Court of Justice of the European Communities (including Court of First Instance Decisions)

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1. Social security for migrant workers ° Unemployment ° Wholly unemployed frontier worker ° Entitlement to the benefits of the Member State of residence ° Calculation of benefits on the basis of the previous wage or salary ° Wage or salary actually received to be taken into account without applying any rule on ceilings laid down in the legislation of the Member State of employment
(Council Regulation No 1408/71, Arts 68(1) and 71(1)(a)(ii))
2. Social security for migrant workers ° Financial provisions ° Community rules on currency conversion ° Calculation of the unemployment benefits payable to wholly unemployed frontier workers ° Rules applicable before Regulation No 574/72 was amended by Regulation No 1249/92
(Council Regulation No 574/92, Art. 107)

1. Article 68(l) and Article 71(l)(a)(ii) of Regulation No 1408/71 are to be interpreted as meaning that, in the case of a frontier worker, within the meaning of Article 1(b) of that regulation, who is wholly unemployed, the competent institution of the State of residence, whose national legislation provides that the calculation of benefits should be based on the amount of the previous wage or salary, must calculate those benefits taking into account the wage or salary actually received by the worker in the last employment held by him in the Member State in which he was engaged prior to his becoming unemployed. In calculating those benefits, the institution of the State of residence may not apply to the remuneration which forms the basis for calculating those benefits the rules on ceilings laid down by the legislation of the State of employment.
2. Article 107 of Regulation No 574/72 is to be interpreted as meaning that, in order to calculate the unemployment benefits of wholly unemployed frontier workers until Regulation No 1249/92 came into force, the last remuneration received in the State of employment had to be converted in accordance with the official rate of exchange on the day of payment.

In Case C-201/91,
REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal de Grande Instance (Regional Court), Metz, for a preliminary ruling in the proceedings pending before that court between
Bernard Grisvard and
Georges Kreitz
and
Association pour l' emploi dans l' industrie et le commerce de la Moselle (Assedic),
voluntary intervener in the proceedings before the national court: Union national interprofessionnelle pour l' emploi dans l' industrie et le commerce (Unedic),
on the interpretation of Article 68(1) and Article 71(1)(a)(ii) 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 and of Article 107(1) of Council Regulation (EEC) No 574/72 of 21 March 1972 laying down the procedure for implementing Regulation (EEC) No 1408/71, as amended and consolidated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6),
THE COURT (First Chamber),
composed of: R. Joliet, President of the Chamber, G.C. Rodríguez Iglesias and D.A.O. Edward, Judges,
Advocate General: C.O. Lenz,
Registrar: L. Hewlett, Administrator,
after considering the written observations submitted on behalf of:
° Mr Grisvard and Mr Kreitz, by Michel Welschinger, of the Colmar Bar,
° Association pour l' emploi dans l' industrie et le commerce de la Moselle and Union national interprofessionnelle pour l' emploi dans l' industrie et le commerce, by Philippe Lafarge, of the Paris Bar,
° the German Government, by Ernst Roeder, Ministerialrat in the Federal Ministry for Economic Affairs, acting as Agent,
° the Commission of the European Communities, by Maria Patakia, of its Legal Service, acting as Agent,
having regard to the Report for the Hearing,
after hearing the oral observations of Mr Grisvard and Mr Kreitz, Association pour l' emploi dans l' industrie et le commerce de la Moselle, Union national interprofessionnelle pour l' emploi dans l' industrie et le commerce, and the Commission of the European Communities, represented by Dimitrios Gouloussis, Legal Adviser, acting as Agent, at the hearing on 11 June 1992,
after hearing the Opinion of the Advocate General at the sitting on 8 July 1992,
gives the following
Judgment

1 By judgment of 26 June 1991, received at the Court on 31 July 1991, the Tribunal de Grande Instance, Metz, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 68(1) and Article 71(1)(a)(ii) 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 and of Article 107(1) of Council Regulation (EEC) No 574/72 of 21 March 1972 laying down the procedure for implementing Regulation (EEC) No 1408/71, as amended and consolidated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6).
2 The questions arose in proceedings between, on the one hand, Mr Grisvard and Mr Kreitz and, on the other, Association pour l' emploi dans l' industrie et le commerce de la Moselle (hereinafter "Assedic"), supported by Union national interprofessionnelle pour l' emploi dans l' industrie et le commerce (hereinafter "Unedic"), concerning the salary to be taken into account by Assedic for the purposes of calculating the unemployment benefits payable to Mr Grisvard and Mr Kreitz.
3 Mr Grisvard and Mr Kreitz had been in gainful employment in the Federal Republic of Germany. Their country of residence was, and still is, France.
4 Mr Grisvard' s contract of employment came to an end on 31 December 1988. That of Mr Kreitz ended on 30 September 1987. On those dates, they became unemployed.
5 Assedic calculated the unemployment benefits paid to Mr Grisvard and Mr Kreitz on the basis of the remuneration which they had received in the Federal Republic of Germany, but taking account of the ceiling applied under that country' s unemployment insurance scheme.
6 In so doing, Assedic applied Unedic Directive No 62-87 of 7 August 1987.
7 Mr Grisvard and Mr Kreitz contested the application of that ceiling and the rate of exchange applied to the last remuneration which they had received in the Federal Republic of Germany in proceedings instituted before the Tribunal de Grande Instance, Metz.
8 Since that court considered that the dispute raised questions relating to the interpretation of Community law, it stayed the proceedings and referred the following questions to the Court for a preliminary ruling:
"1. With regard to the determination of the legislation applicable to the contribution ceiling to be applied when calculating unemployment benefit for frontier workers:
Is Unedic Directive No 62-87 of 7 August 1987 compatible with Community law?
Is the determination of that ceiling governed by Article 68(1) or Article 71(1)(a)(ii) of Regulation (EEC) No 1408/71?
2. With regard to the currency conversion rules applicable in respect of frontier workers:
What rules should be applied by the institution of the place of residence of a frontier worker who is unemployed for the conversion of the amount of the wage or salary received by that worker in the last employment he pursued in the Member State in which he was employed immediately prior to his becoming unemployed?
Must the rate of conversion referred to in Article 107(1) of Regulation (EEC) No 574/72 be applied in such a case?"
9 Reference is made to the Report for the Hearing for a fuller account of the relevant legislation, the background to the main proceedings, 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.
The first question
10 By this question, the national court seeks to establish whether Article 71(1)(a)(ii) and Article 68(1) of Regulation No 1408/71, cited above, are to be interpreted as meaning that the institution of the State of residence which is responsible for paying unemployment benefits to frontier workers who are wholly unemployed may apply to the remuneration which is used as the basis for calculating those benefits the ceilings existing in the State in which the workers were employed.
11 According to Article 71(1)(a)(ii), the competent institution for the payment of unemployment benefits to frontier workers who are wholly unemployed is that of the State of residence. That attachment to the State of residence appears more appropriate and more in conformity with the interests of frontier workers (judgment in Case 58/87 Rebmann [1988] ECR 3467, paragraphs 14 and 15).
12 Article 68(1) provides that "the competent institution of a Member State whose legislation provides that the calculation of benefits should be based on the amount of the previous wage or salary shall take into account exclusively the wage or salary received by the person concerned in respect of his last employment in the territory of that State. However, if the person concerned had been in his last employment in that territory for less than four weeks, the benefits shall be calculated on the basis of the normal wage or salary corresponding, in the place where the unemployed person is residing or staying, to an equivalent or similar employment to his last employment in the territory of another Member State".
13 However, as the Court made clear in its judgment in Case 67/79 Fellinger [1980] ECR 535, paragraph 6, that article is of general application and does not relate to particular situations, such as, in particular, that of frontier workers. The first sentence lays down the general rule that unemployment benefits are to be calculated on the basis of the last wage or salary received in the State of residence. The rule set out in the second sentence is laid down only for the exceptional case in which the worker was not in his last employment in the State of residence for at least four weeks. In so far as that is almost invariably the situation of frontier workers, to subject them to that rule would have the effect of applying to them as a matter of course the rules which that provision lays down by way of exception. Since, moreover, the level of remuneration is often higher in the State of employment, the fact that unemployment benefits paid to frontier workers could never be calculated on the basis of the remuneration paid in the State of employment would be likely to discourage frontier working, contrary to the principles laid down in Regulation No 1408/71 and the Treaty.
14 On all those grounds, the Court ruled in Fellinger that Article 68(1) of Regulation No 1408/71, viewed in the light of Article 51 of the Treaty and the objectives which it pursues, must be interpreted as meaning that, in the case of a frontier worker, within the meaning of Article 1(b) of that regulation, who is wholly unemployed, the competent institution of the Member State of residence, whose national legislation provides that the calculation of benefits should be based on the amount of the previous wage or salary, is to calculate those benefits taking into account the wage or salary received by the worker in the last employment held by him in the Member State in which he was engaged prior to his becoming unemployed.
15 It follows that, in the case of a frontier worker, the competent institution of the State of residence must take into account, for the purpose of calculating unemployment benefits, only the last wage or salary received in the State of employment. In order to answer the national court' s first question, it should next be determined whether this is the wage or salary which was actually received or the wage or salary subject to the ceilings laid down in the legislation of the State of employment.
16 Under the terms of Article 71(1)(a)(ii), a frontier worker who is wholly unemployed is to receive benefits in accordance with the provisions of the legislation of the Member State in whose territory he resides as though he had been subject to that legislation during his last employment. That article clearly requires the legislation of the Member State of residence alone to be applied and not, therefore, the legislation of the State of employment, including any rules it lays down on ceilings.
17 That interpretation, which follows from the wording of the provision in question, is moreover consistent with its aim, which is to equate the system of unemployment benefits for frontier workers with that of workers whose last employment was in the State of residence. That aim would be jeopardized if the unemployment benefits of frontier workers were subject to a ceiling, deriving from the system established by another Member State, which would not be applicable to most workers in the Member State of residence.
18 Consequently, Article 68(l) and Article 71(l)(a)(ii) are to be interpreted as meaning that the institution of the State of residence responsible for the payment of unemployment benefits to frontier workers who are wholly unemployed may not apply the ceilings which exist in the State of employment to the remuneration which forms the basis for calculating those benefits.
The second question
19 In this question, the national court asks how the last remuneration received in the State of employment should be converted into the currency of the State of residence in order to calculate the benefit which is payable.
20 It should be noted that Article 107 of the Regulation No 574/72, cited above, prescribes two methods of conversion.
21 The first method, which is based on the application of a single rate per quarter, calculated by the Commission, is stated to be applicable to the cases listed in Article 107(1).
22 The second method, which consists simply of applying the official rate of exchange on the day of payment, is stated to be applicable in all cases not covered by Article 107(1).
23 The cases to which the first method is stated to be applicable do not include Article 71(1)(a)(ii) of Regulation No 1408/71, which relates to unemployed frontier workers.
24 Assedic, Unedic, the German Government and the Commission consider, however, that the first method should apply to wholly unemployed frontier workers. They refer to the convenience of that method and to the fact that it was chosen by Decision No 140 of 17 October 1989 of the Administrative Commission of the European Communities on Social Security for Migrant Workers concerning the rate of conversion to be applied by the institution of a wholly unemployed frontier worker' s place of residence to the last wage or salary he received in the competent State (OJ 1990 C 94, p. 4).
25 Those arguments cannot be accepted. As the Court held in its judgment in Case 98/80 Romano v Institut National d' Assurance Maladie-Invalidité [1981] ECR 1241, acts of the Administrative Commission cannot have the force of law. Likewise, an argument based on greater convenience cannot prevail against an unequivocal provision.
26 Furthermore, Council Regulation (EEC) No 1249/92 of 30 April 1992 amending Regulation (EEC) No 1408/71 and Regulation (EEC) No 574/72 (OJ 1992 L 136, p. 28) has amended Article 107(1) so as to require the first method to be applied to wholly unemployed frontier workers. However, it appears from the fourteenth recital in the preamble to that regulation that the amendment in question is not declaratory. That recital states that "it is necessary to provide for a rate of conversion for the amounts used for the calculation of indemnities for unemployed frontier workers under the terms of Article 71(1)(a)(ii) and Article 68 of Regulation (EEC) No 1408/71 ...".
27 It follows that, before Regulation No 1249/92 entered into force, which occurred, by virtue of Article 3(1), on 1 June 1992, Article 107(1) of Regulation No 574/72 did not apply to the unemployment benefits of frontier workers.
28 Consequently, Article 107 of Regulation No 574/72 is to be interpreted as meaning that, until Regulation No 1249/92 came into force, in order to calculate the unemployment benefits of wholly unemployed frontier workers, the last remuneration received in the State of employment had to be converted in accordance with the official rate of exchange on the day of payment.

Costs
29 The costs incurred by the German Government and 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 (First Chamber),
in answer to the questions referred to it by the Tribunal de Grande Instance, Metz, by judgment of 26 June 1991, hereby rules:
1. Article 68(l) and Article 71(l)(a)(ii) 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 are to be interpreted as meaning that the institution of the State of residence responsible for the payment of unemployment benefits to frontier workers who are wholly unemployed may not apply the ceilings which exist in the State of employment to the remuneration which forms the basis for calculating those benefits.
2. Article 107 of Council Regulation (EEC) No 574/72 of 21 March 1972 laying down the procedure for implementing Regulation (EEC) No 1408/71 is to be interpreted as meaning that, until Council Regulation (EEC) No 1249/92 of 30 April 1992 amending Regulation (EEC) No 1408/71 and Regulation (EEC) No 574/72 came into force, in order to calculate the unemployment benefits of wholly unemployed frontier workers, the last remuneration received in the State of employment had to be converted in accordance with the official rate of exchange on the day of payment.