Avis juridique important

Judgment of the Court of 5 October 1994. - Simon J. M. van Munster v Rijksdienst voor Pensioenen. - Reference for a preliminary ruling: Arbeidshof Antwerpen - Belgium. - Social security - Freedom of movement for workers - Equal treatment for men and women - Old-age pension - Increase for dependent spouse. - Case C-165/91. European Court reports 1994 Page I-04661

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 ° Derogation permitted as regards entitlement to benefits by virtue of a spouse' s derived rights ° National legislation which, in fixing the amount of an old-age pension, takes into account the existence of a spouse' s own right to such a pension ° Permissible

(EEC Treaty, Arts 48 to 51; Council Directive 79/7/EEC, Arts 4(1) and 7(1)(c))

2. Social security for migrant workers ° Treaty provisions ° National legislation giving rise, in the case of migrant workers, to consequences incompatible with their objective ° Duties of national courts

(EEC Treaty, Arts 5, 48 and 51)

1. Neither the Community law on freedom of movement for workers, in particular Articles 48 and 51 of the Treaty, nor Article 4(1) of Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security, precludes national legislation, applicable irrespective of nationality, which provides for a pension at the "household rate" where the worker' s spouse has ceased all gainful employment and is not in receipt of a retirement pension or equivalent benefit, but which applies only the less favourable "single rate" where the worker' s spouse is in receipt of a retirement pension or equivalent benefit.

2. When, for the purpose of applying a provision of domestic law, a national court which, as a national authority, is required under Article 5 of the Treaty to use all the means at its disposal to achieve the aim of Article 48 of the Treaty, has to characterize a social security benefit awarded under the statutory scheme of another Member State, it should interpret its own legislation in the light of the aims of Articles 48 to 51 of the Treaty and, as far as is at all possible, prevent its interpretation from being such as to discourage a migrant worker from actually exercising his right to freedom of movement.

That obligation arises where a migrant worker is in danger of losing a social security advantage because, taking account of the way in which he has spent his working life, he is subject in one Member State to a pension system under which he can only claim a higher-rate pension provided his spouse is not herself in receipt of an old-age pension or equivalent benefit and in another Member State to a pension system under which the inactive spouse confers the right to a pension supplement until she reaches retirement age but thereupon becomes entitled to a pension in her own right which may not be waived, without, however, any increase in the couple' s total income.

In Case C-165/91,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Arbeidshof, Antwerp (Belgium) for a preliminary ruling in the proceedings pending before that court between

Simon J.M. van Munster

and

Rijksdienst voor pensioenen,

on the interpretation of Articles 3(c), 48 and 51 of the EEC Treaty, 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 (OJ 1979 L 6, p. 24), and of all other provisions which the Court may consider applicable in this case,

THE COURT,

composed of: O. Due, President, G.F. Mancini, J.C. Moitinho de Almeida, M. Diez de Velasco and D.A.O. Edward (Rapporteur) (Presidents of Chambers), C.N. Kakouris, R. Joliet, F.A. Schockweiler, G.C. Rodríguez Iglesias, F. Grévisse, M. Zuleeg, P.J.G. Kapteyn and J.L. Murray, Judges,

Advocate General: M. Darmon,

Registrar: H. von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

° the Rijksdienst voor Pensioenen, by R. Masyn, General Administrateur, acting as Agent,

° the Belgian Government, by G. Mottard, Minister for Pensions, and P. Rietjens, adviser in the Ministry of Foreign Affairs, acting as Agents,

° the Netherlands Government, by B.R. Bot, Secretary General in the Ministry of Foreign Affairs, acting as Agent,

° the Commission of the European Communities, by K. Banks and B.J. Drijber, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Mr van Munster, of the Netherlands Government, represented by T. Heukels, Assistant Legal Adviser in the Ministry of Foreign Affairs, acting as Agent, and the Commission of the European Communities at the hearing on 22 October 1992,

after hearing the Opinion of the Advocate General at the sitting on 14 January 1993,

having regard to the reopening of the oral procedure on 7 February 1994,

after considering the answers given to the Court' s written questions on behalf of:

° the Rijksdienst voor Pensioenen, by W. De Meyer, Assistant General Administrator, acting as Agent,

° the Netherlands Government, by A. Bos, Legal Adviser in the Ministry of Foreign Affairs, acting as Agent,

° the German Government, by E. Roeder, Ministerialrat in the Federal Ministry of the Economy, acting as Agent,

° the United Kingdom, by S.L. Hudson, of the Treasury Solicitor' s Department, acting as Agent, together with N. Paines, Barrister,

° the Commission of the European Communities, by K. Banks and B.J. Drijber,

after hearing the oral observations of the Rijksdienst voor Pensioenen, represented by J.C.A. De Clerck, Assistant Adviser, acting as Agent, the Netherlands Government, represented by J.W. de Zwaan, Assistant Legal Adviser in the Ministry of Foreign Affairs, acting as Agent, the United Kingdom, represented by E. Sharpston, Barrister, and the Commission of the European Communities, represented by K. Banks, B.J. Drijber and P. Altmaier, Administrator, appearing in the capacity of expert, at the hearing on 12 April 1994,

after hearing the Opinion of the Advocate General at the sitting on 28 June 1994,

gives the following

Judgment

1 By judgment of 19 June 1991, received at the Court on 26 June 1991, the Arbeidshof (Higher Labour Court), Antwerp referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Articles 3(c), 48 and 51 of the EEC Treaty, 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 (OJ 1979 L 6, p. 24), and of all other provisions which the Court might consider applicable in this case.

2 Those questions were raised in proceedings between Mr van Munster and the Rijksdienst voor Pensioenen (hereinafter referred to as "the RVP"), a Belgian social security institution, concerning the determination of his retirement pension.

3 Mr van Munster, a Dutch national, was employed in the Netherlands for 37 years and in Belgium for eight years. In each of those two Member States he obtained a retirement pension calculated solely in accordance with the rules of the State concerned. His spouse was never employed during those two periods.

4 In the Netherlands the Sociale Verzekeringsbank (hereinafter "the Netherlands Social Insurance Bank") awarded Mr van Munster an old-age pension under the provisions of the Algemene Ouderdomswet (the general law on old-age benefits, hereinafter "the AOW").

5 Under the AOW, in the version entering into force on 1 April 1985, every married person, on reaching the age of 65, becomes entitled to a personal pension equivalent to 50% of net minimum salary. If his or her spouse is not in work and has not yet reached the age of 65, the pension is increased by a supplement which may likewise amount to 50% of net minimum salary. Where a person has no spouse, the pension amounts to 70% of net minimum salary. The person entitled may not waive those benefits.

6 The Netherlands Social Insurance Bank accordingly awarded Mr van Munster an old-age pension on the basis of 100% of his net minimum salary, 50% on account of his being a married person and 50% on account of the fact that his spouse had not, at the date when the decision was taken, reached the age of 65.

7 In Belgium the RVP also awarded Mr van Munster a retirement pension, with effect from 1 November 1985.

8 According to Article 10(1) of the Belgian Royal Decree No 50 of 24 October 1967, as amended, entitlement to a pension is acquired, on a calendar year basis, at the rate of a fraction of gross salary, actual, notional and lump-sum, up to a maximum of 75%, if the spouse has ceased all gainful employment and does not receive a retirement pension or other equivalent benefit ("the household rate"), and a maximum of 60% in other cases ("the single rate"). Under that scheme the inactive spouse has the right to waive any "pension or equivalent benefit" in order to allow the retired worker to receive the "household rate".

9 Since Mrs van Munster herself was not in receipt of any benefit, the amount of Mr van Munster' s Belgian pension was calculated at the "household rate", taking into account the period of eight years during which he had been employed in Belgium.

10 On 10 October 1987, the day on which Mrs van Munster attained the age of 65, the Netherlands Social Insurance Bank awarded her, pursuant to the provisions of the AOW, an independent old-age pension, calculated on the basis of 50% of net minimum salary. As a necessary consequence, the Netherlands institution withdrew the pension supplement which Mr van Munster had received until then. The total income of the couple was not, therefore, increased by the pension awarded to Mrs van Munster.

11 However, when the RVP learned that the Netherlands Social Insurance Bank had awarded Mrs van Munster a personal old-age pension, it reduced, by decision of 2 February 1988 and as from 1 October 1987, the amount of the retirement pension granted to her husband, by applying the "single rate" rather than the "household rate". It did so on the ground that, according to the Belgian legislation, Mrs van Munster was in receipt of a "retirement pension or an equivalent benefit".

12 Mr van Munster appealed against the decision of the RVP to reduce his pension before the Arbeidshof, Antwerp, which decided to stay proceedings until the Court of Justice had given a preliminary ruling on the following questions:

"1. Is a national provision (such as Article 10(1) of Royal Decree No. 50 of 24 October 1967 on retirement and survivor' s pensions for workers) compatible with Community law, in particular the Treaty of 25 March 1957 establishing the European Economic Community, the principle of freedom of movement for workers, in particular Article 3(c), Article 48(1) et seq. and Article 51 of the EEC Treaty, the principle of equal treatment for men and women, and specifically 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, in particular Article 4(1), where the national provision attaches different consequences to pension benefits related to the situation of the inactive spouse according to whether the benefit is granted in the form of an increase in the pension of the active spouse or in the form of a separate pension granted to the inactive spouse (as granted to married women under the AOW since 1 April 1985)?

2. Does a pension granted to the inactive spouse (as under the AOW, namely since 1 April 1985) have such specific characteristics that under Community law, in particular the rules mentioned in Question 1, there is justification for treating it differently from the benefit granted in the form of an increase in pension on account of a dependent spouse (household rate pension as provided for in the Belgian pension legislation for workers)?"

13 The two questions put to the Court of Justice by the national court concern the compatibility with Community law, first, of a provision of national law such as Article 10(1) of Belgian Royal Decree No 50 and, second, of its practical application to a situation such as that of Mr and Mrs van Munster.

Question 1

14 The essence of the first question is whether Community law, and in particular Articles 48 and 51 of the Treaty and also Article 4(1) of Directive 79/7, preclude national legislation which confers entitlement to a pension at the "household rate" where the worker' s spouse has ceased all gainful employment and is not in receipt of a retirement pension or equivalent benefit, but which applies only the less favourable "single rate" where the worker' s spouse is in receipt of a retirement pension or equivalent benefit.

15 Article 4(1) of Directive 79/7 lays down the principle of equal treatment for men and women in relation to calculation of social security benefits, including increases due in respect of a spouse. It was to comply with that provision and to apply the principle of equal treatment as widely as possible that the AOW was amended. The Belgian legislation, on the other hand, has not been amended to that effect.

16 It is important to note, however, that Directive 79/7 did not require the AOW to be amended. It is apparent from the wording of Article 7(1)(c) that the Member States are authorized to exclude from the scope of the directive the granting of entitlement to old-age benefits by virtue of the derived entitlements of a spouse.

17 It follows that the principle of equal treatment for men and women, as expressed in Directive 79/7, does not preclude a Member State from not applying to a retired worker' s pension the "household rate" which its legislation provides for persons with dependent spouses, where the spouse is entitled in his or her own right to a retirement pension.

19 In the present case the provision of Belgian legislation at issue applies without distinction both to Belgian nationals and to nationals of the other Member States. Consequently, it cannot be regarded as constituting, in itself, a barrier to freedom of movement for workers.

20 It follows that neither the Community law on freedom of movement for workers, in particular Articles 48 and 51 of the Treaty, nor Article 4(1) of Directive 79/7, precludes national legislation which provides for a pension at the "household rate" where the worker' s spouse has ceased all gainful employment and is not in receipt of a retirement pension or equivalent benefit, but which applies only the less favourable "single rate" where the worker' s spouse is in receipt of a retirement pension or equivalent benefit.

Question 2

21 The essence of the second question is whether, and if so, how, the national court, when characterizing, for the purpose of applying a provision of domestic law (such as Article 10(1) of Royal Decree No 50), a social security benefit awarded under the statutory scheme of another Member State (such as the benefit awarded to Mrs van Munster), is bound to interpret its own legislation in the light of the rules of Community law.

22 In order better to understand the nature of the problem raised by the second question, some specific points of the present case should be be stressed.

23 First, the Community national concerned became entitled to a retirement pension in two Member States, after spending most (about 37/45ths) of his working life in one of those two States. His spouse, on the other hand, has never worked and has thus not acquired the right, as a worker, to a pension.

24 Secondly, in one of the two Member States concerned, the worker' s pension is calculated, on the basis of actual, notional and lump-sum remuneration, at a higher rate, where the spouse is not in work and not personally entitled to "a retirement pension or equivalent benefit".

25 Thirdly, as stated earlier in paragraph 15 of this judgment, the other Member State concerned has, in order to comply with the spirit of Directive 79/7, altered the method by which it pays pensions by awarding each spouse, on reaching retirement age, a pension of an equal amount. That pension is subject to the condition that the person concerned should have resided in the State, but not that he should have pursued any gainful employment there. The person concerned may not waive the pension.

26 Fourthly, the award, in the second State, of a personal pension to each of two spouses who have reached the age of 65 leaves unchanged the total income received by the couple in comparison with the income which two spouses over the age of 65 received before the reform of the AOW system on 1 April 1985.

28 As regards retirement pensions such as those in point in the main proceedings, it should be noted that both the migrant worker and the worker whose entire working life has been in only one State ("the non-migrant worker") acquire their pension entitlements progressively throughout their careers.

29 The only difference between them is that the non-migrant worker acquires the entirety of his pension entitlements under a single body of legislation, whereas the migrant worker acquires them in sections corresponding to successive periods of work completed in different Member States under different legislative systems. In such situations, Article 51 of the Treaty aims to create, by coordination rather than by harmonization, a unified career, for social security purposes, for the migrant worker.

30 In the present case, it appears that application of national legislation to a migrant worker in the same way as to a non-migrant worker gives rise to unforeseen consequences, hardly compatible with the aim of Articles 48 to 51 of the Treaty and attributable to the very fact that the migrant worker' s pension entitlements are governed by two different bodies of legislation.

31 Those differences can be traced to the fact that one of the two retirement schemes provides for a higher pension rate for a worker whose spouse is not in receipt of a retirement pension or equivalent benefit, it being assumed that such a pension or benefit increases the couple' s total income and may, in any event, be waived, while the other scheme, in the same circumstances, awards each spouse, on reaching retirement age, a non-renounceable pension of an equal amount, without however implying any increase at all in the couple' s total income.

33 That requirement implies that those authorities should ascertain whether their legislation can be applied literally to migrant workers, in exactly the same way as to non-migrant workers, without ultimately causing migrant workers to lose a social security advantage and, consequently, discouraging them from actually exercising their right to freedom of movement.

34 When applying domestic law, the national court must, as far as is at all possible, interpret it in a way which accords with the requirements of Community law (see the judgment in Case 157/86 Murphy v Bord Telecom Eireann [1988] ECR 673, paragraph 11, and to the same effect the judgments in Case C-106/89 Marleasing [1990] ECR I-4135, paragraph 8, and Case C-91/92 Faccini Dori [1994] ECR I-0000, paragraph 26).

35 The answer to the second question must therefore be that when, for the purpose of applying a provision of domestic law, a national court has to characterize a social security benefit awarded under the statutory scheme of another Member State, it should interpret its own legislation in the light of the aims of Articles 48 to 51 of the Treaty and, as far as is at all possible, prevent its interpretation from being such as to discourage a migrant worker from actually exercising his right to freedom of movement.

Costs

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

On those grounds,

THE COURT,

in answer to the questions referred to it by the Arbeidshof, Antwerp, by judgment of 19 June 1991, hereby rules:

1. Community law, in particular Articles 48 and 51 of the Treaty, and also 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, does not preclude national legislation which provides for the right to a pension at the "household rate" where the worker' s spouse has ceased all gainful employment and is not in receipt of a retirement pension or equivalent benefit, but which applies only the less favourable "single rate" where the worker' s spouse is in receipt of a retirement pension or equivalent benefit such as the pension awarded to Mrs van Munster by the Algemene Ouderdomswet.

2. When, for the purpose of applying a provision of its domestic law, a national court has to characterize a social security benefit awarded under the statutory scheme of another Member State, it should interpret its own legislation in the light of the aims of Articles 48 to 51 of the EEC Treaty and, as far as is at all possible, prevent its interpretation from being such as to discourage a migrant worker from actually exercising his right to freedom of movement.