Judgment of the Court of 17 February 1993. - Commission of the European Communities v Kingdom of Belgium. - Failure of a Member State to fulfil its obligations - Equal pay for men and women - Additional redundancy payments. - Case C-173/91.



European Court reports 1993 Page I-00673



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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Social policy ° Male and female workers ° Equal pay ° Pay ° Definition ° Payment due from the last employer, introduced by a collective agreement in favour of workers made redundant above a certain age and supplementing unemployment benefit ° Included ° Payment to male workers only ° Not permissible

(EEC Treaty, Art. 119)

Summary

A payment due from the last employer, introduced by a collective agreement in favour of workers made redundant above a certain age provided that they are in receipt of unemployment benefit, in order to supplement the latter benefit, constitutes pay within the meaning of Article 119 of the Treaty, provided that it is payable by reason of the earlier employment relationship. Consequently, it is not permissible, by virtue of Article 119 of the Treaty, for that payment to be made to male workers only.

Parties

In Case C-173/91,

Commission of the European Communities, represented by Marie Wolfcarius, of its Legal Service, and by Théophile Magellos, Avocat and lecturer at the Université de Picardie, seconded to the Commission' s Legal Service, acting as Agents, with an address for service in Luxembourg at the office of Roberto Hayder, of its Legal Service, Wagner Centre, Kirchberg,

applicant,

v

Kingdom of Belgium, represented by Robert Hoebaer, Administrative Director at the Ministry for Foreign Affairs, Foreign Trade and Cooperation with Developing Countries, and Christian Deneve, Administrative Director in the Ministry for Labour and Employment, acting as Agents, with an address for service in Luxembourg at the Belgian Embassy, 4 Rue des Girondins,

defendant,

APPLICATION for a declaration that by retaining legislation which excludes female workers over the age of 60 from eligibility for the additional redundancy payments provided for by Collective Agreement No 17, rendered compulsory by the Royal Decree of 16 January 1975, the Kingdom of Belgium has failed to fulfil its obligations under Article 119 of the Treaty or, in the alternative, under 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 (OJ 1976 L 39, p. 40),

THE COURT,

composed of: O. Due, President, G.C. Rodriguez Iglesias and J.L. Murray (Presidents of Chambers), G.F. Mancini, R. Joliet, F.A. Schockweiler, M. Diez de Velasco, P.J.G. Kapteyn and D.A.O. Edward, Judges,

Advocate General: F.G. Jacobs,

Registrar: H. von Holstein, Deputy Registrar,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 20 October 1992, at which the Belgian Government was represented by Jan Devadder, Administrative Director in the Ministry of Foreign Affairs, acting as Agent.

after hearing the Opinion of the Advocate General at the sitting on 2 December 1992,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 2 July 1991, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by retaining legislation which excludes female workers over the age of 60 from eligibility for the additional redundancy payments provided for by Collective Agreement No 17, rendered compulsory by the Royal Decree of 16 January 1975, the Kingdom of Belgium has failed to fulfil its obligations under Article 119 of the Treaty or, in the alternative, under 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 (OJ 1976 L 39, p. 40).

2 Collective Agreement No 17 established a scheme of additional payments for workers who are made redundant at a particular age. Article 3 provides that the scheme is to apply to workers aged 60 and over who are made redundant, whilst Article 4 provides that such workers are entitled to the additional payment provided that they are in receipt of unemployment benefits.

3 The additional payment is payable by the worker' s last employer. It is equal to half the difference between the net reference wage and the unemployment benefit (Article 5). The Belgian Government concedes that, in most cases, the sum of the additional payment and the unemployment benefit exceeds the amount of the pension.

4 Pursuant to Article 144 of the Royal Decree of 20 December 1963 on employment and unemployment, as amended by Article 13 of the Royal Decree of 7 August 1984, "unemployed persons shall cease to be entitled to unemployment benefit as from the first day of the calendar month following that in which their 65th or 60th birthday falls, in the case of men and women respectively". That provision, which reflects the earlier difference in retirement age as between men and women, was maintained despite the entry into force of the Law of 20 July 1990 introducing a flexible retirement age between 60 and 65 for workers of both sexes.

5 It is common ground that, as a result of the combined application of the various national provisions mentioned above, only male workers qualify for the system of additional payments introduced by Collective Agreement No 17.

6 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the pleas in law and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

7 The Commission submits that the system of additional payments at issue falls within the scope of Article 119 of the Treaty and that, in so far as women aged between 60 and 65, unlike men who have attained the same age range, are unable to qualify for it, that system is incompatible with the provisions of that article embodying the principle of equal pay for male and female workers.

8 In the event that Article 119 of the Treaty should be found to be inapplicable to the present case, the Commission submits, in the alternative, that the discriminatory situation at issue is incompatible with Article 5(1) of Directive 76/207, pursuant to which "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." It considers that a condition for the grant of an additional redundancy payment is a condition governing dismissal within the meaning of Article 5 of that directive.

9 The Belgian Government does not deny the difference of treatment as such but contends that it is not contrary to Community law, since the additional payment at issue cannot be regarded as pay within the meaning of Article 119. It considers that the payment is not a redundancy payment but a payment supplementing the unemployment benefit in the event of redundancy, forming an integral part of a sui generis social security scheme, namely the contractual early-retirement pension scheme provided for by the collective labour agreements. The latter is made up of the unemployment benefit, as the basic component, and the additional payment, which, in conjunction with the unemployment benefit, is thus in the nature of a social security benefit.

10 Since the additional payment at issue is thus a social security benefit, Directive 76/207 is not, in the Belgian Government' s view, applicable. It considers that the relevant provisions are those 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) and Council Directive 86/378/EEC of 24 July 1986 on the implementation of the principle of equal treatment for men and women in occupational social security schemes (OJ 1986 L 225, p. 40).

11 The Belgian Government contends that, in Article 7(1)(a) and Article 9(a) respectively, those two directives empower the Member States to derogate from the principle of equal treatment regarding "the determination of pensionable age ... and the possible consequences thereof for other benefits". Since, as in the case of unemployment benefit, the differences regarding the award of the additional payments reflect the different retirement ages for men and women, the alleged discrimination is in its view covered by the derogation mentioned above, being in point of fact one of the "consequences thereof for other benefits".

12 It is necessary to begin by examining the plea in law as to infringement of Article 119 of the Treaty.

13 As is apparent from the case-law of the Court, 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. 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 (see, in particular, the judgment in Case C-262/88 Barber [1990] ECR I-1889, paragraph 12).

14 On the other hand, that definition of "pay" cannot cover social security schemes or benefits such as, for example, retirement pensions, which are governed by statute without any element of negotiation within the undertaking or branch of activity concerned, and which apply compulsorily to general categories of workers. Such schemes provide workers with the benefit of a statutory system to the financing of which the workers, the employers and, in some cases, the public authorities contribute to an extent determined less by the employment relationship between the employer and the worker than by considerations of social policy (judgment in Case 80/70 Defrenne [1971] ECR 445, paragraphs 7 and 8).

15 Having regard to the criteria thus elicited by the Court, the additional payment at issue, although sui generis in certain respects, must be deemed to constitute "pay" within the meaning of Article 119 of the Treaty.

16 It is clear from Collective Agreement No 17 that that payment is to be received from the redundant worker' s last employer (Article 4) and that it is payable by reason of the employment relationship which existed between those two persons, the agreement being applicable only to workers employed in pursuance of a contract of employment and their employers (Article 2).

17 It is also apparent that the additional payment is contractual since it is the result of negotiations between employers and employees. The fact that it was subsequently made compulsory erga omnes by legislation cannot therefore detract from its contractual nature. In any event, as the Court held in Barber (paragraph 16), a redundancy payment made by the employer 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.

18 The Belgian Government' s argument that the additional payment and the unemployment benefit form an indivisible unit, namely the "contractual early-retirement pension," and that consequently the additional payment should, like unemployment benefit, be regarded as a social security benefit cannot be upheld.

19 It must be observed, first, that whilst it is true that the amount of the payment is dependent both on the reference wage and on the unemployment benefit, the additional payment nevertheless constitutes consideration received by the worker from the employer in respect of the employment relationship which existed between them.

20 Secondly, the fact that the payment supplements a social security benefit such as unemployment benefit is not decisive. Under Collective Agreement No 17, the additional payment, although linked to the unemployment benefit as regards the manner in which it is made, is independent of the general social security scheme as regards both its structure and its financing, the latter being the responsibility of the employer alone.

21 Finally, as the Court held in Barber (paragraph 18), provided that the worker is entitled to receive a benefit from his employer by reason of the existence of the employment relationship, the fact that that benefit is in the nature of pay cannot be called in question merely because it can also be regarded as reflecting considerations of social policy.

22 It follows from the foregoing considerations that the additional payment at issue constitutes pay within the meaning of Article 119 of the Treaty, the provisions of which are therefore applicable to the present case and preclude that benefit from being granted only to male workers aged between 60 and 65 who are made redundant whilst female workers who are made redundant within the same age range are denied it.

23 The Commission' s application must therefore be upheld, without there being any need to consider the plea in law advanced in the alternative.

Decision on costs

Costs

24 25 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party' s pleadings. Since the Kingdom of Belgium has been unsuccessful, it must be ordered to pay the costs.

Operative part

On those grounds,

THE COURT

hereby:

1. Declares that by retaining legislation which excludes female workers over the age of 60 from eligibility for the additional redundancy payments provided for by Collective Agreement No 17, rendered compulsory by the Royal Decree of 16 January 1975, the Kingdom of Belgium has failed to fulfil its obligations under Article 119 of the Treaty;

2. Orders the Kingdom of Belgium to pay the costs.