OPINION OF ADVOCATE GENERAL

STIX-HACKL

delivered on 15 May 2003 (1)

Joined Cases C-19/01, C-50/01 and C-84/01

Istituto nazionale della previdenza sociale (INPS)

v

Alberto Barsotti and Others (C-19/01)

and

Milena Castellani

v

Istituto nazionale della previdenza sociale (INPS) (C-50/01)

and

Istituto nazionale della previdenza sociale (INPS)

v

Anna Maria Venturi (C-84/01)

(References for preliminary rulings from the Tribunale di Pisa, the Tribunale di Siena and the Corte Suprema di Cassazione (Italy))

(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 the insolvency of their employer – Limitation of the liability of guarantee institutions)

I –  Introductory comments

1.        These proceedings concern 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 the insolvency of their employer (2) (hereinafter ‘the Directive’).  The procedure specifically concerns the function of a ceiling on payments by a national guarantee institution.

II –  Legislative background

A –    Directive 80/987/EEC

2.        The first recital reads:

‘Whereas it is necessary to provide for the protection of employees in the event of the insolvency of their employer, in particular in order to guarantee payment of their outstanding claims, while taking account of the need for balanced economic and social development in the Community’.

Article 3(1) reads:

‘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.’

The first sentence of Article 4(3) reads:

‘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.’

Article 10 reads:

‘This Directive shall not affect the option of Member States:

(a)      to take the measures necessary to avoid abuses;

(b)      to refuse or reduce the liability referred to in Article 3 or the guarantee obligation referred to in Article 7 if it appears that fulfilment of the obligation is unjustifiable because of the existence of special links between the employee and the employer and of common interests resulting in collusion between them.’

B –    National legislation

3.        To transpose the Directive, Italy adopted Decreto-legge No 80/1992 of 27 January 1992 (3) (hereinafter ‘Legislative Decree’).  Under that Legislative Decree the Istituto nazionale della previdenza sociale (hereinafter ‘INPS’) maintains a Guarantee Fund, which grants certain payments to employees in the event of their having outstanding claims because of their employer’s insolvency.

4.        In the calculation of the amount paid by the Guarantee Fund certain deductions are made from a total amount set for each employee (hereinafter ‘total amount’).  The difference is paid to the employee.  The total amount corresponds to three times the maximum amount of ‘special reparation in addition to the monthly salary’, that reparation in turn being a certain percentage of the individual’s pay before the termination of the contract of employment or employment relationship.  The payments deducted from the total amount are specified in the Legislative Decree (‘special supplementary benefit’, remuneration for work and ‘job-seeker’s allowance’).

III –  Facts of the case and main action

5.        All three of the cases here at issue concern employees who have outstanding claims arising from contracts of employment or employment relationships because of the insolvency of their respective employers.  The employees had applied to the INPS’s Guarantee Fund for the payment of equivalent amounts, but their applications were either completely or partly rejected.

6.        In Case C-19/01 Mr Barsotti (4) has been refused any payment by the INPS because the partial remuneration paid in total by the employer already exceeds the total amount.

7.        In Case C-50/01 the INPS refuses to pay part of the sum for which Mrs Castellani applied.  The INPS has deducted the partial remuneration paid by the employer and the other items from the total amount and awarded the difference. Mrs Castellani, however, applied for the equivalent of all the claims arising from the contract of employment or employment relationship which were not met in the relevant period.

8.        In Case C-84/01 the employer paid Mrs Venturi two of her last three monthly salary payments.  She is asking the INPS to pay her the equivalent of her salary entitlement for the third month.  The INPS rejects this application on the ground that, taken together, the monthly salary payments already made by the employer exceed the total amount.

IV –  Questions submitted for a preliminary ruling

9.        In Case C-19/01 the Tribunale di Pisa (District Court, Pisa) has suspended proceedings and referred the following question to the Court of Justice:

‘May Directive 80/987/EEC and the judgments relating to it (judgments in Joined Cases C-6/90 and C-9/90 Francovich and Others [1991] ECR I-5357 and Case  C‑373/95 Maso and Others [1995] ECR I-4057) be interpreted as meaning that, subject to the ceiling imposed, it is lawful to prohibit aggregation of the compensation awarded by the Guarantee Fund and part of the wages paid by the employer in the last three months only as regards the amount exceeding that represented by the level of the indennità di mobilità (job-seeker’s allowance) provided for, ratione temporis, in respect of the same period, in view of the fact that the said advances appear, like the job-seeker’s allowance and up to the same amount, to be intended to cover the primary needs of the dismissed worker?’

10.      In Case C-50/01 the Tribunale di Siena (District Court, Siena) has suspended proceedings and referred the following question to the Court of Justice:

‘Is the rule precluding aggregation of the accounting value of the special supplementary pay with the payments made to a worker in the reference period (Article 2(4) of Legislative Decree No 80/92) compatible – inter alia in the light of past rulings of the Court of Justice concerning that decree – with EEC Directive 987/80, and in particular:

(1)      can that non-aggregability be regarded as conforming with the purpose of the directive which appears (Article 3(1)) to be to ensure the payment of outstanding claims in respect of wages arising within a specified time span (Article 3(2)) and in respect of a certain period (Article 4(1) and (2))? or

(2)      does that non-aggregability reflect a rule concerning assistance, not conforming with the social criterion on which Directive 80/987 is based?

(3)      Does that non-aggregability render the directive inoperative or result in its partial disapplication?

(4)      Can that non-aggregability be allowed in the context of the power of the Member States to impose a ceiling on the guarantee of payments of workers’ claims (Article [4(3)], having regard to the fact that the Italian legislature has already imposed a ceiling by means of Article 2(2) of the legislative decree at issue?

(5)      Consequently, must the reference to the “maximum amount of the special supplementary pay” in the said Article 2(2) be regarded as being made merely for formal or accounting purposes or is it an incorporative reference (with the consequent inclusion in Legislative Decree No 80/92 of the provisions giving effect to the special wage supplement, including the so-called non-aggregability rule)?

(6)      Finally, may non-aggregability be regarded as allowed in the context of the power of the Member States to adopt the measures necessary to avoid abuses (Article 10(a))?’

11.      In Case C-84/01 the Corte Suprema di Cassazione (Supreme Court of Cassation) has suspended proceedings and referred the following question to the Court of Justice:

‘Is it permissible under Article 4(3) of Directive 80/987/EEC of 20 October 1980 – which provides that, in order to avoid the payment of sums going beyond the social objective of the directive, Member States may set a ceiling to the liability for employees’ outstanding claims in respect of the last three months of the employment relationship – to require sacrifice of part of the claims of those who received pay in excess of the ceiling and have received in the last three months of their employment relationship advances equal to or in excess of that ceiling, whereas those who received pay below the ceiling may then, through aggregation of any advances paid by the employer with the payments made by the public body, secure full satisfaction of their claims (or of a higher percentage thereof)?’

V –  The admissibility of the questions submitted for a preliminary ruling

A –    Arguments of the parties

12.      The Italian Government argues that in a preliminary ruling pursuant to Article 234 EC it is not for the Court of Justice to rule on the compatibility of national law with Community law or on the validity and interpretation of national provisions, that many of the questions put by the Tribunale di Pisa and the Tribunale di Siena should therefore be reworded, and that it is enough for the question put by the Corte Suprema di Cassazione to be answered for all three cases.

13.      The Commission similarly takes the view that the questions submitted by the various courts for a preliminary ruling should be combined and reworded on the ground that they all concern the same issue, namely whether the first sentence of Article 4(3) of the Directive should be interpreted as meaning that the ceiling which a Member State may impose on payments by a guarantee institution

(a)      represents an upper limit on the claims left outstanding by the employer on the relevant date and to be settled by the guarantee institution, less any payments received in that period, or

(b)      is a total amount to be awarded by the guarantee institution, from which all amounts received by the employee in the relevant period are deducted.

B –    Assessment

14.      To enable the Court of Justice to give the referring court an answer that will be useful for the main action, the questions submitted for a preliminary ruling should be combined and reworded, as the Commission and the Italian Government rightly suggest. (5)

15.      In the context of Article 234 EC, for example, the Court has no jurisdiction to rule either on the interpretation of provisions of national laws or regulations or on their conformity with Community law.  It may, however, supply the national court with an interpretation of Community law that will enable that court to resolve the legal problem before it. (6)

16.      ‘Finally, according to settled case-law, it is for the Court alone, where questions are formulated imprecisely, to extract from all the information provided by the national court and from the documents in the main proceedings the points of Community law which require interpretation, having regard to the subject-matter of those proceedings.’ (7)

17.      In view of the information contained in the order for reference, the questions in the three cases should be reworded as one question submitted for a preliminary ruling:

‘Should Article 3(1) and the first sentence of Article 4(3) of 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 be interpreted as meaning that the protection of employees required by the Directive is guaranteed even if the guarantee institution owes the employee concerned no more than a total amount to meet his minimum needs from which certain other payments, including those made by the employer, are deducted?’

VI –  Answering the reworded question submitted for a preliminary ruling

A –    Essential arguments of the parties

18.      Mr Barsotti (C-19/01) takes the view that the provisions of the Legislative Decree according to which advances paid by the employer are deducted from the total amount may be interpreted and applied in such a way that the INPS must pay outstanding claims arising from the contract of employment or employment relationship up to the total amount only if the employee suffers equivalent losses because of the insolvency.  He argues that the total amount may not therefore be further reduced by any advances paid by the employer in such cases.

19.      Mrs Castellani (C-50/01) takes the view that the purpose of the Directive is not to have the guarantee institutions make support payments to prevent hardship, but generally to ensure that outstanding claims are paid.  No deductions may therefore be made from the total amount calculated by the Italian Guarantee Fund. She refers to the Court’s judgment in the Maso case. (8)  It had already been found in that judgment that the Italian ‘job-seeker’s allowance’ was not based on the contract of employment or employment relationship, but was intended to alleviate the hardship suffered by the dismissed employee and could not therefore be deducted from the payments to be made pursuant to the Directive.

20.      Mrs Venturi (C-84/01) takes the view that the Italian legislation concerning the Guarantee Fund is inconsistent with the content and purpose of the Directive. She believes that the total amount referred to in the Legislative Decree can be deemed to comply with the Directive only if it guarantees that any loss or damage is made good.

21.      Even if the total amount as such is compatible with the Directive, Mrs Venturi argues, nothing should be deducted from it.  The level of payments would otherwise vary according to whether or not the employee had received payments from the employer.  The Directive, however, instructed the Member States to take measures in the event of an employer’s insolvency to settle employees’ outstanding claims arising from a contract of employment or employment relationship.  Mrs Venturi also refers to the term ‘ceiling’ in the first sentence of Article 4(3) of the Directive.  As this provision pointed out that payments by the guarantee institutions must be guaranteed amounts, deductions were not admissible.  She also refers to the Court’s judgment in the Maso and Others case, (9) in which one of the deductions for which the Italian legislation provides, the ‘job-seeker’s allowance’, has already been declared incompatible with the Directive.

22.      The INPS argues that it follows from the systematic interpretation of the Directive that the guarantee institutions were meant to support employees financially in the event of their employer’s insolvency.  Accordingly, it could not be the purpose of the Directive to grant the employees concerned payments in addition to those received from their employer.

23.      It argues that Article 1 of the Directive governs compensation for hardship suffered by employees when, as a result of his insolvency, their employer fails to satisfy claims arising from contracts of employment or employment relationships.  The first sentence of Article 4(3) of the Directive refers to the social objective of the guarantee institutions, and the first recital in the preamble to the Directive refers to ‘the need for balanced economic and social development in the Community’.  In the INPS’s view employees’ claims can therefore relate only to a benefit, which, pursuant to the first sentence of Article 4(3) of the Directive, can be granted by way of the application of a total amount to prevent payments from going beyond the social objective.

24.      Nor, it submits, is that view inconsistent with the Court’s judgment in the Maso and Others case. (10) The job-seeker’s allowance at issue in that case had been a form of financial assistance for employees.  The judgment in that case did not therefore affect the possibility of deducting part payments effected by the employer from payments by the Guarantee Fund.

25.      The Italian Government refers to the purpose of the Directive and, in this context, to the Court’s judgments in the Bonifaci and Berto (11) and the Maso and Others  (12) cases.  In its submission, it follows from those judgments and from the first recital in the preamble to the Directive that the Directive sought to give employees at least some social protection in the event of their employer’s insolvency.  The rules of the Legislative Decree were therefore compatible with the Directive inasmuch as they provided for a total amount from which certain other payments were deducted.  The aim of this system was to avoid an excessive financial burden on the State.

26.      The French Government similarly refers to the Court’s judgment in the Maso and Others case, (13) in which the Court defined the aim of the first sentence of Article 4(3) and the social objective of the Directive.  According to the Maso and Others case, the social objective of the Directive was to guarantee a minimum level of protection under Community law in the event of the employer’s insolvency through payment of outstanding claims resulting from contracts of employment or employment relationships.  The inference from Masoand Others for this case, it argues, is that advances paid by the employer towards outstanding claims cannot be deducted from the Guarantee Fund’s payments.

27.      The Commission takes the view that the term ‘ceiling’ in the first sentence of Article 4(3) of the Directive must be interpreted as meaning a maximum limit imposed on claims not met by the employer on the relevant date and to be settled by the Guarantee Fund, less any payments received up to that time.  The aim of the Directive, it argues, is to provide a guarantee for employees’ outstanding claims in the event of insolvency.  The fact that Article 4 of the Directive gives the Member States the option of limiting the liability of the guarantee institutions cannot detract from that aim.

B –    Assessment

28.      The grounds for the orders for reference issued by the national courts and the arguments of the parties in the proceedings before the Court of Justice primarily concern the admissibility of the deductions for which the Legislative Decree provides.  In my opinion, however, the problem arises earlier and concerns the question of the compatibility of a system such as that here at issue with the aims and requirements of the Directive.

29.      The arguments of the parties concerning the inadmissibility of the deductions are closely linked in the present case to a certain interpretation of the nature of payments by the Guarantee Fund.  Before the question of the deductions is discussed, it should therefore be considered whether the Directive in fact permits a method of calculation for payments by a guarantee institution such as that defined in the Italian Legislative Decree.

1. The method of calculating payments by the Guarantee Fund pursuant to the Legislative Decree

30.      As stated above, (14) to calculate the amount paid by the Guarantee Fund in each case, an individual total amount, from which certain deductions are or may be made, is specified, with due regard for the final remuneration received by the employee concerned.

31.      Inherent in this system is the following effect, which I will describe with the aid of an arithmetical example explained at the hearing, without contradiction, by the representative of the INPS:

An employee has an outstanding claim totalling EUR 5 000 arising from the time before insolvency occurred.  Of this, the employer paid EUR 3 000 before the application for payments from the Guarantee Fund, thus leaving an outstanding claim of EUR 2 000.  The individual ceiling up to which the Guarantee Fund would have to pay in the case of this employee is EUR 2 000.

As the Italian Legislative Decree is interpreted, the employee is entitled to a theoretical total amount not exceeding EUR 2 000, comprising – accordingly – payments by the employer and other benefits plus payments from the Fund. (15) However, this amount had already been paid by the employer before the application was made.  The employee would thus receive no further payments from the Guarantee Fund in this case.

On the other hand, the same employee would be entitled to payments up to the ceiling if he could instead claim from the Guarantee Fund the EUR 2 000 which his employer had failed to pay him.  The employee would receive EUR 2 000 from the Guarantee Fund.

32.      As the Italian Government and the INPS have themselves emphasised, the system for which the Legislative Decree provides is based on an interpretation according to which payments by the Guarantee Fund are ‘benefits’ intended to meet the individual employee’s minimum requirements.  The total amount referred to in the Legislative Decree performs the function of a theoretical flat-rate entitlement, which is related to the individual employee’s last remuneration and from which other benefits that alleviate the hardship suffered by him are deducted. Viewed in that way, compensating for the actual individual loss (i.e. the difference between outstanding claims and payments received) cannot be seen as a decisive criterion.

33.      The question that now arises is whether this interpretation, on which the Italian Legislative Decree is evidently based, is consistent with the aims of the Directive.

2. The aims of the Directive

34.      It must first be remembered that neither Article 3(1) of the Directive nor the first sentence of Article 4(3) has anything practical to say on how the payments by a guarantee fund should be calculated.  As a general rule, therefore, this is a matter for the Member States.

35.      The Italian Government bases its interpretation of the Directive mainly on the first sentence of Article 4(3).  It seems questionable, however, whether this provision can really be seen as reflecting an interpretation concerning payments by guarantee institutions according to which those institutions grant ‘benefits’ to meet employees’ minimum requirements.

36.      Although the first sentence of Article 4(3) of the Directive refers to the ‘social objective of [the] Directive’, using it to justify a ‘ceiling’ to prevent payments from going beyond that objective, it cannot be inferred from this alone that the aim of the Directive as a whole is – merely – to ensure that the minimum requirements of employees affected by their employer’s insolvency are satisfied.  For this provision leaves the way open for a derogation.  It is intended to enable guarantee institutions operating, for example, in the form of an externally financed fund to be protected against situations in which they themselves encounter financial difficulties as a result of individual cases of major insolvency.

37.      The main provision that gives information on the aim of the Directive is to be found in Article 3(1) of the Directive.  This provision and the first recital in the preamble to the Directive, however, argue against interpreting payments by a guarantee institution as meaning ‘benefits’ in the sense described.

38.      Article 3(1) of the Directive defines the content of the decisive obligation on the Member States as being to ensure ‘payment of employees’ outstanding claims’. (16)  The first recital similarly refers to the ‘payment of [employees’] outstanding claims’ being guaranteed by means of the Directive.  This shows that the Directive primarily seeks to ensure payments in compensation for employees’ outstanding claims rather than to place the emphasis on the alleviation of hardship possibly arising as a result.

3. The interpretation of the Directive with respect to deductions

39.      It follows from the arguments advanced by the parties in this context that the question of the admissibility of deductions apparently arises only if the Italian interpretation concerning payments by the guarantee institution is not questioned in Community law.  However, as this interpretation is not, in my view, covered as such by the Directive, there is no further need to discuss the admissibility of deductions here.

40.      As the answer to the question on which a preliminary ruling is required is meant to enable the national courts to proceed with the main actions with due regard for applicable Community law, it would none the less seem appropriate to make a number of brief, basic comments on possible deductions from claims against guarantee institutions aimed at protecting employees in the event of their employer’s insolvency.

41.      It follows from Article 3(1) of the Directive that in a system in which a guarantee institution is required to guarantee payments to satisfy employees’ outstanding claims in the event of insolvency the level of those payments must, of course, be guided by the level of the claims to remuneration which have not been met.  This means that payments which the employer has made or which third parties have made on his behalf need not be made good by the guarantee institution.

42.      Furthermore, the Court has already ruled in the case of Maso and Others that, in principle, the first sentence of Article 4(3) and Article 10 of the Directive permit the Member States to adopt national anti-aggregation rules.  However, only certain other payments or payments whose simultaneous receipt must be demonstrably regarded as abuse (17) may be deducted from the entitlement to payment by the guarantee institution. (18)

43.      It is for the national courts to determine whether and to what extent the disputed deductions can or must also be made in a calculation of payments by the Guarantee Fund which guarantees payment of employees’ outstanding claims within the meaning of the Directive.  Should this be the case, the national courts should observe the criteria arising from the first sentence of Article 4(3) and Article 10 of the Directive.  In particular, I would point out that in the case of Maso and Others (19) the Court has already considered in this context the Italian ‘job-seeker’s allowance’ under the legislation applicable in Italy at the time.

VII –  Conclusion

44.      It is therefore proposed that the Court should answer the reworded question referred to it for a preliminary ruling as follows:

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 the insolvency of their employer, and especially Article 3(1) and the first sentence of Article 4(3) of that directive, should be interpreted as meaning that the protection of employees required by the directive is not guaranteed where a guarantee institution owes the employees concerned, to meet their minimum requirements, no more than a total amount from which certain other payments, including payments by the employer, are deducted.

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1 – Original language: German.

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2 – OJ 1980 L 283, p. 23.

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3 – GURI of 13 February 1992.

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4 – In the original action Mr Barsotti was evidently joined by other employees (‘Barsotti and Others’). However, the description of the facts of the case in the order requesting a preliminary ruling refers only to Mr Barsotti.

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5 – See, for example, Case C-107/98 Teckal [1999] ECR I-8121.

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6 – Tekal (cited in footnote 5), paragraph 33, and Case C-17/92 Distribuidores Cinematográficos [1993] ECR I-2239, paragraph 8.

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7 – Tekal (cited in footnote 5), paragraph 34; Case 251/83 Haug-Adrion [1984] ECR 4277, paragraph 9; and Case C-168/95 Arcaro [1996] ECR I-4705, paragraph 21.

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8 – Case C-373/95 Maso and OthersandGazzetta and Others [1997] ECR I-4501.

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9 – Cited in footnote 8.

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10 – Cited in footnote 8.

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11 – Joined Cases C-94/95 and C-95/95 Bonifaci and OthersandBerto and Others [1997] ECR I‑3969.

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12 – Cited in footnote 8.

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13 – Cited in footnote 8.

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14 – See point 3 et seq. above.

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15 –      See point 4 above.

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16 – Case 22/87 Commission v Italy [1989] ECR 143, paragraphs 7 and 11, and Maso and Others (cited in footnote 8).

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17 – Article 10 of the Directive.

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18 – See, in particular, paragraph 57 et seq. of the judgment cited in footnote 8.

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19 – Cited in footnote 8, paragraph 59.