C-144/78

JUDGMENT OF 22. 2. 1979 — CASE 144/78 TINELLI v BERUFSGENOSSENSCHAFT DER CHEMISCHEN INDUSTRIE

CELEX: 61978CJ0144
Datum: 1979-02-22
Källa: eur-lex.europa.eu

In Case 144/78 REFERENCE to the Court under Article 177 of the EEC Treaty by the Landessozialgericht (Regional Social Court) Baden-Württemberg for a preliminary ruling in the proceedings pending before that court between

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

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the procedure and the 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 written procedure

A — The national legislation applicable

The first subparagraph of Article 5 (1) of the German Fremdrentengesetz (Law on foreign pensions) of 25 February 1960 provides that, according to the federal legal provisions applicable to statutory accident insurance, compensation is also payable for an accident at work which occurred outside the territory to which the law applies as long as the person who has sustained the accident was insured at the time of the accident with a German statutory accident insurance institution.

Article 12 (1) of that law provides that the pension to be granted in application of Article 5 for an accident at work or an occupational disease shall be suspended as long as the recipient habitually resides outside the territory to which the law applies. In districts situated within the territory to which the law applies the grant of benefits in kind is excluded.

Article 13 provides that when the accident at work or the occupational disease occurred prior to 9 May 1945 outside the territory to which the law applies and where the recipient had the right to compensation for the accident from a German statutory accident insurance institution the pension may be paid to a German or to a former German national living on the territory of a foreign State. Such a pension is not a social security benefit. Persons who were compelled to leave the territory of the German Reich between 30 January 1933 and 8 May 1945 are regarded as former German nationals.

B — The relevant Community provisions

Annex GIA2 to Regulation No 3 reads as follows:

‘Article 10 of the regulation and the corresponding provisions of the bilateral agreements mentioned in Annex D to the regulation shall not affect the provisions concerning “Fremdrenten” and the payment of benefits in the case of residence outside the territory of the Federal Republic of Germany by virtue of which periods completed outside that territory do not give rise to payment of benefits as long as the person entitled resides outside the Federal Republic of Germany.’

Annex VC 1 (b) to Regulation No 1408/71 reads as follows:

‘Article 10 of the regulation shall not affect the provisions under which accidents (and occupational diseases) occurring outside the territory of the Federal Republic of Germany, and periods completed outside that territory, do not give rise to payment of benefits, or only give rise to payment of benefits under certain conditions, when those entitled to them reside outside the territory of the Federal Republic of Germany.’

C — Facts

Mr Tinelli, an Italian national born in 1914, sustained an accident at work on 27 September 1944 when he was employed by the Soda-Fabrik Stassfurt, at present on the territory of the German Democratic Republic. In 1969 he applied for an invalidity pension to the Berufsgenossenschaft der chemischen Industrie (Social Insurance Fund for the Chemical Industry, hereinafter referred to as ‘the Fund’).

In reliance on Article 12 (1) of the Fremdrentengesetz in conjunction with Annex VC 1 (b) of Regulation No 1408/71, the Fund on 14 March 1974 refused to grant benefits to Mr Tinelli on the ground that at that time he had his habitual residence in Italy, that is to say outside the sphere of application of the Fremdrentengesetz.

The action commenced by Mr Tinelli against that decision was dismissed at first instance. On 23 June 1976 Mr Tinelli transferred his residence to the Federal Republic of Germany and the Fund then granted him, by decision of 20 December 1977, an invalidity pension corresponding to a 30 % disability for the period subsequent to 23 June 1976 but once more refused to pay the pension for the period prior to that date, relying once more on Article 12 of the Fremdrentengesetz.

D — The reference for a preliminary ruling

Mr Tinelli did not accept this partial acknowledgment but appealed to the Landessozialgericht Baden-Württemberg, applying for payment of the invalidity pension for the period from 27 September 1944 to 23 June 1976. By order of 19 May 1978 the Landessozialgericht decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling in pursance of Article 177 of the EEC Treaty:

‘Are (a) Article 50, in conjunction with Annex GIA2, of Regulation No 3 of the Council of 25 August 1958 concerning social security for migrant workers; and (b) Article 89, in conjunction with Annex VC 1 (b), 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, incompatible with Article 51 of the Treaty establishing the European Economic Community of 25 March 1957, or are the said provisions compatible with one another?’

The order of the Landessozialgericht reached the Court on 19 June 1978.

On 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 in pursuance of Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

A — Observations submitted by the German Government

The German Government emphasizes that in the judgment in Case 79/76 (Fossi,[1977] ECR 667 ), the Court declared that the exclusion from the scope of social security of legislation on substitute pensions and pensions awarded to certain categories of persons residing abroad, which contained measures for the integration of persons deponed and refugees in the form of compensation for the loss of certain acquired rights or rights in course of acquisition, was lawful, at least to the extent to which that legislation related to benefits paid in respect of insurance periods completed outside the federal territory, that is to say, for that pan of those provisions which concerns pensions.

The decisive considerations which led the Court to form that view apply in the same way to that part of the legislation which relates to compensation for accidents at work.

The insurance institutions which were competent before 1945 no longer exist or have ceased to function;

The legislation adopted makes it possible to pay compensation for the loss of the rights of refugees and persons deported who after the war settled on federal territory. Furthermore, that legislation equally provides — as is clearly emphasized by the character of the rules relating to social cases — for the grant of benefits to other persons, German or non-German, provided that they were affiliated at the time of the accident to a German insurance institution and that at the present time they reside on federal territory. According to the German Government, it would have been especially harsh towards the persons concerned to make them bear the consequences of the division of Germany and of the absence of agreed rules between the two German States. It was in pursuance of this principle of integration that Mr Tinelli has been receiving benefits since he has settled on federal territory;

The payment of the benefits in question to nationals is of a discretionary nature where they are residing abroad (Articles 12 and 13 of the Fremdrentengesetz). Mr Tinelli does not fulfil the conditions of the aforesaid Article 13 and is in the same position as the person concerned in Case 79/76.

B — Observations submitted by the Italian Government

According to the Italian Government, Annex VC 1 (b) to Regulation No 1408/71 does not provide for any derogation to the principle of equality of treatment and relates solely to Article 10 and not also to Article 3 of that regulation. It lays down that benefits paid following accidents or occupational diseases are social security benefits and that the Federal Republic of Germany is authorized to enact suspensory provisions but that such provisions can apply solely to accidents which have occurred after the entry into force of the regulation.

However, an authorization to a Member State to derogate from the fundamental principle that the place of residence of a person entitled to social security benefits is legally irrelevant seems contrary to Article 51 and to the general principles of the Treaty. Paradoxically, such an authorization would have the result that, in order to preserve his right to benefit, he would have to change his residence.

The solution arrived at in the judgment in Case 79/76 should not be transposed to this case: that judgment was given on a question of interpretation and not of validity; it concerns an invalidity pension and not benefits relating to an accident at work, which Annex VC 1 (b) expressly refers to as social security benefits.

For the solution of this case some relevant information may be found in the judgments in the ‘Algerian’ cases and in particular in that in Case 112/75 (Hirardin,[1976] ECR 553). What that judgment states with regard to discrimination based on nationality must apply also to discrimination based on residence, which as a general rule amounts only to disguised discrimination based on nationality.

Consequently, Annex GIA2 of Regulation No 3 is therefore valid if it is interpreted as meaning that, except for that part which follows the expression ‘as long as’, it confirms the principle set out in Articles 8 and 10 (1) of that regulation; with regard to Annex VC 1 (b) to Regulation No 1408/71, it is valid except in so far as concerns the part which declares ‘when those entitled to them reside outside the territory of the Federal Republic of Germany’.

C — Observations submitted by the Council of the European Communities

The Council recalls the case-law of the Court with regard to the material and the territorial scope (the problem of social assistance and the ‘Algerian’ cases respectively) of Regulation No 1408/71.

In the Council's view the question referred to the Court in fact raises three distinct points:

The validity of Article 89 of Regulation No 1408/71, considered in isolation from the provisions of Annex V, must not be called in question;

As regards the compatibility of Annex VC 1 (b) with the Treaty, the Council has, as regards the implementation of Article 51, a certain margin of discretion in determining how far the co-ordinating measures necessary for establishing freedom of movement for workers must go;

As regards the compatibility of the Fremdrentengesetz with Article 10 of Regulation No 1408/71, reference may be made to the judgment in Case 79/76, according to which benefits paid to the person concerned were not to be considered as social security benefits. In this respect the Court stated that that conclusion was confirmed by the reservation inserted in Annex GIA2 to Regulation No 3 and Annex VC 1 (b) to Regulation No 1408/71, as if it desired to stress its validity.

D — Observations submitted by the Commission of the European Communities

The Commission recalls that in Case 79/76 the Bundessozialgericht assessed the compatibility of the suspensory provisions of the German legislation at issue with Community law from the point of view of equality of treatment referred to in Regulations Nos 3 and 1408/71 and consequently considered as doubtful only the provisions authorizing the grant of benefits to Germans but not to foreigners. Here the court making the reference on the other hand is interested solely in the question of the compatibility of the suspensory provisions with the export guarantee. This difference in the point of departure in the two cases is, as far as the Commission is concerned, of no importance as regards the answer to be given to the Landessozialgericht. Here, as in Case 79/76, what is at issue is a provision the purpose of which is to facilitate the social and economic integration of refugees and persons deported whose rights acquired under insurance could no longer be realized after the end of the Second World War.

The Court's answer in the abovementioned case, according to which benefits paid to persons having their habitual residence outside the Federal Republic of Germany or West Berlin must not be considered as coming under social security, is therefore equally valid here. The reservations contained in the annexes to the regulations relate to facts which do not come within the purview of the provisions of the regulations. The question submitted by the Landessozialgericht with regard to the compatibility of those reservations with the provisions of overriding rules of Community law is thus, strictly speaking, purposeless.

The German Government, represented by Professor K. Jantz and M. Seidel. acting as Agent, the Council of the European Communities, represented by M. Frohn, acting as Agent, and the Commission of the European Communities represented by N. Koch, acting as Agent, presented oral argument at the hearing on 24 January 1979.

The Advocate General delivered his opinion at the hearing on 24 January 1979.

Decision

1. By order of 19 May 1978, received at the Court on 19 June 1978, the Landessozialgericht Baden-Württemberg referred to the Court, for a preliminary ruling in pursuance of Article 177 of the EEC Treaty, a question relating to the compatibility with Article 51 of the Treaty of Article 50, in conjunction with Annex GIA2, of Regulation No 3 of the Council of 25 September 1958 concerning social security for migrant workers (Journal Officiel 1958, p. 561), and of Article 89, in conjunction with Annex VC 1 (b), of Regulation (EEC) 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).

2. This question arose within the context of an action concerning the right to payment of an invalidity pension under German legislation of an Italian national, the plaintiff in the main action, who, when he was employed at Stassfurt (at present on the territory of the German Democratic Republic) suffered an accident at work on 27 September 1944.

3. In 1969 the person concerned made an application for a pension to the Berufsgenossenschaft der chemischen Industrie (Social Insurance Fund for the Chemical Industry, hereinafter referred to as ‘the Fund’), the defendant in the main action, but on 14 March 1974 was refused a pension on the ground that at that time he resided outside the territory of the Federal Republic of Germany. On 23 June 1976 he transferred his residence to the Federal Republic of Germany and by decision of 20 December 1977 the Fund granted him an invalidity pension corresponding to a 30 % disability for the period subsequent to 23 June 1976. However, by the same decision, the Fund repeated its refusal to pay the pension for the period prior to 23 June 1976, relying on Article 12 of the German Fremdrenten- und Auslandsrentengesetz (Law on substitute pensions and pensions awarded to certain categories of persons residing abroad) of 25 February 1960 in conjunction with Annex VC 1 (b) to Regulation No 1408/71.

4. With a view to facilitating the economic and social integration of refugees and persons deported who could not assen their insurance rights because the competent institutions were no longer in existence or were outside the territory of the Federal Republic of Germany, the Fremdrenten- und Auslandsrentengesetz took responsibility under certain conditions for the rights of parties concerned, whether or not they were German nationals. Under the terms of that law, and particularly Article 12 (1), such pensions are to be suspended if the person entitled thereto is habitually resident outside the territory of the Federal Republic of Germany.

5. The Landessozialgericht Baden-Württemberg inquires whether Article 50 of. Regulation No 3 in conjunction with Annex GIA2 thereto and Article 89 of Regulation No 1408/71 in conjunction with Annex VC 1 (b) thereto are or are not compatible with Article 51 of the EEC Treaty.

6. Annex GIA2 to Regulation No 3 reads as follows: Annex VC 1 (b) to Regulation No 1408/71 reads as follows:

‘Article 10 of the regulation shall not affect the provisions under which accidents (and occupational disease) occurring outside the territory of the Federal Republic of Germany, and periods completed outside that territory, do not give rise to payment of benefits, or only give rise to payment of benefits under certain conditions, when those entitled to them reside outside the territory of the Federal Republic of Germany’.

7. In its observations the German Government has emphasized that the purpose of the legislation on substitute pensions is to facilitate the re-integration, following events connected with the National Socialist régime and the Second World War, of exiles and refugees who contribute by their work to reconstruction in the Federal Republic of Germany. Such legislation is of a discretionary nature where such nationals are residing abroad and the benefits in question are not to be regarded as being in the nature of social security.

8. In its judgment of 31 March 1977 in Case 79/76 (Fossi, [1977] ECR 667), the Court ruled that the provisions of Regulations Nos 3 and 1408/71 with regard to equality of treatment for the nationals of one Member State and those of other Member States of the Community did not apply to benefits of the kind referred to in the German legislation in respect of insurance periods completed before 1945 outside the territory of the Federal Republic of Germany. Such benefits are not to be regarded as coming within the sphere of social security, regard being had to the fact that the competent insurance institutions to which the persons referred to by the provision in question were affiliated are no longer in existence or are outside the territory of the Federal Republic of Germany, and the fact that the German legislation in question has the purpose of alleviating certain situations which arose out of events connected with the National Socialist régime and the Second World War, and finally that the payment of the benefits in question is of a discretionary nature where such nationals are residing abroad.

9. The exclusion from the field of social security within the meaning of the Treaty applies to an invalidity pension following an accident at work in the same way as it applies to an invalidity pension not following such an accident since both such benefits correspond to the criteria set out above justifying such an exclusion. That conclusion is, moreover, confirmed by Annex CIA1 and 2 to Regulation No 3 and by Annex VC 1 (b) to Regulation No 1408/71, which exclude the payment of benefits on the ground of accidents at work, such as that in this case, as long as the person entitled resides outside the Federal Republic of Germany.

10. In stating its reasons for referring this question to the Court the Landessozialgericht raised the question whether the provisions at issue do not conflict with a superior rule of law and whether in consequence Article 10 (1) of Regulation No 3 and Article 10 (1) of Regulation No 1408/71 must be applied without the restriction laid down in the annexes. Article 51 of the Treaty requires the Council to adopt such measures in the field of social security as are necessary to provide freedom of movement for workers in particular by making arrangements to secure for migrant workers the payment of benefits to persons resident in the territories of the Member States. Restrictions in the sense referred to in Articles 50 of Regulation No 3 and 89 of Regulation No 1408/71 and the annexes previously referred to are not provided for in that provision.

11. However, Article 51 of the Treaty refers only to social security benefits, so that the Council is not required to adopt provisions relating to benefits not covered by social security.

12. The answer to be given to the question submitted should be that consideration of the provisions of Article 50 of Regulation No 3 in conjunction with Annex GIA thereto and of Article 89 of Regulation No 1408/71 in conjunction with Annex VC 1 (b), thereto has disclosed no factor of such a kind as to affect the validity of those provisions.

Costs

13. The costs incurred by the Government of the Federal Republic of Germany, the Government of the Italian Republic and the Council and Commission of the European Communities, which have submitted observations to the Court, are not recoverable. 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 as to costs is a matter for that court.

On those grounds, THE COURT, in answer to the question referred to it by the Landessozialgericht Baden-Württemberg by order of 19 May 1978, hereby rules: