Opinion of Advocate General

Mr President,

Members of the Court,

1. The Equal Opportunities Commission, a body set up by the Sex Discrimination Act 1975 with the task, inter alia, of combating discrimination on grounds of sex, has made an application for judicial review in the Queen's Bench Division of the High Court of Justice of England and Wales (hereinafter the national court). It seeks a declaration that the Secretary of State for Social Security has failed to bring certain provisions of the Social Security Act 1975 and the Social Security Pensions Act 1975 into line with Council Directive 79/7/EEC of 19 December 1978. In connection with that application the national court has put the following question to the Court for a preliminary ruling:

Directive 79/7

2. Article 1 of Directive 79/7 provides that the purpose of the directive is the progressive implementation of the principle of equal treatment for men and women in the field of social security. Articles 2 and 3 of the directive define its scope rattorte personae and rattorte materiae. The directive is applicable rattorte personae to the working population and to retired or invalided workers and self-employed persons (Article 2). It is applicable ratione materiae, inter alia, to statutory schemes which provide protection against the following risks: sickness, invalidity, old age, accidents at work and occupational diseases, unemployment (Article 3(1 )(a)).

The Social Security Act 1975 and the Social Security Pensions Act 1975

3. The Social Security Act 1975 (hereinafter the SSA) governs contributions to the statutory social security scheme in the United Kingdom and the benefits provided for by that scheme. The SSA distinguishes between benefits for which contributions must be paid (contributory benefits) and those which may be granted without payment of contributions (noncontributory benefits). The contributory benefits — which are the ones concerned here — are as follows: unemployment benefit, sickness benefit, invalidity benefit, benefits for widows, category A retirement pensions payable to a person by virtue of his own contributions, and category B retirement pensions payable to a woman by virtue of contributions paid by her husband or to a man by virtue of contributions paid by his deceased wife.

4. Sections 1 to 11 of the SSA govern the obligation to make contributions. Section 1(2) of the SSA distinguishes between four classes of contribution:

5. The provisions governing the grant of category A retirement pensions are contained in different parts of the SSA and the SSPA. Section 6 of the SSPA distinguishes between the basic pension of a fixed weekly amount independent of the number of years for which contributions were paid and the additional earnings-related pension, the weekly amount of which depends on the earnings on the basis of which contributions were paid. The discrimination referred to by the national court in part (i) of its question concerns the basic pension, to which the following provisions apply.

Scope of the preliminary question

6. The parties to the main proceedings are in agreement on a number of points.

7. According to the Equal Opportunities Commission, the rules stated at (i) and (ii) above are contrary to the principle of equal treatment, inasmuch as they entail discrimination with respect to the obligation to contribute within the meaning of Article 4(1), second indent, of the directive; moreover, the rule stated at (i) above discriminates with respect to the calculation of benefits for the purposes of Article 4(1), third indent, since as already stated a man who has paid contributions for less than 44 years receives a smaller pension than a woman who has paid contributions for the same number of years.

8. Having regard to the foregoing, it seems to me that the preliminary question is intended essentially to ascertain whether Article 7(1 )(a) of Directive 79/7 permits a Member State to derogate from the principle of equal treatment laid down in Article 4(1) by requiring that men and women pay contributions until the pensionable age in order to finance statutory social security benefits, including old-age and retirement pensions, with the resultant consequences with regard to the calculation of the pensions, where by virtue of the abovementioned provision a pensionable age differing according to sex is provided for in that Member State.

Reply to the preliminary question

9. According to Article 7(1 )(a) of Directive 79/7, the directive shall 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.

10. Whatever the position, the parties agree that only discrimination which is linked to the determination of a pensionable age differing according to sex is covered. They disagree, however, about how broadly that link must be understood.

11. It is undoubtedly correct that, where the wording is unclear, the scope of Article 7(1 )(a) must be determined in the light of the aims of the provision. Moreover, the Court stated in Johnston (paragraph 38) in connection with the principle of equal treatment laid down by Directive 76/207/EEC, that:

12. From that altogether sparse information it can nevertheless be inferred that the possibility of adopting derogating measures under Article 7(1) is left to the Member States which, in connection with certain social security payments and/or the contributions relating thereto, take account of the phenomenon, which was more widespread when the directive came into force than now, that women have not worked or worked for a shorter period than men. Article 7(1) of the directive permitted Member States to maintain the relevant advantages for the women concerned and the corresponding disadvantages for working men with regard to the obligation to contribute and/or payment of benefits. The period for which such inequality may be maintained is however not specified, although the Member States were placed under an obligation to monitor continuously and to justify the need to maintain the situation, and to review the inequality flowing from it as soon as possible.

13. For the purpose of answering the preliminary question two points may be inferred from the foregoing discussion. The first concerns the scope of Article 7(1 )(a) of the directive and the second the application of the principle of proportionality, which the Court has held to restrict the scope of derogations from the principle of equal treatment (see point 11 above).

Conclusion

14. On the basis of the foregoing I suggest that the Court reply as follows to the preliminary question:

1 Original language: Dutch.

2 Directive on the progressive implementation of the principle of equal treatment for men ana women in matters of social security, OJ 1979 L 6, p. 24.

3 Employees may contract out of the earnings-related part of the government pension and replace it by a contracted-out company scheme.

4 See on this point inter alia the judgments in Case 71/85 Netherlands v FNV [1986] ECR 3855, Case 384/85 Borrie Clarke [1987] ECR 2865, and C-31/90 Johnson [1991] ECR I-3723, at paragraph 34.

5 Judgment in Case 149/77 Defretme [1978] ECR 1365, paragraph 27. See also judgment in Joined Cases 75/82 and 117/82 Razzouk and Beydoun [1984] ECR 1509, paragraph 16.

6 See the judgment in Case 19/81 Burton [1982] ECR 555, the three judgments of 26 February 1986 in Cases 151/84 Robens [1986] ECR 703, 152/84 Marsball [1986] ECR 723 and 262/84 Beets-Proper [1986] ECR 773 and also the judgment in Case C-262/88 Barber [1990] ECR I-1889.

7 The German Government correctly observes that the Community-law framework within which the present preliminary question must be answered is different in significant respects from the framework in the Barber case. The present case concerns a pensionable age which discriminates according to sex for the grant of statutory social security benefits (including pensions) which, according to established case-law of the Court (see Case 80/70 Defrenne [1971] ECR 445 and Barber, at paragraphs 22 and 23), do not fall within the term pay for the purposes of Article 119 of the EEC Treaty, whereas the questions in Barber concerned a pensionable age discriminating on grounds of sex for the grant of a substitute, contracted-out private company pension, which according to the Court's decision in that case is to be regarded as pay for the purposes of Article 119 of the EEC Treaty.

8 That provision is also open to interpretation. In Case C-328/91 Secretary of State for Social Security v Thomas, Equal Opportunities Commission and Others [1993] ECR I-1247, tne House of Lords has asked whether the second clause of Article 7(l)(a) of Directive 79/7 is applicable to discrimination with respect to the grant, at a different age, of social security benefits such as severe disablement allowance and invalid care allowance.

9 See the abovementioned judgments in Roberts (paragraph 35), Marshall (paragraph 36) and Beets-Proper (paragraph 38).

10 Judgment in Case 222/84 [1986] ECR 1651.

11 Council Directive No 76/207/EEC of 9 February 1976 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 (OJ 1976 L 39, p. 40).

12 That the process of review is fully under way in the United Kingdom seems clear from the document Options for Equality in Sute Pension Age that was laid before the United Kingdom Parliament in December 1991.

13 From the case-law of the Court it appears that, where a court finds that there is unlawful discrimination, the group discriminated against, in this case men, are entitled, pending legislative intervention, to the same treatment and to the application of the same rules as the other group in the same situation, in this case women: see inter alia the judgment in Case 71/85 FNV [1986] ECR 3855, at paragraph 22, and the judgment in Case C-377/89 Cotter and McDermott [1991] ECR I-1155, at paragraph 18.

14 That for the purposes of the application of the principle of proportionality account may be taken of the proper and coherent functioning of the system set up by the Member State has been recendy confirmed by the Court in connection with a national tax system in the judgments in Cases C-204/90 Bachmann [1992] ECR I-249 and C-300/90 Commission v Belgium [1992] ECR I-305.