Instantie

Hof van Justitie EG

Samenvatting

De Richtlijn betreffende de tenuitvoerlegging van het beginsel van
gelijke behandeling van mannen en vrouwen in ondernemings- en sectorile
regelingen in de sociale zekerheid bevat de mogelijkheid tot uitstel wat
betreft de verplichte invoering van de gelijke pensioengerechtigde leeftijd
Deze uitzonderingsbepaling is volgens het Hof van Justitie in strijd met
art. 119 EEG-Verdrag

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Judgment

1 By an order of 12 may 1988, which was received at the Court on 23
September 1988, the Court of Appeal in London reffered to the Court of Justice
for a preliminary ruling under Article 177 of the ECC Treaty a number of
questions concerning the interpretation of Article 119 of the EEC Treaty,
Council Directive 75/117/EEC of 10 February 1975 on the approximation of the
laws of the Member States relating to the application of the principle of
equal pay for men an women (hereinafter referred to as “the directive on equal
pay”) and Council Directive 76/207/EEC of 9 February 1976 on the
implementation of the principle of equal treatment for men and women as
regards access to employment, vocational training and promotion, and working
conditions (herinafter referred to as “the directive on equal treatment”)

2 Those questions arose in dispute between the late Douglas Harvey
Barber and his former employer, the Guardian Royal Exchange Assurance Group
(hereinafter referred to as “the Guardian”), concerning Mr Barber’s right to
an early retirement pension on being made compulsorily redundant

3 It appears from the documents before the Court that Mr Barber was a
member of the pension fund established by the Guardian which applied a
non-contributory scheme, that is to say a scheme wholly financed by the
employer. That scheme, which was a “contracted out” scheme, that is to say
it was approved under the Social Security Pensions Act 1975, involved the
contractual waiver by members of the earnings-related part of the State
pension scheme, for which the scheme in question was a substitute. Members
of a scheme of that kind paid to the State scheme only reduced contributions
corresponding to the basic flat-rate pension payable under the latter scheme
to all workers regardless of their earnings

4 Under the Guardian’s pension scheme, the normal pensionable age was
fexed for the category of employees to which Mr Barber belonged at 62 for men
and at 57 for women. That difference was equivalent to that which exists
under the State social security scheme, where the normal pensionable age is 65
for men and 60 for women. Members of the Guardian’s pension fund were
entitled to an immediate pension on attaining the normal pensionable age
provided for by that scheme

Entitlement to a deferred pension payable at the normal pensionable age
was also conferred on members of the fund who were at least 40 years old and
had completed 10 years’ service with the Guardian when the employment
relationship was terminated

5 The Guardian Royal Exchange Assurance Guide to Severance Terms, which
formed part of Mr Barber’s contract of employment, provided that, in the event
of redundancy, members of the pension fund were entitled to an immediate
pension subject to having attained the age of 55 for men or 50 for women.
Staff who did not fulfil those conditions received certain benefits calculated
on the basis of their years of service and a deferred pension payable at the
normal pensionable age

6 Mr Barber was made redundant with effect from 31 December 1980 when he
was aged 52. The Guardians paid him the cash benefits provided for in the
Severance Terms, the statutory redundancy payment and an ex gratia payment
He would have been entitled to a retirement pension as from the dat of
his 62nd birthday. It is undisputed that a woman in the same position as Mr
Barber woud have received an immediate retirement pension as well as the
statutory redundancy payment and that the total value of those benefits woud
have been greater than the amount paid to Mr Barber

7 Taking the view he was a victim of unlawful discrimination based on
sex, Mr Barber instituted proceedings in the industrial relations tribunals
When his claim was dismissed at first and second instance, he appealed to
the Appeal. That court decided to stay the proceedings and to ask the Court
of Justice to give a preliminary ruling on the following questions:

“(1) When a group of employees are made compulsorily redundant by their
employer in circumstances similar to those of this case and receive benefits
in connexion with that redundancy, are all those benefits “pay” within the
meaning of Article 119 of the EEC Treaty and the pay directive (75/117/EEC),
or do they fall within the equal treatment directive (76/207/EEC), or
neither?

(2) Is it material to the answer to Question (1) that one of the
benefits in question is a pension paid in connexion with a private
occupational pension scheme operated by the employer (“a private pension”)?

(3) Is the principle of equal pay referred to in Article 119 and the
equal pay directive infringed in the cimcumstances of the present case if

(a) a man and a woman of the same age are made compulsorily redundant in
the same circumstances, and in connexion with that redundancy, the woman
receives an immediate private pension but the man receives only a deferred
private pension;

or

(b) the total value of the benefits received by the woman is greater
than the total value of the benefit received by the man?

(4) Are Article 119 and the equal pay directive of direct effect in the
circumstances of this case?

(5) Is it material to the answer to Question (3) that the woman’s right
to access to an immediate pension provided for by the Severance Terms could
only be satisfied if she qualified for an immediate pension under the
provisions of the private occupational scheme in that she was being treated as
retired by the Guardian because she was made redundant within seven years of
her normal pension date under the pension scheme?”

8 Mr Barber died while these proceedings were in progress. Since the
Court of Appeal permitted his widow and executrix, Mrs Pamela Barder, to
continue the proceedings in her name, for and on behalf of Mr Barber’s estate,
these proceedings for a preliminary ruling followed the usual course

9 Reference is made to the Report for the Hearing for a fuller account
of the facts of the case, the relevant provisions of Community law, the course
of the procedure and the written observations submitted to the Court, which
are mentioned or discussed herinafter only in so far as is necessary for the
reasoning of the Court

The first question

10 In its first question the Court of Appeal seeks to ascertain, in
substance, whether the benefits paid by an employer to a worker in connexion
with the latter’s compulsory redundancy fall within the scope of Article 119
of the Treaty and the directive on equal pay or within the scope of the
directive on equal treatment

11 The Court has consistently held (see, in particular, its jugdment of
31 March 1981 in Case 96/80, Jenkins v. Kingsgate, [1981] ECR 911 at paragraph
22) that the first of those two directives, which is designed principally to
facilitate the application of the principle of equal pay outlined in Article
119 of the Treaty, in no way alters the content or scope of that principle as
defined in the latter provision. It is therefore appropriate to consider,
in the first place, whether Article 119 applies in circumstances such as those
of this case

12. As the Court has held, the concept of pay, within the meaning of the
second paragraph of Article 119, comprises any other consideration, whether in
cash or in kind, whether immediate or future, provided that the worker
receives it, albeit indirectly, in respect of his employment from his employer
(see, in particular, the judgment of 9 February 1982 in Case 12/81, Garland v.
British Rail Engineering, [1982] ECR 359 at paragraph 5). Accordingly, the
fact that certain benefits are paid after the termination of the employment
relationship does not prevent them from being in the nature of pay, within the
meaning of Article 119 of the Treaty

13 As regards, in particular, the compensation granted to a worker in
connexion with his redundancy, it must be stated that such compensation
constitutes a form of pay to which the worker is entitled in respect of his
employment, which is paid to him upon termination of the employment
relationship, which makes it possible to facilitate his adjustment to the new
circumstances resulting from the loss of his employment and which provides him
with a source of income during the period in which he is seeking new
employment

14 It follows that compensation granted to a worker in connexion with
his redundancy falls in principle within the concept of pay for the purposes
of Article 119 of the Treaty

15 At the hearing, the United Kingdom argued that the statutory
redundancy payment fell outside the scope of Article 119 of the Treaty,
because it constituted a social security benefit and not a form of pay

16 In that regard it must be pointed out that a redundancy payment made
by the employer, such as that which is at issue, cannot cease to constitute a
form of pay on the sole ground that, rather than deriving from the contract of
employment, it is a statutory or ex gratia payment

17 In the case of statutory redundancy payments it must be borne in mind
that, as the Court held its judgment of 8 April 1976 in Case 43/75 (Defrenne
v. Sabena, [1976] ECR 455 at paragraph 40), Article 119 of the Treaty also
applies to discrimination arising directly from legislative provisions

This means that benefits provided for by law may come within the concept
of pay for the purposes of that provision

18 Although it is true that many advantages granted by an employer also
reflect considerations of social policy, the fact that a benefit is in the
nature of pay cannot be called in question where the worker is entitled to
receive the benefit in question from his employer by reason of the existence
of the employment relationship

19 In the case of ex gratia payments by the employer, it is clear from
the judgment of 9 February 1982 in Case 12/81 (Garland, cited above, at
paragraph 10) that Article 119 also applies to advantages which an employer
grants to workers although he is not required to do so by contract

20 Accordingly, without there being any need to discuss whether or not
the directive on equal treatment is applicable, the answer to the first
question must be that the benefits paid by an employer to a worker in
connexion with the latter’s compulsory redundancy fall within the scope of the
second paragraph of Article 119, whether they are paid under a contract of
employment, by virtue of legislative provisions or on a voluntary basis

The second question

21 In view of the answer given to the first question, the second
question must be understood as seeking in substance to ascertain whether a
retirement pension paid under a contracted-out private occupational scheme
falls within the scope of Article 119 of the Treaty, in particular where that
pension is awarded in connexion with compulsory redundancy

22 It must be pointed out in that regard that, in its judgment of 25 May
1971 in Case 80/70 (Defrenne v. Belgium, [1971] ECR 445 at paragraphs 7 and
8), the Court stated that consideration in the nature of social security
benefits is not in principle alien to the concept of pay. However, the
Court pointed out that this concept, as defined in Article 119, cannot
encompass social security schemes or benefits, in particular retirement
pensions, directly governed by legislation without any element of agreement
within the undertaking or the occupational branch concerned, which are
compulsorily applicable to general categories of workers

23 The Court noted that those schemes afford the workers the benefit of
a statutory scheme, to the financing of which workers, employers and possibly
the public authorities contribute in a measure determined less by the
employment relationship than by considerations of social policy

24 In order to answer the second question, therefore, it is necessary to
ascertain whether those considerations also apply to contracted-out private
occupational schemes such as that referred to in this case

25 In that regard it must be pointed out first of all that the schemes
in question are the result either of an agreement between workers and
employers or a unilateral decision taken by the employer. They are wholly
financed fy the employer or by both the employer and the workers without any
contribution being made by the public authorities in any circumstances.
Accordingly, such schemes form part of the considerations offered to workers
by the employer

26 Secondly, such schemes are not compulsorily applicable to general
categories of workers. On the contrary, they apply only to workers employed
by certain undertakings, with the result that affiliation to those schemes
derives of necessity from the employment relationship with a given employer
Furthermore, even if the schemes in question are established in
conformity with national legislation and consequently satisfy the conditions
laid down by it for recognition as contracted-out schemes, they are governed
by their own rules

27 Thirdly, it must be pointed out that, even if the contributions paid
to those schemes and the benefits which they provide are in part a substitute
for those of the general statutory scheme, that fact cannot preclude the
application of Article 119. It is apparent from the documents before the
Court that occupational schemes such as that referred to in this case may
grant to their members benefits greater than those which would be paid by the
statutory scheme, with the result that their economic function is similar to
that of the supplementary schemes which exist in certain Member States, where
affiliation and contribution to the statutory scheme is compulsory and no
derogation is allowed. In its judgment of 13 May 1986 in Case 170/84
(Bilka-Kaufhaus v. Weber von Hartz, [1986] ECR 1607) the Court held that the
benefits awarded under a supplementary pension scheme fell within the concept
of pay, within the meaning of Article 119

28 It must therefore be concluded that, unlike the benefits awarded by
national statutory social security schemes, a pension paid under a
contracted-out scheme constitutes consideration paid by the employer to the
worker in respect of his employment and consequently falls within the scope of
Article 119 of the Treaty

29 The interpretation of Article 119 is not affected by the fact that
the private occupational scheme in question has been set up in the form of a
trust and is administered by trustees who are technically independent of the
employer, since Article 119 also applies to consideration received indirectly
from the employer

30 The answer to the second question submitted by the Court of Appeal
must therefore be that a pension paid under a contracted- out private
occupational scheme falls within the scope of Article 119 of the Treaty

The third and fifth question

31 In these questions the Court of Appeal seeks in substance to
ascertain, in the first place, whether it is contrary to Article 119 of the
Treaty for a man made compulsorily redundant to be entitled only to a deferred
pension payable at the normal pensionable age when a woman in the same
position receives an immediate retirement pension as a result of the
application of an age condition that varies acccording to sex in the same way
as is provided for by the national statutory pension scheme. Secondly, the
Court of Appeal wishes to ascertain, in substance, whether equal pay must be
ensured at the level of each element of remuneration or only on the basis of a
comprehensive assessment of the consideration paid to workers

32 In the case of the first of those two questions thus formulated, it
is sufficient to point out that Article 119 prohibits any discrimination with
regard to pay as between men and women, whatever the system which gives rise
to such inequality. Accordingly, it is contrary to Article 119 to impose an
age condition which differs acocording to sex in respect of pensions paid
under a contracted-out scheme, even if the difference between the pensionable
age for men and that for women is based on the one provided for by the
national statutory scheme

33 As regards the second of those questions, it is appropriate to refer
to the judgments of 30 June 1988 in Case 318/88 (Commission v. France),
[1988], ECR 3559 at paragraph 27) and of 17 October 1989 in Case 109/88
(Handels- og Kontorfunktionaerernes Forbund i Danmark v. Dansk
Arbejdsgiverforening, acting on behalf of Danfoss, [1989] ECR .. at paragraph
12), in which the Court emphasized the fundamental importance of transparency
and, in particular, of the possibility of a review by the national courts, in
order to prevent and, if necessary, eliminate any discrimination based on sex

34 With regard to the means of verifying compliance with the principle
of equal pay, it must be stated that if the national courts were under an
obligation to make an assessment and a comparison of all the various types of
consideration granted, according to the circumstances, to men and women,
judicial review would be difficult and the effectiveness of Article 119 would
be diminished as a result It follows that genuine transparency, permitting a
effective review, is assured only if the principle of equal pay applies to
each of the elements of remuneration granted to men or women

35 The answer to the third and fifth questions submitted by the Court of
Appeal must therefore be that it is contrary to Article 119 of the Treaty for
a man made compulsorily redundant to be entitled to claim only a deferred
pension payable at the normal pensionable age when a woman in the same
position is entitled to an immediate retirement pension as a result of the
application of an age condition that varies according to sex in the same way
as is provided by the national statutory pension scheme. The application of
the principle of equal pay must be ensured in respect of each element of
remuneration and not only on the basis of a comprehensive assessment of the
consideration paid to workers

The fourth question

36 The national court also asks, in its fourth question, whether Article
119 of the Treaty and the directive on equal pay have direct effect in the
circumstances of this case

37 In view of the answer given to the first question, it is unnecessary
to discuss the effects of the directive on equal pay. As for Article 119,
it is appropriate to refer to the established case-law, which was reviewed by
the Court in particular in its judgment of 31 March 1981 in Case 96/80
(Jenkins, cited above, at paragraph 17) and according to which that provision
applies directly to all forms of discrimination which may be identified solely
with the aid of the criteria of equal work and equal pay referred to by the
article in question, without national or Community measures being required to
define them with greater precision in order to permit their application

38 If a woman is entitled to an immediate retirement pension when she is
made compulsorily redundant, but a man of the same age is entitled in similar
circumstances only to a deferred pension, then the result is unequal pay as
between those two categories of workers which the national court can itself
establish by considering the components of the remuneration in question and
the criteria laid down in Article 119

39 The answer to the fourth question must therefore be that Article 119
of the Treaty may be relied upon before the national courts and it is for
those courts to safeguard the rights which that provision confers on
individuals, in particular where a contracted-out pension scheme does not pay
to a man on redundancy an immediate pension such as would be granted in a
similar case to a woman

Effects of this judgment ratione temporis

40 In its written and oral observations, the Commission has referred to
the possibility for the Court of restricting the effect of this judgment
ratione temporis in the event of the concept of pay, for the purposes of the
second paragraph of Article 119 of the Treaty, being interpreted in such a way
as to cover pensions paid by contracted-out private occupational schemes, so
as to make it possible to rely on this judgment only in proceedings already
pending before the national courts and in disputes concerning events occurring
after the date of the judgment. For its part the United Kingdom emphasized
at the hearing the serious financial consequences of such an interpretation of
Article 119. The number of workers affiliated to contracted-out schemes is
very large in the United Kingdom and the schemes in question frequently
derogate from the principle of equality between men and women, in particular
by providing for different pensionable ages

41 As the Court acknowledged in its judgment of 8 April 1976 in Case
43/75 (Defrenne, cited above), it may, by way of exception, taking account of
the serious difficulties which its judgment may create as regards events in
the past, be moved to restrict the possibility for all persons concerned of
relying on the interpretation which the Court, in proceedings on a reference
to it for a preliminary ruling, gives to a provision. A restriction of that
kind may be permitted only by the Court in the actual judgment which gives the
ruling on the interpretation requested

42 With regard to this case, it must be pointed out that Article 7 (1)
of Council Directive 79/7/EEC of 19 December 1978 on the progressive
implementation of the principle of equal treatment for men and women in
matters of social security (Official Journal 1979 no. L 6, p. 24) authorized
the Member States to defer the compulsory implementation of the principle of
equal treatment with regard to the determination of pensionable age for the
purposes of granting old-age pensions and the possible consequences thereof
for other benefits. That exception has been incorporated in Article 9 (a)
of Directive 86/378/EEC of 24 Juli 1986 on the implementation of the principle
of equal treatment for men and women in occupational social security schemes
(Official Journal 1986 no. L 225, p. 40: corrigendum published in Official
Journal 1986 no. L 283, p. 27), which may apply to contracted-out schemes such
as the one at issue in this case

43 In the light of those provisions, the Member States and the parties
concerned were reasonably entitled to consider that Article 119 did not apply
to pensions paid under contracted-out schemes and that derogations from the
principle of equalitity between men and women were still permitted in that
sphere

44 In those circumstances, overriding considerations of legal certainty
preclude legal situations which have exhausted all their effects in the past
from being called in question where that might upset retroactively the
financial balance of many contracted-out pension schemes. It is
appropriate, however, to provide for an exception in favour of individuals who
have taken action in good time in order to safeguard their rights. Finally,
it must be pointed out that no restriction on the effects of the aforesaid
interpretation can be permitted as regards the acquisition of entitlement to a
pension as from the date of this judgment

45 It must therefore be held that the direct effect of Article 119 of
the Treaty may not be relied upon in order to claim entitlement to a pension
with effect from a date prior to that of this judgment, except in the case of
workers or those claiming under them who have before that date initiated legal
proceedings or raised an equivalent claim under the applicable national law

46 The costs incurred by the United Kingdom and by the Commission of the
European Communities, which submitted observations to the Court, are not
recoverable. As these proceedings are in so far as the parties toe the main
proceedings are concerned, in the nature of a step in the action pending
before the national court, the decision as to costs is a matter for that
court

On those grounds,

THE COURT

in answer to the questions referred to it by the Court of Appeal in
London by an order of 12 May 1988, hereby rules as follows:

1. The benefits paid by an employer to a worker in connexion with the
latter’s compulsory redundancy fall within the scope of the second paragraph
of Article 119 of the Treaty, whether they are paid under a contract of
employment, by virtue of legislative provisions or on a voluntary basis

2. A pension paid under a contracted-out private occupational scheme
falls within the scope of Article 119 of the Treaty

3. It is contrary to Article 119 of the Treaty for a man made compulsory
redundant to be entitled to claim only a deferred pension payable at the
normal retirement age when a woman in the same position is entitled to an
immediate retirement pension as a result of the application of an age
condition that varies according to sex in the same way as is provided for by
the national statutory pension scheme. The application of the principle of
equal pay must be ensured in respect of each element of remuneration and not
only on the basis of a comprehensive assessment of the consideration paid to
workers

4. Article 119 of the Treaty may be relied upon before the national
courts. It is for those courts to safeguard the rights which that provision
confers on individuals, in particular where a contracted-out pension scheme
does not pay to a man on redundancy an immediate pension such as would be
granted in a similar case to a woman

5. The direct effect of Article 119 of the Treaty may not be relied upon
in order to claim entitlement to a pension, with effect from a date prior to
that of this judgment, except in the case of workers or those claiming under
them who have before that date initiated legal proceedings or raised an
equivalent claim under the applicable national law

Rechters

onbekend