C-69/80

and

LLOYDS BANK LIMITED

on the interpretation of Article 119 of the EEC Treaty, Article 1 of Council Directive 75/117/EEC of 10 February 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women (Official Journal 1975, L 45, p. 19) and Article 1 (1) and Article 5 (1) 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 (Official Journal 1976, L 39, p. 40),

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

THE COURT

composed of: J. Mertens de Wilmars, President, P. Pescatore, Lord Mackenzie Stuart and T. Koopmans, Presidents of Chambers, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

years' service or attaining the age of 26 in question are not the same according are entitled: to whether the employee is male or female.

Thus in the case of an employee leaving Lloyds' service before completing five When that claim was rejected by the years' service or attaining the age of 26, tribunal, the two applicants appealed to the consequences under the two schemes the Employment Appeal Tribunal, which

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

allowed the appeal, holding that in this (i) are (a) contributions paid by an case there was an inequality of pay employer to a retirement within the meaning of the Equal Pay benefits scheme, or Act, without further examining the arguments put forward by the parties (b) rights and benefits of a under Community law. worker under such a scheme In its turn, Lloyds appealed against that decision to the Court of Appeal, London. That court, pointing out that the within the scope of the principle problem in question involves provisions of equal treatment for men and of Community law, submitted to the women as regards "working Court of Justice under Article 177 of the conditions" contained in Article 1 Treaty questions for a preliminary ruling paragraph 1 and Article 5 worded as follows: paragraph 1 of the EEC Directive of 9 February 1976 (76/207/ 1. Are EEC)?

(a) contributions paid by an employer (ii) If so, does the said principle have to a retirement benefits scheme, direct effect in Member States so or as to confer enforceable Com- munity rights upon individuals in (b) rights and benefits of a worker the circumstances of the present under such a scheme case? "pay" within the meaning of Article 119 of the EEC Treaty? 2. The order for reference was entered on the Court Register on 3 March 1980. 2. Are

II — W r i t t e n o b s e r v a t i o n s sub- mitted to the C o u r t The plaintiffs consider that Questions 1 and 2 are closely linked and that it is therefore convenient to consider them together. Susan Jane Worringham and Margaret Humphreys, the plaintiffs in the main action (hereinafter referred to as "the plaintiffs"), observe that the immediate If the principle of equal pay were not issue raised by this reference is whether applied to protect the rights of workers the principle of equal pay laid down in under occupational pension schemes, the Article 119 of the Treaty and in Article 1 double aim of Article 119 would be of Directive 75/117/EEC and the frustrated; that aim consists on the one principle of equal treatment laid down hand in guaranteeing equal conditions of in Articles 1, 2 and 5 of Directive competition for the undertakings of the 76/207/EEC entitle female employees to various Member States and, on the be paid the same refund of pension other, in improving the living and contributions as male employees engaged working conditions of female workers. in the same work are paid, but that underlying this issue is a broader ques- tion: whether those principles require that contributions paid under retirement The concept of pay to which the benefits schemes on behalf of male and principle of equality applies is a broad female employees or benefits received by one under Community law. Retirement them under such schemes should be benefits are clearly covered by this equal. concept. In fact, they are funded by contributions paid by the employer which, in any case, are part of the According to the plaintiffs, by excluding consideration which the employee retirement benefits schemes from the indirectly receives in the form of a right requirement of equality without sex to specified benefits under the retirement discrimination despite the fact that benefits scheme. The employee's rights United Kingdom courts and successive under the scheme are earned by him as governments have recognized that part of the reward for his service and are pensions are an aspect of pay, the law therefore consideration received in of the United Kingdom violates the respect of his employment. principles of equal pay and other aspects of employment which it has nevertheless expressly recognized. In modern economic conditions, many of the benefits of employment are received in forms other than cash. It is no doubt Although this discrimination is com- because the drafters of Article 119 pletely unjustified, it is, however, specifi- recognized the realities of the modern

concept of pay that it also means According to the plaintiffs, when a consideration in kind; Article 1 (1) of retirement benefits scheme is considered Directive 75/117/EEC, with its in the light of these criteria the clear reference to "all aspects and conditions conclusion is that such schemes are not of remuneration" moreover confirms part of the social security system and this. that the rights enjoyed under such a scheme are part of the consideration which the worker receives, in respect of It follows from the judgment of the his employment, from his employer. In Court of Justice in Case 80/70, Defrenne fact, those schemes have all the above v Belgian State (hereinafter referred to as characteristics. "Defrenne No l'), that a retirement pension established within the framework of a social security scheme laid down by legislation does not constitute consideration which the worker receives The judgment in Defrenne No 1 was indirectly in respect of his employment consistent with the above-mentioned from his employer, within the meaning opinion of the Advocate General that of Article 119. That judgment was fully social security schemes, including consistent with the opinion of Mr pension schemes, do not fall within Advocate General Dutheillet de Lamothe Article 119 if (a) they are directly that retirement benefits schemes with the governed by legislation; (b) they are following characteristics come within obligatorily applicable to general cat- Article 119: egories or workers; and (c) they are established and operated without any element of agreement within the under- taking or the occupational branch (a) The pension benefit is paid to the concerned. However, the retirement worker because he has a particular benefits schemes operated by British post in the employment of a undertakings do not satisfy any of these particular employer and not because criteria. Moreover, the contributions to of his status as a worker generally; those schemes are determined by the rules of the pension scheme and the amount of the contributions is frequently stated in the contract of employment, (b) The management and funding of the whereas, in the judgment in Defrenne No scheme are organized on an occu- 1, the Court held that the contributions pational basis independent of the to schemes which do not fall within State social security system; Article 119 are determined more by considerations of social policy than by the employment relationship between the (c) The pension benefit is linked to employer and the worker. the contributions payable by the employer, so that it is not payable if the employer defaults in making those contributions; The rights of a worker to benefits under a retirement benefits scheme operated (d) The pension scheme is voluntary in by his employer are part of the origin and the subject of collective consideration the worker receives in agreement between the employer and respect of his employment and hence are the trade union. "pay" within Article 119.

If the Court does not accept this argument, contrary to the plaintiffs' primary submissions, the plaintiffs submit in the alternative that it is necessary to As regards the practical application of rely on Article 1 (1) of Directive the principle of equality, this may be 75/117/EEC which requires the achieved in two different ways : either by elimination of all discrimination on the guaranteeing both equal contributions grounds of sex "with regard to all and similar rights and benefits for men aspects and conditions of remuneration". and women, which would be possible by By that expression Article 1 plainly using unisex actuarial tables, or else by includes also the rights and benefits of a guaranteeing only equal benefits, which worker under a retirement benefits implies the payment of higher contri- scheme in the circumstances of the butions by or on behalf of workers of the present case. In such circumstances, the relevant sex to produce equal benefits. principle of equal pay outlined in Article The second solution is permissible 119 of the Treaty and further defined in provided that the higher contributions Article 1 of Directive 75/117/EEC has payable by the workers of one sex are direct effect in Member States so as to paid by the employer and not by the confer enforeceable rights upon workers concerned. individuals.

As regards Question 3 the plaintiffs As regards Directive 75/117/EEC, the consider that the circumstances of the plaintiffs submit that it contains a present case clearly fall within the scope standard aimed at facilitating the of the direct application of Article 119, practical application of the principle of as defined by the case-law of the Court. equal pay laid down in Article 119. This It is in fact accepted by Lloyds that the aim cannot be effectively attained if plaintiffs were at all material times individuals are prevented from relying

It begins by explaining the characteristics of the occupational pension schemes existing in the United Kingdom and With regard to Question 4, the plaintiffs points out that the benefits in fact consider that if the principle of equal pay received under one of those schemes can does not apply to the contributions paid never be exactly the same for two people by an employer to or to the rights and except purely by accident since they vary benefits of a worker under a retirement in each case according to a variety of benefits scheme, the principle of equal personal factors including the options treatment as defined in Directive taken up by the person concerned, family 76/207/EEC applies to such contri- circumstances and the age to which he or butions, rights and benefits and has she lives. For the same reasons, actual direct effect in Member States. They receipts cannot be known until after the observe that the fourth paragraph of the interests of the member and, where preamble to that directive refers to applicable, of his or her dependants, "working conditions, including pay", cease. It is therefore necessary to which shows that the phrase "working consider that even if the sex of members conditions" encompasses more than the were not taken into account it would in term "pay" in Article 119 of the Treaty any case be impossible to achieve and in Article 1 of Directive 75/117/ equality of benefits between them or. to EEC even if the latter is understood in fix a priori the total amount of benefits the broadest sense. Moreover, as which will be paid to a member. indicated by Article 5 (1) of the same directive, working conditions also include the "conditions governing dismissal". It follows a fortiori that they also include the contributions paid by an employer to a retirement benefits scheme The pension funds set up by retirement and the rights and benefits of a worker benefits schemes are administered on the

basis, inter alia, of actuarial statistics on benefits scheme of the type established in the life expectation of members. It is a the United Kingdom and that the value group calculation reflecting a group of the benefits can never, save by pure average and not the behaviour of any chance, be identical or equal. individual member, and it cannot be otherwise. It is, however, necessary to make a distinction according to sex for the purposes of that calculation since the result is necessarily influenced by differences of sex and sexual behaviour The value of prospective benefits could patterns. In fact, a woman's greater only be ascertained on the basis of an expectation of life means that the cost to actuarial assessment of an "average" the fund of providing identical benefits is person but the apparent equality which greater in the case of a woman than in might well be produced if the scheme that of a man. Since, as has been seen, terms were identical would not be the benefits received by the person produced in fact. concerned can only be known after, and in many cases years after, the relevant employment ends, the same applies to the contributions necessary to maintain those benefits. Consequently, if either "pay" or "con- sideration" are sought to be construed as embracing pension benefits or pension contributions those words would have to be read as extending to such an actuarial Moreover, the contributions paid by a assessment of value and as requiring a worker do not correspond to the benefits comparison not of true but of apparent that he will receive in the future. The value. contributions are received and adminis- tered by the trustees of the pension fund. There is and can be no apportionment between members or actual or notional attribution to any particular member. As regards Question 1 Lloyds observes that the expression "wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly" in Article 119 Finally, the difference between contri- intends to bring into account also butory and non-contributory schemes is benefits which are akin to pay which are irrelevant in the present case since the known and received or enjoyed at the contributions of Lloyds's workers are time when the (assumed) like work is funded by Lloyds. being performed and which are capable then of being calculated, quantified and compared. In fact, the purpose of the definition contained in Article 119 is to identify the constituents of pay in order to enable such comparison readily and On the basis of these considerations, it simply to be made by employers and may therefore be concluded that it is workers of both sexes and therefore to impossible to calculate the value to him identify, quantify and correct any or her of membership of a retirement inequality.

There are, however, other terms of a the employer or by the worker to the contract of employment which might pension schemes cannot constitute pay become or develop into a source of within the meaning of Article 119 since financial advantage or disadvantage to they are received by the trustees of the either sex but the effects of which pension fund and are not receivable by depend upon future events or contin- the worker himself. gencies. In such cases quantification is only possible after the happening and in the light of such events. If the word "consideration" were widely construed to include such elements the purpose of the definition would be frustrated because contemporary comparison would In support of this interpretation, it may become either impracticable or be recalled that the Court in its judgment impossible. in Defrenne No 1 held that the part due from the employers in the financing of State pension schemes does not constitute a direct or indirect payment to the worker. It follows from the same judgment that this characteristic is also Moreover, according to the case-law of shared by "special schemes which . . . the Court in Defrenne No 3, the field of relate in particular to certain categories application of Article 119 must be of workers". This ruling is precisely determined within the context of the applicable to retirement benefits schemes system of the social provisions of the in general and to the instant schemes in Treaty which are set out in the chapter particular. formed by Article 117 et seq. Articles 117 and 118 provide for a programme to be implemented through subordinate legislation. They are supplemented but not contradicted or duplicated by Article 119, provided that the criteria therein provided are strictly construed. In the That conclusion is confirmed by the present case the fact of differential consistent case-law of the Court and by nominal pay scales and like work is the wording of Directive 76/207/EEC present, but the scales are the product of on equal treatment and of Directive the different fund rules and if Article 119 7/79/EEC on social security (Official were applied, which could only be done Journal 1979, L 6, p. 24). In fact, a wide by equalization of those scales alone, this construction of the word "pay", which would, as the facts demonstrate, produce would cover many of the matters dealt even more glaring inequality. In fact, the with in the Equal Treatment Directive, discrimination in this case is "indirect" has been expressly rejected by the Court. or "disguised" and could only be Moreover, Article 1 (2) of the Equal abolished by amending one or other of Treatment Directive excludes from the the pension schemes. scope of that directive "matters of social security", whereas Article 3 (3) of the Social Security Directive leaves the principle of equality in "occupational schemes" in matters of social security to be implemented by subsequent rules. Broaching point (a) of Question 1, Lloyds These provisions are consistent only with observes that the contributions paid by the view that "occupational schemes", in

According to Lloyds, the construction Lloyds asks moreover whether the phrase contended for confines the meaning of "within the framework of a social the word "pay" within clear, manage- security scheme laid down by legislation" able, practicable limits, understandable to used by the Court in the judgment in employers and workers alike, and avoids Defrenne No 1 should be read as conflicts or overlaps between Article 119 descriptive of the scheme before the and Articles 117 and 118. Court or as laying down an essential pre- condition for the exclusion of a pension scheme from the scope of Article 119. With regard to point (b) of Question 1, Lloyds observes first of all that it follows from the judgment in Defrenne No 1 that It replies as follows: "the worker will normally receive the benefits legally prescribed not by reason of the employer's contribution but solely (1) This phrase is simply descriptive; because the worker fulfils the legal conditions for the grant of benefit". These words apply equally both to a typical State scheme and to a typical (2) Alternatively, any pre-condition occupational scheme. should be satisfied all the same if the relevant scheme is validly established under the relevant domestic law taking into consideration the fact These benefits are not consideration paid that, for example, in the United directly or indirectly by the employer.

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

The benefits received by a worker from the trustees of the fund are in no way dependent upon a term in the contract of employment for remuneration or otherwise, or upon any calculation made under such contract but wholly and fundamentally upon the rules of the It should moreover be recalled that the particular scheme. equalization of the terms of retirement benefits schemes for men and women raises highly complex problems for the solution of which the provisions of Article 119 are inadequate and inappro- priate but are reserved by Articles 117 and 118 to the discretion of the auth- orities referred to therein. These problems require solution in principle by the legislators. The first problem is that created by the woman's greater The nature and amount of the benefit expectation of life. There are at least two depend upon a variety of factors schools of thought as to how equality personal and peculiar to the individual between sexes should be measured or worker. The benefit is receivable only defined. The approach consisting of after the termination of the employment fixing identical terms and provisions for and may continue after the death of the men and women seems, however, unfair person concerned. There is therefore no because it can never neutralize the "close connexion" between the nature of natural female advantage. The other the services provided and the benefit view is on the other hand that true received. The receipt is quite unrelated equality can only be reached by to any particular work done or past providing a package of benefits of equal contribution. Equality of benefits be- value to men and women, which would tween workers is quite unattainable. involve the definition of precise actuarial Further it may be asked how sums standards. Each of these solutions could, received after retirement and not moreover, be modified.

With regard to Question 4, Lloyds The difficulties in the above fields could observes that the express exclusion of explain both the terms of Article 3 (3) of matters of social security by Article 1 (2) the Social Security Directive and the of Directive 76/207/EEC, coupled with absence as yet of the provision therein the absence of any reference to pension referred to. schemes in Article 5 (2) (b), show that the general provisions of that directive were not intended to affect pension schemes. Article 119 can operate directly upon pay clauses in individual contracts of service but is not intended to meet and cannot be construed as meeting the essential Alternatively, assuming that Question 3 requirements specified in the preceding or the second part of Question 4 are paragraphs. relevant, Lloyds maintains that Article 119 of the Treaty, Directive 75/117/ EEC and Directive 76/207/EEC are each insufficiently precise to have direct effect, both as regards pension contri- As regards Question 2, Lloyds considers butions and in respect of the rights and that the intent and effect of Directive benefits under retirement benefits 75/117/EEC was to extend the concept schemes. Moreover, with regard to of equal pay to cover both the same Directive 76/207/EEC, the period for work and "work to which equal value is the implementation of that directive in attributed" but not by the use of the the United Kingdom expired in August phrase "all aspects and conditions of 1978, so that the question of direct effect remuneration" to vary or extend the cannot arise in proceedings commenced scope or meaning of the definition of in 1977. pay in Article 119 itself.

millions of pounds altogether. Lloyds Lloyds to the trustees of the pension therefore suggests that the Court, as it scheme is "pay" or not. has already done in Case 43/75, Defrenne v Sabena, should limit the power to rely upon the direct effect of Community provisions in support of claims relating to periods prior to the date of the judgment which it delivers to If the 5 % is pay, it is pay precisely workers who have already brought legal because it can be identified as such proceedings or made an equivalent claim. without regard to any terms related to death or retirement or to any provision made in connexion with death or retirement. It is therefore necessary to concentrate solely on the relationship between employer and employee. The conclusion tnat the 5 % is pay would The United Kingdom considers, with seem to involve finding that on the facts regard to Question 1, that neither contri- the 5 % forms part of the sum due to the butions to a retirement benefits scheme employee but is notionally handed back nor rights or benefits enjoyed under such to the employer to be paid on the a scheme are, as such, "pay" within the employee's behalf to the trustees of the meaning of Article 119. scheme. On the facts, such an approach presents certain difficulties since the employee is at no time entitled to insist on the sum being paid to him by the employer. The question whether in all the circumstances the sum is pay is one primarily for the national court. The It observes first of all that the order for United Kingdom expresses no view on reference refers solely to "contributions the facts of the present case beyond paid by an employer" without making a pointing out that, whichever view distinction between sums compulsorily prevails, the answer will not depend on deducted from the employee's pay, other the consequences of the payment to the sums paid on the employee's behalf, trustees but upon the nature of the sum sums which the employer is required to in terms of a payment by the employer to pay in order to enable the scheme to the employee (or to his order) for a function ("the employer's contribution") given amount of work. or a mixture of these. It is, at least at first sight, surprising that the Court of Appeal and/or the parties see no relevant distinction between these types of contri- bution. With regard to the rights and benefits under a retirement benefits scheme, the arguments against such rights and benefits being "pay" are a fortiori those relating to "contributions paid by the employer". The extent and amount of Under the system applied by Lloyds, the such rights and benefits are not related problem is whether the 5 % described as to the work done but are the product of forming part of the "salary" of male a number of different factors (contri- employees under 25 and paid direct by butions, income from the trustees' own

After putting forward these consider- ations, the United Kingdom observes There is a further objection to treating that if these submissions are correct, it is either the employer's contribution or the unnecessary to reply to Question 3. For rights or benefits as "pay" i n a n y general the sake of completeness it, however, sense. In the United Kingdom, there is in also examines that question. fact a State pension scheme and occu- pational schemes supplementary to the former which must now fulfil certain detailed statutory criteria which ensure that the benefits received by workers are In the opinion of the United Kingdom adequate in terms of the social policy it is clear that if, contrary to its pursued by the legislation of the United submissions, Article 119 applied to Kingdom. It would be odd if the legal pensions, it could not have direct effect. requirements imposed by Community The forms of discrimination in question law on the occupational pension schemes cannot be identified solely with the aid

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

of criteria based on equal work and question. However, this would be exactly equal pay. It is not clear how equality is the situation, as already seen in relation to be achieved in this field since it is to Article 119, if Article 1 of Directive possible to achieve it either by equal 75/117/EEC applied also to pensions. benefits or by equal contributions but not The need to produce criteria with a view by both solutions together so long as to equality in occupational pension retiring ages and life expectancies vary as schemes has been recognized, moreover, between men and women. by the Council and by the Com- mission. The Commission is engaged in drafting a new directive dealing only with those schemes.

Where the indefinite nature of the concepts used by a provision leaves the Member States a margin of discretion on With regard to Question 4, the United matters of substance, a discretion of Kingdom considers that Directive that kind precludes any possibility of 76/207/EEC on equal treatment as according direct effect to the provision in regards working conditions cannot relate

JUDGMENT OF U. 3. 1981 — CASE 69/80

to social security since it expressly rather a worker's contribution in respect excludes matters of social security from of which he is indemnified by the its field of application. employer. It is therefore a contribution paid by an employer on the worker's behalf. On this analysis it also falls within the definition of pay in Article With regard to direct effect, the 119. It is in fact consideration which the arguments against the direct effect of worker receives, directly or indirectly, in Directive 75/117/EEC are valid a respect of his employment from his fortiori with regard to Directive 76/207/ employer. EEC. It is possible to add that Article 5 of the directive shows that detailed legislation is contemplated to give effect to the general principle of equal The question submitted to the Court of treatment. Finally, the time-limit for the Justice by the Court of Appeal however implementation of the directive in the relates to employers' contributions United Kingdom expired on 12 August strictly so-called. According to the 1978, in other words after proceedings Commission, such contributions fall as a were commenced in the main action. matter of language within the definition of pay in Article 119.

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

JUDGMENT OF 11. 3. 1981 — CASE 69/80

A. Toledano-Laredo, acting as Agent, In this way Lloyds provided all contri- and by M. Beloff, Barrister, presented butions required by the fund rules from oral argument at the hearing on 29 men and women over 25 and as between October 1980. itself and these members in substance converted a contributory into a non- contributory scheme. During the hearing Lloyds completed the statement of facts in this case as follows :

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

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 (Official Journal L 38, p. 40).

2 These questions have been raised within the context of proceedings between two female workers and their employer, Lloyds Bank Limited (hereinafter referred to as "Lloyds"), which they complain was in breach of the clause guaranteeing equal pay for men and women incorporated in their contracts of employment with the bank by virtue of the provisions of Section 1 (2) (a) of the Equal Pay Act 1970. The plaintiffs in the main action have claimed in particular that Lloyds has failed to fulfil its obligations under the Equal Pay Act 1970 by not paying female staff under 25 years of age the same gross salary as that of male staff of the same age engaged in the same work.

3 It is clear from the information contained in the order making the reference that Lloyds applies to its staff two retirement benefits schemes, one for men and one for women. Under these retirement benefits schemes, which are the result of collective bargaining between the trade unions and Lloyds and which have been approved by the national authorities under the Finance Act 1970 and certified under the Social Security Pensions Act 1975, the member contracts out of the earnings-related part of the State pension scheme and this part is replaced by a contractual scheme.

4 It follows from the same order that although the two retirement benefits schemes applied by Lloyds do not essentially involve a difference in the treatment of men and women as regards the benefits relating to the retirement pension, they lay down different rules as regards other aspects not related to that pension.

8 The Industrial Tribunal, before which an action was brought at first instance, dismissed by decision of 19 September 1977 the applicants' claim on the ground in particular that the unequal pay for men and women complained of in this instance was the result of a difference in the rules of the bank's retirement benefits schemes for men and women and therefore fell within the exception contained in Section 6 (1 A) (b) of the Equal Pay Act 1970 which excludes from the operation of the principle of equal pay for men and women terms related to death or retirement or any provision made in connexion with death or retirement.

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

9 The plaintiffs in the main action appealed to the Employment Appeal Tribunal, contending that the payment of an additional 5 % gross salary to male employees of Lloyds aged under 25 raised a problem of discrimination between men and women in respect of pay which fell outside the exception contained in Section 6 (1 A) (b) of the Equal Pay Act 1970. They also argued that in any case that section could not be interpreted and applied so as to be contrary to Community law, which overrides the provisions of the Equal Pay Act 1970.

10 The Employment Appeal Tribunal allowed the appeal on the grounds that: (a) there was inequality of pay for men and women under the age of 25 in that instance; (b) the terms or provisions in the contract of employment with reference to pay had to be kept separate from terms or provisions with reference to pensions; and (c) the relevant clause in the contract of employment was not a provision relating to death or retirement as contemplated by Section 6 (1 A) (b) of the Equal Pay Act 1970.

(b) rights and benefits of a worker under such a scheme

'pay' within the meaning of Article 119 of the EEC Treaty?"

JUDGMENT OF 11. 3. 1981 — CASE 69/80

13 It is clear from the information supplied by the national court that the first question asks essentially, first, under (a), whether sums of the kind in question paid by the employer in the name of the employee to a retirement benefits scheme by way of an addition to the gross salary come within the concept of "pay" within the meaning of Article 119 of the Treaty.

1 4 Under the second paragraph of Article 119 of the EEC Treaty, "pay" means, for the purpose of that provision, "the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer".

15 Sums such as those in question which are included in the calculation of the gross salary payable to the employee and which directly determine the calcu- lation of other advantages linked to the salary, such as redundancy payments, unemployment benefits, family allowances and credit facilities, form part of the worker's pay within the meaning of the second paragraph of Article 119 of the Treaty even if they are immediately deducted by the employer and paid to a pension fund on behalf of the employee. This applies a fortiori where those sums are refunded in certain circumstances and subject to certain deductions to the employee as being repayable to him if he ceases to belong to the contractual retirement benefits scheme under which they were deducted.

20 Since the interpretation of Directive 75/117/EEC was requested by the national court merely subsidiarily to that of Article 119 of the EEC Treaty, examination of the second question is purposeless, having regard to the interpretation given to that article.

21 Moreover, Directive 75/117/EEC, whose objective is, as follows from the first recital of the preamble thereto, to lay down the conditions necessary for the implementation of the principle that men and women should receive equal pay, is based on the concept of "pay" as defined in the second paragraph of Article 119 of the Treaty. Although Article 1 of the directive explains that the concept of "same work" contained in the first paragraph of Article 119 of the Treaty includes cases of "work to which equal value is attributed", it in no way affects the concept of "pay" contained in the second paragraph of Article 119 but refers by implication to that concept.

The third question

22 The national court asks further in its third question whether, if the answer to Question 1 is in the affirmative, "Article 119 of the EEC Treaty . . . [has] direct effect in the Member States so as to confer enforceable Community rights upon individuals in the circumstances of the present case".

23 As the Court has stated in previous decisions (judgment of 8 April 1976 in Case 43/75, Defrenne [1976] ECR 455 and judgment of 17 March 1980 in

JUDGMENT OF 11. 3. 1981 — CASE 69/80

26 This applies in particular w h e r e , as in this instance, w o r k e r s leaving their e m p l o y m e n t before reaching a given a g e a r e , in certain circumstances, refunded in the form of a "contributions equivalent premium" at least a proportion of the contributions paid in their name by the employer and

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

where the amount of the gross salary paid to the worker determines the amount of certain benefits and social advantages, such as redundancy payments or unemployment benefits, family allowances and mortgage or credit facilities, to which workers of both sexes are entitled.

27 In this case the fact that contributions are paid by the employer solely in the name of men and not in the name of women engaged in the same work or work of equal value leads to unequal pay for men and women which the national court may directly establish with the aid of the pay components in question and the criteria laid down in Article 119 of the Treaty.

28 For those reasons, the reply to the third question should be that Article 119 of the Treaty may be relied upon before the national courts and these courts have a duty to ensure the protection of the rights which this provision vests in individuals, in particular in a case where, because of the requirement imposed only on men or only on women to contribute to a retirement benefits scheme, the contributions in question are paid by the employer in the name of the employee and deducted from the gross salary whose amount they determine.

The temporal effect of this judgment

33 In this case neither of these conditions has been fulfilled, either in respect of the information available at present to the circles concerned as to the scope of Article 119 of the Treaty, in the light in particular of the decisions of the Court in the meantime on this subject, or in respect of the number of the cases which would be affected in this instance by the direct effect of that provision.

The fourth question

34 As the fourth question was only submitted to the Court of Justice by the national court in case the first two questions were answered in the negative, examination of it has become purposeless.

WORRINGHAM AND HUMPHREYS v LLOYDS BANK

Costs The costs incurred by the Government of the United Kingdom and the Commission of the European Communities, which have submitted obser- vations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,