C-166/99

DEFREYN

OPINION OF ADVOCATE GENERAL RUIZ-JARABO COLOMER delivered on 16 March 2000 *

I — Introduction Article 6 of the Treaty of Amsterdam, 3in order to delete lapsed provisions and to adapt the text of certain of the provisions. Accordingly, Article 12 of the Treaty of Amsterdam provided for the articles of the 1. As is well known to observers of Com- EC Treaty to be re-numbered in accordance munity law and, in particular, those famil- with the equivalence tables set out in the iar with the case-law of this Court in Annex. matters of social policy, this is not the first time that litigation between the Belgian national airline (Sabena SA) and one of its employees has given rise to a reference for a preliminary ruling. As a result of this renumbering, Arti- cles 117 to 120 of the EC Treaty have been replaced by Articles 136 EC to 143 EC and the Protocol on Article 119 of the EC Treaty has become the Protocol on Arti- cle 141 of the Treaty constituting the Nor is it the first time that the Brussels European Community. Cour du Travail has referred a question under Article 177 of the EC Treaty (now Article 234 EC) in one of those cases. 1 On this occasion it seeks the interpretation of the Protocol on Article 119 of the Treaty establishing the European Community 2 (hereinafter 'the Protocol'). II — Facts in the main proceedings

3. Collective Labour Agreement No 17 of 2. The EC Treaty, including its annexes and 19 December 1974 concluded within the protocols, was amended, according to National Labour Council,4 lays down in

* Original language: Spanish. 3 — It amended the Treaty on European Union, the Treaties 1 — It was this court which referred the preliminary question in establishing the European Communities and other related case 43/75 Defrenm v Salienu [19~6| ECR 455. acts. It was signed on 2 October 1997 in Amsterdam and 2 — Protocol (No 2) annexed to the Treaty on European Union. came into force on 1 May 1999. signed in Maastricht on 7 February 1992, which came into 4 — The Agreement was rendered compulsory by a Royal Decree force on 1 November 1993 (OJ 1992, C 191, p. 681. of 16 January 1975.

7. In the judgment of 17 February 1993, 5 in infringement proceedings against Bel- gium, this Court ruled that the additional 5. In June 1960, Ms Defreyn, the appellant payment payable by the last employer, in the main proceedings, started work as an granted to workers made redundant at a employee of Sabena, the respondent airline. certain age with rights to unemployment In November 1984, she requested the benefit, is a payment for the purposes of application of the additional payments scheme. The company informed her that it was granting her request and gave her two 5 — Case C-173/91 Commission v Belgium [1993] ECR I-673.

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Article 119 of the EC Treaty and, conse- the Treaty relating to the benefits under an quently, female workers over 60 years of occupational social security scheme. It did age should not be deprived of this benefit not dispute that Ms Defreyn's claims when the male workers are able to receive it related to a period of employment prior until they are 65 years of age. to 17 May 1990 and that she initiated proceedings after that date.

8. Having learned of this judgment, in June 1993 Ms Defreyn asked to receive the III — The questions referred for a preli- additional payment up to her 65th birth- minary ruling day, in November 1996.

No 315.1 compatible with Article 5 of worker receives, directly or indirectly, in Directive 76/207/EC in that they respect of his employment from his exclude female workers over the age employer.' of 60 from the benefit of pre-retirement payments which constitute additional redundancy payments, granted in addi- tion to unemployment benefit, whereas such payments are guaranteed for male workers until the age of 65?

(3) If the above two questions are 13. The Protocol is intended to clarify the answered in the affirmative, does the temporal effects of Article 119 of the application of the Protocol on Arti- Treaty on occupational social security cle 119 of the Treaty preclude the schemes and provides as follows: action brought by Ms Defreyn from succeeding inasmuch as it is founded on breach of Article 5 of Directive 76/207?'

IV — The applicable Community legisla- tion 'For the purposes of Article 119 of the Treaty, benefits under occupational social security schemes shall not be considered as remuneration if and in so far as they are attributable to periods of employment prior 12. Article 119 of the Treaty lays down the to 17 May 1990, except in the case of principle that men and women should workers or those claiming under them who receive equal pay for equal work. The have before that date initiated legal pro- second paragraph defines the pay in the ceedings or introduced an equivalent claim following terms: under the applicable national law'. 6

6 — Following the renumbering of the Treaty articles within the framework of the Treaty of Maastricht, the text of the Protocol reads as follows: 'For the purposes of Article 141 of this Treaty, the benefits under occupational social security 'For the purpose of this Article, "pay" schemes shall not be considered as remuneration if and in so far as they are attributable to periods of employment prior means the ordinary basic or minimum wage to 17 May 1990, except in the case of workers or those claiming under them who have before that date initiated or salary and any other consideration, legal proceedings or introduced an equivalent claim under whether in cash or in kind, which the the applicable national law'.

'1. Application of the principle of equal treatment with regard to working condi- 17. Both Sabena and the Belgian Govern- tions, including the conditions governing ment consider that the additional pre- dismissal, means that men and women shall retirement payment claimed by Ms Defreyn be guaranteed the same conditions without is 'pay' within the meaning of Article 119 discrimination on grounds of sex.' and that the scheme which provides for the payment of this benefit is, without any doubt, a social security scheme organised on an occupational basis and created to supplement a pre-existing social security scheme. However, she is not entitled to 'pay' until her 65th birthday because her situation falls directly within the ambit of the Protocol which limits in time the application of the definition of 'pay' to V — Procedure before the Court of Justice benefits under an occupational social secur- ity scheme. Both consider that the applica- tion of the Protocol is not limited to payments made under an old-age pension, but includes any payment made under an occupational social security scheme and, thus, the additional payment claimed by 15. Sabena, the Belgian government and Ms Defreyn. For this reason they propose the Commission submitted written obser- that the reply to the national court should vations in this case within the period be that the contested payment is made prescribed for this purpose by Article 20 under an occupational social security of the EC Statute of the Court of Justice. scheme to which the Protocol applies. Counsel for Ms Defreyn, Sabena, the Belgian Government, the United Kingdom Government and the Commission pre- sented oral argument at the hearing of 24 February 2000. They maintain that, should the Court find otherwise, it would have to be concluded 7 — Council Directive of 9 February 1976 (in the application of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (OJ 1976 L 39, p. 40), 8 — Cited at footnote 5 above.

18. The United Kingdom Government states that the additional payment falls under an occupational social security scheme to which the Protocol is applicable. The Commission considers that the period It cites various reasons in support of this for which Ms Defreyn claims the additional statement: firstly, the wording of the Pro- payment, from 1 December 1991, when tocol does not limit its application to she turned 60, to 30 November 1996, retirement pensions; secondly, the payment when she reached 65, cannot be considered requested is payable by the undertaking a period of employment in the strict sense. and is intended to supplement the unem- It reaches the conclusion that the Protocol ployment benefit paid under the general is not applicable in this particular case social security scheme; thirdly, the fact that because the benefits claimed cover a period the Protocol does not differentiate between after 17 May 1990 and because the above- different benefits indicates that it is inten- mentioned judgment of the Court of Justice in Case C-173/91, in which Belgium was censured for non-compliance, does not 9 — Cited at footnote 5 above. contain any limit on its effects in time.

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OPINION OF MR RUIZ-JARABO — CASE C-166/99

pay for men and women applied to retire- a company pension scheme, in view of the ment pensions under an occupational social fact that in that State there was a large security scheme. number of workers affiliated to such schemes, which often contained exceptions to the principle of equal treatment, parti- cularly in determining different retirement ages for men and women. 19

23. For the purposes of this case, the judgment in Barber presents two important aspects. The first is that the Court of Justice confirmed its case-law that a retirement pension paid under a company pension plan, which in that particular case was 'contracted out' from the general social security scheme, 17 was a benefit paid by the employer to the worker by virtue of the working relationship, and therefore inclu- ded within the scope of Article 119 of the Treaty. 18

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consider that Article 119 did not apply to additional costs in respect of their pensions pensions paid under contracted-out schemes. 22 schemes and that derogations from the principle of equality between men and women were still permitted in that sphere.

26. For those reasons, it was held, in paragraph 45 of the judgment, that the direct effect of Article 119 of the Treaty 28. Of all the interpretations which flowed may not be relied upon in order to claim from paragraph 45 23 of the Barber judg- entitlement to a pension with effect from a ment, 24 the Member States adopted that date prior to that of that judgment, except which appears in the Protocol, in force in the case of workers or those claiming since 1 November 1993, which states that, under them who, before that date had for the purposes of Article 119 of this initiated legal proceedings or raised an Treaty, benefits under occupational social equivalent claim under the applicable security schemes are not to be considered as national law. remuneration if and in so far as they are attributable to periods of employment prior to 17 May 1990, except in the case of workers or those claiming under them who have before that date initiated legal pro-

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ceedings or introduced an equivalent claim age, accidents at work, occupational dis- under the applicable national law. 25 eases and unemployment. It also applies to the provisions relating to social assistance in so far as they are intended to supplement or replace the above schemes.

B — The answer to the first question. The applicability of the Protocol on Article 119 of the EC Treaty to the disputed additional allowance. 31. In its judgment in Dufrenne, the Court of Justice distinguished the statutory social security schemes from those to which Article 119 applied.26 The former relate to general categories of workers; their 29. In the first question referred for a retirement pensions are directly governed preliminary ruling, the Brussels Cour du by legislation without any element of Travail seeks to establish whether a benefit agreement within the undertaking or the intended to supplement unemployment occupational branch concerned; and they benefits, paid by the employer as a result assure for the workers the benefit of a legal of a collective agreement to workers over a scheme, the financing of which workers, certain age who take voluntary redun- employers and possibly the public autho- dancy, should be treated as an allowance rities contribute in a measure determined payable under an occupational social secur- less by the employment relationship ity scheme to which the Protocol on between the employer and the workers Article 119 of the Treaty is applicable. than by considerations of social policy. In these schemes the worker receives the benefits legally prescribed, not by reason of the employer's contribution but solely because the worker fulfils the legal condi- tions for the grant of benefit. 27

32. In contrast, those schemes to which 33. The contested benefit is not paid under Article 119 of the Treaty applies are char- a social security scheme directly governed acterised by being financed entirely by the by legislation, nor is it applicable to general undertaking or the undertaking in conjunc- categories of workers. As I stated above, tion with the workers, without assistance this Court, in C-173/91, 28 rejected the from public authorities, and by being arguments of the Belgian Government that applicable only to workers employed in it should be considered as a social security certain undertakings or sectors. They are benefit because it formed an inseparable included among the occupational social part of the unemployment benefit, known security schemes to which Directive as a 'contractual early-retirement pension'. 86/378 applies and which defines them at Article 2 in the following terms: occupa- tional schemes are those which are not governed by Directive 79/7 whose purpose is to provide workers, whether employees or self-employed, in an undertaking or group of undertakings, area of economic activity or occupational sector or group of such sectors with benefits intended to supplement the benefits provided by statu- tory social security schemes or to replace t h e m , w h e t h e r m e m b e r s h i p of such 34. In contrast, the present case concerns a schemes is compulsory or optional. benefit created by collective agreement payable to the workers of a company and intended to supplement the statutory ben- efit and to provide protection against unemployment to those workers made redundant at a certain age, the payment of which is the responsibility of the last employer who pays it by reason of the employment relationship given that the amount is based on the number of years worked.

the Treaty and it is payable under the 39. I am of the opinion that, by now, there occupational social security scheme. can be no doubt over whether the Protocol applies exclusively to pensions or to all benefits paid under an occupational social security scheme. Although it is true that in the Barber judgment the Court of Justice held that Article 119 of the Treaty could not be relied on to invoke a right to a 36. It remains to be considered whether the pension with effect from a date prior to its Protocol applies to it, given that the Court, enactment, account must be taken of the in C-173/91, was silent with regard to the fact that the applicant in the main proceed- argument of the Belgian Government that, ings requested only that her entitlement to if the additional payment created by Col- a retirement pension be recognised, with no lective Agreement No 17 was included discussion of other benefits. However, in within the scope of Article 119 of the the Ten Oever 29 judgment, which was the Treaty, it would be necessary to refer to next in the series, in which the applicant the Protocol, which limits the scope of that requested recognition of his entitlement to article in time when applied to benefits a survivor's pension, the Court, using the under an occupational social security same reasoning used to justify the limit of scheme. the effects in time in the Barber judgment, held that equal treatment in occupational pension schemes could only be relied on for benefits due for periods of employment after 17 May 1990. 30

37. In the order for reference, the Brussels Cour du Travail expresses doubts as to the applicability of the Protocol in this case. I propose to dispel these doubts as I deal with them.

and women resulting from an age condition deferred until a particular age; and the way for entitlement to a retirement pension in which occupational pension funds are upon dismissal for economic reasons which financed and thus of the accounting links varies according to sex. There have been existing in each individual case between the divergent interpretations of the Barber periodic contributions and the future judgment which limits, with effect from amounts to be paid. the date of the judgment, namely 17 May 1990, the effect of its interpretation of Article 119 of the Treaty. Those diver- gences were removed by the judgment in Ten Oever, cited above, which was deliv- ered before the entry into force of the However, in its opinion: (i) the additional Treaty on European Union. While extend- pre-retirement payment has no causal link ing it to all benefits payable under occupa- with 'periods of employment prior to tional social security schemes and incorpor- 17 May 1990'; (ii) there is no link between ating it in the Treaty, Protocol No 2 its amount and the number of annual essentially adopted the same interpretation contributions paid; (iii) there is no 'time of the Barber judgment as did the Ten lag' in this case between the accrual of Oever judgment. It did not, on the other entitlement to the pension and actual hand, any more than the Barber judgment, payment; and (iv) the pre-retirement pay- deal with, or make any provision for, the ment does not involve the same financial conditions of membership of such occupa- mechanisms as those governing occupa- tional schemes.' tional pensions.

prior to 17 May 1990, the Court of Justice does, that it should not be granted in the ruled, in paragraph 60 of the Coloroll case of the contested additional benefit. judgment, 33 that the limitation of the effects in time of the Barber judgment is applicable to benefits not linked to the length of the active service, only where the operative event occurred before 17 May 1990. 34 In the instant case, the operative event, which was the dismissal, occurred It is true that the grant of the abovemen- before that date. tioned benefit, which was created as an incentive to free positions occupied by older workers of a certain age in order to protect the jobs of younger workers, is unlike that of a retirement pension which accrues progressively throughout the work- ing life and to which all workers are entitled in time. 35 42. Nor can I agree with the statement that there is no link between the amount of the benefit and the contributions paid ((ii)), given that the amount is determined by the number of years of employment at a rate of 1% of the final gross annual salary and In spite of this, it seems to me that it is that, in the case of more than 25 years of evident that there is a time-lag since this is a service, 82% of this amount is guaranteed. benefit which requires that the employment It is in fact during the years in which the with the undertaking should have ceased worker is active that the greater part of the for it to be received, as is the case with old- contributions to both statutory and occu- age and unemployment benefits. This time- pational social security schemes are paid. lag does not exist in the case of invalidity benefits due to illness or industrial acci- dents, for example, which are received only while the worker is of employment age, requiring no break between the accrual of the entitlement and payment of the benefit.

mechanisms as the occupational pensions be subsequent to that date and not the ((iv)), in which the periodic contributions periods during which there is entitlement to and the future payments are linked. How- receive the benefit. ever, this is not a sufficiently convincing reason to conclude that the Protocol should not be applicable to it. In fact, this is a benefit which, in view of the age the beneficiaries have to reach, could be refer- red to as a pre-retirement pension, intended to supplement unemployment benefit in the case of dismissal, the period during which it is payable being linked to retirement age, 46. Finally I would note that Ms Defreyn which in Belgium is different for men and ceased working for Sabena in December women. Member States were allowed to 1986 and the undertaking paid her the maintain this age difference defined by sex additional payment until her 60 t h birthday under Article 9 of Directive 86/378. Thus, in November 1991. Since, by applying the respondent undertaking should be one Article 9 of the collective working agree- of the interested parties who might reason- ment, the contribution continues to be paid ably have assumed that Article 119 did not for the occupational pension scheme as apply to this benefit and made their calcu- though the worker were still in employ- lations accordingly when shedding staff. I ment, I have asked myself whether I need to believe, therefore, that if it now found itself consider, as a period of employment or a obliged to apply the principle of equality of similar period, the period between 17 May payment for this benefit to statutory situa- 1990 and 30 November 1991 during which tions which have already exhausted their time Ms Defreyn accrued rights to the effects in time, the economic balance of the benefit in relation to which she could claim scheme created by that collective agreement the direct effect of Article 119 to require could be seriously affected. equality of treatment.

47. I must conclude, therefore, that the 49. Directive 76/207 provides for the contested additional payment is a benefit implementation of the principle of equal granted under an occupational social secur- treatment between men and women in ity scheme to which the Protocol to Arti- relation to access to employment, voca- cle 119 of the Treaty establishing the tional training and promotion, and work- European Community is applicable. ing conditions. According to the second recital in the preamble, this Directive is not concerned with pay. The Court of Justice stated, at paragraph 24 of the judgment in Gillespie, 36 that, when a benefit comprises payment made directly or indirectly by the employer to the employee by reason of the C — The second and third questions refer- employment relationship, it is covered by red for preliminary rulings — Whether Article 119 of the Treaty and cannot also Directive 76/207 applies to the instant case. be covered by Directive 76/207.

48. In the second and third questions the Brussels Cour du Travail is essentially asking whether Article 5 of Directive 76/207 precludes the contested benefit Given that the contested benefit is, without being paid to women to the age of 60 any doubt, pay within the meaning of when it is paid to men to the age of 65 and Article 119, the provisions of Directive whether, if the Protocol is applicable in this 76/207 cannot be relevant for resolving case, Ms Defreyn may base her action on this dispute and there is, therefore, no need that article. to reply to these two questions.

(2) Given that the contested additional payment is pay within the meaning of Article 119 of the Treaty, there is no need to reply to the second and third questions.

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