Keywords
Summary

Keywords

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1. Social policy ° Male and female workers ° Equal pay ° Pay ° Concept ° Survivor' s pension paid by a private occupational scheme ° Included ° Scheme administered in the form of a trust ° Possibility of both workers and their survivors relying on the direct effect of Article 119 against trustees

(EEC Treaty, Art. 119)

2. Social policy ° Male and female workers ° Equal pay ° Article 119 of the Treaty ° Direct effect ° Private occupational pension scheme administered in the form of a trust containing rules incompatible with the principle of equal pay ° Not permissible ° Obligations of employers, trustees and national courts

(EEC Treaty, Art. 119)

3. Social policy ° Male and female workers ° Equal pay ° Article 119 of the Treaty ° Applicability to private occupational pension schemes ° Finding in the judgment of 17 May 1990 in Case C-262/88 Barber ° Effects limited to benefits payable in respect of periods of service subsequent to the date of that judgment ° Benefits not linked to the duration of the actual period of service and survivors' pensions ° Right to equal treatment depending on the date on which the event conferring entitlement to the benefit occurred ° Disadvantaged workers to be granted the same advantages as other workers in relation to the period between 17 May 1990 and the date of implementation of the measures achieving equal treatment ° Bringing about equal treatment for the future by abolishing the advantages previously conferred ° Permissible

(EEC Treaty, Art. 119)

4. Social policy ° Male and female workers ° Equal pay ° Article 119 of the Treaty ° Scope ° Non-contracted-out occupational pension schemes ° Included ° Effects limited to benefits payable in respect of periods of service subsequent to the judgment of 17 May 1990 in Case C-262/88 Barber

(EEC Treaty, Art. 119)

5. Social policy ° Male and female workers ° Equal pay ° Pay ° Concept ° Employers' contributions paid under funded defined-benefit occupational pension schemes ° Excluded ° Inequalities in the amounts of capital benefits or substitute benefits due to the use of actuarial factors in the funding ° Permissible

(EEC Treaty, Art. 119)

6. Social policy ° Male and female workers ° Equal pay ° Pay ° Concept ° Additional benefits paid by a private occupational scheme in return for voluntary contributions of the employees ° Excluded

(EEC Treaty, Art. 119)

7. Social policy ° Male and female workers ° Equal pay ° Transfer of pension rights from a private occupational scheme to another owing to the worker' s change of job ° Obligation incumbent on the second scheme to make good, by increasing the benefits, the inadequacy of the capital sum transferred due to discriminatory treatment ° Obligation limited to benefits payable in respect of periods of service subsequent to the judgment of 17 May 1990 in Case C-262/88 Barber

(EEC Treaty, Art. 119)

8. Social policy ° Male and female workers ° Equal pay ° Article 119 of the Treaty ° Scope ° Private occupational pension schemes having members of only one sex ° Excluded

(EEC Treaty, Art. 119)

Summary

1. The direct effect of Article 119 of the Treaty may be relied on by both employees and their dependants against the trustees of an occupational pension scheme who are bound, in the exercise of their powers and performance of their obligations as laid down in the trust deed, to observe the principle of equal treatment.

First of all, a survivor' s pension provided for by an occupational pension scheme falls within the scope of Article 119 and the fact that such a pension, by definition, is not paid to the employee but to the employee' s survivor does not affect that interpretation since such a benefit, being an advantage deriving from the survivor' s spouse' s membership of the scheme, is vested in the survivor by reason of the employment relationship between the employer and the survivor' s spouse and is paid to the survivor by reason of the spouse' s employment. Secondly, although not party to the employment relationship, the trustees are required to pay benefits which do not thereby lose their character of pay within the meaning of Article 119. The effectiveness of that article would be considerably diminished and the legal protection required to ensure real equality would be seriously impaired if an employee or an employee' s dependants could rely on that provision only as against the employer, and not against the trustees, who are expressly charged with performing the employer' s obligations.

2. Article 119 of the Treaty being mandatory in nature, employers and trustees cannot be allowed to rely on the rules of the pension scheme, or those contained in the trust deed, or on any difficulties arising from the insufficiency of the funds held by the trustees, in order to evade their obligation to ensure equal treatment in the matter of pay.

In so far as the relevant rules of national law prohibit them from acting beyond the scope of their powers or in disregard of the provisions of the trust deed, employers and trustees are bound, in order to ensure compliance with the principle of equal treatment, to use all the means available under domestic law, such as recourse to the national courts, especially where involvement of the national courts is necessary to amend the provisions of the pension scheme or of the trust deed.

National courts are bound to provide the legal protection which individuals derive from the direct effect of provisions of the Treaty. They are therefore bound, particularly in the context of Article 119, to ensure correct implementation of Article 119, taking due account of the respective liabilities of the employers and trustees under the rules of domestic law, and, to the full extent of their discretion under national law, to interpret and apply the relevant domestic provisions in conformity with the requirements of Community law and where this is not possible to disapply any incompatible domestic provisions.

3. By virtue of the judgment in Case C-262/88 Barber, the direct effect of Article 119 of the Treaty may be relied upon, for the purpose of claiming equal treatment in the matter of occupational pensions, only in relation to benefits payable in respect of periods of service subsequent to 17 May 1990, with the consequence that employers and trustees are bound to ensure equal treatment in relation to those benefits, subject to the exception in favour of workers or those claiming under them who have, before that date, initiated legal proceedings or raised an equivalent claim under the applicable national law. The limitation of the effects in time of the Barber judgment is applicable to benefits not linked to the length of actual service only where the operative event occurred before 17 May 1990.

Similarly, a survivor may claim equal treatment in this matter only in relation to periods of service subsequent to 17 May 1990, since a survivor' s pension is an advantage stemming from the survivor' s spouse' s membership of the occupational scheme.

Once the Court has found that discrimination in relation to pay exists and so long as measures for bringing about equal treatment have not been adopted by the scheme, the only proper way of complying with Article 119 is to grant to the disadvantaged workers the same advantages as those enjoyed by the other workers.

However, as regards periods of service subsequent to entry into force of rules designed to eliminate discrimination, Article 119 does not preclude achievement of equal treatment by reducing the advantages of the favoured persons since it merely requires that men and women should receive the same pay for the same work without imposing any specific level of pay.

4. Non-contracted-out occupational pension schemes are covered by Article 119 of the Treaty, so that they are subject to the principles laid down in the judgment of 17 May 1990 in Case C-262/88 Barber and more particularly to the limitation of its effects in time.

First, such schemes are the result either of negotiation between employers and employees or their representatives or of a unilateral decision of the employer. They are funded entirely by the employer or by both employer and employees with no contributions from the State. Such schemes are not compulsory for general categories of workers but concern only the workers employed by particular undertakings, membership of the schemes flowing automatically from the employment relationship with a specific employer and, although the schemes are set up in accordance with national legislation, they are governed by their own specific rules. Secondly, the Court dealt in Barber for the first time with the question of how inequality of treatment arising from the setting of different retirement ages for each sex was to be assessed with reference to Article 119 and such differentiation is to be found in other types of occupational pension schemes and produces the same discriminatory effects.

5. Although both the pension, of a defined amount, which the employer undertakes to pay to the employee under a private occupational pension scheme and the employees' contributions to the scheme are covered by the concept of pay within the meaning of Article 119 of the Treaty, this is not so in the case of the employer' s contributions which ensure the adequacy of the funds necessary to cover the cost of the pensions, so securing their payment in the future. Such funded pension schemes apply actuarial factors, such as the longer life expectancy of women, which mean that the employer' s contributions necessary for providing equal pensions for men and women are higher for women.

It follows that the fact that, where in such a scheme the pension provided for is converted into a capital sum or replaced by a reversionary pension payable to a person entitled in return for surrender of part of the amount payable, or is reduced in the event of early retirement, or where acquired rights are transferred to another scheme, there are inequalities between workers of different sex is not covered by Article 119 either. Those inequalities are merely the consequence of a method of funding such schemes, necessarily incorporating actuarial factors.

6. The principle of equal treatment laid down in Article 119 of the Treaty applies to all pension benefits paid by occupational schemes, without any need to distinguish according to the kind of contributions, employers' or employees' , to which they relate. However, where an occupational pension scheme does no more than provide the membership with the necessary arrangements for management so as to provide additional benefits for themselves through the payment of purely voluntary contributions, those benefits are not covered by Article 119.

7. In the event of the transfer of pension rights from one occupational scheme to another owing to a worker' s change of job, the second scheme is obliged, on the worker reaching retirement age, to increase the benefits it undertook to pay him when accepting the transfer so as to eliminate the effects, contrary to Article 119, suffered by the worker in consequence of the inadequacy of the capital transferred, this being due in turn to the discriminatory treatment suffered under the first scheme.

Membership of a new scheme, involving the transfer of a worker' s acquired rights, necessitated by his change of job must not make the worker lose the rights which he has under Article 119.

However, since, in the judgment of 17 May 1990 in Case C-262/88 Barber, the Court limited the direct effect of Article 119 so as to allow it to be relied upon in claims for equal treatment in the matter of occupational pensions in relation only to benefits payable in respect of periods of service subsequent to the date of pronouncement of that judgment, neither the scheme which transferred rights nor the scheme which accepted them is required to take the financial steps necessary to bring about a situation of equality in relation to periods of service prior to 17 May 1990.

8. A worker cannot rely on Article 119 in order to claim pay to which he could be entitled if he belonged to the other sex in the absence, now or in the past, in the undertaking concerned of workers of the other sex who perform or performed comparable work. In such a case, the essential criterion for ascertaining that equal treatment exists in the matter of pay, namely receipt of the same pay for performance of the same work, cannot be applied.

It follows that Article 119 is not applicable to occupational pension schemes which have at all times had members of only one sex.