C-12/81

JUDGMENT OF 9. 2. 1982 — CASE 12/81

In Case 12/81

REFERENCE to the Court under Article 177 of the EEC Treaty by the House of Lords of the United Kingdom for a preliminary ruling in the action pending between

EILEEN GARLAND

and

BRITISH RAIL ENGINEERING LIMITED

Facts and Issues

I — Facts and written procedure whole of the shareholding in which is held by the British Railways Board, a The appellant in the main action, Mrs public authority charged by statute with Garland, is a married woman employed the duty of providing railway services in by British Rail Engineering Limited, the Great Britain.

GARLAND v BRITISH RAIL ENGINEERING

During the period of their employment The issues of Community law were not all employees of British Rail Engineering raised until the case reached the House enjoy certain valuable travel facilities of Lords. In view of those issues the which are also extended to their spouses House of Lords made an order dated 19 and dependent children. January 1981 in which it puts the following two questions to the Court: On retirement former employees, men and women, continue to enjoy travel " 1 . Where an employer provides facilities but they are reduced in (although not bound to do so by comparison with those which they contract) special travel facilities for enjoyed during the period of their former employees to enjoy after employment. However, although male retirement which discriminate employees continue to be granted against former female employees in facilities for themselves and for their the manner described above, is this wives and dependent children as well, contrary to : female employees no longer have such facilities granted in respect of their families. (a) Article 119 of the EEC Treaty?

JUDGMENT OF 9. 2. 1982 — CASE 12/81

represented by Anthony Scrivener Q C special travel facilities and submits that and F. Marr Johnson, on 15 April 1981 the case-law of the Court and above all by Mrs Garland, represented by Thomas the opinions of Advocates General have Morison Q C and Nicolas Underhill, and conferred a wide ambit on that on 21 April 1981 by the Government definition. The benefits in question are of the United Kingdom, represented "of considerable value", they are by R. D. Munrow of the Treasury featured prominently in recruitment Solicitor's Department, assisted by Peter advertising, they form a "significant" Scott QC. part of an employee's remuneration and are granted as a result of the Upon hearing the report of the Judge- employment relationship; consequently Rapporteur and the views of the those benefits fall squarely within the Advocate General the Court decided to definition of Article 119 of the EEC open the oral procedure without any Treaty. preparatory inquiry. It did however ask the representative of British Rail Engineering to send it before 30 September 1981 the notices by which The appellant in the main action then employees are informed, before or after sets out to demonstrate that the grant of their retirement, about the travel facilities those benefits to former employees in question. comes within the ambit of Article 119 or the directive on equal pay. It relies on the judgment of 25 May 1971 in Case 80/70 Gabrielle Defrenne [1971] E C R II — W r i t t e n o b s e r v a t i o n s s u b - 445 and submits that, since the only m i t t e d u n d e r A r t i c l e 20 of essential question is whether the benefit t h e P r o t o c o l on t h e S t a t u t e in issue is provided as a result of the of t h e C o u r t employment relationship, "it is im- material whether its actual receipt is deferred until after the termination of A — Observations of the appellant in the the employment". main action

The appellant in the main action submits Finally, the appellant considers that her that the benefit in question is pay within previous submissions on the grant of the the meaning of Article 119 of the Treaty benefits in question to families apply "a and that Article 119 is directly fortiori when the relevant concept is applicable. She believes that the 'working conditions' rather than ' p a y ' . " principles formulated by the Court in the Woningham case should apply in this case since the respondent in the main Therefore, should those travel benefits action has admitted "both direct and not be "pay" within the meaning of overt discrimination, and has not sought Article 119 of the EEC Treaty and the to argue that the discrimination is directive on equal pay, they are in any objectively justifiable on any grounds event "working conditions" within the other than sex"; its case has been based meaning of the directive on equal simply on the argument that such treatment. discrimination is not unlawful by reason of the exception contained in Section 6 (4) of the Sex Discrimination Act. That directive also has "direct effect". The provisions of the directive are sufficiently clear and precise and leave the Member States no relevant margin of (b) Directive 76/207 on equal treatment discretion in the performance of the obligations which it imposes.

individuals. Furthermore, since the conditions" referred to in Article 5 of the respondent is a wholly-owned subsidiary directive on equal treatment. In any of a corporation created by statute for event they are a present right vested in the purpose of operating the national the employee during his period of railway service, it is to be regarded as an employment, although only to be emanation of the national government. enjoyed after retirement.

"Special travel facilities enjoyed by the After quoting the definition of "pay" set spouses and dependent children of out in the second paragraph of Article employees which continue on the 119 of the EEC Treaty the Commission retirement of the employee constitute states that special travel facilities granted 'pay' within the meaning of the second to employees represent benefits in kind paragraph of Article 119 of the EEC paid to workers directly by the employer. Treaty. In this connection Article 119 may be relied upon before the national courts." The Commission takes the view, first, that such benefits granted by an employer to his employees should C — Observations of the respondent in properly be treated as being "in respect the main action of" an employment. Secondly special travel facilities, which also benefit an employee's spouse and children, The respondent in the main action first of nevertheless represent consideration in all submits that the special travel facilities kind which a worker receives directly in question do not constitute "pay" from the employer in respect of his within the meaning of that expression as employment. Thirdly, the fact that the used in Article 119 of the EEC Treaty benefits continue to be enjoyed beyond and Article 1 of Council Directive the active working life of an employee 75/117/EEC; consequently the alleged and into retirement does not prevent him discrimination is not a contravention from receiving them in respect of his of either of those provisions. The employment because they would hardly respondent argues that such facilities are be "in respect of retirement". Conse- not "consideration in cash" or "other quently the Commission accepts that consideration in kind, which the worker "the concept of equal pay extends to receives in respect of his employment special travel facilities granted to spouses from his employer", first because they

are provided as a matter of concession In view of the answers proposed to by British Rail Engineering and not Questions 1 (a), (b) and (c), Question 2 pursuant to any agreement between does not arise, but even if those employer and worker and, secondly, questions were answered in the affirm- because they are incapable of assessment ative, the respondent submits in the alter- in financial terms. A fortiori the receipt native that neither Article 119 nor either of such facilities by a retired employee of the directives is directly applicable in shows that the provision of such facilities Member States so as to confer after retirement forms part of the enforceable Community rights upon provision which an employer makes individuals in the circumstances outlined voluntarily for the retirement of that in the order making the reference for a employee; it forms no part of the "pay" preliminary ruling. which that employee earned during his working years. In conclusion the respondent submits that the questions referred to the Court should be answered as follows : The respondent also submits that the facilities in question do not constitute "working conditions" either, within the " 1 . Where an employer provides meaning of Article 1 of Council (although not bound to do so by Directive 76/207. contract) special travel facilities for former employees to enjoy after retirement which discriminate According to the respondent it is not against former female employees, arguable that the provision of special such provision is not contrary to travel facilities relates to matters of Article 119 of the EEC Treaty or access to employment, promotion or Council Directive 75/117/EEC or vocational training. The argument must 76/207/EEC. be that those facilities are part of the "working conditions" of an employee; that expression must be construed as 2. In the circumstances, Question 2 indicating that the conditions in question does not arise." must relate to the work being carried out by the employee at the material time. Viewed in this light the provision of free travel between an employee's place of D — Observations of the United King- work and his home is a "working condition". However, discrimination in dom relation to the provision of other travel facilities would not be discrimination in regard to an employee's "working As far as the nature of the facility in conditions"; it would only be discrimi- question is concerned, the United nation in regard to the facilities which Kingdom states that it could be varied or the employer afforded to an employee stopped by British Rail Engineering at outside his work. In any event, there any time but emphasizes that in practice cannot possibly be discrimination in that would be difficult and 'would need regard to an employee's "working to be discussed first with the trade conditions" after that employee retires unions concerned. It also points out that from work since there can be no the facility is to the greater benefit of "working conditions" if the employee is women than men since women retire five no longer working. years before men.

Again with reference to the Jenkins That article signifies that men and judgment, cited above, the United women should receive equal pay for Kingdom states that if the benefit in equal work. According to the United question is not pay for the purposes of Kingdom the test of whether there is Article 119 — which it had tried to unlawful discrimination based on sex is demonstrate — Directive 75/117 "is whether the relationship between pay on irrelevant". the one hand and work or work's value on the other is different because of the worker's sex. The nature of the facility in If on the other hand the benefit is pay question is such that neither its cost nor for the purposes of Article 119 of the its value can be compared with the EEC Treaty a question might in theory amount or value of the work done to arise as to the effect of the directive. The earn it by male and female employees. It United Kingdom here reminds the Court is true that the facility may be described that "it does not consider that directives as arising out of the worker's can have the effect of imposing employment and that without that obligations upon individuals. Directives employment it would not have been are addressed only to Member States and granted, but "once the benefit cannot be purport to impose obligations only upon related to the work, the principle of those States". Furthermore Article 1 of Article 119 cannot be invoked". Further- Directive 75/117 contains no provisions more, and in any event, such a facility which are capable of conferring rights or provided after a worker has retired is not imposing obligations on individuals as within Article 119 at all. That article is the terms of the directive do not even meant to affect legal relationships only refer to retirement benefits and afford no and is not intended to cover gratuitous guidance as to how they should apply to gestures by the employer.. such matters. It is plain that individuals may not rely upon directives "as having horizontal effect so as to create rights inter se which may be enforced as a As regards the direct applicability of matter of law". Article 119, the United Kingdom submits with reference to the judgment of 31 March 1981 in Case 96/80 Jenkins [1981] ECR 911 that even if free travel facilities after retirement are pay for the Article 1 of Council Directive 76/207 purpose of Article 119, the provisions of that article cannot be applied directly "without the aid of national or In the submission of the Government of Community measures which resolve the the United Kingdom this directive does questions of how to approach the not touch the lawfulness of the provision differing retiring ages and life of free travel facilities after retirement

Decision

1 By o r d e r d a t e d 19 J a n u a r y 1981 w h i c h was received at the C o u r t o n 22 J a n u a r y 1981 the H o u s e of Lords referred t o the C o u r t for a preliminary ruling u n d e r Article 177 of the E E C T r e a t y t w o questions as to t h e interpret-

JUDGMENT OF 9. 2. 1982 — CASE 12/81

ation of Article 119 of the 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 L 45, p. 19) and of Article 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 L 39, p. 40).

2 Those questions were raised in the context of a dispute between an employee of British Rail Engineering Limited, a subsidiary of the British Railways Board, which is a body created by the Transport Act 1962 charged with the duty of managing the railways in the United Kingdom, and her employer concerning discrimination alleged to be suffered by female employees who on retirement no longer continue to enjoy travel facilities for their spouses and dependent children although male employees continue to do so.

3 It was submitted before the House of Lords that that situation was contrary to Article 119 and the directives implementing it and the House of Lords therefore referred the following two questions to the Court:

6 According to the order making the reference for a preliminary ruling, when male employees of the respondent undertaking retire from their employment on reaching retirement age they continue to be granted special travel facilities for themselves, their wives and their dependent children.

7 A feature of those facilities is that they are granted in kind by the employer to the retired male employee or his dependants directly or indirectly in respect of his employment.

8 Moreover, it appears from a letter sent by the British Railways Board to the trade unions on 4 December 1975 that the special travel facilities granted after retirement must be considered to be an extension of the facilities granted during the period of employment.

9 It follows from those considerations that rail travel facilities such as those referred to by the House of Lords fulfil the criteria enabling them to be treated as pay within the meaning of Article 119 of the EEC Treaty.

JUDGMENT OF 9. 2. 1982 — CASE 12/81

10 The argument that the facilities are not related to a contractual obligation is immaterial. The legal nature of the facilities is not important for the purposes of the application of Article 119 provided that they are granted in respect of the employment.

GARLAND v BRITISH RAIL ENGINEERING

that the grant of special transport facilities solely to retired male employees represents discrimination based on difference of sex, the provisions of Article 119 of the Treaty apply directly to such a situation.

Costs

16 The costs incurred by the Commission of the European Communities and the Government of the United Kingdom of Great Britain and Northern Ireland, which have submitted observations to the Court, are not recoverable. As this case is, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings before the national court, the decision as to costs is a matter for that court.

On those grounds,

THE COURT

Delivered in o p e n court in L u x e m b o u r g o n 9 F e b r u a r y 1982.

A. V a n H o u t t e G. Bosco President of the First Chamber, Registrar Acting as President

OPINION OF MR ADVOCATE GENERAL VERLOREN VAN THEMAAT D E L I V E R E D O N 8 D E C E M B E R 1981 1

Mr President, the file on the case that since 1976 Members of the Court, female employees have in this respect been treated in the same way as men during their employment. However, it appears from the same letter that after The background to Case 12/81, now female employees retire facilities for the before the Court, is the understandable members of their families are withdrawn. desire of Mrs Garland to be able to Mrs Garland's dispute with her employer continue to enjoy the same travel eventually reached the House of Lords. facilities as retired male employees of her The House of Lords has put the employer, British Rail Engineering following questions on the case to the Limited, after she attains pensionable Court: age. The travel facilities for retired male employees are also available to their wives and dependent children. It appears " 1 . Where an employer provides from a letter of 4 December 1975 which (although not bound to do so by was sent by the British Railways Board contract) special travel facilities for to the trade unions and is contained in former employees to enjoy after

1 — Translated from the Dutch.