C-262/88

OPINION OF MR VAN GERVEN —CASE C-262/88

OPINION OF MR ADVOCATE GENERAL VAN GERVEN delivered on 30 January 1990 *

Summary Page

1917 Introduction 1912 Background 1916 Questions 1 and 2

(i) The terminal payment 19 17

(¡i) The pension benefits 1918

Question 4 1934

Conclusion 1942

Mr President, Background Members of the Court, 2. In 1948 Mr Barber became an employee of the Car & General Insurance Cor- poration Limited (hereinafter referred to as 'C & G'), a company which was 1. The questions which the Court of Appeal subsequently taken over by the Guardian. has referred to the Court arose in a dispute As from 1970 Mr Barber was Deputy Head between Mr Douglas Harvey Barber and of the Guardian's South Yorkshire Claims the Guardian Royal Exchange Assurance Bureau at Sheffield. That claims bureau was Group (hereinafter referred to as 'the closed by the Guardian. On 31 December Guardian') concerning the compatibility of 1980 Mr Barber was dismissed by reason of the conditions in which Mr Barber was redundancy together with a number of dismissed with the Sex Discrimination Act other employees. He was aged 52 at the 1975 and Community law. time.

* Original language: Dutch.

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BARBER

Where the contract of employment of the staff concerned is terminated on grounds of early retirement or redundancy and their ages do not exceed 65 (for men) or 60 (for women), they may claim application of the special conditions set out in the Severance Terms. Two of those conditions are relevant in this case, namely pension entitlement (see paragraph 6 below) and terminal payment (see paragraph 7 below). 4. The normal pensionable age for employees of the Guardian not covered by a separate section of the pension scheme is 65 for men and 60 for women. However, for members of the Guardian's pension fund who, like Barber, were previously members 6. The Severance Terms confer on members of the C & G's pension fund, the normal of the pension fund who have attained the pensionable age is 62 for men and 57 for age of 55 (for men) or 50 (for women. The pension scheme further women) — that is to say 10 years or, in the provides that all members of the pension case of members of the previous C & G fund may claim an immediate pension not only on reaching the normal pensionable 2 — See the judgment of the Employment Appeal Tribunal age but also 'on being retired' by the which states that 'under Rule 32, Mr Barber became entitled to an immediate payment on retirement at age 62 or on being retired by the participating company at any 1 — In that regard see paragraph 17 below time during the 10 years preceding normal pension date'

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OPINION OF MR VAN GERVEN — CASE C-262/88

He was not case of members of the pension fund who granted an immediate pension. He received have been employed by the Guardian for 10 from the Guardian a net terminal sum years or more but have not attained the age amounting to UKL 18 597, including the of 55 (for men) or 50 (for women), the statutory redundancy payment of Severance Terms merely grant entitlement UKL 3 060. Furthermore, he was granted a to a deferred pension in accordance with deferred pension payable as from the the rules of that fund. According to that normal pensionable age, namely 62.

age. 9. Mr Barber considered that he had fallen victim to discrimination. He instituted proceedings against the Guardian for breach of the Sex Discrimination Act 1975 and Community law before an Industrial 7. The Severance Terms further provide Tribunal and, after his claim was dismissed, that, in the event of a redundancy, he appealed to the Employment Appeal employees receive compensation, the Tribunal. That tribunal pointed out that Mr amount of which depends on whether or Barber may well be entitled to claim an not the person concerned is entitled to claim immediate pension from the trustees of the an immediate pension. If that is the case, the pension fund on the ground that he was employee receives a terminal payment equal made redundant during the 10 years to the statutory redundancy payment preceding the normal pensionable date increased by a percentage thereof which (paragraph 4 above) and that, even though varies according to the number of years of the contract of employment was terminated

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BARBER

'(1) When a group of employees are made compulsorily redundant by their employer in circumstances similar to (4) Are Article 119 and the Equal Pay 3 — Judgment of 16 February 1982 in Case 19/81 Burton Directive of direct effect in the circum- [1982] ECR 555 stances of this case?

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OPINION OF MR VAN GERVEN — CASE C-262/88

(5) Is it material to the answer to Question (iv) Council Directive 86/378/EEC of 3 that the woman's right to access to an 24 July 1986.7 immediate pension provided for by the Severance Terms could only be satisfied if she qualified for an immediate pension under the provisions of the private occupational scheme in that she was being treated as retired by the Questions 1 and 2 Guardian because she was made redundant within seven years of her normal pension date under the pension scheme?' 12. In its first question, the Court of Appeal wishes to ascertain whether all the benefits which employees made redundant receive 11. I would refer to the Report for the under severance terms such as those of the Hearing for a more detailed account of the Guardian are to be regarded as 'pay' within facts of the case and the course of the the meaning of Article 119 of the EEC procedure, and for a summary of the obser- Treaty and Directive 75/117, or whether vations of the parties. As the relevant legis- they fall within Directive 76/207 or any lation is also set out in the Report for the other Community legislation. The second Hearing, I can confine myself here to listing question merely draws attention to the fact the four Council directives which are that the first question is concerned, amongst referred to by the parties in their obser- other things, with pension benefits granted vations : under an occupational pension scheme. For that reason, I shall not consider that question separately.

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BARBER

I now turn to the question of the extent to by the fact that the payment is made after which those two kinds of benefits fall within the employment has been terminated. Since the scope of Article 119 of the EEC Treaty. the judgment in Garland, 1 0which was I shall not consider Directive 75/117 sep- concerned with travel facilities granted to arately since the question raised concerns male employees upon retirement, it has been the delimitation of the scope of Article 119 established law that advantages granted and not the specific application of the after the employment has come to an end principle of equal pay, which is dealt with fall within the scope of Article 119. by Directive 75/117. 8 Furthermore, I consider that the judgment in Worringham 11 provides — implicit, if not explicit — confirmation of the view that terminal payments constitute 'pay' within The terminal payment the meaning of Article 119. In paragraph 15 of that judgment the Court stated that:

13. Under Article 119 of the EEC Treaty, a consideration other than the actual wage or 'Sums... which are included in the calcu- salary is to be regarded as 'pay' where it is lation of the gross salary payable to the received by the employee, whether directly employee and which directly determine the or indirectly, in cash or in kind, in respect calculation of other advantages linked to the of his employment from his employer. As salary, such as redundancy payments..., Mr Advocate General VerLoren van form part of the worker's pay within the Themaat emphasized in his Opinion in meaning of the second paragraph of Article Burton, 9 t h e phrase 'in respect of his 119 of the Treaty even if they are employment' presupposes an unseverable immediately deducted by the employer and causal connection between pay and paid to a pension fund on behalf of the employment. employee' (emphasis added).

15. Does that also hold true in the case of that part of the terminal payment which The causal connection between the terminal corresponds to the statutory minimum payment and the employment is clearly 10 — Judgment of 9 February 1982 i n Case 12/81 Garland illustrated by the fact that the amount of the [1982] ECR 359. payment depends on the number of years of 11 — Judgment of 11 March 1981 in Case 69/80 Wornngham service completed by an employee made [1981] ECR 767. 12 — The English courts would appear to take the same redundant. That connection is not displaced approach. Thus, in a judgment given in January 1988 in Hammersmith and Queen Charlotte's Special Health Authority v Cato, published in the CMLR, the Employment 8 — See the judgment of 31 March 1981 in Case 96/80 Jenkins Appeal Tribunal expressly staled that a terminal payment [1981] ECR 911, paragraphs 19 to 22 constitutes 'pay' within the meaning of Article 119 of the 9 — [1982] ECR 579, at p. 589. EEC Treaty

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OPINION OF MR VAN GERVEN —CASE C-262/88

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BARBER

Persons covered by a scheme of this kind, In considering the question whether referred to as a "contracted-out" scheme, pensions paid under a scheme of that kind make reduced contributions to the national in connection with redundancy fall within scheme, corresponding to the basic flat-rate Article 119 of the EEC Treaty, I must draw pension payable under the national scheme attention to the Court's judgments in to all workers regardless of their earnings. Defrenne I, Bilka 17 and Newstead. On the other hand, they are required to contribute to the occupational scheme, in accordance with the conditions which it lays down.'

18. In Defrenne I the Court considered whether a retirement pension introduced under a statutory social security scheme constituted a consideration within the meaning of Article 119. The Court The Guardian's pension scheme corresponds answered that question in the negative in to that description, except in one respect: it paragraphs 7 to 9 of its judgment: is a non-contributory scheme, that is to say one to which employees are not required to contribute.

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OPINION OF MR VAN GERVEN — CASE C-262/88

9 Accordingly, the part due from the Article 119 (see paragraphs 20 to 22 of the employers in the financing of such judgment). schemes does not constitute a direct or indirect payment to the worker.'

The decision in Bilka must, in my view, be understood as meaning that pensions paid In taking that approach the Court indicated under an occupational scheme established that pension contributions paid by an by contract and financed exclusively by the employer on the basis of and to a statutory employer must be regarded as pay — even social security scheme do not fall within though they resemble social security Article 119 since they are determined less by benefits — inasmuch as they are established the employment relationship between the (usually) after consultation within the employer and the employee than by undertaking concerned in favour of a considerations of social policy. special category of employees, namely those who work in a particular undertaking, and are therefore connected with the employment relationship between a given employer and his employees.

19. Following that judgment, the question arose whether it was possible to infer a contrario that direct or indirect payments made by the employer under an occu- 20. In De/renne I and Bilka the Court pational pension scheme of contractual clearly defined the scope of Article 119 in origin do come within that article. relation to purely statutory pension schemes and purely contractual pension schemes respectively. But what about 'contracted- out' schemes?

ruling on the consequences which must be occupational pension scheme. That drawn from that connection between an scheme contains some provisions which occupational pension scheme and the State are more favourable than the statutory pension scheme. scheme of general application and is a substitute for the latter. Such a contri- bution must therefore, like a contri- bution to a statutory social security scheme, be considered to fall within the In Newstead that question arose once again. scope of Article 118 of the Treaty, not Like Mr Barber, Mr Newstead was of Article 119.' affiliated to an occupational pension scheme which was regarded as a 'contracted-out' scheme. In accordance with the qualifying conditions laid down by the Social Security Pensions Act 1975, that scheme provided 21. The United Kingdom regards the for the award of a widow's pension (but not judgment in Newstead as confirming its a widower's pension) on the death of a contention that 'contracted-out' schemes married male employee. The widow's such as the Guardian's fall outside the scope pension was paid out of a fund financed by of Article 119 of the EEC Treaty on the contributions from male employees. Those ground that they are in substitution for the contributions were deducted from the gross statutory scheme. In my view, that salary by the employer. Since female conclusion is too general. employees were not required to pay contri- butions to the fund, they received a higher net salary than male employees.

consideration from the scope of Article 119 consideration (still) closer to the one in on account of its resemblance to the one in Bilka (which was also concerned with a Defrenne I constitutes an excessively pension financed exclusively by the far-reaching extension of the decision in employer). On the other hand, the second Newstead. Instead, the situation now before characteristic in no way precludes Article the Court resembles the one in Bilka. To 119 from being applicable. That Treaty begin with, in this case entitlement to an provision is aimed at any consideration immediate pension in connection with which an employee receives, directly or compulsory redundancy does not arise from indirectly, in respect of his employment legislation which makes such entitlement from his employer. It is clear that the mandatory by analogy with equivalent contributions made by the employer to the provision made under the State social trustees of the pension fund are intended for security scheme for redundant employees employees whose interests the trustees must generally. It arises from the Guardian's look after. The sums which the employer Severance Terms which, as in Bilka, are of a pays to the trustees of the pension fund and purely contractual nature. Moreover, the which the trustees of the fund pay out to scheme at issue here is not financed, as in employees must therefore be regarded as Newstead, by deductions from earnings, but, indirect consideration received by the as in Bilka, by contributions which the employees. That point of view seems to me employer pays to his employees out of his to be confirmed by the Court's judgment in own funds through a pension scheme as Worringham. additional consideration. Accordingly the Guardian's pension scheme for redundant employees — just like the terminal payment with which it is closely connected and partially interchangeable in this case — comes within the scope of 23. To summarize, I am of the opinion that Article 119. pensions which are paid through the trustees of a pension fund financed by employers' contributions to employees made compul- sorily redundant under an occupational pension scheme which is regarded as a 'contracted-out' scheme constitute ' p a y ' within the meaning of the second paragraph 22. I pointed out above (in paragraph 17) of Article 119 of the EEC Treaty. that the Guardian's pension scheme exhibits two characteristics: on the one hand, it is financed solely by the employer's contri- butions and, on the other, the contributions are paid to and the pensions are paid by the trustees of a pension fund. The intermediate question

Before answering the Court of Appeal's 'Consequently the question of interpretation questions concerning the discriminatory which has been referred to the Court nature of the contested system, I shall concerns not the benefit itself, but whether consider whether the Commission's the conditions of access to the voluntary arguments are well founded. If the redundancy scheme are discriminatory. That Commission is right and the conditions of is a matter covered by the provisions of access to remuneration (including a Directive 76/207 to which reference was payment or pension benefit in connection made by the national court, and not by with redundancy) come within Article 119, those of Article 119 of the Treaty or the third, the fifth and also the fourth Directive 75/117.' questions must, as specified by the national court in its order for reference, be answered from the point of view of Article 119. If not, those questions must be answered in the light of the directives on equal treatment 26. I understand that paragraph of the which would then be applicable. judgment as meaning that where 'the benefit itself' is involved, Article 119 is applicable. If, on the other hand, the question concerns the conditions of access to the redundancy scheme, then it is not Article 119 but 25. It may be of assistance briefly to Directive 76/207 which applies, even summarize the facts in Burton. Mr Burton though there are financial consequences (see was employed by the British Railways Board below) attaching to those conditions for the (BR), a statutory body corporate. In employee. However, the Court did not connection with an internal reorganization, define the term 'benefit' in detail, or even BR made an offer of voluntary redundancy the 'conditions [of access]' to a given to some of its employees on the terms scheme. embodied in a collective agreement between management and the recognized trade unions. That agreement provided that only staff aged 60/55 (male/female) or more could avail itself of that offer. Under the In Burton, the Court gave judgment on a voluntary redundancy scheme, eligible staff specific condition of access, namely the received an early retirement pension in different age condition according to sex addition to a cash payment. Mr Burton, governing entitlement to the advantages who was aged 58, applied for voluntary provided for by the redundancy scheme on

28. At first sight, there is a problem of The Court took the view, not only in compatibility. In particular, I fail to see why Burton but also in three later judgments an age condition imposed for the grant of a (Roberts,20 Marshall21 and Beets-Proper22), pension cannot fall within Article 119, that an age-limit applied for the purpose of whilst a condition concerning full-time terminating an employment relationship employment also imposed for the grant of a constitutes a working condition and more pension can. In both cases the condition is particularly a condition governing dismissal one which determines 'access' to a pension whose validity must be examined in the light scheme. 24 As such they must be dis- of Directive 76/207. tinguished from conditions governing pay stricto sensu which regulate, for instance, the amount, the components and the method of calculation of remuneration, or in this case 27. In Bilka the Court had to deal not with 23 — See also the judgment of 13 July 1989 in Case 171/88 a different age condition according to sex Rinner-Kühn [1989] ECR 2743 in which the Court held but, as stated earlier (paragraph 19), with a that A r t i c l e119 in principle precludes national legislation which permits employers to exclude part-time (predomi- nantly female) employees from continued payment of 19 — Judgment of 15 June 1978 in Case 149/77 Defrenne v wages in the event of illness. Sabena [1978] ECR 1365 24 — There are differences of course: the condition concerning full-time employment concerns the grant itself, whilst the 20 — Judgment of 26 February 1986 in Case 151/84 Roberts age condition concerns the time at which the grant begins. [1986] ECR 703. That difference is relative: a 'delay' in the case of a 21 — Judgment of 26 February 1986 in Case 152/84 Marshall retirement or old-age pension is tantamount to 'forfeiture' [1986] ECR 723 in the event of the recipient's death. It is also irrelevant in 22 — Judgment of 26 February 1986 in Case 262/84 Beets-Proper the context of the present case: both conditions relate to [1986] ECR 773. access to the scheme.

29. There are three solutions for over- coming that 'impasse'. However, there is a 30. The first solution has the merit of being preliminary point: the reason why problems consistent with the Court's view, as of delimitation between the scope of Article expressed in paragraphs 19 and 20 of its 119 and that of the directives on equal judgment in Defrenne III (which precede treatment (in which the scope of the latter paragraph 21, set out in paragraph 26 of overlaps with that of the former) arise so this Opinion), that: frequently lies of course in the fact that the Court has recognized in its judgments that Article 119 —but not the aforesaid directives — has direct effect as between 'in contrast to the provisions of Articles 117 individuals on certain conditions (see para- and 118, which are essentially in the nature graphs 47 and 49 below). If that vital of a programme, Article 119, which is difference were to disappear or diminish in limited to the question of pay discrimination importance, then of course the aforesaid between men and women workers, problems of demarcation would also constitutes a special rule, whose application become less serious, if not cease altogether. is linked to precise factors.

Those three solutions are: either the scope In these circumstances it is impossible to of Article 119 is limited, in accordance with extend the scope of that article to elements Burton, to conditions governing pay stricto of the employment relationship other than sensu which relate to the amount of those expressly referred to'.

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The drawbacks to that solution are that it does not provide, any more than the Two factors militating against that solution previous solution, a satisfactory criterion for are that on the whole it involves a restrictive distinguishing Article 119 from Articles 117 interpretation of the scope of Article and 118 — the criterion of the direct or 119 — whereas the Court, once it is within indirect effect on pay is not so explicit, that sphere, takes a broad view as regards although it may perhaps be easier to apply the components which come within the than the distinction between the 'benefit concept of 'pay' — and that this interpret- itself' and the 'conditions of access' to ation is less consistent with the principle of remuneration — and that it leads to the equality in all respects between male and consequence that the area reserved by female employees, whose fundamental Articles 117 and 118 to the Member States importance the Court has repeatedly and the Commission is encroached upon. emphasized 25 and applied 26 in order to give, according to the circumstances, a narrow or a wide interpretation of concepts of Community law.

terminated on certain financial conditions. say the grant of, remuneration (including a Viewed in those terms, the age condition or payment or pension benefit in connection age-limit is clearly revealed as a working with redundancy), but not the conditions condition, more particularly as a condition precedent thereto which govern the governing dismissal or, in a wider context, inception, continuation or termination of termination, that is to say a condition for the employment relationship, even though the selection of employees whose those conditions are attended by financial employment relationship is to be consequences or accompanied by financial terminated. 27 If, on the other hand, the age provisions (such as terminal payments or condition or limit does not play such a role pension benefits). but relates, as in this case, to the grant of a terminal payment or a pension to employees the termination of whose employment relationship has already been decided upon

118 excessively. That compromise constitutes a restriction of the second solution, which is far too wide — and in my Essentially, the distinction does amount to view insufficiently supported by the Treaty bringing within Article 119 working provisions — inasmuch as it does not bring conditions (including conditions governing within Article 119 all working conditions dismissal or other forms of redundancy) which are directly or indirectly capable of which directly govern access to, that is to affecting pay, but only those which govern the grant of (a component of) pay and are 27 — Sec, in particular, paragraph 32 of the judgment in Marshall, cited above in footnote 21 - thus to be distinguished from those which 28 — Roberts as well, as is clear from paragraph 33 of the govern a factor other than pay (for instance judgment, was concerned with a (similar) age condition for the gram of an early retirement pension (and not, as might the termination of the employment be inferred from paragraphs 30 and 32 of the judgment, with an age-limit for compulsory redundancy) Admittedly, relationship), even though that factor may the Court did not examine that (similar) age condition bring a financial provision into operation. from the point of view of Article 119 but described it as a condition governing dismissal wuhin ihc meaning of Anicie 5 of Directive 76/207/EEC since the Court was asked only whether Mrs Roberts had been treated in a manner that was contrary to that directive The application of Article 119 would not have been to her advantage since she had received the same terminal payments as male employees of the same age (see paragraphs 42 and 43 below).

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OPINION O F MR VAN GERVEN —CASE C-262/88

into operation. In the event that the Court should disagree with my Opinion and take the view that conditions of access to remuneration must without distinction — and therefore inclu- ding the age condition at issue in these proceedings — be appraised exclusively in Questions 3 and 5 the light of the directives on equal treatment (and that none of those conditions falls within Article 119), I shall now follow a two-pronged approach also in order to help evaluate the consequences of that choice, that is to say I shall consider both the possi- bility of applying Article 119 and the possi- 35. The third question starts from the bility of applying the directives on equal premise that in the present case a man and

As is apparent from my greater in the case of a redundant woman Opinion, I consider that the distinction to be drawn is a different one and does not lie, as the Commission has than in the case of a redundant man. The suggested, in the fact that the initiative to terminate the contract of employment is taken by the employer or by the Court of Appeal wishes to ascertain whether employee. those differences of treatment are contrary

to the principle of equal pay laid down in this case, it directly concerns the grant of Article 119. pension rights. None the less, as I have stated (in paragraph 33) I shall also consider the possibility that, according to the Court, that condition must be assessed in the light of the directives on equal treatment. The fifth question is difficult to comprehend. I understand it as meaning that the Court of Appeal seeks to ascertain whether the difference in treatment estab- lished is discriminatory where it is the result 1. Applicability of Article 119 of a provision of the specific occupational scheme adopted by the Guardian which treats an employee in connection with a redundancy as if he or she were being retired on the ground that he or she was 37. If, as argued above (paragraph 34), made redundant within the seven years Article 119 is regarded as being applicable before the normal pensionable age (which, to a different age condition according to we are given to understand, also differen- sex, such as that contained in the Severance tiates on grounds of sex and, in particular, Terms, there is no difficulty in establishing is earlier in the case of women, in unlawful discrimination. It is clear in those accordance with the age laid down in circumstances that a different age condition United Kingdom legislation for receipt of according to sex constitutes overt discrimi- the State pension). Essentially, therefore, it nation. is necessary to ascertain whether an occu- pational scheme which lays down in connection with redundancy a different age condition according to sex for the grant of an immediate pension is contrary to If the Court goes along with that possibility Community law where that age condition of applying Article 119, a problem of reflects a different age condition according temporal effect may arise in connection with to sex which is laid down by the occu- the pensionable age for the grant of an pational scheme but also, it would appear old-age or retirement pension. The from the United Kingdom legislation, by the Council's conviction, particularly when it State scheme for the grant of an old-age or adopted Directive 86/378 on equal retirement pension. treatment in occupational social security schemes, was that Article 119 did not apply to an age condition of that kind and, in keeping with that conviction, it permitted for the time being the adoption of a Questions 3(a) and 5 different pensionable age according to sex in Article 9(1)(a) of that directive (see paragraph 38 below). This could be a ground, in line with the assumption made by the Court in Defrenne II, for making a 36. In this case the difference of treatment reservation on account of the principle of can be traced back to the different age legal certainty concerning the temporal condition according to sex laid down in the effect of the new interpretation advocated Severance Terms. According to the view as regards specifically the age condition expressed above, an age condition of that referred to in the aforesaid provision. In this kind falls within Article 119 where, as in case, however, there is no need for that

In my view, the age condition contained in the Guardian's Severance Terms falls within Article 5(1) of Directive 76/207, which provides as follows:

old age, including early retirement, 'Application of the principle of equal treatment with regard to working conditions, including the conditions governing dismissal, means that men and women shall be guaranteed the same conditions without discrimination on grounds of sex' (emphasis added). ...' (emphasis added).

30 — In Burton, cited in footnote 3, the Court considered that the term 'dismissal' also covered a case of voluntary That provision has been further defined by redundancy. The Council has since adopted Directive the Court inter alia in Roberts. In that 86/378/EEC which applies inter alia to schemes which provide protection in the event of early retirement (see judgment the Court stated that the term paragraph 39).

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BARBER

According to the Guardian, that article must I am therefore of the opinion that the be read in conjunction with the aforesaid difference of treatment at issue here — in exception available to Member States which the context of the possibility of applying the is provided for by Article 9(1)(a) of the directives on equal treatment — must be same directive. In its view, the United assessed on the basis of Article 5(1) of Kingdom took advantage of the possibility Directive 76/207. According to that offered by that article in order to depart provision, the same conditions governing from the principle of equal treatment as dismissal must be applied to men and regards the determination of an age women. condition for the grant of a pension, as provided for in the contested Severance Terms.

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The Court goes on to decide that the case is concerned not with social security benefits 'Even though the retirement scheme at issue but with 'dismissal' within the meaning of does not prima facie discriminate between Article 5 of Directive 76/207:

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BARBER

'In those circumstances the grant of a scheme — in accordance with the exception pension to persons of the same age who are laid down in Article 7 of Directive made redundant amounts merely to a 79/7 — and, in connection therewith, under collective measure adopted irrespective of an occupational pension scheme is not the sex of those persons in order to capable of affecting the interpretation of guarantee them all the same rights.' Article 5(1) of Directive 76/207.

(2) If, alternatively, Article 119 is not considered applicable: a different age In my view, that question must be answered condition according to sex which is laid in the negative for the same reasons as those down by an occupational scheme for on which the decision in Roberts is based, the grant of an immediate pension in namely that the exception in Article 7 of connection with compulsory Directive 79/7 must be interpreted strictly redundancy constitutes a discriminatory and that it is possible to derogate from the condition governing dismissal which is principle of equal treatment only as regards prohibited by Article 5(1) of Directive the determination of the normal pensionable 76/207.' age and the implications thereof for other social security benefits but not as regards the conditions governing dismissal which are referred to in Article 5 of Directive 76/207. That argument applies, in my view, Question 3(b) to all conditions governing dismissal including — in the context of the possibility of applying that directive, now under consideration — the age condition for the 45. I would remind the Court that the grant of a pension in connection with Guardian's Severance Terms accord redundancy. The answer to the question redundant employees who are not entitled raised in paragraph 40 above is therefore as to an immediate pension a higher terminal follows: the fact that a different pensionable payment. The parties to the main age is provided for under the State pension proceedings are agreed, however, that the

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However, the question raises an additional problem, in so far as it suggests that, in the Formulated in those terms — in connection event of Article 119 being applicable, the with Article 119 (and the implementing principle of equal pay contained therein is directive) — the question does not raise any not infringed provided that the total value particular difficulties. It is established of the benefits is the same, even though it is case-law since the Court's judgment in made up of components which differ Defienne II that Article 119 has direct according to sex but are mutually compen- effect, also as between individuals, where sating. there is direct discrimination which may be identified by reference to the criteria laid down by Article 119 on the basis of a purely legal analysis (paragraph 21 of the decision). As shown earlier, discrimination can be established entirely by reference to the In my view the principle of equal pay criteria laid down by Article 119, which implies equality at the level of each have been elucidated by the Court in its component of remuneration. If it were decisions, and therefore on the basis of a otherwise, the enforceability of that legal analysis. The fact that the discrimi- principle by the courts would be seriously jeopardized. The courts would then have to 31 — The approach of the British courts is the same. In evaluate and compare the most diverse Hayward v Cammell Laird (No 2), [1988] ICR 464, the House of Lords considered that Article 1 of Directive advantages which employers confer on their 75/117/EEC cannot be understood as meaning that, where pay as a whole is the same for men and women, it is of no employees. That may call for a complex importance that some components of that pay discriminate factual analysis which would not guarantee in favour of women provided that this is compensated for by equally discriminatory pay components in favour of the equality of total pay as effectively as the men.

48. As I have stated (paragraph 24 et seq.) 49. In its judgment in Marshall, the Court in connection with the intermediate stated, precisely in connection with the same question, it is my opinion that the age directive as is now under consideration condition at issue falls within the scope of (76/207), that: Article 119. None the less I wish to consider, in the event that the Court should disagree with that opinion and consequently in the alternative, whether Article 5 of Directive 76/207 which would in my view be applicable in that case (see paragraph 38 'A directive may not of itself impose obli- et seq. above) also has direct effect. An gations on an individual and . . . a provision affirmative answer to that question would of a directive may not be relied upon as mean that, in the proceedings pending such against such a person. It must therefore before the national court against his be examined whether, in this case, the previous employer, the Guardian, Mr respondent must be regarded as having Barber would be able to rely on the acted as an individual' (paragraph 48 of the principle of equal treatment referred to in decision). Article 5 of the directive, with the result that Section 6(4) of the Sex Discrimination Act 1975, according to which the prohibition of discrimination provided for therein is inap- plicable to 'provision in relation to death or retirement', would have to be disregarded In that judgment the Court reportedly 33 by the national court. relied on the doctrine of estoppel or the nemo auditar principle, 34 according to which a Member State (upon whom a directive has imposed obligations) which has failed to transpose the directive into national law within the prescribed period, or When the question is answered, it must be borne in mind that the unequal treatment at 32 — See in P a r t III of the Report for t h e Hearing t h e United Kingdom's answer to a question from the Court issue here arises from the Severance Terms concerning the tax advantages connected with occupa- tional pension schemes. which form part of the contracts of 33 — P. E. Morris: 'The direct effect of directives — Some employment concluded by the Guardian recent developments in the European Court', Journal of with its employees and relates to the Busmen Law, 1989, p. 233 et seq. and p . 309 et seq. in particular at p. 310. Guardian's occupational pension scheme 34 — The principle of nemo auditur propriam turpitudinem which is recognized by the competent allegans is more widespread than the common law doctrine of estoppel. The nemo auditur principle is more clearly United Kingdom authority (the Occu- aimed at default whereas the doctrine of estoppel can, pational Pensions Board) as a amongst other things, (also) refer to a contradiction in one's own conduct and the expectations thereby aroused 'contracted-out' scheme within the meaning in, and acted on by, another

That obligation on the part of the national judicial authorities has been reaffirmed in a number of later judgments. 39 In later judgments the Court has confirmed that a directive cannot of itself impose obli- gations on individuals and that a provision of a directive may not be relied upon as such against an individual. 37 Where it is In those circumstances we are concerned sufficiently precise, however, it may relied not with the direct effect of the directive in upon by individuals against a Member State question as between individuals but with the but also against public authorities. It is natural effect of national law as interpreted against that background that the direct by the courts in accordance with effect of Article 5(1) of Directive 76/207 Community law. 40 This means, in my view, must be examined in proceedings against that such an interpretation in conformity individuals. with the directive may not be restricted to the interpretation of national legislation subsequent to the adoption of the direc- tive concerned or national legislation specially enacted for transposing the directive into national law. 41 Frequently, 50. Before embarking upon that exam- national implementing legislation will be ination I would point out that, even if that involved — as in Von Colson—but that article does not have direct effect as between individuals, it is for the national 38 — Judgment of 10 April 1984 in Case 14/83 Von Colson and Kamann [1984] ECR 1891. See also the judgment of the same date in Case 79/83 Harz [1984] ECR 1921. 35 — See also the judgment of 15 May 1986 in Case 222/84 39 — See the judgments cited above in Johnston (paragraph 53) Johnston [1986] ECR 1651, paragraph 56). and Kolpinghuis Nijmegen (paragraph 12), in addition to 36 — A further question on that point in Case C-188/89 Foster the judgments of 20 September 1988 in Case 31/87 and Others v British Gas, judgment of 12 July 1990 [1990] Gebroeders Beentjes [1988] ECR 4635, paragraph 39 and of ECR I-3313. 7 November 1989 in Case 125/88 Nijman [1989] ECR 3533, paragraph 6). 37 — Judgments of 12 May 1987 in Joined Cases 372 to 374/85 Traen [1987] ECR 2141, paragraph 24, of 11 June 1987 in 40 — See the Opinion of 14 November 1989 of Mr Advocate Case 14/86 Pretore di Salò v Persons unknown [1987] ECR General Darmon in Cases 177/88 and 179/88. 2545, paragraph 19 and of 8 October 1987 in Case 80/86 41 — See, however, the Opinion of Advocate General Sir Kolpinghuis Nijmegen [1987] ECR 3969, paragraph 9. Gordon Slynn in Marshall, cited above in footnote 21.

The Court's aforesaid judgment in Von Colson is particularly instructive in regard to this case not only because that case as well The direct effect of a provision as between was concerned with Directive 76/207 but individuals, known as horizontal direct also because the German national court effect, is an indeterminate and equivocal drew the conclusion from that judgment term that I shall not attempt to define here. that it was not empowered to interpret a In its judgment in Defrenne II the Court specific provision of German law in apparently considered in connection with accordance with the normal methods of Article 119 of the EEC Treaty that a interpretation customarily applied under the provision has horizontal effect when it German legal system but, on the contrary, imposes obligations not only on the was required to interpret it in a strictly Member States but also on individuals, in literal manner thereby enabling a solution in that case the employers, to which closer conformity with the directive and correspond rights conferred on other indi- based on a general provision of national law viduals, in that case the employees. The to be arrived at. 42 Hence it would appear Court stated that Article 119 that Community law may set limits to certain methods of interpretation applied under a national legal system, without of course being able to compel the national court to give an interpretation contra 'also extends to all agreements which are legem.43 intended to regulate paid labour collectively, as well as to contracts between individuals' (paragraph 39 of the decision).

discrimination which that provision lays Community law. That is the question of the down. In Marshall the Court interpreted effect of the provisions of a directive with horizontal effect in the same terms but then regard to third parties. 44 denied that a provision in a directive had such an effect on the ground that, however precise it may be, it cannot impose any obli- gations on individuals with the result that other individuals cannot rely on that provision against them either. As stated earlier (in paragraph 49), the thrust of the Court's case-law is that a Member State may not rely on its own default as against an individual. However, that default is broadly construed: on the one hand, certain consequences follow None the less, as a result of the fact that in where the Member State acts qua employer Marshall the direct effect of a directive and thus in a 'capacity governed by private vis-à-vis a Member State was based on that law', that is to say in a horizontal State's failure to transpose the directive into relationship with its employees; and on the national law (paragraph 49 above), the other, individuals, in this case the question of the horizontal direct effect of employees, are also allowed to rely on that the provisions of a directive was viewed default vis-à-vis independent public auth- from another angle and in this case that orities of the Member State which are not question has to be reformulated in regard to themselves responsible for failure of the relations between individuals as well. Now latter to transpose a directive into national the question is not specifically whether law. The nemo auditur principle has thus Article 5(1) of Directive 76/207 imposes on acquired a far-reaching ambit (not the Guardian obligations to which the rights connected with personal default), with the conferred on Mr Barber correspond — the result that the directive has to a degree been provision does not do that of itself—but endowed with effect with regard to third whether Mr Barber can rely as against the parties, in particular to the detriment of the Guardian on the failure of a Member State aforesaid public authorities. which is in default to comply with its obli- gation to implement Community law, if Mr Barber's rights had been impaired thereby.

To extend also to relationships governed purely by private law the application of the principle of nemo auditttr proprium turpi¬ tudinem allegans on the basis of a Member State's default, so that it loses its original meaning altogether, strikes me as inappro- priate — unless the Court wishes to override its decision in Marshall— since that would come very close to endowing the provisions Having regard to the Court's case-law, of a directive with full horizontal direct however, I do not propose that this further effect (even though such an extension could step be taken. So far the Court has be distinguished in theory 45 ). Granted, that restricted the effect of the nemo auditur standpoint would help to prevent a great principle and/or doctrine of estoppel (and many of the problems which now arise in thus the effect with regard to third parties the field under consideration: the unequal of the provisions of a directive) to indi- treatment of employers in the public and viduals who are connected with the public private sectors (an economic problem) and authorities and for whose actions the State above all of workers employed by public or consequently bears a degree of responsi- private employers (a social problem) would bility. To be sure, if in this case we were be eliminated as a result, and awkward dealing with a discriminatory private problems of delimitation would be avoided, redundancy scheme approved as such by the in connection with the term 'State', between public authorities or, a fortiori, declared the public sector and the private sector, generally binding, that case-law would in problems which are further aggravated by my view have to be applied because the the fact that workers employed by the same authorities would then be (co-)responsible public utility institution or undertaking may, for that scheme. However, here we are depending on whether it is privatized or concerned with a specific redundancy nationalized, find themselves at one moment scheme which, admittedly, relates to an in the private sector and at the next in the occupational pension scheme that is public sector. It must be remembered, regarded by the public authorities as a however, that those problems would not 'contracted-out' scheme and qualifies for arise in this case if the Court were to accept tax advantages but which as such has not by my primary argument that Article 119 is any means been approved by the public applicable to the unequal treatment at issue authorities. Furthermore, in recognizing the here. underlying occupational pension scheme and conferring tax advantages, the auth- 45 — As stated in paragraph 51 above, it can be distinguished on orities have not laid down any discrimi- the ground that u would involve only a generalized 'third-party' effect (which is now accepted by the Court natory conditions but have merely tolerated only where it is to the detriment of the public authorities) them, which distinguishes this case from ana not direct effect stricto sensu based on the existence of a personal obligation on the part of the individual/ Marshall and Johnston since in those cases employer-

That question was passed over in silence in the parties' written observations and was scarcely touched upon at the hearing. I shall therefore confine myself to setting it in its 'Summarizing, one may conclude that proper context. Should the Court's ruling "Drittwirkung" does not ensue imperatively presuppose an answer to that question, then from the Convention. On the other hand, the parties before the Court must be given nothing in the Convention prevents the an opportunity to state their views on it. States from conferring "Drittwirkung" upon the fundamental rights and freedoms within their national legal systems in so far as they lend themselves to it. In some States "Drittwirkung" of the rights and freedoms guaranteed by the Convention is already All in all, the question is not whether a recognized, whilst in other States this directive acquires horizontal direct effect or, "Drittwirkung" at least is not excluded in to be more precise, effect with regard to principle. A view in conformity with this third parties, as a result of a provision of tendency is that it may be inferred from the international law: if a provision of inter- changing social circumstances and opinions national law actually takes effect as between that the purport of the Convention is going individuals in the Community's legal system, to be to secure a certain minimum guarantee that is on the basis of its own ambit. A to the individual also in his relations with

46 — Articles 2 and 26 of the first Covenant and Articles 3 and 47 — P. Van Dijk en G. J. H. van Hoof: De Europese conventie 7 of the second relate to the fundamental right under in theorie en praktijk, 1979 (2nd edition: 1982), at pp. 15 discussion here. Those Covenants have been ratified and 16. The 1982 edition was translated into English in between 1976 and now by all the Member States (the sole 1984 under the title: Theory and Practice of the European exceptions being Greece in the case of the first Covenant Convention on Human Rights. The passage quoted is to be and Ireland in the case of the second). found at pp. 16 and 17.

Ultimately it is for the Member States to determine, on their own responsibility (sanctioned by international law), how to comply with their obligations under Treaties. In connection with the European Convention, to which the Court attaches particular importance for the interpretation of the fundamental rights forming part of It is generally assumed, also by the authors Community law, that would seem to imply cited above, that it depends on the nature that it is for the Court, by way of a uniform and the formulation of each individual right interpretation valid throughout the whether it can be given effect with regard to Community, 5 0to establish the scope and third parties. It seems to me that equal effect of the Convention's provisions, and treatment of men and women at work is thus also to ascertain whether the funda- amongst those fundamental rights which mental rights recognized in the Convention deserve to be endowed with that effect to a must be endowed with effect with regard to greater extent than other such rights. That third parties, in areas covered by Community right produces its effect in full only where it law. In that regard the Court will clearly is not restricted to vertical relationships, that take into account, on the one hand, the is to say those between officials and the significance of the fundamental right in authorities which employ them, but also question — in this case the equal treatment takes effect with regard to all horizontal of men and women — in the Community's relationships. A factor militating against legal system and, on the other, the consti- that, however, is that the general tutional traditions (and sense of justice) in prohibition of discrimination in Article 14 of the Member States. The same holds true, in the European Convention is regarded not as my view, for the two aforesaid International an autonomous provision — although a Covenants whose significance for the inter- trend away from that view is visible — but pretation of fundamental rights under as affording protection only in conjunction with other provisions of the Convention. 48 49 — See Decisions Nos 172/1984, 180/1984 and 182/1984 of the competent committee of 7 April 1987, published in the Article 26 of the International Covenant on Report of the Human Rights Committee, UN/GAOR/42nd Civil and Political Rights, on the other Session, Suppl. 40 (A/42/40) 1987, pp. 139 to 169 (in particular, paragraphs 12.1 to 12.5 of the first decision) 50 — See, in connection with the GATT provisions, the 48 — See the work cited in footnote 47, p. 339 et seq. (Dutch judgment of 16 March 1983 in Case 266/81 SIOT [1983] edition), p. 386 et seq. (English edition). ECR 731, paragraph 28.

(2) Pensions which are paid through the trustees of a pension fund financed by employers' contributions to employees made compulsorily redundant under an occupational pension scheme which is regarded as a "contracted-out" scheme constitute "pay" within the meaning of the second paragraph of Article 119 of the EEC Treaty.

51 — See the judgments of 18 October 1989 in Case 374/87 Orkem [1989] ECR 3283, paragraphs 18 and 31 and in Case 27/88 Solvay [1989] ECR 3355, paragraphs 15 and 28. 52 — See the Opinion of Mr Advocate General Capotorti in Case 149/77 Defrenne III[1978] ECR 1380, at p. 1386. 53 — See, for the same view, P. Pescatore: 'Bestand und Bedeutung der Grundrechte im Recht der Europäischen Gemeinschaften', Europarecht, 1979, p. 1 et seq., in particular at p. 10. For further references, see my Opinion of 5 December 1989 in Case C-326/88 Hansen (judgment of 10 July 1990, judgment of 10 July 1990 [1990] ECR I-2911), paragraph 11.

I - 1942

BARBER

(3) The principle of equal pay which is referred to in the first paragraph of Article 119 of the EEC Treaty implies equality at the level of each component of remuneration.

Primarily