JUDGMENT OF THE COURT (Sixth Chamber) 16 July 1998 *

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1 AGS ASSEDIC v DŪMON AND FROMENT JUDGMENT OF THE COURT (Sixth Chamber) 16 July 1998 * In Case C-235/95, REFERENCE to the Court under Article 177 of the EC Treaty by the Cour d'appel (Court of Appeal), Douai (France) for a preliminary ruling in the proceedings pending before that court between AGS Assedie Pas-de-Calais and François Dumon and Maître Froment, liquidator and representative of Établissements Pierre Gilson, on the interpretation of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer (OJ 1980 L 283, p. 23), * Language of the case: French. I

2 JUDGMENT OF CASE C-235/95 THE COURT (Sixth Chamber), composed of: H. Ragnemalm, President of the Chamber, G. E Mancini (Rapporteur) and J. L. Murray, Judges, Advocate General: G. Cosmas, Registrar: R. Grass, after considering the written observations submitted on behalf of: AGS Assedie Pas-de-Calais, by R. Lamoril, of the Arras Bar, Mr Dumon, by B. Meurice, of the Lille Bar, the French Government, by C. de Salins, Deputy Director of the Legal Affairs Directorate of the Ministry of Foreign Affairs, and C. Chavance, Secretary of Foreign Affairs in the same Directorate, acting as Agents, the Commission of the European Communities, by M. Wolfcarius, of its Legal Service, and H. Kreppel, a national civil servant on secondment to that service, acting as Agents, having regard to the report of the Judge-Rapporteur, after hearing the Opinion of the Advocate General at the sitting on 21 November 1996, gives the following I

3 AGS ASSEDIO v DŪMON AND FROMENT Judgment 1 By a judgment of 27 January 1995, rectified by a further judgment of 31 May 1995 and received at the Court on 6 July 1995, the Cour d'appel (Court of Appeal), Douai, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty two questions on the interpretation of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer (OJ 1980 L 283, p. 23; 'the directive'). 2 Those questions were raised in proceedings between Mr Dumon, a former employee of Établissements Pierre Gilson ('Gilson') and AGS Assedie Pas-de- Calais, as representative of the Association pour la Gestion du Régime d'assurance des Créances des Salariés (Association for the management of the insurance scheme to cover employees' outstanding claims) ('AGS'), concerning the guarantee ceiling that was applied to his outstanding claims on the courtsupervised liquidation of Gilson. Community law 3 Pursuant to Article 1(1) thereof, the Directive applies to employees' claims arising from contracts of employment or employment relationships and existing against employers who are in a state of insolvency, as defined in Article 2(1). 4 Under Article 3(1) Member States are to take the measures necessary to ensure that guarantee institutions guarantee, subject to Article 4, payment of employees' outstanding claims resulting from contracts of employment or employment relationships and relating to pay for the period prior to a given date. I

4 JUDGMENT OF CASE C-235/95 5 Under Article 4(1) Member States are to have the option to limit the liability of guarantee institutions, referred to in Article 3. In particular, under Article 4(3), Member States may, in order to avoid the payment of sums going beyond the social objective of the Directive, set a ceiling to the liability for employees' outstanding claims. Where Member States exercise that option, they are to inform the Commission of the methods used to set the ceiling. 6 Article 11(1) provides that the Member States are to bring into force the laws, regulations and administrative provisions necessary to comply with the Directive within 36 months of its notification, and to inform the Commission thereof forthwith. Under Article 11(2), they are further required to communicate to the Commission the texts of the laws, regulations and administrative provisions which they adopt in the area governed by the Directive. National law 7 In French law the Code du Travail (Employment Code) contains a series of rules, dating from before the Directive, designed to guarantee the payment of salaries in the event of default by the undertaking following a court-supervised recovery scheme or liquidation, and to limit the guarantee liability of the institutions established to cover the risk of employers' insolvency (Law No of 27 December 1973, amended and supplemented by Law No of 25 January 1985, and Law No of 27 December 1975). 8 Under Article L of the Code du Travail, any employer having the capacity of a trader, or of a legal person at private law even if not a trader, and employing one or more employees must insure them against the risk, in the event of a court-supervised recovery scheme (redressement judiciaire), of non-payment of sums due to them under the contract of employment. I

5 AGS ASSEDIO v DŪMON AND FROMENT 9 Article L provides that the insurance scheme provided for in Article L is to be implemented by an association set up by the most representative national employers' organisations and approved by the Minister for Employment. 10 The AGS, which comprises the Conseil National du Patronat Français (French National Employers' Council), the Confederation des Petites et Moyennes Entreprises (Confederation of Small and Medium-sized Businesses) and the Confederation Nationale de la Mutualité de la Coopération et du Crédit Agricole (National Confederation for Agricultural Cooperation and Credit), was established for that purpose. A management agreement, concluded between those associations and the Union Nationale Interprofessionnelle pour l'emploi dans l'industrie et le Commerce (Interprofessional National Union for Employment in Industry and Commerce; 'Unedic'), was approved by the Ministry of Employment. The Unedic and the associations for employment in industry and commerce, known as 'Assedies', are entrusted by the AGS with the task of collecting the contributions for financing that guarantee scheme and placing the necessary funds at the disposal of the court-appointed receivers or administrators. 1 1 By virtue of Article L the guarantee liability of the institutions mentioned in Article L is limited, all claims of the employee being taken into account, to one of the amounts laid down by decree with reference to the monthly ceiling used to calculate contributions to the unemployment insurance scheme provided for in Book III, Title V, Chapter 1, Section II of the Code du Travail. 12 Under Article D of the Code du Travail, the maximum amount of the guarantee provided for in Article L of the Code du Travail is set at 13 times the monthly ceiling used to calculate contributions to the unemployment insurance scheme where the claims result from legislative provisions or regulations or from stipulations in a collective agreement and arose under a contract of employment concluded more than six months before the decision declaring a court-supervised I

6 JUDGMENT OF CASE C-235/95 recovery scheme ('ceiling 13'). That ceiling, which as at 1 July 1995 amounted to FF , is assessed at the date on which the employee's claim falls due and at the latest at the date of the judgment adopting the scheme or ordering a courtsupervised liquidation. In the other cases, the amount of the guarantee is limited to four times the monthly ceiling used to calculate contributions to the unemployment insurance scheme ('ceiling 4'). On 1 July 1995, that ceiling amounted to FF The main proceedings 13 By a contract of employment dated 1 April 1977 Mr Dumon was engaged by Gilson as a 'voyageur représentant et placier' (commercial traveller, hereinafter 'VRP'). 1 4 By a judgment of 22 August 1989, the Tribunal de Commerce (Commercial Court), Lille, put Gilson into court-supervised liquidation and appointed Mr Froment liquidator. On 15 September 1989, Mr Dumon was dismissed on grounds of redundancy with effect from 8 December Mr Dumon applied to the Conseil de Prud'Hommes (Labour Tribunal), Tourcoing, for, first, the determination of the exact amount of his outstanding claims and, second, an order requiring the AGS, represented by the Assedie for the Pas-de- Calais, to pay that amount. More specifically, Mr Dumon challenged the decision of the AGS limiting its guarantee to ceiling 4, whereas he claimed entitlement to ceiling 13 provided for in the same article. He submitted that, in accordance with Article D 143-2, his claim resulted from legislative provisions or a collective agreement and arose under a contract of employment concluded more than six months before the decision declaring a court-supervised liquidation. I

7 AGS ASSEDIC v DŪMON AND FROMENT 16 Relying on Article D of the Code du Travail, the AGS argued that Mr Dumon's claim resulted neither from legislative provisions or regulations nor from a collective agreement, but from a contract of employment. In its submission, ceiling 4 therefore applied. 17 By judgment of 27 January 1992 the Conseil de Prud'Hommes, Tourcoing, held that Mr Dumon's claim resulted from legislative provisions, in particular Article L of the Code du Travail which listed the conditions to be satisfied in order to pursue the occupation of VRP, and from contractual provisions, namely Article 5 of the national collective agreement for VRPs, with the result that that claim could be asserted against the AGS up to ceiling 13 and not ceiling 4. It therefore assessed Mr Dumon's claim against Gilson at FF and, taking into account sums already paid by the AGS, assessed the amount still outstanding at FF On 13 March 1992 the AGS, represented by the Assedie for the Pas-de-Calais, appealed against that judgment to the Cour d'appel, Douai, submitting that the ceiling applicable in Mr Dumon's case was not ceiling 13 but ceiling 4, and that, taking into account the advances already paid, Mr Dumon had exhausted all his rights in regard to it. 19 For his part, Mr Dumon asked the Cour d'appel to uphold the judgment of the Conseil de Prud'Hommes, Tourcoing. In the alternative, he submitted that Article D of the French Code du Travail was incompatible with Article 4(3) of the Directive, which, being precise and unconditional, had to be accorded direct effect. The questions referred for a preliminary ruling 20 The Cour d'appel, Douai, upheld the decision of the Conseil de Prud'Hommes concerning the existence and amount of Mr Dumon's outstanding claims in the court-supervised liquidation of Gilson. Having doubts, however, as to the I

8 JUDGMENT OF CASE C-235/95 interpretation of the Directive with regard to the guarantee limitations laid down by national law, it decided to stay proceedings and refer the following questions to the Court of Justice for a preliminary ruling: '1. Is Article 4 of Council Directive 80/987 of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer of general application and mandatory in nature and must it therefore have direct effect in national law? 2. In the absence of the Commission's having been informed in accordance with Article 11 of the Directive of 20 October 1980, is Article D of the French Code du Travail (which provides that the maximum amount of the guarantee provided for in Article L of the Code du Travail is set at thirteen times the monthly ceiling used to calculate contributions to the unemployment insurance scheme where the claims result from provisions of legislation or regulations or from stipulations of a collective agreement and arose under a contract of employment which was concluded at a date more than six months before the decision declaring a court-supervised recovery scheme, and that in other cases the amount of the guarantee is limited to four times the aforementioned ceiling) compatible with that directive?' Question 2 21 By its second question, which it is appropriate to examine first, the national court is essentially asking whether Articles 4(3) and 11 of the Directive preclude the application of provisions such as Article D of the French Code du Travail, setting a ceiling on the payment guarantee in respect of employees' outstanding claims, where the Member State has failed to inform the Commission of the methods used to set that ceiling. I

9 AGS ASSEDIO v DUMON AND FROMENT 22 It should be noted as a preliminary point that, in the observations which it submitted to the Court, the French Government stated that two reports on bringing the national provisions into line with the Directive were sent to the Commission in 1984 and 1986 through the intermediary of the General Secretariat of the Comité Interministériel pour les Questions de Coopération Économique Européenne (Interministerial Committee for questions of European Economic Cooperation) and France's Permanent Representation with the European Communities. Those documents set out in detail the methods for setting the general salary guarantee ceiling provided for under the French scheme, referring in particular to the provisions limiting the guarantee by the AGS and stating the detailed rules for setting the maximum guarantee amounts. In particular, the option granted to Member States by Article 4 of the Directive corresponded to a mechanism which had existed in French law since 1976, so that the French authorities limited themselves to communicating to the Commission the tables of equivalence between the Community provisions and the French provisions. 23 In those circumstances, the French Government invites the Court to hold that the obligation to provide information imposed by the Directive has been fully complied with. 24 For its part, the Commission states that the French legislation served as an example in preparing the Directive and that it was able to take notice of the methods for setting the ceiling as early as 1979, in the documentation addressed to the Council by the French delegation. The Commission therefore considers that it has received from the French Republic the information referred to in Article 4(3) of the Directive, even though no formal notification was made after the directive was adopted. 25 It should be borne in mind that, in proceedings under Article 177 of the Treaty, which is based on a clear separation of functions between the national courts and the Court of Justice, any assessment of the facts in the case is a matter for the national court (see Case 104/77 Oehlschläger v Hauptzollamt Emmerich [1978] ECR 791, paragraph 4; Case 36/79 Denkavit Futtermittel v Finanzamt Warendorf [1979] ECR 3439, paragraph 12). The Court of Justice is thus empowered to rule on the interpretation or validity of Community provisions only on the basis of the facts which the national court puts before it (see Case C-30/93 AC-ATEL I

10 JUDGMENT OF CASE C-235/95 Electronics Vertriebs ν Hauptzollamt München-Mitte [1994] ECR I-2305, paragraph 16; Case C-352/95 Phytheron International w Jean Bourdon [1997] ECR I-1729, paragraph 11). 26 Moreover, as the Court held at paragraph 14 of its judgment in Phytheron International, cited above, to alter the substance of questions referred for a preliminary ruling would be incompatible with the Court's function under Article 177 of the Treaty and with its duty to ensure that the Governments of the Member States and the parties concerned are given the opportunity to submit observations under Article 20 of the EC Statute of the Court, bearing in mind that, under that provision, only the order of the referring court is notified to the interested parties. 27 In those circumstances, it is for the national court to verify whether new information presented in the course of the proceedings before the Court of Justice are useful, or indeed necessary, in resolving the dispute in the main proceedings. 28 As for the answer to be given to the second question, it should first be pointed out that the second subparagraph of Article 4(3) of the Directive requires Member States which have set a ceiling to the liability for employees' outstanding claims, as the preceding subparagraph authorises them to do, to inform the Commission of the methods used to set that ceiling. 29 However, that provision does not imply that the duty to inform the Commission gives rise to a Community procedure for monitoring the methods chosen by the Member State, or that Member States' exercise of the option to set a ceiling is subject to the express or implied agreement of the Commission. I

11 AGS ASSEDIC v DŪMON AND FROMENT 30 Moreover, neither the wording nor the purpose of the provision in question provides justification for the view that Member States' non-compliance with their obligation to give prior notice in itself renders the ceilings thus adopted unlawful (in relation to an analogous provision, see Case 380/87 Etlichem Base v Comune di Cinisello Balsamo [1989] ECR 2491, paragraph 22). 31 It is therefore apparent that the purpose of the obligation to give notice laid down in the second subparagraph of Article 4(3) is simply to inform the Commission whether Member States have exercised the option referred to in the preceding subparagraph and, if so, in what manner. 32 As for Article 11 (2) of the Directive, which requires Member States to communicate to the Commission the texts of the laws, regulations and administrative provisions which they adopt in the field governed by the Directive, it is clear from that provision that it concerns relations between the Member States and the Commission and confers no right upon individuals which could be infringed in the event of a breach by a Member State of the obligation to give prior notice to the Commission of the methods used to set the ceiling referred to in Article 4(3). 33 The answer to the second question must therefore be that Articles 4(3) and 11 of the Directive do not preclude the application of provisions such as Article D of the French Code du Travail, setting a ceiling on the payment guarantee in respect of employees' outstanding claims, where the Member State has failed to inform the Commission of the methods used to set that ceiling. Question 1 34 In its first question, the national court asks whether Article 4 of the Directive is of general application and mandatory in nature in its scope, with the result that individuals may rely on it before a national court. I

12 JUDGMENT OF CASE C-235/95 35 Given the answer to the second question, there is no need to give a ruling on the first. Costs 36 The costs incurred by the French Government and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. On those grounds, THE COURT (Sixth Chamber), in answer to the questions referred to it by the Cour d'appel, Douai, by judgment of 27 January 1995, rectified by judgment of 31 May 1995, hereby rules: Articles 4(3) and 11 of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer do not preclude the application of provisions setting a ceiling on the payment guarantee in respect I

13 AGS ASSEDIO v DUMON AND FROMENT of employees' outstanding claims, where the Member State has failed to inform the Commission of the methods used to set that ceiling. Ragnemalm Mancini Murray Delivered in open court in Luxembourg on 16 July R. Grass Registrar H. Ragnemalm President of the Sixth Chamber I

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