C-218/00

4 —Case C-67/96 Albany [1999] ECR I-5751; Joined Cases C-115/97, C-116/97 and C-117/97 Emitíais' [19991 ECR 1 — Original language: English. I-6025 and Case C-219/97 Drųvende Bukken [1999] ECR 2—Joined Cases C-159/91 and C-160/91 Poucet and Pisire I-6121. [1993] ECR I-637. 5 —Joined Cases C-180/98 to C-184/98 Pavlov and Others v 3 — Case C-244/94 Fédération Française des Sociétés d'Assur- Stichting Pensioenfonds Medische Specialisten [2000] ECR ances [1995] ECR I-4013. I-6451.

I-693

OPINION OF MR JACOBS — CASE C-218/00

rules of civil liability. They could therefore on the other, imposed in some cases too only obtain damages from the employer if great a burden on employers. his fault could be established. Many acci- dents at work were however the result of force majeure or even negligence on the part of the victim and could thus not give rise to damages. Moreover, even where the accident was the consequence of the employer's negligence, victims found it difficult to prove such negligence or 6. The mechanism ultimately chosen to refrained from bringing proceedings in overcome those difficulties was a system order not to put their employment at risk. of insurance against accidents at work financed exclusively by the employer who would in exchange be relieved of his civil liability. Such a system constituted for both employers and employees a compromise solution in that

4. In that situation it was generally felt that workers and their families should enjoy better social protection against the negative — employees did not receive full repar- economic consequences of injuries which ation of all damage caused by an occur as a result of or in connection with accident, but received insurance bene- dangerous manual work. It was also felt fits related to their earnings before the that the risk of an accident at work accident even where they had caused (occupational risk) should in principle be the accident themselves, and borne by the employer who benefits from the work giving rise to the risk.

8. Today it follows from Article 38 of the Italian constitution that workers (lavora- 10. The Testo unico distinguishes between tori) are entitled to the provision of, and the industrial sector (Articles 1 to 204) and insurance for, means adjusted to their daily the agricultural sector (Articles 205 to needs inter alia in case of accident (infor- 290), which is subject to a special regime. tunio) or sickness (malattia). Under the As regards the industrial sector — which is fourth paragraph of that Article those and the one at issue in the present case — it similar tasks are to be carried out by bodies follows from Article 1 of the T.U. that and institutions set up or integrated into the insurance is compulsory for all those who State. According to the fifth paragraph engage in activities considered by the legis- private assistance is free. lature to involve risk (e.g. activities carried out through machines). Under Article 4(3) craft workers (artigiani) who are habitually engaged in a manual activity in their respective undertakings are among the persons covered by the insurance. Under Article 9 employers are required to insure 9. Most of the detailed legislative provi- their employees, firms are required to sions governing compulsory insurance insure their members and self-employed against accidents at work and occupational craft workers are required to insure them- diseases are contained in Decree No 1224 selves where they are engaged in one of the of the President of the Republic of 30 June activities involving risk listed in Article 1 and where the person to be covered by the insurance is mentioned in Article 4. 7 — Law No 80 of 17 March 1898. 8 — Royal Decree No 264 of 23 March 1933 which was converted into Law No 860 of 29 June 1933. At that time the INAIL was known as the INFAIL. 9 — GURI of 13 October 1965, No 257, supplemento ordinario.

12. The INAIL is a public law body with legal personality and operational auton- omy. 11 It has special powers to verify whether employers comply with their obli- Insurance benefits gations and whether victims of accidents at work and occupational diseases follow their treatment. 12 Not only does it operate the insurance regime, it is also involved in other activities such as accident prevention 13. The main economic benefits granted by (e.g. through information campaigns), the the INAIL under the insurance scheme in operation of specialised data banks on the industrial sector are accidents at work, several initiatives con- cerning the rehabilitation and reintegration of victims (e.g. through a prosthesis centre and a network of mobility rehabilitation centres) and social assistance. According to Article 55 of Law No 88 of 9 March 1989 designed to 'restructure' the INAIL, 13 the — a daily allowance in case of temporary INAIL is to be classified as a public incapacity for work; service-providing body and is subject to supervision by the Ministry of Employment and Social Security. That law provides also that the INAIL must perform the functions attributed to it in accordance with 'sound — a monthly pension in case of perma- nent incapacity for work; 10 — Under Article 127 of the Testo unico some limited categories of employees in the industrial sector (e.g. employees of the national railway operator) are to be insured with other bodies which operate also as legal monopolies in their fields. Under Article 256 of the Testo unico persons working in agriculture are to be insured with the INAIL. 11 — Article 1 of Royal Decree No 1280 of 28 September 1933 (GURI of 13 October 1933, No 239). — a monthly pension for survivors and a 12 — The INAIL points in that regard to Articles 21, 26, 95, 106, 138 of the T.U. lump sum for funeral expenses in case 13 — GURI No 60 of 13 March 1989, supplemento ordinario. of death.

15. The amount of the monthly pension in 18. According to the principle of automatic case of permanent incapacity for work is a payment of benefits (Article 67 of the T. U.) certain percentage of the earnings for the insurance cover is guaranteed for the per- year preceding the termination of work. son concerned even if the employer has The percentage in question is determined failed to comply with its obligations to give on the basis of the degree of permanent notice of the relevant employment relation- incapacity for work and a further factor ship and/or to pay the insurance contribu- fixed in the T.U. As regards the earnings tions. It appears that under a law of 1997 for the year preceding the termination of the automatic payment of benefits is in work, Article 116(3) of the T.U. provides principle no longer available for the self- that only earnings between a certain maxi- employed as from 1 January 1998. Since mum and minimum may be taken into the main proceedings concern periods account. The maximum corresponds to a before the change of the legislation, I will national average remuneration fixed by not take that change into account. ministerial Decree increased by 30% and the minimum to the same average remun- eration less 30%. In 1999 the relevant Decree set for example the maximum and minimum annual earnings to be taken into account at around EUR 19 850 and EUR 10 690 respectively.

Insurance contributions

19. Insurance benefits are financed through 16. The level of the pension for survivors is contributions paid by employers or by the a certain percentage (e.g. 50% for the self-employed who are covered by com- surviving spouse) of the victim's earnings pulsory insurance.

20. The scheme in the agricultural sector with the technical reserve for pensions 15 or works according to the redistribution from increases in current contributions. 16 method: for each year the INAIL collects It seems likely that the adjustments in the contributions necessary to cover the question are financed through a com- expenditure (allowances, pensions) which it bination of both elements. 17 expects to arise in the course of the year (Article 262 of the T.U.). The contributions due are fixed by ministerial decree (Article 257 of the T.U.). If there is a significant deficit, State financing appears to be guaranteed (Article 263 of the T.U.). 22. Under Article 41 of the T.U. contribu- tions in respect of employees are calculated as a certain percentage of their remuner- ation. 18 That percentage (tasso) depends on the average risk of the activity of the undertaking for which they work. The percentage so determined may be modified for individual undertakings (tasso specifico aziendale) if those undertakings can prove that by virtue for example of safety meas- 2 1 . As regards the industrial sector ures the risk of their activities is lower than Article 39(2) of the T.U. provides for a the nationwide average. system of so-called 'underlying capital redistribution' (ripartizione dei capitali di copertura): contributions for each year must be determined so that they will cover all anticipated charges resulting from acci- dents occurring during the year which include both the short-term benefits and 23. The calculation of insurance contribu- the capital value of long-term pensions to tions for self-employed craft workers is be paid in relation to those accidents. For governed by Article 42 of the T.U. and for the calculation of the capital values of the period at issue in the main proceedings pensions the INAIL must submit actuarial by a Ministerial Decree of 21 June 1988. 19 tables for approval by the competent min- Activities of self-employed craft workers ister (Article 39(1) of the T.U.). The funds are classified in 10 different risk categories. collected in order to cover the capital value For each risk category special unitary of future pensions constitute a technical premiums (premi speciali unitari) are estab- reserve. That reserve must be managed by lished. Those special unitary premiums are the INAIL in order to obtain the benefits necessary for financing pensions and allow- ances without any prejudice to the stability 15 — F. De Compardi, P. Gualtierotti, op. cit. in note 6, at page 54. of those funds. It is not clear whether the 16 — That appears to be the position defended by the Italian periodical adjustments of insurance bene- Government and the INAIL in their respective observa- fits in line with increases in average earn- tions. 17 _ See Achille D'Arenzo, Particolarità e caratteristiche delle ings 14 are financed essentially through modalità di finanziamento nell' assicurazione contro gli infortuni sul lavoro, Rivista degli infortuni e delle malattie profits obtained through investments made professionali, 1997, I, 631. 18 — The detailed rules are to be found in a Ministerial Decree of 18 June 1988 (GURI of 30 June 1988, No 152, supplemento ordinario). 14 — See above at paragraph 17. 19 — GURI of 29 June 1988, No 151.

25. Under Articles 41 and 42 of the T.U. The main proceedings and the order for the levels of insurance contributions both reference for employees and for self-employed craft workers are approved (approvato) by min- isterial decree on the basis of a resolution (delibera) of the INAIL. The INAIL has 27. By summary order of 30 December submitted to the Court a letter from the 1998 the Pretore (Magistrate) of Vicenza competent minister of 1981 in which the required the undertaking Cisal di Battistello minister refused to approve the resolution Venanzio & C. Sas ('Cisai di Battistello of the INAIL concerning new special uni- Venanzio' or 'the applicant') to pay to the tary premiums for craft workers and INAIL in respect of its managing partner invited the INAIL to reconsider the pro- (socio accomandatario) Mr Battistello posed tariffs in order to make the necessary unpaid insurance contributions of ITL adjustments. 6 606 890 for the period 1992 to 1996. The order stated that, according to the applicable rules, 22 Mr Battistello, in his capacity as craft worker (artigiano) engaged in manual activity in his own undertaking, should have been insured with the INAIL against accidents at work. Some statistics

26. It follows from statistics published by the INAIL 20 that in 1999 it spent around 28. In the main proceedings before the EUR 3 500 million on pensions in case of Tribunale Vicenza, Cisal di Battistello Ven- permanent incapacity for work, around anzio objects to that order. It states that Mr EUR 1 000 million on pensions for surviv-

31. The referring court decided therefore to 29. The referring court states that the refer the following two questions to the INAIL displays certain characteristics Court: which are, in its view, difficult to reconcile with the concept of undertaking within the meaning of the Community competition rules. It refers in that regard to the auto- matic nature of benefits, compulsory affili- ation itself and the absence of a profit motive. It considers none the less that 'Does a public non-profit-making insurance characteristics which are typical for bodies body, such as the INAIL, to which is engaged in an economic activity predomi- entrusted, on the basis of sound economic nate. It mentions the strong nexus between and business practice, the operation as a risk and contributions, the duty of the INAIL to perform its functions in accord- 24 — See above at paragraph 12. 25 — The Tribunale refers to Article 1 of law No 413 of 15 April 1965 which concerns craft workers and Article 8 of law 23 — Bollettino No 4 of 15 February 1999, at page 57. No 91 of 1981 which concerns professional sports persons.

I-700

CISAL

monopoly of a scheme of insurance against ring court's doubts are based on the fact risks deriving from accidents at work and that as from 1 January 1998 the principle occupational diseases based on a system of of automatic payment of insurance benefits compulsory registration which pays bene- has been abolished in respect of self-em- fits on a partially automatic basis (provid- ployed craft workers. Since the main pro- ing thus insurance cover for employees, but ceedings concern the period from 1992 to not for self-employed persons — as from 1996 a preliminary ruling based on that 1998) even in the event of non-payment of amendment of the law would not have any premiums by the employer, and calculates effects in the main proceedings. the premiums on the basis of the risk categories to which the insured work is assigned, constitute an undertaking within the meaning of Articles 81 et seq. EC?

26 — See paragraphs 6 to 9 of the order for reference and the wording or the first question referred. 33. The INAIL contends, first, that the 27 — Paragraphs 12 and 13 of the order for reference. reference is inadmissible, because the refer- 28 — Sec above at paragraph 18.

I-701

OPINION OF MR JACOBS — CASE C-218/00

because — in view of the social objective INAIL which operates the Italian regime of and the public law status of the INAIL — compulsory insurance against accidents at Article 86(2) EC and not Article 86(1) EC work and occupational diseases is to be should apply. Secondly, the referring court regarded as an undertaking for the pur- could not itself adopt the regulatory meas- poses of the competition rules of the EC ures which would become necessary in Treaty. order to guarantee effective social protec- tion in a system with more than one insurance provider. Thirdly, it follows from Article 86(3) EC that it is not for national courts but for the Commission to ensure the application of Article 86 EC.

I-702

CISAL

maternity insurance scheme for self-em- ance scheme retirement pensions had been ployed persons engaged in non-agricultural financed by active workers, pension rights occupations and the basic pension scheme had been laid down by legislation and had for skilled traders were not to be classified not been proportionate to the insurance as undertakings. The Court stressed that contributions paid and schemes which had those bodies fulfilled an exclusively social been in surplus had helped finance those function, that their activity was based on which had financial difficulties. the principle of solidarity and entirely non-profit-making and that the benefits paid were statutory benefits bearing no relation to the amount of the contribution.

I-703

OPINION OF MR JACOBS — CASE C-218/00

43. In the three parallel judgements in close link between contributions and bene- Albany, Drijvende Bokken and Brentjens 36 fits in that both are a percentage of the and in the subsequent judgment in Pav- remuneration of the victim and the INAIL lov 37 the Court confirmed the principles must operate the insurance scheme accord- established in FFSA and held that Nether- ing to sound economic and business prac- lands pension funds which provided tice in order to maximise income. Neither supplementary old-age pensions respect- the INAIL's social objective, its non-profit- ively to employees and members of the making character nor the limited elements medical specialists' profession were to be of solidarity embodied in the scheme can classified as undertakings. The Court affect the finding that the INAIL's activities emphasised the fact that the funds them- are predominantly of an economic nature. selves determined the amount of contribu- tions and benefits and that they operated in accordance with the capitalisation prin- ciple. The amount of the benefits thus depended on the financial results of the investments made. The non-profit-making character of the funds, the pursuit of a social objective, the restrictions or controls on investments and the various elements of 45. The INAIL, the Italian Government solidarity embodied in the scheme could and the Commission maintain that the not deprive the funds at issue of their status INAIL cannot be classified as an undertak- as undertakings within the meaning of the ing. They argue in substance that competition rules but might justify their exclusive rights.

— the insurance scheme is characterised by strong elements of solidarity (e.g. automatic payment of benefits) which a private insurer could not offer. 48. The fact that the INAIL engages in parallel with its insurance activities in prevention, rehabilitation and social assist- ance activities is also irrelevant. The con- cept of undertaking is relative in the sense that a given entity might be regarded as an undertaking for one part of its activities (e.g. insurance), even where another part of Some irrelevant features its activities might fall outside the compe- tition rules (e.g. prevention, rehabilitation, social assistance). 38 Financially the latter activities appear in any event to be much less important than its insurance activity. 39 46. It follows in my view from the Court's case-law and in particular from the cases set out above that the INAIL's public-law status, its non-profit-making character and the pursuit of social objectives cannot be taken into account for its classification. It is a separate question whether those features might help to justify the grant to the IN AIL of exclusive or special rights under Article 86(2). They cannot however as such 49. The argument that the concept of have a bearing on the question whether the undertaking is relative applies also as INAIL's insurance activities should or regards the INAIL's special powers. 40 should not be regarded as economic activ- Whilst the INAIL may be regarded as ities. acting in the exercise of official authority and thus outside the competition rules where it relies on those powers, the clas-

— benefits are paid even where the victim was negligent,

51. Cisal di Battistello Venanzo relies on Article 55 of Law No 88 of 9 March 1989 under which the INAIL must operate the insurance scheme according to 'sound economic and business practice' and must try to 'maximise income'. In its view that rule shows the entrepreneurial nature of the — the scheme guarantees the provision of INAIL. means of subsistence determined on the basis of the victim's earnings instead of granting compensation for damage,

52. I am not convinced by that argument. Most public authorities will have to oper- ate according to the principle of good administration which will include the obli- gation to minimise costs and, where appro- — benefits cover not only immediate and priate, to maximise income for example direct damage but also more indirect through the efficient collection of adminis- economic consequences of an accident.

I - 706

CISAL

58. It must however be recalled that in the industrial sector benefits are financed fully through contributions and contributions are calculated in order to cover all antici- pated charges (including the long-term pension liabilities) resulting from the acci- 56. In my view, a pension scheme operated dents predicted to occur during the year. according to the redistribution principle Higher benefits in line with increases in could not be offered by a private insurer average earnings appear to be financed since nobody would be prepared to finance partly through investments made with the the current pensions of others without the technical reserve and partly through guarantee that the next generation would increases in contributions. The general do the same. 43 financing philosophy underlying the scheme in the industrial sector thus appears to be not very different from that which 41 — See above at paragraphs 3 to 6. would be used by a private sector insurer. 42 — See for example the Belgian system at issue in Case C-206/98 Cimmmsum v Beigumi [2000] UCU I-3509. 43 — See my Opinion in Albany, cited m note 4, at paragraph 338 of the Opinion. 44 — See above at paragraph 20.

I - 707

OPINION OF MR JACOBS — CASE C-218/00

64. Cisal di Battistello Venanzio argues however that in actuarial and economic terms it does not make any difference 61. The INAIL, the Italian Government whether the provisions of the law at issue and the Commission contend, fourthly, link contributions and benefits directly or that on an individual level benefits are not via a common third factor on the basis of directly linked to contributions. which they are both calculated. In both cases higher or lower contributions will be mathematically related to proportionately higher or lower benefits.

45 — See for the importance of that argument the judgment in 62. It is in my view indeed an essential Poucet as summarised in FFSA, above at paragraph 4L 46 — See respectively paragraphs 22 and 23 and paragraphs 14 feature of private insurance that contribu- to 16.

I-708

CISAL

66. I have one important doubt as regards that reasoning. It will be recalled that for 67. Under the Court's case-law the the calculation of pension benefits only elements of solidarity present in the rules annual earnings between a given maximum governing the activities of the body in and minimum — an average nationwide question are relevant. Those elements may salary increased and decreased by 30% be so fundamental and predominant that as respectively — are to be taken into a matter of principle no private insurer can account, whereas for the calculation of offer that type of insurance on the market. contributions all earnings above the legal On the other hand, they may not go so far minimum wage are relevant. It might there- as to prevent its activities from being fore well be that an employer has to pay regarded as economic activities. In the high contributions in respect of an latter case the question often arises whether employee with a high salary, but that the those elements might however help to employee in question will not be entitled to justify exclusive or special rights granted correspondingly high pension benefits to the body in question.

I-709

OPINION OF MR JACOBS — CASE C-218/00

68. In that regard the INAIL, the Italian or an auxiliary body. It will be recalled that Government and the Commission point in the field of obligatory car insurance a essentially to the principle of automatic common fund guarantees the payment of payment of benefits, according to which insurance benefits even where the car caus- insurance benefits are paid even where the ing the accident is not insured. employer has failed to pay the contribu- tions due.

72. The INAIL, the Italian Government and the Commission argue, first, that the level of benefits is fixed by the T.U. and 70. It must however also be borne in mind thus by law. Those benefits have to be paid that the principle of automatic payment is independently of the financial results of the just one feature of the scheme in issue and investments of the INAIL. In contrast to the that it does not directly form part of the schemes under scrutiny in Albany or in scheme's core rationale, namely to guaran- Pavlov, benefits are not determined on the tee employees earnings-related insurance basis of contributions but contributions are cover against accidents at work and occu- determined on the basis of benefits. pational diseases even where the employer's fault cannot be established and in exchange to relieve employers of their civil liability. Moreover the Italian compe- tition authority rightly notes that automatic payment of benefits could also be guaran- 73. In my view the fact that benefits are teed through a fund managed by the State determined by law cannot in itself remove

I - 710

CISAL

75. Cisal di Battistello Venanzio maintains 77. Insurance schemes with a social objec- that according to the wording of the T. U. it tive take a variety of forms ranging from is the INAIL which has to decide by State social security schemes operating resolution about the tariffs in question, predominantly according to the principle whilst the competent Minister has only the of solidarity at one end of the spectrum to power to give or withhold his approval. schemes with only isolated elements of solidarity operated by commercial insurers at the other. The task of classifying inter- mediate schemes is a question of degree which requires analysis of a series of criteria. I find the scheme operated by the 76. On the basis of the documents sub- INAIL particularly difficult to classify. mitted to this Court it appears to me that the power to fix the levels of the con- tributions lies in practice ultimately with the Government. The provisions on the levels of contributions in respect of both employees and the self-employed are pub- 78. As stated above the Italian competition lished in the form of ministerial decrees in authority considers on the basis of its the official journal of the Italian republic. expert knowledge of the national legal Those decrees are not merely formal appro- background that the insurance services

I-711

OPINION OF MR JACOBS — CASE C-218/00

82. I accordingly conclude that a body which operates a national system of com- pulsory insurance against accidents at work and occupational diseases under conditions 80. First, the link between contributions such as those applying to the Italian Istituto and benefits via the victim's earnings Nazionale per l'Assicurazione contro gli appears in my view to be too indirect to Infortuni sul Lavoro cannot be regarded as be comparable to the link which is typical an undertaking for the purposes of the for private insurance. I consider in par- competition rules of the EC Treaty. ticular that no private insurer could offer on the free market a scheme in which for the calculation of pension benefits only earnings in a relatively narrow range between a given minimum and maximum were taken into account, whilst for the calculation of contributions all earnings above the minimum wage were relevant. The scheme appears to provide medium- In the alternative: Articles 86 EC and 82 range pensions even where high or low EC contributions have been paid. By virtue of that redistributive element it acts in my view more as a social security scheme which guarantees basic social protection for all those who form part of the scheme 83. By its second question the referring than as an insurer which grants benefits court asks in essence whether in a context proportionate to the contributions paid by such as the Italian one compulsory insur- the individual person insured. ance of craft workers against accidents at

I-712

CISAL

work and occupational diseases with the right of the fund is justified by virtue of INAIL infringes Articles 86 and 82 EC. Article 86(2) EC.

I-713

OPINION OF MR JACOBS — CASE C-218/00

90. The applicant — if I understand its scribe supplementary private insurance in observations correctly — complains respect of those risks. mainly about the fact that only earnings below a given maximum are taken into account for the calculation of pension benefits. That obliges craft-workers such as Mr Battistello to contract supplementary private insurance in order to obtain insur- 93. Since none of those submitting obser- ance benefits which are truly related to his vations has raised or discussed those issues earnings prior to the accident. I cannot express a view on them. If there- fore the INAIL were to be considered, contrary to my view, to be an undertaking, it would be for the national court to assess whether there were any concrete indi- cations that Italy has created a situation in which the INAIL on the one hand enjoys a monopoly but on the other is manifestly unable to satisfy demand. In doing so it 91. I consider that there is nothing wrong would have to analyse whether any con- with a State scheme which guarantees crete or potential abuses by the INAIL were means of subsistence related to a national the direct consequence of the framework average wage whilst supplementary cover- created by the legislature, whether the age has to be obtained through private system was manifestly inadequate and insurance. Such combinations of obligatory whether the legislature overstepped the basic public protection with voluntary margin of appreciation which it must supplementary private protection are a necessarily have in that field. 50 common feature in many Member States.

96. Cisal di Battistello Venanzio argues that the INAIL's monopoly is not necessary to guarantee the constitutionally required 99. As regards that final assessment the social protection of workers. The same INAIL, the Italian Government and the results could in its view be achieved Commission rightly stress however that through compulsory insurance with private insurance against accidents at work and insurers on which certain minimum legal occupational diseases fulfils an essential requirements could be imposed. The prin- social function and that the Member States ciple of automatic payment of benefits enjoy a margin of appreciation in organis- could be maintained through the establish- ing their systems of social security. It is ment of a State fund. therefore in principle incumbent on each Member State to consider whether — in view of the particular features of the national legal context — a regime with several private insurers subjected to certain legal minimum requirements would still enable it to ensure the level of insurance 97. The INAIL, the Italian Government which it seeks to guarantee. 51 and the Commission maintain that the abolition of the exclusive right would lead to a departure of the 'good risks' to private insurers whereas the 'bad risks' would remain with the INAIL.

100. I accordingly conclude that if the INAIL were to be classified as an under- taking it would be for the referring court to establish whether the INAIL is manifestly 98. Whilst that line of argument appears at not in a position to satisfy demand and first sight to be in keeping with the Court's whether the grant of the exclusive right is reasoning in Albany, I consider that the justified under Article 86(2) EC. Court should not express a definitive view on that issue in the present case since too many important points concerning the 51 — See Albany, cited in note 4, paragraph 122 of the factual and legal background are unclear. judgment.