Court of Justice 12-07-1973 ECLI:EU:C:1973:92

Facts and procedure

Since 24 October 1950 Mr Willy Hakenberg, a French national resident in France, has been acting in the German Federal Republic as a representative for several French industrial undertakings which have their registered offices in France, the last of which was ‘Anciens Etablissements D. Angenieux fils aîné’ at St. Etienne.

Mr Hakenberg's activities consist, in particular, in visiting customers among German manufacturers and wholesalers

in order to sell them mechanical and metal parts for cycles and motor-cycles. For this purpose he tours Germany canvassing business for almost nine months in the year during which time he has no fixed abode.

He lives in a caravan towed by a motor vehicle registered in France.

In Germany Mr Hakenberg has at his disposal a post box as well as a business reception service in Wuppertal-Barmen.

He returns periodically to France for about three months in the year, outside the time he spends canvassing business, in order to make contact with the undertakings he represents.

Mr Hakenberg is paid entirely by commission and does not carry out any commercial transactions on his own behalf.

He is not registered either in France or in Germany at a ‘Registre du commerce’ or a registry of commercial agents.

In 1964 Mr Hakenberg applied to be made subject to the French general social security scheme with retroactive effect from 1950.

The ‘Commission de recours gracieux de la Caisse primaire centrale de sécurité sociale’ for the Paris area, by a decision dated 3 November 1964, refused to allow the application for the dual reason that Mr Hakenberg was not a wage-earner and that he carried on his work in Germany.

Mr Hakenberg contested this decision on 8 January 1965 before the ‘Commission de première instance du contentieux de la sécurité sociale et de la mutualité sociale agricole de Paris’.

By judgment dated 16 June 1965 the Commission decided that Mr Hakenberg must be made subject to the general social security scheme.

The Caisse primaire lodged an appeal against this decision on 26 July 1965.

The Cour d'appel of Paris, by judgments dated 22 February and 18 April 1967, ordered 21 firms, who had been or were then employers of Mr Hakenberg, to be joined as parties to the action, and then by a judgment dated 15 November 1967 appointed an expert to draw up a report on the nature of Mr Hakenberg's activities and of the conditions of his employment.

In view of that report, the Cour d'Appel of Paris, by judgment dated 17 February 1971, held that Mr Hakenberg must be made subject to the French general social security scheme under the provisions of national law which provide for the affiliation of travellers and commercial representatives and in view of the second sub-paragraph of Article 13 (1) (c) of Regulation No 3 of the Council dated 25 September 1968 concerning social security for migrant workers (OJ p. 561) as amended by Regulation No 24/64 of the Council dated 10 March 1964 (OJ p. 746).

The employers of Mr Hakenberg and the Caisse primaire appealed against this judgment to the Cour de Cassation.

By a judgment dated 1 February 1973 the ‘chambre sociale’ of the Cour de Cassation decided to suspend judgment

until the Court of Justice shall have given a ruling on the meaning to be assigned, for the purposes of determining the institution for affiliation to social security,

1. to the expression ‘employed’ in Article 12 of Regulation No 3 and until it shall have decided

   1. whether a representative who for nine months in the year tours a Member State canvassing business, but whose activities extend into the territory of another Member State, in which are situated the registered offices of the undertakings which employ him and with which he returns to make contact outside the time he spends canvassing business, must be regarded as pursuing his activities in the territory of such Member States or solely in the territory of the first mentioned State;

   2. whether the fact that a person is principally employed in the territory of a Member State is sufficient to enable Article 12 to apply;

2. to the expression ‘duration of employment of 12 months’ in Article 13 (a) of the said Regulation No 3 before it was amended by Regulation 24/64 of 10 March 1964 and until it shall have decided whether a worker who has been employed for several years in the territory of a Member State by an undertaking having its registered office in the territory of another Member State, for successive periods of 9 months, alternating with periods of 3 months in the latter state, must be regarded as falling within the scope of the said Article 13 (a);

3. to the provisions of Article 1 (h) of the said Regulation No 3 under which the term ‘permanent residence’ means ‘the place where a person habitually resides’ and until it shall have decided whether it is necessary to regard as ‘permanent residence’ any place where a person habitually resides within the frontiers of a Member State, even when habitual residence is not confined to a fixed place and consists of business canvassing tours made by caravan or whether habitual residence implies a certain degree of confinement to a given place and whether, as a result, a worker only has a permanent residence in the Member State in which he has a definite address to which he returns in the intervals between his tours and in which the registered offices of the undertakings which employ him are situated.

The judgment of the Cour de Cassation was registered at the Court Registry on 21 February 1973.

In accordance with the provisions of Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were filed by the Commission of the European Communities on 14 May 1973, by the ‘Caisse primaire centrale d'assurance maladie de la region parisienne’ on 18 May 1973 by the ‘Anciens Etablissements D. Angenieux’ and 15 other companies on 21 May, by Mr Hakenberg on 21 and 22 May and by the Government of the French Republic on 24 May.

After hearing the report of the Judge-Rapporteur and the Advocate-General, the Court decided to open the oral procedure without any preparatory inquiry.

The oral observations of ‘Anciens Etablissements D. Angenieux’ and 15 other companies, (the plaintiffs in the main action), Mr Hakenberg (the defendant in the main action), and of the Commission were heard in open court on 4 July 1973.

In the proceedings before the Court, ‘Anciens Etablissements D. Angenieux’ and 15 other companies, the plaintiffs in the main action, were represented by Me Arnaud Lyon-Caen, the ‘Caisse primaire d'assurance maladie de la region parisienne’ by Me Jean-Paul Desache, Mr Hakenberg by Me Jean Landousy, the Government of the French Republic by the Ambassador of France at Luxembourg and the Commission by its legal adviser Italo Telchini, assisted by Marie-Jose Jonczy, a member of its legal service.

Observations submitted to the Court

The written and oral observations submitted to the Court may be summarised as follows:

‘Anciens Etablissements D. Angenieux fils ainé’ and 15 other companies, the plaintiffs in the main action, stress the fact that the first two questions referred by the Cour de Cassation relate to the situation existing before Regulation No 3 was amended by Regulation No 24/64, whereas the third question relates to Regulation No 3 as amended.

1. As regards the first question, it should be pointed out first of all that Regulation No 3 as is stated in Article 4, is of general application to all wage-earners or assimilated workers, and thus also to representatives governed by ‘statut’ required to travel in the territories of several Member States.

   Then it should be said that Regulation No 3, before it was amended in 1964, made no provision by means of an exception in respect of workers on temporary postings, for the case of a worker simultaneously employed in the territories of two Member States. The former Article 12 would lead to the joint application of the social welfare legislations of France and Germany. The previous decisions of the Court (judgment 92/63, Nonnenmacher, of 9 June 1964, Rec. 1964, p. 557; judgment 19/67, Van der Vecht, of 5 December 1967, Rec. 1967, p. 445) do not exclude the simultaneous application of different legislations, provided that it does not involve workers or their employers in an increase in charges which does not produce a corresponding addition to social welfare protection. Now, such would be the situation in this case if the legislations of France and Germany were jointly applied. It is therefore necessary to seek some criterion ascertaining which legislation is the only one to be applied. Now in this respect the only criterion conceivable is that of employment.

   As regards the interpretation to be given to the term ‘employed’ in Article 12 of Regulation No 3, there is no doubt that Mr Hakenberg must be regarded as ‘employed’ in the territory of the Federal Republic of Germany, inasmuch as, for the requirements of his work, he stays there for more than nine months in the year. It matters little, for the purposes of the application of Article 12 of Regulation No 3, whether the party concerned has a permanent residence in France, since the only question which arises is to know whether he is ‘employed’ in Germany. The decisive criterion adopted by Article 12, apart from any concept of permanent residence or permanent address, is the worker's physical presence at his place of work, whereas his permanent address or his permanent residence might be in the territory of another Member State. Mr Hakenberg's activities as a representative in German territory thus correspond with the situation mentioned in Article 12, even though these activities are extended into the territory of another Member State where the registered offices of his employers are situated.

   Moreover, the very idea of an ‘extension’ of activities into French territory implies that the activities of the person concerned do indeed take place in Germany where he must therefore be regarded as ‘employed’ within the meaning of Article 12 of Regulation No 3.

   In any event it is undeniable that Mr Hakenberg carries on his principal employment in the territory of the Federal Republic and this is sufficient for the purpose of ascertaining whether Article 12 applies, since he fulfils the other conditions which this requires.

2. Article 13 (a) of Regulation No 3, in its original version, involves a derogation from the general principle laid down by Article 12; it determines the scope and effect of this derogation and, like all exceptions, is not to be widely and improperly construed. It is obviously irrelevant to Mr Hakenberg's case since it concerns the worker who, while employed by an undertaking situated in the territory of a Member State, is posted temporarily by that undertaking to another State for a period not exceeding 12 months. Now, for decades Mr Hakenberg has pursued his activities as a representative in Germany for nine to ten months each year. Furthermore, it is not possible, except at the risk of violating the restrictive terms of the former paragraph (a) of Article 13, to admit that successive periods of nine months in each year in another Member State may be deemed to be a period of residence of 12 months, particularly since the text expressly provides that the said period of 12 months may only be renewed once at the most, and that with the consent of the competent authority of the latter State or the agency designated by it.

3. It is necessary to interpret Article 1 (h) of Regulation No 3 in order to assess the scope and purport of Article 13 (1) (c), as re-drawn by Regulation No 24/64. Mr Hakenberg cannot take advantage of the exception which this provision adds to the general principle laid down by Article 12, as he does not, within the meaning of Article 1 of Regulation No 3, have his permanent residence in France, but in Germany.

   It should be pointed out that, in the context of Regulation No 3, the idea of residence is not to be understood as a concept of national law, but is to be regarded as a criterion for solving a conflict of international law; it determines, inter alia, the national legislation applicable to a given situation of fact.

   The decisive factor, in this respect, is the finding that Mr Hakenberg more often than not resides in Germany, his periods of residence never being less than nine or ten months a year; the effective centre of his working activity is established in Germany. Hence the place where he habitually resides and, consequently, his permanent residence within the meaning of Article 1 of Regulation No 3 is indeed in Germany and not in France. It matters little in this respect that the person concerned does not reside in a fixed place in Germany.

4. To conclude, the answers to be given to the questions referred by the Cour de Cassation might be as follows:

   1. a representative who, owing to the exigencies of canvassing business, resides for nine months a year in a Member State, must be regarded as ‘employed’ in the territory of that State, within the meaning of Article 12 of Regulation No 3;

   2. a representative who has been employed for a large number of years, to the extent of nine months each year, in the territory of a Member State, cannot benefit from the exception provided by the former paragraph (a) of Article 13 of Regulation No 3 which lays down, for the purposes of the application of that exception, a maximum period of employment of 12 months;

   3. it is sufficient, in order that there should be ‘habitual residence’ within the meaning of Article 1 of Regulation No 3, that the person concerned should habitually reside in the territory of a Member State irrespective of the form his residence takes, i.e. whether it be fixed or not.

The observations of the ‘Caisse primaire centrale d'assurance maladie de la region parisienne’, the plaintiff in the main action, are essentially as follows:

1. In Article 12 of Regulation No 3 the expression ‘(workers) employed in the territory of one Member State’ stands in contrast to the expression ‘even if they permanently reside in the territory of another Member State’. Thus the place where the worker pursues his working activities on behalf of the undertaking which employs him, is decisive for the purposes of the application of Article 12. Although a business representative must periodically make contact with the undertaking he represents, he is obviously ‘employed’ in the territory of the State in which he pursues the activities appropriate to his professional standing. The very idea of an ‘extension of activities’ into the territory of the Member State in which the registered offices of the undertakings employing him are situated, of necessity implies that the activities of the representative are in the territory in which he is canvassing business and in which he must therefore be regarded as ‘employed’ within the meaning of Article 12 of Regulation No 3.

   This ‘extension’ of the representative's activity is not an ancillary employment; it forms part of his usual working activities and governs the manner in which they are carried out. The wording of Article 12, moreover, makes no reservations and does not insist upon exclusive employment; on any view, it is the principal activity which results in affiliation to the scheme and which defines the nature of such affiliation,

2. The interpretation of Article 13 (a) of Regulation No 3, in its original version, is governed, as regards the meaning of the term ‘duration of… employment… (of) … 12 months’, by the term ‘probable duration of their employment’ and by the necessity of obtaining the consent of the latter State for the duration of employment to be continued ‘for a further period of not more than 12 months’.

   These two references make it possible to define the area of application of the former paragraph (a) of Article 13: it concerns wage earners who are employed in the territory of a Member State other than that in which they are permanently resident and in which the establishment to which they are attached is situated, for a temporary initial period of 12 months which can be continued for a further period of not more than 12 months; on the other hand, it does not apply to a representative whose area of activity has for several years regularly and continuously been in a Member State other than that in which he is permanently resident and in which the registered office of the undertaking which employs him is situated, the activities of that undertaking in the territory of such State being of a permanent nature, even though he returns to his country of origin for three months in the year in order to contact the undertaking to which he is attached. In the case of such a representative one should not speak of the ‘probable duration of his employment’: his work normally consists of canvassing business in the territory of the Member State in which he is employed, that State being his usual area of activity; his interest and that of his employer is to maintain this activity for as long as possible in that area. Furthermore, such a representive does not need to seek permission every year, and in fact has never done so, for an extension which on any view could only be granted to him for a further period of not more than 12 months.

   Article 13 (a), as worded before it was amended by Regulation No 24/64, therefore would not apply to the situation of a representative whose area of potential customers is usually situated in the territory of a Member State other than that in which he is permanently resident and in which the registered office of the undertaking on which he depends is situated.

3. Under Article 1 (h) of Regulation No 3 the term ‘permanent residence’ means the place where a person habitually resides.

   A person who lives, dwells and works in a certain country for at least nine months in the year by definition habitually resides in that country. The question causes no difficulty where that person lives and works in a fixed place.

   Must a representative who is required by the nature of his work to travel about the country in which he is staying, be regarded for that reason alone as having no permanent residence? It should be noted that he is not permanently resident in his country of origin, since, as distinct from domicile, which is a legal concept, residence is a purely factual concept which depends on the de facto presence of the person concerned in a certain place. One cannot reside in a country while habitually living and working in another. It matters little whether in the country in which he canvasses business, he lives in a fixed abode, in a series of hotels or in a caravan belonging to him; in each case he is habitually residing in that country. The place where a person habitually resides does not consist merely of a fixed abode; that definition would apply to any manner of residence and especially to living in a caravan if this is permanent in nature and is related to the representative's work, if this is continuous in character.

   A representative, who habitually and for an indefinite time lives for at least nine months a year in a Member State in which he travels canvassing business, has his permanent residence in that state within the meaning of Article 1 (h) of Regulation No 3.

Mr Hakenberg, the defendant in the main action, observes that it follows from the previous decisions of the Court that travellers, representatives and local agents (‘V.R.P.’) are to be regarded as workers within the meaning of Regulation No 3. As such, they are subject either to the legislation of the State in which they permanently reside, if they carry on part of their activities there or are attached to several undertakings which have their registered offices in different States, or, in other cases, to the legislation of the Member State in which the registered office of the undertaking is situated. In the present case, all the employers are French undertakings, having their registered offices in France; these employers give instructions to their representative in France and he accounts to them there.

1. Mr Hakenberg's activities are of one kind only. The two aspects, i.e. the administrative and commercial, of the manner in which these activities are pursued are closely dependent upon each other: the activities are pursued in France as well as in Germany.

2. In view of the wider scope and effect of Article 13 (a) of Regulation No 3 before it was amended by Regulation No 24/64, one can quite properly regard a worker who is permanently resident in a Member State, and employed for successive annual periods of nine months (separated by periods of residence of three months in that State) in the territory of another Member State by a series of undertakings which have in the territory of the former State establishments to which he is normally attached, as coming within the area of application of that provision on the grounds that he had had a series of temporary postings.

3. Regulation No 3 seeks to avoid any unnecessary plurality or overlapping of charges and liabilities resulting from a simultaneous or alternative application of several legislations. With this in view, business representatives pursuing their activities in the territories of several Member States must be subject to the social security scheme of the country in which they are permanently resident. As for determining his own permanent residence, it should be pointed out that Mr Hakenberg stays alternately in France and Germany in accordance with the requirements of canvassing business and of making contact with his employers. However it is in France that he has his legal ‘domicile’, a secondary residence, his family connections, and France is where the administrative centre of his activities is situated and where he pays his taxes and fulfils his duties as a citizen.

The Government of the French Republic points out that the question of determining the legislation which applies to Mr Hakenberg was governed by two succeeding instruments: from 1950 to 1959 by Article 3 of the General Convention between France and the Federal Republic of Germany on social security and, from 1959 to 1964, by Articles 12 and 13 of Regulation No 3. For the purpose of seeking the criterion for determining the legislation to be applied, these two instruments, by adopting the criterion of employment, establish the principle of the application of the legislation operative in the place of employment. The two texts recognise only three exceptions to this general rule, which are to be strictly interpreted. In the case of occasional employment the legislation to be applied is that of the country in which the worker habitually resides and in which the undertaking to which he is normally attached is situated; the provisions of the Convention and of Regulation No 3 (Article 13 (a)), as they existed before 1964, referring to these circumstances, do not apply to the present case, since the occasional employment cannot be extended beyond a certain period and the undertakings to which Mr Hakenberg is attached are situated in France, whereas he himself is habitually employed nine months a year, every year, in Germany. The second exception, concerning workers with transport undertakings, and the third, which applies to wage-earners or assimilated workers employed in undertakings or establishments lying astride the common frontier of two countries, are irrelevant to the present case.

The legislation to be applied to Mr Hakenberg must therefore be determined according to the principle that the legislation applicable is that of the place of employment, as successively laid down by the Convention between France and Germany and Article 12 of Regulation No 3. Strict observance of this rule would lead to the application of German legislation for nine months and French legislation for three months, which would be contrary to the objectives both of the Convention and of the Regulation. This deficiency in the law was repaired, as from 1 April 1964, by Regulation No 24/64; the new Article 13 (1) (c) introduced by this Regulation, although not applicable to the present case, makes it clear that, in order to determine the legislation to be applied to a worker pursuing his activities in the normal way in the territory of several Member States, the criterion to be adopted is that of permanent residence. This criterion is also adopted by Article 14 (1) (c) (i) of Regulation No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (OJ L 149, p 2) which replaced Regulation No 3 as from 1 October 1972.

Having regard to the period involved in the present case, only the Convention between France and the Federal Republic of Germany of 1950 and Article 13 of Regulation No 3 as it existed before 1965 can apply. The only general principle which can be adopted in applying these provisions is that the ruling legislation is that of the country in which the worker is employed, since the exceptions to this principle, which must be strictly interpreted, cannot dictate the solution of the present case.

This solution doubtless presents certain technical difficulties but legally there is no other solution that is compatible with the instruments as they stood before 1965.

The Commission states that the question whether Mr Hakenberg must, for the purposes of the French Social security regulations, be deemed to be a wage-earner, has been decided by the French courts within the limits of their jurisdiction; there remains to be determined what provisions have applied or apply to him, in view of his activities.

In this connection three periods in Mr Hakenberg's career should be distinguished.

1. From 1950 to 1 January 1959, the date on which Regulation No 3 came into force, Mr Hakenberg's situation was governed by the General Convention of 10 July 1950 between France and the Federal Republic of Germany on social security. The Court has no jurisdiction to interpret a bilateral Convention of this kind.

2. Since 1 January 1959 the provisions which could govern Mr Hakenberg's case have been contained in Regulation No 3 and especially in Articles 12 and 13.

   As regards the period from 1 January 1959 to 1 April 1964, the date of the entry into force of Regulation No 24/64 which amended Article 13, the question arises whether Article 12 of Regulation No 3 applied to Mr Hakenberg. It is therefore important to establish whether a business representative whose working activities are pursued for nine months in the year solely in the territory of a Member State and who for the three remaining months of the year is in contact with his employers in the territory of another Member State, is pursuing his activities in the territories of those two States or only in the territory of the former State. In this connection it must be remembered that the administrative side of a business representative's activities, in the form of contacts with his employers, is an extension of the commercial side of his activities. The representative is an intermediary between his employer and his customers, and the contacts which he makes with the latter are only of value by virtue of the connections which bind him to the former. What is concerned is not a question of activities of a different nature, but rather of different, inseparable aspects of the same activity. It must also be borne in mind in the present case, that the representative pursues his activities in the territories of two Member States. Furthermore there is nothing in Article 12 which justifies the conclusion that a person's principal employment is sufficient as a criterion for determining the legislation to be applied.

   Since Article 12 does not cover Mr Hakenberg's situation, it may be thought, particularly if reference is made to the Court's judgment in Case 19/67 (Van der Vecht) and in view of the fact that Article 13, before it was amended by Regulation No 24/64, was wider in scope and effect, that the activitites of a worker, employed for several years in the territory of a Member State by an undertaking having its registered office in the territory of another Member State, and pursued over successive periods of nine months in the year separated by period of residence of three months in the second State, comes within the scope of Article 13 (a) in its original version; hence it is not impossible to see in Mr Hakenberg's activities a series of temporary postings.

3. The third question raised by the Cour de Cassation relates to the third period of Mr Hakenberg's career, i.e. from 1 April 1964. Since that date, Article 13 (1) (c), introduced into Regulation No 3 by Regulation No 24/64, has applied. The question is where does Mr Hakenberg have his permanent residence — in the country in which he stays longest but has no fixed abode, or the country in which he has a definite permanent address to which he returns in the intervals between his tours. The meaning of the words ‘permanent residence’, and especially of the expression ‘habitually resides’ which defines them, is therefore to be sought in the context of Article 13 (1) (c). It would be difficult to interpret the phrase ‘habitually resides’ in a way which would be applicable to everyone covered by Regulation No 3. The determination of habitual residence is a question of fact and leads to different results in different cases.

   In Article 13 (1) (c) the term ‘permanent residence’ must have the same meaning for the three cases laid down in that provision. The second and third cases refer to the situation of a worker who does not have his permanent residence in the territory of a Member State in which he pursues his activities. Accordingly, in the case of a business representative, lenght of time should not be taken as the criterion for determining habitual residence. To do so would in most cases in fact mean that one of the countries in which that worker is employed must be designated as the country of permanent residence; now, in the two situations with which it is concerned, Article 13 (1) (c) presumes that the country in which the worker is employed is not the country of permanent residence. One is therefore driven to conclude that, in this case as in that of frontier workers, the idea of habitual residence means the place where a worker has his permanent address and where he habitually returns at comparatively infrequent intervals. For the purposes of Article 13 (1) (c) the Member State in the territory of which the worker has his permanent residence is the one to which he habitually returns at comparatively frequent intervals, between periods of work in the territories of other Member States and possibly during his activities in the territory of that State in which, too, his interests, other than those connected with his work, are centred.

4. If German legislation were declared to be applicable to the party concerned in the circumstances the result would be that he could not be affiliated to any social security scheme and he would thus be deprived of all protection. Indeed, the Federal Republic of Germany recognises only business representatives who are paid a wage or salary as having the status of workers and makes such representatives alone subject to a social security scheme. Mr Hakenberg does not come within this category.

5. The answers to the questions referred by the Cour de Cassation may be as follows:

   1. 1. A business representative who for nine months in the year tours a Member State, canvassing business, but whose activities extend into the territory of another Member State in which are situated the registered offices of the undertakings which employ him and with which he returns to make contact outside the time he spends canvassing business, must be regarded as pursuing his activitites in the territories of such States within the meaning of Article 13 (1) (c) of Regulation No 3.

      2. The answer to this question is in the negative.

   2. In the absence of any clear provision covering the special situation of a business representative, and having regard to the wider scope and effect of the text of Article 13 (1) (a) of Regulation No 3 as it stood prior to Regulation No 24/64, a worker employed for several years in the territory of a Member State by an undertaking having its registered office in the territory of another Member State, for successive periods of nine months each year separated by periods of residence of three months in the latter State, comes within the scope of the said Article 13 (1) (a).

   3. For the purposes of the application of Article 13 (1) (a) of Regulation No 3, the Member State in whose territory a worker has his permanent residence is the one in which his permanent address is to be found and to which he returns at comparatively frequent intervals on a habitual basis between periods of activity in the territories of other Member States and, possibly, during his activitites in the territory of that State, and in which his interests, other than those connected with his work, are centred.

As to the first and second questions (system existing before Regulation No 24/64)

In the first question an interpretation is sought of the term ‘employed’ in Article 12 of the Regulation No 3 in order to determine whether

1. a business representative who for nine months in the year continuously tours a Member State canvassing business but whose activities extend into the territory of another Member State in which the registered offices of the undertakings who employ him and with whom he returns to make contact outside the time spent in canvassing business, must be regarded as pursuing his activities in the territories of the said two States, or solely in the territory of the State in which he makes his tours, and

2. to have a principal occupation in the territory of a Member State is sufficient for the purposes of Article 12.

The second question seeks an interpretation of the former Article 13 (a) of Regulation No 3 to enable the national court to determine whether an employment involving a regular alternation of making tours for the purpose of canvassing business and making contacts with the undertakings represented fulfils the criteria of the said provision and more particularly that of ‘a duration of employment of 12 months’.

Article 12 of Regulation No 3 provides that ‘wage-earners or assimilated workers employed in the territory of one Member State shall be subject to the legislation of that State even if they permanently reside in the territory of another Member State or if their employer or the registered office of the undertaking which employs them is situated in the territory of another; Member State’.

The former Article 13 of the same Regulation made three exceptions to this principle as regards workers on temporary postings (paragraph (a)) workers in transport services (paragraph (b)) and workers employed in undertakings which lie astride the common frontier of two Member States.

Paragraph (a) of that Article, in particular, provides that wage-earners or assimilated workers whose permanent residence is in the territory of one Member State and who are employed in the territory of another Member State by an undertaking having in the territory of the former State an establishment to which they are normally attached, shall be subject to the legislation of the former State as though they were employed in its territory, in so far as the probable duration of their employment in the territory of the latter State does not exceed 12 months; which period could be extended once only for a further period of 12 months with the consent of the competent authority of the latter State.

It appears from the terms and the general scheme of this provision that its purpose is to govern the situation of wage-earners who are employed on a regular basis by an undertaking situated in the territory of a Member State and are posted temporarily, by the undertaking to which they are attached, to the territory of another Member State.

This provision cannot therefore be extended to cover the essentially different situation of business representatives who are not paid a wage or salary.

In particular, the strict time limits laid down by former paragraph (a) of Article 13 are not compatible with working activities which involve making regular business-canvassing tours in the territory of a Member State, in the interests of undertakings situated in another Member State.

Since it could not be brought within any of the situations referred to in former Article 13, the occupation in question was covered solely by the general principle laid down by Article 12 of Regulation No 3 before the amendment made by Regulation No 24/64.

In these circumstances the answer to the second question must be that the employment in question does not come within the scope of Article 13 (a) in its former version, but within that of Article 12 of Regulation No 3.

Article 12 adopts as a criterion of attachment for the purposes of determining the social security legislation to be applied, the fact that wage-earners or assimilated workers are ‘employed in the territory of a Member State’.

It follows both from this Article and an approximation to the exceptions in Article 13 that this provision seeks to ensure that one national legislation is applied and, with this in view, it takes into consideration a worker's employment, assuming that such employment is normally confined to the territory of one and the same Member State.

In order to safeguard, given the state of Community legislation at the time in question, the principle that one legislation must apply to an employment which, although of a consistent and continuous nature, extend over the territories of several Member States and comes within the application of Article 12, the features of the activity in question must be analysed in order to establish whether it has a predominant connection with the territory of one or other of the States concerned.

For this purpose not only must the duration of periods of activity be considered, but also the nature of the employment in question.

As regards the kind of activity described by the Cour de Cassation, the predominant connection is to be sought in the working relationships by which a representative is attached to the undertakings for whose interests he is responsible and not in the occasional contacts which he makes with scattered customers.

Thus the answer to the first question must be that a business representative pursuing his working activities in the circumstances mentioned in the order referring the questions must be regarded as being employed in the territories of the two States concerned, the predominating employment, however, for the purposes of determining the legislation to be applied, being that on the territory of the State in which the registered offices of the undertakings which he represents are situated.

As to the third question (system existing subsequently to Regulation No 24/64

The third question asks for a definition of the term ‘permanent residence’ which is stated as meaning ‘the place where a person has his habitual residence’ in Article 1 (h) of Regulation No 3 and thus for the determination of the question whether there must be regarded as a permanent residence any habitual residence within the frontiers of a Member State even when such habitual residence is not in a fixed place but consists of business-canvassing tours carried out by caravan, or whether habitual residence implies some degree of permanence in a given place and whether therefore a worker can be permanently resident only in the Member State where he returns, in the intervals between his tours, to a fixed permanent address and where the registered offices of the undertakings which employ him are also situated.

It apparent from the order referring the questions that this question is raised by reason of the amendment made by Regulation No 24/64 to Article 13 of Regulation No 3 for the purpose of distinguishing and defining the derogations from the principle laid down in Article 12.

For this purpose, it must be pointed out in particular that Regulation No 24/64 introduced into Article 13 a new provision — which forms the first section of sub-paragraph (c) of paragraph (1) — under which wage-earners or assimilated workers normally carrying on their activities in the territories of several Member States are subject to the legislation of that State in whose territory they have their ‘permanent residence’.

The type of activity which is under consideration by the Cour de Cassation comes within the scope of this new provision and therefore, since Regulation No 24/64 came into force, has been subject to the general rule laid down in Article 12.

In these circumstances the third question refers to the interpretation in relation to the special type of employment in issue of the concept of permanent residence in Article 13 (1) (c) — first section — in view of the definition which it is given in Article 1 (h) of Regulation No 3.

When a worker pursues his working activities in the territories of several Member States, Article 13 (1) (c) (first section), in order to avoid the simultaneous application of several legislations, gives preference to the legislation of the State on whose territory the worker carries on part of his activities and where he has his permanent residence.

By using in this way the criterion of permanent residence, to enable a choice to be made between different legislations ascertained by reference to places of employment, Article 13 demonstrates that permanent residence is to be determined by taking into account factors other than those connected with work.

To this criterion, the definition in Article 1 (h) adds that of the ‘habitual’ nature of the residence, from which it is apparent that it is scarcely appropriate to take into consideration, for the purpose of determining permanent residence, itinerant activities for the purpose of canvassing business which are by their nature unstable.

On the other hand, the possession of a permanent address in a Member State is, in such a case, to be regarded as a stabilizing factor which can determine permanent residence within the meaning of Article 13 (1) (c) (first section) and there is all the more reason for so regarding it when the permanent address is in the territory of the Member State of which the business representative is a national and in which his interests are centred.

The answer to the question must therefore be that by ‘permanent residence’, in the sense in which this term is used in Article 13 (1) (c) (first section) and more extensively defined in Article 1 (h) of Regulation No 3, there must be understood, in the case of a business representative pursuing the kind of activities described in the order of reference of a preliminary ruling, the place in which that worker has established the permanent centre of his interests and to which he returns in the intervals between his tours.

Costs

The costs incurred by the Government of the French Republic and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable.

As the proceedings are, so far as the parties to the main action are concerned in the nature of a step in the action before the Cour de Cassation of France it is for that court to make a decision as to costs.