Report for the Hearing in Case C-373/89

I — Facts

A — Legislative background

1. In the Kingdom of Belgium the legal basis of the social security scheme for self-employed persons is Royal Decree No 38 of 27 July 1967 organizing social security for self-employed persons (hereinafter referred to as Royal Decree No 38, which was published in the Moniteur belge of 29.7.1967). It determines the field of application of the various schemes available to self-employed persons and defines the obligations of such persons. Pursuant to Article 1 thereof, the social security arrangements laid down by Royal Decree No 38 apply to: (1) family allowances, (2) retirement and survivors benefits and (3) sickness and invalidity benefits. Pursuant to Article 2, the present decree applies to, and the obligations that it imposes must be fulfilled by, self-employed persons and persons assisting them.

2. Article 37(1) of the Royal Decree of 19 December 1967 (published in the Moniteur belge of 28.12.1967), amended by the Royal Decree of 20 July 1981 laying down general rules for the implementation of Royal Decree No 38, provides as follows:

3. Article 12(2) of Royal Decree No 38 is worded as follows:

4. Pursuant to Article 2 thereof, 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 (Official Journal 1979 L 6, p. 24) is to apply to the working population, including inter alia self-employed persons. Article 3(1) of that directive is worded as follows:

B — The background to the main proceedings

5. The late Jean Leloup, an architect in Belgium, who was covered by the social security arrangements for self-employed persons, as set out inter alia in Royal Decree No 38 was summoned by Integrity ASBL, the social security fund for self-employed persons, to appear before the Tribunal de travail (Labour Tribunal), Nivelles, regarding the payment of social security contributions payable by self-employed persons. In the course of the proceedings, Mr Leloup, whose professional income was very modest, requested that Article 37 of the Royal Decree of 19 December 1967 be applied to him. Mr Leloup died in 1988 and his heirs continued the proceedings.

C — The question referred to the Court

6. Considering that the dispute raised questions of interpretation of Community provisions, the Tribunal de travail, Nivelles, by judgment of 4 December 1989, stayed the proceedings and referred the following question to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty:

7. In the grounds of the judgment of the national court, the Nivelles Tribunal de travail refers to a parliamentary question of 7 March 1989 in which the Belgian Senator R. Pataer expressed the view that it was contrary to the present ideas on the emancipation of men and women for Article 37 of the Royal Decree of 19 December 1967 not to be applicable to married men. The Minister's reply, as set out in the judgment of the national court, is as follows:

II — Procedure

8. The decision of the national court was received at the Court Registry on 15 December 1989.

9. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted on behalf of

10. Upon hearing the report of the Judge-Rapporteur, the Court decided to open the oral procedure without any preparatory inquiry.

11. By decision of 4 July 1990, the Court assigned the case to the Second Chamber, pursuant to Article 95(1) and (2) of the Rules of Procedure.

III — Summary of the written observations submitted to the Court

12. Nadine Rouvroy and her children, the heirs of Mr Leloup, claim that the words married woman in Article 37(1) of the Royal Decree of 19 December 1967 constitute the focal point of the preliminary question. The travaux préparatoires for Royal Decree No 38 of 27 July 1967 and the amending legislation contain no explanation or statement of reasons for the distinction drawn in Article 37, which benefits only married women. Nor does academic legal literature provide any justification for that distinction; legal writers have merely noted the distinction and called for Article 37(1) to be amended. In a judgment of 24 June 1987, the Tribunal de Nivelles stated that:

13. The heirs of Mr Leloup assume that the idea underlying Article 37(1) of the Royal Decree of 19 December 1967 is the traditional view that, in a household, the man engages in a main occupation and his wife, if working (even in a main occupation) continues to be regarded as engaged in a subsidiary activity, particularly if her income from it is modest.

14. The heirs of Mr Leloup propose, in conclusion, that the Court reply as follows to the question referred to it by the Tribunal de Nivelles (Wavre Division):

15. The Belgian Government considers in the first place that the application of the social security regime for self-employed persons and the obligation to contribute to it do not give rise to any discrimination.

16. It also maintains that a distinction is to be drawn with regard to the calculation of contributions. On the one hand, there are people who habitually engage in an occupation as a principal activity and as a self-employed person. They are required to pay at least the minimum contributions, even if they have not made any profits. On the other hand, there are people who habitually engage in another occupation as a main occupation, in addition to their occupation as a self-employed person. They are either not liable to pay contributions or else are only required to pay contributions at a reduced rate when their income from their occupation as a self-employed person does not exceed a certain ceiling.

17. The Belgian Government also considers that the people to whom Article 37 is intended to apply were not determined according to the criterion of sex but on the basis of socio-economic criteria. Thus, that article does not refer only to women, since (male) students are also covered by it. It is not applicable to all women but only to married women and widows. As regards students as a category, an age limit (25 years) has been fixed and applies to students of both sexes.

18. The Belgian Government also observes that the application of Article 37 is not automatic or mandatory. It is optional and should be applied for. Entitlement to make such an application is in fact dependent on the situation of the person concerned as regards benefits. Self-employed persons are entitled to the benefits only if they pay the contributions mentioned in Article 12(1) of Royal Decree No 38 (contributions payable by people who engage in a main occupation as self-employed persons). The beneficiaries of Article 37 could nevertheless apply for the benefits since they would normally be covered by their spouse's insurance (married women or widows) or that of their parents (students): they have the benefit of secondary rights. That possibility was not available before 1985 to those who were excluded from the scope of Article 37 (married men, for example). Subsequently, the Belgian legislature introduced the survivor's pension and the household pension so that, theoretically, that argument in favour of Article 37 no longer applies.

19. The Belgian Government adds, finally, that both the repeal of Article 37 of the Royal Decree of 19 December 1967 and its extension to married men would result in indirect discrimination in breach of Article 4 of Directive 79/7. Its repeal would impose on many more women than men the obligation to pay contributions, since the statistics show that at present there are always more married women than married men who, in addition to their household duties, engage in a limited occupation on a self-employed basis in order to balance the household budget. If the extension of Article 37 to married men were envisaged, it would be necessary to ensure that both spouses within a family unit did not apply for it, since in such circumstances no one would have a guaranteed right to benefits.

20. In conclusion, the Belgian Government proposes that the Court reply as follows to the question submitted by the Tribunal de travail, Nivelles:

21. The Commission refers to previous decisions of the Court (in particular the judgments in Case 286/85 Cotter [1987] ECR 1453, Case 384/85 Borrie Clarke [1987] ECR 2865, Case 150/85 Drake [1986] ECR 1995, Case 80/87 Dik [1988] ECR 1601 and Case C-102/88 Ruzius-Wilbrink [1989] ECR 4311), according to which Directive 79/7 entered into force on 23 December 1984. Article 4 of that directive is directly applicable and gives effect to the aim of the directive which is implementation of the principle of equal treatment. In the absence of measures for the implementation of Article 4(1) of the directive and until such time as the national government adopts the necessary measures to give effect thereto, members of the sex that is discriminated against are entitled to have applied to them the same conditions as the members of the privileged sex whose circumstances are the same, and those conditions constitute, in the absence of application of the directive, the only valid reference system.

22. The Commission considers that Article 37 of the Royal Decree of 19 December 1967 constitutes a case of direct discrimination against men and that such discrimination falls within the scope of Directive 79/7, in so far as Article 2 of that directive refers expressly to self-employed persons, Article 3(1) refers to schemes covering sickness, invalidity and old age, and Article 4(1) prohibits all discrimination on grounds of sex with respect to the obligation to contribute and the calculation of contributions.

23. The Commission proposes that the Court give the following reply to the question:

1 Language of the case: French.