JUDGMENT OF 12. 10. 1978 — CASE 10/78 BELBOUAB v BUNDESKNAPPSCHAFT

In Case 10/78 REFERENCE to the Court pursuant to Article 177 of the EEC Treaty by the Sozialgericht Gelsenkirchen (Third Chamber) for a preliminary ruling in the proceedings pending before that court between

THE COURT composed of: H. Kutscher, President, J. Mertens de Wilman and Lord Mackenzie Stuart (Presidents of Chambers), P. Pescatore, M. Sørensen, G. Bosco and A. Touffait, Judges, Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

The order for reference and the written observations submitted pursuant to 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

The Sozialgericht (Social Court) Geilenkirchen summarizes the facts as follows:

Tayeb Belbouab, born on 14 April 1924 in Algeria, was an underground worker in the French mines from 29 March 1947 to 17 November 1950 and subsequently from 6 June 1951 to 4 October 1960 (155 months in all). At that time he possessed French nationality. In 1960 he emigrated to the Federal Republic of Germany to avoid possible political difficulties. Since Algeria became independent on 1 July 1962 he has not obtained a French passport; he has since possessed Algerian nationality and holds an Algerian passport.

From 26 May 1961 he worked in Germany as an underground worker in a mine and, by his 50th birthday, he had completed 142 months of contributions to the old-age insurance scheme of the Bundesknappschaft. He then applied for a mineworker's pension in accordance with Article 45 (1) (2) of the Reichsknappschaftsgesetz (German Law on social insurance for mineworkers) which is worded as follows:

‘On application by the insured the mineworker's pension shall be granted when the insured: (1) Suffers a reduction in his capacity for work as a miner and has completed the qualifying period in accordance with Article 49 (1); or (2) Having reached the age of 50 years, no longer has a post whose economic value is equivalent to the previous post as a mineworker and has completed the qualifying period in accordance with Article 49 (2).’

Article 49 (2) provides that the ‘qualifying period’ for entitlement to a mineworker's pension under Article 45 (1) (2) is completed when the insured person has completed insurance periods of 300 calendar months in continuous employment as an underground or assimilated worker.

Tayeb Belbouab's application was rejected by a decision of the Bundesknappschaft of 2 September 1974 on the ground inter alia that the provisions of Regulation (EEC) No 1408/71 read in conjunction with Regulation No 574/72 and the provisions of the Franco-German Convention were not applicable in view of the fan that the applicant possessed Algerian nationality and that in consequence the entitlement to a pension could only be examined in the light of national law. By a letter of 26 September 1974 Tayeb Belbouab protested against that rejection arguing that he had paid contributions in France as a French citizen. The protest was rejected by a further decision of the Bundesknappschaft of 7 June 1975 in particular for reasons which are summarized by the Sozialgericht as follows:

‘The plaintiff has been an Algerian citizen since the independence of Algeria and has been registered as such with the residents' registration office. Under Article 1 in conjunction with Annex A to Regulation (EEC) No 3 on social security for migrant workers that regulation was applicable to the French Departments and to Algeria. Algeria was, however, deleted from Annex A to Regulation (EEC) No 3 by Regulation No 109/65 of 30 June 1965, on the understanding that Regulations Nos 3 and 4 should no longer apply as from 19 January 1965 to Algeria and Algerian citizens. The same naturally also applies to Regulations (EEC) Nos 1408/71 and 574/72 which replaced Regulations Nos 3 and 4. Contrary to the plaintiff's view it was not a question of what nationality he possessed during the period when he was employed in the French mines, but his nationality at the time of consideration of the application for a pension.’

Tayeb Belbouab subsequently brought an action before the Sozialgericht Gelsenkirchen against the rejection of his protest. The parties then reached an arrangement to enable the defendant to reconsider its decision in the light of the judgment of the Court of Justice of the European Communities of 26 June 1975 in Case 6/75 (Horst v Bundesknappschaft [1975] 1 ECR 823) in which the Court ruled that ‘In so far as is necessary for the acquisition, the maintenance or the recovery of the right to benefits, insurance periods completed in Algeria before 19 January 1965 must be taken into consideration in calculating the pensions referred to in Chapters 2 and 3 of Regulation No 3 even if the risk materializes and the claim for a pension is made after that date’ and in the light of a judgment of the Bundessozialgericht (Federal Social Court) of 26 November 1975 also in the Horst case following the judgment by the Court of Justice.

In its decision of 1 April 1976 the Bundesknappschaft reiterated its previous view. In the grounds of the decision it stated that it was not possible to take into account the French insurance periods; nor did the judgment of the Court of Justice of the European Communities have any effect on the decision to be adopted, since that judgment was concerned with a German, that is a national of a Member Sute of the Community, who sought to have account taken of periods completed in Algeria.

After a further written protest by the plaintiff in the main action followed by a further rejection by the defendant, the plaintiff brought an action for annulment before the Sozialgericht Gelsenkirchen. He stated in support of his application that the aforesaid Community regulations were applicable to him. The fact that he was subsequently arbitrarily accorded Algerian nationality cannot be a ground for not taking account of the French insurance periods; that would be unfairly harsh. By order of 7 December 1977 received at the Registry of the Court of Justice of the European Communities on 1 February 1978 the Sozialgericht stayed proceedings and asked the Court of Justice to give a preliminary ruling on the following questions:

‘1. Does the legal principle that legal rights under public law acquired by a person's own efforts may not be encroached upon by sovereign measures without compensation, which finds expression in German law in Article 14 of the Grundgesetz (Basic Law), apply in the law of the European Community? 2. Do Regulations Nos 1408/71 and 574/72 violate that legal principle in so far as they contain no rule corresponding to Article 16 (2) of Regulation No 109/65? 3. Or does Article 16 (2) of Regulation No 109/65 continue to apply, directly or by analogy, so that Articles 2 (1), 38 (1) and 94 (2) of Regulation No 1408/71 are to be interpreted as meaning that the insurance periods completed in France by an employed person before 19 January 1965 are to be taken into consideration if during such periods he was a French citizen and as such enjoyed the advantages conferred by Article 1 (a) in conjunction with Annex A to Regulation No 3 on social security for migrant workers, although at the time of applying for a German pension he possesses Algerian nationality?’

In the statement on the grounds for its decision the Sozialgericht set out the reasons for its doubts which caused it to ask the above questions:

The plaintiff is not one of the persons covered by the regulation cause he is not, within the meaning of Articles 1 and 2 of Regulation No 1408/71, a national of one of the Member States, a stateless person or a refugee as he has not sought that su tus.

The nationality of the members of his family is irrelevant (cf. Judgment in Case 40/76 of 23 November 1976Kermaschek v Bundesanstalt fur Arbeit [1976] ECR 1669).

On the other hand the plaintiff has acquired, by virtue of his work, certain legal rights under public law; such rights are protected by Article 14 of the Grundgesetz (Basic Law) of the Federal Republic of Germany in that they cannot be adversely affected by the act of a public authority without compensation.

Following the independence of Algeria Article 16 (2) of Regulation No 109/65 deleted Algeria from the Annex to Regulation No 3 ‘without prejudice to accrued rights’ (cf. Judgment in Case 6/75 of 26 June 1975Horst v Bundesknappschaft, already referred to) which means that such a right, which is similar to a reversionary interest, is under German law to be given the same protection as a proprietary right.

However, Regulation No 109/65 which amended Regulation No 3 ‘lost its point of reference’ by virtue of the repeal of Regulation No 3 by Article 99 of Regulation No 1408/71; it is for that reason that the defendant held that the accrued rights of the plaintiff were extinguished without any compensation.

It was in the light of these considerations that the Sozialgericht raised the question whether Community law also recognizes a kind of proprietary guarantee, similar to a basic right, protecting legal rights acquired under public law as a result of personal effort. In practical terms the question is whether the regulations in force — Regulations Nos 1408/71 and 574/72 — contain provisions which also guarantee rights whose maintenance had previously been ensured by Article 16 (2) of Regulation No 109/65. It may be asked whether Article 94 (2) of Regulation No 1408/71 is henceforward sufficient in this respect in view of the fact that Article 2 (1) of that regulation provides that the regulation is applicable only to workers who are nationals of one of the Member States?

Furthermore, does Article 99 of Regulation No 1408/71 which repeals Regulation No 3 but does not refer to Regulation No 109/65 enable Article 16 (2) of the latter regulation to be applied directly or, in particular, by analogy with regard to the provisions of the current regulation, No 1408/71, which replaced Regulation No 3 and which, in principle, should not restrict or withdraw without compensation the rights of employed persons working in Europe as this would be contrary to the principle of protection reflected in Article 16 (2) of Regulation No 109/65?

The order of the Sozialgericht Gelsenkirchen was received at the Court Registry on 1 February 1978. In accordance with Anide 20 of the Protocol on the Statute of the Court of Justice the Commission of the European Communities submitted written observations.

Upon hearing the repon of the Judge-Rapporteur and the views of the Advocate General the Court decided that a preparatory inquiry was not necessary but it expressed the wish to take note of the judgment of the Bundessozialgericht of 26 November 1975 (Case 5 RKn 11/72) to which reference was made in the course of the efforts to achieve a seulement between the parties to the main proceedings which led to the suspension of the proceedings before the Sozialgericht Gelsenkirchen.

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

The Commission of the European Communities summarizes the facts and procedure and then suggests an answer to the questions raised, referring to four aspects of the problem before the Sozialgericht:

1) The German court takes as its premise that the personal criterion of nationality should under Article 2 (1) of Regulation No 1408/71 be satisfied at the present time or at the time of the examination of the application for a pension. It is necessary first to ascertain whether this premise is correa because if not the problem may be resolved by applying positive Community law alone. For that reason the order of the questions raised should be reversed.

2) As regards the time to be taken into consideration for determining nationality under Article 2 (1) of Regulation No 1408/71 it should be recalled that the plaintiff was a French national until 30 June 1962 and subsequently an Algerian national from 1 July 1962 by which time he had already worked more than a year in the German mines. Depending on whether the possession of the nationality of a Member Sute is taken into consideration at the time of the acquisition of the right to benefits or at the time when the periods are completed the plaintiff in the main proceedings is to be regarded as either Algerian or French. As the provisions in question (Article 4 (1) of Regulation No 3 and Article 2 (1) of Regulation No 1408/71 successively) are unclear the Commission inclines to the view that the time of the completion of insurance periods should be taken into account as otherwise a change of nationality would have retroactive effects which would be incompatible with the freedom of movement for workers (in this respect it may be noted that conversely this view might lead to a non-migrant within the meaning of Articles 48 to 51 of the Treaty being able to benefit even retroactively from the status of a migrant worker if he became a national of a Member State). It is therefore preferable to have regard to the time of the completion of the periods particularly as a textual argument derived from the wording of Article 2 (1) of Regulation No 1408/71 which refers to workers ‘who are’ nationals of the Member States.

3) As to the possibility that Article 16 (2) of Regulation No 109/65 may still be applicable the Sozialgericht omitted to lake into account the fan that the plaintiff is one of the persons covered by Regulation No 3 by virtue of his being a French national and not a national of the French Union. The case-law of the Court of Justice on accrued rights within the meaning of Article 16 (2) has, up to now, had only a territorial scope inasmuch as it has been held that Algeria does fall within the field covered by Regulation No 3 until 19 January 1965 and not only until 30 June 1962; the question of nationals' and thus of the persons covered by the regulations has not been resolved (see the above-mentioned Horst judgment). In fact Regulation No 3 was applicable to the territory of Algeria but not to workers of Algerian origin who, until 30 June 1962, were French nationals. In the light of a comparison of Article 16 (2) (a) and Article 5 of Regulation No 109/65 on the one hand and Annex A to Regulation No 3 on the other such persons cannot be held to be persons covered by Regulation No 3. It cannot be envisaged that rights acquired by Algerians should be accorded protection by virtue of a kind of fictitious inclusion of Algeria in the territory of the Community until 19 January 1965; on the other hand Article 16 (2) of Regulation No 109/65 has in the words of the Sozialgericht lost its ‘point of reference’ since the repeal of Regulation No 3 and therefore the question whether Algeria falls within the territorial scope of Regulation No 1408/71 arises in the same terms as at the time when Regulation No 3 was still in force as both regulations take account of insurance periods completed under the legislation of the Member States before their entry into force (see Article 94 (2) of Regulation No 1408/71). The fact that Regulation No 1408/71 is silent as to the territories which it coven does not allow its scope to be restricted more narrowly than the limits set by Regulations No 3 and No 109/65 and by the case-law of the Court of Justice.

4) Interpreted in this way Article 94 of Regulation No 1408/71 guarantees that all periods completed before the loss of French nationality shall be taken into account and it renden nugatory the question of the protection of accrued rights for periods completed in France. position is different for periods completed after the loss of French nationality but that consequence is not a matter of Community law.

For the plaintiff in the main action the practical effect of this legal position is that he satisfies the conditions for obtaining the miner's pension under Article 45 (1) (2) of the Reichsknappschaftsgesetz. Under Community law the defendant in the main action is obliged to aggregate insurance periods completed in France by the plaintiff in the main proceedings with the insurance periods completed in Germany up to 30 June 1962. Under the provisions of the Reichsknappschaftsgesetz the defendant is obliged to take into consideration all the insurance periods completed in the Federal Republic of Germany by the plaintiff, including those months completed before 30 June 1962. The defendant can only satisfy this twofold obligation by simply taking into consideration all the insurance periods completed by the palintiff.

In conclusion the Commission takes the view that the following answers may be given to the questions raised by the Sozialgericht Gelsenkirchen:

‘1. Regulation No 1408/71 guarantees, by the application of Article 94 (2), that all insurance periods and periods of employment or residence completed in the territory of the Member States before its entry into force shall be takten into consideration. As regards the condition contained in Article 2 (1) of the regulation with regard to nationality of a Member Sute, the nationality held by the worker when he completed the insurance periods or the periods of employment or residence is decisive. 2. Regulation No 109/65 relates to the inclusion of Algeria in the territories covered by Regulations Nos 3 and 4. It contains no provision relating to the inclusion of workers of Algerian origin in the persons covered by the two regulations.’

III — Oral procedure

The Commission, represented by its legal adviser, Mr Koch, presented oral argument and its answers to the questions put by the Court of Justice at the hearing on 27 June 1978.

The Advocate General delivered his opinion at the hearing on 20 September 1978.

Decision

1. By an order of 7 December 1977 which was received at the Court Registry on 1 February 1978 the Sozialgericht Gelsenkirchen referred to the Court of Justice for a preliminary ruling pursuant to Article 177 of the EEC Treaty questions relating to the interpretation 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 (Official Journal, English Special Edition 1971 (II), p. 416) and Regulation No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 (Official Journal, English Special Edition, 1972 (I), p. 160) with regard to the concept of legal rights acquired by a worker who was a Community migrant worker for a part of his working life but who subsequently became a foreign worker following a change of nationality consequent upon the setting up of a new State.

2. The questions were raised in the context of a dispute between the Bundesknappschaft, Saarbrücken, and a mineworker born in Algeria in 1924, a French national by birth, who worked in France for 155 months and subsequently, as from 26 May 1961, in Germany but who lost French nationality on 1 July 1962 when Algeria became independent. On reaching the age of 50 the plaintiff applied for a mineworker's pension in accordance with Article 45 (1) (2) of the German law on social insurance for mineworkers (Reichsknappschaftsgesetz) which lays down the requirement that the applicant must have completed an insurance period of 300 months in regular work as an underground worker or in assimilated work. The application was rejected by the competent German body (the Bundesknappschaft) on the ground that the plaintiff no longer possessed the nationality of a Member Sute of the Community and therefore Regulation No 1408/71 was no longer applicable to him and in consequence his right to a pension could be examined only on the basis of German law. A protest by the plaintiff was also rejected on the grounds on the one hand that Regulation No 109 of the Council of 30 June 1965 (Journal Officiel 1965, p. 2124) made Regulations Nos 3 and 4 on social security for migrant workers, and therefore Regulation No 1408/71 which replaced Regulation No 3, inapplicable to Algeria and Algerian nationals as from 19 January 1965 and, on the other, that ‘it was not a question of what nationality the applicant possessed during the period when he was employed in the French mines, but his nationality at the time of consideration of the application for a pension’.

3. An application for the annulment of that administrative decision was brought before the Sozialgericht Gelsenkirchen which takes the view that the plaintiff, as an Algerian national, is not a person covered by Regulation No 1408/71 since under Article 2 (1) of that regulation it is applicable only to workers who are nationals of one of the Member States or who are stateless persons or refugees residing within the territory of one of the Member Sutes. Nevertheless, according to the Sozialgericht, the plaintiff has acquired, by virtue of his efforts and having regard to the insurance periods completed in France, legal rights analogous to a proprietary right under German constitutional law which are protected by Article 14 of the Grundgesetz (Basic Law) and which cannot be taken away without compensation. In the view of the Sozialgericht, although Article 16 (2) of Regulation No 109/65 had the effect of deleting Algeria from Annex A to Regulation No 3 ‘without prejudice to accrued rights’, that article was repealed by virtue of the fact that Article 99 of Regulation No 1408/71 repealed Regulation No 3 and consequently Regulation No 109/75 which contained only amendments to the provisions of Regulation No 3 has ceased to have any effect. That is the situation underlying the three questions which have been referred to the Court of Justice for a preliminary ruling.

4. The basic reasoning of the national court rests on the premises that the personal criterion of the nationality of the plaintiff which is to be taken into account pursuant to Article 2 (1) of Regulation No 1408/71 is that existing at the time of the application for a pension and that neither Regulation No 1408/71 nor Regulation No 574/72 contains any provision analogous to Article 16 (2) of Regulation No 109/65 protecting accrued rights. It is therefore necessary to examine first whether these premises are in accordance with Community law.

5. The establishment of the greatest possible freedom of movement for migrant workers, which is one of the foundations of the Community, is the primary aim of Article 51 of the Treaty. It is in the light of that objective that regulations implementing that article are to be interpreted.

6. The persons covered by Regulation No 1408/71 are defined in Article 2 of the regulation as follows: ‘This regulation shall apply to workers who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States …’. That provision lays down two conditions for the application of the regulation : (a) that a worker is or has been subject to the legislation of one or more Member Sates; and (b) that the worker is a national of one of the Member States.

7. In order to satisfy the principle of legal certainty, one of the requirements of which is that any factual situation should normally, in the absence of any contrary provision, be examined in the light of the legal rules existing at the time when that situation obtained, the second condition must be interpreted as meaning that the status of being a national of one of the Member States refers to the time of the employment, of the payment of the contributions relating to the insurance periods and of the acquisition of the corresponding rights. It is clear from this that the criterion of nationality laid down by Article 2 (1) of Regulation No 1408/71 must be examined in direct relationship to the periods during which the worker in question carried on his work.

8. This interpretation is supported by Article 94 (2) of Regulation No 1408/71 which provides that ‘All insurance periods, as also, where applicable, all periods of employment or residence completed under the legislation of a Member Sute before the date of entry into force of this regulation …, shall be taken into consideration for the purpose of determining entitlement to benefits in accordance with the provisions of this regulation’. That article clearly implies that accrued rights are to be recognized and protected under the Community rules on social security for migrant workers if the) were acquired by a migrant within the meaning of the aforesaid provisions, that is to say a national of a Member State. Consequently, Article 2 (1) and Article 94 (2) of Regulation No 1408/71, read in conjunction with one another, are to be interpreted as guaranteeing that all insurance periods and all periods of employment or residence completed under the legislation of a Member State before the entry into force of that regulation shall be taken into consideration for the purpose of determining entitlement to benefits in accordance with its provisions, subject to the condition that the migrant worker was a national of one of the Member States when the periods were completed.

9. In reaching this solution, which provides the national court with all the factors for the interpretation of Community law which are necessary to resolve the problem with which it is confronted, it is not necessary to have recourse to the interpretation of Article 16 (2) of Regulation No 109/65 of 30 June 1965 amending and supplementing Regulations Nos 3 and 4 on social security for migrant workers. In fact Regulation No 109/65 relates to the inclusion of Algeria in the territories covered by Regulations Nos 3 and 4 and contains no provision relating to the inclusion of workers of Algerian origin amongst the persons covered by the two regulations. Consequently, Article 16 (2) of Regulation No 109/65 is not applicable in the present case as Algeria is excluded from its geographical extent and nationals of the French Union are excluded from the definition of persons covered, whereas the plaintiff worked in France, not Algeria, and was, at that time, of French nationality and not a national of the French Union.

10. The answer given to the third question makes it unnecessary to reply to the first two questions as, interpreted in that way, the provision in question contains no factor of such a kind as to prejudice the fundamental human rights included in the general principles of Community law which the Court must protect.

Costs

11. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main anion are concerned, in the nature of a step in the action pending before the Sozialgericht Gelsenkirchen, costs are a matter for that court.

On those grounds, THE COURT, in answer to the questions referred to it by the Sozialgericht Gelsenkirchen by order of 7 December 1977, hereby rules: