61989J0227

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Social security for migrant workers - Community provisions - Replacement of social security conventions between Member States - Restriction - Retention of advantages previously conferred by the combined effect of national law and international conventions

(EEC Treaty, Arts 48(2) and 51; Council Regulation No 1408/71, Arts 6 and 7)

Articles 48(2) and 51 of the EEC Treaty must be interpreted as precluding the loss of social security advantages for workers who have exercised their right to freedom of movement which would result from the inapplicability, following the entry into force of Council Regulation (EEC) No 1408/71, of conventions operating between two or more Member States and incorporated in their national law.

Although the replacement of the social security conventions between Member States by Regulation No 1408/71 is mandatory in nature, it cannot have the effect of allowing the purpose of Articles 48 to 51 of the EEC Treaty to be disregarded; that would be the case if workers who had availed themselves of their right to freedom of movement were to lose the social security advantages previously conferred on them by national legislation, whether alone or in conjunction with international social security conventions operating between two or more Member States.

In Case C-227/89,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Sozialgericht (Social Court) Stuttgart for a preliminary ruling in the proceedings pending before that court between

Ludwig Roenfeldt, residing in Stuttgart,

and

Bundesversicherungsanstalt fuer Angestellte, Berlin,

on the interpretation of Council Regulation (EEC) No 1408/71 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),

THE COURT (Sixth Chamber)

composed of: G. F. Mancini, President of the Chamber, T. F. O' Higgins, M. Díez de Velasco, C. N. Kakouris and F. A. Schockweiler, Judges,

Advocate General: M. Darmon

Registrar: V. Di Bucci, Administrator,

after considering the observations submitted on behalf of

Mr Roenfeldt, the plaintiff in the main proceedings, by A. Klinger, Rechtsanwalt, Stuttgart,

the Bundesversicherungsanstalt fuer Angestellte, the defendant in the main proceedings, by T. Herrmann, Leitender Verwaltungsdirektor, acting as Agent,

the Council of the European Communities, by M. Arpio, an Administrator in its Legal Department, acting as Agent,

the Commission of the European Communities, by K. Banks, a member of its Legal Department, assisted by B. Schulte, of the Max-Planck-Institut fuer auslaendisches und internationales Sozialrecht, acting as Agents,

having regard to the Report for the Hearing,

after hearing oral argument on behalf of the Bundesversicherungsanstalt, represented by Holger Moebius, Verwaltungsoberrat, acting as Agent, the Council, represented by R. Frohn, a member of its Legal Department, and M. Arpio, and the Commission, represented by B. Schulte, at the hearing on 25 October 1990,

after hearing the Opinion of the Advocate General delivered at the sitting on 12 December 1990,

gives the following

Judgment

1 By order of 9 February 1989, which was received at the Court on 18 July 1989, the Sozialgericht Stuttgart referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of certain provisions of Council Regulation (EEC) No 1408/71 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 Articles 48(2) and 51 of the EEC Treaty.

2 The question arose in proceedings between Mr Roenfeldt and the Bundesversicherungsanstalt fuer Angestellte (Federal Insurance Institution for Salaried Employees) regarding the calculation of his retirement pension.

3 Mr Roenfeldt, a German national residing in the Federal Republic of Germany, paid contributions under the German old-age pension insurance scheme from 1941 until 1957. He then worked in Denmark until 1971, during which time he paid contributions to the Danish social security scheme. Since then he has worked in Germany and has accordingly been subject to compulsory insurance.

4 It appears from the documents before the Court that the retirement age is not the same in Denmark and in Germany. In Denmark the retirement age is 67 years, whereas in Germany it is 65 years, with the option of early retirement at 63. According to Paragraph 25 of the Angestelltenversicherungsgesetz (Clerical Staff Insurance Law):

"(1) A retirement pension shall be granted on request to an insured person who has completed his sixty-third year ... provided that the qualifying period laid down in the first sentence of subparagraph 7 has been completed.

...

(7) ...the qualifying period is completed on the termination of a period of 35 years of insurance comprising at least 180 calendar months ..."

5 When he was about to reach the age of 63 Mr Roenfeldt took steps to obtain early retirement, as is permitted under German legislation. However, he was unable to do so because, according to the Bundesversicherungsanstalt fuer Angestellte, contributions paid in Denmark cannot be taken into account for the calculation of pension rights in Germany until the applicant has reached the general statutory age limit under Danish law, namely 67 years.

6 Mr Roenfeldt brought proceedings to annul the decision before the Sozialgericht Stuttgart, arguing that, irrespective of the retirement age laid down by Danish legislation, the periods of contribution completed in Denmark had to be taken into account in calculating the German pension. In support of that argument he cited the social insurance convention concluded between the Federal Republic of Germany and the Kingdom of Denmark on 14 August 1953, which provided that periods of insurance completed in Denmark were to be taken into account not only in respect of completion of the qualifying period but also in the calculation of the German retirement pension.

7 For its part, the defendant institution contended that the periods of insurance completed in Denmark could be taken into consideration only for the purpose of determining the qualifying period and the conditions governing pension entitlement. It further submitted that the plaintiff could not rely on the German-Danish convention on the ground that the Community regulations on social security had replaced the conventions concluded between Member States.

8 In its order referring the matter to the Court, the Sozialgericht first expresses doubts as to the validity under Community law of provisions adopted by Member States which lay down different age limits for the commencement of entitlement to their respective old-age benefits.

9 On account of those doubts the national court decided to stay the proceedings and refer the following question to the Court for a preliminary ruling:

"Is Regulation (EEC) No 1408/71, in conjunction with Paragraph 25 of the Angestelltenversicherungsgesetz (Clerical Staff Insurance Law), compatible with Article 48(2) and Article 51 of the EEC Treaty?"

10 Reference is made to the Report for the Hearing for a fuller account of the facts of the case before the national court, the course of the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

11 It should be recalled as a preliminary point that it is not for the Court, under Article 177 of the EEC Treaty, to rule on the compatibility with the Treaty of provisions of national law. The Court does, however, have jurisdiction to provide the national court with all such matters relating to the interpretation of Community law as may enable that court to decide the issue of compatibility in the case before it.

12 With regard to the doubts expressed by the Sozialgericht as to the compatibility with Community law of national provisions establishing different age limits for retirement, it should be noted that the Court has consistently held (see in particular the judgment of 5 July 1988 in Case 21/87 Borowitz v Bundesversicherungsanstalt fuer Angestellte [1988] ECR 3715, at paragraph 23) that Regulation No 1408/71 does not set up a common scheme of social security but allows different national schemes to exist. As the Court has further held on several occasions (see in particular the judgment of 15 January 1986 in Case 41/84 Pinna v Caisse d' allocations familiales [1986] ECR 1, at paragraph 20), Article 51 leaves in being differences between the Member States' social security systems and, consequently, in the rights of persons working in the Member States. It follows that substantive and procedural differences between the social security systems of individual Member States are unaffected by Article 51 of the Treaty.

13 As far as the inclusion of periods of insurance completed by workers in other Member States is concerned, it is true that under Articles 16 and 17 of the Convention on social insurance concluded between the Federal Republic of Germany and the Kingdom of Denmark on 14 August 1953 Germans who had resided in Denmark and completed periods of insurance in the Federal Republic of Germany were entitled to have up to 15 years of residence in Denmark taken into account in the calculation of the German retirement pension.

14 However, it is clear from Article 6 of Regulation No 1408/71 that subject to the exemptions under Articles 7, 8 and 46(4) the regulation replaces, as regards persons and matters which it covers, the provisions of any social security convention binding two or more Member States. Since the provisions of the German-Danish convention are not included in those express exemptions, they could no longer apply to benefits after Regulation No 1408/71 entered into force in Denmark. Those provisions of the German-Danish convention were therefore replaced with effect from 1 April 1973 by the rules of Community law contained in the regulation.

15 Accordingly, the question is whether, and how, Community law requires account to be taken of insurance periods completed in Denmark, and of contributions paid there before Regulation No 1408/71 entered into force in that country following its accession to the Communities, for the purpose of granting a retirement pension in some other Member State.

16 According to Article 94(2) of Regulation No 1408/71 "all periods of insurance and, where appropriate, all periods of employment or residence completed under the legislation of a Member State before the date of entry into force of this Regulation shall be taken into consideration for the determination of rights to benefits under this Regulation". It follows that in the case before the national court account must also be taken, for the purpose of determining pension rights in Germany, of the periods of insurance completed under Danish legislation before the date on which the regulation entered into force in Denmark.

17 Furthermore, Article 45 of Regulation No 1408/71 requires the competent institution of a Member State whose legislation makes the acquisition, retention or recovery of the right to benefits conditional upon the completion of insurance periods to take into account insurance periods completed under the legislation of any Member State as though they had been completed under the legislation which it administers.

18 However, it must be added that, as far as the calculation of the amount of the pension is concerned, Article 46 of the regulation provides that every competent institution must, in accordance with the legislation which it administers, determine the amount of benefit corresponding to the total length of the insurance periods to be taken into account in pursuance of such legislation.

19 Consequently, Regulation No 1408/71 does not provide that periods of contribution completed in one or more Member States are to be added, for the purpose of increasing the amount of the pension, to the periods of contribution completed in the Member State in which the pension is sought. Thus it is only for the acquisition of the pension entitlement that periods of insurance completed in the various Member States are aggregated.

20 It follows that, unlike the arrangement under the German-Danish convention, periods of insurance completed in Denmark cannot be taken into consideration pursuant to Regulation No 1408/71 for the calculation of the pension amount; that amount is determined pro rata according to the periods completed under German legislation. That being so, it must be admitted that the plaintiff will lose social security advantages previously conferred on him by the bilateral convention between the two States involved.

21 In those circumstances, the question submitted by the Sozialgericht Stuttgart must be construed as asking whether the loss of social security advantages which the workers concerned incur because conventions between Member States have been rendered inoperative by the entry into force of Regulation No 1408/71 is compatible with Articles 48(2) and 51 of the Treaty.

22 In the Walder judgment of 7 June 1973 (Case 32/72, [1973] ECR 599, at paragraphs 6 and 7) concerning the interpretation of Articles 6 and 7 of Regulation No 1408/71, the Court ruled that it was clear from those articles that the replacement by the regulation of the provisions of social security conventions between Member States was mandatory in nature and did not allow of exceptions, save for the cases expressly set out in the regulation.

23 Nevertheless, consideration must be given to whether, when such replacement has the effect of placing workers in a less favourable position as regards some of their rights than was accorded to them under the previous system, it is compatible with the principle of freedom of movement for workers under Articles 48 to 51 of the Treaty.

24 The provisions of Regulation No 1408/71, adopted pursuant to Article 51 of the Treaty, must be construed in the light of the aim of that article, namely to contribute to the establishment of the greatest possible measure of freedom of movement for migrant workers - a principle which is one of the foundations of the Community.

25 Article 51 requires the Council to adopt such measures in the field of social security as are necessary to provide freedom of movement for workers, by securing, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, the aggregation of all the periods taken into account under the laws of the various countries.

26 According to the case-law of the Court (see in particular the judgments of 24 October 1975 in Case 24/75 Petroni v ONPTS [1975] ECR 1149, at paragraph 13, 25 February 1986 in Case 254/84 De Jong v Sociale Verzekeringsbank [1986] ECR 671, at paragraph 15, and 14 December 1989 in Case C-168/88 Dammer v Securex Kinderbijslagfonds [1989] ECR 4553, at paragraph 21), the aim of Articles 48 to 51 of the Treaty would not be attained if, as a consequence of the exercise of their right to freedom of movement, workers were to lose advantages in the field of social security guaranteed to them in any event by the legislation of a single Member State. In its judgment of 9 July 1980 in Case 807/79 (Gravina v Landesversicherungsanstalt Schwaben [1980] ECR 2205, at paragraph 7), the Court accordingly concluded that the application of Community rules could not bring about a reduction in the benefits awarded by virtue of the legislation of a single Member State.

27 On a proper construction of that case-law, "benefits awarded by virtue of the legislation of a single Member State" must mean not only the benefits provided under national law alone, as formulated by national legislators, but also the benefits available under the provisions of the international social security conventions in force between two or more Member States and incorporated in their national law, which have the effect of placing the worker concerned in a more favourable position than is accorded by Community provisions.

28 Any other interpretation of that case-law, disregarding the provisions of conventions between Member States which entail greater advantages for workers than are available under Community provisions, would substantially restrict the scope of the aims pursued by Article 51, inasmuch as the worker exercising his right to freedom of movement would find himself in a less favourable position than if he had not availed himself of that right.

29 It follows from the foregoing that the answer to be given to the question referred to the Court is that Articles 48(2) and 51 of the EEC Treaty must be interpreted as precluding the loss of social security advantages for the workers concerned which would result from the inapplicability, following the entry into force of Council Regulation (EEC) No 1408/71, of conventions operating between two or more Member States and incorporated in their national law.

Costs

30 The costs incurred by Council and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since 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 (Sixth Chamber),

in answer to the question referred to it by the Sozialgericht Stuttgart by order of 9 February 1989, hereby rules:

Articles 48(2) and 51 of the EEC Treaty must be interpreted as precluding the loss of social security advantages for the workers concerned which would result from the inapplicability, following the entry into force of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, of conventions operating between two or more Member States and incorporated in their national law.