1. In this case the Arrondissementsrecht- insurance against invalidity is governed in bank, Amsterdam, has referred to the Court the Netherlands by two laws: the Wet op de three questions concerning the interpretation Arbeidsongeschiktheidsverzekering of 18 of point 4 of the part relating to the Nether- February 1966 (Law on Insurance against lands of Annex VI to Council Regulation Incapacity for Work, 'the WAO') and the (EEC) N o 1408/71 of 14 June 1971 « and the Algemene Arbeidsongeschiktheidswet of 11 validity of those provisions in the light of December 1975 (General Law on Incapacity Articles 48 and 51 of the EC Treaty. for Work, 'AAW').

3. The WAO, which came into force on 1 These questions have arisen in the context of July 1967, provided for the compulsory proceedings between two Netherlands insurance of employed persons against inval- nationals and the competent Netherlands idity. social security institution concerning the question whether the periods of military ser- vice served by the former must be taken into account for the purpose of their obtaining a social security benefit for incapacity for work.

Article 3 of the WAO states that 'employed * Original language: Greek. 1 — See the codified text of that regulation contained in Council person' means any natural person in an Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 employment relationship governed by pri- L 230, p. 6) and Council Regulation (EEC) No 1248/92 of 30 April 1992 (OJ 1992 L 136, p. 7). vate or public law.

According to the W A O , the right to benefits and the amount thereof are independent of the duration of insurance periods. The amount is determined on the basis of the degree of invalidity and the worker's salary By decision of 18 October 1993, the compe- (subject to a certain maximum). tent Netherlands social security institution, the Nieuwe Algemene Bedrijfsvereniging ('NAB'), granted him a social security ben- efit under the WAO from 20 July 1991 for a degree of invalidity of 80 to 100%. In calcu- lating the amount of the benefit payable, the N A B took into account approximately five years' employment in the Netherlands, 4. The AAW, which came into force on 1 excluding the period of military service. October 1976, provides for the compulsory insurance of all Netherlands residents against invalidity. The acquisition of the right t o benefits and the calculation of the amount are not subject to any conditions with regard to the duration of insurance periods.

6. Mr Hollanders, also a Netherlands 2 — In the Netherlands, civil servants and persons treated as such national, performed compulsory military ser- were originally insured against incapacity for work under t h e 1922 Pensioenwet (Law on pensions), which was replaced in vice in the Netherlands from 10 June 1953 to 1965 by the Algemene Burgerlijke Pensioenwet (General 16 May 1955 and then a period of voluntary Pensions Law, ' A B P W ) : sec Case C-227/94 Olivieri-Coenen [1995] ECR 1-3301, paragraph 5. military service until 11 February 1958.

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GRAHAME AND HOLLANDERS v BESTUUR VAN DE NIEUWE ALGEMENE BEDRIJFSVERENIGING

8. The persons concerned initiated proceed- 2. Is point 4(a) or 4(c), depending on the rel- ings against those decisions before the evant time, of Part J of Annex VI to Regu- Administrative Law Section of the lation N o 1408/71, as they stood on 20 July Arrondissementsrechtbank, Amsterdam. 1991 and 17 June 1992 respectively, to be That court expressed doubts as to whether interpreted as meaning that periods of paid the abovementioned provision of Regulation employment and periods treated as such N o 1408/71 was compatible with the prin- completed in the Netherlands before 1 July ciple of the freedom of movement for work- 1967 include: ers laid down in Articles 48 and 51 of the Treaty and, in particular, whether the excep- tion laid down in Article 48(4), to the effect that the provisions of Article 48 do not apply to employment in the public service, also covered cases such as those before the (a) periods during which the person con- national court. Furthermore, it was uncertain cerned was performing his compulsory

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OPINION OF MR COSMAS — CASE C-248/96

military service under the Netherlands 10. In addition, Article 51 provides as fol- legislation; lows:

(b) periods during which the person con- 'The Council shall, acting unanimously on a cerned was an enlisted member of the proposal from the Commission, adopt such Netherlands armed forces and in that measures in the field of social security as are capacity came under a special statutory necessary to provide freedom of movement insurance scheme against incapacity for for workers; to this end, it shall make work for civil servants and persons arrangements to secure for migrant workers treated as such? and their dependants:

12. Article 40(1) of Regulation N o 1408/71, within the meaning of Article 1 (a) of the which concerns the conditions governing the regulation, the competent institution grant of invalidity benefits where a worker shall fix the amount of cash benefits in has been successively subject to the legisla- accordance with the provisions of the tions of different Member States, according Law of 18 February 1966 on insurance to at least one of which (such as, in this case, against incapacity for work (WAO), tak- the Netherlands legislation) the amount of ing account of: benefit depends on the duration of periods of insurance, refers, for calculating the amount of benefit, to the provisions of Chapter 3 of the regulation, relating to old- age and death pensions, particularly Article — insurance periods completed under the 46, which deals with the award of benefits by abovementioned Law of 18 February each of the competent insurance institutions 1966 (WAO), of the Member States.

13. With regard to the application of the Netherlands legislation concerning insurance against incapacity for work, Regulation N o 1408/71, as worded at the time material to — periods of paid work and equivalent peri- the Grahame case, in the form codified by ods completed in the Netherlands before Regulation N o 2001/83, 3 contained the fol- 1 July 1967.' lowing provision in Annex VI, Part I con- cerning the Netherlands, 4 point 4:

14. Furthermore, the regulation as worded at the time material to the Hollanders case, 'For the purpose of applying Article 46(2) of as amended by Regulation N o 1248/92, con- the regulation, Netherlands institutions will tained the following provision in the same respect the following provisions: Annex VI, Part J, point 4:

VI — Substance of the case (")···

(c) In the calculation of the benefits awarded in accordance with the above- 16. It is common ground that Mr Grahame mentioned Law of 18 February 1966 and Mr Hollanders were employed persons (WAO) or in accordance with the when they became unfit for work and that abovementioned Law of 11 December therefore they are subject to the regulation, 1975 (AAW), the Dutch institutions that they are entitled to invalidity benefits shall take account of: from the Netherlands institution and that the benefits in this case are awarded in accord- ance with Article 46 in conjunction with the abovementioned provisions of Annex VI, point 4(a) or (c) respectively.

— periods of paid employment and periods treated as such completed in the Netherlands before 1 July 1967,

Moreover, as the successive versions of the said provisions, on which the present case i turns, are not fundamentally different they

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GRAHAME AND HOLLANDERS v BESTUUR VAN DE NIEUWE ALGEMENE BEDRIJFSVERENIGING

20. At the hearing, the French Government relied on Article l(s) of the regulation t o contend that the terms must be given the same meaning as in the WAO, which does 17. With this question, the national court not recognize a period of military service as asks whether periods of compulsory and vol­ a period of paid work or equivalent period, untary military service in the Netherlands also in view of the special disciplinary sys­ armed forces before 1 July 1967 are periods tem which characterizes it. However, the of paid work or equivalent periods within French Government observes that, under the meaning of the relevant provisions of Article 13(2)(e), last sentence, an employed Annex VI. person who is called u p for service in the armed forces and who is insured is t o retain the status of employed person and conse­ quently, in that case, the period of military service is treated as a period of paid work. 18. The NAB and the Netherlands Govern­ ment contend that the terms 'periods of paid work and equivalent periods' in the relevant provisions of the Annex must be given the same meaning as in Dutch law. In the light of the special provisions to which they are sub­ ject, members of the armed forces are not deemed in Dutch law to be employed per­ sons and therefore military service does not 21. It must be observed, first, that the Court constitute paid work, or the equivalent. has consistently held that, in interpreting a provision of Community law, it is necessary to consider not only its wording but also, where appropriate, the context in which it * Translator's note: There is a difference in the wording of the successive English language versions; 'periods of paid work and equivalent periods' becomes 'periods of paid employment and periods treated as such'. For the sake of convenience, tne wording 'periods of paid work and equivalent periods' will be used throughout the Opinion, since the differences are immaterial in 5 — Cited in footnote 2. this case. 6 — Case C-71/93 [1994] ECR 1-1101.

23. In the present case, as the Commission correctly observes, the relevant provisions of Annex VI were introduced so that persons who worked before the W A O came into In other words, periods of paid work or force and were therefore not insured under equivalent periods within the meaning of the that law would also be covered for social relevant provisions of Annex VI must be security purposes. 9 I would add that they construed as periods which would be insur- were also introduced so that such persons ance periods if they had been completed should be covered uniformly and in the same under the WAO, as the Netherlands Gov- ernment correctly observes. Consequently, the military service performed by the appli- cants in the main proceedings is a 'period of 7 — See, for example, Case C-340/94 De Jaeck [1997] ECR1-461, paragraph 17. 8 — Sec Case C-266/95 Garcia [1997] ECR 1-3279, paragraph 27; De Jaeck, cited in footnote 7, paragraph IS; Joined Cases C-4/95 and C-5/95 Staber and Piosa Pereira [1997] ECR 10 — This is clear from the original wording of Annex V, Part F, 1-511, paragraph 36; and Case 41/84 Pinna [1986] ECR 1, point 4(a) of the regulation: 'For the purposes of Article paragraph 20. 46(2) of the regulation, periods of paid employment and 9 — This is why the abovementioned provisions refer, on the one periods treated as such completed under Netherlands legis- hand, to 'insurance periods' completed under the WAO and, lation before 1 July 1967 shall also be considered as insur- on the other, to 'periods of paid work etc.' completed before ance periods completed under Netherlands legislation on 1 July 1967, when the WAO came into force. insurance against incapacity for work.'

25. That interpretation which, in my opin- ion, is clear from the very wording of the relevant provisions of Annex VI, also con- forms with the definitions of 'periods of employment' and 'periods of self- employment' in Article l(s) cited above (see paragraph 15). It is clear from the introduc- tory words of that article that those defini- tions apply to the whole of the regulation 28. Furthermore, that argument has been and, for the purpose of classifying the work disposed of by the case-law. In De Jaeck in in question in each case, they refer to the particular, 12 the Court, when interpreting national legislation under which the particu- the phrases 'a person •who is employed' and lar periods were completed. " 'a person who is self-employed' for the pur- poses of Title II of the regulation, observed that 'just as the description "employed per- son" or "self-employed person" for the pur- poses of Article 1(a) and 2(1) of the regu- lation depends on the national social security scheme under which the person is insured, "a 26. The Commission's argument that the person who is employed" (or "engaged in relevant terms of Annex VI must be con- paid employment") and "a person who is strued as including voluntary and compul- self-employed" for the purpose of Title II of sory military service cannot be accepted. It the regulation should be understood to refer presupposes that those terms have an to activities deemed such by the legislation autonomous Community meaning irrespec- applicable in the field of social security in the tive of (or even contrary to) the provisions Member State in whose territory those of national law. activities are pursued.' , 3 Moreover, in the same judgment the Court added that the abovementioned terms in Title II do not have an autonomous Community meaning based on employment law, in view of the fact that the purpose of the regulation is merely to coordinate the social security legislation That assumption seems to me to be mis- of the Member States. u taken.

29. In the present case, it appears from the 30. It may be concluded from this that mili­ order for reference that the criterion for tary service in the Netherlands is not deemed determining whether a person is deemed t o to be a period of paid work within the mean­ be an employed person and covered by the ing of the WAO and that persons perform­ W A O is the existence of an employment ing military service are not subject to the relationship under private or public law. WAO, but to special social security schemes. Civil servants are expressly excluded, and Furthermore, there is nothing in the file to activity for purposes of national defence is show that the WAO has been extended to not deemed to be paid employment. those categories, either indirectly or by refer­ ence. Therefore, in view of what has been said above, the periods of military service served by the applicants in the main pro­ ceedings cannot be regarded as 'periods of paid work or equivalent periods', within the meaning of the relevant provisions of Annex VI to the regulation. In particular, persons performing compul­ sory military service are not employed o n the basis of a contract or on that of an appointment as a civil servant. They are not deemed to be in an employment relationship and their work is not deemed to be paid employment. From the social security view­ 31. The Commission contends that persons point, they are covered by the Wet performing voluntary military service are in Arbeidsongeschiktheidsvoorziening Mili­ a relationship of subordination, that logically tairen (Netherlands Law on Incapacity for they receive pay for their services and that Work in Members of the Armed Forces), they must therefore be deemed to be civil which came into force in 1972. servants and the period of military service must be regarded as a 'period of paid work' within the meaning of the relevant provi­ sions of Annex VI. O n this point the Com­ mission relies on the abovementioned judg­ ments in Van Poučke and Olivieri-Coenen.15

service in the Netherlands, the argument provisions of Annex VI of the regulation must be rejected in view of what was said (which are also at issue in the present case), above. even if that person was insured during that period under a special scheme for civil ser­ 18 vants and persons treated as s u c h . Since, in that case it was common ground that the activity of the person concerned constituted paid employment under Dutch law, 1 9 I con­ sider that that judgment indicates merely So far as the Van Poučke judgment is con­ that the fact that the person concerned cerned, I do not think it is material to the belonged simultaneously to a special scheme present case. In that judgment, the Court for civil servants did not have the effect that held that a Belgian military doctor (a civil her activity ceased to be paid employment servant) was within the category of persons within the meaning of the regulation. covered by the regulation in view of the fact that certain social security legislation, to which the regulation applied, had been extended to that category. , 6 Accordingly the Court found, further, that the employment as a civil servant of a person falling within the scope of the regulation was an activity as a person 'employed' within the meaning of Article 14c of the regulation. , 7 Conse- quendy the Court did not hold either that 34. The fact that Article 13(2)(e) of the regu­ civil servants, particularly soldiers, are cov­ lation provides that 'a person called up or ered by the regulation, or that their employ­ recalled for service in the armed forces, o r ment is automatically regarded as an activity for civilian service, of a Member State shall of an employed person within the meaning be subject to the legislation of that State' of the regulation. does not' affect the view set out above. Article 13 forms part of Title II, which relates to the determination of the legislation applicable. As the Court has observed with regard to different provisions of Article 13(2), the provisions in question are designed to resolve conflicts of legislation which may 33. The Olivieri-Coenen judgment likewise arise where, over the same period, the place has no bearing on the present case. In that of residence and the place of employment are judgment, the Court found that, for the pur­ not situated in the same Member State, 2 0 and poses of a similar invalidity benefit in the not to define the conditions creating the Netherlands, periods in which a person right or the obligation to become affiliated t o worked as a teacher under a contract of employment concluded with a private educa­ tional establishment were periods of paid 18 — Paragraph 18. employment within the meaning of the 19 — That was also stressed by the Netherlands social security institution which was the defendant in the main proceed­ ings (sec the Opinion of Advocate General Lenz in that case, point 12). 20 — See Case C-245/88 Daalmeįer [1991] ECR 1-555, para­ 16 — Paragraphs 9 and 11. graph 13, and Case C-198/90 Commission v Netherlands 17 — Paragraph 19. [1991] ECR 1-5799, paragraph 10.

21 — See Case C-2/89 Kits van Henningen [1990] E C R 1-1755, paragraph 19; Dejaeck, cited above, paragraph 27, and Stö­ ber and Piosa Pereira, cited above, paragraph 36. 22 — Of course, if and in so far as military service is regarded as an insurance period under the law of the State where it is performed, the other Member Sutes must recognize it as such for calculating the benefit payable, even if those peri­ 36. This question requires a reply only if the ods did not have to be taken into account under their own legislation (see Joined Cases C-113/92, C-114/92 and period of military service may be deemed a C-156/92 Fabriīīi and Others [1993] E C R 1-6707, para­ period of paid work or an equivalent period graphs 22 and 25). Conversely, if they recognize it as such for their nationals, they must, under the same conditions, within the meaning of Annex VI. Conse­ recognize military service performed in another Member S u t e (see Case C-131/96 Romero [1997] E C R 1-3659, para­ quently I propose to examine the third ques­ graphs 33 and 36). tion, subject to my observations concerning Likewise, a 'social advantage' within the meaning of Regu­ lation N o 1612/68 which is granted to nationals (the taking the second. into account of periods of military service for determining seniority in an undertaking) must also be granted t o migrant workers who have performed their military service in their homeland (judgment in Case 15/69 Süamüch v Uglioīa [1969] E C R 363). However, an advantage which is granted to nationals w h o are called up, but which is not a 'social advantage' within the meaning of Regulation N o 1612/68 because it is closely linked with military service, does not have to be granted to migrant workers also (Case C-315/94 De Vos [1996] E C R 1-1417, paragraphs 20 to 23). T h e above cases concerned the extension to migrant work­ ers of rights which a Member State grants to those whom it 37. According to the relevant provisions of calls up, and n o t an autonomous obligation, imposed on a Member State, to grant such rights to its own conscripts, as Annex VI, for calculating the benefits due in the present case under the WAO, account is to be taken of

38. Therefore, and subject of course to my 40. To reply to this question, it is first neces- observations concerning the second ques- sary to consider whether persons performing tion, the fact that the first applicant per- compulsory or voluntary military service are formed part of his military service in the deemed to be workers within the meaning of Netherlands armed forces (i. e. with the Article 48 of the Treaty and whether they Netherlands State) outside the territory of might fall within the exception laid down b y the Netherlands does not affect the present paragraph 4 of that Article. case. This is all the more true in that, as the written observations of the defendant in the main proceedings point out, the former Netherlands New Guinea, where the appli- cant performed his military service, was an overseas territory of the Netherlands (see 41. First of all it must be pointed out that Article 227(1) and (3) and Annex IV to the the Court has consistently held that the term Treaty and the Protocol of 25 March 1957) 'worker' in Article 48 has a Community until the Treaty of 15 August 1962 whereby meaning and must be defined in accordance sovereignty over this territory was trans- with the objective criteria which characterize ferred to the Republic of Indonesia, and it the employment relationship, taking into therefore maintained special relations with account the rights and duties of the persons the Netherlands. 2A concerned, the essential characteristic of the employment relationship being that for a certain period of time a person performs ser- vices for and under the direction of another 23 — See Cise C-282/91 De Wü [1993] ECR 1-1221, paragraph 21. See also Case 300/84 Van Roosmalen [1986] ECR 3097, person in return for which he receives remu- paragraphs 29 and 30, and Joined Cases 82/86 and 103/86 neration, regardless of whether this legal Laborero and Sabato [1987] ECR 3401, paragraph 24. 24 — See Case 87/76 Bozzone [1977] ECR 687, paragraph 21. relationship is governed by public or private

42. Article 48(4) has a limited sphere of application. It provides only that Member 43. O n the basis of those considerations, a States may exclude nationals of other Mem­ person performing compulsory military ser­ ber States from access to certain posts in the vice cannot be regarded as an employed per­ public service in view of the legitimate inter­ son and is accordingly in principle not cov­ est of the Member States in reserving to their ered by Article 48 either. As the defendant in own nationals a range of posts connected the main proceedings and the Netherlands with the exercise of powers conferred by Government correctly pointed out, military public law and with the protection of general service is the performance of an obligatory interests. 2 9 The Court assesses in each par­ service to the State and not an economic ticular case whether an activity or a post activity for which payment is received on the forms part of these specific activities of the basis of an employment relationship. This public service. For example, it has found that applies even if a soldier is presumed to the posts of head technical office supervisor, receive financial assistance from the State to principal supervisor, works supervisor, stock meet his personal expenses. 3 5 Consequently controller and night watchman with the municipality of Brussels and architect with

44. Conversely, in my opinion the infor­ mation in the file, sparse though it is, justi­ fies the conclusion that persons performing voluntary military service in the Netherlands must be deemed, for the purposes of the Treaty, to be employed persons in the broad 46. Nevertheless, the scope of Regulation sense, as the Commission correctly observes. N o 1408/71 in relation to persons and As already mentioned, 3 7 these persons serve subject-matter is both narrower and wider in the army on the basis of public law and than that of Articles 48 and 51 of the Treaty. perform their tasks as military civil servants. Thus, whereas the original version of the Furthermore, according to the Commission, regulation stated that its legal basis was which has not been contradicted on this Article 51 and that the regulation was limited point, those persons must be paid for their to employed persons, Regulation N o services. I conclude that this activity consti­ 1390/81 extended the scope to self-employed tutes professional service and as such is cov­ persons. However, as the latter are covered ered by Article 48. Furthermore, by nature it by Chapters 2 and 3 of Title III of the falls within the scope of paragraph 4. Treaty, which relate to the right of establish­ ment and services respectively (Articles 52 t o 66), and accordingly Article 51 did not pro­ vide a legal basis for that extension (see the third recital in the preamble to Regulation N o 1390/81), the Council also had recourse to Article 235 of the Treaty. In addition, although, as already mentioned, 3 9 civil ser­ 45. We come now to Article 51, which pro­ vants are deemed to be employed persons vides that the Council is to adopt such mea­ within the meaning of Article 48 of the sures in the field of social security as are nec­ Treaty, Article 4(4) of the regulation still essary to provide freedom of movement for excludes from its scope special schemes for workers. I think it is clear, for obvious rea­ civil servants and persons treated as such, sons of consistency, that the definition of although in 1991 the Commission presented 'worker' in Article 51 is as broad as in a proposal for amending the regulation so as Article 48. Therefore the Council must carry to cover civil servants also. 4 0

48. That interpretation is consistent with the nature of the regulation as a means of coor- dinating, not harmonizing, the laws of the 50. Nevertheless, as appears from paragraph Member States relating to social security and 36 of the Vougioukas judgment, which has it shows that the fact that a person is an already been cited several times, the validity employed person for the purposes of the of the relevant provisions of Annex VI (and I Treaty does not automatically guarantee him shall propose a ruling that they are valid) the benefit of 'the favourable provisions of does not entail the refusal of a request for the regulation. That is because, whereas the aggregation when it may be satisfied, in abovementioned articles of the Treaty apply direct application of Articles 48 to 51 of the on the basis of the objective characteristics of Treaty, without recourse to the coordination the employment relationship, the regulation rules adopted by the Council. applies by reason of a person's belonging to a national social security scheme which is covered by the regulation, and membership of such a scheme is subject to substantive conditions laid down by the national legisla- ture.

51. In the present case, as appears from the 41 — See paragraphs 32 and 33, which state that the differences order for reference and as the second appli- between the national schemes and the resulting technical cant pointed out in his written and oral difficulties of coordination which originally justined this failure to act cannot justify indefinitely the lack of any observations and the French Government coordination, and paragraph 34, which sutes that, by this stated at the hearing, with regard to failure to act, the Council has not fully discharged its obli- gation under Article 51. employed persons comparable to the appli-

V — Conclusion

54. I n view of t h e foregoing, I p r o p o s e t h a t the following r e p l y be given t o t h e national c o u r t :

(1) T h e t e r m s ' p e r i o d s of paid w o r k and equivalent p e r i o d s c o m p l e t e d in t h e N e t h e r l a n d s before 1 J u l y 1967' in A n n e x V I , P a r t c o n c e r n i n g t h e N e t h e r - lands, p o i n t 4(a), a n d ' p e r i o d s of paid e m p l o y m e n t and p e r i o d s treated as s u c h

42 — Cited in footnote 29, paragraph 38 et seq., and footnote 8, paragraphs 36 to 39, respectively.

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completed in the Netherlands before 1 July 1967' in point 4(c), of Council Regulation (EEC) N o 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to mem- bers of their families moving within the Community, as amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983 and Council Regu- lation (EEC) N o 1248/92 of 30 April 1992 respectively, include compulsory or voluntary military service in the Netherlands armed forces provided that such service is regarded by the WAO as a period of paid work or equivalent period. Subject to that proviso, the fact that military service was performed outside the territory of the Netherlands is immaterial.