JUDGMENT OF 30. 11. 1977 — CASE 64/77 TORRI v ONPTS

In Case 64/77 Reference to the Court under Article 177 of the EEC Treaty by the Tribunal du Travail, Liege, 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, P. Pescatore, J. Mertens de Wilmars, 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, the 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

Mario Torri, an Italian national who was born on 25 October 1909, was employed successively in Italy from 1926 to 1942 and subsequently in 1946 and 1947 (19 years) and in Belgium from 1949 to 1973 (25 years). On 29 November 1973 he submitted a claim for a retirement pension to the Office National des Pensions pour Travailleurs Salariés (National Pensions Bureau for Employed Persons, hereinafter referred to as ‘the ONPTS’). That institution granted him a retirement pension of FB 132333 per annum from 1 November 1974 when the plaintiff attained the age of 65. The amount of the pension corresponds to 25 years' employment in Belgium and was calculated on the basis of the Royal Decree No 50 of 24 October 1967 on retirement and survivors' pensions for employed persons.

In addition. Mr Torri has. been receiving since 1 December 1973 an old-age pension paid by the competent Italian institution on the basis of his previous employment in Italy amounting to FB 12970 per annum.

Taking the view that as he had continued to reside in Belgium after the termination of his employment Article 50 of Regulation (EEC) No 1408/71 of the Council was applicable to him, Mr Torri challenged the decision of the ONPTS and sought from that institution a supplement to his pension as from 1 November 1974 amounting to FB 33777 per annum, representing the difference between the amount of the theoretical Belgian pension, that is to say the amount to which he would have been entitled if he had spent the whole of his working life in Belgium, namely FB 179080 and the sum of the Belgian and Italian pensions awarded him, namely FB 145303. Article 50 of Regulation (EEC) No 1408/71 of the Council, as amended, is worded as follows:

‘Award of a supplement when the total of benefits payable under the legislations of the various Member States does not amount to the minimum laid down by the legislation of the State in whose territory the recipient is permanently resident. A recipient of benefits to whom this chapter applies may not, in the State in whose territory he is permanently resident and under whose legislation a benefit is payable to him, be awarded a benefit less than a minimum benefit determined by that legislation for a period of insurance or residence equal to all the insurance periods taken into account for the payment in accordance with the provisions of the preceding articles. The responsible institution of that State shall, if necessary, pay him throughout the period of his residence in its territory a supplement equal to the difference between the total of the benefits payable under this chapter and the amount of the minimum benefit.’

Mr Torri takes the view that the minimum benefit referred to in Article 50 of Regulation (EEC) No 1408/71 is the amount of the theoretical Belgian pension calculated in accordance with Article 46 (2) (a) of that regulation. The ONPTS refused to accede to the request of the plaintiff; it takes the view that Belgian legislation does not lay down any ‘minimum benefit’ within the meaning of Article 50 of Regulation (EEC) No 1408/71 and therefore no supplement could be granted to the plaintiff.

Mr Torri then applied to the Tribunal du Travail (Labour Tribunal) Liege. By judgment of 11 May 1977 that court decided to stay proceedings and to refer the following questions to the Court of Justice of the European Communities for a preliminary ruling pursuant to Article 177 of the EEC Treaty:

‘What is to be understood by “minimum benefit” within the meaning of Article 50 of Regulation (EEC) No 1408/71 of the Council where, in the legislation of a Member State no minimum pension of a fixed amount is known because the calculation of benefits rests on the amount of wage or salary and on the duration of the insurance periods completed? Does the minimum benefit correspond in that case to the amount of the “theoretical pension” calculated in accordance with the provisions of Article 46 (2) (a) of the regulation?’

The judgment referring the matter to the Court of Justice was registered at the Court Registry on 26 May 1977.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted on behalf of Mr Torri by Daniele Rossini, Director of the social organization ‘Patronato Acli’ and on behalf of the Commission of the European Communities by its Legal Adviser Marie-Jose Jonczy, acting as Agent.

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

II — Summary of the written observations submitted to the Court

Mr Torri states that in accordance with Article 7 of Royal Decree No 50 of 24 October 1967 in Belgium the retirement pension is calculated both on the basis of the working life of the worker and of the gross remuneration earned by him during that period. The Belgian pension is therefore not a fixed amount and in fact there is neither a minimum benefit nor a maximum benefit.

In accordance with the obligation imposed on Member States by Article 5 of Regulation (EEC) No 1408/71 the Belgian government first declared that under its legislation there were no minimum benefits (OJ C 12 of 24. 3. 1973, p. 11); subsequently it included special invalidity pensions for miners in the field of application of Article 50 of Regulation No 1408/71 (OJ C 84 of 12. 10. 1973, p. 7).

The question in the present instance arose when the ONPTS started to refer in its decisions to the amount of a minimum benefit with reference to Article 50 of Regulation (EEC) No 1408/71. According to the definition given by the ONPTS (see Annex V to the observations) the minimum benefit corresponds to the amount of the pension payable solely by virtue of the insurance periods validated in Belgium. It is clear from the heading and from the wording of Article 50 that the minimum benefit corresponds to the theoretical pension which the migrant worker would receive if he had completed the whole of his working life in the territory of the State where he resides. Furthermore the fact that Article 50 is placed after the provisions of Article 46 shows that the minimum benefit corresponds to the amount of the theoretical pension calculated in accordance with paragraph (2) (a) of Article 46. Applied in conjunction with Article 3 (1) of Regulation (EEC) No 1408/71 Article 50 appears to have the objective of guaranteeing the migrant worker the same treatment as regards pensions as that reserved to the national worker for a working life of the same length.

In short, Mr Torri takes the view:

That in the Belgian system of retirement and survivors' pensions the minimum benefit corresponds to the theoretical pension calculated in accordance with Article 46 (2) (a) of Regulation (EEC) No 1408/71;

That the pension supplement referred to in Article 50 of Regulation (EEC) No 1408/71 is payable if the recipient has his residence in Belgium even though the declaration made by the Belgian government in pursuance of Article 96 of the regulation does not include benefits under the system of retirement and survivors' pensions for employed persons.

The Commission first recalls the origins of Article 50 of Regulation (EEC) No 1408/71. In particular it refers to Article 40 of the initial proposed version of the revised Regulation No 3 which the Commission submitted to the Council in January 1966 (JO No 194 of 28. 10. 1966, p. 3333), and to the accompanying statement of the reasons on which it was based (Commission Document COM (66)8 of January 1966). In the terms of the statement of reasons the grant of a supplement was proposed ‘… in order to bring the amount of the benefits provided for the person concerned to the minimum amount laid down by the legislation of the State in whose territory he resides where the conditions for the grant of that minimum are fulfilled by taking all the insurance periods into account (paragraph 1). This provision will be applicable by the institutions of the three countries whose legislation at present lays down a minimum for invalidity, old-age and survivors' pensions — France, Italy and Luxembourg …’.

It is clear from the statement of reasons that the intention, at least that of the Commission, was to ensure that a migrant worker who receives portions of a pension from different Member States and who resides in one of them should receive at least the minimum pension laid down by the legislation of the State in which he resides where that State does lay down a minimum pension. If the minimum pension had been intended to be the theoretical amount the provision would have been applicable in all the Member States and not only in three of them.

Article 40 of the aforesaid proposed text became Article 50 of Regulation (EEC) No 1408/71. The fact that the wording of the latter article is slightly different from the Commission's proposed version does not affect its basic purport.

Under Article 5 of Regulation (EEC) No 1408/71 ‘the Member States shall specify… the minimum benefits referred to in Article 50… in declarations to be notified and published in accordance with Article 96’. In the view of the Commission such notification would not be possible if minimum benefit were intended to mean the theoretical amount. In fact the theoretical amount of a pension is determined on the basis of the individual insurance history of each worker and can only be calculated when the person concerned has made an application for a pension and filled in all the necessary forms.

From all the notifications by Member States under Articles 5 and 96 of Regulation (EEC) No 1408/71 the following conclusions may be drawn:

First, as the Belgian legislation only lays down a minimum benefit for invalidity pensions for mineworkers Mr Torri cannot claim a minimum old-age benefit.

Secondly, it is evident that some Member States have no minimum benefit within the meaning of Article 50. That provision is only applicable in those Member States whose legislation lays down a minimum benefit for the risk in question. In those legal systems where the concept of a minimum benefit exists the expression has a very particular meaning referring to the minimum level of pension which is guaranteed to a person entitled to a pension irrespective of the amount of remuneration, contributions or any other factors which are taken into account in calculating the pension. The minimum benefit is a fixed amount, that is to say a flat-rate sum laid down by the law, payable to all pensioners whether they are covered by Regulation (EEC) No 1408/71 or not.

It is therefore a national concept in contrast to the concept of the theoretical amount introduced by Regulation (EEC) No 1408/71. Sometimes the minimum benefit is made conditional on completion of a certain number of years of insurance. In the context of rules adopted on the basis of Article 51 of the EEC Treaty it would have been normal that in granting the right to that minimum benefit account should be taken of all the periods taken into consideration by the various national legal systems to which the worker was subject. That explains the wording of Article 50 of Regulation (EEC) No 1408/71 which essentially seeks to enable a worker who has not completed sufficient insurance periods in order to be entitled to the minimum benefit determined by the legislation of the State in which he resides to satisfy the conditions relating to the insurance period by aggregating all the periods of insurance or residence completed in the various Member States.

Finally, Article 50 of Regulation (EEC) No 1408/71 is only of somewhat limited application. It only concerns three or four Member States and only seeks to guarantee, where necessary after aggregation, the minimum pension which is laid down on a flat-rate basis by the legislation of the Member State where the worker resides or where he is entitled to a part pension if the sum of the various pensions paid is less than the aforementioned minimum benefit.

The Commission proposes that the questions referred to the Court for a preliminary ruling be answered as follows:

“The minimum benefit” within the meaning of Article 50 of Regulation (EEC) No 1408/71 of the Council corresponds to the minimum amount of pension, that is to say the fixed sum determined by the legislation of certain Member States which is payable to all pensioners whether or not the entitlement to it is conditional on the completion of a specified period of insurance.

Where no provision is made in the legislation of the Member State in whose territory the worker is permanently resident for a minimum pension of a fixed amount Article 50 is not applicable.'

III — Oral procedure

At the hearing on 13 October 1977 Mr Torri, represented by Daniele Rossini, the Office National des Pensions pour Travailleurs Salaries, represented by J. Peltot, acting as Agent, and the Commission of the European Communities, represented by its Legal Adviser, Marie-Jose Jonczy, acting as Agent, presented oral argument.

The Advocate-General delivered his opinion at the hearing on 15 November 1977.

Decision

1. By a judgment of 11 May 1977 which was received at the Court Registry on 26 May, the Tribunal du Travail, Liege, referred the following question to the Court for a preliminary ruling pursuant to Article 177 of the Treaty: ‘What is to be understood by “minimum benefit” within the meaning of Article 50 of Regulation (EEC) No 1408/71 of the Council (OJ English Special Edition 1971 (II) p. 416) where, in the legislation of a Member State, no minimum pension of a fixed amount is known because the calculation of benefits rests on the amount of wage or salary and on the duration of the insurance periods completed?’ and the supplementary question: ‘Does the minimum benefit correspond in that case to the amount of the “theoretical pension” calculated in accordance with the provisions of Article 46 (2) (a) of the regulation?’.

2. These questions were raised in the course of proceedings relating to an application by a worker of Italian nationality residing in Belgium who worked in Italy from 1926 to 1942 and then in 1946 and 1947 and in Belgium from 1949 to 1973 and who receives a Belgian retirement pension and an Italian retirement pension.

3. In the terms of Article 50 of the regulation in question: ‘A recipient of benefits to whom this chapter applies may not, in the State in whose territory he is permanently resident and under whose legislation a benefit is payable to him, be awarded a benefit less than the minimum benefit determined by that legislation for a period of insurance or residence equal to all the insurance periods taken into account for the payment in accordance with the provisions of the preceding articles. The responsible institution of that State shall, if necessary, pay him throughout the period of his residence in its territory a supplement equal to the difference between the total of the benefits payable under this chapter and the amount of the minimum benefit’.

4. The plaintiff in the main action takes the view that if no minimum benefit of a fixed amount is determined by the Belgian legislation which was applicable to him the minimum benefit must be understood as corresponding to the amount of the theoretical Belgian pension calculated in accordance with Article 46 (2) (a) of the regulation, that is to say, the amount of the pension which would be payable to him if all his insurance periods had been completed under the relevant Belgian legislation.

5. Article 50 covers cases where the periods of employment of the worker under the legislation of the States to which he was subject were relatively short with the result that the total amount of the benefits payable by those States does not provide a reasonable standard of living.

6. In order to remedy that situation the article in question provides that where the legislation of the State of residence lays down a minimum benefit, the benefit payable by that State shall be increased by a supplement equal to the difference between the total of the benefits payable by the different Member States to the legislation of which the worker was subject and the minimum benefit

7. Moreover Article 5 of the regulation provides that the Member States shall specify in the declarations referred to in that article ‘the minimum benefits referred to in Article 50’; that provision accords with the hypothesis that not all the systems of legislation necessarily include minimum benefits of the type in question but it would scarcely be comprehensible if the interpretation put forward by the plaintiff in the main action were correct.

8. According to the declaration made by the Kingdom of Belgium a minimum benefit exists only in the context of the laws relating to invalidity pensions for mineworkers.

9. It is for the national court to assess whether that declaration is complete having regard to all the national legislation in question.

10. Moreover, the view of the plaintiff in the main action is not in accordance with the other provisions of Chapter III of the regulation.

11. Indeed, while those provisions serve to ensure that pensioned workers who have worked for identical periods under identical systems of legislation receive identical pensions, the consequence of the plaintiff's view would be that those workers would receive different pensions according to their place of residence as those living in the Member State with the highest level of pensions would receive a higher pension than workers who had the same insurance record.

12. The interpretation which is thereby proposed would result in giving Article 50 an effect which, going beyond its limited object, would bring it in to conflict with the general objective of Chapter III of not influencing the free choice of the place of residence which Article 48 (3) (d) of the Treaty guarantees to a former worker.

13. It must therefore be concluded that Article 50 of Regulation (EEC) No 1408/71 of the Council is applicable only in cases in which provision is made in the legislation of the Member State in whose territory the worker resides for a minimum pension.

14. A reply to this effect should therefore be given to the questions referred to the Court.

Costs

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

16. 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, Liege, by judgment of 11 May 1977, hereby rules: