C-104/98

OPINION OF MR ALBER — CASE C-104/98

OPINION OF ADVOCATE GENERAL ALBER delivered on 16 September 1999 *

A — Introduction mentioned in Article 3 of the Directive, such as those paid in the event of invalidity.

1. The Oberster Gerichtshof (Supreme 3. The contested provision contained in Court), Austria, has made the present Paragraph 122c of the Bauern-Sozialversi- reference to the Court for a preliminary cherungsgesetz 3 (Farmers' Social Insurance ruling, which concerns the interpretation Law, hereinafter 'the BSVG') states that '[a] and application of Article 7 of Council male insured person is to be entitled to an Directive 79/7/EEC of 19 December 1978 early old-age pension on account of inca- on the progressive implementation of the pacity for work after completion of his principle of equal treatment for men and 57th year, and a female insured person after women in matters of social security,1 in completion of her 55th year, if he or she ...'. order to determine the compatibility with This provision repealed an otherwise iden- Community law of a statutory provision tical rule which provided that '[a] male or which establishes, as from 1 September female insured person is to be entitled to an 1996, different pensionable ages 2 for men early old-age pension on account of inca- and women in respect of a benefit described pacity for work after completion of his or as an 'early old-age pension on account of her 55th year, if he or she ...' incapacity for work'.

5. The referring court has reservations as to of incapacity for work'. 5Over the years, the contested provision's compatibility with the conditions for the grant of the benefit Directive 79/7. It considers it questionable were relaxed in order to remove the whether the Austrian provision falls under severest cases of hardship in the economic the derogation contained in Article 7(1)(a) sector concerned. Nevertheless, the nature of the Directive. The derogation allows of the benefit has not essentially changed. Member States to exclude from the scope The mere fact that 'old-age pension' has of the Directive 'the determination of been used in the title of the benefit since pensionable age for the purposes of grant- 1993 6 does not make it an old-age or ing old-age and retirement pensions and the retirement pension within the meaning of possible consequences thereof for other the Directive. benefits'. However, if the benefit in ques- tion were to be characterised as an 'inva- lidity' benefit 4within the meaning of the Directive, it would not be covered by the derogation and the unequal treatment in respect of entitlement to the benefit would thus be prohibited pursuant to the principle of equal treatment as set out in Article 4 of the Directive, which is directly applicable since 23 September 1984. 7. 7. A further doubt on the part of the referring court as to the incompatibility of the unequal treatment between men and women, introduced in 1996, arises from Article 7(2) as well as the overall purpose of the Directive from which it can be inferred that the derogation in Article 7(1) of the Directive may be maintained only for a specific transposition period. In accor- dance with the Court's case-law, the refer- ring court comes to the conclusion that amendments to discriminatory provisions 6. There are good reasons for categorising within the scope of the derogation laid the benefit at the level of Community law down in Article 7(1) are regarded as com- as an invalidity benefit within the meaning patible with the Directive only if they move of the Directive. According to the national in the direction of the removal of unequal court, the reduced capacity for work of the treatment. However, the national legisla- potential beneficiary is an indispensable tion at issue is a step in the opposite prerequisite for entitlement to the benefit. direction, since a discriminatory provision A historical analysis of the benefit's origins between men and women has been reinforces the impression that it constitutes adopted, where before there was none. an invalidity benefit within the meaning of Community law. The benefit was originally referred to simply as a 'pension on account 5 — See Paragraph 79(1) and Paragraph 70b of the Bauern- Pensionsversicherungsgesetz (Farmers' Pension Insurance Law, 'the PVG', in force since 1 January 1971). 6 — See the 18th amendment to the BSVG (in force since 1 January 1979), which entered into force on 1 July 1993 4 — See Article 3(1)(a) of the Directive. (BGBl. 1993/337).

I I . In respect of their assessment of the first question, the applicants rely to a great extent on the referring court's analysis. Since a reduced capacity to work is the primary prerequisite for the grant of the 9. The applicants, the Austrian and United benefit, it should be regarded as an inva- Kingdom Governments and the Commis- lidity benefit within the meaning of the sion have all taken part in the proceedings. Directive. It is thus not covered by the I shall return to their submissions within derogation in Article 7(1)(a) of the Direc- the framework of my legal analysis. tive. I - 3630

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12. As a preliminary, the Austrian Govern- be regarded as an early old-age pension for ment points out that the benefit in question which the minimum age for both sexes has is not, from a systematic point of view, a been set at 55 years. At the same lime as the special feature of farmers' social insurance, creation of the early old-age pension on but is also to be found in the same terms in account of reduced capacity for work, the the social insurance scheme for self- early old-age pension on the ground of employed persons in the commercial sector permanent incapacity for work was intro- (GSVG) as well as in the social insurance duced for farmers and traders. 9' scheme for employees (ASVG).

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16. Since the Austrian Government is ulti- linked to the different pensionable ages. mately of the opinion that the 'early old- Since the statutory amendment which gave age pension on account of incapacity for rise to the discrimination at issue was made work' constitutes an old-age pension within for financial reasons, it is difficult to see the meaning of Article 7(1)(a) of the Direc- how such an amendment could be necessa- tive, it is only in the alternative that it rily linked to the different pensionable ages. submits observations on the consequences of the pensionable age on other benefits, which might constitute a justification.

10 — Case C-328/91 Thomas and Others [1993] ECR I-1247; Case 9/91 Equal Opportunities Commission [1992] ECR I-4297; Case C-92/94 Graham and Others [1995] ECR 20. The legal categorisation of the benefit I-2521; Joined Cases C-377/96 to C-384/96 De Vriendt and Others [1998] ECR I-2105. at issue is ultimately an assessment of

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national law that is to be carried out by the 22. In order to be able to categorise a referring court. Nevertheless, such an benefit under one of the risks, one must assessment must take place within para- ascertain its characteristics. Such objective meters laid down by Community law, and criteria should also make it possible to it is the Court of Justice's task to specify draw a clear dividing line between the those parameters. different risks. In the case of an 'old-age benefit' the essential prerequisite of entitle- ment is the fact of having reached statutory retirement age. Where an 'invalidity bene- fit' is concerned, however, there must be a permanent incapacity for work on account 21. Article 3 of the Directive defines its of physical or psychological disabilities. In scope. Pursuant to Article 3(1)(a) thereof, the case of an 'unemployment benefit' it is the Directive it to apply to usually required, for example, that the beneficiary is not in an active employment relationship, but that he is nevertheless, in principle, ready to take up work again, which is manifested by the fact that he puts himself at the disposal of the employment authorities as someone looking for work. 11 'statutory schemes which provide protec- tion against the following risks:

deemed no longer fit for work by reason of more serious. 14 As the benefit to be old age. 12 categorised in the present case demon- strates, considerations of social and employment policy, such as easing the burden of a particular economic sector and the campaign against social inequal- ities, can also play a role in the conception of a social benefit, without casting doubt on the nature of the benefit itself. The 24. Nevertheless, such circumstances criterion of having attained a minimum age should not be permitted to stand in the also enables the circle of potential benefi- way of clear definitions. Even if the statu- ciaries to be defined objectively. Thus it tory retirement age is linked to incapacity should not be used as a constitutive element for work, whatever form it may take, that when categorising the benefit. involves a presumption which can take the form of a legal fiction. Maintaining the physical ability to work is quite possible despite having attained the statutory retire- ment age, which, in itself, does not cast doubt on the fact that the pensionable age has been attained. On the other hand, the objective attainment of a certain age is 26. The circumstances in which benefici- necessary and sufficient. 13 aries actually receive this benefit, as out- lined by the Austrian Government at the hearing, do not, as a rule, preclude such an approach. If in 1998 the share of early old- age pensions on account of incapacity for work in the farmers' social insurance scheme represented 50% of all the early old-age pensions granted, which, when 25. When it comes to the risk of invalidity, compared with all the pensions granted, the situation is fundamentally different. In represents a share of 39%, whereas the this regard a disability which impairs a share consisting of 'bone fide pensions on person's capacity for work is objectively account of incapacity for work' represents required. This is true of the benefit at issue only 15%, then this indisputably represents in the present case. The criterion of age a large share. However, it must not be may constitute a significant factor in forgotten that, in the context of the condi- respect of the risk to be insured. Viewed tions for granting the benefit, the criterion from the point of view of social policy, one of incapacity for work is linked to that of may take the view that reduced capacity for the protection of professional or trade work combined with old age is certainly activity, which results in the necessity of

29. In its analysis the Court established the following criteria in respect of the 'conse- 27. For the rest of my analysis I shall quences ... for other benefits' within the assume that the benefit in question is an meaning of Article 7(1)(a) of the Directive invalidity benefit within the meaning of which may justify unequal treatment. As Article 3 of Directive 79/7, so that it docs had already been established in Thomas, 17 not fall within the scope of the first it is limited to the forms of discrimination derogation in Article 7(1)(a) of the Direc- existing under the other benefit schemes tive, but may perhaps be regarded as which are necessarily and objectively linked 'another benefit' for which the determina- to the difference in pensionable age. 18 This tion of different pensionable ages has is so where such forms of discrimination 'consequences'. are objectively necessary in order to avoid disturbing the financial equilibrium of the social security system or to ensure coher- ence between the retirement pension scheme and other benefit schemes. 19

28. In Graham, 16 the Court of Justice accepted unequal treatment between men and women in respect of entitlement to and calculation of certain invalidity benefits under United Kingdom law as conse- quences for other benefits of the determi- 30. Whereas in Graham there was an nation of different pensionable ages foi- objective link between the pensionable age men and women. The particular matters at and the discrimination at issue because the issue in Graham were a reduction of the disagreeable consequence, consisting of a invalidity pension as from retirement reduction in the benefit, took place directly age — 60 years for women and 65 years upon reaching pensionable age, that is not

so in the present case. There is no link systematic anomaly under Austrian law, it between the determination of pensionable had to remain unchanged for women, ages and the minimum qualifying age for whereas it was increased by two years fői­ the early old-age pension on account of men. Futhermore, there is no obligation for incapacity for work. The conditions for a State, which has laid down a difference of granting the benefit and the age limit fixed five years between the pensionable ages fői­ for the early old-age pension on account of men and women, automatically to trans­ incapacity for work are unconnected with pose that difference to all the consequences the general old-age pension scheme. The for other benefits. only point in common between the two schemes is the statutory retirement age, since it is at. this time that the early retirement benefit on account of incapacity for work is replaced by the normal old-age pension. 33. This line of reasoning can however not conceal the fact that, prior to the statutory amendments at issue, a discrimination-free scheme was in place, the form of which was not dictated by the statutory retirement age since the benefit at issue was unconnected 31. By comparison with the statutory with it. retirement age, the minimum age for receipt of the benefit at issue was chosen rather inconsistently. Whereas it was set for women at the age of 55 years, namely five years before statutory retirement age, it was set for men at 57 years, namely eight years before retirement age. 34. It is therefore not easy to see why the discrimination introduced by the statutory amendment in respect of the minimum age for receiving the early old-age pension on account of incapacity for work should be necessarily linked to the statutory retire­ 32. At the hearing, the Austrian Govern­ ment age. On the contrary, the earlier ment conceded that if the different qualify­ statutory scheme under which there was ing ages for the benefit had been set at 50 no discrimination and which functioned years for women and 55 years for men, a perfectly well indicates that there is no symmetrical increase of two years in the necessary link between the age required to age limits, that is to say to 52 years for receive the benefit, which is now different, women and 57 years for men, would and the statutory retirement age. The age of certainly have presented no problems. The 55 which was the same for both men and situation in the present case was however women was changed neither uniformly nor different, in that the 'pensionable age' for in a manner proportionate to the statutory this benefit was also set at 55 years for retirement age. For this reason it is only women. Since an increase in the age with difficulty that the coherence of the required beyond this 'normal age for an schemes may be submitted as a justification early pension' would have represented a for the unequal treatment at issue.

38. It should first be stated that 'subse- quent' designates, first, the period immedi- ately following the date on which the Directive became binding for the Member State. In the case of the Republic of Austria that is the date on which it joined the 36. It follows that the difference in the European Economic Area, namely 1 Janu- qualifying age for men and women for an ary 1994, or, at the latest, the time it early old-age pension on account of inca- became a member of the European Com- pacity for work cannot be regarded as munity, namely 1 January 1995. On the objectively or necessarily linked to the other hand, the term 'subsequent' refers to statutory retirement age. The second alter- the notion that a rule had previously native provided by Article 7(1 )(a) of the existed which provided for equal treatment. Directive cannot therefore be relied upon to justify the unequal treatment. This is the case irrespective of whether Article 7(1 )(a) of the Directive authorises Member States merely to maintain existing forms of dis- 39. Also to be clearly stated is the fact that, according to the logic of the foregoing 20 — For example- Case C-343/92 Roks and Others [1994] ECU analysis, it was not the pensionable age in I-571, paragraph 35 et seq. the strict sense of the term, which was

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in Article 7(1 )(a) constitutes a standstill Commission have all used the concept of clause, which precludes Member States standstill requirement or standstill clause, I from introducing any new measure that is shall define the content of that concept for discriminatory even if that measure falls the purposes of further analysis. within the scope of Article 7(1 )(a). The Government answers this question in the negative. Such a standstill requirement cannot be inferred either from the wording of the Directive or from the case-law of the Court.

Assessment

45. Since the Austrian Government, the 47. It is clear that the Directive's objective United Kingdom Government and the is equal treatment for men and women in

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matters of social security, even if certain without the need for elaborate legal analy- matters have been excluded from the sis, as a step in the direction of the Directive's scope for a period of time which Directive's objective. 2 5 a priori has not been defined. 2 1 The purpose of the derogation in Article 7(l)(a) of the Directive has been described in the Court's case-law as temporarily maintain- ing the advantages accorded to women with respect to retirement. 22 50. In the present case it is substantially more difficult to determine what would constitute progress within the meaning of the Directive. As the Austrian Government has correctly pointed out, under the non- discriminatory legislation which was applicable to the early old-age pension on account of incapacity for work prior to the 1996 statutory amendment, women were placed at a relative disadvantage, because they were entitled to the benefit only five 48. Those 'advantages accorded to women' years before reaching statutory retirement can nevertheless have an adverse effect on age, whereas men were potentially entitled them in respect of both the calculation of to the benefit ten years prior to reaching the benefit and its consequences on other normal pensionable age. To raise the qua- benefits. Such adverse consequences for the lifying age for the benefit at issue by the pension rights of women have been same amount for men and women would, it accepted by the Court. 23 The problem is is true, be consistent with an objective thus the criterion by which to measure the defined as absolute equality of treatment, intended step against the Directive's aim. but it would have a greater adverse effect on women. A way out of this conflict of interests is by no means obvious.

52. The introduction, on the other hand, of 54. The Austrian and United Kingdom unequal treatment into a scheme of benefits Governments suggest limiting to the future which had previously not been discrimina- the effects in time of the Court's judgment tory represents something quite different. in the event that it holds the Austrian rules The fact that it had initially been possible to be incompatible with Community law. to organise a type of benefit in a neutral The Austrian Government refers in this way can serve as an indication that the context to the major financial repercus- derogation was not applied. It cannot be sions. regarded as 'maintaining the exclusions concerned' within the meaning of Arti- cle 7(2) of the Directive where, when adopting subsequent laws, the derogation is for the first time invoked as a legal basis. To that effect, nor can Article 7(1) be c o n s i d e r e d i n d e p e n d e n t l y from Arti- 55. According to the settled case-law of the cle 7(2). Even if paragraph 1 only mentions Court, national courts may, and as a 'the determination of pensionable age', the general rule must, apply the rules of use of the term 'maintaining' in paragraph Community law as interpreted by the Court 2 implies that the derogation in paragraph even to legal relationships arising and 1 must at least be invoked in order to established before the judgment ruling on justify a subsequent statutory amendment the request for interpretation. 28According which is discriminatory. Any subsequent to that case-law, any limitation to the introduction of new forms of unequal principle of the retroactive effect of an treatment would therefore be impossible.

57. As regards protecting the expectation that national rules are compatible with 56. The conditions required in order to Community law, I would note the follow- justify limiting the temporal effects of an ing. In respect of old-age insurance, the interpretative ruling on Article 7(1)(a) of c o n s e q u e n c e s of the 'necessary link' the Directive are not satisfied in the present between a form of discrimination and case. It is true that the Austrian Govern- differing pensionable ages have been clearly ment explains that incompatibility of the established by the Court in its earlier current rules with Community law would rulings. 32 The criteria for assessing the entail considerable economic burdens. The 'necessity', and the Objective link' have alleged additional burdens must however also been established by the Court in a way be viewed in perspective. First, the statu- that leaves no room for legal doubts. In the tory amendment at issue was not, as such, light of the previous, non-discriminatory the result of the costs of the relevant rules which were applicable for several economic sector of the social insurance years, the Republic of Austria could hardly have had any reasonable doubt that the introduction of discriminatory qualifying 29 —Case C-228/92 Roquette frères [1994] ECR I-1445, ages was not necessary within the meaning paragraph 19. of this case-law. 30 — Case 43/75 Defreime [1976] ECR 455, paragraphs 74 to 75, and Case 24/86 Blaizot [1988] ECR 379, paragraph 28. 31 —Joined Cases C-363/93 and C-407/93 to C-411/93 Lancry and Others [1994] ECR I-3957, paragraph 40 et seq. 32 — See Thomas and Graham, both cited in note 10.