“(1)

Is a voluntary redundany benefit, which is paid by an employer to a worker wishing to leave his employment, within the scope of the principle of equal pay contained in Article 119 of the EEC Treaty and Article 1 of Council Directive 75/117/EEC of 10 February 1975?

(2)

If the answer to Question 1 is in the affirmative, does the principle of equal pay have direct effect in Member States so as to confer enforceable Community rights upon individuals in the circumstances of the present case?

(3)

If the answer to Question 1 is in the negative:

2.1.

In the first Defrenne judgment (Case 80/70 [1971] ECR 445) the Court ruled that: “A retirement pension established within the framework of a social security scheme laid down by legislation does not constitute consideration which the worker receives indirectly in respect of his employment from his employer within the meaning of the second paragraph of Article 119 of the EEC Treaty.” That decision makes it desirable for me to examine the relationship between the voluntary redundancy scheme in question and statutory pension schemes. The Government of the United Kingdom in particular bases its view of the case primarily on this relationship, which it considers to be of vital importance. It claims that the relationship affects both the amount and the duration of the voluntary redundancy benefits. Mr Burton however denies that there is such a relationship.

2.2.

In the second Defrenne judgment (Case 43/75 [1976] ECR 455) the Court ruled inter alia that: “The principle that men and women should receive equal pay, which is laid down by Article 119, may be relied on before the national courts. These courts have a duty to ensure the protection of the rights which that provision vests in individuals, in particular in the case of those forms of discrimination which have their origin in legislative provisions or collective labour agreements, as well as where men and women receive unequal pay for equal work which is carried out in the same establishment or service, whether private or public.” That judgment is cited not only by Mr Burton, whose view is supported by the Commission, but also by British Railways and the Government of the United Kingdom, in order to support opposite conclusions. In this regard the term “pay” and the difference between “direct and overt discrimination” on the one hand and “indirect and disguised discrimination” on the other are important in these proceedings. The prohibition of discrimination contained in Article 119 is directly applicable to the first kind of discrimination but not to the second. In later judgments, most recently in Case 96/80 Jenkins [1981] ECR 911, the Court has repeatedly emphasized the significance of this distinction as regards the direct applicability of Article 119.

2.3.

In the third Defrenne judgment (Case 149/77 [1978] ECR 1365) the Court ruled that: “Article 119 of the EEC Treaty cannot be interpreted as prescribing, in addition to equal pay, equality in respect of the other working conditions applicable to men and women. At the time of the events which form the basis of the main action there was, as regards the relationships between employer and employee under national law, no rule of Community law prohibiting discrimination between men and women in the matter of working conditions other than the requirements as to pay referred to in Article 119 of the Treaty.” As regards the events forming the basis of the main action, the question submitted to the Court in that case referred in particular to the age-limit for the termination of a female employee's contract of employment, an age-limit which the contracts of employment of comparable male staff did not contain. Mr Burton and the Government of the United Kingdom cite that judgment to support opposite conclusions. Although the Employment Appeal Tribunal has not raised any explicit question on this point, the difference in age-limits is in fact of crucial importance in this case also, albeit not in the same way as in the third Defrenne judgment. The Commission therefore rightly devotes much attention to this point in its written observations (pages 9 to 13). It believes that the second sentence of that judgment of the Court implies that the decision on the age-limit would have been different if Directive 76/207 had been in force at that time. I shall come back to the details of the Commission's observations concerning the significance of this when I consider the relevant provisions of Directive 76/207.

2.4.

The Court's judgment of 29 July 1979 in Case 129/79 McCarthys Limited v Wendy Smith [1980] ECR 1275 concerned unequal ordinary wages and does not appear to be relevant to this case.

2.5.

However, the Court's judgment in Case 69/80 Worringham and Humphreys v Lloyds Bank Limited [1981] ECR 767 is relevant to this case. In that judgment the Court ruled inter alia that: “A contribution to a retirement benefits scheme which is paid by an employer in the name of employees by means of an addition to the gross salary and which therefore helps to determine the amount of the salary constitutes ‘pay’ within the meaning of the second paragraph of Article 119 of the EEC Treaty.” It appears from that judgment that not all benefits conferred on employees which are related to a pension scheme fall outside the ambit of Article 119 just because they are so related.

2.6.

Finally, in Case 96/80 Jenkins v Kingsgate [1981] ECR 911 the Court made it clear that the distinction drawn in the second De fienne ju dgment between overt and disguised discrimination, which is important in determining whether or not Article 119 is directly applicable, does not coincide with a factual distinction between direct discrimination or discrimination in form, on the one hand, and indirect discrimination or discrimination in substance, on the other. The Court put it in the following words :

According to a recent interesting study by A. W. Govers (Gelijkheid van vrouw en man in het Europees sociaal recht, Geschriften van de Vereniging voor Arbeidsrecht No 6, Alphen aan de Rijn 1981), in making the distinction in paragraph (1) between direct and indirect discrimination the Court was subscribing to a well-established international tradition, besides confirming its previous decisions on this subject. The distinction drawn in the second Defrenne judgment between overt and disguised discrimination is, however, related to the distinction between direct and indirect applicability, as the second paragraph of the Jenkins judgment once again shows. Since the terminology of both distinctions is virtually identical in some Community languages, use of the terminology contained in the second Defrenne judgment might lead to misunderstanding following the judgment in the Jenkins case. In the rest of my opinion therefore, I shall use other terminology where necessary. Perhaps a distinction between “discrimination directly ascertainable by the courts” and “discrimination not directly ascertainable by the courts” might be adequate for present purposes to clarify the terminology used in paragraph 18 of the second Defrenne judgment.

2.7.

The Burton case now before the Court is the first in which questions on the interpretation of directives concerning equal treatment of men and women must also be answered.

3.1.

The parties to the main action are agreed that Article 1 of Directive 75/117/EEC (Official Journal 1975 L 45, p. 19) has nothing material to add to Article 119 of the Treaty for the purposes of this case. Bearing in mind the Court's earlier decisions on equal treatment, that directive may therefore be ignored.

3.2.

That is not the case with Directive 76/207/EEC (Official Journal 1976 L 39, p. 40) on the implementation of the principle of equal treatment for men and women as regards inter alia working conditions. Article 1 explains that the purpose of the directive is to put into effect the principle of equal treatment for men and women as regards working conditions, and Article 2 (1) provides that “for the purposes of the following provisions, the principle of equal treatment shall mean that there shall be no discrimination whatsoever on grounds of sex either directly or indirectly by reference in particular to marital or family status”. Article 5 (1) of the directive provides that “application of the principle of equal treatment with regard to working conditions, including the conditions governing dismissal, means that men and women shall be guaranteed the same conditions without discrimination on grounds of sex.” The third question of the employment Appeal Tribunal seeks to ascertain whether, should Article 119 not apply, voluntary redundancy benefits come under the principle, thus defined, of equal treatment for men and women as regards their working conditions.

3.3.

Finally Directive 79/7/EEC (Official Journal 1979, L 6, p. 24) on the progressive implementation of the principle of equal treatment for men and women in matters of social security is perhaps indirectly relevant. Referring to Article 1 (2) of the aforementioned Directive 76/207/EEC, which envisages a separate directive on this subject, this third directive, provides inter alia in Article 7 (1) that the directive shall be without prejudice to the right of Member States to exclude from its scope: (a) the determination of pensionable age for the purposes of granting old-age and retirement pensions and the possible consequences thereof for other benefits”.

Although that directive does not have to be implemented until 1984 it is clear from its terms that at the time of Mr Burton's application the Council had already reached the conclusion that under Community law a difference in age-limits in schemes such as those contemplated by Article 7 (1) of Directive 79/7/EEC is not contrary to the principle of equal treatment. Moreover, Member States are of course empowered to make use of that provision before 1984. I shall come back later to the question whether the provision is also relevant to the redundancy payments at issue in these proceedings. Counsel for Mr Burton denied this at the hearing on the ground that by its nature the power given to the Member States in Article 7 can apply only to social security matters covered by that directive.

(i)

the statutory lump-sum redundancy payment under the Redundancy Act 1965 (now replaced by the Employment Protection (Consolidation) Act 1978, Part VI, sections 81 to 120),

(ii)

a supplementary severance payment (equal to one week's standard pay for each year of service in excess of 15 years or after 45 years of age), and

(iii)

an amount equal to 25% of the sum of the other two payments.

(i)

a special early retirement pension scheme. Where an employee is retired on grounds of redundancy within five years prior to minimum pension age (60 in the case of men and 55 in the case of women) and has an entitlement to pension the British Railways Board pays a pension equal to the pension from the minimum pension age; and

(ii)

An advance for men aged 55 or over and for women aged 50 or over equal to the amount of the lumpsum retirement benefit upon the attainment of the normal pensionable age; however, the advance falls due for repayment when the minimum pensionable age is attained and is thus in the nature of a loan. But by investing it the employee receives interest during the relevant period and by spending it he has the advantage of enjoying the benefit earlier, which at a time of high inflation provides greater purchasing power.

(a)

in the way he affords her access to opportunities for promotion, transfer or training, or to any other benefits, facilities or services or by refusing or deliberately omitting to afford her access to them, or

(b)

by dismissing her, or subjecting her to any other detriment.”

5.1.

Question 1: Let me remind the Court that the first question put to it reads: “Is a voluntary redundancy benefit, which is paid by an employer to a worker wishing to leave his employment, within the scope of the principle of equal pay contained in Article 119 of the EEC Treaty and Article 1 of Council Directive 75/117/EEC of 10 February 1975?” In examining this question I have already indicated that in order for the Court's answer to be of practical help in resolving the dispute in the main action a clear distinction must be drawn in these proceedings between different aspects of the benefit scheme at issue. It has been sufficiently established in the written and oral procedure that all the payments at issue are made directly by the employer to the worker and are mostly for the employer's account. Only in the case of that part of the benefits which is dealt with in paragraph 24 of the relevant scheme can 41% of the expenditure at present be reclaimed from a fund in which employers participate and which is administered by the government.

Moreover, it is clear that the payments are not due under a statutory scheme but under voluntary agreements between the employers and workers. This is true both for the payments made under paragraph 24 and for those made under paragraph 25 of the relevant scheme. I do not think that it is relevant, for the purpose of determining whether Article 119 applies, that the method of calculating the amount of the benefits partly depends on statutory provisions. As was rightly pointed out in the course of the proceedings, such a criterion would mean that statutory minimum wages which discriminated between the sexes would not fall under Article 119 either. Such a criterion was clearly rejected in the second Defrenne judgment, where the Court held that “forms of discrimination which have their origin in legislative provisions or collective labour agreements” are contrary to Article 119. The parties also agreed at the hearing that in order to answer the question it does not matter whether or not the relevant payments are based on a contract.

It is clear from what I have just said that the voluntary redundancy benefits under the scheme operated by British Railways are not pension rights in the context of a statutory social security scheme which, according to the Court's judgment in the first Defrenne judgment, are not subject to Article 119. A consideration relevant to the Court's decision in the present case is the fact that it based its decision in that judgment on the finding in paragraphs 6 to 10 that Article 119 does not apply to “schemes ... directly governed by legislation without any element of agreement within the undertaking or the occupational branch concerned, which are obligatorily applicable to general categories of workers” and are financed from contributions which are “determined less by the employment relationship between the employer and the worker than by considerations of social policy”. In the present case it is a question of a direct connection between employers and workers and of a retirement scheme introduced voluntarily by the employer with the agreement of, or at any rate after consultation with, the trade unions concerned.

In order to determine whether the nature of the voluntary redundancy benefits in question or the method of calculating them, render Article 119 inapplicable it is necessary to begin by examining the wording of the second paragraph of that article. If those benefits are not ordinary wages they may be other consideration in cash or in kind which the worker receives

On the basis of the information before the Court it seems indisputable that the payments in question are received directly or indirectly from the employer. As regards the required connection with the employment, I would consider that in the light of the passages which I have cited from the decision in the first Defrenne judgment the decisive question is whether the benefits are received by the worker concerned from his employer owing to his employment. The French and Italian texts of Article 119 containing the words “en raison de l'emploi” and “in ragione dell'impiego”, also show that the test is not whether the payment is consideration for work performed. Only the English text of Article 119, which contains the words “in respect of his employment”, might perhaps point to a more restrictive meaning. What is required for the purposes of the final words of the second paragraph of Article 119, and what incidentally I believe is also required by the English text logically construed, is rather an unseverable causal link between the payment and a worker's employment.

In my judgment that requirement of an unseverable causal link between payment and employment is certainly fulfilled in the case of voluntary redundancy benefits; if he has no such employment a worker cannot lay claim to such benefits. Consequently the question whether Article 119 applies to consideration provided in respect of employment in the past need not be answered in the Burton case. As regards that question I refer to my opinion in the Garland case. As I said earlier, the fact that the amount of the benefits referred to in paragraphs 24 and 25 of the scheme in question is determined in whole or in part by statutory pension rules cannot in my judgment shake those conclusions reached on the basis of the wording of Article 119. My opinion on this aspect of the first question is therefore that voluntary redundancy benefits paid voluntarily, or otherwise than by contract, by an employer to a worker do not fall outside the ambit of Article 119 by reason of their nature or the fact that their composition or the method of calculating them is partly dependent on statutory rules. That conclusion means that, subject to the points to be made concerning the other aspect of the dispute, discrimination on the basis of sex in the granting or the calculation of such benefits is contrary to Article 119.

The case before the Court is however concerned solely with the other aspect of the benefit scheme which I mentioned in my analysis of the questions. That other aspect concerns the alleged discrimination on grounds of sex in the provisions on the duration of, or access to, the benefit scheme. Given the wording of Article 119 and considering the third Defrenne judgment, I think it is beyond argument that Article 119 does not cover this aspect. As the Commission seems to have implicitly conceded in its written submissions, the stipulation of the age-limit which must be attained in order to qualify for access to the voluntary redundancy scheme is, at most, to be included amongst the working conditions referred to in Directive 76/207.

Consequently, my examination of the first question submitted to the Court leads me to the ultimate conclusion that this question must be answered as follows:

“The principle of equal pay contained in Article 119 of the EEC Treaty and Article 1 of Directive 75/117/EEC of 10 February 1975 applies to voluntary redundancy benefits paid by an employer to a worker wishing to leave his employment and to the method of calculating them, but not to age-limits placed on qualification for such payments.”

5.2.

Question 2. This question presupposes an affirmative answer to Question 1 and reads as follows : “If the answer to Question 1 is in the affirmative, does the principle of equal pay have direct effect in Member States so as to confer enforceable Community rights upon individuals in the circumstances of the present case?” Bearing in mind the second Defrenne judgment, the Jenkins judgment and the answer I have proposed to Question 1, I consider that the answer to Question 2 might read as follows:

“Where the national court is able, using the criteria of equal work and equal pay, without the operation of Community or national measures, to establish that the benefits in question and the method of calculating them being determined, whether or not by reference to statutory provisions, by a voluntary redundancy scheme applied by the employer voluntarily or otherwise than by contract, constitute discrimination on the basis of sex, the provisions of Article 119 apply directly to such a situation.”

5.3.

Question 3. As my answer to Question 1 is in the negative on the crucial point of the age-limit, I cannot avoid examining Question 3 also. I shall start with the first part of that question, which, I would remind the Court, assumes a negative answer to Question 1 and runs: “Is such a voluntary redundancy benefit within the scope of the principle of equal treatment for men and women as regards ‘working conditions’ contained in Article 1 (1), Article 2 (1) and Article 5 (1) of Council Directive 76/207/EEC of 9 February 1976?” It follows from my answer to Question 1 that I should now examine this question solely in relation to the age-limit, for I infer from the third Defrenne judgment that an age-limit which is a condition for the enjoyment of benefits such as those in question cannot as such be regarded as falling under Article 119.

On closer examination Question 3 (i), with its scope thus restricted, divides into two parts. The first part comprises the question whether an age-limit operating as a condition for the enjoyment of benefits such as those in question comes under the term “working conditions” contained in Directive 76/207. Given the customary distinction in labour law between wages and comparable consideration, on the one hand, and other working conditions, on the other hand, I consider that an affirmative answer to this question is, for one thing, logical if a balanced system is to be arrived at. Age-limits relating to the right to specific wages or other consideration in respect of employment are of such concern to workers that a negative answer to this part of the question would create an incomprehensible and illogical gap in the additional guarantees of equal treatment for men and women as regards their employment which Directive 76/207/EEC seeks to secure. On no account does the very general term “working conditions” call for any other answer either. Last but not least, however, I can refer to the thirdDefrenne judgment in which the Court expressly described the age-limit in question as a “working condition”. Because of that judgment I need not for the purposes of this part of my opinion place reliance on the use of the phrase “including the conditions governing dismissal” contained in Article 5 (1) of Directive 76/207. Besides, to my mind this case is not concerned with conditions governing dismissal but with working conditions relating to the receipt of consideration within the meaning of Article 119.

However, I think that it is much more difficult to answer the second part of Question 3 (i), namely the question of the interpretation of the principle of equal treatment in a case such as this. I have already referred to Article 7 (1) (a) of Directive 79/7. I would remind the Court that that provision states 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 old-age and retirement pensions and the possible consequences thereof for other benefits”. It follows from that provision that the difference in pensionable age which Member States fix for men and women and the effects which that may have on other benefits do not constitute a prohibited form of sex discrimination under Community law.

Where a private scheme is tied to or derived from the statutory difference in pensionable age such a difference in the private scheme can hardly be regarded as being contrary to the principle of equal treatment under Community law if a similar provision in a statutory scheme must be regarded as being unprohibited discrimination on the basis of sex under Community law.

Moreover, in my opinion it is perfectly possible to argue that, for the purposes of the application of the principle of equal treatment for men and women to benefits such as those in question, it is not just the date from which they are payable which is important but also, perhaps even primarily, the way in which that date is determined and the duration of the relevant benefits in practice. As both the qualifying age for all the types of benefits at issue and their duration are determined according to criteria which are identical for men and women, there is no question of conflict with the principle of equal treatment.

For those reasons I suggest that the Court should answer Question 3 (i) as follows: “Although the age-limit for access to a voluntary redundancy scheme such as that in question and the determination of the duration of the relevant benefits fall within the term ‘working conditions’ contained in Articles 1 (1), 2 (1) and 5 (1) of Council Directive 76/207/EEC of 9 February 1976, such a benefits scheme is not contrary to the last-mentioned provision if the qualifying age for all the benefits in question and their duration in practice is derived from the pensionable age in the same way for men and women.”

On account of the similarities between the two types of benefit referred to in paragraphs 24 and 25 of the scheme I do not think that they call for separate consideration in this respect.

The answer which I have proposed to Question 3 (i) makes it unnecessary to examine Question 3 (ii).

5.4.

To sum up therefore I propose that the Court should answer the questions put to it as follows: