David Neath v Hugh Steeper Ltd.
Date: 1993-12-22
16 Given the reasons explained in paragraph 44 of the Barber judgment for limiting its effects in time, it must be made clear that equality of treatment in the matter of occupational pensions may be claimed only in relation to benefits payable in respect of periods of employment subsequent to 17 May 1990 (the date of the Barber judgment) 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.
27 The Commission claims that this is indeed the case and that consequently any difference in treatment based on sex would be permissible only if it were objectively justified. Statistical data based on the life expectancy of the two sexes do not, in its view, constitute an objective justification because they reflect averages calculated on the basis of the entire male and female population whereas the right to equal treatment in the matter of pay is a right given to employees individually and not because they belong to a particular class.
28 It is, of course, settled law that the concept of pay, within the meaning of the second paragraph of Article 119, comprises any 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 end of the employment relationship does not prevent them from being pay within the meaning of Article 119 (see, in particular, the Barber judgment at paragraph 12).
29 The assumption underlying this approach is that the employer commits himself, albeit unilaterally, to pay his employees defined benefits or to grant them specific advantages and that the employees in turn expect the employer to pay them those benefits or provide them with those advantages. Anything that is not a consequence of that commitment and does not therefore come within the corresponding expectations of the employees falls outside the concept of pay.
30 In the context of a defined-benefit occupational pension scheme such as that in question in the main proceedings, the employer' s commitment to his employees concerns the payment, at a given moment in time, of a periodic pension for which the determining criteria are already known at the time when the commitment is made and which constitutes pay within the meaning of Article 119. However, that commitment does not necessarily have to do with the funding arrangements chosen to secure the periodic payment of the pension, which thus remain outside the scope of application of Article 119.
31 In contributory schemes, funding is provided through the contributions made by the employees and those made by the employers. The contributions made by the employees are an element of their pay since they are deducted directly from an employee' s salary, which by definition is pay (see the judgment in Case 69/80 Worringham and Humphreys v Lloyds Bank [1981] ECR 767). The amount of those contributions must therefore be the same for all employees, male and female, which is indeed so in the present case. This is not so in the case of the employer' s contributions which ensure the adequacy of the funds necessary to cover the cost of the pensions promised, so securing their payment in the future, that being the substance of the employer' s commitment.
32 It follows that, unlike periodic payment of pensions, inequality of employers' contributions paid under funded defined-benefit schemes, which is due to the use of actuarial factors differing according to sex, is not struck at by Article 119.
33 That conclusion necessarily extends to the specific aspects referred to in the questions submitted, namely the conversion of part of the periodic pension into a capital sum and the transfer of pension rights, the value of which can be determined only by reference to the funding arrangements chosen.