Report for the Hearing in Case C-373/89
I — Facts
A — Legislative background
1. In the Kingdom of Belgium the legal basis of the social security scheme for self-employed persons is Royal Decree No 38 of 27 July 1967 organizing social security for self-employed persons (hereinafter referred to as ‘Royal Decree No 38, which was published in the Moniteur belge of 29.7.1967). It determines the field of application of the various schemes available to self-employed persons and defines the obligations of such persons. Pursuant to Article 1 thereof, the social security arrangements laid down by Royal Decree No 38 apply to: (1) family allowances, (2) retirement and survivors’ benefits and (3) sickness and invalidity benefits. Pursuant to Article 2, ‘the present decree applies to, and the obligations that it imposes must be fulfilled by, self-employed persons and persons assisting them’.
2. Article 37(1) of the Royal Decree of 19 December 1967 (published in the Moniteur belge of 28.12.1967), amended by the Royal Decree of 20 July 1981 laying down general rules for the implementation of Royal Decree No 38, provides as follows:
‘When their income from employment within the meaning of Article 11(2) and (3) of Royal Decree No 38, on which the calculation of their contributions for a specific year is to be based, is less than BFR 77472, married women, widows and students to whom Royal Decree No 38 applies may, for the year in question, apply to be treated as persons covered by Article 12(2) of that decree.’
3. Article 12(2) of Royal Decree No 38 is worded as follows: The last paragraph of that article was amended by Article 2 of the Law of 13 June 1985 as follows:
‘A person to whom this decree applies who, in addition to the activity giving rise to the application to him of this decree, habitually engages in another occupation as a main occupation is not liable to pay contributions if his or her income from working as a self-employed person during the relevant year referred to in Article 11(2), reassessed in accordance with Article 11(3), is less than BFR 32724.
When such income amounts to BFR 32724 or more, such a person is liable to pay either
1) the contributions referred to in paragraph 1, if that income amounts to BFR 154000 or more; or
2) if not, an annual contribution of 3.30% to the health care section of the sickness and disablement insurance scheme and 8.49% to the other schemes.
The King shall determine what is meant, for the purposes of this paragraph, by a habitual occupation constituting a main occupation and what may be treated in the same way.
The King may, subject to the conditions and limitations to be determined by him, extend the application of this paragraph to certain categories of persons to whom this decree applies who do not meet the requirement relating to engagement in another occupation.’
‘The King may, subject to conditions and limitations to be determined by him, extend the application of this paragraph to certain categories of persons to whom this decree applies who do not meet the requirement relating to engagement in another occupation.’
4. Pursuant to Article 2 thereof, Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (Official Journal 1979 L 6, p. 24) is to apply to the working population, including inter alia self-employed persons. Article 3(1) of that directive is worded as follows: Article 4(1) of the directive provides as follows:
‘This directive shall apply to:
a) statutory schemes which provide protection against the following risks:
i) sickness,
ii) invalidity,
iii) old age,
iv) accidents at work and occupational diseases,
v) unemployment;
b) social assistance, in so far as it is intended to supplement or replace the schemes referred to in (a).’
‘The principle of equal treatment means that there shall be no discrimination whatsoever on ground of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:
i) the scope of the schemes and the conditions of access thereto,
ii) the obligation to contribute and the calculation of contributions,
iii) the calculation of benefits, including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits.’
B — The background to the main proceedings
5. The late Jean Leloup, an architect in Belgium, who was covered by the social security arrangements for self-employed persons, as set out inter alia in Royal Decree No 38 was summoned by ‘Integrity ASBL’, the social security fund for self-employed persons, to appear before the Tribunal de travail (Labour Tribunal), Nivelles, regarding the payment of social security contributions payable by self-employed persons. In the course of the proceedings, Mr Leloup, whose professional income was very modest, requested that Article 37 of the Royal Decree of 19 December 1967 be applied to him. Mr Leloup died in 1988 and his heirs continued the proceedings. Before the Nivelles labour tribunal, Integrity claimed that Article 37 of the Royal Decree of 19 December 1967 applied only to married women, widows and students and not to married men or widowers. Mr Leloup's heirs contended that, if that was the case, Article 37 was contrary to the principle of equal treatment for men and women.
C — The question referred to the Court
6. Considering that the dispute raised questions of interpretation of Community provisions, the Tribunal de travail, Nivelles, by judgment of 4 December 1989, stayed the proceedings and referred the following question to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty:
‘Does Article 37 of the Royal Decree of 19 December 1967 laying down general rules for the implementation of Royal Decree No 38 of 27 July 1967 organizing social security for self-employed persons comply with Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security?’
7. In the grounds of the judgment of the national court, the Nivelles Tribunal de travail refers to a parliamentary question of 7 March 1989 in which the Belgian Senator R. Pataer expressed the view that it was contrary to the present ideas on the emancipation of men and women for Article 37 of the Royal Decree of 19 December 1967 not to be applicable to married men. The Minister's reply, as set out in the judgment of the national court, is as follows:
‘Unless and until the Court of Justice of the European Communities gives a preliminary ruling to the contrary, I consider that Article 37 of the Royal Decree of 19 December 1967 laying down general rules for the implementation of Royal Decree No 38 of 27 July 1967 organizing social security for self-employed persons is not contrary to Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security.’
II — Procedure
8. The decision of the national court was received at the Court Registry on 15 December 1989.
9. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted on behalf of Nadine Rouvroy, the widow of Jean Leloup, and their children Olivier, Eric and Mathieu, by Franklin Huisman, of the Brussels Bar; the Belgian Government, by P. Mainil, Secrétaire d'Etat pour les Classes Moyennes, and the Commission of the European Communities, by Marie Wolfcarius, a member of its Legal Department, acting as Agent.
10. Upon hearing the report of the Judge-Rapporteur, the Court decided to open the oral procedure without any preparatory inquiry.
11. By decision of 4 July 1990, the Court assigned the case to the Second Chamber, pursuant to Article 95(1) and (2) of the Rules of Procedure.
III — Summary of the written observations submitted to the Court
12. Nadine Rouvroy and her children, the heirs of Mr Leloup, claim that the words ‘married woman’ in Article 37(1) of the Royal Decree of 19 December 1967 constitute the focal point of the preliminary question. The travaux préparatoires for Royal Decree No 38 of 27 July 1967 and the amending legislation contain no explanation or statement of reasons for the distinction drawn in Article 37, which benefits only married women. Nor does academic legal literature provide any justification for that distinction; legal writers have merely noted the distinction and called for Article 37(1) to be amended. In a judgment of 24 June 1987, the Tribunal de Nivelles stated that: That judgment was overturned by the Cour de travail (Labour Court), Brussels, for reasons unconnected with the passage cited.
‘The judiciary must also refuse to apply Article 37 in so far as it creates discrimination between men and married woman, contrary to the principles laid down by the directive of the European Communities of 19 December 1978.’
13. The heirs of Mr Leloup assume that the idea underlying Article 37(1) of the Royal Decree of 19 December 1967 is the traditional view that, in a household, the man engages in a main occupation and his wife, if working (even in a main occupation) continues to be regarded as engaged in a subsidiary activity, particularly if her income from it is modest. In his reply to a question put to him by Sénateur Pataer, the Ministre de Prévoyance sociale (Minister for Social Security) conceded by implication that the Belgian rules are not entirely beyond reproach. The heirs of Mr Leloup add that Article 37 of the Royal Decree of 19 December 1967 undeniably creates discrimination on the ground of sex, either directly or indirectly, by referring to matrimonial status and it is therefore contrary to the principle of equal treatment provided for in Article 4 of Directive 79/7.
14. The heirs of Mr Leloup propose, in conclusion, that the Court reply as follows to the question referred to it by the Tribunal de Nivelles (Wavre Division):
‘Article 37 of the Royal Decree of 19 December 1967 laying down general rules for the implementation of Royal Decree No 38 of 27 July 1967 organizing social security for self-employed persons contravenes the directive (79/7/EEC) of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security.’
15. The Belgian Government considers in the first place that the application of the social security regime for self-employed persons and the obligation to contribute to it do not give rise to any discrimination.
16. It also maintains that a distinction is to be drawn with regard to the calculation of contributions. On the one hand, there are people who habitually engage in an occupation as a principal activity and as a self-employed person. They are required to pay at least the minimum contributions, even if they have not made any profits. On the other hand, there are people who habitually engage in another occupation as a main occupation, in addition to their occupation as a self-employed person. They are either not liable to pay contributions or else are only required to pay contributions at a reduced rate when their income from their occupation as a self-employed person does not exceed a certain ceiling. That distinction is not based on sex and consequently does not infringe Article 4 of Directive 79/7. However, the Belgian legislature found that certain categories of persons engaged in a full-time principal activity, but not one which could be regarded as an ‘occupation’ within the meaning of labour law. That applies to women who undertake the education of their children and look after their homes, and to students. Where such people engage in an occupation as a self-employed person in addition to their primary activity, in order to balance the family budget or to defray the costs of study, the time spent on that occupation is necessarily limited. The last subparagraph of Article 12(2) of Royal Decree No 38 was implemented by Article 37. It is apparent from the origin of the latter that it relates exclusively to the restricted income deriving, for certain categories of persons, from an independent occupation which is necessarily limited.
17. The Belgian Government also considers that the people to whom Article 37 is intended to apply were not determined according to the criterion of sex but on the basis of socio-economic criteria. Thus, that article does not refer only to women, since (male) students are also covered by it. It is not applicable to all women but only to married women and widows. As regards students as a category, an age limit (25 years) has been fixed and applies to students of both sexes.
18. The Belgian Government also observes that the application of Article 37 is not automatic or mandatory. It is optional and should be applied for. Entitlement to make such an application is in fact dependent on the situation of the person concerned as regards benefits. Self-employed persons are entitled to the benefits only if they pay the contributions mentioned in Article 12(1) of Royal Decree No 38 (contributions payable by people who engage in a main occupation as self-employed persons). The beneficiaries of Article 37 could nevertheless apply for the benefits since they would normally be covered by their spouse's insurance (married women or widows) or that of their parents (students): they have the benefit of secondary rights. That possibility was not available before 1985 to those who were excluded from the scope of Article 37 (married men, for example). Subsequently, the Belgian legislature introduced the survivor's pension and the household pension so that, theoretically, that argument in favour of Article 37 no longer applies.
19. The Belgian Government adds, finally, that both the repeal of Article 37 of the Royal Decree of 19 December 1967 and its extension to married men would result in indirect discrimination in breach of Article 4 of Directive 79/7. Its repeal would impose on many more women than men the obligation to pay contributions, since the statistics show that at present there are always more married women than married men who, in addition to their household duties, engage in a limited occupation on a self-employed basis in order to balance the household budget. If the extension of Article 37 to married men were envisaged, it would be necessary to ensure that both spouses within a family unit did not apply for it, since in such circumstances no one would have a guaranteed right to benefits. Moreover, with more particular reference to retirement benefits, their amount would be lower more frequently where the husband sought to have Article 37 applied than when the wife did so. That situation derives from the fact that the amount of the pension depends on the number of years worked and the fact that the great majority of married self-employed women actually engage in an occupation for only a small part of their potential working life. From the point of view of Article 37, apparent equal treatment of married men and married women would give rise to more disadvantages for women than for men as regards possible entitlement to benefits.
20. In conclusion, the Belgian Government proposes that the Court reply as follows to the question submitted by the Tribunal de travail, Nivelles:
‘Article 37 of the Royal Decree of 19 December 1967 laying down general rules for the implementation of Royal Decree No 38 of 27 July 1967 organizing social security for self-employed persons is in conformity with Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security.’
21. The Commission refers to previous decisions of the Court (in particular the judgments in Case 286/85 Cotter [1987] ECR 1453, Case 384/85 Borrie Clarke [1987] ECR 2865, Case 150/85 Drake [1986] ECR 1995, Case 80/87 Dik [1988] ECR 1601 and Case C-102/88 Ruzius-Wilbrink [1989] ECR 4311), according to which Directive 79/7 entered into force on 23 December 1984. Article 4 of that directive is directly applicable and gives effect to the aim of the directive which is implementation of the principle of equal treatment. In the absence of measures for the implementation of Article 4(1) of the directive and until such time as the national government adopts the necessary measures to give effect thereto, members of the sex that is discriminated against are entitled to have applied to them the same conditions as the members of the privileged sex whose circumstances are the same, and those conditions constitute, in the absence of application of the directive, the only valid reference system.
22. The Commission considers that Article 37 of the Royal Decree of 19 December 1967 constitutes a case of direct discrimination against men and that such discrimination falls within the scope of Directive 79/7, in so far as Article 2 of that directive refers expressly to self-employed persons, Article 3(1) refers to schemes covering sickness, invalidity and old age, and Article 4(1) prohibits all discrimination on grounds of sex with respect to the obligation to contribute and the calculation of contributions. In those circumstances, Article 37 of the Royal Decree of 19 December 1967 must be regarded as contravening Directive 79/7 and in particular the second indent of Article 4(1) in so far as, in a number of areas covered by the directive, it excludes married men and widowers from the benefit granted to married women and widows, even though they fulfil the same conditions. From this the Commission concludes that married men or widowers engaged in a main occupation on a self-employed basis but earning income within the statutory threshold must, if they apply, be entitled to receive the same treatment as persons engaged in a similar occupation on a secondary basis, in the same way as married women or widows. Other things being equal, self-employed men should have the benefit of the preferential system of calculating social security contributions which at present is restricted to self-employed women, that system being, in the absence of measures for the implementation of Article 4(1) of the directive, the only valid reference system. The Commission points out that the directive draws no distinction between ‘positive’ and ‘negative’ discrimination and that consequently a Member State cannot justify a discriminatory provision by arguing that the discrimination involved is ‘positive’ for women.
23. The Commission proposes that the Court give the following reply to the question:
‘National legislation which restricts to married women or widows the benefit of exemption from or reduction of contributions under the statutory schemes which provide protection against one or more of the risks referred to in Article 3(1)(a) of Directive 79/7/EEC of 19 December 1978, without granting the same exemption from contributions to married men or widowers, even though they fulfil the same conditions, is not in conformity with Article 4(1) of the said directive.’
G. F. Mancini
Judge-Rapporteur
1 Language of the case: French.