Avis juridique important

Judgment of the Court of 13 March 1991. - Ann Cotter and Norah McDermott v Minister for Social Welfare and Attorney General. - Reference for a preliminary ruling: Supreme Court - Ireland. - Equal treatment in matters of social security - Principle of national law prohibiting unjust enrichment. - Case C-377/89. European Court reports 1991 Page I-01155

Summary Parties Grounds Decision on costs Operative part

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1. Social policy - Equal treatment for men and women in matters of social security - Directive 79/7, Article 4(1) - Increases in social security benefits in respect of persons deemed to be dependants automatically granted to married men - Obligation to ensure equal treatment for married women even if in some cases that will result in double payment of the increases to the same family

(Council Directive 79/7, Art. 4(1))

2. Social policy - Equal treatment for men and women in matters of social security - Directive 79/7, Article 4(1) - Compensatory payments for married men replacing increases in social security benefits - Obligation to ensure equal treatment for married women notwithstanding the prohibition on unjust enrichment laid down by national law

(Council Directive 79/7, Art. 4(1))

1. Article 4(1) of Council Directive 79/7/EEC, on the prohibition of all discrimination on grounds of sex in matters of social security, must be interpreted as meaning that if, after the expiry of the period allowed for implementation of the directive, married men have automatically received increases in social security benefits in respect of a spouse and children deemed to be dependants without having to prove actual dependency, married women without actual dependants are entitled to the same increases even if in some circumstances that will result in double payment of the increases to the same family.

2. Article 4(1) of Council Directive 79/7 must be interpreted as meaning that where a Member State has included in the legislation intended to implement that article, adopted after the expiry of the period allowed by the directive, a transitional provision providing for compensatory payments to married men who have lost their entitlement to an increase in their social security benefits in respect of a spouse deemed to be dependent because actual dependency cannot be shown to exist, married women in the same family circumstances are entitled to the same payments even if that infringes the prohibition on unjust enrichment laid down by national law.

In Case C-377/89,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Supreme Court of Ireland for a preliminary ruling in the proceedings pending before that court between

Ann Cotter and Norah McDermott

and

Minister for Social Welfare and Attorney General,

on the interpretation 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 (Official Journal 1979 No L 6, p. 24),

THE COURT,

composed of: O. Due, President, T.F. O' Higgins, J.C. Rodríguez Iglesias and M. Díez de Velasco (Presidents of Chambers), Sir Gordon Slynn, C.N. Kakouris, R. Joliet, F.A. Schockweiler and P.J.G. Kapteyn, Judges,

Advocate General: J. Mischo,

Registrar: J.A. Pompe, Deputy Registrar,

after considering the written observations submitted on behalf of:

Ann Cotter and Norah McDermott, by Mary Robinson, Senior Counsel, and Gerard Durcan, Barrister-at-Law, instructed by Gallagher Shatter, Solicitors,

the Irish Government, by Louis J. Dockery, Chief State Solicitor, acting as Agent, assisted by David Byrne, Senior Counsel, and Aindrias O' Caoimh, Barrister-at-Law,

the Commission of the European Communities, by Karen Banks, a member of its Legal Department, acting as Agent,

having regard to the Report for the Hearing,

after hearing oral argument by the parties at the hearing on 18 October 1990,

after hearing the Opinion of the Advocate General delivered at the sitting on 29 November 1990,

gives the following

Judgment

1 By order of 27 July 1989, which was received at the Court on 19 December 1989, the Supreme Court of Ireland referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation 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 (Official Journal 1979 No L 6, p. 24, hereinafter referred to as "the directive").

2 Those questions arose in proceedings for a declaration that after 23 December 1984, the date on which the directive should have been implemented in the Member States, Mrs Cotter and Mrs McDermott (hereinafter referred to as "the applicants") were entitled to various social security benefits to which married men in the same circumstances were entitled.

3 Article 4(1) of the directive provides that:

"The principle of equal treatment means that there shall be no discrimination whatsoever on ground of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:

- the scope of the schemes and the conditions of access thereto;

- the obligation to contribute and the calculation of contributions;

- the calculation of benefits including increases due in respect of a spouse and for dependants under the conditions governing the duration and retention of entitlement to benefits".

4 It is not disputed that under the Social Welfare (Consolidation) Act 1981 (hereinafter referred to as "the 1981 Act") a married man was automatically entitled to increases in his social security benefits in respect of a spouse and children without having to prove that they were actually dependent on him, whereas married women were required to fulfil additional conditions. Moreover, under the 1981 Act a lower rate of unemployment benefit was payable to a married woman than to a married man, and for a shorter period.

5 That position was altered by the Social Welfare (No 2) Act 1985 (Commencement) Order 1986 (Statutory Instrument No 173 of 1986), which brought into effect on 20 November 1986 the provisions of sections 3 and 4 of the Social Welfare (No 2) Act 1985. Those provisions confine the payment of an increase in respect of an adult dependant to a situation where actual dependency can be shown, irrespective of the sex of the claimant, and establishes equality of treatment for male and female claimants with regard to increases in respect of a dependent child.

6 The Social Welfare (Preservation of Rights) (No 2) Regulations 1986 (Statutory Instrument No 422 of 1986) provided on a transitional basis that claimants who did not have a spouse actually dependent on them and therefore ceased to be entitled to an increase in respect of an adult dependant after the entry into force of the Social Welfare (No 2) Act 1985 became eligible for a compensatory allowance. It is common ground that those provisions - whose application has been extended several times - cover only married men, who previously received automatic increases even if they had no actual dependants.

7 On 4 February 1985 the applicants applied to the High Court for an order quashing the decisions made by or on behalf of the Minister for Social Welfare pursuant to the 1981 Act to cease to pay them unemployment benefit on the expiry of a period of 312 days and, in the case of Mrs Cotter, the automatic cessation of pay-related benefit. The applicants claimed that as from 23 December 1984 they were entitled, under Article 4(1) of the directive, to be paid unemployment benefit at the same rate and for the same period as a married man, and in the case of Mrs Cotter that she was entitled, for that period, to payment of pay-related benefit.

8 The High Court requested the Court to give a preliminary ruling on the following questions:

(i) Does Directive 79/7/EEC, and in particular Article 4, have direct effect in Ireland as from 23 December 1984, and

(ii) Are married women subject to national legislation entitled as from 23 December 1984 to benefits under the same conditions as men, where no measures have been taken to implement Article 4 of the directive?

9 In its judgment of 24 March 1987 in Case 286/85 (McDermott and Cotter v Minister for Social Welfare and Attorney General, [1987] ECR 1463), the Court, in answer to those questions, ruled that:

"(1) Where Council Directive 79/7/EEC of 19 December 1978 has not been implemented, Article 4(1) of the directive, which prohibits all discrimination on grounds of sex in matters of social security, could be relied on as from 23 December 1984 in order to preclude the application of any national provision inconsistent with it.

(2) In the absence of measures implementing Article 4(1) of the directive women are entitled to have the same rules applied to them as are applied to men who are in the same situation, since, where the directive has not been implemented, those rules remain the only valid point of reference".

10 Before the judgment of the Court of Justice was delivered, the applicants brought new proceedings before the High Court seeking, inter alia, a declaration that they were entitled to the same increases in their social security benefits as married men in their circumstances received before the entry into force of the Social Welfare (No 2) Act 1985 and to the transitional compensatory payments which such men received after that date.

11 Those new proceedings and the proceedings brought on 4 February 1985 were heard together before the High Court. It allowed their application only in part, rejecting in particular their claims in respect of increases for adult and child dependants and in respect of the transitional compensatory payments. The High Court considered that it would be unfair and inequitable to pay those sums to the applicants when their spouses were not financially dependent on them. On appeal to the Supreme Court, the respondents argued that to allow the claims of the applicants would offend against the principle prohibiting unjust enrichment, which under Irish law constitutes a ground for restricting or refusing relief in certain circumstances.

12 The Supreme Court was uncertain whether that principle of national law was compatible with the direct effect of Article 4(1) of the directive. It therefore stayed the proceedings and referred the following questions to the Court for a preliminary ruling:

"1. Is the ruling of the Court of Justice in Case 286/85, Norah McDermott and Ann Cotter v Minister for Social Welfare and Attorney General, [1987] ECR 1453, whereby the Court of Justice answered the second question referred to it pursuant to Article 177 EEC by the High Court in its interpretation of the provisions of Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 as follows:

' In the absence of measures implementing Article 4(1) of the directive, women are entitled to have the same rules applied to them as are applied to men who are in the same situation, since, where the directive has not been implemented, those rules remain the only valid point of reference.'

to be understood as meaning that married women are entitled to increases in Social Welfare benefits in respect of

(a) a husband as dependant, and

(b) a child as dependant

even where it is proved that no actual dependency existed or even if as a result double payments of such increases in respect of dependants would occur?

2. In a claim by women for compensatory payments in respect of discrimination alleged to have been suffered by reason of the failure to apply to them the rules applicable to men in the same situation, is Council Directive 79/7/EEC to be interpreted as meaning that a national court or tribunal may not apply rules of national law such as to restrict or refuse such compensation in circumstances where the granting of such compensation would offend against the principle prohibiting unjust enrichment?"

13 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the observations submitted to the Court, which are referred to or mentioned hereinafter only in so far as is necessary for the reasoning of the Court.

The first question

14 In its first question, the Supreme Court asks whether Article 4(1) of the directive must be interpreted as meaning that if, after the expiry of the period allowed for implementation of the directive, married men have automatically received increases in social security benefits in respect of spouses and children deemed to be dependants without having to prove actual dependency, married women without actual dependants are entitled to the same increases even if in some circumstances that will result in double payment of such increases.

15 At the hearing, the Irish Government argued as a preliminary point that the prohibition of discrimination laid down in Article 4(1) of the directive applies only to circumstances in which the person in respect of whom an increase has been granted is financially dependent.

16 That argument cannot be upheld. Article 4(1) of the directive states that it is applicable in particular as concerns "the calculation of benefits including increases due in respect of a spouse and for dependants". The very wording of Article 4(1) includes any increases due in respect of spouses who are not dependants. With regard to other persons, in particular children, no proof of their actual dependency is required under the directive as a prior condition for the application of the principle of equal treatment to the payment of the increases in question.

17 Consequently, while Member States may stipulate whatever conditions they wish for entitlement to increases in social security benefits, they are required to comply fully with the principle of equal treatment laid down in Article 4(1) of the directive.

The second question

23 As is apparent from its wording, the second question referred by the Supreme Court seeks in substance to determine whether Article 4(1) of the directive must be interpreted as meaning that where a Member State has included in the legislation intended to implement that article, adopted after the expiry of the period allowed by the directive, a transitional provision providing for compensatory payments for married men who have lost their entitlement to an increase in their social security benefits in respect of a spouse deemed to be dependent because actual dependency cannot be shown to exist, married women in the same family circumstances are entitled to the same payments even if that infringes the prohibition on unjust enrichment laid down by national law.

24 The directive does not provide for any derogation from the principle of equal treatment laid down in Article 4(1) in order to authorize the extension of the discriminatory effects of earlier provisions of national law. It follows that a Member State may not maintain beyond 23 December 1984 any inequalities of treatment attributable to the fact that the conditions for entitlement to compensatory payments are those which applied before that date. That is so notwithstanding the fact that those inequalities are the result of transitional provisions (see the judgment in Case 80/87, Dik v College van Burgemeester en Wethouders, [1988] ECR 1601).

26 As has already been stated in the reply to the first question, if the national authorities could rely on the principle of national law prohibiting unjust enrichment they would be able to use their own unlawful conduct as a ground for depriving Article 4(1) of the directive of its full effect.

27 The reply to the second question must therefore be that Article 4(1) of Directive 79/7 must be interpreted as meaning that where a Member State has included in the legislation intended to implement that article, adopted after the expiry of the period allowed by the directive, a transitional provision providing for compensatory payments for married men who have lost their entitlement to an increase in their social security benefits in respect of a spouse deemed to be dependent because actual dependency cannot be shown to exist, married women in the same family circumstances are entitled to the same payments even if that infringes the prohibition on unjust enrichment laid down by national law.

Costs

28 The costs incurred by the Irish Government and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action 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 Supreme Court of Ireland by an order of 27 July 1989, hereby rules:

1. Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 must be interpreted as meaning that if, after expiry of the period allowed for implementation of the directive, married men have automatically received increases in social security benefits in respect of a spouse and children deemed to be dependants without having to prove actual dependency, married women without actual dependants are entitled to the same increases even if in some circumstances that will result in double payment of the increases.

2. Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 must be interpreted as meaning that where a Member State has included in the legislation intended to implement that article, adopted after the expiry of the period allowed by the directive, a transitional provision providing for compensatory payments to married men who have lost their entitlement to an increase in their social security benefits in respect of a spouse deemed to be dependent because actual dependency cannot be shown to exist, married women in the same family circumstances are entitled to the same payments even if that infringes the prohibition on unjust enrichment laid down by national law.