OPINION OF MR ADVOCATE-GENERAL REISCHL

DELIVERED ON 15 OCTOBER 1975 (*1)

Mr President,

Members of the Court,

Mr Galati, the plaintiff in the proceedings in the national court which gave rise to the question referred for a preliminary ruling with which the Court must now deal, is an Italian national and took up paid employment both in the Federal Republic of Germany and in Italy. In January 1971 he gave up compulsorily insurable employment for reasons of health, in other words, as stated in the order requesting a preliminary ruling, the insurance risk of incapacity for earning materialized on that date. In view of this, the plaintiff applied for a part pension from the German pensions insurance scheme on account of incapacity for earning or, alternatively, occupational invalidity. This application was rejected by a decision of the Landesversicherungsanstalt Schwaben of 14 August 1973. The rejection was based on the ground that the plaintiff had not completed the qualifying period of 60 calendar months which is laid down in paragraphs 1246 (3) and 1247 (3) of the Reichsversicherungsordnung.

The plaintiff had completed 27 months under the German social insurance scheme and paid compulsory contributions in Italy for a total of 142 weeks until January 1971. In addition he was granted permission to pay two voluntary weekly contributions in respect of the period from 27 June 1971 to 4 July 1971, as laid down in Article 1 of Decree No 1432 of the President of the Italian Republic of 30 September 1971, and had apparently paid these contributions, too.

However, in the view of the Landesversicherungsanstalt, the voluntary Italian insurance period must be disregarded because it was not completed before the insurance risk materialized. German law (paragraphs 1246 (3), 1247 (3) and 1255 (6) of the Reichsversicherungsordnung) provides in fact that the insurance period which is regarded as the qualifying period must be completed before the risk materializes and that only contributions which have been paid before the risk materialized can be taken into account. However it is important to know whether the Italian insurance periods may be counted towards the qualifying period, since the decision must be made only according to German law. If the voluntary Italian insurance period is disregarded, this produces an Italian insurance period of 32·77 months when the conversion rules contained in Article 13 (4) of Regulation No 4 or in Article 15 (3) of Regulation (EEC) No 574/72 are applied and, when the 27 German monthly insurance periods are included, a total period of 59·77 months. This however is insufficient, because the remaining fraction of a month is already excluded when the Italian insurance weeks are converted into insurance months. Thus rounding the figure up to 60 months, as provided in paragraph 1250 (3) of the Reichsversicherungsordnung, is out of the question.

Mr Galati appealed to the Sozialgericht Augsburg against that decision.

With regard to the abovementioned conversion rules, the Sozialgericht Augsburg considers inter alia that the view that the decimal fraction must be treated as a partially completed German monthly contribution period when the insurance periods are aggregated is tenable, and that this would allow the fraction to be rounded up under paragraph 1250 (3) of the Reichsversicherungsordnung. As to taking into account the voluntary Italian insurance periods, the court considers that an interpretation of Article 45 of Regulation (EEC) No 1408/71 is tenable whereby the German insurance institution must treat voluntary contributions, even those paid after the insurance risk has materialized and which may be counted towards the Italian qualifying period in accordance with Article 9 of the abovementioned presidential Decree as if they could be counted towards the German qualifying period.

The Sozialgericht stayed the proceedings by order of 27 January 1975 and referred the following two questions for a preliminary ruling under Article 177 of the EEC Treaty:

When insurance periods which are expressed in weeks are converted into periods which are expressed in months (Article 15 (3) of Regulation (EEC) No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71, OJ L 74 of 27. 3. 1972, p. 1), is any decimal fraction which may be left over to be disregarded in the aggregation of insurance periods or is it to be taken into account by the competent institution as a full month or one which has started to run?

Is the last phrase of Article 45 (1) of 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 L 149 of 5. 7. 1971, p. 2) to be interpreted as constituting a fiction in the sense that insurance periods in another Member State which can be counted towards the qualifying period are treated without examination by the competent institution as insurance periods completed in its own State which can be counted as aforesaid, or is it permissible to examine the insurance periods completed in the other Member State in the light of the legislation which the institution administers?

In my opinion the following view on those questions is appropriate.

With regard to the problem of converting insurance periods which are expressed in weeks into periods which are expressed in months, it must first be stated that the relevant provisions of Regulation No 4 and Regulation (EEC) No 574/72 are in harmony in this respect and that there is no doubt as to the accuracy of the abovementioned arithmetical result when a six-day week is assumed and only the Italian insurance periods which were completed before the risk materialized are taken into account.

It is also important here whether the view of the Landesversicherungsanstalt is correct that in the absence of express provisions laid down in the Community regulations decimal fractions must not be taken into account or whether it is necessary to agree with the Commission which considers that it follows from the lack of such provisions of Community law that decimal fractions are included in the aggregation prescribed and that the decision on rounding them up must be made according to the national law of the competent institution.

I do not consider the view of the Landesversicherungsanstalt to be correct, that only the provisions on conversion which are laid down in Community law could, in view of their coordinating function, prescribe the extent to which Italian periods are to be treated as German periods when they are converted and that, in accordance with the aim of these provisions, as a result only complete units of time could be taken into consideration in accordance with the law of the competent institution. There are no indications contained in the Community regulations in support of the latter opinion. With regard to the first point it is necessary to say that coordinating provisions of Community law need not necessarily contain a comprehensive set of rules; it is therefore conceivable that reference must be had to national law where there are lacunae.

However, the basic principle of the protection of migrant workers from disadvantages and loss of rights underlying Regulation No 3 and Regulation (EEC) No 1408/71 which replaced it, must be a decisive factor with regard to the decision. If the regulations provide that insurance periods completed in the various Member States must be taken into account, this really forms the essence of the system laid down in Community law. Therefore it seems completely unacceptable simply to allow some of the insurance periods completed under the legislation of a Member State to be disregarded in the absence of a special express provision within the context of the conversion rules laid down in the regulations.

If the intention is to avoid such a loss, it would be possible per se to consider acknowledging that it is necessary to round up the figures by referring to general legal principles of the Member States or at least to prevailing practice. However I have objections to going so far, since this would mean a partial harmonization of social insurance law which is not included in the aim of the regulations. Therefore the only appropriate solution remaining is the Commission's proposal that the fraction left over on conversion should be included in the aggregation of existing insurance periods laid down under the regulations and that the decision whether the figures should be rounded up should be made according to national law.

Although it is indeed possible to reach different results in this way in the various Member States, because obviously no uniform rules of conversion exist, I do not consider this to be decisive because such differences in social insurance law are at any rate frequently unavoidable so long as there is no uniformity.

Nor in my opinion must the fact carry any weight that the figures may perhaps be rounded up several times, according to the argument put forward by the Commission, which is a fact which caused the Landesversicherungsanstalt to speak of an improvement in the position of migrant workers, whereas Article 51 of the Treaty only requires that discrimination be abolished. In fact if there were really an improvement in their position, because a distinction cannot be made between countries and individual cases, it would be more acceptable according to the basic principles of the case-law on social insurance law, so long as the Community legislature or the national legislature does not provide other solutions, than a loss of rights for migrant workers such as would doubtless occur if some insurance periods were not taken into account. Moreover, it seems, however, highly doubtful whether the comparison with purely national working conditions which is made by the Landesversicherungsanstalt, which of course is intended to support its argument with regard to the alleged improvement in the position of migrant workers, is at all permissible. I have the impression that in this case situations are being compared which are not at all comparable, that is, the situation of workers in respect of whom only one national law was decisive and the position of migrant workers who were subject to several legal systems and for whom certain apparent advantages are no other than reasonable compensation for numerous disadvantages connected with emigration.

Finally I would like to stress in addition that two further points of view put forward by the Landesversicherungsanstalt are also scarcely capable of undermining the opinion of the Commission.

This applies first to the observation that the problem of converting remaining decimal fractions was already known when Regulation No 4 was re-enacted and that the provisions on conversion were adopted in Regulation (EEC) No 574/72 without amendment. This is doubtless correct. In my opinion, however, this can only mean that the solution which follows from Regulation No 3, as I have just described, was regarded as appropriate and that amendments were considered superfluous.

This applies further to the reference by the Landesversicherungsanstalt to the legislative aim of German rounding-up provisions according to which only German insurance periods should be taken into account. In my opinion it is quite obvious that such considerations must be ruled out precisely because of Community law. This follows, as the Commission correctly stressed, clearly from Article 8 of Regulation No 3 and Article 3 of Regulation (EEC) No 1408/71, that is, from the principle of equality of treatment which applies to migrant workers.

Therefore it is necessary to state with regard to the first question that under Community law when smaller units of time are converted into larger units of time, fractions which remain must not be left out of account, that they must be included in the necessary aggregation and that a decision must be made on the possibility of rounding up the figure according to national law.

It is not necessary to go further into the rounding-up provisions which may come into consideration, such as paragraph 1250 (3) of the Reichsversicherungsordnung to which the court making the reference has referred, or into the objections thereto put forward by the Landesversicherungsanstalt. The question whether the abovementioned provisions can be applied to the present case, where appropriate by analogy, as the Commission has claimed, is one which the court making the reference alone must decide, naturally taking into account the principles of Community law which have been mentioned.

2. The second question

It is conceivable that judgment can be given in the main action on the basis of the reply given to the first question. The court making the reference has that indicated too. Nevertheless, this depends essentially on the interpretation of the national law and upon the elucidation of the problems raised by the Landesversicherungsanstalt, which the court making the reference has perhaps not yet finally completed. Therefore it seems impossible in any case to declare that the second question is without purpose, quite apart from the fact that it was not asked merely in the alternative.

Accordingly it is necessary to examine further whether the last phrase of Article 45 (1) of Regulation (EEC) No 1408/71 is to be interpreted as meaning that insurance periods which may be counted towards the qualifying period must be treated without examination by the competent institution in another Member State as insurance periods completed in its own state which can be counted as aforesaid.

In this respect the Commission is of the opinion that Community law precludes an examination under national law of foreign insurance periods which can be taken into account and that under the Community regulations only the legal system under which they were completed decides whether foreign insurance periods may be counted. On the other hand the Landesversicherungsanstalt considers that the national law of the competent institution is decisive with regard to the examination of the requirements for entitlement; in particular this determines whether the qualifying period has been completed and whether insurance periods completed after the risk has materialized may be taken into account.

In the examination of this issue, we cannot confine ourselves to Regulation (EEC) No 1408/71; Regulation No 3 must also be included. This follows from Article 118 of Regulation (EEC) No 574/72 as amended by Regulation (EEC) No 878/73 and from the fact that the risk materialized before 1 October 1972, that no assessment had been made in respect of the application for a pension before that time and that on the basis of the risk insured benefits must be granted in respect of the period before that date. Accordingly, in such a situation, as the Commission correctly emphasized, it is necessary to refer to Articles 24, 26, 27 and 28 of Regulation No 3 with regard to the aggregation up to 30 September 1972, and to Articles 40 and 44 et seq. of Regulation (EEC) No 1408/71 with regard to the period from 1 October 1972.

Article 27 of Regulation No 3 provides that whenever an insured person has been subject to the legislation of two or more Member States, the insurance periods and assimilated periods completed under the legislation of each of the Member States shall be aggregated for the acquisition, maintenance or recovery of the right to benefit. Article 1 (p) defines what is deemed to be the insurance period. The term ‘insurance periods’ thereunder covers ‘contribution periods or periods of employment as defined or reckoned as insurance periods in the legislation concerning a contributory scheme under which they were completed’. Thus it is clearly dependent on the legal system under which the insurance periods were completed and the determining factor is solely whether that legal system recognizes it as an insurance period. Thus, the conclusion seems to be quite obvious that there must be no examination under the law of the institution examining the claim, not even with regard to the date on which the insurance period was completed.

On the other hand, Article 28 of Regulation No 3 must certainly not be overlooked. Paragraph (a) thereof states that the institution of each of the Member States shall, in accordance with its own legislation, determine whether the person concerned satisfies the conditions for entitlement to the benefits prescribed in that legislation taking into the account the aggregation of periods as set out in the preceding article. Paragraph (b) provides with regard to the fixing of the part pension that the said institution shall, taking the so-called amount for accounting purposes, determine the amount due pro rate with the length of the periods completed under the said legislation before the risk materialized, as compared with the total length of the periods completed under the legislation of all the Member States concerned before the risk materialized.

However it is necessary to observe in this connexion that it is necessary not to read too much into the phrase, used in Article 28 (b), ‘before the risk materialized’. It does not mean that insurance periods must be disregarded in so far as they come into consideration under national law; for it is obviously not the aim of Regulation No 3 to amend national law by curtailing rights, where it provides that insurance periods which were completed after the risk materialized are to be taken into account.

Moreover, as regards Article 28 (a) it is necessary first to remember that it is merely a provision on calculation and that with regard to our problem it is certainly not completely clear. Therefore it must be evaluated authoritatively by reference finally to the reasoning behind Regulation No 3 and Article 51 of the EEC Treaty. Thus it must be recalled that the essential aim of these provisions, which is repeatedly stressed in case-law, is to protect migrant workers from loss of rights. In fact, however, it cannot be denied that the application of the argument put forward by the Landesversicherungsanstalt would lead to such a loss of rights for Italian migrant workers; a proportion of their insurance periods would not be taken into account, whilst this would not be so if they had completed all the insurance periods in Italy. The fact that a loss of rights could lead to an adverse effect upon the right to freedom of movement must in my opinion be conclusive. With regard to the interpretation of the provisions concerned in this case the only conclusion which can be drawn therefrom is that the decisive stress must be laid on Article 27 in conjunction with Article 1 (p), that is, on the principle that foreign insurance periods which are recognized as such according to the relevant law must be taken into account without examination of them by the institutions of other Member States when they are aggregated.

Moreover I feel that my opinion is reinforced by the judgment in Case 2/72 (Judgment of 6 June 1972, Salvatore Murru v Caisse Regionale d'Assurance Maladie de Paris Rec. 1972, p. 333), to which the Commission has also referred. This is concerned with the related problem of assimilated periods (Article 1 (r) of Regulation No 3). In this connexion the principle is clearly emphasized, ‘that the regulation refers to the conditions which must be fulfilled under national law for a specific period to be acknowledged as equivalent to insurance periods completed in that State’ (Rec. 1972, p. 338), and this is so although it would have been more favourable for the person concerned in that case if it had been decided according to the law of the institution making the calculation.

Moreover, it cannot be effectively held against this conclusion that this would thereby lead to an improvement in the position of migrant workers in contrast to workers who only have German insurance periods to show, because in fact greater consequences would attach to foreign insurance periods than to German periods completed after the risk materialized. It may also be said in this connexion that the argument put forward seeks to compare situations which are not comparable. Moreover, it should also be observed in the present connexion that such an improvement in position, if it is in fact possible to speak of one, would be more acceptable under the system laid down in Regulation No 3 than the loss of rights for migrant workers.

With regard to Regulation (EEC) No 1408/71 the situation is no different.

It is true that Article 45, which corresponds to Article 27 of Regulation No 3, contains the additional words ‘as though they had been completed under the legislation which it administers’. However, this must certainly not be understood as a limitation on the principle that insurance periods which are completed under the legislation of another Member State are taken into account. One is bound to infer this, as the Commission does, from the fact that Article 45 of Regulation (EEC) No 1408/71 and Article 27 of Regulation No 3 have clearly laid down the basic principle that foreign insurance periods are to be taken into account. Moreover the definition of insurance periods contained in Article 1 (r) of Regulation (EEC) No 1408/71 is even more clearly in line with the opinion which I hold since it says that insurance periods are ‘contribution periods or periods of employment as defined or recognized as insurance periods by the legislation under which they were completed or considered as completed …’.

Moreover, as regards the argument based on Article 46 of Regulation (EEC) No 1408/71, which corresponds to Article 28 of Regulation No 3, the observations made on Article 28 clearly apply fully and completely in this connexion too. In view of the similarity of the words used there is no need to demonstrate this fact further.

With regard to both regulations I accordingly consider in fact that the interpretation advocated by the Commission is correct.

The fact that the Administrative Committee on Social Security for Migrant Workers of the European Economic Community came to the same finding in its resolution of 20 April 1964 (1) (OJ 1964, p. 2475) is certainly not decisive, because such resolutions do not bind the Court of Justice, but it is, however, of relevance. Moreover, in contrast to the view of the Landesversicherungsanstalt it is not merely concerned with the calculation of the amount for accounting purposes in respect of States in which insurance periods can be taken into account after the risk has materialized but it is a quite general statement. For the sake of simplicity I shall not demonstrate this by reading the resolution. Instead, I would refer to the operative part thereof which is published in the Official Journal 1964, p. 2476.

To summarize, therefore, I would like to propose that the Court reply as follows to the questions referred by the Sozialgericht, Augsburg:

Decimal fractions which arise on the conversion of insurance periods from smaller into larger units of time under Article 13 of Regulation No 4 and Article 15 of Regulation No 574/72 must be counted when the insurance periods are aggregated. Whether it is permissible to round up the result of the aggregation depends on the provisions of national law which the insurance institution making the calculations administers. In this respect, migrant workers have the same rights as nationals of the competent Member State.

Article 27 of Regulation No 3 and Article 45 of Regulation (EEC) No 1408/71 impose a duty on the competent institution of a Member States to take into account the insurance periods completed under the legislation of other Member States and which may be counted towards the qualifying period as insurance periods completed in its own State which can be counted as aforesaid. The competent institution may not examine periods completed in other Member States in the light of the law which it administers.

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Translated from the German.

Translator's note: this accompanied the draft regulation submitted to the Council.