Report for the Hearing in Case C-338/91

I — Facts and procedure

1. 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 (OJ 1979 L 6, p. 24) applies, according to Article 2, to the working population, including self-employed persons, workers and self-employed persons whose activity is interrupted by illness, accident or involuntary unemployment and persons seeking employment, and to retired or invalided workers and self-employed persons. According to Article 3(1) the directive applies to statutory schemes which provide protection against the following risks: sickness, invalidity, old age, accidents at work and occupational diseases, and unemployment. However, Article 3(2) provides that the directive ‘shall not apply to the provisions concerning survivors' benefits ...’. Article 4(1) provides as follows: The time allowed for transposing the directive into national law, which was fixed as six years in Article 8, expired in the case of the Netherlands on 23 December 1984.

‘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:

the scope of the schemes and the conditions of access thereto,

the obligation to contribute and the calculation of contributions,

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.’

2. In the Netherlands, the Algemene Arbeidsongeschiktheidswet (General Law on Incapacity for Work, hereinafter ‘the AAW’), which is applied by trade associations (‘bedrijfsverenigingen’), provides for benefits to be paid after the first year of incapacity for work up to the age of 65. Originally, the AAW, which came into force on 1 October 1976, excluded married women from benefits for incapacity for work. They were extended to married women by the Wet Invoering Gelijke Uitkeringsrechten voor Mannen en Vrouwen (Law of 20 December 1979 introducing equal treatment for men and women as regards entitlement to benefits, Staatsblad 1979, p. 708), which came into force on 1 January 1980. However, certain conditions were imposed, including the requirement that the married woman's incapacity for work had not arisen before 1 October 1975, that is to say more than a year before the entry into force of the AAW. By several judgments of 5 January 1988 (AAW 1983/S 90, published in Rechtspraak Sociale Verzekering 1988/200, inter alia), the Centrale Raad van Beroep decided that in so far as that condition applied solely to married women, it constituted discrimination on the ground of sex contrary to Article 26 of the International Covenant on Civil and Political Rights (‘the International Covenant’) of 19 December 1966 (Treaty Series, vol. 999, p. 171), which provides as follows: The court considered that since 1 January 1980, the date of the entry into force of the abovementioned Law of 20 December 1979 introducing equal treatment for men and women as regards entitlement to benefits, it could no longer be denied that Article 26 of the International Covenant had direct effect, within the meaning of Articles 93 and 94 of the Netherlands Constitution, as regards equal treatment for men and women in the context of the AAW, so that from that date married women (whose incapacity for work had arisen before 1 October 1975) were also entitled to AAW benefits. By virtue of Article 25(2) of the AAW benefits for incapacity for work are payable not earlier than one year before either the date of claim or the date on which they are automatically granted, save in special cases where authorized by the competent trade association. Article 32(1 )(b) of the AAW provides as follows: The Algemene Weduwen-en Wezenwet (General Law on Widows and Orphans, ‘the AAW’), which is applied by the Sociale Verzekeringsbank (Social Security Fund), entitles widows of insured persons, subject to certain conditions, to widows' pensions up to the age of 65. On the face of it, the AWW does not entitle widowers to survivors' pensions. However, in two judgments of 7 December 1988 (AWW 1987/17 and AWW 1987/46, published in Rechtspraak Sociale Verzekering 1989/67), the Centrale Raad van Beroep (Higher Social Security Court) held, relying on Article 26 of the International Covenant, that entitlement to AWW benefits must be granted to men and women alike. In a subsequent judgment of 30 January 1991 (AWW 1990/105, published in Rechtspraak Sociale Verzekering 1991/182), the Centrale Raad van Beroep made the entitlement to AWW benefit thus conferred on widowers retroactive to 23 December 1984, the date on which Directive 79/7 should have been transposed into national law, basing itself primarily on reasons of practicality. In addition, in a judgment of 23 May 1991 (AAW 1986/322, published in Administratiefrechtelijke Beslissingen 1991, p. 544), the Centrale Raad van Beroep decided that in the case of widowers the legal consequences of the award of AWW benefits must be given full effect when benefits provided for by another law were involved and that Article 32(1 )(b) of the AAW was therefore equally applicable to men, so that since 23 December 1984 the result of that provision was that men, too, must forfeit their AAW benefit if they became entitled to a widower's pension. The Centrale Raad concluded that from that date Article 32(1 )(b) of the AAW operated neither direct nor indirect discrimination against women.

‘All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status’.

‘Benefits for incapacity for work shall be withdrawn:

(...)

b) when a woman to whom they have been granted becomes entitled to a widow's pension or temporary widow's benefit under the Algemene Weduwen-en Wezenwet.’

3. Mrs Steenhorst-Neerings, the plaintiff in the main proceedings, who was born on 13 August 1925, was paid an invalidity pension from 1963 under the Invaliditeitswet, the Netherlands law on invalidity which was in force at that time. In view of the judgments delivered by the Centrale Raad van Beroep on 5 January 1988 referred to above she applied for AAW benefits on 17 May 1988 to the Bedrijfsvereniging voor Detailhandel, Ambachten en Huisvrouwen (Trade Association for Retailers, Craftsmen and Housewives, hereinafter ‘Detam’). By decision of 9 November 1989, the Board of Detam, the defendant in the main proceedings, granted her the benefits she had applied for on the basis of incapacity for work of between 80 and 100%, with effect from 17 May 1987, that is to say, in accordance with Article 25(2) of the AAW, one year before the claim was submitted. In the same decision, applying Article 32(1 )(b), it withdrew the benefits with effect from 1 July 1989 on the ground that since that date Mrs Steenhorst-Neerings was entitled to a widow's pension under the AWW as the result of the death of her husband.

4. Mrs Steenhorst-Neerings challenged that decision before the Raad van Beroep, s'-Hertogenbosch, which decided that the dispute before it raised questions concerning the interpretation of Community law and accordingly decided by order of 17 December 1991 to refer the following questions to the Court of Justice for a preliminary ruling:

‘1) Does Community law require that married women who became unfit for work before 1 October 1975 be entitled to benefits under the AAW (Algemene Arbeidsongeschiktheidswet) with retroactive effect to 23 December 1984, the expiry date for transposition of the directive, if those women did not apply for the benefits, for the reasons set out in the order making the reference, until after 5 January 1988 (the date on which certain judgments were delivered by the Centrale Raad van Beroep regarding equal treatment of men and women) ?

2) Is a national provision such as that contained in Article 32(1 )(b) of the AAW compatible with Article 4(1) of Directive 79/7/EEC if it is applied in practice (at least from 1 December 1987) to both widows and widowers who are unfit for work, but refers on the face of it exclusively to widows who are unfit for work?’

5. In the order making the reference, the Raad van Beroep first pointed out, in explaining the reasons which led it to put the first question, that apart from a few exceptions married women did not claim AAW benefits until after the abovementioned judgments of the Centrale Raad van Beroep of 5 January 1988 were made known because before that date the trade associations and the Netherlands Government considered that the AAW no longer discriminated between (married) women and men and that claims submitted by (married) women would have been systematically rejected. Next, it pointed out that in a decision of 8 August 1991 (AAW 1990/287), the Centrale Raad van Beroep agreed that that ‘misleading’ situation constituted a ‘special case’ within the meaning of Article 25(2) of the AAW, but that it had not yet ruled on the practice of a trade association of allowing AAW benefit to start earlier than one year before the date of claim only where the beneficiary was suffering ‘undue hardship’. According to the court making the reference, the question which remains is therefore whether, and if so, to what extent, the trade associations should exercise their discretion to allow AAW benefits for married women unfit for work to commence earlier than one year before the date of claim. In that regard, the Raad van Beroep noted first that women could claim AAW benefits from 23 December 1984 by virtue of Directive 79/7. From the judgment of the Court of Justice of 25 July 1991 in Emmott, paragraph 22 (see 208/90 [1991] ECR I-4269) it inferred that only after a Member State had properly implemented the directive could individuals be obliged to comply with the time-limit within which they could seek to avail themselves of their rights, and wondered whether the application of that case-law to this case, in which at the time of Mrs Steenhorst-Neerings' claim the Netherlands legislature had not yet fully and properly transposed Directive 79/7, would not have the result that the time-limit laid down in Article 25(2) of the AAW would be wholly inapplicable so that the question of whether or not there was a ‘special case’, which would justify an extension of the time-limit, would not even arise. As regards the second question, the Raad van Beroep first pointed out, referring to its order of reference in Case C-337/91, (A. M. van Germert-Derks v Bestuur van de Nieuwe Industriële Bedrijfsvereniging), that as a rule survivors' benefits could in fact be granted to widowers only with effect from 1 December 1987 and that it was also only after that date that Article 32(1 )(b) of the AAW entailed the replacement of the (higher) AAW benefit by the (lower) AWW pension, both for widowers unfit for work and for widows unfit for work. Although the Centrale Raad van Beroep ruled that that provision applied equally to men after 23 December 1984, the date on which Directive 79/7 should have been transposed into national law, the fact that the survivors' pensions provided for by the AWW could also not take effect, apart from ‘special cases’, more than one year before the date of claim, in accordance with Article 25(3) of the AWW, meant that it was usually only after 1 December 1987 that a survivor's pension could in fact be granted to widowers because apart from a few exceptions widowers did not claim such benefits until after the abovementioned judgments of the Centrale Raad van Beroep of 7 December 1988. Next, the Raad van Beroep stated that even if after 1 December 1987, or at least after 1 July 1989, the date from which Mrs Steenhorst-Neerings' AAW benefit was withdrawn pursuant to Article 32(1 )(b) of the AAW, the result of the provision in practice, by virtue of the case-law established by the Centrale Raad, was that AAW benefits were withdrawn also in the case of widowers unfit for work, it remained on the face of it discriminatory against widows who were unfit for work. Referring inter alia to the judgment of the Court of Justice of 4 April 1974 in Commission v France (Case 167/73 [1974] ECR 359), in which the Court held that France had failed to fulfil the relevant Community obligations by failing to amend a provision which was discriminatory by its wording but which, in practice, by virtue of administrative directives, was not applied in a discriminatory fashion, it concluded that the situation was perhaps not compatible with Community law.

6. The order made by the Raad van Beroep, 's-Hertogcnbosch, was lodged at the Court Registry on 30 December 1991.

7. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were lodged on 10 April 1992 by the Netherlands Government, represented by T. P. Hofstee, Deputy Secretary-General at the Ministry of Foreign Affairs, on 13 April 1992 by the Commission of the European Communities, represented by Karen Banks and Ben Smulders, members of the Commission's Legal Service, acting as Agents, and on 14 April 1992 by the Bestuur van de Bedrijfsvereniging voor Detailhandel, Ambachten en Huisvrouwen, the defendant in the main proceedings, represented by E. H. Pijnacker Hordijk, of the Amsterdam Bar.

8. Upon hearing the Report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

II — Written observations lodged by the parties

A — First question

9. Detam makes the preliminary remark that the Netherlands' social security laws, in particular the AAW and the AWW, are based on the assumption that persons entitled to benefits may not forfeit that entitlement solely by reason of the fact that they did not apply for them to the competent authorities within a fixed period after the occurrence of the event or materialization of the risk which gave rise to entitlement to the benefits. However, in view of the fact that for certain reasons, linked in particular to the budget and the need to check applications, it was necessary to ensure that those entitled could not claim entitlement retroactively for too long periods, the laws generally contain a provision to the effect that benefits cannot be paid before a fixed term prior to the date of claim, save where authorized by the competent authorities in ‘special cases’. Detam argues that according to the case-law in the Netherlands there can be no such ‘special case’ and no special authorization where the failure to claim is attributable to the person entitled to the benefits himself. As regards claims made with retroactive effect and based on a superior rule of national, Community or international law, the Centrale Raad van Beroep has conceded that no fault is attributable to the person entitled to the benefits if, during the period in which he wishes to avail himself of his rights, the applicability of the superior rule of law in question has not yet been confirmed by judicial decision. However, it is also clear from the judgments delivered by the Centrale Raad that for there to be a ‘special case’ so that special authorization may be granted it is not enough for there to be no fault attributable to the person entitled to the benefits; it is also necessary for application of the restriction to one year's retroactive effect to entail ‘special hardship for the person entitled to the benefit’. That would be the case if that person could show that for the periods in respect of which his claim is made his total income would be lower than the ‘minimum subsistence’ level. According to Detam that criterion is necessary to satisfy the principle that social security in the Netherlands is intended to guarantee a basic income equal to the minimum subsistence level and also to take sufficient account of requirements connected with the need to check, from the point of view of both organization and the budget, claims which refer to relatively remote events. Those requirements are particularly important in view of the fact that social security benefits are financed by means of the ‘envelope’ system: claims which the insured persons make during one year must, in principle, be covered by the contributions collected in that same year. In view of that, the equilibrium of the social security system might be seriously prejudiced if it was necessary to take into account claims with a retroactive effect going back many years. Finally, Detam acknowledges that in Emmott, cited above, the Court of Justice declared that: ‘(...) until such time as a directive has been properly transposed, a defaulting Member State may not rely on an individual's delay in initiating proceedings against it in order to protect rights conferred upon him by the provisions of the directive and that a period laid down by national law within which proceedings must be initiated cannot begin to run before that time’ (paragraph 23). Nevertheless, it considers that in view of the characteristics of the Netherlands legislation on social security which it has just described, one cannot merely apply without further consideration to the restriction on the retroactive effect of claims imposed by Article 25(2) of the AAW the principles laid down by the Court in Emmott, which was concerned with the question whether a limitation period could be pleaded against an individual when he was still not in a position reasonably to know his rights. Detam argues that the provision in Article 25(2) of the AAW is not concerned with the procedural rights of the individual but with the amount of benefits which are the subject of a claim having retroactive effect, and is therefore not an expression of the legal principle that individuals must avail themselves of their rights within a reasonable period, failing which their claims may be declared inadmissible. Consequently, it suggests that the answer to the first question referred for a preliminary ruling should be in the negative.

10. The Netherlands Government observes that when the legislature adopted measures such as those contained in Article 25(2) of the AAW it was establishing an acceptable balance between: on the one hand, the legitimate interest of those entitled to benefits to be able to make their claims applicable to a certain period in the past, on the other hand, the legitimate interest of the administration, which as a rule cannot be obliged to grant benefits in respect of periods relatively remote in the past, which would entail exorbitant effort in order to ascertain whether in that period the insured person met the conditions of eligibility for the benefits and which would prevent it from taking the measures which the law provides for to reintegrate those in receipt of benefits into the labour circuit so as to reduce the cost of unnecessary benefits. It should also be pointed out that Article 25(2) of the AAW does not deprive the retroactive effect of entitlement to benefits under the AAW of all content. It provides that in all cases benefits may be granted with retroactive effect for one year, and that in special cases longer retroactive effect may be allowed. The Netherlands Government maintains that the considerations set out above are sufficient to distinguish this case from the case which gave rise to Emmott. Article 25(2) of the AAW does not introduce a time-limit for bringing proceedings applicable in domestic law which may be pleaded against the grant of a social security benefit, as was the case in Emmott, but serves to determine the material amount of claims submitted under the AAW. Emmott also served to elaborate, in special circumstances, on the consistent case-law of the Court to the effect that where there are no Community rules applicable, the conditions (in particular regarding procedure) applicable to the commencement of proceedings seeking to safeguard rights which individuals have conferred on them by directly applicable provisions of Community law are essentially a matter of domestic law. Consequently, the Netherlands Government considers that it may reasonably apply provisions such as those in Article 25(2) of the AAW, particularly in view of the fact that they are applied identically to men and to women in respect of claims based exclusively on domestic law and, in view of the exceptions allowed for, do not make it impossible to exercise rights derived from Community law. Finally, it points out that the Commission has never expressed the slightest criticism of those provisions.

11. The Commission observes first that as regards the obligations imposed on the Netherlands by Directive 79/7, that country is undeniably at fault, because if Mrs Steenhorst-Neerings had been a man she would have been able to claim AAW benefits. Next, it considers that the restriction on the retroactive effect of claims for AAW benefits is not unacceptable per se, inasmuch as it is quite reasonable in order to avoid serious budgetary imbalances to fix limits on the period with respect to which benefits payable in the past may still be claimed from the authorities. In view of the judgment delivered in Emmott, cited above, the Commission takes the view, however, that decisive importance must be given to the fact that the Netherlands did not transpose Directive 79/7 in due time. In Emmott, the individual concerned had lost entitlement to equal treatment because she had not brought proceedings by a certain date, whereas in this case the individual's exercise of that right is limited because she did not apply to the administration earlier. In both cases, that omission does not amount to a fault on the part of the individual because the Member State had not fulfilled its obligations regarding the transposition of the directive so that the individuals were not sufficiently informed of the full extent of their right to enjoy equal treatment. Consequently, the Commission suggests that the first question should be answered as follows:

‘Community law requires that benefits be granted with retroactive effect to 23 December 1984 (the date on which the period allowed for transposing Council Directive 79/7/EEC expired) to married women whose incapacity for work arose before 1 October 1975 when, for reasons independent of their will, resulting from the delay in transposing the aforementioned directive into national law, the women did not claim those benefits until after 5 January 1988.’

B — Second question

1. Detam makes the preliminary observation that one of the fundamental principles of Netherlands law on social security is that insured persons may not claim simultaneously more than one basic benefit at the minimum level which is dependent on age, incapacity for work, or the death of a spouse. All the social insurance legislation covering those risks has the common aim of ensuring that those insured are entitled in principle to a guaranteed income corresponding to the ‘minimum subsistence’ level, so that it is evident that entitlement to benefits is not cumulable. Detam maintains that cumulation of such benefits would in any event make it impossible to finance the social security schemes. Next, Detam observes that as a result of the abovementioned judgment of the Centrale Raad van Beroep of 23 May 1991 (AAW 1986/322), Article 32(1 )(b) of the AAW is also applicable to widowers. In addition, the survivor's pension payable to widows with a child under 18 amounts to 100% of the minimum net salary and is therefore always greater than AAW benefits, which go up to a maximum of 70% of the minimum net salary. As far as the survivor's pension payable to widows without children under 18 is concerned, it amounts to 70% of the net minimum salary and differs only slightly or not at all from the full AAW benefits. However, exceptionally, situations may arise in which the amount of the survivor's pension is lower than the AAW benefit. Finally, Detam maintains that, contrary to what would appear to be implied in the order making the reference, there is no automatic transfer from AAW benefits to an AWW pension. Entitlement to AAW benefits ceases solely when the beneficiary applies for an AWW pension and pursues that claim. At the moment when the claim is made for AWW benefits, the beneficiary is informed of the possible financial consequences of changing from AAW benefits to AWW benefits, which may lead him to withdraw the claim in order to preserve the higher benefits awarded under the AAW. By doing so, he does not forfeit the right to submit later a claim for an AWW pension, for example if the percentage of his incapacity for work is reduced. Detam refers in that context to Directive 90/21 of the Sociale Verzekeringsbank of 1 November 1990 on the evolution and the application of entitlement. Detam therefore suggests that the Court declare that the second question is without purpose because the premise on which it is based, namely that application of Article 32(1 )(b) of the AAW leads automatically to a reduction in benefits for a married woman unfit for work if she becomes a widow, is wrong in fact. As an alternative, Detam suggests that the Court reply to the second question to the effect that Directive 79/7 does not preclude the application of a national provision such as that at issue in this case. The reply should be in the negative in particular because equal treatment between men and women in the field of survivors' pensions as in fact implemented in practice now, but not yet in the text of the AWW or in that of Article 32 of the AAW, does not rest on any provision of Community law because Article 3(2) of Directive 79/7 provides expressly that it ‘shall not apply to provisions concerning survivors' benefits.’

2. The Netherlands Government first observes that the second question is based on the premise that provisions governing cumulability of benefits, such as Article 32(l)(b) of the AAW, fall within the ambit of Directive 79/7. However, in view of Article 3(1) of that directive, which provides that it shall apply to ‘statutory schemes’ covering inter alia invalidity, and Article 3(2), which excludes from its scope ‘provisions’ concerning survivors' benefits, it should be asked whether ‘provisions’ concerning survivors' benefits contained in ‘statutory schemes’ such as the AAW, which in fact concern the risks referred to in Article 3 of Directive 79/7, should not also be excluded from its ambit. If so, a provision governing the cumulability of benefits such as that contained in Article 32(1 )(b) of the AAW is not covered by Directive 79/7, since that provision refers back to the AWW. In addition, if the second question seeks essentially to know whether a national provision such as Article 32(1 )(b) of the AAW is compatible with Directive 79/7, the Netherlands Government refers for the sake of brevity to the written observations it submitted in that regard in Case C-377/91, referred to above. If, by contrast, it seeks to know whether Netherlands law, and more particularly Article 32(1 )(b) of the AAW, is contrary to the directive because its wording refers exclusively to widows who are unfit for work, the Netherlands Government maintains that until the adoption by the Netherlands parliament of the draft law on the introduction of an Algemene Nabestaandenwet (Law on the provisions generally applicable to survivors, Kamerstukken II, 1990-1991, p. 22013 Nos 1-3), which is intended to establish by legislation, independently of any obligation attributable to Community law, the principle of equal treatment for men and women with regard to survivors' benefits, it is difficult to adopt different wording, which does not distinguish between the sexes, in statutory schemes which refer to the AWW as it stands. Since the Netherlands courts have determined that the AWW shall apply without distinction based on sex it is any case acceptable for Article 32(1 )(b) of the AAW to be applied also, in accordance with that case-law, without distinction as to sex even though the wording of the provision is not at present to that effect. According to the Netherlands Government the Court envisaged a similar approach in its judgment of 20 March 1984 in Razzouk and Beydoun v Commission (Cases 75 and 117/82 [1984] ECR 1509, paragraph 19).

3. The Commission first reviews the consistent case-law of the Court on the matter (see in particular its judgment of 23 May 1985 in Commission v Germany Case 29/84 [1985] ECR 1661) according to which transposing a directive into national law does not necessarily require that the provisions of the directive are formally and literally adopted in an express, specific legal provision; depending on the content of the directive, a general legal context may suffice if it effectively guarantees full application of the directive, in a precise and clear manner, so that where the directive is intended to create rights for individuals they are able to know the full extent of those rights and if necessary avail themselves of those rights in the national courts. According to the Commission the order making the reference indicates that both the case-law of the Supreme Court of the Netherlands, the Centrale Raad van Beroep, and the practice followed by the administrative authorities responsible for applying the AAW, the trade associations, are at present in harmony with the directive as regards rights which may be relied upon by virtue of that law, by women whose incapacity for work arose before 1 October 1975. The Commission also considers, on the basis of the facts known to it, that there are no grounds for concluding that in this case there is a risk of legal uncertainty such as was referred to in the judgment of the Court, cited above, of 4 April 1974 in Commission v France. Accordingly, it proposes that the reply to the second question should be:

‘A national legal provision concerning entitlement to benefits under social security provisions as described above which, although it refers solely to widows who are unfit for work, is applied by the national courts and by the administrative authorities responsible for applying the national provision in the same fashion to both widows who are unable to work and widowers who are unable to work, and which offers adequate legal certainty, is compatible with Article 4(1) of Council Directive 79/7/EEC.’

P. J. G. Kapteyn

Judge-Rapporteur

1 Language of the case: trench.