JUDGMENT OF 5. 12. 1967 — CASE 14/67 LANDESVERSICHERUNGSANSTALT RHEINLAND-PFALZ v WELCHNER

In Case 14/67 Reference to the Court under Article 177 ot the EEC Treaty by the IVth Senate of the Bundessozialgericht (Federal Social Security Court) for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, A. M. Donner and W. Strauß (Rapporteur), Presidents of Chambers, A. Trabucchi, R. Monaco, J. Mertens de Wilmars and P. Pescatore, Judges, Advocate-General: J. Gand Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Origins of the case

(1). For a period of sixty-one months between 1942 and May 1947, the plaintiff, the respondent before the Bundessozialgericht (hereinafter referred to as ‘the plaintiff’) was at first in the German army and then a prisoner of war in France. From May 1947 to February 1951, that is for forty-five months, he was employed in France as a free worker insured against invalidity under French legislation. In 1951 he moved and settled in Germany where, until 1961, he completed insurance periods of one hundred and six months in all under German legislation. As a result of an illness which he contracted, the defendant, the appellant before the Bundessozialgericht (hereinafter referred to as ‘the defendant’) awarded him an invalidity pension from July 1961 until his recovery; on the same grounds the plaintiff received a pension under the French social security system. With regard to the amount of the pension due in Germany a dispute arose between the parties to the main action, regarding the interpretation of certain provisions of the Reichsversicherungs-ordnung, the relevant legal provisions. Under the terms of those provisions, the periods of military service and of captivity must be taken into account as ‘substitute periods’ (‘Ersatzzeiten’) capable of increasing the amount of the pension, provided that, in the three years following their expiry, the person concerned ‘commenced an employment or occupation falling within the ambit of compulsory pensions insurance’. The defendant considers that, since the plaintiff allowed this period to elapse without commencing an occupation in Germany, he has failed to satisfy the said conditions. The plaintiff on the other hand considers that it may be deduced from the provisions of Community law that the fact of commencing an occupation in another Member State of the EEC (in this case, in France) is equivalent to commencing an occupation in Germany. The proceedings which the plaintiff brought before the Sozialgericht, Freiburg, the competent court of first instance, were dismissed; the Landessozialgericht, Baden-Württemberg, to which he appealed, granted his suit, on the particular ground that, in cases such as the present, the provisions of Annex G (I) of Regulation No 3 must be applied mutatis mutandis in favour of the person concerned; the defendant appealed against this decision to the Bundessozialgericht.

(2). On 1 March 1967 the IVth Senate of the Bundessozialgericht decided to request the Court to give a preliminary ruling on the following question: The reasons which it puts forward for its question may be summarized as follows: (a) The IVth Senate is inclined to think that the total of the insurance periods and assimilated periods which must be taken into account in accordance with Community law must not exceed the total number of periods which is directly required to be taken into consideration by the legislation of each of the Member States. It recognizes however that this concept ‘does not emerge with all necessary clarity’ from the wording of. the relevant provisions of Community law. No doubt this opinion might be supported by the fact that Article 28 (1) (a) of Regulation No 3 refers to the legislation of Member States; nevertheless Article 27 (1) and Article 28 (1) (b) of Regulation No 3 together with Article 13 (1) (a) of Regulation No 4 of the Council of the EEC (Official Journal of 16 December 1958, p. 597) give grounds for the view that, in order to calculate the benefit due, the insurance institutions of each of the Member States must treat the periods completed in other Member States in the same way as if they had been completed in their country. (b) Nevertheless, the IVth Senate continues, the wording of Annex G (I) (B) (1) of Regulation No 3, as amended by Article 6 of Regulation No 130/63 of the Council of the EEC of 18 December 1963 (Official Journal of 28 December 1963, p. 2996), provides that ‘In determining whether periods which under German legislation constitute periods of interruption (Ausfallzeiten) or supplementary periods (Zurechnungszeiten) must be taken into account as such, the contributions paid under the legislation of another Member State and affiliation to the pension insurance scheme of another Member State shall be assimilated to the contributions paid under German legislation and affiliation to the German pension insurance scheme’. Certainly this provision does not mention the ‘substitute periods’ concerned in this case; but the Senate which brought the matter before the Court points out that the Xllth Senate of the Bundessozialgericht decided in a previous case that the similarity of interests concerned required the application of the said periods mutatis mutandis, as the absence of any indication in Annex G can only be regarded as an oversight. Objections may however be made against this argument; and the IVth Senate goes into the matter in detail.

‘Must Article 28 (1) (b) of Regulation No 3 of the Council of the European Economic Community concerning social security for migrant workers … or Annex G (I) (B) to (D) (to that regulation), or those provisions read together, be interpreted to mean that, in determining whether “substitute” periods must be taken into account under German legislation, the contributions paid under the provisions in force in another Member State of the European Economic Community are equivalent to those provided for by the German legislation?’

II — Procedure

The order making the reference was received at the Court Registry on 3 May 1967.

Under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, the Government of the Federal Republic of Germany and the Commission of the European Communities submitted written observations.

They were heard in the oral part of the proceedings on 10 October 1967.

The Advocate-General delivered his reasoned oral opinion at the hearing on 8 November 1967.

Ill — Summary of the written observations submitted under Article 20 of the Statute of the Court of Justice of the EEC

1. Observations of the Government of the Federal Republic of Germany

The observations of the Federal Government may be summarized as follows:

A —) The question put to the Court should be understood as follows: when deciding whether under German law ‘substitute’ periods must be taken into consideration, is an occupation which, under the legislation of another Member State, falls within the scope of compulsory pensions insurance equivalent to an occupation subject to such insurance under German legislation? The order making the reference is mistaken when it asks whether the contributions must be assimilated. This is not the decisive issue, since according to German law insurance contributions can be paid despite the absence of an occupation falling within the ambit of the compulsory insurance system, especially in cases of optional continued insurance.

B —) As the Federal Government shows, the provisions of German domestic law do not allow a ruling to be given in favour of the plaintiff in cases such as the present.

C —) Even under Community law, the question set out at A above must be answered in the negative for the following reasons:

a) It is no doubt correct that the ‘assimilated periods’ are those which under Articles 27 and 28 of Regulation No 3 must be taken into account, and the ‘substitute periods’ recognized by German law fall into this category. But those provisions do not require that account should be taken of the periods which the national legislation of the Member State concerned assimilates to insurance periods strictly so-called. This is clear from the wording of Article 27 (1) together with the reference made by Article 28 (1) (a) and (b) to the method of establishing the assimilated periods provided for in the first of the provisions quoted. Moreover, on the ground set out at B above, it is impossible in this case to take into account the substitute period in dispute.

b) The Federal Government adds that this interpretation is confirmed by Annex G to the regulation, since, in establishing a special system for each of the Member States, this annex is to be regarded as a special provision in relation to the regulation. The fact that in certain cases it assimilates the conditions obtaining in the other Member States to those obtaining in Germany plainly indicates that a consideration of Articles 27 and 28 alone cannot give this result, otherwise the said provisions of Annex G would be superfluous.

c) Even considered in isolation, Annex G confirms the interpretation obtained up to the present, since in the case of Germany it only mentions ‘periods of interruption’ and ‘supplementary periods’, to the exclusion of ‘substitute periods’. Moreover the important factor in those latter cases is not that the contributions have been paid but that there was an insurance or that the person concerned subsequently commenced a compulsorily insurable occupation. Furthermore, Annex (G) (I) (B) refers to periods ‘which under German legislation constitute periods of interruption or supplementary periods’; this is an additional reason for stating that in principle national law is the basis on which it must be decided whether one is faced with assimilated periods, and that the system established by Annex G constitutes the exception.

d) The origin of this system, the Federal Government continues, precludes the supposition that, although ‘substitute periods’ were not mentioned, this is to be explained as a mere oversight. The working parties entrusted with drawing up the provisions of Community law on social security were twice concerned with the question to what extent account must also be taken of the conditions obtaining in other Member States in order to calculate the ‘assimilated periods’ under German law: in the original text Annex G mentions in this connexion only the supplementary periods; ‘periods of interruption’ were only added in Regulation No 130/63 (cf. above I (2) (b)). But when this topic is broached the stumbling block of the ‘substitute periods’ is met. The German Government, on whose initiative the system was amended, was aware of the problem and when it gave its approval to Regulation No 3 and to Regulation No 130/63 it was with the intention that the system should not be extended to the ‘substitute’ periods.

e) Since they constitute exceptional rules, the relevant provisions of Annex G cannot be applied mutatis mutandis. Such an application is moreover precluded because the situations are dissimilar.

2. Observations of the Commission of the European Economic Communities

The Commission puts forward the following points in particular:

The question submitted to the Court must be answered in the affirmative for the following reasons:

A —) One must begin by considering what interpretation must be given to Article 28 of Regulation No 3.

a) This provision must be interpreted in the light of Articles 48 to 51 of the EEC Treaty. Under the terms of Article 51, the measures to be adopted by the Council must secure the aggregation of all periods ‘taken into account’ under the laws of the several countries; the ‘substitution’ periods recognized by German law correspond to this definition. Regulation No 3 satisfies this requirement by ‘defining as widely as possible’ the various periods to which it is to be applied. Besides ‘insurance periods’ (‘Versicherungszeiten’) and ‘periods of employment’ (‘Beschäftigungszeiten’) it includes ‘assimilated periods’ (‘gleichgestellte Zeiten’). These concepts are defined in Article 1 (p) to (r). They must therefore foe accepted as having a Community meaning. Consequently it is of little importance what German law intends by ‘assimilated periods’. Under German legislation, ‘substitute’ periods are ‘taken into account’ (‘angerechnet’); this amounts to saying that they are ‘taken into consideration’ (‘berücksichtigt’) under this legislation, in accordance with the provisions of Article 51 of the EEC Treaty, and that they are ‘assimilated’ (‘gleichgestellt’) to insurance periods, within the meaning of Regulation No 3.

b) The Bundessozialgericht, the Commission continues, is correct in taking as its basis the concept that periods abroad cannot be equivalent to German periods for the constitution of assimilated periods unless they satisfy the conditions required by German legislation for the constitution of periods. But this is what in fact occurs in the present case, since in the three years after the expiry of the ‘substitute’ period the plaintiff commenced a compulsorily insurable occupation. The additional condition required by the German courts, that is to say, the payment of contributions in the course of this occupation, was satisfied by the plaintiff in France as well.

c) Although it is impossible to invoke the letter of Articles 27 and 28 of Regulation No 3 to give an affirmative response to the question put, it is only by ignoring the ‘nationality’ of the disputed period (1947 to 1951) that the objectives of the Treaty and of the regulation will be observed. To do otherwise would, on the contrary, result in awarding insured persons who worked from 1947 to 1951 in another Member State, all other factors being moreover perfectly equal, a lower pension than that paid to insured persons working in Germany at this time. This result is incompatible with the case-law of the Court. The Commission points out that in addition its argument does not mean that the total of the periods to be aggregated under Community law is greater than the total number of periods to be taken into consideration under the legislation of the Member States concerned; in fact the plaintiff would only be credited with 167 (106 + 61) months of insurance by German law and with 45 months of insurance by French law.

B —) It is clear from these reasons that the interpretation of Annex G to the regulation only plays a subordinate role:

a) If it is considered, with the Commission, that an examination of Articles 27 and 28 of Regulation No 3 alone is sufficient to entail an affirmative response, this amounts to finding that express confirmation in the Annex would be pointless. Moreover Germany may not apply a system differing from that of the other Member States.

b) Furthermore the reasoning by analogy adopted by the XIIth Senate of the Bundessozialgericht (cf. above, I (2) (b)) is illogical. There is no reason to accord to ‘supplementary periods’ treatment differing from that accorded to ‘substitute periods’.

Grounds of judgment

By an order of 1 March 1967 which was received at the Court Registry on 3 May 1967, the IVth Senate of the Bundessozialgericht requests the Court to rule whether ‘Article 28 (1) (b) of Regulation No 3 …, or Annex G (I) (B) to (D) to that regulation, or those provisions read together, must be interpreted to mean that, in determining whether under German law substitute periods (Ersatzzeiten) must be taken into account, the contributions paid under the legislation of another Member State of the EEC must be assimilated to contributions paid under German legislation’.

The dispute pending before the Bundessozialgericht concerns a provision of German law under which, for the purpose of calculating an invalidity pension, periods of military service and of captivity shall be taken into consideration in favour of the person concerned as ‘substitute periods’ (Ersatzzeiten), provided that within a certain time following the expiry of those periods he commenced ‘a compulsory invalidity insurance employment or occupation’. The question raised by the Bundessozialgericht refers both to Article 28 of Regulation No 3, which applies to all Member States and to all categories of ‘assimilated periods’, and to Annex G (I) of this regulation, which particularly refers to certain periods assimilated to insurance periods by the legislation of the Federal Republic of Germany.

Since the provisions of Article 28 of Regulation No 3 do not clarify the concept of ‘assimilated periods’, reference must be made to Article 1 (r). The same holds good for the provisions of Article 27 to which Article 28 refers several times.

Article 1 (r) of Regulation No 3 provides that ‘for the purposes of this Regulation … the term “assimilated periods” means periods treated as insurance periods or, where applicable, as periods of employment, as defined in the legislation under which they were completed, in so far as they are regarded by the said legislation as being equivalent to insurance periods or periods of employment’. This double reference to national legislation sets forth very clearly the principle that the said regulation, in so far as it takes ‘assimilated periods’ into account, intends neither to modify nor supplement national law, provided that the latter observes the provisions of Articles 48 to 51 of the Treaty. In particular, the phrase ‘in so far as they are regarded … as being equivalent …’ shows that the regulation is also referring to the conditions under which national law will regard a given period as being equivalent to insurance periods properly so-called.

This interpretation is confirmed by the tenor of Annex G (I) which forms an integral part of Regulation No 3 under the terms of Article 50 thereof. In fact Annex G (I) (B) (1) provides that ‘In determining whether periods which under German legislation constitute periods of interruption (Ausfallzeiten) or supplementary periods (Zurechnungszeiten) must be taken into account as such, the contributions paid under the legislation of another Member State and affiliation to the pension insurance scheme of another Member State shall be assimilated to the contributions paid under German legislation and affiliation to the German pension insurance scheme’.

The expressions ‘periods of interruption’ and ‘supplementary periods’ mentioned in the said Annex G (I) (B) (1) correspond to terms employed by the German legislation to which this part of the Annex refers. This legislation distinguishes clearly between those two categories and the ‘Ersatzzeiten’ (substitute periods) in question. It is thus impossible to attribute to a mere oversight the fact that the authors of Annex G did not provide for the ‘substitute periods’ rules analogous to those which they made for the other above-mentioned categories of periods. This is all the more improbable since the Council has repeatedly considered the problem of the assimilated periods provided for by German legislation. In fact, although the original wording of Annex G (I) (B), which entered into force on 1 October 1958, only mentioned ‘supplementary periods’, the wording as amended by Article 6 of Regulation No 130/63/EEC of the Council, which entered into force on 28 December 1963, adds ‘periods of interruption’ thereto. Moreover, the German legislation in question only refers to specific situations before the entry into force of the Treaty, which cannot therefore have an adverse effect on the free movement of workers within the Common Market.

Taken together the foregoing grounds lead to the conclusion that the provisions of Article 28 of Regulation No 3 and Annex G thereto do not require the institutions of the Federal Republic of Germany to assimilate contributions paid under the legislation of another Member State to the contributions paid under German legislation in determining whether account must be taken of certain periods as ‘substitute periods’ (Ersatzzeiten) within the meaning of German law.

The costs incurred by the Government of the Federal Republic of Germany and by the Commission of the European Communities which submitted observations to the Court are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the IVth Senate of the Bundessozialgericht the decision on costs is a matter for that court.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the German Government and of the Commission of the EEC; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the EEC, especially Article 51; Having regard to the Protocol on the Statute of the Court of Justice of the EEC, particularly Article 20; Having regard to Regulation No 3 of the Council of the EEC concerning social security for migrant workers (Official Journal of 16 December 1958, p. 561 et seq.), especially Articles 1 (r), 27 and 28 together with Annex G (I); Having regard to Regulation No 130/63/EEC of the Council amending certain annexes to Regulation No 3 and Regulation No 4 (Official Journal of 28 December 1963, pp. 2996/63 et seq.), especially Article 6; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; THE COURT in answer to the question referred to it by the IVth Senate of the Bundessozialgericht, by an order of that court of 1 March 1967, hereby rules:

I Article 28 of Regulation No 3 of the Council of the EEC concerning social security for migrant workers, together with Annex G thereto, does not require the institutions of the Federal Republic of Germany to take into account a period completed under the legislation of another Member State in determining whether ‘substitute periods’ within the meaning of German legislation must be taken into account;

2 The decision on costs in the present proceedings is a matter for the IVth Senate of the Bundessozialgericht.