Commission of the European Communities v Grand Duchy of Luxembourg. (Freedom of movement for persons) [1993] EUECJ C-111/91 (10 March 1993)

Judgment 1 By application at the Court Registry on 12 April 1991, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by imposing residence requirements for the grant of childbirth and maternity allowances, the Grand Duchy of Luxembourg had failed to fulfil its obligations under Article 7(2) of Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community (OJ, English Special Edition 1968 (II), p. 475), under Article 18(1) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as codified by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6), and under Article 52 of the EEC Treaty. 2 The Commission challenges the Luxembourg legislation on the ground that it makes the payment of childbirth and maternity allowances conditional on residence requirements that are discriminatory towards various categories of persons in the Grand Duchy of Luxembourg who enjoy the right of free movement. 3 The childbirth allowance is split into three instalments, namely the prenatal allowance, the childbirth allowance proper and the postnatal allowance, although the Commission is challenging the conditions of grant for the first two instalments only. The first instalment is paid when the mother-to-be has undergone the last of the medical examinations required by the legislation. It is a condition for such payment that the mother-to-be should have been "officially resident" in the Grand Duchy for a year preceding the birth of the child and have attended all the medical examinations required by the legislation. The second instalment of the childbirth allowance is paid after the birth of the child, but only if three conditions are met: the birth must have taken place on Luxembourg territory (or on foreign territory while the mother was absent on reasonable grounds), one of the parents must have been officially resident in the Grand Duchy for a year at the time of the birth, and the mother must have undergone the postnatal examination. 4 The maternity allowance is paid to every woman who is pregnant or has given birth, provided that either she has been officially resident in the Grand Duchy for the entire year preceding the beginning of her entitlement, or her husband has been officially resident in the Grand Duchy for three years preceding the entitlement date. The allowance is paid on demand for a maximum period of sixteen weeks, beginning with the eighth week preceding the presumed date of birth, as evidenced by a medical certificate. 5 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the legislative scheme in dispute, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. Childbirth allowance 6 As both parties have agreed, childbirth allowance is a social advantage within the meaning of Article 7(2) of Regulation No 1612/68. By virtue of that Article, migrant workers must therefore receive the allowance in the same way as national workers. 7 The Luxembourg Government argues, first, that the disputed residence requirement is not discriminatory, because it is imposed on Luxembourg nationals in the same way as on nationals of other Member States. 8 That argument cannot be accepted. 9 The rules on equal treatment, both in the Treaty and in Article 7 of Regulation No 1612/68, forbid not only overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result (see Case 152/73 Sotgiu v Deutsche Bundespost [1974] ECR 153, paragraph 11). 10 That applies to the requirement that the mother reside on the territory of the Grand Duchy for a year preceding the birth of the child, because such a requirement is in practice more easily met by Luxembourg nationals than by nationals of other Member States (see, in that regard, Case C-279/89 Commission v United Kingdom [1992] ECR I-5785 , paragraph 42). 11 The Luxembourg Government maintains, secondly, that the disputed residence requirement is objectively justified on public health grounds, because it goes hand in hand with the rules making payment of the childbirth allowance conditional on the carrying out of several medical examinations. 12 That justification cannot be accepted. In the circumstances of the present case, a requirement of prior residence in the Grand Duchy is neither necessary nor appropriate to attain the public health objective that is being sought. Whilst the obligation to undergo certain medical examinations in the Grand Duchy is indeed appropriate in the light of that objective, it is disproportionate not to take account of medical examinations that may have been carried out in other Member States. 13 Moreover, the argument of the Luxembourg Government is irrelevant as regards the second instalment of the childbirth allowance because, in the first place, the residence requirement for that instalment can also be met by the child' s father and, in the second place, the compulsory postnatal examination of the mother has no connection with the requirement of residence prior to the birth. 14 The Luxembourg Government' s argument regarding the need to ensure that all the medical examinations take place under the supervision of a single doctor, cannot be accepted. It is enough to point out here that the Luxembourg legislation does not in any way require that the compulsory medical examinations should all take place under the supervision of the same doctor. 15 It appears, therefore, that the disputed residence requirement is not justified by the objective of protecting public health, and is accordingly incompatible with Article 7(2) of Regulation No 1612/68. 16 The imposition of such a discriminatory requirement also constitutes a breach of Article 52 of the Treaty. 17 Article 52 confers on nationals of one Member State who wish to pursue activities as self-employed persons in another Member State the benefit of the same treatment as the host State' s own nationals and prohibits any discrimination based on nationality which hinders the taking up or pursuit of such activities. That prohibition covers not only specific rules on the pursuit of occupational activities, but also, as emerges from the General Programme for the abolition of restrictions on the freedom of establishment (OJ, English Special Edition, Second Series (IX), p. 7), any measure which, pursuant to any provision laid down by law, Regulation or administrative action in a Member State, or as the result of the application of such a provision, or of administrative practices, hinders nationals of other Member States in their pursuit of an activity as a self-employed person by treating nationals of other Member States differently from nationals of the country concerned. 18 It follows that the imposition of residence requirements which are, as has already been established, discriminatory as regards the payment of childbirth allowance constitutes a breach of Article 52 of the Treaty. 19 The Commission' s action must therefore be allowed in so far as it relates to childbirth allowance. Maternity allowance 20 The question of maternity allowance must be examined in the light of Article 7(2) of Regulation No 1612/68, of Regulation No 1408/71 and of Article 52 of the Treaty. As Advocate General Jacobs points out in points 32 to 34 of his Opinion, those prov isions do not have the same scope ratione personae. 21 In that connection, since Regulation No 1612/68 is of general application regarding the free movement of workers, Article 7(2) thereof may apply to social advantages which, at the same time, fall specifically within the scope of Regulation No 1408/71. 22 As the Luxembourg Government agreed at the hearing, maternity allowance is a social advantage within the meaning of Article 7(2) of Regulation No 1612/68. By virtue of that article, migrant workers must therefore receive the allowance in the same way as national workers. 23 The defendant Government' s argument that the residence requirement is not discriminatory, because it is imposed on Luxembourg nationals in the same way as on the nationals of other Member States, must be rejected for the reasons given in paragraphs 9 and 10 of this judgment. 24 That requirement is therefore incompatible with Article 7(2) of Regulation No 1612/68. 25 In the Commission' s view, the disputed requirement is also incompatible with Article 18(1) of Regulation No 1408/71. 26 Under that provision, the competent institution of a Member State whose legislation makes the acquisition, retention or recovery of the right to benefits conditional upon the completion of periods of insurance, employment or residence must, to the extent necessary, take account of periods of insurance, employment or residence completed under the legislation of any other Member State as if they were periods completed under the legislation which it administers. 27 The Luxembourg Government maintains, however, that the maternity allowance was outside the material scope of Regulation No 1408/71 at the time the period for compliance with the reasoned opinion expired. It submits that the allowance could not have been covered by the regulation until after its amendment by Council Regulation (EEC) No 1247/92 of 30 April 1992 (OJ 1992 L 136, p. 1), which came into force on 1 June 1992, because, following that amendment, the Luxembourg maternity allowance is now expressly referred to in the new text. 28 The Court has consistently held that the distinction between benefits excluded from the scope of Regulation No 1408/71 and those which fall within its scope is based essentially on the constituent elements of the particular benefit, in particular its purposes and the conditions on which it is granted, and not on whether it is classified as a social security benefit by national legislation (see Case C-78/91 Hughes v Chief Adjudication Officer [1992] ECR I-4839 , paragraph 14). 29 The Court has often stated that a benefit may be regarded as a social security benefit in so far as it is granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a legally defined position, and provided that it concerns one of the risks expressly listed in Article 4(1) of Regulation No 1408/71 (see, in particular, Hughes, paragraph 15, Case C-356/89 Newton v Chief Adjudication Officer [1991] ECR I-3017 , Joined Cases 379 to 381/85 and 93/86 Giletti and Others [1987] ECR 955, paragraph 11, and Case 249/83 Hoeckx v Openbaar Centrum voor Maatschappelijk Welzijn, Kalmthout [1985] ECR 973 , paragraphs 12 to 14). 30 It should be noted here, first, that the provisions concerning the disputed maternity allowance confer on recipients a legally defined right, without any individual and discretionary assessment of personal needs (see the Hughes judgment), and, secondly, that maternity benefits are expressly mentioned in Article 4(1)(a) of Regulation No 1408/71. 31 The Luxembourg Government' s argument that non-contributory benefits are not covered by Regulation No 1408/71 cannot be accepted. Article 4(2) of that Regulation expressly provides that the Regulation applies to non-contributory schemes. 32 It follows that, even before Regulation No 1247/92 came into force, Regulation No 1408/71, and in particular Article 18 thereof, applied to maternity allowance. The Grand Duchy was therefore obliged to take account of periods of residence completed under the legislation of any other Member State, as if they were periods completed under Luxembourg legislation. 33 It should be noted finally, for the reasons given in paragraphs 17 and 18 of this judgment, that the residence requirement imposed by the legislation challenged by the Commission, is also in breach of Article 52 of the Treaty. 34 It follows from the above that the application must be allowed in its entirety, and it must therefore be held that, by imposing residence requirements for the grant of childbirth and maternity allowances, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 7(2) of Regulation No 1612/68, Article 18(1) of Regulation No 1408/71, and Article 52 of the EEC Treaty. Costs 35 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Grand Duchy of Luxembourg has been unsuccessful, it must be ordered to pay the costs. On those grounds, THE COURT hereby: 1. Declares that, by imposing residence requirements for the grant of childbirth and maternity allowances, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 7(2) of Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community, Article 18(1) of Council Regulation No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as codified by Council Regulation (EEC) No 2001/83 of 2 June 1983, and Article 52 of the EEC Treaty; 2. Orders the Grand Duchy of Luxembourg to pay the costs. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII