OPINION OF MRS ADVOCATE GENERAL ROZÈS

DELIVERED ON 17 NOVEMBER 1983 (1)

Mr President,

Members of the Court,

The Raad van Beroep, Amsterdam, has referred four questions to the Court for a preliminary ruling under the first and second paragraphs of Article 177 of the EEC Treaty. It requests the Court to rule on the interpretation of various provisions of the Council's regulation of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (2) and of the regulation of 21 March 1972 implementing that regulation. (3) The questions relate primarily to Article 15 (1) (b) and (c) of the implementing regulation, which lays down the manner in which insurance periods are to be aggregated for the application of Article 46 (2) (b) of the basic regulation.

The main proceedings were brought by Wilhelm J. Derks, a German national who formerly worked in the Netherlands, against the Nieuwe Algemene Bedrijfsvereniging [New General Professional and Trade Association], a Netherlands social security institution (hereinafter referred to as “the Association”) with regard to the method of calculating and therefore the amount of the benefit under the Netherlands Wet op de Arbeidsongeschiktheidsverzekering [Law on Insurance against Incapacity for Work, hereinafter referred to as “the Incapacity (Insurance) Law”] which the authority pays to the plaintiff pursuant to the aforementioned regulations. These proceedings have been brought primarily because part of the insurance periods to be taken into account for the calculation of the benefit was completed under the Invaliditeitswet [Invalidity Law which was replaced by the Incapacity (Insurance) Law from which it differed to a considerable extent. The Court has already seen in Blottner ν Nieuwe Algemene Bedrijfsvereniging (4) in which also questions was submitted by the Raad van Beroep, Amsterdam, some of the difficulties caused by that change in the legislation.

I —

The facts may be summarized as follows.

The plaintiff was employed in the Netherlands as a labourer from 7 June 1955 to 1 April 1971.

From the beginning of his employment to 31 December 1964 he paid 500 weekly contributions in respect of the whole of that period (5) under the Invalidity Law, according to which the amount of the benefit depended on the number of insurance periods completed by the worker. It was therefore “Type Β legislation”, to recall the terminology of Regulation No 3, (6) which it is convenient still to use.

The system of insurance set up by the Invalidity Law was repealed by the Liquidatiewet Invaliditeitswetten [Invalidity Laws (Repeal) Law] of 10 December 1964, as amended, by virtue of which (7) from 1 January 1965 contributions could no longer be paid under the Invalidity Law but employed persons, such as the plaintiff, remained insured against the risk of invalidity until the Incapacity (Insurance) Law came into force. (8)

That was on 1 January 1967. Until 31 March 1971 Mr Derks was insured under that law, which is “Type A legislation” within the meaning of the expression adopted from Regulation No 3, since the amount of the benefit payable under it is independent of the duration of the insurance at the time of the materialization of the risk.

During most of the period in which he worked in the Netherlands the plaintiff also paid contributions in the Federal Republic of Germany in respect of the risk of invalidity. He made the payments under the Arbeiterrentenversicherungs-Neuregelungsgesetz [Manual Workers Pension Reform Law] which is Type Β legislation. (9) The contributions were voluntary. The plaintiff insured himself in the State of which he was a national as he thought he would thereby receive a higher pension than if he were affiliated to his Netherlands employer's supplementary insurance scheme. (10) His voluntary insurance in the Federal Republic of Germany covered two periods: 1 January 1957 to 31 December 1966 and 1 January 1968 to 31 December 1968.

From 1 April 1971 (11) the plaintiff was subject solely to the compulsory invalidity insurance scheme in Germany.

On 8 October 1976 he sustained injuries resulting in his incapacity for work.

He therefore applied to the Association under the Incapacity (Insurance) Law for an invalidity pension, which was granted by decision of 31 May 1978 with effect from 7 October 1977. That decision was based on Article 45 (3) of Regulation No 1408/71 which is concerned with legislation, such as the Incapacity (Insurance) Law, which does not impose any condition with regard to the duration of insurance but requires the worker to be subject to the legislation at the time of the materialization of the risk. If, at that time, the employee is, in particular, subject to the legislation of another Member State, just as the plaintiff was subject to German law, that provision states that he is to be deemed to be still so subject.

Since the plaintiff was entitled to a Netherlands pension only if account was taken of insurance periods completed in the Federal Republic of Germany the Association applied Article 46 (2) of Regulation No 1408/71. In order to calculate the actual amount of the benefit for the purposes of Article 46 (2) (b) it determined the length of the insurance periods completed in the Netherlands (12) in relation to the total length of insurance periods completed in the Netherlands and in the Federal Republic of Germany. (12)

The periods from 1 January 1957 to 31 December 1966 and 1 January 1968 to 31 December 1968, since they were covered by insurance both under Netherlands law and under German law, constitute overlapping periods for the purpose of the application of the rules for the calculation of the benefit to be provided by the Association. The latter therefore had recourse to the rules provided for in Article 15 of Regulation No 574/72, as is required by Article 46 (2) (d). (13)

With regard to 1968, during which the plaintiff was subject to voluntary insurance in the Federal Republic of Germany and compulsory insurance in the Netherlands, the Association took only the latter into account as required by Article 15 (1) (b). That part of its decision is not contested.

The disagreement between the parties to the main proceedings therefore relates to the period between 1 January 1957 and the end of 1966. With regard to that period the Association took into account only the insurance periods completed in Germany to the exclusion of those completed in the Netherlands. It based its decision on Article 15 (1) (c) which provides that when a period of insurance, other than a period treated as such, completed under the legislation of one Member State coincides with a period treated as such under the legislation of another Member State, only the period other than a period treated as such shall be taken into account.

Its reasoning is based on two hypotheses :

The insurance period completed under the Invalidity Law was a period treated as such;

Where a period of voluntary insurance other than a period treated as such coincides with a period of compulsory insurance treated as such, precedence must be given to the former.

The result was that the amount of the Netherlands benefit awarded to the plaintiff was less by two thirds than it would have been if the insurance period completed in the Netherlands had been taken into account.

The Association also stated that such a decision was normal.

The plaintiff rejects that analysis of this situation. He therefore instituted proceedings before the Raad van Beroep, Amsterdam, on 6 July 1978 in which he contended primarily that the period from-1 January 1957 to 31 December 1966 was, like 1968, a period during which he was subject to compulsory insurance in the Netherlands.

Since that court considered that judgment in the dispute depended on an interpretation of the Community regulations on social security for migrant workers it stayed the proceedings and referred the following questions to the Court for a preliminary ruling:

4. If a period treated as a period of compulsory insurance, completed under the legislation of a Member State, coincides with a period of voluntary insurance other than a period treated as such, does the question whether a period is compulsory or voluntary (Article 15 (1) (b)) or the question whether a period is “treated as such, completed under the legislation of one Member State” (Article 15 (1) (c)) take precedence under Article 15 of Regulation No 574/72?

It should be noted that the first three questions all relate to the definition of the periods of gainful employment completed in the Netherlands before 1 July 1967.

II —

The first question seeks to determine whether the contribution periods completed under the Invalidity Law must be regarded as completed under “legislation” within the meaning of Article 1 (j) of Regulation No 1408/71 in conjunction with Articles 1 (r) and 94 (2) of that regulation.

In order to reply to that question effectively it must not be overlooked that the question is not put in a general manner but for the application of Article 46 (2) of Regulation No 1408/71 and that the application is to be effected at a time when the law in question is no longer in force. It must also be remembered that the question does not relate to the whole of the period before the Incapacity (Insurance) Law came into force but solely to that part of the period when it was possible to pay contributions under the Invalidity Law, that is to say until 31 December 1964.

It is no longer possible, it states, to refer to periods of contribution since contributions paid under the Invalidity Law were redeemed in their entirety and the periods completed under it were capitalized, including the extent to which they might give rise to a right to invalidity benefits.

Nevertheless, with regard to international relations, in particular for the application of Article 46 (2) (b) of Regulation-No 1408/71 (14) it was necessary to determine the periods of insurance completed before the Incapacity (Insurance) Law came into force. That determination was made in accordance with Circular No 315 of 8 March 1967 issued by the Sociale Verzekeringsraad [Social Security Council], the main contents of which were repeated in the aforementioned provision of Annex V. Thus the concept of periods of contribution was replaced by that of periods of paid employment and periods treated as such completed in the Netherlands before 1 July 1967. The latter concept is clearly much wider than the former.

Under the system provided for in the Invalidity Law a substantial part of the periods of gainful employment were not regarded as periods of insurance: insurance under it was subject to a wage limit; it was not possible for an employed person to insure himself after the age of 35; in general periods during which no contribution was made could not be taken into account as periods of insurance. Moreover, according to the aforementioned circular issued by the Social Security Council periods of residence in the Netherlands were considered as periods of insurance unless it could be shown that, during those periods, the person concerned was not in gainful employment in that State. It is common ground that the expression “periods treated as such” in paragraph 4 (a) of Part H of Annex V refers to such periods.

For the purposes of the application of Article 46 (2) of Regulation No 1408/71 must the “periods of paid employment and periods treated as such completed under Netherlands legislation before 1 July 1967” be deemed to have been completed under “legislation” within the meaning of Article 1 (j) in conjunction with Article 1 (r) and with Article 94 (2) of that regulation?

It may be recalled that Article 1 (j) of Regulation No 1408/71 provides that:

“‘Legislation’ means in respect of each Member State statutes, regulations and other provisions and all other implementing measures, present or future, relating to the branches and schemes of social security covered by Article 4 (1) and (2).” (15)

In its judgment of 9 June 1977 in the Blottner case (16) the Court stated that:

“The question arises whether the words ‘present or future’ exclude from the scope of that definition measures which were no longer in force at the time of the adoption of the regulation in question and of the regulation taken in implementation thereof ...

Article 51 of the Treaty makes provision for the establishment of a system of social security securing for migrant workers 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.

The objective of that article would not be attained if the worker lost the status of an insured person within the meaning of the regulations in question solely because of the fact that, at the time when those regulations were adopted, the national legislation in force at the time when the worker was insured had been replaced by different legislation.

It follows that the words ‘present or future’ must not be interpreted in such a way as to exclude measures which were previously in force but had ceased to be so when the said Community regulations were adopted.” (17)

According to that provision :

“‘Periods of insurance’ means periods of contribution or periods of employment as defined or recognized as periods of insurance by the legislation under which they were completed or considered as completed, and all periods treated as such, where they are regarded by the said legislation as equivalent to periods of insurance.”

As a result of the fact that, in connection with the application of Article 46 (2), the concepts which were in force at the time of the Invalidity Law were replaced by those contained in the Social Security Council's circular and in paragraph 4 (a) of Part Η of Annex V, it is no longer possible to refer to the concepts of the Invalidity Law which was the national legislation under which the periods in question were completed but to the two subsequent sources mentioned.

That replacement provides a clear answer to the question put to the Court: periods of paid employment and periods treated as such completed in the Netherlands before 1 July 1967 within the meaning of Annex V to the regulation are periods of employment as defined therein and periods treated as such which it recognizes as the equivalent of periods of insurance.

“All periods of insurance ... 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.”

III —

In view of the foregoing explanations, in which it has been noted that periods of contribution are no longer to be taken into account for the application of Article 46 (2) to cases such as this one, the second question, which refers to that concept, has lost its purpose.

IV —

An examination of the third question alone will therefore suffice to determine whether periods of paid employment within the meaning of paragraph 4 (a) of Part H of Annex V must be regarded as periods other than periods treated as periods of insurance or as periods treated as periods of insurance under the legislation of a Member State within the meaning of Article 15 (1) (c) of Regulation No 574/72.

It maintains first that periods of paid employment completed in the Netherlands before 1 July 1967 do not correspond to the concept of periods treated as periods of insurance within the meaning of Article 1 (r) of Regulation No 1408/71. The definition given to “periods of insurance” by that provision is in three parts and according to it periods of paid employment fall within the category of periods of insurance other than periods treated as such. Such periods are, as has been stated, primarily “periods of employment as defined or recognized as periods of insurance by the legislation under which they were completed”.

The Commission also notes that according to the wording of Article 1 (r) whether a period is to be regarded as a “period treated as a period of insurance” is to be decided by the relevant national legislation as the Court held in its judgment of 5 December 1967 in the Welchner case. (18) Paragraph 4 of Part H of Annex V relates only to the systems of aggregation and apportionment provided for by Regulation No 1408/71.

Finally it emphasizes that the periods of paid employment completed in the Netherlands before 1 July 1967 cannot be periods treated as periods of insurance within the meaning of Article 15 of the implementing regulation since Article 1 (r) already includes within the term “periods of insurance” periods treated as such. Therefore, if the relationship established by Annex V between periods of paid employment completed in the Netherlands before July 1967 and periods completed under the Incapacity (Insurance) Law were simply one of equivalence there would be no need for the annex. The relationship must therefore be of some other type. Instead the periods in question must be regarded as periods completed under the Incapacity (Insurance) Law within the meaning of the second part of the definition contained in Article 1 (r). (19)

In my opinion those arguments, which are based on a reference to the legislation under which the periods in question were completed or are considered as completed, that is to say the Netherlands legislation in force before 1 July 1967, ignore the fact that such a reference is devoid of meaning in the context of the application of Article 46 (2). (20)

Reference should therefore be made, to paragraph 4 (a) of Part H of Annex V alone.

It would be useful to quote here the precise wording of paragraph 4 (a) of Part Η of Annex V to Regulation No 1408/71 which provides that:

“For the purposes of the provisions of Article 46 (2) of the regulation, periods of paid employment and periods treated as such completed under Netherlands legislation before 1 July 1967 shall also be considered as periods of insurance completed under Netherlands legislation on insurance against incapacity for work.” (22)

A comparison of that wording with that of the aforementioned Article 1 (r) leads inevitably to the following conclusion: the relationship established by Annex V between periods of employment completed in the Netherlands before 1 July 1967 and the Incapacity (Insurance) Law is not one of equivalence within the meaning of the third part of the definition of periods of insurance. Such periods, as they are regarded as having been completed under the Incapacity (Insurance) Law, fall within the second category of periods of insurance defined by Article 1 (r) of Regulation No 1408/71.

V —

The fourth question referred to the Court by the Raad van Beroep arises solely if periods of employment completed in the Netherlands before 1 July 1967 are regarded as periods treated as periods of insurance within the meaning of Article 15(1) (c) of the implementing regulation. Since they are in my opinion not to be regarded in that way I shall consider this question only in case the Court does not share my opinion.

The Netherlands court asks whether, if a period treated as (within the meaning of Article 15 (1) (c)) a period of compulsory insurance (within the meaning of Article 15 (1) (b)) coincides with a period of voluntary insurance (within the meaning of Article 15 (1) (b)) other than a period treated as such (within the meaning of Article 15 (1) (c)), preference is to be given to the fact that it is a period treated as a period of insurance or to the fact that it is compulsory.

It is necessary to recall in this case that the period of voluntary insurance other than a period treated as such is the period of insurance completed by the plaintiff in the Federal Republic of Germany and that the period of compulsory insurance which is alleged to be a period treated as such is the period of his paid employment in the Netherlands. The two periods run from 1 January 1957 to 31 December 1966.

1.In the Association's opinion the order in which periods may be taken into account in such case is as follows:

Periods of compulsory insurance;

Periods of voluntary insurance which give rise to the payment of contributions in the same way as periods of compulsory insurance (the two categories have in common the fact that they are actual periods of insurance);

Periods treated as periods of insurance.

The Association therefore considers that the most important difference between the categories of periods of insurance does not lie in the fact that some are compulsory and some are voluntary but that some are periods of insurance, (23) whether compulsory or voluntary, and some are treated as periods of insurance.

In the context of Article 15 (1) of Regulation No 574/72 subparagraph (b) thereof relates only to cases in which actual periods of insurance, one of which is compulsory in one Member State and the other of which is voluntary in another, coincide. In the Association's view periods treated as periods of insurance do not in any way fall within the provision.

According to the Association Article 15 (1) (c) relates to a completely different situation from that governed by the preceding subparagraph. The two subparagraphs must be examined completely independently of one another. Subparagraph (c) envisages the coinciding of periods treated as periods of insurance and actual periods of insurance, whether compulsory or voluntary, since the words “other than a period treated as such” cover both categories.

Further support for the contention that the distinction between periods other than periods treated as periods of insurance and periods treated as such takes precedence over the distinction between compulsory insurance and voluntary insurance, is to be found in Article 15 (1) (d) which governs the situation in which two periods treated as periods of insurance coincide. In determining which period is to be taken into account the question whether the insurance is compulsory or voluntary is irrelevant. Furthermore, in the Association's view, the expression “compulsory insurance” is reserved, in subparagraph (d) as it is in subparagraph (b), for periods other than periods treated as periods of insurance.

2.In my opinion such a view must be rejected.

It could only be correct, as the Association itself recognizes, if the expression “periods of insurance” in Article 15 (1) (b) and (d) of Regulation No 574/72 were given a narrower meaning — as not extending to periods treated as periods of insurance — than in Article 1 (r) of Regulation No 1408/71.

2.1.In my view such an interpretation must be ruled out.

First, as the Court is aware, for the application of Regulation No 574/72 the expressions used therein and defined in Article 1 of Regulation No 1408/71 have the meaning assigned to them by the latter. (24)

Secondly, Article 15 (1) contains nothing which would justify giving the same words (periods of insurance) a different meaning in subparagraphs (b) and (d) from that given in subparagraph (c).

2.2.Finally, an analysis of the scheme of Article 15 (1), which follows a logical order, leads to a different view, namely that precedence is given to the distinction between periods of compulsory insurance and periods of voluntary insurance.

In general it is possible to distinguish three cases in which periods of insurance coincide from the point of view of the criterion of whether they are periods of compulsory insurance or of voluntary insurance: a period of compulsory insurance, whether it is treated as a period of insurance or is treated as a period other than a period of insurance, coincides with a period of voluntary insurance; two periods of compulsory insurance coincide and two periods of voluntary insurance coincide.

With regard to the first case Article 15 (1) (b) gives precedence to periods completed under a compulsory insurance scheme.

With regard to the situation in which two periods of compulsory insurance coincide, three possibilities exist in theory: two periods of insurance other than periods treated as such coincide; a period other than a period treated as such coincides with a period treated as such and two periods treated as such coincide. However, in fact only the latter two possibilities can arise since Article 13 (1) of Regulation No 1408/71 provides that a worker to whom that regulation applies is to be subject to the legislation of a single Member State only. Those two possibilities are precisely those provided for in Article 15 (1) (c) and (d) respectively.

Finally, the coinciding of two periods of voluntary insurance is also hypothetical since the second indent of Article 15 (2) of Regulation No 1408/71 requires the person concerned to opt for one of them.

2.3.In addition, and perhaps most important of all, the Association's argument appears to be incompatible with the objectives pursued in Articles 48 to 51 of the Treaty and in the Community regulations concerning social security.

If, where a period of paid employment completed in the Netherlands before 1 July 1967, even if it is regarded as a period treated as a period of insurance, coincides with a period of voluntary insurance in the Federal Republic of Germany, the latter period were to be taken into account, the workers concerned would receive less than they were entitled to not only if the period completed in the Netherlands had been taken into account but also if they had not paid voluntary contributions in Germany.

Such a consequence would appear to be contrary to the principles of the Court's case-law concerning social security for migrant workers, of which I need refer only to the most recent judgments. The Court recalled in its judgment of 10 March 1983 in the Baccini case (25) that “in accordance with Articles 48 and 51 of the Treaty, Regulations Nos 1408/71 and 574/72 of the Council are in particular intended to prevent the migrant worker, as a result of his migration from one Member State to another, from ... being placed in a worse position than that in which he would have been if he had completed his entire career in only one Member State.” (26)

Similarly, the Court held in its judgment of 15 September 1983 in the Jerzak case (27) that “the aim of Articles 48 to 51 of the Treaty would not be attained if the social security advantages which a worker may derive from the legislation of a single Member State were to be withdrawn or reduced as a result of the application of those regulations”. (28)

For those reasons my reply in the alternative to the fourth question is that where a period treated as a period of compulsory insurance coincides with a period other than a period treated as a period of voluntary insurance, the compulsory nature of the insurance takes precedence.

On those grounds I am led to the conclusion that the Court should reply as follows to the questions referred to it for a preliminary ruling by the Raad van Beroep, Amsterdam, in the proceedings between Wilhelm J. Derks and the Association:

1.For the purposes of the application of Article 46 (2) of Regulation No 1408/71 periods of paid employment and periods treated as such completed in the Netherlands before 1 July 1967 must be deemed to have been completed under “legislation” within the meaning of Article 1 (j) in conjunction with Article 1 (r) and Article 94 (2) of that regulation;

2.Periods of paid employment completed in the Netherlands before 1 July 1967 are periods of insurance other than periods treated as such within the meaning of Article 15 (1) (c) of Regulation No 574/72;

3.There is no need to reply to the final question referred to the Court by the Raad van Beroep.

Nevertheless I would add in the alternative :

Where a period treated as (within the meaning of Article 15 (1) (c) of Regulation No 574/72) a period of compulsory insurance (within the meaning of Article 15 (1) (b)) coincides with a period of voluntary insurance (within the meaning of Article 15 (1) (b)) other than a period treated as such (within the meaning of Article 15 (1) (c)), the compulsory nature of the insurance takes precedence.

(1) Translated from the French.

(2) Regulation (EEC) No 1408/71 (Official Journal, English Special Edition 1971 (II), p. 416), codified in Official Journal 1980, C 138, p. 1.

(3) Regulation (EEC) No 574/72 (Official Journal, English Special Edition 1972 (I), p. 159), codified in Official Journal 1980, C 138, p. 65.

(4) Judgment of 9. 6. 1977 in Case 109/76 [1977] ECR 1141.

(5) Reply given by the Association to a question put to it at the hearing.

(6) Concerning social security for migrant workers, adopted by the Council of the EEC on 25. 9. 1948, Journal Officiel 1958, p. 561.

(7) Article 3(1).

(8) In fact, under Article 10 of the Invalidity Laws (Repeal) Law, Article 71 of the Invalidity Law ceased to have effect except in so far as, on the one hand, it gave a right to an invalidity pension in respect of an invalidity arising before 1 July 1967 and, on the other hand, an application for the invalidity pension was made by 1 July 1969 at the latest.

(9) Annex III to Regulation No 1408/71.

(10) See the plaintiff's application in the proceedings brought in respect of the Association's decision.

(11) That was apparently the date at which he resumed gainful employment in the Federal Republic of Germany.

(12) Or periods treated as such.

(13) It provides: “The procedure for taking into account overlapping periods, when applying the rules of calculation laid down in this paragraph, shall be laid down in the implementing regulation referred to in Article 97.”

(14) Point 2 on page 2 of the Social Security Council's circular.

(15) Article 4 (1) and (2) defines, as the Court is aware, the branches of social security to which the regulation applies.

(16) Cited above.

(17) Paragraphs 10 to 13, [1977] ECR 1141 at pp. 1149 and 1150.

(18) Case 14/67 Landesvenicherungsanstalt Rheinland-Pfalz v Jozef Welchner [1967] ECR 331, in particular at p. 337.

(19) “Periods of employment as defined or recognized as periods of insurance by the legislation under which they were ... considered as completed.”

(20) It is for that reason that I am proposing to the Court a solution which differs from that adopted in the Welchner case. On the one hand that judgment was interpreting Regulation No 3 which did not contain a provision similar to paragraph 4 (a) of Part H of Annex V to Regulation No 1408/71 and on the other hand it related to German legislation and not to Netherlands legislation.

(21) It seems clear to me that the reference made in that provision to the legislation under which the periods of insurance were completed, in this case the Invalidity Law, is intended to refer to paragraph 4 (a) of Part H of Annex V.

(22) That is to say, the Incapacity (Insurance) Law.

(23) In other words, periods other than periods treated as periods of insurance.

(24) Article 1 (c) of Regulation No 574/72.

(25) Judgment of the Third Chamber in Case 232/82 Buccini v Office National de l'Emploi [1983] ECU 583.

(26) Paragraph 17.

(27) Judgment of the Third Chamber in Case 279/82 Lio Jerzak ν Bundeknappschaft, Verwahungsstelle Aachen [1983] ECR 2603.

(28) The Community regulations concerning social security for migrant workers.

(29) Paragraph 11. In this case the advantages which would thereby be reduced are those which the plaintiff would have received in respect of his period of employment in the Netherlands between 1 January 1957 and 31 December 1966 had he not paid voluntary contributions in his country of origin during the same period.