Conclusions
OPINION OF ADVOCATE GENERAL
GEELHOED
delivered on 22 May 2003 (1)
Joined Cases C-4/02
Hilde Schönheit
v
Stadt Frankfurt am Main
and C-5/02
Silvia Becker
v
Land Hessen
(Reference for a preliminary ruling from the Verwaltungsgericht Frankfurt am Main (Germany))
((Social policy – Male and female workers – Equal pay – Application of Article 119 of the EC Treaty (now Article 141 EC), Directive 86/378/EEC or Directive 79/7/EEC – Concept of pay – Pension scheme for officials – Calculation of pensions for part-time officials – Unequal treatment compared to full-time workers – Indirect discrimination on the ground of sex – Justification by objective factors unrelated to discrimination on the ground of sex – Protocol concerning Article 119 of the EC Treaty (now Protocol concerning Article 141 EC) – Temporal effects of judgment))
I ─ Introduction
1. In these cases the Verwaltungsgericht (Administrative Court) Frankfurt am Main (Germany) has submitted for a preliminary ruling
11 questions on the compatibility of German legislation on pensions for officials, and more specifically the reduction of
pensions of officials working part-time for which that legislation provides, with the principle of the equal treatment of
men and women in the labour market, as laid down in Article 141 EC and secondary Community law.
II ─ Legislative background
A ─
Community law
The Treaty
2. The first and second paragraphs of Article 119 of the Treaty read: 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 purposes 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, directly or indirectly, in respect of his employment from his employer.
3. In the meantime, the Treaty of Amsterdam has replaced the first and second paragraphs of Article 119 of the Treaty with Article 141(1)
and (2), first subparagraph, EC. Article 141(1) and (2) EC read:
1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal
value is applied.
2. 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 directly or indirectly, in respect of his employment, from his employer. ...
4. The Protocol concerning Article 119 of the Treaty establishing the European Community (now the Protocol concerning Article 141
EC; hereinafter
the Barber Protocol) stipulates:For the purposes of Article 119 of this Treaty, benefits under occupational social security schemes shall not be considered
as remuneration if and in so far as they are attributable to periods of employment prior to 17 May 1990, except in the case
of workers or those claiming under them who have before that date initiated legal proceedings or introduced an equivalent
claim under the applicable national law.
Directive 79/7
5. Pursuant to Article 3(1)(a) 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
(2)
(hereinafter
Directive 79/7), this Directive applies to statutory schemes which provide protection inter alia against old age.
6. Article 4(1) of Directive 79/7 stipulates: The principle of equal treatment means that there shall be no discrimination whatsoever on ground 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 and the calculation of contributions,
─
the calculation of benefits including increases due in respect of a spouse and for dependants and the conditions governing
the duration and retention of entitlement to benefits.
Directive 86/378
7. Article 2(1) of 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
(3)
as amended by Council Directive 96/97 of 30 December 1996
(4)
(hereinafter
Directive 86/378) reads: Occupational social security schemes means schemes not governed by Directive 79/7/EEC whose purpose is to provide workers, whether employees or self-employed,
in an undertaking or group of undertakings, area of economic activity, occupational sector or group of sectors with benefits
intended to supplement the benefits provided by statutory social security schemes or to replace them, whether membership of
such schemes is compulsory or optional.
8. Article 4 of Directive 86/378 provides: This Directive shall apply to:
(a) occupational schemes which provide protection against the following risks: ... ─ old age, including early retirement, ...
9. Article 5(1) of Directive 86/378 reads:
1. Under the conditions laid down in the following provisions, the principle of equal treatment implies that there shall be no
discrimination on the basis of sex, either directly or indirectly, by reference in particular to marital or family status,
especially as regards:
─
the scope of the schemes and the conditions of access to them;
─
the obligation to contribute and the calculation of contributions;
─
the calculation of benefits, including supplementary benefits due in respect of a spouse or dependants, and the conditions
governing the duration and retention of entitlement to benefits.
10. Article 6(1) of Directive 86/378 stipulates: Provisions contrary to the principle of equal treatment shall include those based on sex, either directly or indirectly, in
particular by reference to marital or family status, for:...
(h) setting different levels of benefit, except in so far as may be necessary to take account of actuarial calculation factors
which differ according to sex in the case of defined-contribution schemes. In the case of funded defined-benefit schemes, certain elements (examples of which are annexed) may be unequal where the inequality
of the amounts results from the effects of the use of actuarial factors differing according to sex at the time when the scheme's
funding is implemented; ...
Directive 97/80
11. Article 2(2) of Council Directive 97/80/EC of 15 December 1997 on the burden of proof in cases of discrimination based on
sex
(5)
(hereinafter
Directive 97/80) provides:For purposes of the principle of equal treatment referred to in paragraph 1, indirect discrimination shall exist where an
apparently neutral provision, criterion or practice disadvantages a substantially higher proportion of the members of one
sex unless that provision, criterion or practice is appropriate and necessary and can be justified by objective factors unrelated
to sex.
12. Article 4 of Directive 97/80 reads:
1. Member States shall take such measures as are necessary, in accordance with their national judicial systems, to ensure that,
when persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish,
before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination,
it shall be for the respondent to prove that there has been no breach of the principle of equal treatment.
2. This Directive shall not prevent Member States from introducing rules of evidence which are more favourable to plaintiffs.
3. Member States need not apply paragraph 1 to proceedings in which it is for the court or competent body to investigate the
facts of the case.
B ─
National law
13. Paragraph 6 of the Beamtenversorgungsgesetz (Law on civil service pensions) of 24 August 1976 (hereinafter
the BeamtVG) in the version published on 16 March 1999 stipulates, under the heading
Normal pensionable service:
(1) Pensionable service is the period of service completed by the official from the date of appointment as an official in the
service of a public-law employer within national territory. That does not include periods ...
5. of unpaid leave ... Periods of part-time employment are pensionable only in such proportion as the reduced working time bears to normal working
time ... .
14. The Fünftes Gesetz zur Änderung dienstrechtlicher Vorschriften (Fifth law amending civil service-related legislation) of 25
July 1984 (hereinafter
the amending law of 1984) introduced into the second clause of the first sentence of Paragraph 14(1) of the BeamtVG under the heading
Amount of pension a pension abatement in the event of unpaid leave and reduction of working time for family reasons and on grounds covered
by the regulation concerning special leave.
15. Paragraph 14(1) of the BeamtVG in the version amended by the amending law of 1984, applicable from 1 August 1984 until 31
December 1991 (hereinafter
Paragraph 14 of the BeamtVG (old version)), read:
(1) On completion of ten years' pensionable service the pension shall amount to 35% and shall rise with every further year of
service by 2% until completion of the twenty-fifth year of service, and thereafter by 1% of pensionable service, subject to a maximum of seventy-five percent ...; in the case of part-time work, leave or reduced
working time, the rate of pension which would have been attained hereunder but for these departures from full-time work, and
before application of the maximum rate, shall be reduced in such proportion as actual pensionable service bears to the period
of time which but for the departures from full-time working would have been completed but shall not be less than 35% or more
than 75%.
16. The pension abatement introduced by the amending law of 1984, applied on the degressive pension scale of the old version of
Paragraph 14 of the BeamtVG, was abolished by Paragraph 14(16) of the Fünftes Gesetz zur Änderung besoldungsrechtlicher Vorschriften
(Fifth Law amending regulations concerning remuneration) of 28 May 1990 (hereinafter
the Fifth amending law of 1990).
17. In addition, the degressive scale of increases provided for in Paragraph 14 of the BeamtVG (old version) was replaced with
a linear system.
18. Paragraph 14(1) of the BeamtVG, which is entitled
Amount of pension and entered into force on 1 January 1992 (hereinafter
Paragraph 14 of the BeamtVG (new version)), thus reads as follows:(1) In respect of each year of pensionable service the pension shall amount to 1.875% of ... remuneration, subject, however,
to a maximum amount of 75% ... .
19. Paragraph 85 of the BeamtVG, which is entitled
Rate of pension for officials in service as at 31 December 1991, stipulates:
(1) Where on 31 December 1991 the person concerned already had the status of an official, the rate of pension acquired by that
date shall be maintained. In that connection calculation of pensionable service and rate of pension shall be determined in
accordance with the law applicable up to 31 December 1991. The second and third clauses of the first sentence of Paragraph 14(1)
shall not apply. The rate of pension resulting from the first and second sentences shall rise with each year which from 1
January 1992 onwards is completed as pensionable service under the law applicable as from that date by one percent of the
pensionable remuneration up to a maximum rate of 75%. ...
(4) The rate of pension under paragraphs (1), (2) or (3) shall be used as the basis for calculating the pension if such rate is
higher than the rate of pension resulting under this law for the whole period of pensionable service. The rate of pension
under paragraph (1) may not exceed the rate of pension which would result from calculation under the law applicable until
31 December 1991.
III ─ Facts of the case and procedural background
Case C-4/02
20. Mrs Schönheit, who was born on 12 July 1939, had been employed as a social worker by the City of Frankfurt am Main since 1966,
initially as an employee and from 1 January 1984 as an official.
21. Until 30 June 1992 she worked full-time; between 1 July 1992 and 31 December 1995 she was employed on a half-time basis. Thereafter
she was on unpaid leave for six months (from 1 January 1996 until 30 June 1996). Subsequently, she again worked on a half-time
basis.
22. On 8 March 1999 Mrs Schönheit applied for early retirement on the basis of her serious invalidity. By its decision of 12 July
1999 the City of Frankfurt am Main granted her request for early retirement on the basis of incapacity for service with effect
from 1 August 1999.
23. Similarly by a decision of 12 July 1999 the City of Frankfurt am Main determined Mrs Schönheit's pension benefits at 65.80%
of her pensionable remuneration.
24. The City of Frankfurt am Main proceeded as follows when determining the pension.
25. Step 1: The years of pensionable service were first calculated in accordance with Paragraph 6 of the BeamtVG, i.e. periods
of part-time working were deducted from the period of service to be taken into account (
actual period of service). The actual period of service amounted to 30 years and 142.5 days (30.39 years). Pursuant to Paragraph 14 of the BeamtVG
(new version), this period of pensionable service was multiplied by 1.875%, which resulted in a pension of 30.39 x 1.875 =
56.98125%, rounded up to 56.99%.
26. Step 2: As Mrs Schönheit was already an official on 31 December 1991, an alternative calculation was then made in accordance
with Paragraph 85 of the BeamtVG. In respect of the period from 1 April 1965 until 31 December 1992 the period of pensionable
service under Paragraph 6 of the BeamtVG amounted to 26 years and 219 days, which was rounded up to 27 years. Under Paragraph 14
of the BeamtVG (old version), but without the pension abatement which until then was still in force, the pension amounted
to 67%. In respect of the period from 1 January 1992 until 31 July 1999 the period of pensionable service, pursuant to Paragraph 6
of the BeamtVG, was 3 years and 228.5 days (3.79 years), resulting in a pension entitlement of 3.79%. The total pension therefore
amounted to 67% + 3.79% = 70.79%.
27. Since the rate of pension under this alternative calculation would have been higher than the rate resulting from the linear
calculation under the law applicable at that time, the City of Frankfurt am Main, having regard to Paragraph 85(4) of the
BeamtVG, compared that rate of pension with the rate resulting from a calculation only under Paragraph 14 of the BeamtVG (old
version), thus also including a pension abatement.
28. Step 3: In this process the notional pension was first calculated, i.e. the pension which Mrs Schönheit would have received
if she had worked full-time throughout her period of service (
notional period of service). This notional period of service amounted to 34 years and 66 days (34.18 years). It would have resulted in a rate of pension
of 74%. This percentage was then reduced in the ratio of actual period of service to notional period of service: 30.39 ± 34.18
x 74% = 65.80%.
29. On 3 August 1999 Mrs Schönheit raised an objection to the determination of the amount of her pension.
30. By a decision of 4 January 2000 the City of Frankfurt am Main dismissed her objection.
31. On 7 February 2000 Mrs Schönheit appealed to the Verwaltungsgericht Frankfurt am Main. She is seeking the annulment of the
order of 12 July 1999 and of the decision of 4 January 2000. She is also demanding that the City of Frankfurt am Main award
her a pension of at least 70.79%.
Case C-5/02
32. Mrs Becker, who was born on 15 July 1951, was employed as a subject teacher by the
Land of Hesse from 23 August 1971. From 1 August 1981 until 31 July 1989 she worked part-time for a number of periods of varying
duration. From 1 August 1989 until 31 July 1995 she took unpaid leave, and from 1 August 1995 she again worked part-time.
From 1 February 2000 her employer granted her a retirement pension on the ground of incapacity for service.
33. By order of 5 January 2000 the Regierungspräsidium Darmstadt determined Mrs Becker's pension benefits at 52.18% of her pensionable
remuneration.
34. The Regierungspräsidium Darmstadt proceeded as follows when determining the pension.
35. Step 1: Mrs Becker's years of pensionable service were first calculated in accordance with Paragraph 6 of the BeamtVG. The
result was 25 years and 83.58 days (25.23 years). These years of pensionable service were then multiplied, pursuant to Paragraph 14(1)
of the BeamtVG (new version), by 1.875, which gave a pension rate of 25.23 x 1.875% = 47.30625%, which was rounded up to 47.31%.
36. Step 2: As Mrs Becker was already an official on 31 December 1991, an alternative calculation was made in accordance with
Paragraph 85 of the BeamtVG. In respect of the period until 31 December 1991 the period of pensionable service under Paragraph 6
of the BeamtVG amounted to 18 years and 228.32 days, which was rounded up to 19 years. Under Paragraph 14 of the BeamtVG (old
version), but without the pension abatement, the rate of pension amounted to 53%. In respect of the period from 1 January
1992 until 31 July 1999 the period of pensionable service pursuant to Paragraph 6 of the BeamtVG was 4 years and 341.93 days
(4.94 years), resulting in a pension entitlement of 4.94%. The total pension therefore amounted to 53% + 4.94% = 57.94%.
37. Step 3: Finally, the pension was calculated in accordance with Paragraph 85(4) of the BeamtVG, with the pension abatement
applied. The notional pension was first calculated. Mrs Becker's notional period of service amounted to 32 years and 78.68
days (32.22 years). This notional period of service would have given her a rate of pension of 72%. The pension abatement was
then applied: 25.23 (actual period of service) ± 32.22 (notional period of service) x 72% (notional pension), which ultimately
resulted in a rate of pension of 52.18%.
38. On 8 February 2000 Mrs Becker raised an objection to the determination of her pension.
39. By a decision on the objection dated 30 November 2000 the Regierungspräsidium Darmstadt dismissed the objection.
40. On 21 December 2000 Mrs Becker lodged an appeal. She is seeking the annulment of the order of the Regierungspräsidium Darmstadt
of 5 January 2000 as set out in the decision on the objection of 30 November 2000. She is also demanding that her pension
be calculated at at least 57.94%.
Questions submitted for a preliminary ruling
41. By a decision of 12 November 2001 the Verwaltungsgericht Frankfurt am Main submitted nine questions for a preliminary ruling
in Case C-4/02 and 11 such questions in Case C-5/02.
42. According to the referring court, both appeals are well founded. It maintains that the provisions of Paragraph 14 of the BeamtVG
(old version) concerning the pension abatement for part-time working is incompatible with Article 141 EC since it gives rise
to indirect discrimination on the ground of sex.
43. The referring court explains that official statistics reveal it is predominantly women who work part-time. When pensions are
determined, it is therefore predominantly women who are affected by the pension abatement.
44. According to the referring court, there are no clear objective factors to justify the difference of treatment. The aim pursued
by the authorities of saving costs by introducing the pension abatement cannot in itself be seen as justification for the
difference of treatment.
45. This position contrasts, however, with that of the Bundesverwaltungsgericht (Federal Administrative Court). This court takes
the view that the reduction of pensions in proportion to working time in the case of part-time working and unpaid leave does
not amount to inadmissible indirect discrimination against women, even though far more women than men take advantage of such
dispensations. It argues that awarding pensions only in proportion to the length of service is, like the reduction or withholding
of pay, a consequence of more limited performance and is therefore objectively justified; there can therefore be a priori
no question of an infringement of a prohibition in Community law of direct or of indirect discrimination on the ground of
sex.
(6)
According to this view, the second clause of the first sentence of Paragraph 14(1) of the BeamtVG (old version) was meant
to correct the relatively more favourable treatment of officials working other than full-time that resulted from the former
degressive pension scale.
46. As views differ on the interpretation of the relevant Community legislation, the referring court decided to refer the following
questions to the Court of Justice for a preliminary ruling:
─ In Cases C-4/02 and C-5/02
1. Is the grant of an old-age pension under the BeamtVG subject to Article 119 of the EC Treaty, now superseded by Article 141(1)
and (2) EC, in conjunction with Directive 86/378/EEC or the provisions of Directive 79/7/EEC?
2. Do benefits under the BeamtVG constitute a scheme under Article 6(1)(h) of Directive 86/378/EEC with the consequence that,
irrespective of their being financed by budgetary resources, it is legitimate to take into account actuarial factors or analogous
matters in order to differentiate levels of benefit?
3. Are the factors required to justify indirect discrimination on the ground of sex provided for by Article 2(2) of Directive
97/80/EC applicable in the case of Article 119 of the EC Treaty and Article 141(1) and (2) EC, as well as Directive 86/378/EEC,
irrespective of whether a question arises in judicial proceedings as to relaxation of the burden of proof or whether that
question is of no significance under the principle applicable to judicial proceedings of official establishment of facts?
4. Is an apparently neutral criterion in a legal provision to be judged as to its necessity solely on the basis of the intention
of the legislature and the grounds for enactment which are apparent from the legislative process, in particular where the
existence of such intentions and grounds is documented in the procedure leading to adoption of the legislation and demonstrably
constituted the relevant reason for the enactment?
5. In so far as, in parallel with or addition to those intentions and grounds (see Question 4), regard may also be had to other
legitimate aims of the legislation as justificatory factors within the meaning of Article 2(2) of Directive 97/80/EC, or the
case-law of the Court of Justice on establishing the existence of indirect discrimination on the ground of sex, can a national
court in that connection establish of its own motion the existence of legitimate aims for a provision of law and, where appropriate,
use them to justify a distinguishing criterion, in particular where its reasoning in that regard is founded on considerations
inherent in the scheme of the law? Can it also do so where such considerations are not discernibly reflected in the grounds
for the enactment documented in the course of the legislative procedure?
6. Can the discrimination initially apparent in the calculation of the pensions of older female part-time civil servants as a
proportion of final salary be justified on the ground that it is necessary to achieve a legitimate aim where that discrimination
is intended, as it were, to offset a minimum pension acquired during the first 10 years of service with no account being taken
of the reduced working time, although civil servants' pension benefits are met solely from general budgetary resources without
any contribution by female officials? As justification for such necessity, if appropriate on an ancillary basis, can reference
be made to the fact that pension benefits are in the nature of maintenance support and to their characteristic as a traditional
principle of the professional civil service under Article 33(5) of the Grundgesetz (Basic Law)?
7. If such discrimination is deemed necessary under Question 6, is a reduction in the rate of pension for older female and male
officials with entitlement to benefits far above the minimum pension in respect of at least 10 reckonable years of service,
applicable by virtue of their previous part-time service, still reasonable (proportionate) if the amount of such reduction
is calculated by reference not only to the extent of the reduced working time on a linear basis but also, to the detriment
of those concerned, to the duration of full-time employment in relation to that of part-time employment ─ even though for
older female and male civil servants the possibly disproportionately favourable grant of a minimum pension irrespective of
the reduction of their working time is no longer possible? Would it not in this context be (more) appropriate to abandon
the disproportionate reduction in the rate of pension for older and longer-serving female and male officials and instead for
there merely to be a proportionate reduction in the minimum pension?
8. Where the numbers of budgetary and established posts remain unchanged, can additional personnel costs incurred in the recruitment
of additional persons by an expansion of part-time employment, in contrast to the hitherto predominant full-time employment,
justify the necessity of passing these costs on to part-time employees by way of a disproportionate reduction in their rate
of pension, as occurred under the second and third clauses of the first sentence of Paragraph 14(1) of the BeamtVG in the
version thereof applicable until 31 December 1991?
9. Is it reasonable for such costs to be taken into account as a matter of necessity (Question 8) if the additional costs are
passed on solely to earlier part-time employees, so that women, for by far the most part, must bear them, even though the
expansion of part-time employment opportunities at the time of the legislative amendment in that regard principally pursued
the objective of reducing general unemployment by the partial absorption of surplus male and female applicants to the civil
service?
In Case C-5/02
10. Does the Protocol concerning Article 119 of the EC Treaty as part of the Treaty on European Union of 1992 (OJ 1992 C 191,
p. 68) generally preclude examination under Article 141(1) and (2) EC (formerly Article 119 of the EC Treaty) of the detailed
rules for the inclusion of periods of employment prior to 17 May 1990? Does the prohibition on such examination also apply
where after 17 May 1990 the provisions relevant to the inclusion of periods of employment completed before the relevant date
of 17 May 1990 have been amended but those amendments effect only a partial adjustment to meet the requirements of Article
119 of the EC Treaty and, for certain categories, effect no such favourable adjustment?
11. In determining adherence to the relevant date of 17 May 1990 in the enactment of laws is the date of publication in the official
gazette decisive, or is the matter determined by the conclusion of deliberations in the legislative bodies ─ even where the
assent of the Federal Government is required by law?
Proceedings before the Court
47. By decision of 8 February 2002 the President of the Court joined the two cases. Written comments have been submitted to the
Court by the applicants in the main action, Mrs Schönheit (Case C-4/02) and Mrs Becker (C-5/02), by the German Government
and by the Commission. On 6 March 2003 a hearing took place at which Mrs Becker and the Commission explained their positions
in greater detail.
IV ─ Assessment
Preliminary comments
48. The questions submitted for a preliminary ruling concern the German pension scheme for officials and more specifically the
abatement of the pensions of officials working part-time for which this scheme provides.
49. Before these questions are considered, it will be helpful to describe the operation of the German system as it once was, as
it operated with the abatement and as it operates now. Although it is for the German court, as the court with full knowledge
of the facts, to interpret and enforce the rules, I would none the less like to dwell on this aspect briefly with a view to
making the following more readable and comprehensible.
50. Initially, until the end of 1991, this system was characterised by a degressive scale of increases, with a minimum rate of
35% for the first 10 years, a 2% increase for each of the following 15 years of service and a further increase of 1% for each
remaining year of service, up to a maximum of 75%.
51. In 1992 this degressive scale of increases gave way to a linear scale based on 40 years of service, the pension for each year
of pensionable service being 1.875% up to a maximum of 75%.
52. Any period worked part-time was and continues to be taken into account in accordance with Paragraph 6 of the BeamtVG. Thus
an official who has worked part-time for 30 years, for example, is entitled to 15 years' worth of pension.
53. The contested pension abatement dates back to the early 1980s. Its introduction was associated with the expansion for labour
market policy reasons of the opportunity for officials to work part-time. Part-time working was initially taken into account
through the reduction of the pension at a flat rate of 0.5% for each year of part-time working. In 1984 the pension abatement
was also introduced for unpaid leave and the reduction of working time for family reasons and under the regulation concerning
special leave. The flat-rate deduction was also replaced with a proportional reduction of pensions. The following formula
was applied in this context: (actual period of service ± notional period of service) x notional pension. The difference between
notional pension and the pension calculated in accordance with this formula is the pension abatement. However, pensions may
not amount to less than 35% after abatement.
54. From the sources cited in the order for reference it is evident that the introduction of the pension abatement was essentially
intended to compensate for the costs associated with the wider availability of part-time working and the staff administration
it entailed.
55. As indicated above, with effect from 1 January 1992 the degressive pension scale provided for in Paragraph 14 of the BeamtVG
was replaced by the Fifth amending law of 1990 with a linear pension scale. At the same time, the pension abatement ─ which
had been strongly criticised ─ was abolished. To enable the change to be made from a degressive to a linear system, a transitional
scheme was needed for officials who had already been in service before 31 December 1991. This is defined in Paragraph 85 of
the BeamtVG.
56. According to that provision, officials who were already in service on 31 December 1991 retained any pension rights acquired
before that date. To determine what pension officials already in service before 31 December 1991 will ultimately receive,
a number of comparative calculations have to be made.
57. A calculation is first made on the basis of the new legislation, the period of service actually worked part-time being taken
as the starting point and multiplied by 1.875%.
58. A second calculation is then made, based partly on the degressive scale applicable until 31 December 1991, as referred to
in Paragraph 14 (old version), but without the pension abatement, and partly on the new legislation in respect of years of
pensionable service thereafter. If the result of this calculation is higher, this calculation applies. In the case of officials
who have worked part-time, however, this amount is limited by the third comparative calculation (second sentence of Paragraph 85(4)
of the BeamtVG).
59. This third calculation does include the pension abatement provided for in the old version. The first step is to calculate
the notional pension, i.e. the pension which would be paid if the official concerned had worked full-time throughout his period
of service. The rate of pension is then calculated in relation to the actual period of service.
60. The following example will serve as an illustration. Let us assume that an official has worked for 30 years on a part-time
basis. His notional pension (as if he had worked full-time for 30 years) is then calculated as follows: 35% for the first
10 years; 30% (15 x 2%) for the 11th to the 25th year; and 5% (5 x 1%) for the 26th to the 30th year, making a total of 70%.
61. If the pension abatement is now applied, the result is a pension of 35% (70% x 15/30).
62. If the pension abatement was not applied and the pension was calculated solely in accordance with Paragraph 6 of the BeamtVG,
15 years would have been worked full-time, giving an entitlement to 45% (35% for the first 10 years, 2% for each of the remaining
years).
63. A worker who worked full-time for 15 years would similarly be entitled to a rate of pension of 45%.
64. To summarise, part-time working is taken into account in the determination of pensions in two ways: first, in the determination
of the number of years of pensionable service and, then, through the pension abatement contested here.
65. The third to ninth questions primarily concern the requirements that must be met to justify the indirect discrimination to
which this pension abatement allegedly gives rise. They will be considered together below.
66. The first two questions concern, in particular, the applicable Community legislation. In the order for reference the referring
court remarks that in its view the German pension scheme for officials falls within the scope of Article 141 EC. It adds that
for the assessment of the discrimination against women resulting from the pension abatement it makes no difference whether
the pension scheme does not constitute pay within the meaning of Article 119 of the EC Treaty (now Article 141 EC) or must
be regarded as a statutory system for protection against the risks of old age within the meaning of Article 3(1)(a) of Directive
79/7. Discrimination is, after all, prohibited under Article 4(1) of that Directive. If Directive 86/378 was deemed applicable
to the pension scheme, the same would be true since Article 5(1) of that Directive prohibits direct and indirect discrimination
on the basis of sex inter alia in the calculation of benefits.
67. Finally, in Case C-5/02 the referring court has submitted two further questions concerning the interpretation of what has
come to be known as the Barber Protocol.
The first two questions submitted for a preliminary ruling in Cases C-4/02 and C-5/02
68. According to the two applicants in the main action, the German Government and the Commission, the award of retirement pensions
within the meaning of the Beamtenversorgungsgesetz is governed by Article 141 EC. Reference is made in this context to the
judgments in
Gerster ,
(7)
Beune ,
(8)
Griesmar
(9)
and
Evrenopoulos .
(10)
69. The Commission and the German Government also maintain that Directive 79/7 is not applicable in this instance. They claim
that pensions based on the Beamtenversorgungsgesetz are not pension payments made under a statutory social security scheme
within the meaning of Article 3 of that Directive.
70. Directive 86/378 cannot, according to the Commission, restrict the scope of Article 141 EC. According to the German Government,
this Directive is applicable to the German system of pension provision for officials because the German system conforms to
the definition given in Article 2 of the Directive of an occupational social security scheme. The application of a number
of provisions of the Directive might possibly be precluded by the specific features of employment relationships governed by
public law, but this did not extend, according to the German Government, to the prohibition of discrimination under Article 5
of the Directive.
71. The German Government and the Commission take the view that the exception referred to in Article 6(1)(h) of Directive 86/378
does not apply to the cases under consideration here. In this context the German Government states that the pension abatement
for officials who have previously worked part-time is not based on an actuarial calculation within the meaning of this article,
but emanates from the system underlying the German pension scheme for officials.
Assessment
72. I endorse the largely identical views expressed by the applicants in the main action, the Commission and the German Government.
In my opinion there is no doubt that the German pension scheme for officials falls within the scope of Article 141 EC. The
Court has already confirmed this in the aforementioned judgments in respect of the Dutch, French and Greek pension schemes
for officials and recently in the
Niemi judgment
(11)
in respect of the Finnish pension scheme for officials. It is evident from this case-law that the decisive factor for the
qualification of a pension scheme is whether the pension is paid to the worker on the basis of an employment relationship
between the person concerned and his former employer, i.e. whether it satisfies the criterion of
employment derived from the wording of Article 141 EC. The German pension scheme at issue satisfies this criterion. This scheme is applicable
to a specific category of workers, the benefits are determined by reference to the period of service completed by those entitled,
and they are based on the final salary. The link is thus forged between pension and employment relationship. As the pension
benefits under consideration are not payments made under a statutory social security scheme, Directive 79/7 does not apply
to them.
73. I agree, moreover, with the Commission that the reference in the first question submitted for a preliminary ruling makes little
sense since that Directive cannot restrict the scope of Article 141 EC, as the Court has explicitly ruled, unnecessarily perhaps,
in paragraph 64 of the judgment in
Beune .
74. The answer to the second question, which is hardly a request for a more precise interpretation, can be kept very brief. As
the German Government itself has already explained, the abatement rules contested in the main action have nothing whatever
to do with actuarial calculation factors, as referred to in Article 6(1)(h) of Directive 86/378. It is therefore impossible
to derive from this provision any argument to justify different levels of benefit.
The third to ninth questions submitted for a preliminary ruling
75. The German Government contends that, even if women are placed at a great disadvantage by the pension abatement, as the referring
court claims, this does not automatically mean that the pension abatement amounts to discrimination against former officials
who worked part-time, since the abatement is justified by objective factors unrelated to sex.
76. According to the German Government, the conditions justifying indirect discrimination, as defined in Article 2(2) of Directive
97/80, apply irrespective of the distribution of the burden of proof and irrespective of whether the court is assigned an
official or a more passive role in national proceedings. Article 2(2) of Directive 97/80, after all, summarises the Court's
rulings in the area of indirect discrimination, which applies irrespective of the distribution of the burden of proof or of
the nature of national proceedings.
77. Secondly, according to the German Government, considerations other than those referred to in the explanatory memorandum on
the law may be taken into account to justify indirect discrimination. It deduces this from the judgment in
Finalarte .
(12)
The referring court should therefore consider whether there are other justificatory grounds.
78. In this context the German Government states that it can be deduced from national legislation that the pension abatement is
a correction mechanism inherent in the system, its object being to prevent part-time officials from being better placed as
a result of the former degressive system.
79. The pension abatement was therefore objectively justified since, when introducing it, the national legislature had opted not
for a rigid system of deductions but for a formula of individual calculations which reflected the relationship between actual
years of pensionable service and years of pensionable service had part-time working not occurred. According to this formula,
the longer the period of full-time working as a proportion of the total period of service, the smaller the pension abatement
(in the event of part-time working or unpaid leave).
80. Furthermore, the financing of the increased staff administration costs resulting from the expansion of the opportunity to
work part-time had not been the decisive factor in the introduction of the pension abatement. It had been intended rather
as a means of maintaining the internal balance in the German pension scheme for officials.
81. The applicants in the main action point out that the pension abatement results in a lower pension, by some 5% in their case,
than that of a full-time official who has completed a similar number of years of pensionable service. The abatement discriminated
against women in particular, because in Germany's public service it was predominantly women who worked on a part-time basis.
That is not disputed; what is important, therefore, is the objective justification.
82. According to the applicants in the main action, there is no objective justification. They do not endorse the argument advanced
by the German Government regarding preferential treatment. Only in well-defined circumstances could there be said to be an
advantage. For all practical purposes, however, it was negligible. It was true that under the 35% rule of the old degressive
pension scale officials working part-time and officials working full-time accumulated the same rate of pension in the first
10 years and that this could be considered favourable for officials working part-time. If the same part-time officials continued
to work part-time for a further 10 years, this advantage was already greatly reduced, since only their part-time working was
considered in the calculation. Consequently, they still had 35% after 20 years, whereas officials who had worked full-time
attained 55%. Full-time officials benefited, moreover, from the 35% rule if they left the service after five years.
83. The Commission believes that Paragraph 85 of the BeamtVG in conjunction with the second clause of the first sentence of Paragraph 14(1)
of the BeamtVG (old version) makes for discrimination on the ground of sex if those provisions result in more women than men
being affected by the abatement when their pensions are determined and in the pensions of officials working part-time being
reduced by a greater amount than would have been the case if a
pro rata temporis rule had applied.
84. The Commission also contends that the introduction of the pension abatement was prompted by cost considerations. Referring
to the judgment in
Roks ,
(13)
it claims that, while the Member States may cut back on their social systems for budgetary reasons, they may not do so in
a manner which is inconsistent with Community law. A national scheme which was introduced solely for budgetary reasons and
resulted in unequal pay for men and women was inconsistent with Article 141 EC.
85. The Commission further points out that the German Government has contended that the introduction of the pension abatement
was a necessary adjustment to the 35% rule. According to the Commission, however, there is no justification for applying this
abatement solely to part-time officials.
86. The Commission then states that Community law is not opposed to part-time workers receiving pensions
pro rata temporis . It does, however, oppose any measure, such as a pension abatement, which results in a disproportionate reduction in pensions
and thus in indirect discrimination on the ground of sex.
Assessment
87. According to settled case-law, the prohibition imposed by Article 141 EC covers not only direct but also indirect discrimination
on the ground of sex. Indirect discrimination occurs when a (national) provision or rule, though worded in neutral terms,
in fact places women at a far greater disadvantage than men, unless this difference of treatment is justified by objective
factors unrelated to discrimination on the ground of sex.
88. In the present case Paragraph 85(4) of the BeamtVG in conjunction with the second clause of the first sentence of Paragraph 14(1)
of the BeamtVG (old version) is worded in sexually neutral terms. None the less, discrimination can be said to obtain if it
is clear that significantly more women than men are affected by this legislation.
89. In this context the referring court has commented that it is evident from statistics that, as significantly more women than
men work part-time, it is primarily female officials who are affected by the pension abatement. It would therefore seem at
first glance that indirect discrimination exists.
90. In that case, it must be considered whether there is any justification on the ground of objective factors unrelated to discrimination
on the ground of sex.
91. It is ultimately for the national court to determine whether such factors exist in the specific case before it. None the less,
the dossier in the main action and the written and oral observations of the parties enable the Court to give some indications
which may be helpful to the referring court.
(14)
92. It is settled case-law that it is for the Member State which has adopted the allegedly discriminatory legislation to show
that this legislation reflects a legitimate aim and that the means of achieving this aim are necessary and reasonable. The
Court's rulings leave the Member States considerable scope for assessing the need to pursue social and employment objectives.
(15)
This scope is, however, restricted in that it may not have the effect of frustrating a fundamental principle of Community
law, such as that of equal pay for men and women.
(16)
93. From the official sources cited in the order for reference it can be discerned that the pension abatement was introduced for
budgetary reasons. It follows from the Court's rulings that, although budgetary considerations may underlie such a choice
of policy, they may not themselves constitute the aim pursued by that policy and cannot therefore justify discrimination against
one of the sexes.
(17)
94. If it transpires that the pension abatement was introduced solely to save costs, I do not believe that this reason can serve
as justification.
95. Referring to the case-law of the Bundesverwaltungsgericht, however, the German Government has also argued that the pension
abatement was intended as a means of correcting the relatively more favourable treatment of officials working other than full-time
that was due to the former degressive pension scale. A more favourable situation of this kind could not be avoided by taking
part-time working into account solely on the basis of Paragraph 6(1) of the BeamtVG. The measure was therefore justified.
96. Although this reason is not explicitly evident from the background to the passing of the legislation relating to the pension
abatement, the introduction of such a correction mechanism may be legitimate. The question is, however, whether this legislation
is necessary and reasonable.
97. It must first be said that simple, general declarations that the pension abatement at issue in the main action has a correction
as its objective do not in themselves demonstrate that this abatement is unrelated to discrimination on the ground of sex.
Nor do they provide information on the basis of which it can reasonably be judged that the means chosen were appropriate to
achieving that objective.
98. I would also point out that, although in certain circumstances the minimum rate of 35% which applied under the degressive
system could be to the advantage of part-time officials, the same was true of officials who had always worked full-time. Yet
the pension abatement was introduced solely for part-time working.
99. That the abatement can be described as disproportionate is evident from simple calculations and is illustrated in the example
given in paragraphs 58 to 63.
100. In fact, the introduction of the pension abatement in the event of part-time working amounts, as it were, to the early introduction
of the current linear system, which is based on 40 years of service.
(18)
However, this has led to officials who have worked part-time being treated differently from officials who have always worked
full-time: their pensions are different even though they have completed the same number of years of pensionable service.
(19)
101. Although the pension abatement was abolished when the linear calculation system entered into force in 1992, it continues to
be applicable under the transitional legislation to officials who have spent some of their service careers working part-time.
They are still confronted with this abatement and are therefore worse off than officials who were similarly in service before
31 December 1991, but have worked full-time and have the same number of years of pensionable service.
102. As the Commission has pointed out, Community law does not oppose a
pro rata temporis pension abatement for part-time working.
(20)
A
pro rata temporis reduction of this nature is implied by Paragraph 6 of the BeamtVG. The application of the second clause of the first sentence
of Paragraph 14(1) of the BeamtVG (old version), however, (still) leads to an additional abatement of pensions. If, besides
part-time working being considered when the number of years of pensionable service is determined, an additional ─ disproportionate
─ pension abatement is applied, there is indirect discrimination on the ground of sex which cannot be justified on grounds
of reduced working time or the need to rectify any preferential treatment allegedly enjoyed by part-time employees.
The 10th and 11th questions submitted for a preliminary ruling in Case C-5/02
103. These questions concern the Barber Protocol. In submitting these questions, the referring court is seeking to establish whether
─ contrary to this Protocol ─ periods of service occurring before the date of the ruling in the
Barber case, 17 May 1990, may be taken into account if after 17 May 1990 the legislation applicable to periods of service before
that date was subsequently amended, without however eliminating the unequal treatment involved for a certain group.
104. The referring court states in this context that the Protocol is based on the judgment in
Barber , in which the Court restricted the effect of that judgment
ratione temporis . As the ground for this restriction the Court based its ruling on the principle of legitimate expectations. The referring
court doubts whether the principle of legitimate expectations can be relied upon in the present case, since the authors of
the legislation were aware of the discriminatory effect of the pension abatement, yet made an amendment which in certain situations
permits this effect to persist.
105. In the written documents the Commission has stated that the Court not only considered the restriction
ratione temporis from the angle of the principle of legitimate expectations and legal certainty but also bore in mind the possibility of claims
with a retroactive effect upsetting the financial balance of a number of pension schemes. The Commission therefore proposes
in the written documents, in accordance with that judgment, that claims to equal treatment should not relate to periods before
17 May 1990.
106. During the hearing the Commission and Mrs Becker's representative pointed out, however, that there is a difference between
the present case and the
Barber case. The Commission points out that the latter case concerned a scheme that had already been in existence for many years,
whereas in the present case the pension abatement was allowed to stand by the Fifth amending law of 1990 in respect of pension
rights acquired in the period prior to the entry into force of that law. While the Member States could reasonably assume in
the case of the
Barber judgment that Article 141 EC did not apply to pension schemes, the same cannot be said of the period thereafter, i.e. after
17 May 1990. In this context the Commission contends that the amending law was published on 28 May 1990 and thus a few days
after the
Barber judgment. The Commission therefore believes that, strictly speaking, Germany cannot rely on the Barber Protocol where the
abatement of Mrs Becker's pension is concerned. The principle of legitimate expectations did not apply in the present case.
Nor did legal certainty require that the abatement be retained for prior periods.
107. Mrs Becker agrees that the German Government cannot rely on the principle of legitimate expectations since, as the referring
court has also stated, the authors of the legislation were aware of the indirect discrimination. Furthermore, she believes
that the financial implications of not applying the pension abatement which is inconsistent with Article 141 EC are insignificant.
Finally, she points out that she was unable to lodge an earlier protest against the pension abatement retained in the transitional
legislation. This was possible only in the case of a final decision on pensions, a preventive remedy being inadmissible under
German law.
Assessment
108. Further support for the Commission's and Mrs Becker's argument cannot be found in the text of the Protocol, in its origins
or in the rulings of the Court.
109. In the
Barber judgment the Court ruled that contracted-out occupational pensions fall under the concept of pay as used in Article 141 EC
and that no distinction may therefore be made on the ground of sex in the award of such pensions. As the Member States and
the interested parties could not have been aware of such an interpretation at that time and in order to prevent financial
claims from having an unsettling effect on pension funds, the Court restricted this interpretation
ratione temporis . The Court explained later that this ruling also applies to supplementary pensions, survivors' pensions, the transfer of
pension rights and civil service pensions.
(21)
110. The Court also explained in this subsequent case-law that, where these pensions are concerned, claims to equal treatment may
be made only in relation to benefits payable in respect of periods of service subsequent to the date of the
Barber judgment ─ 17 May 1990.
(22)
One exception to this exists in the case 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. The Court abided strictly by the aforementioned
date and exceptions thereto. The wording of the Barber Protocol is also clear in this regard. This Protocol ties in with the
date of the
Barber judgment. If the contracting parties had wanted to make certain exceptions in respect of periods of work before that date,
apart from those in favour of persons who had already initiated legal proceedings, they could have done so. It is therefore
inappropriate that an exception should be made in Mrs Becker's case in respect of the periods completed before 17 May 1990.
V ─ Conclusion
111. In view of the above I propose that the Court should answer the questions submitted by the Verwaltungsgericht Frankfurt am
Main for a preliminary ruling as follows:
- ─
Old-age pensions paid under the Beamtenversorgungsgesetz fall within the scope of Article 141 EC.
- ─
Article 141 EC precludes national legislation, such as Paragraph 85(4) of the Beamtenversorgungsgesetz in conjunction with
the second clause of Paragraph 14(1) of the Beamtenversorgungsgesetz (old version), if as a result of that legislation, which
leads to a greater reduction in the pensions of officials working part-time than would be the case under a
pro rata temporis scheme, more women than men are affected when their pensions are determined.
- ─
It is for the national court, which has sole jurisdiction to assess the facts and interpret the national legislation, to determine
whether and to what extent a legislative provision which, though applying independently of the sex of the worker, actually
affects a considerably higher percentage of women than men, is justified by objective reasons unrelated to any discrimination
on grounds of sex.
- ─
By virtue of the Protocol concerning Article 141 EC, the direct effect of Article 141 EC may be relied upon, for the purpose
of claiming equal treatment in the matter of 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 national law.
- 1 –
- Original language: Dutch.
- 2 –
- OJ 1979 L 6, p. 4.
- 3 –
- OJ 1986 L 225, p. 40.
- 4 –
- OJ 1997 L 46, p. 20.
- 5 –
- OJ 1998 L 14, p. 6.
- 6 –
- Bundesverwaltungsgericht, judgment of 23 April 1998, 2 C 2.98, ZBR 1998, pp. 357 ff.; judgment of 22 July 1999, 2 C 19.98,
ZBR 2000, pp. 38 ff.
- 7 –
- Judgment in Case C-1/95
Gerster [1997] ECR I-5253.
- 8 –
- Judgment in Case C-7/93
Beune [1994] ECR I-4471.
- 9 –
- Judgment in Case C-366/99
Griesmar [2001] ECR I-9383.
- 10 –
- Judgment in Case C-147/95
Evrenopoulos [1997] ECR I-2057.
- 11 –
- Judgment in Case C-351/00
Niemi [2002] ECR I-7007.
- 12 –
- Judgment in Joined Cases C-49/98, C-50/98, C-52/98 to C-54/98 and C-68/98 to C-71/98
Finalarte [2001] ECR I-7831, paragraph 37 et seq.
- 13 –
- Judgment in Case C-343/92
Roks [1994] ECR I-571.
- 14 –
- Judgments in Case C-167/97
Seymour-Smith and Perez [1999] ECR I-623 and Case C-187/00
Kutz-Bauer [2003] ECR I-2741.
- 15 –
- Judgments in Case C-317/93
Nolte [1995] ECR I-4625 and in the cases cited in the previous footnote.
- 16 –
- See the case-law cited in footnote 14.
- 17 –
- Judgments in
Roks , cited in footnote 13, and
Kutz-Bauer , cited in footnote 14.
- 18 –
- The maximum pension is 75% under both the linear and the degressive system, although it is attained in the former case after
40 years of service and in the latter case after 35 years of service (on the basis of full-time working). If all 40 years
are worked part-time, the pension under the linear system is 37.5% (20 x 1.875%). The same result is achieved under the degressive
system by means of the pension abatement (75% x (20 ± 40)).
- 19 –
- See the previous footnote. Under the degressive system an official who had worked full-time for 20 years would have a pension
amounting to 55% of his final salary. See also the example given in paragraphs 58 to 63. A linear calculation would give him
37.5%.
- 20 –
- See, for example, the judgments in Joined Cases C-399/92, C-409/92, C-425/92, C-34/93, C-50/93 and C-78/93
Helmig [1994] ECR I-5727, Case C-333/97
Lewen [1999] ECR I-7243, Case C-411/96
Boyle [1998] ECR I-6401 and Case C-249/97
Grüber [1999] ECR I-5295.
- 21 –
- Judgments in Case C-110/91
Moroni [1993] ECR I-6591, Case C-152/91
Neath [1993] ECR I-6935, Case C-200/91
Coloroll [1994] ECR I-4389, Case C-408/92
Smith [1994] ECR I-4435, Case C-7/93
Beune [1994] ECR I-4471, Case C-28/93
Van den Akker [1994] ECR I-4527, Case C-57/93
Vroege [1994] ECR I-4541 and Case C-128/93
Fisscher [1994] ECR I-4583.
- 22 –
- See the judgment in Case C-109/91
Ten Oever [1993] ECR I-4879.
