The office refused Ms Kaske's application on the ground that she did not fulfil the criteria for unemployment benefit laid down by the Austrian law implementing the Community regulation on social security of migrant workers, which came into force in Austria on 1 January 1994. Ms Kaske had neither completed a period of insurance or employment in Austria immediately before claiming unemployment benefit, nor did she fall within the scope of certain provisions of Austrian law favourable to residents who spend a period of at least 15 years in Austria before completing insurance periods elsewhere. The effect of those provisions is that an application in Austria for unemployment benefit will be accepted, without the person concerned having to complete a further period of employment there before he or she can apply for unemployment benefit.

However, Ms Kaske claims that she is entitled under an Austro-German convention that came into force in 1979 to have the periods of insurance she completed in Germany taken into account.

Ms. Kaske's appeal against the decision of the office was dismissed, so she appealed to the Verwaltungsgerichtshof. The Verwaltungsgerichtshof made a reference to the Court of Justice of the EC, asking whether the provisions of the Austro-German convention, which are more favourable than national law, could be applied, despite the subsequent entry into force of a Communityregulation. The question is whether the Court's decision in the case of Rönfeldt (C-227/89) - in which it held that a bilateral or multilateral convention may not result in workers who exercise their right to free movement losing social security rights - applies in relation to unemployment benefit.

The Court observes that, contrary to the contention of the Austrian Government, there is nothing to prevent the reasoning in the Rönfeldt case, which concerned pension rights, from applying to unemployment benefit, which may be classified as a social security benefit, since Rönfeldt applies to all forms of social advantage.

The result of this is that where a national of a Member State which is a party to a bilateral convention is entitled to claim unemployment benefit before the entry into force of the Community regulation on social security of migrant workers because he or she has exercised the right to free movement of workers, that person enjoys an established right to continued application of the convention after the Community regulation has come into force. The person had a legitimate expectation that he or she would benefit from the provisions of the bilateral convention.

The Court accordingly considers that no distinction should be drawn between periods of insurance or employment by reference to whether they came before or after the entry into force of the Treaty and the Community regulation. The right to application of the convention can be acquired before the Community regulation takes effect. Only if a worker has exhausted all the rights he or she acquired during a period of insurance or employment that succeeded the entry into force of the Community regulation must his or her position be evaluated under that regulation.

The Court of Justice also states in its judgment, by way of response to another question referred by the national court, that a national rule imposing residency restrictions on entitlement to unemployment benefit (15 years' residence preceding the last period of employment abroad) is both discriminatory on grounds of nationality because it favours " stable " Austrians, and constitutes a barrier to the free movement of persons, because it means that nationals of other Member States are treated less favourably. Such restrictions are incompatible with the Community law principle of the free movement of workers.

Unofficial document for media use only; not binding on the Court of Justice. Available in German, English, French, Italian, Dutch, Portuguese and Swedish. For the full text of the judgment, please consult our internet page www.curia.eu.int  at approximately 3 pm today. For further information, please contact Fionnuala Connolly Tel: (00 352) 4303 3355; Fax: (00 352) 4303 2731.