JUDGMENT OF 15. 9. 1983 — CASE 279/82 JERZAK v BUNDESKNAPPSCHAFT
In Case 279/82 REFERENCE to the Court under Article 177 of the EEC Treaty by the Landessozialgericht [Higher Social Court] für das Land Nordrhein-Westfalen in Essen for a preliminary ruling in the case pending before that court between
THE COURT (Third Chamber), composed of: U. Everling, President of Chamber, Y. Galmot and C. Kakouris, Judges, Advocate General: P. VerLoren van Themaat Registrar: P. Heim
gives the following:
JUDGMENT
Facts and Issues
The facts of the case, the procedure and the written observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the European Economic Community may be summarized as follows:
I — Facts and written procedure
Leo Jerzak, a German national, worked in the coalmines in Germany and Belgium from 1937 to 1960. From 1961 to 1973 he was insured as coke-oven worker under the miners' insurance scheme in the Federal Republic of Germany.
Having contracted silicosis as a result of working in the coalmines, Mr Jerzak was awarded a pension for occupational disease paid by the Belgian accident insurance institution in accordance with Article 57 (1) of Regulation No 1408/71 of the Council, which states that:
“When a person who has contracted an occupational disease has, under the legislation of two or more Member States, pursued an activity likely to cause that disease, the benefits that he or his survivors may claim shall be awarded exclusively under the legislation of the last of these States whose conditions are satisfied, taking into account, where appropriate, the provisions of paragraphs (2) and (3).”
50.94% of the cost of that pension was borne by the German Bergbau-Berufsgenossenschaft [Miners' Mutual Benefit Society] pursuant to Article 57 (3) (c) of Regulation No 1408/71, which provides that:
“The cost of cash benefits including pensions shall be divided between the competent institutions of the Member States in whose territories the person concerned pursued an activity likely to cause the disease. This division shall be carried out in the ratio which the length of old age insurance periods completed under the legislation of each of the States bears to the total length of the old age insurance periods completed under the legislation of all those States at the date on which the benefits commenced.”
Since 1973 the Bundesknappschaft has provided Mr Jerzak with a miner's disability pension. It was determined on the basis of the provisions of German law alone since the amount resulting from the application of Article 46 (2) of Regulation No 1408/71 was less advantageous for him.
Taking into account the fact that the Belgian pension for occupational disease had been increased as from 15 December 1975 as a result of Mr Jerzak's increased degree of invalidity, the Bundesknappschaft decided on 27 April 1977, on the basis of Paragraph 75 of the Reichsknappschaftsgesetz [Law on the Miners' Insurance Fund] to suspend as from 15 December 1975 payment of a proportion of the invalidity pension provided under the German rules on miners' insurance and to require the sums wrongly received to be repaid.
Paragraph 75 of the Reichsknappschaftsgesetz provides that in order to determine the amount by which the benefit is to be reduced where an accident pension overlaps with an invalidity pension it must be ascertained whether the sum of the two benefits exceeds “the annual remuneration used to calculate the accident pension and 100% of the basis of assessment for the miner's pension”. However, the Bundesknappschaft took the view that the annual remuneration taken into account by other Member States could not be used as the basis for the calculations made in Germany and decided to take account only of the basis of assessment for the pension paid under the German rules on miners' insurance.
On 12 May 1977 Mr Jerzak lodged a complaint. He contended that, since the accident pension in Belgium and in Germany was based on annual remuneration and this was higher than the basis of assessment for the miner's pension, that remuneration had to be taken into account. The Bundesknappschaft dismissed his complaint on 17 April 1978 on the ground, in particular, that by virtue of Article 12 of Regulation No 1408/71 and the provisions of Regulation No 574/72 only the personal basis of assessment entered into the calculations made on the basis of Paragraph 75 of the Reichsknappschaftsgesetz.
On 2 May 1978 Mr Jerzak appealed to the Sozialgericht [Social Court] Aachen against the decisions of 27 April 1977 arid 17 April 1978. As his principal claim, besides asking that court to annul the contested decisions, he asked it to order the Bundesknappschaft to pay him the invalidity pension without applying Paragraph 75 of the Reichsknappschaftsgesetz in conformity with the judgments in which the Bundessozialgericht [Federal Social Court] had held, on the basis of the decisions of the Court of Justice on Regulations Nos 3 and 4 of the Council, that a foreign accident pension must be left out of account when provisions of national law against the overlapping of benefits were applied.
The Bundesknappschaft argued before the Sozialgericht that a duty to apply provisions of national law on the suspension of benefits arose from Article 12 of Regulation No 1408/71 and Article 7 (1) of Regulation No 574/72. It pointed out that the minutes of the Council meeting on the application of Article 7 of Regulation No 574/72 contained the following statement by the German delegation:
“When the accident pension from another State is brought into account German law requires that in order to determine the upper limit the annual remuneration on which that pension is based should be taken into consideration. Where the accident pension is based on annual remuneration which cannot be taken into account primarily because it could not be actualized, then provisionally account should only be taken of the personal basis of assessment in order to determine the amount to be suspended.”
The Bundesknappschaft also pointed out that the provisions of Point E of Part I of Annex G to Regulation No 3, as supplemented by Regulation No 130/63 of 18 December 1963 (Journal Officiel, 28. 12. 1963, p. 2996), were not incorporated in Regulation No 1408/71. Regulation No 3 there provides that:
“Where an invalidity pension or an old-age pension payable under German legislation overlaps with an accident pension payable under the legislation of another Member State on account of an accident at work or occupational disease the annual remuneration to be taken into consideration shall be that which should be taken into consideration under the German legislation at the time of the accident in the case of a person suffering a similar injury. For that purpose the provisions in force at the claimant's place of residence in the Federal Republic of Germany or, if he resides outside the Federal Republic of Germany, the provisions in force at the place at which the competent German pension insurance institution has its headquarters shall be applied. The determination or recalculation of that remuneration shall be governed by the provisions of German legislation.”
By a judgment dated 18 April 1979 the Sozialgericht Aachen granted the alternative claim and ordered the Bundesknappschaft to calculate the benefit in accordance with Paragraph 75 of the Reichsknappschaftsgesetz on the basis of an annual remuneration calculated from the amounts of accident pension paid by the Belgian authorities and the decrease in the plaintiff's earning capacity as if it were annual remuneration paid under the German legislation. The Sozialgericht dismissed the rest of the application.
On 8 June 1979 Mr Jerzak appealed against that judgment to the Landessozialgericht at Essen and on 20 June 1979 the Bundesknappschaft did the same.
Mr Jerzak, maintaining the principal claims made in his application at first instance, asked the Landessozialgericht to order the defendant to calculate the invalidity pension due under the German rules on miners' insurance without taking account of Paragraph 75 of the Reichsknappschaftsgesetz.
The Bundesknappschaft asked it to vary the lower court's judgment on the ground that the solution adopted by that court posed certain difficulties owing to the fact that the accident pension was not the same as the annual remuneration, of which it constituted only two thirds, and the fact that the basic wage for the purposes of the Belgian accident insurance had not been adjusted, unlike the annual remuneration taken into account under German accident insurance rules.
By order dated 11 October 1982 the Landessozialgericht decided to submit the following questions for a preliminary ruling:
“1. (a) Are a Member State's legal provisions governing the overlapping of one social security benefit with another (Paragraph 75 of the Reichsknappschaftsgesetz) applicable (the first sentence of Article 12 (2) of Regulation (EEC) No 1408/71) even where : (i) the benefit to be reduced has been determined under national legislation alone (Article 46 (1) of the regulation); and (ii) a proportion of the benefit to be taken into account (Article 57 (3) (c) of the regulation) is borne by an insurance institution in the State under whose legislation the benefit to be reduced is provided? (b) Does the application of the legislation governing the overlapping of social security benefits depend in principle on the proportions of benefit borne? (c) Does it matter whether the assignment by Article 57 (1) of the regulation to the last insurance institution of sole responsibility for awarding benefit operates to the advantage or disadvantage of the insured person? 2. Is the extent to which the benefit is reduced or suspended dependent upon the size of the proportions of the benefit to be brought into account and if so to what degree? 3. Is the disregarding of annual remuneration as the upper limit for the purposes of an application by analogy of Paragraph 75 of the Reichsknappschaftsgesetz contrary to Articles 48 to 51 of the Treaty establishing the European Economic Community or other provisions or principles of Community law?”
It emerges from the order for reference that the questions submitted by the Landessozialgericht arise from the following considerations :
1. Paragraph 75 of the Reichsknappschaftsgesetz is a rule for purely internal use to avoid the overlapping of benefits. It envisages only the overlapping of an accident pension with a miner's pension provided under the German legislation. The highest German courts have moreover ruled out the application of Paragraph 75 in situations such as that in the main proceedings.
2. Referring to the judgment given by the Court in Case 34/69 (Duffy [1969] ECR 597), the Landessozialgericht raises the question whether Article 12 (2) of Regulation No 1408/71 enables an “internal” rule against the overlapping of benefits to be applied to comparable benefits provided in another Member State, even though the benefits to be reduced and to be taken into account were not determined on the basis of that regulation, where the amount of the pension to be taken into account is, in accordance with Article 57 (3) (c) of Regulation No 1408/71, borne proportionately by the social security institution which provides the benefit to be reduced.
3. The national court, which refers to decisions of the Bundessozialgericht, wonders whether a relatively minor advantage accruing in this case from the application of Article 57 of Regulation No 1408/71, and in particular from the fact that entitlement to occupational disease benefit no longer depends on production of evidence that the disease was caused by dangerous work carried out in a particular Member State, may justify imposing on the insured a major disadvantage resulting from the application of national provisions against the overlapping of benefits. With that in mind the Landessozialgericht wonders whether the German authorities must take into account the whole accident pension or only the proportion borne by them under Article 57 (3) of Regulation No 1408/71.
4. The Landessozialgericht considers that, as the abovementioned declaration of the German delegation has no legal significance and the provisions of Point E of Pan I of Annex G to Regulation No 3 were not incorporated in Regulation No 1408/71, that lacuna ought to be filled on the basis of Articles 48 to 51 of the Treaty. It believes that the fact of not taking into account the portion of benefit determined in accordance with Article 57 (3) (c) of Regulation No 1408/71 and the resultant nonapplicability of Article 75 of the Reichsknappschaftsgesetz would give migrant workers an unjustified advantage over national workers. The order for reference was registered at the Court on 19 October 1982. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Economic Community written observations were lodged by the Commission of the European Communities, represented by Manfred Beschel, a member of its Legal Department, 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 any preparatory inquiry. Pursuant to Article 95 (1) and (2) of the Rules of Procedure the Court decided, by an order dated 20 April 1983, to assign the case to the Third Chamber.
II — Summary of the written observations submitted to the Court by the Commission
The Commission points out that in, inter alia, its judgment of 13 October 1977 in Case 112/76 (Manzoni [1977] ECR 1647) the Court clearly established the principle that the application of Community law, in particular Article 12 (2) of Regulation No 1408/71, may not have the effect of reducing or diminishing in any way rights acquired under national legislation alone. The Commission therefore considers that it is not possible in this case to envisage the reduction, pursuant to Article 12 (2) of Regulation No 1408/71, of the miner's pension determined on the basis of German law alone.
The Commission reminds the Court that, according to its established case-law, in particular its judgment of 15 May 1974 in Case 184/73 (Kaufmann [1974] ECR 517), Article 12(2) of Regulation No 1408/71 allows Member States to apply “internal” rules against the overlapping of benefits to comparable benefits provided in another Member State when the benefits granted by the Member State in question are provided in pursuance of Community rules. Therefore the fact that the institutions of different Member States help to finance the same social security benefit provided by one of those States cannot of itself require the application, in accordance with Article 12(2) of Regulation No 1408/71, of internal rules against the overlapping of benefits.
According to the Commission, Article 57 of Regulation No 1408/71 merely lays down a method of financing, which should not be confused with questions relating to the acquisition or retention of rights to social security benefits.
The Commission points out that in the judgment of 21 October 1975 in Case 24/75 (Petroni v ONPTS [1975] ECR 1149) the Court held that the reduction of a benefit provided under the legislation of one Member State alone when the benefit to be taken into account had been determined on the basis of Article 45 of Regulation No 1408/71 was contrary to Article 51 of the Treaty.
Referring to the judgment given by the Court on 2 July 1981 in Joined Cases 116, 117, 119, 120 and 121/80 (Giorgio Celestre and Others [1981] ECR 1737), the Commission considers that the situation in this case would be totally different if the rule in question against the overlapping of benefits were an “external” rule requiring social security benefits received in other Member States to be taken into consideration.
As regards the “unjustified advantages” referred to by the Landessozialgericht, which Mr Jerzak is said to enjoy in comparison with national workers who, being in receipt of the same benefits under German legislation alone, could not challenge the application of that rule against the overlapping of benefits, the Commission observes that the Court has repeatedly pointed out that any differences which may exist to the benefit of migrant workers are not the result of the interpretation of Community law but of the absence of a common social security scheme or the failure to harmonize the existing national schemes.
The Commission states that if the Court decides to adopt the view advocated by it Questions 2 and 3 of the Landessozialgericht will lose their purpose.
The Commission proposes that the Court should reply to the first question as follows:
“The first sentence of Article 12 (2) of Regulation No 1408/71 must be interpreted as ruling out the reduction or suspension of a benefit acquired solely under the legislation of one Member State even if the benefits which were acquired under the legislation of another Member State were determined pursuant to Article 57 of Regulation No 1408/71 and the competent institution of the first Member State contributes towards the financing of those benefits as provided for in Article 57 (3) (c)”
III — Oral procedure
At the hearing on 2 June 1983 oral argument was presented on behalf of the Commission of the European Communities by Manfred Beschel, acting as Agent.
The Advocate General delivered his opinion at the hearing on 30 June 1983.
Decision
1. By an order dated 11 October 1982, which was received at the Court on 19 October 1982, the Landessozialgericht für das Land Nordrhein-Westfalen [Higher Social Court for North Rhine-Westphalia] referred to the Court for a preliminary ruling under 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).
2. The questions were raised in proceedings between Leo Jerzak and the Bundesknappschaft [Federal Insurance Fund for Miners] concerning the application of Paragraph 75 of the Reichsknappschaftsgesetz [Law on the Miners Insurance Fund] which applies to the overlapping of a pension paid under the German miners' insurance scheme and one paid under the German accident insurance scheme.
3. Mr Jerzak, a German national, worked in the coalmines in Germany and Belgium.
4. After contracting silicosis as a result of his work in Belgium, Mr Jerzak was awarded a pension for occupational disease in that country which was pj id under Belgian legislation by the Belgian accident insurance institution. The cost or the pension was partly borne by the Bergbau-Berufsgenossenschaft, the German miners' mutual benefit society, in accordance with Article 57 (3) of Regulation No 1408/71.
5. Since 1973 the Bundesknappschaft has provided Mr Jerzak with a miner's disability pension awarded on the basis of the provisions of German law alone as the amount resulting from the application of Article 46 (2) of Regulation No 1408/71 is less advantageous for him.
6. Taking into account the fact that the Belgian pension for occupational disease had been increased on account of Mr Jerzak's increased degree of invalidity, the Bundesknappschaft decided pursuant to Article 75 of the Keichsknappschaftsgesetz to suspend payment of a proportion of the invalidity pension provided under the German miners' scheme and to require repayment of the sums unduly paid.
7. Mr Jerzak appealed against that decision to the Sozialgericht [Social Court] Aachen and then to the Landessozialgericht für das Land Nordrhein-Westfalen which has asked the Court to rule upon the following preliminary questions :
“1)
a) Are a Member State's legal provisions governing the overlapping of one social security benefit with another (Paragraph 75 of the Reichsknappschaftsgesetz) applicable (the first sentence of Article 12 (2) of Regulation (EEC) No 1408/71) even where:
i) the benefit to be reduced has been determined under national legislation alone (Article 46 (1) of the regulation); and
ii) a proportion of the benefit to be taken into account (Article 57 (3) (c) of the regulation) is borne by an insurance institution in the State under whose legislation the. benefit to be. reduced is provided?
b) Does the application of the legislation governing the overlapping of social security benefits depend in principle on the proportions ol benefit borne?
c) Does it matter whether the assignment by Article 57 (1) of the regulation to the last insurance institution of sole responsibility tor awarding benefit operates to the advantage or disadvantage of the insured person?
2) Is the extent to which the benefit is reduced or suspended dependent upon the size of the proportions of the benefit to be brought into account and if so to what degree?
3) Is the disregarding of annual remuneration as the upper limit for the purposes of an application by analogy of Paragraph 75 ol the Reichsknappschaftsgesetz contrary to Articles 48 to 51 of the Treaty establishing the European Economic Community or other provisions or principles of Community law?”
8. In essence the first question seeks to establish whether Article 12 (2) of Regulation No 1408/71 of the Council allows a national provision designed to prevent the overlapping of national benefits alone to be applied in a case where the benefit to be reduced has been awarded solely on the basis ol national law and where the cost of the benefit to be taken into account to make the reduction, awarded under the legislation of another Member State, is borne by the competent institutions of the two Member States concerned in accordance with the procedure laid down by Article 57 (3) of the same regulation.
9. The first point to recall is that Article 12 (2) of Regulation No 1408/71 provides that the provisions of the legislation of a Member State for the reduction, suspension or withdrawal of benefit in cases of overlapping with other social security benefits may be invoked “even though the right to such benefits was acquired under the legislation of another Member State”.
10. Construed in the light of Articles 48 to 51 of the Treaty, which constitute the basis, the framework and the bounds of the social security regulations, Article 12 (2) of Regulation No 1408/71 forms the counterpart of the advantages which Community law affords workers in enabling them to require the social security legislation of more than one Member State to be applied simultaneously. Its purpose is to prevent them from deriving advantages from that possibility, which in national law are considered excessive.
11. However, although the Court has consistently held that limitations may be imposed on migrant workers to balance the social security advantages which they derive from the Community regulations and which they could not obtain without them, the aim of Articles 48 to 51 of the Treaty would not be attained if the social security advantages which a worker may derive from the legislation of a single Member State were to be withdrawn or reduced as a result of the application of those regulations.
12. It must therefore be accepted that the application, pursuant to Article 12 (2) of Regulation No 1408/71, of a provision designed to prevent the overlapping of national benefits alone to a benefit payable under the legislation of another Member State is not justified unless the benefit to be reduced was acquired by virtue of the application of the provisions of that regulation.
13. In this regard it must be stressed that the German miner's pension which the German authorities plan to reduce was acquired solely on the basis of German law.
14. Hence the circumstances in which the benefit to be taken into consideration in effecting the reduction (in this case the Belgian pension for occupational disease) was acquired and awarded do not affect the answer to be given to the question raised.
15. In any event it may be noted that the financing of part of the cost of a benefit by the competent institutions of two Member States in accordance with Article 57 (3) of Regulation No 1408/71 cannot be regarded as an advantage deriving from the application of Community law so as to permit the reduction, under Article 12 (2) of that regulation, of a pension acquired under the legislation of a single Member State. Article 57 of Regulation No 1408/71 prescribes a mere method of financing and does not confer any special advantage on the person concerned.
16. In view of the foregoing considerations the answer to the first question submitted by the Landessozialgericht für das Land Nordrhein-Westfalen must be that the first sentence of Article 12 (2) of Regulation No 1408/71 must be construed as excluding the reduction or suspension of a benelit acquired solely under the legislation of one Member State even if the benefits to be taken into account in effecting the reduction being acquired under the legislation of another Member State were awarded in application of Article 57 of Regulation No 1408/71 and if the competent institution of the lirst Member State contributes to the cost of those benefits upon the terms set out in Article 57 (3) (c).
17. In view of the answer just given to the first question there is no need to rule upon the other questions raised by the Landessozialgericht fur das Land Nordrhein-Westfalen.
Costs
18. The costs incurred by the Commission, which has submitted observations to the Court, are not recoverable. As the proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.
On those grounds, THE COURT (Third Chamber),