Report for the Hearing in Case C-154/92

I — Facts and written procedure

1. In Belgium Article 4 of Royal Decree No 50 of 24 October 1967 on the retirement and survivors' pension for employed workers {Staatsbhd of 27 October 1967, p. 11258) defined the normal pensionable age as 65 years for men and 60 years for women. Pursuant to Article 10 of that decree, eligibility for retirement pension is acquired, for each calendar year, at the rate of a fraction, the amount of which is fixed according to special rules, of the salaries taken into account to the extent of 75% or 60% according to whether or not the worker has a dependent spouse. The fraction corresponding to each calendar year is determined as follows: the numerator is one and the denominator is a figure that cannot be higher than 45 for a man or 40 for a woman. Where an employment record is longer than 40 or 45 years the most advantageous calendar years within the limit of 40 or 45, respectively, are taken into consideration. In pursuance of Article 9a, for each year of employment prior to 1 January 1955 account is taken of a flat-rate salary.

2. The Law of 20 July 1990 introducing a flexible pensionable age for employees and adapting employees' pensions to trends in general wellbeing {Staatsblad, 15 August 1990, p. 15875) provides in Article 2(1) that the retirement pension is to take effect ... no earlier than the first day of the month following the month during which the person concerned reaches the age of 60 years. As regards the calculation of the pension, Article 3(1) provides that entitlement to the retirement pension is acquired, for each calendar year, at the rate of a fraction of the salaries referred to in Royal Decree No 50 and that the denominator of that fraction remains fixed at 45 for men and 40 for women.

3. Mr Remi van Cant has received a retirement pension since 1 June 1991, the date on which he reached the age of 65 years; in calculating that pension, account was taken of a fraction representing his employment record of 45/45ths for the years 1945 to 1990. For the years prior to 1955 his pension was calculated on the basis of a flat-rate salary.

4. Mr van Cant applied to the Arbeidsrechtbank Antwerpen to have the decision of the National Pensions Office fixing the amount of his pension set aside; in support of that application he maintained that if he had been a woman his retirement pension would have been calculated on the basis of 1/40 of the salary to be taken into account for the 40 most favourable years of his employment record, of which four, rather than nine, years (prior to 1955) would have been calculated on the basis of a flat-rate salary; this method of calculation would have resulted in a pension that was approximately FB 31000 per annum higher than the amount determined by the National Pensions Office.

5. The Arbeidsrechtbank Antwerpen found that the method for calculating the pension provided for in Article 3 of the Law of 20 July resulted in discrimination between men and women, contrary to Article 4 of Directive 79/7. It was uncertain, however, as to the question whether the derogations provided for in Article 7(1 )(a) of the Directive, which allow the States to exclude from the scope of the Directive the determination of pensionable age for the purposes of granting old-age and retirement pensions and the possible consequences thereof for other benefits, might cover a difference in the method of calculating the benefits provided.

6. Consequently, the Arbeidsrechtbank Antwerpen, in application of Article 177 of the EEC Treaty, decided, by judgment of 23 April 1992, to stay the proceedings until the Court of Justice had given a preliminary ruling on the following questions:

‘1. Does the method of calculating a man's retirement pension involve discrimination on grounds of sex for the purposes of Article 4 of Directive 79/7/EEC, where a different method is laid down for calculating a woman's retirement pension which can result in the grant of a higher retirement pension for the same employment record because, in particular, a man's retirement pension is calculated on the basis of 1/45 x 60% or 75% of the flat-rate, notional or actual salaries of each reckonable calendar year of employment, whereas a woman's pension is calculated on the basis of 1/40 x 60% or 75% of the same salaries, and because — in certain cases — account is taken of the 45 most favourable years of the employment record in the case of a man and the 40 most favourable years in the case of a woman, all of the foregoing being considered in the light of the fact that men and women may choose to receive their retirement pension from the first day of the month following their 60th birthday?

2. If so, does Article 4(1) of Directive 79/7/EEC have direct effect in the circumstances of the present dispute? And if so:

3. Does that mean that the retirement pension for men must be calculated on the basis of the more favourable rules of calculation which at present apply exclusively to women by virtue of the Article 3 of the Law of 20 July 1990 introducing a flexible pensionable age for employees and adapting employees' pensions to trends in general wellbeing’

7. The judgment of the Arbeidsrechtbank Antwerpen was lodged at the Court Registry on 6 May 1992.

8. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted on 5 August 1992 by the National Pensions Office, represented by its Deputy Administrator-General, W. de Meyer, on the same day by the Commission of the European Communities, represented by Karen Banks and Pieter van Nuffel, of its Legal Service, acting as Agents, and on 10 August 1992 by the Belgian Government, represented by J. Devadder, Director of Administration at the Ministry of Foreign Affairs, acting as Agent.

9. 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.

10. Pursuant to Article 95(1) and (2) of the Rules of Procedure, the Court, by decision of 18 January 1993, assigned the case to the Sixth Chamber.

II — Written observations submitted to the Court

11. The National Pensions Office, the defendant in the main proceedings, observes that the stated objective of Directive 79/7 is equal treatment for men and women in matters of social security, although it provides that that objective is to be attained progressively. The National Pensions Office observes that it is necessary to examine whether the provisions of the directive are unconditional and sufficiently clear and precise to be directly applicable. In that regard, it refers to the opinion of the Belgian Conseil d'Etat on the compliance with Directive 79/7 of the bill introducing a flexible retirement age. The Conseil d'Etat observed that Directive 79/7 itself created an inconsistent situation, since in Article 7(1 )(a) it authorizes the Member States to determine a different pensionable age for men and women and in Article 4(1) it prohibits any discrimination in the calculation of pensions. According to the Conseil d'Etat, the latitude left to the Member States as regards the determination of the pensionable age must logically be reflected in the method for the calculation of benefits. Although Directive 79/7, with the aim of protecting women, accepts that an employment record may be reduced, the benefit of that protection would be destroyed if the pension were calculated as though that reduction did not exist. Relying on the fact that Directive 79/7 is less absolute than it appears at first sight and that it creates an inconsistent situation, the Conseil d'Etat was right to conclude that it did not have direct effect. The National Pensions Office states that the general rule, which, moreover, at one time applied to all employees, consists in the determination of the normal pensionable age at 65; the creation of an advantageous situation for certain specific groups, whether certain male employees, such as underground miners, or women, does not establish a discriminatory situation as regards those who remain in the normal situation. The sole change effected by the Law of 1990 concerns the possibility for men to take retirement at 60, although it means accepting a reduced pension. The National Pensions Office states that the changes in the law in Belgium are consistent with the principle of the progressive implementation of the principle of equal treatment pursued by Directive 79/7. When it introduced the flexible retirement age in 1990, there were two ways in which the Belgian Government might have established the same calculation method for men and women: either by introducing a generalized calculation in fortieths, followed by a slow and gradual reversion to a calculation in forty-fifths, or by immediately establishing a calculation in forty-fifths for all employees. In the light of the number of people unemployed and those seeking work, it did not seem appropriate to extend women's working life. The National Pensions Office further explains that the Law of 1990 envisaged that a flexible pensionable age would be introduced without women's acquired rights being adversely affected. Those acquired rights had as their counterpart the fact that it was impossible for women to claim entitlement to a replacement income, such as unemployment benefit or invalidity benefit, once they had reached the age of 60. The National Pensions Office emphasizes that the concept of retirement age is not clearly defined in Directive 79/7; it is uncertain whether it is the compulsory age, or an element of fact depending on the completion of a number of conditions laid down in advance or the totting-up of a specific number of years of activity, or a full employment record. The National Pensions Office draws the conclusion that the Law of 1990 did not alter the pensionable age, which remains fixed at 65 years for men and, in the form of an acquired right, at 60 years for women. In those circumstances, it is possible to continue to rely on Article 7(1 )(a) to justify the difference in calculation. That point of view is supported by the judgment in Case C-9/91 The Queen v Secretary of State for Social Security, ex parte Equal Opportunities Commission [1992] ECR I-4297, where the Court recognized that the fact that a difference in pensionable ages could be maintained meant that discrimination linked to that difference continued to be justified. The National Pensions Office suggest that the questions should be answered as follows:

‘1. The method of calculating the retirement pension of male claimants does not constitute discrimination on grounds of sex within the meaning of Article 4 of Directive 79/7/EEC, since Article 7(1 )(a) of that Council Directive of 19 December 1978 must be interpreted as meaning that it allows different retirement ages to be determined according to sex, for the purposes of granting a pension, for the calculation of which use is also made, in addition to an age criterion, of a salary criterion, even if the age at which entitlement to the pension arises appears to be the same, so that the difference in the methods of calculating men's and women's pensions which necessarily arises therefrom is also justified.

2. Since the provisions of Directive 79/7/EEC are not as unconditional and clear as may be thought, their direct effect may be questioned.

3. The. retirement pension of male claimants need not be calculated in the same way as the pension of female claimants, since for men the pensionable age remains unaltered and fixed at 65 years, despite the fact that the pension can be obtained from the age of 60 at the very earliest, and the fact that the pensionable age for women remains fixed at 60 years’.

12. The Government of the Kingdom of Belgium also describes the changes in the legislation concerning the progressive implementation of the principle of equal treatment for men and women in matters of social security. The Law of 1990 provides for different pensionable ages, namely 65 for male workers covered by a bridging pension scheme, 60 for all claimants, both men and women, and a preferential age, 55, for underground miners. The reason for retaining the calculation in fortieths for women and forty-fifths for men must be seen in the context of social law and labour law; the right to unemployment, sickness or invalidity benefits ceases at the age of 60 for women and 65 for men. According to the opinion of the Conseil d'Etat, the latitude allowed to the Member States as regards the determination of pensionable age by Article 7(1 )(a) of the Directive can be reflected in the method of calculating benefits. That point of view is support by the judgment in Equal Opportunities Commission, cited above, in which the Court accepted that discrimination other than the determination of a statutory pensionable age which differs according to sex is justified if it is linked to that difference. Since the Law of 1990 constitutes a step in the progressive achievement of equal treatment, and regard being had to the precarious financial equilibrium of the pension scheme for employed workers, the temporary maintenance of a pension calculation more favourable to women can hardly be regarded as incompatible with Directive 79/7. The Belgian Government concludes, as regards the first question, that Article 7(1 )(a) is to be interpreted as meaning that it authorizes the maintenance of different methods of calculation for the pensions of male and female workers in a pension scheme for employed workers such as that in force in Belgium. Since the decision adopted by the National Pensions Office is compatible with Directive 79/7, there is no need to answer the second question. As regards the third question, reference should be made to the answer to the first question.

13. The Commission states, in regard to the first question, that the retirement pension at issue in the main proceedings comes within the scope ratione materiae of Directive 79/7. It cannot be denied that the different method for calculating pensions according to whether the recipient is a man or a woman constitutes discrimination within the meaning of Article 4(1). The question therefore arises whether or not that discrimination comes within one of the derogations provided for in Article 7 of the Directive. Under the Belgian system prior to the Law of 20 July 1990, the pensionable age was fixed at 65 for men and 60 for women. Following the Court's interpretation of Article 7(1 )(a) of the Directive in its judgment in Equal Opportunities Commission, cited above, the difference in the methods of calculating retirement pensions of men and women could be regarded as necessarily linked to the difference in the determination of the statutory pensionable age. The answer is however less evident since the Law of 20 July 1990. There are certain arguments in favour of the application of Article 7(1 )(a). Thus, the principle of equal treatment in the field of pensions is to be achieved gradually; the concept of pensionable age is not clearly defined and a State might properly consider that pensionable age is the normal age at which the person concerned can become fully entitled to a pension; lastly, the distinction between the ages of 60 and 65 is maintained under the law on pensions, in particular for male workers covered by a bridging pension scheme under an agreement, and under other social security legislation. The Commission also acknowledges that it would be paradoxical to accuse Belgium of being in breach of Community law in implementing equal treatment in the matter of pensions by introducing a flexible pensionable age, when it would have been entitled to maintain the previous, more discriminatory, scheme. The Commission also points out that the Court, in its judgment in Equal Opportunities Commission, accepted that the object of the Directive is a progressive implementation of the principle of equal treatment without upsetting the complex financial equilibrium of pension schemes. In those circumstances, the Commission does not reject out of hand the proposition that Article 7(l)(a) of Directive 79/7 authorizes the maintenance of a discriminatory method of calculating the retirement pension in the framework of a progressive adaptation to the principle of equal treatment of a pension scheme which was originally discriminatory as regards both pensionable age and the method of calculating the pension. There are also, however, arguments against the application of Article 7(1 )(a) of Directive 79/7: the Court has consistently held that that provision constitutes a derogation from the principle of equal treatment which must be construed narrowly; its scope is restricted to discrimination necessarily linked to the difference concerning the determination of pensionable age. If a State abandoned the difference in pensionable ages, it would not be entitled to maintain the earlier discrimination linked to that difference in ages, for example discrimination in calculating the pension. The derogation provided for in Article 7 of the Directive is specifically intended to allow the States to adapt the financial equilibrium of the pensions scheme before the pensionable age is made uniform. Lastly, the Commission considers whether the Law of 1990 changed the pensionable age. If it is accepted that the pensionable age is the age at which it is possible to obtain full pension rights, namely 65 for men and 60 for women, the Belgian law did not change the pensionable age and it is therefore impossible to speak of discrimination contrary to Directive 79/7. While expressing its reservations concerning that interpretation, the Commission acknowledges that it is a question of national law; it points out, however, that the national court accepted, in the questions referred for a preliminary ruling, that the Law of 20 July 1990 determined the pensionable age for men and women in the same way. While pointing out that it understands the Belgian Government's position, the Commission none the less concludes that there has been an infringement of Directive 79/7. As regards the second question, the Commission states that it follows from the judgments in Case 71/85 Netherlands v FNV [1986] ECR 3855 and Case 286/85 McDermott and Cotter [1987] ECR 1453, in which the Court held that Article 4(1) of the Directive had direct effect, that that question must be answered in the affirmative. As regards the third question, the Commission considers that the answer to this question can also be found in the judgment in Netherlands v FNV in which the Court stated that in the absence of measures to implement Article 4(1), women are entitled to have applied to them the same rules as those applied to men in the same situation. In a case such as the present one, where discrimination exists against men, it is necessary to apply to men the method for calculating pensions applicable to women. Accordingly, the Commission proposes that the questions referred to the Court be answered as follows:

‘1. Where, under national law, the retirement pension of both men and women is payable at choice as from the first day of the month following the sixtieth birthday, any difference between the method of calculating the retirement pension of a man and that of calculating the pension of a woman constitutes discrimination prohibited by Article 4(1) of Directive 79/7.

2. Article 4(1) of Directive 79/7 may be relied on, as from 23 December 1984, in order to preclude the application of any national provision inconsistent with Article 4(1). In that case, men are entitled to be treated in same way as women and to have the same method of calculating the retirement pension applied to them as to women with the same employment record.’

F.

A. Schockweiler Judge-Rapporteur

1 Language of the case: Dutch.