C-19/81

on the interpretation of Article 119 of the Treaty and 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 Articles 1 (1), 2 (1) and 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 L 39, p. 40), with regard to payment of a voluntary redundancy benefit,

THE COURT

composed of: G. Bosco, President of the First Chamber, acting as President, A. Touffait and O. Due (Presidents of Chambers), P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe, T. Koopmans, A. Chloros and F. Grévisse, Judges,

Advocate General: P. VerLoren van Themaat Registrar: A. van Houtte

gives the following

BURTON v BRITISH RAILWAYS BOARD

Mr Burton, the plaintiff in the main The documents lodged with the Court action, is employed by the Board at reveal that the voluntary redundancy managerial level in the Chief Finance benefits in question are of two main Officer's organization at Doncaster. He kinds: voluntary redundancy allowances is aged 58 and has been employed by the and pension benefits. Section 24 of the Board since the age of 16. Redundancy, Transfer and Resettlement Arrangements for Railway Staff indicates that the allowances claimed by M r Burton comprise three elements: the As part of a re-organization of its lump sum calculated in accordance with Eastern Region the Board made an offer the provisions of the Redundancy of voluntary redundancy to some of its Payments Act 1965, that is to say, the employees. A memorandum was drawn amount calculated by reference to that up embodying the terms of a collective Act; an additional payment calculated on agreement between management and the similar principles; and an amount equal recognized trade unions on the terms on to 2 5 % of the sum of the first two which the reorganization of the financial elements, which the plaintiff considers to department was to be carried out. be a kind of interest payable on the first Paragraph 6 of the memorandum two elements. These three elements (statutory, voluntary and interest) are all provides as follows: redundancy allowances, and they are paid directly by British Rail to those who are to benefit from the arrangements. The calculation is in no way related to "Staff aged 60/55 (Male/Female) may the amount which Mr Burton would leave the service under the Redundancy

The result is that if Mr Burton had been eligible for the voluntary redundancy The Industrial Tribunal rejected M r benefit at issue he would have received: Burton's claim. He appealed to the (1) the three elements of which that Employment Appeal Tribunal. In the benefit is composed, that is, the statutory course of the appeal it was conceded on payment, the additional payment and the his behalf that by virtue of section 6 (4) 2 5 % sum representing interest on the of the Sex Discrimination Act it is not first two elements, and (2) the early contrary to the Act for an employer to retirement pension, together with an treat a male employee less favourably advance equal to the sum which he than he treats a female employee as would have received on reaching the age regards access to voluntary redundancy of 60. benefit. However, Mr Burton contended

BURTON v BRITISH RAILWAYS BOARD

JUDGMENT OF 16. 2. 1982 — CASE 19/81

BURTON v BRITISH RAILWAYS BOARD

It might therefore be argued, on the "A retirement pension established within basis of that decision, that any financial the framework of a social security inequality arising from prescription of scheme laid down by legislation does not different age requirements for men and constitute consideration which the women for any purpose is not within the worker receives indirectly in respect of principle of equal pay.

JUDGMENT OF 16. 2. 1982 — CASE 19/81

Mr Burton submits that there are Mr Burton submits that the answer to fundamental differences between the the second question should be that the facts in Defrenne (No 3) and the facts of principle of equal pay does have direct the present case which place the former effect in Member States so as to confer outside and the latter within the concept upon individuals, by virtue of of pay in Article 119. The relevant Community law, rights of which they provision in Miss Defrenne's contract did may avail themselves in the circum- not concern the payment of money. It stances of the present case. simply provided that her employment ended automatically at a certain age. By contrast, the minimum age requirements set by the collective agreement for entitlement to take voluntary redundancy are requirements directly concerned with The Court has ruled that Article 119 of the payment of money by employer to the Treaty applies directly to all forms of worker. The only function of the age discrimination which may be identified requirement is to determine whether or solely with the aid of the criteria of equal not the worker would be entitled to work and equal pay referred to by the payment from his employer upon leaving article in question, without national or his employment. Further, the effect of Community measures being required to the age requirement applied to Mr define them with greater precision in Burton is not simply that he has to wait order to permit of their application longer than his female equivalent for the (judgment in Case 69/80, referred to same financial settlement, but that he, above, and judgment of 31 March 1981 unlike his female equivalent, is not in Case 96/80, Jenkins, [1981] E C R entitled to the payment at all. Only those 911). who satisfy the condition at the specified time receive the payment. Accordingly, a woman of 58 has the following choices: to leave with a redundancy payment or to stay until normal retirement. A man of 58 on the other hand has different and The form of discrimination complained of by Mr Burton may, he claims, be

identified by the national courts and (Official Journal, English Special tribunals solely with the aid of the Edition, 1968 (II), p. 475) that the criteria of equal work and equal pay prohibition of discrimination includes, as referred to in Article 119. "working conditions", the payment of voluntary redundancy benefit by an employer to a worker wishing to leave his employment. Mr Burton considers that the words "working conditions" in As to the third question, Mr Burton the directive on equal treatment should observes that if the answer to the first be interpreted in a manner consistent question is in the negative, so that a with the Court's interpretation of the voluntary redundancy benefit falls similar phrase in Article 48 of the Treaty outside the concept of pay in Article 119, and Article 7 of Regulation N o 1612/68. such a benefit is within the scope of the principle of equal treatment for men and women as regards "working conditions" contained in Articles 1 (1), 2 (1) and 5 (1) of Directive 76/207. Article 5 (1) of the directive on equal treatment, like Article 7 of Regulation No 1612/68, specifically includes "dismissal" within its scope. It requires that "men and women shall be The purpose of the directive on equal guaranteed the same conditions without treatment is to put into effect in the discrimination on grounds of sex" with Member States the principle of "equal regard to "working conditions, including treatment" as regards inter alia working the conditions governing dismissal". conditions (Article 1 (1)). It thereby Plainly, the phrase "the conditions implements a general principle of governing dismissal" refers to any ter- Community law prohibiting discrimi- mination of a worker's contract of nation based on sex as regards the employment by his employer in whatever conditions of employment and working form it occurs. conditions of men and women. The first recital in the preamble to the directive on equal treatment refers to "working conditions, including pay", and it is clear that the words "working conditions" Article 1 (1) of the directive on equal encompass more than even the extended treatment distinguishes between working definition of "pay" in Article 119. This is conditions and other matters which are further indicated by Article 5 (1) of the within its scope, and social security, directive on equal treatment, which which is dealt with on the conditions refers to "working conditions" including referred to in Article 1 (2). The principle the conditions governing dismissal. of equal treatment has been applied in matters of social security by Council Directive 7 9 / 7 / E E C of 19 December 1978 (Official Journal 1979 L 6, p. 24). That directive does not apply to Mr Burton submits that it is apparent redundancy benefits, whether statutory from the Court's interpretation of Article or otherwise. Redundancy benefits are 48 of the Treaty and Article 7 of Regu- not paid to give protection against the lation N o 1612/68 of the Council of 15 risks of unemployment, and they are October 1968 on freedom of movement entirely different in nature from social for workers within the Community security. Redundancy benefits have

Mr Burton submits that the provisions of the directive on equal treatment on which he relies in the present case are sufficiently clear and precise to have The British Railways Board is of the direct effect. Indeed, they are as clear opinion that a voluntary redundancy and precise as other provisions in benefit which is paid by an employer to a Community law against discrimination worker wishing to leave his employment (in Articles 48, 59 and 119 of the Treaty, is not within the scope of the principle of for instance) which have been held by equal pay contained in Article 119 and in the Court to create individual rights Article 1 of Directive N o 75/117. which national courts must protect. They stipulate the protection to which individuals are entitled and which they may seek to have enforced in national The language of Article 119 of the courts in order to enjoy the fundamental Treaty is not appropriate to include right bestowed by the Treaty. They give benefits arising outside the terms of the the necessary precision to enable the contract of employment. A voluntary right to be protected and enforced by redundancy benefit cannot properly be national courts solely with the aid of the described as a "wage", "salary" or

BURTON v BRITISH RAILWAYS BOARD

"other consideration" which is received The Board submits that the discrimi- by an employee directly or indirectly in nation of which Mr Burton complains is respect of his employment. indirect or disguised discrimination and, accordingly, the provisions of Article 119 do not have direct effect.

JUDGMENT OF 16. 2. 1982 — CASE 19/81

linked to the amount of work done or employees. It is true of course that the the value of such work. It is related to benefit may in a general sense be the amount that would be payable at described as arising out of the worker's minimum retirement age if the individual employment and that without some such had reached that age. In return for the employment, it would not have been benefit, the employee must give up his granted, but once the benefit cannot be employment which until then enables related to the work done, the principle him to earn more than the pension which of Article 119 cannot be invoked. he receives under the scheme. This introduces a further complication into any attempt to equate the value of the benefit to the work done or the value of such work. The period for which the The non-contractual, gratuitous and benefit is enjoyed, and thus its value, discretionary nature of the benefit, which depends upon a combination of the age is generally admitted, emphasizes the of retirement from which the benefit fact that the benefit is not for work commences and the chances of survival done, but is conferred in return for a until normal pension age. It is well promise to give up work. known that in general women have a longer expectation of life than men.

As the Court stated in Case 149/77, Defrenne (No 3) ([1978] ECR 1365) "Article 119 . . . cannot be interpreted as The second part of Article 119 contains a prescribing, in addition to equal pay, definition of the concept of "p a y"· The equality in respect of the other working provision defines both the nature and the conditions applicable to men and scope of the principle of equal treatment women". which forms the basis of Article 119.

the State pension scheme, but such the State additional pension from a employees may receive part of their contracted-out scheme receive the same benefit from an occupational pension measure of protection against inflation as scheme. The first type of scheme is that given by the State to those who have directly governed by legislation without been members of only the State scheme. any element of agreement within the undertaking or occupational branch concerned. The second type, which is therefore supplementary to the first, must now fulfil certain detailed statutory criteria under the Social Security United Kingdom legislation protects the Pensions Act which ensures that the pension rights of those who are in benefits given to the individual worker occupational pension schemes. are adequate in terms of social policy. Whether or not they are used for contracting-out purposes, pension schemes must be approved by the Board of Inland Revenue under the Finance Act 1970 (as amended by the Finance Act If for any reason a contracted-out 1971). The two types of pension scheme occupational pension scheme fails to are now inextricably linked, and in effect provide benefits equivalent to those operate in partnership with one another. provided under the State scheme, a member of that scheme who has contracted out may be treated as though he had always been a full member of the State scheme and be given full State scheme benefits. Finally, exempt Most occupational pension schemes in approved schemes enjoy considerable tax the United Kingdom follow the pattern advantages in recognition of the contri- of the State scheme in providing bution which they make towards pensions for men at age 65 and for employees' retirement income. women at 60. The benefits of private schemes are usually structured to take account of the benefits flowing from the State scheme.

scheme, but to be a substitute for it or undoubtedly discourage such schemes, part of it, it must be regarded as outside making them substantially more the scope of Article 119 and as falling to expensive and unattractive for employers. be dealt with under the broader headings Such schemes serve a useful social and of Article 118. economic purpose in industries which would otherwise have to resort to compulsory redundancies, and should not be discouraged except on clear and compelling grounds. It is true that the sums paid in the present case as voluntary redundancy benefits are not pensions or other retirement benefits in the usual sense of sums paid on and following retirement if As far as the direct applicability of and when the employee reaches normal Article 119 is concerned, the United retiring age or ceases work owing to ill- Kingdom Government considers it health, although the sums are paid as a unnecessary to do more than cite the matter of convenience through a pension judgment of 31 March 1981 in the scheme, are calculated in the case of the Jenkins case, mentioned above: periodic benefits by reference to the normal pension payable at minimum pension age, and are payable from ages which are directly linked to the normal pensionable ages. The lump sum payable "As the Court has stated in previous at the latter age and the death benefit decisions (judgment of 8 April 1976 in under the pension scheme determine the Case 43/75, Defrenne [1976] ECR 455; amount of the advance which the judgment of 27 March 1980 in Case employer is prepared to make to the 129/79, Wendy Smith [1980] ECR 1275 employee by way of lump sum at early and judgment of 11 March 1981 in Case retirement. Because the amount of the 69/80, Worringham) Article 119 of the pension varies according to the minimum Treaty applies directly to all forms of retiring age (which itself is different for discrimination which may be identified men and women), the amount of the solely with the aid of criteria of equal voluntary redundancy benefit as well as work and equal pay referred to by the the date from which it may be claimed article in question, without national or differs as between the sexes. Community measures being required to define them with greater precision in order to permit of their application. Among the forms of discrimination which may be thus judicially identified, the Court mentioned in particular cases The United Kingdom Government where men and women receive unequal concedes that there are similarities pay for equal work carried out in the between the normal pension and the same establishment or service, public or voluntary redundancy benefits. It private". considers that these similarities are so substantial that even if the sums were regarded as pay it would, quite apart from other considerations, be illogical to give direct effect to the provisions of The United Kingdom Government Article 119 so as to require equality of submits that if, contrary to its other treatment in relation to such benefits, submissions, voluntary redundancy ben- particularly when to do so would efits are pay for the purpose of Article

Of the items referred to in Article 1 of The United Kingdom Government the directive, the only one which might further submits that it has been clear conceivably be relevant is social security. since the Court's ruling in the second But as to that Article 1 (2) provides that: Defrenne case that Article 119 cannot be given direct effect in respect of indirect and disguised discrimination, that is to "With a view to ensuring the progressive say discrimination which cannot be implementation of the principle of equal identified solely with the aid of criteria treatment in matters of social security, based on equal work and equal pay. the Council, acting on a proposal from the Commission, will adopt provisions defining its substance, its scope and the Thus, in the view of the United arrangements for its application". Kingdom it is clear that if, contrary to its submissions, Article 119 does apply either to pensions generally or to the Thus matters of social security are, benefits under consideration, the article except to the extent indicated in Article 2 in so applying cannot have direct effect. (1), excluded from the directive on the assumption that further measures are to be taken in that field and that the As to Article 1 of Council Directive Commission is to produce a draft 75/117, if the benefit is not pay for the directive which will deal specifically with purposes of Article 119 the directive is equal treatment in occupational schemes. irrelevant to the present case (see Worringham and Humphreys v Lloyds Bank Ltd.). The Danish Government concerns itself solely with Question 3 (ii), that is to say, whether provisions of a directive may or If on the other hand the benefit is pay must form the basis for the settlement of for the purposes of Article 119, but the cases pending before the national courts Court finds that it is not within the scope even though such provisions have not of that article in so far as it is directly been implemented in the national legal applicable, a question might, in theory, system. arise as to the effect of the directive.

According to Article 189 a directive is binding upon the Member States to The case-law of the Court of Justice which it is addressed as to the aim to be leans towards enabling individuals to rely achieved, but leaves to the Member State upon the provisions of directives in the choice of form and methods. As a proceedings between them and the State. result national measures must always The reasoning underlying that case-law be adopted in order to implement is that it would be incompatible with the a directive even if, exceptionally, a binding effect attributed to the directive directive is directly applicable (judgment by Article 189 to exclude as a matter of 6 May 1980 in Case 102/79, of principle the possibility that the Commission v Belgium [1980] E C R obligations which it imposes on Member 1473). States may be invoked by those affected. If an individual were prevented from relying upon a directive which obliges the Member State to pursue a particular In principle, therefore, the national auth- course of conduct, the legal effectiveness orities and the courts must apply the of such an instrument would be national implementing measures and not weakened and the uniform application of the provisions of the directive. Community law would be prejudiced.

decisively that it is only Member States to legal certainty in the case of upon which obligations may be imposed individuals. Private persons are now by the provisions of a directive. Article required not only to investigate national 191 of the Treaty indicates that regu- sources of law but also to take into lations must be published in the Official account the sources of Community law. Journal of the European Communities, If it were permissible in some situations whereas directives and decisions are to rely on a directive as against an notified to the persons to whom they are individual the result would be to create addressed and take effect on such latent legal uncertainty making it notification. In the opinion of the Danish difficult for the individual to arrange his Government that is a fundamental affairs in reliance on the national legal principle in the legal systems of the situation. The Danish Government is of Member States, which requires that the opinion that that would be unac- instruments with general applicability ceptable. must be published if they are to be enforceable on individuals. The principle is expressed in Article 22 of the Danish Constitution. As a result the Danish Government is of the opinion that the individual must be able to proceed in accordance with the case-law of the Court of Justice on the In accordance with that principle Article assumption that directives must be 191 has laid down a duty of publication implemented in national law by means of only in the case of the instruments which national provisions. In particular the according to Article 189 may be binding combined provisions of A r t i c l e s189 and on individuals. Directives need not be 191 of the Treaty rule out the possibility published; hence it may be inferred that that persons other than Member States directives by their nature may not may have obligations imposed on them contain provisions which are binding by the provisions of a directive. upon individuals.

worker, payment of the allowance is directive and the national law at issue made largely in respect of that service. (the Sex Discrimination Act 1975) the Even payment of a lump sum which does Commission is of the opinion that it is not depend exclusively on length of unnecessary to go further and consider service would be dependent on the fact whether the directive has such that the worker had been in the service "horizontal" direct effect, that is to say, of the employer. whether the individual may rely directly on one of its provisions, in the absence of any national legislation in the matter or in the presence of national provisions which conflict with the directive, as The Commission observes that the against his employer before the national concept of equal pay extends to courts. If the Court were to hold that voluntary redundancy benefit. That Directive 76/207 meant specifically, for concept may be relied upon before the instance, that the question of age national courts by workers as against represented a working condition for the their employer directly on the basis of purposes of Articles 1 (1), 2 (1) and 5 (1) Article 119. It is not necessary to show of the directive in question, the national the existence of implementing provisions authorities would be obliged to interpret at Community or national level in order national law, for instance section 6 (4) of to establish that the payment of a the Sex Discrimination Act 1975, particular benefit did or did not involve accordingly. For the purposes of the discrimination between the sexes. Any present case that section cannot be such discrimination would be direct and interpreted so as to permit discrimination overt and could only be identified on the between the sexes based on age where basis of the exclusive criteria of equal payment of voluntary redundancy pay referred to in Article 119 (judgment benefits is concerned. of 8 April 1976 in Case 43/75, Defrenne).

Decision

1 By an order of 16 January 1981 which was received at the Court on 4 February 1981 the Employment Appeal Tribunal referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty three questions concerning the interpretation, with regard to payment of voluntary redundancy benefit, 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 Articles 1 (1), 2 (1) and 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 L 39, p. 40).

2 According to the case-file Mr Burton, the plaintiff in the main action, is an employee of the British Railways Board (hereinafter referred to as "the Board"), a body established by the Transport Act 1962 and responsible for operating the railway system in Great Britain.

3 As a result of an internal reorganization the Board made an offer of voluntary redundancy to some of its employees. A memorandum was drawn up embodying the terms of a collective agreement between management and the recognized trade unions on the terms on which certain aspects of the reorganization were to be carried out. Paragraph 6 of the memorandum provides as follows:

JUDGMENT OF 16. 2. 1982 — CASE 19/81

"Staff aged 60/55 (Male/Female) may leave the service under the Redundancy and Resettlement arrangements when the Function in which [they are] employed has been dealt with under Organization Planning."

(2) If the answer to Question (1) is in the affirmative, does the principle of equal pay have direct effect in Member States so as to confer enforceable Community rights upon individuals in the circumstances of the present case?

BURTON v BRITISH RAILWAYS BOARD

(3) If the answer to Question (1) is in the negative:

(i) is such a voluntary redundancy benefit within the scope of the principle of equal treatment for men and women as regards 'working conditions' contained in Article 1 (1), Article 2 (1) and Article 5 (1) of Council Directive 76/207/EEC of 9 February 1976?

(ii) if so, does the said principle have direct effect in Member States so as to confer enforceable Community rights upon individuals in the circumstances of the present case?"

7 The principal issue raised by those questions is whether the requirement that a male worker should have reached the age of 60 in order to be eligible for payment of a voluntary redundancy benefit whereas women workers become eligible at the age of 55 amounts to discrimination prohibited by Article 119 of the Treaty or by Article 1 of Directive 75/117 or, at least, by Directive 76/207 and, if so, whether the relevant provision of Community law may be relied upon in the national courts.

12 From the information supplied by the United Kingdom Government in the course of the proceedings it appears that a worker who is permitted by the Board to take voluntary early retirement must do so within the five years preceding the normal minimum age of retirement, and that he may receive the following benefits: (1) the lump sum calculated in accordance with the provisions of the Redundancy Payments Act 1965, (2) a lump sum calculated on the basis of the total length of his employment with the Board, and (3) 2 5 % of the sum of the first two amounts. In addition he is entitled up to the minimum retiring age to an early retirement pension equal to the pension to which he would have been entitled had he attained the minimum statutory retirement age and to an advance, repayable at the minimum retiring age, equal to the sum to which he becomes entitled at that age.

1 3 Council Directive 7 9 / 7 / E E C of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (Official Journal 1979, L 6, p. 24), which was adopted with particular reference to Article 235 of the Treaty, provides in Article 7 that 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.

1 4 It follows that the determination of a minimum pensionable age for social security purposes which is not the same for men as for women does not amount to discrimination prohibited by Community law.

1. The principle of equal treatment contained in Article 5 of Council Directive 76/207 of 9 February 1976 applies to the conditions of access to voluntary redundancy benefit paid by an employer to a worker wishing to leave his employment.

2. The fact that access to voluntary redundancy is available only during the five years preceding the minimum pensionable age fixed by national social security legislation and that that age is not the same for men as for women cannot in itself be regarded as discrimination on grounds of sex within the meaning of Article 5 of Directive 76/207.

Costs

19 The costs incurred by the Government of the United Kingdom, the Government of the Kingdom of Denmark and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As the proceedings are, 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.

JUDGMENT OF 16. 2. 1982 — CASE 19/81

On those grounds,

Delivered in open court in Luxembourg on 16 February 1982.

P. Heim G. Bosco Registrar President of the First Chamber, acting as President