C-192/85

Mr President, at pp. 798 and 799) Advocate General Members of the Court, Warner described in detail the functioning of such a scheme. In the British system a distinction must be drawn between two elements of retirement pensions: the basic component, financed by the State, which is 1. It is a rather unusual case of sex discrimi- the same for everyone, and a variable nation which has led the Employment component based on earnings, in which the Appeal Tribunal to refer four questions t o amount of employer and employee contri- the Court for a preliminary ruling. butions and the amount of the benefit paid on retirement vary in accordance with earnings. Subject to certain statutory requirements regarding their substance (in particular the rules governing widows' In this case the appellant in the main benefits) and their form (approval by an proceedings, who alleges that he has been official body) independent retirement discriminated against by his employer o n schemes may be established for the adminis- grounds of sex, is a man, George N . tration of the second component, which Newstead, 58 years old, who has been a then ceases to belong to the State scheme. civil servant since 1970 and is now Such schemes are therefore called employed as Information Officer in the 'contracted-out' schemes, in the sense that Department of Transport. members have 'contracted out' of the statutory scheme with regard to the earnings-related component of retirement pensions. An independent scheme thus partially replaces the statutory scheme. T h e dispute has its origin in the 1974 Employers and employees then pay reduced reform of the national civil service pensions rates of contribution to the State scheme for scheme (Principal Civil Service Pension the basic pension, and the sums paid into Scheme 1974, hereinafter referred to as 'the the independent scheme are the latter's sole Principal Scheme'), with particular regard t o source of finance. Under the Social Security the scheme of widows' pensions. It is an Pensions Act 1975, in order to be qualified occupational pension scheme established in as a 'contracted-out' scheme an independent accordance with the Superannuation Act scheme must provide for a widow's pension; 1972 and, in its amended form, is in there is no such requirement with regard to conformity with the Social Security a widower's pension. Pensions Act 1975.

The questions referred by the Employment Female civil servants, on the other hand, Appeal Tribunal, which were drawn up in leaving aside certain specific cases in which agreement with the parties, may be they may but are not required to contribute summarized as follows: to the scheme, are not obliged or even permitted to make such contributions for a widower's pension. 'Does a deduction from gross salary such as that at issue here which is applied only for men constitute a breach The amounts thus deducted from the salaries of male civil servants who are unmarried when they leave the Civil Service of Article 119 on its own or in are refunded, with compound interest at the conjunction with Council Directive rate of 4 % per annum with yearly rises, to 75/117/EEC of 10 February 1975 on the persons concerned in the case of the approximation of the laws of the retirement and to their estates in the case of Member States relating to the their death. However, Mr Newstead, who application of the principle of equal pay says that he is a 'confirmed bachelor' and for men and women (Official Journal has no intention of marrying, considers that 1975, L 45, p. 19), adopted in he is denied immediate access to part of his implementation of that article, salary, whereas his female colleagues in like circumstances are not put to that incon- venience; he considers that he is therefore a or of Council Directive 76/207/EEC of victim of discrimination on grounds of sex. 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to The tribunal which heard the matter at first employment, vocational training and instance agreed, on the basis of the relevant promotion, and working conditions national legal provisions, the Equal Pay Act (Official Journal 1976, L 39, p. 40)? 1970 and the Sex Discrimination Act 1975. The industrial tribunal considered that Mr Newstead received less favourable If the answer to that question is in the remuneration, for the purposes of the Equal affirmative, under what conditions does Pay Act 1970, and that there was detriment primary or secondary Community law have on the ground of sex, for the purposes of direct effect?' the Sex Discrimination Act 1975. The tribunal held, however, that the matter was covered by the exemptions made in those It should be observed that in its third Acts for provisions relating to death or question the Employment Appeal Tribunal retirement (Section 6 (1A) of the Equal Pay referred only to Directive 76/207, but that, Act 1970 and Section 6 (4) of the Sex as may be seen from the judgment attached Discrimination Act 1975). to the request for a preliminary ruling, it

Since the case does not concern the Analysing the terms used in Article 119 and payment of benefits from an occupational in the Court's case-law, he argues that there pension fund or of social security benefits is a breach of Article 119, read together the question of how Directive 76/207 with Directive 75/117, because the English applies to such benefits need not be version of Article 119 speaks of the amount considered. The fact that the sum withheld which a worker 'receives'; the pay he is placed in a pension fund is not relevant; receives differs from that paid to a to take that fact into account would partly comparable female employee. There is thus frustrate the objects of the directive. discrimination on grounds of sex in relation to an aspect and condition of remuneration.

In his view Article 119 would be deprived of 3. Neither the United Kingdom nor the much of its substance if the Court were to Commission shares that point of view. follow the interpretation of the Worringham judgment (Case 69/80, referred to above) put forward by the industrial tribunal, according to which the question of difference in pay should be assessed in the According to the United Kingdom, there is light of gross pay. That would permit all no inequality of pay. Salaries can be manner of deductions before pay was compared only on the basis of gross pay, actually 'received'. before deductions of any kind — tax, social

NEWSTEAD v DEPARTMENT OF TRANSPORT

Emphasizing the particularities of pension If that assertion is wrong, however, it is funds, which are strongly influenced by life necessary to establish, as the Court has not expectancies, different for men and for yet done in a comprehensive manner, women, the United Kingdom argues that whether benefits under an occupational the financial rules hitherto adopted in that pension constitute 'pay^ for the purposes of area cannot be put in question by a simple Article 119 of the Treaty. The United application of Article 119. Kingdom submits that occupational pension schemes, both because they ensure financial provision and because they may cover other risks (death, illness, accident, etc.), are matters of social security, in respect to Occupational pension schemes must by their which Articles 117 and 118, and not Article nature come under Articles 117 and 118; 119, provide for close cooperation between that is confirmed by the judgments of the the Member States. In his Opinion in the Court, which has excluded statutory social Worringham case, Advocate General security schemes from the scope of Article Warner considered that a pension scheme 119. As Advocate General Warner put it in

OPINION OF MR DARMON — CASE 192/85

In order to determine whether the principle of equal pay is observed it is not sufficient Furthermore, Article 9 (1) of the draft to compare gross pay without considering directive provides that the Member States net pay, since certain deductions, as in this may defer application of the principle of case, stem at least in part from a decision on equal treatment with regard to pensions for the part of the employer. However, the surviving spouses. The discrimination issue in this case is one not of inequality complained of by Mr Newstead is therefore with regard to a financial benefit provided not prohibited by Community law. by the employer but of a difference in a condition of employment which has financial consequences. In the Defienne III judgment of 15 June 1978 in Case 149/77 4. In the Commission's view, it must be [1978] ECR 1365, at paragraph 21), the determined whether the problem is one of Court stated that the fact that certain pay or of working conditions. The conditions of employment may have

NEWSTEAD v DEPARTMENT OF TRANSPORT

The fact that a deduction is made cannot be The obligation for single male civil servants viewed in isolation from the reason for to contribute could be discontinued, a which it is made: the compulsory contri- solution which Mr Newstead appears to bution is justified by the provision of a prefer. benefit under a social security scheme, and the one cannot be dissociated from the other. It is therefore necessary to determine The problem of interpretation before the what provisions of Community law are Court concerns an obligation to contribute applicable to survivors' pensions. The to an occupational scheme for the purposes Commission's analysis of Article 1 (2) of of a survivor's pension, an obligation which, Directive 76/207, Article 3 (2) and (3) of with certain exceptions, falls only on men, Directive 79/7 and Article 9 of the proposal whether or not they are married. It is that for a directive submitted on 5 March 1983 obligation that lies behind the measure leads it to conclude, with the United which Mr Newstead regards as discrimi- Kingdom, that no instrument of Community natory, and the latter is merely a conse- law yet provides for equal treatment in quence. relation to occupational social security schemes and that even if the proposal for a In Case 19/81 (Burton, referred to above), directive were adopted in its present form the plaintiff argued that he was treated less there would not necessarily be any obli- favourably than a female worker inasmuch gation on Member States to ensure equality as at the age of 58 he was not eligible for a in the case of survivors"pensions. voluntary redundancy benefit, whereas a woman of the same age was. Going beyond 5. The main issue in this case is once more the effect, the Court addressed itself to the the definition of the scope of Article 119. cause, and held that the questions referred The applicant considers that the measure in did not concern a benefit as such but in fact dispute in the main proceedings may be raised the issue whether the age conditions, regarded as an aspect of pay which differs which differed according to the sex of the according to sex, the United Kingdom worker and determined eligibility for the

benefit, constituted discrimination the civil service unions are currently in prohibited by Community law. The cause of progress with a view to extending the same the difference in treatment lay in the pay deduction to all civil servants, whatever conditions relating to age, and the fact that their sex and marital status. That is not men were not eligible for a benefit under what Mr Newstead would like to see, since the same conditions as women was merely in fact he does not wish to contribute for a an effect. spouse which he says he will never have; if I have correctly understood the matter, however, he will nevertheless be less dissat- isfied, since single women who, like him, intend to remain single will be treated as In this case, the cause is the obligation to unfavourably as he is. contribute which is imposed only on male civil servants, and the effect is a difference in comparison with their female colleagues with regard to the immediate availability of This kind of claim is not supported by part of their salary. Articles 117 to 119 of the Treaty, and if the question were to be restricted to that aspect the answer would be that none of the provisions referred to applies. If our examination were to be restricted to the effect alone, as suggested by the applicant, the question would arise whether there was in fact any discrimination on This case nevertheless raises a real issue

employment. At the hearing, moreover, old-age, accidents at work and occupational Counsel for Mr Newstead admitted that the diseases, and unemployment. Article 4 of applicant would no doubt have considered that directive prohibits discrimination on the situation less unjust if he were married, grounds of sex by reference in particular to precisely because his wife would then have a marital status, especially as concerns 'the right to a survivor's pension. It appears from obligation to contribute and the calculation the remarks of Counsel that Mr Newstead of contributions' (my emphasis). wishes to be placed in the same situation as unmarried women, that is to say he thinks that, like them, unmarried men should be exempt from the obligation to contribute. According to Article 3 (2), however, the Negotiations between the Government and directive does not apply 'to the provisions

concerning survivors' benefits', and Article 3 and therefore falls within the scope of (3) leaves the implementation of the Article 1 (1) of Directive 75/117, in fact lies principle of equal treatment in occupational outside the field governed by Article 119 schemes to subsequent provisions to be and the directive adopted in implementation adopted by the Council on a proposal from of it, and falls instead within that governed the Commission. As I said, a proposal on byArticles 117 and 118, the second of which the subject was submitted by the expressly governs matters of social security. Commission to the Council on 5 May 1983. We have been told that its adoption may be delayed for a considerable period. In his Opinion in Case 149/77 (Defrenne III, referred to above, [1978] ECR 1365 at p. 1382), Advocate General Capotorti has According to Article 2 (1) of the proposal already pointed out that working for a directive, conditions, governed generally by Articles 117 and 118, certainly include pay. Those articles may thus, through their effect on ' "Occupational schemes" means schemes working conditions, have an influence on whose purpose it is to provide workers, rules regarding pay. That is true in whether employees or self-employed, in an particular of matters relating to social undertaking or group of undertakings or an security, and it is scarcely necessary to point occupational sector or group of such out the close links between them and sectors, with benefits intended to national policies of social protection. supplement the benefits provided by statutory social security schemes or to replace them, whether affiliation to such It follows that pay deductions made schemes is compulsory or optional'. pursuant to an obligation to contribute to a social security scheme fall within the ambit of working conditions to which the principle of equal treatment for men and women The scheme of survivors' pensions to which applies only in so far as it has been M r Newstead has been obliged to implemented by a Council directive. contribute falls under those criteria since it Although Directive 76/207 concerns partly replaces the statutory scheme, in so 'working conditions, including pay* (first far as its earnings-related component is recital in the preamble), it excluded from its concerned. scope, by referring to a directive to be adopted by the Council, those concerning matters of social security (Article 1 (2)), Article 5 of the draft directive, like Article 4 which have since been partly covered by of Directive 79/7, prohibits discrimination Directive 79/7. on grounds of sex by reference in particular to marital status, especially as regards 'the obligation to contribute'. Consequently, a situation such as that at issue in this case does not fall within the scope of Article 119, which 'in contrast to One conclusion is inescapable: according to the provisions of Articles 117 and 118, Council Directive 79/7 and the proposal of which are essentially in the nature of a 5 March 1983 the obligation to contribute programme', is 'limited to the question of to a social security scheme, which the pay discrimination between men and women applicant says affects his conditions of pay workers[and]constitutes a special rule

The close cooperation between the Community institutions and the Member Under Community law as it now stands, States of which Article 118 speaks is perhaps there is thus no obligation on a Member even more necessary in matters of social State to apply the principle of equal security than in other matters. The financial treatment for men and women to an obli- difficulties with which the Member States of gation to make contributions for the the Community are faced (see in this regard purpose of creating survivors' pensions. Dr Leo Crijns, 'Les pensions de vieillesse et les problèmes y afférents dans les dix États membres de la Communauté européenne, 7. It remains to be seen, however, whether Droit Social N o 9-10, September/October such a conclusion is compatible with the 1984, p. 573) are certainly far from judgments of the Court according to which conducive to action on the part of the a contribution owed by a worker to a social Council to hasten the abolition of discrimi- security scheme, including a statutory one, nation on grounds of sex in occupational may be regarded as pay for the purposes of pension schemes. The Commission has Article 119. officially expressed its deep regret with regard to that state of affairs (see Official Journal 1984, C 314, p. 22, reply given on The Court has held that: 11 October 1984 by M r Richard, on behalf of the Commission, to a question put by a member of the European Parliament). However, although I think the delay is ' . . . the amounts which the public auth- indeed very regrettable, I am forced to orities are obliged to pay in respect of conclude that the scheme in question has contributions owed to the social security the characteristics of occupational schemes scheme by persons working for the State with regard to which the principle of equal and which are included in the calculation of treatment has not yet been implemented. the gross salary payable to civil servants Moreover, since we are concerned with an must be regarded as pay within the meaning

of Article 119 since they directly determine Article 119 of the Treaty is specific in scope the calculation of other advantages linked to and concerns the 'application of the the salary" (judgment of 18 September 1984 principle that men and women should in Case 23/83 Liefiing v Academisch receive equal pay for equal work' (first Ziekenhuis bij de Universiteit van Amsterdam paragraph). Its relatively restricted sphere of [1984] ECR 3225, at paragraph 13, p. application is included in the more general 3239). scope of Articles 117 and 118. The funda- mental nature of the principle laid down in Article 119 has led the Court to hold that it is directly applicable with regard to 'all Those remarks reflect the contents of the forms of discrimination which may be iden- decision in Case 69/80 Worringham, tified solely with the aid of the criteria of referred to above, at paragraphs 14 to 17 equal work and equal pay referred to by the [1981] ECR 790. article in question, without national or Community measures being required to define them with greater precision in order to permit of their application' (judgment of In reality, the problem becomes clear when 9 February 1982 in Case 12/81 Garland w one refers, as the Court did in Defrenne III, British Rail Engineering [1982] ECR 359, at following the Opinion of Advocate General paragraph 14, p. 370). Capotorti, to the distinction which must be drawn between the scope of Articles 117 and 118 of the Treaty on the one hand, and That is the general framework in which the that of Article 119 on the other. decisions cited above, referred to by the Employment Appeal Tribunal, the parties to the main proceedings and those who have submitted observations to the Court, must Articles 117 and 118 are general in scope; be understood. they emphasize 'the need to promote improved working conditions and an improved standard of living for workers, so as to make possible their harmonization The judgments of the Court reflect a desire while the improvement is being maintained' to strike a balance between: (first paragraph of Article 117) and give the Commission 'the task of promoting close cooperation between Member States in the on the one hand, the fundamental nature of social field', particularly in matters relating the principle laid down in Article 119, which to social security (first paragraph of Article demands Community support for its 118). effective application, and

As I have already pointed out, social' comes under Articles 117 and 118 of the security, under which heading survivors' Treaty and Directives 76/207 and 79/7. As pensions fall, is one of the matters expressly we have seen, under Community law as it referred to in Article 118. now stands those provisions do not prohibit different treatment on grounds of sex in That is why there is no contradiction that respect. between the solution which I propose in this case and that arrived at by the Court in It is understandable that the persons Worringham and Liefiing, where the issue affected should find that a deplorable state was not the obligation to contribute, a of affairs, and one can only hope that working condition, but sums paid pursuant Community legislation settling the matter thereto — that is to say the amount of the will be adopted as soon as possible. contribution — included in the gross salary However that may be, so long as the and used to determine the calculation of proposal for a directive currently before the other advantages linked to the salary. In Council is not in force a measure such as plain language the obligation itself should that at issue in the main proceedings cannot, not be confused with the contribution which I think, be regarded as incompatible with is merely the financial consequence thereof. primary or secondary Community law.