JUDGMENT OF 17. 6. 1970 — CASE 3/70 CAISSE DE COMPENSATION v DI BELLA

In Case 3/70 Reference to the Court under Article 177 of the EEC Treaty by the conseil de prud'hommes d'appel de Mons (Mons Arbitration Appeal Tribunal) (Belgium) for a preliminary ruling in the action pending before that court between

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

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure

Mr Vincenzo Beninato, a worker of Italian nationality, was insured in Italy for a period of eight weeks between 1 September 1943 and 31 July 1944, and subsequently in Belgium, where he worked in the coal-fields for more than ten years until he was retired on an invalidity pension on 1 June 1959.

The pension was payable solely by the Belgian social security authorities.

Mr Beninato died on 19 January 1962 at the age of 38 and his widow, Francesca (née Di Bella), residing in Catania (Italy), was awarded a survivor's pension payable by the Fonds national de retraite des ouvriers mineurs (National Pension Fund for Mineworkers), Caisse de prévoyance de Mons (Mons Social Security Fund).

In a decision of which Mrs Beninato was informed on 31 December 1965, the Caisse de compensation pour allocations familiales des Charbonnages du Couchant de Mons dismissed a claim for the grant of family allowances in respect of a child whom she was bringing up.

The Caisse based its refusal on the fact that under Article 42 (6) of Regulation No 3, as amended as from 1 February 1964 by Regulation No 1/64, family allowances were payable in accordance with the Italian legislation and had to be borne by the institutions of that country.

On appeal by Mrs Beninato, the Conseil de prud'hommes de première instance de Mons, Chambre pour ouvriers (Mons Arbitration Tribunal of first instance, Manual Workers' Division) upheld the application for family allowances in a decision of 30 January 1969.

The Caisse de compensation appealed against this decision on 11 March 1969 and, by judgment of 15 November 1969, the Conseil de prud'hommes d'appel de Mons decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling on the interpretation of the phrase ‘came under the legislation’ appearing in Article 42 (6) (a) of Regulation No 3 concerning social security for migrant workers (as amended by Regulation No 1/64).

1) Is this phrase to be understood to mean that a deceased worker must be regarded as having come under the legislation only if he has satisfied the conditions under which he or his dependants may acquire the right in question?

2) When the orphan permanently resides in the territory of a Member State in which the deceased worker has completed insufficient insurance periods to entitle him to the benefits provided for in the legislation of the country of permanent residence, is the competent institution in the country from which the pension is due required to pay the family allowances to the dependants?

The judgment of the Conseil de prud'hommes d'appel de Mons was received at the Court Registry on 16 January 1970.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted by the Commission of the European Communities on 23 March 1970 and by the Government of the Italian Republic on 10 April 1970.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided to open the oral procedure without any preparatory inquiry.

The Commission and the Government of the Italian Republic submitted their oral observations at the hearing on 5 May 1970. The Advocate-General delivered his opinion at the hearing on 14 May 1970.

II — Observations submitted to the Court

The Commission's main observations are as follows:

The questions referred to the Court of Justice for interpretation arise out of the amendment to the text of Article 42 of Regulation No 3.

The Article originally read ‘Where the legislation of the competent country provides, in the event of the wage-earner's death, for family allowances for the children, entitlement to such allowances shall likewise extend to children who are permanently resident or are being brought up in the territory of another Member State …’.

As the Belgian legislation provided for the grant of family allowances in favour of the children on the death of a wage-earner, the present case could have been settled without further difficulties by the application of the former Article 42 of Regulation No 3 in conjunction with the former Article 69 of Regulation No 4.

Regulation No 1/64 of the Council of 1 February 1964 amended Article 42 of Regulation No 3; paragraph (6) of Article 42 as amended reads :

‘Where the death of a paid worker or assimilated worker, does not open entitlement to a pension in respect of industrial accidents or occupational disease pursuant to the legislation of a Member State, granting of family allowances in respect of his children is governed by the following rules : (a) if the deceased worker came under the legislation of a single Member State and if the orphan permanently resides or is being brought up in the territory of another Member State, family allowances are due in accordance with the legislation of the former Member State as though the orphan permanently resided or was being brought up in that country; (b) if the deceased worker came under the legislation of several Member States and: (i) if the orphan permanently resides or is being brought up in the territory of one of these States, family allowances are due in accordance with the legislation of that Member State; …’.

A purely literal application of Article 42 (6) (b), such as that put forward by the Caisse de compensation pour allocations familiales des Charbonnages du Couchant de Mons, would result in a refusal to pay the additional pension in favour of the orphan which, in Italy, takes the place of family allowances. Mr Beninato had only been insured in Italy for eight weeks and thus had not completed the minimum of six months' insurance required under the Italian legislation. Moreover, even if the right to a proportion of a pension in respect of an orphan was acquired under the Italian legislation by aggregating the insurance periods completed by Mr Beninato in Belgium and in Italy in accordance with the provisions of Article 27 of Regulation No 3, such proportion would not be paid by reason of the provisions of Article 28 (2) of Regulation No 4 which provides that ‘If the insurance periods and assimilated periods, completed under the legislation of one Member State, do not together total six months no benefit shall be granted under the said legislation’.

Such a conclusion would be a complete contradiction of the spirit of Regulation No 1/64. The purpose of this Regulation cannot be to deprive those concerned of benefits to which they might have been entitled if the deceased worker had been subject to the legislation of a single Member State; there is thus a gap in the present scheme.

In these circumstances the only solution within the spirit and objectives of the Treaty and of Regulation No 3 would be to accept that, where an insurance period is not taken into consideration for the grant of a proportionate amount of a pension under Article 28 (2) of Regulation No 4, such period has not been completed in the State in question within the meaning of Article 42 (6) of Regulation No 3. The phrase ‘came under the legislation’ used in Article 42 (6) (a) of Regulation No 3 is thus to be interpreted to mean that the deceased worked must only be regarded as having ‘come under the legislation’ if he has satisfied the conditions under which his dependants may acquire the right in question. However, this interpretation cannot be applied in a general way to the other provisions of Regulation No 3 in which the same phrase is used.

The. main observations submitted by the Government of the Italian Republic are as follows:

For the purposes of the interpretation of paragraph (6) of Article 42 of Regulation No 3, it is necessary to consider this paragraph in the context of the Article as a whole.

It follows from the first four paragraphs of Article 42 that, in. determining from which State the family allowances are due to the persons entitled to a pension, a distinction must be made according to whether this pension is payable by virtue of the legislation of a single Member State or, on the other hand, by virtue of the legislation of several Member States. In the second, case, the fact of residence in a particular State might result in a change in the competent authority for the payment of family allowances from one country to another.

Paragraph (5) makes a departure from this system, in that the place of permanent residence of the orphan has no bearing on the question which is the competent authority for payment.

On the other hand, paragraph (6) applies a criterion which is to a large extent similar to that contained in paragraphs (1) to (4), in that it makes a distinction according to whether the deceased worker involved came under the legislation of a single Member State (subparagraph (a)) or under the legislation of several Member States (subparagraph (b)).

If Article 42 is taken as a whole the only logical interpretation of paragraph (6) (a) is as follows :

A worker may only be regarded as having come under the legislation of another Member State if he has in fact worked in that State during the minimum period necessary to give rise to the legal consequences inherent in matters of social security.

Paragraphs (1) and (2) which, to a certain extent, might be regarded as parallel to paragraph (6) (a) and (b), use the phrase ‘pension due in pursuance of the legislation …’, which thus shows that the situation envisaged is one in which the conditions for acquiring the right are satisfied. It is in this sense that the phrase ‘came under the legislation …’ used in paragraph (6) must be interpreted. A worker who has been employed for a certain period cannot be regarded as coming under particular legislation by reason of his employment if that employment is unaffected by such legislation. This interpretation expressly agrees with Article 28 (2) of Regulation No 4.

Moreover, any different interpretation of Article 42 (6) of Regulation No 3 would lead to the creation of a legal vacuum. It is inconceivable that Regulation No 3, which was adopted in order to coordinate the national laws of each Member State, intended, in the difficult matter of family allowances in respect of minor children of deceased workers, to provide that no Member State should be liable to pay such allowances although the worker had been employed within the Community.

Grounds of judgment

1. By judgment of 15 November 1969, received at the Court Registry on 16 January 1970, the Conseil de prud'hommes d'appel de Mons submitted the following questions to the Court under Article 177 of the EEC Treaty for a preliminary ruling on the interpretation of the phrase ‘came under the legislation’ contained in Article 42 (6) (a) of Regulation No 3 concerning social security for migrant workers, as amended in accordance with Article 1 of Regulation No 1/64 EEC of the Council: 1. ‘Is this phrase to be understood to mean that a deceased worker must be regarded as having come under the legislation only if he has satisfied the conditions under which he or his dependants may acquire the right in question?’ 2. ‘When the orphan permanently resides in the territory of a Member State in which the deceased worker has completed insufficient insurance periods to entitle him to the benefits provided for in the legislation of the country of permanent residence, is the competent institution in the country from which the pension is due required to pay the family allowances to the dependants?’

2. By virtue of Article 42 (6) of Regulation No 3, in the event of the death of a wage-earner, which does not open entitlement to a pension in respect of industrial accidents or occupational disease pursuant to the legislation of a Member State, the granting of family allowances in respect of his children is governed differently according to whether the deceased worker came under the legislation of a single Member State or of several Member States.

3. If the deceased worker came under the legislation of a single Member State and if the orphan permanently resides or is being brought up in the territory of another Member State, family allowances are due in accordance with legislation of the former Member State as though the orphan permanently resided or were being brought up in that country.

4. If the deceased worker was subject to the legislation of several Member States and if the orphan permanently resides or is being brought up in the territory of one of these States, family allowances are due in accordance with the legislation of that Member State.

5. The special feature of the legal situation which gave rise to the decision to refer the case for a ruling is that the deceased worker was successively employed and insured in Italy and in Belgium.

6. However, the insurance period completed under the Italian legislation was less than the minimum of six months necessary for the acquisition of any right at all and the situation cannot be remedied by calling in aid the principle of aggregation.

7. In fact, as the Italian legislation provides for the allowances in question to be paid in respect of the orphan of a worker in the form of supplements or increases in the widow's pension, Article 28 (2) of Regulation No 4 is applicable.

8. As regards survivor's pensions, that provision stipulates that 8 ‘If the insurance periods … completed under the legislation of one Member State do not together total six months no benefit shall be granted under the said legislation’ and thus excludes any possibility of aggregation.

9. The main point of the questions put by the Conseil de prud'hommes d'appel de Mons is therefore whether the phrase ‘came under the legislation’ used in Article 42 (6) of Regulation No 3 can refer to the legislation of a Member State which when applied has no effect on the acquisition of a right to benefits.

10. The problem of interpretation thus raised can only be resolved in the light of the objectives of the provisions of Articles 48 to 51 of the Treaty, which form the basis of Regulation No 3.

11. Those provisions, the purpose of which is to ensure that the migrant worker and his dependants obtain the benefits which correspond to the various periods of employment and insurance completed by him, do not allow Regulation No 3 to be interpreted in such a way as to deprive those concerned of certain benefits by reason of their place of permanent residence.

12. As regards in particular the system established by Article 42 (6): to take into account not only legislation under which the deceased worker completed the main part of his career for social security purposes but also other legislation to which he was temporarily subject without its having any possible practical effects for him, would amount to depriving an orphan residing permanently in the territory of this latter State of any family allowance in the absence of any right to benefit to which such allowance could be attached.

13. Such a result would be contrary to the purpose of Articles 48 to 51 of the Treaty and in particular to the object of Article 42 (6) of Regulation No 3 which is to ensure in all circumstances the payment of family allowances which correspond to insurance periods completed by the deceased worker in one or more Member States, whatever the place of permanent residence of his dependants.

14. It follows from this that in the context of Article 42 (6) the phrase ‘came under the legislation’ must be interpreted in such a way as to prevent the taking into account of any legislation which cannot lead to the acquisition of a right.

15. The reply to the first question must therefore be that the phrase ‘came under the legislation’ in Article 42 (6) (a) of Regulation No 3 must be understood to mean that a deceased worker must not be regarded as having come under the legislation unless he has in fact satisfied the conditions under which he or his dependants may acquire the right in question.

16. The reply to the second question must therefore be that where an orphan permanently resides in the territory of a Member State in which the deceased worker completed insufficient insurance periods to acquire a right to the benefits provided for by the legislation of the country of permanent residence, the competent institution of the country from which the pension is due, is required to pay the family allowances to the dependants.

Costs

17. The costs incurred by the Commission of the European Communities and the Government of the Italian Republic, which have 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, in the nature of a step in the action pending before the Conseil de prud'hommes d'appel de Mons, 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 Communities and of the Government of the Italian Republic; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 48 to 51 and 177; Having regard to Regulation No 3 of the Council concerning social security for migrant workers, as amended by Regulation No 1/64 of the Council of 18 December 1963, especially Articles 27 and 42; Having regard to Regulation No 4 of the Council on implementing procedures and supplementary provisions in respect of Regulation No 3, especially Article 28 (2); Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, THE COURT in answer to the questions referred to it by the Conseil de prud'hommes d'appel de Mons by judgment of 15 November 1969, hereby rules:

1 The phrase ‘came under the legislation’ in Article 42 (6) (a) of Regulation No 3 must be understood to mean that a deceased worker must not be regarded as having come under the legislation unless he has in fact satisfied the conditions under which he or his dependants may acquire the right in question;

2 Where an orphan permanently resides in the territory of a Member State in which the deceased worker insufficient insurance periods to acquire a right to the benefits provided for by the legislation of the country of permanent residence, the competent institution of the country from which the pension is due is required to pay the family allowances to the dependants.