JUDGMENT OF 13. 10. 1977 — CASE 112/76 MANZONI v FNROM

In Case 112/76 Reference to the Court under Article 177 of the EEC Treaty by the Tribunal du Travail (Labour Tribunal), Charleroi, for a preliminary ruling in the action pending before that court between

THE COURT, composed of: H. Kutscher, President, M. Sørensen and G. Bosco, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe and A. Touffait, Judges, Advocate-General: J.-P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and issues

The facts, procedure and the written observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:

I — Facts and procedure

Mr Manzoni, an Italian national, was employed in Italy from 24 September 1944 to 31 July 1950, that is for 244 weeks, and as an underground worker in the mines in Belgium from 1952 to 28 May 1972, that is for more than 20 years. He stopped work at the latter date for health reasons. On the basis of his work in Belgium he was granted by the defendant in the main action (hereinafter referred to as ‘the FNROM’) an invalidity pension from 1 December 1972. Later he was granted by the Italian institution a right to a proportionate pension with effect from 1 December 1972 on the basis of his employment in Italy.

The FNROM then reviewed the plaintiffs case; by decision notified on 12 December 1975, applying Article 46 (3) of Regulation No 1408/71, it reduced the amount of the invalidity pension paid since 1 December 1972 by the amount of the apportioned Italian pension and further claimed repayment of the amount over-paid of BF 12523.

Relying on the judgment of the Court of 21 October 1975 in Case 24/75 (Petroni, [1975] ECR 1149), which ruled that Article 46 (3) of Regulation No 1408/71 is incompatible with Article 51 of the EEC Treaty to the extent to which it imposes a limitation on the overlapping of two benefits by a reduction in the amount of a benefit acquired under national legislation alone, Mr Manzoni brought an action against the decision of the FNROM before the Tribunal du Travail, Charleroi.

The Italian legislation relating to invalidity is of Type B, that is to say, such that the amount of pension varies according to the duration of the insurance periods. It requires, moreover, a minimum insurance cover of five years and at least 260 weekly contributions as regards general invalidity and one year and at least 52 weekly contributions as regards occupational invalidity (apart from accident at work).

On the other hand, the Belgian legislation is of Type A, that is to say, such that the amount of the pension does not depend on the duration of the insurance periods. Nevertheless, the Belgian legislation on the special invalidity scheme for mineworkers is not strictly speaking based on risk, as is, for example, the Netherlands legislation. Article 1 (2) of the Royal Decree of 19 November 1970 stipulates that the invalidity pension shall be granted to a worker who has been employed for a minimum of ten years in the mines.

According to the court making the reference the invalidity pension granted in Belgium after ten years' employment as a mineworker (underground or surface worker), or five years underground in the case of pneumoconiosis, corresponds to a full working life of 30 years as a mineworker. Accordingly, there is in the case at issue in the main action a duplication of insurance periods for the grant of a benefit of the same kind capable of leading to an undue advantage.

Taking the view that the case concerns an invalidity pension, the grant of which is subject to different criteria from those relating to the retirement pension in question in the aforementioned judgment in the Petroni case, the Tribunal du Travail, Charleroi, by order dated 18 November 1976, stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty:

1) If the pension paid by the Belgian State under the present invalidity pension scheme for mineworkers established by the Royal Decree of 19 November 1970 and subsequent amending decrees is reduced on the basis of Article 46 (3) of Regulation (EEC) No 1408/71 by reason of the benefits paid by other Member States, is such reduction in accordance with Article 51 of the Treaty of Rome?

2) Are the competent institutions entitled to reduce benefits payable by them by applying Article 46 (3), where the overlapping of the benefits awarded by the various Member States results in the grant of benefits on the basis of duplicated insurance periods?

The judgment of the Tribunal du Travail, Charleroi, was received at the Court on 25 November 1976.

After 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.

II — Summary of written observations submitted to the Court under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

The plaintiff in the main action observes first of all that, contrary to what the judgment making the reference states, the Belgian invalidity pension under the mineworkers' scheme payable after 10 years' work does not correspond to that payable after a full working life of 30 years in the mines. Under Article 1 (2) of the Royal Decree of 19 November 1970 a period of 10 years is the minimum and maximum duration of insurance periods taken into account for entitlement to full benefit. The reference to a working life of 30 years was to be found in Article 13 of the Royal Decree of 28 May 1958 (repealed on 1 November 1970), which provided that ‘the retirement or invalidity pension … may be aggregated with one or more pensions granted under one or more other retirement or invalidity pension schemes only up to the amount of the retirement pension provided for in respect of 30 years' employment as an underground worker’. If the Belgian legislature had wished to maintain this ceiling on aggregation it would have had to provide for the preliminary calculation of the amount of the theoretical retirement pension payable in respect of 30 years' employment as a mineworker to a claimant of an invalidity pension coming under the rules for aggregation. There is no provision on this subject. The only limitation on aggregation is that at present laid down by Article 23 (1) of the Royal Decree of 19 November 1970 according to which ‘an invalidity pension granted under the present decree may be aggregated with one or more retirement or invalidity pensions only up to the annual amount of the pension laid down in Article 4 (1) …’, that is to say, up to the amount of the full pension due after ten years' employment as a mineworker. That provision makes no reference to pensions granted by another State under the European regulations or a bilateral convention.

The plaintiffs working life spent in Italy and Belgium shows that the Belgian insurance periods do not duplicate the Italian insurance periods. Duplication of insurance periods is possible only where there is aggregation, and the right to the Belgian pension arose in this case by reason of the periods of work in Belgium alone. The periods of work completed in Italy outside the mining industry could not be aggregated with the Belgian periods to determine the right to the Belgian pension if aggregation were necessary, for they were periods coming under two different schemes (Article 38 (2) of Regulation No 1408/71).

As for the compatibility of Article 46 (3) with Article 51 of the Treaty, it appears obvious that the interpretation already given by the Court of the provision in question applies also to the invalidity pension scheme. It follows, moreover, from the judgment in Case 140/73, Mancuso ([1973] II ECR 1449), although given in a case arising under the old Regulations Nos 3 and 4, that the provisions in relation to old age pensions and death benefits apply by analogy to the payment of invalidity benefits.

The FNROM takes the view that the effect of the limitation provided for in Article 46 (3) of Regulation No 1408/71 is not to place migrant workers at a disadvantage but to avoid. putting them in too privileged a position. The limitation in question is not an obstacle to the principle of equality of treatment between migrant and non-migrant workers, but, on the contrary, gives it the very widest scope by guaranteeing as the amount of the benefit the highest theoretical amount which the person concerned can claim from amongst the theoretical amounts provided for by the national legislations to which he has been subject. From this point of view Article 46 (3) of Regulation No 1408/71 is not incompatible with Article 51 of the Treaty in relation to its application to cases of invalidity pension for mineworkers, for it gives migrant workers the most advantageous pension scheme and the one which is the most compatible with the principle of equality of treatment.

The aforementioned judgment in Petroni was given in a case of retirement pension where the decisive criteria differ fundamentally from those of invalidity pensions for mineworkers. Having regard to the flat-rate nature of such pensions the application of the judgment in Petroni would contradict one of its grounds, namely that the method which it recognizes cannot lead to an overlapping of benefits for one and the same period. In respect of the 30 years prior to the date on which the Belgian invalidity pension took effect, 1 December 1972, the plaintiff receives both a Belgian invalidity pension granted by reason of employment in Belgium from 1952 to 1972 and an Italian invalidity pension granted by reason of employment in Italy from 1944 to 1950. There is thus an overlapping of benefits for one and the same period.

The Belgian Government observes that in the judgment in Petroni the Court decided that the principle of Article 51 of the Treaty implies that the regulation must establish rules for co-ordination without their leading to unjustified overlapping. Since the generalized use of apportionment was excluded by the Court, the Council, in Regulation No 1408/71, evolved two systems for calculating pensions, one based on the simple application of national legislation and the other derived from the system of aggregation and apportionment already provided for in the former Regulation No 3. When the right to benefit depends on aggregation of the insurance or residence periods the pension granted by a national institution is calculated solely according to the duration of the insurance periods completed under the legislation of the country where the institution has its seat. Since a worker can be subject only to the legislation of one Member State the total of the periods of insurance (or of residence) to be taken into account cannot exceed the duration of the longest complete working life laid down by a legislation to which the worker has been subject. Article 46 (2) of Regulation No 1408/71 thus lays down a system for calculating benefits avoiding unjustified overlapping and respecting the principle of equality of treatment before the law, since the non-migrant worker is not placed at a disadvantage in relation to the migrant worker. When the right arises without recourse to aggregation, apportionment is prohibited. In the case of invalidity, where the worker has been employed in two or more countries of Type A, this difficulty is resolved by the fact that the worker is entitled only to the invalidity pension from the country in which he fell ill. But in the case where the first subparagraph of Article 46 (1) applies the provision of Article 46 (3) introduces a just solution by guaranteeing the worker the highest theoretical amount. This rule likewise respects the principle of non-discrimination since non-migrant workers can never obtain a benefit higher than that granted in respect of a full working life.

If Article 46 (3) is incompatible with Article 51 of the Treaty it is also incompatible with Article 12 of Regulation No 1408/71 and with the principle of equality of treatment proclaimed in Articles 7 and 48 of the Treaty. The rules for the prevention of overlapping of benefits provided for in Article 12 (1) and (2) do not apply to benefits calculated in accordance with Article 46 since the unjustified overlapping which Article 12 seeks to prevent is avoided by Article 46 (3). But if Article 46 (3) is void, Article 46 could give rise to discrimination in respect of a non-migrant worker in so far as the migrant worker takes advantage of unjustified overlapping which cannot be prevented by the application of Article 12 (in its present form).

The Italian Government considers that it is possible to resolve the case in a manner favourable to the worker on the basis of national law alone. It states that the Court has considered that since the Community rules do not establish a common social security system, the rules for co-ordinating the various schemes do not apply when the right to specific benefits is acquired on the basis of a single national legislation and cannot be relied on to reduce benefits which an insurance institution is liable to pay under its own legislation. Further, the Court has stated that the very objectives of the Community rules would be jeopardized if their application, instead of guaranteeing benefits accruing to the person concerned, should lead to his losing rights already acquired in one of the Member States on the basis of the legislation in force therein (cf. besides the judgment given in the aforementioned case of Petroni, the judgments in Cases 50/75, Massonet [1975] ECR 1473, 49/75, Borella [1975] ECR 1461, 35/74, Rzepa [1974] ECR 1241, 191/73, Niemann [1974] ECR 571, 140/73 (abovementioned) and 27/71, Keller [1971] ECR 885.

It is only where the regulations grant workers social security benefits which they could not obtain if the regulations did not apply that limitations may be imposed in consideration of the benefits which they thereby obtain; apart from this case, similar limitations are not justified since their result would be to place the worker in a less advantageous position than that which would arise from the application of the national law in the absence of the regulations.

In the Case at issue in the main action the plaintiff received two distinct and independent invalidity pensions, each payable on the basis of the respective national legislation (and each taking account solely of the periods of employment completed in each State). It was not ‘necessary’ to have recourse to the aggregation provided for by the Community rules (Article 45 (1) of Regulation No 1408/71). Therefore Article 46 (3) certainly cannot be invoked and there is consequently no problem of interpretation of that provision.

The expression ‘duplicated periods’ should be understood to refer only to those taken into consideration by both States to determine severally the pension to which the worker is entitled — as would happen if in the present case the Belgian institution had also taken account of the years of work completed in Italy and the Italian institution those completed in Belgium. There is no duplication where the pension received in one Member State is granted by virtue of the national legislation solely on the basis of the activity pursued in the State which is liable to pay the pension, even though in respect of that activity the person concerned receives a pension paid independently on the basis of a greater number of years (according to a legal fiction), which fortuitously also covers the period of activity completed in another Member State, for which another pension is already paid independently by the latter. It is quite arbitrary to calculate the ten fictitious years ‘as if’ the person concerned had begun to work in Belgium ten years previously (that is to say, during the period when he was working in Italy). It would be more logical to calculate those years ‘as if’ the worker had worked in Belgium for ten years (which work he had not been able to ‘pursue’ by reason of his invalidity).

The Italian Government therefore concludes that the limit which may be laid down in the Community rules regarding the criteria for the grant of insurance benefits with respect to the relationship between national schemes cannot be invoked to deny or reduce benefits already due to those entitled on the basis of the legislation of a single Member State. It proposes in the alternative to reply that there is no unjustified overlapping arising from a duplication of periods which might justify the reduction of the amount due under national law alone when the conditions for the payment of the various national insurance benefits are not fulfilled.

The Commission observes first of all that since Mr Manzoni was subject successively to a legislation of Type B in one Member State then to a legislation of Type A in another Member State, Article 46 of Regulation No 1408/71 should have been applied. Such application would have allowed the plaintiff to obtain, on the one hand, an apportioned pension in Italy, since aggregation of the insurance periods was necessary to give entitlement to benefits and, on the other hand, the Belgian invalidity pension, since, having worked for more than 20 years in the Belgian mines, he amply fulfilled the qualifying period of ten years required by Belgian legislation. The invalidity pension due from the FNROM was thus a benefit acquired by virtue of national legislation alone.

Only if the criteria for the grant of invalidity pensions were fundamentally different from those in relation to old age pensions might it be asked whether in the case of invalidity pensions Article 46 (3) could be regarded as compatible with Article 51 of the Treaty. The Court considered in the aforementioned case of Mancuso that the application by analogy of Articles 27 and 28 of Regulation No 3 to invalidity pensions also implied the application by analogy of the interpretation which it gave to these provisions in relation to old age pensions. Translating the judgment in Mancuso into the context of Regulation No 1408/71, it is therefore not possible to show that Article 46 (3) is compatible with Article 51 of the Treaty in relation to invalidity pensions by contending that there is a fundamental difference between the old age pension and invalidity pension schemes.

In the present case, since the Belgian invalidity pension was acquired without its being necessary to have recourse to aggregation of the insurance periods, the FNROM ought not to have reduced the amount of the pension by reason of benefits acquired in other Member States.

There is no duplication of insurance periods, whether real or fictitious. The national court's confusion no doubt arises from the fact that the Royal Decree of 28 May 1958 establishing the rules of the FNROM in relation to old age and widow's pensions provided in Article 13 that a retirement or invalidity pension might overlap with one or more retirement or invalidity pensions granted under other pension schemes only to the limit of the retirement pension provided in respect of thirty years employment as an underground worker in the mines. The Royal Decree No 50 of 24 October 1967 on retirement and survivor's pensions for employed workers consolidated the legislation on retirement and survivor's pensions for all employed workers including mineworkers and entrusted the administration of those pensions to a single institution, the Office National des Pensions pour Travailleurs Salaries (National Pensions Office for Employed Persons). That decree did not maintain the ceiling to aggregation of the decree of 1958. As it has not been responsible for old age pensions for mineworkers since 1 January 1968, the date on which the Royal Decree No 50 entered into force, the FNROM has never had to be acquainted with that decree. This is no doubt the reason for its error in relation to the reference to a working life of 30 years.

Even if there had been a duplication of periods Article 46 (3) would not apply. It is perfectly possible to imagine two pensions, each acquired by virtue of Article 46 (2), which exceed the highest theoretical amount, for the calculation of each of which fictitious periods were taken into account.

The Commission therefore proposes the following answers to the questions raised:

1) The application by analogy of the provisions of Chapter 3: Old Age and Death (pensions), of Title III of Regulation No 1408/71 to cases of invalidity pensions referred to in Article 40 (1) of the same regulation implies that Article 46 (3) of Regulation No 1408/71 is incompatible with Article 51 of the Treaty to the extent to which it imposes a limitation on the overlapping of two invalidity benefits acquired in different Member States by a reduction in the amount of an invalidity benefit acquired under national legislation alone.

2) It follows that the competent institutions of a Member State may not apply Article 46 (3) to reduce a benefit acquired under national legislation alone, even in the case of actual duplication of the insurance periods taken into account for the calculation of the benefit.

At the hearing on 28 April 1977 the plaintiff in the main action, represented by Mr Rossini, Director of the Italian welfare service ‘Patronato ACLI’, the FNROM, represented by Mr Stein, the Belgian Gouvernment, represented by Mr Perl, acting as Agent, and the Commission of the European Communities, represented by Miss Jonczy, acting as Agent, submitted their oral observations.

The Advocate-General delivered his opinion at the hearing on 20 September 1977.

Decision

1. By a judgment dated 18 November 1976, received at the Court Registry on 25 November 1976, the Tribunal du Travail, Charleroi, referred certain questions under Article 177 of the EEC Treaty on the interpretation of Article 51 of the EEC Treaty and Article 46 (3) of Regulation No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (OJ, English Special Edition 1971 (II), p. 416).

2. These questions have been referred in the context of an action concerning the way in which the competent Belgian institution calculated the invalidity pension of an Italian national, the plaintiff in the main action, who worked first in Italy and then in Belgium as an underground worker in the mines.

3. In Belgium that worker satisfied all the conditions laid down by the national legislation for entitlement to an invalidity pension under the scheme for mineworkers.

4. On the other hand, for his entitlement to benefit in Italy, he had to have recourse to the provisions of Article 45 of Regulation No 1408/71; for the purposes of calculating that benefit, the periods actually completed in both Member States were aggregated and the Italian benefit was apportioned.

5. Relying on the rule for the limitation of benefits laid down by Article 46 (3) of Regulation No 1408/71, the Belgian institution believed it could reduce the invalidity pension by the amount of the apportioned Italian benefit and claimed repayment of the amount overpaid.

6. It is asked first: ‘If the pension paid by the Belgian State under the present invalidity pension scheme for mineworkers established by the Royal Decree of 19 November 1970 and subsequent amending decrees is reduced on the basis of Article 46 (3) of Regulation (EEC) No 1408/71 by reason of the benefits paid by other Member States, is such reduction in accordance with Article 51 of the Treaty of Rome?’

7. It is then asked: ‘Are the competent institutions entitled to reduce benefits payable by them by applying Article 46 (3), where the overlapping of the benefits awarded by the various Member States results in the grant of benefits on the basis of duplicated insurance periods?’

First question

8. The regulations in the field of social security for migrant workers have as their basis, their framework and their bounds Articles 48 to 51 of the Treaty.

9. Article 51 requires the Council to adopt in the field of social security such measures as are ‘necessary’ to provide freedom of movement for workers, providing for the aggregation, in particular for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries.

10. The aim of Articles 48 to 51 would not be attained if, as a consequence of the exercise of their right to freedom of movement, workers were to lose advantages in the field of social security guaranteed to them in any event by the legislation of a Member State alone.

11. Article 46 (3) appears to be a rule limiting the amount of the various apportioned benefits and the Council, in the exercise of the powers which it holds under Article 51 concerning the coordination of the social security schemes of the Member States, has the power, in conformity with the provisions of the Treaty, to lay down detailed rules for the exercise of rights to social benefits, including invalidity benefits, which the persons concerned derive from the Treaty.

12. However, an application of Article 46 (3) of Regulation No 1408/71 which would lead to a diminution of the rights which the persons concerned already enjoy in a Member State by virtue of the application of the national legislation alone is incompatible with Article 51.

13. It is therefore proper to conclude that Article 46 (3) is incompatible with Article 51 of the Treaty to the extent to which it imposes a limitation on benefits acquired in different Member States by a reduction in the amount of a benefit acquired under the national legislation of a Member State alone.

Second question

14. The Belgian legislation on the special invalidity scheme for miners provides that the invalidity pension shall be granted to a worker who has been employed for a minimum of ten years in the mines.

15. The person concerned worked as a miner in Belgium for more than 20 years.

16. The application of rules preventing the overlapping of benefits where there is duplication of insurance periods is possible only where for the acquisition or calculation of the worker's right it is necessary to have recourse to aggregation of the insurance periods and apportionment of the benefits.

17. Entitlement to a pension under Belgian legislation was acquired in the present case on the basis of periods of work completed in Belgium alone.

18. Accordingly the second question does not call for an answer.

Costs

19. The costs incurred by the Belgian Government, the Italian Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable.

20. 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 national court, the decision on costs is a matter for that court.

On those grounds, THE COURT in answer to the questions referred to it by the Tribunal du Travail, Charleroi, by judgment of 18 November 1976, hereby rules: