61980C0069
OPINION OF MR ADVOCATE GENERAL WARNER
DELIVERED ON 11 DECEMBER 1980
My Lords,
This case comes before the Court by way of a reference for a preliminary ruling by the Court of Appeal of England and Wales. It raises questions as to the scope and effect, in relation to sex discrimination in pension schemes, of Article 119 of the EEC Treaty and of certain Council directives.
The appellant in the proceedings before the Court of Appeal is Lloyds Bank Limited, which is one of the “big four” English clearing banks. The respondents are two young women who were employed by Lloyds Bank as clerical officers but who left its employment while they were still under 25, namely Mrs Susan Jane Worringham and Miss Margaret Humphreys. No secret has been made of the fact that, in this litigation, Mrs Worringham and Miss Humphreys are supported by the Equal Opportunities Commission, which is a body established by a British statute, the Sex Discrimination Act 1975, with the duty of working towards the elimination of discrimination between men and women, and with the power (under Section 75 of that Act) to provide assistance in legal proceedings having that purpose.
It is common ground that male and female clerical officers employed by Lloyds Bank perform, in their respective grades, “equal work” within the meaning of that expression in Article 119. The arrangements made to provide them with pensions differ, however, in some respects.
All permanent staff of the Bank are, on entering its employment, required to become members of a retirement benefits scheme. There are two such schemes, one for men and one for women. Both schemes are funded schemes managed by trustees. There are six trustees, the Chairman, the Deputy Chairman, the Chief General Manager and the Deputy Chief General Manager of the Bank, a trustee nominated by the Lloyds Bank Staff Association and one nominated by the Banking, Insurance and Finance Union, which is a trade union. The trustees are obliged to, and do, carry out their duties as trustees independently of and without reference to their respective positions as officers of the bank and nominees of the staff association and union.
The two funds are fed by contributions made by the members and by the bank.
Each member, with the exception of women under 25, is required to contribute 5 % of his or her salary to the appropriate fund. Contributions are deducted from a member's salary at source and paid by the Bank directly to the trustees.
Since 1968 the salary scales of all clearing bank employees in the United Kingdom, in the grades that matter in this case, have been agreed nationally in the Joint Negotiating Council for Banking (the “JNC”). The JNC has recommended that in the case of banks with contributory pension schemes (i. e. schemes under which the employees are required to contribute) the nationally agreed salary scales should be adjusted to provide for the employees' contributions. Of the four major clearing banks only Lloyds operates a contributory scheme. Accordingly Lloyds has instituted salary scales under which its female staff under 25 are paid at the rates agreed in the JNC, while all other staff (i. e. females over 25 and males of all ages) are paid at those rates plus 5 %. The object is to achieve equality in “take-home” pay, but we were told that in practice the take-home pay of a man under 25 is slightly less than that of a woman of the same age and grade. We were not told why.
By the rules of the two schemes, Lloyds is required to pay annually to the trustees of each fund sums calculated by an actuary on the basis of current and anticipated demands on the fund, in the light of such factors as the number, age, seniority, and marital status of present and of retired staff, and the effects of inflation both current and prospective. Those factors differ from year to year and as between the two funds. The result of the actuary's calculation is expressed as a percentage of the aggregate of the salaries of all the members of the scheme. No part of the bank's contribution is ascribed to any particular member.
There is no fixed mathematical relationship between the proportion of the funds representing employees' contributions and the proportion representing the bank's annual contributions; but the former account for the smaller part. For example, in the year ended 30 June 1979, which was, I understand, a typical year, the total of members' contributions was about UKL 6 million whilst that of the bank was nearly UKL 36 million.
Benefits are paid out of each fund by the trustees according to its rules. Some benefits are mandatory, some lie in the trustees' discretion. Some are payable to the member, others to his or her dependants. Since 1 July 1974, the major benefits under both schemes have been substantially the same for men and women. In either case a member qualifies for benefit after completing 5 years' service or attaining the age of 26. The retirement age is 60 in both cases and retired employees of both sexes are entitled to pensions of 1/720th of their annual salary at retirement for each completed month of service, with a maximum pension of two-thirds of final remuneration. There are, however, some differences between the terms of the men's and the women's schemes. For example, the men's scheme provides for the payment of pensions to the surviving spouse and dependent children of a member who dies after retirement, whereas the women's scheme makes no such provision, and there are differences between the two schemes as regards payments made to dependents on the death of a member in service.
We are told that both schemes have been “certified” by the Occupational Pensions Board under Part III of the Social Security Pensions Act 1975 and “approved” by the Board of Inland Revenue under Sections 19 and 20 of the Finance Act 1970. That calls for explanation.
The legislation governing the British social security system (principally the Social Security Act 1975 and the Social Security Pensions Act 1975) provides for retirement pensions to consist of two elements, a basic component, which is the same for everyone, and a variable earnings-related component.
Such pensions are payable out of the National Insurance Fund, which is fed by contributions from earners, employers and the Treasury. The principle of the earnings-related component is that the more a person earns, the more he and his employer contribute and the more he receives by way of pension on retirement. Part III of the Social Security Pensions Act 1975 provides for what has been described as a “partnership” between the State social security scheme and independent occupational pension schemes such as those here in question. Where an occupational pension scheme fulfils requirements laid down in the Act, its members may be “contracted out” of the earnings-related part of the State scheme. Among those requirements are requirements as to the minimum annual rate of pension (calculated by reference to the member's salary and period of service with the employer); as to benefits for widows; as to the transfer of accrued rights by members who cease working for the employer before reaching pensionable age; as to the rules governing the commutation and surrender of pensions; and so forth. Upon the issue by the Occupational Pensions Board, which is a statutory body responsible for the oversight of occupational pensions schemes, of a “contracting-out certificate” the members of the scheme to which the certificate relates cease to belong to the earnings-related part of the State scheme. They and their employer then pay reduced rates of contribution to the State scheme and the members are eligible only for the basic component of the State pension.
Approval of a retirement benefits scheme under the Finance Act 1970 is a different matter. Under Section 19 et seq. of that Act the Board of Inland Revenue may, and in some circumstances must, “approve” such a scheme if it fulfils certain elaborately prescribed conditions. Approval entails fiscal advantages. For instance the employer's contributions to the scheme are deductible in computing its profits for corporation-tax purposes and excluded from the computation of the members' emoluments for income-tax purposes. Members' contributions are deductible in computing their emoluments. Counsel for the bank told us at the hearing that those tax savings covered about half the total cost of the contributions.
The rules of Lloyds Bank's two schemes governing the rights of members who leave the service of the bank before normal retirement age are similar. In order to comply with Part III of the Social Security Pensions Act 1975 they provide that there shall be either (i) a payment to another “contracted-out” scheme transferring that person's accrued rights to that scheme or (ii) a payment to the State scheme of what is called a “contributions equivalent premium”, buying the person back into that scheme. Where a contributions equivalent premium is paid, the person concerned is entitled to a refund of his or her past contributions, with interest, but subject to deductions in respect of part of the cost of the contributions equivalent premium and in respect of income tax. Since a female employee of the bank who is under 25 has made no contributions, she receives no refund.
The fact that, under Lloyds Bank's salary scales, a man under 25 is nominally paid 5% more than a woman of the same age, results in other incidental disadvantages to the woman. In particular any redundancy payment and any unemployment benefit to which she may become entitled will be less than the man's, because such payments and benefits are calculated by reference to gross earnings. For the same reason, she has access to lesser mortgage and credit facilities.
It appears to be recognized by everyone concerned that the position is unsatisfactory. We have been told in outline of the negotiations that have taken place between the management of Lloyds Bank, the Lloyds Bank Staff Association and the Union, with a view to resolving it, preferably by the formation of a single scheme covering both men and women; and of the difficulties in the way of the adoption of that course. We have been told also that those negotiations have been suspended pending the outcome of this litigation.
The litigation was initiated by applications made by Mrs Worringham on 19 May 1977 and by Miss Humphreys on 12 September 1977 for the hearing by an Industrial Tribunal of their complaints about the salary scales fixed for male and female clerical staff of Lloyds Bank under the age of 25. Their cases were, by consent, consolidated and were heard by an Industrial Tribunal at London on 19 September 1977. On 30 September 1977 the Tribunal gave its decision. The Tribunal, whilst recognizing that “the arrangements now in force are in certain limited areas inequitable to the female employees”, held that the differences in those salary scales were covered by Section 6 (1A) (b) of the British Equal Pay Act 1970, which exempts from the provisions of that Act “any provision made in connexion with death or retirement”.
The applicants appealed to the Employment Appeal Tribunal. They contended that the payment of an additional 5% gross salary to male employees of Lloyds aged under 25 was not within the exception in Section 6 (1A) (b) of the Equal Pay Act 1970. In support of that contention they relied on Community law, in particular Article 119 of the EEC Treaty. By a judgment delivered on 11 November 1978 the Employment Appeal Tribunal allowed the appeal. It based its decision exclusively on the interpretation of Section 6 (1A) (b) of the Equal Pay Act. It held that, although the purpose of paying an extra 5% to the men was connected with the pension arrangements, the terms of the contract of employment as to pay must be kept separate from terms or provisions as to pensions, and that there was an inequality of pay. The Tribunal accordingly left unresolved the argument about Community law.
The Bank now appeals to the Court of Appeal.
Before the Court of Appeal, it was conceded on behalf of the applicants, in view of the decision of that Court in a case heard in the meantime {Garland v British Rail Engineering Ltd [1979] 1 WLR 754), that the salary differential was exempted from the scope of the Equal Pay Act by Section 6 (1A) (b), and that the applicants could therefore succeed only on the strength of Community law. They relied on Article 119 of the Treaty and on Article 1 of Council Directive 75/117/EEC of 10 February 1975 (“the Equal Pay Directive”) and, in the alternative, on Articles 1(1) and 5(1) of Council Directive 76/207/EEC of 9 February 1976 (“the Equal Treatment Directive”). They contended that, by virtue of those provisions, they were entitled to (a) an additional 5% by way of salary and (b) a refund of pension contributions on leaving the employment of the bank.
Such are the circumstances in which the Court of Appeal has referred to this Court four questions, which, in slightly abbreviated terms, are as follows:
1.
Are
(a)
contributions paid by an employer to a retirement benefits scheme, or
(b)
rights and benefits of a worker under such a scheme
“pay” within the meaning of Article 119 of the EEC Treaty?
2.
Are
(a)
such contributions or
(b)
such rights and benefits
“remuneration” within the meaning of Article 1 of the Equal Pay Directive?
3.
If the answer to Question 1 or 2 is in the affirmative, does Article 119 of the Treaty or Article 1 of the said Directive, as the case may be, have direct effect in Member States so as to confer enforceable rights upon individuals in the circumstances of the present case?
4.
If the answers to Questions 1 and 2 are in the negative:
(i)
are
(a)
contributions paid by an employer to a retirement benefits scheme, or
(b)
rights and benefits of a worker under such a scheme
within the scope of the principle of equal treatment for men and women as regards “working conditions” contained in Article 1(1) and Article 5(1) of the Equal Treatment Directive?
(ii)
if so, does that principle have direct effect in Member States so as to confer enforceable rights upon individuals in the circumstances of the present case?
Your Lordships observe that those questions make no reference to the 5% salary differential, or to any consequent inequality in redundancy payments, unemployment benefits or mortgage or credit facilities. This Court is not therefore concerned with those matters. The Court of Appeal has clearly taken the view that the outcome of this case depends upon whether or not the provisions of Community law relied on by the applicants apply to retirement benefits schemes of the kind here in question. That, it seems to me, involves a decision by that Court as to the nature of the arrangements from which the relevant discrimination arises. This Court cannot, in my opinion, on a reference under Article 177 of the Treaty, go behind such a decision of the national court. I say that because arguments were addressed to us on those matters.
Two further propositions were, as it seemed to me, clearly established as a result of the argument before this Court. The first is that the concept of equality between men and women cannot be applied to contributions paid by an employer to such a retierement benefits scheme. The reason is that they are global contributions, no particular part of which is attributable to any individual member of the scheme. The second proposition is that that concept cannot be applied to the benefits actually received by members from the scheme. That is because the amount of the benefits to be eventually drawn by a member from the scheme must inevitably depend on factors personal to him or to her, such as the age at which he or she dies, whether he or she leaves a surviving spouse or other dependants, and so forth.
Therefore, as Counsel for the bank submitted, and as I think Counsel for the applicants accepted, the only matter over which equality can be achieved is rights to benerits under the scheme, what Counsel for the bank called “identity of scheme terms”.
So, in my opinion, the first point for consideration is whether Article 119 of the Treaty, taken by itself, requires a pension scheme of the kind here in question to confer the same rights on a man and on a woman, and whether, if so, Article 119 has in that respect direct effect, in the sense of conferring on individuals such as the applicants rights enforceable in the courts of Members States. I take those questions together because, manifestly, even if rights to benefits under such a pension scheme are “pay” within the meaning of Article 119, it will avail the applicants nothing if that Article does not, in relation to such rights, have direct effect.
The authorities in this Court about Article 119 do not afford clear answers to those questions.
From the judgment in Case 90/70, the first Defirenne case [1971] 1 ECR 445, one can deduce that, whilst pension rights may constitute “pay” as defined by Article 119, that concept does not include rights under social security schemes established by legislation and partly financed from public funds, whether they be established for the benefit of workers generally or for the benefit of special categories of workers. That excludes, of course, from the ambit of Article 119 pension rights under the British State scheme, but it throws little further light on the problem. The opinion of Mr Advocate General Dutheillet de Lamothe in that case affords some additional help. He too thought that schemes established by national social security legislation, whether general or special, were outside the scope of Article 119. He thought on the other hand that retirement pensions paid directly by an employer to his former employees — sometimes called “deferred pay” — were undoubtedly within its scope. He had more hesitation about what he called “supplemental schemes” (“régimes complémentaires”), but came down in favour of the view that Article 119 did apply to them. His description of such schemes would cover the schemes here in question but for one feature of them, their link with the State scheme through the contracting-out system. Mr Advocate General Dutheillet de Lamothe did not consider such a case, presumably because no such system existed at the time in any of the Member States.
From the judgment in Case 43/75, the second Dejrenne case [1976]1 ECR 455, one may deduce three general propositions.
The first had already been briefly stated by Mr Advocate General Dutheillet de Lamothe in the first Dejrenne case. It is that Article 119 has two purposes, first to avoid a situation in which undertakings established in Member States with advanced legislation on the equal treatment of men and women suffer a competitive disadvantage as compared with undertakings established in Member States that have not eliminated discrimination against female workers as regards pay, and secondly to pursue the social objectives of the Community as expressed in the preamble to tne Treaty and in Article 117 of it.
The second general proposition laid down in that judgment is that, having regard to the context in which Article 119 is to be read, in particular that of the improvement of working conditions and of the improvement of the standard of living of workers referred to in Article 117, effect can be given to Article 119 only by “raising the lowest salaries”. The option of lowering the higher ones is not open. (See paragraph 15 of the judgment.)
Thirdly the judgment makes it clear that there is an area within which Article 119 has direct effect and an area within which it does not. As to that the judgment draws a distinction between “direct and overt” discrimination and “indirect and disguised” discrimination. The first can be identified by reference to the simple criteria of “equal pay” and “equal work” that are to be found in Article 119 itself. The second can be identified only by reference to implementing legislation enacted either at Community level or at national level.
I confess that I find the distinction thus made puzzling. I understand, of course, that Article 119 has direct effect in some areas and not in others; that it has direct effect in those areas where a court can apply its provisions by reference to the simple criteria that those provisions themselves lay down; and that it can have no direct effect where implementing legislation is necessary to lay down the relevant criteria. What puzzles me is why the concepts of “direct and overt” discrimination as distinct from “indirect and disguised” discrimination should be relevant in that connexion. We are all familiar with the cases in this Court that establish that covert discrimination is just as much discrimination as overt discrimination: Case 152/73 Sotgiu v Deutsche Bundespost [1974]1 ECR 153, Case 61/77 Commission y Ireland [197S] ECR 417 and Case 237/78 CRAM v Toia [1979] ECR 2645. In none of those cases, however, was it suggested, or could it sensibly have been suggested, that the distinction between overt and covert discrimination affected the question whether the relevant provision of Community law had direct effect or not. In the present case there is nothing indirect, covert or disguised about the different treatment of men and women under Lloyds Bank's pension arrangements. Yet, if such arrangements are within the scope of Article 119, the question manifestly arises whether that difference in treatment is a matter that can be dealt with directly by the courts under Article 119 itself or whether it can be dealt with only on the basis of legislation implementing it. At all events the decision of the Court in the second Defrenne case did not turn on the distinction, which is not mentioned in the actual ruling.
In Case 149/77, the third Defrenne case [1978] ECR 1365, the Court drew the distinction between equal pay, to which Article 119 applies, and the equal treatment of men and women in other respects which is to be achieved pursuant to Articles 117 and 118 of the Treaty. The judgment contains a passage (in paragraph 23) which could even be interpreted as meaning that there is no overlap between the spheres of application of Articles 117 and 118 and the sphere of application of Article 119.
Lastly, in Case 129/79 Macarthysw Smith (27 March 1980, not yet reported) the Court reiterated and further explained the difference between the type of situation in which Article 119 has direct effect and the type of situation where it does not, but again by reference to the test of direct and overt as opposed to indirect and disguised discrimination. No more, however, than in the second Defrenne case, did the decision of the Court turn on that distinction or was it mentioned in the ruling.
I turn to consider the language of Article 119. It is as follows:
“Each Member State shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work.
For the purpose of this Article, ‘pay’ means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer.
Equal pay without discrimination based on sex means :
(a)
that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement;
(b)
that pay for work at time rates shall be the same for the same job.”
In my opinion one must not attach too much importance to the precise meaning of the words used in the English text of that Article. As was pointed out by Mr Advocate General Trabucchi in the second Defrenne case [1976]1 ECR 455, at p. 484, Article 119 is the “translation” into Community law of the International Labour Organization's Convention No 100 dated 29 June 1951“concerning equal remuneration for men and women workers for work of equal value”, which all the Member States of the Community have ratified. It is noteworthy that, whilst the French text of Article 119 uses, where the two texts correspond, the same words as Article 1 of the Convention, the English texts use different words. Thus, where the English text of the Convention has “remuneration”, Article 119 has “pay”, and where the English text of the Convention has “any additional emoluments whatsoever payable directly or indirectly, whether in cash or in kind, by the employer to the worker and arising out of the worker's employment”, Article 119 has the phrase that I read a moment ago, which uses the words “consideration” and “in respect of his employment”. “Consideration” has of course a technical meaning in the English law of contract, which it cannot bear here, where the corresponding French word is “avantage”; and an argument was addressed to us on “in respect of his employment” which could hardly have been sustained on “arising out of” his employment or on the French “en raison de l'emploi de ce dernier”.
There are two respects in which the English and French texts of Article 119 both differ from the texts of Convention No 100. One is that in the Convention the definition of “remuneration” is introduced by the word “includes” (“comprend” in French), whereas in Article 119 it is introduced by “means” (“il faut entendre” in French). The other is that the Convention does not contain the tailpiece in Article 119 defining “discriminaiton based on sex” in the case of work at piece rates and work at time rates respectively. As to that tailpiece, however, it is to be observed that, whilst the English text of it uses the word “means”, the French uses “implique”, which has no restrictive effect.
I will spare Your Lordships a discussion of the other four authentic texts of Article 119, and say only that their wording is closer to that of the French text.
Viewing the language of Article 119 in that light, it seems to me perfectly capable of extending to rights under a retirement benefits scheme. The phrase “consideration, whether in cash or in kind” seems to me one of wide import. It was suggested to us that it would not cover anything to which the worker concerned was not entitled under his or her contract of employment. Perhaps that suggestion was based on the meaning of the word “consideration” in English law. At all events it is in my opinion wrong. Let me give an example. An employer may, in prosperous times, voluntarily distribute Christmas bonuses to his staff. No employee has a contractual right to such a bonus. But Article 119 would, in my opinion, clearly preclude an employer from discriminating between men and women in the distribution of it.
It was also submitted that rights under such a scheme were not received, even indirectly, from the employer. Others were concerned in their elaboration and in their financing: the trustees, the Occupational Pensions Board and the Inland Revenue. In my view the circumstance that the terms of a scheme have to be discussed with and to be approved by others does not detract from the fact that, at the end of the day, its adoption is the act of the employer. Nor is the element of tax saving in my opinion relevant. Wages and salaries, which are undoubtedly “pay”, are also deductible in computing the employers' profits for tax purposes; and I hardly think that the circumstance that a member of the scheme is taxable on benefits he receives from it and not on contributions he makes to it can affect the issue. It was also pointed out that some of the benefits under the scheme were payable not to the member but to his dependants. The conferment of the right to those benefits on his dependants can, however in my opinion, properly be regarded as an advantage to the member arising from his employment.
Thus I would, but for one factor, have come to the conclusion that rights under pension schemes such as those here in question were “pay” within the extended meaning given to that word by Article 119.
That factor is the link between such schemes and the State social security scheme created by the contracting-out system. To hold that Article 119 applied in relation to those schemes would mean holding that ever since that Article took effect (i.e. since the end of the first stage of the transitional period in the case of the original Member States and since 1 January 1973 in the case of the new Member States) a Member State operating such a system was under an obligation to ensure that a contracted-out scheme afforded equal rights for men and women whilst it was under no such obligation as regards its State scheme. That would, it seems to me, be an unbalanced result to reach, ás well as one calculated to deter contracting out. In my opinion, where a privately established pension scheme is designed, not as a supplement to the State social security scheme (as was envisaged by Mr Advocate General Dutheillet de Lamothe) but as a substitute for it or for part of it, it must be regarded as outside the scope of Article 119 and as falling to be dealt with under the broader headings in Article 118.
Lest, however, Your Lordships should differ from me on that point, I will add that, in my opinion, if Article 119 does apply to rights under such schemes, it cannot have direct effect in relation to them. I do not say that because of the different expectations of life of men and women, a factor on which the bank laid much stress. That, so far as I can see, merely affects the cost of providing the same pensions for women as for men, without giving rise to the sort of choice of method that only a legislature can make. Unequal contributions by men and women would themselves be a breach of the principle of equal pay, so that the extra cost can only be borne by the employer. I say it because, as appears from a Report of the Occupational Pensions Board to which we were referred (“Equal Status for Men and Women in Occupational Pensions Schemes”, Cmnd. 6599, August 1976) the conferment of equal rights on men and women under such schemes gives rise to some problems that can be solved only by legislation. A court cannot decide, for instance, on the basis of a general provision like Article 119, whether a period of maternity leave should or should not be treated as pensionable service. In the case of the United Kingdom a problem arises for contracted-out schemes from the circumstance that the State scheme is based on different retirement ages for men and women, 65 and 60 respectively, and that a scheme cannot be contracted out unless it provides benefits at least as good as those provided by the State scheme. In the case of Lloyds Bank that problem is solved by the fact that both men and women retire from its service at 60. But, for an employer from whose service the normal retiring age was 65, only legislation could resolve the conflict between the requirement that men and women should be treated equally and the requirement that they should receive not less than they would under the State scheme.
I will not detain Your Lordships for so long on the directives relied upon by the applicants. The considerations that lead me to think that the applicants cannot succeed on Article 119 lead me to the same conclusion as regards those directives.
The provision in the Equal Pay Directive on which the applicants rely is the first paragraph of Article 1, which reads:
“The principle of equal pay for men and women outlined in Article 119 of the Treaty, hereinafter called ‘principle of equal pay’, means, for the same work or for work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration.”
Nothing turns on the change from the use of the word “pay” in Article 119 to the use of the word “remuneration” in the Directive. That is a feature of the English texts only. In all the other texts the same word is used in Article 119 and in the Directive: “rémunération” in French, “Entgelt” in German, and so forth. Bearing that in mind, it does not seem to me that, for present purposes, the Directive adds anything to Article 119.
Article 9 of the Equal Treatment Directive provides that Member States are to put into force the laws, regulations and administrative provisions necessary in order to comply with the Directive within 30 months of its notification. Notification took place in February 1976, so that the Directive cannot on any view be invoked in these proceedings which were started in 1977. The Court has been pressed none the less to answer the question that the Court of Appeal has asked about it, so that the bank should know what its obligations are. I think that the Court can properly respond to that request, as it responded to a somewhat similar request of the Bundesgerichtshof in Case 120/79, the second De Cavel case [1980] ECR 731.
Article 1(1) of the Directive provides:
“The purpose of this Directive is to put into effect in the Member States the principle of equal treatment for men and women as regards access to employment including promotion, and to vocational training and as regards working conditions and, on the conditions referred to in paragraph 2, social security. This principle is hereinafter referred to as ‘the principle of equal treatmen’.”
Article 2(2), read in conjunction with the preamble, makes it clear that, although the principle of equal treatment is to apply to social security, the manner of its application in that field is not covered by the Directive but is to be the subject of subsequent instruments.
Article 5(1) provides:
“Application of the principle of equal treatment with regard to working conditions, including the conditions governing dismissal, means that men and women shall be guaranteed the same conditions without discrimination on grounds of sex.”
That language does not appear to me apt to cover the terms of a pension scheme, at all events one linked to the national social security scheme. But, if I am wrong about that, there are, in my opinion, the same obstacles in the way of giving direct effect to it as there are in the case of Article 119. That being so, I refrain from discussing the wider and more difficult question whether a directive can directly impose obligations on private persons.
In the result I am of the opinion that, in answer to the questions referred to the Court by the Court of Appeal, Your Lordships should rule that, where a retirement benefits scheme is designed as a substitute for all or part of a State social security scheme, neither contributions paid by the employer to it nor the rights or benefits of a worker under it are “pay” within the meaning of Article 119 of the EEC Treaty, or “remuneration” within the meaning of Article 1 of Council Directive 75/117/EEC, or within the scope of any provision of Council Directive 76/207/EEC.