Judgment of the Court of 14 December 1995. - Ursula Megner and Hildegard Scheffel v Innungskrankenkasse Vorderpfalz, now Innungskrankenkasse Rheinhessen-Pfalz. - Reference for a preliminary ruling: Sozialgericht Speyer - Germany. - Equal treatment for men and women in matters of social security - Article 4(1) of Directive 79/7/EEC - Minor and short-term employment - Exclusion from compulsory old-age insurance and sickness insurance and from the obligation to pay unemployment insurance contributions. - Case C-444/93.



European Court reports 1995 Page I-04741



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

++++

1. Social policy ° Equal treatment for men and women in matters of social security ° Scope ratione personae of Directive 79/7 ° Working population within the meaning of Article 2 of the directive ° Persons in minor employment characterized by a limited number of working hours and low pay ° Included

(Council Directive 79/7, Art. 2)

2. Social policy ° Equal treatment for men and women in matters of social security ° Directive 79/7 ° National legislation excluding minor and short-term employment from the compulsory sickness and old-age insurance schemes and from the obligation to contribute to the unemployment insurance scheme ° Provisions principally affecting women ° Objective justification ° Permissible

(Council Directive 79/7, Art. 4(1))

Summary

1. Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security must be interpreted as meaning that persons in employment which is regarded as minor because it regularly consists of fewer than 15 hours' work a week and regularly attracts remuneration of up to one-seventh of the average monthly salary or in short-term employment characterized by the fact that it tends by its nature to be regularly limited to fewer than 18 hours a week or is so limited in advance by a contract of employment, form part of the working population within the meaning of Article 2 of that directive and therefore fall within its scope ratione personae.

The fact that a person' s earnings from employment do not cover all his needs cannot prevent him from being under Community law a worker or a member of the working population.

2. Article 4(1) of Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security must be interpreted as meaning that national provisions under which employment regularly consisting of fewer than 15 hours a week and regularly attracting remuneration of up to one-seventh of the monthly reference amount is excluded from compulsory insurance under the statutory sickness and old-age insurance schemes, and national provisions under which employment which tends by its nature to be regularly limited to fewer than 18 hours a week or is so limited in advance by a contract of employment is excluded from the obligation to contribute to the statutory unemployment insurance scheme, do not constitute discrimination on grounds of sex, even where the relevant provisions affect considerably more women than men, since the national legislature was reasonably entitled to consider that the legislation in question was necessary in order to achieve a social policy aim unrelated to any discrimination on grounds of sex.

That will be the case where the exclusion of such employment from compulsory insurance corresponds to a structural principle of a contributory social security scheme, is the only means of satisfying a social demand for such employment and is designed to avoid an increase in unlawful employment and devices circumventing social legislation.

Parties

In Case C-444/93,

REFERENCE to the Court under Article 177 of the EC Treaty by the Sozialgericht Speyer (Germany) for a preliminary ruling in the proceedings pending before that court between

Ursula Megner,

Hildegard Scheffel

and

Innungskrankenkasse Vorderpfalz, now

Innungskrankenkasse Rheinhessen-Pfalz,

supported by

Landesversicherungsanstalt Rheinland-Pfalz,

Bundesanstalt fuer Arbeit,

Firma G.F. Hehl & Co.,

interveners,

on the interpretation of Article 4(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 (OJ 1979 L 6, p. 24),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, C.N. Kakouris (Rapporteur), D.A.O. Edward and G. Hirsch (Presidents of Chambers), F.A. Schockweiler, J.C. Moitinho de Almeida, P.J.G. Kapteyn, J.L. Murray, P. Jann, H. Ragnemalm and L. Sevón, Judges,

Advocate General: P. Léger,

Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

° Mrs Megner and Mrs Scheffel, by Gert Siller, an officer of the Deutscher Gewerkschaftsbund,

° Innungskrankenkasse Vorderpfalz, by Ralf Imhoff, Justitiar of the Innungskrankenkasse-Bundesverband,

° Landesversicherungsanstalt Rheinland-Pfalz, by Lothar Florian, Director,

° Firma G.F. Hehl & Co., by Volker Daum, Rechtsanwalt, Mannheim,

° the German Government, by Ernst Roeder, Ministerialrat in the Federal Ministry of Economic Affairs, and Bernd Kloke, Regierungsrat in that ministry, acting as Agents,

° the Belgian Government, by Patrick Duray, Assistant Adviser in the Legal Affairs Department of the Ministry of Foreign Affairs, acting as Agent,

° the French Government, by Catherine de Salins, Deputy Director in the Legal Affairs Department of the Ministry of Foreign Affairs, and Claude Chavance, Attaché Principal d' Administration Centrale in that ministry, acting as Agents,

° the Irish Government, by Michael A. Buckley, Chief State Solicitor, acting as Agent,

° the United Kingdom, by S. Lucinda Hudson, Assistant Treasury Solicitor, acting as Agent, and Nicholas Paines, Barrister,

° the Commission of the European Communities, by Marie Wolfcarius, of its Legal Service, and Horstpeter Kreppel, a German civil servant seconded to its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Mrs Megner and Mrs Scheffel, represented by Gert Siller; Innungskrankenkasse Vorderpfalz, represented by Ralf Imhoff; Firma G.F. Hehl & Co., represented by Ralph Landsittel, Rechtsanwalt, Mannheim; the German Government, represented by Ernst Roeder; the French Government, represented by Claude Chavance; the Irish Government, represented by Donal O' Donnel, Barrister; the United Kingdom, represented by Nicholas Paines; and the Commission, represented by Marie Wolfcarius and Horstpeter Kreppel, at the hearing on 8 March 1995,

after hearing the Opinion of the Advocate General delivered at the sitting on 31 May 1995,

gives the following

Judgment

Grounds

1 By order of 26 October 1993, received at the Court on 18 November 1993, the Sozialgericht (Social Court) Speyer referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Article 4(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 (OJ 1979 L 6, p. 24, hereinafter "the directive").

2 That question was raised in proceedings between Mrs Megner and Mrs Scheffel, on the one hand, and Innungskrankenkasse Vorderpfalz, on the other.

3 Mrs Megner and Mrs Scheffel are employed as cleaners by Firma G.F. Hehl & Co., an office cleaning undertaking. Their normal working time is a maximum of two hours per working day, five days a week. Their remuneration is set by the collective agreement for office-cleaning trades and does not exceed one-seventh of the relevant monthly reference amount.

4 The plaintiffs in the main proceedings sought from Innungskrankenkasse Vorderpfalz recognition that they were subject to compulsory insurance under the statutory sickness and old-age insurance scheme and that they were under an obligation to pay contributions to the statutory unemployment insurance scheme.

5 By letter of 6 March 1992, Innungskrankenkasse Vorderpfalz refused their request on the ground that they were in minor or short-term employment, which, under the German legislation, is exempt from compulsory insurance and contributions under the relevant statutory schemes.

6 Paragraph 8(1)(1) of Volume IV of the Sozialgesetzbuch (Social Security Code, hereinafter "SGB") provides that employment

"... shall be regarded as being minor where:

it is regularly engaged in for fewer than 15 hours a week and the monthly remuneration does not regularly exceed:

...

(b) ... one-seventh of the average monthly salary (Paragraph 18) ...".

7 The reference amount referred to in Paragraph 8(1)(1)(b) is fixed annually. In 1993 it was DM 530 a month in the original Laender and DM 390 in the new Laender.

8 By virtue of Paragraph 7 of Volume V of the SGB, minor employment is exempt from compulsory sickness insurance. In addition, under Paragraph 5(2)(1) of Volume VI of the SGB, such employment is not subject to compulsory old-age insurance.

9 The statutory unemployment insurance scheme gives entitlement to unemployment benefit or assistance to persons who have exercised an activity subject to the obligation to pay contributions or to persons who have accrued a period treated as equivalent thereto (Paragraphs 100, 134, 104 and 168 of the Arbeitsfoerderungsgesetz, Law on the Promotion of Employment, hereinafter "the AFG").

10 By virtue of Paragraph 169a(1) and (2) of the AFG, workers in short-term or minor employment are exempt from the obligation to pay contributions.

11 Paragraph 102(1) of the AFG defines "short-term employment" as:

"... employment which is by its nature regularly limited to 18 hours a week or is so limited in advance by a contract of employment ...".

12 It was in those circumstances that Mrs Megner and Mrs Scheffel brought proceedings in the Sozialgericht Speyer in which they claimed that the national provisions relating to exemption from compulsory insurance and contributions under the statutory schemes in question constituted indirect discrimination against women and were therefore contrary to Article 4(1) of the directive, which provides as follows:

"The principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:

° the scope of the schemes and the conditions of access thereto,

° the obligation to contribute ...".

13 Considering that the outcome of the proceedings turned on the interpretation of the directive, the Sozialgericht Speyer stayed the proceedings and referred the following question to the Court for a preliminary ruling:

"Must Article 4(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 (OJ 1979 L 6, p. 24) be interpreted as meaning that a national rule which excludes employment regularly consisting of fewer than 15 hours a week and regularly attracting remuneration of up to one-seventh of the monthly reference amount (SGB IV, Paragraph 18) from compulsory insurance under the statutory sickness and old-age insurance schemes (SGB V, Paragraph 7; SGB VI, Paragraph 5(2)(1); SGB IV, Paragraph 8(1)(1)) and a national rule which excludes employment which tends by its nature to be regularly limited to fewer than 18 hours a week or is limited in advance by a contract of employment from the obligation to contribute to the statutory unemployment insurance scheme (AFG, Paragraphs 169a(1) and 102(1)) constitute discrimination on grounds of sex if considerably more women than men are affected thereby, and is it the case that such discrimination is not justified by objective criteria unrelated to any discrimination on grounds of sex?"

14 Before considering the interpretation of Article 4(1) of the directive, the Court must ascertain whether persons in employment of the type referred to in the national court' s question fall within the scope of the directive.

Scope ratione personae of the directive

15 According to Article 2, the directive "shall apply to the working population ° including self-employed persons, workers and self-employed persons whose activity is interrupted by illness, accident or involuntary unemployment and persons seeking employment ° and to retired or invalided workers and self-employed persons".

16 It follows from that provision that the definition of the working population is very broad, since it covers any worker, including persons who are merely seeking employment. In contrast, according to the Court' s case-law, the directive does not apply to persons who have never been available for employment or who have ceased to be available for a reason other than the materialization of one of the risks referred to by the directive (Joined Cases 48/88, 106/88 and 107/88 Achterberg-te Riele and Others v Sociale Verzekeringsbank [1989] ECR 1963, paragraph 11).

17 The German Government and Firma G.F. Hehl & Co. argue that persons in minor employment are not part of the working population within the meaning of Article 2 of the directive, in particular because the small earnings which they receive from such employment are not sufficient to satisfy their needs.

18 That argument cannot be upheld. The fact that a worker' s earnings do not cover all his needs cannot prevent him from being a member of the working population. It appears from the Court' s case-law that the fact that his employment yields an income lower than the minimum required for subsistence (see Case 53/81 Levin v Staatssecretaris van Justitie [1982] ECR 1035, paragraphs 15 and 16) or normally does not exceed 18 hours a week (see Case C-102/88 Ruzius-Wilbrink [1989] ECR 4311, paragraphs 7 and 17) or 12 hours a week (see Case 139/85 Kempf v Staatssecretaris van Justitie [1986] ECR 1741, paragraphs 2 and 16) or even 10 hours a week (see Case 171/88 Rinner-Kuehn [1989] ECR 2743, paragraph 16) does not prevent the person in such employment from being regarded as a worker within the meaning of Article 48 (the Levin and Kempf cases) or Article 119 of the EEC Treaty (the Rinner-Kuehn case) or for the purposes of Directive 79/7 (the Ruzius-Wilbrink case).

19 The German Government further argues that a different view ought to be taken in this case, since what is at issue is not the concept of a worker within the meaning of Article 48 of the Treaty, as in particular in the Levin case, but the concept of a worker within the meaning of social security law. It maintains that the definition of the concept of a worker in the latter sphere falls within the competence of the Member States.

20 It should be observed in that connection that as long ago as the judgment in Case 75/63 Hoekstra (née Unger) [1964] ECR 177 (paragraph 1 of the operative part) the Court ruled that the concept of "wage-earner or assimilated worker" referred to in Regulation No 3 of the Council of 25 September 1958 concerning social security for migrant workers (Journal Officiel 1958, 30, p. 561) had, like the term "worker" in Articles 48 to 51, a Community meaning. Consequently, the fact that the Levin, Kempf and Rinner-Kuehn cases do not relate to social security law and are not concerned with the interpretation of Article 2 of Directive 79/7 cannot call in question the finding made in paragraph 18, since those judgments define the concept of a worker in the light of the principle of equal treatment.

21 It follows that persons in minor employment of the type referred to in the national court' s question are part of the working population within the meaning of Article 2 of the directive and therefore fall within its scope ratione personae.

Interpretation of Article 4(1) of the directive

22 By its question, the national court essentially seeks to establish whether Article 4(1) of the directive is to be interpreted as meaning that national provisions under which employment regularly consisting of fewer than 15 hours a week and regularly attracting remuneration of up to one-seventh of the monthly reference amount is excluded from compulsory insurance under the statutory sickness and old-age insurance schemes, and national provisions under which employment which tends by its nature to be regularly limited to fewer than 18 hours a week or is so limited in advance by a contract of employment is excluded from the obligation to contribute to the statutory unemployment insurance scheme, constitute discrimination on grounds of sex where the relevant provisions affect considerably more women than men and are not justified by objective criteria unrelated to any discrimination on grounds of sex.

23 It is common ground that the national provisions at issue in the main proceedings are not directly discriminatory, since they do not exclude persons in minor employment from the statutory schemes at issue on the ground of their sex. It must therefore be considered whether such provisions may constitute indirect discrimination.

24 As the Court has consistently held, Article 4(1) of the directive precludes the application of a national measure which, although formulated in neutral terms, works to the disadvantage of far more women than men, unless that measure is based on objective factors unrelated to any discrimination on grounds of sex. That is the case where the measures chosen reflect a legitimate social policy aim of the Member State whose legislation is at issue, are appropriate to achieve that aim and are necessary in order to do so (Case C-343/92 De Weerd, née Roks and Others [1994] ECR I-571, paragraphs 33 and 34).

25 In this case, the German Government argues, in particular, that the exclusion of persons in minor employment from the statutory social security schemes corresponds to a structural principle of the German social security scheme.

26 In support of the German Government' s arguments, the United Kingdom and the Irish Government stressed in particular that contributory schemes, such as that at issue, require equivalence to be maintained between the contributions paid by employees and employers and the benefits paid in the event of the materialization of one of the risks covered by the scheme. The structure of the scheme could not be maintained in its present form if the provisions in question had to be abolished. Serious problems would arise in particular in the statutory old-age insurance scheme. The scheme would no longer be able to function on an exclusively contributory basis.

27 The German Government further explains that there is a social demand for minor employment, that it considers that it should respond to that demand in the context of its social policy by fostering the existence and supply of such employment and that the only means of doing this within the structural framework of the German social security scheme is to exclude minor employment from compulsory insurance.

28 In addition, the German Government contends that the jobs lost would not be replaced by full- or part-time jobs subject to compulsory insurance. On the contrary, there would be an increase in unlawful employment ("black" work) and a rise in circumventing devices (for instance, false self-employment) in view of the social demand for minor employment.

29 The Court observes that, in the current state of Community law, social policy is a matter for the Member States (see Case C-229/89 Commission v Belgium [1991] ECR I-2205, paragraph 22). Consequently, it is for the Member States to choose the measures capable of achieving the aim of their social and employment policy. In exercising that competence, the Member States have a broad margin of discretion.

30 It should be noted that the social and employment policy aim relied on by the German Government is objectively unrelated to any discrimination on grounds of sex and that, in exercising its competence, the national legislature was reasonably entitled to consider that the legislation in question was necessary in order to achieve that aim.

31 In those circumstances, the legislation in question cannot be described as indirect discrimination within the meaning of Article 4(1) of the directive.

32 Accordingly, it should be stated in reply to the question from the national court that Article 4(1) of the directive must be interpreted as meaning that national provisions under which employment regularly consisting of fewer than 15 hours a week and regularly attracting remuneration of up to one-seventh of the monthly reference amount is excluded from compulsory insurance under the statutory sickness and old-age insurance schemes, and national provisions under which employment which tends by its nature to be regularly limited to fewer than 18 hours a week or is so limited in advance by a contract of employment is excluded from the obligation to contribute to the statutory unemployment insurance scheme, do not constitute discrimination on grounds of sex, even where the relevant provisions affect considerably more women than men, since the national legislature was reasonably entitled to consider that the legislation in question was necessary in order to achieve a social policy aim unrelated to any discrimination on grounds of sex.

Decision on costs

Costs

33 The costs incurred by the Belgian, French, German and Irish Governments, the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT,

in answer to the question referred to it by the Sozialgericht Speyer, by order of 26 October 1993, hereby rules:

Article 4(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 must be interpreted as meaning that national provisions under which employment regularly consisting of fewer than 15 hours a week and regularly attracting remuneration of up to one-seventh of the monthly reference amount is excluded from compulsory insurance under the statutory sickness and old-age insurance schemes, and national provisions under which employment which tends by its nature to be regularly limited to fewer than 18 hours a week or is so limited in advance by a contract of employment is excluded from the obligation to contribute to the statutory unemployment insurance scheme, do not constitute discrimination on grounds of sex, even where the relevant provisions affect considerably more women than men, since the national legislature was reasonably entitled to consider that the legislation in question was necessary in order to achieve a social policy aim unrelated to any discrimination on grounds of sex.