Important legal notice

61995C0221

European Court reports 1997 Page I-00609

Opinion of the Advocate-General

1 The question on which the Court is to give a preliminary ruling in this case was raised by the Tribunal du Travail (Labour Court), Tournai (Belgium) in order to resolve the proceedings pending before that court between the Institut National d'Assurances Sociales pour Travailleurs Indépendants (National Institute for Social Insurance for the Self-employed, hereinafter `Inasti'), on the one hand, and Mr Hervein and Hervillier SA, on the other.

2 According to the summary of the facts contained in the order for reference, for a number of years Mr Hervein, a French national residing in France, pursued very similar activities in France and Belgium. He was chairman/director general in France and assistant director in Belgium of Etablissements Hervillier SA and also director of Laines Anny Blatt SA and Laines Berger du Nord SA in both States until 6 October 1986.

3 Inasti, the plaintiff in the main proceedings, considers that Mr Hervein was an employed person in France and a self-employed person in Belgium and that he was therefore subject to the Belgian social security scheme for travailleurs indépendants (self-employed persons). It therefore claimed payment from Mr Hervein and Hervillier SA of contributions as from 1 July 1982, the date of the entry into force of Regulation (EEC) No 1390/81 (1) (hereinafter `Regulation No 1380/41'), which extended to self-employed persons and members of their families Regulation (EEC) No 1408/71 (2) (hereinafter `Regulation No 1408/71'), until he resigned from those posts at the end of 1986, amounting to a total of BFR 1 588 489.

4 The defendants resisted that claim on the ground that, while it is true that French legislation treats company directors as employed persons for social security purposes, they do not thereby lose their status as self-employed persons and must be regarded as such where they are not bound to the undertaking by a relationship of subordination.

5 The question referred to the Court by the Tribunal du Travail, Tournai to enable it to resolve the dispute is worded as follows:

`Does self-employment (activité non-salariée) for the purposes in particular of Article 14a(2) of Council Regulation (EEC) No 2001/83 of 2 June 1983 refer specifically to the activities of a self-employed person (travailleur indépendant) who is a national of a Member State?'

Community provisions

6 Article 1 of Regulation No 1408/71, as amended by Regulation (EEC) No 2001/83 (3) (hereinafter `Regulation No 2001/83'), provides as follows:

`...

(a) "employed persons" and "self-employed persons" mean respectively:

(i) any person who is insured, compulsorily or on an optional continued basis, for one or more of the contingencies covered by the branches of a social security scheme for employed or self-employed persons;

7 Title II of Regulation No 1408/71, as extended by Regulation No 1390/81 and amended and updated by Regulation No 2001/83, contains a complete system of conflict rules designed to determine the legislation applicable to those coming within its scope. The general principle, as laid down in Article 13(1), is that a worker is to be subject to the legislation of one Member State only. Article 13(1) provides that:

`1. Subject to Article 14c, persons to whom this Regulation applies shall be subject to the legislation of a single Member State only. That legislation shall be determined in accordance with the provisions of this Title.'

8 Article 14a(2) of Regulation No 1408/71, which the national court has asked the Court to interpret, provides that:

`2. A person normally self-employed in the territory of two or more Member States shall be subject to the legislation of the Member State in whose territory he resides if he pursues any part of his activity in the territory of that Member State. If he does not pursue any activity in the territory of the Member State in which he resides, he shall be subject to the legislation of the Member State in whose territory he pursues his main activity ...'.

9 Article 14c lays down special rules applicable to persons simultaneously employed in the territory of one Member State and self-employed in the territory of another Member State. According to that provision, in the version in force at the material time: (4)

`1. A person who is employed simultaneously in the territory of one Member State and self-employed in the territory of another Member State shall be subject:

(a) to the legislation of the Member State in the territory of which he is engaged in paid employment, subject to subparagraph (b);

(b) in the instances referred to in Annex VII, to the legislation of each of these Member States, as regards the activity pursued in its territory.

10 According to Article 14d,

`1. The person referred to in ... [Article] 14c(1)(a) shall be treated, for the purposes of application of the legislation laid down in accordance with these provisions, as if he pursued all his professional activity or activities in the territory of the Member State concerned.'

11 Annex VII to Regulation No 1408/71 provides, in so far as relevant to the present case:

`(Article 14c(1)(b) of the Regulation)

Instances in which a person shall be simultaneously subject to the legislation of two Member States

12 Written observations have been submitted to the Court by the defendants in the main proceedings, the Belgian and French Governments and the Commission.

13 Mr Hervein and Hervillier SA observe that Mr Hervein's activity in both France and Belgium during the period in respect of which Inasti demands payment of contributions was self-employment, since by acting as director of various companies at all times he was not bound by a contract of employment because the relationship of subordination inherent in such a contract was absent. They further state that, although French social security legislation treats company directors as employed persons for the purposes of affiliation, contributions and cover in social security matters, they do not thereby lose their status as self-employed persons. For that reason, they consider that Mr Hervein's situation corresponds to the case envisaged in Article 14a(2) of Regulation No 1408/71, which provides that a person normally self-employed in the territory of two or more Member States is to be subject to the legislation of the Member State in which he resides if, as is the case here, he pursues any part of his activity in that Member State, and that, accordingly, he must be subject only to the French legislation.

They suggest that the answer to the question referred to the Court should be that self-employment for the purpose of Article 14a(2) of Regulation No 1408/71 refers specifically to the activities of a self-employed person who is a national of a Member State.

14 The Belgian Government points out in its observations that in Regulation No 1408/71 there is no definition of the terms employment and self-employment, although these terms are to be found in Articles 13 and 14a of Regulation No 1408/71, which determine the legislation applicable to different categories of persons coming within its scope. In the Belgian Government's opinion, as Community law now stands, the sole criterion for determining whether a worker is employed or self-employed is to be found in the social security scheme to which the worker is affiliated in his own country. In the present case, the defendant is French and recognizes that in France he is affiliated to the social security scheme for employed persons. Accordingly, the only solution must be that he is to be regarded as such a person for the purposes of the application of Regulation No 1408/71.

The Belgian Government further states that, in view of Article 1(s) of Regulation No 1408/71, which provides that "periods of employment" and "periods of self-employment" mean periods so defined or recognized by the legislation under which they were completed, and all periods treated as such, where they are regarded by the said legislation as equivalent to periods of employment or of self-employment', it must be inferred that it is the legislation of the Member States which determines whether an activity is employment or self-employment and that there is nothing to prevent the same activity from being subject to a social security scheme for employed persons in one Member State and to a scheme for self-employed persons in another Member State.

The Belgian Government suggests that the answer to be given to the national court should be that self-employment for the purposes of Article 14a(2) of Regulation No 1408/71 refers to activity pursued by a worker in a self-employed capacity and regarded as such by the legislation of the Member State in which he pursues that activity and that the way in which an activity is treated in one Member State should have no effect on the way in which the same activity is treated in another Member State.

15 The French Government observes that the answer which the Court will give to the question as put by the national court will not be of much assistance to it in applying Community law in order to resolve the case before it since, in the French Government's view, it is not a question of ascertaining whether Mr Hervein was an employee but of applying to employed persons, self-employed persons and members of their families moving within the Community the relevant Community provisions that coordinate the national social security schemes.

In that regard, the French Government points out that Article 51 of the EC Treaty establishes a principle of coordination between the social security laws of the Member States, which retain considerable freedom with regard to the organization of their social protection schemes and, more specifically, to the right or obligation to be affiliated and the conditions for entitlement to benefits. Consequently, there are differences between the schemes applying in the various Member States and a person's rights will differ according to whether he is affiliated in one State or another.

In its analysis of the present case, the French Government observes that, like persons simultaneously pursuing employment in the territory of two or more Member States - a situation governed by Article 14(2) of Regulation No 1408/71 - or self-employment in the territory of two or more Member States - a case provided for in Article 14a(2) of Regulation No 1408/71 -, a person who is simultaneously employed and self-employed in the territory of two or more Member States is subject to the legislation of a single Member State only, in accordance with Article 14c(a), unless one of the situations envisaged in Article 14a(b) applies, where the activities are pursued in two or more of the States referred to in Annex VII to Regulation No 1408/71, in which case the person concerned will be subject to the legislation of both States at the same time.

Since that is the case of a person who is self-employed in Belgium and in paid employment in one of the other Member States - except Luxembourg -, in accordance with the applicable Community provisions, it must be concluded that the person concerned is affiliated to both the French social security legislation as an employed person and the Belgian legislation as a self-employed person.

The French Government submits that the answer to be given to the national court is that self-employment referred to in Article 14a(2) of Regulation No 1408/71 refers to an activity pursued by any person to whom the definition of `self-employed person' in Article 1 of Regulation No 1408/71 applies.

16 The Commission considers that there is a fundamental distinction between `employment' and `self-employment' for the purposes of the application of Title II of Regulation No 1408/71. Specifically, in order to ascertain the articles of Title II of Regulation No 1408/71 applicable to Mr Hervein and, therefore, the social security legislation to which he is subject, it is first necessary to ascertain whether his occupational activities were pursued in an employed or a self-employed capacity.

Since those two concepts do not appear to be defined in Regulation No 1408/71, the Commission suggests that it is necessary to start with the definitions of `employed person' and `self-employed person' given in Article 1 of the regulation, in accordance with which it is necessary to regard as such persons covered by a social security scheme provided for by the legislation of a Member State applicable to employed persons or self-employed persons. In the Commission's view, the persons covered by Regulation No 1408/71 are determined according to the social security scheme to which a person is affiliated rather than according to concepts more typical of labour law.

Since, as Community law now stands, it is for the legislation of each Member State to determine the conditions governing the right or obligation to be affiliated to a social security scheme or a particular branch of such scheme, it will be necessary to refer to the provisions of the national law applicable in the particular case.

17 The Commission goes on to state that the term `worker' in Article 48 of the Treaty, which has a Community meaning and must be defined according to objective criteria that characterize the working relationship, taking account of the rights and duties of the persons concerned, does not coincide with the abovementioned concept of worker for the purposes of the application of Regulation No 1408/71. This is because Article 48 of the Treaty confers rights of Community origin on migrant workers, which makes it necessary to have a Community definition allowing the persons enjoying those rights to be determined. Article 51 of the Treaty, on the other hand, only provides for the coordination of national social security schemes. In order to determine who can rely on the coordinating provisions in Regulation No 1408/71 it is necessary in each case to see who is affiliated to those schemes. Whether the person concerned is a person covered by Regulation No 1408/71 will therefore depend on his being affiliated to a social security scheme for employed persons or for self-employed persons.

The Commission concludes by stating that in order to ascertain whether the activities in question in the present case are of one type or the other, it will be necessary to examine whether the activities in question are regarded, in the Member State in whose territory they are pursued, as constituting employment or self-employment for the purposes of affiliation to its social security schemes.

18 In the de Jaeck case, (5) which concerns the interpretation of the term `employed' for the purposes of the application of Title II of Regulation No 1408/71, the Commission was asked by the Court to answer a number of questions, and I consider that the replies given are relevant to the resolution of the present case.

First of all, the Court asked the Commission to indicate whether it considered that the concepts of employed persons or self-employed persons in Tile II of the Regulation were to be interpreted in the same way as `employed person' and `self-employed person' in Article 1(a). Secondly, the Commission was asked to provide examples to illustrate its argument that if the concepts of employment and self-employment for the purposes of the application of Title II of the Regulation had to be defined with reference to labour law, the consequence would be that in certain cases it would be impossible to apply the conflict rules to persons still covered by the Regulation.

In short, when Title II is applied it is still not possible to know whether the person concerned will be treated as an employed person or a self-employed person for the purposes of the application of the Regulation. For that reason, Title II is not based on those concepts, but refers to the nature of the activities pursued, in the expectation that the legislation that proves to be applicable pursuant to Title II will definitively resolve the issue. For example, it may be that a person is self-employed in one Member State and that, pursuant to the conflict rules, he is subject only to the social security legislation of another Member State in which he is employed, in which case he cannot be regarded as a self-employed person for the application of the other provisions of the Regulation.

20 In response to the second question, the Commission suggests the following examples:

1)(1) Under German social security legislation, students are affiliated to the social security scheme applicable to employed persons. For this reason, pursuant to Article 1(a) of the Regulation, they are deemed to be employed persons and fall within its scope ratione personae. If, in order to apply Title II, it were necessary to follow the specific criteria of labour law, it would be impossible to decide whether they were employed or self-employed, since they do not pursue any economic activity or to determine which legislation was applicable to them for the purposes of Regulation No 1408/71 while they were staying in another Member State.

2)(2) If it were necessary to follow the Court's definition of `worker' for the purposes of Article 48 of the Treaty, a person employed for a short period, such as two hours a day on two days per week, as in the case of Mr Kits van Heijningen, could not be treated as either an employed person or a self-employed person. In that case, (8) however, the Court held that a person is covered by Regulation No 1408/71 if he meets the conditions laid down in Article 1(a) in conjunction with Article 2(1), irrespective of the time devoted to his occupational activity.

The Commission concludes by stating that it is preferable to apply the criterion established by social security law, because it is clear that, at the national level, both academic writers and the courts have great difficulty when it comes to distinguishing between employed persons and self-employed persons for the purposes of applying national labour law.

21 I agree with the French Government that the Court's answer to the question as put by the national court will be of no great assistance to it when it comes to applying Community law in order to resolve the case before it. Accordingly, I propose, first of all, to give an answer to the preliminary question and then to provide the national court with other elements of interpretation that will allow it to apply Community law for the purpose of resolving the case before it.

22 I infer from the wording of the preliminary question that the national court wants this Court to fill the gap in Regulation No 1408/71 by providing a Community definition of what is meant by `self-employment', just as it has done for such terms as `worker' for the purposes of application of Article 48 of the Treaty, `pursuit of activities as self-employed persons' for the purposes of application of Article 52 of the Treaty, or `wage-earner or assimilated person' for the purposes of application of the Community social security regulations.

As regards the first of those terms, the Court has consistently held that `... the concept of worker within the meaning of Article 48 of the Treaty has a specific Community meaning. To come within the definition of worker a person must pursue an activity which is effective and genuine to the exclusion of activities of such a small scale as to be regarded as purely marginal and ancillary. The essential characteristic of the employment relationship is that for a certain period a person performs services for and under the direction of another person in return for which he receives remuneration.' (9)

Interpreting that definition a contrario sensu in the recent Asscher judgment, (10) the Court took the view that the activity of the plaintiff in the main proceedings, who in the Netherlands was the director of a company of which he was the sole shareholder, a situation very much like that of Mr de Jaeck, was not subject to a relationship of subordination and that he could not therefore be regarded as a `worker' within the meaning of Article 48 of the Treaty; rather, he was `pursuing an activity as a self-employed person' within the meaning of Article 52 of the Treaty. (11)

As regards the third term, the Court held in Hoekstra that the expression `wage-earner or assimilated worker' used by Regulation No 3 (12) had a meaning only within the framework and limits of the concept of `workers' provided for in the Treaty to the application of which that regulation was limited; that the said expression, which was intended to clarify the concept of `workers' for the purposes of Regulation No 3, had therefore, like that concept, a Community meaning; that even if, for the sake of argument, the expression `wage-earner or assimilated person' appeared in the legislation of each of the Member States, it could not possibly have a comparable meaning and role, so that it was impossible to establish the meaning by reference to similar expressions which might appear in national legislation; and that the concept of `wage-earner or assimilated person' had thus a Community meaning, referring to all those who, as such and under whatever description, were covered by the different national systems of social security. (13) The principle thus established by the Court was incorporated in Regulation No 1408/71, in Article 1(a).

23 It is easy to understand the dilemma facing the Tribunal du Travail de Tournai in applying Title II of Regulation No 1408/71 and deciding which of the two possible bodies of legislation, the French or the Belgian, is applicable to Mr Hervein. Much of the system of conflict rules contained in that Title is intended to determine the legislation applicable to `persons in paid employment' and `persons who are self-employed', depending on whether their activities are pursued in one or more Member States, and it must be acknowledged that their application would be much easier in practice if there were a definition of both concepts applicable uniformly throughout the Community.

24 However, that definition has not thus far been provided by the legislature, since, as I have said, it is not to be found in any of the Community regulations on social security for migrant workers. As far as the case-law is concerned, although the Court stated in Van Poucke (14) that an activity pursued as an official by a person coming within the scope of Regulation No 1408/71 was employment for the purposes of Article 14c, it did not define what was to be understood by such an activity in general terms. Nor did it do so in van Roosmalen, (15) where it held that the concept of `self-employed person' within the meaning of Article 1(a)(iv) of the Regulation, covering insurance on a voluntary basis, applied to persons who had pursued or were pursuing, otherwise than under a contract of employment or by way of self-employment in a trade or profession, an occupation in respect of which they received income permitting them to meet all or some of their needs, even if that income was supplied by third parties benefiting from the services of a missionary priest.

25 I agree with the Commission that the factor determining whether a person comes within the scope of the Regulation is affiliation to a Member State's social security scheme for employed workers or self-employed workers and that in determining, for the purposes of application of the Regulation, whether an activity is to be regarded as employment or self-employment, it will be necessary to ascertain how the person is treated by the Member State in question when it applies its social security legislation.

26 According to a consistent line of decisions, `... it is for the legislature of each Member State to lay down the conditions creating the right or the obligation to become affiliated to a social security scheme or to a particular branch under such a scheme, provided always that in this connection there is no discrimination between nationals of the host State and nationals of the other Member States'. (16)

27 However, it should also be pointed out that, although in principle Member States are competent to determine the conditions governing affiliation to their national social security schemes, they are not empowered to determine the territorial scope of their own legislation, since that is entirely a matter for Community law. In the Ten Holder case (17) the Court stated that the provisions of Title II constituted a system of conflict rules the effect of which was to divest the legislature of each Member State of the power to determine the ambit and conditions for the application of its national legislation so far as the persons who were subject thereto and the territory within which the provisions of national law took effect were concerned.

28 In the light of those considerations, I propose that the answer to be given to the national court should be that `self-employment', referred to in Article 14a(2) of Regulation No 1408/71 is activity regarded as such, for the purposes of the application of its social security scheme, by the legislation of the Member State in whose territory the activity is pursued.

29 Consequently, if it is necessary to ascertain in each case whether activity is classified as `employment' or `self-employment' by the social security legislation of the Member State in whose territory it is pursued, then in the present case Mr Hervein at the same time pursues an activity as an employed person in France - since he is affiliated to the scheme for employed persons in that Member State - and an activity as a self-employed person in Belgium, since the legislation of that State provides that, by virtue of the activity which he pursues in its territory, he must be affiliated to the scheme for self-employed persons.

30 On that basis, it is already possible to consider the application of the conflict rules in Title II of Regulation No 1408/71 and to proceed to determine which legislation is applicable to Mr Hervein. His situation falls within the case envisaged by Article 14c, which lays down the special rules applicable to a person who is simultaneously employed in the territory of one Member State and self-employed in the territory of another Member State and, more particularly, by Article 14c(1)(b), which provides that in the instances referred to in Annex VII that person is to be subject to the legislation of each of these Member States, as regards the activity pursued in its territory, since Belgium is one of the countries appearing in that Annex.

31 In accordance with that provision, Mr Hervein is simultaneously subject to the French legislation as regards the activity pursued in France, in respect of which he is affiliated to that Member State's scheme for employed persons, and to the Belgian legislation as regards the activity pursued in Belgium, in respect of which he is regarded as affiliated to the scheme for self-employed persons and for which the corresponding contributions are being claimed in the main proceedings. Quite simply, that means that, pursuant to Article 14c(1)(b) of Regulation No 1408/71 and point 1 of Annex VII to that Regulation, Mr Hervein must be affiliated to and pay contributions to social security schemes in two Member States.

32 Clearly, that outcome is perplexing. First, in the Nonnenmacher case, (18) decided at a time when the Community rules applicable to migrant workers in social security matters were to be found in Regulation No 3, the Court of Justice was asked whether the mandatory application of the legislation of the Member State in which the worker was employed excluded the application of the legislation of any other Member State and it ruled that Article 12 of Regulation No 3, which came under Title II which, like Title II of Regulation No 1408/71, contained conflict rules for determining the legislation applicable to persons coming within its scope, did not prohibit the application of the legislation of a Member State other than the one in which the person concerned worked, except to the extent that it required that person to contribute to the financing of a social security institution which was unable to provide him with additional advantages in respect of the same risk and of the same period. In the van der Vecht case (19) the Court also held that the purpose of Article 12 of Regulation No 3 was to avoid the simultaneous application of national legal systems which might needlessly increase the social security contributions of both the worker and the employer, and that Article 12 prohibited Member States other than that in whose territory a worker was employed from applying their social security legislation to such worker, where to do so would lead to an increase in the charges borne by workers or their employers without any corresponding supplementary social security protection.

Secondly, when Regulation No 1408/71 was applicable only to employed persons and members of their families, the phenomenon of a person being subject to the social security legislation of two Member States did not arise. The provision with this tenor was introduced by Regulation No 1390/81, extending Regulation No 1408/71 to self-employed persons and members of their families, which entered into force on 1 July 1982. As the Commission itself admits in the observations which it submitted in the de Jaeck case, (20) the proposal for a regulation which it submitted to the Council did not contemplate that possibility. The regulation of the detailed rules for implementing subparagraph (b) which, according to Article 14c(2), were to be laid down in a regulation to be adopted by the Council on a proposal from the Commission, was effected by Regulation (EEC) No 3811/86 (hereinafter `Regulation No 3811/86'), which became applicable on 1 January 1987. (21)

33 I wonder to what extent that regulation can be regarded as compatible with the principles governing freedom of movement for workers and the right of establishment laid down in Articles 48 and 52 of the Treaty as interpreted by the Court, which has had to rule on various occasions on their application to factual situations very similar to the present one, but with the difference that at the material time Regulation No 1390/81 had still not entered into force.

34 In the Stanton (22) and Wolf (23) cases the Court gave preliminary rulings on questions that had also been referred by Belgian courts. The first of those cases concerned Mr Stanton, a British national, who was employed in the United Kingdom and in that capacity paid contributions to the British social security scheme for employees. At the same time he acted as director of a Belgian insurance company, which was a subsidiary of the British company which employed him. By reason of this activity, Mr Stanton was automatically affiliated by the Belgian authorities to the Belgian social security scheme for self-employed persons. In due course Inasti requested Mr Stanton and the insurance company, which was jointly liable, to pay the corresponding contributions. The second case concerned Mr Wolf, a German national, who was employed in the Federal Republic of Germany as a chemical engineer and at the same time was a director of a company whose registered office was in Belgium. Inasti requested that he and the Belgian company pay contributions to the social security scheme for self-employed persons on account of the directorship.

35 Mr Stanton and Mr Wolf sought to be exempted from the obligation to pay those contributions in application of Article 12(2) of Royal Decree No 38 establishing the social security scheme for self-employed persons, which provided that a self-employed person who, in addition to his activities as such, habitually pursued by way of principal occupation another occupational activity was not liable to pay any contributions if his income as a self-employed person did not reach a certain level. Inasti objected on the ground that the expression `another occupational activity' in that provision referred only to those activities as an employed person that were covered by a Belgian social security scheme.

36 In each of those cases the Court observed that `[t]he first paragraph of Article 52 of the Treaty requires the abolition of all restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State. It is settled law that that is a directly applicable rule of Community law.' The Court went on to point out that freedom of establishment was not confined to the right to create a single establishment within the Community, but entailed the right to set up and maintain, subject to observance of the relevant professional rules of conduct, more than one place of work within the Community and that was `equally true in respect of a person who is employed in one Member State and wishes, in addition, to work in another Member State in a self-employed capacity'. (24)

In each case the Court considered that `[t]he provisions of the Treaty relating to the free movement of persons are thus intended to facilitate the pursuit by Community citizens of occupational activities of all kinds throughout the Community, and preclude national legislation which might place Community citizens at a disadvantage when they wish to extend their activities beyond the territory of a single Member State'. It went on to observe that `[t]he legislation of a Member State which exempts persons whose principal occupation is employment in that Member State from the obligation to pay contributions to the scheme for self-employed persons but withholds such exemption from persons whose principal occupation is employment in another Member State has the effect of placing at a disadvantage the pursuit of occupational activities outside the territory of that Member State. Articles 48 and 52 of the Treaty therefore preclude such legislation.' Taking into account, furthermore, that that national provision afforded no additional social protection to the persons concerned, who were affiliated to the social security scheme of the Member State in which they pursued their principal employment, the Court concluded that `the impediment to the pursuits of occupational activities in more than one Member State may not in any event be justified on that basis'. (25)

37 More recently, in the Kemmler case, (26) the Court answered a question referred by the same national court that is hearing the dispute between Inasti and Mr Hervein and Hervillier SA. In that case, Inasti had claimed from Mr Kemmler payment of contributions to the Belgian social security scheme for self-employed persons for 1981 and the first two quarters of 1982. As in the Stanton and Wolf cases, the contributions related to periods prior to the entry into force of Regulation No 1390/81. Mr Kemmler practised as a lawyer in Frankfurt and Brussels and refused to pay the contributions on the ground that he was already affiliated to the German social security scheme for self-employed persons and that affiliation to the Belgian social security scheme would not have afforded him any additional social protection. His habitual residence was in Germany but he had also resided in Belgium for part of the period in respect of which payment of the contributions was claimed.

38 Since Regulation No 1390/81 was not applicable to the dispute between Inasti and Mr Kemmler, the question referred to the Court had to be answered by applying only Article 52 of the Treaty, on freedom of establishment, since Mr Kemmler had a stable and permanent establishment in both Member States.

39 Following the same reasoning as in the Stanton and Wolf cases, the Court reached the same conclusion in the Kemmler case: `Legislation of a Member State which requires contributions to be made to the scheme for self-employed persons by persons already working as self-employed persons in another Member State where they have their habitual residence and are affiliated to a social security scheme inhibits the pursuit of occupational activities outside the territory of that Member State. Article 52 of the Treaty therefore precludes legislation of that kind unless it is duly justified.' In that regard, just as in the case of Mr Stanton and Mr Wolf, the legislation in question, pursuant to which Mr Kemmler was required to join and pay contributions to the Belgian scheme for self-employed persons, afforded no additional social protection. Consequently, the Court went on to state that `... the impediment to the pursuit of occupational activities in more than one Member State may not in any event be justified on that basis' and gave the following answer to the Tribunal du Travail de Tournai: `Article 52 of the Treaty precludes a Member State from requiring contributions to be paid to the social security scheme for self-employed persons by persons already working as self-employed persons in another Member State where they have their habitual residence and are affiliated to a social security scheme, that obligation affording them no additional social cover.' (27)

40 In the de Jaeck case (28) both the Council and the Commission were requested to submit their observations on the compatibility of Article 14c(1)(b) with Articles 48 to 52 of the Treaty in the light of the case-law of the Court and, in particular, the Kemmler judgment. (29) I consider that those observations are also relevant to the resolution of the present case.

41 The Council claims, first of all, that it has a broad discretion which corresponds to the political responsibilities given to it by Article 51 of the Treaty, as a result of which the Court's review of decisions taken by the Council within the framework of its own responsibility must be limited to a general review with regard to their objective; (30) and, secondly, that the Court considered in the Triches case (31) that none of the provisions of the Treaty restricted the freedom conferred on the Council by Article 51 to choose any means which, viewed objectively, were justified, even if the provisions adopted did not result in the elimination of all possibility of inequality between workers arising by reason of disparities between the national schemes in question. Furthermore, an exception such as that in Article 14c(1)(b) of Regulation No 1408/71 to the principle laid down in Article 13, which provides that persons to whom Regulation No 1408/71 applies are to be subject to the legislation of a single Member State only, cannot be contrary to Articles 48 to 52; in order for that to be so, the application of that provision would have to produce undesired secondary effects or practical problems that would place migrant workers at a disadvantage compared with their national counterparts, whereas it has not been established that the application of that provision has raised any problem within the Administrative Commission on Social Security for Migrant Workers.

42 In answer to that question put by the Court, the Commission confirms that the rule in Article 14c(1)(b) did not appear in the proposal which it submitted to the Council and that it is the result of an amendment which was raised within the Council itself. It points out that the reason why it was adopted was to ensure that a person pursuing an activity as an employed person in one Member State (for example, France) and an activity as a self-employed person in any of the Member States set out in Annex VII (for example, Belgium) did not escape the obligation to pay the social contributions which he would have had to pay in the State in which he pursued the second activity if he had pursued both activities in that State, which would have placed him in a more advantageous position than that of his competitors who pursued both activities in that State. The Commission leaves it to the Court to decide whether the exception laid down in Article 14c(1)(b) to the principle that a worker is to be subject to the legislation of a single Member State only is compatible with Articles 48 to 52 of the Treaty.

43 I cannot accept the Council's arguments. As the preamble to Regulation No 1390/81 states, `... freedom of movement for persons, which is one of the cornerstones of the Community, is not confined to employed persons but also extends to self-employed persons in the framework of the freedom of establishment and the freedom to supply services' (second recital); `... the coordination of the social security schemes applicable to self-employed persons is necessary to attain one of the objectives of the Community ...' (third recital); and `... in the sphere of social security, the application of national legislations only would not afford sufficient protection to self-employed persons moving within the Community; ... in order to make the freedom of establishment and the freedom to provide services fully effective, the social security schemes for self-employed persons should be coordinated' (fifth recital).

44 However, it is easy to establish that, with the entry into force of the Community legislation designed to coordinate the social security schemes of the Member States applicable to self-employed persons, the situation of a person pursuing an activity of that type in Belgium and an activity as an employed person in another Member State (except in Luxembourg), to give one example from the various possibilities that might rise under Annex VII to Regulation No 1408/71, is worse than before, when only the Treaty provisions on freedom of movement for persons were applicable. In fact, Mr Stanton, Mr Wolf and Mr Kemmler were only required to be affiliated to and pay contributions to one social security scheme, while Mr Hervein, pursuant to Article 14c(1)(b) of Regulation No 1408/71, is required to join and pay contributions to both the French scheme for employed persons and the Belgian scheme for self-employed persons, in so far as the activity pursued in each territory is concerned.

45 The difference between the position of Mr Stanton, Mr Wolf and Mr Kemmler, on the one hand, and Mr Hervein's position, on the other hand, is that, for the former, the obligation to be affiliated to a second social security scheme of a Member State when they were already affiliated to the social security scheme in another Member State was the result of the application of national legislation, the Belgian legislation in their case, while for Mr Hervein the same obligation is imposed by Community legislation.

46 Since the Court has considered that Articles 48 to 52 of the Treaty preclude a Member State's legislation from requiring a person who pursues an activity as an employed person or as a self-employed person in another Member State to pay contributions to the scheme for self-employed persons, where that person resides in the other Member State and is affiliated to its national social security scheme, because it has adverse effects on the pursuit of occupational activities outside the territory of that Member State, I believe that it is necessary to conclude, for even stronger reasons, that Articles 48 to 52 preclude the same effects from being produced by a Council Regulation.

47 In that regard, it is necessary only to add that in the Stanton, Wolf and Kemmler cases the Court apparently considered that making the pursuit of occupational activities outside the territory of a single Member State more onerous might be justified where the national legislation afforded some additional social protection. However, in application of the principle of the hierarchy of norms and in the light of what is laid down in Articles 48 and 52 of the Treaty, the purpose of which is to facilitate the pursuit of occupational activities throughout the territory of the Member States, there is no justification whatsoever for the Council, in making use of its legislative powers, to place Community nationals at a disadvantage where they wish to extend their activities to the territory of certain other Member States.

48 In my view, that argument is most telling when it comes to examining the compatibility of Article 14c(1)(b) with Articles 48 and 52 of the Treaty. However, it is not the only argument. At the material time, six States out of a Community of ten members were mentioned in Annex VII to Regulation No 1408/71. (33) In the instances of Belgium, Denmark (for residents), France, Greece and Italy, a person self-employed in one of those States and employed in any other State was subject to the legislation of two States. For Germany, that applied only to a person self-employed in farming. The Council states that the purpose of those rules was to ensure that a person who was simultaneously employed and self-employed in two Member States did not pay lower contributions than a person pursuing both activities in a single Member State, which would have allowed him to enjoy an unwarranted advantage compared with his competitors whose activities were not divided between two Member States. I shall now consider, taking Mr Hervein's case as an example, whether the rule in Article 14c(1)(b) achieves that purpose.

49 As I explained at the beginning of this Opinion, for a number of years Mr Hervein pursued a very similar activity in France, his country of residence, and Belgium: he was simultaneously chairman/director general and director of various companies. He comes within the scope of Regulation No 1408/71, since it is established that he is affiliated to the social security scheme for employed persons in France. In Belgium, a person pursing an activity such as Mr Hervein's is required to be affiliated to a self-employed person's scheme.

When it comes to applying Title II of the Regulation in order to determine the legislation to which he is subject, it is easy to establish that his situation falls within Article 14c. Were it not for subparagraph (1)(b) of that article and the abovementioned Annex VII, Mr Hervein would be subject only to the French social security legislation, which would regard him as an employed person and treat him as though he pursued all his activities in France. The same solution would be reached if, instead of pursuing an activity as a self-employed person in Belgium, he did so in Germany, unless the activity was farming, or in Denmark, provided that he was not resident in that country, or in the United Kingdom or Ireland, to take a few more examples. On the other hand, the situation of someone like Mr Hervein is comparatively worse if he plans to pursue that self-employed activity in Belgium, as we have seen, in Italy or in Greece, since he is simultaneously subject to the legislation of two Member States, which entails a twofold obligation to join and pay contributions to social security schemes in respect of the activities pursued in each territory.

50 The Council's argument that, if Article 14c(1)(b) did not exist, a person in Mr Hervein's position would enjoy a privileged position compared with his competitors who pursued all their activities in the same Member State because he would be required to pay lower contributions cannot be accepted for a number of reasons: first, because I infer that it is precisely to avoid that result that Article 14d(1) provides that a person who is employed simultaneously in one Member State and self-employed in another Member State and who is subject to the legislation of the first State is to be treated as if he pursued all his activity in that State; and, secondly, because the way in which contributions are calculated differs greatly from one Member State to another, so that it is rather imprudent to state at the outset that affiliation in a single Member State would mean in each case that the amount of the contributions would be lower.

To my mind, that argument of the Council is even less convincing in the light of the amendments to Regulation No 1408/71 introduced by Regulation No 3811/86. From its entry into force on 1 January 1987, although a person who is simultaneously employed in one Member State and self-employed in another of the States referred to in Annex VII is subject to the legislation of both States, it is by no means clear whether that is so only as regards the activity pursued in each territory, since this point was abolished in both the indents of which Article 14c(b) was comprised. Furthermore, the new paragraph (2) of Article 14d provides that a person in this situation is to be treated, for the purpose of determining the rates of contributions to be charged to self-employed workers under the legislation of the Member State in whose territory he is self-employed, as if he pursued his paid employment in the territory of that Member State: when it comes to applying the national legislation, a provision so worded may have the effect of reducing the rate of contribution as well as increasing it.

51 The Council also claims that the raison d'être for the provision is to ensure that the obligation to pay contributions to a social security scheme for self-employed persons is not avoided by, for example, a Belgian national who, simply by crossing the frontier, seeks paid employment in another Member State. I am inclined to believe that that was in fact the reason why the Council, at that time, introduced its amendment of the Commission's proposal; however, as has already been shown, the effect of the provision is to impede the pursuit of occupational activities outside the territory of a Member State.

I would add that a person residing in Belgium, where he is both employed and self-employed, will perhaps be in a similar situation if he remains in that State or if, pursuant to Article 14c(1)(b), he moves to France in order to take up paid employment there and continues to be self-employed in Belgium. However, that situation will be very different from the situation of a person residing, for example, in Germany and employed in that State whilst being self-employed in Denmark or in any of the other Member States not included in the list in Annex VII.

52 Consequently, I must conclude that, even if Article 14c(1)(b) may in certain cases have the effect that the person concerned has additional protection by way of pension rights or maintains rights to death benefit acquired under the legislation of each of the Member States, the provision not only places obstacles in the way of the pursuit of occupational activities in different Member States but also emphasizes the disparities already deriving from their national laws and has the effect that nationals of the Member States are treated differently depending on the place in which they intend to pursue those activities.

53 It is clear from all the foregoing that Article 14c(1)(b) and Annex VII to Regulation No 1408/71 should be declared invalid in so far as they provide that a person who is simultaneously employed in the territory of one Member State and self-employed in the territory of one of the Member States referred to in Annex VII is to be subject to the legislation of each of those Member States.

54 The fact that the national court has referred a question on interpretation in this case does not prevent the Court from examining the validity of a provision. Of crucial importance here is the principle established by the Court in the judgment the Schwarze case, (34) in which it held that: `the conclusion to be drawn from the ... questions ... is that the [national] court is concerned less with the interpretation of the Treaty or of a measure adopted by a Community institution than with obtaining a preliminary ruling on the validity of such a measure, which the Court is empowered to give by subparagraph (b) of the first paragraph of Article 177'; and in those cases `it is appropriate for the Court to inform the national court at once of its view without compelling the national court to comply with purely formal requirements which would uselessly prolong the procedure ... and would be contrary to [the] very nature [of Article 177]. Although [such] strict adherence to formal requirements may be defended in the case of litigation between two parties whose mutual rights must be subject to strict rules, it would be inappropriate to the special field of judicial cooperation under Article 177 which requires the national court and the Court of Justice ... to make direct and complementary contributions to the working out of a decision'. (35)

55 Moreover, Advocate General Darmon expressed a similar view in his Opinion in Case C-37/89: `... it is for the Court to verify the validity of a legislative provision even though the question referred to it does not ask for this to be done, once the Court contemplates interpreting the provision in a way which may cause it to be rendered invalid'. (36)

56 And that is precisely what the Court has done over the years. In the Strehl case, (37) for example, where a Belgian court had sought the interpretation of Article 46(3) of Regulation No 1408/71 and Decision No 91 of the Administrative Commission on Social Security for Migrant Workers, the Court first considered the validity of those provisions and declared that they were incompatible with Article 51 of the Treaty; in Roquette Frères (38) the Court held that six of the questions referred by the national court for the interpretation of certain provisions of regulations indirectly requested an appraisal of the validity of those provisions and proceeded to examine them and declare them invalid; in Roviello, (39) in which the national court had referred three questions for a preliminary ruling on the interpretation of Point 15 of Section C in Annex VI to Regulation No 1408/71, the Court first interpreted the provision and then declared it invalid; in the Weiser case, (40) too, in which a French court had referred a question for a preliminary ruling on the interpretation of Article 11(2) of Annex VIII to the Staff Regulations of Officials of the European Communities, the Court of Justice declared in its judgment that that provision was invalid.

The same happened in Case 313/86, (41) Case C-204/88 (42) and Case C-117/88, (43) in which the Court of Justice examined of its own motion the validity of Community provisions which the national courts had asked it to interpret without finding anything to affect their validity.

57 As regards the consequences of Article 14c(1)(b) and Annex VII to Regulation No 1408/71 being declared invalid, the Court has already resolved that `where it is justified by overriding considerations, the second paragraph of Article 174 gives the Court discretion to decide, in each particular case, which specific effects of a regulation which has been declared void must be maintained'. (44)

Since the Stanton, Wolf and Kemmler judgments, (45) in which the Court provided the interpretation of Articles 48 and 52 of the Treaty that served as the basis for that declaration of invalidity, were delivered in 1988 (the first two) and 1996 (the third), and since in all those cases the facts examined in the main proceedings dated from periods prior to the entry into force of Regulation No 1390/81 (which introduced both Article 14c and Annex VII into Regulation No 1408/71), it is appropriate, in the present case, to take into account, exceptionally, the fact that the Member States which, following the entry into force of that regulation on 1 July 1982, required persons who were already affiliated to a scheme for employed persons in another Member State to be affiliated to their own social security schemes for self-employed persons might have been uncertain as to the precise extent of their obligations as regards freedom of movement for persons.

58 Consequently, I suggest that the Court should declare, as it did in Pinna, (46) that overriding considerations of legal certainty involving all the interests at stake, public and private, in principle militate against calling in question affiliation and contributions payable in application of Article 14c(1)(b) in respect of periods prior to the delivery of the judgment declaring that provision invalid, except as regards workers or those entitled under them who have already commenced legal proceedings or made an equivalent claim in accordance with applicable national law prior to that date.

Conclusion

In the light of the foregoing considerations, I suggest that the Court's answer to the question referred by the Tribunal du Travail de Tournai should be as follows:

`Self-employment' referred to in Article 14a(2) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the version codified by Council Regulation (EEC) No 2001/83 of 2 June 1983, is activity regarded as such, for the purposes of the application of its social security scheme, by the legislation of the Member State in whose territory the activity is pursued.

In the light of the foregoing reasoning, I suggest that the Court should also declare that:

(1) Article 14c(1)(b) of Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community and Annex VII thereto must be declared invalid in so far as they provide that a person who is simultaneously employed in the territory of one Member State and self-employed in the territory of another Member State is to be subject to the legislation of each of those States.

(2) The invalidity of those provisions cannot be relied on to call in question affiliation and the contributions payable, in application of the provision declared invalid, in respect of periods prior to the delivery of the judgment establishing the invalidity, except as regards workers or those entitled under them who have already brought legal proceedings or made an equivalent claim in accordance with applicable national law prior to that date.

(1) - Council Regulation (EEC) No 1390/81 of 12 May 1981 extending to self-employed persons and members of their families Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving within the Community (OJ 1981 L 143, p. 1).

(2) - Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (OJ English Special Edition 1971 (II), p. 416).

(3) - Council Regulation (EEC) No 2001/83 of 2 June 1983 amending and updating Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, self-employed person and members of their families moving within the Community and also amending and updating Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71 (OJ 1983 L 230, p. 6).

(4) - Council Regulation (EEC) No 3811/86 of 11 December 1986 amending Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community and Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71 (OJ 1986 L 355, p. 5), applicable from 1 January 1987, changed the wording of Article 14c so that it also regulated the pursuit of two or more activities carried out on an employed or a self-employed basis in the territory of two or more Member States.

(5) - Case C-340/94 de Jaeck v Staatssecretaris van Financiën, pending before the Court.

(6) - This was what happened in Case C-121/92 Staatssecretaris van Financien v Zinnecker [1993] ECR I-5023. Mr Zinnecker, a German national residing in Germany, who worked on a self-employed basis for approximately half of the time in Germany and the other half in the Netherlands, had, under Netherlands legislation, to be regarded as coming within the scope ratione personae of the Regulation (Title I), but the legislation applicable to him was the legislation of the Member State in which he resided (Article 14a of Title II).

(7) - The conclusion reached by the Court in the Zinnecker case cited in footnote 6 above was that Mr Zinnecker was not insured in either State since German legislation provided only for voluntary insurance for persons in that situation and because Mr Zinnecker had chosen not to subscribe to that insurance.

(8) - Case C-2/89 Bestuur van de Sociale Verzekeringsbank v Kits van Heijningen [1990] ECR I-1755.

(9) - Case C-3/90 Bernini v Minister van Onderwijs en Wetenschappen [1992] ECR I-1071, paragraph 14, and Case 197/86 Brown v Secretary of State for Scotland [1988] ECR 3205, paragraph 21.

(10) - Case C-107/94 Asscher v Staatssecretaris van Financiën [1996] ECR I-3089 paragraph 26.

(11) - Emphasis added.

(12) - Regulation No 3 of the Council on social security for migrant workers (Journal officiel 1958, 30, p. 561/58).

(13) - Case 75/63 Hoekstra née Unger v Bedrijfsvereniging Detailhandel [1964] ECR 177, at 184-5.

(14) - Case C-71/93 Van Poucke [1994] ECR I-1101. Mr Van Poucke pursued a twofold professional activity, as a military doctor in Belgium and as a self-employed doctor in the Netherlands, and was obliged to pay contributions to the Belgian institutions for the social insurance of self-employed persons. In application of Article 14c(1)(a) and Article 14d(1), by simultaneously pursuing an employed activity in Belgium and a self-employed activity in the Netherlands, he was subject in respect of the self-employed activity to the corresponding Belgian legislation in the same way as if that activity was pursued in Belgium.

(15) - Case 300/84 van Roosmalen v Bestuur van de Bedrijfsvereniging voor de Gezondheid [1986] ECR 3097. That case concerned the application of Netherlands legislation. Paragraph 1 of Annex I to Regulation No 1408/71, which refers to the Netherlands, provides that: `Any person pursuing an activity or occupation without a contract of employment shall be considered a self-employed person within the meaning of Article 1(a)(ii) of the Regulation.'

(16) - Case 254/84 De Jong v Sociale Verzekeringsbank [1986] ECR 671, paragraph 13. See also Case 266/78 Brunori [1979] ECR 2705, paragraph 6; Case 110/79 Coonan v Insurance Officer [1980] ECR 1445, paragraph 12; Case 275/81 Koks [1982] ECR 3013, paragraph 9; Case 276/81 Kuijpers [1982] ECR 3027, paragraph 14; Case 43/86 Sociale Verzekeringsbank v De Rijke [1987] 3611, paragraph 12; Case 368/87 Hartmann Troiani v Landesversicherungsanstalt Rheinprovinz [1989] ECR 1333, paragraph 21; and Case C-297/92 INPS v Baglieri [1993] ECR I-5211, paragraph 13.

(17) - Case 302/84 Ten Holder v Nieuwe Algemene Bedrijfsvereniging [1986] ECR 1821, paragraph 21.

(18) - Case 92/63 Nonnenmacher v Sociale Verzekeringsbank [1964] ECR 281, at 288-9.

(19) - Case 19/67 Sociale Verzekeringsbank v van der Vecht [1967] ECR 345 et seq., at 354.

(20) - Cited in footnote 5, above.

(21) - Cited in footnote 4, above. Following the entry into force of Regulation 3811/86, Article 14c acquired a new version from which paragraph (2) was omitted.

(22) - Case 143/87 Stanton v Inasti [1988] ECR 3877.

(23) - Joined Cases 154/87 and 155/87 Inasti v Wolf and Others [1988] ECR 3897.

(24) - Cited in footnotes 22 and 23, above, paragraphs 10 to 12.

(25) - Ibid., paragraphs 13 to 15.

(26) - Case C-53/95 Kemmler [1996] ECR I-703.

(27) - Ibid., paragraphs 12 to 14.

(28) - Cited in note 5, above.

(29) - Cited in note 26, above.

(30) - In that regard, the Council refers to Case C-280/93 Germany v Council [1994] ECR I-4973, paragraphs 89-91, in the sphere of the Common Agricultural Policy.

(31) - Case 19/76 Triches v Caisse Liégeoise pour Allocations Familiales [1976] ECR 1243, paragraph 18.

(32) - Cited in footnote 26, above, paragraphs 12 and 13.

(33) - Upon the accession of Spain and Portugal, both States were added to the list. The same happened upon the accession of Austria, Finland and Sweden.

(34) - Case 16/65 Schwarze v Einfuhr- und Vorratsstelle für Getreide und Futtermittel [1965] ECR 877.

(35) - This extract is taken from the Opinion of Advocate General Mancini in Case 20/85 Roviello v Landesversicheringsanstalt Schwaben [1988] ECR 2805, at 2822, 2826.

(36) - Case C-37/89 Weiser v Caisse nationale des barreaux français [1990] ECR I-2395, at I-2411.

(37) - Case 62/76 Strehl v Pensioenfonds Mijnwerkers [1977] ECR 211, paragraph 10.

(38) - Case 145/79 Roquette Frères v French Customs Administration [1980] ECR 2917, paragraph 6.

(39) - Cited in footnote 35, above.

(40) - Cited in footnote 36, above.

(41) - Case 313/86 Lenoir v Caisse d'allocations familiales des Alpes-Maritimes [1988] ECR 5391.

(42) - Case C-204/88 Paris [1989] ECR 4361.

(43) - Case C-117/88 Trend-Moden Textilhandel v Hauptzollamt Emmerich [1990] ECR I-631.

(44) - Case 112/83 Produits de maïs v Administration des douanes et droits indirects [1985] 719, paragraph 18, and Case 41/84 Pinna v Caisse d'allocations familiales de la Savoie [1986] ECR 1, paragraph 26.

(45) - Cited in footnotes 22, 23 and 26, above.

(46) - Cited in footnote 44, above.