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

JUDGMENT OF THE COURT (Grand Chamber)

14 April 2015 (*)

(Reference for a preliminary ruling — Male and female workers — Equal treatment in matters of social security — Directive 79/7/EEC — Article 4 — Directive 97/81/EC — UNICE, CEEP and ETUC Framework Agreement on part-time work — Calculation of benefit — System for inclusion of contribution gaps — Part-time workers and full-time workers)

In Case C‑527/13,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunal Superior de Justicia de Galicia (Spain), made by decision of 10 September 2013, received at the Court on 7 October 2013, in the proceedings

Lourdes Cachaldora Fernández

v

Instituto Nacional de la Seguridad Social (INSS),

Tesorería General de la Seguridad Social (TGSS),

THE COURT (Grand Chamber),

composed of V. Skouris, President, K. Lenaerts, Vice-President, A. Tizzano, R. Silva de Lapuerta, M. Ilešič, A. Ó Caoimh and J.-C. Bonichot, Presidents of Chambers, A. Arabadjiev, C. Toader, M. Safjan, D. Šváby, A. Prechal, E. Jarašiūnas, C.G. Fernlund and F. Biltgen (Rapporteur), Judges,

Advocate General: Y. Bot,

Registrar: M. Ferreira, Principal Administrator,

having regard to the written procedure and further to the hearing on 29 September 2014,

after considering the observations submitted on behalf of:

–        the Instituto Nacional de la Seguridad Social (INSS) and the Tesorería General de la Seguridad Social (TGSS), by M.A. Lozano Mostazo and I. Pastor Merino, abogados,

–        the Spanish Government, by L. Banciella Rodríguez-Miñón, acting as Agent,

–        the European Commission, by L. Lozano Palacios and D. Martin, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 9 October 2014,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation, first, of Article 4 of 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) and, secondly, of Clause 5(1)(a) of the Framework Agreement on part-time work concluded on 6 June 1997 (‘the Framework Agreement’), set out in the Annex to Council Directive 97/81/EC of 15 December 1997 concerning the Framework Agreement on part-time work concluded by UNICE, CEEP and the ETUC (OJ 1998 L 14, p. 9), as amended by Council Directive 98/23/EC of 7 April 1998 (OJ 1998 L 131, p. 10).

2        The request was made in the course of proceedings between Ms Cachaldora Fernández and the Instituto Nacional de la Seguridad Social (INSS) (National Institute of Social Security, ‘the INSS’) and the Tesorería General de la Seguridad Social (TGSS) (Social Security General Fund) concerning the determination of the basis for the calculation of a pension for total permanent invalidity.

 Legal context

 EU law

3        In accordance with Article 2 thereof, Directive 79/7 is to apply 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.

4        Under Article 3(1) of that directive, it is to apply, in particular, to statutory schemes which provide protection against invalidity.

5        Article 4(1) of that directive provides:

‘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 to them,

–        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.’

6        The third paragraph in the preamble to the Framework Agreement is worded as follows:

‘This Agreement relates to employment conditions of part-time workers recognising that matters concerning statutory social security are for decision by the Member States. In the context of the principle of non-discrimination, the parties to this Agreement have noted the Employment Declaration of the Dublin European Council of December 1996, wherein the Council inter alia emphasised the need to make social security systems more employment-friendly by “developing social protection systems capable of adapting to new patterns of work and of providing appropriate protection to people engaged in such work”. The parties to this Agreement consider that effect should be given to this Declaration.’

7        Under Clause 2(1), that Framework Agreement ‘applies to part-time workers who have an employment contract or employment relationship as defined by the law, collective agreement or practice in force in each Member State’.

8        Clause 4(1) of the Framework Agreement provides:

‘In respect of employment conditions, part-time workers shall not be treated in a less favourable manner than comparable full-time workers solely because they work part time unless different treatment is justified on objective grounds.’

9        Clause 5(1)(a) of the Framework Agreement provides:

‘In the context of Clause 1 of this Agreement and of the principle of non-discrimination between part-time and full-time workers:

(a)      Member States, following consultations with the social partners in accordance with national law or practice, should identify and review obstacles of a legal or administrative nature which may limit the opportunities for part-time work and, where appropriate, eliminate them.’

 Spanish law

10      Article 140(1)(a) of the General Law on social security (ley general de la seguridad social), approved by Royal Legislative Decree 1/1994 of 20 June 1994 (BOE No 154, 29 June 1994, p. 20658; ‘the LGSS’), in the version applicable to the case in the main proceedings, provides:

‘The basis for the calculation of permanent invalidity pensions arising from sickness other than an occupational disease shall be determined in accordance with the following provisions:

(a)      The quotient is used that results from dividing by 112 the contribution bases of the interested party during the 96 months before the month preceding the event giving rise to the entitlement.’

11      Rule 3(b) of additional provision 7(1) of the LGSS provides, with regard to the basis for the calculation of retirement and invalidity pensions applicable to part-time workers, as follows:

‘For the purposes of calculating pensions for retirement and for permanent invalidity arising from a non-occupational disease, the periods during which there was no obligation to pay contributions shall be included using the minimum contribution basis of all the bases applicable to each period, corresponding to the number of hours most recently worked.’

12      Article 7(2) of Royal Decree 1131/2002 governing social security for part-time workers and partial retirement (Real Decreto 1131/2002 por el que se regula la Seguridad Social de los trabajadores contratados a tiempo parcial, así como la jubilación parcial) of 31 October 2002 (BOE No 284, 27 November 2002, p. 41643, ‘Royal Decree 1131/2002’), which implemented the provisions of rule 3(b) of additional provision 7(1) of the LGSS provides:

‘For the purposes of calculating pensions for retirement and for permanent invalidity arising from a non-occupational disease or a non-occupational accident, the periods during which there was no obligation to pay contributions shall be included taking into consideration the minimum contribution basis of all the bases applicable to each period, corresponding to the number of hours worked under the contract on the date on which that obligation to pay contributions was interrupted or expired.’

 The dispute in the main proceedings and the questions referred for a preliminary ruling

13      Ms Cachaldora Fernández made contributions to Spain’s social security system between 15 September 1971 and 25 April 2010, making a total of 5 523 days on a full-time basis, except for the periods from 1 September 1998 to 28 February 1999, 1 March 1999 to 23 March 2001, and 24 March 2001 to 23 January 2002, when she was employed on a part-time basis. However, she made no contributions for the period from 23 January 2002 to 30 November 2005.

14      On 21 April 2010, Ms Cachaldora Fernández applied to the INSS for an invalidity pension.

15      By decision of 29 April 2010, she was awarded a pension on the ground of total permanent invalidity to pursue her normal occupation. The monthly basic amount was fixed at EUR 347.03 and the applicable rate at 55%. That amount was calculated using, as the calculation period, the eight years preceding the date of the event giving rise to the invalidity, that is to say, the period from March 2002 to February 2010, and taking, for the period from March 2002 to November 2005, the minimum contribution bases applicable in each of those years, to which was applied the reduction coefficient for the part-time work that give rise to the payment of the last contributions prior to March 2002.

16      Ms Cachaldora Fernández lodged a complaint against that decision, claiming that, for the purposes of calculating her pension, for the period between March 2002 and November 2005, the full amount of the minimum contribution bases for each of those years should be taken into consideration and not the reduced amount thereof resulting from the application of the coefficient for part-time work. According to that calculation method, the basic amount of her pension — which is not disputed by the INSS — would come to EUR 763.76.

17      Since the INSS rejected that complaint on the ground that the proposed calculation method was not consistent with Article 7(2) of Royal Decree 1131/2002, Ms Cachaldora Fernández brought an action against that decision before the Juzgado de lo Social No 2 de Ourense (Social and Labour Court No 2, Ourense). By judgment of 13 October 2010, that court dismissed the action and upheld the administrative decision of the INSS, relying on Article 7(2) of Royal Decree 1131/2002 and on additional provision 7 of the LGSS.

18      Ms Cachaldora Fernández lodged an appeal against that judgment before the Tribunal Superior de Justicia de Galicia (High Court of Justice, Galicia). That court has doubts as to the compatibility of the Spanish legislation with EU law.

19      The referring court asks, first, whether, in the main proceedings, there is indirect discrimination against female workers within the meaning of Directive 79/7. Accordingly, it is claimed that the national provisions at issue in the main proceedings, in so far as they mainly affect female workers, have an adverse effect on a greater number of women than men and it is not certain that the justification put forward, namely that ‘covering [contribution] gaps in proportion to the part-time work done is consistent with a principle of logic and balance of the protection afforded by the social security system, which determines that the protection afforded by that system can never exceed previous contributions to it, in accordance with the principles of payment of contributions and proportionality between the contributions paid and the cover provided’ complies with the requirements of EU law.

20      Thus, on the one hand, a criterion of proportionality in relation to the contribution of the worker concerned would require calculating the reduction coefficient for part-time work, applied to the minimum contribution bases taken into account for the periods when there are contribution gaps, on the basis of all the contributions paid by the worker in the course of his working life. The national provisions at issue in the main proceedings, however, do not provide for such a method of calculation, since they impose the use of the reduction coefficient for the part-time work corresponding to the contract preceding the contribution gap, which could, as evidenced in the main proceedings, give rise to totally disproportionate results when the part-time work represents only a small part of the entire working life of the worker concerned.

21      On the other hand, it is not right to apply a proportionality criterion to the mechanism for covering contribution gaps since that mechanism does not follow a rationale based on contributions, as is shown by the fact that the gaps are taken into account by considering fixed contributions which do not correspond to the contributions paid, but seeks, rather, to address the problems connected with taking into account a fixed period for calculating the reference base. In the present case, the fact of having worked part-time and making contributions, rather than remaining inactive and not making contributions had, it is claimed, a detrimental effect on Ms Cachaldora Fernández, as her invalidity pension was thereby reduced.

22      The referring court considers, secondly, that the national provisions at issue in the main proceedings may also infringe the Framework Agreement. It is true that the invalidity pension at issue in the main proceedings cannot, in the light of the criteria laid down by the Court, be regarded as a wage and, therefore, it is not an employment condition subject to the principle of non-discrimination against part-time workers, provided for in Clause 4 of the Framework Agreement. However, Clause 5(1)(a) of the Framework Agreement requires Member States to identify and review obstacles of a legal or administrative nature which may limit the opportunities for part-time work and, where appropriate, eliminate them. In the present case, it is arguable that the conditions in which contribution gaps are taken into account under Spanish legislation constitute an ‘obstacle of a legal nature’ to part-time work in that those workers who, after losing a full-time job, accept a part-time job are disadvantaged as against those who do not accept such work. That constitutes a significant impediment to accepting part-time work.

23      In those circumstances, the Tribunal Superior de Justicia de Galicia decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Is a national provision, such as additional provision 7(1), rule 3(b) of the [LGSS], contrary to Article 4 of Directive 79/7, in that it affects a group comprising mainly women, and according to which contribution gaps existing within the period for calculating the reference base of a contributory invalidity pension, after a period of part-time employment, are covered by taking into account the minimum contribution bases applicable at any time, reduced as a result of the reduction coefficient of the employment before the contribution gap, whereas if the employment is full time, there is no reduction?

(2)      Is a national provision, such as additional provision 7(1), rule 3(b) of the [LGSS], contrary to Clause 5(1)(a) of the [Framework Agreement], in that it affects a group comprising mainly women, and according to which contribution gaps existing within the period for calculating the reference base of a contributory invalidity pension, after a period of part-time employment, are covered by taking into account the minimum contribution bases applicable at any time, reduced as a result of the reduction coefficient of the employment before the contribution gap, whereas if the employment is full time, there is no reduction?’

 Consideration of the questions referred for a preliminary ruling

 The first question

24      By its first question, the referring court asks, in essence, whether Article 4 of Directive 79/7 must be interpreted as precluding, in the light of the matters set out in the order for reference, a rule of national law which provides that the contribution gaps existing within the reference period for calculating a contributory invalidity pension, after a period of part-time employment, are taken into account at the level of the minimum contribution bases applicable at any time, reduced as a result of the reduction coefficient of that employment, whereas, if those gaps follow full-time employment, there is no provision for such a reduction.

25      In that regard, whilst it is established that EU law respects the power of the Member States to organise their social security systems and that, in the absence of harmonisation at EU level, it is for the legislation of each Member State to determine the conditions for the grant of social security benefits, the fact nevertheless remains that, when exercising that power, Member States must comply with EU law (see, to that effect, judgments in Watts, C‑372/04, EU:C:2006:325, paragraph 92 and the case-law cited, and Somova, C‑103/13, EU:C:2014:2334, paragraphs 33 to 35 and the case-law cited).

26      Consequently, EU law does not affect, in principle, the choice of the Spanish legislature to adopt, as the basis for calculating the invalidity pension at issue in the main proceedings, a reference period limited to eight years and to apply a reduction coefficient when a contribution gap immediately follows a period of part-time work. However, it is necessary to establish whether, in the main proceedings, that choice complies with Directive 79/7.

27      It must be noted, from the outset, that a rule of national law such as that at issue in the main proceedings is not directly discriminatory on grounds of sex, since it applies without distinction to both male and female workers. It is therefore necessary to examine whether it is indirectly discriminatory on grounds of that criterion.

28      As regards the question whether legislation such as that at issue in the main proceedings constitutes indirect discrimination, as the referring court suggests, it is apparent from the settled case-law of the Court that indirect discrimination arises where a national measure, albeit formulated in neutral terms, works to the disadvantage of far more women than men (see, in particular, judgments in Brachner, C‑123/10, EU:C:2011:675, paragraph 56 and the case-law cited, and Elbal Moreno, C‑385/11, EU:C:2012:746, paragraph 29).

29      In the present case, it must be noted that the assessment of the referring court is based on the dual premiss that the national provision at issue in the main proceedings concerns a group of part-time workers, the great majority of which is made up of female workers.

30      In that regard, it should be noted that, as is apparent from the order for reference, the national provision at issue is not applicable to all part-time workers, but only to workers who have had a gap in their contributions during the reference period of eight years preceding the date of the event giving rise to the invalidity, when that gap follows a period of part-time work. Accordingly, general statistical data concerning the group of part-time workers, taken as a whole, are not relevant to establish that many more women than men are affected by that provision.

31      Furthermore, it should be pointed out that even if it appears that a worker such as Ms Cachaldora Fernández is disadvantaged because she worked part time during the period immediately preceding the gap in her contributions, it is possible that, as the INSS, the Spanish Government and the European Commission have stated, some part-time workers may also benefit from the rule of national law at issue in the main proceedings. In all cases where the last contract that preceded professional inactivity is a full-time contract, but where the workers, for the remainder of the calculation period or even throughout their entire working lives, worked only part-time, they will benefit since they will receive a pension that is overvalued in relation to the contributions actually paid.

32      In those circumstances, the statistical data on which the national court has based its assessments cannot lead to the conclusion that the group of workers disadvantaged by the rule of national law at issue in the main proceedings is mainly composed of part-time workers and, in particular, female workers.

33      In the light of the foregoing, the national provision at issue cannot, on the basis of the matters set out in the order for reference, be regarded as placing at a disadvantage predominantly a particular category of workers, in this case those working part-time and, in particular, women. That provision cannot, therefore be regarded as being an indirectly discriminatory measure within the meaning of Article 4(1) of Directive 79/7.

34      Accordingly, the answer to the first question is that Article 4(1) of Directive 79/7 must be interpreted as not precluding a rule of national law which provides that the contribution gaps existing within the reference period for calculating a contributory invalidity pension, after a period of part-time employment, are taken into account at the minimum contribution bases applicable at any time, reduced as a result of the reduction coefficient of that employment, whereas, if those gaps follow full-time employment, there is no provision for such a reduction.

 The second question

35      By its second question, the referring court asks, in essence, whether Clause 5(1)(a) of the Framework Agreement must be interpreted as applying to legislation of a Member State which provides that the contribution gaps existing within the reference period for calculating a contributory invalidity pension, after a period of part-time employment, are taken into account by using the level of the minimum contribution bases applicable at any time, reduced as a result of the reduction coefficient of that employment, whereas, if those gaps follow full-time employment, there is no provision for such a reduction.

36      In that regard, it must be pointed out that it is clear from its preamble that the Framework Agreement relates to the ‘employment conditions of part-time workers, recognising that matters concerning statutory social security are for decision by the Member States’.

37      Furthermore, as is apparent from the case-law of the Court, the term ‘employment conditions’, within the meaning of the Framework Agreement, covers pensions which depend on an employment relationship between the worker and the employer, excluding statutory social security pensions, which are determined less by that relationship than by considerations of social policy (judgment in Elbal Moreno, C‑385/11, EU:C:2012:746, paragraph 21).

38      In the present case, it is apparent from all the information available to the Court that the pension at issue in the main proceedings is a statutory social security pension. Consequently, that pension cannot, as the Advocate General observed in point 29 of his Opinion, be regarded as constituting an employment condition, within the meaning of Clause 4(1) of the Framework Agreement, and does not, therefore, fall within its scope.

39      In addition, an interpretation of ‘obstacles of a legal … nature’, as referred to in Clause 5(1)(a) of the Framework Agreement, under which Member States would be forced to adopt, outside the area of employment conditions, measures relating to a pension such as that at issue in the main proceedings, would amount to imposing general social policy obligations on those Member States concerning measures that fall outside the scope of that Framework Agreement.

40      Moreover, as has been noted in paragraphs 30 and 31 of the present judgment, the national provision at issue in the main proceedings does not affect all part-time workers, but only workers who have had a gap in their contributions immediately after a period of part-time work. Furthermore, that provision benefits workers who, even though employed part-time for much of their working lives, were employed full-time immediately before a contribution gap. In view of the random nature of the impact of that provision on part-time workers, it cannot be regarded as a legal obstacle likely to limit the opportunities for part-time work.

41      The answer to the second question is therefore that the Framework Agreement must be interpreted as not applying to legislation of a Member State which provides that the contribution gaps existing within the reference period for calculating a contributory invalidity pension, after a period of part-time employment, are taken into account by using the minimum contribution bases applicable at any time, reduced as a result of the reduction coefficient of that employment, whereas, if those gaps follow full-time employment, there is no provision for such a reduction.

 Costs

42      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Grand Chamber) hereby rules:

1.      Article 4(1) of 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 must be interpreted as not precluding a rule of national law which provides that the contribution gaps existing within the reference period for calculating a contributory invalidity pension, after a period of part-time employment, are taken into account by using the minimum contribution bases applicable at any time, reduced as a result of the reduction coefficient of that employment, whereas, if those gaps follow full-time employment, there is no provision for such a reduction.

2.      The Framework Agreement on part-time work, concluded on 6 June 1997, set out in the Annex to Council Directive 97/81/EC of 15 December 1997 concerning the Framework Agreement on part-time work concluded by UNICE, CEEP and the ETUC, as amended by Council Directive 98/23/EC of 7 April 1998, must be interpreted as not applying to legislation of a Member State which provides that the contribution gaps existing within the reference period for calculating a contributory invalidity pension, after a period of part-time employment, are taken into account by using the minimum contribution bases applicable at any time, reduced as a result of the reduction coefficient of that employment, whereas, if those gaps follow full-time employment, there is no provision for such a reduction.

[Signatures]

* Language of the case: Spanish.

© European Union
The source of this judgment is the Europa web site. The information on this site is subject to a information found here: Important legal notice. This electronic version is not authentic and is subject to amendment.