Report for the Hearing in Case C-173/91 *
I — Relevant national and Community legislation
1. The Royal Decree of 20 December 1963 on employment and unemployment provides, in Article 144 (as amended by the Royal Decree of 7 August 1984, Article 13) that:
2. Collective Labour Agreement No 17 of 19 December 1974 agreed within the National Labour Council and rendered compulsory by a Royal Decree of 16 January 1975 (Moniteur of 31 January 1975, p. 1055) lays down a scheme of additional payments for certain elderly workers if they are made redundant. Article 3 provides that:
3. Article 119 of the EEC Treaty provides that:
4. Council Directive 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) provides, in Article 5(1), that:
5. Article 7(1 )(a) of 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 (OJ 1979 L 6, p. 24) provides that:
6. Article 9 of Council Directive 86/378/EEC of 24 July 1986 on the implementation of the principle of equal treatment for men and women in occupational social security schemes (OJ 1986 L 225, p. 40) provides for an analogous derogation in the case of occupational social security schemes.
II — Course of the pre-litigation procedure
7. The Commission came to the view that the effect of the combined application of the various national provisions referred to above was that the additional payments scheme provided for by Collective Agreement No. 17 benefited only male workers. Since it considered that this result was contrary to the requirements of Article 119 of the EEC Treaty, or, in the alternative, of Articles 2 and 5 of Directive 76/207/EEC, the Commission, by a letter of 27 November 1989, and in accordance with Article 169 of the EEC Treaty, called upon the Belgian Government to submit its observations on the alleged breach of obligations within a period of two months.
8. By a letter of 5 April 1990 from its Permanent Representation at the European Communities, the Belgian Government stated its position which the Commission judged to be unsatisfactory. On 30 July 1990, the Commission therefore delivered, pursuant to the first paragraph of Article 169 of the EEC Treaty, a reasoned opinion finding that the Kingdom of Belgium, in not amending within the prescribed period the national provisions referred to above in order to bring them into conformity with Article 119 of the EEC Treaty and with Articles 2 and 5 of Council Directive 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 including dismissal, had failed to fulfil its obligations under the Treaty. In accordance with the second paragraph of Article 169 of the EEC Treaty, the Commission requested the Belgian Government to take the measures necessary to comply with the opinion within a period of two months.
9. By a letter of 10 October 1990, the Belgian Government maintained its position.
Ill — Written procedure and forms of order sought by the parties
10. By an application lodged at the Court Registry on 2 July 1991, the Commission, in accordance with the second paragraph of Article 169 of the Treaty, brought the matter of the alleged breach of obligations by the Kingdom of Belgium before the Court of Justice.
11. 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.
12. The Commission, the applicant, claims that the Court should:
13. The Kingdom of Belgium, the defendant, contends that the Court should:
IV — Summary of the parties' arguments
14. The Commission maintains that the additional payments scheme established by Collective Labour Agreement No. 17 falls within the scope of Article 119 of the Treaty and that its provisions are incompatible with Article 119 as the principle that men and women should receive equal pay for equal work has not been observed.
15. The Commission, relying on the case law of the Court (in particular on the judgments in Cases 12/81 Garland v British Rail Engineering [1982] ECR 359 and 262/88 Barber v Guardian Royal Exchange [1990] ECR I-1989), points out that the concept of pay within the meaning of Article 119 comprises any other consideration, whether in cash or in kind, whether immediate or future, provided that the worker receives it, albeit indirectly, in respect of his employment from his employer, that the fact that certain benefits are paid after the termination of the employment relationship does not prevent them from being in the nature of pay, and, finally, there can be no doubt that a benefit is pay when the worker is entitled to receive it from his employer as a result of the existence of an employment relationship.
16. Since Article 119 is therefore applicable to this case, it does not permit a situation in which a woman aged between 60 and 65 may not, unlike a man of the same age and in the same situation, be dismissed subject to the same terms, that is to say with payments additional to the unemployment benefit granted to her. Whereas a man who is made redundant after his 60th birthday is entitled to unemployment benefit and therefore to additional payments until he is 65, a woman made redundant at the same age and in the same circumstances is not entitled to unemployment benefit and is not therefore entitled to the additional payment. The difference in pensionable age (60 for women and 65 for men), which also applies as regards eligibility for unemployment benefit, and to which the Belgian Government attaches importance in order to justify the difference in treatment relating to additional payments, may be seen as one of the indirect causes of the discrimination in question but it cannot be considered a justification for it.
17. The Commission also states that the introduction, by the Law of 20 July 1990, of a flexible pensionable age for employed workers does not alter the situation as far as the infringement is concerned, given that Article 144 of the Royal Decree of 20 December 1963, which bars unemployed women from entitlement to unemployment benefit as soon as they reach 60 years of age, has not been amended and that, as a result, the additional payments scheme continues to be applied differently to men and to women aged 60 or over.
18. It is only in the alternative, if the Court does not find that Article 119 applies, that the Commission considers applicable to the discriminatory situation in question Article 5(1) of Directive 76/207/EEC, according to which the principle of equal treatment with regard to working conditions, including the conditions governing dismissal, means that men and women are to be guaranteed the same conditions without discrimination on grounds of sex. In the Commission's view, there is no doubt that a condition for granting an additional redundancy payment is a condition governing dismissal within the meaning of Article 5, if regard is had to the relevant case law of the Court in particular its judgment in Case C-19/81 Burton v British Railways Board [1982] ECR 555 from which it is clear that the word dismissal appearing in that provision must be widely construed.
19. The Commission also stresses that it is incorrect to treat the additional payment as a social security benefit, as the Belgian Government attempts to do, by claiming that it is linked to unemployment benefit. Whereas unemployment benefit is indeed a social security benefit, nonetheless its nature is totally different from that of the additional payment which, given its characteristics, is clearly a benefit which is extraneous to the unemployment benefit scheme. The Belgian Government is therefore wrong to rely on the exception provided for in Article 7(l)(a) of Directive 79/7/EEC which allows 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 and which, given the fundamental importance of the principle of equality of treatment, is, as the Court has repeatedly stated, to be strictly construed.
20. The Belgian Government states, first of all, that the additional payment scheme has three aims: (a) to improve living standards for older workers made redundant; (b) to avoid systematic dismissal; (c) to encourage, by way of social security benefit, the departure of older workers and the recruitment of young workers.
21. It goes on to argue that the additional payment in question cannot fall within the concept of pay within the meaning of Article 119, as the Commission would claim; rather, it is covered by the concept of occupational social security scheme within the meaning of Directive 86/378/EEC. Contrary to the Commission's view, the Collective Agreement does not establish a redundancy payment scheme but a scheme providing for payments to supplement unemployment benefit in the event of redundancy. The essential difference resides in the fact that a redundancy payment depends solely on the amount of salary and the number of years worked whereas the additional payment is a function of unemployment benefit and an integral part of a hybrid and sui generis system-the prépension conventionnelle [early retirement pension payable under a collective agreement]. It is made up, on the one hand, of unemployment benefit which can be regarded as the basic benefit, and on the other hand, of the additional payment, those two parts being indivisible. Therefore, the payment in question is a supplementary social security benefit the existence of which is linked to that of the basic benefit, that is to say unemployment benefit. Since this is without any possible doubt a social security benefit to which the right of derogation provided for in Article 7(1)(a) of Directive 79/7/EEC is applicable, the same must be true of the additional payment.
22. The Belgian Government also argues that the Commission is wrong to rely on the judgment in the Barber case to support its view that the additional payment constitutes pay within the meaning of Article 119 of the Treaty. That case involved an agreement which only concerned the employees of the undertaking in question whereas the additional payment is covered by an inter-trade agreement which a Royal Decree has made mandatory for all workers and employers. Moreover, the existence of an employment relationship is likewise not a determining factor for the purposes of determining the existence of pay because a link with an employment contract also exists in the case of all social security benefits. Finally, the fact that the additional payment is calculated according to previous salary can hardly be taken as an indication that the payment is a form of remuneration since in Belgium social security benefits are calculated on the basis of previous salary.
23. In arguing that the disputed additional payment is a social security benefit, the Belgian Government, also denies that Directive 76/207/EEC, relied upon in the alternative by the Commission, is applicable in this case. That directive refers, in Article 1(2), to provisions to be adopted to ensure the implementation of the principle of equal treatment in matters of social security. Those provisions were adopted in Directives 79/7/EEC and 86/378/EEC which therefore apply. However, since those two directives provide for the possibility for Member States to derogate from the principle of equal treatment with regard to the determination of pensionable age and the possible consequences thereof for other benefits, and since, as with unemployment benefit, the differences in the awarding of additional payments stem from the difference in pensionable ages for men and women, the alleged discrimination is covered by that right of derogation since it is precisely one of the possible consequences thereof for other benefits.
24. The Belgian Government also points out that, since the additional payment is linked to unemployment benefit and thus has in common with that benefit the character of a social security benefit, and since the fact that a women cannot receive the additional payment from the age of 60 is the consequence of the age limit laid down for eligibility for unemployment benefit, the Commission cannot call in question the additional payment scheme, which is the consequence of a difference existing in a social security scheme such as that providing unemployment benefit, without calling in question the latter scheme. Since the Commission refrained, in its application, from contesting the validity of the unemployment benefit rules with regard to age limits, the Belgian Government takes the view that the Commission's application is unfounded.
25. Finally, in the alternative, the Belgian Government refers to the Treaty on European Union, signed at Maastricht on 7 February 1992, and in particular to the Protocol concerning Article 119 of the Treaty establishing the European Community, which is worded as follows: