JUDGMENT OF 30. 11. 1967 — CASE 18/67 PAGOTTO v OFFICE NATIONAL DES PENSIONS

In Case 18/67 Reference to the Court under Article 177 of the EEC Treaty by the Belgian Conseil d'État for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, A. M. Donner, President of Chamber, A. Trabucchi (Rapporteur), R. Monaco and J. Mertens de Wilmars, Judges, Advocate-General: R. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure

The facts may be summarized as follows :

Mrs Pagotto, the plaintiff in the main action, is the widow of a worker who died on 17 July 1960 having been insured as a wage-earner in Italy, Germany and Belgium.

With regard to Belgium, Mrs Pagotto made an application for a pension to the Office National des Pensions pour Ouvriers (National Workers' Pensions Office), which was refused by a ministerial decision of 12 February 1963.

On appeal by Mrs Pagotto, the Commission d'Appel Spéciale (Special Appeals Commission) recognized that the insured person had worked in Belgium for eight years (1927, 1940 to 1945 and 1959) and by a decision of 10 July 1964 granted to Mrs Pagotto a survivor's pension of BF 5189. The Commission took as the basis of its calculation an annual pension of BF 18450 corresponding to those eight years but based its calculation on only half that figure, in application of Article 13 (2) of the Belgian Law of 21 May 1955, relating to retirement and survivors' pensions, and of Article 11 of the Royal Decree of 17 June 1955, implementing that Law, on the ground that the de ceased had not — even by aggregation — been employed for at least half of the period from 1 January 1926 to the date of death.

Furthermore, on the basis or Article 13 (l)(c) of Regulation No 4 of the Council, the Commission d'Appel deducted from those eight years, or 96 months, the 42 months of insurance in Germany which the deceased had effected during assimilated insurance periods in Belgium and thus awarded 54/96ths of a Belgian pension corresponding to eight years of insurance in Belgium.

Following an appeal against this decision by the Office National des Pensions pour Ouvriers, the Commission Supérieure des Pensions on 27 May 1966 revised the contested decision and awarded Mrs Pagotto a survivor's pension of BF 1085. This reduction in the amount payable by the Belgian institutions is due essentially to the fact that, for reasons pertaining to the Belgian legislation, the number of years of insurance which the deceased was recognized to have completed was reduced to two (1927 and 1959).

The Commission Supérieure considered, moreover, that the amount of the pension should be calculated in accordance with Article 28 (1)(b) of Regulation No 3 of the Council of the EEC, by virtue of which Belgian legislation is applicable; that, in accordance with the terms of Article 8 of the Law of 21 May 1955 and of Article 6 of the Royal Decree of 17 June 1955, referred to above, the reference period must be determined (by the year and not by the month, as had been done by the Commission d'Appel Spéciale; that the rule for conversion of insurance periods under domestic legislation into insurance periods under the legislation of another country is determined by the provisions of Article 13 of Regulation No 4; and that, in calculating the pro rata fraction for Belgium by the month and not by the calendar year, the said Commission d'Appel incorrecdy applied Article 13. The plaintiff requested the Belgian Conseil d'Etat to annul this decision by taking into account, by way of Belgian insurance, 449 weekly contributions, being equivalent to eight years and seven and a half months.

The plaintiff relied, inter alia, on the provisions of Article 13 (4) of Regulation No 4. In this connexion, she referred to the judgment of 25 June 1965 of the Commission Supérieure des Pensions in the Guissart case, which allowed the conversion of insurance periods according to the above-mentioned provisions to the unit of calculation in the country taking the smallest unit.

As the Belgian Conseil d'État considered that the calculation of the periods to be taken into account in determining the working life of the deceased depends on the unit of time used in this connexion and that this entailed an interpretation of Article 28 (1)(b) of Regulation No 3, on which the parties were opposed, it suspended proceedings by order of 11 May 1967 and referred to the Court of Justice of the European Communities the following questions:

‘When applying Regulation No 3, should the denominator of the fraction used in pro rata calculations be determined by reference to the same unit of time in every country in which the insured person has completed insurance periods? If the answer is in the affirmative, what should that unit be?’

In its order making the reference, the Belgian Conseil d'État considers that Article 13 (4) of Regulation No 4 of the Council of the EEC establishes the method of conversion of insurance periods completed under the legislation of one Member State into insurance periods within the meaning of the legislation of other Member States, but that this provision goes no further.

The above-mentioned request was received at the Court Registry on 19 May 1967. Only the Commission of the European Communities submitted a statement of case (on 27 July 1967) under Article 20 of the Statute of the Court annexed to the EEC Treaty.

During the oral procedure the Commission of the EEC presented its explanations in further detail.

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

II — Observations submitted under Article 20 of the Statute of the Court

The observations of the Commission may be summarized as follows:

1. The Belgian Conseil d'Etat poses the question how annual insurance periods, as calculated under the Belgian Law, may be inserted into the total period of employment of a worker who has effected insurance periods in a country (in this case Germany) in which the unit of computation in respect of the insurance period to be taken into account is one month. In order to resolve this problem, two points must be taken into account, first that the insurance period of one year used by Belgian legislation may in reality correspond to periods of actually less than one year (down to a minimum of 185 days) in the working life of the person insured, and secondly that during the same calendar year the worker may have been employed for a certain time in another Member State. The Commission makes a distinction between calendar years during which the worker is subject to Belgian legislation alone and those during which he is also subject to the legislation of other Member States. (a) In the first case, there is here no question of interpretation relating to Community law. In this connexion, in fact, there is no necessity to take a unit of time other than the insurance years, which can if necessary be converted into the smallest common unit of time, in accordance with the provisions of Article 13 (4) of Regulation No 4 of the Council of the EEC. In this case, when the person concerned has completed in Belgium the 185 working days required under Belgian legislation, the insurance period to be taken into account is one year. To take into account not the insurance year (12 months) but the actual lesser period would lead to a modification of Belgian legislation, which would be incompatible with Article 51 of the EEC Treaty. (b) In the second case, no insurance period can be taken into account by Belgian legislation where, on aggregation, in the same calendar year, of the periods completed in Belgium and those completed in other States, the person concerned does not complete the 185 days of insurance required by Belgian legislation. However, when a worker has completed the 185 days required under Belgian legislation, either in Belgium alone or by aggregation, the situation is as follows: (a) In order to determine the benefit to which the person concerned would have been entitled if he had spent his whole working life in Belgium (calculation for accounting purposes) it is appropriate to take into account the total number of years thus obtained. Each calendar year during which at least 185 days have been aggregated must be considered as a complete year. (b) For the pro rata calculation, if recourse to a period completed in another Member State has been necessary in order to reach the required 185 days and to cause a Belgian period of one year to start to run, that period of one year must be calculated pro rata. On the other hand, when a worker, while completing solely under Belgian legislation the required 185 days, has also worked in another country in the same calendar year, the Commission wonders whether the complete year should be taken into account or whether, on the contrary, it should be calculated pro rata by using the number of actual months completed in Belgium as the denominator. As the worker has completed periods abroad in respect of which he receives a fraction of the pension, to grant him a fraction of the Belgian pension covering a year would, according to the Commission, be tantamount to granting him a benefit relating to periods which have already been taken into account in calculating the amount of the benefits paid by the competent institutions of another State, which has been precluded by the Court in its judgment in Case 1/67. Finally, where the person concerned has completed 185 days in Belgium but has worked for less than one year in all in the two countries in question, for example eight months in Belgium and two months in Germany, the Commission considers that it is necessary to take as the numerator the full unit less any periods actually completed in the other country. In this case, the Commission stated in its oral observations, however, that the only question of interpretation of Community law with which the national court is faced is how, if the six years of war (1940 to 1945) are to be considered, the actual insurance periods which the person concerned completed in Germany during those years should be taken into account and, more particularly, how the periods in Germany should be deducted from the periods in Belgium. In this connexion the Commission of the EEC supports the method followed by the Commission d'Appel, namely the conversion of the insurance period completed in Belgium into months (8 years = 96 months) and the deduction from that figure of the number of actual months' insurance completed in Germany during the same period.

Grounds of judgment

Referring in general terms to the interpretation of Regulation No 3 of the Council of the EEC, the Belgian Conseil d'Etat poses the question whether the denominator of the fraction for the pro rata calculation of a benefit should be determined on the basis of the same unit of time in all the Member States in which the insured person has completed insurance periods, and what, if the answer should be in the affirmative, that unit should be. In its statement of the reasons for the reference to the Court of Justice, the Conseil d'Etat mentions in particular that the parties are in disagreement on points of law as regards the interpretation of Article 28 (1) (b) of the said regulation.

It does not appear from the factors taken into account by the national court and forming the legal framework of the question that that question has been formulated with a view to an aggregation of the periods.

However, the main question raised in this case in respect of the interpretation of Community regulations concerning social security for migrant workers bears upon the way in which insurance periods must be counted to determine the pension of a worker who has been employed in different countries when the units used in those countries for such calculations are different. The necessity to make use of homogeneous units for such computation purposes must be reconciled with the requirement that the reference unit adopted by any Member State to assess insurance periods in that State should be respected. This requirement means in particular that, for the purposes of establishing the right to a pension in one Member State and of determining the amount thereof, it is not possible to take into account insurance periods completed in that State, which, even after aggregation with periods completed in other Member States within each relevant unit of time, are shorter than the period adopted by the legislation of the first State.

But this requirement cannot rule out the possibility of converting this period into another unit of time, for the purposes of compensatory calculations necessary to avoid duplication of one and the same period, which is theoretical in respect of one Member State but has actually been completed in another Member State, such period being, however, counted in different units of time.

Therefore, the fraction used in such a case for pro rata calculations should have its denominator and numerator determined according to the same unit of time for all the countries concerned, and this unit of time must be that of the State having the shortest insurance period, when this period is a fraction of the other period. Otherwise, this unit must be a multiple common to the various units of time in question.

Costs

The costs incurred by the Commission of the EEC which has submitted observations to the Court are not recoverable and as these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the Belgian Conseil d'État, the decision as to 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 observations of the Commission of the European Economic Community; Upon hearing the opinion of the Advocate-General; Having regard to Regulations Nos 3 and 4 of the Council of the European Economic Community, concerning social security for migrant workers; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community; 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 Belgian Conseil d'État (Section d'Administration, VIth Chamber) by order of that court of 11 May 1967, hereby rules:

1 When periods assimilated to insurance periods under the legislation of one Member State overlap insurance periods actually completed in another State and giving a right in that State to a pension, and when the units of time adopted by the legislation of these States are different, it is necessary, as regards both the denominator and the numerator of the fraction for pro rata calculations, to convert these units into the smallest of the units of time adopted by the States concerned when this smallest unit is a fraction of the other, or, in default thereof, to convert these units into a common multiple;

2 It is for the Belgian Conseil d'Etat to decide on costs in the present case.