Opinion of Advocate General Van Gerven delivered on 4 May 1994

1 Original language: Dutch.

2 Judgment in Case C-262/88 Berber v Guardian Royal Exchange Assurance Group [1990] ECR I-1889, paragraph 35 and point 3 of the operative part.

3 The order for reference also mentions a fourth category of female employees who were affiliated to the Pension Scheme but who have since died. Since none of the cases in the main proceedings concerns this category, I will not consider it further.

4 Question 1 (2)(iii) in the Coloroll case.

5 Opinion in Cases C-109/91, C-110/91, C-152/91 and C-200/91, [1993] ECR I-4932 and I-4933, point 60.

6 The Court first developed this criterion in its judgment in Joined Cases 75/82 and 117/82 Razzouk and Beydoun v Commission [1984] ECR 1509 {paragraph 19) in the context of the right to equal treatment of male and female European Community officials. The Court subsequently applied it to ensure the application of the principle of equal treatment confirmed in Article 4(1) of Directive 79/7/EEC (full reference in footnote 11) for so long as that directive is not (fully) complied with by national legislative bodies (see, inter alia, the Court's judgment in Case 384/85 Borne Clarke v Chief Adjudication Officer [1987] ECR 2865, paragraph 12, and, recently, its judgment of 24 February 1994 in Case C-343/92 De Weerd (née Roks) and Others v Bestuur van de Bedrijfsvereniging voor de Gezondheid, Geestelijke en Maatschappelijke Belangen and Others (paragraph 18). In its judgments in Kowalska and Numz, the Court extended that criterion to Article 119 of the EC Treaty (judgments in Case C-33/89 Kowalska v Freie und Hansestadt Hamburg [1990] ECR I-2591, paragraph 20, and in Casc C-184/89 Nimz v freie und Hansestadt Hamburg [1991] ECR I-297, paragraph 18).

7 Judgment in Case C-109/91 Ten Oever v Stichting Bedrijfspensioenfonds voor het Glazenwassers- en Schoonmaakbedrijf [1993] ECR I-4879, paragraph 20 and point 2 of the operative part; judgment of 14 December 1993 in Case C-110/91 Moroni v Firma Collo, paragraph 31 and point 3 of the operative part; judgment of 22 December 1993 in Case C-152/91 Neath v Hugh Steeper, paragraph 18 and point 1 of the operative part.

8 Judgment in Case 184/83 Hofmann v Banner Ersatzkasse [1984] ECR 3047, paragraph 27; judgment in Case C-229/89 Commission v Belgium [1991] ECR I-2205, paragraph 22; judgment in Case C-226/91 Molenbroek v Bestuur van de Sociale Verzekeringsbank [1992] ECR I-5943, paragraph 15. See also the recent judgment of 24 February 1994 in Case C-343/92 De Weerd (ne'e Roks) (cited in footnote 5), in which the Court ruled, with regard to Directive 79/7, that that directive leaves intact ... the powers reserved by Articles 117 and 118 of the Treaty to the Member States to define their social policy within the framework of close cooperation organized by the Commission, and consequently the nature and extent of measures of social protection, including those relating to social security, and the way in which they are implemented (paragraph 28). In my view, the same applies to Article 119 of the EC Treaty as well.

9 The Court has pointed out many times that, although this provision may be relevant to the interpretation of other Community provisions, it is essentially in the nature of a programme and the attainment of the objectives must be the result of a social policy to be defined by the competent authorities (see the judgment in Case 126/86 Giménez Zaera v Instituto Nacional de la Seguridad Social y Tesoreria General de la Segundad Social [1987] ECR 3697, paragraphs 13 and 14). The Court has more recently confirmed this view at paragraphs 25 and 26 of its judgment in Joined Cases C-72/91 and C-73/91 Sloman Neptun Scbiffahrts v Seebetriebsrat Bodo Ziesemer der Sloman Neptun Scbiffahrts [1993] ECR I-887, in which it added (at paragraph 27) that Article 117 does not allow any judicial review of the social policy pursued by Member States.

10 Judgment in Case 43/75 Defrenne v Sabena (Defrenne IĪ) [1976] ECR 455, paragraph 15.

11 Point 60 of the Opinion.

12 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).

13 Paragraph 29 of the judgment in De Weerd (née Roks) (empnasis added), with reference to the judgment in Case 30/85 Teuling v Bedrijfsvereniging voor de Cbeintscbe Industrie [1987] ECR 2497 and the judgment in Case C-229/89 Commission v Belgium, cited in footnote 7. This principle had already been expressed in paragraph 22 of the Teuhng judgment and in paragraph 24 of the second judgment, but without the phrase in italics.

14 At points 14 and 15 of its written observations the German Government refers in particular to the Widows Pension' judgment of the Bundesarbeitsgericht of 5 September 1989 (3 AZR 575/88, also published in Betriebs-Berater, 1989, p. 2400, and in Der Betrieb, 1989, p. 2615), in which a three-level theory was applied in the context of the protection of acquired rights in the implementation of the principle of equal treatment in the case of private widows' pension insurance schemes. According to that theory, an employer will be able to introduce retroactive levelling-up of pensionable ages only if he can specifically demonstrate compelling reasons (zwingende Gründe), such as the existence of an economic crisis, the reduction of an unplanned over-provision of benefits and a serious breach of fiduciary duty.

15 At the hearing, counsel for the applicants in the Smith case correctly pointed out that the Commission's argument failed to take account of the inherent characteristics of occupational pension schemes. As the Court pointed out in its judgments, cited above in footnote 6, in Ten Oever (paragraph 17), Moroni (paragraph 29) and Neath (paragraph 14), it is characteristic of occupational pension schemes that there is a time lag between the accrual of entitlement to the pension, which occurs gradually throughout the employee's working life, and its actual payment, which is deferred until a particular age.

16 Paragraph 36 of the judgment in De Weerd (née Roks).

17 Judgment in Case 170/S4 Bilka-Kaufhaus v Weber von Hartz [1986] ECR 1607, at paragraph 36. Those criteria are that the measures should correspond to a real need on the part of the undertaking, be appropriate with a view to achieving the objectives pursued and be necessary to that end.

18 Thus, in my view, no account can be taken of cost factors having general potential effects, such as the potential cost of a limited rise in the price index and the prospects of an economic recession, referred to by Avdel Systems Limited.

19 Point 7.4 of the order for reference.

20 Avdel Systems Limited points out the effect on the size of its workforce if a large number of male employees (approximately 90% of its staff) were to exercise the right to retire on a full pension at the age of 60.

21 The Court's readiness to take account of the financial equilibrium of the scheme in question when deciding whether discrimination is justified is shown by the judgments in, inter alia, Case C-9/91 The Queen v Secretary of State for Social Security, ex parte Equal Opportunities Commission [1992] ECR I-4297, paragraphs 15 to 18, (statutory pension scheme), and Case C-338/91 Steenhorst-Neerings v Bestuur van de Bedrijfsvereniging voor Detailhandel, Ambachten en Huisvrouwen [1993] ECR I-5475, paragraph 23, (statutory scheme governing work disability benefits).

22 The mere fact that application of the principle of equal treatment will involve financial burdens having an inevitable impact on the financial equilibrium of an occupational pension scheme cannot therefore be a ground of justification in itself: the situation must involve difficulties which are impossible or almost impossible to resolve. If, in view of the limited period of time and the financial position of the pension scheme (for instance, the presence of surpluses, reserves and so on), the difficulties arc capable of being resolved, reference may be made by analogy to what the Court held in relation to statutory social-security measures in the judgment in De Weerd (née Roks) cited above in footnote 5: ... although budgetary considerations may influence a Member State's choice of social policy and affect the nature or scope of the social protection measures it wishes to adopt, they cannot themselves constitute the aim pursued by that policy and cannot, therefore, justify discrimination against one of the sexes (paragraph 35).

23 See, in relation to Directive 79/7, the judgment in Case 80/87 Dik and Others v College van Burgemeester en Wethouders Arnhem en Winterswijk [1988] ECR 1601, paragraph 14.

24 See the judgment in Case 171/88 Rinner-Kühn v FWW Spezial-Gebandereinigung [1989] ECR 2743, paragraph 15.

25 Compare the test of proportionality as formulated by the Court in, inter aha, its judgment in Bilka (paragraph 36) and its judgment in Teuling, cited in footnote 12, (paragraph 18); the measures chosen must be appropriate with a view to achieving the justified objective and must also be necessary to that end. This means that in the case in point the national court must not only consider whether the measure taken by the employer and/or the occupational pension scheme is pertinent, that is to say that it must have a logical connection with the objective pursued (for a case in which the Court held that a measure was not pertinent, see the judgment in Case C-328/91 Secretary of State for Social Security v Thomas and Others [1993] ECR I-1247, paragraph 16), but must also consider whether there is any feasible alternative for the employer and/or the occupational pension scheme which will limit the application of the principle of equal treatment less.

26 Cited in footnote 16.

27 Barber judgment, paragraphs 41 and 44.

28 Judgment in Case 384/85 Barrit Clarke v Chief Adjudication Officer [1987] ECR 2865.

29 Judgment cited in footnote 22.

30 Judgment in Case C-31/90 Johnson v Chief Adjudication Officer [1991] ECR I-3723.

31 In the Borne Clarke case, the United Kingdom defended such transitional provisions relating to invalidity benefits with the argument that it was necessary to safeguard the legitimate expectation of those receiving benefits under the old rules that they would not lose benefits owing to the rule changes (sec paragraph 4 of the judgment in Borrie Clarke).

32 Sec the judgments in Borne Clarke (paragraph 9) and in Dik (paragraph 8).

33 Paragraph 10 of the judgment in Borrie Clarke; sec also the judgments in Dik (paragraph 9) and in Johnson (paragraph 32).

34 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).

35 The original Commission proposal did not contain this transitional provision. However, Article 10 of the proposal did contain a similar transitional provision regarding the use of actuarial calculation factors differing according to sex.

36 See Article 3(1)(a) of Directive 79/7 and the second recital in the preamble thereto. Article 3(1)(b) provides that the directive also applies to social-assistance schemes in so far as they are intended to supplement or replace the schemes referred to in Article 3(1)(a).

37 Paragraph 9 of the judgment in Ten Oever, cited above in footnote 6, with reference to paragraph 7 of the judgment in Case 80/70 Defrenne v Belgium (Defrenne I) [1971] ECR 445. See also paragraph 14 of the judgment in Moroni, also cited above in footnote 6. Compare this with the definition given in the Court's established case-law of the term social security benefit in Regulation No 1408/71, namely a benefit which is granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a legally defined position and provided that it concerns one of the risks expressly listed in Article 4(1) of Regulation No 1408/71; see, inter alia, the judgments in Case C-78/91 Hughes v Chief Adjudication Officer [1992] ECR I-4839, paragraph 15, and in Case C-111/91 Commission v Luxembourg [1993] ECR I-817, paragraph 29.

38 For the rationale of this direct applicability, see the classic work by P. Roubier, Le droit transitoire, Paris, Dalloz, 1960, p. 340 et seq.

39 See Article 8(1) of Directive 79/7.

40 See the judgment in Case C-9/91 Equal Opportunities Commission, cited in footnote 20, confirmed in the judgment in Case C-328/91 Thomas and Others, cited in footnote 24, paragraph 9.

41 See, among others, H Chabas in Mazeaud, Mazeaud and Chabas, Leçons de droit civil, I, introduction à l'étude du droit, Paris, Montchrcstien, 1991, No 147, pages 197 and 198; J. Ghestin and G. Goubeaux, Traité de droit civil, introduction générale, Paris, L. G. D. J., 1990, No 373, pages 333 and 334; P. Roubier, Le droit transitoire, p. 380 et seq.

42 Paragraph 39 of the judgment in Defrenne 11, cited above in footnote 9, subsequently confirmed by the Court in settled case-law, inter alia in its judgments, cited above in footnote 5, in Case C-33/89 Kowalska, paragraph 12, and in Case C-184/89 Nimz, paragraph 17 (in the latter judgment solely in relation to collective labour agreements).

43 When explaining the effect in time of Barber in its judgments in Ten Oever (paragraph 19), Moroni (paragraph 31) and Neath (paragraph 16), the Court expressly referred to the reasoning in paragraph 44 of its judgment in Barber.

44 In this connection the Pension Fund also relies on a further argument, namely that in paragraph 32 of the judgment in Barber the Court ruled that Article 119 prohibits any discrimination with regard to pay as between men and women, whatever the system which gives rise to such inequality (paragraph 32, emphasis added). I will leave aside the question whether that passage should be interpreted in the manner suggested by the Pension Fund. It must, in any case, be read in conjunction with the second sentence of the same paragraph, which makes it clear that the Court does not regard the fact that a pensionable age differing according to sex provided for in contracted-out occupational pension schemes is based on the statutory pension scheme as any justification for discrimination of that kind.