C-55/00

When a Member State has concluded with a non-member country a social security convention under which nationals of both States are accorded the right to aggregate In September 1996 she lodged an appli- insurance periods completed in both for the cation with the Istituto Nazionale della purposes of being awarded an old-age Previdenza Sociale (hereinafter 'the INPS') pension, the question arises whether those for an old-age pension. In November 1997 Community provisions allow the Member her application was refused on the ground State to deny that right to a worker who is that she was a French national and the a national of another Member State. The Italo-Swiss Social Security Convention of reason given by the State for refusing 14 December 1962, ratified by Law aggregation is that the worker is not one No 1781 of 31 October 1963 (hereinafter of its own nationals. 'the Italo-Swiss Convention'), was inappli- cable for the aggregation of her insurance periods. She immediately lodged an official appeal against that decision and the INPS confirmed its refusal in June 1998.

1. The facts in the main proceedings

3. In the proceedings before the courts, Mrs Gottardo maintains that, since she is a 2. Elide Gottardo was Italian by birth and national of a Member State, Italy should acquired French nationality following her acknowledge her right to receive a pension under the same conditions as Italian nationals, albeit by application of a con- 1 — Original language: Spanish. vention concluded with a non-member

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Article 39(2) EC establishes: IV. The proceedings before the Court of Justice

'Such freedom of movement (for workers 8. The applicant in the main proceedings, within the Community) shall entail the the INPS, the Italian and Austrian Govern- abolition of any discrimination based on ments and the Commission have presented nationality between workers of the written observations in these proceedings. Member States as regards employment, remuneration and other conditions of work and employment.'

Mrs Gottardo's representative, the repre- sentative of the INPS, the agent of the 7. Article 7(1) and (2) of Regulation (EEC) Italian Government and the agent of the No 1612/68 2 provides: Commission appeared to make oral sub- missions at the hearing held on 6 March 2001.

10. The INPS states that the Italo-Swiss 12. The Austrian Government submits that Convention cannot be applied to the principle of non-discrimination in Mrs Gottardo because she is not a citizen Article 12 EC has been incorporated into of either of the contracting States. Nor, for the sphere of social security by Article 3 of the same reason may she invoke the Second Regulation No 1408/71 and that, therefore, Additional Agreement, adopted in 1980, it is necessary to have recourse to Article 12 which provides for the aggregation of EC only if the Regulation is applicable to contribution periods completed in non- the facts in the main proceedings. It points member States which have concluded social out that Articles 39 EC and 42 EC and security agreements with Italy and with Regulation No 1408/71 refer, in principle, Switzerland. to migrant workers moving within the Community and there is no provision for those rules to be extended to insurance periods completed outside it. The Austrian Government states that Regulation No 1408/71 could be considered to require equal treatment for Italian and French nationals only if the Italo-Swiss social security Convention were 'legislation' within the meaning of the Regulation, because only under those circumstances does Article 3 establish a duty of non- discrimination.

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social security benefits listed in Article 4 of the second forms part of the chapter Regulation No 1408/71, the national court devoted to the free movement of workers. is entitled to question whether the con- dition of nationality imposed by the Italo- Swiss Convention is compatible with Article 39(2) EC. In that regard, it states that the acknowledgment of a contribution period giving entitlement to an old-age pension is a social advantage which Italian law must confer on claimants, by observing 15. This Court has consistently held that the prohibition against discrimination Article 12 EC is intended to apply indepen- based on nationality which Article 39(2) dently only in situations governed by EC imposes on the Member States. Community law where the Treaty does not lay down a specific prohibition on discrimination. 4In the sphere of the free movement of workers, the principle of equal treatment has been implemented and realised by Article 39(2) EC, which establishes the abolition of any discrimi- The Commission finishes by stating that nation as regards employment, remuner- Italy cannot avoid the obligation to ensure ation and other conditions of work and equality of treatment, with respect to the employment. old-age pension entitlement, between Ita- lian workers who have been employed in Switzerland and workers from other Member States who are in the same pos- ition.

The old-age pension is a deferred right 17. The Italian court has carefully avoided which the worker acquires throughout his referring to Regulation No 1408/71 working life. When a migrant worker has because, firstly, it considers that the appli- moved exclusively between Member States, cation by the INPS of the social security his pension entitlement is calculated by convention with Switzerland in this case application of Regulation No 1408/71. infringes Article 39 EC and, secondly, it However, if he has also worked in a very probably knows how this Court has non-member country with which the interpreted Regulation No 1408/71 in cases Member State to which he has applied for in which a Member State which has con- a pension has concluded a social security cluded a social security convention with a convention providing for the aggregation of non-member country refuses to include, the contributions paid in both States, when calculating entitlement to benefits, aggregation of the periods completed in the periods completed in that non-member that non-member country forms part of the country by workers who are nationals of conditions of work which the Member another Member State, and does not wish State is required to afford the citizens of to receive the same reply. the other Member States, under Article 39(2) EC, without discrimination on grounds of nationality.

It is therefore unnecessary, in this case, to A. The interpretation of Regulation refer to Article 12 EC or Article 7(2) of No 1408/71 and the refusal of Member Regulation No 1612/68 in order to reply to States to aggregate, in respect of nationals the question referred for a preliminary of other Member States, insurance periods ruling by the Tribunale Ordinario, Rome. completed in a non-member country with which they have concluded a social security convention

19. However, each time a question has been referred for a preliminary ruling in a dispute in which a migrant worker has been 20. The first of those judgments was in the same or similar circumstances to delivered in 1972, 7in reply to a question those of Mrs Gottardo in Italy, and has from the Bundessozialgericht (Federal sought to invoke the principle of equal Social Court). The case, which related to treatment laid down in that provision, the Regulation No 3 8 (the predecessor of Court has given a negative answer. Regulation No 1408/71) was similar to the one which is the subject of this Opinion. 9Unlike Mrs Gottardo, the claim- ant was an Italian national who asked the German social security institution to take into account insurance periods completed in Switzerland, invoking the Italo-Swiss social security Convention. The reasoning has been based on the fact that a bilateral social security convention concluded between a Member State and a third State, although incorporated as a statute into the domestic legal order, did not constitute 'legislation' within the mean- ing of Article 1(j) of Regulation The Court pointed out that Article 16 of No 1408/71, and it was not therefore Regulation No 3 (laying down the rules possible to rely on Article 3 to claim equal relating to aggregation for sickness and treatment. 6Admittedly, in most cases the maternity benefits) referred to insurance national court specifically requested an periods 'completed under the legislation of interpretation of those two provisions of each of the Member States' and that secondary legislation. I do not dispute that, Article 1(b) of that Regulation, which was if the question is expressed in those strict equivalent to Article 1(j) of Regulation terms, it might merit that response, but I No 1408/71, stated that 'legislation' meant

21. The second judgment was delivered in 1977. 10 The case concerned an invalidity pension payable in Belgium to the persons entitled under a deceased Italian worker 22. The third judgment was delivered in who had worked in Italy, Belgium and 1993, in the Grana-Novoa case, 13 in Austria and had acquired in Austria an response to a question referred by the invalidity pension calculated in accordance Bundessozialgericht, which had to give a with a bilateral social security convention ruling in proceedings brought by a migrant between Italy and Austria. Belgian law worker who had been refused an invalidity provided for account to be taken of the pension. Ms Grana-Novoa, who had Span- periods completed not only in the Member ish nationality, had not paid compulsory States but also in third countries, with the insurance contributions in her country of consequence that the benefit to be paid was origin but had, on the other hand, pursued reduced. The Court of Justice confirmed an occupation subject to compulsory social that the provisions of Regulations Nos 3 insurance in Switzerland and Germany. In and 4 11 (the latter was the predecessor of Germany she became permanently inca- Regulation No 574/72), 12 concerning the pacitated and applied for an invalidity aggregation of insurance periods, refer only pension. Her application was refused on to periods completed under the legislation the ground that she had not worked in the of the Member States, and that periods Federal Republic of Germany for a suffi- completed in a third country, whether or cient number of years to complete the qualifying period required by the German rules. Ms Grana-Novoa challenged that decision before the German courts. It was 10 — Case 75/76 Kaucic [1977] ECR 495. 11 — Regulation No 4 of the Council of 3 December 1958 fixing established that she would have been the procedure for implementing Regulation No 3 (Journal awarded a pension if the periods completed Officiel 1958 30, p. 597). 12 — Regulation (EEC) No 574/72 of the Council of 21 March in Switzerland had also been taken into 1972 fixing the procedure for implementing Regulation account. Germany had concluded with (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving Spain a social security convention which within the Community (OJ, English Special Edition 1971 established equal treatment for German (II), p. 416) in the version amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6). The final consolidated version, which incorporates the many amendments made to the Regulation since its adoption, was published in OJ 1997 L 28, p. 102. 13 — Case 23/92 Grana-Novoa [1993] ECR I-4505.

The national court was unsure whether, since 1 January 1986, the date of Spain's accession to the European Communities, the principle of non-discrimination on grounds of nationality prevented the appli- cation of the safeguard clause inasmuch as it might obstruct, within the Member State 23. Ms Grana-Novoa, who was in an which was a party to the convention, the almost identical situation to that of free movement of nationals of other Mrs Gottardo, therefore found that, Member States. although Article 39(2) EC prohibits dis- crimination on grounds of nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment, of which social security entitlement is undoubtedly one, she was unable to rely on that provision to claim, in Germany, the Principally, the national court was asking same treatment as that accorded to German whether the concept of 'legislation' referred nationals who had completed insurance to in Article 3(1) of Regulation No 1408/71 periods in Switzerland. 15 covers the provisions of international con- ventions concluded between a Member State and a third country which have been 14 — Garavagno, R., Cahiers genevois et romands de sécurité sociale, 1993, No 11, pp. 82 and 9 1 , particularly p. 9 1 , incorporated as statute law into the considers that, although the outcome is logical and cannot domestic legal order. If that question were be criticised, it departs from the Court's previous rulings in which it had preferred to interpret the concept of 'legis- answered in the affirmative, the court lation' widely. The same opinion is expressed in Revue de Jurisprudence Sociale, 1994, pp. 151 and 152, where it is wished to know whether the principle of added that the judgment would prevent the many legal and equal treatment laid down in Article 12 EC practical problems caused by the application to the nationals of other Member States of conventions con- and Article 3(1) of Regulation No 1408/71 cluded beuveen a Member State and one or more third countries, such application being, in any event, only- prevented the German social security insti- partial, because it was not valid vis-à-vis third parties. tutions to which application had been made 15 — The main proceedings ended when the applicant aban- doned her action in the light of the preliminary ruling given for an old-age or validity pension from by the Court of Justice. See the letter from tile Bundesso- taking account, for German nationals only zialgericht dated 1 November 1993, which is on the 'National decisions' database of the Court of Justice, and not for other Community citizens, of reference QP/02295-P1.

24. I must point out that not all of the five principle of non-discrimination on grounds Member States which submitted observa- of nationality required the German auth- tions in the Grana-Novoa case proposed orities to acknowledge the claimant's right that the first of the two questions referred to aggregation of the insurance periods should be answered in the negative. Italy completed in Switzerland.18 and Portugal suggested to the Court of Justice that a Member State is required to ensure that citizens of the European Union who have carried on an activity in its territory and completed the corresponding insurance periods receive the same treat- ment as its own citizens under its legis- lation, which includes social security con- ventions signed with third countries.16 B. Recent case-law on the national treat- ment principle in favour of a company resident in one Member State with a permanent establishment in another, as

. . si applica cioè soltanto ai cittadini dei due Stati contraenti e non copre quindi i described seem to have been laid in the cittadini di altri Stati comunitari residenti in Germania. Ma tale esclusione è conforme al principio di non Saint-Gobain judgment,19 delivered, curi- discriminazione che è uno dei fondamenti della ously enough, in a case concerning the right Comunità .

. . Il principio di non discrimina- zione imporrebbe quindi che ali atto stesso della con- clusione di accordi bilaterali, tali interessi venissero tenuti presenti e che pertanto gli accordi coprissero non solo i cittadini dei due Stati contraenti, ma anche i cittadini degli altri Stati membri residenti nello Stato comunitario con- traente'. ['It is true that the Convention .

. . The principle of non-discrimination 18 — At the hearing, when I pointed out this radical change of requires, therefore, that when bilateral agreements are concluded, that interest should be kept in mind and that opinion and asked him to account for it, the Agent of the consequently the agreements should cover not only the Italian Government replied that it was not motivated by nationals of the two contracting States but also nationals political reasons but was brought about by the precedent of other Member States resident in the contracting set by the Court of Justice in the Grana-Novoa judgment. Member State']. 19 — Case C-307/97 Saint-Gobain [1999] ECR I-6161.

28. In order to justify its refusal, the The Court then stressed this point by German Government relied upon the fact adding that the obligations which Commu- nity law imposes on Germany do not jeopardise those resulting from its agree- 20 — These three concessions were: firstly, an exemption from German corporation tax for the dividends received from ments with the United States and Switzer- shareholdings in foreign companies limited by shares, specifically from the United States of America ana Switzer- land, and that the balance and the reci- land, on the ground that the bilateral treaties for the procity of the treaties concluded by Ger- avoidance of double taxation concluded between Germany and each of those non-member countries, which provide many with those two countries would not for such exemption, restrict it to German companies and companies subject in Germany to unlimited tax liability; be called into question by a unilateral secondly, the crediting of the corporation tax levied on the profits of the foreign subsidiaries and sub-subsidiaries of Sainr-Gobain SA in the countries in which they arc established; and thirdly, an exemption from capital tax 2 1 — C a s e C - 2 7 9 / 9 3 Schumacher ( 19951 ECR 1-225, on dividends from shareholdings in subsidiary companies, paragraph 2 1 ; Case C-80/94 Wielockx [ 19951 ECR by including the shareholding in the United States sub- 1-2493, paragraph 16; Case C-107/94 Ancher |1966| sidiary in the domestic assets of the permanent establish- ECR 1-3089, paragraph 36; Case C-250/95 futura Par- ment subject hable for the tax. This concession was ticipations and Singer [1997| ECR 1-2471, paragraph 19; reserved by law for German companies limited by shares. and Case C-264/96 ICI (19981 ECR 1-4695, paragraph 19.

29. By that judgment Member States have been required to grant non-resident com- panies with a permanent establishment in their territory the same tax advantages as It seems clear, therefore, that there needs to they grant to national and resident com- be radical change in the case-law of the panies under the same conditions. 22 Court of Justice to give Article 39(2) EC the scope required by the fundamental prin- ciple of non-discrimination it enshrines. It is necessary to depart from the solution reached in the Grana-Novoa judgment of 2 August 1993 and apply to this sphere the criterion introduced in the Saint-Gobain judgment of 2 October 1999, which requires Member States to grant non-resi- dent companies limited by shares, with a I think that the judgment also overcame the permanent establishment in their territory, difficulty involved, for a Member State the same concessions as they give national which had concluded with a non-member country a social security convention pro- viding for concessions restricted to the 23 — This was the view expressed in the following terms by Advocate General Van Gerven in point 12 of his Opinion, nationals of both, in extending them to cited in footnote 6: '... the solution suggested here is migrant workers who were the nationals of supported also by the special nature of a bilateral convention between a Member State and a third country. other Member States, a difficulty which Such an agreement is the result of a process of negotiation between both States in which the respective contracting parties' rights and duties are usually based on the principle of reciprocity. That means that such conventions are based on a well-defined equilibrium also as regards the financial 22 — This is not only my opinion. See Lausterer, M.: 'The consequences. There can be no doubt that the striking of Saint-Gobain Judgment of the ECJ', The EC Tax Journal, such a balance would be seriously hampered and that the 1999: vol. 4, pp. 45 to 54, particularly p. 53; Martin scope for negotiation of Member States and third countries Jiménez, A.J.: Revista Española de Derecho Financiero, would be severely restricted if the Member State in 2000, pp. 493 to 498, particularly p. 498; Kostense, H.E.: question were to work on the basis that the rights which 'The Saint-Gobain case and the application of tax treaties. it stipulates for its own nationals were also to be granted to Evolution or revolution?', EC Tax Review, 2000, pp. 220 all other Community citizens. In saying that I am not to 232, particularly p. 232; and Offermanns, R.: 'Treaty thinking solely of the position of social security conven- Benefits for Permanent Establishments: The Saint-Gobain tions but also of other bilateral agreements based on a Case', European Taxation, 2000, pp. 180 to 189, par- form of (financial) equilibrium of the reciprocal benefits, ticularly p. 188. for example as with double taxation agreements.'

C. The proposed change in case-law and the effect of the wording of the question referred for a preliminary ruling 32. To give an example of these contra- dictions, I shall refer to two cases decided by the Court of Justice in the space of just two years, in which it had to clarify whether a specific article of the French 30. I wish to emphasise how paradoxical it Labour Code (L 213-1), which, subject to is for the Court of Justice to give the exceptions, prohibited the employment of national court the reply I propose, con- women to do night work in factories and sidering the answer it gave to the Bundes- workshops, was contrary to Article 5 of sozialgericht only eight years ago. Directive 76/207/EEC. 24 In the first case the question referred for a preliminary ruling went no further; in the second, the national court added that it was necessary to take into account the ILO Convention No 89 of 9 July 1948, which had been The only difference I can find between the signed by France and which prohibits night Grana-Novoa case and Mrs Gottardo's work by women. case is that the Bundessozialgericht requested an interpretation of Regulation No 1408/71, whereas the Tribunale Ordi- nario, Rome, has not looked at secondary law but has asked directly for an inter- pretation of Treaty provisions which unconditionally prohibit discrimination on grounds of nationality. The facts which had given rise to the two cases were very similar: two undertakings were charged with infringing the provisions of the Labour Code, by employing women in their factories to do night work, an 31. It seems worrying to me that divergent infringement punishable by a fine. solutions are found when the circumstances are almost equivalent and the applicable Community provisions are identical. The 24 — Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men only reason for that divergence lies in the and women as regards access to employment, vocational training and promotion, and working conditions (01 1976 different wording of the questions referred L 39, p. 40).

33. In the Stoeckel judgment, 25 which was In that case the Court held that, while it is the first to be delivered, although the true that equal treatment of men and French Government claimed that the ILO women constitutes a fundamental right Convention was applicable, the Court of recognised by the Community legal order, Justice merely replied that the Directive its implementation has been gradual, and imposes on Member States the obligation has been achieved by means of directives. not to lay down by legislation the principle Those directives allow, temporarily, certain that night work by women is prohibited, derogations from the principle of equal where night work by men is not pro- treatment. In those circumstances, it is not hibited. 26 sufficient to rely on the principle of equal treatment in order to evade performance of the obligations which are incumbent on a Member State in that field under an earlier international agreement and observance of which is safeguarded by the first paragraph

Treaty. 28 26 — Some authors have expressed puzzlement or unease at such a succinct reply from the Court of Justice. De Vos, D., 'Le travail de nuit: La "Real Politik" de l'égalité!', Journal des tribunaux du travail, 1993, pp. 1 to 7, particularly p. 5; 28 — On 13 March 1997 the Court of Justice gave a ruling in Huglo, J.-G., Recueil Dalloz-Sirey, 1991 Jur., pp. 445 and Case C-197/96 declaring that it had failed to fulfil its 446, particularly p. 446, '(L'on ne peut que regretter que la obligations since, after denouncing ILO Convention No 89, Cour de Justice, dans son arrêt du 25 juillet dernier, n'ait it maintained in force Article L 213-1 of the Labour Code pas examiné le problème [de droit international]') ('It has (ECR I-1489). Judgment is currently pending in Case to be a matter for regret that, in its judgment of 25 July, C-224/99 in which the Commission has brought an action the Court of Justice did not consider the [international against France under the first paragraph of Article 228 EC law] problem'). for not having complied with that judgment. It is asking

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35. I think it is significant that the Court of Community law to the specific case. 30 waited until it had received the second The Court has also held that, when the question referred for a preliminary ruling questions submitted for a preliminary rul- before giving the French courts which had ing concern the interpretation of a provi- to apply that body of rules the full inter- sion of Community law, the Court gives its pretation of the Community legislation ruling without, in principle, having to look they needed when, during the preliminary into the circumstances in which a national reference proceedings in the Stoeckel case, court was prompted to submit the ques- it had already been pointed out that the tions and envisages applying the provision ILO Convention was applicable in of Community law which it has asked the France. 29 Court to interpret. 31

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Article 234 EC might depend too much on of Justice held in the Saint-Gobain judg- the court which raises the question, so that, ment, such an extension would not in any depending on the way it worded the ques- way affect the rights of the non-member tion referred for a preliminary ruling, it country and would not impose any new could determine the answer, as occurred in obligation on it. Nor would the equilibrium the cases I have just examined. between the parties or reciprocity be jeop- ardised. Finally, it would not compromise the rights conferred by the Convention on the Swiss State, since the obligations relat- ing to the inclusion of the insurance periods devolve upon Italy and in no way affect the Swiss old-age pension scheme.

D. The reply to the question referred by the Tribunale Ordinario, Rome

37. It may be inferred from the foregoing considerations that I agree with the 39. Thus, a Community citizen who is not national court and with the Commission Italian cannot rely on the abovementioned that it must be possible for the prohibition Convention to claim inclusion in Switzer- against discrimination by reason of land of insurance periods completed in nationality established in Article 39 EC to Italy. preclude the INPS from refusing to allow Mrs Gottardo to include insurance periods completed in Switzerland for the purpose of acquiring the right to an old-age pension in Italy, on the ground that she does not fulfil the nationality condition laid down in the Convention.

41. Italy points out that, in a case similar to that of Mrs Gottardo, concerning a Spanish national who had worked in Italy, Spain and Switzerland, the Swiss authorities ref- 42. I therefore consider that Article 39(2) used to provide the Italian authorities with EC precludes a Member State from refusing the information it required to award him to take into account, for the purpose of benefits, on the ground that the claimant granting the right to an old-age pension to did not fulfil the condition of nationality. workers who are nationals of other Member States, insurance periods com- pleted in a third country with which it has concluded a social security convention, if it includes such periods for its own nationals under the same circumstances.

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