Margherita Baccini v Office national de l'emploi (ONEM) (79/81)

II —Summary of the written observations submitted to the Court

Mrs Baccini, the appellant in the main action, considers that the legal problems as set out in the judgment making the reference raise the question whether, in order to determine an unemployed person's incapacity for work, it is necessary to have regard to the legislation of the State to which the worker was subject at the time when the risk materialized or to the legislation of the State which is responsible for paying the invalidity benefit the grant of which annuls the worker's right to unemployment benefit due under the legislation of the first State.She claims that it is necessary to resolve that legal problem because the Belgian institution withdrew her unemployment benefit not for the reason that she received an Italian pension but because that pension had been awarded to her for a degree of incapacity for work which exceeded 50%.In her opinion, by analogy with Article 39 (1) of Regulation No 1408/71, according to which incapacity for work followed by invalidity must be determined by the institution of the Member State whose legislation was applicable at the time when incapacity for work followed by invalidity occurred, her degree of incapacity for work should be determined under Belgian legislation because it was in Belgium that she fell ill, was recognized as suffering from invalidity and then as being again fit for work and that she signed on for unemployment benefit. The fact that the Italian authorities considered Mrs Baccini's invalidity to be permanent simply proves that those authorities considered themselves bound by the concordance of the criteria of invalidity provided for by Article 40 (4) of Regulation No 1408/71 only as regards positive effects (grant of the pension) and not as regards negative effects (withdrawal of the pension).Mrs Baccini considers moreover that by virtue of its structure and nature the Italian invalidity pension may be assimilated to an anticipatory retirement pension and thus overlaps with the Belgian unemployment benefit within the limits set by the first paragraph of Article 141 and Articles 145 and 146 of the Royal Decree of 20 December 1963.She observes that if the application of the provision at issue, the third paragraph of Article 141 of the Royal Decree of 20 December 1963, is made possible by the very terms of Regulation No 1408/71, which provides in Article 12 (2) that:“The provisions of the legislation of a Member State for reduction, suspension or withdrawal of benefit in cases of overlapping with other social security benefits or other income may be invoked even though the right to such benefits was acquired under the legislation of another Member State or such income arises in the territory of another Member State”,then the strict application of the third paragraph of Article 141 has had the effect of depriving her, as a migrant worker, of entitlement to unemployment benefit under Belgian legislation alone. That result is contrary not only to Articles 48 to 51 of the Treaty but also to Article 1 of the Protocol to the European Convention on Human Rights which provides that every natural person is entitled to the peaceful enjoyment of his possessions and therefore of his only source of income. The protection of fundamental rights is an integral part of the general principles of law which the Court has the task to safeguard wherever they are adversely affected by a rule of Community law.Mrs Baccini emphasizes that she is in the position of which she complains because of the effect of a measure adopted by the Community, Regulation No 1408/71 of the Council. If the Belgian and Italian periods of insurance had not been aggregated, and thus if the Community regulations had not been applied, she would not have received the apportioned invalidity pension payable by Italy and would have continued to receive Belgian unemployment benefit which is greater than the amount of the Italian invalidity pension.Mrs Baccini proposes that the questions submitted to the Court should be answered as follows:“Any provision contained in Regulations Nos 1408/71 or 574/72 of the Council whose application has the effect of reducing to nothing the benefits acquired by a migrant worker under the legislation of the State to which he was subject when the relevant risk materialized is incompatible with the Treaty.”“If benefits of a different kind are incompatible, the worker concerned must in any event receive an amount by way of benefits at least equal to that due under the legislation of the State on whose territory the risk entitling him to the benefits materialized.”The Office National de l'Emploi, the repondent in the main action, considers that, although the Court has no jurisdiction in proceedings for a preliminary ruling to decide whether rules of national and Community law are compatible, it should nevertheless be observed that the third paragraph of Article 141 of the Royal Decree of 20 December 1963 does not at all contradict the provisions of Community law. The prohibition of the overlapping of unemployment benefit with an invalidity pension is one of the cases governed by Article 12 (2) of Regulation No 1408/71.It adds that in distinguishing between Belgian and foreign benefits the Belgian Royal Decree is very favourable to the migrant worker: the payment of benefits under foreign sickness and invalidity insurance schemes entails withdrawal of Belgian unemployment benefit only in so far as the degree of incapacity for work is recognized as being 50% or more (third paragraph of Article 141) whereas receipt of a benefit under the Belgian sickness and invalidity insurance scheme constitutes an absolute bar to entitlement to Belgian unemployment benefit (first paragraph of Article 141).The Office National de l'Emploi believes that the legal issues raised by this case stem from the fact that the Italian authorities did not apply Article 40 (4) of Regulation No 1408/71 correctly.Neither Article 40 (4) nor the rules of concordance contained in Annex IV to Regulation No 1408/71 make any distinction between decisions producing a positive effect (acquisition of a right to a pension) and decisions producing a negative effect (withdrawal of the pension). Consequently the Italian institution should have considered itself bound by each decision of the Belgian institution and in particular should have withdrawn the invalidity pension awarded to Mrs Baccini when the Belgian institution declared that she was fit to resume work.The Office National de l'Emploi believes that it is not for the Belgian courts or the Court of Justice but for the Italian State to specify the designation of the benefits which it awards and consequently to indicate whether the invalidity pension which it grants is a benefit awarded under a sickness and invalidity insurance scheme or an anticipatoryold-age pension.The Commission analyses the various provisions applicable: the provisions of Belgian law on unemployment and invalidity benefits, the Italian legislation on invalidity pensions, the Community rules referred to in the judgment making the reference and the provisions of Belgian and Community law for the prevention of overlapping benefits.It stresses that the issues raised by this case are important in two respects :— First, the financial consequences of the contested decision of the Director of the regional office of the Office National de l'Emploi at La Louvière: by virtue of that decision Mrs Baccini is not only disentitled to unemployment benefit but also to cash benefits under the Belgian sickness and invalidity insurance scheme if she falls ill (she remains entitled to benefits in kind under Italian legislation because she receives an Italian pension — Article 28 of Regulation No 1408/711 and to Belgian family allowances. She remains entitled only to the much smaller Italian family allowances (Article 77 ( 11 (a) of Regulation No 1408/71). Thr Commission also points out that Mr* Baccini is faced with repaying unemployment benefits considered to ha\r been improperly received when her onk means of subsistence is the insignificant amount of the Italian invalidity pension— Secondly, the large number of similar disputes in Belgium which have been decided differently: the Commission, which has entered into discussions with the Belgian authorities in order to resolve such situations in a uniform manner, considers that the solution to these problems really amounts to a question of interpreting national law which does not fall within the jurisdiction of the Court in so far as it is for the Belgian authorities to take account of the real nature of the Italian invalidity pension.Against that background the Commission points out that the Belgian and Italian concepts of invalidity are fundamentally different. The Italian legislation makes provision for the grant of pensions which presuppose that invalidity is permanent, although they do not ruie out all work, and their acquistion and amount depend on the length of insurance periods (type B legislation: see Section 2 of Chapter 2 of Title III of Regulation No 1408/71). The Belgian law, however, which is based on risk, makes provision for the payment of invalidity allowances the amount of which is independent of the length of insurance periods and which only require continuing invalidity of a degree of more than 66% in order to be maintained (Section 1 of Chapter 2 of Title III of Regulation No 1408/71). Thus the Italian invalidity rules amount to an “anticipatory retirement pension” scheme whereas the Belgian rules are akin to a sickness benefit scheme.According to the Commission, which agrees with Mrs Baccini on this point, it would have been desirable for the Italian invalidity pension to be assimilated not to the Belgian invalidity allowance but to more comparable benefits such as an anticipatory old-age pension or a miner's invalidity'pension which do not entail withdrawal of unemployment benefits but simply reduce them (Anieles 146 and 146 bis of the Rova! Decree of 20 December 1963).The Commission agrees that the question whether the third paragraph of Article 141 of the Belgian Royal Decree of 20 December 1963 is compatible with the Community regulations does not arise in so far as :— First, it constitutes a provision for the prevention of overlapping benefits as defined in Article 12 (2) of Regulation No 1408/71. That must be the conclusion if Belgian unemployment benefits and the Italian invalidity pension may not in any event be considered to be “benefits of the same kind in respect of invalidity, old age, death or occupational disease” within the meaning of Article 12 (1) of Regulation No 1408/71 which permits benefits of the same kind to overlap;— Secondly, it follows from the judgment in Case 37/77 Mura [1977] ECR 1699 that when rights are granted pursuant to the application of national law alone, that national law applies in its entirety, including its provisions against the overlapping of benefits which expressly apply to benefits granted under foreign legislation.The Commission observes however that, having bound the Italian institutions under Article 40 (4) of Regulation No 1408/71 by determining the degree of Mrs Baccini's invalidity, the Belgian institutions then rely on the grant of the apportioned Italian invalidity pension in order to deduce from this that, in accordance with the provisions of Belgian law for the prevention of overlapping benefits and Article 12 (2) of Regulation No 1408/71, Mrs Baccini may draw unemployment benefit in Belgium. The Commission considers that “the apparently absurd result of the application of the national provision against the overlapping of benefits in its entirety and exclusively is caused by the fact that the effects of Article 40 (4) of Regulation No 1408/71 are more extensive than the draftsmen of that provision had imagined” in so far as that regulation in no way contemplates the coordination of benefits coming under different branches of social security.In the Commission's view Mrs Baccini's fitness to resume work in Belgium and, as the case may be, her entitlement to draw unemployment benefit in that country cannot be contested on the ground that the Italian invalidity pension continues to be paid to her. Under Italian legislation the degree of invalidity is determined once and for all on the date of acquisition of the right to the pension and is not reassessed.The Commission considers that in so far as, on the one hand, the Court has never been asked to consider the question of the effects of a national provision against overlapping where it applies to benefits of a different kind and, on the other hand, it has nevertheless held that the scope of such a provision may be limited by the regard which should be had to the aims of Article 51 of the Treaty, the questions put by the national court should be answered on the basis of the objectives of the Treaty and secondary Community law.The first aim of the Community regulations is to ensure that workers may indeed move freely.As the Court stated many times, the aim of Article 51 of the Treaty and the regulations adopted for its implementation is to prevent a migrant worker from losing the benefit of his periods of employment because he moves from one Member State to another so that he is no worse off than if he had worked all his life in one Member State (judgment in Case 22/77 Greco [1977] ECR 1978 — Opinion of Mr Advocate General Warner).The second fundamental principle of the Community rules was affirmed in particular in the judgments in Case 24/75 Petroni [1975] ECR 1149 and Case 34/69 Duffy [1969] ECR 597. It is that the rights which workers have in a Member State from the application of national legislation alone must not be diminished by the effect of provisions of Community law. Consequently a migrant worker may not be entirely deprived of a national benefit, acquired without the aid of Community law, by the effect of a provision of national law against the overlapping of' benefits which was applied as the result of the grant of an apportioned pension in another Member State.The principle of restricting the effect of provisions of national law against the overlapping of benefits was repeated in the Brouwer-Kaune judgment in Case 181/78 [1979] ECR 2111.In the Commission's view a third fundamental principle is that a migrant worker may not suffer a disadvantage because of a system which, in the absence of a common social security scheme, exists merely to coordinate national legislation which is not yet harmonized (judgment in Case 50/73 Massonet [1975] ECR 1473).In view of the principles set forth above the Commission proposes that the questions should be answered as follows:1. So long as a migrant worker receives a social security benefit under national legislation alone Regulation No 1408/71 does not prevent the national legislation from being applied to him in its entirety, including national rules against the overlapping of benefits.2. However, Regulation No 1408/71 and Article 51 of the EEC Treaty on which it is based do not permit a national provision against the overlapping of benefits to create a situation in which, owing to the total withdrawal of unemployment benefit to which a migrant worker was entitled under national legislation, that worker receives in the aggregate less than he would have in fact received if he had never worked anvwhere else than in that Member State.According to the Italian Government, the prohibition of overlapping to which the Cour du Travail, Mons, refers comes within the scope of the first sentence of Article 12 (2) of Regulation No 1408/71 of the Council.Article 12 (2) confirms in Community law the rule against overlapping contained in the third paragraph of Article 141 of the Belgian Royal Decree of 20 December 1963.However, the Italian Government considers that Article 12 (2) of Regulation No 1408/71 is not compatible with the aims of the Treaty as stated in Articles 48 to 51 and reaffirmed by the Coun in a consistent line of decisions. Article 12 (2) constitutes a hindrance to freedom of movement for workers or at any rate restricts their freedom to choose their place of work in so far as it adversely affects rights which they have under national legislation alone and thus deprives them of benefits to which they would be entitled if they had spent their working life in one Member State.In the view of the Italian Government the nonconformity of Article 12 (2) with the provisions of Articles 48 and 51 of the Treaty cannot be cured by reason of the fact that if Mrs Baccini is allowed to receive both the Italian invalidity pension and Belgian unemployment benefit her situation as a migrant worker will be more favourable than that of a national worker and will cause discrimination between workers in the same Member State.