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Judgment of the Court (Second Chamber) of 21 November 1991.

Union de Recouvrement des Cotisations de Sécurité Sociale et d'Allocations Familiales de la Savoie (URSSAF) v Hostellerie Le Manoir SARL.

Reference for a preliminary ruling: Cour d'appel de Chambéry - France.

Free movement of workers - Indirect discrimination - Social security contributions.

Case C-27/91.

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Judgment of 21 November 1991, URSSAF / Hostellerie Le Manoir (C-27/91, ECR 1991 p. I-5531) ECLI:EU:C:1991:441

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Union de Recouvrement des Cotisations de Sécurité Sociale et d'Allocations Familiales de la Savoie (URSSAF) v Hostellerie Le Manoir SARL.

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Keywords

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Free movement of persons - Workers - Equal treatment - National legislation making employers' social security contributions more onerous in the case of workers undergoing vocational training which does not come under the national education system - Covert discrimination against workers undergoing vocational training who are nationals of other Member States - Not permissible

(EEC Treaty, Art. 48; Council Regulation No 1612/68, Art. 7(2) )

Summary

The prohibition of any discrimination based on nationality as regards remuneration and social advantages, as laid down in Article 48 of the Treaty and Article 7(2) of Regulation No 1612/68, covers not only covert discrimination based on nationality but all overt forms of discrimination which, by applying other distinguishing criteria, in fact achieve the same result. Accordingly, it precludes national rules which require a body responsible for recovering social security contributions to take into account, for a trainee worker who does not come under the national education system, a basis for calculating employers' social security contributions which is more unfavourable than that applied in respect of a trainee worker who comes under the national system, since essentially trainees from other Member States will come under the less favourable system, which is liable to discourage employers from offering them possibilities of traineeship.

Parties

In Case C-27/91,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Cour d' Appel (Court of Appeal), Chambéry (France), for a preliminary ruling in the proceedings pending before that court between

Union de Recouvrement des Cotisations de Sécurité Sociale et d' Allocations Familiales de la Savoie (URSSAF)

and

Hostellerie Le Manoir S.à r.l.,

on the interpretation of Article 48 of the EEC Treaty and Article 7(2) of Regulation (EEC) 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),

THE COURT (Second Chamber),

composed of: F.A. Schockweiler, President of the Chamber, G.F. Mancini and J.L. Murray, Judges,

Advocate General: C.O. Lenz,

Registrar: H.A. Ruehl, Principal Administrator,

after considering the written observations submitted on behalf of:

- URSSAF, the applicant in the main proceedings, by its Director, Christian Gendey,

- the Commission of the European Communities, by Maria Patakia, a member of its Legal Service, and Théofile Margellos, a Greek official seconded to the Legal Service under the scheme for exchanges with national officials, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of the Commission at the hearing on 24 October 1991,

after hearing the Opinion of the Advocate-General at that hearing,

gives the following

Judgment

Grounds

1 By judgment of 7 January 1991, which was received at the Court on 28 January 1991, the Cour d' Appel (Court of Appeal), Chambéry, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 48 of the EEC Treaty and Article 7(2) of Regulation (EEC) 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 Union de Recouvrement des Cotisations de Sécurité Sociale et d' Allocations Familiales de la Savoie (Social Security and Family Allowance Contribution Collection Office for Savoy, hereinafter referred to as "URSSAF") and Hostellerie Le Manoir S.à r.l. (hereinafter referred to as "Le Manoir") concerning employers' social security contributions due from Le Manoir in connection with practical vocational training which Miss Noreen Haugh, an Irish national who was undergoing vocational training at a technical college in Ireland, had undertaken at Le Manoir between 2 April and 30 September 1985.

3 Under the French legislation, only employers who provide vocational training to trainees coming under the French national education system are subject to the payment of social security contributions, calculated according to the allowances actually paid to the trainees, even if those are lower than the amount of the basic minimum index-linked wage.

4 URSSAF considered that Le Manoir was not entitled to benefit from the provisions of that legislation as regards a trainee who did not come under the French national education system, and, in view of the fact that there was no convention on the matter between France and Ireland, demanded the payment of contributions on the basis of the minimum index-linked wage and not on the basis of the lower amount of the allowances actually paid.

5 The dispute came before the Cour d' Appel, Chambéry, which decided to stay the proceedings and refer the following question to the Court for a preliminary ruling:

"Is it compatible with the principle of freedom of movement for workers and the prohibition of any discrimination as regards remuneration and social advantages, as laid down in Article 48 of the EEC Treaty and Article 7(2) of the Community regulation of 15 October 1968, for a body responsible for collecting social security contributions in France to use a different basis for calculating the employer' s social security contributions in the case of an Irish trainee sent for practical training by the educational establishment which she attends from that used in the case of French trainees on the sole ground that, by reason of her nationality, such a trainee is not covered by the vocational training system administered by the French national education authorities and that there is no agreement between France and Ireland in that regard?"

6 Reference is made to the Report for the Hearing for a fuller account of the facts, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

7 In order to reply to the question referred by the Cour d' Appel, Chambéry, it should be stated in limine that the concept of worker, within the meaning of Article 48 of the Treaty and Regulation No 1612/68, cited above, has a Community meaning. As the Court has already held, any person who pursues an activity which is effective and genuine, to the exclusion of activities on such a small scale as to be regarded as purely marginal and ancillary, is to be treated as a worker. The essential characteristic of the employment relationship is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration (see, for example, the judgment in Case 197/86 Brown v Secretary of State for Scotland [1988] ECR 3205).

8 As the Court has already held, the fact that a person performs those services under a traineeship contract does not prevent him from being regarded as a worker, if he pursues an activity which is effective and genuine and if the essential characteristics of the employment relationship are fulfilled (see, for example, the judgment in Case 66/85 Lawrie-Blum v Land Baden Wuerttemberg [1986] ECR 2121).

9 Next, it must be observed that national rules such as those referred to in the main proceedings, although formally addressed to employers, in reality concern trainee workers. The fact that employers are required to pay different employers' social security contributions depending on the category of trainee worker in question affects the possibilities of some of those workers to have access to a traineeship.

10 Lastly, it should be observed that, as the Court has consistently held, the principle of equal treatment laid down in Article 48 of the Treaty and Article 7 of Regulation No 1612/68 prohibits not only overt discrimination based on nationality but all covert forms of discrimination which, by applying other distinguishing criteria, in fact achieve the same result (see the judgment in Case 33/88 Allué and Coonan v Università degli Studi di Venezia [1989] ECR 1591).

11 In that regard, it must be observed that, although the national rules referred to in the main proceedings are not overtly based on the criterion of nationality, they affect essentially trainee workers who are nationals of other Member States. This is because the vast majority of persons who, as part of vocational training provided by an educational establishment, undertake a practical traineeship as workers, come under the national education system of their State of origin.

12 It must therefore be considered that making the benefit of an alleviation in employers' social security contributions dependent upon the employer' s engaging trainee workers coming under the national education system of a particular Member State in fact causes discrimination between trainee workers from that Member State and trainee workers who are nationals of other Member States.

13 In those circumstances, the reply to the question referred by the Cour d' Appel de Chambéry must be that the prohibition of any discrimination based on nationality as regards remuneration and social advantages, as laid down in Article 48 of the EEC Treaty and Article 7(2) of Regulation No 1612/68, precludes national rules which require a body responsible for recovering social security contributions to take into account, for a trainee worker who does not come under the national education system, a basis for calculating employers' social security contributions which is more unfavourable than that applied in respect of a trainee worker who comes under the national system.

Decision on costs

Costs

14 The costs incurred by the Commission of the European Communities, which has 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.

Operative part

On those grounds,

THE COURT (Second Chamber),

in answer to the question referred to it by the Cour d' Appel, Chambéry, by judgment of 7 January 1991, hereby rules:

The prohibition of any discrimination based on nationality as regards remuneration and social advantages, as laid down in Article 48 of the EEC Treaty and Article 7(2) of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community, precludes national rules which require a body responsible for recovering social security contributions to take into account, for a trainee worker who does not come under the national education system, a basis for calculating employers' social security contributions which is more unfavourable than that applied in respect of a trainee worker who comes under the national system.

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