C-351/00

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OPINION OF MR ALBER — CASE C-351/00

For the purpose of this Article, "pay" workers for equal work or work of equal means the ordinary basic or minimum value is applied. wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer.

2. For the purpose of this Article, "pay" means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the Equal pay without discrimination based on worker receives directly or indirectly, in sex means: respect of his employment, from his employer...'.

(a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement; The second sentence of Article 141(2) EC is identical to the second sentence of the second paragraph of Article 119 of the EC Treaty.

(b) that pay for work at time rates shall be the same for the same job.'

(b) social assistance, in so far as it is intended to supplement or replace the schemes referred to in (a). 6. Article 3 reads:

2. ...

'1. This Directive shall apply to: 3. ...'

(a) statutory schemes which provide pro- tection against the following risks: 7. Article 4 of the directive reads:

' 1 . The principle of equal treatment means that there shall be no discrimination what- — sickness, soever on grounds of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:

— invalidity,

2. ...'

9. Article 5(1) of Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, 8. Article 7(1)(a) reads: vocational training and promotion, and working conditions 4reads:

' 1 . This Directive shall be without prejudice 'Application of the principle of equal treat- to the right of Member States to exclude ment with regard to working conditions, from its scope: including the conditions governing dismis- sal, means that men and women shall be guaranteed the same conditions without discrimination on grounds of sex.'

(a) the determination of pensionable age for the purposes of granting old-age and retirement pensions and the poss- B — National legislation ible consequences thereof for other benefits;

10. The referring court describes the pen- sion scheme at issue as follows: Before the

4 — Council Directive of 9 February 1976, OJ 1976 L 39, p. 40.

Valtion eläkelaki was enacted in 1966, the the retirement age for women was 60 and State was responsible for the livelihood of for men 50. The scheme was amended by a its public servants even after termination of law of 1994 with effect from 1 January their service. Previously better than 1995. Under the scheme now in force, the employment pensions in the private sector, posts of persons employed in the Finnish the pension benefits under the Valtion army are classified according to the nature eläkelaki have since 1993 corresponded to of their respective functions, neutrally as them. Employment pension schemes in the regards sex, as professional military posts private sector are likewise governed by and civilian posts. In professional military statute. In Finland, all employment is posts the retirement age is 55, and in compulsorily covered by a statutory civilian posts 65, irrespective of sex in both employment pension scheme. instances. At retirement age, these employees must leave the service and are subsequently entitled to receive a pension. In practice, retirement age is the same as pensionable age. The new pension scheme applies to service relationships which began on or after 1 January 1995. 11. Persons in an official or employment relationship with the State are covered by the pension scheme under the Valtion eläkelaki. The amount of the pension under the Valtion eläkelaki is determined on the basis of years of employment and estab- lished income level. Each year of employ- ment increases the pension by 1.5%. The established income level is determined on 13. For service relationships which began the basis of the income earned during the before 1 January 1995, as in the case at last years of employment. The general issue here, retirement age is determined in pensionable age under the Valtion eläkelaki accordance with special transitional provi- now stands at 65. sions. Under those transitional provisions, the retirement age in such earlier service relationships for men employed in the defence forces is 50 to 55 and for women 60. However, regardless of sex, persons who began their service before 1 January 1995 are entitled to a pension where their length of service in such posts is at least 30 12. For certain categories of workers, how- years. ever, a pensionable age lower than that general pensionable age has been laid down. Such a pensionable age lower than the general pensionable age is laid down in the legislation concerning the relevant department or establishment. The follow- ing arrangements are or were respectively in place as regards the defence forces: Previously, persons enlisted in those forces 14. The parties to the proceedings are were covered by a pension scheme in which agreed that the following provisions are

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1 April 1969 she has been enlisted in the IV — The preliminary ruling procedure service of the Finnish defence forces and is therefore covered by the pension scheme under the Valtion eläkelaki. Her retirement age is determined in accordance with the Asetus puolustusvoimista,6 more specifi- cally by way of the transitional provisions 20. The referring court considers that the laid down in Regulation No 1994/1032. 7 pension scheme at issue is not contrary to Finnish national law. However, it is uncer- tain in its view whether a pension payable under the Valtion eläkelaki falls within the scope of Article 141 EC and whether the pension scheme at issue might be contrary to the prohibition of discrimination laid down in that article. 18. To obtain clarification on her pension- able age, Mrs Niemi applied to the Valtio- konttori (State Treasury), the department responsible for implementing the Valtion eläkelaki, for a binding advance ruling on the age from which she would be entitled, on the basis of her years of service, to 21. The Vakuutusoikeus refers to the judg- receive a pension. An advance ruling of that ment of the Court of 28 September 1994 in kind is binding on a pension decision made Case C-7/93 Beune. 8In that judgment the in respect of the person who is the subject Court had held that a pension scheme of that advance ruling. resembling the scheme governed by the Valtion eläkelaki fell within the scope of Article 141 EC.

23. On account of the special features of V — Observations of the participants in the Finnish employment pension scheme the proceedings and the difference between the Finnish and Netherlands employment pension schemes which was the subject-matter of the judg- ment in Beune, it was uncertain, according to the referring court, whether the Court's decision in Beune 9was to be construed in such as way that it could be regarded as corresponding to the present case, and 26. The claimant first points to the fact whether the provisions of the EC Treaty that the Valtion eläkelaki per se does not could be interpreted likewise in this case as contain any discrimination in respect of they were in that case. pensionable age. However, regulations sub- ordinate to that law provide for a scheme under which discriminatory retirement ages are applied. 10 For men enlisted in the service of the defence forces as at 31 De- cember 1994 who on 1 January 1995 had become military professionals, retirement age was between 50 and 55. When calculat- ing a person's years of service, not only the 24. The Vakuutusoikeus has therefore years spent in military posts but also those referred the following question for a pre- liminary ruling: spent as a civilian in the public service are taken into account. However, in otherwise identical circumstances, the retirement age for female members of the professional military is invariably 60. A uniform retire- ment age of 55 applies only to military professionals recruited after 1 January 1995. Does the pension scheme under the Valtion eläkelaki fall within the scope of Article 141 EC or of Council Directive 79/7/EEC?

31. The Finnish Government first describes the Finnish pension scheme as part of the statutory social security scheme: State pen- sions, which are essentially regulated by the 28. In order to illustrate her argument, the Valtion eläkelaki, form part of the general claimant describes the respective situations employment pension scheme, to which of a man and a woman, each serving as persons employed in the defence forces military professionals and sharing the same are also closely linked. Employment pen- career path, which show clearly, she sub- sions, along with national pensions, are one mits, that men serving in such posts may, of the pillars of social security in Finland. on otherwise equal terms, retire on a The Finnish Government states that pension 10 years earlier in some cases than employment pensions provide a basic level their female counterparts. The sole basis for of protection for employed and self-em- that distinction is sex. From 1 December ployed persons. National pensions on the 1997 at the latest, such discrimination on other hand are paid only to persons receiv- grounds of sex has been also contrary to ing a very small pension on account of the Finnish law. duration of their employment or to those who have never been in gainful employ- ment.

29. The retirement age for military pro- fessionals is a fundamental condition of service and the accompanying pension is a 32. The employment pension scheme is, benefit comparable with pay. That benefit according to the Finnish Government, a falls within the scope of Article 141 EC. self-contained, comprehensive package, and membership of it is compulsory. A person's entire employment record is always taken into account in determining the amount of pension payable.

36. According to the Finnish Government, pensionable age in the defence forces is determined on the basis of the functions performed. It is lower than the general pensionable age for public servants and 34. Pensions are, according to the Finnish lower than the age at which claimants are Government, paid out of the national entitled to an old-age pension. The respect- budget. However, to make provision for ive retirement ages are laid down in the financing pensions in the future, employees' legislation relating to the departments and and employers' contributions are paid into institutions concerned. There is, therefore, a State pension fund separate from the no direct relationship between retirement budget. Every year money is transferred age and general pensionable age; retirement from the fund to the national budget in age is the age at which the individual order to cover the pension costs. The costs concerned has to leave the service. As are approximately 2.5 times the revenue persons who have reached retirement age from the fund. The greater proportion of can no longer serve, they are entitled to the costs is, therefore, borne directly by the receive a pension corresponding to the national budget. length of their service.

35. Persons employed in the defence forces are covered by a scheme corresponding to 37. As regards the transitional arrange- the Valtion eläkelaki. Apart from a few ment 13 applicable in the context of the particular features reflecting the special main proceedings, the Finnish Government nature of their duties, only their pension- argues that since the retirement age for men able age and the amount of pension received are different. In the military pro- 13 — See the provisions implementing Amending Regulation fession, pensionable age is 55 provided that No 1994/1032 of 28 November 1994.

38. As regards the answer to the question referred, the Finnish Government submits 40. The Commission examines the Finnish that the fact that employment pensions are State pensions scheme by reference to the regulated by different laws depending on relevant case-law of the Court. 15 Accord- the employment sector concerned does not ing to that case-law, a decisive criterion is make the schemes under which they are whether the worker may claim his pension paid occupational or supplementary pen- by reason of the employment relationship sion schemes as defined in the case-law of existing between him and his previous the Court. 14 A pension paid under the State pension scheme is not linked to a particular employment or servic relationship; on the 15 — See Beune (cited in footnote 8) and Case C-147/95 DEI v Evrenopoulos [1997] ECR I-2057, Case C-50/99 Podesta v CRICA and Others |2000] ECR I-4039, Case C-262/88 Barber v Guardian Royal Exchange Assurance Croup 14 — The Finnish Government is referring in this regard to [1990] ECR I-1889 and Joined Cases C-234/96 and Beune (cited in footnote 8) and to Case 170/84 Bilka v C-235/96 Deutsche Telekom v Vick and Conze [2000] Weber von Hartz [1986] ECR 1607. ECR I-799.

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employer. The scheme at issue in this case is ment age which, in accordance with Para- without any doubt a statutory scheme. The graph 8 of the Valtion eläkelaki, entails employment pension scheme, of which the entitlement to a pension. Valtion eläkelaki forms part, is in itself statutory and compulsory. However, the benefits derived from it are based on the employment relationship alone, as is appar- ent from Paragraph 1 of the Valtion eläkelaki.

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OPINION OF MR ALBER — CASE C-351/00

50. However, it must be borne in mind that 52. Since retirement from the service as a in this case leaving the service, according to result of his reaching retirement age also the claimant, is linked to entitlement to a and specifically entails receipt of a pension, pension from a factual, legal and economic and thus a monetary benefit, it must be viewpoint. Her wish is to leave the service, considered whether that benefit is 'pay' not without entitlement to a pension, but within the meaning of Article 141 EC. on the same conditions and with the same Notwithstanding the conditions governing financial benefits as those available to male access to the benefit, which can be left aside military professionals. Thus, the referring for the moment, the benefit must con- court has expressly pointed out that the sequently be categorised in the light of the compulsory retirement age is, in practice, State Pensions Law. the same as pensionable age. Given, there- fore, that this dispute in effect concerns retirement from the service concurrently with the grant of a pension, the principle of equal pay laid down by Article 141 EC must first be examined.

53. Article 141(2) EC defines 'pay' as 'the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer'. Since this case relates to a retirement benefit rather than to remuneration received in respect of an active employment relationship, what is concerned here can be nothing other than 'other consideration' received by the worker from the employer in respect of his employment.

55. In its previous decisions the Court had to categorise both the Netherlands civil service pension scheme 19 and the French civil and military retirement pension 57. In categorising the benefit in point in scheme. 20 In spite of the various differ- Beune, the Court held that a statutory basis ences in the structure of the two schemes, it alone was not sufficient to exclude a benefit came to the conclusion in both cases that from the scope of Article 119 of the EEC the benefits under both schemes were 'pay' Treaty. 24 However, the criterion of negoti- within the meaning of Article 119 of the ation between employers and employees' EC Treaty or Article 141 EC. In particular, representatives was satisfied only if it in its judgment in Beune, 21which must be resulted in a formal agreement. Similarly regarded as fundamental, the Court pro- in the civil service there were consultation vided a synopsis of the constituent elements procedures which did not necessarily cul- of the concept of pay, as they could be minate in an agreement. 25 Applicability of inferred from its previous judgments, and Article 119 of the EEC Treaty did not depend on whether the benefit concerned was supplementary.26 With regard to the 18 — For the first time, in Case 80/70 Defrenne v Belgium [1971] ECR 445, paragraph 7 et seq.; see also Bilka (cited funding of the scheme, the Court held that in footnote 14, at paragraph 17 et seq.), Barber (cited in the pension scheme was indeed managed footnote 15, at paragraph 22 et seq.) and Beune (cited in footnote 8, at paragraph 24) as well as Case C-366/99 independently in accordance with rules Griesmar v Ministre de l'Economie, des Finances et de l'Industrie et Ministre de la Fonction publique, de la Réforme de l'Etat et de la Décentralisation [2001] ECR I-9383, paragraph 27. 22 — Cited in footnote 8. 19 — See Beune (cited in footnote 8). 23 — Cited in footnote 18. 20 — See Griesmar (cited in footnote 18) and Case C-206/00 Mouflin v Recteur de l'académie de Reims [2001] ECR 24 — See paragraph 26 of the judgment (cited in footnote 8). I-10201. 25 — See paragraph 32 of the judgment (cited in footnote 8). 21 — Cited in footnote 8. 26 — See paragraph 37 of the judgment (cited in footnote 8).

61. In the judgment in Griesmar 37 the Court again summarised the essential crite- ria for characterising a pension scheme. First the Court stated that it had pointed 59. The only decisive criterion was ulti- out in Beune 38'that, of the criteria for mately 'whether the pension is paid to the characterising a pension scheme which it worker by reason of the employment had adopted on the basis of the situations relationship between him and his former that had been brought before it, the only employer'. 30 The pension, which 'concerns possible decisive criterion is whether the only a particular category of workers,... is pension is paid to the worker by reason of directly related to the period of service the employment relationship between him and... [the] amount [of which] is calculated and his former employer, that is to say, the by reference to the civil servant's last salary', 31 was a pension paid by the public employer which was entirely comparable to 32 — See paragraph 45 of the judgment (cited in footnote 8). 33 — Case C-147/95 DEI v Evrenopoulos (cited in footnote 15). 34 — See paragraph 3 of the judgment (cited in footnote 15). 27 — See paragraph 39 of the judgment (cited in footnote 8). 35 — See paragraph 19 et seq. of the judgment (cited in footnote 8). 28 — See paragraph 40 of the judgment (cited in footnote 8). 36 — See paragraph 22 of the judgment (cited in footnote 15). 29 — See paragraph 42 of the judgment (cited in footnote 8). 37 — Cited in footnote 18. 30 — See paragraph 43 of the judgment (cited in footnote 8). 38 — Cited in footnote 8; see, in that judgment, paragraphs 23 31 — See paragraph 45 of the judgment (cited in footnote 8). and 24.

62. The Court nevertheless went on as follows: 'However, considerations of social policy, of State organisation, of ethics, or even the budgetary concerns which influenced, or may have influenced, the establishment of a scheme by the national legislature cannot prevail if the pension concerns only a particular category of workers, if it is directly related to the period of service and if its amount is calculated by reference to the civil servant's last salary.' 41The pension paid by the 64. The pension scheme applicable in this public employer was in that case entirely case is based, at least in terms of its defining comparable to that paid by a private principles as laid down in the Valtion employer to his former employees. 42 eläkelaki, on statute. The legal provisions by means of which that scheme is applied to persons employed in the defence forces 4 4 are, admittedly, of a lower rank than a statute. However, what is concerned is enacted law as opposed to a formal agree- ment between the employer and employees' representatives. The scheme is, moreover, a 63. The Court has thus developed a func- compulsory one. As the participants in tional conception of retirement benefits. these proceedings, all agree, all employees Under that conception the primary con- are in one way or another affiliated to the sideration is the connection between the Finnish employment pension scheme. What employment relationship and the retire- is more, this scheme does not involve a ment benefit and no longer the structural supplementary pension benefit. These con- principles of the system of benefit. In that siderations appear to bear out the view held respect, the Court's decisions since Beune, by the Finnish Government that the scheme

65. However, the schemes which the Court had to assess in Beune and Griesmar 45 were also based on statute. They, too, were compulsory schemes. Whilst Beune con- cerned a supplementary pension, the French civil service retirement pension scheme which was the subject of Griesmar involved a basic pension. The structure of 67. There are fundamental structural dif- the civil service pension schemes operating ferences in terms of funding between the in the Netherlands and Finland seems to be schemes at issue in Beune and Griesmar. fundamentally different. Whilst on the one Whilst the French civil service retirement hand persons employed in the Netherlands pension scheme is funded in its entirety out civil service likewise are in the first place of the State budget, the Netherlands supple- paid a basic pension under a general mentary pension scheme opts for funding scheme which is then topped up with a through a separate fund, a solution never- supplementary pension, in Finland on the theless similar in a number of respects to other hand employment pensions, accord- the organisation of an occupational pen- ing to the Finnish Government, form the sion fund. basic pension which can in some cases 4 6 be supplemented by a national pension.

68. The Finnish option occupies the middle ground between those two different types of arrangement. Whilst a State pension 66. The fact that the civil service retirement fund is financed to begin with by employers pensions at issue in Griesmar is a basic and employees to make provision for the pension did not prevent the Court from subsequent funding of pensions, the State pensions are, according to the Finnish Government, paid out of the State budget, 45 — Beune (cited in footnote 8) and Griesmar (cited in footnote 18). to which money is transferred on an annual 46 — If the income from an employment pension is too low. basis from the pension fund.

70. There can be no denying the fact that in the Valtion eläkelaki, as described in these proceedings, the pension scheme is estab- lished for all persons employed by the 72. The provisions applying to persons State, although access to the benefit is employed in the defence forces cover both acquired by means of specific legislative military and civilian posts. Those provi- instruments governing the individual situ- sions describe a category of employees ations of objectively defined categories of characterised by the fact that they are in employees. In the claimant's case, the an employment relationship with one and Valtion eläkelaki is applied by means of the same employer, that is to say the the Asetus puolustusvoimista together with defence forces. They are distinguished from the provisions implementing Amending all other employees, even from other State Regulation No 1994/1032 of 28 Novem- employees, by reason of that specific fea- ber 1994. In that context the different ture of their employment relationships. retirement ages for male and female employees, which have given rise to the present disputes, result exclusively from the 47 — See Griesmar, paragraph 31 (cited in footnote 18).

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77. In the light of those circumstances it can be considered that the pensions under the Valtion eläkelaki are granted in remun- 75. Just as the Finnish Government has eration for the services performed by State maintained clearly and plainly that the employees until their retirement from the pensions under the Valtion eläkelaki are service. In that regard, the amount of the not based on a special employment rela- pensions takes account of the level, dur- tionship, the Commission has maintained, ation and nature of the services per- in equally unambiguous terms, that the formed. 49 The pensions provided under opposite is true. The referring court, the the Valtion eläkelaki are therefore deter- Finnish Government and the claimant have mined by length of service and their all submitted that the employment pension amount is calculated on the basis of the scheme in Finland takes into consideration salary which the person concerned received a person's entire employment record. In during his or her final years at work. contrast, when pensions under the Valtion Consequently, such pensions satisfy the eläkelaki are calculated, account is taken 49 — For a comparable finding in relation to the pensions at issue in Griesmar, see paragraph 32 of the judgment in that 48 — See paragraph 32 of the judgment (cited in footnote 18). case (cited in footnote 181.

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criterion of employment which the Court, the point of view of Regulation (EEC) in Beune and Griesmar, held to be decisive No 1408/71 52 cannot, therefore, in the for the purpose of characterising, with light of the Court's case-law in Beune and respect to Article 141 EC, pensions pro- Griesmar, in any way alter the nature of the vided under a retirement scheme for civil benefits as pay. 53 servants. 50 Pensions under the Valtion eläkelaki are consequently to be regarded as 'pay' within the meaning of that Treaty provision.

81. As is already made clear in its title, that directive concerns the implementation of 79. The functional approach underlying the principle of equal treatment as regards the line of argument 51 developed above employment conditions. The principle also presupposes the structural principles of applies to employment relationships in the pension schemes have taken second place. The Finnish Government's argument that under the Valtion eläkelaki a statutory 52 — Council Regulation (EEC) No 1408/71 on the application social security scheme is concerned from of social security schemes to employed persons, to self- employed persons and to members of their families moving witnin the Community, as amended and updated by Council Regulation (EC) No 118/97 (OJ 1997 L 28, p. 1). 53 — See Beune (cited in footnote 8) and Griesmar (cited in 50 — See Griesmar, paragraphs 34 and 35 (cited in footnote 18). footnote 18); see, in addition, Mouflin (cited in footnote 51 — See point 63 above. 20).

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public service. 54 Article 5 of Directive in the light of the answer proposed here. It 76/207/EEC expressly provides that appli- is, in any case, an entirely hypothetical cation of that principle also covers the question as the Valtion eläkelaki lays down conditions governing dismissal. Given that a pensionable age without any discrimi- the different retirement ages for male and nation. female military professionals partake of the nature of a condition governing dismissal, that difference is contrary to Directive 76/207/EEC in so far as it constitutes prohibited discrimination on grounds of sex. 84. In the result, the question referred by the Vakuutusoikeus should be answered to the effect that the pension scheme under the Valtion eläkelaki falls within the scope of Article 141 EC.

The pension scheme under the Valtion eläkelaki falls within the scope of Article 141 EC.

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