The reductions in employee contributions granted between April and October 2000 to the Compagnie des pêches de Saint-Malo in response to the sinking of the vessel Erika off the coast of Brittany are compatible with European Union law, said Advocate General Giovanni Pitruzzella in his Opinion delivered on Thursday 5 March (Case C-212/19).
Following an infringement action, the EU Court of Justice found in October 2011 that France had failed to fulfil its obligations to recover this aid, which the European Commission had declared incompatible with EU state aid rules in 2005 (Case C-549/09).
In February 2013, a collection order against the Compagnie des pêches de Saint-Malo was issued by the French authorities for an amount corresponding to the reduction in employee contributions, together with default interest. The company brought an action before the French courts to have this claim for repayment of €85,000 annulled.
According to the Compagnie des pêches de Saint-Malo, the Commission’s 2005 decision involves only the recovery of the reductions in employers’ contributions; the reductions in employees’ contributions should be recovered, in its view, from the employees, who were the sole beneficiaries.
The case is currently before the French Conseil d'État, which is asking the Court for a preliminary ruling. It states that, under the applicable French law, employer’s contributions to the agricultural employees’ scheme and the seafarer’s scheme are payable by employers, while employees’ contributions are payable by employees. Employee contributions are not borne by the employer, but are only deducted by the employer from the insured persons’ remuneration in each paycheck, and the employee contribution relief is passed on to the employees, who receive a higher net salary and are the direct beneficiaries.
The issue at stake in the dispute is therefore whether the Commission’s decision should be interpreted as declaring the employer contribution relief alone to be incompatible or as also declaring the employee contribution relief to be incompatible.
In the latter case, it is necessary to determine whether the company has benefited from all the relief or only part of it and, in the latter case, how that part is to be assessed, and whether France must order the employees concerned to repay the part of the aid they apparently received.
In his Opinion, the Advocate-General suggests that the Court should annul the Commission’s decision.
In his view, it cannot be ruled out that the reduction in employee contributions may have conferred an indirect advantage on the companies concerned by these measures. However, according to Mr Pitruzzella, if the companies concerned by the relief in question had no other option than to pass it on to their employees’ wages, they could not be regarded as being directly beneficiaries of that relief.
The advantage identified by the Commission did not consist in an indirect benefit, but in the fact that these companies were exempted from charges which they would normally have had to bear. At the very least, it was incumbent on the Commission to specify the nature of such an indirect benefit.
The Advocate-General mentioned the possibility that the Court may not follow his proposal to declare the contested decision invalid. However, under no circumstances may the employees of the companies referred to in the contested decision be required to repay the aid at issue in the main proceedings.
Thus, in the event that the Court does not follow his first recommendation, Mr Pitruzzella suggests that it reply that the companies benefiting from the reductions in employee contributions declared incompatible with EU law by the contested decision must be regarded as having benefited from those reductions in full.
See the conclusions: http://bit.ly/2POMFLI (Original version in French by Mathieu Bion)