C-333/97

OPINION OF MR RUIZ-JARABO — CASE C-333/97

OPINION OF ADVOCATE GENERAL RUIZ-JARABO C O L O M E R delivered on 4 March 1999 *

1. The Arbeitsgericht (Labour Court), Gel- Mrs Lewen seeks payment of a Christmas senkirchen (Germany), has referred to the bonus for 1996 in the amount of DM 5 Court under Article 177 of the EC Treaty 500, which the defendant refuses to pay her three questions on the interpretation of apparently on the grounds that she took Article 119 of the Treaty, Article 11(2) of maternity leave during that year and, at the Directive 92/85/EEC 1(hereinafter 'Direc- time when the bonus was paid, she was on tive 92/85') and Clause 2(6) of the frame- parenting leave in order to take care of her work agreement on parental leave, as daughter. implemented by Directive 96/34/EC 2 (here- inafter 'Directive 96/34'), the latter not yet having been transposed into national law at the time when the order for reference was made.

3. From 1 October 1990 to 6 September 1996, Mrs Lewen worked as a dental technician for the defendant, who also employs men, at a monthly salary of I — The facts in the main proceedings DM 5 500 before tax for a 39.25 hours.

5. On the basis of that declaration, the plaintiff's employer, without having given prior notice in 1995, refused to pay the full 4. The national court states in its order for bonus for 1996 both to her and to two reference that, on 1 December in preceding other female employees who were on years, the defendant had awarded all his parenting leave in 1996 (their details are employees a Christmas bonus amounting to not given in the order for reference and one month's salary. To be eligible for the they are not parties to the main proceed- bonus, employees were required to sign a ings). declaration indicating their consent to the terms on which the bonus would be paid to them. That declaration stated that the bonus was a single, voluntary, social pay- ment, revocable at any time and restricted to Christmas each year, the payment of which did not create any future right as II — The questions referred regards the reason for, or the amount, method of payment or composition of, the bonus. The bonus was awarded each year on the express condition that the worker 6. With a view to resolving this dispute, the did not, before 1 July of the following year, Arbeitsgericht, Gelsenkirchen, has referred terminate his employment relationship with the following questions to the Court for a the undertaking or give the undertaking preliminary ruling: any grounds to terminate the employment relationship without notice. In either of those cases, in the same way as if there had been a breach of the contract of employ- ment, the worker would be required to '(1) Is a Christmas bonus "pay" within the repay the bonus in full on leaving the firm. meaning of Article 119 of the EC It does not seem that the declaration made Treaty or "payment" within the mean- it clear that the bonus would also have to ing of Article ll(2)(b) of Directive be repaid if the worker's contract of 92/85/EEC for work performed in the year in which the bonus is awarded even where it is given by the employer 3 — This German allowance has been held by the Court of Justice to be a 'family allowance' within the meaning of mainly or exclusively as an incentive Article 4(l)(h) of Council Regulation (EEC) N o 1408/71 of 14 Tune 1971 (OJ English Special Edition 1971 (II), p. 416), for future work and/or loyalty to the and a 'social advantage' within the meaning of Article 7(2) firm. Is it to be regarded as in the of Council Regulation (EEC) N o 1612/68 of 15 October 1968 (OJ, English Special Edition 1968 (II), p. 475). See nature of pay or payment at least Joined Cases C-245/94 and C-312/94 Hoever and Zachow v Land Nordrhein-Westfalen [1996] ECR I-4895, and Case where the employer has not announced C-85/96 Martinez Sala [1996] ECR I-2691. prior to the beginning of the year of the

'For the purposes of this Article, "pay" Is there a breach of Article 119 of the means the ordinary basic or minimum wage EC Treaty, Article ll(2)(b) of Direc­ or salary and any other consideration, tive 92/85/EEC and Clause 2(6) of the whether in cash or in kind, which the [Annex to] Directive 96/34/EC if, when worker receives, directly or indirectly, in awarding a Christmas bonus to a respect of his employment from his women who is on parenting leave, an employer.

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Equal pay without discrimination based on (b) maintenance of a payment... and/ sex means: or entitlement to an adequate allowance ... .'

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Directive 96/34 was amended and extended declaration of intent by the employer, even to the United Kingdom by Directive 97/75/ though he is not required to pay it either by EC, 5 which gives the United Kingdom until law or by the contract of employment, is 15 December 1999 to adapt its domestic irrelevant. What matters is that it is a law accordingly. pecuniary allowance paid in connection with the employment relationship.

IV — Observations submitted to the Court of Justice

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Further- to produce good work in the months to more, taking into account the fact that it is follow, and any employees who were at a voluntary payment by the employer, Mrs that time engaged in military service or Lewen was not entitled to the bonus when were performing alternative social duties she started her parenting leave and she would have lost the bonus in the same way cannot claim that it was a right which she as employees who had terminated their was in the process of acquiring. It further contract of employment. Secondly, because, states that, in the absence of any provisions when paying the bonus in previous years, laid down by law or arising from an he clearly stated in writing, in the declara- agreement or even a contract, the employer tion which employees were required to alone is entitled to decide whether, and on sign, that it was a special, voluntary, social what terms, to pay the bonus, no court payment, revocable at any time and having jurisdiction to consider whether restricted to Christmas of the year in there is any justification for paying the

13. The German Government considers work and loyalty to the firm. To the that the bonus at issue is 'pay' within the question whether the Christmas bonus is meaning of Article 119 of the Treaty and related to work performed during a given that the fact that the employer left it until period which includes the period of mater- December 1996 before deciding to pay the nity leave, it offers two answers: if the 1996 bonus and on what terms is immaterial. bonus was paid in respect of work per-

It maintains that the fact that the period in which a female employee is on parenting leave is not taken into account as a period of active employment when it comes to It further states that, in so far as the bonus calculating the bonus, with the result that does not appear to have been intended to she is paid less, is not contrary to Arti- reward work performed prior to the start of cle 119 of the Treaty. The same is not true, parenting leave, the view must be taken however, of a refusal to pay the bonus in that, at that time, there were no acquired full on the ground that a female employee is rights or rights in the process of being on parenting leave at the time when the acquired. There could not therefore be any bonus is paid, which might constitute rights to preserve or maintain under Clause discrimination prohibited by Article 119 if 2(6) of the framework agreement on par- the work she has already performed or will ental leave. perform in the period to which the bonus

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relates is not taken into account. Since a Treaty, and then whether it constitutes considerably greater percentage of women 'payment' within the meaning of Arti- than men take parenting leave in order to cle ll(2)(b) of Directive 92/85. care for children, there is indirect discrimi- nation.

18. The principle that men and women should receive equal pay for equal work, V — Examination of the questions referred contained in Article 119 of the Treaty, forms part of the foundations of the Community. 6That article gives a broad definition of 'pay' as meaning '... the ordinary basic or minimum wage or salary and any other consideration, whether in A. The first question cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer'.

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19. By way of example, the following are legislation or collective agreements to a instances — not exhaustively listed — of woman on maternity leave. what the Court has, over the years, held to fall within the concept of pay: travel facilities granted by a railway undertaking to its employees on their retirement and 9 extended to the members of their families; a travel concession granted by an employer, on the basis of the contract of employment, 20. The Court of Justice has also held that, to the employee's spouse or the person of since Article 119 of the Treaty is manda­ the opposite sex with whom the employee tory in nature, the prohibition of discrimi­ has a stable relationship outside mar­ nation between men and women which it riage; 10 temporary assistance granted by lays down applies not only to the action of an employer to a worker on account of the public authorities, but also extends to termination of the employment relationship all agreements which are intended to reg­ and paid on termination with a view to ulate paid labour collectively, as well as enabling him to adjust to his new circum­ contracts between individuals. 17 stances; 11 compensation paid to staff council members in the form of paid leave or overtime pay for attending training courses imparting the knowledge necessary for working on staff councils, even where, during such courses, they are not perform­ ing work provided for in their contracts of 21. Is the definition of pay laid down by employment; 12 compensation granted to a the Treaty, as interpreted and supplemented worker in connection with his redun­ by the case-law of the Court, to be regarded dancy; 1 3 the payment of wages by an as including a bonus which an employer employer to an employee in the event of awards to a worker at Christmas mainly or illness, 14 even where a woman's incapacity exclusively as an incentive for future work for work is the result of pregnancy; 15 and and/or loyalty to the firm? the benefit paid by an employer under

In the case of ex gratia payments by the 25. In my opinion, the answer here must be employer, the Court has held that Arti- in the negative. Article 11(2)(b) provides cle 119 of the Treaty applies also to that female employees must continue to advantages which an employer grants to receive a payment and/or be entitled to an workers although he is not required to do adequate allowance for the duration of so by the contract. 18 their maternity leave, which is laid down in Article 8 of the same directive as being a continuous period of at least fourteen weeks at least two of which are compul- sory. In Gillespie, 19 the Court held that, since the benefit paid by an employer under legislation or collective agreements to a woman on maternity leave was based on 23. As Community law stands at present, the employment relationship, it constituted however, it is not possible to determine pay within the meaning of Article 119 of whether the bonus constitutes pay for the the Treaty. services provided during the year in which it was awarded or whether it is intended, as the plaintiff in the main proceedings appears to claim, to act as an incentive for future work and loyalty to the firm. These questions will have to be resolved in accordance with national law. In Boyle, 20 the Court, commenting speci- fically on the term 'payment' used in Article 119 of Directive 92/85, held that, like the definition of 'pay' in Article 119 of the Treaty, it encompassed all consideration paid directly or indirectly by the employer to the worker during maternity leave in respect of her employment relationship, In any event, the employer's reasons for and that the term 'allowance' to which paying the bonus cannot alter the fact that that provision also refers includes all it is deemed to be pay within the meaning income received by the worker during her of Article 119 of the Treaty, and it must maternity leave which is not paid to her therefore be awarded to men and women directly by her employer pursuant to the on the same basis without discrimination employment relationship. based on sex.

as that of 'pay' within the meaning of The conditions which an employer lays Article 119 of the Treaty, is confined to the down in respect of membership of a remuneration received by the worker dur company pension scheme by his employees ing her maternity leave which is paid by her fall within the scope of Article 119 of the employer. Treaty, 2 1and pensions paid under private occupational pension schemes 2 2 fall within the concept of pay since they constitute consideration paid by the employer to the In view of the fact that the bonus at issue is worker in respect of the employment rela not intended to guarantee workers a certain tionship. This has not, however, prevented level of income for the period of their the Court from classifying the accrual of maternity leave, it cannot, in my opinion, pension rights in the context of an occupa be regarded as a payment which they must tional pension scheme wholly financed by continue to receive throughout that period. the employer as one of the rights connected with the employment contracts of the workers for the purposes of Arti cle ll(2)(a) of Directive 92/85, 2 3which

27. In addition to the maintenance of a Article 119 of the Treaty, with the result payment and/or entitlement to an appro that it must be paid to men and women on priate allowance, Article ll(2)(b) requires the same basis without discrimination rights connected with the employment based on sex, and furthermore that, for contract also to be guaranteed during maternity leave. As I see it, the right to receive the bonus at issue is one of those 21 — Case 170/84 Bilka ν Weber von Hartz [1986] ECR 1607.

28. Classification of the bonus at issue as and Stichtung Bedrijfspensioenfonds voor de Detailhandel [1994] ECR I-4583; and Case C-435/93 Dietz ν Stichting 'pay' within the meaning of Article 119 Thuiszorg Rotterdam [1996] ECR 1-5223. and as a right connected with the employ 22 — See, in addition to Barber, cited in footnote 8 above, and Vroege, Fisscher and Dietz, cited in footnote 21 above, ment contract within the meaning of Arti Case C-109/91 Ten Oever ν Stichting Bedrijfspensioen fonds voor het Glazenwassers-en Schoonmaakbedrijf cle 11 (2)(a) of Directive 92/85, and not as [1993] ECR 1-4879; Case C-110/91 Moroni ν Collo 'payment' within the meaning of Arti [1993] ECR 1-6591; Case C-200/91 Colorali Pension Trustees ν Russell and Others [1994] ECR I-4389; Case cle ll(2)(b), is perfectly compatible, and C-7/93 Bestuur van het Algemeen Burgerlijk Pensioen fonds ν GA Beune [1994] ECR 1-4471; and Case C-147/95 indeed consistent, with the case-law of the DEI ν Evrenopoulos [1997] ECR I-2057. Court of Justice. 23 — Boyle, cited in footnote 20 above, paragraph 82.

30. It follows from this line of reasoning that both the aim pursued by the employer in paying the bonus and the fact that he failed to give sufficient notice of his inten- 32. Article 119 of the Treaty establishes the tion, the following Christmas, to fix the principle that men and women should amount of the bonus exclusively on the receive equal pay for equal work and, as basis of future performance and not to pay has been shown in the answer to the first the bonus to workers whose employment question, the bonus at issue falls within the relationship was in abeyance at the time of concept of 'pay' within the meaning of that payment or thereafter are insignificant in article. It must therefore be awarded to that regard. Those are in any event issues of men and women on the same basis without fact which it is for the national court to discrimination based on sex. appraise on the basis of the guidelines given by the Court of Justice, since the bonus in question is not governed by law or by a collective agreement, it is not prescribed by the contract of employment, and the national courts disagree as to its purpose and the terms on which it is awarded. 33. Article ll(2)(a) of Directive 92/85 pro- vides that women must continue to enjoy the rights connected with their employment contract during the maternity leave provi- ded for in Article 8. As I said in my answer to the first question, it is my view that the bonus at issue is one of those rights.

B. The second question

31. By its second question, the national 34. The national court also seeks from the court seeks to ascertain whether there is a Court an interpretation of Clause 2(6) of breach of one or more of the provisions of the framework agreement on parental Community law which it cites, namely leave, as implemented by Directive 96/34, Article 119 of the Treaty, Article 11(2) of which had not yet been transposed into Directive 92/85 and Clause 2(6) of the German law at the time when the order for

reference was made, Member States having 35. In the light of Article 119 of the Treaty, been given until 3 June 1998 to effect such and Article ll(2)(a) of Directive 92/85, transposition. I note, however, that the may an employer wholly exclude from German legislature is a few years ahead of receipt of the bonus at issue a woman the Community legislature in that it has who is on parenting leave at the time when already enacted legislation allowing work- it is paid, namely 1 December, without ers to take parenting leave on grounds of taking into account the period she has the birth of a child which can last until the worked during the year in which the bonus child is three years old. There is therefore is awarded or the period for the protection no reason why the Court should not of mothers which she has completed ? provide the national court required to give judgment in the main proceedings with some guidelines which may be of assistance to it in interpreting national law in accor- dance with the substance and the purpose of the framework agreement. 36. The answer to this question will depend entirely on how the right was acquired by the workers in question, and I have already pointed out that the Court of Justice does not have the factual information necessary to enable it to give a specific answer since the bonus at issue is not governed by law or Clause 2(6) of the framework agreement on by a collective agreement and it is not even parental leave, as implemented by Directive referred to in the individual contract of 96/34, provides that rights acquired or in employment. Furthermore, there is dis- the process of being acquired by the worker agreement between the parties as to whe- on the date on which parental leave starts ther it is intended to reward work and are to be maintained as they stand until the loyalty to the firm over the past year, end of parental leave. whether it is meant as an incentive for future work and loyalty to the firm in a period which appears to extend until 1 July of the following year, or whether it serves a combination of both purposes in propor- tions which are likewise unspecified. In view of the wording of Clause 2(6) and the fact that, in the second question, the national court is concerned to ascertain the consequences of calculating the amount of the bonus without taking into account either the period of active employment or 37. That being the case, it will be for the the period for the protection of mothers, national court, once it has ascertained how while in its third question, it addresses workers acquire the right to the Christmas directly the issue of calculating the amount bonus, to determine whether it is contrary of the bonus without taking into account to Community law for an employer to the periods of parenting leave, I shall exclude a woman who is on parenting leave consider how that provision should be from payment of the bonus without taking interpreted when answering the third ques- into account the work performed during tion. the year in which the bonus was awarded

or a period of protection for mothers. In so that is the employer's aim in awarding the doing it should have regard to the follow- bonus, the national court may take into ing guidelines: account whether a worker whose employ- ment relationship starts on 1 December will receive the full bonus, only part of it or nothing at all, and whether a worker whose parenting leave was due to start at — If the reference period is that period of the beginning of January would receive all the year which has already elapsed and it is or only part of the bonus in view of the fact shown that the bonus is intended exclu- that suspension of the contract of employ- sively to reward work and loyalty to the ment was not stipulated, in the document firm during that period, the right to the which employees were required to sign on bonus will be acquired gradually over the receiving the bonus in previous years, as year and it will not be possible to penalise a one of the grounds on which the worker person such as Mrs Lewen, who has would be required to repay the bonus. worked for part of that year, by excluding her entirely from receipt of the bonus, unless it has been established that, in the event of termination or suspension of the contract of employment before 1 Decem- — There is a third scenario, which partly ber, the worker loses any right to receive coincides with the previous two, and the proportion which would have accrued according to which the reference period to him up to the time of the termination or can be assumed to run from July one year the start of the suspension. When deciding to June the following year.

When — If the reference period is the following deciding whether that is the employer's year, and it is shown that the bonus is aim in awarding the bonus, the national intended exclusively as an incentive for court will need to take into account factors work and loyalty to the firm during that such as whether a worker whose employ- period, a worker who is not going to be ment relationship began in January and actively employed during the reference another whose employment relationship period will not be entitled to receive the began after July but before December

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42. Leaving aside cases where the reference employment on 1 December, including period has included periods of active those whose contract of employment is in employment and maternity leave, which I abeyance, that is to say men who are on have already dealt with, I take the view that parenting leave, discharging military obli- excluding workers who are on parenting gations or on extended leave, and women leave from receipt of the Christmas bonus who are on parenting leave or extended is not necessarily discriminatory. leave. The condition therefore applies to male and female workers in the same way and cannot be regarded as constituting discrimination directly based on sex. 25

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that such a clause applies more frequently court which is to give judgment in the main to women results from the exercise of the proceedings to determine, in the light of the right to unpaid supplementary maternity conditions under which workers acquire leave, which constitutes a special advantage the right to receive the Christmas bonus, available only to women, and cannot and taking into account the guidelines in amount to discriminatory treatment of the above reasoning, whether there is a women. breach of Article 119 of the Treaty and Article ll(2)(a) of Directive 92/85 if an employer wholly excludes from receipt of the bonus at issue a female employee who worked until 15 May 1996, then comple- ted a period for the protection of mothers 46. In this case, it may well be that a higher lasting until 6 September 1996 and imme- percentage of women than men take par- diately thereafter began a period of parent- enting leave in order to take care of a child ing leave which is expected to last until in the course of their career. Accordingly, 12 June 1999, on the ground that she was the exclusion from receipt of the Christmas on parenting leave at the time when the bonus of workers whose contract of Christmas bonus was paid. employment is in abeyance will, in fact, apply to substantially more women than men. However, the fact that it applies more frequently to women will result from the exercise of the right to parenting leave, which is not a working condition but a special advantage available to workers only on grounds of recent paternity or mater- nity. C. The third question

49. I pointed out when dealing with the loyalty to the firm during that period, second question that the almost complete without its having been established that, lack of detailed information as to how in the event of termination or suspension of workers acquire the right to the Christmas the contract of employment prior to bonus made it impossible for; the Court to 1 December, a worker loses all rights to give a definite ruling on that question and, receive the proportion of the bonus which accordingly, the answer I proposed was would have accrued to him until the time of neither in the affirmative nor in the nega- the termination or the start of the suspen- tive. The same is true of the third question. sion, the ruling will have to be, first, that I am once again forced to give some Article ll(2)(b) of Directive 92/85 pre- guidelines for the national court to take cludes an employer, when calculating the into account when giving judgment on the amount of the Christmas bonus, from substance of the case. taking into account the period for the protection of mothers in order to impose a pro rata reduction.

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following year and that the bonus is year to June the following year, and that the intended exclusively to give an incentive aim of the bonus is partly to reward work for work and loyalty to the firm in the year and loyalty to the firm during that period commencing on the day when the bonus is of the year which has already elapsed at the paid, then there is no breach of Article 119 time of payment, and partly to give an of the Treaty, Article ll(2)(a) of Directive incentive for work and loyalty to the firm 92/85 or Clause 2(6) of the framework up to June the following year, it must find agreement on parental leave, as implemen- that there is a breach of Article ll(2)(a) of ted by Directive 96/34, if a female worker Directive 92/85 if an employer, when whose contract of employment is going to calculating the Christmas bonus, takes into be in abeyance throughout the reference account the period for the protection of period because she is on parenting leave is mothers completed by a female worker in excluded from the right to the bonus. order to impose a pro rata reduction. With regard to the periods of parenting leave, Community law as it stands at present does not protect the right of workers to have periods of active employment taken into 54. If, finally, the national court concludes account for the purpose of acquiring rights that the reference period runs from July one to a bonus of the kind described.

VI — Conclusion

55. In the light of the foregoing considerations, I suggest that the Court's answers to the questions referred by the Arbeitsgericht, Gelsenkirchen, should be as follows:

(3) It is for the national court which is to give judgment in the main proceedings to determine, in the light of the conditions under which the right to receive the bonus at issue is acquired, and taking into account the guidelines in points 52 to 54 of this Opinion, whether Article 119 of the Treaty, Article ll(2)(a) of Directive 92/85 and Clause 2(6) of the framework agreement on parental leave, as implemented by Council Directive 96/34/EC of 3 June 1996 on the framework agreement on parental leave concluded by UNICE, CEEP and the ETUC, preclude an employer, when calculating the bonus payable to a woman on parenting leave, from taking into account the period for the protection of mothers in order to impose a pro rata reduction. As it stands at present, Community law does not protect the right of workers to have periods of parenting leave taken into account as periods of active employment for the purpose of acquiring rights to a bonus of the kind described.

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