JUDGMENT OF 10. 11. 1971 — CASE 26/71 GROSS V CAISSE D'ASSURANCE VIEILLESSE DE STRASBOURG

In Case 26/71 Reference to the Court under Article 177 of the EEC Treaty by the Commission de Première Instance du Contentieux de la Sécurité Sociale et de la Mutualité Sociale Agricole du Bas-Rhin sitting in Strasbourg, for a preliminary ruling in the action pending before that court between

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

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure

Heinrich Gross, a German national born on 11 August 1904 and residing in Mullheim (Federal Republic of Germany), successively completed 145 quarterly insurance periods in Germany and 50 quarterly insurance periods in France.

On 30 April 1969 he submitted to the Bundesbahnversicherungsanstalt (Federal Railways Insurance Institution) in Karlsruhe a claim for the award of his entitlement under French old-age insurance

On 2 April 1970 he was informed of a decision of the Caisse Regionale d'Assurance Vieillesse des Travailleurs Salaries de Strasbourg, dated 15 December 1969, whereby he was granted the benefit of an old-age pension calculated in accordance with the French Code de la Sécurité Sociale and Articles 27 and 28 of Regulation No 3 concerning social security for migrant workers.

On 11 May 1970 Mr Gross applied to the Commission de Procedure Gracieuse et de Remise des Dettes of the Caisse Regionale d'Assurance Vieillesse des Travailleurs Salaries in Strasbourg contesting the application of Regulation No 3 to his case and requesting the award of his entidement on the sole basis of payments made by him in France.

The said Commission rejected his application by decision delivered on 29 June 1970 and notified to Mr Gross on 22 July 1970.

Mr Gross instituted proceedings against this decision on 5 September 1970 before the Commission de Première Instance du Contentieux de la Sécurité Sociale et de la Mutualité Sociale Agricole du Bas-Rhin in Strasbourg.

After hearing argument on 31 March 1971, the said Commission decided on 28 April 1971 to request the Court of Justice, in accordance with Article 177 of the EEC Treaty,

‘to give a preliminary ruling on the interpretation of the legal provisions relied on by the parties and, more particularly, to state whether, notwithstanding the rules in force (Articles 27 and 28 of Regulation No 3 and Article 51 of the Treaty of Rome), migrant workers must occupy a privileged position as compared with nationals of the State in which they are working.’

This decision was lodged at the Court Registry on 8 June 1971.

In accordance with Article 20 or the Protocol on the Statute of the Court of Justice of the EEC, written observations were lodged on 6 July 1971 by the plaintiff in the main action, on 21 July 1971 by the Commission of the European Communities and on 2 August 1971 by the defendant in the main action.

Having heard 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 presented its oral observations at the hearing on 6 October 1971.

The Advocate-General delivered his opinion on 13 October 1971.

In the procedure berore the Court, the plaintiff in the main action himself submitted observations, the defendant in the main action was represented by its Assistant Director, Paul Kuntz, and the Commission by its Legal Adviser, Italo Telchini.

II — Observations submitted to the Court

The written and oral observations submitted to the Court may be summarized as follows:

Heinrich Gross, the plaintiff in the main action, is of the opinion that the way in which the Caisse Régionale de Strasbourg has calculated his old-age pension conflicts with the principles of Community law on freedom of movement for workers. Instead of obtaining, like any French insured person, 50/120 of his pension, he was allowed, under Articles 27 and 28 of Regulation No 3, only a reduced amount of 50/195, which constituted an unjustified reduction of his acquired rights.

The Caisse Regionale d'Assurance Vieillesse des Travailleurs Salaries de Strasbourg, the defendant in the main action, points out that the fraction of the French pension payable to Mr Gross was awarded:

first, in accordance with the Order of 19 October 1945, which takes account of the average annual earnings over the previous 10 years of affiliation, of the percentage corresponding to the age reached at the date when the pension becomes payable and of the duration of insurance in France;

secondly, in accordance with Regulations Nos 3 and 4 concerning social security for migrant workers, which provide for the aggregation of insurance periods completed in two or more States of the Community, the determination of the amount for accounting purposes of the benefit to which the person concerned would be entitled if all his insurance periods had been completed exclusively under French legislation and the calculation of the French portion pro rata with the periods completed in France as compared with the total duration of insurance periods completed under the legislative systems of all the Member States concerned.

In pursuance of those provisions, account was taken of the following factors:

basic annual wage (average annual wage coresponding to the contributions paid during the last 10 years of insurance completed before the age of 60 or before the age taken as the basis for the award, if this method of calculation is more advantageous): FF 14866.19;

percentage (for insured persons who have contributed for at least 30 years the pension is equal to 20 % of the basic annual wage; where the insured person requests the award of his pension after the age of 60 this pension is increased by 4 % of the basic annual wage for each year after that age): 20 + (5 X 4) = 40 %;

the formula tor calculating the old-age pension acquired over 30 years is as follows: 14 866.19 × 40 100= FF 5 946.47;

on the basis of contributions paid in France alone the applicant could not claim the right to a full old-age pension, but having made contributions in respect of 145 quarterly insurance periods in Germany, in addition to the 50 quarterly insurance periods in France, he is entitled, under Article 27 (1) of Regulation No 3, to aggregation of the insurance periods completed in the two States (145 + 50 = 195 quarterly periods), which entitle him to receive an old-age pension in France.

under Article 28 (1) (b) of Regulation No 3 the amount payable by the French social security institution pro rata with the duration of insurance periods completed under French legislation as compared with the total duration of periods completed under French and German legislation is therefore, as from 1 September 1969: 5 946.47 × 50 195= FF 1 524.73.

Mr Gross wishes this reduction (50/195) to be limited to 50/120, in view of the fact that, in calculating old-age pensions, French legislation provides only for a maximum period of 30 years (120 quarterly periods).

This solution, which is more favourable to the plaintiff in the main action than that adopted by the Caisse, is unaceptable since it does not take account of Regulations Nos 3 and 4.

Article 51 of the EEC Treaty provides for aggregation of all periods taken into account under the different national legislative systems for the purpose both of acquiring and retaining the right to benefit and of calculating the amount of benefit. There is no reason to suppose that this rule enables aggregation to be foregone where it is not in the insured's interest or that it is intended to ensure that migrant workers are treated more favourably than nationals of the countries in which they are working. All international agreements give foreigners the same rights as nationals but they cannot put the former in a privileged position.

It also emerges from Article 27 and 28 of Regulation No 3 — adopted in pursuance of Article 51 of the Treaty — that aggregation of insurance periods completed in two or more Member States is obligatory and admits of no derogation. Despite what the Court has declared in its judgment of 5 July 1967 (Case 1/67, Stanislas Ciechelski v Caisse Régionale de Sécurité So ciale du Centre d'Orleans; reference for a preliminary ruling by the Chambre Sociale of the Cour d'Appel, Orleans; [1967] ECR 181) pro rata calculation cannot be excluded even where the insured person's right to benefit is acquired in pursuance of the legislation of a single Member State and there is no need to take account of periods completed in another State. Subparagraphs (f) and (g) of paragraph (1) and paragraph (3) of Article 28 of Regulation No 3 would be devoid of purpose if the award of the various benefits without aggregation were possible.

In this case, with regard to the possible limitation to 120 (instead of 195) for the purpose of the pro rata calculation, it must be observed that no legal text provides for this limitation, that it would lead, in certain cases, to the non-application of obligatory EEC regulations and that, in other cases, it would favour foreign nationals as compared with French nationals affiliated in France to two social security schemes.

The Commission of the European Communities points out that to be entitled in France to an old-age pension it is necessary to make contributions for a minimum of 15 years, in other words 60 quarterly periods. Failing this minimum, the insurance periods completed in pursuance of the legislation of two or more Member States must be aggregated. In this case, the Caisse Regionale made a correct application of the legal provisions in force since the person concerned would not have had any right to a pension without aggregation. In these circumstances, the observations made by the Caisse criticizing the judgment of the Court in Case 1/67 are not relevant.

Furthermore, the Commission points out that on 14 June 1971 the Council adopted Regulation No 1408 on the application of social security schemes to employed persons and their families moving within the Community (OJ L 149, p. 2). That regulation in particular repeals Regulation No 3 and will enter into force on the first day of the seventh month following publication in the Official Journal of the Communities of the implementing regulation referred to in Article 97 thereof. Article 46 (2) (c) is in the following terms:

If the total length or the insurance periods completed under the legislations of all the Member States concerned before the materialization of the risk is longer than the maximum period required by the legislation of one of these States for receipt of full benefit, the competent institution of that State shall, when applying the provisions of this paragraph, take into consideration this maximum period instead of the total length of the periods completed; this method of calculation must not result in the imposition on that institution of the costs of a benefit greater than the full benefit provided for by the legislation which it administers'.

On the entry into force of that provision Mr Gross will be entitled to require the Caisse Regionale to recalculate his pension according to the formula:

14866,19×40 100× 50 120

However, in view of the legal provisions at present applicable, the reply to the question put to the Court should be in the following terms:

where in a Member State the right to benefit only exists when account is taken of insurance periods completed under the legislation of other Member States, the competent institution of the first Member State is obliged to apply Articles 27 and 28 of Regulation No 3. For this reason, the position of the migrant worker is not more favourable than that of nationals of the country in which he is working.

Grounds of judgment

1. By decision of 28 April 1971, received at the Court on 8 June 1971, the (Commission de Premiere Instance du Contentieux de la Sécurité Sociale du Bas-Rhin submitted, under Article 177 of the EEC Treaty, a question relating to the interpretation of Articles 27 and 28 of Regulation No 3 of the Council concerning social security for migrant workers and of Article 51 of the EEC Treaty, in connexion with the method of determining old-age pensions.

2. It appears from the file that the plaintiff in the main action has been affiliated successively to German and French social insurance schemes, having completed 195 quarterly periods in this manner, 145 in Germany and 50 in France.

3. Whereas on the basis of periods completed in France alone he would only have been able to claim an ‘old-age annuity’ under Article L 336 of the French Code de la Sécurité Sociale, the Caisse Régionale d'Assurance Vieillesse des Travailleurs Salaries of Strasbourg granted him the benefit of an ‘old-age pension’ calculated under Article L 331 of the same Code, by applying the provisions of Articles 27 and 28 of Regulation No 3 relating to the aggregation and pro rata calculation of insurance periods.

4. The applicant submitted a complaint against this decision to the Commission de Procédure Gracieuse, disputing the application of Regulation No 3 and requesting that his rights be quantified by reference solely to payments made by him in France.

5. This complaint was rejected, whereupon he brought an action before the Commission de Première Instance du Contentieux de la Sécurité Sociale in which he confined his objection to the methods of calculation applied by the Caisse Regionale for the pro rata calculation of his pension under Article 28 of Regulation No 3.

6. It appears from these facts that the question of interpretation raised by the Commission de Première Instance concerns the applicability of Articles 27 and 28 of Regulation No 3 to the case of a worker who, whilst entitled to a social security benefit under the legislation of the State concerned, does not however fulfil the conditions required by that legislation for entitlement to a benefit of a more advantageous kind.

7. Furthermore, it is necessary in order to answer the question referred to consider which methods of calculation are applicable under Article 28 of Regulation No 3 where the total of insurance periods completed by a worker in the Community as a whole exceeds the total of the periods taken into account by national legislation for the grant of full benefit.

8. Article 27 of Regulation No 3 provides, in accordance with Article 51 of the EEC Treaty, that where an insured person has been successively subject to the legislation of two or more Member States the insurance periods shall be aggregated for the purpose of the acquisition of the right to benefits.

9. Where the legislation of a Member State provides for old-age benefits of different kinds, depending on the period of affiliation, the principle of aggregation laid down in Article 27 is applicable wherever a worker has not completed, under the relevant legislation, the periods necessary to entitle him to benefit of the more advantageous kind.

10. Consequently, where there is aggregation, the calculation of the benefit must be made in accordance with the rules contained in Article 28 Regulation No 3.

11. Under Article 28 (1) (b) the institution shall determine the amount due ‘pro rata with the length of the periods completed’ under its own legislation ‘as compared with the total length of the periods completed under the legislation of all the Member States concerned’.

12. It follows from this that, for the purpose of calculating the fraction of the benefit to be borne by the relevant institution, account must be taken of all periods in fact ‘completed’ and not merely those representing the total required for the grant of full benefit.

Costs

13. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable.

14. 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 Commission de Premiere Instance du Contentieux de la Sécurité Sociale et de la Mutualite Sociale Agricole du Bas-Rhin, costs are 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 Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 51 and 177; Having regard to Regulation No 3 of the Council concerning social security for migrant workers, especially Articles 27 and 28; Having regard to the Protocol on the Statute of the Court of Justice of the European Communities, 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 question referred to it by the Commission de Première Instance du Contentieux de la Sécurité Sociale et de la Mutualité Sociale Agricole du Bas-Rhin by decision of 28 April 1971, hereby rules:

1 Where the legislation of a Member State provides for old-age benefits of different kinds, depending on the length of time for which the worker concerned has been affiliated, insurance periods completed successively or alternately under the legislation of two or more Member States must be aggregated wherever the worker has not completed the number of periods necessary under the legislation of the first State to entitle him to benefit of the more advantageous kind.

2 Where aggregation is necessary, for the purpose of calculating the fraction of the benefit to be borne by the relevant institution account must be taken of the periods in fact completed by the worker concerned, and not merely those representing the total required in the State in question for entitlement to full benefit.