## Facts

- Volker Graf, a German national living in Austria, worked for Filzmoser Maschinenbau GmbH under an employment contract starting in 1992.
- In 1996, Graf gave notice terminating his Austrian employment to take a new job in Germany.
- Austrian law (§ 23 Angestelltengesetz) provided statutory termination compensation (“Abfertigung”) after a minimum period of service, but § 23(7) denied the benefit when the employee resigns on his own initiative (and in certain fault-based situations).
- Graf claimed Abfertigung equal to two months’ salary; Filzmoser refused payment because Graf resigned voluntarily.
- Graf sued, asserting that denying the benefit when he resigned to work in another Member State restricted free movement of workers under Article 48 EC (now Article 39 EC).
- The trial court dismissed the claim; the appellate court referred a question to the European Court of Justice for a preliminary ruling.

## Issues

1. Whether Article 48 EC (free movement of workers) precludes national legislation that denies statutory termination compensation when a worker resigns to take employment with a new employer in the same or another Member State, while allowing compensation when termination is not initiated by or attributable to the worker.

## Decision

- The European Court of Justice held that Article 48 EC does not preclude the Austrian rule denying termination compensation where the worker resigns to take a new job, whether domestically or cross-border.
- The Court found no discrimination based on nationality because the rule applied irrespective of nationality and did not affect migrant workers more than non-migrant workers.
- The Court held the measure was not a prohibited restriction on free movement because any deterrent effect was too uncertain and indirect.
- The case was returned to the referring national court to resolve the dispute consistently with the Court’s interpretation.

## Legal Principles

- Article 48 EC prohibits discrimination on grounds of nationality in employment-related matters; a rule applicable without distinction to nationals and non-nationals is not discriminatory absent disparate impact on migrant workers.
- Non-discriminatory measures can still violate free movement if they preclude or deter workers from exercising mobility by materially affecting access to another Member State’s labor market.
- A national measure is not a restriction where the alleged disadvantage depends on a future, hypothetical event not directly tied to the worker’s decision to migrate; effects that are too uncertain and indirect are insufficient to establish an obstacle to free movement.

## Conclusion

The Court upheld a national severance scheme that withholds termination compensation when the employee resigns to change jobs, including to work in another Member State, because the rule is non-discriminatory and any potential deterrent to cross-border movement is too contingent and indirect to infringe free movement of workers.


Graf v. Filzmoser Maschinenbau GmbH, Case C-190/98, 2000 E.C.R. I-493 (E.C.J. 2000)