JUDGMENT OF 1. 3. 1984— CASE 104/83 JUDGMENT OF THE COURT (SECOND CHAMBER)
In Case 104/83 REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal du Travail [Labour Court], Brussels, for a preliminary ruling in the proceedings pending before that court between
THE COURT (Second Chamber) composed of: K. Bahlmann, President of Chamber, P. Pescatore and O. Due, Judges, Advocate General: G. F. Mancini Registrar: H. A. Rühi, Principal Administrator
gives the following
JUDGMENT
Facts and Issues
The facts of the case, the course of the procedure and the observations submitted under Article 20 of the Protocol on the Statute of the Court may be summarized as follows :
I — Facts and procedure
The plaintiff in the main action, Mr Cinciuolo, who is of Italian nationality and whose working life as an employee was spent first in Italy and then in Belgium, has been receiving in Belgium since 1 February 1977 an invalidity allowance under the relevant Belgian provisions. Since the same date he has also been receiving in Italy on the one hand an apportioned invalidity benefit, calculated according to the aggregation and apportionment principles contained in Article 46 (2) 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 on the other an occupational disease benefit.
The two Italian benefits were set off against the Belgian benefits pursuant to Article 70 (2) of the Belgian Law of 9 August 1963. The reduction as a result of a Belgian provision against overlapping was more favourable to the plaintiff than that resulting from the application of the principles of aggregation and apportionment provided for in Article 46 (2) of Regulation No 1408/71 and is not challenged by the plaintiff in the main action.
Following the increase as from 1 July 1977 in the Italian occupational disease benefit the Institut National d'Assurance Maladie-Invalidité (hereinafter referred to as “the Institut National”) reduced the Belgian benefit from the same date. After a further increase in the Italian benefit on 1 July 1980 the Institut National again reduced the Belgian benefit.
Mr Cinciuolo challenged those two reductions, claiming that they had been made in breach of Article 51 (1) of Regulation No 1408/71 which provides:
“If, by reason of an increase in the cost of living or changes in the level of wages or salaries or other reasons for adjustment, the benefits of the States concerned are altered by a fixed percentage or amount, such percentage or amount must be applied directly to the benefits determined under the provisions of Article 46, without the need for a recalculation in acordance with the provisions of that article.”
The Institut National contended that Article 51 applied only to pensions and that there was no question of extending its application to benefits of another kind.
Mr Cinciuolo maintained that in calculating the benefits to be paid pursuant to Article 46 account must be taken also of the national rules against overlapping referred to in Article 12 of the aforesaid regulation, and that a pension paid originally on the basis of those rules against overlapping remained subject to the stabilization provided for in Article 51 of the regulation and therefore did not have to be recalculated on the basis of alterations occurring by reason of an increase in the cost of living or the level of wages or salaries in the amount of the benefits paid by the institution of another Member State which had been taken into account pursuant to the rule against overlapping, and that that was so whatever the nature of the benefits.
The Institut National insisted that there was no connection between Article 46 and Article 12 of the regulation in question and observed that Article 51 of the latter made no reference to Article 12, which related to the prevention of the overlapping of benefits.
By applications dated 31 July 1979 and 5 December 1980 Mr Cinciuolo challenged the decisions of the Belgian authorities in relation to the reduction of the benefits in question before the Tribunal du Travail, Brussels. The latter stayed the proceedings and referred the following question to the Court for a preliminary ruling:
“Does Article 51 (1) of Regulation (EEC) No 1408/71 of 14 June 1971 apply solely to the invalidity, old-age and survivor's pensions referred to in Article 46 or docs it also apply to benefits of a different nature, such as those in respect of accidents at work or occupational disease, which, by virtue of the national rules against the overlapping of benefits, originally affected the amount of the pension fixed pursuant to Article 46 and any subsequent adjustments to which might again affect that pension? In other words, is it necessary to recalculate the pension pursuant to Article 46 in the event of an adjustment being made to the amount of a benefit in respect of occupational disease which is not aggregate or is partially aggregable with the pension?”
The order making the reference was received at the Court Registry on 3 June 1983.
Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were lodged at the Court by the plaintiff in the main action, represented by D. Rossini, Trade Union Delegate from the Patronato ACLI (Social and Legal Service for Italian Workers), by the defendant, the Institut National d'Assurance Maladie-Invalidité, represented by J. J. Masquelin of the Brussels Bar, and by the Commission, represented by J. Griesmar, a member of its Legal Department, acting as Agent, assisted by F. Herbert of the Brussels Bar.
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.
By order dated 9 November 1983 the Court, in application of Article 95 (1) and (2) of the Rules of Procedure, assigned the case to the Second Chamber.
II — Written observations submitted to the Court
In Mr Cinciuolo's view the Institut National is wrong in claiming that Article 51 covers only invalidity, old-age, and survivor's pensions and does not extend to benefits of any other kind. On the contrary, account must be taken of the connection between Articles 51, 46 and 12 of Regulation. No 1408/71 to determine whether or not the stabilization rule in Article 51 is applicable.
When Article 51 contemplates the possibility of recalculation of the benefits it refers to Article 46. That in turn is directly connected with Article 12 which lays down the rules against overlapping of benefits. It is as a result of the combined application of those two articles with Article 7 (1) (c) of Regulation No 574/72 of the Council of 21 March 1972 laying down the procedure for implementing the aforesaid Regulation No 1408/71 (Official Journal, English Special Edition 1972 (I), p. 159) that the invalidity benefit due solely under the Belgian legislation was reduced when it was. Accordingly, changes in the Italian benefits ought not now to affect the Belgian benefits. Mr Cinciuolo refers on that issue to the judgment of the Court of 2 February 1982 in Case 7/81 Sinatra, [1982] ECR 137).
On the other hand, account must be taken for the purpose of recalculating the benefits of, for example, any worsening of the party's incapacity and any increase in the degree of invalidity. Article 51 (2) and the procedure referred to in Article 49 of Regulation No 574/72 apply in such a case.
In view of the foregoing Mr Cinciuolo considers that the answer to be given to the question referred to the Court for a preliminary ruling might be as follows:
“Article 51 (1) of Regulation No 1408/71 applies equally to benefits other than pensions, such as benefits for accidents at work and occupational disease, if the amount of the pension was affected at the outset by such other benefits and if subsequent alterationsthereof are attributable to occurrences not personal to the insured.”
According to the Institut National, since Article 51 of Regulation No 1408/71 refers only to Article 46 which relates to benefits of the same kind and contains no reference to Article 12 and since, moreover, Article 12 (2) enables the national provision against overlapping to be applied when the insured receives benefits of the same kind paid in accordance with Articles 46 and 51 and one or more benefits of a different kind (or other income), it is easy to perceive that the machinery established by Article 51 applies, strictly speaking, solely to benefits of the same kind.
In the opinion of the Institut National the aforegoing analysis, which is rather of a formal nature, may be confirmed by citing reasons appertaining more to the merits than to the form.
It must not be forgotten that Article 12 refers to benefits or income presumed to be quite different from the benefits of the same kind to which Article 46 (and Chapter 2 to Title III) relates. It is not only a question of benefits of a different kind (Article 12 (2)) but also income or salary arising from a professional or trade activity, which is referred to in Article 12 (3) (see also Article 7 (1) (b) and (c) of Regulation No 574/72 which relates to the application of Article 12 (2) and (3)).
The Institut National considers that the profoundly different nature of income received from pursuit of a professional or trade activity (in comparison with benefits of the same kind within the ambit of Chapter 2 of Title III) makes it incompatible with the application, for the purposes of an adjustment, of a procedure such as that provided for in Article 51. In the case of an invalid for example, income from a professional or trade activity resumed part-time is a very variable factor as regards both increase and reduction.
In view of the application of the rules on overlapping to benefits of the same kind and to other benefits or income the Institut National does not accept Mr Cinciuolo's proposition that the original situation in relation to the benefit should remain unaltered, for that would prevent reconsideration of the insured's position some time after, for example in the event of an invalid's having to reduce the amount of work which he had been able to do.
Whereas it may be presumed that adjustment made in the case of benefits of the same kind as a result of a reassessment due to an increase in the cost of living would give an equivalent result, on the whole, it appears obvious that such a procedure cannot be used when the calculation of the benefit involves factors or matters which cannot be compared or assimilated to a benefit of the same kind, such as income from a trade or professional activity resumed part-time or benefits of a different kind such as, for example, those awarded for an accident at work or for occupational disease which are of a special nature (since subsequent developments may necessitate a revision of the percentage fixed) and scarcely compatible with the adjustment procedure provided for in Article 51.
The Institut National is therefore of the opinion that Article 51 refers solely to benefits of the same kind awarded in the States in question pursuant to Article 46 and does not apply to the aforesaid benefits when they are reduced because the beneficiary also receives a benefit of a different kind or other income or salary. Any reassessment of such benefits or income may thus involve a recalculation and, if necessary, a further reduction.
The Institut National concludes that the question referred to the Court for a preliminary ruling should be answered as follows :
“Subsequent adjustments of a benefit of a different kind, such as benefits relating to accidents at work or occupational disease, which originally affected the amount of the invalidity, old-age or survivors' pension awarded pursuant to Article 46 of Regulation No 1408/71 are not covered by the provisions of Article 51 (1) and (2) of Regulation No 1408/71.”
The Commission refers first to the aforesaid judgment in the Sinatra case in which the Court emphasized that the main objective of Article 51 was to simplify administration.
It observes that Article 46 of Regulation No 1408/71 involves a comparison between the “independent” benefits based solely on national law and “Community” benefits, namely those obtained as a result of aggregating periods as provided for in Article 45 thereof.
It is for the purpose of avoiding having to make a new comparison to determine the most advantageous scheme at each alteration of one or more of the benefits granted that Article 51 restricts the need for a recalculation to the cases mentioned in its paragraph (2), namely an alteration in the method of determining the benefits or in the rules for calculating them.
The problem to be resolved is whether Article 46 must be interpreted strictu sensu, or given a wider interpretation so as to include benefits of a different kind which by reason of the national provisions against overlapping are also involved in the operation of the procedure provided for by Article 46.
In the Commission's view, the present case is indeed concerned with benefits of a different kind. It appears from the case-law of the Court that when, as in the present case, a worker enjoys an “independent” benefit in a Member State he is entitled to the highest benefit out of, on the one hand, that which he may claim under the legislation of that Member State in its entirety, including any provision against overlapping which it may contain, and on the other hand the benefit which he may claim pursuant to the provisions of Regulation No 1408/71 in its entirety. The part of the calculation relating to the “Community” benefit is based on Article 46 as a whole, including paragraph (3) thereof (see the judgments of the Court of 16 May 1979 in Case 236/78 Fonds National de Retraite v Mura [1979] ECR 1819 and 5 May 1983 in Case 238/81 Van der Bunt [1983] ECR 1385).
It follows that in calculating the Community pension pursuant to Article 7 (1) (c) of Regulation No 574/72 account is to be taken of the national provisions against overlapping. Thus the original calculation is to be made, according to Article 46, taking into account the benefits of a different kind covered by the national provisions against overlapping.
In the Commission's view it follows that in view of the ratio legis of Article 51 as interpreted by the Court in the aforesaid Sinatra case the article must, as a provision implementing Article 46, be taken to refer to all benefits included in the original calculations, including benefits of a different kind taken into account in the national provisions against overlapping.
In consequence the Commission proposes that the question referred to the Court for a preliminary ruling should be answered as follows:
“Article 51 (1) of Regulation (EEC) No 1408/71 applies to all benefits of the States concerned which are taken into account for the purposes of the calculations and comparisons to be made under Article 46, including paragraph (3) thereof and its implementing provisions.”
III — Oral procedure
At the sitting on 15 December 1983 oral argument was presented by J. J. Masquelin, for the defendant, and by F. Herbert, for the Commission.
The Advocate General delivered his opinion at the sitting on 9 February 1984.
Decision
1. By a judgment of 26 May 1983, which was received at the Court on 3 June 1983, the Tribunal du Travail, Brussels, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 51 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 question was raised in proceedings between Salvatore Cinciuolo, an Italian national, and, inter alia, the Institut National d'Assurance Maladie-Invalidité (hereinafter referred to as the “Institut National”), a Belgian social security institution.
3. Mr Cinciuolo has been receiving since 1 February 1977 an invalidity allowance under Belgian legislation. He also receives two Italian benefits, namely an apportioned invalidity pension calculated according to the aggregation and apportionment principles contained in Article 46 (2) of Regulation No 1408/71 and an occupational disease benefit.
4. The two Italian benefits were set off against the Belgian benefit pursuant to Article 70 (2) of the Belgian Law of 9 August 1963. That reduction, pursuant to a Belgian provision against the overlapping of benefits, was more favourable to Mr Cinciuolo than that resulting from the application of the aggregation and apportionment principles contained in Article 46 (2) of Regulation No 1408/71 and is not challenged by him.
5. Following the increase as from 1 July 1977 in the Italian occupational disease benefit the Institut National reduced the Belgian benefit by a corresponding amount as from the same date. After a further increase in the Italian benefit on 1 July 1980 the Institut National again reduced the Belgian benefit.
6. Mr Cinciuolo challenged the two reductions before the Tribunal du Travail, Brussels, on the ground that they had been made in breach of Article 51 (1) of Regulation No 1408/71. The Institut National contended that Article 51 applied only to pensions and that there was no question of extending its application to benefits of another kind.
7. The Tribunal du Travail stayed the proceedings and referred the following question to the Court for a preliminary ruling :
“Does Article 51 (1) of Regulation (EEC) No 1408/71 of 14 June 1971 apply solely to the invalidity, old-age and survivor's pensions referred to in Article 46 or does it also apply to benefits of a different nature, such as those in respect of accidents at work or occupational disease, which, by virtue of the national rules against the overlapping of benefits, originally affected the amount of the pension fixed pursuant to Article 46 and any subsequent adjustments to which might again affect that pension?
In other words, is it necessary to recalculate the pension pursuant to Article 46 in the event of an adjustment being made to the amount of a benefit in respect of occupational disease which is not aggregable or is partially aggregable with the pension?”
8. In order to answer that question it is necessary to interpret Article 51 of Regulation No 1408/71 in the light of its wording, context and objectives.
9. Article 51 (1) provides that if, by reason of an increase in the cost of living or changes in the level of wages or salaries or other reasons for adjustment, the benefits of the States concerned are altered by a fixed percentage or amount, such percentage or amount must be applied directly to the “benefits determined under the provisions of Article 46”, without the need for a recalculation in accordance with the provisions of that article. On the other hand, Artide 51 (2) provides that if the method of determining, or the rules for calculating, benefits should be altered, a recalculation is to be carried out In view of the terms used in Article 51 (1) for the reference to Article 46, it must be observed that the only case covered expressly by Article 51 is that of an alteration in one of the benefits which have been determined under the provisions of Article 46.
10. Article 46 determines the rules governing the amount of benefits for workers who have been subject to the legislation of two or more Member States. In particular, it specifies the calculations which are required in order to determine whether the application of the national legislation, including its provisions against overlapping, is more favourable to the worker in question han the system of aggregation and apportionment provided for in Article 46 (2), lt follows that the calculations made pursuant to Article 46 may take into account not only benefits the amount of which must be determined according to that article but also, as a result of the national rules against overlapping, other benefits which may subsequently be altered.
11. It must be emphasized that Article 51 does not constitute an exception in relation to Article 46 but a provision governing its application. The fact that a particular situation is not expressly covered by such a provision does not prevent the provision from applying to it if that is in accordance with its objectives.
12. As the Court recognized in its judgment of 2 February 1982 (Case 7/71 Sinatra v Fonds National [1982] ECR 137), Article 51 was intended to reduce the administrative burden which a fresh examination of the insured's situation following every alteration in the benefits received would entail The regulation was thus intended to exclude a fresh calculation where the alteration in the benefits results from events unconnected with the personal circumstances of the insured and is a consequence of the general evolution of the economic and social situation.
13. The same grounds of simplification and stability argue against a recalculation each time a benefit which influenced the original calculation of benefits, by virtue of the national rules against overlapping, is altered as a result of the same general evolution. In fact, the distinction made by Article 51, depending on whether the alteration in benefits is due to the general evolution in the economic situation or to an alteration in the method of determining the benefits or in the rules for calculating them, is just as suitable for application to benefits other than those determined pursuant to Article 46.
14. Therefore the answer to the question must be that Article 51 of Regulation No 1408/71 must be interpreted as applying to benefits such as those in respect of accidents at work or occupational disease which, by virtue of the national rules against the overlapping of benefits, originally affected the amount of the pension fixed pursuant to Article 46 and any subsequent adjustments to which might again affect that pension. It is therefore not necessary to recalculate the pension pursuant to Article 46 if an adjustment is made to such a benefit on account of the general evolution of the economic and social situation.
Costs
15 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 proceedings 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 (Second Chamber), in answer to the question referred to it by the Tribunal du Travail, Brussels, by a judgment of 26 May 1983, hereby rules: