Case C-147/02

Michelle K. Alabaster

v

Woolwich plc and Secretary of State for Social Security

(Reference for a preliminary ruling from the Court of Appeal (England and Wales) (Civil Division))

(Social policy – Men and women – Equal pay – Pay during maternity leave – Calculation of the amount of pay – Pay rise taken into account)

Summary of the Judgment

1.        Social policy – Men and women – Equal pay – Maternity leave – Determining the pay received during maternity leave – Criteria – Obligation to include a pay rise awarded between the beginning of the period covered by the reference pay and the end of the maternity leave – Conditions

(EC Treaty, Art. 119 (Arts 117 to 120 of the EC Treaty have been replaced by Arts 136 EC to 143 EC))

2.        Social policy – Approximation of laws – Protection of the safety and health of workers – Pregnant workers and workers who have recently given birth or are breastfeeding – Directive 92/85 – Pay received during maternity leave – Obligation on the Member States to determine how any pay rise is to be included

(Council Directive 92/85)

1.        Article 119 of the Treaty (Articles 117 to 120 of the Treaty have been replaced by Articles 136 to 143 EC) must be interpreted as requiring that, in so far as the pay received by the worker during her maternity leave is determined at least in part on the basis of the pay she earned before her maternity leave began, any pay rise awarded between the beginning of the period covered by the reference pay and the end of the maternity leave must be included in the elements of pay taken into account in calculating the amount of such pay. This requirement is not limited to cases where the pay rise is back-dated to the period covered by the reference pay.

(see para. 50, operative part 1)

2.        Absent any Community legislation in this sphere, it is for the competent national authorities to determine how, in compliance with all the provisions of Community law, and in particular Directive 92/85 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding, any pay rise awarded before or during maternity leave must be included in the elements of pay used to calculate the pay due to a worker during maternity leave.

(see para. 56, operative part 2)





JUDGMENT OF THE COURT (Full Court)
30 March 2004(1)

(Social policy – Men and women – Equal pay – Pay during maternity leave – Calculation of amount – Whether to include a pay rise)

In Case C-147/02,

REFERENCE to the Court under Article 234 EC by the Court of Appeal (England and Wales) (Civil Division) for a preliminary ruling in the proceedings pending before that court between

Michelle KAlabaster

and

Woolwich plc,Secretary of State for Social Security,

on the interpretation of Article 119 of the EC Treaty (Articles 117 to 120 of the EC Treaty have been replaced by Articles 136 to 143 EC) and the judgment in Case C-342/93 Gillespie and Others [1996] ECR I-475,

THE COURT (Full Court),



composed of: V. Skouris, President, P. Jann, C.W.A. Timmermans, C. Gulmann, J.N. Cunha Rodrigues and A. Rosas, Presidents of Chambers, A. La Pergola, J.-P. Puissochet, R. Schintgen (Rapporteur), F. Macken and N. Colneric, Judges,

Advocate General: P. Léger,
Registrar: L. Hewlett, Principal Administrator,

after considering the written observations submitted on behalf of:

Mrs Alabaster, by L. Cox QC and K. Monaghan, Barrister,

Woolwich plc, by M. Griffiths, Barrister, instructed by C. McIntyre, Solicitor,

the United Kingdom Government, by P. Ormond, acting as Agent, C. Vajda QC and R. Haynes, Barrister,

the Commission of the European Communities, by M.-J. Jonczy and N. Yerrell, acting as Agents,

after hearing the oral observations of Mrs Alabaster, represented by K. Monaghan and by A. Reindorf, Barrister, the United Kingdom Government, represented by C. Jackson, acting as Agent, and C. Vajda, and the Commission, represented by J. Jonczy and N. Yerrell, at the hearing on 24 June 2003,

after hearing the Opinion of the Advocate General at the sitting on 30 September 2003,

gives the following



Judgment



1
By order of 27 March 2002, received at the Court on 22 April 2002, the Court of Appeal (England and Wales) (Civil Division) referred to the Court for a preliminary ruling under Article 234 EC three questions on the interpretation of Article 119 of the EC Treaty (Articles 117 to 120 of the EC Treaty have been replaced by Articles 136 to 143 EC) and the judgment in Case C-342/93 Gillespie and Others [1996] ECR I-475.

2
Those questions were raised in proceedings between Mrs Alabaster and Woolwich plc (hereinafter ‘the Woolwich’) and the Secretary of State for Social Security relating to a request to have a pay rise taken into account in calculating statutory maternity pay.


Legal background

Community legislation

3
The first two paragraphs of Article 119 of the Treaty, as applicable at the time of the facts in the main proceedings, provide:

‘Each Member State shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work.

For the purpose of this article, pay means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, whether directly or indirectly, in respect of his employment from his employer.’

4
According to the first paragraph of Article 1 of Council Directive 75/117/EEC of 10 February 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women (OJ 1975 L 45, p. 19), the principle of equal pay is intended to eliminate, for the same work or for work to which equal value is attributed, all discrimination on grounds of sex with regard to all aspects and conditions of remuneration.

5
Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding (tenth individual directive within the meaning of Article 16(1) of Directive 89/391/EEC) (OJ 1992 L 348, p. 1) was adopted on the basis of Article 118a of the EC Treaty.

6
Article 14(1) provided that the directive was to be transposed by 19 October 1994 at the latest.

7
Article 8 of Directive 92/85, on maternity leave, provides as follows:

‘1.     Member States shall take the necessary measures to ensure that workers within the meaning of Article 2 are entitled to a continuous period of maternity leave of at least 14 weeks allocated before and/or after confinement in accordance with national legislation and/or practice.

2.       The maternity leave stipulated in paragraph 1 must include compulsory maternity leave of at least two weeks allocated before and/or after confinement in accordance with national legislation and/or practice.’

8
With regard to employment rights, Article 11 of Directive 92/85 provides as follows:

‘In order to guarantee workers within the meaning of Article 2 the exercise of their health and safety protection rights as recognised in this article, it shall be provided that:

...

(2)
in the case referred to in Article 8, the following must be ensured:

(a)
the rights connected with the employment contract of workers within the meaning of Article 2, other than those referred to in point (b) below;

(b)
maintenance of a payment to, and/or entitlement to an adequate allowance for, workers within the meaning of Article 2;

(3)
The allowance referred to in point 2(b) shall be deemed adequate if it guarantees income at least equivalent to that which the worker concerned would receive in the event of a break in her activities on grounds connected with her state of health, subject to any ceiling laid down under national legislation.

(4)
Member States may make entitlement to pay or the allowance referred to in points 1 and 2(b) conditional upon the worker concerned fulfilling the conditions of eligibilty for such benefits laid down under national legislation.

These conditions may under no circumstances provide for periods of previous employment in excess of 12 months immediately prior to the presumed date of confinement.’

National law

The Social Security Contributions and Benefits Act 1992

9
The national provisions on statutory maternity pay are to be found in Part XII of the Social Security Contributions and Benefits Act 1992 (‘the Act’).

10
Under section 164 of the Act, an employee is entitled to statutory maternity pay if she has been employed for a continuous period of at least 26 weeks with the same employer by the 15th week before the expected week of confinement, her normal weekly earnings are over a certain level, she has given the employer the appropriate notice and the baby is due within 11 weeks.

11
Under section 165(1) of the Act, statutory maternity pay is payable for a maximum of 18 weeks.

12
Section 166(1) of the Act provides that there are two rates of pay, the ‘higher rate’ and the ‘lower rate’.

13
Section 166(2) of the Act states that the higher rate is a rate equivalent to nine-tenths of the woman’s normal weekly earnings for a period of eight weeks immediately preceding the 14th week before the expected week of confinement or the lower rate, whichever is the higher. The lower rate is a flat-rate weekly payment.

14
Under section 166(1) and (4) of the Act, where an employee is entitled to higher rate statutory maternity pay, she is entitled to the higher rate for six weeks and to the lower rate for 12 weeks.

15
Section 171(4) of the Act provides that a woman’s normal weekly earnings are to be taken to be the average weekly earnings which in the relevant period have been paid to her.

The Statutory Maternity Pay (General) Regulations 1986

16
The Statutory Maternity Pay (General) Regulations 1986, as amended with effect from 12 June 1996 by Statutory Instrument No 1335 of 1996 (‘the Regulations’), lay down certain conditions for applying the Act with regard to statutory maternity pay.

17
Regulation 20 of the Regulations defines ‘earnings’ for the purpose of calculating statutory maternity pay.

18
Regulation 21 determines how normal weekly earnings are to be calculated.

19
Regulation 21(2) defines ‘the appropriate date’ as the first day of the 14th week before the expected week of confinement, or the first day in the week in which the woman is confined, whichever is the earlier.

20
Regulation 21(3) provides that the relevant period for the purposes of Section 171(4) of the Act is the period between:

‘(a)
the last normal pay day before the appropriate date; and

(b)
the last normal pay day to fall at least 8 weeks earlier than the normal pay day mentioned in subparagraph (a), including the normal pay day mentioned in subparagraph (a) but excluding that first mentioned in subparagraph (b)’.

21
Regulation 21(7) provides as follows:

‘In any case where a woman receives a back-dated pay increase which includes a sum in respect of a relevant period, normal weekly earnings shall be calculated as if such sum was paid in that relevant period even though received after that period.’


The main proceedings and the questions referred

22
Mrs Alabaster was an employee of the Woolwich in the United Kingdom from 7 December 1987 to 23 August 1996.

23
She commenced maternity leave on 8 January 1996, her expected week of confinement being 11 February 1996.

24
Mrs Alabaster received statutory maternity pay from the week of 7 January 1996. It was paid at the higher rate not just for the statutory six-week period but for an additional four weeks under her contract of employment. She then received it at the lower rate for eight weeks.

25
On 12 December 1995 Mrs Alabaster received a pay increase with effect from 1 December. However, this increase was not reflected in the calculation of her statutory maternity pay because it came after the relevant period for calculating normal earnings.

26
Pursuant to Regulation 21(3) of the Regulations, the relevant period for calculating normal earnings in Mrs Alabaster’s case began on 1 September 1995 and ended on 31 October 1995.

27
Regulation 21(7) of the Regulations was thus not applicable since it only entered into force on 12 June 1996. In any event, the provision would not have applied in Mrs Alabaster's case because her pay increase was not backdated in respect of the relevant period.

28
On 21 January 1997 Mrs Alabaster brought a complaint against the Woolwich in the Employment Tribunal, arguing that the failure to reflect the salary increase in the calculation of the statutory maternity pay she received constituted discrimination against her on grounds of sex, contrary to Article 119 of the Treaty.

29
The Secretary of State for Social Security was joined in the proceedings by an order of the Employment Tribunal dated 30 May 1997.

30
By a decision of 10 March 1999 the Employment Tribunal held, applying the Gillespie judgment, that the failure to take account of Mrs Alabaster’s pay increase in determining her statutory maternity pay amounted to a breach of Article 119 of the Treaty.

31
The Woolwich and the Secretary of State for Social Security appealed on this issue to the Employment Appeal Tribunal, which dismissed the appeal by a decision of 7 April 2000, also applying Gillespie.

32
The respondents in the main proceedings appealed to the Court of Appeal (England and Wales) (Civil Division), which, taking the view that the resolution of the dispute depended on the interpretation of Community law, decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘In a situation where:

the earnings-related element of a woman’s statutory maternity pay (SMP) is calculated by reference to her normal weekly earnings for an eight week period ending on the 15th week before the expected week of confinement (the relevant period), and

the employer grants a pay rise, which is not back-dated to the relevant period, at any time after the end of the relevant period used for calculating that woman’s earnings-related element of SMP and before the end of her maternity leave:

1.
Is [Article 119 of the Treaty] and the judgment in Gillespie [1996] ECR I‑475 to be interpreted as meaning that the woman is entitled to have that pay rise taken into consideration in calculating or re-calculating the earnings-related element of her SMP?

2.
Is the answer to Question 1 affected by whether the effective date of the pay rise commences: (i) prior to the beginning of the woman’s maternity leave, (ii) prior to the ending of the period of the earnings-related period of her SMP, or (iii) on some other date and, if so, on what date?

3.
If the answer to Question 1 is in the affirmative,

(a)
how should the calculation or re-calculation of the normal weekly earnings in the relevant period take into account the pay rise?

(b)
Should the relevant period be changed?

(c)
What allowance, if any, should be made for other factors occurring within the period to which the pay rise relates such as the numbers of hours worked, and the reason for the pay increase?

(d)
Does it follow that if there is a reduction in pay after the end of the relevant period but before the end of the woman’s period of maternity leave, her SMP should be calculated or re-calculated to take account of the reduction of pay, and if so, how is this to be done?’


Request for reopening of the oral procedure

33
By document lodged at the Court Registry on 18 November 2003, the United Kingdom Government requested the Court to order the reopening of the oral procedure pursuant to Article 61 of the Rules of Procedure.

34
In support of that request, it claims that in his Opinion the Advocate General gave his views on a question which had not been expressly referred by the national court.

35
The Court may of its own motion, or on a proposal from the Advocate General, or at the request of the parties reopen the oral procedure, in accordance with Article 61 of its Rules of Procedure, if it considers that it lacks sufficient information, or that the case must be dealt with on the basis of an argument which has not been debated between the parties (see the order in Case C-17/98 Emesa Sugar [2000] ECR I-665, paragraph 18, the judgment in Case C‑309/99 Woutersand Others [2002] ECR I-1577, paragraph 42, and the judgment of 13 November 2003 in Case C-209/01 Schilling and Fleck-Schilling [2003] ECR I-0000, paragraph 19).

36
In the circumstances of this case, however, the Court, after hearing the Advocate General, considers that it has all the details necessary for it to answer the questions referred and that those matters were addressed in the arguments presented to it at the hearing. The request for reopening the oral procedure must therefore be refused.


The questions referred

First and second questions

37
By the first question the national court asks whether Article 119 of the Treaty and the judgment in Gillespie are to be interpreted as meaning that a woman is entitled to have a pay rise which was awarded to her after the relevant period and was not back-dated to that period taken into consideration in the calculation of the earnings-related element of the statutory maternity pay. By the second question it asks whether the fact that the effective date of the pay rise commences prior to the beginning of the maternity leave, or prior to the end of the earnings-related period of her statutory maternity pay, or on some other date has any effect on the answer to the first question. As those questions are closely related it is necessary to consider them together.

38
It must be observed at the outset that whilst Directive 92/85, which was to be transposed by the Member States by 19 October 1994, was not applicable at the time of the facts of the main proceedings in Gillespie, it does apply ratione temporis to this case.

39
However, whilst the Directive provides in Article 11(2) and (3) that some of the rights connected with the employment contract of persons such as the applicant in the main proceedings must be ensured, it is not sufficient to provide a useful reply to the first two questions raised by the national court.

40
In those circumstances it is necessary to determine whether it is possible to deduce the answer to those questions from other provisions or principles of Community law.

41
It must be observed in this connection that under Article 1 of Directive 75/117 the principle of equal pay for men and women for equal work enshrined in Article 119 of the Treaty, which was applicable at the time of the facts in the main proceedings, means that for the same work or for work to which equal value is attributed all discrimination on grounds of sex with regard to all aspects and conditions of remuneration must be eliminated.

42
Regarding first the concept of pay in the aforementioned provisions, according to the definition in the second paragraph of Article 119 of the Treaty it includes all consideration which workers receive directly or indirectly from their employers in respect of their employment. The legal nature of such consideration is not important for the purposes of the application of that article, provided that it is granted in respect of employment (see Case 12/81 Garland [1982] ECR 359, paragraph 10, and Gillespie, paragraph 12).

43
Consideration classified as pay includes, inter alia, consideration paid by the employer by virtue of legislative provisions and under a contract of employment whose purpose is to ensure that workers receive income even where, in certain cases specified by the legislature, they are not performing any work provided for in their contracts of employment (see Case C-360/90 Bötel [1992] ECR I-3589, paragraphs 14 and 15, and Gillespie, paragraph 13 and the cases cited therein).

44
It follows that, since the benefit paid by an employer under legislation or collective agreements to a woman on maternity leave is based on the employment relationship, it constitutes pay within the meaning of Article 119 of the Treaty and Directive 75/117 (Gillespie, paragraph 14, and Case C‑411/96 Boyle and Others [1998] ECR I-6401, paragraph 38).

45
Secondly, the Court has consistently held that discrimination involves the application of different rules to comparable situations or the application of the same rule to different situations (see, in particular, Case C-279/93 Schumacker [1995] ECR I-225, paragraph 30, and Gillespie, paragraph 16).

46
In that connection women taking maternity leave provided for by national legislation are in a special position which requires them to be afforded special protection, but which is not comparable, in particular, either with that of a man or with that of a woman actually at work (Gillespie, paragraph 17). Therefore they cannot usefully rely on the provisions of Article 119 of the Treaty to argue that they should continue to receive full pay while on maternity leave as though they were actually working, like other workers (Gillespie, paragraph 20).

47
However the Court found, thirdly, at paragraph 22 of Gillespie, that benefit paid during maternity leave is equivalent to a weekly payment calculated on the basis of the average pay received by the worker at the time when she was actually working and which was paid to her week by week, just like any other worker. The principle of non-discrimination therefore requires that a woman who is still linked to her employer by a contract of employment or by an employment relationship during maternity leave must, like any other worker, benefit from any pay rise, even if back-dated, which is awarded between the beginning of the period covered by reference pay and the end of maternity leave. To deny such an increase to a woman on maternity leave would discriminate against her since, had she not been pregnant, she would have received the pay rise.

48
It follows that in a case such as that in the main proceedings where the income guaranteed by national law to the worker is calculated partially on the pay received by her before her maternity leave, Article 119 of the Treaty entitles her to have a pay rise which was awarded to her after the beginning of the period covered by the reference pay and before the end of maternity leave taken into account in determining the elements of her pay used to calculate the consideration paid by her employer.

49
The requirement recalled in paragraph 22 of the judgment in Gillespie means that any pay rise awarded after the beginning of the period covered by her reference pay must be included in the elements of pay used to determine the amount of pay owed to the worker during her maternity leave, and, contrary to the contention of the United Kingdom Government, should not be limited to cases where the pay is back-dated to that period.

50
In the light of the foregoing, the reply to the first and second questions must be that Article 119 of the Treaty must be interpreted as requiring that, in so far as the pay received by the worker during her maternity leave is determined, at least in part, on the basis of the pay she earned before her maternity leave began, any pay rise awarded between the beginning of the period covered by the reference pay and the end of the maternity leave must be included in the elements of pay taken into account in calculating the amount of such pay. This requirement is not limited to cases where the pay rise is back-dated to the period covered by the reference pay.

Third question

51
By the third question the referring court asks essentially, in the event that the Court finds that there is a right to have a pay rise taken into account in circumstances such as those in the main proceedings, how the pay rise should be taken account of in calculating the pay due to the worker during her maternity leave and whether account should also be taken of any decrease in the woman’s pay during the period following that covered by the reference pay and during her maternity leave.

52
As regards the first point it should be borne in mind that Article 234 EC is based on a clear division of functions between the national courts and the Court of Justice, so that the Court may rule on the interpretation or validity of Community provisions only on the basis of the facts which the national court puts before it (Case C-30/93 AC-ATEL Electronics Vertriebs [1994] ECR I-2305, paragraph 16). It follows that, within the framework of the procedure under Article 234 EC, it is not for the Court of Justice but for the national court to apply the Community rules which it has interpreted to national measures or situations (Case 222/78 ICAP [1979] ECR 1163, paragraph 10, and C‑342/97 Lloyd Schuhfabrik Meyer [1999] ECR I-3819, paragraph 11).

53
Furthermore, as the manner in which the requirement referred to at paragraph 50 of this judgment is to be implemented is not the subject of Community legislation, it is within the discretion of the competent authorities of the Member State concerned, provided that they comply with that requirement and with all provisions of Community law, in particular those stemming from Directive 92/85. It is not therefore for the Court to rule on the manner in which the pay rise is to be taken into account when determining the reference pay, or on whether the period covered by that pay should be altered or whether, where the information on file is in any event not sufficient, other factors that may affect the determination of that pay should be taken into account.

54
As to the question of whether decreases in pay ought to be taken into account, the Court has held that in the context of Article 234 EC proceedings it must, in order to determine whether it has jurisdiction, examine the conditions in which the case has been referred to it by the national court. The spirit of cooperation which must prevail in the preliminary ruling procedure requires the national court to have regard to the function entrusted to the Court of Justice, which is to assist in the administration of justice in the Member States and not to deliver advisory opinions on general or hypothetical questions (Case C-415/93 Bosman [1995] ECR I-4921, paragraph 59; Case C-379/98 PreussenElektra [2001] ECR I-2099, paragraph 38; Case C-390/99 Canal Satélite Digital [2002] ECR I-607, paragraph 18; and Case C‑451/99 Cura Anlagen [2002] ECR I-3193, paragraph 16).

55
In this case the hypothetical nature of the issue on which the Court is asked to rule is confirmed by the fact that the main proceedings, as set out in the order for reference, relate exclusively to the refusal to take account of a pay rise, there being no question of any pay decrease. In those circumstances the reply to the second part of the third question referred by the national court cannot have any bearing on the main proceedings and that part of the question is therefore inadmissible.

56
In the light of the foregoing considerations, the reply to the third question must be that, absent any Community legislation in this sphere, it is for the competent national authorities to determine how, in compliance with all the provisions of Community law, and in particular Directive 92/85, any pay rise awarded before or during maternity leave must be included in the elements of pay used to calculate the pay due to a worker during maternity leave.


Costs

57
The costs incurred by the United Kingdom Government and by the Commission, 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 action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT

in answer to the questions referred to it by the Court of Appeal (England and Wales) (Civil Division) by order of 27 March 2002, hereby rules:

1.
Article 119 of the EC Treaty (Articles 117 to 120 of the Treaty have been replaced by Articles 136 to 143 EC) must be interpreted as requiring that, in so far as the pay received by the worker during her maternity leave is determined at least in part on the basis of the pay she earned before her maternity leave began, any pay rise awarded between the beginning of the period covered by the reference pay and the end of the maternity leave must be included in the elements of pay taken into account in calculating the amount of such pay. This requirement is not limited to cases where the pay rise is back-dated to the period covered by the reference pay.

2.
Absent any Community legislation in this sphere, it is for the competent national authorities to determine how, in compliance with all the provisions of Community law, and in particular Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding (tenth individual directive within the meaning of Article 16(1) of Directive 89/391/EEC), any pay rise awarded before or during maternity leave must be included in the elements of pay used to calculate the pay due to a worker during maternity leave.

Skouris

Jann

Timmermans

Gulmann

Cunha Rodrigues

Rosas

La Pergola

Puissochet

Schintgen

Macken

Colneric

Delivered in open court in Luxembourg on 30 March 2004.

R. Grass

V. Skouris

Registrar

President


1
Language of the case: English.