JUDGMENT OF 12. 7. 1984 CASE 237/83 taking, and that in connection with the application of the national provisions of the Member State in which that undertaking is established concerning the retention of affiliation to the general social security scheme of that State during the temporary posting of the employee in question to a non-member country, any provision which discriminates against nationals of other Member States must be disregarded. In Case 237/83 REFERENCE to the Court under Article 177 of the EEC Treaty by the Commission de Première Instance du Contentieux de la Sécurité Sociale et de la Mutualité Sociale Agricole [Social Security Tribunal of First Instance], Paris, for a preliminary ruling in the proceedings pending before that court between SÃRL PRODEST and CAISSE PRIMAIRE D'ASSURANCE MALADIE [Local Sickness Insurance Fund] PARIS, on the interpretation of Regulation No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community, (Official Journal, English Special Edition 1968 (II), p. 465), THE COURT (Fifth Chamber), composed of: Y. Galmot, President of Chamber, O. Due, Ü. Everling, C. Kakouris and R. Joliét, Judges, Advocate General: C. O. Lenz -Registrar: H. A. Rühl, Principal Administrator gives the following 3154
PRODEST v CAISSE PRIMAIRE D'ASSURANCE MALADIE DE PARIS JUDGMENT Facts and Issues The facts of the case, the course of the procedure and the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows: I Facts and procedure The plaintiff in the main proceedings, Prodest Sari, is a temporary-employment undertaking governed by French law. With effect from 17 June 1981 it sent Mr van Robaeys, a Belgian national resident in France and insured under the French social security scheme, to work temporarily in Nigeria. The Caisse Primaire d'assurance Maladie, Paris, rejected an application from the plaintiff in the main proceedings for Mr van Robaeys's insurance to be maintained for the duration of his period of work abroad. It based its refusal on the second paragraph of Article 39 of the Law of 3 January 1972, which became the third paragraph of Article L 341-3 of the Code du Travail [Labour Code] which provides as follows : "Without prejudice to international agreements, no temporary-employment undertaking may place foreign workers at the disposal of any person whatsoever if the service in question is to be provided outside French territory." The refusal was confirmed by the Commission de Recours Gracieux [Complaints Board of the Caisse] and the plaintiff therefore brought the matter before the Commission de Première Instance du Contentieux. Considering that a limitation of that kind on the employment of foreign workers was not applicable to workers who were nationals of the European Economic Community, the plaintiff claimed that the refusal was unlawful. It referred in that connection to Regulation No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community. Considering that the dispute referred to it turns upon the interpretation to be given to Regulation No 1612/68, and in order to determine whether that provision enables the second paragraph of Article 39 of the Law of 3 January 1972 to be disregarded, the Commission de Première Instance requested the Court of Justice, pursuant to Article 177 of the Treaty, to answer the following question: "May an insured person who is a national of a Member State of the European Economic Community, is employed by a French company and is resident in France, claim that his insurance under the French general social security scheme should be maintained for the duration of his posting to Nigeria, by virtue of Regulation No 1612/68 of the Council, and in those circumstances is it appropriate to disregard the restriction contained in the second paragraph of Article 39 of the Law of 3 January 1972 which has been 3155
JUDGMENT OF 12. 7. 1984 CASE 237/83 adopted as the third paragraph of Article L 341-3 of the Labour Code?" The request for a preliminary ruling was received at the Court Registry on 21 October 1983. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted to the Court by the Caisse Primaire d'assurance Maladie, Paris, represented by J. Salvadori, and by the Commission of the European Communities, represented by its Legal Adviser, J. Griesmar, acting as Agent, assisted by F. Herbert of the Brussels Bar. Upon hearing the report of the Judge- Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. By order of 14 March 1984, the Court assigned the case to the Fifth Chamber. The defendant therefore considers that it was entitled to refuse to maintain Mr van Robaeys's insurance under the French general social security scheme for the duration of his posting to Nigeria. In its written observations, the Commission states that the question seeks essentially to define the field of application of the principle of freedom of movement for workers. In fact, the point at issue is whether the second paragraph of Article 39 of the Law of 3 January 1972 relates also to the employment of Community nationals for activities performed outside the territory of the Community. Although, in general terms, that paragraph appears to embody discrimination based on nationality, which is contrary to Community law in so far as it is unfavourable to nationals of other Member States assigned to work for a period outside French territory but within the Community, it should be noted, according to the Commission, that Article L 341-1 of the same Labour Code provides that: II Written observations submitted to the Court According to the defendant, a national of a Member State of the European Economic Community may rely upon the provisions of Community regulations only with respect to work to which he is assigned within another Member State of the Community. In the present case, whilst on the hand the worker in question is indeed a national of one of the Member States, he was, on the other hand, assigned to work not in a Member State but in a non-member country. "The provisions of the present title shall, where appropriate, apply without prejudice to treaties, conventions or agreements duly ratified or approved and published and in particular the treaties establishing the European Communities and the measures adopted by the Community authorities in implementation thereof." The question remaining to be considered, which is precisely the question with which the present case is concerned, is therefore whether, in so far as it refers to activities performed outside the 3156
PRODEST v CAISSE PRIMAIRE D'ASSURANCE MALADIE DE PARIS Community, Article L 341-3 falls within the field of application of Community law, in which case it is not applicable to the present case. According to the Commission, prima facie three approaches would appear possible: (i) Community law applies to employment relationships which are entered into within the Community and/or which give rise to tasks or services within the Community; (ii) Community law applies to all such employment relationships, regardless of the place where the tasks or services are performed (inside or outside the Community); (iii) Community law applies to all activities carried out within the Community regardless of where the employment contract is concluded. The Commission then reviews the Community legislation which it considers may be applicable. It concludes that the provisions of Articles 3 (c), 48 (1), (2) and (3), 49 (b) and (c), 52 and 59 of the Treaty appear to favour free access to work rather than the freedom to perform work, which is equivalent, in the case of employed persons, to free access to the labour market, regardless of the place where the activity is carried out. The Commission also examines the regulations and directives relating to freedom of movement for workers, but observes, in that connection, that as a result of divergences of terminology it is not possible to formulate a decisive conclusion regarding determination of the connecting factor for defining the precise field of application ratione materiae of the principle of the free movement of persons. It seems to the Commission that the authors of the provisions in question intended to cover in any event, among the possible kinds of discrimination, only those kinds which constitute the most immediate and substantial obstacle. The Commission examines the decisions of the Court concerning the free movement of persons, and in particular the judgment of 24 October 1974 (Case 36/74 Walrave ECR 1974, 1405) and states that the Court has had recourse to a connecting factor which extends the field of application of Community law beyond the area covered by the two criteria in question, namely access to employment and the carrying out of activities. According to the approach adopted in the Walrave judgment, the principle of equality of treatment also governs employment relationships entered into outside the Community, under which the work is also performed outside the Community, provided that in some way those relationships have repercussions for the employment situation within the Community. As regards the specific area of social security, the Commission refers in particular to the judgments of 8 April 1976 (Case 112/75 Hirardin [1976] ECR 553), of 31 March 1977 (Case 87/76 Bozzone [1977] ECR 687) and of 11 July 1980 (Case 150/79 Commission v Belgium [1980] ECR 2621). Those decisions confirm, in its opinion, the tenor of the Walrave judgment cited above, in particular the fact that the applicability of Community law is not in any case dependent upon the place where the activity is performed. From those decisions of the Court, the Commission infers that legal relationships originating within the territory of the Community fall within 3157
JUDGMENT OF 12. 7. 1984 CASE 237/83 the field of application of Community law. That conclusion necessarily follows from considerations relating both to the objectives of the Treaty and to practical grounds. In the Commission's view, the fundamental character of the principle of equality of treatment embodied in the Community legal order, implies, as is apparent from the very terms of Article 48 (2) of the Treaty which refers to discrimination "as regards employment, remuneration and other conditions of work and employment", that an employment relationship originating in the Community should be considered in its entirety. True equality of treatment can in fact only be guaranteed if it covers all aspects of an activity. Moreover, in its judgments on the interpretation of Article 7 (2) of Regulation No 1612/68, the Court has confirmed that the principle of equality of treatment must facilitate the maximum possible integration, of a migrant worker and his family in the host Member State (see judgment of 30. 9. 1975 in Case 32/75 Cristini [1975] ECR 1085). fecting their career development by comparison with that of the nationals of the State in question. A provision like the one at issue here also affects undertakings established in the Member State in question which would be prevented from obtaining the services of the best qualified staff. There would be other substantial disadvantages of a practical nature for economic activities, by reason of the essentially mobile nature of those activities. For numerous kinds of employment involving activities performed outside the Community, nonapplicability of the rule of equality of treatment would make it possible systematically to recruit other Community nationals on less favourable conditions of employment or remuneration than those enjoyed by the State's own nationals, and that discrimination against other Community nationals might even have adverse effects on the employment of nationals of the State concerned. Finally, the Commission points to the legal uncertainty to which Community nationals would be exposed if Community provisions were applied differently depending on the place where an activity was performed, at a time when occupational mobility is so important. The Commission also observes that statutory or contractual provisions under which a State's own nationals are treated differently from other Community nationals with regard to the pursuit of an activity in a country outside the Community indisputably have repercussions on the employment market within the Community. They are likely, for example, to exclude Community nationals from certain jobs, thus af The Commission concludes that the principle of equality of treatment applies in relation to the free movement of persons where a Community national residing in a Member State is bound by a contract of employment concluded with an employer who is a national of the host Member State, his situation being governed, as the defendant shows by referring to the prohibition clause in Article L 341, by the legislation of the 3158
PRODEST v CAISSE PRIMAIRE D'ASSURANCE MALADIE DE PARIS latter State, regardless of the place where his activity as an employed person is carried on (inside or outside the Community). It follows, in the Commission's opinion, that the refusal to maintain insurance in this case can in no circumstances be based on the third paragraph of Article L 341-3 of the Labour Code. The Commission then goes on to ask whether a Community national residing and employed in France is entitled to maintain his insurance under the French social security scheme during his posting to a non-member country. That question falls within the field of application of Regulation 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 (Official Journal, English Special Edition 1971 (II), p. 416). equality of treatment, as formulated, with respect to the field of application of Regulation No 1408/71 aforesaid, in Article 3 thereof. The Commission refers to the relevant French legislation, namely Article L 768 and L 769 of the Code de la Sécurité Sociale [French Social Security Code], which provides as follows: Article L 768 "Workers who are sent by their employer to work abroad temporarily as employees or in a capacity assimilated thereto, and who remain subject to French social security legislation by virtue of international conventions or arrangements, shall be deemed, for the purposes of the application of that legislation, to have their residence and place of work in France." The Commission points out that by virtue of Article 2 thereof, that regulation applies to workers who have been subject to the legislation of one or more Member States and are nationals of one of the Member States or who are stateless persons or refugees residing within the territory of one of the Member States, and also to the members of their families and their survivors. Article 13 er seq., which govern determination of the applicable legislation and therefore of the scheme by which the person concerned is to be covered, do not deal with the matter of cover, if any, where work is performed outside the Community. In the Commission's view, the answer to the question submitted for a preliminary ruling must be based on the national legislation and on the principle of Article L 769 "If they are not, or are no longer, covered by Article L 768, workers who are sent by their employer to work abroad temporarily as employees or in a capacity assimilated thereto, and whose remuneration is paid by that employer, shall be subject to French social security legislation, provided that the employer undertakes to pay all the contributions due. The maximum period for which the workers referred to in the foregoing paragraph may be subject to French social security legislation shall be fixed by means of regulations. For the purposes of the application of that legislation, they shall be deemed to have their residence and place of work in France." 3159
JUDGMENT OF 12. 7. 1984 CASE 237/83 It must in fact be concluded that Mr van Robaeys unquestionably falls within the field of application of Article L 769 and must accordingly be subject to French legislation, in accordance with the conditions laid down in that article, in the same way as a French national. On the basis of the foregoing, the Commission proposes that an answer be given in the following terms : "Regulation No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community must be interpreted as meaning that the prohibition of discrimination laid down in particular in Article 1 and Article 3 (1) thereof applies to the assessment of national provisions regarding work performed outside the Community by a Community national, bound by a contract of employment entered into with an undertaking established in the Community." Ill Oral procedure At the sitting on 19 June 1984, oral argument was presented by the plaintiff in the main proceedings, represented by Jean L. de Grandcourt, of the Paris Bar, and by the Commission, represented by F. Herbert, of the Brussels Bar. The Advocate General delivered his opinion at the sitting on 4 July 1984. Decision 1 By a decision of 3 June 1983, which was received at the Court on 21 October 1983, the Commission de Première Instance du Contentieux de la Sécurité Sociale et de la Mutualité Sociale Agricole [Social Security Tribunal of First Instance], Paris, referred to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Regulation No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community (Official Journal, English Special Edition 1968 (II), p. 475). 2 The question was raised in proceedings between the French company Prodest Sàrl, Caisse Primaire d'assurance Maladie [Local Sickness Insurance Fund], Paris [hereinafter referred to as "the Fund"], in which the issue was whether the insurance of a Belgian national employed by the company should be maintained under the French social security scheme while he was working temporarily in Nigeria. 3 The Fund rejected an application made by the company for that purpose, on the basis of the second paragraph of Article 39 of the Law of 3 January 3160
PRODEST v CAISSE, PRIMAIRE D'ASSURANCE MALADIE DE PARIS 1972, which became the third paragraph of Article L 341-3 of the Code du Travail [Labour Code]; it provides as follows: "Without prejudice to international agreements, no temporary-employment undertaking may place foreign workers at the disposal of any person whatsoever if the service in question is to be provided outside French territory." In the view of the Fund, that provision extends to Community nationals except in the case of a posting to a Member State. 4 Considering that the decision to be given depended upon the interpretation of the aforementioned Community regulation, the national court stayed the proceedings and requested the Court of Justice to answer the following question: "May an insured person who is a national of a Member State of the European Economic Community, is employed by a French company and is resident in France, claim that his insurance under the French general social security scheme should be maintained for the duration of his posting to Nigeria, by virtue of Regulaion No 1612/68 of the Council, and in those circumstances is it appropriate to disregard the restriction contained in the second paragraph of Article 39 of the Law of 3 January 1972 which has been adopted as the third paragraph of Article L 341-3 of the Labour Code?" 5 It should be stated in the first place that the main proceedings concern a national of a Member State who is an employee of a company established in another Member State and that in principle such a case comes within the scope of the Community provisions on the free movement of workers within the Community. Essentially the national court wishes to know whether those rules may be disregarded when the Community employer assigns a worker to a temporary posting outside the Community. 6 In its judgment of 12 December 1974 (Case 36/74 Walravev Union Cycliste Internationale [1974] ECR 1405), in which one of the questions was whether or not it was important that the acitivities at issue were carried out partly 3161
JUDGMENT OF 12. 7. 1984 CASE 237/83 outside the territory of the Community, the Court ruled that the principle of non-discrimination as laid down, inter alia, in Article 48 of the Treaty and in the aforementioned Regulation No 1612/68 applied in judging all legal relationships in so far as those relationships, by reason either of the place where they were entered into or of the place where they took effect, could be located within the territory of the Community. It follows that activities temporarily carried on outside the territory of the Community are not sufficient to exclude the application of that principle, as long as the employment relationship retains a sufficiently close link with that territory. 7 In a case such as this, a link of that kind can be found in the fact that the Community worker was engaged by an undertaking established in another Member State and, for that reason, was insured under the social security scheme of that State, and in the fact that he continued to work on behalf of the Community undertaking even during his posting to a noń-member country. 8 By virtue of Article 7 (2) of the aforementioned Regulation No 1612/68, the principle of non-discrimination also applies to the social advantages enjoyed by workers. Even though that provision is stated to refer to the advantages enjoyed by Community nationals in the territory of the other Member States, it must be interpreted, in the light of the decision of the Court cited above, as also applying to a situation such as that described above. 9 Consequently, when the social security authorities of the Member State in which an employer is established apply their national legislation in circumstances such as those of the present case, they must disregard any provision which leads to discrimination against workers who are nationals of another Member State., io The answer to the question submitted must therefore be that the provisions of Community law concerning the free movement of workers within the Community, in particular the provisions of Regulation No 1612/68 of the Council of 15 October 1968, must be interpreted as meaning that the principle of non-discrimination applies to the case of a national of a Member 3162
PRODEST v CAISSE PRIMAIRE D'ASSURANCE MALADIE DE PARIS State who is employed by an undertaking of another Member State even during a period in which the employee temporarily works outside the territory of the Community for that Community undertaking, and that in connection with the application of the national provisions of the Member State in which that undertaking is established concerning the retention of affiliation to the general social security scheme of that State during the temporary posting of the employee in question to a non-member country, any provision which discriminates against nationals of other Member States must be disregarded. Costs 11 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of 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 (Fifth Chamber) in answer to the question referred to it by the Commission de Première Instance du Contentieux de la Sécurité Sociale et de la Mutualité Sociale Agricole de Paris by a decision of 3 June 1983, hereby rules: The provisions of Community law concerning the free movement of workers within the Community, in particular the provisions of Regulation No 1612/68 of the Council of 15 October 1968, must be interpreted as meaning that the principle of non-discrimination applies to the case of a national of a Member State who is employed by an undertaking of another Member State even during a period in which the employee temporarily works outside the territory of the Community for that Community undertaking, and that in connection with the application of the national provisions of the Member State in which that undertaking is established concerning the retention of affiliation to the general social 3163
OPINION OF MR ADVOCATE GENERAL LENZ CASE 237/83 security scheme of that State during the temporary posting of the employee in question to a non-member country, any provision which discriminates against nationals of other Member States must be disregarded. Galmot Due Everling Kakouris Joliét Delivered in open court in Luxembourg on 12 July 1984. For the Registrar H. A. Rühi Principal Administrator Y. Galmot President of the Fifth Chamber OPINION OF MR ADVOCATE GENERAL LENZ DELIVERED ON 4 JULY 1984 l Contents A Facts and procedure Questions referred to the Court of Justice 3165 3166 B Opinion 1. Interpretation of the principle of freedom of movement 3166 2. Legal basis 3. Case-law of the Court of Justice (a) Case 36/74 (Walrave) (b) Case 87/76 (Bozzone) 4. The effects of discrimination within the Community between national and foreign workers in connection with employment contracts under which foreigners are assigned temporary postings 3168 5. The consequences of the obligation of non-discrimination 3169 C Conclusion 3167 3167 3167 3168 1 Translated from the German. 3164