C-109/91

TEN OEVER

OPINION OF ADVOCATE GENERAL VAN GERVEN delivered on 28 April 1993 *

Summary

The Court's case-law on Article 119 of the EEC Treaty and the judgment in Barber I - 4894

Background to the present cases I 4897

The operation in time of the Barber judgment I - 4901

Article 119 and the different methods of funding occupational pension schemes 1 - 4934

Applicability of Article 119 to pension schemes having members of only one sex I - 4935

Conclusion I -4936

* Original language- Dutch-

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O P I N I O N O F MR VAN GERVEN — CASE C-109/91

At the outset, however, it would be useful to look briefly at the Barber judgment and to 2. Given the scope and complexity of the examine the background to the various cases questions which have been referred for a before the national courts in so far as this is preliminary ruling and the observations sub- relevant to my Opinion. mitted to the Court, I propose to proceed as follows. First, I shall examine what I con- sider to be the most crucial question, which runs like a thread through all these cases. It is this: what precisely are the effects in time The Court's case-law on Article 119 of the of the Barber judgment. Then I will consider EEC Treaty and the judgment in Barber whether that judgment, as well as the tempo- ral limitation imposed in that judgment, also applies to pension schemes other than those in question in that case. I will then go on to examine the question — which arises in particular in Case C-152/91, Neath [1993] 3. As is well known, Article 119 of the ECR 1-6953, and Case C-200/91, Coloroll Treaty lays down the obligation that the [1994] ECR 1-4397 — of the compatibility Member States must ensure in principle that men and women receive equal pay for equal work. 'Pay' is defined in the second para- graph of Article 119 as 'the ordinary basic or 1 — Judgment of 17 May 1990 in Case C-262/88 Barber v minimum wage or salary and any other con- Guardian Royal Exchange Assurance Group [1990] ECR 1-1889. sideration, whether in cash or in kind, which 2 — OJ 1986 L 225, p. 40. the worker receives, directly or indirectly, in

As far as the interpretation of 'consideration' in Article 119 is concerned, the Court had held in Defrenne (No 1) that social security 4. In the Barber case the Court had to con- schemes and benefits, in particular old-age sider a 'contracted-out' pension scheme pensions, although in principle not entirely approved under United Kingdom legislation, separate from the concept of pay, did not fall that is to say an occupational pension scheme established in consultation between the social partners or by unilateral decision of the employer, financed by the employer 3 — Case 80/70 Defrenne v Belgian State [1971] ECR 445, para- graph 6; confirmed in inter aha the judgment in Case alone or by employer and employees com- 12/81 Garland v British Rail Engineering [1982] ECR 359, bined, and which employees may join in par- paragraph 5; Case C-262/88 Barber v Guardian Royal Exchange Assurance Group, paragraph 12; sec, most recently, tial substitution for their statutory pension. the judgment of 17 February 1993 in Case C 173/91 Com mission v Belgium [1993] ECR I-673, paragraph 13. From the principles set out above the Court 4 — The quotation comes from the judgment in Case deduced that 129/79 Macarlhys v Smith [1980] ECR 1275, paragraph 10, which on this point expressly refers to the judgment in Defrenne (No 2); as far as the judgment in Defrenne (No 2) itself is concerned, sec the judgment in Case 43/75 [1976] ECR 455, in particular paragraphs 18, 21, 24 and 40. For subsequent confirmatory judgments, sec inter aha the judg 5 — Defrenne (No 1 ) , paragraphs 7 to 9; sec the judgment in Case men! in Case 69/81 Womngham and Another v loyds Bank 170/84 Bilka Kaufhaus Gmbll v Karm Weber von Hartz [1981] ECR 767, paragraph 23, the judgment in Case ] 1986] ECR 1607, paragraphs 17 and 18; sec, more recently, 96/80 Jenkins v Kmgsgate (Clothing Productions) [1981] paragraph 14 of the judgment in Commission v Belgium, ECR 911, paragraph 17; and the judgment in Barber, para cited above in footnote 3 graph 37. 6 - Bilka, paragraph 22.

Asked whether a scheme under which a man 'In those circumstances, overriding consider- made compulsorily redundant was entitled ations of legal certainty preclude legal situa- only to a deferred pension at the normal tions which have exhausted all their effects in pensionable age whilst a women in the same the past from being called in question where circumstances was entitled to a pension that might upset retroactively the financial which was payable immediately was compat- balance of many contracted-out pension ible with Article 119, the Court replied in schemes. It is appropriate, however, to pro- the negative. The reasons given by the Court vide for an exception in favour of individuals in paragraph 32 of its judgment were that: who have taken action in good time in order to safeguard their rights. Finally, it must be pointed out that no restriction on the effects of the aforesaid interpretation can be permit- '... Article 119 prohibits any discrimination ted as regards the acquisition of entitlement with regard to pay as between men and to a pension as from the date of this judg- women, whatever the system which gives ment.' 10 rise to such inequality. Accordingly, it is contrary to Article 119 to impose an age condition which differs according to sex in respect of pensions paid under a contracted- The Court therefore held that: out scheme, even if the difference between the pensionable age for men and that for women is based on the one provided for by the national statutory scheme.' 'The direct effect of Article 119 of the Treaty may not be relied upon in order to claim entitlement to a pension with effect from a date prior to that of this judgment, except in 5. The Court was, however, aware of the the case of workers or those claiming under tremendous financial implications of its them who have before that date initiated judgment. It also considered that, in view of legal proceedings or raised an equivalent the exceptions to the principle of equal treat- claim under the applicable national law.' 11 ment regarding pensionable age provided for in Directives 79/7/EEC 8 and 86/378/ EEC, 9 the Member States could reasonably

6. The Ten Oever case. Mr Ten Oever was married to M. F. Heeren, who was employed in the cleaning sector. Her employer had established a pension scheme which was The Kantongerecht considered it desirable to administered by the Stichting Bedrijfspen- refer the matter to the Court of Justice for a sioenfonds voor het Glazenwassers-en preliminary ruling. 12 Schoonmaakbedrijf (Pension Fund for the Window-cleaning and Cleaning Sector, here- inafter referred to as 'the Pension Fund'). It was a collective occupational pension scheme financed by employers and workers. Until 1 January 1989 the Pension Fund's rules 7. The Moroni case. From 1968 to 1983 Mr made provision only for a widow's pension; Moroni, who was born in 1948, was an since that date a widower's pension has also employee of Collo GmbH. In 1983 he been provided for, but without retroactive entered the service of another employer. effect. After his wife had died on 13 October When taking up his employment with Collo 1988, Mr Ten Oever applied — according to he had acquired a prospective right to a pen- the judgment referring the case, before sion under that undertaking's pension 17 May 1990 — for the grant of a survivor's scheme, which provided inter alia that pension with effect from 13 October 1988. employees leaving the service of the firm and The Pension Fund rejected his request on the gainful employment in general were to be ground that at the time of his wife's death its entitled to a pension on reaching the age of rules did not provide for such a pension. 65 (60 in the case of female employees), pro- vided that by that time they had worked in the service of Collo for at least 10 years. On 6 November 1990 Mr Moroni brought an action against Collo in the Arbeitsgericht On 8 June 1990 Mr Ten Oever applied to the [Labour Court] Bonn. On the basis of Arti- Kantongerecht (Magistrate's Court), Utre- cle 119 of the EEC Treaty and Articles 5 and cht, requesting it to decide that he should be 6 of Directive 86/378 he argues that the granted a widower's pension with effect from 13 October 1988. According to Mr Ten Oever, the pension constituted pay within 12 — For the precise wording of the questions of the Kanton the meaning of Article 119 of the Treaty and gerecht, reference is made to the Report for the I Hearing.

Mr Moroni has also the possibility under the German legislation of making an early claim, that is to say before he reaches the age of 65 (and at the earliest upon reaching the age It is useful to look at the relevant German of 60), to the occupational pension earned legislation. Under that legislation, Mr with C o l l o . , 6 However, the condition Moroni, despite having left Collo's employ­ imposed on male employees in this regard is ment prematurely, has, by virtue of his that they must be entitled to claim the statu­ length of service and the time at which tory old-age pension and actually do so, before leaving that employment he had qual­ which, besides requiring the completion of ified for future pension rights, acquired as certain insurance periods under the statutory against Collo an indefeasible right vested in old-age pension rules, also generally requires interest to benefits ('Versorgungsan- a relatively long period of unemployment wartschafť), which, as far as the old-age pen­ prior to the attainment of the age of 60. That sion at issue is concerned, is transformed condition does not apply to female employ­ into entitlement vested in possession to bene­ ees. 1 7 In making an early claim Mr Moroni fits ('Versorgungsanspruch') when he reaches must also be prepared to accept a further 14 65 years of age. Upon his early departure reduction: besides the pro rata reduction from the undertaking's employment, the cal­ mentioned above, a male employee's pension culation of that entitlement is as follows: the will also be subject to an actuarial deduction occupational pension which would be pay­ ('versicherungs-mathematische Abschlag'). able upon his reaching 65 years of age in On the other hand, a female employee can, Collo's employment is reduced in propor­ upon completion of the insurance periods tion to the ratio between the actual period of required under the statutory pension rules, that service and that which he would have automatically obtain early payment of the 15 completed by the age of 65. However, a old-age pension: if she leaves the undertaking prematurely with an indefeasible prospective

right to pension benefits she will be subject A member of Scheme 4 can, with the consent only to the reduction based on her early of his employer and the trustees of that pen- departure, and not to a pro rata reduction or sion scheme, retire early and take a reduced any actuarial deduction for drawing her pen- pension immediately at any time after his sion early. 50th birthday. If that consent is given, the pension is calculated on the basis of the pen- sion which the member would have received at the normal retirement date, having regard, This treatment of men and women under however, to the anticipated period of pay- occupational pension schemes reflects the ment of the pension. A reduction of 6% is position under the statutory rules on old-age applied for each year and month between the pensions, which have served as a model for actual retirement date and the normal pen- occupational pension schemes. 18 sionable age. If the employer and the trustees do not consent to a member taking early retirement, a member leaving Scheme 4 after his 50th birthday and before the normal 8. The Neath case. Mr Neath, who was born retirement date will be entitled only to a in 1935, was employed by Hugh Steeper Ltd deferred pension or to a transfer payment to until he was made redundant on 29 June another pension scheme. If the member opts 1990, which was after the delivery of the for a deferred pension, Scheme 4 is liable to judgment in the Barber case. At that time he pay the part of the pension owed which was 54 years and 11 months old. During that accrued during the member's affiliation to period Mr Neath was consecutively a mem- the scheme. If he opts for a transfer pay- ber of two occupational pension schemes run ment, an amount which is actuarially equiv- by Hugh Steeper. Between December alent to the sum of benefits which the mem- 1975 and December 1978 he was a member ber had accrued during his membership of of Scheme 5; from January 1979 until the ter- Scheme 4 is transferred to another pension mination of his employment he was a mem- scheme of the member's choice. Scheme ber of Scheme 4, a contracted-out scheme to 4 then ceases to be liable to provide any ben- which his rights acquired under the first efits to the member. scheme were transferred.

attributable to service after 17 May 1990 expectancy for women. Mr Neath considered (the date of the Barber judgment), was his this to be contrary to Article 119 of the 60th birthday. On the other hand, the Barber Treaty, as interpreted by the Court of Justice judgment was not considered to be applica- in the Barber case. The Industrial Tribunal ble to periods of service prior to the judg- decided to refer the matter to the Court of ment. Moreover, it was assumed that Article Justice. 19 119 of the Treaty did not preclude the use of actuarial factors. According to the calcula- tions of Scheme 4's actuary, if, for the pur- pose of calculating Mr Neath's benefits in respect of his entire service, he were assumed 9. The Coloroll case. The background to the to have a normal retirement age of 60, his main proceedings in this case is the financial transfer value would have been £39 934.56, collapse in the middle of 1990 of the Col- using male actuarial factors. If female actuar- o r o l lGroup of Companies and the conse- ial factors were used, his transfer value quential necessity to wind up certain of the would have been £41 486.25: that difference pension schemes of those undertakings. The is attributable to the fact that female actuarial proceedings are not conventional proceed- factors assume that women have a higher life ings but a test case (a representative action) expectancy so that the costs involved for which Colorali Pension Trustees Limited Scheme 4 in providing benefits to women are (hereinafter 'the Colorali Trustees'), which is regarded as being higher than in the case of still the trustee for eight pension schemes of men. the Colorali Group, has brought before the High Court. They seek directions from the High Court on matters which fall within that court's supervisory jurisdiction over trusts. The 'defendants' in the main proceed- ings are a number of persons selected by the Colorali Trustees as representative of the divergent interests and views. 20

in the United Kingdom. Consequently, dif- The operation in time of the Barber judg- ferent pension amounts are payable to men ment and women of the same age and having the same number of years of service. Further- more, where alternative benefits are provided by reference to a capital valuation of pension 10. Possible interpretations. As I have said, rights, actuarial factors are applied which the key question in these cases concerns the produce different results as between males precise operation in time of the Barber judg- and females because life expectancy and pen- ment. It is clear from the observations sub- sion commencement dates for men and mitted to the Court that the practical impor- women differ. Finally, two of the pension tance of the answer to this question is schemes have the particular feature of having enormous. I therefore propose to focus at no female members; yet the aforementioned once on the core of the problem. Apparently, there are some four possible interpretations sex-based calculation factors still affect the of the limitation which the Court sought to benefits of certain male employees. place on the operation in time of its judg- ment in the Barber case.

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O P I N I O N O F MR VAN GERVEN - CASE C-109/91

of service completed or contributions paid support the second option. In the Coloroll prior to that date. In other words, it is not case it is also supported by two defendants, the periods of service (before or after the Judith Broughton and Coloroll Group plc. judgment in Barber) which are decisive, but the date on which the pension falls to be paid.

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TEN OEVER

It follows that the rule as thus deciding to limit the scope of a judgment in interpreted may, and must, be applied by the time the Court is guided mainly by two con- courts even to legal relationships arising and siderations: a general principle of legal cer- established before the judgment ruling on tainty inherent in the Community legal the request for interpretation, provided that order and a concern to prevent serious prob- in other respects the conditions enabling an lems from arising, through an unrestricted action relating to the application of that rule retroactive application of the judgment, in to be brought before the courts having juris- respect of legal relationships established in diction, are satisfied. good faith. However, it is to be added at once that, as the Court has repeatedly con- firmed, the mere fact that a judicial decision has important practical consequences is not As the Court recognized in its judgment of in itself a sufficient reason to curtail its unre-

Luik, Faculte paragraph 12 Recently, the Court summarized these prin de Droit, d'Economie et de Sciences Sociales de I iège, ciples again in a judgment of 16 J u l y1992 delivered in Case 1981, p 219 C 163/90 legros [992] ECR 1 4625, paragraph 30.

'As the Court has held (see in particular the consider' 29 that their conduct was in accord- judgment of 8 April 1976), in determining ance with Community law, for example whether or not to limit the temporal effect of where the scope of a Community provision a judgment it is necessary to bear in mind was not entirely clear. The Court has that, although the practical consequences of accepted a fortiori that good faith exists any judicial decision must be weighed care- where the Community institutions them- fully, the Court cannot go so far as to dimin- selves had helped to create an impression of ish the objectivity of the law and compro- validity under Community law, either by mise its future application on the ground of approving a particular act of secondary the possible repercussions which might Community law which left the practices result, as regards the past, from a judicial concerned intact (judgments in Pinna (No decision.' 26 1), 30 Barber and Legros) or by not bringing an action under Article 169 against the Mem- ber State in default (Defrenne (No 2) and Legros) or by vacillating over the question of

Such good faith exists where those parties or Member States 'were reasonably entitled to 16. The good faith of parties concerned or Member States is thus a special circumstance which can justify limiting the effect of a judgment in time if the absence of a limita- 26 — Case 24/86 Blaizot, cited in the previous footnote, para- tion would produce serious problems for graph 30; judgment in the Defrenne (No 2) case, paragraph 71; see also the judgment in Worringham (cited above in legal relationships created in the past. footnote 4), paragrapn 31, and the judgment in Legros, cited in the previous footnote, paragraph 30. 27 — For express confirmation of this, see, inter alia, the judg- ment in Joined Cases 205/82 to 215/82 Deutsche Milchkon- tor and Others v Federal Republic of Germany [1983] ECR 29 — This expression is used in the judgment in Barber, at para- 2633, paragraph 30. On legal certainty as a principle for the graph 43, as well as in the judgment in Legros, at paragraph protection of legal relationships which have come into

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TEN OEVER

According to the Court, such a problem The Court's regard for 'all the interests at arises if the judgment concerned may have stake, public and private', 35 including the important general economic and financial serious financial consequences of a judgment consequences going beyond the particular for the parties or authorities which have facts of the case in point. Thus in Defrenne acted in good faith, is also evident in a num- (No 2) the Court lent a receptive ear when ber of recent cases. In Blaizot, for example, the United Kingdom and Irish Governments the Court took account of the possibility expressed the fear that many undertakings that its judgment (in which it ruled that a might experience serious financial difficulties supplementary enrolment fee for foreign as a result of unforeseen pay claims. 33 Partly university students was incompatible with in view of the good faith (mentioned above) Article 7 of the EEC Treaty) might 'retroac- of the market participants the Court held tively throw the financing of university edu- that cation into confusion and might have unforeseeable consequences for the proper functioning of universities'. 36 In Barber, too, the Court noted (see the passage cited above in paragraph 5) that 'the financial balance of many contracted-out pension schemes' might be 'upset retroactively'. And still more recently, in the Legros case, in which a 'In these circumstances, it is appropriate to charge levied by the French overseas territo- determine that, as the general level at which ries (the 'octroi de mer') was declared pay would have been fixed cannot be known, incompatible with Community law, the important considerations of legal certainty Court was prepared to limit the temporal affecting all the interests involved, both pub- effect of its judgment on account of the cat- lic and private, make it impossible in princi- astrophic financial repercussions which the ple to reopen the question as regards the French overseas territories would face if past. unduly paid charges became repayable:

In financial and economic terms, the balance of such occupational pension schemes is also However, a few preliminary observations are based on a number of premises, including necessary: in considering the issues arising in data concerning pension lifetimes and the these cases it is crucial to understand how survival probabilities of men and women occupational pension schemes (contracted- (see paragraphs 34-39). out and supplementary) are built up and run. As is clear from the observations of the gov- ernments and pension schemes appearing 38 — A distinction must be made in this regard between the before the Court, most of these pension so-called fixed-contribution schemes (frequently called schemes are characterized by their accruing 'defined contribution plans' or 'money purchase schemes') and the so-called fixed-benefit schemes (also called 'defined nature. In practice, an employee accrues pen- benefit plans'). In the first-mentioned schemes the benefit consists of the capitalized sum of — and is accordingly sion entitlements on the basis of his periods dependent on — contributions periodically made in the of service with the employer concerned. For past by the members. In schemes with fixed benefits, on the other hand, the level of the benefit is fixed in advance (in that purpose, contributions (calculated on the trust deed, constitutive rules, policy conditions or other general conditions) on the basis of the number of years of the basis of actuarial factors) are periodically service, cither as a fixed amount or as a percentage of the paid to a particular pension fund by the employee's final salary. I would, incidentally, point out that the pension schemes m the Coloroll case arc of the second type and that, according to the evidence before the Court, most occupational pension schemes in Denmark, the Neth- erlands and the United Kingdom also belong to this cate- gory. As regards the aforementioned difference between occupational pension schemes, sec, inter alia. P. E. 37 — Legros, paragraph 34. For another recent temporal limita- d'Herbais, Mémento des retraités dans la C. E. E. Analyse tion imposed on account of the important financial conse- comparée des régimes de base et complémentaires des sala- quences of a judgment, this time in relation to the invalidity riés et des fonctionnaires, Paris, CERR, 1990,pp. 17-18; see of a Community regulation in the field of agricultural pol- also, together with other categorisations, G. Tamburi and P. icy (concerning, in particular, a 'clawback' levy on products Mouton, 'Problèmes de frontières entre régimes privés et which had attracted a variable slaughter premium), see the régimes publics de pensions', Revue internationale du Tra- judgment of 10 March 1992 in Joined Cases C-38/90 and vail, 1986, (163), pp. 145-146. C-151/90 Lomas [1992] ECR I-1781, paragraphs 27-30.

18. It seems to me that in Barber, too, the be important for a proper understanding of Court recognizes, if only implicitly, the dis- what the Court means in paragraph 44 of its tinction between the accrual and the falling judgment in Barber where it holds that 'legal due of an occupational pension. The Court's situations which have exhausted all their conclusion that pension payments made effects in the past' may not be called in ques- under a contracted-out scheme constitute tion. To give that passage a literal reading, as 'consideration paid by the employer to the certain parties to the main proceedings in the worker in respect of his employment' 39 can Coloroll case (namely James Russell, Gerald

largely vanish. 40 Moreover, this distinction makes it clear what the Court meant in paragraph 44 of the Barber judgment by 'the acquisition of enti- tlement to a pension as from the date of this judgment'. Since it is the service itself and, in some cases, the relevant contributions which give rise to the employee's pension rights, on the one hand, and the obligations of the Here again, the distinction between the employer and/or (the trustees of) the pen- accrual and the falling due of the pension sion fund, on the other, the Court clearly has helps to clarify matters. Since it is the service in view here periods of service after 17 May itself and, in some cases, the relevant contri-

The coming 19. I also consider the distinction between into being of a pension right on the basis of a the accrual of the pension (or the coming into being of pension rights) and the pen- sion's falling to be paid for the first time (or 40 — That judgments of the Court may not be interpreted in a the pension rights' becoming exercisable) to way which deprives them of their useful effect was con firmed by the Court in inter alta its judgment of 2 March 1989 in Case 359/87 Pama (No 2) [1989; ECR 585, para graph 16; sec also the Opinion of Advocate General I.cn7 in that case, in particular at pp. 605 606, paragraph 29, in which he cites case law from which it is clear that a telco 39 - Barber, paragraph 28; sec paragraph 4 above. logical interpretation of judgments of the Court is usual

period of service in the past leads indeed to a 'In order to satisfy the principle of legal cer- legal situation whose effects are exhausted in tainty, one of the requirements of which is the sense that the worker has definitively that any factual situation should normally, in acquired the pension right relating to that the absence of any contrary provision, be period of service. examined in the light of the legal rules exist- ing at the time when that situation obtained, the second condition [the nationality requirement contained in Article 2(1)] must be interpreted as meaning that the status of

munity law. A precedent may be cited from Community case-law on social security schemes, namely the judgment of 12 October 1978 in Belbouab. This case related to Regu- A similar application of the principle of legal lation N o 1408/71. It concerned an Algerian certainty, this time in the field of family worker who before Algeria's independence allowances, is to be found in the judgment in had possessed French nationality and had Pinna (No 1). After reaching the view that worked as a French national in France and the former version of Article 73(2) of Regu-

Case 12/71 [1971] ECR 743, paragraph 5; Case 13/71 [1971] down in Article 2(1) of the regulation related ECR 767, paragraph 5; and Case 14/71 [1971] ECR 779, paragraph 5. to the claimant's nationality at the time of 42 — This principle already formed the basis of the Court's case- submission of his application for a pension. It law in relation to Regulation N o 3; see in particular the judgment of 26 June 1975 in Case 6/75 Horst v

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TEN' OEVER

family allowances, laid down for workers pension schemes since account must indeed active in France rules which departed from be taken of their belief that conditions as to those laid down in Article 73(1) for other pensionable age varying according to sex Member States) was invalid, the Court never- were permissible. In Barber this was recog- theless limited the temporal effect of its judg- nized by the Court in as many words: in ment. According to the Court, Overriding view of the derogations from the principle of considerations of legal certainty involving all equal treatment contained in Directive the interests at stake, public and private' pre- 79/7 and 86/378 the Member States and the cluded the calling in question of 'the pay- 'parties concerned' were 'reasonably' entitled ment of family benefits for periods prior to to consider 'that Article 119 did not apply to the delivery of this judgment'. 43 The Court pensions paid under contracted-out schemes ruled that the invalidity of the provision in and that derogations from the principle of question could not be relied upon 'in order equality between men and women were still to support claims regarding benefits for peri- permitted in that sphere'. 45 ods prior to [the date of this judgment]'. 44

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O P I N I O N O F MR VAN GERVEN — CASE C-109/91

In passing, I would point out that, in my seded as soon as the Treaty on European view, the third interpretation, in which it is Union comes into force. suggested that the falling due of the pension after 17 May 1990 should be the decisive cri- terion (irrespective of the time when the periods of service to which the pension relates were completed), cannot be enter- tained under any circumstances. I consider Article 239 of the EEC Treaty will be appli- this option undesirable not only in view of cable to the Protocol which is to be annexed the way, described above, in which pension to the EEC Treaty: as soon as the Treaty on rights accrue but also on account of the clear European Union comes into force, that Pro- unfairness to which this interpretation would tocol will become an integral part of the lead for a large number of workers: not a

differ only in that they lead to entitlement to indent of Article B of the Treaty on Euro- payment before or after 17 May 1990 would pean Union expressly confirms that one of then be treated in a very different way. the Union's objectives is 'to maintain in full the "acquis communautaire" and build on it', that is to say the entire body of the existing Community rules as interpreted and applied by the Court. 48 Accordingly, I see in the Protocol no more than a declaratory deter- Finally, I consider that the fourth interpreta- tion goes too far.

L., 1957, (574), 587; see also the definition of 'treaty' in Article 2(l)(a) of the 46 — The Court has repeatedly taken a similar position when Vienna Convention on the Law of Treaties of 21 May 1969: declaring invalid acts of the institutions: it is then said that, 'an international agreement concluded between States in for the sake of 'important reasons of legal certainty', the written form and governed by international law, whether declared invalidity of the act in question cannot affect the embodied in a single instrument or in two or more related validity of payments made and commitments entered into instruments and whatever its particular designation'. in implementation of that act: see the judgment in Case 34/86 Council v Parliament [1986] ECR 2155, paragraph 48 — Sec also Article C of the Treaty on European Union, which 48 and the judgment in Case C-284/90 Council v Parlia- provides that the institutional framework of the Union is to ment [1992] ECR I-2277, paragraph 37. respect and build upon the 'acquis communautaire'.

mination of meaning adopted in relation to According to the defendants in the main Article 119 and the case-law of the Court. 49 proceedings in the Coloroll case other than Judith Broughton and Coloroll Group pic, the Court had in view in the Bilka judgment, which concerned a non-contracted-out occu- Does the ruling in Barber as well as the tem- pational pension scheme, the entire situation poral limitation provided for therein also of such pension schemes. In other words, apply to occupational pension schemes according to these parties, that judgment other than those envisaged in that judg- concerned not only the point concerning the ment? exclusion of workers who arc members of non-contracted-out occupational pension schemes, with which that case was specifi- cally concerned, but also the point relating to 24. In the Coloroll case the High Court also the commencement date of the pension asks the Court of Justice whether the tempo- under such occupational pension schemes. ral limitation on the Barber judgment also Since the point concerning the commence- extends to occupational pension schemes ment date in non-contracted-out occupa- other than 'contracted-out' occupational tional pension schemes had accordingly been pension schemes which were considered in decided in the judgment in Bilka, thus long that judgment (Question 3), in other words before the judgment in Barber was delivered, whether it also applies to supplementary or the temporal limitation imposed in the judg- non-statutory, and not just contracted-out, ment in Barber should not, in their view, be pensions. This question also arises in the applied to non-contracted-out occupational Moroni case, although the question submit- pension schemes. ted by the Arbeitsgericht Bonn primarily seeks to ascertain whether the ruling in Bar- ber, in particular on the point concerning the incompatibility with Article 119 of an age condition varying according to sex for enti- tlement to a pension (see above, at paragraph 4), is also applicable to the occupational pen- sion scheme in that case. Judith Broughton, Coloroll Group pic and the United Kingdom and, in the Moroni case, the German Government, on the other hand, have put forward the view that the 25. Both questions are interwoven and, in scope of the judgment in Bilka is indeed my view, are particularly connected with the limited to the point concerning the exclusion scope to be given to the Bilka judgment of of workers who arc members of non- 1986. I would remind the Court that in that contractcd-out occupational pension judgment it held that benefits paid under an schemes. Unlike the German Government, occupational pension scheme applicable in a however, the other three interveners consider German undertaking constitute consider- that the judgment in Barber, including the ation within the meaning of Article temporal limitation for which it provides, 119 (paragraph 3 above). with regard to the commencement date of the pension — with which that case was spe- cifically concerned — applies to all occupa tional pension schemes, both contracted-out 49 — See, in the same sense, S Prechal, B ' ommen ruimen in Maastricht'. Nederlands Juristenblad. 1992, (349), p 354 and non-contractcd-out.

26. I agree with Judith Broughton, Colorali date of the pension — in a general way Group plc and the United Kingdom: the rul- which is applicable to all occupational pen- ing in Barber, including the temporal limita- sion schemes and that consequently the tem- tion which it lays down, is applicable to all poral limitation laid down in the judgment is occupational pension schemes, irrespective of also applicable to pension schemes other the category to which they belong. than contracted-out schemes. I find no sup- port in the operative part of the Barber judg- ment for making a distinction between contracted-out and non-contracted-out pen- sion schemes since nowhere in points 3 and 5 thereof does there appear to be a limitation to contracted-out occupational pension schemes alone. Moveover, such a distinction would, from the economic point of view, lead to arbitrary distortion between the respective pension schemes. In any event, if In my view, in Bilka the Court ruled only on in its Bilka judgment the Court had also the question whether an occupational pen- ruled on the commencement date of the pen- sion scheme of the type in question in that sion under non-contracted-out pension case (a contractual company scheme financed schemes, it would, in my view, have also lim- exclusively by the employer and established ited the temporal effect of that judgment after consultation within the company con- rather than, as is the case, giving it retroac- cerned) fell within the scope of Article tive effect to ... 8 April 1976, that is the date 119 and on the question whether the exclu- on which the Court in Defrenne (No 2) held sion of part-time workers (mainly women) Article 119 to have direct effect. 5 0 The from such a scheme constitutes discrimi- upshot of this would then be that, as regards nation contrary to that provision. The Court the commencement date of the pension, answered both questions in the affirmative. Article 119 would be applied to the scheme Only in Barber did the Court also address with retroactive effect going back more than the question of the lawfulness of an age con- 14 years, depending on whether the occupa- dition, for the commencement of the pen- tional pension scheme in question was a sion, varying according to sex under an non-contracted-out or a contracted-out occupational pension scheme (which in that scheme. The financial consequences of such case was a contracted-out scheme) (see an interpretation would be catastrophic for above, paragraph 4). Member States in which supplementary occupational pension schemes, that is to say non-contracted-out schemes, are very com- mon. This cannot have been the intention of the Court.

27. The positions of the parties. In the Neath case (Question 3(b)) and the Coloroll case 28. The Commission, on the other hand, (Question 4) the question is raised whether it takes the view that the principle of equal pay is compatible with Article 119 of the EEC for men and women must be applied individ- Treaty for the payments made under a pen- ually and not on a category basis. The fact sion scheme to be calculated on the basis of that women generally live longer than men actuarial calculation factors, in particular has no significance at all for the life expect- actuarial assumptions about the different life ancy of a specific individual and it is not expectancy of men and women, which lead acceptable for an individual to be penalized to different results for men and women. on account of assumptions which arc not certain to be true in his specific case. More- over, there are a number of risk factors which are not taken into account: risks asso- ciated with certain occupations, smoking, state of health and so on. Finally, there is no The pension funds and pension fund admin- technical necessity for pension schemes to istrators as well as most of the intervening have a distinction based on life expectancies: Member States argue that this is completely some pension schemes, and all State pension normal. They say that such actuarial calcula- schemes, use a system of risk compensation tion factors are based on reliable and objec- which covers differences in the probable tive statistical data which are related to life lifespan of men and women. 51 The Commis- expectancy after pensionable age has been sion points out that the Supreme Court of reached. Since those factors vary from sex to the United States has held that similar dis- sex — on average women live longer and crimination in pension schemes is incompat- therefore on average receive their pension ible with the Civil Rights Act 1964. From over a longer period of time than men — this the Commission concludes that, since actuarial factors are, according to their argu- different actuarial calculation factors are con- ments, essential for evaluating the liabilities trary to Article 119 of the Treaty, neither assumed by a pension scheme and conse- employers nor trustees may rely on them to quently for the financial structuring of the justify a proportionately greater reduction of entire pension scheme. Taking into account the pension of a man than that of a woman actuarial factors — which, moreover, is a upon early retirement, to justify smaller cap- generally accepted practice in (contractual) ital sums for men than for women where schemes — thus has a direct and quite legit- these are opted for, or to justify a different imate influence on the sum of rights which measure of the reduction of the pension are transferable to another scheme and on the amounts of commutation payments (that is to say, where a scheme member opts to 51 — These arguments were also advanced by lhe Commission in receive a capital sum instead of a periodic the explanatory note of 29 April 1983 on the proposal which was to lead to the adoption of Directive 86/378: pension): in the last case, other circumstances COM (83) 217 final, pp. 7 8.

— Article 6(1 )(h) allows levels of benefit dif- fering according to sex to be set in so far 29. Community legislation and case-law. as may be necessary to take account of Before I explain my position, I will put the actuarial calculation factors which differ issue of actuarial calculation factors in their according to sex in the case of benefits Community law context. As far as Commu- designated as contribution-defined; 53 nity legislation is concerned, there is Direc- tive 86/378. In contrast to the original Com- mission proposal for a directive, which expressly prohibited the determination of — according to the second subparagraph of benefit amounts or rates of contribution by Article 6(1 )(i), levels of employer contri- taking account of 'different factors of calcu- bution differing rules according to sex lation, actuarial or otherwise, with regard to may be set in the case of benefits desig- the phenomena of ill-health, mortality or life nated as contribution-defined 5 4'with a expectancy', 52 the directive contains various view to making the amount of those ben- derogations from the implementation of the efits more nearly equal'; principle of equal treatment in occupational social security schemes, those derogations being related to the ' use of actuarial calcula- tion factors varying according to sex. For the — according to Article 6(1 )(d), except as provided for in subparagraphs (h) and (i),

52 — Article 6(l)(h)(i) of the Commission's proposal of 5 May 1983, OJ 1983 C 134, p. 7. For this approach the Commis- sion found support from inter alia the European Parlia- ment: see the report by H. Pcctcrs on behalf of the Com- 53 — The expression 'designated as contribution-defined' refers mittee on Social Affairs and Employment of 12 March to so-called fixed-contribution schemes; on this, sec above, 1984, European Parliament, Documents de seance, 1983- footnote 38. 1984, doc. 1-1502/83 (PE 87/755/dcf.), p. 10. 54 — Sec the footnote above.

56 — I can disregard the case-law which the Court of Justice and the Court of First Instance have developed in staff cases 30. As yet, there is no Community case-law with regard to the taking into account of pension rights on the relationship between actuarial calcula- acquired elsewhere, in particular the actuarial countcrvalue of such rights, by members of staff of the Community insti- tion factors and the principle of equal tutions: see inter alia the judgment in Joined Cases 118 123/82 Maria Grazia Celant and Others v Commission [1983] ECR 2995; Joined Cases 75/88, 146/88 and 147/88 Bonazzi-Bertoatlliand Others v Commission [1989] ECR 3599; Case C 137/88 Schneemann and Others v Com- mission [1990] ECR 1-369. 55 — These derogations have attracted criticism írom various authors who have doubts about their compatibility with 57 — See paragraphs 33 and 34 of the judgment in Barber. Article 119 of the Treaty: sec D. Curtin, 'Occupational pen 58 — Barber, paragraph 35 and point 3 of the operative part. sion schemes and Article 119: beyond the fringe?'. Com 59 — Whether that passage must in fact be given such a wide mon Markel Law Revmc. 1987, (215), pp. 225 229; E Ellis, ranging meaning is a question which I will leave aside here, European Community Sex Equably Law; Oxford, Claren The passage cited was referring in fact to various types of don Press, 1991, pp. 56 57; A. Laurent, 'Les CE éliminent consideration granted, according to the circumstances, to des discriminations fondées sur le sexe dans les regimes men and women. The national court was asked to assess all professionnels de sécurité sociale', Revue internationale du those types of consideration in globo, a task which it was Travail, 1986. (753), pp. 759 761; S. Prêchai and N Bur hardly able to fulfil The present cases do not, however, rows. Gender discrimination law of the European Commu concern different elements of pay but the actuarial method ruly; Aldcrshot, Dartmouth, 199C, pp. 283 282. of calculating one single element of pay.

Article 119 is therefore directly applicable only to forms of discrimination which are ascertainable as such by the national court 64 60 — A clear illustration of this is to be found in the judgment in with the aid of the criteria of 'equal work' Macarthys: although the national court had specifically referred to the Court questions about the scope of Direc- and 'equal pay' mentioned in that article. 65 tive 75/I17/EEC, the Court decided that the dispute could In Defrenne (No 2) the Court made it clear be entirely resolved through an interpretation of Article 119; see paragraph 17 of that judgment. that this is the case as regards discrimination 61 — For example, mention may be made of the fact that Direc- tive 86/378 has a wider scope ratione personae than Article 119 since by virtue of Article 3 of the directive it is also applicable to self-employed persons. Ratione materiae the directive applies inter alia to all occupational schemes which provide protection against the risks of sickness, 63 — Defrenne (No 2), paragraph 18. invalidity, old age, industrial accidents, occupational dis- 64 — The reference to 'judicial' identification is made for the first eases and unemployment (Article 4(a)). time in the judgment in Macarthys, paragraph 10; sec also 62 — Sec, in relation to Directive 75/111, the judgment in Jen- the judgment in Worringbam, paragraph 23, and the judg- ment in Jenkins, paragraph 17. In paragraph 38 of the judg- kins, paragraph 22; the judgment of 3 December 1987 in ment in Barber the Court refers to 'the national court'. Case 192/85 Newstead [1987] ECR 4753, paragraph 20. This was also expressly confirmed by the Court in para- 65 — Macarthys, paragraph 10; judgment in Worringbam, para- graph 11 of Barber. graph 23; judgment in Jenkins, paragraph 17.

In all these cases, it is, however, possible for the national court to ascertain the existence of unequal treatment on the basis of a purely 'It is impossible not to recognize that the legal analysis: the actuarial calculation factors complete implementation of the aim pursued are contained in a statutory provision or by Article 119, by means of the elimination form part of the conditions governing an of all discrimination, direct or indirect, occupational pension scheme (contained in between men and women workers, not only the trust deed, constitutive rules or general as regards individual undertakings but also conditions) and are clearly based on nothing entire branches of industry and even of the else than the distinction between men and economic system as a whole, may in certain cases involve the elaboration of criteria whose implementation necessitates the 69 — Defrenne (No 2), paragraph 19. That the question of the scope of the direct effect of Article 119 essentially depends on the criterion whether unequal treatment can be ascer tained on the basis of a purely judicial analysis of the cir 66 — De/renne (No 2), paragraph 21. cumstances of the case and docs not depend so much on the criterion whether 'direct' or 'indirect', 'overt' or 'disguised' 67 — Defrenne (No 2), paragraphs 22-23; Mauirtbys, paragraph forms of discrimination exist is convincingly argued by 10; Worringham, paragraph 23; Jenkins, paragraph 17. Advocate General VerLoren Van Themaat in his Opinion in 68 — As regards those aims, see the judgment in Defrenne (No the Burton case. [1982] ECR 582, paragraph 2.6., with rcf 2), paragraphs 8 12. crcnce to the judgment in Jenkins.

34. Possible grounds of justification. Never- theless, the question arises whether it is pos- sible to identify an objective reason on the basis of which such unequal treatment may be justified under Community law. It is argued by various sides that such a reason is to be found in objectively determinable dif- ferences in average life expectancy between men and women. 35. I thus come to the question whether dif- ferences in average life expectancy between men and women can justify the use of sex- based actuarial factors in the calculation of employee contributions and benefits in occu- pational pension schemes. It is true that Before going into this question, I would women as a group prove to live longer than draw attention to the reservation expressed men. It is, however, equally true that not all individual men and women exhibit the

70 — On this point, see, in relation to the sex discrimination existing in the Barber case in the matter of conditions of 73 — If the pension scheme is also financed by employers' and/or access, in particular the age requirement in the Guardian State contributions, I consider that account may be taken, pension scheme rules, paragraph 47 of my Opinion in that in calculating those contributions, of sex-based actuarial case [1990] ECR I-1934-1935. factors in so far as differences resulting therefrom do not in 71 — Barber, paragraph 38. any way lead to a different burden in respect of contribu- 72 — For examples of other, more indirect discrimination in tions for male and female employees and the payments occupational pension schemes, see D. Curtin, art. at., Com- made to men and women with the help of those contribu mon Market Law Review, 1987, p. 216. tions are not discriminatory either.

36. I can put those propositions in another way. The unequal treatment of men and women may be justified, and therefore not constitute unlawful discrimination, if the dif- ference in treatment is based on objective In my view, the answer must be in the affir- differences which are relevant, that is to say mative: although Article 119 — unlike its which bear an actual connection with the American counterpart, the Civil Rights Act subject of the rules entailing unequal treat- 1964, which is expressly orientated towards ment. In this regard, I could for instance equal treatment of the individual, distinct imagine that factors having a direct impact from the sex group to which the individual on the life expectancy of a specific individ- belongs 74 — prescribes in general terms the ual, such as risks associated with a particular application of the principle of equal pay for occupation, smoking, eating and drinking 'men and women', this provision also reflects habits and so forth, would be taken into the aspiration to treat the worker as an indi- account, if this is technically possible, in vidual with regard to the worker's right to order to justify individual differences in con- equal pay for equal work, and not simply as tributions and/or benefits. As regards differ- a member of one particular sex group. 75 For, ences in average life expectancy between men as the Court confirmed in its judgment in and women, the situation is different, how- Murphy, underlying Article 119 is the princi- ever. These differences bear no relation to the ple that a worker of one sex engaged in work life expectancy of a specific individual and of equal value to that of a worker of the are thus irrelevant for the calculation of the opposite sex may not be paid a lower wage contributions and/or benefits which may be than the latter on grounds of sex. 76 The ascribed to that individual. mere fact that, in general, women live on

38. In order to justify the use of sex-based actuarial calculation factors in the determina- tion of employee contributions or pension '... when insurance risks are grouped, the benefits some parties point out that their use better risks always subsidize the poorer is necessary in order to maintain the financial risks. Healthy persons subsidize medical balance of occupational pension schemes. benefits for the less healthy; unmarried The United Kingdom above all attempts to workers subsidize the pensions of married convince the Court of the need for this. Its workers; persons who eat, drink, or smoke argument runs as follows: the fact that to excess may subsidize pension benefits for women live on average longer than men is an persons whose habits are more temperate. essential element in assessing the financial Treating different classes of risks as though liabilities of such schemes since it must be they were the same for purposes of group assumed that women will draw their pension insurance is a common practice which has during a longer period than their male col- never been considered inherently unfair. To leagues. This necessarily gives rise to unequal insure the flabby and the fit as though they costs for a scheme, depending on whether were equivalent risks may be more common men or women are involved, which inevita- than treating men and women alike; but bly has effects on the level of benefits. The nothing more than habit makes one "subsi- imposition of a unisex method for calculat- dy" seem less fair than the other.' 77 ing the funding required for the scheme would also fly in the face of reality and impair the actuary's ability to give sound advice concerning the pension scheme's lia- bilities and the appropriate level of future contributions.

discriminatory treatment, 78 I am not con- taking into account the lifespan of the per- vinced by those arguments. I have difficulty sons entitled to pensions. There is nothing to in accepting that it would be technically nec- prevent actuaries, when determining that bal- essary to take into account actuarial factors ance, from taking account of actuarial factors differing according to sex (in particular dif- differing according to sex (see above, para- ferences in life expectancy between men and graph 34).

ities. But this concerns only the internal actuarial methods of administration which are used by actuaries in order to ascertain the Whilst I therefore find that the necessity to funds needed in order to maintain a financial maintain the financial balance of occupa- balance between contributions and benefits, tional pension schemes does not constitute a ground of justification for discriminatory treatment of men and women as regards con- 78 — Sec, in particular, the judgment in the Equal Opportunities tributions and benefits, it does, however, Commission case, which concerned the interpretation of the derogation from the principle of equal treatment of men seem to me to be a reason to take a broad and women provided for in Article 7(l)(a) of Directive view of the temporal limitation of the pro- 79/7; judgment of 7 July 1992 in Case C 9/91 The Queen v Secretary of Slate for Sonai Security, ex parte Equal Oppor- posed interpretation. I consider that limita- tunities Commission ¡1992] ECR 1 4297, in particular para graphs 15 18.

paragraph 13. Mention may also be made of the judgment 40. Limitation of the temporal effect of the in the Celant case, in which the Court, with regard to the interpretation proposed in this Opinion. taking into account, in the Community pension scheme, of insurance periods completed under a national pension Should the Court decide to adopt the pos- scheme, likewise stressed the need for 'sound financial man agement' of that scheme: judgment in Celant, cited in foot ition taken in this Opinion, it would be note 56, paragraph 27. appropriate to place a temporal limitation on 79 — Sec A. Laurent, art. at., p. 760. the operation of that interpretation and to 80 — I am here thinking of the United States, where it is estab lished that the use of actuarial factors varying according to indicate as precisely as possible the modali- sex for the calculation of contributions to pension schemes ties of the proposed limitation. is contrary to the Civil Rights Act 1964 since the ruling of the United States Supreme Court in Los Angeles Depart

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OPINION OF MR VAN GERVEN — CASE C-109/91

Question 4(c) wherein it is asked to what actuarial factors was not covered by the extent (in particular, in respect of which peri- Barber judgment, it suggested that, should ods) can the trustees of a pension scheme be the Court adopt the interpretation proposed required to review and recalculate determi- above, it should limit the temporal effect of nations made by reference to actuarial con- its judgment in the present case. In its obser- siderations in relation to events prior to vations in the Coloroll case, on the other 17 May 1990. hand, the Commission takes the view that the reasoning followed in the Barber judg- ment in relation to the effects in time of that judgment must also be applicable in relation to claims challenging discrimination which Nearly all the parties intervening before the appeared to be permissible on account of Court have adopted a position with regard Directive 86/378. Should the Court uphold a to the temporal effect of a judgment in which different view, the Commission suggests that the Court ex hypothesi holds Article 119 to it should invite written observations as to the be applicable to the use of actuarial calcula- most appropriate limitation in time of its tion factors varying according to sex. Their decision. positions may be summarized as follows.

I - 4922

TEN OEVER

contributions to be paid by, and the benefits of its interpretation to pension entitlements to be paid to, male and female employees in which correspond to periods of service sub- respect of periods in the past by taking sequent to the date of its judgment in the account of such actuarial differences. To alter Neath and Coloroll cases. The only excep- such determinations in respect of the past tion which I consider desirable in this regard could seriously jeopardize the financial bal- concerns the situation of persons — employ- ance of pension schemes. ees or those claiming under them — who before the date of the Court's judgment have initiated legal proceedings or raised an equiv- alent claim under the applicable national law.

Mr Ten Oever, the United Kingdom and the Commission take the view that this question 43. This brings me to the following conclu- must be answered in the affirmative. The sion. In view of the derogations provided for Pension Fund and the Netherlands and Ger- in Directive 86/378, the parties concerned man Governments, on the other hand, pro- could reasonably assume that the use of pose a negative answer. actuarial factors varying according to sex, in particular for the determination of contribu- tions to be paid by, and benefits to be paid to, employees, was permissible under Article 119. In order to prevent pension schemes 45. Before giving my view, I consider it nec- built up in the past on the basis of such fac- essary to describe the precise characteristics tors from being called in question, with all of the widower's pension in question. the considerable financial repercussions According to the rules of the Pension Fund, which this would entail, it is therefore it is a pension which is awarded to the man appropriate for the Court to limit the effect to whom the female member or the former

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O P I N I O N O F MR VAN GERVEN — CASE C 109/91

84 — OJ 1987 C 309, p. 10. In the fifth recital of the preamble to this proposal, express reference is made to Article 9(b) of 81 — This is what is provided by Article 2(l)(c) of the rules of Directive 86/378. the Pension Fund, which has been in force since 1 January 1989. 85 — It is to be noted that Article 4 forms part of Title I of the proposed directive, 'Survivors' benefits', in which it appears 82 — Law of 17 March 1949, Staatsblad] 121. alongside provisions intended to implement the principle of 83 — Article 3(1) of the Wet betreffende verplichte Deelneming equal treatment in the matter of orphans' benefits (Article in een Bedrijfspensioenfonds. 5) and other survivors' benefits (Article 6).

I - 4924

TEN OEVER

47. I propose to consider first of all the tive 76/207 either. T h u s , according to the argument which these parties believe they C o u r t , the case fell within the exception to can derive from the judgment in Newstead. the application of the principle of equal That case concerned the question of the treatment provided for in Article 1(2) of compatibility with C o m m u n i t y law of a Directive 76/207. 90 United Kingdom occupational pension scheme (again, a contracted-out scheme) which required only male civil servants to contribute 1.5% of their gross salary to a w i d o w s ' pension fund.

However, result of the deduction of a contribution to I consider it to be of decisive importance an occupational pension scheme. Since that that in Barber the C o u r t expressly went back scheme replaced the statutory scheme, the C o u r t concluded that such a contribution ' m u s t therefore, like a contribution to a stat- 88 - Council Directive 76/207/EEC of 9 February 1976 on the utory social security scheme, be considered implementation of the principle of equal treatment for men ana women as regards access to employment, vocational to fall within the scope of Article 118 of the training and promotion, and working conditions, OJ Treaty, not of Article 119.' 87 1976 L 39, p. 40. 89 - Newstead, paragraphs 25 27. 90 — Newstead. paragraph 28. Article 1(2) of this directive refers, with a view to ensuring the progressive implementation of the principle of equal treatment in matters of social security, to provisions which the Council, acting on a proposal from 86 — Neu stead, cited in footnote 62, paragraph 21. the Commission, is to adopt defining its substance, its 87 — Paragraph 15 of the judgment in Neustead. scope and the arrangements for its application.

50. There remains the question whether, as the Netherlands Government and the Pen- sion Fund argue, a pension scheme such as the one under consideration is not rather like an old-age pension, as in the first Defrenne case, and therefore still falls outside the scope of Article 119. If I apply the criteria 49. In Barber the Court came to that con- developed in the judgments in Defrenne (No clusion on the basis of an analysis of the 1), Bilka and Barber (see above, paragraph 3) contracted-out occupational pension scheme to the widower's pension in the Ten Oever in question in that case which goes back to case, then I must answer that question in the the criteria developed in Defrenne (No 1) negative. First of all, it is clear that this pen- and Bilka (see paragraph 3 above) and which sion scheme, although made compulsory by I will shortly apply to the widower's pension law, is the result of collective consultations with which the Ten Oever case is concerned. within the industry concerned and is not as First of all, however, I would make this such directly established by law. Upon appli- point: it follows from the very nature of a cation by the employers' and trade union widower's pension of the kind now in ques- organizations considered to be representa- tion that the pension is not granted to the tive, which initially drew up the actual terms employee but to the employee's surviving of the pension scheme through a process of spouse. However, I do not see in that cir- collective bargaining, the State merely stipu- cumstance any convincing objection to the lates that the scheme concerned is to be application of Article 119 to such a widow- made compulsory for an entire industry. The er's pension despite the way in which the scheme is therefore primarily 'the result ... of Court defined 'pay' for the purposes of Arti- an agreement between workers and employ- cle 119 (see above, paragraph 3) — 'consider- ers'. 93 ation which the worker receives ... in respect of his employment'. The essential point is that under the rules of the Pension Fund, membership of the scheme affords entitle- ment to the widower's pension: 92 in other Furthermore, it is not disputed that the pen- words, as the United Kingdom rightly points sion scheme in question is funded exclusively out, the pension is acquired within the by employers and employees without any employment relationship between employer contributions from the State. 94

Finally, the scheme is not compulsorily principles which I have indicated above in applicable to general categories of workers relation to the temporal effect of the Barber but only to workers employed by certain judgment. 96 As far as the reference date is undertakings, in particular workers in the concerned, I would consider appropriate not window-cleaning and cleaning industry. In the date of the Barber judgment but that of the words of the Barber judgment, it must the judgment to be given in the Ten Oever therefore be assumed that affiliation to the case, since only in that case is the Court scheme derives of necessity from the asked to rule on this issue. employment relationship with a given employer and that the scheme, even though recognized and made compulsory by the public authorities, is governed by its own rules. 95 Concretely, the view I have taken means that, contrary to what the United Kingdom in particular argues, Mr Ten Oever is indeed entitled to the widower's pension which he claims since as a person claiming under a 51. It follows that a widower's pension, such worker he took action in good time to safe- as that concerned in the Ten Oever case, falls guard his rights, namely by initiating legal within the scope of Article 119 of the Treaty. proceedings on 8 October 1990 before the Although I think that, strictly speaking, it Kantonrechter at Utrecht. was possible, even before the judgment in Barber and particularly after the judgment in Bilka, to come to this conclusion on the basis of the Court's case-law, I agree with The question whether Article 119 may be the Netherlands and German Governments relied upon by the spouse of a deceased and the United Kingdom that the Court's worker judgment must be limited in time on this point, too. Once again, given the derogation provided for in Article 9(b) of Directive 86/378 (see above, paragraph 46), the Mem- ber States and the parties concerned could assume that discrimination in occupational 52. In the Coloroll case (Question 1), and to pension schemes as regards the granting of some extent in the Ten Oever case as well, widowers' pensions was still permissible the question arises as to whether, apart from under Community law. the worker himself or herself, persons dependent on the worker, in particular the widow or widower of the worker, may also rely on the direct effect of Article 119 of the EEC Treaty with regard to claims to benefits under a pension scheme. I accordingly consider that, as regards the application of Article 119 to widowers' pen- sions, the Court must again limit its judg- ment in time in accordance with the 96 Indeed, a similar approach is proposed by the Commission in us proposal of 27 October 1987 for a Council directive mentioned above, wherein Article 13(2) provides that with respect to the application of the principle of equal treatment to benefits of the surviving spouse, the directive may not be relied upon in respect of applications submitted before the 95 Barber, paragraph 26 date of its implementation

Although the Court admitted that the deter- mination of an individual's standing and legal interest in bringing proceedings was a matter of national law, it referred to its set- tled case-law according to which Commu- 53. I cannot accept that last view. I have nity law requires that national legislation already reached the conclusion (in paragraph should ensure effective judicial protection 51) that a widower's pension of the type in and that the application of national legisla- question in the Ten Oever case falls within tion must not render virtually impossible the the scope of Article 119 of the EEC Treaty. exercise of the rights conferred by Commu- As far as such a pension scheme is con- nity law. 98 The Court's actual answer to the cerned, but also with regard to other occupa- question raised was that an individual may tional pensions, the question whether Article rely on Directive 79/7 before a national 119 may be relied upon by the worker's sur- court if he bears the effects of a discrimina- viving spouse usually arises in practice where tory national provision regarding his spouse the worker has died and the surviving spouse who is not a party to the proceedings, subsequently claims the benefits from the pension scheme of which the worker was a member. If, as a matter of law, this spouse could not rely on Article 119, then in such a 97 — Judgment of 11 July 1991 in Joined Cases C-87/90 to situation the principle of equal pay would C-89/90 Verholen and Others v Sodale Verzekeringsbank [1991] ECR 1-3757, paragraph 23. lose its useful effect. 98 — Verholen, paragraph 24.

The question whether Article 119 may be 56. Moreover, I find support for this view in relied upon against the trustees of an occu- both the wording of Article 119 and the pational pension scheme case-law of the Court. As far as the wording of Article 119 is concerned, the Commission rightly points out that 'pay' includes all con- sideration which the worker receives directly 55. The question submitted to the Court in or indirectly from the employer in respect of the Coloroll case (Question 1) is a different his employment. The Court accordingly held one: it is whether employees or those claim- in Barber that the fact that contracted-out ing under them may, in relation to claims to occupational pensions are not paid to the pension benefits, also rely on the direct effect employee by the employer himself but by of Article 119 against a person other than the the trustees of a pension scheme is irrelevant employer, namely the trustees of an occupa- for the purposes of Article 119: tional pension scheme. I will first consider the main issue itself, as to whether Article 119 may be relied upon, before going on to deal with the other problems raised in the High Court's questions.

'That interpretation of Article 119 is not Most of the defendants in the main proceed- affected by the fact that the private occupa- ings in the Coloroll case (all but Judith tional scheme in question has been set up in Broughton and Coloroll Group pic), the the form of a trust and is administered by United Kingdom and the Commission take trustees who are technically independent of the view that Article 119 may be relied upon the employer, since Article 119 also applies against the trustees of a pension scheme. I to consideration received indirectly from the can only endorse their arguments: the employer.' 100

From that case-law it follows that the Court does not limit the direct effect of Article 119 to vertical situations (State-private indi- viduals) and contractual conditions agreed collectively or individually between the employer and employees but extends it to all contracts between individuals. These undoubtedly include contractual agreements Nor do I consider that this view is contra- which an employer has made with persons, dicted by Article 6(2) of Directive 86/378, as including trustees, who are engaged in some the Netherlands Government argues. That way or other to administer the pension provision requires the management bodies of rights accruing to an employee from the supplementary or contracted-out occupa- employment relationship with that employer. tional pension schemes to take account of the principle of equal treatment where the granting of benefits is left to their discretion. I see in that provision merely a confirmation of the Community legislature's intention to 57. In my view, this carry-over effect which give effect to the principle of equal treatment Article 119 has with regard to the trustees of an occupational pension scheme cannot be resisted by arguing for example, as Judith 102 — See the judgment of 15 June 1978 in Case 149/77 Defrenne v Sabena (Defrenne (No 3» [1978] ECR 1365, paragraph 27; judgment of 20 March 1984 in Joined Cases 75/82 and 117/82 Razzouk and Reydoun v Commission [1984] ECR 1509, paragraph 16. It is precisely the fundamental nature 101 — Judgment of 27 June 1990 in Case C-33/89 Kowalska v of the principle of equal treatment in the Community legal Freie und Hansestadt Hamburg [1990] ECR I -2591, para- order that has repeatedly led the Court to interprete nar- graph 12, containing a reference to the judgment in rowly the derogations from it permitted by the Commu- Defrenne (No 2), paragraph 39; on the matter of collective nity legislature: see the judgments in Case 151/84 Roberts labour agreements, sec also the judgment of 7 February [1986] ECR 703, paragraph 35, Case 152/84 Marshall 1991 in Case C-184/89 Nimz v Freie und Hansestadt [1986] ECR 723, paragraph 54, and Case 262/84 Beets- Hamburg [1991] ECR I-297, paragraph 17. Proper [1986] ECR 773, paragraph 38.

as effectively as possible and certainly not effect will be almost entirely neutralized by any argument a contrario according to which the limitations concerning the temporal the worker or the person (or persons) claim- effect of the Court's rulings which I have ing under him could not, as regards pay dis- proposed, and in particular of the Barber crimination directly caught by Article 119, judgment itself (paragraph 21, above) as well rely on Article 119 against trustees as well. as of the judgments to be given in the Neath In any case, that directive cannot detract and Coloroll cases in which the Court is from the effect of Article 119 (see paragraph asked to rule on the question of actuarial cal- 31 above). culation factors (paragraph 43, above). The periods of service in relation to which a worker is entitled to rely on the principle of equal treatment will then be clear for all par- ties, so that in principle no more problems should arise where transfer payments are made from one pension scheme to another. 58. For the sake of clarity, I will deal with another point raised by the Netherlands Government. This Government points out the complications which, in its view, could be produced by an extension of the horizon- tal direct effect of Article 119 where a worker is a member of different occupational pension schemes in succession — usually, but not necessarily, as a result of his chang- ing his employer. This point is also touched upon by the High Court in Question 5(2) of its order for reference. In such circum- 59. The effects of Article 119 in relation to stances, it happens quite frequently (consider the action of trustees. In the event that Arti- Mr Neath's option between a deferred pen- cle 119 may also be relied upon against the sion and a transfer payment, paragraph trustees of a pension scheme, the High Court 8 above) that the most recent pension poses a number of sub-questions about the scheme, in exchange for a transfer payment, way in which the trustees or the employer has taken over the previous scheme's obliga- should act in order to give effect to the prin- tion to pay benefits. In such a case, can the ciple of equal treatment (Question l(2)(i), (ii) last pension scheme be confronted with the and (iii)). 103 Essentially, there are two ques- claims of a worker which are based on tions to be answered: they concern (i) the unequal treatment to which that worker was effect of Community law on the way in subjected under a previous pension scheme which trustees or employers are to exercise with a different employer? their powers, and (ii) the financial shaping of the equal treatment principle, in particular whether this must be put into effect by increasing the benefits granted to the disad- vantaged sex or whether it may also be put into effect by reducing the benefits granted to workers of the advantaged sex. Like the interveners who advocate the sec- ond interpretation of the temporal effect of Barber, I consider that this feared 'domino' 103 For the exact wording, see the Report for the Hearing.

On the first point, concerning the effect of 60. The second question, concerning the Community law on the way in which trust- financial result to be achieved as far as ees and employers are to exercise their pow- employees are concerned, appears to me to ers, I can be brief. It is clear that these per- be more delicate. A number of defendants in sons are bound to do everything within their the main proceedings in Coloroll (James powers to ensure that benefits payable to Russell, Gerald Parker, Robert Sharp and workers or those claiming under them are in Joan Fuller) rightly refer in this regard to the conformity with the principle of equal treat- judgment in Defrenne (No 2). In that case, ment, having due regard for the limitations the Court, having regard to the social aim on the temporal effect of that principle pro- underlying Article 119, as reflected in Article posed above. With this in view, they can be 117, which refers to the need to promote obliged to cooperate with one another, such improved working conditions and an cooperation being, according to the High improved standard of living for workers, Court's order for reference, generally stated that 'the objection that the terms of required in order to make amendments to this article may be observed in other ways the trust deed and to the rules of the pension than by raising the lowest salaries may be set scheme. It goes without saying that this aside'. 106 However, that ground of judgment leaves a major supervisory task to be per- must be read in its context: the main pro- formed by the national court, which must ceedings concerned a claim for compensation ensure that Community law takes full effect made by Gabrielle Defrenne against her and that the legal protection which it former employer, Sabena, on account of pay requires is available, 104 and to that end — discrimination in relation to service which making full use of the discretion conferred had taken place in the previous decade. The upon it by its own national law — must Court's statement may accordingly be interpret and apply national (legislative and, regarded as only having in view discrimi- a fortiori, contractual or constitutive) provi- nation occurring in the past. The fact that, in sions in accordance with Community law or, relation to such discrimination and pending a when this does not appear to be possible, if measure eliminating it, an increase of the necessary set aside on its own authority the lowest salaries is required has been con- legislative, contractual or constitutive provi- firmed by more recent case-law: particularly sions which conflict with it. 105 since its judgment in Razzouk and Bey- doun 107 the Court has indicated that 'the only valid frame of reference' for an immedi- ate implementation of the principle of equal treatment, so long as a scheme is still not

adapted to that principle, is to be found in and the detailed arrangements for their the pension scheme rules in force. This implementation'. 109 means that, pending new adjusted rules, the rule applicable under the existing scheme provisions to members of the more favoured sex must also be applied to members of the less favoured sex. 108 As regards the past, or, 61. The relation between the liability of the more precisely, as regards pension benefits pension scheme and that of the employer. In which relate to periods of service performed the event that Article 119 may be relied upon in the past, the principle of equal treatment against both the employer and the trustees of therefore requires that the benefits of the a pension fund, the High Court poses a disadvantaged sex be brought up to the level number of detailed questions regarding the of those of the advantaged sex. relation between the liability of the pension fund and that of the employer (Question 1(3)), in particular where the funds of the pension scheme or of the employer are insuf- ficient (Question 1(4)).

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which apply to similar national claims or be the scope of Article 119 of the Treaty. 1 1 1The of such a nature as to make it virtually Court came to this decision on the basis of impossible, or extremely difficult, to exercise an analysis of the pension schemes in ques- rights conferred by Community law. 110 tion, from which it ascertained inter alia that they were 'wholly financed by the employer or by both the employer and the workers without any contribution being made by the public authorities in any circumstances'. 112 Article 119 and the different methods of This shows that, for the purpose of classify- funding occupational pension schemes ing benefits as 'advantages' covered by Arti- cle 119, the Court makes no distinction between benefits paid under an occupational pension scheme depending on the method of funding such a scheme, whether exclusively 62. By its Question 5(1) the High Court also on the basis of employers' contributions or seeks to ascertain whether, in the case of on the basis of both employers' and employ- pension schemes which are not funded ees' contributions. As a matter of fact, that exclusively by employers' contributions but not only benefits paid out of employers' are also funded by compulsory and/or addi- contributions are covered by Article tional voluntary employees' contributions, 119 could already be deduced from the judg- Article 119 only applies to the benefits pay- ment in Worringham, in which the Court able out of those assets of the fund which are held that an employee's contribution to a attributable to employers' contributions or contracted-out pension scheme (under which also to benefits attributable to the aforesaid only men had to make contributions) which employees' contributions. was paid by the employer to the pension fund on behalf of the employee constitutes pay within the meaning of Article 119. 113

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TEN OEVER

apply the principle of equal treatment in full, Applicability of Article 119 to pension whereas it would only partly apply — schemes having members of only one sex namely not as far as employees' contribu- tions are concerned — to schemes whose funding also depends on employees' contri- butions. This would undoubtedly lead to a large number of devices designed to circum- vent Article 119 and therefore to new forms of discrimination.

64. By its sixth and last question the High Court seeks to ascertain whether Article 119 applies to schemes which have at all times had members of only one sex. More specifically, it asks whether a member of such a scheme is entitled to additional bene- fits to which that member would have been entitled as a result of Article 119 had the scheme had a member or members of the other sex.

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OPINION OF MR VAN GERVEN — CASE C-109/91

within the same establishment or service'. 114 Matters would be different, of course, if an In other words, if only workers of one sex employer decided to propose separate pen- work in an undertaking or division of an sion schemes to his employees depending on undertaking, those workers may not rely on their sex. In that event, which, as the United Article 119 with a view to the equalization of Kingdom rightly points out, falls outside the their pay and other consideration to the level ambit of the question asked by the High of the pay and consideration which a hypo- Court, it seems to me that Article thetical worker of the other sex would 119 requires an examination to establish receive: in such a case, the criterion of equal, whether the pension benefits granted to male or at least comparable, work by workers of and female employees — this time under dif- the other sex, which is essential for the appli- ferent pension schemes — meet the 'equal cation of Article 119, cannot be applied. pay' and 'equal work' criteria laid down in Article 119.

Conclusion

66. In view of the foregoing considerations, I propose that the C o u r t should answer the questions arising in these cases as follows:

In Cases C-109/91, C-110/91, C-152/91 and C-200/91:

However, Article 119 may not be relied upon in this respect in order to claim enti- tlement to such a widower's pension in so far as this pension corresponds to periods of employment served before the date of the judgment of the Court in this case, except in the case of workers or those claiming under them who have before that date initiated legal proceedings or raised an equivalent claim under the applicable national law.

In Cases C-110/91 and C-200/91:

The prohibition resulting from Article 119 of the EEC Treaty with regard to the setting of a pensionable age varying according to sex, as well as the temporal limi- tation of that rule, as prescribed in the judgment of 17 May 1990 in Case C-262/88 Barber, are not only applicable to contracted-out pension schemes but also to all other forms of occupational pension schemes.

In Cases C-152/91 and C-200/91:

Article 119 of the Treaty precludes account from being taken, in an occupational pension scheme, of actuarial calculation factors varying according to sex, at least in so far as this leads to men and women paying different contributions or receiving different benefits. The direct effect of Article 119 may not, however, be relied upon in this regard in relation to pension entitlements which correspond to periods of employment served before the date of the judgment in these cases, except in the case of workers or those claiming under them who have before that date initiated legal proceedings or raised an equivalent claim under the applicable national law.

In Case C-200/91:

(5) As Community law stands at present, the question as to the relation between the liability of a pension scheme and that of the employer with regard to breaches of Article 119 of the EEC Treaty, particularly where the funds of one of those parties are insufficient, can be dealt with only at the national level. However, Community law requires the national rules on liability which apply in relation to breaches of Article 119 to be no less favourable than those which apply to similar national claims and that they must not be of such a nature as to make the exercise of rights conferred by Community law virtually impos- sible or extremely difficult.

(6) It is immaterial for the purposes of Article 119 of the Treaty whether an occu- pational pension scheme is funded exclusively on the basis of employers' con- tributions or also on the basis of compulsory or voluntary employees' contri- butions.

(7) Where only employees of one sex work within an undertaking or division of an undertaking and those employees are members of an occupational pension scheme having members only of that sex, those employees may not rely on Article 119 of the EEC Treaty with a view to the equalization of their pen- sions with that which an hypothetical worker of the other sex would receive.

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