Report for the Hearing in Case C-377/89

I — Legislative Background

1. Directive 79/7/EEC

Directive 79/7/EEC of 19 December 1978 (Official Journal 1979 L 6, p. 24) contains the provisions envisaged by Article 1(2) of Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion and working conditions (Official Journal L 39, p. 40), with regard to the progressive implementation of the principle of equal treatment in matters of social security. Article 1 states that the purpose of the directive is the progressive implementation, in the field of social security and other elements of social protection provided for in Article 3, of the principle of equal treatment for men and women in matters of social security. According to Article 3(1) the directive applies inter alia to statutory schemes which provide protection against unemployment.

Article 4(1) provides that:

To this effect Article 8 of the directive provides that Member States must bring into force the laws, regulations and administrative provisions necessary to comply with the directive within six years of its notification, that is to say before 23 December 1984. Article 5 stipulates that Member States shall take the measures necessary to ensure that any laws, regulations and administrative provisions contrary to the principle of equal treatment are abolished.

According to Article 10 the directive is addressed to the Member States and is based on the Treaty of Rome, in particular Article 235.

2. National law

The law on social security in Ireland has traditionally been based on the principle that a married woman is deemed to be the dependant of her husband if she is living with him or is wholly or mainly maintained by him; her husband, on the other hand, is only a dependant of his wife if he is incapable of self-support by reason of some physical or mental infirmity and is wholly or mainly maintained by her. Furthermore, increases of benefit were also paid in respect of dependent children who were normally resident with a beneficiary. However, children were regarded for these purposes as being normally resident with their father; it was thus the father rather than the mother who normally qualified for increases in respect of dependent children.

In implementation of Directive 79/7/EEC the Social Welfare (No 2) Act 1985 was passed by the Oireachtas (Irish Parliament) on 16 July 1985 but did not come into effect until various dates in 1986. The aim of this Act, which was not made retrospective to 23 December 1984, was to remove married women from the category of automatic dependency and to treat them as having the same status within the social welfare code as married men.

(i) Unemployment benefit

Until 15 May 1986 unemployment benefit was payable to married women for a period of 312 days from the initial payment, as opposed to a period of 390 days from the initial payment in respect of married men, single men and single women. On 15 May 1986 the provisions of section 6 of the Social Welfare (No 2) Act 1985 were brought into effect by the provisions of the Social Welfare (No 2) Act 1985 (Section 6) (Commencement) Order 1986. Section 6 of the 1985 Act provided for the payment of unemployment benefit to married women for a period of 390 days; it had a limited retrospective effect.

Until 15 May 1986 the personal rate of unemployment benefit payable in respect of married woman was lower than that applicable in respect of a married man, single man or single woman. On 15 May 1986 the provisions of section 2 of the Social Welfare Act 1986 came into effect, which provided for the payment of the same rate of unemployment benefit to married women as was payable to married men, single men and single women.

(ii) Unemployment assistance

Until 19 November 1986 there was no provision in Irish law for the payment of unemployment assistance to married women. On that date the Social Welfare (No 2) Act 1985 (Commencement) Order 1986 brought into effect the provisions of section 23 of the Social Welfare (No 2) Act 1985. This section repealed paragraph D of section 136(3) of the Social Welfare (Consolidation) Act 1981, which had had the effect of excluding married women from the payment of unemployment assistance.

(iii) Adult dependant increase

Until 20 November 1986 a married man was entitled to an increase on his personal rate of unemployment benefit or assistance in respect of an adult dependant if his wife lived with him or was wholly or mainly maintained by him. In contrast, until that date a married woman was only entitled to an increase in respect of an adult dependant on her personal rate of unemployment benefit if her husband was incapable of self support by reason of some physical or mental infirmity and was wholly or mainly maintained by her. This position was altered by the Social Welfare (No 2) Act 1985 (Commencement) Order 1986, which brought into effect on 20 November 1986 the provisions of section 3 of the Social Welfare (No 2) Act 1985. This provided in effect that an adult dependant of a person was a spouse who was wholly or mainly maintained by that person (but excluding a spouse in employment, a spouse who was self-employed or a spouse who was entitled to claim certain benefits or allowances under the social welfare code). The provisions of section 3 of the Social Welfare (No 2) Act 1985 confined the payment of an increase in respect of an adult dependant to a situation where actual dependency could be shown, in respect of both male and female claimants.

With regard to the payment of disability benefit, different forms were used for married men and married women. A married man automatically obtained increases for his wife and children by completing the relevant form indicating he lived with his wife and children. A married woman was unable to make a similar claim for increases for her husband and children unless her husband was an invalid and financially dependent on her. Section 3 of the Social Welfare (No 2) Act 1985 was implemented in respect of such benefit on 17 November 1986 and introduced equal treatment for married men and women.

(iv) Child dependant increases

Until 20 November 1986 an increase was paid on the personal rate of unemployment benefit in respect of a qualified child or qualified children who normally resided with the beneficiary. However, under Article 5 of the Social Welfare (Normal Residence) Regulations 1974, it was provided that a qualified child who was resident with more than one of the following persons: his father, his stepfather, his mother, his stepmother, should be regarded as normally residing with the person first so mentioned and with no other person, provided that where the child's mother or stepmother was wholly or mainly maintaining the child and the child's father or stepfather was incapable of self-support by reason of some physical or mental infirmity, the child should be regarded as normally residing with his mother or stepmother as the case might be and with no other person.

On 20 November 1986 the provisions of section 4 of the Social Welfare (No 2) Act 1985 were brought into effect in respect of unemployment benefit by the Social Welfare (No 2) Act 1985 (Commencement) Order 1986. Section 4 provides that any increase of benefit in respect of a qualified child who normally resides with a beneficiary and with the spouse of a beneficiary shall be payable at the rate of one half of the appropriate amount in any case where the spouse of the beneficiary is not an adult dependant. Also on 20 November 1986 the Social Welfare (Normal Residence) Regulations 1986, came into effect and repealed the Social Welfare (Normal Residence) Regulations 1974 as amended. Paragraph 6 of the 1986 Regulations provides that except in certain circumstances a qualified child shall be regarded as normally residing with his parents. Paragraph 7 of the Regulations provides that where a qualified child is resident with one parent only he shall be regarded as normally residing with that parent and with no other person, provided, where that parent is a member of a household, that the parent so elects.

The combined effect of section 4 of the Social Welfare (No 2) Act 1985 and the Social Welfare (Normal Residence) Regulations 1986 is that a claimant for unemployment benefit, whether male or female, who has a qualified child or children receives an increase on the personal rate of such benefit at the rate of one half of the appropriate amount unless the spouse of such claimant is an adult dependant, in which case an increase at the full appropriate amount is payable.

Similar arrangements in respect of disability benefit with regard to the payment of an increase on the personal rate in respect of a qualified child or qualified children came into effect on 17 November 1986.

(v) Preservation of rights

On 12 December 1986 the Minister for Social Welfare made the Social Welfare (Preservation of Rights) (No 2) Regulations 1986, which came into effect in respect of the payment of unemployment benefit from 20 November 1986 and in respect of disability benefit from 17 November 1986. The Regulations applied to persons who, prior to the bringing into effect of the provisions of the Social Welfare (No 2) Act 1985 and the Regulations made thereunder, received or were entitled to receive an increase in respect of an adult dependant. In the case of persons who ceased to be entitled to an increase in respect of an adult dependant because that adult dependant was entitled to or in receipt of any pension, benefit, assistance or allowance under Parts 2 or 3 of the Social Welfare Consolidation Act 1981, the person affected became entitled under the Social Welfare (Preservation of Rights) Regulations 1986 to an increase on the amount of his benefit or allowance in the sum of £20 per week.

In the case of persons who ceased to be entitled to an increase in respect of an adult dependant by reason of the adult dependant being in employment or self-employed with a weekly income in excess of £50 a week, the person affected by reason of the provisions of the Social Welfare (Preservation of Rights) Regulations 1986 became entitled to an increase on his benefit or allowance in the amount of £10 per week, together with an amount equal to the difference between the increase payable to that person in respect of child dependants under the Social Welfare (No 2) Act 1985 and the increase for those dependants which would have been payable but for the said Act.

The increases payable under the provisions of the Social Welfare (Preservation of Rights) Regulations 1986 were designed to be transitional in nature. Article 7 provided that the increases in payments provided for under the Regulations should be paid for the duration of the period of continuous entitlement to the payment in question or until the first anniversary of the relevant effective date (which was defined as the date upon which the Social Welfare (Preservation of Rights) (No 2) Regulations 1986 came into effect in respect of a particular allowance or benefit). However, the effect of the Social Welfare (Preservation of Rights) (No 2) Regulations 1986 was extended by reason of the provisions of the Social Welfare (Preservation of Rights) (No 2) (Amendment) Regulations 1987, Article 3 of which extended increases in payment under the 1986 Regulations for the duration of the period of continuous entitlement of that payment or in the case of unemployment benefit to 7 April 1988 or in the case of disability benefit until 4 April 1988. This was once again extended by reason of the provisions of the Social Welfare (Preservation of Rights) (Amendment) Regulations 1988, which extend increases of payment under the 1986 Regulations for the duration of the period of continuous entitlement to the payment or until 21 July 1988 in the case of unemployment benefit or 25 July 1988 in respect of disability benefit. The 1988 Regulations also provided for increases in payment to continue after 21 July 1988 in the case of unemployment benefit and after 25 July 1988 in the case of disability benefit at a reduced level of increase which was to continue for the duration of the period of continuous entitlement to the payment or until 5 January 1989 in the case of unemployment benefit and 2 July 1989 in the case of disability benefit. Increases commenced under the Social Welfare (Preservation of Rights) (No 2) Regulations 1986 continue to be paid, but at a somewhat reduced level from the rate of increase originally set out in these Regulations.

II — Facts and Written Procedure

1. Facts

The first applicant, Mrs Ann Cotter, is a married woman who was in insurable employment for a period of approximately nine years. On being made redundant in January 1984, she claimed unemployment benefit, which was first paid on or about 17 January 1984. It took the form of basic benefit at the rate of IR £32.75 per week, together with an element of pay-related benefit, which in her case amounted to IR £13.54 per week. In accordance with a decision under the Social Welfare (Consolidation) Act 1981, both benefits ceased to be paid on 17 January 1985, on the grounds that a married woman was only entitled to receive unemployment benefit for a period of 312 days from the date of the initial payment and that the payment of pay-related benefit automatically ceased on the cessation of the payment of unemployment benefit. Had Mrs Cotter been a married man, a single man or a single woman the unemployment benefit and pay-related benefit would have continued for a further 78 days, and the personal rate of benefit would have been higher than the special low rate for married women.

Mrs Cotter remained unemployed from 17 January 1985 until 20 June 1985. She applied for unemployment assistance on 21 January 1985 but her claim was disallowed and her appeal against that decision was also disallowed on the grounds that she was a dependant of her husband. In the event, Mrs Cotter did not receive any unemployment benefit or unemployment assistance from 17 January 1985 until June 1985. In June 1985 she obtained work; that employment continued until 17 January 1986, when she was made redundant. On 21 January 1986 Mrs Cotter applied for unemployment benefit but her application was refused on the basis that she was considered not available for work, and her appeal against this decision failed on the same basis. On 3 April 1986 Mrs Cotter made a fresh application for unemployment benefit, which was allowed as from 7 April 1986. From 7 April 1986 until 14 May 1986 the personal rate of unemployment benefit paid to Mrs Cotter was lower than that payable to a married man in the same circumstances, and Mrs Cotter received no increase on her personal rate of unemployment benefit for a dependent adult or for dependent children, as a married man would automatically have done in the same circumstances. During the period from 15 May 1986 until 20 November 1986 Mrs Cotter received the same personal rate of unemployment benefit as that payable to a married man in the same circumstances as her, but she did not receive any increase on that personal rate of unemployment benefit in respect of an adult dependant or in respect of child dependants such as would automatically have been paid to a married man in the same circumstances.

From 20 November 1986 onwards Mrs Cotter received the same personal rate of unemployment benefit as a married man in the same circumstances and she also received an increase in respect of her two child dependants in a sum equal to half the full rate of weekly increase which would normally be paid in respect of two child dependants. She did not, however, receive any payments under the transitional arrangements which had been introduced in November 1986 and were payable to a married man in the same circumstances.

The second applicant, Mrs Norah McDermott, is a married woman who was in insurable employment from approximately September 1982 until 4 November 1983. Upon becoming unemployed she applied for unemployment benefit. The basic unemployment benefit was paid to her at the rate of IR £30.90 per week from about 3 January 1984. The payment of her benefit ceased on 5 January 1985. She was informed by an official in her local employment exchange that her entitlement to unemployment benefit had ceased as of that date on the grounds that a married woman was only entitled to receive unemployment benefit for a period of 312 days. From 5 January 1985 until 12 March 1985 Mrs McDermott was not in receipt of any social welfare benefit or allowance whatsoever. On 12 March 1985 she became entitled to and obtained disability benefit, which was paid to her for the period until 12 March 1986 at the lower personal rate then applicable to a married woman. No increase on the personal rate of disability benefit was paid to Mrs McDermott in respect of an adult dependant or in respect of child dependants, which would have been paid automatically to a married man in the same situation as her.

Mrs McDermott ceased to receive disability benefit on 14 March 1986 after a period of 312 days from the date of initial payment, and although she was still unfit for work she received no social welfare benefits or allowances from 14 March 1986 until 24 July 1986. At that stage Mrs McDermott was assessed as being fit for work, and from 25 July 1986 to 26 September 1986 she received no social welfare benefits or allowances of any kind, although she was available for work. In September 1986 she commenced a work experience training course which continued until 19 December 1986. Mrs McDermott took up full-time employment on 12 January 1987.

Both applicants applied to the High Court on 4 February 1985 for conditional orders of certiorari to have the decisions made by or on behalf of the Minister for Social Welfare to cease to pay unemployment benefit after the period of 312 days quashed, on the grounds that the decisions were made contrary to and in infringement of the rights of each applicant under Article 4 of Council Directive 79/7/EEC and, in the case of Mrs Cotter, on the ground that to pay her unemployment benefit at a lower rate than a married or single man was contrary to the directive.

The respondents filed an affidavit in each case in which they stated that Article 4 of the directive at issue did not impose a clear and precise obligation concerning the manner of securing compliance, but left a wide degree of discretion. It could not therefore be directly effective so as to be capable of being invoked by the applicants before Irish courts.

2. The judgment in Case 286/85

In the course of the proceedings, the High Court requested the Court to give a preliminary ruling on whether:

In its judgment of 24 March 1987 (Case 286/85 McDermott and Cotter v Minister for Social Welfare and Attorney General [1987] ECR 1453) on that reference, the Court ruled that:

3. Subséquent procedure before the national courts

Following that judgment, and after the initiation by the applicants of fresh proceedings before the High Court seeking declarations of entitlement to various payments which a married man in their circumstances would have received during different periods from 23 December 1984 onwards and, alternatively, damages for breach of their right to equal treatment pursuant to the provisions of Directive 79/7, the High Court allowed their claim only partially, rejecting in particular their claims in respect of increases for adult and child dependants and in respect of transitional payments. On appeal to the Supreme Court, the respondents argued that to allow the claims of the applicants would offend against the principle prohibiting unjust enrichment, which under Irish law is recognized as affording a ground for restricting or refusing relief in certain circumstances.

4. The questions referred to the Court

By judgment of 17 July 1989 the Supreme Court decided to stay the proceedings until the Court of Justice had given a preliminary ruling under Article 177 of the EEC treaty on the following questions:

5. Procedure before the Court

The judgment of the Supreme Court was received at the Court Registry on 19 December 1989. Pursuant to Article 20 of the protocol on the Statute of the Court of Justice of the EEC written observations were submitted by Mrs Cotter and Mrs McDermott, represented by Mary Robinson, Senior Counsel, and Gerard Durcan, Barrister-at-Law, by the Irish Governement, represented by Louis J. Dockery, Chief State Solicitor, assisted by David M. Byrne, Senior Counsel, and Aindrias O'Caoimh, Barrister-at-Law, and by the Commission of the European Communities, represented by Karen Banks, a member of its Legal Department, acting as Agent.

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

III — Written observations submitted to the Court

1. The applicants submit, relying on the direct effect of Directive 79/7/EEC, in particular Article 4, that they are entitled to receive the automatic increases for an adult dependant on the personal rate of unemployment benefit or disability benefit which a married man in the same situation as them received during the relevant periods under Irish law. They rely in particular on the Court's judgments of 24 March 1987 (Case 286/85 Mc Dermott and Cotter (No 1), supra), of 24 June 1987 (Case 384/85 Borrie Clarke v Chief Adjudication Officer [1987] ECR 2877) and of 8 March 1988 (Case 80/87 Dik and Others v College van Burgemeester en Wethouders [1988] ECR 1601).

2. The Irish Government submits that Article 4 of Council Directive 79/7/EEC must be interpreted as meaning that the word dependants refers to persons who are actually dependent on the persons entitled to the benefit of statutory schemes as referred to in Article 3(l)(a) of the directive and social assistance as referred to in Article 3(1 )(b) of the directive, and as not meaning that married women are entitled to increases in such social welfare benefits in respect of their spouses or children where no actual dependency exists or where such increases have been paid to men in respect of dependent spouses or children, which would entail double payment of such increases in respect of dependants.

3. The Commission contends that the different arguments which the Supreme Court's first question suggests may be advanced by the respondents are without merit. Since these seem to be the kinds of argument on the basis of which reference is made in the second question to a theory of unjust enrichment, it appears further that such a notion has no place in the context of the directive. In this context, any argument based on unjust enrichment which could be put forward by the respondents would inevitably amount to a contradiction of the content of the directive and would therefore be unacceptable. As the Court has consistently held, recourse to provisions of national law to restrict the scope of the provisions of Community law would have the effect of impairing the unity and efficacy of that law and consequently cannot be accepted (see the judgment of 17 December 1980 in Case 149/79 Commissionv Belgium [1980] ECR 3881, at paragraph 19). In this context, reliance on a principle of unjust enrichment known to Irish law is designed to frustrate the effect which the Court has said the directive should have.

1 Language of the case: English.

2 Statutory Instrument No 173 of 1986.

3 Statutory Instrument No 211 of 1974

4 Statutory Instrument No 367 of 1986

5 Statutory Instrument No 422 of 1986.

6 Statutory Instrument No 351 of 1987.

7 Statutory Instrument No 63 of 1988.