Conclusions
OPINION OF ADVOCATE GENERAL
GEELHOED
delivered on 27 June 2002 (1)
Case C-442/00
Ángel Rodríguez Caballero
v
Fondo de Garantía Salarial (FOGASA)
((Reference for a preliminary ruling from the Tribunal Superior de Justicia de Castilla-La Mancha (Spain)) (Reference for
a preliminary ruling from the Tribunal Superior de Justicia de Castilla-La Mancha – Interpretation of Article 1 of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member
States relating to the protection of employees in the event of insolvency of their employer – Employees' claims arising from contracts of employment or employment relationships – Whether or nor a claim arising from a settlement reached in a compulsory pre-litigation procedure concerning a dismissal falls
within the scope of that term – Direct application of the Directive in the event of legislation which by definition precludes this situation))
I ─ Introduction
1. In this case the Spanish court seeks a ruling on a number of questions concerning the interpretation of Council Directive
80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees
in the event of insolvency of their employer
(2)
(hereinafter:
the Directive). These questions essentially ask whether payments to be made by the employer to the employee as a result of unfair dismissal
are claims for the purposes of the Directive, whether these claims should be determined by way of a judicial or administrative
decision and whether the Directive is directly applicable in the event that national legislation has precluded a specific
situation.
II ─ Legal framework
A ─
Community law
2. Article 1(1) of the Directive provides that:This Directive shall apply to employees' claims arising from contracts of employment or employment relationships and existing
against employers who are in a state of insolvency within the meaning of Article 2(1).
3. Article 2(2) reads: This Directive is without prejudice to national law as regards the definition of the terms
employee,
employer,
pay,
right conferring immediate entitlement and
right conferring prospective entitlement.
4. Articles 3(1) and 4(1) and (3) provide: Article 3
1. Member States shall take the measures necessary to ensure that guarantee institutions guarantee, subject to Article 4, payment
of employees' outstanding claims resulting from contracts of employment or employment relationships and relating to pay for
the period prior to a given date.Article 4
1. Member States shall have the option to limit the liability of guarantee institutions, referred to in Article 3.
3. However, in order to avoid the payment of sums going beyond the social objective of this Directive, Member States may set
a ceiling to the liability for employees' outstanding claims.When Member States exercise this option, they shall inform the Commission of the methods used to set the ceiling.
5. Article 10 of the Directive provides that: This Directive shall not affect the option of Member States:
(a) to take the measures necessary to avoid abuses;
(b) ...
.
B ─
National legislation
6. The Fondo de Garantía Salarial (FOGASA) is an autonomous body accountable to the Ministerio de Trabajo y Seguridad Social
(Ministry of Employment and Social Security) to which, upon the transposition of the Directive, the function of guarantee
institution as referred to in Article 3 of the Directive has been assigned.
7. This guarantee institution guarantees employees' claims in the event of the employer's insolvency. Pursuant to Article 33
of the Estatuto de los Trabajadores (Workers' Statute) remuneration includes the amount recognised in a conciliation agreement
or in a judicial decision concerning all claims referred to in Article 26 of the Workers' Statute and
supplementary compensation in respect of post-dismissal remuneration awarded where appropriate by the competent court.
8. Article 26 of the Workers' Statute indicates what the term
remuneration should be understood to mean. Essentially, remuneration involves any economic benefit, either in cash or in kind, that workers
receive in consideration of the services they provide under the terms of their employment.
9. Under Article 56(1)(b) of the Workers' Statute, post-dismissal remuneration is the remuneration which the undertaking has
to pay in any event for the period starting with the effective date of dismissal and ending with the date on which the decision
is made public, the dismissal is declared unfair, or the employer acknowledges in the pre-litigation administrative conciliation
proceedings, which are compulsory under Article 63 of the Ley Procesal Laboral (Law on employment procedure), that the dismissal
was unfair and offers to pay the relevant statutory compensation and the outstanding remuneration from the date of dismissal.
The same applies to remuneration which has been agreed upon in a conciliation procedure which is also compulsory and takes
place before the court prior to the commencement of legal proceedings and which must be promoted by the court itself, as provided
by Article 84(1) of the Law on employment procedure.
III ─ Facts and procedure
10. On 30 March 1997, Ángel Rodríguez Caballero, the applicant in the main proceedings, was dismissed by his employer, the undertaking
AB Diario de Bolsillo SL. The dismissal was recognised as unfair. The employer acknowledged this in the settlement following
the pre-litigation administrative procedure which is compulsory under Spanish law.
(3)
In this settlement between the parties it was also agreed that the employer would pay a sum of ESP 136 896 in
salarios de tramitación (remuneration which has to be paid in the event of unfair dismissal; hereinafter:
post-dismissal remuneration).
(4)
11. This sum, however, was not paid by the undertaking in question, which led to the instigation of enforcement proceedings. By
a decision of 7 June 1997 the undertaking was declared insolvent. Caballero subsequently applied to FOGASA and requested that
the sum mentioned be paid to him as remuneration. This institution, however, rejected his application by a decision of 30
April 1998.
12. On 21 January 1999, Caballero applied to the Juzgado de lo Social (Social Court) No 2, Albacete, for an order against FOGASA.
By a decision of 16 April 1999, this court dismissed the application on the ground that, pursuant to Article 33 of the Workers'
Statute, when an employer has previously been declared insolvent FOGASA incurs secondary liability for post-dismissal remuneration
only where this has been awarded by the competent court and not where it has resulted from conciliation between the parties.
13. Caballero appealed from this decision to the Sala de lo Social (Chamber for Labour Matters) of the Tribunal Superior de Justicia
(High Court of Justice) of Castilla La-Mancha.
14. This court was not certain whether the claim arising from remuneration, which had been recognised in a procedure prescribed
by statute, such as a conciliation agreement reached before and approved by the court, and supervised and promoted by it,
should also be regarded as falling within the scope of the term
employees' claims as referred to in Article 1(1) of the Directive and whether FOGASA should not be ordered to accept this claim.
15. Further, the court also pointed out the following aspects:
a. Under Spanish law, in case of the employer's insolvency, it is sufficient for the statutory liability of FOGASA (in place
of the employer) to arise for ordinary claims concerning remuneration due in respect of services performed but not paid for
by the employer, or in respect of bonuses or holiday allowances not paid by the employer, that this claim has been recognised
in any type of conciliation, whether in a court-supervised or an administrative-law procedure, or by a decision of the court.
b. The agreement reached in the compulsory, court-supervised conciliation must also be approved by the court. The court is furthermore
obliged to encourage agreement between the parties and the agreement may in any event be challenged by, inter alia, FOGASA.
c. In order for FOGASA to be liable in place of the employer, the employer must be declared insolvent in legal proceedings commenced
after an attempt has been made to enforce the terms of the conciliation agreement and specific provision is made enabling
FOGASA to intervene in these proceedings and make any relevant submissions.
d. FOGASA is able, by a reasoned decision given in the file which is to be compiled at the request of the employee, to refuse
to make the requested payment in place of the employer if it considers that the conciliation agreement was reached as a result
of circumvention of the law; it may also do this when the employee's claim has been recognised in a judgment.
e. In both cases (ordinary and post-dismissal claims concerning remuneration) the claim arises from a contract of employment
and judicial review is assured.
IV ─ Questions referred for a preliminary ruling
16. The above has induced the court in the main proceedings to seek a preliminary ruling by an Order of 27 October 2000, received
at the Court Registry on 30 November 2000, on the following questions:
(a) Should a concept of the kind at issue in the present proceedings, namely the
salarios de tramitación which is payable by the employer to the employee as a result of the dismissal being unfair, be regarded as falling within
those
employees' claims arising from contracts of employment or employment relationships referred to in Article 1(1) of Council Directive 80/987/EEC on the approximation of the laws of the Member States relating
to the protection of employees in the event of the insolvency of their employer?
(b) In the affirmative, is there an obligation under Article 1(1) of Directive 80/987 to determine employees' claims by way of
either a judicial decision or an administrative decision, and should such claims include all those employee claims upheld
in the course of any other procedure recognised at law and judicially reviewable, such as conciliation, a compulsory procedure
conducted before a court, which must encourage the parties to negotiate before commencing any legal proceedings and approve
the terms of any agreement and may prevent the agreement being concluded if it considers that the terms of the agreement would
seriously prejudice one of the parties or amount to a circumvention of the law or an abuse of process?
(c) In the event that
salarios de tramitación agreed upon in a court-supervised conciliation and approved by the court does fall within the scope of
employees' claims, may the national court responsible for giving judgment in the proceedings refrain from applying a provision of national
law which excludes the employee's claim for such remuneration from the scope of matters for which the national state guarantee
institution, the Fondo de Garantía Salarial, is responsible and apply Article 1(1) of Directive 80/987 directly on the ground
that it considers the provision to be clear, precise and unconditional?
V ─ Assessment
A ─
Observations of the parties
17. The Spanish Government, the United Kingdom Government and the Commission and the EFTA Surveillance Authority have intervened
in the proceedings.
18. According to the Spanish Government,
salarios de tramitación or
post-dismissal remuneration does not fall within the
employees' claims arising from contracts of employment or employment relationships referred to in Article 1(1) of Directive 80/987/EEC. It argues that
post-dismissal remuneration is not in the nature of pay, but rather compensation, as it does not correspond to a period of employment but to a period
which runs from the dismissal to the conciliation.
19. The United Kingdom Government also regards post-dismissal remuneration as being more in the nature of compensation. It thereto
observes that in order to determine whether post-dismissal remuneration falls within
employees' claims it should in fact be examined whether the Directive obliges the Member States to also guarantee post-dismissal remuneration
in the event of the employer's insolvency. As appears from Article 3 in conjunction with Article 1 of the Directive, what
must be at issue are employees' claims to pay and these claims, as defined by national law, must be guaranteed. It points
out that this is a matter of minimum harmonisation and that the meaning of the term
pay depends on the national definition. Whether post-dismissal remuneration may be considered pay is therefore a matter for the
national court, applying its national law, to decide. As the Spanish legislator, given the wording of Article 33(2) of the
Workers' Statute, has chosen to distinguish between remuneration and compensation as a result of unfair dismissal, which,
according to the United Kingdom Government, it is competent to do (as, according to that Government, it is up to the Member
States whether they wish to guarantee such compensation in the case of the insolvency of the employer), the first question
should be answered in the negative.
20. The Commission is of the opinion that, for the determination of the actual scope of the guarantee obligation, Articles 3 and
4 of the Directive have to be examined. In this the term
pay, which is determined by national law, is of essential importance. The Commission emphasises that pursuant to the Spanish
implementing legislation pay is also understood to include supplementary compensation on account of
post-dismissal remuneration. From this it deduces that the latter remuneration falls as much within the scope of
employees' outstanding claims as referred to in Article 3(1) of the Directive, as within that of
employees' claims arising from contracts of employment or employment relationships as referred to in Article 1(1) of the Directive.
21. The EFTA Surveillance Authority also believes that
employees' claims are at issue here, given that
post-dismissal remuneration falls within the Spanish definition of pay and therefore presupposes an employment relationship.
22. As regards the second question, both the Commission and the EFTA Surveillance Authority are of the opinion that the Member
States are free to impose rules and conditions which have to be complied with before a claim can be accepted. The Surveillance
Authority of EFTA, however, points out that these rules should not have the result of rendering the exercise of Community-law
given rights practically impossible or extremely difficult. According to this institution, the Spanish rule amounts to a de
facto restriction of the guarantee institution's liability. The Commission stresses that it must be examined whether objective
criteria underlie the distinction made by the Spanish legislation in the treatment of post-dismissal remuneration which has
been recognised by a judicial decision and post-dismissal remuneration which has been acknowledged in a court-supervised conciliation
agreement. Relevant to this question are the legal consequences of each of these documents, the rights of defence belonging
to FOGASA in either case and the need to prevent abuse.
B ─
Assessment
1. The first question
23. The referring court asks whether Mr Caballero's claim (post-dismissal remuneration) falls within the employees' claims arising
from contracts of employment or employment relationships referred to in Article 1 of the Directive.
24. Article 1 of the Directive, together with Article 2 of the Directive, concerns the Directive's personal scope. It includes
the elements
claims arising from contracts of employment or employment relationships,
employees' claims and
claims existing against employers who are in a state of insolvency. The referring court has indicated that the present case indeed involves a claim arising from an employment contract or employment
relationship, that it involves a claim of an employee and that it involves an employer who is in a state of insolvency.
25. As far as I am concerned, the fact that Mr Caballero falls within the personal scope of the Directive is hereby established.
26. It is, however, not sufficient to answer the question solely in accordance with Article 1 of the Directive, as the Commission
and the United Kingdom Government have also rightly pointed out. The analysis must also be performed in the light of the guarantee
provided. In this respect, Article 3 of the Directive stipulates that employees must be offered a minimum level of protection
in the event of the employer's insolvency. To this end, specific guarantees are especially provided for the payment of outstanding
claims. This provision entails an obligation for the Member States.
27. Both Article 1 and Article 3 speak of claims arising from contracts of employment or employment relationships. It further
appears from Article 3 that the claims in question concern pay. This means that the obligation which the Directive imposes
on the Member States concerns the guarantee of outstanding claims to payment. Article 2 of the Directive provides that, for
the purpose of the definition of the term pay, the national legislation must be consulted.
28. It is an established fact that Spain has implemented the Directive. It has established a guarantee institution which guarantees
employees' outstanding claims relating to pay against insolvent employers.
29. The Spanish legislator has elected to guarantee not only
strict remuneration, but also
post-dismissal remuneration. This I infer from the Spanish definition of pay and the guarantee obligation of the Spanish guarantee institution.
30. The Spanish legislation provides that pay shall not only be understood to mean ordinary pay (pay in consideration for work
that is performed under the terms of an employment contract), but also post-dismissal remuneration. As was already made clear
in paragraph 9, the Spanish employment legislation here refers to remuneration which the employer is under an obligation to
pay to the employee in the event of the latter's unfair dismissal. Therefore, given the Spanish definition of pay, the present
case involves a claim within the meaning of the Directive. As an aside I will add that, even if post-dismissal remuneration
could perhaps be regarded as compensation for wrongfully lost pay, this does not alter the fact that under Spanish law we
are dealing with remuneration arising from an employment relationship.
31. As there is a claim arising from an employment relationship and as this claim relates to pay, it follows that Mr Caballero
should also have a claim for compensation from the Spanish guarantee institution. This after all corresponds with the obligation
arising from Article 3 of the Directive, which is to guarantee outstanding claims relating to pay for a specific period of
time.
2. The second question
32. It is apparent from the file, however, that Mr Caballero's claim was rejected and that FOGASA has therefore not made any payments.
The reason given for this is that the claim was not recognised by a judicial decision. The referring court's second question
concerns this aspect.
33. The Spanish legislator has provided that FOGASA is liable in place of the employer for ordinary claims relating to pay and
for claims to post-dismissal remuneration. However, FOGASA's liability with respect to post-dismissal remuneration is conditional.
It only applies in the event that it has been recognised by judicial decision.
34. For ordinary claims relating to pay it is, however, sufficient that the claim has been acknowledged in conciliation proceedings
before the court or an administrative body.
35. The Directive does not include any provisions as regards the procedure that is to be followed, nor does it include the obligation
to establish employees' claims by a judicial or administrative decision. The Directive thus leaves it to the Member States,
within certain parameters, to establish the procedures in accordance with which the claims arising from the Directive may
be enforced. These procedures as established by the Member States may not, however, prejudice the objective or the
practical effect of the Directive. Furthermore, the Community principle applies that similar situations should not be treated differently
and that different situations should not be treated identically unless such differentiation is objectively justified.
(5)
36. As appears from the above there is a difference between ordinary claims relating to pay and claims upheld by the court on
account of unfair dismissal on the one hand and claims for post-dismissal remuneration which have been acknowledged in conciliation
proceedings on the other. The former claims are paid by FOGASA, whereas the latter are not. It should therefore be examined
whether any objective justification exists to support this difference.
37. Pursuant to Article 10 of the Directive, the Member States are authorised to take measures to prevent abuse, although the
Court has imposed strict requirements on such measures in order to prevent justified claims of employees from being undermined.
(6)
38. The order for reference has made clear that the procedure provided by the Spanish legislation for cases in which claims for
post-dismissal remuneration are settled by means of conciliation offers sufficient guarantees to prevent abuse. In the conciliation
procedure, too, there is judicial intervention. The court, before attaching its approval to the conciliation agreement, will
first ascertain that no grave prejudice, evasion of the law or abuse of process has taken place. In addition, FOGASA also
has means of preventing evasion of the law and protecting its interests. First of all, FOGASA can challenge the conciliation
agreement reached before the court if it is of the opinion that in the conclusion of this agreement the law was evaded or
its interests were not or insufficiently considered. FOGASA further has the power to directly counter any evasion of the law
in the assessment of the applications it receives from employees for payment of their claims relating to pay, as the institution
is able to reject such applications by a reasoned decision if it believes that the law was evaded in the conclusion of the
conciliation agreement. This is even possible when the claim has been acknowledged by a judgment.
39. Against this background, I fail to detect any convincing arguments to justify the distinction between ordinary claims relating
to pay and claims for post-dismissal remuneration which have been established by a judicial decision on the one hand and claims
for post-dismissal remuneration which have been acknowledged in conciliation proceedings on the other.
40. Perhaps unnecessarily I will add that under Spanish employment law procedure the parties have a duty to attempt the conclusion
of a conciliation agreement in order to prevent a judicial decision. The attempt must furthermore be serious. As has already
appeared from the above, these matters are conducted before a court which in fact has to promote the conciliation. A record
is made of the conciliation achieved, which is signed by the parties and by the judge who must also approve the agreement.
Furthermore, an agreement concluded in this way is enforceable if it is not fulfilled. Under Spanish law, however, it does
not constitute a judicial decision, as a judgment is not delivered in a dispute.
41. This gives rise to a situation where the conclusion of a conciliation agreement, entirely in accordance with the requirements
of Spanish procedural labour law, may consequently cancel the application for payment of outstanding pay to the guarantee
institution. I consider this to be a violation of the object of the Directive.
3. The third question
42. The last question presupposes that claims relating to pay, which have been agreed upon in court-supervised conciliation proceedings
and approved by the court, fall within the
employees' claims referred to in the Directive. The question is whether in such cases the national provision precluding the guarantee institution's
liability for these claims can be disregarded and Article 1(1) of the Directive directly invoked instead.
43. The Court has already determined (see the
Francovich
(7)
and
Wagner Miret
(8)
cases) that with regard both to its personal scope and the content of the remuneration guarantee the Directive is sufficiently
precise and unconditional for application by the national courts.
44. Recently the Court has also held in the
Gharehveran case
(9)
that just as a private individual must be able to rely on the right which he has under a precise and unconditional provision
of a directive when the provision is separable from other provisions of the same directive that do not have the same degree
of precision or unconditionality, he must also be allowed to do so once the discretion given to the Member State (with regard
to these provisions) has been fully used.
45. My interpretation of the
Gharehveran case mentioned in paragraph 44 is as follows: even when employees are unable to base their claims directly upon the provisions
of the Directive itself, they are still able to do so when the national legislator has implemented the Directive. Given the
fact, which I have indicated above, that the present case is governed entirely by Articles 1 and 3 of the Directive, which
the Court in its earlier case-law has held to be directly applicable, it is not necessary in the present case to rely on the
construction followed by the Court in
Gharehveran .
46. As the Spanish legislator has also brought post-dismissal remuneration under the scope of the claims protected by the Directive,
the obligation arises from the Directive to accept such claims. A national provision excluding the guarantee institution's
liability for claims for post-dismissal remuneration established by conciliation, should therefore, when it lacks objective
justification, not be applied by the national court.
(10)
Conclusion
47. In the light of the above, I propose that the Court should answer the referring court as follows:
(1) Given that Article 2(2) of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member
States relating to the protection of employees in the event of insolvency of their employer refers to the national term
pay and the Spanish legislation, for the purpose of implementing the Directive, understands pay to also include supplementary
compensation for lost pay on account of unfair dismissal recognised by the competent judicial authority, the remuneration
included in such compensation falls within the term
employees' claims arising from contracts of employment or employment relationships referred to in Article 1(1) in conjunction with Article 3(1) of the Directive.
(2) Directive 80/987/EEC does not contain any rules concerning the procedures according to which the national authorities have
to determine the claims arising from the Directive. It is therefore up to the Member States to determine such claims in accordance
with their national law. The national regulations in question may not, however, prejudice the object and scope of the Directive
and they must ensure that similar cases receive equal treatment.
(3) A national provision which excludes employees' claims arising from a contract of employment or an employment relationship
from the guarantee institution's liability on the ground that the claims in question have not been recognised by a judicial
decision, while identical claims, which have been recognised by a judicial decision, do fall within the scope of the guarantee
institution's liability, must not be applied by the national court if there are no objective grounds to justify this difference
in treatment.
- 1 –
- Original language: Dutch.
- 2 –
- OJ 1980 L 283, p. 23.
- 3 –
- In the present case this involved a compulsory conciliation procedure pursuant to Article 84 of the Law on employment procedure.
- 4 –
- It emerges from the file that according to the settlement that was reached the employer would
re-employ Mr Caballero. The sum mentioned covers the period starting with the dismissal and ending with the settlement which resulted
from the conciliation procedure.
- 5 –
- See for example Cases C-217/91
Spain v
Commission [1993] ECR I-3923, paragraph 37 and C-306/93
SMW Winzersekt v
Land Rheinland-Pfalz [1994] ECR I-5555, paragraph 30.
- 6 –
- There must be a real, demonstrable danger of abuse which the rule in question could forestall. See Case C-373/95
Federica Maso and Others v
INPS and Italian Republic [1997] ECR I-4051.
- 7 –
- Joined Cases C-6/90 and C-9/90
Francovich and Others [1991] ECR I-5357.
- 8 –
- Case C-334/92
Wagner Miret v
Fondo de Garantía Salarial [1993] ECR I-6911.
- 9 –
- Case C-441/99
Gharehveran [2001] ECR I-7687.
- 10 –
- See for example Case C-258/98
Carra and Others [2000] ECR I-4217, paragraph 16.
