Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE COURT

14 September 1999 (1)

(Equal pay for men and women - Payments on termination of employment - Indirect discrimination)

In Case C-249/97,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234 EC) by the Landesgericht Linz, Austria, for a preliminary ruling in the proceedings pending before that court between

Gabriele Gruber

and

Silhouette International Schmied GmbH & Co. KG,

on the interpretation of Article 119 of the EC Treaty (Articles 117 to 120 of the EC Treaty have been replaced by Articles 136 EC to 143 EC),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, P.J.G. Kapteyn (Rapporteur), J.-P. Puissochet, G. Hirsch and P. Jann (Presidents of Chambers), J.C. Moitinho de

Almeida, C. Gulmann, J.L. Murray, D.A.O. Edward, H. Ragnemalm, L. Sevón, M. Wathelet and R. Schintgen, Judges,

Advocate General: P. Léger,

Registrar: H.A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

- Gabriele Gruber, by Klaus Mayr, Sekretär der Kammer für Arbeiter und Angestellte für Ober-Österreich at Linz,

- Silhouette International Schmied GmbH & Co. KG, by Christoph Szep, Rechtsanwalt, Linz,

- the Austrian Government, by Wolf Okresek, Ministerialrat am Kanzleramt, acting as Agent,

- the United Kingdom Government, by Lindsey Nicoll, of the Treasury Solicitor's Department, acting as Agent, and by Clive Lewis, Barrister,

- the Commission of the European Communities, by Marie Wolfcarius and Barbara Brandtner, of its Legal Service, acting as Agents, assisted by Stefan Köck and Martin Oder, of the Brussels Bar,

having regard to the Report for the Hearing,

after hearing the oral observations of Gabriele Gruber, Silhouette International Schmied GmbH & Co. KG and the Commission at the hearing on 8 December 1998,

after hearing the Opinion of the Advocate General at the sitting on 23 February 1999,

gives the following

Judgment

1. By order of 24 October 1996, received at the Court on 8 July 1997, the Landesgericht (Regional Court) Linz referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) two questions on the interpretation of Article 119 of the EC Treaty (Articles 117 to 120 of the EC Treaty have been replaced by Articles 136 EC to 143 EC).

2. Those questions have been raised in proceedings between Gabriele Gruber and Silhouette International Schmied GmbH & Co. KG (hereinafter 'Silhouette').

   The relevant law

   Austrian law

3. Paragraph 23(1) of the Angestelltengesetz (Law on Employees, hereinafter 'the AngG') provides that if an employment relationship which has lasted, without interruption, for three years is ended the employee is to be entitled to a termination payment.

4. According to Paragraph 23(7) of the AngG, a termination payment is not, however, payable if the employee himself gives notice to terminate the contract, if he resigns before the end of the contractual period for no important reason or if he is responsible for his dismissal before the end of the contractual period.

5. The important reasons for which an employee may terminate his contract and receive the full termination payment provided for by Paragraph 23(1) of the AngG are laid down by law. They are enumerated in Paragraph 26 of the AngG and Paragraph 82a of the Gewerbeordnung 1859 (Trade and Industry Code, hereinafter 'the GewO 1859'), which applies to workers.

6. Paragraph 26 of the AngG is worded as follows:

   'The following, in particular, shall be regarded as important reasons which justify the employee leaving prematurely:

   (1) the employee is unfit for work or cannot continue to work without damage to his health or moral welfare;

   (2) the employer improperly reduces or withholds pay to which the employee is entitled, discriminates against him by providing unhealthy or insufficient food or insanitary living accommodation where payment is made in kind, or fails to abide by other important terms of the contract;

   (3) the employer fails to fulfil his statutory obligation to protect the life, health and moral welfare of his employee;

   (4) the employer inflicts physical or moral injury on the employee or members of his family or seriously damages their reputations, or refuses to protect the employee against such conduct on the part of one of the employer's colleagues or a member of his family.'

7. Paragraph 82a of the GewO 1859 provides:

   'A worker may leave his work before the end of the contractual period without giving notice if:

   (a) he cannot continue work without demonstrable damage to his health;

   (b) the employer inflicts physical injury on the worker or members of his family or seriously damages their reputations;

   (c) the employer or members of his family seek to lead the worker or members of his family into immoral or unlawful conduct;

   (d) the employer improperly withholds pay due to the worker or fails to abide by other important terms of the contract;

   (e) the employer is unable or unwilling to pay the worker's wages.'

8. Paragraph 23a(3) of the AngG, introduced in 1971, provides that female employees who have been employed without interruption for five years are to be entitled to one half of the termination payment under Paragraph 23(1) if they give notice of resignation, after a live birth, within the period of protection specified in Paragraph 5(1) of the Mutterschutzgesetz (Law on Maternity Benefits, hereinafter 'the MSchG'). If a female employee exercises a right to parental leave under the MSchG, notice must be given no later than three months before the end of the period of parental leave.

9. Under Paragraph 23a(4) of the AngG, the right to receive that termination payment also exists for male employees who have exercised their right to parental leave under the Eltern-Karenzurlaubsgesetz (Law on Parental Leave, hereinafter 'the EKUG') or under similar statutory provisions and who give notice of resignation not more than three months before the end of their period of parental leave.

10. Both the MSchG and the EKUG allow employees to take two years' parental leave.

11. According to Paragraph 2 of the Arbeitersabfertigungsgesetz (Law on Termination Payments for Workers), the provisions of Paragraphs 23 and 23a of the AngG are applicable to workers.

    The dispute in the main proceedings

12. Gabriele Gruber was employed by Silhouette from 23 June 1986 to 13 December 1995 as a worker.

13. She has two children, born on 1 October 1993 and 19 May 1995. She took two years' parental leave both for the first child and for the second child, so that from autumn 1993 she was first subject to the maternity leave arrangements (providing protection before and after childbirth), then on parental leave. When she experienced difficulties in arranging for the care of her children owing to a lack of child-care facilities, and although she had manifested a real desire to continue her employment, on 16 November 1995 she terminated her employment contract in order to take care of her children.

14. After receiving her notice providing that reason for the termination of her employment, Silhouette paid Mrs Gruber the termination payment provided for in Paragraph 23a(3) of the AngG.

15. Mrs Gruber, claiming that her resignation was for important reasons connected with the lack of child-care facilities for children under three years of age in her locality, the Land of Upper Austria, challenged the reduction in her termination payment before the Landesgericht Linz. There she argued that she was entitled to payment of the full termination payment under Paragraph 23(1) of the AngG, on the ground that the national provisions which limited her entitlement constituted indirect discrimination against female workers prohibited by Article 119 of the Treaty.

16. Considering that the determination of the case depended on the interpretation of Article 119 of the Treaty, the Landesgericht Linz decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:

    '1. Is it compatible with Article 119 of the EC Treaty that, owing to lack of child-care facilities, it is predominantly women who have to terminate their employment relationship in order to take care of their children and that such women, despite fulfilment of additional conditions (longer service), receive no more than one half of the termination payments which would be due to them in respect of the actual period of their employment (Paragraph 23a(3) of the AngG), whilst men remain credited with the full period for the purpose of such payments?

    2. Is it relevant that in Austria most nurseries are State-run or State-aided?'

    Admissibility of the questions referred for a preliminary ruling

17. Silhouette claims that the questions must be declared inadmissible. In its submission, they are hypothetical because, contrary to what is stated by the referring court and by Mrs Gruber, Mrs Gruber was not compelled to resign from her employment for lack of child-care facilities for her child since she could still have taken more than a year's parental leave. Consequently, she could not rely on

    Paragraph 23(1) of the AngG. At the hearing, the Commission partly shared this view, considering that the right to continue to take parental leave could be decisive in the examination of the question whether a situation which compelled a worker to give up work existed.

18. At the hearing, Mrs Gruber accepted that she could indeed have taken parental leave for a further year. But, she argued, the problem raised by the Landesgericht would have arisen in any case at the end of that leave, since children may be placed in nurseries only from the age of three years, so that the situation of the child between two and three years of age did not change.

19. As the Advocate General points out in paragraph 23 of his Opinion, Silhouette's objection amounts to a criticism of the assessment of the facts and the application of national law by the Landesgericht. However, the Court has consistently held that it is for the national courts to furnish it with the factual and legal information necessary to give useful answers to the questions they submit to it. According to that same case-law, it is for the national court to interpret the national provisions at issue. The Court cannot therefore substitute its own judgment for that of the national court as regards the question whether those provisions apply in the case before it.

20. The questions referred for a preliminary ruling are accordingly admissible.

    The first question

21. By its first question the Landesgericht asks essentially whether Article 119 of the Treaty precludes national legislation under which a termination payment is granted to workers who end their employment relationship prematurely in order to take care of their children owing to a lack of child-care facilities for them, where that payment is reduced in relation to that received, for the same actual period of employment, by workers who give notice of resignation for an important reason, if the workers who receive the reduced termination payment are predominantly women.

22. It must be observed first of all that it is not contested that termination payments constitute 'pay' within the meaning of Article 119 of the Treaty. The dispute in the main proceedings concerns the calculation of the amount of termination payment which the claimant may claim.

23. Nor is it contested that in the present case there can be no direct discrimination on the grounds of sex, since the reduced termination payment provided for by Paragraph 23a of the AngG is made on the same conditions to female workers as it is to male workers who end their employment relationship after the birth of a child.

24. It is therefore necessary to determine whether the application of a provision such as Paragraph 23a of the AngG, in circumstances such as those referred to by the Landesgericht, constitutes a measure which is indirectly discriminatory towards female workers.

25. According to settled case-law, indirect discrimination arises where a national measure, although formulated in neutral terms, works to the disadvantage of far more women than men (see, in particular, the judgment in Case C-1/95 Gerster [1997] ECR I-5253, paragraph 30).

26. It is also clear from the case-law of the Court that Article 119 of the Treaty precludes the application of provisions which maintain differences of treatment between male and female workers as a result of the application of criteria not based on sex where those differences of treatment are not attributable to objective factors unrelated to sex discrimination (see, in particular, the judgment in Case C-167/97 Seymour-Smith and Perez [1999] ECR I-623, paragraph 52).

27. The first question to be examined therefore is whether Paragraph 23a(3) puts a worker like Mrs Gruber at a disadvantage in relation to other workers who are in a situation identical to or similar to hers.

28. In this regard, two different arguments have been put forward.

29. According to the first, put forward by Mrs Gruber and the Commission, the groups to be compared are workers who resign from employment for reasons of maternity and workers who resign for important reasons. When this comparison is made, a disadvantage exists, since the first group receives only one half of the termination payment granted to the second group. In this argument, therefore, resigning from employment for reasons of maternity is considered to be equivalent to an important reason within the meaning of Paragraph 26 of the AngG, giving rise to entitlement to the full termination payment provided for in Paragraph 23(1) of that Law.

30. Silhouette and the Austrian Government, on the other hand, argue that the groups to be compared are workers who resign for reasons of maternity and workers who resign from employment without any important reason or who voluntarily end their employment relationship for reasons of personal convenience. Here, the argument runs, there is no disadvantage, since the first group is entitled to a termination payment, whilst the second receives none. It follows that Paragraph 23a(3) of the AngG, providing for entitlement to a limited termination payment, constitutes a special provision granting preferential treatment for the workers concerned.

31. The validity of both those arguments depends on whether the situation in which workers who resign in order to take care of their children find themselves is in substance and origin similar to the situation of workers who resign for important

    reasons within the meaning of Paragraph 26 of the AngG and Paragraph 82a of the GewO 1859.

32. From the examples given in Paragraph 26 of the AngG and Paragraph 82a of the GewO 1859 it would appear that the situations envisaged have the common characteristic of being related to the working conditions in the undertaking or to the conduct of the employer, rendering continued work impossible, so that no worker could be expected to maintain his employment relationship, even during the period of notice normally provided for in the event of resignation.

33. The situations referred to above are therefore in substance and origin different from that of a worker like Mrs Gruber.

34. It follows that the exclusion of such a worker from the benefit of Paragraph 23(1) of the AngG does not constitute an indirectly discriminatory measure.

35. The answer to be given to the first question must therefore be that Article 119 of the Treaty does not preclude national legislation under which a termination payment is granted to workers who end their employment relationship prematurely in order to take care of their children owing to a lack of child-care facilities for them, where that payment is reduced in relation to that received, for the same actual period of employment, by workers who give notice of resignation for an important reason related to working conditions in the undertaking or to the employer's conduct.

    The second question

36. By its second question the national court asks essentially whether the fact that in the Member State concerned nurseries are mostly run by the public services or with their financial support affects the answer to be given to the first question.

37. On this point, it need merely be observed that the question whether or not the grant of a reduced termination payment to workers who end their employment relationship prematurely in order to look after their children owing to a lack of child-care facilities for them constitutes discrimination within the meaning of Article 119 of the Treaty cannot depend on the public or private nature of such facilities.

38. The answer to be given to the second question must therefore be that the fact that in the Member State concerned nurseries are mostly run by the public services or with their financial support does not affect the answer to be given to the first question.

    Costs

39. The costs incurred by the Austrian and United Kingdom Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT

in answer to the questions referred to it by the Landesgericht Linz by order of 24 October 1996, hereby rules:

1. Article 119 of the EC Treaty (Articles 117 to 120 of the EC Treaty have been replaced by Articles 136 EC to 143 EC) does not preclude national legislation under which a termination payment is granted to workers who end their employment relationship prematurely in order to take care of their children owing to a lack of child-care facilities for them, where that payment is reduced in relation to that received, for the same actual period of employment, by workers who give notice of resignation for an important reason related to working conditions in the undertaking or to the employer's conduct.

2. The fact that in the Member State concerned nurseries are mostly run by the public services or with their financial support does not affect the answer given to the first question.

Rodríguez IglesiasKapteyn Puissochet Hirsch Jann Moitinho de Almeida Gulmann Murray Edward Ragnemalm Sevón WatheletSchintgen

Delivered in open court in Luxembourg on 14 September 1999.

R. Grass G.C. Rodríguez Iglesias

Registrar President

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1: Language of the case: German.