Jean-Louis Pennartz v Caisse primaire d'assurance maladie des Alpes-Maritimes (268/78)

Contents

In Case 268/78REFERENCE to the Court under Article 177 of the EEC Treaty by the Cour de Cassation of France (Social Chamber) for a preliminary ruling in the proceedings pending before that court betweenJEAN-LOUIS PENNARTZ, Cannes-la-Bocca,andCAISSE PRIMAIRE D'ASSURANCE MALADIE DES ALPES-MARITIMES [Central Sickness Insurance Fund for the Alpes-Maritimes], Nice,THE COURT (First Chamber)composed of: J. Mertens de Wilmars, President of Chamber, A. O'Keeffe and G. Bosco, Judges,Advocate General: H. MayrasRegistrar: A. Van Houttegives the following

Judgment

Facts and Issues

I —Facts and procedure

1.Regulation No 3 of the Council concerning social security for migrant workers (journal Officiel 1958, p. 561) provides in Article 18 (1), which comes under Chapter I (‘Sickness, Maternity’) of Head III:‘Where, under the legislation of one Member State the payment of cash benefits is related to the average wage over a given period, the average wage to be reckoned for the calculation of such benefits shall be based on actual wages obtained during the period completed under the legislation of such Member State’.Subsequently, Regulation (EEC) No 1408/71 of the Council (Official Journal, English Special Edition, 1971 (II), p. 416) which replaced Regulation No 3 on 1 October 1972 provided in Article 58, which comes under Chapter 4 (‘Accidents at work and occupational diseases’) in Title HI;(1) The competent institution of a Member State whose legislation provides that the calculation of cash benefits shall be based on an average wage or salary shall determine such average wage or salary exclusively by reference to wages or salaries recorded during the periods completed under the said legislation.(2) The competent institution of a Member State whose legislation provides that the calculation of cash benefits shall be based on a standard wage or salary shall take account exclusively of the average wage or salary or, where appropriate, of the average of the standard wages or salaries corresponding to the periods completed under the said legislation.(3) The competent institution of a Member State whose legislation provides that the amount of cash benefits shall vary with the number of members in the family shall take into account also the members of the family of the person concerned who are residing in the territory of another Member State, as if they were residing in the territory of the competent State.’

2.In France pensions payable to persons who have sustained accidents at work and suffer permanent incapacity are covered by Article L 451 et seq. of the Code de la Sécurité Sociale [Social Security Code]. Pursuant to Article L 451:‘Pensions payable to persons who have sustained such an accident and suffer permanent incapacity, or, in the case of death, their successors, shall be calculated on the basis of the annual wages of the person concerned.The wage forming the basis for the calculation of the pension shall be determined in accordance with the detailed rules laid down by decree of the Council of State.’The detailed rules mentioned in the second paragraph above were laid down in Decree No 46-2959 of 31 December 1946. Articles 103 and 108 of that decree provide as follows:Article 103:‘The wage forming the basis for the calculation of the daily allowance and pension pursuant to Articles 46 and 48 of the Law of 30 October 1946 [Code de la Sécurité Sociale, Articles 449 and 451] comprises all wages or earnings relating to the period to be taken into consideration in each of the cases hereinafter referred to in Articles 104 and 108 taking account, where appropriate, of benefits in kind and gratuities, after deducting trade costs and workshop costs and excluding family allowances prescribed by law and employers' social security contributions.’Article 108:‘In calculating the pension the rate referred to in Article 103 above includes the actual total remuneration received from one or more employers during the twelve months before the cessation of work as a consequence of the accident, subject to the following provisions:(1) If the person concerned has been for less than twelve months in the trade or professional category in which he was classified at the time of the cessation of work in consequence of the accident the annual salary shall be calculated by adding to the actual remuneration relating to the period of his employment in that category the remuneration which he would have received during the period necessary to complete the period of twelve months.Nevertheless, if the sum thereby obtained is less than the total amount of the remuneration received by the person concerned in his various employments the latter amount shall form the basis for calculation of the pension in accordance with the first paragraph of this article.’

3.Jean-Louis Pennartz, a French national residing in France, worked in France from 1966 to 1967, in Belgium from August 1967 to December 1968, and has worked in France from 7 April 1969. On 25 April 1969 he sustained an accident at work for which the Caisse Primaire d'Assurance Maladie des Alpes-Maritimes (hereinafter referred to as ‘the Fund’) granted him from 3 May 1970 an invalidity pension at the rate of 4 % permanent partial invalidity which was subsequently increased to 6 %.The Fund, in pursuance of the provisions of Article L 451 of the Social Security Code and of Articles 103 and 108 of Decree No 46-2959 of 31 December 1946, calculated the amount of the pension on the basis of an average annual wage of FF 9240 which was reckoned on the basis of the remuneration actually received by the person concerned in his last employment, held at the time of the accident.Mr Pennartz challenged this method of calculation, maintaining that the wage forming the basis for calculating the pension must be determined in terms not only of the wage received in his last employment but also of the wage actually received previously, in particular in Belgium, where his annual basic wage amounted to a sum corresponding approximately to FF 1000 per month. In this connexion he relied in particular on the second subparagraph of paragraph (1) of Article 108 of the above-mentioned Decree No 46-2959.The Commission de Recours Gracieux [Appeals Board] of the Fund found in favour of Mr Pennartz in a decision of 11 March 1975 but the Regional Director of Social Security, Marseilles, annulled that decision.Mr Pennartz was unsuccessful in his applications to have the annulment set aside, either by the Commission de Premiere Instance du Contentieux de la Sécurité Sociale des Alpes-Maritimes [Tribunal of First Instance for Social Security Appeals for the Alpes-Maritimes] or the Cour d'Appel [Court of Appeal] Aix- en-Provence, and brought the matter before the Cour de Cassation.The Cour de Cassation took the view that settlement of the case concerned the interpretation of provisions of Community law and decided, by a judgment of 22 November 1978, to stay the proceedings and to refer the following question to the Court of Justice pursuant to Article 177 of the EEC Treaty:‘Pursuant to the Community provisions then applicable, must the basic wage to be used in calculating the benefits payable to a person who has suffered an accident at work and who has worked successively in more than one Member State during the reference period fixed in accordance with the legislation of the State where the accident occurred be reckoned on the basis of all remuneration received during that period in any of those States or solely on the basis of the remuneration received in the State in which the claimant was working at the time of the accident, in accordance with the provisions and the method of calculation in force in that State?’

4.The judgment making the reference was received at the Court Registry on 27 December 1978.The Direction Regionale des Affaires Sanitaires et Sociales Provence-Alpes-Côte d'Azur [Regional Board for Health and Social Matters for Provence, the Alpes, and the Cote d'Azur] and the Commission of the European Communities submitted written observations pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC.After hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to assign the case to the First Chamber pursuant to Article 95 of the Rules of Procedure. It also decided to open the oral procedure without any preparatory inquiry.

II —Written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

(A)The Direction Régionale des Affaires Sanitaries et Sociales Provence-Alpes-Côte d'Azur, the authority charged with the supervision of the Fund, the respondent in the main action, observes that in that action it is necessary to have regard not only to Articles 103 and 108 of the French Decree of 31 December 1946 but also to Articles 18 (1) and 30 (2) of EEC Regulation No 3. These provisions, read together, show that, if the legislation of a Member State refers for the award of cash benefits to the average wage for a certain period such average wage must be determined solely on the basis of the wages established during the period completed under the legislation of that Member State.

(B)The Commission of the European Communities first makes some preliminary remarks on the scope of the provisions of Article 18 (1) read in conjunction with Article 30 (2) of Regulation No 3.It states first that the above-mentioned provisions are solely concerned with cases in which, pursuant to the legislation applicable, cash benefits payable to a person who has sustained an accident at work or an occupational disease must be calculated on the basis of an average wage. These provisions are accordingly not applicable to pensions determined on the basis of the actual total remuneration of the worker.Secondly it observes that, as shown by the established case-law of the Court of Justice, the provisions on social security for migrant workers cannot be relied upon if they would confer upon the workers concerned a lesser advantage than that which they would in any event obtain under the legislation of a single Member State. In these circumstances it is therefore proper to apply only the national provisions.The Commission next considers the question submitted by the court making the reference and considers that the reply should be to the effect that where the calculation of a pension for an accident at work is based on the average wage for a certain period such average wage must be determined on the sole basis of the remuneration received by the person concerned when he was subject to the legislation of the Member State which is responsible for payment of the pension.This follows from the very wording of Article 18 (1) which shows clearly that the words ‘under the legislation of such Member State’ relate to the expression ‘period completed’. The interpretation advanced by Mr Pennartz to the effect that the said provision merely establishes the competence of the law of the Member State concerned for fixing the duration of the reference period employed as the basis for calculating the pension is directly at variance with the meaning of the words and amounts to confusing the ‘reference period’ for the calculation of the average salary with the ‘period completed’ under the legislation of the competent Member State. This interpretation also disregards the scope of the Community provisions in question by attributing to them the role of determining the law applicable which is in fact determined by Articles 12 to 15 of the said Regulation No 3.Any doubts still existing as to the exact meaning of Article 18 (1) of Regulation No 3 would be dispelled by the clearer wording of Article 58 (1) of Regulation No 1408/71 which replaced it and whose wording does not henceforth give rise to any misunderstanding:‘The competent institution of a Member State whose legislation provides that the calculation of cash benefits shall be based on an average wage or salary shall determine such average wage or salary exclusively by reference to wages or salaries recorded during the periods completed under the said legislation.’It should be remarked that the concept of the wages recorded during the periods completed under the legislation of the State which is responsible for payment of the pension is not necessarily indentical with that of the wages received on the territory of that State. Although that is normally the case under Article 12 of Regulation No 3 it nevertheless remains that, in certain situations which are also contemplated in Title II of that regulation, the worker may be subject to the legislation of a Member State other than the one in which he is employed. In such a situation the competent social security institutions must clearly take account of the remuneration received in Member States other than those whose legislation applies to them.The Commission then recalls that the provisions of Articles 18 (1) and 30 (2) by no means constitute a special case. In fact they merely express a more general idea which applies both in the social legislation of the Member States and in other parts of the same Regulation No 3 (old-age pensions and death benefits, unemployment benefits) whenever the calculation of benefits must be determined on the basis of wages.The principal reason for these provisions is a practical one, namely that they avoid the difficulties inherent in taking into consideration wages recorded abroad. Since the wage to be taken into consideration is normally established on the basis of a number of factors relating to the facts of the situation and to the law of the Member State in question it is evident that there are difficulties in applying these factors to wages recorded abroad which normally have an entirely different legal and economic background. A further difficulty arises at present from the disarray in currency matters which affects the conversion of the sums in question into the currency of the country in which the benefit is awarded. The rule laid down in Articles 18 (1) and 30 (2) is concerned to avoid these very difficulties.The further point may be made that the above-mentioned rule is more often favourable to the person concerned than the reverse. At any rate if during the period concerned economic conditions are normal, the wages most recently received by the worker will probably be higher than those which he may previously have received under the legislation of another Member State. It is in fact reasonable to suppose that it was the prospect of improving his occupation and income which prompted the worker to emigrate and to change his employment.On the basis of these considerations the Commission suggests that the question submitted should receive the following answer:‘Articles 18 (1) and 30 (2) of Regulation (EEC) No 3 concerning social security for migrant workers must be interpreted to mean that if a worker sustains an accident at work when he was subject to the legislation of a Member State in accordance with which the calculation of the pension for the accident at work takes account of the average wage for a certain period, the average wage taken into consideration in calculating the said pension shall be determined exclusively in terms of the remuneration recorded during the period in the course of which the person concerned was subject to the legislation of that Member State.’

III —Oral procedure

The Commission of the European Communities, represented by its Legal Adviser, J. Amphoux, acting as Agent, presented oral argument at the hearing on 7 June 1979.The Advocate General delivered his opinion at the hearing on 21 June 1979.

Decision

1By a judgment of 22 November 1978, which was received at the Court of Justice on 27 December 1978, the Cour de Cassation of France submitted to the Court of Justice pursuant to Article 177 of the EEC Treaty a preliminary question on the interpretation of certain provisions of Regulation No 3 of the Council of 25 September 1958 concerning social security for migrant workers (Journal Officiel, 1958, p. 561).

2This question was raised in the course of an action between Mr Pennartz, a worker of French nationality residing in France, who, on 25 April 1969, sustained an accident at work there, and the Caisse Primaire d'Assurance Maladie des Alpes-Maritimes [Central Sickness Fund for the Alpes-Maritimes] (hereinafter referred to as ‘the Fund’) concerning the award of an invalidity pension in connexion with that accident.

3The judgment making the reference indicates that the Fund granted Mr Pennartz from 3 May 1970 a pension for accident at work at a rate of permanent partial invalidity of 4 %, which was subsequently increased to 6 %. The Fund calculated the amount of the pension from an average wage based solely on the wage actually received by him in his employment at the time of the accident. In this connexion the Fund proceeded on the basis of the provisions of Article L 451 of the French Social Security Code and on Articles 103 and 108 of Decree No 46-2959 of 31 December 1946.

4Mr Pennartz contested this method of calculation, claiming that the wage taken as the basis for the calculation of the pension must be determined not only in terms of the wage received in his employment at the time of the accident but also of the higher wage which he had in fact received previously in Belgium. The Fund took the view inter alia that its method of calculation was in accordance with the provisions of Article 18 (1) of Regulation No 3 of the Council and Mr Pennartz then maintained that it had misapplied that provision which, in his view, merely determined the law applicable in fixing the reference period and in no way affected the determination of the wage to be taken into account in calculating the pension.

5The French Cour de Cassation, the court of last instance to which the dispute was referred, considered that settlement thereof concerned the application of relevant rules of Community law and submitted the following preliminary question to the Court of Justice:‘Pursuant to the Community provisions then applicable, must the basic wage to be used in calculating the benefits payable to a person who has suffered an accident at work and who has worked successively in more than one Member State during the reference period fixed in accordance with the legislation of the State where the accident occurred be reckoned on the basis of all remuneration received during that period in any of those States or solely on the basis of the remuneration received in the State in which the claimant was working at the time of the accident, in accordance with the provisions and the method of calculation in force in that State?’

6It appears from the judgment making the reference that the question submitted concerns the interpretation of the provisions of Regulation No 3 of the Council concerning accidents at work, which were in force at the time when the pension in dispute was awarded.

7Chapter 4 of Head III of Regulation No 3, which deals with ‘Industrial accidents and occupational diseases’, does not contain any specific provisions concerning the calculation of cash benefits, such as pensions. Nevertheless Article 30 (2) of that chapter refers as regards such benefits to the ‘provisions of Article 18 of this regulation’, the first paragraph of which is worded as follows:‘Where, under the legislation of one Member State, the payment of cash benefits is related to the average wage over a given period, the average wage to be reckoned for the calculation of such benefits shall be based on actual wages obtained during the period completed under the legislation of such Member State.’

8Article 18 (1) should not be interpreted as merely determining the legislation applicable for fixing the reference period for the average wage without affecting in any way the determination of the remuneration to be taken into consideration in calculating the pension. Apart from the fact that such an interpretation is contrary to the very wording of that provision, it would deprive it of all practical purpose since the legislation applicable has already been settled by Articles 12 to 15 in Head II of the regulation in question.

9On the other hand it is clear from both the wording and the objectives of Article 18 (1) that that provision is intended to establish, where, under the legislation of one Member State, the basic wage employed in calculating cash benefits is the average wage over a given period, the remuneration of which ..the competent institution must take account in order to determine that wage and it provides for that purpose that the remuneration to be taken into consideration is the wage ‘obtained’ during the periods of work completed under the legislation of such State.

10If, having regard to the provisions of Articles 12 to 15 of the regulation, the legislation applicable is that of the Member State on whose territory the worker was employed at the time when the accident occurred, the wage ‘obtained’ within the meaning of Article 18 (1) constitutes only the wages paid in the reference period, established in accordance with that legislation, on the territory of. that State.

11For these reasons the answer to be given to the question submitted is that in pursuance of Articles 18 (1) and 30 (2) of Regulation No 3 of the Council, where, under the legislation of one of the Member States, the basic wage to be reckoned for the calculation of cash benefits due to a person who has sustained an accident at work and who has worked successively in one or more Member States is the average wage for a given period, such average wage is to be determined solely by reference to the wages paid in the State in which the person concerned was working at the time of the accident, in accordance with the rules and the method of calculation prevailing in that State.

Costs

12The costs incurred by the Direction Régionale des Affaires Sanitaires et Sociales Provence-Alpes-Côte d'Azur and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable and since, in so far as the parties to the main action are concerned, these proceedings are in the nature of a step in the action pending before the national court, the decision as to costs is a matter for that court.

Operative part

On those grounds,THE COURT (First Chamber),in answer to the question referred to it by the Cour de Cassation of France by a judgment of 22 November 1978, hereby rules: In pursuance of Articles 18 (1) and 30 (2) of Regulation No 3 of the Council, where, under the legislation of one of the Member States, the basic wage to be reckoned for the calculation of cash benefits due to a person who has sustained an accident at work and who has worked successively in one or more Member States is the average wage for a given period, such average wage is to be determined solely by reference to the wages paid in the State in which the person concerned was working at the time of the accident, in accordance with the rules and the method of calculation prevailing in that State.

Delivered in open court in Luxembourg on 11 July 1979