C-19/01

BARSOTTI AND OTHERS

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 15 May 2003 1

I — Introductory comments insolvency of their employer, in particular in order to guarantee payment of their outstanding claims, while taking account of the need for balanced economic and social 1. These proceedings concern the interpre- development in the Community'. tation of 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 2(herein- after 'the Directive'). The procedure speci- fically concerns the function of a ceiling on Article 3(1) reads: payments by a national guarantee institu- tion.

'Member States shall take the measures necessary to ensure that guarantee institu- tions guarantee, subject to Article 4, pay- I I— Legislative background ment of employees' outstanding claims resulting from contracts of employment or employment relationships and relating to pay for the period prior to a given date.' A — Directive 80/987/EEC

2. The first recital reads: The first sentence of Article 4(3) reads:

'Whereas it is necessary to provide for the protection of employees in the event of the

'This Directive shall not affect the option of Member States: 4. In the calculation of the amount paid by the Guarantee Fund certain deductions are made from a total amount set for each employee (hereinafter 'total amount'). The difference is paid to the employee. The total amount corresponds to three times the (a) to take the measures necessary to avoid maximum amount of 'special reparation in abuses; addition to the monthly salary', that reparation in turn being a certain percent- age of the individual's pay before the termination of the contract of employment or employment relationship. The payments deducted from the total amount are speci- (b) to refuse or reduce the liability referred fied in the Legislative Decree ('special to in Article 3 or the guarantee supplementary benefit', remuneration for obligation referred to in Article 7 if it work and 'job-seeker's allowance'). appears that fulfilment of the obliga- tion is unjustifiable because of the existence of special links between the employee and the employer and of common interests resulting in collusion between them.'

III— Facts of the case and main action

B — National legislation 5. All three of the cases here at issue concern employees who have outstanding

3. To transpose the Directive, Italy adopted Decreto-legge No 80/1992 of 27 January 3 — GURI of 13 February 1992.

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BARSOTTI AND OTHERS

OPINION OF MRS STIX-HACKL — JOINED CASES C-19/01, C-50/01 AND C-84/01

IV — Questions submitted for a prelimin- worker in the reference period (Article 2(4) ary ruling of Legislative Decree No 80/92) compatible — inter alia in the light of past rulings of the Court of Justice concerning that decree — with EEC Directive 80/987, and in 9. In Case C-19/01 the Tribunale di Pisa particular: (District Court, Pisa) has suspended pro- ceedings and referred the following ques- tion to the Court of Justice:

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BARSOTTI AND OTHERS

the fact that the Italian legislature has — which provides that, in order to avoid already imposed a ceiling by means of the payment of sums going beyond the Article 2(2) of the legislative decree at social objective of the directive, Member issue? States may set a ceiling to the liability for employees' outstanding claims in respect of the last three months of the employment relationship — to require sacrifice of part of the claims of those who received pay in excess of the ceiling and have received in the last three months of their employment (5) Consequently, must the reference to relationship advances equal to or in excess the "maximum amount of the special of that ceiling, whereas those who received supplementary pay" in the said Article pay below the ceiling may then, through 2(2) be regarded as being made merely aggregation of any advances paid by the for formal or accounting purposes or is employer with the payments made by the it an incorporative reference (with the public body, secure full satisfaction of their consequent inclusion in Legislative claims (or of a higher percentage thereof)?' Decree No 80/92 of the provisions giving effect to the special wage supplement, including the so-called non-aggregability rule)?

(6) Finally, may non-aggregability be V — The admissibility of the questions regarded as allowed in the context of submitted for a preliminary ruling the power of the Member States to adopt the measures necessary to avoid abuses (Article 10(a))?'

A — Arguments of the parties

11. In Case C-84/01 the Corte Suprema di Cassazione (Supreme Court of Cassation) has suspended proceedings and referred the following question to the Court of Justice: 12. The Italian Government argues that in a preliminary ruling pursuant to Article 234 EC it is not for the Court of Justice to rule on the compatibility of national law with Community law or on the validity and 'Is it permissible under Article 4(3) of interpretation of national provisions, that Directive 80/987/EEC of 20 October 1980 many of the questions put by the Tribunale

(b) is a total amount to be awarded by the guarantee institution, from which all 5 — See, for example, Case C-107/98 Teckal [1999] ECR I-8121. amounts received by the employee in 6 — Tekal (cited in footnote 5), paragraph 33, and Case C-17/92 Distribuidores Cinematográficos [1993] ECR I-2239, para- the relevant period are deducted. graph 8.

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BARSOTTI AND OTHERS

to the subject-matter of those proceed- VI — Answering the reworded question ings.' 7 submitted for a preliminary ruling

A — Essential arguments of the parties

18. Mr Borsoni (C-19/01) takes the view 17. In view of the information contained in that the provisions of the Legislative Decree the order for reference, the questions in the according to which advances paid by the three cases should be reworded as one employer are deducted from the total question submitted for a preliminary ruling: amount may be interpreted and applied in such a way that the INPS must pay outstanding claims arising from the con- tract of employment or employment rela- tionship up to the total amount only if the employee suffers equivalent losses because of the insolvency. He argues that the total amount may not therefore be further reduced by any advances paid by the employer in such cases.

20. Mrs Venturi (C-84/01) takes the view that the Italian legislation concerning the 22. The INPS argues that it follows from Guarantee Fund is inconsistent with the the systematic interpretation of the Direct- content and purpose of the Directive. She ive that the guarantee institutions were believes that the total amount referred to in meant to support employees financially in the Legislative Decree can be deemed to the event of t h e i r e m p l o y e r ' s comply with the Directive only if it guar- insolvency. Accordingly, it could not be antees that any loss or damage is made the purpose of the Directive to grant the good. employees concerned payments in addition to those received from their employer.

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BARSOTTIAND OTHERS

24. Nor, it submits, is that view incon- Others case, the social objective of the sistent with the Court's judgment in the Directive was to guarantee a minimum level Maso and Others case. 10 The job-seeker's of protection under Community law in the allowance at issue in that case had been a event of the employer's insolvency through form of financial assistance for payment of outstanding claims resulting employees. The judgment in that case did from contracts of employment or employ- not therefore affect the possibility of ment relationships. The inference from deducting part payments effected by the Masoand Others for this case, it argues, is employer from payments by the Guarantee that advances paid by the employer Fund. towards outstanding claims cannot be deducted from the Guarantee Fund's pay- ments.

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OPINION OF MRS STIX-HACKL — JOINED CASES C-19/01, C-50/01 AND C-84/01

arguments of the parties in the proceedings made, is specified, with due regard for the before the Court of Justice primarily con- final remuneration received by the cern the admissibility of the deductions for employee concerned. which the Legislative Decree provides. In my opinion, however, the problem arises earlier and concerns the question of the compatibility of a system such as that here at issue with the aims and requirements of the Directive. 31. Inherent in this system is the following effect, which I will describe with the aid of an arithmetical example explained at the hearing, without contradiction, by the representative of the INPS:

29. The arguments of the parties concern- ing the inadmissibility of the deductions are closely linked in the present case to a certain interpretation of the nature of payments by the Guarantee Fund. Before the question of An employee has an outstanding claim the deductions is discussed, it should there- totalling EUR 5 000 arising from the time fore be considered whether the Directive in before insolvency occurred. Of this, the fact permits a method of calculation for employer paid EUR 3 000 before the payments by a guarantee institution such as application for payments from the Guaran- that defined in the Italian Legislative tee Fund, thus leaving an outstanding claim Decree. of EUR 2 000. The individual ceiling up to which the Guarantee Fund would have to pay in the case of this employee is EUR 2 000.

1. The method of calculating payments by the Guarantee Fund pursuant to the Legis- lative Decree As the Italian Legislative Decree is inter- preted, the employee is entitled to a theoretical total amount not exceeding EUR 2 000, comprising — accordingly — payments by the employer and other benefits plus payments from the Fund. 15 However, this amount had already been 30. As stated above, 14 to calculate the paid by the employer before the application amount paid by the Guarantee Fund in was made. The employee would thus each case, an individual total amount, from receive no further payments from the which certain deductions are or may be Guarantee Fund in this case.

32. As the Italian Government and the INPS have themselves emphasised, the system for which the Legislative Decree provides is based on an interpretation according to which payments by the Guar- antee Fund are 'benefits' intended to meet 35. The Italian Government bases its inter- the individual employee's minimum pretation of the Directive mainly on the first requirements. The total amount referred sentence of Article 4(3). It seems question- to in the Legislative Decree performs the able, however, whether this provision can function of a theoretical flat-rate entitle- really be seen as reflecting an interpretation ment, which is related to the individual concerning payments by guarantee institu- employee's last remuneration and from tions according to which those institutions which other benefits that alleviate the grant 'benefits' to meet employees' min- hardship suffered by him are deducted. imum requirements. Viewed in that way, compensating for the actual individual loss (i.e. the difference between outstanding claims and payments received) cannot be seen as a decisive criterion.

36. Although the first sentence of Article 4 (3) of the Directive refers to the 'social objective of [the] Directive', using it to justify a 'ceiling' to prevent payments from going beyond that objective, it cannot be inferred from this alone that the aim of the Directive as a whole is — merely — to ensure that the minimum requirements of 33. The question that now arises is whether employees affected by their employer's this interpretation, on which the Italian insolvency are satisfied. For this provision Legislative Decree is evidently based, is leaves the way open for a derogation. It is consistent with the aims of the Directive. intended to enable guarantee institutions

40. As the answer to the question on which a preliminary ruling is required is meant to enable the national courts to proceed with the main actions with due regard for applicable Community law, it would none the less seem appropriate to make a number 38. Article 3(1) of the Directive defines the of brief, basic comments on possible deduc- content of the decisive obligation on the tions from claims against guarantee institu- Member States as being to ensure 'payment tions aimed at protecting employees in the of employees' outstanding claims'. 16 The event of their employer's insolvency. first recital similarly refers to the 'payment of [employees'] outstanding claims' being guaranteed by means of the Directive. This shows that the Directive primarily seeks to ensure payments in compensation for employees' outstanding claims rather than to place the emphasis on the alleviation of hardship possibly arising as a result. 41. It follows from Article 3(1) of the Directive that in a system in which a guarantee institution is required to guaran- tee payments to satisfy employees' out- 16 — Case 22/87 Commission v Italy [1989] ECR 143, paragraphs 7 and 11, and Maso and Others (cited in standing claims in the event of insolvency footnote 8). the level of those payments must, of course,

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BARSOTTI AND OTHERS

be guided by the level of the claims to remuneration which have not been met. This means that payments which the employer has made or which third parties have made on his behalf need not be made good by the guarantee institution.

42. Furthermore, the Court has already ruled in the case of Maso and Others that, in principle, the first sentence of Article 4(3) and Article 10 of the Directive permit the Member States to adopt national anti- aggregation rules. However, only certain other payments or payments whose simul- taneous receipt must be demonstrably regarded as abuse 17 may be deducted from the entitlement to payment by the guarantee institution. 18

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, and especially Article 3(1) and the first sentence of Article 4(3) of that directive, should be interpreted as meaning that the protection of employees required by the directive is not guaranteed where a guarantee institution owes the employees concerned, to meet their minimum requirements, no more than a total amount from which certain other payments, including payments by the employer, are deducted.

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