Constance Christina Ellen Smith and others v Avdel Systems Ltd.
Date: 1994-09-28
5 Until 30 June 1991 the retirement age was set at 65 years for men and 60 years for women. With effect from 1 July 1991, that age was set uniformly at 65 years for both sexes. According to the national court, the change relates to benefits payable in respect of periods of service both prior and subsequent to 1 July 1991.
11 In its judgment in Case C-262/88 Barber v Guardian Royal Exchange Assurance Group [1990] ECR I-1889 ("the Barber judgment"), the Court ruled that pensions paid under a contracted-out pension scheme fall within the scope of Article 119 of the Treaty (paragraph 28), which prohibits any discrimination between men and women in relation to pay, whatever the arrangements giving rise to such inequality. Accordingly, it is contrary to Article 119 to impose an age condition which differs according to sex, even if the difference between the pensionable ages for men and women corresponds to that provided for by the national statutory scheme (paragraph 32).
12 However, overriding considerations of legal certainty led the Court to rule that the direct effect of Article 119 may be relied on, for the purpose of claiming equal treatment in the matter of occupational pensions, only in relation to benefits payable in respect of periods of service subsequent to 17 May 1990, subject to the exception in favour of workers or those claiming under them who have, before that date, initiated legal proceedings or raised an equivalent claim under the applicable national law (point 5 of the operative part of the Barber judgment, as clarified by the Court in, inter alia, its judgment of 6 October 1993 in Case C-109/91 Ten Oever v Stichting Bedrijfspensioenfonds voor het Glazenwassers- en Schoonmaakbedrijf [1993] ECR I-4879).
13 It was in order to comply with the Barber judgment that the occupational scheme concerned in the main proceedings adopted the measure now in dispute. In order to do so, it opted for one of the two possible ways of achieving equal treatment: instead of granting men the same advantage as that enjoyed by women and thus lowering their retirement age to that for women, the scheme raised the retirement age for women to that for men, even for the past, including the period prior to the Barber judgment, and as a result the position of women was made less favourable.
14 That being so, the point raised is whether it is permissible, for the purpose of achieving equality, to take away from the favoured class (in this case, women), both for the past and for the future, the advantage enjoyed by that class, the reference date being either the date of entry into force of such a measure (in this case, 1 July 1991) or the date of the Barber judgment (17 May 1990), which identified the discrimination to be eliminated.
15 At paragraph 15 of its judgment of 8 April 1976 in Case 43/75 Defrenne v Sabena [1976] ECR 455, where there was a claim in the main proceedings for compensation for discrimination in relation to pay, the Court ruled, in view of the connection between Article 119 and harmonization of working conditions while maintaining improvement, against the argument that compliance with Article 119 could be achieved otherwise than by raising the lowest salaries.
16 Moreover, in paragraphs 18 to 20 of its judgment of 7 February 1991 in Case C-184/89 Nimz v Freie und Hansestadt Hamburg [1991] ECR I-297, the Court held that a national court must set aside any discriminatory provision of national law, without having to request or await its prior removal by collective bargaining or by any other constitutional procedure, and to apply to members of the disadvantaged group the same arrangements as those enjoyed by other workers, arrangements which, failing correct implementation of Article 119 in national law, remain the only valid point of reference.
17 It follows that, once the Court has found that discrimination in relation to pay exists and so long as measures for bringing about equal treatment have not been adopted by the scheme, the only proper way of complying with Article 119 is to grant to the persons in the disadvantaged class the same advantages as those enjoyed by the persons in the favoured class.
18 Application of this principle to the present case means that, as regards the period between 17 May 1990 (the date of the Barber judgment) and 1 July 1991 (the date on which the scheme adopted measures to achieve equality) the pension rights of men must be calculated on the basis of the same retirement age as that for women.
19 As regards periods of service prior to 17 May 1990, the Barber judgment excluded application of Article 119 to pension benefits payable in respect of those periods, so that employers and trustees are not required to ensure equal treatment as far as those benefits are concerned.
20 It follows that, as far as those latter periods are concerned, Community law imposed no obligation which would justify retroactive reduction of the advantages which women enjoyed.
21 As regards periods of service completed after the entry into force, in this case on 1 July 1991, of rules designed to eliminate discrimination, Article 119 of the Treaty does not preclude measures which achieve equal treatment by reducing the advantages of the persons previously favoured. Article 119 merely requires that men and women should receive the same pay for the same work without imposing any specific level of pay.
22 The answer to the first question must therefore be that Article 119 of the Treaty precludes an employer who adopts measures necessary to comply with the Barber judgment from raising the retirement age for women to that for men in relation to periods of service completed between 17 May 1990, the date of that judgment, and the date on which those measures come into force. On the other hand, as regards periods of service completed after the latter date, Article 119 does not prevent an employer from taking that step. As regards periods of service prior to 17 May 1990, Community law imposed no obligation which would justify retroactive reduction of the advantages which women enjoyed.
The second question
23 The point of the second question is whether, if Article 119 allows the retirement age for women to be raised to that for men, occupational pension schemes which equalize retirement ages in that way must minimize the adverse consequences of that change for women.
24 In view of the answer given to the first question, the second question arises only in relation to periods of service subsequent to the entry into force of the measures taken to achieve equality by raising the retirement age for women.
25 In reply to that point it is sufficient to say that equal treatment between men and women in relation to pay is a fundamental principle of Community law and that, given the direct effect of Article 119, its application by employers must be immediate and full.
26 It follows that, once discrimination has been found to exist, and an employer takes steps to achieve equality for the future by reducing the advantages of the favoured class, achievement of equality cannot be made progressive on a basis that still maintains discrimination, even if only temporarily.
27 The answer to the second question must therefore be that the step of raising the retirement age for women to that for men, which an employer decides to take in order to remove discrimination in relation to occupational pensions as regards benefits payable in respect of future periods of service, cannot be accompanied by measures, even if only transitional, designed to limit the adverse consequences which such a step may have for women.
The third question
28 The substance of the third question is whether, in those cases in which Article 119 precludes raising the retirement age for women in order to achieve equal treatment, an occupational scheme may nevertheless take such a step by reason of objectively justifiable considerations relating to the needs of the undertaking or to the needs of the scheme itself.
29 This question concerns pension benefits payable in respect of periods of service completed between 17 May 1990, the date of the Barber judgment, and the date of the entry into force of the measures designed to achieve equal treatment by raising the retirement age for women. As explained above, it is only in relation to these periods that such a step is not permissible.
30 Even assuming that it would, in this context, be possible to take account of objectively justifiable considerations relating to the needs of the undertaking or of the occupational scheme concerned, the administrators of the occupational scheme could not reasonably plead, as justification for raising the retirement age for women during this period, financial difficulties as significant as those of which the Court took account in the Barber judgment, since the space of time involved is relatively short and attributable in any event to the conduct of the scheme administrators themselves.
31 The answer to the third question must therefore be that Article 119 of the Treaty precludes an occupational scheme, relying on its own difficulties or those of the undertaking concerned, from retrospectively raising the retirement age for women in relation to periods of service completed between 17 May 1990 and the date of entry into force of the measures by which equality is achieved in the scheme in question.