Österreichischer Gewerkschaftsbund, Gewerkschaft Öffentlicher Dienst

v. Austria (Case C-195/98)

Before the Court of Justice of the European

Communities (Fifth Chamber)

ECJ (5th Chamber)

(Presiding, Edward ( Rapporteur), acting for the President of the Fifth

Chamber; Jann and Sevón, JJ.) Francis Jacobs, Advocate General.

30 November 2000

H1 Reference from Austria by the Oberster Gerichtshof (Supreme Court) for a

preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC).

H2 Preliminary rulings--"court or tribunal"--Austria--court giving declaratory rulings in employment matters constituted "court or tribunal" for purposes of Article 177 (now Article 234 EC)--migrant workers--public service--Community law and national law--method of determining pay scale for teachers employed by State--national law imposing stricter conditions for periods of employment spent in Member States other than Austria--discriminatory under Article 48 (now Article 39 EC) and Article 7 of Regulation 1612/68--such provisions binding from date of accession--periods of employment spent in other Member States to be taken into account without any temporal limitation. H3 Under paragraph 26 of the Austrian Federal Law on Contractual Public Servants of 1948 ("the VBG"), in determining the pay scale of contractual teachers and teaching assistants employed by the Federal State, previous periods of employment in the service of an Austrian public authority or a teaching establishment in Austria were automatically taken into account. However, periods of employment spent in a Member State other than Austria were taken into account in full only where it was in the public interest to do so and with the consent of the competent authorities. The applicant in the main proceedings, G, was a union representing, inter alia, public sector employees. The respondent was Austria in its capacity as employer of contractual teachers and teaching

assistants. In 1997, G sought a declaratory ruling from the Oberster Gerichtshof, pursuant to *376 paragraph 54 of the Austrian Law on Labour and Social Courts ("the ASGG"), to the effect that contractual teachers and teaching assistants were entitled to have account taken of all periods of employment spent in Member States of the European Union or of the European Economic Area in teaching posts in public or State-recognised schools, colleges or universities, in the civil service or in other public-law entities which were to be regarded as equivalent to Austrian local authorities. Three questions were referred to the Court on the interpretation of Articles 177 and 48 (now Articles 234 and 39 EC) and Article 7 of Regulation 1612/68 on freedom of movement for workers within the Community. In particular, the national court sought to determine whether, in exercising the function of giving declaratory rulings under the ASGG, the Oberster Gerichtshof constituted a "court or tribunal" within the meaning of Article 177. Held: The Oberster Gerichtshof constituted a "court or tribunal" under Article 177 EC when exercising function of giving declaratory rulings in employment law matters. H4 (a) In order to determine whether a body making a reference was a court or tribunal for the purposes of Article 177 of the EC Treaty, which was a question governed by Community law alone, the Court took account of a number of factors, such as whether the body was established by law, whether it was permanent, whether its jurisdiction was compulsory, whether its procedure was inter partes, whether it applied rules of law and whether it was independent. Furthermore, a national court was entitled to refer a question to the Court only if there was a case pending before it and if it was called upon to give judgment in proceedings intended to lead to a decision of a judicial nature. [24]-[25] Vaassen-Göbbels v. Management of the Beambtenfonds voor het Mijnbedrijf (61/65), 30 June 1966: [1966] E.C.R. 261; [1966] C.M.L.R. 508; Job Centre Coop. arl (C-111/94): [1995] E.C.R. I-3361; Dorsch Consult Ingenieurgesellschaft mbH v. Bundesbaugesellschaft Berlin mbH (C-54/96): [1997] E.C.R. I-4961; [1998] 2 C.M.L.R. 237; Gabalfrisa SL and Others v. Agencis Estatal de Administracion Tributaria (Aeat) (C 110- 147/98): [2000] E.C.R. I-1577, [2002] 3 C.M.L.R. 13; Victoria Film A/s v. Riksskatteverket (C-134/97): [1998] E.C.R. I-7023; [1999] 1 C.M.L.R. 279, followed. H5 (b) From an institutional point of view, the Oberster Gerichtshof fulfilled all the criteria to be a court or tribunal within the meaning of Article 177 of the EC Treaty. It was established by law, it was independent and it exercised its activities on a permanent basis. From a procedural point of view, most elements of the procedure provided for by the ASGG were typical of judicial proceedings. In particular, the Oberster Gerichtshof's jurisdiction was compulsory and the procedure *377 at issue was governed by law and was inter partes. Furthermore, the procedure did not entail the referral of purely hypothetical questions: the application was required to concern a point of substantive law of importance for at least three employers or employees and the Oberster Gerichtshof had previously held that it had no jurisdiction to answer in abstracto legal questions of

a general nature unrelated to sufficiently specific factual situations. Although the procedure also had features that were less characteristic of judicial proceedings, it was none the less intended to result in a decision that was judicial in character. In particular, the final decision was binding on the parties and was intended to have persuasive authority for parallel proceedings concerning the individual employers and employees. Accordingly, in exercising functions such as those provided for by paragraph 54 of the ASGG, the Oberster Gerichtshof constituted a court or tribunal for the purposes of Article 177. [26]-[32] National law imposing stricter conditions for periods of employment spent in Member States other than Austria constituted indirect discrimination under Article 48 (now Article 39 EC) and Article 7(1) and 7(4) of Regulation 1612/68. H6 (a) The derogation in Article 48(4) of the EC Treaty, according to which the provisions on freedom of movement for workers were not to apply to "employment in the public service", concerned only access for nationals of other Member States to certain posts in the civil service. It did not apply to the activities of teachers and teaching assistants. In any event, the instant case did not concern the rules for access to "employment in the public service", but simply the determination of seniority for the purposes of calculating pay. Once a Member State had admitted workers who were nationals of other Member States into its public administration, Article 48(4) could not justify discriminatory measures against them with regard to remuneration or other conditions of employment. Accordingly, Article 48(4) did not apply to the facts at issue in the instant proceedings. [36]-[38] Grahame and Another v. Bestuur Van de Nieuwe Algemene Bedrijfsvereniging (C-248/96): [1997] E.C.R. I-6407; Schöning-Kougebetopoulou v. Freie und Hansestadt Hamburg (C-15/96): [1998] E.C.R. I-47; Lawrie-Blum v. Land Baden-Wurttemberg (66/85): [1986] E.C.R. 2121, [1987] 3 C.M.L.R. 403; Bleis v. National Minister of Education (C-4/91): [1991] E.C.R. I-5627, [1994] 1 C.M.L.R. 793; EC Commission v. Luxembourg (C-473/93): [1996] E.C.R. I-3207, [1996] 3 C.M.L.R. 981; Sotgiu v. Deutsche Bundespost (152/73): [1974] E.C.R. 153, followed. H7 (b) Article 48 prohibited not only overt discrimination by reason of nationality, but also all covert forms of discrimination which, by the application of other distinguishing criteria, led in fact to the same result. A provision of national law was to be regarded as indirectly *378 discriminatory if it was intrinsically liable to affect migrant workers more than national workers and there was a consequent risk that it would place the former at a particular disadvantage, and if it was not justified by objective considerations independent of the nationality of the workers concerned and proportionate to the legimate aim pursued by that law. National rules under which previous periods of employment in the public service of another Member State were not to be taken into consideration constituted unjustified indirect discrimination and contravened Article 48(2) of the EC Treaty. While paragraph 26 of the VBG did not preclude account being taken of previous periods of employment spent in other Member States, such periods were taken into account in full only if the public interest required it and with the consent of the

competent authorities. No such condition was imposed in order for periods of employment spent in Austria to be taken into account. Paragraph 26 of the VBG therefore imposed stricter conditions in respect of periods of employment spent in a Member State other than Austria, to the detriment of migrant workers who had spent part of their career in another Member State. Accordingly, paragraph 26 was liable to breach the principle of non-discrimination enshrined in Article 48 and in Article 7(1) and 7(4) of Regulation 1612/68. [39]-[44] Scholz v. Opera Universitaria di Cagliari and Another (C-419/92): [1994] E.C.R. I-505; [1994] 1 C.M.L.R. 873; O'Flynn v. Adjudication Officer (C-237/94): [1996] E.C.R. I-2617; [1996] 3 C.M.L.R. 103; Schöning-Kougebetopoulou v. Freie und Hansestadt Hamburg (C-15/96): supra; EC Commission v. Greece (C-187/96): [1998] E.C.R. I-1095, followed. H8 (c) The objective of staff mobility within the Austrian public administration did not require a discriminatory restriction on the mobility of migrant workers. Furthermore, the differences between the public services in Austria and those in the other Member States could not justify a difference in the conditions under which previous periods of service were taken into account. Finally, given the large number of employers covered by paragraph 26 of the VBG, the pay scheme was intended to allow the greatest possible mobility within a group of legally distinct employers and not to reward the loyalty of an employee to a particular employer. Paragraph 26 was not in any event proportionate to the objective the Austrian government claimed it intended to achieve. Accordingly, Article 48 of the EC Treaty and Article 7(1) and 7(4) of Regulation 1612/68 precluded a national rule such as paragraph 26 of the VBG concerning the account to be taken of previous periods of service for the purposes of determining the pay of contractual teachers and teaching assistants, where the requirements which applied to periods spent in other Member States were stricter than those applicable to periods spent in comparable institutions of the Member State concerned. [47]-[51] *379 Periods of employment spent in comparable institutions in other Member States to be taken into account without any temporal limitation. H9 The instant case did not concern the recognition of rights under Community law allegedly acquired before the accession of Austria to the European Union, but concerned the current discriminatory treatment of migrant workers. The Act concerning the conditions of accession of Austria contained no transitional provisions concerning the application of Article 48 of the EC Treaty and Article 7(1) of Regulation 1612/68. Those provisions were to be considered immediately applicable and binding as regards Austria as of the date of its accession to the European Union. Since that date, such provisions could be relied on by migrant workers from the Member States. Accordingly, where a Member State was obliged to take into account, in calculating the pay of contractual teachers and teaching assistants, periods of employment in certain institutions in other Member States comparable to the Austrian institutions listed in paragraph 26 of the VBG, such periods were to be taken into account without any temporal limitation. [54]-[56]

H10 Representation A. Alvarado-Dupuy, Zentralsekretär of the Gewerkschaft öffentlicher Dienst, for Österreichischer Gewerkschaftsbund, Gewerkschaft öffentlicher Dienst. M. Sawerthal, Hofrat at the Finanzprokuratur Wien, acting as Agent, for Austria. C. Stix-Hackl, Gesandte in the Federal Ministry of Foreign Affairs, acting as Agent, for the Austrian Government. P.J. Kuiper, Legal Adviser, acting as Agent, assisted by T. Eilmansberger, of the Brussels Bar, for the EC Commission. H11 Cases referred to in the judgment: 1. Foglia v. Novello (104/79), 11 March 1980: [1980] E.C.R. 745; [1981] 1 C.M.L.R. 45. 2. Foglia v. Novello (244/80), 16 December 1981: [1981] E.C.R. 3045; [1982] 1 C.M.L.R. 585. 3. Vaassen-Göbbels v. Management of the Beambtenfonds voor het Mijnbedrijf (61/65), 30 June 1966: [1966] E.C.R. 261; [1966] C.M.L.R. 508. 4. Job Centre Coop. arl (C-111/94), 19 October 1995: [1995] E.C.R. I-3361. 5. Dorsch Consult Ingenieurgesellschaft mbH v. Bundesbaugesellschaft Berlin mbH (C-54/96), 17 September 1997: [1997] E.C.R. I-4961; [1998] 2 C.M.L.R. 237. 6. Gabalfrisa SL and Others v. Agencis Estatal de Adminisracion Tributaria (Aeat) (C 110-147/98), 21 March 2000: [2000] E.C.R. I-1577; [2002] 1 C.M.L.R. 13. 7. Victoria Film A/s v. Riksskatteverket (C-134/97), 12 November 1998: [1998] E.C.R. I-7023; [1999] 1 C.M.L.R. 279. 8. Grahame and Another v. Bestuur Van de Nieuwe Algemene Bedrijfsvereniging (C-248/96), 13 November 1997: [1997] E.C.R. I-6407. *380 9. Schöning-Kougebetopoulou v. Freie und Hansestadt Hamburg (C-15/96), 15 January 1998: [1998] E.C.R. I-47. 10. Lawrie-Blum v. Land Baden-Wurttemberg (66/85), 3 July 1986: [1986] E.C.R. 2121, [1987] 3 C.M.L.R. 403. 11. Bleis v. National Minister of Education (C-4/91), 27 November 1991: [1991] E.C.R. I-5627, [1994] 1 C.M.L.R. 793. 12. EC Commission v. Luxembourg (C-473/93), 2 July 1996: [1996] E.C.R. I-3207, [1996] 3 C.M.L.R. 981. 13. Sotgiu v. Deutsche Bundespost (152/73), 12 February 1974: [1974] E.C.R. 153. 14. Scholz v. Opera Universitaria di Cagliari and Another (C-419/92), 23 February 1994: [1994] E.C.R. I-505; [1994] 1 C.M.L.R. 873. 15. O'Flynn v. Adjudication Officer (C-237/94), 23 May 1996: [1996] E.C.R. I-2617; [1996] 3 C.M.L.R. 103. 16. EC Commission v. Greece (C-187/96), 12 March 1998: [1998] E.C.R. I-1095. H12 Further cases referred to by the Advocate General:

Before the European Courts: 17. Society for the Protection of Unborn Children Ireland Ltd v. Grogan and Others (C-159/90), 4 October 1991: [1991] E.C.R. I-4685; [1991] 3 C.M.L.R. 849. 18. Elliniki Radiophonia Tileorassi AE (Ert) v. Dimotiki Etairia Pliroforissis and Sotirios Kouvelas (C-260/89), 18 June 1991: [1991] E.C.R. I-2925; [1994] 4 C.M.L.R. 540. 19. EC Commission v. Germany (C-62/90), 8 April 1992: [1992] E.C.R. I-2575; [1992] 2 C.M.L.R. 549. 20. Criminal Proceedings against Perfili (C-177/94), 1 February 1996: [1996] E.C.R. I-161. 21. Criminal Proceedings against Unterweger (318/85), 5 March 1986: [1986] E.C.R. 955. 22. Borker (138/80), 18 June 1980: [1980] E.C.R. 1975; [1980] 3 C.M.L.R. 638. 23. El-Yassini v. Secretary of State for the Home Department (C-416/96), 2 March 1999: [1999] E.C.R. I-1209; [1999] 2 C.M.L.R. 32. 24. Proceedings against Demenagements-Manutention Transport SA (Dmt) (C-256/97), 29 June 1999: [1999] E.C.R. I-3913; [1999] 3 C.M.L.R. 1. 25. Societe D'Importation Edouard Leclerc-Siplec v. TFI Publicite SA and Another (C-412/93), 9 February 1995: [1995] E.C.R. I-179; [1995] 3 C.M.L.R. 422. 26. Union Royale Belge des Societes de Football Association Asbl and Others v. Bosman and Others (C-415/93), 15 December 1995: [1995] E.C.R. I-4921; [1996] 1 C.M.L.R. 645. *381 27. Verein gegen Unwesen In Handel und Gewere Köln eV v. Mars GmbH (C-470/93), 6 July 1995: [1995] E.C.R. I-1923; [1995] 3 C.M.L.R. 1. 28. Nederlandse Spoorwegen v. Minister Van Verkeer en Waterstaat (36/73), 27 November 1973: [1973] E.C.R. 1299; [1974] 2 C.M.L.R. 148. 29. Garofalo and Others v. Ministero della Sanita and Unita Sanitaria Locale (USL) No. 58 di Palermo (C 69/96-79/96), 16 October 1997: [1997] E.C.R. I-5603; [1998] 1 C.M.L.R. 1087. 30. Firma Anton Dürbeck v. Hauptzollamt Frankfurt AM Main-Flughafen (112/80), 5 May 1981: [1981] E.C.R. 1095; [1982] 3 C.M.L.R. 314. 31. Eurico Italia Srl and Others v. Ente Nazionale Risi (C 332, 333 & 335/92), 3 March 1994: [1994] E.C.R. I-711; [1994] 2 C.M.L.R. 580. 32. Broekmeulen v. Huisarts Registratie Commissie (246/80), 6 October 1981: [1981] E.C.R. 2311, [1982] 1 C.M.L.R. 91. 33. Kraus v. Land Baden-Württemberg (C-19/92), 31 March 1993: [1993] E.C.R. I-1663. 34. EC Commission v. Greece (C-290/94), 2 July 1996: [1996] E.C.R. I-3285; [1997] 2 C.M.L.R. 1002. 35. Württembergische Milchverwertung-Südmilch AG v. Ugliola (15/69), 15 October 1969: [1969] E.C.R. 363; [1970] C.M.L.R. 194. 36. EC Commission v. France (C-35/97), 24 September 1998: [1998] E.C.R. I-5325. 37. Meints v. Minister Van Landbouw, Natuurbeheer en Visserij (C-57/96), 27 November 1997: [1997] E.C.R. I-6689; [1998] 1 C.M.L.R. 1159.

38. Vougioukas v. Idryma Koinonikon Asfalisseon (Ika) (C-443/93), 22 November 1995: [1995] E.C.R. I-4033. 39. Nijhuis v. Bestuur Van het Landelijk Instituut Sociale Verzekeringen (C-360/97), 20 April 1999: [1999] E.C.R. I-1919; [2000] 2 C.M.L.R. 801. 40. Kenny v. Insurance Officer (1/78), 28 June 1978: [1978] E.C.R. 1489; [1978] 3 C.M.L.R. 651. 41. Duphar BV and Others v. Netherlands (238/82), 7 February 1984: [1984] E.C.R. 523; [1985] 1 C.M.L.R. 256. 42. Stanton and Another v. Institut National D'Assurances Sociales pour Travailleurs Independants (INASTI) (143/87), 7 July 1988: [1988] E.C.R. 3877; [1989] 3 C.M.L.R. 761. 43. Institut National D'Assurances Sociales pour Travailleurs Independants (INASTI) v. Wolf and Others (154 & 155/87), 7 July 1988: [1988] E.C.R. 3897. 44. R. v. Immigration Appeal Tribunal and Singh, Ex parte Secretary of State for the Home Department (C-370/90), 7 July 1992: [1992] E.C.R. I-4265; [1992] 3 C.M.L.R. 358. *382 45. Saldanha and Another v. Hiross Holding AG (C-122/96), 2 October 1997: [1997] E.C.R. I-5325. 46. Vlassopoulou v. Ministerium für Justiz, Bundes- und Europaangelegenheiten Baden-Wüttemberg (C-340/89), 7 May 1991: [1991] E.C.R. I-2357; [1993] 2 C.M.L.R. 221. 47. Andersson v. Sweden (C-321/97), 15 June 1999: [1999] E.C.R. I-3551; [2000] 2 C.M.L.R. 191. 48. Tsiotras v. Landeshauptstadt Stuttgart (C-171/91), 26 May 1993: [1993] E.C.R. I-2925. 49. Francovich and Others v. Italy (C6 & 9/90), 19 November 1991: [1991] E.C.R. I-5357; [1993] 2 C.M.L.R. 66. 50. Asscher v. Staatssecretaris Van Financien (C-107/94), 27 June 1996: [1996] E.C.R. I-3089; [1996] 3 C.M.L.R. 61. Before the UK courts: 51. Macnaughton v. Macnaughton's Trustees, 22 July 1953: 1953 S.C. 387; 1953 S.L.T. 240.

Opinion of Advocate General Jacobs

Introduction A1 In this reference for a preliminary ruling, the Austrian Oberster Gerichtshof (Supreme Court) asks whether rules for the determination of certain teachers' pay are compatible with Article 48 of the EC Treaty (now Article 39 EC) or Article 7 of Regulation 1612/68 [FN1] in that their effect is that previous periods of employment completed in other Member States are treated differently from periods completed in Austria. Because Austria's accession to the European Union is relatively recent, it also refers a question on the temporal effects of the

Community provisions in issue. As a preliminary point, however, it queries the admissibility of its request for a preliminary ruling in the light of the special nature of the proceedings before it. FN1 Council Regulation 1612/68 on freedom of movement for workers within the Community, [1968] O.J. Spec. Ed. 475. A2 In Austria there are two categories of personnel working for federal public authorities: the first consists of civil servants (Beamte), appointed by administrative act, not under contract, whose employment is in principle guaranteed for life. Their status is determined by specific laws (Beamtendienstrechtsgesetz) and more generally by public law. The second category, with which the present case is concerned, consists of contractual employees (Vertragsbedienstete) engaged on the basis of a private law employment contract. Their status is governed by the federal Law on Contractual Public Servants of 1948 (Vertragsbedienstetengesetz 1948, hereinafter the "VBG"). A3 *383 It appears that Austria employs at the federal level approximately 40,000 school teachers about 13,500 of whom are contractual teachers (Vertragslehrer). The federal government also employs approximately 10,000 university teaching personnel about 1,500 of whom are contractual teaching assistants (Vertragsassistenten). According to the applicant in the main proceedings, some 75,000 further teachers are employed at the level of the different federal states (Bundesländer). Their status is governed by laws of the Bundesländer which are similar to the federal laws. A4 The rules relating to the salaries of contractual teachers and contractual teaching assistants employed at the federal level are contained in the VBG. The contentious provision is paragraph 26 of the VBG which determines the calculation of seniority of contractual public servants for the purpose of classification within the relevant pay scale. The following features are of particular relevance. Previous periods of employment completed in the service of an Austrian public authority or in certain Austrian public or publicly recognised private teaching establishments are automatically taken into account in full. Previous periods of employment spent at comparable institutions abroad are taken into account in full only with the consent of the Federal Minister for Finance which is given only if such periods are "of special importance for the successful deployment" of the employee in question. A more detailed account of the national legal framework will be given below. A5 The applicant in the main proceedings, Österreichischer Gewerkschaftsbund, Gewerkschaft öffentlicher Dienst (hereinafter "the Gewerkschaftsbund") is a trade union representing, among others, employees in the public sector. A6 The respondent is Austria in its capacity as employer of contractual teachers and contractual teaching assistants. A7 It appears that a number of contractual teachers and contractual teaching assistants had, before being employed by the respondent, completed periods of employment in the public service or in teaching posts in other Member States of

the European Union or of the European Economic Area. In many cases those periods of employment had been completed before Austria joined the European Economic Area on 1 January 1994 or the European Union on 1 January 1995. The competent Secretary of State seems to have rejected in 1996 a request by the applicant to treat previous periods of employment completed in other Member States in the same way as such periods completed in Austria. A8 In the main proceedings the Gewerkschaftsbund seeks a declaration that certain categories of contractual teachers and teaching assistants employed by the respondent are entitled to have the following periods of previous employment taken into account from the date of their classification in the relevant pay scale, or from 1 January 1994 if later, namely those completed in States which now belong to the European *384 Union or the European Economic Area in teaching posts in public or State-recognised schools, colleges and universities or in the civil service or for other public-law entities which must be regarded as equivalent to Austrian local authorities. Those periods of employment should be taken into account in accordance with the principles laid down in paragraph 26 of the VBG applicable to previous periods of service for Austrian authorities or in teaching posts in Austria. A9 The Gewerkschaftsbund, presumably on the basis of Article 48(4) of the EC Treaty and the case law on that provision, does not seek the same declaration in respect of contractual teachers and teaching assistants whose activity exceptionally involves direct or indirect participation in the exercise of powers conferred by public law or duties designed to safeguard the general interests of the State or other public authorities. A10 The Gewerkschaftsbund seeks the declaration in a special form of procedure which is governed by paragraph 54(2) to (5) of the Arbeitsund Sozialgerichtsgesetz (Law on Labour and Social Courts, hereinafter the "ASGG"). According to those provisions certain employers' and employees' bodies may bring an action before the Oberster Gerichtshof against other employers' or employees' bodies for a declaration concerning rights or legal relationships which relate to a factual situation independent of any particular named person. That procedure will also be discussed in more detail below. A11 Against that background the Oberster Gerichtshof has referred the following questions for a preliminary ruling: 1. May a preliminary ruling of the Court of Justice of the European Communities under Article 177 of the EC Treaty [now Article 234 EC] be sought in proceedings in which the Oberster Gerichtshof has to decide, as a court of first and final instance, on the basis of a factual situation independent of particular named persons, alleged by one party and presumed to be true, on an application by that party for a declaration that rights or legal relationships in the field of employment law, which according to the submissions of that party, which are presumed to be true, are of importance for at least three employers or employees, do or do not exist? If Question 1 is answered in the affirmative, 2. Does Article 48 of the EC Treaty or any other provision of Community law, in particular Article 7 of Council Regulation 1612/68, preclude the use of different

methods for determining the qualifying date for advancement purposes, which affects the classification of contractual teachers and teaching assistants employed by the defendant within the relevant pay scale, in that, on the one hand, periods of employment completed under a contract of employment with an Austrian local authority or in a teaching post with an Austrian public school, university or establishment of higher education, or with the Academy of Visual Arts or in a State-approved private school in Austria are--provided that the activity in question amounts to at least half of that laid down for full-time employees--taken into account in their entirety as of the date of recruitment whereas, on the other hand, periods of employment completed with comparable establishments of other Member States are taken into account in their entirety only with the approval of the Minister *385 for Finance and when they are of special importance for the successful deployment of the contractual employee, failing which they are taken into account as regards only half of their duration if the employment relationship commenced on or before 30 April 1995 or, if it commenced at a later date, as regards only half of their duration, but only in so far as the periods in question do not exceed a total of three years? If Questions 1 and 2 are answered in the affirmative, 3. Are periods completed in institutions in Member States comparable to the said institutions to be taken into account without temporal limitation? A12 Written observations have been submitted by the parties in the main proceedings, namely the applicant Gewerkschaftsbund and Austria in its capacity as respondent in the main proceedings (hereinafter "Austria as respondent"), by the Commission and also by Austria in its capacity as Member State entitled to submit observations (hereinafter "the Austrian Government"). Interestingly, the views expressed by Austria as respondent and by the Austrian Government are not identical. A13 Initially the Commission and the Austrian Government asked to present oral argument. Subsequently, both withdrew their requests. In the circumstances the Court decided not to hold a hearing.

Question 1: Admissibility A14 With its first question, the national court wishes to know whether its request for a preliminary ruling is admissible. Its doubts arise from the special character of the procedure.

Nature of proceedings A15 The Oberster Gerichtshof describes the nature of the main proceedings, as provided for in paragraph 54(2) to (5) of the ASGG, as follows. A16 The object of the proceedings is a declaration that rights or legal relationships which concern a factual situation independent of any particular named person exist or do not exist. The application must concern a point of substantive law in the field of employment law disputes as defined by the ASGG. The point of law in question must be of importance for at least three employers or employees.

A17 Applications can be brought by employers' or employees' bodies which are capable of entering into collective agreements. They can seek such a declaration only within the scope of their activity. Potential respondents are employers' or employees' bodies which are also capable of entering into collective agreements. However, according to the case law of the Oberster Gerichtshof, as set out in the order for reference, in cases concerning the public sector the employing public entity may act as respondent or applicant instead of an employers' representation. A18 The Oberster Gerichtshof decides as a court of first and final instance. It appears from the order for reference and more specifically *386 its introductory section that when sitting in those cases it is composed of five members, three permanent judges of the Oberster Gerichtshof and two knowledgeable lay members. A19 As regards procedure, the Oberster Gerichtshof must base its legal assessment on the facts alleged by the applicant without further examination. Nor may the applicant's assertion that the decision is of importance for at least three employers or employees be examined further. The respondent may not dispute the facts alleged by the applicant and may submit only legal arguments. A20 The parties, the Commission and the Austrian Government have provided the Court with the following additional information on the procedure in question. A21 The central purpose of the adoption of the ASGG in 1985 was to improve access to the courts for employees and employers. According to the travaux préparatoires that goal was to be achieved by a concentration and acceleration of proceedings and by the introduction of collective rights of action. Moreover, in factual situations raising legal questions of general interest it should be not for individuals but for employers' or employees' bodies to bring necessary "test" cases. A22 In its case law the Oberster Gerichtshof has emphasised that in the procedure at issue employers' and employees' bodies should submit for judgment only truly typical factual situations of general importance and that it is not competent to answer in abstracto legal questions of a general nature without reference to sufficiently concrete factual situations. A23 The proceedings are contentious, the parties being the applicant and the respondent. Interested third parties may submit observations. The applicant determines whether to bring proceedings and the parties determine their scope. A24 The final decision is binding on the parties. They cannot make a second application for a declaration relating to the same factual situation and raising the same legal questions. A25 Although the decision is in no way binding on other courts, it is obviously intended to have persuasive authority on parallel proceedings concerning individual employers and employees. Thus, according to paragraph 54(5) of the ASGG the running of time for bringing parallel proceedings is suspended with regard to the rights and legal relationships forming the subject of the proceedings under paragraph 54(2) of the ASGG.

The issues on admissibility

A26 The Oberster Gerichtshof expresses doubts about the judicial nature of the proceedings at issue and consequently about the admissibility of its request for a preliminary ruling. A27 The applicant Gewerkschaftsbund, the Austrian Government and the Commission consider that the questions referred as admissible and *387 that the first question should be answered in the affirmative. The proceedings before the Oberster Gerichtshof present, in their view, the essential elements of true judicial proceedings. A28 According to Austria as respondent the Court is not competent to reply to the first question. Referring to Case C-159/90, Society for the Protection of Unborn Children Ireland Ltd v. Grogan and Others, [FN2] Case C-260/89, Elliniki Radiophonia Tileorassi AE (Ert) v. Dimotiki Etairia Pliroforissis and Sotirios Kouvelas [FN3] and Case C-62/90, EC Commission v. Germany [FN4] it argues that the question whether it is appropriate for a national court to decide cases at first and final instance lies outside the scope of Community law. FN2 [1991] E.C.R. I-4685; [1991] 3 C.M.L.R. 849. FN3 [1991] E.C.R. I-2925; [1994] 4 C.M.L.R. 540. FN4 [1992] E.C.R. I-2575; [1992] 2 C.M.L.R. 549. A29 That argument seems to be based on a misconception of the national court's question. It is true that the issue of the legality of national procedural arrangements might in certain circumstances lie outside the scope of Community law. [FN5] However the Oberster Gerichtshof does not ask whether Community law precludes or prohibits provisions under which disputes such as that in the main proceedings are settled by one court at first and final instance. It merely asks whether, in view of the peculiarities of the main proceedings, Article 177 of the EC Treaty allows it to seek a preliminary ruling. Thus, its question concerns only the admissibility of its request for a preliminary ruling and the interpretation of Article 177 which is a rule of Community law. FN5 Case C-177/94, Criminal Proceedings against Perfili: [1996] E.C.R. I-161. A30 A further source of possible confusion is the national court's reference to the two Foglia v. Novello [FN6] judgments. There the issue was whether the case before the referring court was of a hypothetical or contrived nature. FN6 Cases 104/79, Foglia v. Novello: [1980] E.C.R. 745; [1981] 1 C.M.L.R. 45 and 244/80, Foglia v. Novello: [1981] E.C.R. 3045; [1982] 1 C.M.L.R. 585. A31 In the present case, in contrast, doubts as to the admissibility of the reference arise only with regard to the nature of the procedure. No one has claimed that the actual dispute between the applicant and the respondent is

contrived or not genuine. A32 Why then does the Oberster Gerichtshof have doubts with regard to its right to refer questions for a preliminary ruling in proceedings of this nature? A33 In the order for reference the Oberster Gerichtshof explains that in the past it has taken the view that the procedure provided for in Paragraph 54(2) to (5) of the ASGG did not correspond to the traditional image of judicial decision-making. In its view, it was rather an opinion on the law, clothed in the appearance of a judicial decision. It therefore regarded those provisions as questionable on constitutional grounds and in particular because it was seised in such cases as a court not of final instance but of first and only instance. We *388 are also told that the Austrian Verfassungsgerichtshof (Constitutional Court) has dismissed applications made by the Oberster Gerichtshof to set aside the rules governing the procedure in question as unconstitutional. A34 The Oberster Gerichtshof refers also to Foglia v. Novello I and II, [FN7] Case 318/85, Criminal Proceedings against Unterweger, [FN8] Case 138/80, Borker [FN9] and Case C-111/94, Job Centre Coop. arl [FN10] and states that Article 177 does not give the Court of Justice the task of delivering opinions on general or hypothetical questions, but merely confers jurisdiction on it to answer questions which correspond to an objective requirement for an effective decision in a specific legal dispute. According to the Oberster Gerichtshof it is thus not clear whether the requested ruling is necessary to enable it to give "judgment" within the meaning of Article 177. FN7 Cases 104/79 and 244/80, cited in fn. 6. FN8 [1986] E.C.R. 955. FN9 [1980] E.C.R. 1975; [1980] 3 C.M.L.R. 638. FN10 [1995] E.C.R. I-3361. A35 The decisive issue is thus whether the procedure and the final decision under Article 54(2) to (5) of the ASGG are sufficiently judicial in nature within the meaning of the case law of the Court. A36 The case law on the judicial nature of a given national procedure or decision arguably forms part of a broader body of case law on the concept of "court or tribunal" within the meaning of Article 177. In that regard it is well established that whether the referring body is covered by that concept is a question of Community law alone. [FN11] In order to establish whether a given body is a "court or tribunal" the Court takes account of a cluster of different factors, [FN12] such as whether the body concerned is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is independent. [FN13] FN11 Case 61/65, Vaassen-Göbbels v. Management of the Beambtenfonds voor het Mijnbedrijf: [1966] E.C.R. 261; [1966] C.M.L.R. 508.

FN12 See, for example, Case C-54/96, Dorsch Consult Ingenieurgesellschaft mbH v. Bundesbaugesellschaft Berlin mbH: [1997] E.C.R. I-4961; [1998] 2 C.M.L.R. 237, para. [23] of the judgment. FN13 See, for example, Case C-416/96, El Yassini v. Secretary of State for the Home Department: [1999] E.C.R. I-1209; [1999] 2 C.M.L.R. 342 para. [17] of the judgment. A37 From an institutional point of view the Oberster Gerichtshof clearly fulfils all those criteria. It is established by law and exercises its activities on a permanent basis; its independence is equally beyond doubt. The fact that two of the five judges are knowledgeable lay members is a common feature of labour law tribunals and cannot prevent it from judging as a court of a Member State. A38 I therefore turn to the core of the matter, namely the function which the Oberster Gerichtshof performs in the main proceedings. In that regard, it is settled case law that a national court may refer a question to the Court only if there is a case pending before it and if it is called *389 upon to give judgment in proceedings intended to lead to a decision of a judicial nature. [FN14] FN14 Case 318/85, Criminal Proceedings against Unterweger, cited in fn. 8, para. [4] of the order; Case C-134/97, Victoria Film A/s v. Riksskatteverket: [1998] E.C.R. I-7023; [1999] 1 C.M.L.R. 279, para. [14] of the judgment: Case C-256/97, Proceedings against Demenagements-Manutention Transport SA (Dmt): [1999] E.C.R. I-3913; [1999] 3 C.M.L.R. 1, para. [9]. A39 Many elements of the procedure at issue are typical of judicial proceedings: the Oberster Gerichtshof's jurisdiction under Paragraph 54(2) to (5) of the ASGG is compulsory in the sense that either party may bring a case before the Oberster Gerichtshof irrespective of the objections of the other; the procedure is governed by law; it is inter partes and the parties determine the scope of the proceedings; in its decision the court applies rules of labour and social law rather than principles of fairness. A40 What then are the special features of the Austrian procedure and do they prevent it from being of a judicial nature? A41 I will discuss three issues: the nature of the disputes brought before the Oberster Gerichtshof and of the procedure at issue; the nature of the final decision it is called upon to take; and, finally, whether the findings on the first two issues are affected by the fact that the Oberster Gerichtshof decides as a court of first and final instance.

The nature of the dispute A42 The first question is thus whether the Oberster Gerichtshof decides on real cases meaning legal disputes of a judicial nature and whether it does so in a procedure of a judicial nature. A43 Three features seem relevant. First, we are faced with a declaratory remedy;

secondly, the right of action is exercised collectively by an employers' or employees' association; and, thirdly, arguments are limited to points of law whereas the facts alleged by the applicant can be challenged only to a limited extent. A44 Declaratory judgments are an important element of developed procedural systems. They may prevent at an early stage potentially costly infringements of a contract or the law where the rights and obligations of the parties are uncertain. Usually the risks inherent in declaratory proceedings are limited by rules designed to prevent the courts from giving advisory opinions in hypothetical cases and to avoid unnecessary litigation. A45 The Court has therefore never refused to deal with a reference merely because the questions were referred in declaratory proceedings. [FN15] In a borderline case the Court held: Although the main actions seek a declaratory remedy and, having the aim of preventing infringement of a right under threat, must necessarily be based on hypotheses which are, by their nature, uncertain, such actions are none the less permitted under national law, as interpreted by the *390 referring court. Consequently, the questions submitted by that court meet an objective need for the purpose of settling disputes properly brought before it. [FN16] FN15 See, for example, Case C-412/93, Societe D'Importation Edouard Leclerc-Siplec v. TFI Publicite SA and Another: [1995] E.C.R. I-179; [1995] 3 C.M.L.R. 422, para. [14]. FN16 Case C-415/93, Union Royale Belge des Societes de Football Association Asbl and Others v. Bosman and Others: [1995] E.C.R. I-4921; [1996] 1 C.M.L.R. 645, para. [65]. A46 As regards the procedure under scrutiny we are told by the Gewerkschaftsbund and by the Commission that an application may be dismissed where the applicant does not invoke a special legal interest in the declaration (Feststellungsinteresse). No such interest exists for instance where the respondent has never contested the rights at issue. A47 Collective rights of action are an equally common feature of modern judicial systems. They are mostly encountered in areas such as consumer protection, labour law, unfair competition law or protection of the environment. The law grants associations or other representative bodies the right to bring cases either in the interest of persons which they represent or in the public interest. This furthers private enforcement of rules adopted in the public interest and supports individual complainants who are often badly equipped to face well organised and financially stronger opponents. The danger of abuse of such collective rights of action is again normally tackled by national procedural rules. Consequently, the Court has never objected to national rules providing for such collective rights of action and in practice often deals with questions referred in proceedings brought by interested associations. [FN17]

FN17 See, for example, Case C-470/93, Verein gegen Unwesen In Handel und Gewerbe Köln eV v. Mars GmbH: [1995] E.C.R. I-1923; [1995] 3 C.M.L.R. 1. A48 Accordingly, neither the declaratory nature of the remedy nor the collective exercise of the right of action can call into question the judicial nature of the dispute and the procedure. A49 The truly original feature of the procedure at issue is thus the set of rules dealing with the relationship between the law and the facts. As already stated, the rights or legal relationships on which the declaration is sought may be independent of any particular named person. The point of law in question must however be of importance for at least three employers or employees. A50 The Oberster Gerichtshof thus does not decide disputes related to a concrete case involving clearly identified persons. It is expected to decide disputes related to a set of at least three factual situations which raise the same legal problem. The idea is to extrapolate from that set of actual situations "typical" but abstract facts. A51 None the less--and this is confirmed by all the observations submitted-- the Oberster Gerichtshof cannot be asked to decide theoretical legal questions wholly unrelated to existing facts. A52 Are the disputes to be decided by the Oberster Gerichtshof then of a judicial nature? A53 In my view, there is a fundamental difference between a court *391 confronted with, on the one hand, an abstract legal question wholly unrelated to existing facts and, on the other hand, a legal question related to abstract but typical facts. A54 In the first situation courts normally refused to deal with the case. Thus, a Scottish judge once said: Our Courts have consistently acted on the view that it is their function in the ordinary run of contentious litigation to decide only live, practical questions, and that they have no concern with hypothetical, premature or academic questions, nor do they exist to advise litigants as to the policy which they should adopt in the ordering of their affairs. Courts are neither a debating club nor an advisory bureau. ... [FN18] FN18 Macnaughton v. Macnaughton's Trustees, 22 July 1953: 1953 S.C. 387; 1953 S.L.T. 240 per Lord Thomson (Lord Justice Clerk) at 1953 S.C. 392. A55 The reasons for that attitude, which is probably universally shared, are easy to understand. There is, first, the danger that the court might take an uninformed and therefore wrong decision. A legal question can best be answered in the factual context where the law will actually have to be applied. The parties' arguments will be more forceful and to the point if they can be linked to specific facts. Secondly, courts are reluctant to rule where their decision will have no practical consequences for at least one of the parties. They do not like acting as a "moot court". It is felt that the resources of the judiciary are mis-allocated where the hypothetical situation might never occur. Finally, there is the fear that an

issue which in practice will arise, if at all, only in the future may be prejudged on the wrong basis. That in turn would considerably weaken the authority of judicial decision-making. The Court of Justice has therefore held with regard to its own activities that its duty under Article 177 of the Treaty is not that of delivering advisory opinions on general or hypothetical questions but of assisting in the administration of justice in the Member States. [FN19] FN19 Case 244/80, Foglia v. Novello, cited in fn. 6, para. [18] of the judgment. A56 But in a representative action like the present, namely one where a court is confronted with typical but abstract facts, many of the objections to hypothetical cases are not relevant or have less force. The fact that the case is a condensate of several situations may even assist the court, because exceptional situations can more easily be recognised and isolated as such. There is no danger that the legal question may never become relevant since it is already relevant in all the real cases represented by the "typical" one. The decision will have practical consequences not only in one but in many cases. The only threat to the judgment's authority is that the courts dealing with the "real" cases may distinguish them on the facts. I am therefore satisfied that a representative action of the present kind, based on typical but abstract facts, is in principle of a judicial nature. A57 That conclusion is not affected by the admittedly unusual rules of evidence--the fact that the Oberster Gerichtshof must base its legal assessment on the typical facts alleged by the applicant without further *392 examination, that the applicant's assertion with regard to the decision's importance for at least three employers or employees must also not be examined further and that the respondent is thus confined to legal arguments. A58 It is true that those rules create a theoretical risk of abuse in that they seem to allow the applicant to alter the nature of the procedure and to oblige the Oberster Gerichtshof to decide hypothetical legal questions unconnected to any existing factual situation. Such abuses are however unlikely given the limits on who can use the procedure. Moreover, the Gewerkschaftsbund and the Commission have stressed that the Oberster Gerichtshof has developed a body of case law specifically designed to prevent such abuses. There is no suggestion in the present case that the issue is purely hypothetical. The mere possibility of isolated abuses of a procedure should not have any bearing on the broader question whether references made in the context of that procedure are as such admissible. A59 I conclude therefore on that point that the procedure under scrutiny and the cases decided under it are in principle of a judicial nature.

The nature of the decision A60 Is the final decision which the Oberster Gerichtshof is called upon to take equally of a judicial nature? A61 It is well established that references in procedures ending with non-binding legal opinions are in principle inadmissible. [FN20] As already stated, the real

purpose of the procedure at issue is to provide strong persuasive authority for parallel proceedings concerning individual employers and employees. In that regard several of those submitting written observations emphasise the Leitungsfunktion (guiding function) of the Oberster Gerichtshof's decisions. It is for that reason that the time-limits for bringing such parallel proceedings are suspended. FN20 Case 318/85, Criminal Proceedings against Unterweger, cited in fn. 8; see however for a more lenient approach the Opinion of Advocate General Mayras in Case 36/73, Nederlandse Spoorwegen v. Minister Van Verkeer en Waterstaat: [1973] E.C.R. 1299; [1974] 2 C.M.L.R. 148, at [1973] E.C.R. 1317 and Joined Cases C 69/96-79/96, Garofalo and Others v. Ministero della Sanita and Unita Sanitaria Locale (USL) No. 58 di Palermo: [1997] E.C.R. I-5603; [1998] 1 C.M.L.R. 1087, paras [18]-[27] of the judgment. A62 The Oberster Gerichtshof's decision thus has the typical features of a test case judgment: the direction is important not so much because of its direct legal consequences but for its indirect significance in other cases. A63 I do not think that judgments with such effects can be treated as non-binding advisory opinions for the purposes of Article 177 of the Treaty. First, they are at least legally binding on the parties to the proceedings. Furthermore, where ordinary national procedures have been used by one of the parties in order to bring a test case and the national court has then referred questions for a preliminary ruling, the *393 Court has never hesitated to reply to those questions. [FN21] I do not think that the Court's attitude can be different where the national procedure is specifically designed to encourage cases similar to test cases in their effects. Indeed such proceedings may be highly desirable in the interest of procedural economy. FN21 Case 112/80, Firma Anton Dürbeck v. Hauptzollamt Frankfurt AM Main-Flughafen: [1981] E.C.R. 1095; [1982] 3 C.M.L.R. 314, Opinion of Advocate General Reischl at [1981] E.C.R. 1127, and Joined Cases C 332, 333 & 335/92, Eurico Italia Srl and Others v. Ente Nazionale Risi: [1994] E.C.R. I-711; [1994] 2 C.M.L.R. 580, paras [16] & [17] of the judgment. A64 A comparison with the effects of preliminary rulings under Article 177 of the Treaty may also be appropriate. The main objective of the preliminary ruling procedure is to achieve uniform interpretation and application of Community law in all cases raising identical issues. Nevertheless, since such a ruling is binding at least for the referring jurisdiction, there can be no doubt about its judicial nature. A65 Accordingly, the Oberster Gerichtshof's final decisions are also of a judicial nature.

A court of first and final instance A66 The last point to consider is that the Oberster Gerichtshof decides as a court

of first and final instance. If anything, arguments for the admissibility of references from the Oberster Gerichtshof may be stronger than in the ordinary case. When questions are referred by the only body able to hear a certain type of case, the Court should reply in order to further the uniform application of Community law. The development of national case law in a given area without the deciding bodies being able or bound to refer questions for a preliminary ruling is clearly undesirable. Such a development would threaten the coherence of the Community legal order and the effective protection of the rights of individuals which they derive from Community law. Those considerations for the effectiveness of Article 177 of the Treaty have always been an underlying reason for the Court accepting references from bodies of a disputed judicial nature. [FN22] Furthermore, and particularly in the circumstances of the present case, Article 177(3) of the Treaty must be borne in mind: that provision obliges courts or tribunals against whose decisions there is no judicial remedy to make references and pursues a goal very similar to the one emphasised by the case law just quoted. FN22 Case 246/80, Broekmeulen v. Huisarts Registratie Commissie: [1981] E.C.R. 2311, [1982] 1 C.M.L.R. 91, para. [16] of the judgment; implicit, for example, in Case 318/85, Criminal Proceedings against Unterweger, cited in fn. 8, para. [3] of the order, and Case C-134/97, Victoria Film, cited in fn. 14, para. [18] of the judgment. A67 Accordingly, the request for a preliminary ruling is admissible.

Question 2: Compatibility with EC law A68 At issue is whether a rule such as Paragraph 26 of the VBG infringes Article 48 of the EC Treaty or Article 7 of Regulation 1612/68 in that *394 previous periods of employment completed in Austria are treated differently from periods completed in other Member States. A69 The VBG applies, according to paragraph 1(1) thereof, to all persons who are in a private-law employment relationship with the federal State. Part I of the VBG contains, inter alia, in paragraphs 8a to 26 the general rules on their remuneration. According to paragraph 37 of the VBG, contractual teachers are contractual civil servants, to which many of the general provisions on remuneration apply. The same follows with regard to contractual teaching assistants from paragraph 51(1) of the VBG. A70 The monthly remuneration due to a contractual public servant who falls within a given pay scale and who is classified within that pay scale in a given pay group varies according to pay steps. Once classified in a pay group a contractual teacher or teaching assistant advances every two years to the next pay step provided for in respect of him. That advancement is determined, unless otherwise provided, by the qualifying date for advancement purposes which in turn is to be ascertained in accordance with the contentious rule, paragraph 26 of the VBG. A71 The application of paragraph 26 of the VBG leads to the following results.

A72 According to paragraph 26(1) and (2) of the VBG previous periods of employment in the service of an Austrian public authority, public teaching institution or publicly recognised private teaching institution are automatically treated as preceding in their entirety the date on which the person concerned is engaged as a contractual employee. A73 Other previous periods of employment, namely periods completed abroad or in Austria in an institution not covered by paragraph 26(2) of the VBG (e.g. a private bank), are taken into account in full only where it is in the public interest to do so and with the consent of the Federal Minister for Finance; such consent is given only if such periods are "of special importance for the successful deployment" of the contractual public servant (paragraph 26(1) and (3) of the VBG). Where those periods do not fulfil those conditions they are taken into account to the extent of one half if the service as Austrian contractual employee started not later than 30 April 1995 (under the former version of paragraph 26(3) of the VBG); they are taken into account to the extent of one half in so far as the periods do not exceed a total of three years, if the service started after that date (under the current version of paragraph 26(3) of the VBG). A74 According to the Austrian case law submitted by the applicant, the authorities' decisions on the incorporation of those other periods of employment are subject to judicial review. The decisions have to be taken in the framework of a regular administrative procedure. According to that case law the public interest referred to in paragraph 26(3) of the VBG lies in the fact that Austrian public entities benefit--without having to bear the costs of education and practical *395 training--from qualified new employees who are immediately able to operate competently. A75 It appears furthermore that with regard to the criterion of "special importance for successful deployment" the authorities have to establish what activities or studies were actually performed, how long they lasted and what knowledge and abilities were acquired. They must then establish what asks actually had to be performed by the applicant in the course of the first six months of his new employment in Austria, to what extent he was more successful in his new employment than other employees without similar previous experience and whether there was a causal link between such experience and such success. Where all those elements speaking favour of the person concerned and where without his previous experience he would have been considerably less successful in his new employment, his previous activity is of "special importance" for his successful deployment within the meaning of the VBG. It has also been held by Austrian courts that the division by the authorities of periods of previous employment or studies into periods the whole of which and periods only part of which are taken into account is lawful where a certain period sufficed to acquire the knowledge and experience necessary for successful deployment. A76 According to the parties the legislation at issue appears to be linked to Article 21(4) of the Austrian Constitution which guarantees employment mobility between the federal, regional and local public service. In that context the second sentence of Article 21(1) of the Austrian Constitution lays down the so-called Homogenitätsprinzip (principle of homogeneity) according to which regional

public service regulations may not differ from parallel federal laws or regulations to an extent which would seriously hamper mobility within the public service as guaranteed by the aforesaid Article 21(4). A77 Are the rules at issue compatible with the principle of freedom of movement for workers? A78 Under Article 48(1) of the EC Treaty freedom of movement for workers was to be secured by the end of the transitional period at the latest. Under Article 48(2) such freedom of movement entails the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. According to its fourth paragraph, Article 48 does not apply to employment in the public service. A79 Under Article 7(1) of Regulation 1612/68 a worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and, should he become unemployed, reinstatement or re-employment. A80 The Gewerkschaftsbund and the Commission consider that the rule *396 at issue infringes the Treaty. Both claim that Article 26 of the VBG results in indirect discrimination on grounds of nationality against workers from other Member States. In their view, neither the differences between national pay schemes and qualifications of teachers nor the existence of the constitutional rules facilitating employment mobility within the Austrian public sector can justify the difference of treatment with regard to the periods of employment taken into account. A81 The Commission adds that apart from indirectly discriminating against workers from other Member States the rule also discourages Austrian nationals from exercising their fundamental freedom under the Treaty to work in other Member States. A82 Austria as respondent and the Austrian Government consider that the rule does not infringe the Treaty. However, two different lines of argument are submitted. A83 Austria as respondent maintains, first, that contractual teachers and teaching assistants are covered by the concept of "employment in the public service" within the meaning of Article 48(4) of the Treaty. Secondly, it contests the relevance of the Court cases on which the applicant relies [FN23] since they concerned different factual situations and legal issues. Thirdly, it emphasises that public employers in Austria are linked by the constitutional principle of homogeneity. Therefore, it is said, the element of rewarding loyalty plays a greater role than it would in the absence of that principle. FN23 Case C-419/92, Scholz v. Opera Universitaria di Cagliari and Another: [1994] E.C.R. I-505; [1994] 1 C.M.L.R. 873; Case C-19/92, Kraus v. Land Baden-Württemberg: [1993] E.C.R. I-1663; Case C-15/96, Schöning-Kougebetopoulou v. Freie und Hansestadt Hamburg: [1998] E.C.R. I-47; Case C-187/96, EC Commission v. Greece: [1998] E.C.R. I-1095. A84 The Austrian Government concedes that the exception in Article 48(4) is not

applicable and that there is a prima facie restriction of freedom of movement for workers. Nonetheless, in its view, such a restriction is justified. It also invokes the constitutional principle of homogeneity. A85 Two preliminary points can be resolved quickly. A86 In the first place, contractual teachers and teaching assistants are workers within the meaning of Articles 48 to 51 of the Treaty and Article 7 of Regulation 1612/68. They perform for a certain period of time services in the form of tuition for and under the direction of a school or university in return for which they receive remuneration. The legal nature of the employment relationship and particularly whether it is governed by public or private law is immaterial. [FN24] FN24 Case 66/85, Lawrie-Blum v. Land Baden-Wurttemberg: [1986] E.C.R. 2121, [1987] 3 C.M.L.R. 403, paras [17] & [20]-[22] of the judgment; Advocate General Lenz in Case C-4/91, Bleis v. National Minister of Education: [1991] E.C.R. I-5627, [1994] 1 C.M.L.R. 793, para. 10 of the Opinion. A87 Secondly, in the present case the exception of Article 48(4) of the Treaty does not apply. A88 *397 Austria as respondent infers from EC Commission v. Greece [FN25] that contractual teachers and teaching assistants are covered by the concept of "public service" within the meaning of Article 48(4). The same is said to follow from the Austrian classification of their activities as Hoheitsverwaltung (administration through exercise of public authority). FN25 [1996] E.C.R. I-3285; [1997] 2 C.M.L.R. 1002. A89 It is however established case law that neither teachers not teaching assistants are normally covered by the Community concept of "employment in the public service" within the meaning of Article 48(4). [FN26] In that respect the respondent's reference to EC Commission v. Greece [FN27] appears to be misplaced since in paragraph 34 of that judgment the Court expressly states that the generality of posts in the area of education are remote from the specific activities of the public service covered by Article 48(4). The respondent's other argument based on the classification of teachers' activities under Austrian administrative law cannot be accepted either. The effectiveness of the Treaty provisions on freedom of movement for workers require a uniform interpretation and application of the concept of public service which cannot therefore be left to the discretion of the Member States. [FN28] FN26 Case C-473/93, EC Commission v. Luxembourg: [1996] E.C.R. I-3207, [1996] 3 C.M.L.R. 981, para. [7] of the judgment with further references. FN27 Case C-290/94, cited in fn. 25. FN28 See for example Case 152/73, Sotgiu v. Deutsche Bundespost: [1974] E.C.R. 153, para. [5] of the judgment; Case C-473/93, EC Commission v.

Luxembourg, cited in fn. 26, paras [26] & [27]. A90 Moreover, the present case is not about eligibility for or access to "employment in the public service" but merely about the determination of seniority for the purposes of calculating remuneration. It is well established that, once a Member State had admitted workers from other Member States to its public service, Article 48(4) cannot justify discriminatory measures against them with regard to remuneration or other conditions of employment, even if employment in the public service within the meaning of that provision is involved. [FN29] I agree therefore with the referring court which found it difficult to understand why the applicant Gewerkschaftsbund excluded from its application in the main proceedings contractual teachers exercising a school management or supervisory function. FN29 See, for example, Case 152/73, Sotgiu, cited in fn. 28, para. [4] of the judgment; Case C-187/96, EC Commission v. Greece, cited in fn. 23, para. [17]. A91 Is there an infringement of Article 48 of the Treaty or Article 7(1) of the Regulation? I will first discuss the main issue whether there is an infringement of the principle of non-discrimination on grounds of nationality with regard to workers from other Member States. The secondary issue whether there is also a prohibited obstacle for Austrian workers desiring to work in another Member State will briefly be addressed at the end of the analysis. A92 Ratione materiae Article 48(2) of the Treaty prohibits discrimination *398 "as regards employment, remuneration and other conditions of work and employment". Article 7(1) of Regulation 1612/68 prohibits discrimination "in respect of any condition of employment and work, in particular as regards remuneration, dismissal, and should he become unemployed, reinstatement or re-employment". A93 The present case concerns a rule on the taking into account of previous periods of employment for the determination of the qualifying date for advancement purposes of contractual public servants. That date itself is decisive for the calculation of seniority. Seniority in turn matters because any contractual public servant who belongs to a given pay group within a given pay scale moves after two years to the next pay step. A94 Even if the provision at issue is thus not directly concerned with remuneration, its repercussions on the salaries of contractual public servants are automatic and important. Furthermore, no one has claimed that the determination of the qualifying date for advancement purposes affects other issues not directly related to the employment relationship such as state social security benefits or fiscal treatment. It seems thus to have consequences exclusively for remuneration which is a matter expressly mentioned in Article 48(2) of the Treaty and Article 7(1) of Regulation 1612/68. A95 The Court has consistently applies those provisions to rules on the calculation of seniority for the purposes of determining the remuneration due and confirmed thereby explicitly [FN30] or implicitly [FN31] that such rules were

covered by the notion of "conditions of employment and work" within the meaning of those provisions. FN30 Case 15/69, Württembergische Milchverwertung-Südmilch AG v. Ugliola: [1969] E.C.R. 363; [1970] C.M.L.R. 194, para. [5] of the judgment. FN31 Case C-15/96, Schöning-Kougebetopoulou v. Freie und Hansestadt Hamburg and Case C-187/96, EC Commission v. Greece, both cited in fn. 23. A96 The position is not affected by the Commission's recent proposal for a Regulation amending Regulation 1612/68 [FN32] which proposes introducing the following new Article 7(5): 5. Where working conditions, professional advancement or certain advantages accorded to workers depend, in a Member State, on the occurrence of certain facts or events, any comparable facts or events which have occurred in any other Member State shall entail the same consequences or confer the same advantages accorded. FN32 Proposal for a European Parliament and Council Regulation amending Council Regulation 1612/68 on freedom of movement for workers within the Community, submitted by the Commission on 14 October 1998, [1998] O.J. C394/1. A97 It cannot be argued that the proposed new provision is necessary in that the existing provisions do not cover the issue. The proposal itself makes it clear that it is intended to codify the case law of the Court. [FN33] In any event the new rule could not, if adopted, reduce the scope of Article 7(1) of the Regulation as interpreted in the Court's case law. FN33 Preamble, recital 4. A98 The rules under scrutiny therefore fall within the scope ratione *399 materiae of Article 48(2) of the Treaty and Article 7(1) of Regulation 1612/68. A99 Is the prohibition of discrimination on grounds of nationality with regard to remuneration infringed? A100 Obviously there is no direct discrimination on grounds of nationality. The provision does not distinguish between workers of different nationalities but between periods of employment completed in certain Austrian institutions and other periods of employment. Periods in those Austrian institutions may also have been completed by workers of other Member States since under Austrian law--and that has been emphasised by the Austrian Government--equal access to employment for foreign teachers is guaranteed and provisions for the recognition of foreign diplomas are in place. A101 However, it is well established that Article 48(2) of the Treaty and 7(1) of Regulation 1612/68 prohibit equally all covert forms of discrimination which, by the application of distinguishing criteria other than nationality, led in fact to the

same result. [FN34] FN34 Case 152/73, Sotgiu, cited in fn. 28, paragraph 11 of the judgment; Case C-35/97, EC Commission v. France: [1998] E.C.R. I-5325, para. [37]; indirectly already in Case 15/69, Südmilch v. Ugliola, cited in fn. 30, para. [6]. A102 A national provision must be regarded as indirectly discriminatory if, first, it is intrinsically liable to affect migrant workers more than national workers with a consequent risk that it will place the former at a particular disadvantage and, secondly, it is not based on objective considerations independent of nationality or is not proportionate to a legitimate aim which it pursues. [FN35] FN35 See to that effect Case C-237/94, O'Flynn v. Adjudication Officer: [1996] E.C.R. I-2617; [1996] 3 C.M.L.R. 103, para. [20] of the judgment; Case C-57/96, Meints v. Minister Van Landbouw, Natuurbeheer en Visserij: [1997] E.C.R. I-6689; [1998] 1 C.M.L.R. 1159, para. [45]; Case C-15/96, Schöning-Kougebetopoulou, cited in fn. 23, para. [21]; Case C-35/97 Commission v. France, cited in fn. 34, para. [38]. A103 At issue is a provision which distinguishes between periods of employment completed in specified institutions in Austria and other periods of previous employment. The distinguishing criterion used has both an institutional and a territorial dimension. A104 Where a person has worked for example in industry or commerce and not for one of the categories of employers enumerated in paragraph 26(2) of the VBG, the less favourable regime applies independently of whether those periods were completed in Austria or abroad. That institutional effect has not been challenged before the national court, has not been referred for a preliminary ruling, and, in any event, seems to lie outside the scope of Community law. Consequently I will not discuss it. A105 Where previous periods of employment have been completed in the service of one of the categories of employers listed in paragraph 26(2) of the VBG, the applicable regime depends on the Member State in which those periods have been completed. A106 Such territorial differentiation has been brought before the Court on *400 many occasions. The taking into account of periods of employment or insurance completed in other Member States is often relevant for the grant of social security benefits. [FN36] In the following three cases which were referred to in all the observations submitted, the employment relationship itself was affected by whether previous periods of employment in the public service were taken into account. FN36 See, for example, C-443/93, Vougioukas v. Idryma Koinonikon Asfalisseon (Ika): [1995] E.C.R. I-4033 and more recently Case C-360/97, Nijhuis v. Bestuur Van het Landelijk Instituut Sociale Verzekeringen: [1999] E.C.R. I-1919; [2000] 2 C.M.L.R. 801.

A107 In Scholz [FN37] a public body in Italy when recruiting staff took into account candidates' periods of employment in the public service. The body did so only with regard to periods of employment completed in the Italian public service and not with regard to periods completed in the public service of another Member State. FN37 Case C-419/92, cited in fn. 23. A108 In Schöning-Kougebetopoulou [FN38] a doctor's classification within a given pay group depended on whether previous periods of employment had been completed with an employer covered by a public sector collective agreement. FN38 Case C-15/96, cited in fn. 23. A109 In EC Commission v. Greece [FN39] the grant of seniority increments and the placing on a particular point on a grading scale in the public service was dependent on whether previous periods of employment had been completed in the Greek or in another Member States' public service. FN39 Case C-187/96, cited in fn. 23. A110 In all three cases the Court held that the fact that the national rules at issue precluded the taking into account of previous periods of employment completed in other Member States' public services constituted unjustified indirect discrimination and was in breach of Article 48(2) of the EC Treaty. A111 In Scholz, which concerned access to employment, a parallel infringement of Articles 1 and 3 of Regulation 1612/68 had been alleged. The Court refused to apply the latter provisions and held that they had no independent force since they merely clarified and gave effect to the rights already contained in the Treaty. A112 In the two other cases, however, which concerned remuneration, the Court applied Article 48(2) of the EC Treaty and Article 7(1) of Regulation 1612/68 in parallel. I will follow the latter approach. A113 The present case--and here I agree with the Austrian Government--is in one respect new. Whereas the national rules in the aforesaid three cases simply excluded the possibility of taking into account periods of employment completed in other Member States, the Austrian rules under scrutiny do not. Such periods may be taken into account in their entirety where they fulfil certain conditions established by law. Where they do not, at least part of the period is taken into account. A114 I will briefly recall those conditions. Formally the consent of the *401 Federal Minister for Finance is required. From a substantive point of view those periods will be taken into account only if they are in the public interest and of special importance for the successful deployment of the contractual public servant. A115 Thus a first difficult question seems to arise: is there a Community law

obligation to give automatic recognition to periods of employment in the public service of other Member States or may a Member State examine the comparability of the periods involved? A116 It is obvious that with regard to remuneration in the public service the Member States pursue different policies which in turn lead to different systems. Furthermore there are major differences also in respect of the amounts paid. In the absence of Community legislation the Member States are free to have such divergent legislation. A117 It is also well established that the Community prohibitions of discrimination on grounds of nationality are in principle not concerned with any disparities in treatment which may result, between Member States, merely from divergences existing between the laws of the various Member States. [FN40] FN40 Case 1/78, Kenny v. Insurance Officer: [1978] E.C.R. 1489; [1978] 3 C.M.L.R. 651, para. [18] of the judgment. A118 That may be the reason why the Court seems to have accepted in EC Commission v. Greece that such a comparison of periods of employment might in principle be admissible. However, the burden of proof seems to lie on the receiving Member State. The Court held: Consequently, even in the absence of specific Community legislation on this matter, it is for Greece to establish, at the request of the person concerned, whether or not the post he held in another Member State is equivalent to a post in Greek public service which is taken into account for the purposes of salary scale grading and the grant of a seniority increment. The fact that the Member State in question considers that in practice it is difficult to carry out that comparison cannot in any circumstances justify its refusal to do so. [FN41] FN41 Case C-187/96, EC Commission v. Greece, cited in fn. 23, para. [22] of the judgment. A119 In the present case, however, the question of principle can be left open whether and if so under what conditions a Member State may engage in a comparison of periods of employment completed in the public service of another Member State. That is because, even if such a comparison were admissible, the substantive conditions for recognition of periods completed abroad must be based on non-discriminatory and objective criteria. [FN42] FN42 Case 1/78, Kenny v. Insurance Officer, cited in fn. 40, para. [18] of the judgment. A120 Under the provision at issue any period of employment in one of the enumerated Austrian institutions must be fully taken into account. The applicant has stated without being contradicted that that is so independently of the previous activity's comparability with or utility for the new employment. Thus, it is said, employment periods as a primary school teacher or as a communal worker

seem to count fully *402 for the determination of the qualifying date for advancement purposes of a newly engaged high-school teacher. A121 With regard to periods of employment completed in other Member States in institutions corresponding to the ones listed in paragraph 26(2) of the VBG, the person concerned has to prove two things, namely that it is in the public interest to take account of those periods and that they are of special importance for the successful deployment of the contractual public servant. Moreover, it appears from the national case law which has been invoked that that is a difficult burden to discharge. A122 The fundamental difference is thus that periods completed abroad are scrutinised with regard to their specific utility for the new post whereas periods completed in Austria are not. Such a provision imposes stricter requirements on periods completed abroad and is therefore liable to affect migrant workers from other Member States more than national workers since the former are more likely to have spent parts of their working life in other Member States. Consequently there is a risk that it will place those migrant workers at a particular disadvantage. A123 The first part of the indirect discrimination test having been completed, the next issue is whether the provision under scrutiny is based on objective considerations independent of the nationality of the employees concerned and whether it is proportionate to its legitimate aims. A124 The main argument invoked by the Austrian Government is the basic difference between the situation at Community level where diversity of public service laws prevails and the situation within Austria where the constitutional principle of homogeneity guarantees harmonised remuneration systems and public sector mobility. A125 First, I must point out an inconsistency in that argument with regard to teachers who were previously employed by Austrian private schools. It seems to me that they are not covered by the constitutional guarantee of job mobility and their employers are not obliged to comply with the homogeneity principle. Nonetheless, they seem to benefit from the more favourable regime. A126 In any event, such differences between the national and the Community situation could at most be invoked in order to justify a Member State's policy of comparing periods completed abroad with periods spent in a "homogeneous" national framework rather than taking them automatically into account. They cannot justify a difference of substantive requirements. They cannot explain why periods completed abroad must be of "special importance" whereas periods completed in Austria need not. Even where a Member State is entitled to assess the comparability of facts or events which occurred in another Member State, the use of double or in other words discriminatory standards is prohibited. A127 The Austrian Government's second argument is that contrary to the *403 situation in Schöning-Kougebetopoulou the objective of rewarding loyalty plays a greater role in the Austrian context where employers are linked by the principle of homogeneity. A128 That argument seems in several respects misconceived. First, the argument seems to assume that owing to the principle of homogeneity there is greater uniformity of working conditions in the Austrian context than in Schöning-

Kougebetopoulou. However, the reverse seems to be true: in the latter case working conditions were not merely loosely harmonised but at least partly unified by means of a collective agreement between employers and employees. A129 Secondly, as already stated, it seems to be inconsistent to invoke the homogeneity principle where publicly recognised private schools do not appear to be bound by it and teachers who work for those schools do not benefit from the constitutional guarantee of public sector mobility. A130 Thirdly and most importantly, given the multiplicity of employers potentially concerned--the Austrian Federation, the Bundesländer, the communes and even publicly recognised private schools--the purpose of the rule cannot be the desire to reward employee loyalty to a particular employer. [FN43] On the contrary, it is apparent from the Austrian constitutional rules that with regard to periods of employment completed in Austria the system is designed to afford maximum mobility within a group of legally separate employers. FN43 Case C-15/96, Schöning-Kougebetopoulou v. Freie und Hansestadt Hamburg, cited in fn. 23, para. [27] of the judgment. A131 While I do not question the legitimacy of such an objective, I cannot see why a discriminatory restriction of the mobility of migrant workers within the Community is necessary or even useful in order to further mobility within the Austrian public service. In my view the Austrian Constitution's goal of public sector job mobility and the Treaty's goal of mobility of migrant workers are not mutually exclusive or even conflicting but can readily coexist. A132 None of the parties has argued that the real purpose of the Austrian rules is to reward and encourage either loyalty to the public service in its entirety or a particular kind of public service ethos. Such an argument could not in any event in my view succeed because it can provide no objective justification for disregarding periods of previous employment in the public service of another Member State. [FN44] FN44 See my Opinion in Case C-419/92, Scholz, cited in fn. 23, at para. 27. A133 The last argument advanced by the Austrian Government concerns the consequences of an obligation automatically to incorporate periods completed abroad. Such an obligation, it is said, would constitute a one-sided burden on those States whose pay systems take into account previous periods of employment in the public service. In its view, a supplementary burden could arise where contractual public servants become later on in their career public servants appointed by administrative act (Beamte), since there is at present no mechanism for *404 distribution of the resulting pension burden among the public service employers of the different Member States. A134 I would stress at the outset that the critical issue in the present case is not the duty automatically to take into account periods of employment completed abroad but the Community law prohibition on relying on discriminatory substantive requirements when doing so. In any event, first, Austria appears to

be just one of many Member States to rely with regard to its public service on a pay system which takes account of previous periods of public service employment. [FN45] Secondly, burdensome financial consequences for a Member State, which moreover have not been substantiated, are never a valid justification for infringements of a fundamental freedom. [FN46] Thirdly, pension rights of civil servants are not at issue in the present proceedings: the provision under scrutiny concerns contractual teachers and teaching assistants who may (but will not necessarily) later become civil servants appointed by administrative act; classification is only for the purposes of determining their remuneration and not for pension purposes. In any event, the Council has in the meantime adopted Regulation 1606/98 amending Regulations 1408/71 and 574/72 with a view to extending them to cover special schemes for civil servants. [FN47] FN45 See my Opinion in Case C-15/96, Schöning-Kougebetopoulou, cited in fn. 23, para. 24. FN46 See, for example, Case 238/82, Duphar BV and Others v. Netherlands: [1984] E.C.R. 523; [1985] 1 C.M.L.R. 256, para. [23] of the judgment. FN47 Council Regulation of 29 June 1998, [1998] O.J. L209/1. A135 Nothing thus indicates that paragraph 26 of the VBG, in so far as it distinguishes between periods completed in certain Austrian institutions and periods completed in similar institutions in other Member States, is based on objective and legitimate considerations independent of the nationality of the migrant workers involved. Accordingly, the provision at issue must be regarded as infringing the prohibition of indirect discrimination on grounds of nationality as regards conditions of work or employment contained in Article 48(2) of the EC Treaty and Article 7(1) of Regulation 1612/68. A136 The Commission contends, as already stated, that the Austrian rules result also in a restriction of freedom of movement for Austrian workers. A137 It is well established that the Treaty rules on free movement of persons not only forbid discrimination by a Member State against nationals of other Member States but also preclude national legislation which might place Community citizens at a disadvantage when they wish to pursue an economic activity in the territory of another Member State. [FN48] With regard to workers, the basis for that proposition lies not so much in Article 48(2) or in Article 7(1) of Regulation 1612/68 but rather in the more general rule of Article 48(1) which protects freedom *405 of movement for workers as such. [FN49] In both Scholz and EC Commission v. Greece [FN50] the Advocate General considered that unconditional refusal to recognise periods of employment completed abroad constituted an obstacle to freedom of movement since it deterred persons from taking up employment in other Member States. In my view, the same must be said of the Austrian rules at issue which make recognition of periods completed in other Member States subject to other and more burdensome requirements than recognition of periods completed in Austria. However, neither in Scholz nor

in EC Commission v. Greece did the Court find it necessary to address the issue since in any event the rules infringed the prohibition of indirect discrimination on grounds of nationality. Since that applies also in the present case, I will not expand further on that point. FN48 Case 143/87, Stanton and Another v. Institut National D'Assurances Sociales pour Travailleurs Independants (INASTI): [1988] E.C.R. 3877; [1989] 3 C.M.L.R. 761, para. [13] of the judgment; Joined Cases 154 & 155/87, Institut National D'Assurances Sociales pour Travailleurs Independants (INASTI) v. Wolf and Others: [1988] E.C.R. 3897, para, [13]; Case C-370/90, R. v. Immigration Appeal Tribunal and Singh, Ex parte Secretary of State for the Home Department: [1992] E.C.R. I-4265; [1992] 3 C.M.L.R. 358, paras [16] & [23]. FN49 See my Opinion in Case C-419/92, Scholz, cited in fn. 23, para. 22. FN50 Cited in fn. 23. A138 I accordingly conclude that rules of a Member State on the taking into account of previous periods of employment for the determination of contractual teachers' and teaching assistants' pay infringe Article 48 of the EC Treaty and Article 7(1) of Regulation 1612/68 where more onerous requirements are imposed with regard to periods completed in other Member States than with regard to periods completed in comparable institutions in that Member State.

Question 3: Temporal limitation A139 At issue is whether, where a Member State is required to take into account periods completed in certain institutions in other Member States, those periods must be taken into account without temporal limitation. A140 Both the Gewerkschaftsbund and the Commission contend that previous periods of employment have to be taken into account independently of whether those periods were completed before or after the accession of Austria. A141 Article 2 of the Act concerning the conditions of accession of Norway, Austria, Finland and Sweden and the adjustments to the Treaties on which the European Union is founded [FN51] (hereinafter "the Act of Accession") provides that, from the date of accession, the provisions of the original Treaties are to be binding on the new Member States and are to apply in those States under the conditions laid down in those Treaties and in the Act of Accession. FN51 [1994] O.J. C241/21. A142 In view of the fact that the Act of Accession contains no transitional provisions with regard to the application of Article 48 of the EC Treaty or Article 7(1) of Regulation 1612/68, those provisions must be *406 regarded as being immediately applicable and binding on Austria from the date of its accession namely 1 January 1995. [FN52]

FN52 Case C-122/96, Saldanha and Another v. Hiross Holding AG: [1997] E.C.R. I-5325, para. [14] of the judgment. A143 Thus, any act or omission by Austria taking place after the date of accession falls under the scope of application ratione temporis of the prohibition of direct or indirect discrimination against migrant workers on grounds of nationality with regard to conditions of work or employment. A144 The question is thus whether in taking any decision on comparability the receiving Member State must take into account all periods of employment independently of whether they have been completed before accession. The answer seems clear. Discrimination against nationals of other Member States is prohibited, in the absence of transitional provisions, with immediate effect from the date of accession to the European Union. Previous periods of employment will necessarily have been completed before accession. In the absence of transitional provisions, those periods of employment must therefore necessarily be taken into account. A145 An analogy can be made with the principle of equal pay for men and women for work of equal value. If--to take an extreme example--men in a particular Member State received an annual increment to take account of their experience and seniority, while women received no such increment, then where (in the absence of transitional provisions) that Member State is required, on accession to the European Union, to give effect to the principle of equal pay, it is obvious that women would be entitled to have account taken of periods of employment completed before accession. It could not sensibly be suggested that, where a man had 10 years' seniority, women would have to wait another 10 years before achieving parity (by which time men would have acquired a further 10 years' seniority). The effect would be to perpetuate discrimination indefinitely. Exactly the same argument applies in the present case to discrimination on grounds of nationality in respect of periods of employment completed in other Member States. A146 Parallels exist also with regard to the recognition of diplomas. The Court in its case law [FN53] and the Community legislature [FN54] have never made the host Member State's obligations with regard to recognition dependent on whether diplomas were acquired after accession of the Member State issuing the diploma or after entry into force of the Community treaties. FN53 Implicit for example in Case C-340/89, Vlassopoulou v. Ministerium für Justiz, Bundes- und Europaangelegenheiten Baden-Wüttemberg: [1991] E.C.R. I-2357; [1993] 2 C.M.L.R. 221. FN54 See, for example, Council Directive 89/48 on a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three years' duration, [1989] O.J. L19/16. A147 A different finding would put migrant workers who want to work in a "new Member State" or to leave that State in order to work in an "old *407 Member

State" at an illogical disadvantage compared to workers moving within the area composed of the "old Member States". A148 That result is not affected by judgments such as Case C-321/97, Andersson v. Sweden [FN55] or Case C-171/91, Tsiotras v Landeshauptstadt Stuttgart. [FN56] In Andersson two former employees of a Swedish undertaking which was declared insolvent before the accession of Sweden to the European Union tried to rely on Council Directive 80/987 on the approximation of laws of the Member States relating to the protection of employees in the event of the insolvency of their employer in combination with the principles established in Joined Cases C 6 & 9/90, Francovich and Others v. Italy. [FN57] In Tsiotras a Greek national who before his country's accession to the Community had worked in Germany, but who on the date of accession was unemployed, who remained afterwards unemployed and for whom it was objectively impossible to find employment tried to rely against German on the freedom of movement for workers. In both cases the Court refused to draw legal conclusions from facts which had occurred before the accession of the respective Member States. FN55 [1999] E.C.R. I-3551; [2000] 2 C.M.L.R. 191. FN56 [1993] E.C.R. I-2925. FN57 [1991] E.C.R. I-5357; [1993] 2 C.M.L.R. 66. A149 In both judgments however the rationale was that Community law rights cannot be acquired before accession and as a consequence cannot be recognised after accession when the conditions for their acquisition of existence are no longer in place. The present case is different since it does not concern recognition of Community law rights allegedly acquired before accession but discriminatory treatment of migrant workers with regard to their current status which itself is the consequence of past events governed by the laws of their respective Member States of origin. A150 It follows that, where the Austrian authorities take decisions on the recognition of previous periods of employment, all such periods have to be taken into account, even those completed before the date of accession. A151 I do not consider that a different result can be reached with regard to Austrian workers having completed relevant periods of employment in other Member States. When such a worker returns to his home country and requests after the date of Austria's accession recognition of previous periods of employment completed in other Member States he must be treated in the same way as any other person enjoying the rights and liberties guaranteed by the EC Treaty. [FN58] FN58 Compare Care C-107/94, Asscher v. Staatssecretaris Van Financien: [1996] E.C.R. I-3089; [1996] 3 C.M.L.R. 61, para. [32] of the judgment. A152 I accordingly conclude that periods completed in institutions in other

Member States comparable to the Austrian institutions enumerated in paragraph 26(2) of the VBG must be taken into account without any temporal limitation; the periods to be taken into account *408 therefore include any such periods completed before the accession of Austria to the European Union.

Conclusion A153 The substantive questions referred by the Oberster Gerichtshof, Austria, should therefore in my opinion be answered as follows: (1) Rules of a Member State on the taking into account of previous periods of employment for the determination of contractual teachers' and teaching assistants' pay infringe Article 48 of the EC Treaty (now Article 39 EC) and Article 7(1) of Regulation 1612/68 where more onerous requirements are imposed with regard to periods completed in other Member States than with regard to periods completed in comparable institutions in that Member State. (2) Where a Member State is required to take into account periods completed in certain institutions in other Member States, those periods must be taken into account without any temporal limitation; the periods to be taken into account therefore include any such periods completed before the accession of a Member State to the European Union. JUDGMENT 1 By order of 30 April 1998, received by the Court on 20 May 1998, the Oberster Gerichtshof (Supreme Court) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) three question on the interpretation of Article 48 of the EC Treaty (now, after amendment, Article 39 EC) and Article 177 of that Treaty and Article 7 of Council Regulation 1612/68 on freedom of movement for workers within the Community [FN59] hereinafter "the Regulation"). FN59 [1968] O.J. Spec. Ed. 475. 2 Those questions were raised in proceedings between the Österreichischer Gewerkschaftsbund, Gewerkschaft öffentlicher Dienst (hereinafter "the Gewerkschaftsbund") and Republik Österreich (hereinafter "Austria") concerning the compatibility with Article 48 of the Treaty and Article 7 of the Regulation of the rules contained in the Vertragsbedienstetengesetz 1948 (Federal Law on Contractual Public Servants of 1948, hereinafter "the VBG") for the determination of certain teachers' pay. The effect of those rules is that previous periods of employment spent in Austria are treated differently from those spent in other Member States for the purpose of determining the pay of contractual teachers and teaching assistants. The Community legislation 3 Article 7(1) and (4) of the Regulation provides:

1. A worker who is a national of a Member State may not, in the territory *409 of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and should he become unemployed, reinstatement or re-employment; ... 4. Any clause of a collective or individual agreement or of any other collective regulation concering eligibility for employment, employment, remuneration and other conditions of work or dismissal shall be null and void in so far as it lays down or authorises discriminatory conditions in respect of workers who are nationals of the other Member States. The national legislation 4 In Austria there are two categories of personnel working for federal public authorities. The first consists of civil servants (Beamte), appointed by administrative act, not under contract, whose employment is in principle guaranteed for life. Their status is determined by specific laws. The second category, with which the present case is concerned, consists of contractual employees of the public administration, engaged on the basis of a private law employment contract. Their status is governed by the VBG. 5 Under paragraph 1(1) the VBG applies to all staff engaged by the Federal State under a private law employment contract. The first part of the VBG contains, in paragraphs 8a to 26, general rules on the remuneration of such staff. 6 Under paragraph 37(1) of the VBG, contractual teachers, that is to say contractual staff engaged for educational purposes in teaching or educational establishments, boarding schools, institutions for the blind or for deaf mutes or other comparable establishments also fall within the scope ratione personae of that law. According to paragraph 51(1) of the VBG the same is true of contractual teaching assistants. 7 Section I of the VBG sets out in paragraph 11 the monthly remuneration of a full-time contractual employee on salary scale I which has a total of 21 steps. Under paragraph 19(1) of the VBG, a contractual employee is promoted every two years to the step immediately above the one he holds. 8 The reference date, which is the relevant date for advancement, must be determined in accordance with paragraph 26 of the VBG; the version in force at the material time provides: 1. The advancement date is to be ascertained by adding in before the date of engagement--excluding periods before the eighteenth birthday and having regard to the limiting provisions in subparagraphs 4 to 8: 1. the periods specified in subparagraph 2, in full, 2. the periods specified in subparagraph 2(1)(a) and (b) and 2(4)(e) and (f), if they have been completed to less than half the extent prescribed for full-time employees, to the extent of one half,

3. other periods, (a) which fulfil the requirements of subparagraph 3, in full, (b) which do not fulfil the requirements of subparagraph 3, if they do not exceed three years in total, to the extent of one half. *410 2. The periods to be credited under subparagraph 1(1) are: 1. the time spent in employment of at least half the extent prescribed for full-time employees (a) in the service of a regional or local authority in Austria or (b) as a teacher (aa) in a public school, university or college in Austria or (bb) in the Academy of Visual Arts or (cc) in a publicly recognised private school in Austria; ... 4. the time ... (e) of activity or training with a regional or local authority in Austria, in so far as the promotional measures of employment policy of the Arbeitsmarktförderungsgesetz (Employment Market Promotion Law) BGBl. No 31/1969 were applicable thereto and the period was spent in employment of at least half the extent prescribed for full-time employees, (f) in employment of at least half the extent prescribed for full-time employees in an employment relationship entered into within the scope of the legal capacity of an Austrian university or college, the Academy of Visual Arts, the Academy of Science, the Austrian National Library or another scientific institution in accordance with the Forschungsorganisationsgesetz (Law on Organisation of Research BGBl. No. 341/1981), or a Federal museum; 3. Periods in accordance with subparagraph 1(3) in which a contractual public servant has exercised an activity or carried on a course of study may in the public interest, with the consent of the Federal Chancellor, be taken into account in full if the activity or course of study is of special importance for the successful deployment of the contractual public servant. Such periods are, however, to be taken into account in full without the consent of the Federal Chancellor, 1. if they have already been taken into account in full in the immediately preceding Federal service relationship in accordance with the first sentence or with a similar provision of other legislation, and 2. the contractual public servant is still exercising the relevant deployment at the start of the new service relationship. ... 9 Paragraph 26 of the VBG had been subject to an amendment published in the BGBl. No 297/1995 with effect from 1 May 1995. Before then, under paragraph 26(1)(a) the periods specified in subparagraph 2 (which remained unamended) were credited in full and under paragraph 26(1)(b) the other periods were credited to the extent of one half, and subparagraph 3, which otherwise also had the same wording, referred to subparagraph 1(b). 10 Paragraph 54(2) to (4) of the Arbeits- und Sozialgerichtsgesetz (Law on Labour and Social Courts, hereinafter "the ASGG") provides: (2) Employers' and employees' bodies which are capable of entering into

collective agreements (Paragraphs 4-7 ArbVG) may, within their scope of activity, bring an application before the Oberster Gerichtshof against an employees' or employers' body which is capable of entering into *411 collective agreements for a declaration that rights or legal relationships which concern a factual situation independent of any particular named person exist or do not exist. The application must concern a point of substantive law in the field of employment law disputes within the meaning of Paragraph 50 of the ASGG, which is of importance for at least three employers or employees. (3) The application shall be served on the respondent designated by the applicant; the respondent shall submit its observations within four weeks. During that time other employers' and employees' bodies which are capable of entering into collective agreements may, within their scope of activity, submit their observations on the application. (4) The Oberster Gerichtshof shall decide on the application, sitting as an ordinary chamber, (Paragraph 11(1)) on the basis of the facts stated therein. The decision shall be served on all the bodies which are capable of entering into collective agreements involved in the proceedings. The main proceedings and the questions referred for a preliminary ruling 11 The applicant in the main proceedings, the Gewerkschaftsbund, is a union representing, inter alia, public sector employees. 12 The respondent in the main proceedings is Austria, as the employer of contractual teachers and teaching assistants. 13 By letter of 13 December 1996, the State Secretary for the Public Service rejected an application by the Gewerkschafatsbund asking for account to be taken, pursuant to paragraph 26 of the VBG, of periods of previous employment spent by contractual teachers or teaching assistants in other Member States. 14 To establish the reference date for the purposes of determining advancement and hence the pay scale of a contractual employee of the public administration, paragraph 26(1) and (2) of the VBG provides that previous periods of employment spent in the service of an Austrian public authority or in public or State-recognised private teaching establishments in Austria are automatically deemed to precede in full the date of engagement of the person concerned as a contractual employee. 15 On the other hand, other periods of employment, that is to say those spent in another Member State or in an institution in Austria which is not covered by paragraph 26(2) of the VBG are taken into account in full only with the approval of the competent authorities. That approval is only given if the periods in question are "of special importance for the successful deployment" of the contractual employee. When they do not meet those conditions they are taken into account as regards only half of their duration if the employment relationship commenced on or before 30 April 1995 (according to the version of Article 26(3) of the VBG in force before 1 May 1995). If it commenced at a later date, they are taken into account as regards half of their duration provided that they do not exceed a total of three years (according to the version of paragraph 26(3) of the VBG in force at

the material time). 16 *412 By application of 14 July 1997, the Gewerkschaftsbund submitted an application, on the basis of paragraph 54(2) of the ASGG, concerning the position of certain categories of contractual teachers and teaching assistants employed by the respondent in the main proceedings. It claimed that the Oberster Gerichtshof should declare that those employees are entitled from the date of their classification in the relevant pay scale, or from 1 January 1994 if later, to have account taken of all periods of employment spent in States which now belong to the European Union or the European Economic Area in teaching posts in public or State-recognised schools, colleges and universities or in the civil service or for other public-law entities which must be regarded as equivalent to Austrian local authorities. Such periods of activity should be taken into account in accordance with the principles laid down in paragraph 26 of the VBG applicable to previous periods of service for Austrian local authorities or in teaching posts in Austria. 17 Austria contended, however, that the rule in paragraph 26 of the VBG simply took account of the different forms of employment in the public service of the various Member States, that it was, therefore, consistent with the principle of proportionality and, moreover necessary in order to maintain the special regime applied in the public administration as regards promotion and pay. 18 The Oberster Gerichtshof considers that the procedure provided for in paragraph 54(2) to (4) of the ASGG does not correspond to the conventional view of litigation. It is rather, in its view, a matter of giving an advisory opinion on the law with the appearance of a judicial decision. 19 As regards the principle of freedom of movement the Oberster Gerichtshof considers that the Court has never ruled in a comparable case since, under paragraph 26 of the VBG, previous periods of employment spent in other Member States are not automatically ignored but can be taken into account in full with the agreement of the competent authorities. 20 Taking the view that the case turns on the interpretation of Community legislation, the Oberster Gerichtshof decided to stay proceedings and refer the following questions to the Court for a preliminary ruling: 1. May a preliminary ruling of the Court of Justice of the European Communities under Article 177 of the EC Treaty (now Article 234 EC) be sought in proceedings in which the Oberster Gerichtshof has to decide, as a court of first and final instance, on the basis of a factual situation independent of particular named persons, alleged by one party and presumed to be true, on an application by that party for a declaration that rights or legal relationships in the field of employment law, which according to the submissions of that party, which are presumed to be true, are of importance for at least three employers or employees, do or do not exist? If Question 1 is answered in the affirmative, 2. Does Article 48 of the EC Treaty or any other provision of Community *413 law, in particular Article 7 of Council Regulation 1612/68, preclude the use of different methods for determining the qualifying date for advancement purposes, which affects the classification of contractual teachers and teaching assistants

employed by the defendant within the relevant pay scale, in that, on the one hand, periods of employment completed under a contract of employment with an Austrian local authority or in a teaching post with an Austrian public school, university or establishment of higher education, or with the Academy of Visual Arts or in a State-approved private school in Austria are--provided that the activity in question amount to at least half of that laid down for full-time employees--taken into account in their entirety as of the date of recruitment whereas, on the other hand, periods of employment completed with comparable establishments of other Member States are taken into account in their entirety only with the approval of the Minister for Finance and when they are of special importance for the successful deployment of the contractual employee, failing which they are taken into account as regards only half of their duration if the employment relationship commenced on or before 30 April 1995 or, if it commenced at a later date, as regards only half of their duration, but only in so far as the periods in question do not exceed a total of three years? If Questions 1 and 2 are answered in the affirmative, 3. Are periods completed in institutions in Member States comparable to the said institutions to be taken into account without temporal limitation? Admissibility 21 By its first question, the national court wishes to know essentially whether, in exercising the functions provided for by paragraph 54(2) to (5) of the ASGG, it constitutes a court or tribunal within the meaning of Article 177 of the Treaty and whether it is therefore admissible for it to refer a question for a preliminary ruling. 22 In that regard the Oberster Gerichtshof refers, inter alia, to the judgments in Case 104/79, Foglia v. Novello and Case 244/80, Foglia v. Novello, [FN60] pointing out that Article 177 of the Treaty does not give the Court the task of delivering opinions on general or hypothetical questions but merely confers jurisdiction on it to answer questions which correspond to an objective requirement for an effective decision in a specific legal dispute. FN60 [1980] E.C.R. 745; [1981] 1 C.M.L.R. 45; and [1981] E.C.R. 3045; [1982] 1 C.M.L.R. 585. 23 It is to be noted at the outset that no one has claimed that the dispute in the main proceedings is hypothetical or contrived. The reservations about the admissibility of the question referred for a ruling derive from the particular nature of the proceedings before the national court under paragraph 54(2) to (5) of the ASGG. 24 In that regard, it is settled case law that in order to determine whether a body making a reference is a court or tribunal for the purposes of Article 177 of the Treaty, which is a question governed by Community law alone, the Court takes account of a number of factors, such as whether the body is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its *414 procedure is, inter partes, whether it applies rules of law and whether it is

independent. [FN61] FN61 See, in particular, Case 61/65, Vaassen-Göbbels v. Management of the Beambtenfonds voor het Mijnbedrijf: [1966] E.C.R. 261; [1966] C.M.L.R. 508; Case C-111/94, Job Centre Coop. arl: [1995] E.C.R. I-3361, para. [9]; Case C-54/96, Dorsch Consult Ingenieurgesellschaft mbH v. Bundesbaugesellschaft Berlin mbH: [1997] E.C.R. I-4961; [1998] 2 C.M.L.R. 237, para. [23]; and Joined Cases C 110-147/98, Gabalfrisa SL and Others v. Agencis Estatal de Administracion Tributaria (Aeat): [2000] E.C.R. I-1577, para. [33]. 25 Moreover, a national court may refer a question to the Court only if there is a case pending before it and if it is called upon to give judgment in proceedings intended to lead to a decision of a judicial nature. [FN62] FN62 See, inter alia, Case C-134/97, Victoria Film A/s v. Riksskatteverket: [1998] E.C.R. I-7023; [1999] 1 C.M.L.R. 279, para. [14]. 26 As the Advocate General observed at paragraph A37 of his Opinion, it is common ground that, from an institutional point of view, the Oberster Gerichtshof fulfils all the criteria to be a court or tribunal within the meaning of Article 177 of the Treaty. It is established by law, it is independent and exercises its activities on a permanent basis. 27 As regards the characteristics of the procedure provided for by paragraph 54 of the ASGG, it is to be noted, first, that most elements of that procedure are typical of judicial proceedings. In particular, the Oberster Gerichtshof's jurisdiction under paragraph 54(2) to (5) of the ASGG is compulsory in the sense that either party may bring a case before the Oberster Gerichtshof regardless of the objections of the other. The procedure is governed by law and it is inter partes, the parties determining the scope of the proceedings. 28 Next, it appears from the court file that the procedure does not entail the referral of purely hypothetical questions to the Oberster Gerichtshof: paragraph 54(2) of the ASGG requires that, for the purposes of seeking the opinion of the Oberster Gerichtshof under that paragraph, the application submitted by the employers' or employees' organisation must concern a point of substantive law of importance for at least three employers or employees. Moreover, the Oberster Gerichtshof has held that, in that procedure, employers' and employees' bodies should submit to it only truly typical factual situations of general importance and that it has no jurisdiction to answer in abstracto legal questions of a general nature unrelated to sufficiently specific factual situations. 29 Finally, although the procedure at issue also has features which are less characteristic of judicial proceedings than those mentioned in the two previous paragraphs, that is to say, the fact that the Oberster Gerichtshof does not rule on disputes in a specific case involving identified persons, that it must base its legal assessment on the facts alleged by the applicant without further examination, that the decision is declaratory in nature and the right to bring proceedings is exercised collectively, the procedure is nonetheless intended to result in a

decision that is judicial in character. 30 *415 In particular, the final decision is binding on the parties who cannot make a second application for a declaration relating to the same factual situation and raising the same legal questions. Moreover, the decision is intended to have persuasive authority for parallel proceedings concerning individual employers and employees. Thus, according to paragraph 54(5) of the ASGG, the running of time for bringing parallel proceedings is suspended with regard to the rights and legal relationships forming the subject of the proceedings under paragraph 54(2) of the ASGG. 31 It follows from the foregoing considerations that the question referred for a preliminary ruling is admissible. 32 Accordingly, the answer to the first question must be that, in exercising functions such as those provided for by paragraph 54(2) to (5) of the ASGG, the Oberster Gerichtshof constitutes a court or tribunal within the meaning of Article 177 of the Treaty. Question 2 33 By its second question, the national court is essentially asking whether Article 48 of the Treaty or Article 7(1) and (4) of the Regulation preclude a national rule such as paragraph 26 of the VBG concerning the account to be taken of previous periods of service for the purposes of determining the pay of contractual teachers and teaching assistants, under which the requirements which apply to periods spent in other Member States are stricter than those applicable to periods spent in comparable institutions of the Member State concerned. 34 In order to determine the advancement and hence the pay scale of a contractual employee of the public administration, paragraph 26 of the VBG provides for previous periods of employment in the service of an Austrian public authority or a teaching establishment in Austria to be taken into account. However, periods of employment spent in a Member State other than Austria are taken into account in full only where it is in the public interest to do so and with the consent of the competent authorities. 35 It is first necessary to consider the argument of Austria that contractual teachers and teaching assistants fall within the definition of "employment in the public service" within the meaning of Article 48(4) of the Treaty. 36 The derogation in Article 48(4) of the Treaty, according to which the provisions on freedom of movement for workers are not to apply to "employment in the public service", concerns only access for nationals of other Member States to certain posts in the civil service. [FN63] It is settled *416 case law that it does not apply to the activities of teachers and teaching assistants. [FN64] FN63 Case C-248/96, Grahame and Another v. Bestuur Van de Nieuwe Algemene Bedrijfsvereniging: [1997] E.C.R. I-6407, para. [32], and Case C-15/96, Schöning-Kougebetopoulou v. Freie und Hansestadt Hamburg: [1998] E.C.R. I-47, para. [13].

FN64 Case 66/85, Lawrie-Blum v. Land Baden-Wurttemberg (66/85), 3 July 1986: [1986] E.C.R. 2121, [1987] 3 C.M.L.R. 403, para. [28]; Case C-4/91, Bleis v. National Minister of Education: [1991] E.C.R. I-5627, [1994] 1 C.M.L.R. 793, para. [7]; and Case C-473/93, EC Commission v. Luxembourg: [1996] I E.C.R. 3207, [1996] 3 C.M.L.R. 981, para. [33]. 37 In any event, the case in the main proceedings does not concern the rules for access to "employment in the public service", but simply the determination of the seniority of contractual teachers or teaching assistants for the purposes of calculating their pay. Once a Member State has admitted workers who are nationals of other Member States into its public administration, Article 48(4) of the Treaty cannot justify discriminatory measures against them with regard to remuneration or other conditions of employment. [FN65] FN65 See, inter alia, Case 152/73, Sotgiu v. Deutsche Bundespost: [1974] E.C.R. 153, para. [4]. 38 It follows that Article 48(4) does not apply to the facts of the case in the main proceedings. It must therefore be considered whether a rule such as paragraph 26 of the VBG might breach the principle of non-discrimination laid down in Article 48 of the Treaty and Article 7(1) and (4) of the Regulation. 39 According to the settled case law of the Court, Article 48 of the Treaty prohibits not only overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other distinguishing criteria, lead in fact to the same result. [FN66] FN66 See, inter alia, Case C-419/92, Scholz v. Opera Universitaria di Cagliari and Another (C-419/92), 23 February 1994: [1994] E.C.R. I-505; [1994] 1 C.M.L.R. 873, para. [7], and Case C-237/94, O'Flynn v. Adjudication Officer: [1996] E.C.R. I-2617; [1996] 3 C.M.L.R. 103, para. [17]. 40 A provision of national law must be regarded as indirectly discriminatory if it is intrinsically liable to affect migrant workers more than national workers and there is a consequent risk that it will place the former at a particular disadvantage and it it is not justified by objective considerations independent of the nationality of the workers concerned, and proportionate to the legitimate aim pursued by that law. [FN67] FN67 See, O'Flynn, cited above, paras [19] & [20]. 41 The Court has already held that national rules under which previous periods of employment in the public service of another Member State may not be taken into consideration constituted unjustified indirect discrimination and contravened Article 48(2) of the Treaty. [FN68] FN68 See Scholz, cited above, paragraph 11, Schöning-Kougebetopoulou, cited

above, para. [23]; and Case C-187/96, EC Commission v. Greece: [1998] E.C.R. I-1095, para. [21]. 42 It is true that, unlike the national rules at issue in the cases cited in the last paragraph, paragraph 26 of the VBG does not preclude account being taken of previous periods of employment spent in other Member States. 43 However, such periods are taken into account in full only if the *417 public interest requires it and with the consent of the competent authorities. That consent is granted only if those periods are "of special importance for the successful deployment" of the contractual teacher or teaching assistant. No such condition is imposed in order for periods of employment spent in Austria to be taken into account. 44 It follows that paragraph 26 of the VBG imposes stricter conditions in respect of periods of employment spent in a Member State other than Austria, to the detriment of migrant workers who have spent part of their career in another Member State. That Paragraph is liable, therefore, to breach the principle of non-discrimination enshrined in Article 48 of the Treaty and Article 7(1) and (4) of the Regulation. 45 The Austrian Government, however, contends that the restrictions on freedom of movement are justified by overriding reasons of public interest and are consistent with the principle of proportionality. 46 In that regard, it argues that the principle of homogeneity laid down in the second sentence of paragraph 21(1) of the Austrian constitution ensures the free movement of public service employees on Austrian territory. That freedom of movement would be impeded if transfer from one service to another were made financially unattractive. Moreover, the pay scheme for the staff concerned was intended to reward their loyalty. However, the same scheme could not be extended to cover periods of employment spent in other Member States since, at the current stage of the integration process, the public services of the Member States are not interconnected to the same extent as Austrian local authorities and have very different characteristics. 47 It must first be observed that the objective of staff mobility within the Austrian public administration does not require a discriminatory restriction on the mobility of migrant workers. 48 Next, the differences between the public services in Austria and those in the other Member States cannot justify a difference in the conditions under which previous periods of service are taken into account. In particular, such differences cannot explain why the periods spent in a Member State other than Austria have to be of special importance for the deployment of the person concerned, a condition which is not imposed in respect of periods of employment spent in Austria. 49 Finally, as regards the argument concerning the objective of rewarding the loyalty of the staff concerned, given the large number of employers covered by paragraph 26(2) of the VBG, the pay scheme is intended to allow the greatest possible mobility within a group of legally distinct employers and not to reward the loyalty of an employee to a particular employer.

50 It follows from the foregoing that paragraph 26 of the VBG is not in any event proportionate to the objective the Austrian Government claims it is intended to achieve. 51 The answer to the second question must therefore be that Article 48 of the EC Treaty and Article 7(1) and (4) of the Regulation preclude a *418 national rule such as paragraph 26 of the VBG concerning the account to be taken of previous periods of service for the purposes of determining the pay of contractual teachers and teaching assistants, where the requirements which apply to periods spent in other Member States are stricter than those applicable to periods spent in comparable institutions of the Member State concerned. Question 3 52 By its third question, the national court is essentially asking whether, a Member State which is obliged to take into account, in calculating the pay of contractual teachers and teaching assistants, periods of employment in certain institutions in other Member States comparable to the Austrian institutions listed in paragraph 26(2) of the VBG, must take such periods into account without temporal limitation. 53 The purpose of the question is to determine whether periods of employment spent by such staff before the accession of Austria to the European Union must be taken into account. 54 It is important to note that the case in the main proceedings does not concern the recognition of rights under Community law allegedly acquired before the accession of Austria, but concerns the current discriminatory treatment of migrant workers. 55 The Act concerning the conditions of accession of Austria, Finland and Sweden and the adjustments to the Treaties on which the European Union is founded, [FN69] contains no transitional provisions concerning the application of Article 48 of the Treaty and Article 7(1) of the Regulation. Those provisions must be considered to be immediately applicable and binding as regards Austria as of the date of its accession to the European Union, that is to say 1 January 1995. Since that date, they can be relied on by migrant workers from the Member States. In the absence of transitional provisions, previous periods of employment must necessarily be taken into account. FN69 [1994] O.J. C241/21, and [1995] O.J. L1/1. 56 The answer to the third question must therefore be that where a Member State is obliged to take into account, in calculating the pay of contractual teachers and teaching assistants, periods of employment in certain institutions in other Member States comparable to the Austrian institutions listed in paragraph 26(2) of the VBG, such periods must be taken into account without any temporal limitation. Costs

57 The costs incurred by the Austrian Government and by the Commission, 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. R1 Order *419 On those grounds, THE COURT (Fifth CHAMBER), in answer to the questions referred to it by the Oberster Gerichtshof by order of 30 April 1998, HEREBY RULES: 1. In exercising functions such as those provided for by paragraph 54(2) to (5) of the Arbeits- und Sozialgerichtsgesetz (Law on Labour and Social Courts), the Oberster Gerichtshof constitutes a court or tribunal within the meaning of Article 177 of the EC Treaty (now Article 234 EC). 2. Article 48 of the EC Treaty (now, after amendment, Article 39 EC) and Article 7(1) and (4) of Regulation 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community preclude a national rule such as paragraph 26 of the Vertragsbedienstetengesetz 1948 (Federal Law on Contractual Public Servants of 1948) concerning the account to be taken of previous periods of service for the purposes of determining the pay of contractual teachers and teaching assistants, where the requirements which apply to periods spent in other Member States are stricter than those applicable to periods spent in comparable institutions of the Member State concerned. 3. Where a Member State is obliged to take into account, in calculating the pay of contractual teachers and teaching assistants, periods of employment in certain institutions in other Member States comparable to the Austrian institutions listed in paragraph 26(2) of the Vertragsbedienstetengesetz 1948, such periods must be taken into account without any temporal limitation.

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