Case C-577/08

Rijksdienst voor Pensioenen

v

Elisabeth Brouwer

(Reference for a preliminary ruling from the Arbeidshof te Antwerpen)

(Equal treatment for men and women in matters of social security – Directive 79/7/EEC – Frontier workers – Calculation of pensions)

Summary of the Judgment

1.        Social policy – Equal treatment for men and women in matters of social security – Directive 79/7

(Council Directive 79/7, Art. 4(1))

2.        Preliminary rulings – Interpretation – Temporal effects of judgments by way of interpretation

(Art. 234 EC)

1.        Article 4(1) of Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security precludes national legislation under which, for the years 1984 to 1994, the calculation of old-age and retirement pensions for female frontier workers, concerning equal work or work of equal value, was based on notional and/or flat-rate daily wages lower than those for male frontier workers.

(see para. 31, operative part)

2.        The Court may, exceptionally, taking account of the serious difficulties which its judgment may create as regards events in the past, be moved to restrict the opportunity for all persons concerned of relying on the interpretation the Court gives to a provision of European Union law in response to a reference for a preliminary ruling. However, the financial consequences that might ensue for a Member State from a preliminary ruling do not in themselves justify limiting the temporal effects of the ruling.

(see paras 33-34)

JUDGMENT OF THE COURT (Fourth Chamber)

29 July 2010 (*)

(Equal treatment for men and women in matters of social security – Directive 79/7/EEC – Frontier workers – Calculation of pensions)

In Case C‑577/08,

REFERENCE for a preliminary ruling under Article 234 EC from the arbeidshof te Antwerpen (Belgium), made by decision of 18 December 2008, received at the Court on 29 December 2008, in the proceedings

Rijksdienst voor Pensioenen

v

Elisabeth Brouwer,

THE COURT (Fourth Chamber),

composed of J.‑C. Bonichot, President of Chamber, C. Toader, K. Schiemann (Rapporteur), P. Kūris and L. Bay Larsen, Judges,

Advocate General: N. Jääskinen,

Registrar: R. Şereş, Administrator,

having regard to the written procedure and further to the hearing on 18 March 2010,

after considering the observations submitted on behalf of:

–        the Belgian Government, by L. Van den Broeck and C. Pochet, and by E. Pools, acting as Agents,

–        the European Commission, by M. van Beek, acting as Agent,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        This reference for a preliminary ruling concerns the interpretation of Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (OJ 1979 L 6, p. 24).

2        That question was raised in the course of proceedings between Ms Brouwer against the Rijksdienst voor Pensioenen (National Pension Office, ‘the Rijksdienst’) on the allegedly discriminatory calculation of the amount of the retirement pension granted to her.

 Legal context

 Community legislation

3        The purpose of Directive 79/7 is to progressively eliminate discrimination on grounds of sex in matters of social security. Under Article 3(1)(a) thereof, it applies to statutory schemes which provide protection against, inter alia, old age.

4        Pursuant to Article 4(1) of that Directive:

‘The principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:

…

–        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.’

5        Article 7(1)(a) of that directive provides that the directive is to be without prejudice to the right of Member States to exclude from its scope:

‘the determination of pensionable age for the purposes of granting retirement pensions and the possible consequences thereof for other benefits’.

 National legislation

6        Article 5(7) of the Royal Decree of 23 December 1996 implementing Articles 15 to 17 of the Law of 26 July 1996 modernising social security and ensuring the viability of the statutory pension schemes, provides:

‘A worker of Belgian nationality:

(a)      who was habitually employed as a worker, employee or a mineworker in a country which borders Belgium, provided that he maintained his principal residence in Belgium and returned to it in principle every day,

(b)      or who was employed in a foreign country as a worker, or employee each time for periods of less than one year by an employer established in that country, to perform paid work or work deemed to be of a seasonal nature, provided that he maintained his principal residence in Belgium and that his family continued to reside there,

may receive a retirement pension equal to the difference between the amount of the retirement pension which he would have received if that activity as an employed worker had been carried out in Belgium and the amount of the pension received for the same activity pursuant to the legislation of the country of employment.’

7        Pursuant to Article 25 of the Royal Decree of 21 December 1967 concerning general rules for the scheme of retirement and survivor’s pensions for employed persons (Moniteur belge of 16 January 1968), the pay that must be taken into account when determining the retirement pension which a worker referred to in Article 5(7) of the Royal Decree of 23 December 1996 is to receive if that activity is carried out as a worker in Belgium or for determining the survivor’s pension is established by the Crown for each calendar year, taking into account the data concerning the previous calendar year which appear on the individual account.

 The facts of the main proceedings and the question referred

8        Ms Brouwer, a Belgian national residing in Belgium, worked in the Netherlands as a frontier worker from 15 August 1960 to 31 December 1998. From 1 January 1999, she ceased working and received benefits as an early retiree in Belgium.

9        Since she was entitled to a full retirement pension in Belgium until her 65^th birthday, and the responsibility for payment fell thereafter to the Kingdom of the Netherlands by reason of insurance periods completed in that state, in 2003, Ms Brouwer brought a claim for a retirement pension before the Rijksdienst. The pension, calculated on the basis of the insurance periods completed pro rata temporis, was fixed at EUR 11 724.61 and was granted to her from 1 May 2004.

10      The amount of the pension was calculated in accordance with the applicable Belgian legislation, in particular Article 5(7) of the Royal Decree of 23 December 1996, on the basis of notional and/or flat-rate daily wages determined annually by Royal Decree on the basis of the average pay received by the workers in Belgium during the previous year.

11      On 1 June 2004, Ms Brouwer disputed the amount of the pension granted to her for the period from 1 January 1968 to 31 December 1994, pointing out that the calculation of that amount was based on notional and/or flat-rate wages which, during the period in question, were lower for female workers than for their male colleagues.

12      On 5 July 2004, the Rijksdienst informed Ms Brouwer that it maintained its original decision, arguing that during the period in question the average wage in real terms, on the basis of which the retirement pension was calculated, was not the same for female and male workers, which entailed a difference in the amounts of the pensions. However, from 1995, the daily wage was the same for male and female workers. This development was prompted by the widespread equality in pay and by the fact that women who work increasingly do so for longer periods.

13      Ms Brouwer appealed against the decision of the Rijksdienst to the arbeidsrechtbank te Hasselt (Labour Court, Hasselt). By judgment of 16 June 2006, that court annulled the decision and ruled that the Rijksdienst was to recalculate Ms Brouwer’s retirement pension on the basis of the notional and/or flat-rate wages which were applied to male frontier workers during the period from 1 January 1968 to 31 December 1994.

14      The arbeidsrechtbank te Hasselt held that the constitutional rights of equal treatment and non-discrimination do not preclude a difference in treatment between categories of persons provided that the difference is based on an objective criterion, has a legitimate aim and is reasonably proportionate to the intended aim. In the present case, those conditions are not fulfilled.

15      According to the arbeidsrechtbank te Hasselt, even if, previously, differences of treatment on grounds of sex arose from the factual situation which prevailed at the time and which was characterised by a difference in the level of pay of men and women, such a situation is incompatible with Article 141 EC and the obligation thereunder to ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied. Consequently, the Belgian legislature can no longer rely on a system in which a lower notional wage is taken into account for a woman when calculating her pension as a frontier worker, by arguing that this reflects a situation in which, on average, female workers received lower average pay than male workers.

16      The Rijksdienst brought an appeal against the judgment of the 16 June 2006 before the arbeidshof te Antwerpen.

17      It is against that background that the arbeidshof te Antwerpen decided to stay proceedings and refer the following question to the Court:

‘Are the Royal Decrees of 01.12.1969, 18.06.1970, 08.06.1971, 14.09.1972, 31.07.1973, 12.07.1974, 13.02.1975, 28.11.1975, 26.11.1976, 26.09.1977, 31.07.1978, 31.08.1979, 02.12.1980, 13.01.1982, 14.03.1983, 11.01.1984, 30.11.1984, 24.01.1986, 30.12.1986, 06.01.1988, 02.12.1988, 30.11.1989, 10.12.1990, 01.06.1993, 08.12.1993, 19.12.1994 and 10.10.1995 enacted pursuant to Article 25 of the Royal Decree of 21 December 1967 laying down general rules for the retirement and survivor’s pension for employed persons (Koninklijk Besluit tot vaststelling van het algemeen reglement betreffende het rust- en overleveringspensioen voor werknemers) – which establish lower notional and/or flat-rate daily wages for the calculation of a retirement pension for female frontier workers than for male frontier workers – in accordance with Article 4(1) of Directive 79/7/EEC on the progressive implementation of the principle of equal treatment for men and women in matters of social security?’

 The question referred for a preliminary ruling

18      The European Commission starts from the premiss that the average real wages of workers in Belgium for the years 1968 to 1994, on the basis of which the retirement pension was calculated, concerned equal work or work of equal value. In the Commission’s opinion, since the Belgian authorities did not correct the wage differences existing in practice, those differences also influenced the notional and/or flat-rate wages applied to the calculation of the retirement pension.

19      It argues that such a calculation constitutes direct discrimination within the meaning of Community law, incompatible with Article 4 of Directive 79/7.

20      The Belgian Government maintained in its written observations that there was no such discrimination. During the period form 1968 to 1994, there was a significant difference between the pay of male and female workers, employed in different sectors, and often a reduced working plan for women. As a result, the pay to be taken into consideration for the calculation of average salaries was different. It is natural therefore that there is a difference in the notional and/or flat-rate daily wages resulting in differences in the amounts of the pensions. According to the Belgian Government, since 1995, the daily wage has been the same for male and female workers, because wages have been adjusted and women have become more active in professional activities traditionally reserved to men.

21      However, it must be noted that, at the hearing, the Belgian Government radically changed its position.

22      First, it acknowledged the unequal treatment and described the steps taken to remedy the situation and to fulfil the requirements of Directive 79/7. In particular, a proposal for a Royal Decree was drawn up, which was intended to make the flat-rate daily wages for women equal to those for men. The Belgian Government maintained that Article 2 of that proposal provided that those who wish to benefit from that equalisation had to make an application in accordance with the general regulation on retirement and survivors’ pensions for workers.

23      Second, the Belgian Government requested the Court to limit the temporal effects of its judgment, not as regards payment of arrears but only as regards interest due on those arrears. In particular, the Belgian Government requested that entitlement be restricted to beneficiaries who had initiated legal proceedings before 18 December 2008, the date on which this reference for a preliminary ruling was made by the arbeidshof te Antwerpen.

24      The Belgian Government argued that the two conditions recognised by the Court of Justice’s case law, allowing the limitation of the temporal effects of a judgment of the Court, were fulfilled.

25      With regard to the first condition, namely that there was good faith in the case of a misinterpretation of a provision of Community law – in the present case, Article 4(1) of Directive 79/7 – the Belgian Government maintained that it considered the differences in pay between men and women to have been justified on objective grounds. In that regard, the Belgian Government relied on the fact that no similar cases had been brought before the Belgian courts and that the Commission had not taken any infringement actions on that subject against the Belgian state.

26      With regard to the second condition, namely the risk of serious economic repercussions of such a judgment for the Member State concerned, the Belgian Government contended that even the payment of arrears without interest represented a very large burden on Belgian public finances.

 Findings of the Court

27      It should be noted at the outset that, in proceedings under Article 234 EC, the Court has no jurisdiction to rule on the compatibility of a national provision with Community law and that, consequently, the question referred for a preliminary ruling should be reformulated and be interpreted as seeking to determine whether Article 4(1) of Directive 79/7 precludes national legislation under which, for the period from 1968 to 1994, the calculation of retirement and old-age pensions of female frontier workers was based on notional and/or flat-rate wages lower than those of male frontier workers.

28      In order to answer this question, as the Commission rightly submits, the period from 1968 to 1994, at issue in the main proceedings, must be divided. In particular, a distinction must be drawn between the period from 23 December 1984, the date by which Directive 79/7 was to have been transposed into national law, to 31 December 1994, and the period from 1 January 1968 to 22 December 1984.

29      With regard to the period from 1 January 1968 to 22 December 1984, the compatibility of the national legislation at issue could be examined only as regards Article 119 of the EC Treaty (Articles 117 to 120 of the EC Treaty have been replaced by Articles 136 EC to 143 EC), since Directive 79/7 was not adopted until 1978 and the period prescribed for its transposition was fixed at 23 December 1984. However, provisions such as those at issue in the main proceedings, relating to statutory pension schemes were outside the scope of that article and could not therefore be considered to be contrary to it (see, to that effect, Case 80/70 Defrenne [1971] ECR 445, paragraph 7).

30      With regard to the period from 23 December 1984 to 31 December 1994, it should be noted that the Kingdom of Belgium, as it acknowledged itself at the hearing, had failed to fulfil its obligations arising under Directive 79/7 regarding the calculation of retirement pensions in applying, until 1 January 1995, a discriminatory method of calculation, which was based on higher notional and/or flat-rate daily wages for male frontier workers than for female frontier workers, for equal work or work of equal value.

31      In view of the foregoing, it must be concluded that Article 4(1) of Directive 79/7 precludes national legislation under which, for the period from 1984 to 1994, the calculation of retirement and old-age pensions of female frontier workers was based on notional and/or flat-rate wages lower than those of male frontier workers.

32      With regard to the Belgian Government’s request to limit the temporal effects of the judgment in the event that the Court should find the existence of discrimination, the Court makes the following findings.

33      The Court may, exceptionally, taking account of the serious difficulties which its judgment may create as regards events in the past, be moved to restrict the possibility for all persons concerned of relying on the interpretation which the Court gives to a provision of European Union law in response to a reference for a preliminary ruling (see Case C‑262/88 Barber [1990] ECR I‑1889, paragraph 41).

34      It is, however, settled case-law that the financial consequences which might ensue for a Member State from a preliminary ruling do not in themselves justify limiting the temporal effects of the ruling (Case C‑184/99 Grzelczyk [2001] ECR I‑6193, paragraph 52; Case C‑209/03 Bidar [2005] ECR I‑2119, paragraph 68; and Case C‑423/04 Richards [2006] ECR I‑3585, paragraph 41).

35      To limit the effects of a judgment solely on the basis of such considerations would considerably diminish the judicial protection of the rights which individuals have under Community law (see, to that effect, Case C-35/97 Commission v France [1998] ECR I-5325, paragraphs 52).

36      In addition to the existence of a risk of serious economic repercussions due in particular to the large number of legal relationships entered into in good faith on the basis of rules considered to be validly in force, an additional factor to take into account to justify the limitation of the temporal effects of the judgment is the existence of significant objective uncertainty regarding the implications of Community provisions (see, to that effect, Bidar, paragraph 69, and Richards, paragraph 42).

37      In the present case, the Belgian national authorities cannot rely on the existence of significant objective uncertainty with regard to the scope of the obligation to ensure equality of treatment, which follows clearly from Article 4(1) of Directive 79/7, under which the principle of equal treatment implies that there is to be no discrimination whatsoever on grounds of sex either directly, or indirectly, as regards, inter alia, the calculation of benefits.

38      If it is established that it was indeed notional and/or flat-rate wages for equal work or work of equal value which were taken into account as a basis for the calculation of retirement pensions, which is a matter for the referring court to verify, the Belgian authorities were not entitled to take the view that the fact that the wages of female workers were lower than those of male workers resulted from the existence of objective factors and not from simple wage discrimination.

39      In addition, the fact that the Commission had not initiated any Treaty infringement proceedings in that regard against the Kingdom of Belgium cannot be interpreted as the Commission’s tacit consent to the wage discrimination that the Belgian authorities tolerated for the period from 1984 to 1994 in calculating the retirement pensions of female frontier workers.

40      The finding that the existence of significant objective uncertainty regarding the scope of Article 4(1) of Directive 79/7 cannot be established in the present case is sufficient to justify not limiting the temporal effects of the present judgment.

 Costs

41      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. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Fourth Chamber) hereby rules:

Article 4(1) 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, precludes national legislation under which, for the years 1984 to 1994, the calculation of old-age and retirement pensions for female frontier workers, concerning equal work or work of equal value, was based on notional and/or flat-rate daily wages lower than those for male frontier workers.

[Signatures]

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* Language of the case: Dutch.