Opinion of the Advocate-General
++++
Mr President,
Members of the Court,
1. This case arises out of the difficulties encountered with respect to the pension rights of non-active spouses by nationals of the Community who have been employed both in Belgium and in the Netherlands since the latter Member State amended its legislation on the matter with effect from 1 April 1985.
2. The Court is familiar with the problem. It came to light in the Bakker case, in which the judgment that the Court had to give (1) did not have to answer ° since that was not the question put to it ° the queries which are submitted to it today and which seek essentially to ascertain whether the consequences, for the application of the Belgian rules, of the amendment of Netherlands legislation call in question the compatibility of those rules with Community law.
3. I shall not set out ° referring in this connection to the Report for the Hearing (2) ° the national rules concerned, that is to say, first, Royal Decree No 50 of 24 October 1967, as amended by the Law of 15 May 1984 on retirement and survivors' pensions for employed persons and, secondly, the Algemene Ouderdomswet, the general law on old-age (hereinafter referred to as "the AOW"), as amended in 1985. I shall confine myself to noting the features which are of relevance for an understanding of the case.
4. The Belgian rules award a retired employed person a pension, either at the "household rate" of 75%, if his spouse has ceased all occupational activity and does not receive a retirement or survivor' s pension or an equivalent benefit, or else at the "single rate" of 60% in other cases.
5. Until 1985, the AOW also awarded retired workers an increase for a dependent, occupationally inactive spouse.
6. Consequently, until that date, no difficulty arose in that respect for a migrant worker. The increase in pension that he received in the Netherlands did not affect his rights to a Belgian pension at the household rate.
7. This is no longer so since the amendment of the AOW by the Law of 28 March 1985, enacted in implementation of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (3) (hereinafter called "the directive").
8. As the Netherlands Government points out, the AOW sets up an insurance scheme for the population at large based, not as in many countries, including Belgium, (4) on the pursuit of an occupational activity, but on the length of the beneficiary' s residence in the Netherlands between his 15th and 65th birthdays.
9. That until 1985 support of a family was taken into account was reflected in the fact that the AOW granted entitlement to a pension of 100% of minimum salary only to married men, with full insurance, while unmarried men and women could receive only 70% and married women had no personal entitlement to benefits.
10. In order to make that legislation conform to the directive, the Netherlands considered that anyone, man or woman, who had been insured under the AOW should, from the age of 65, have a personal entitlement to benefit.
11. That was the case so far as Mr and Mrs van Munster were concerned. Born in 1920, Simon van Munster was employed in Belgium from 1974 to 1981 and for almost 41 years in the Netherlands.
12. In 1985, having reached the age of 65 and having his inactive wife dependent on him, he applied to the competent Belgian authority ° the Rijksdienst voor Pensioenen (hereinafter referred to as "the RVP"), the defendant in the main proceedings ° for an old-age pension which was awarded to him at the household rate.
13. The other old-age pension which Mr van Munster received in the Netherlands and which therefore included a supplement for a dependent inactive spouse, was "split" into two pensions, personal to each spouse, when Mrs van Munster herself reached the age of 65.
14. Although the total amount of the two Netherlands pensions did not exceed that of the benefit previously received by Mr van Munster, the conversion into a personal pension for the wife of the supplement previously paid on that account to the husband had the effect, in Belgium of causing the husband to lose the benefit of the household rate, which was replaced by the single rate. The result was a reduction of 15% in the amount of the income that Mr van Munster derived from his Belgian pension.
15. Mr van Munster ° understandably ° did not take kindly to such a reduction in his income. He contested before the court the decision adopted in his case by the RVP and it is in the context of the appeal against the decision given at first instance by the Arbeidsrechtbank (Labour Court), Antwerp, that the Arbeidshof (Higher Labour Court), Antwerp, requests the Court to give a preliminary ruling on two questions, the text of which is reproduced in the Report for the Hearing. (5)
16. The purpose of those is, essentially, to make it possible:
° to assess whether a provision of national law which attaches different consequences to the payment of a pension to an inactive spouse, depending on whether it is made in the form of an increased pension for the active spouse or in the form of a separate pension awarded to the other spouse, is compatible with the EEC Treaty, and more especially with the principles of freedom of movement for workers and of equal treatment for men and women;
° to determine whether there exists, with regard to Community law, any justification for treating the pension awarded to the inactive spouse differently from that awarded in the form of an increase in pension for a dependent spouse.
17. Let me dispose at once of the question of compatibility with the principle of equal treatment for men and women.
18. Whilst the court making the reference refers more particularly to Article 4(1) of the directive, which provides that:
"the principle of equal treatment means that there shall be no discrimination whatsoever on ground of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:
(...)
° the calculation of benefits including increases due in respect of a spouse and for dependents and the conditions governing the duration and retention of entitlement to benefits",
Article 7(1), as the Commission rightly observes, allows Member States to exclude from the scope of application of the directive:
"(...)
(c) the granting of old-age or invalidity benefit by virtue of the derived entitlements of a wife".
19. Thus, both the written observations of the parties to the main proceedings and of the other participants in the proceedings before the Court and their oral arguments at the hearing were also directed to the possible infringement of the principle of freedom of movement for workers.
20. The national court referred in this connection to Articles 3(c), 48(1) et seq. and 51 of the Treaty.
21. As regards the interests at issue in this case, it should be pointed out that those articles prescribe the following:
° Article 3(c): the abolition, as between Member States, of obstacles to freedom of movement for persons;
° Article 48: freedom of movement for workers within the Community (paragraph (1)), the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work (paragraph (2)), the right to move freely within the territory of Member States to accept offers of employment actually made and to stay there for the purpose of employment (paragraph (3)(a), (b) and (c));
° Article 51: the adoption of such measures in the field of social security as are necessary to provide freedom of movement for workers, in particular making arrangements to secure for migrant workers and their dependants the aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries.
22. To put it plainly, the question which arises in this case for the national court is whether the provision of the Belgian social security legislation at issue constitutes an obstacle to freedom of movement for workers. If so, it will fall to that court to determine, in the light of the explanations which this Court will have given it, whether such an obstacle may be justified from the point of view of Community law.
23. It is well known that there are considerable differences between the social laws of the Member States, and that the Community legislature has not yet made them the subject of harmonization but has confined itself at this stage to drawing up only coordinating rules. (6)
24. The Court has allowed such diversity, but has been concerned to point out that it may operate only on condition that the protection of freedom of movement for workers within the Community is respected.
25. That requirement applies first and foremost to the Community legislature.
26. Thus it is that, in its judgment in Pinna I, (7) the Court declared Article 73(2) of Regulation No 1408/71 invalid, in so far as it excluded the grant to workers subject to French legislation, of French family allowances in respect of members of their family resident in another Member State.
27. Two paragraphs of the judgment must be quoted here.
28. The Court first pointed out that, in providing for:
"coordination, not the harmonization, of the legislation of the Member States",
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, and hence in the rights of persons working in the Member States, are unaffected by the Treaty." (8)
29. The Court, however, immediately qualified that statement as follows:
"The objective of securing free movement for workers within the Community (...) will (...) be imperilled and made more difficult to realize if unnecessary differences in the social security rules are introduced by Community law." (9)
It concluded:
"It follows that the Community rules on social security introduced pursuant to Article 51 of the Treaty must refrain from adding to the disparities which already stem from the absence of harmonization of national legislation." (10)
30. It is because it "added" to the disparities stemming from national legislation and therefore impeded freedom of movement for workers that the Court declared Article 73(2) of Regulation No 1408/71 to be invalid.
31. The case-law of the Court in this connection is extremely clear. The Court describes freedom of movement for migrant workers as "one of the foundations of the Community", (11) and states that:
"The aim of Articles 48 to 51 would not be attained if, as a consequence of the exercise of their right to freedom of movement, workers were to lose the advantages in the field of social security guaranteed to them by the laws of a single Member State." (12)
32. May a national social security system have, for this purpose, to take into consideration a situation occurring in another Member State?
33. The beginnings of an answer may be found in the Court' s judgment in the Paraschi case. (13)
34. From 1965 to 1979, Mrs Paraschi, a Greek national, pursued in Germany an activity which was subject to compulsory insurance. Having fallen ill in 1977, she returned in 1979 to her country of origin where she was unable to resume employment because of her state of health or to obtain an invalidity pension under the Greek rules. Her application for a German invalidity pension was rejected because, on account of a legislative amendment applicable with effect from 1984, she no longer fulfilled the condition as to the duration of compulsory insurance to which the award of that benefit was subject. As a transitional measure, the new law allowed the persons affected to preserve their entitlement to invalidity pension through voluntary contributions paid at least once a month during the year 1984.
35. The amendment of the system had given rise to a number of difficulties with respect to certain migrant workers, and Mrs Paraschi ° who had been unable to benefit from the transitional measures ° had maintained that they were liable to lead to discrimination against migrant workers returning to their countries of origin, because of the structural differences between certain national social security systems.
36. The Court stated that:
"The conditions governing the right or obligation to become a member of a social security system are a matter to be determined by the legislation of each Member State, provided always that there is no discrimination in that connection between the nationals of the host State and those of other Member States", (14)
and that:
"Consequently, Community law does not prevent the national legislature from amending the conditions for the grant of an invalidity pension, even if it makes them stricter, provided that the conditions adopted do not give rise to any overt or disguised discrimination as between Community workers." (15)
37. The Court pointed out that:
"Although, as the Court has held, Article 51 of the Treaty leaves in being differences between the social security systems of the Member States and hence in the rights of the people working there (...), the aim of Articles 48 to 51 would not be attained if, as a consequence of the exercise of their right to freedom of movement, workers were to lose the advantages in the field of social security guaranteed to them by the laws of a single Member State; such a consequence might discourage Community workers from exercising their right to freedom of movement and would therefore constitute an obstacle to that freedom." (16)
38. Legislation such as that in question, the Court considered:
"Even if it applies, formally, to every Community worker and can thus lead to a prolongation of his reference period, nevertheless, in so far as it makes no provision for any possibility of prolongation where events or circumstances corresponding to those which enable the period to be prolonged occur in another Member State, it is liable to have a much greater adverse effect on migrant workers since they above all, particularly in case of sickness or unemployment, tend to return to their countries of origin", (17)
and the Court added:
"Consequently, such legislation has the effect of dissuading migrant workers from exercising their right of free movement." (18)
39. From those considerations the Court concluded that Articles 48(2) and 51 of the Treaty do not preclude:
"National legislation which makes the conditions for the grant of an invalidity pension stricter (...). However, those articles preclude such legislation where it permits the reference period to be prolonged, subject to conditions, but does not provide for the possibility of a prolongation where events or circumstances corresponding to the events or circumstances which would enable a prolongation to be granted occur in another Member State." (19)
40. Thus, a national social security system whose substantive and procedural differences vis-à-vis the corresponding systems of the other Member States "are unaffected by Article 51 of the Treaty" and under which the conditions for the grant of benefits may even be made more rigorous, would not be compatible with Community law if, through failure to take into consideration certain events or circumstances occurring in another Member State, it came to discriminate, even indirectly, against migrant workers or, more generally, to hinder their freedom of movement, a fundamental principle of Community law deriving from Articles 48 to 51 of the Treaty.
41. Is it not necessary, however, to pass on from fact to law and inquire whether, over and above the "events and circumstances", a national social security system must also, in certain cases, take into account the corresponding rules of another Member State, in order not to impede freedom of movement for migrant workers?
42. The following example, which enlarges the scope of the case in point, demonstrates the relevance of the question.
43. Will a Community national working as an employed person in Member State A and having a dependent spouse for whom he would normally, on ceasing employment, receive an increase in his pension entitlements, be dissuaded from taking up employment in Member State B if he knows that he will lose all entitlement to the increase in State A by reason of the specific nature of State B' s pension scheme? Similarly, will not this same worker, if he has been employed for several years in Member State B, hesitate to accept other employment in Member State A, knowing that the personal pension awarded by State B to his inactive spouse will deprive him on his retirement of the "household rate" from which his counterpart who has always worked in State A, will benefit?
44. The answer to this question is obviously in the affirmative. There is here an obstacle, which no less obviously, even in the absence of any formal provision, affects migrant workers in comparison with non-migrant workers, and therefore nationals of other Member States in comparison with the nationals of the Member State in question. (20)
45. It is certainly tempting to maintain that the source of the difficulty is to be found, in this case, in the new Netherlands legislation. The Government of the Kingdom of Belgium has not failed to do so, and has gone so far as to state that the system thus adopted "lacks consistency when it comes to be applied (...) to migrant workers" (21) and is incompatible with the principle of freedom of movement.
46. That argument is not convincing. Without there being any need to consider the respective merits of the Belgian and Netherlands systems, taken separately, or whether the amendment of the AOW, a system of insurance for the population at large and not only for employed persons, was necessary or optional in character, from the point of view of Directive 79/7, there can be no escaping the conclusion that the reduction in Mr van Munster' s Belgian pension is not a result of the AOW, which could not govern that pension, but of the effect produced by the Belgian rules when the Netherlands legislation was amended.
47. Here we arrive at the heart of the problem. Can national rules, originally not discriminatory or obstructive, become so because they cease to preserve freedom of movement for workers, following amendments to the corresponding rules of another Member State?
48. In my opinion the answer to that question must be in the affirmative.
49. As Community law stands at present, the autonomy of the Member States with regard to the establishment of their social security systems is not open to question. Nor, however, is it divisible. The autonomy of Member State A is not exclusive of that of Member State B. More than that, the first may not wholly disregard the rules of the second, and vice versa.
50. The situation of a migrant worker, with respect to his pension rights, is necessarily governed by as many national systems as States in which he has successively been employed.
51. Where those systems are alike in nature, the way in which they fit together does not, in principle, interfere with freedom of movement, and the conformity of each with Community law is determined separately.
52. Where however, as in this case, there is interference as a result of their different nature, it is the overall situation with respect to pension rights that must be considered, and if it discloses an obstacle to freedom of movement for migrant workers, it is the national rules affecting the exercise of that freedom that will have to be examined for their compatibility with Community law.
53. In other words, if the pension, including a supplement for an inactive spouse, paid to a worker in Member State B is split into two personal benefits paid to each spouse respectively, Member State A may not on that account reduce the retirement pension which it pays to that worker without thereby infringing the principle of freedom of movement for migrant workers. What State A must take into consideration here is that in State B, on the one hand, the worker' s spouse was inactive and, on the other, the total amount received by the couple by way of retirement pension is unaltered.
54. On this point it remains to consider the problem, raised in the second question put by the national court, of justifications derived from Community law of a possible restriction of freedom of movement for workers.
55. As the Netherlands Government correctly points out, (22) in this matter the only possible areas of justification are public policy, public health and public safety. It will be observed that none of these three reasons has been relied on by the Government of the Kingdom of Belgium or the RVP.
56. I therefore propose that the Court rule as follows:
(1) Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security, read in conjunction with Article 7(1)(c) of that directive, is to be interpreted as meaning that it does not preclude a national provision from attaching different consequences to the grant of a pension for an inactive spouse according to whether that benefit is awarded in the form of an increase in the active spouse' s pension or in the form of a pension awarded to the inactive spouse personally;
(2) Articles 3(c), 48 and 51 of the Treaty are to be interpreted as meaning that they preclude such a provision if, not being justified on the grounds of public policy, public safety or public health, it is liable, following a change in employment entailing a move by the employed person to another Member State, to reduce the income received by way of pension by him and his spouse, who has remained inactive, and, therefore, to hinder the exercise by migrant workers of their freedom of movement within the Community.
(*) Original language: French.
(1) - Judgment in Case 151/87 Bakker v Rijksdienst voor Werknemerspensioenen [1988] ECR 2009.
(2) - I, 1.
(3) - OJ 1978 L 6, p. 24.
(4) - A concise survey of the social provisions in force discloses three types of system: those that take no account of the situation of the inactive spouse but only of workers who have made contributions; those ° the majority ° that provide for an increase in the pension of the active spouse, and finally the system, a category of which the Netherlands is the sole representative that awards a personal pension to the inactive spouse.
(5) - I, 2.
(6) - See second and fourth recitals of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed workers and their families moving within the Community (OJ, English Special Edition 1971 (II), p. 416).
(7) - Judgment in Case 41/84 Pietro Pinna v Caisse d' Allocations Familiales de la Savoie [1986] ECR 1.
(8) - Paragraph 20.
(9) - Paragraph 21.
(10) - Ibid.
(11) - Judgment in Case 254/84 De Jong v Sociale Verzekeringsbank [1986] ECR 671, paragraph 14.
(12) - Ibid., paragraph 15.
(13) - Judgment in Case C-349/87 Paraschi v Landesversicherungsanstalt Wuerttemburg [1991] ECR I-4501.
(14) - Paragraph 15.
(15) - Paragraph 16.
(16) - Paragraph 22.
(17) - Paragraph 24, my emphasis.
(18) - Paragraph 25.
(19) - Paragraph 27.
(20) - Dissuasion from the exercise of a right recognized by the Treaty, and more particularly by Article 48, is regarded in the case-law of the Court as a possible obstacle to freedom of movement of workers (see in particular on this point the judgment in Case C-10/90 Masgio [1991] ECR I-1119, paragraph 18, paragraph 22 of the judgment in Paraschi, cited above, and the judgment in Case C-228/88 Bronzino [1990] ECR I-531, paragraph 12).
(21) - Observations of the Belgian Government, at p. 5 of the French translation.
(22) - Paragraph 20 of its observations.
Full & Egal Universal Law Academy