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

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 26 April 2018 (1)

Case C‑17/17

Grenville Hampshire

v

The Board of the Pension Protection Fund,

Interested party:

Secretary of State for Work and Pensions

(Request for a preliminary ruling from the Court of Appeal (United Kingdom))

(Request for a preliminary ruling — Protection of employees in the event of the insolvency of their employer — Article 8 of Directive 2008/94/EC — Protection of the immediate and prospective entitlement of employees to old-age benefits — Supplementary occupational pension scheme — Minimum guarantee — Direct applicability)

I.      Introduction

1.        The present request for a preliminary ruling in the field of social policy concerns the protection of employees in the event of the insolvency of their employer. Specifically, it relates to the fate of claims under an occupational pension scheme set up by an employer in the event of insolvency. Such claims are covered by Article 8 of Directive 2008/94/EC, (2) which requires Member States to take measures to protect the interests of employees in respect of their rights to old-age benefits in the event of the insolvency of the employer. The Court clarified this responsibility for providing protection in its judgments in Robins and Hogan to the effect that employees must retain at least 50% of their entitlement to old-age benefits in the event of the insolvency of their employer. (3)

2.        In the present case the focus is once again on the transposition of the directive in the United Kingdom, which provides for an absolute cap on claims for compensation to which employees are entitled in the event of the insolvency of their employer. The contested national rules affect above all employees whose entitlement under a supplementary occupational pension scheme is already relatively high. In the case of the applicant in the main proceedings, Mr Hampshire, those rules result in a loss of more than 67% of his old-age pension entitlement.

3.        Against this background, the question arises as to the extent and practical operation of the minimum guarantee developed by the Court for the accrued pension entitlement.

4.        The question also arises as to the possible direct applicability of Article 8 of the directive in the present case. That provision is relatively broad in its wording but at the same time has been given extensive clarification in the Court’s case-law.

II.    Legal framework

A.      EU law

5.        The framework of this case in EU law is defined by the rules of Directive 2008/94 on the protection of employees in the event of the insolvency of their employer (‘the Directive’). According to recital 3, the Directive seeks to protect employees in the event of the insolvency of their employer, in particular in respect of payment of outstanding claims.

6.        Article 8 of the Directive provides:

‘Member States shall ensure that the necessary measures are taken to protect the interests of employees and of persons having already left the employer’s undertaking or business at the date of the onset of the employer’s insolvency in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors’ benefits, under supplementary occupational or inter-occupational pension schemes outside the national statutory social security schemes.’

7.        Reference should also be made to Article 12(a) of the Directive, which contains the following provision:

‘This Directive shall not affect the option of Member States:

(a)      to take the measures necessary to avoid abuses;

(b)      …’

B.      National law

8.        Directive 2008/94 was transposed in the United Kingdom, in so far as the protection of employees’ rights to old-age benefits is concerned, mainly by the Pensions Act 2004.

9.        The Pensions Act 2004 establishes a statutory Pension Protection Fund (‘PPF’). In the event of the insolvency of an employer, the PPF assumes responsibility, subject to certain conditions, for employees’ claims under a supplementary occupational pension scheme. In order to fund this task, it imposes a levy on all eligible supplementary occupational pension schemes. Furthermore, if responsibility is assumed, it takes over the remaining assets of the scheme in question. The Board of the Pension Protection Fund (‘the Board’) administers the PPF.

10.      By virtue of section 127(2) of the Pensions Act 2004, one of the conditions for the PPF assuming responsibility is that at the time when insolvency occurs, the value of the assets of the scheme concerned is less than the amount of the protected liabilities.

11.      However, the full pension claims of all employees in the supplementary occupational pension scheme are not regarded as ‘protected liabilities’ within the meaning of that provision, but only the compensation entitlements accruing to them under the Pensions Act 2004 (‘PPF compensation’). The amount of PPF compensation payable in each case is determined by the Board following insolvency during an ‘assessment period’.

12.      For employees who have already attained their pension scheme’s normal pension age at the time of the insolvency of the employer, section 162 of the Pensions Act 2004 does not provide for a reduction of their claims. On the other hand, employees who have not yet attained the normal pension age at the time of the insolvency are entitled to only 90% of the value of their accrued entitlement. In addition, their claim is subject to the cap under Schedule 7, paragraph 26 of the Pensions Act 2004 which is at issue in the main proceedings.

13.      The annually applicable cap for employees in a certain age group is set by the PPF. Although the level is increased each year according to the general trend in earnings, benefit recipients to whom the cap applies receive throughout their lifetime the amount which was determined for the year in which they were first paid benefits by the PPF.

14.      Furthermore, Schedule 7, paragraph 28 of the Pensions Act 2004 provides for an inflationary adjustment with an upper limit of 2.5% p. a. for the maximums initially defined; however, no provision is made for adjustment of the maximum based on that provision in respect of compensation attributable to employment prior to 6 April 1997.

15.      If, after concluding its assessment and calculation of the total protected liabilities to be serviced, the PPF finds that there were sufficient assets in the supplementary occupational pension scheme at the relevant time at least to pay benefits to employees to the level of the PPF compensation, it must determine pursuant to section 154 of the Pensions Act 2004 that it is not appropriate for the PPF to assume responsibility.

16.      In this case, the supplementary occupational pension scheme is wound up outside the PPF. The supplementary pension scheme in question is then required to grant employees PPF compensation from the remaining funds. Under section 154(7) of the Pensions Act 2004, the supplementary occupational pension scheme is subject to the directions of the PPF.

17.      As soon as the valuation by the PPF has taken place, it becomes binding under section 145 of the Pensions Act 2004, subject to appeal.

III. Facts, main proceedings and request for a preliminary ruling

18.      Grenville Hampshire, the appellant in the main proceedings, was employed from 1971 to 1998 by Turner & Newall plc (‘T&N’). Throughout his period of employment he was a member of the T&N supplementary occupational pension scheme. In 1998 he took retirement at the age of 51, when his pension entitlement was set by the trustees of the T&N pension scheme at GBP 48 781.80 per annum before tax, with an annual increase of at least 3%. Following a takeover by the US undertaking Federal Mogul, an insolvency application was filed for T&N, now Federal Mogul, in the United States in 2001. Subsequently, on 10 July 2006, the PPF opened the assessment in the United Kingdom concerning the takeover of the supplementary occupational pension scheme.

19.      After the assessment had been concluded, the PPF found on 19 September 2011 that, as at 10 July 2006, sufficient funds were available in the T&N pension scheme to grant at least PPF compensation to the remaining employees throughout their lifetime. The amount of relevant PPF compensation for Mr Hampshire was set at GBP 19 819 per annum before tax, as he had not yet attained the normal pension age for the T&N pension scheme in 2006 and was thus subject to the statutory cap.

20.      In addition, it was not envisaged that that amount would be subject to any inflationary adjustment because Mr Hampshire’s employment was largely prior to 6 April 1997. Compared to his entitlement of GBP 60 240 per annum, which Mr Hampshire would have received in 2006 if his employer had not become insolvent, this represents a reduction of 67%, a figure set to rise.

21.      For this reason, Mr Hampshire and 15 other former employees of T&N who are affected by similar reductions first sought application of the review mechanism under the Pensions Act 2004 in respect of the PPF valuation and subsequently appealed against the decision confirming that valuation, relying on Article 8 of Directive 2008/94.

22.      The PPF considers, however, that the Court’s case-law on Article 8 of the Directive only requires Member States to have introduced systems of protection which guarantee all employees in a supplementary occupational pension scheme compensation of at least 50% of the value of their accrued entitlement on average, but not each individual employee.

23.      The proceedings are now before the Court of Appeal (United Kingdom). By order of 26 July 2016, received at the Court of Justice on 16 January 2017, the Court of Appeal stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling pursuant to Article 267 TFEU:

1.      Does Article 8 of Directive 80/987/EEC (now superseded by Article 8 of Directive 2008/94/EC) require Member States to ensure that every individual employee receives at least 50% of the value of his accrued entitlement to old-age benefits in the event that his employer becomes insolvent (with the sole exception of cases of abuse, to which Article 10(a) of that Directive applies)?

2.      Alternatively, subject to the findings of the national courts regarding the facts of the case, is it sufficient under Article 8 of Directive 80/987 for a Member State to have a system of protection where employees usually receive more than 50% of the value of their accrued entitlement to old-age benefits but some individual employees receive less than 50% by virtue of:

(a)      a financial cap on the amount of compensation paid to employees (in particular employees who have not reached their pension scheme’s normal pension age at the time of the employer’s insolvency); and/or

(b)      rules limiting the annual increases in the compensation paid to employees or the annual revaluation of their entitlements prior to pension age?

3.      Is Article 8 of Directive 80/987 directly effective in the circumstances of the present case?

24.      In the proceedings before the Court of Justice, Mr Hampshire, the PPF, the United Kingdom, Ireland and the European Commission submitted written observations. The same parties were represented at the hearing on 8 March 2018.

IV.    Legal assessment

25.      The referring court asks the Court about the interpretation of ‘Article 8 of Directive 80/987, now superseded by Article 8 of Directive 2008/94’. The wording of the provision was not amended when the Directive was recast. As the PPF decision of 19 September 2011 is at issue in the main proceedings, I shall have regard hereinafter solely to the provisions of Directive 2008/94.

A.      The admissibility of the request for a preliminary ruling

26.      It is necessary, first of all, to consider the objection raised by the United Kingdom that the request for a preliminary ruling is inadmissible because the questions asked therein are purely hypothetical.

27.      It claims, first, that this is because it would not be appropriate in any case for the PPF to assume responsibility, as there are sufficient assets available in the T&N pension scheme, even in the event of a higher valuation of the protected liabilities.

28.      Second, in the absence of direct applicability of Article 8 of the Directive, Mr Hampshire can pursue his claim only in the form of an action for damages against the State. Such a course of action is a priori futile, however, as the Court held in Hogan that a serious breach of Article 8 of the Directive can be taken to exist only from 25 January 2007, (4) whilst the insolvency of the employer in the present case occurred in 2006.

29.      It should first be pointed out that, according to the Court’s settled case-law, it is solely for the national court to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court; an exception applies, however, where it is quite obvious that the interpretation of EU law bears no relation to the actual facts of the main action or its purpose. (5)

30.      Nevertheless, it will be necessary in any case to clarify in the main proceedings whether the calculation of the protected liabilities pursuant to the provisions of the Pensions Act 2004 meets the requirements of Article 8 of Directive 2008/94. If this were not so, a revaluation of the protected liabilities would have to be conducted by the PPF. It cannot therefore be denied that the questions referred relate to the specific dispute in the main proceedings and are relevant to the decision.

31.      Furthermore, the question whether Article 8 of the Directive has direct effect under the circumstances of the main proceedings or whether the only conceivable claim is for damages against the State is precisely the subject of the request for a preliminary ruling. (6) It is far from obvious that Article 8 of the Directive would not have direct effect.

32.      The reference for a preliminary ruling is therefore admissible.

B.      The first two questions

33.      By the first question, the referring court essentially wishes to ascertain whether Article 8 of Directive 2008/94 is to be understood, in the light of the Court’s judgments in Robins (7) and Hogan, (8) to the effect that Member States must provide for systems of protection which guarantee that each individual employee receives at least 50% of the value of his accrued entitlement to old-age benefits in the event of the insolvency of his employer.

34.      Alternatively, by its second question, the referring court wishes to know whether the requirements of the Directive can also be met by a national system under which, in an individual case (a) by virtue of caps or (b) in the absence of an annual increase in amounts, an employee receives back less than 50% of the value of his accrued entitlement. In the latter case, the level of compensation could therefore fall below 50% of the level of the accrued entitlement over time as a result of the non-adjustment.

35.      The answer to Question 2(b) thus depends on what value is protected by Article 8 of the Directive: the amount to which an employee was entitled at the time of the insolvency of the employer or the total value of the accrued entitlement to old-age benefits.

36.      As both the first question and the second question concern the interpretation of Article 8 of the Directive with regard to the level of protection and the interpretation of existing case-law on that provision, the first two questions should be dealt with together.

37.      In this regard, the first step is to consider whether Article 8 of the Directive establishes an individual guarantee for each individual employee, and not merely an average level of protection for all employees (see 1 below), and the second step is to examine the value to which such a minimum guarantee might relate (see 2 below). Lastly, I shall deal with the United Kingdom’s arguments for limiting the level of protection in the present case (see 3 below).

1.      Does Article 8 of the Directive contain an individual minimum guarantee for each employee (Questions 1 and 2(a))?

38.      Under Article 8 of Directive 2008/94, Member States are to ensure ‘that the necessary measures are taken to protect the interests of employees … in respect of rights conferring on them immediate or prospective entitlement to old-age benefits’.

39.      The level of protection which must be specifically guaranteed by Member States in the light of that provision has already been determined by the Court in its judgments in Robins and Hogan. (9) In Robins it ruled that, where there is a fall in the level of benefits to, ‘in certain cases … 20 or 49% of the benefits to which an employee was entitled, that is to say, … less than half’, this cannot be considered to protect the interests of employees within the meaning of the abovementioned provision. (10) The Court then confirmed this interpretation in Hogan and Webb-Sämann. (11)

40.      This statement by the Court regarding the level of protection under Article 8 of the Directive must be construed as an individual minimum guarantee for each employee.

41.      First of all, this is clear from the words chosen by the Court. It found that the protection of the interests of employees, within the meaning of Article 8 of the Directive, is no longer guaranteed if in certain cases (12) less than half of the value of the accrued entitlement is compensated. This shows that non-compliance with the necessary level of protection in an individual case is sufficient to constitute an infringement of the Directive.

42.      Accordingly, it was sufficient for a finding of a serious breach of Article 8 of the Directive in Hogan that, under the system in force in Ireland, 10 named employees were paid less than 50% of the value of their individual pension entitlements following the insolvency of their former employer. (13) It follows that it is sufficient if only a small number of beneficiaries — for example around 0.1%–0.2% of the employees of T&N in the main proceedings — are affected by reductions in excess of 50%.

43.      Second, the Court stresses in settled case-law the aim of the Directive, which is to ensure a minimum degree of protection for all employees. (14) However, this aim is effectively achieved only if the minimum standard applies to and can be relied on by each individual employee. By contrast, the postulation favoured by the United Kingdom of merely guaranteeing receipt of 50% of the pension entitlement ‘in principle’ would allow situations to arise in which individuals are entirely unprotected. Nevertheless, the idea of minimum harmonisation underlying the Directive prohibits non-compliance with the level of protection declared as binding by the Directive. (15) The exclusion of individual employees from that minimum standard is therefore unlawful.

44.      Furthermore, it is clear from the drafting history of the present Article 8 of the Directive that it was the EU legislature’s intention to avoid creating particular hardships through the provision. (16) It is inherent in a hardship clause that it should take into account precisely the particular circumstances of the individual case.

45.      This is also apparent in the situation underlying the judgments in Robins and Hogan. Both cases concerned the question whether the United Kingdom or Ireland were liable for damages for incorrect transposition of the Directive. The fact that a provision confers rights on individuals constitutes a mandatory condition for such a claim. (17) The Court considered that the liability of the Member State was only contingent on a finding of a serious breach of the obligation to transpose the Directive (18) and all the other conditions, including the conferral of individual rights by Article 8 of the Directive, were therefore met.

46.      Against this background, in the present context Article 8 of the Directive must be considered to grant the employees concerned the individual right to protection of at least 50% of their accrued entitlement to old-age pension. As the first question is thus to be answered in the affirmative, Question 2(a) must be answered in the negative.

47.      Lastly, it should also be mentioned that the minimum guarantee under Article 8 of the Directive must, of course, be applicable at each stage of the procedure, in particular during the assessment period provided for by the Pensions Act 2004. (19)

2.      Does Article 8 of the Directive also protect envisaged growth in the pension entitlement (Question 2(b))?

48.      The further question arises whether the minimum guarantee under Article 8 of Directive 2008/94 relates only to the value of the claims at the time of the insolvency of the employer or includes envisaged growth in the level of benefit over the entire pension period.

49.      It has already been made clear in case-law that Article 8 of the Directive refers to the protection of the entire pension entitlement acquired through contributions. The Court thus ruled in Webb-Sämann that Article 8 — contrary to Article 3 of the Directive for example — ‘seeks to guarantee the protection of the long-term interests of employees, given that, as regards immediate or prospective entitlements, such interests extend, in principle, over the entire retirement period’. (20)

50.      This is also apparent from the drafting history of the proposal for the Directive, according to which Article 8 of the Directive is intended to ensure that it is possible to meet pension entitlements ‘earned by the employee through many years’ work in the undertaking’. (21) Accordingly, in its settled case-law, the Court regards the pension entitlement of employees under a supplementary occupational pension as a form of ‘deferred pay’. (22)

51.      If envisaged growth in the pension entitlement is not included in the calculation of the minimum protection, however, insufficient account will be taken of the contributions previously paid, as the envisaged annual increase is factored into contributions.

52.      National systems of protection under Article 8 of Directive 2008/94 must therefore also guarantee growth in the entitlement in so far as over the years the guaranteed amount may not fall below 50% of the value originally accrued for a pension year.

53.      The second question in its entirety must therefore be answered in the negative.

3.      Possibility of limitation under the circumstances of the main proceedings?

54.      It remains to be determined whether a lower individual level of protection can be justified in this case for other reasons.

55.      As a first reason, the United Kingdom mentions that in any case Mr Hampshire already has a particularly high level of pension compared with other employees and full compensation for that entitlement would not be socially acceptable.

56.      As the Court has already made clear, there is no obligation in the context of Article 8 of the Directive to provide a full guarantee against the loss of entitlements. (23) A cap on entitlement is not therefore ruled out per se. Rather, Member States can and must take into consideration the need for balanced economic and social development in transposing the Directive. (24)

57.      Consequently, it is possible — as is provided, in essence, by the national rules at issue — to structure compensation at different levels depending on the total value of the entitlement, whereby beneficiaries with previously larger incomes and correspondingly higher entitlements are affected more significantly. The social impact can be mitigated through those beneficiaries receiving back only 50% of the value of their entitlement. (25) However, a reasonable balance cannot be achieved by largely denying certain individuals protection under the Directive.

58.      First, this is apparent from the objective of the Directive of honouring the contributions paid over a working life, taking account of the fact that the entitlement under the occupational pension represents ‘deferred pay’. (26) Second, the PPF is not funded from tax revenue, but by contributions to supplementary occupational pension schemes and by a takeover of their assets. At the hearing it was also explained that those contributions are calculated on the basis of risk, with the result that pension schemes with high commitments also have to pay correspondingly high contributions to the PPF.

59.      Accordingly, it would appear to be socially reasonable compensation for EU law to provide for a minimum guarantee of 50% for all employees. Furthermore, in the main proceedings only a few employees are affected by the cap on their claims. The possible financial effects are thus negligible compared to the overall costs of the system.

60.      As a second reason for the cap on entitlement, the United Kingdom Government mentions tackling ‘moral hazard’, that is, the risk of conduct by employees at management level that is intentionally injurious to the interests of the company. Senior executives should not be tempted, knowing that their pension claims are guaranteed by the State even in the event of the insolvency of the undertaking, to take high-risk decisions that might actually result in the insolvency of the undertaking.

61.      According to the Court’s settled case-law, EU law cannot be relied on for abusive or fraudulent ends. (27) Formalising this general legal principle, (28) Article 10 of Directive 80/987, now replaced by Article 12(a) of Directive 2008/94, expressly recognises the right of Member States to take the measures necessary to avoid abuse.

62.      However, the United Kingdom does not claim at all that, in providing for the cap on entitlement, it availed itself of the authorisation in Article 10 of Directive 80/987, now replaced by Article 12 of Directive 2008/94. Consequently, the applicability of the national rules also does not require the national courts to have found abusive conduct on the part of the beneficiary. (29) There is no scope, however, for other national measures with a merely similar objective in addition to the express authorisation in the Directive to combat specific cases of abuse.

63.      In any case, the rules in the Pensions Act 2004 go beyond what is necessary to combat moral hazard. (30)

64.      First, it would appear bold to assert the basic premiss that a senior executive who has taken early retirement, with a correspondingly high pension entitlement, is in all likelihood responsible for the insolvency of the undertaking. Second, senior executives who have already attained the normal pension age are not actually covered by the cap, even if they were possibly involved in high-risk business decisions that contributed to the insolvency of the employer. Therefore, the national rules do not in any case pursue the objective cited by the United Kingdom Government in a consistent and systematic manner, (31) as age is clearly not a suitable criterion to which a risk of abuse can be attached.

65.      In summary, the national rules therefore establish a kind of general suspicion in respect of senior executives who have not yet attained the pension age, which runs counter to the fundamental idea of combating abuse. According to case-law, a general presumption of the existence of abuse is unlawful. (32)

4.      Interim conclusion

66.      The answer to the first two questions must therefore be that Article 8 of Directive 2008/94 is to be interpreted to the effect that every individual employee — subject to specific cases of abuse within the meaning of Article 12(a) of that directive — is entitled to compensation of at least 50% of the total value of his accrued rights or entitlements to old-age benefits in the event of the insolvency of his employer.

C.      The third question

67.      The third question concerns the direct applicability of Article 8 of Directive 2008/94 in the main proceedings.

68.      It is settled case-law that national courts must provide the legal protection which individuals derive from the rules of EU law and ensure that those rules are fully effective. (33) If such provisions are contained in a directive, national courts are also bound, when they apply domestic law, to interpret that law, so far as possible, in the light of the wording and the purpose of the directive in order to achieve the objective pursued by the directive and thus to comply with the third paragraph of Article 288 TFEU. (34)

69.      If it is not possible, in the view of the national court, to give an interpretation in conformity with the directive, a provision of the directive may also be applied directly. This is the case — where there has been a failure to implement a directive by the end of the period prescribed or to implement the directive correctly — as regards all the provisions of a directive which are unconditional and sufficiently precise (see 1 below), provided they are to be relied on against the State (see 2 below). (35)

1.      The unconditional and sufficiently precise nature of the provision

70.      The Court clarified in Francovich the conditions under which a provision is to be regarded as unconditional and sufficiently precise. According to that judgment, three factors are relevant: first, the beneficiaries, second, the content of the claim and, third, its addressees, that is, the person liable for the act or obligation concerned. (36) Unlike in Francovich, in the present case these three criteria for direct application are all met, the addressee being clear from the national implementing provisions. (37)

–       Beneficiaries

71.      It is clear from the wording of Article 8 of Directive 2008/94 that it is intended to protect employees affected by the insolvency of their employer. The Court has ruled that the determination by the Directive of the beneficiaries of the guarantees of that directive meets the conditions of precision and unconditionality normally required for a direct application of the provision. (38)

–       Content of the claim

72.      If consideration is given only to the wording of Article 8 of the Directive, the specific content of the right which is to be conferred on employees is less clear. (39)

73.      However, the Court made clear in Francovich that the possibility of choosing among several possible means does not preclude the relevant provisions of the directive being applied directly. (40) Rather, it is sufficient that it is possible to determine a minimum guarantee on the basis of the provision in question. (41) The Court thus ruled in Webb-Sämann that, although the Member States enjoy a wide margin of appreciation when implementing Article 8 of Directive 2008/94, they are nonetheless obliged to ensure a minimum degree of protection for employees as required by that provision. (42)

74.      The precise content of this minimum guarantee is undoubtedly evident from the Court’s case-law on the provision. (43) The case-law clarifies and defines, where necessary, the meaning and scope of that provision as it must be, or ought to have been, understood and applied from the date of its entry into force. (44)

75.      The purpose of the requirement that a provision which is to be applied directly must be unconditional and sufficiently precise is to guarantee a manageable right in practice. To this effect the Court states in settled case-law that a provision must be sufficiently precise to be relied on by an individual and applied by a court (45) The assessment thus depends on whether the precise content is clear beyond doubt to the body applying the law, that is to say, from the provision itself, from its context and its drafting history (46) and with the aid of the case-law concerning it. (47)

76.      For those responsible at the PPF, it became clear at the latest when the judgment was delivered in Robins on 25 January 2007 that they were not permitted to apply a basis for calculation under which certain employees would receive compensation of less than 50% of their accrued entitlements. (48) Instead, the ceiling for compensation claims should have been set, directly applying Article 8 of the Directive, at 50% of the accrued pension entitlement at least.

77.      The content of the obligation under Article 8 of Directive 2008/94 was therefore to be regarded as unconditional and sufficiently precise on 19 September 2011, the date of the contested assessment decision by the PPF. (49)

–       Addressee of the obligation

78.      As regards the addressees of the obligation, the Court has stressed that the Member States enjoy broad discretion in implementing the protection in the context of Article 8 of the Directive. Protection can thus be ensured by direct funding by the public authorities, an obligation on employers to insure or the setting up of a guarantee institution. (50)

79.      However, the Court also ruled in Gharehveran with regard to the precision of the addressees that the individual must be allowed to rely on the directive once the discretion given to the Member State has been fully used. (51) The Member State must therefore be bound to a decision taken in transposing the directive if this constitutes the exercise of the discretion available to the Member State. (52)

80.      In Francovich the Court had considered that Article 3 of Directive 80/987 was not directly applicable in respect of the precision of the addressees only because it had not been transposed at all in the Member State concerned. On that occasion the Court ruled that the Italian Republic could not itself be identified as the person liable for the unpaid claim in question solely because it had not transposed the directive. (53)

81.      The situation is different here, however. The United Kingdom introduced rules transposing Directive 2008/94 which fail to meet the requirements of Article 8 of the Directive only with regard to the prescribed minimum guarantee of 50%. The national rules do, however, contain a clear definition of those responsible for the calculation and for liability, namely the PPF. Furthermore, detailed rules were laid down governing the funding of the PPF and the winding up of supplementary occupational pension schemes. (54)

82.      Consequently, the addressee of the obligation under Article 8 of the Directive is also fixed unconditionally and sufficiently precisely in this case.

2.      Reliance on direct applicability against public bodies

83.      It is recognised that provisions of a directive that are unconditional and sufficiently precise may be relied upon by individuals, not only against a Member State and all the organs of its administration, (55) but also against other organisations or bodies which are subject to the authority or control of the State or which possess special powers. (56)

84.      It is settled case-law that a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the State, for performing a task in the public interest and has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals is included among the bodies against which the provisions of a directive capable of having direct effect may be relied upon. (57)

85.      The PPF is such a body. It performs the task in the public interest, which is laid down in the Directive, (58) of determining the specific level of protection in each individual case and, if necessary, assuming responsibility for employees’ claims. In addition, it has special powers within the meaning of the above definition, (59) as it may impose a levy on eligible supplementary occupational pension schemes and, in addition, it has the right under section 154 of the Pensions Act 2004 to issue the necessary directions to supplementary occupational pension schemes in connection with their winding up. Furthermore, it was apparent at the hearing that the classification of the PPF as a State authority is not disputed between the parties.

86.      By contrast, a directive cannot impose obligations directly on an individual. (60)

87.      For this reason, the United Kingdom rejects the direct application of Article 8 of Directive 2008/94 in the main proceedings, asserting that the provision may not be relied on against a private body such as the T&N pension scheme.

88.      It is clear from the order for reference, however, that it is not necessary in the main proceedings to examine whether Mr Hampshire can claim from T&N directly payment of compensation of at least 50% of his accrued pension entitlement. The defendant and respondent in the main proceedings is the PPF. The national court designates the subject-matter of the proceedings as the stage preceding payment, the valuation of the protected liabilities by the PPF. That decision makes a binding determination of the amount of compensation received by employees both in the case of assumption of responsibility by the PPF and in the case of a possible winding up outside the PPF.

89.      Accordingly, the only question arising in the main proceedings is whether a body like the PPF may be required to conduct a revaluation of the protected liabilities and, in doing so, to apply Article 8 of the Directive directly.

90.      It is true that the Pensions Act 2004 provides that T&N continues to be responsible for payment if there are sufficient funds in its assets to grant the State-fixed PPF compensation. However, this does not mean that there is a direct application of the provision vis-à-vis T&N. Rather, the Pensions Act 2004 merely provides, in the special case of a surplus, that the occupational pension scheme will not be incorporated into the PPF because no subsidisation is necessary. In this case, too, however, the supplementary occupational pension scheme is wound up according to the directions of the Board, albeit outside the PPF. If, following a revaluation, the protected liabilities exceeded the available assets, the PPF would have to assume responsibility in any case.

91.      The purpose of the main proceedings, as described in the request for a preliminary ruling and also discussed at the hearing before the Court, is limited to requiring the PPF to apply Article 8 of the Directive directly in the calculation of liabilities. It is possibly also to be required to exercise its power to issue directions to T&N in accordance with EU law.

92.      The effect which the calculation of the PPF compensation may then have on supplementary pension schemes whose funds are sufficient even without subsidisation can therefore be described as a mere reflex. It results from the particular characteristics of the Pensions Act 2004 and not from the Directive itself. In so far as this may be seen as detrimental to T&N, it is nevertheless recognised in the Court’s case-law that mere adverse repercussions on the rights of third parties, even if the repercussions are certain, do not justify preventing an individual from relying on a directly applicable provision of a directive against the Member State. (61)

93.      Admittedly, the other employees of T&N would possibly have received additional payments in the event of the distribution of the surplus created because of the undervalued compensation claims of Mr Hampshire and the other applicants. It should be noted in this regard, however, that the mere removal of such possible benefits likewise cannot be regarded as an obligation falling on a third party pursuant to the provision of the directive relied on. (62)

V.      Conclusion

94.      I therefore propose that the questions referred for a preliminary ruling be answered as follows:

1.      Article 8 of Directive 2008/94 is to be interpreted to the effect that every individual employee — subject to specific cases of abuse within the meaning of Article 12(a) of that directive — is entitled to compensation of at least 50% of the total value of his accrued rights or entitlements to old-age benefits in the event of the insolvency of his employer.

2.      Article 8 of Directive 2008/94 contains an obligation on Member States which is unconditional and sufficiently precise, with the result that it may be relied on directly by an individual against a body such as the Pension Protection Fund.

1      Original language: German.

2      Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer (OJ 2008 L 283, p. 36), which replaces Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer (OJ 1980 L 283, p. 23).

3      Judgments of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 57), and of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraph 51).

4      Judgment of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraph 51).

5      Judgments of 16 July 1992, Meilicke (C‑83/91, EU:C:1992:332, paragraph 23); of 22 November 2005, Mangold (C‑144/04, EU:C:2005:709, paragraphs 34 and 37); and of 21 December 2016, Tele2 Sverige and Watson and Others (C‑203/15 and C‑698/15, EU:C:2016:970, paragraph 130).

6      It is not explained in any case why a reference with a view to the direct application of a provision of EU law should be precluded if the conditions for making a claim for damages against the State are not met. It should also be pointed out that the relevant State action which might have infringed Article 8 of the Directive is not the insolvency in 2006, but the PPF decision in 2011.

7      Judgment of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56).

8      ‑

9      Judgments of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56), and of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272).

10      Judgment of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 57).

11      Judgments of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraph 51), and of 24 November 2016, Webb-Sämann (C‑454/15, EU:C:2016:891, paragraph 35).

12      Judgment of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 57).

13      The operative part of the judgment of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272) thus also states that the plaintiffs did not retain at least 50% of the value of their entitlement.

14      Judgments of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428, paragraph 3); of 18 October 2001, Gharehveran (C‑441/99, EU:C:2001:551, paragraph 26); and of 24 November 2016, Webb-Sämann (C‑454/15, EU:C:2016:891, paragraph 31); see also recital 3 of Directive 2008/94.

15      See also Article 11(1) of Directive 2008/94.

16      COM(78) 141 final, p. 7, comments on Article 7 of the draft directive, which is essentially the same as Article 8 of the final directive.

17      Judgments of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428, paragraph 38 et seq.); of 5 March 1996, Brasserie du Pêcheur and Factortame (C‑46/93 and C‑48/93, EU:C:1996:79, paragraph 51); and of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56 paragraph 69).

18      Judgment of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 82).

19      See points 11 and 15 of this Opinion.

20      Judgment of 24 November 2016, Webb-Sämann (C‑454/15, EU:C:2016:891, paragraph 27).

21      COM(78) 141 final, p. 7.

22      Judgments of 17 May 1990, Barber (C‑262/88, EU:C:1990:209, paragraph 25), and of 1 April 2008, Maruko (C‑267/06, EU:C:2008:179, paragraph 45); and my Opinion in Parris (C‑443/15, EU:C:2016:493, point 33).

23      Judgments of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 42 et seq.), and of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraph 42).

24      See my Opinion in Robins and Others (C‑278/05, EU:C:2006:476, point 71).

25      This limit represents fair compensation from the point of view of EU law (see judgment of 25 April 2013, Hogan and Others (C‑398/11, EU:C:2013:272, paragraph 43 et seq.)).

26      See point 50 of this Opinion and footnotes 21 and 22.

27      Judgments of 3 December 1974, van Binsbergen (33/74, EU:C:1974:131, paragraph 13); of 9 March 1999, Centros (C‑212/97, EU:C:1999:126, paragraph 24); of 28 July 2016, Kratzer (C‑423/15, ECLI:EU:C:2016:604, paragraph 37); and of 22 November 2017, Cussens and Others (C‑251/16, EU:C:2017:881, paragraph 27).

28      Judgments of 22 May 2008, Ampliscientifica and Amplifin (C‑162/07, EU:C:2008:301, paragraph 27 et seq.); of 5 July 2007, Kofoed (C‑321/05, EU:C:2007:408, paragraph 38); and of 22 November 2017, Cussens and Others (C‑251/16, EU:C:2017:881,paragraph 27).

29      According to case-law, however, concrete evidence that relates to the individual case in question is necessary (see, for example, judgment of 18 December 2014, McCarthy and McCarthy Rodriguez (C‑202/13, EU:C:2014:2450, paragraph 53)).

30      According to the formula developed by the Court in taxation law, such rules must have the specific purpose of applying to the abusive arrangements (see judgments of 12 September 2006, Cadbury Schweppes and Cadbury Schweppes Overseas (C‑196/04, EU:C:2006:544, paragraph 55), and of 13 March 2007, Test Claimants in the Thin Cap Group Litigation (C‑524/04, EU:C:2007:161, paragraph 79)).

31      See, with regard to this requirement, judgments of 6 November 2003, Gambelli and Others (C‑243/01, EU:C:2003:597, paragraph 67); of 10 March 2009, Hartlauer (C‑169/07, EU:C:2009:141, paragraph 55); and of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157, paragraph 78). This case-law in relation to the fundamental freedoms must also apply to rules of secondary law (see also my Opinions in Persidera, C‑112/16, EU:C:2017:250, point 66 with footnote 46, and in Commission v Austria, C‑187/16, EU:C:2017:578, point 71).

32      See, to that effect, judgments of 4 March 2004, Commission v France (C‑334/02, EU:C:2004:129, paragraph 27); of 28 October 2010, Établissements Rimbaud (C‑72/09, EU:C:2010:645, paragraph 34); and of 25 October 2017, Polbud — Wykonawstwo (C‑106/16, EU:C:2017:804, paragraph 64).

33      See, with regard to directives, judgments of 9 March 2004, Pfeiffer and Others (C‑397/01 to C‑403/01, EU:C:2004:584, paragraph 111), and of 15 April 2008, Impact (C‑268/06, EU:C:2008:223, paragraph 42), and, in general, judgments of 27 February 2018, Associação Sindical dos Juízes Portugueses (C‑64/16, EU:C:2018:117, paragraph 34), and of 6 March 2018, Achmea (C‑284/16, EU:C:2018:158, paragraph 34).

34      Judgments of 13 November 1990, Marleasing (C‑106/89, EU:C:1990:395, paragraph 8); of 5 October 2004, Pfeiffer and Others (C‑397/01 to C‑403/01, EU:C:2004:584, paragraph 113); of 15 April 2008, Impact (C‑268/06, EU:C:2008:223, paragraph 98); of 15 January 2014, Association de médiation sociale (C‑176/12, EU:C:2014:2, paragraph 38); and of 19 April 2016, DI (C‑441/14, EU:C:2016:278, paragraphs 29 and 31).

35      Judgments of 19 January 1982, Becker (8/81, EU:C:1982:7, paragraphs 17 to 25); of 9 March 2004, Pfeiffer and Others (C‑397/01 to C‑403/01, EU:C:2004:584, paragraph 103); of 24 January 2012, Dominguez (C‑282/10, EU:C:2012:33, paragraph 33); and of 15 February 2017, British Film Institute (C‑592/15, EU:C:2017:117, paragraph 13).

36      Judgment of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428, paragraph 12).

37      See point 78 et seq. of this Opinion and judgment of 18 October 2001, Gharehveran (C‑441/99, EU:C:2001:551, paragraphs 39 to 44).

38      Judgments of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428, paragraph 22), and of 18 October 2001, Gharehveran (C‑441/99, EU:C:2001:551, paragraph 33), with regard to Directive 80/987 as the predecessor provision to Directive 2008/94.

39      Or ‘nebulous’, as Advocate General Bobek put it in Webb-Sämann (C‑454/15, EU:C:2016:653, point 58).

40      Judgment of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428, paragraph 17).

41      See, to that effect, judgments of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428, paragraph 19 et seq.); of 9 March 2004, Pfeiffer and Others (C‑397/01 to C‑403/01, EU:C:2004:584, paragraph 105); and of 15 April 2008, Impact (C‑268/06, EU:C:2008:223, paragraph 74).

42      Judgment of 24 November 2016, Webb-Sämann (C‑454/15, EU:C:2016:891, paragraph 35).

43      See in this regard the statements made in this Opinion under B.

44      See, most recently, judgments of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 44); of 19 April 2016, Dansk Industri (C‑441/14, EU:C:2016:278, paragraph 40); and of 22 November 2017, Cussens and Others (C‑251/16, EU:C:2017:881, paragraph 41).

45      Judgments of 19 January 1982, Becker (8/81, EU:C:1982:7, paragraph 27); of 26 October 2006, Pohl-Boskamp (C‑317/05, EU:C:2006:684, paragraph 41); and of 1 July 2010, Gassmayr (C‑194/08, EU:C:2010:386, paragraph 45).

46      See judgments of 17 December 1970, SACE (33/70, EU:C:1970:118, paragraph 13); of 4 December 1974, Van Duyn (41/74, EU:C:1974:133, paragraph 12); and of 19 January 1982, Becker (8/81, EU:C:1982:7, paragraph 27 et seq.).

47      See, with regard to the possibility of a provision being clarified by case-law, judgment of 4 December 1974, Van Duyn (41/74, EU:C:1974:133, paragraph 14).

48      The Court ruled to this effect, for example, in the judgment of 20 December 2017, Protect Natur-, Arten- und Landschaftsschutz Umweltorganisation (C‑664/15, EU:C:2017:987, paragraphs 45 et seq., 55 et seq.), stating that a national provision which does not ensure the minimum protection provided for in Article 9(3) of the Aarhus Convention may not be applied. See also judgment of 15 October 2009, Djurgården-Lilla Värtans Miljöskyddsförening (C‑263/08, EU:C:2009:631, paragraph 45).

49      The date of insolvency on 10 July 2006 is thus immaterial. Furthermore, according to case-law, EU law applies in any case to the future effects of situations that have arisen in the past (see, for example, judgment of 7 November 2013, Gemeinde Altrip and Others (C‑72/12, EU:C:2013:712, paragraph 22), and of 26 March 2015, Commission v Moravia Gas Storage (C‑596/13 P, EU:C:2015:203, paragraph 32)).

50      Judgment of 25 January 2007, Robins and Others (C‑278/05, EU:C:2007:56, paragraph 36 et seq.).

51      Judgment of 18 October 2001, Gharehveran (C‑441/99, ECLI:EU:C:2001:551, paragraph 44), with regard to the predecessor Directive 80/987.

52      See to that effect judgment of 18 October 2001, Gharehveran (C‑441/99, ECLI:EU:C:2001:551, paragraph 40).

53      Judgment of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428, paragraph 25). In Wagner Miret, on the other hand, there was only partial transposition by which certain areas were not yet regulated at all, with the result that national discretion had likewise not been fully used (see judgment of 16 December 1993, (C‑334/92, EU:C:1993:945, paragraph 16 et seq.)).

54      See, with regard to these criteria, judgment of 18 October 2001, Gharehveran (C‑441/99, ECLI:EU:C:2001:551, paragraph 41).

55      See, for example, judgments of 19 January 1982, Becker (8/81, EU:C:1982:7 paragraph 25); of 8 October 1987, Kolpinghuis Nijmegen (80/86, EU:C:1987:431, paragraph 7); of 22 June 1989, Costanzo (103/88, EU:C:1989:256, paragraph 31); and of 28 June 2007, JP Morgan Fleming Claverhouse (C‑363/05, EU:C:2007:391, paragraph 58).

56      Judgments of 12 July 1990, Foster and Others (C‑188/89, EU:C:1990:313, paragraph 18); of 4 December 1997, Kampelmann and Others (C‑253/96 to C‑258/96, EU:C:1997:585, paragraph 46); and of 10 October 2017, Farrell (C‑413/15, EU:C:2017:745, paragraph 33).

57      Judgments of 12 July 1990, Foster and Others (C‑188/89, EU:C:1990:313, paragraph 18); of 24 January 2012, Dominguez (C‑282/10, EU:C:2012:33, paragraph 39); and of 10 October 2017, Farrell (C‑413/15, EU:C:2017:745, paragraph 33).

58      See also, with regard to these criteria, judgment of 10 October 2017, Farrell (C‑413/15, EU:C:2017:745, paragraph 38 et seq.).

59      See judgments of 12 July 1990, Foster and Others (C‑188/89, EU:C:1990:313, paragraph 18); of 4 December 1997, Kampelmann and Others (C‑253/96 to C‑258/96, EU:C:1997:585, paragraph 46); of 24 January 2012, Dominguez (C‑282/10, EU:C:2012:33, paragraph 39); and of 10 October 2017, Farrell (C‑413/15, EU:C:2017:745, paragraph 38 et seq.).

60      Judgments of 14 July 1994, Faccini Dori (C‑91/92, EU:C:1994:292, paragraph 25); of 9 March 2004, Pfeiffer and Others (C‑397/01 to C‑403/01, EU:C:2004:584, paragraph 108); of 15 January 2014, Association de médiation sociale (C‑176/12, EU:C:2014:2, paragraph 36); and of 19 April 2016, Dansk Industri (C‑441/14, EU:C:2016:278, paragraph 30).

61      See, to that effect, judgments of 26 September 2000, Unilever (C‑443/98, EU:C:2000:496, paragraph 49 et seq.); of 7 January 2004, Wells (C‑201/02, EU:C:2004:12, paragraph 57); of 17 July 2008, Arcor and Others (C‑152/07 to C‑154/07, EU:C:2008:426, paragraph 36); and of 6 October 2015, T-Mobile Czech Republic and Vodafone Czech Republic (C‑508/14, EU:C:2015:657, paragraph 48).

62      See judgment of 17 July 2008, Arcor and Others (C‑152/07 to C‑154/07, EU:C:2008:426, paragraph 38).

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