OPINION OF ADVOCATE GENERAL

CRUZ VILLALÓN

delivered on 28 June 2012 ( 1 )

Case C-124/11

Bundesrepublik Deutschland

v

Karen Dittrich

Case C-125/11

Bundesrepublik Deutschland

v

Robert Klinke

Case C-143/11

Jörg-Detlef Müller

v

Bundesrepublik Deutschland

(References for a preliminary ruling from the Bundesverwaltungsgericht (Germany))

‛Equal treatment in employment and occupation — National legislation granting assistance to public servants in cases of illness — Family members eligible to be covered by the assistance — Exclusion of registered partnerships — Scope of Directive 2000/78/EC — Concept of ‘pay’’

1. Against the background of three sets of judicial proceedings in which it is sought to establish whether registered partnerships are entitled to a benefit which German law gives to married couples, the Bundesverwaltungsgericht is asking the Court of Justice whether it is possible to base such a claim on the principle of equal treatment which applies by virtue of EU law in the area of employment and occupation.

2. The Court of Justice therefore has the opportunity to outline the case-law on the scope of Council Directive 2000/78/EC of 27 November 2000 ( 2 ) establishing a general framework for equal treatment in employment and occupation. On this occasion the task is to determine whether the directive is applicable to assistance granted to public servants in cases of illness.

3. In order to so, it will be necessary to consider whether such assistance constitutes pay for the purposes of Directive 2000/78, which, interpreting Recital 13 in the preamble to the directive in conjunction with Article 3(1)(c), applies to the facts in this case only if the assistance in question is treated as equivalent to ‘pay’ within the meaning given to that term in Article 141 of the EC Treaty (now Article 157 TFEU). To that end, I will need to elaborate on the criteria applied by the Court of Justice in its judgments in this area, which have until now related only to cases involving retirement pensions, whilst also determining to what extent Article 3(3) makes Directive 2000/78 inapplicable to payments made by State schemes or similar.

I – Legislative framework

A – EU law

4. Recital 13 in the preamble to Directive 2000/78 states as follows: ‘This Directive does not apply to social security and social protection schemes whose benefits are not treated as income within the meaning given to that term for the purpose of applying Article 141 of the EC Treaty, nor to any kind of payment by the State aimed at providing access to employment or maintaining employment.’

5. Article 1 of the Directive 2000/78 defines the purpose of the Directive in the following terms: ‘The purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.’

6. According to Article 2 of Directive 2000/78: ‘1. For the purposes of this Directive, the “principle of equal treatment” shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1. 2. For the purposes of paragraph 1: (a) direct discrimination shall be taken to occur where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any of the grounds referred to in Article 1; …’

7. The scope of Directive 2000/78 is defined in Article 3: ‘1. Within the limits of the areas of competence conferred on the Community, this Directive shall apply to all persons, as regards both the public and private sectors, including public bodies, in relation to: … (c) employment and working conditions, including dismissals and pay; … 3. This Directive does not apply to payments of any kind made by state schemes or similar, including state social security or social protection schemes. …’

B – National law

1. Legislation relating to partnerships

8. Paragraph 1(1) of the Gesetz über die Eingetragene Lebenspartnerschaft (Law on registered partnerships, ‘the LpartG’) of 16 February 2001, ( 3 ) as amended by Paragraph 7 of the Law of 6 July 2009, ( 4 ) provides as follows: ‘Two persons of the same sex establish a partnership when they declare, in person and in the presence of the relevant public servant and each other, that they wish to create a partnership together. Such declarations cannot be made conditionally or for a fixed period.’

9. By virtue of Paragraph 5 of the LPartG, the partners ‘are each required to make an adequate contributions, through their work and their assets, to the common needs of the partnership …’.

2. Legislation on assistance for public servants

10. The Bundesbeamtengesetz (Law on federal public servants ‘the BBG’) establishes the right of public servants to receive assistance in cases of illness. By virtue of Paragraph 80, in certain circumstances such assistance can also cover the spouse and dependent children of a federal public servant.

11. Under the regulations applicable up until 14 February 2009, the spouse and dependent children of a federal public servant were entitled to assistance but this did not extend to a registered partner. The assistance was never unconditional since, in the case of a spouse, it was only given if the income of the spouse was less than EUR 18 000 or if, despite having health insurance, the spouse could not obtain any benefits under the insurance or these had been suspended for an indefinite period due to an individual exclusion relating to a congenital condition or certain illnesses. Hence, there was a right to assistance where the spouse of a beneficiary was financially dependent due to low income or to the inadequacy of health insurance through no fault of the spouse.

12. Pursuant to the powers under Paragraph 80(4) of the BBG, the Federal Ministry of the Interior adopted the Bundesbeihilfeverordnung (Regulations on federal assistance, ‘the BBhV’) of 13 February 2009, ( 5 ) which, in so far as is relevant for the present purposes, maintained the previous system, under which registered partners were excluded as beneficiaries of assistance in cases of illness.

13. Subsequent to the material events in this case, but without affecting the decisions in the main proceedings, the law was amended so as to include registered partners amongst the beneficiaries of the assistance in question. ( 6 )

II – Facts

14. The applicants in the main proceedings are federal public servants who have entered into registered partnerships and whose respective partners are reliant on them for financial support.

15. Having applied for assistance in cases of illness and been initially refused it by the authorities, the applicants in Cases C-124/11 and C-125/11 were held to be entitled to the assistance by the Verwaltungsgericht (Administrative Court), Berlin, which took the view that, although registered partners are not mentioned as beneficiaries of the assistance, they are nevertheless entitled to it by virtue of Directive 2000/78, since, according to the case-law of the Court of Justice, such assistance constitutes ‘pay’ within the meaning of the directive as it is paid solely in respect of the employment and not by way of a benefit under a general state social security or social protection scheme.

16. The claimant’s application in Case C-143/11, on the other hand, was rejected both by the authority and by the administrative court, on the basis that there had been no infringement of Directive 2000/78 because the situations of a spouse and a registered partner are not comparable.

17. In all three cases, the losing party in the proceedings appealed to the Bundesverwaltungsgericht.

18. The starting point for the referring court is the fact that the national legislation does not include registered partners among the potential beneficiaries of the public assistance provided for federal public servants in cases of illness. Spouses of such public servants, where applicable, are, however, mentioned as beneficiaries of such assistance.

19. The Bundesverwaltungsgericht is uncertain whether or not Directive 2000/78 applies to the situations at issue in the original proceedings. If it is applicable, the consequence would be that registered partners should be treated the same as spouses, with the result that the individuals involved in those proceedings would be entitled to the disputed public assistance.

20. The referring court takes the view that the applicability of Directive 2000/78 depends on how the public assistance in question should be classified in law. Specifically, it depends on whether it constitutes a component of pay within the meaning of Article 157 TFEU — in which case Directive 2000/78 would be applicable — or a State social security benefit or equivalent, which would be excluded from the scope of the directive.

21. The Bundesverwaltungsgericht takes the view that the criteria used by the Court of Justice to differentiate between different retirement pensions according to the source of their funding are not appropriate in the context of sickness provision schemes. This is because, amongst other reasons, assistance in cases of illness is not dependent on the length of time spent working in the public service.

III – The question referred

22. In this situation, the Bundesverwaltungsgericht is referring the following question to the Court of Justice: ‘Does Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation apply to national legislation on the grant of assistance to public servants in cases of illness?’

IV – Procedure before the Court of Justice

23. The references for a preliminary ruling in Cases C-124/11 and C-125/11 were lodged at the Court of Justice on 9 March 2011. The reference in Case C-143/11 was lodged on 24 March 2011.

24. The three requests for preliminary rulings were joined by Order of the President of the Court of 27 May 2011.

25. Written observations have been submitted by Messrs K. Dittrich, R. Klinke and J.D. Müller, and by the Commission.

26. At the hearing, held on 3 May 2012, the legal representatives of the parties presented oral observations.

27. In the notice convening the hearing the parties were invited to make written submissions concerning how the disputed assistance was financed, and, in particular, concerning whether the assistance was wholly or partially financed by contributions made by the Federal Republic of Germany, as the employer of the public servants, or by the social security budget. The period for submitting such information ended on 13 April 2012.

V – Arguments

28. The applicants in the main proceedings contend that Directive 2000/78 is applicable to the disputed assistance. This is because, in their view, according to the case-law of the Court of Justice, first, all pay within the meaning of Article 157 TFEU falls within the scope of the directive and, second, the definition of employment also covers the relationship between public servants and the State. ( 7 )

29. The applicants argue that classifying the assistance as pay cannot be opposed on the grounds that it is a scheme laid down by law, since in this situation the legislature is acting only as an employer and not as a public authority. Neither, according to the applicants, can it be opposed on the grounds that public servants constitute a general category of workers, and they cite the case of Barber on this point. ( 8 ) Finally, they claim that it cannot be opposed on the grounds that the assistance does not depend on length of service and its amount is not calculated on the basis of final salary. In summary, the applicants maintain that such factors may be relevant when determining the nature of retirement pensions, but not for the purposes of establishing whether or not the disputed assistance constitutes pay.

30. The Commission is in agreement with the approach of the applicants in the main proceedings. Having noted that the case-law requires that the concept of pay be given a broad interpretation, covering all benefits or pay granted to a worker in respect of his work, whether pursuant to a contract, legislative provisions or a judicial decision, the Commission argues that the Court of Justice has always held, in connection with retirement, that, although it is not the only criterion, the only one which is decisive is that the pension has been awarded in respect of the employment relationship which existed between the worker and his former employer. In addition to this primary criterion, there are three supplementary criteria for construing a retirement pension as a benefit under an occupational social security scheme and, as such, as pay within the meaning of Article 157 TFEU, as distinct from a benefit granted under a public social security scheme, namely: (a) that the pension should not be applicable to a particular category of workers; (b) that it should be directly related to length of service; and (c) that the amount of the pension should be calculated on a final salary basis.

31. As far as the disputed assistance is concerned, the Commission points out, first, that it is a benefit applicable to a particular category of workers; second, that it is granted in respect of employment and is linked to a civil service salary or pension and therefore constitutes part of that pay; and, third, that the other criteria laid down by the case-law in connection with pensions are not relevant to this case, since both the length of service criterion and the final salary criterion have been used by the Court of Justice only to determine whether the pensions of public servants can be regarded as pay even though they would not normally satisfy the criteria that the Court found in Barber to be characteristic of a private pension scheme. It is true that, in the case of assistance to public servants in cases of illness, there is no similar scheme under private law. It would not therefore be possible to look to analogous private law schemes when seeking to establish the parameters of the statutory social security scheme.

32. Accordingly, the only decisive criterion is that the assistance in question is granted by virtue of the employment relationship with the State and that the latter is acting as an employer and not in its role of insurer under a public statutory scheme. It should therefore be regarded as pay within the meaning of Article 157 TFEU, irrespective of the fact that the entitlement to it arises under legislation or that it also plays a social policy role.

33. In response to the invitation referred to in point 24 of this Opinion, the applicants in the main proceedings and the German Government have all stated that the disputed assistance is financed by the Federal Republic of Germany, in its capacity as employer, and is not in any way financed by the social security system.

VI – Assessment

A – A preliminary remark

34. As I have indicated, the subject-matter of the questions jointly referred is the applicability of Directive 2000/78 in circumstances where it is sought to establish whether ‘registered partners’ under the legislation of a Member State are entitled to a benefit granted under the law of that Member State to married couples.

35. That is as far as these questions go. By that I mean that the Court has not been asked whether the rights of the applicants in the main proceedings to be treated in the same way as married couples have been infringed; it has only been asked whether the conditions have been met for those proceedings to be decided under Directive 2000/78.

36. Thus, the Court is not expected to make a ruling concerning potential discrimination, but only on whether the conditions are met for the referring court to be able to decide the cases before it by applying the directive. To do so, it must confine itself to determining whether the disputed assistance constitutes pay within the meaning of Article 3(1)(c) of Directive 2000/78, which depends on whether the disputed assistance can be treated as ‘pay’ under Article 157 TFEU, to which Recital 13 in the preamble to the directive refers for the definition of that term.

B – The conditions governing the applicability of Directive 2000/78

37. As the Bundesverwaltungsgericht has correctly pointed out, the applicability of Directive 2000/78 depends on whether the disputed assistance can be regarded as ‘pay’ within the meaning of Article 157 TFEU.

38. Article 3(1)(c) of Directive 2000/78 provides that the directive ‘shall apply to all persons, as regards both the public and private sectors, including public bodies, in relation to: … (c) employment and working conditions, including dismissals and pay’.

39. As this is a case involving a benefit which is paid by a public authority, there is no alternative but to consider the exception contained in Article 3(3) of Directive 2000/78, which provides that ‘[t]his Directive does not apply to payments of any kind made by state schemes or similar, including state social security or social protection schemes’.

40. This exception must, however, be assessed in the light of Recital 13 in the preamble to Directive 2000/78, which provides that ‘[t]his Directive does not apply to social security and social protection schemes whose benefits are not treated as income within the meaning given to that term for the purpose of applying Article 141 of the EC Treaty, nor to any kind of payment by the State aimed at providing access to employment or maintaining employment’.

41. This combined interpretation of Article 3(3) and Recital 13 of Directive 2000/78, which was adopted by the Court of Justice in Maruko, ( 9 ) suggests that not all benefits paid by public authorities, or even all benefits that emanate from public authorities that are social security institutions, fall outside the scope of Directive 2000/78, but only those paid by such institutions that cannot be regarded as ‘pay’ within the meaning of what is now Article 157 TFEU.

1. The concept of ‘pay’

42. In order to provide a reply to the question referred, it is therefore necessary to resolve one very specific issue, namely whether or not the disputed assistance constitutes ‘pay’ within the meaning of Article 157 TFEU, given that, as I have already mentioned, Directive 2000/78 makes reference to that Article when defining the concept of pay used in Article 3(1)(c). As we shall see, if we analyse whether or not each of the components of the concept of ‘pay’ is present, it becomes apparent that the exception resulting from a combined interpretation of Article 3(3) and Recital 13 in the preamble to Directive 2000/78 is entirely sensible. That exception, basically, does no more than to state a consequence which arises of necessity out of the very concept of ‘pay’.

43. Article 157 TFEU defines pay as ‘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’. The concept therefore has a material component (wage or salary and other consideration), a subjective component (employer and worker) and a causal component (the employment relationship). We must now consider whether all of these are present in the case of the disputed assistance.

44. As far as the material component is concerned, I have no doubt that the reference in Article 157 TFEU to ‘any other consideration, whether in cash or in kind, which the worker receives directly or indirectly’ covers the substance of the disputed assistance adequately. In effect, the assistance reimburses the worker for between 50% and 80% of health care costs incurred by the worker or by certain dependants. ( 10 )

45. In my opinion, the causal component is also present in these cases. The assistance is, in effect, available only to federal public servants, as such, and because they are federal public servants. Furthermore, it is available to them only as long as they are federal public servants who are actually working in that capacity. This is apparent from Paragraph 2(2) of the BBhV, which provides that public servants who are on unpaid leave are also entitled to the assistance provided that the leave is for no longer than one month. It is clear to me that there is a causal link between the disputed assistance and the employment relationship. ( 11 )

46. That only leaves us with the thorniest issue. The assistance under consideration constitutes a cash benefit to which federal public servants are entitled by virtue of their employment relationship with the federal government. Is it, though, a benefit which ‘the worker receives … from his employer’, as required by Article 157 TFEU? This, in my view, is the nub of the question.

2. More specifically, how is the benefit financed?

47. A benefit received by a worker in respect of the employment relationship with his employer constitutes ‘pay’ within the meaning of Article 157 TFEU only if it is actually paid by the employer. Other benefits to which the worker may be entitled, including benefits in respect of his employment, will therefore fall outside the concept of pay and consequently any protection from discrimination in respect of them must be sought outside Directive 2000/78.

48. That is why not all social security benefits can be included within the concept of ‘pay’, but only those which, as well as constituting pay ‘in respect of … employment’, are paid by the employer, albeit through a social security institution, that is to say, indirectly.

49. As the Court stated very early on, in Defrenne, ( 12 ) social security schemes ‘assure for the workers the benefit of a legal scheme, the financing of which workers, employers and possibly the public authorities contribute in a measure determined less by the employment relationship between the employer and the worker than by considerations of social policy’ (paragraph 8), so that ‘the part due from the employers in the financing of such schemes does not constitute a direct or indirect payment to the worker’ (paragraph 9), and, furthermore, ‘the worker will normally receive the benefits legally prescribed not by reason of the employer’s contribution but solely because the worker fulfils the legal conditions for the grant of benefits’ (paragraph 10).

50. The fact that Directive 2000/78 does not apply ‘to social security and social protection schemes whose benefits are not treated as income within the meaning given to that term for the purpose of applying Article [157 TFEU]’ (Recital 13 in the preamble), implies that, since such a comparison is possible only where the benefit received by the worker is paid by the employer, it is necessary to determine whether the social security scheme is financed in this respect by the employer, by the worker or by a public authority. Only if, having established that it is financed by the employer, it can be concluded that, in reality, the social security scheme is paying a benefit which is indirectly attributable to the employer, can it be said that the benefit is ‘pay’ within the meaning of Article 157 TFEU.

51. This approach must apply both to social security institutions specifically, and to all public schemes for financing employment benefits generally. This is because, given that the decisive factor is that the benefit is ultimately paid by the employer, it must be irrelevant whether it is paid directly or through an intermediary; and, in the event that it is paid through an intermediary, it is irrelevant whether the intermediary is a private body or a public institution, of whatever nature, whether or not it is governed by public law, what form of legal personality it takes and what arrangements govern its functioning.

52. This means that, in every case, it must be established who it is that is financing the benefit granted to the worker. Starting with the person making the payment in the final instance, and having established that this is not the employer, it is necessary to ascertain whether the person is merely an intermediary of the employer. In the case of benefits paid by public institutions in general, or by social security institutions in particular, it would be a question of determining whether such benefits are funded by contributions from the employer, from other sources, from the workers themselves, from the public authorities or from all of these in varying measures. Clearly, given the obvious diversity between the Member States in this regard, this task can only be performed by the relevant national court.

53. In my view, the source of financing criterion — together with the criteria of the material component and of the employment ‘grounds or reason’ — may, due to its cross-cutting nature, prove more useful than the criteria relating to the limitation on beneficiaries or the greater or lesser resemblance of the benefit to other equivalent benefits in the realm of private assistance.

54. The same must, of course, apply to benefits consisting of a retirement pension as to those involving assistance in cases of illness. Where there is a material benefit paid in respect of employment, the only important question is whether or not it is financed by the employer. I think that the advantages of this formula in terms of simplifying the problem of whether or not a benefit should be classified as ‘pay’ for the purposes of Article 157 TFEU are fairly indisputable. ( 13 )

C – The circumstances in the main proceedings

55. With regard to the facts at issue in the proceedings which have given rise to this reference, it is apparent from the information made available to the Court that the disputed benefits derive from the employment relationship between the federal public servants and the federal government and that they are financed directly out of the federal budget, which is funded in this respect by the public purse, with monies provided by the Member State in its capacity as the employer of the federal public servants.

56. This being the case, the indications are that, for the reasons explained in this Opinion, the benefits in question should be regarded in this case as ‘pay’ for the purposes of Article 157 TFEU, and it therefore follows that Directive 2000/78 is applicable to the provisions of national law governing them.

57. Even so, it is ultimately for the national court to ascertain whether, bearing in mind the specific arrangements applying to the benefits, their financing can actually be attributed to the Member State in its capacity as the employer of the public servants in the main proceedings.

VII – Conclusion

58. In the light of the foregoing observations, I suggest to the Court that it should answer the question referred as follows: Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation is applicable to national legislation on the grant of assistance to public servants in cases of illness if the State, in its capacity as a public employer, is the principal source of finance for that assistance, which is a matter for the national court to ascertain.

( 1 ) Original language: Spanish.

( 2 ) OJ 2000 L 303, p. 16.

( 3 ) BGBl. I, p. 266.

( 4 ) BGBl. I, p. 1696.

( 5 ) BGBl. I, p. 326.

( 6 ) Amendment to the BBhV of 13 July 2011 (BGBl. I, p. 1394).

( 7 ) Case C-267/06 Maruko [2008] ECR I-1757 and Case C-4/02 Schönheit and Becker [2003] ECR I-12575.

( 8 ) Case C-262/88 [1990] ECR I-1889, paragraph 26.

( 9 ) And, more recently in Case C-147/08 Römer [2011] ECR I-3591, paragraph 32.

( 10 ) The Court of Justice has always taken a very broad approach to what is covered by the material component of the concept of ‘pay’. Thus, it has held that travel facilities (Case C-12/81 Garland [1982] ECR 359, paragraph 9), Christmas bonuses (Case C-281/97 Krüger [1999] ECR I-5127, paragraph 17) and compensation in respect of training undertaken (Case C-360/90 Bötel [1992] ECR I-3589, paragraphs 12 to 15) all constitute pay. I do not think that expanding this list to include pay of the kind in question here should present any difficulty.

( 11 ) The purpose served by the benefit which the pay comprises is, it seems to me, of little consequence. By this I mean that it is irrelevant whether it is consideration in the narrow sense, a productivity bonus or a measure intended to improve working conditions. The decisive factor here is the grounds or reason for the benefit rather than the purpose which it serves. The benefit must derive from an employment relationship (and therefore be ‘in respect of’ it, using the terminology of Article 157 TFEU) and may serve whatever legitimate purpose the employer chooses.

( 12 ) Case 80/70 [1971] ECR 445.

( 13 ) The same can be said in the interests of achieving a degree of substantive uniformity between the arrangements applying in the Member States, over and above the formal differences attributable to their respective social security and public welfare systems and their freedom to create their own structures in this field. See, on this point, Krebber, S., ‘Art. 157’, in: Callies, C., and Ruffert, M., EUV/AEUV, 4th ed., C.H. Beck, Munich, 2011, marginal note 28.