Case C-520/03

José Vicente Olaso Valero

v

Fondo de Garantía Salarial (Fogasa)

(Reference for a preliminary ruling from the Tribunal Superior de Justicia de la Comunidad Valenciana)

(Social policy – Protection of workers in the event of the insolvency of their employer – Directive 80/987/EEC – Scope – Definition of ‘claims’ – Definition of ‘pay’ – Compensation payable in the event of unfair dismissal)

Summary of the Judgment

1. Social policy – Approximation of laws – Protection of workers in the event of the insolvency of their employer – Directive 80/987 – Scope – Definition of pay – Application of national law – National legislation including compensation for unfair dismissal – Whether permissible

(Council Directive 80/987, Art. 2(2))

2. Social policy – Approximation of laws – Protection of workers in the event of the insolvency of their employer – Directive 80/987 – Scope – Definition of pay – National legislation including compensation for unfair dismissal awarded by judgment or administrative decision and excluding claims established in a conciliation procedure – Breach of the principle of equal treatment – Duties and powers of the national court

(Council Directive 80/987, Art. 2(2))

1. According to Article 2(2) of Council Directive 80/987 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, it is for national law to specify the term ‘pay’ and to define it.

In this regard, the fact that Directive 80/987 links the payment of remuneration to reference periods does not exclude its application to compensation for unfair dismissal. If, therefore, the word ‘pay’, as defined by national law, includes that compensation, the latter falls within the ambit of Directive 80/987 as it stood even before it was amended by Directive 2002/74.

(see paras 31-33, operative part 1)

2. In connection with the application of Council Directive 80/987 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, where, according to the national legislation in question, claims corresponding to compensation for unfair dismissal, awarded by judgment or administrative decision, fall within the definition of ‘pay’, identical claims, established in a conciliation procedure such as that in question in the circumstances of this case, must also be regarded as employees’ claims arising from contracts of employment or employment relationships and as relating to pay for the purposes of that directive. Workers who have been unfairly dismissed are in a comparable situation in so far as they are entitled to compensation where they are not reinstated.

The national court must therefore set aside domestic legislation which, in breach of the principle of equality, excludes the latter claims from the definition of ‘pay’ under that legislation.

(see paras 35, 38, operative part 2)

JUDGMENT OF THE COURT (First Chamber) 16 December 2004 (1)

(Social policy – Protection of workers in the event of the insolvency of their employer – Directive 80/987/EEC – Scope – Definition of ‘claims’ – Definition of ‘pay’ – Compensation payable in the event of unfair dismissal)

In Case C-520/03,REFERENCE for a preliminary ruling under Article 234 EC, from the Tribunal Superior de Justicia de la Comunidad Valenciana (Spain), by decision of 27 November 2003, received at the Court on 15 December 2003, in the proceedings

v

THE COURT (First Chamber),,

composed of P. Jann, President of the Chamber, K. Lenaerts, N. Colneric (Rapporteur), K. Schiemann and E. Juhász, Judges,

Advocate General: A. Tizzano,

having regard to the written procedure,after considering the observations submitted on behalf of:

and having regard to the decision taken, after hearing the Advocate General, to determine the case without an Opinion,

gives the following

‘Member States shall 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.’

‘Member States shall 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, including, where provided for by national law, severance pay on termination of employment relationships.

The claims taken over by the guarantee institution shall be the outstanding pay claims relating to a period prior to and/or, as applicable, after a given date determined by the Member States.’

Legislative Royal Decree 1/1995

‘All economic benefits which workers receive, whether in cash or in kind, in consideration of the services which they provide in their professional capacity for others shall be deemed to be remuneration, provided that those benefits remunerate actual work, whatever form the remuneration takes, or rest periods treated as work. …

2.‘Employers shall be required to pay equal remuneration for work of equal value, directly or indirectly, whatever the nature of the work, whether as wages or as other benefits, without any discrimination as regards any of the elements or conditions thereof on grounds of sex.’

‘1.

For the purposes of the preceding paragraph, “remuneration” shall include the amount which the conciliation agreement or the judicial decision recognises as such by virtue of the definition in Article 26(1), and also supplementary compensation in respect of “salarios de tramitación”, awarded where appropriate by the competent court, although the Fund shall in no case pay, jointly or separately, an amount greater than the product of twice the daily interprofessional minimum wage and the number of days of unpaid remuneration, up to a maximum of 120 days.

2.The amount of compensation, for the sole purpose of its payment by the Wages Guarantee Fund in cases of dismissal or the cancellation of a contract in accordance with Article 50 of this Law, shall be computed on the basis of 25 days per year of employment and may not exceed the ceiling fixed in the previous paragraph.’

‘1.

...

2.‘I.

(a)

(b)

The employer shall continue to register the worker with the social security authorities during the period corresponding to the remuneration referred to in (b) above.’

Royal Decree 505/1985 concerning Fogasa

‘For the purposes of this Royal Decree, all economic benefits to which workers are entitled shall be considered to be protected claims for wages provided that they remunerate:

...

2.The law on employment procedure

On those grounds, the Court (First Chamber) rules as follows:

Signatures.