Language of document : ECLI:EU:C:1998:577

JUDGMENT OF THE COURT

1 December 1998 (1)

(Social policy — Men and women — Equal pay — Article 119 of the EC Treaty —Directive 75/117/EEC — Remedies for breach of the prohibition ondiscrimination — Pay arrears — Domestic legislation placing a two-year limit onawards for the period prior to the institution of proceedings — Similar domesticactions)

In Case C-326/96,

REFERENCE to the Court under Article 177 of the EC Treaty by theEmployment Appeal Tribunal, London, for a preliminary ruling in the proceedingspending before that court between

B.S. Levez

and

T.H. Jennings (Harlow Pools) Ltd,

on the interpretation of Article 119 of the EC Treaty, and Articles 2 and 6 ofCouncil Directive 75/117/EEC of 10 February 1975 on the approximation of thelaws of the Member States relating to the application of the principle of equal payfor men and women (OJ 1975 L 45, p. 19),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, J.-P. Puissochet, G. Hirsch andP. Jann (Presidents of Chambers), G.F. Mancini (Rapporteur), J.C. Moitinho deAlmeida, J.L. Murray, D.A.O. Edward, H. Ragnemalm, R. Schintgen andK.M. Ioannou, Judges,

Advocate General: P. Léger,


Registrar: H.A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

—    Mrs Levez, by David Pannick QC and Dinah Rose, Barrister, instructed byPauline Matthews, Solicitor,

—    the United Kingdom Government, by Lindsey Nicoll, of the TreasurySolicitor's Department, acting as Agent, with Nicholas Paines, Barrister,

—    the French Government, by Catherine de Salins, Head of Sub-directoratein the Legal Affairs Directorate of the Ministry of Foreign Affairs, andAnne de Bourgoing, chargé de mission with the same Directorate, acting asAgents,

—    the Commission of the European Communities, by Christopher Docksey andMarie Wolfcarius, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Mrs Levez, represented by David Pannickand Dinah Rose, instructed by Pauline Matthews; of T.H. Jennings (Harlow Pools)Ltd, represented by Jason Coppel, Barrister; of the United Kingdom Government,represented by Nicholas Paines; of the French Government, represented by Annede Bourgoing; of the Irish Government, represented by Mary Finlay SC and EileenBarrington, Barrister; and of the Commission, represented by Christopher Docksey,at the hearing on 3 March 1998,

after hearing the Opinion of the Advocate General at the sitting on 12 May 1998,

gives the following

Judgment

1.
    By order of 14 August 1996, received at the Court on 4 October 1996, theEmployment Appeal Tribunal, London, referred to the Court for a preliminaryruling under Article 177 of the EC Treaty two questions on the interpretation of

Article 119 of that Treaty, and Articles 2 and 6 of Council Directive 75/117/EECof 10 February 1975 on the approximation of the laws of the Member Statesrelating to the application of the principle of equal pay for men and women (OJ1975 L 45, p. 19; hereinafter 'the Directive‘).

2.
    Those questions were raised in proceedings between Mrs Levez and T.H. Jennings(Harlow Pools) Ltd (hereinafter 'Jennings‘), her former employer, concerningarrears of remuneration not paid by reason of discrimination on grounds of sex.

Community law

3.
    Article 2 of the Directive provides that 'Member States shall introduce into theirnational legal systems such measures as are necessary to enable all employees whoconsider themselves wronged by failure to apply the principle of equal pay topursue their claims by judicial process after possible recourse to other competentauthorities‘.

4.
    Article 6 of the Directive provides that 'Member States shall, in accordance withtheir national circumstances and legal systems, take the measures necessary toensure that the principle of equal pay is applied. They shall see that effectivemeans are available to take care that this principle is observed‘.

National legislation

5.
    In the United Kingdom, pursuant to Section 1(1) of the Equal Pay Act 1970(hereinafter 'the Act‘), any contract under which a woman is employed is deemedto contain an equality clause.

6.
    Section 2(5) of the Act provides that a woman is not entitled, in proceedingsbrought in respect of a failure to comply with an equality clause (includingproceedings before an industrial tribunal), to be awarded any payment by way ofarrears of remuneration or damages in respect of a time earlier than two yearsbefore the date on which the proceedings were instituted (hereinafter 'the rule atissue‘).

7.
    It is clear from the order for reference that the Act does not empower industrialtribunals to extend that period.

8.
    Nevertheless, according to the information provided by the United KingdomGovernment, it would be open to a person in Mrs Levez's position to bringproceedings in the County Court on the basis both of the Equal Pay Act and of thetort of deceit committed by her employer.

Facts

9.
    In February 1991 Mrs Levez was recruited as manager of a betting shop owned byJennings at a salary of UKL 10 000 per annum. In December 1991 she wasappointed manager of another shop belonging to Jennings, replacing a man whohad received an annual salary of UKL 11 400 from the date of his appointment inSeptember 1990 until he left in October 1991.

10.
    According to the order for reference, it is common ground that the work which MrsLevez and her predecessor were employed to perform was the same. Furthermore,the parties agree that all managers employed by Jennings in its betting shops weresubject to the same contract terms.

11.
    However, Mrs Levez's pay was raised with effect from 30 December 1991, but onlyto UKL 10 800, Jennings having falsely declared to her that this was the salary paidto her male predecessor. Her salary did not reach UKL 11 400 until her next payrise, in April 1992.

12.
    On leaving her job with Jennings in March 1993, Mrs Levez discovered that untilApril 1992 she had been paid less than her male predecessor. She thereforebrought a claim under the Act on 17 September 1993 before the IndustrialTribunal. The Tribunal decided on 25 July 1994 that Mrs Levez was entitled to asalary of UKL 11 400 with effect from the date on which she had taken up herduties — that is to say, from 18 February 1991 — and ordered Jennings to pay herthe corresponding salary arrears.

13.
    However, by letter of 26 July 1994, addressed to the Office of the IndustrialTribunal, Jennings alleged that part of the Tribunal's decision was contrary to theAct. In view of the two-year limitation period fixed by section 2(5) of the Act andthe fact that Mrs Levez's application to the Industrial Tribunal was dated 17September 1993, Jennings argued that the Tribunal was not empowered to awardarrears of remuneration in respect of the period prior to 17 September 1991 andcalled on the Chairman to review the dates specified in the decision.

14.
    By letter of 12 August 1994, the Chairman of the Industrial Tribunal acknowledgedthat under section 2(5) of the Act Mrs Levez was not entitled to arrears of pay inrespect of the period prior to 17 September 1991, that being the date marking thestart of the two-year period prior to the lodging of her claim.

15.
    According to the order for reference, no formal amendment was made to theTribunal's decision. However, a copy of the letter was sent to Mrs Levez. On 22August 1994 she appealed to the Employment Appeal Tribunal against theTribunal's decision, arguing that the decision to amend the date from which arrearsof remuneration should be paid to 17 September 1991 was contrary to Communitylaw. Mrs Levez claimed that she was entitled to recover equal pay as from thedate when she commenced working for Jennings, namely 18 February 1991. After

service of the Notice of Appeal, Mrs Levez obtained the support of the EqualOpportunities Commission, which served an amended Notice of Appeal for whichleave was granted on 12 October 1995.

The questions referred for a preliminary ruling

16.
    Those were the circumstances in which the Employment Appeal Tribunal decidedto stay proceedings and to refer the following questions to the Court of Justice fora preliminary ruling:

'1.    Is it compatible with Community law to apply, to a claim for equal pay forequal work without discrimination on grounds of sex, a rule of national lawwhich limits a claimant's entitlement to arrears of remuneration or damagesfor breach of the principle of equal pay to a period of two years prior to thedate on which the proceedings were instituted, in circumstances where —

    (a)    that rule of national law applies to all claims for equal pay without sexdiscrimination, but to no other claims;

    (b)    rules which are in this respect more favourable to claimants areapplied to other claims in the field of employment law, includingclaims in respect of breach of the contract of employment, racialdiscrimination in pay, unlawful deductions from wages, and sexdiscrimination in matters other than pay;

    (c)    the national court has no discretion to extend the two-year period inany circumstance, even where a claimant was delayed in bringing herclaim because her employer misrepresented to her the level ofremuneration received by men performing like work to her own?

2.    In particular, having regard to the consistent case-law of the Court thatrights conferred by the direct effect of Community law are to be exercisedunder the conditions determined by national law, provided inter alia thatthose conditions are no less favourable than those relating to similardomestic actions, how is the phrase ”similar domestic actions” to beinterpreted in the case of a claim for equal pay in circumstances where theconditions laid down by national legislation implementing the principle ofequal pay differ from those laid down by other national legislation in thefield of employment law, including legislation relating to breach of thecontract of employment, racial discrimination, unlawful deductions fromwages, and sex discrimination in matters other than pay?‘

Question 1

17.
    Having regard to the information before the Court, the first question referred bythe national court must be construed as seeking to ascertain whether Communitylaw precludes the application of a rule of national law which limits an employee'sentitlement to arrears of remuneration or damages for breach of the principle ofequal pay to a period of two years prior to the date on which the proceedings wereinstituted, there being no possibility of extending that period, where the delay inbringing a claim is attributable to the fact that the employer deliberatelymisrepresented to the employee the level of remuneration received by persons ofthe opposite sex performing like work.

18.
    The first point to note is that, according to established case-law, in the absence ofCommunity rules governing the matter it is for the domestic legal system of eachMember State to designate the courts and tribunals having jurisdiction and to laydown the detailed procedural rules governing actions for safeguarding rights whichindividuals derive from Community law, provided, however, that such rules are notless favourable than those governing similar domestic actions (the principle ofequivalence) and do not render virtually impossible or excessively difficult theexercise of rights conferred by Community law (the principle of effectiveness) (see,to that effect, Case 33/76 Rewe v Landwirtschaftskammer Saarland [1976] ECR1989, paragraph 5; Case 45/76 Comet v Produktschap voor Siergewassen [1976] ECR2043, paragraphs 13 and 16; Joined Cases C-430/93 and C-431/93 Van Schijndel andVan Veen v SPF [1995] ECR I-4705, paragraph 17; Case C-261/95 Palmisani v INPS[1997] ECR I-4025, paragraph 27; Case C-246/96 Magorrian and Cunningham[1997] ECR I-7153, paragraph 37; and paragraph 16 of the judgment of 15September 1998 in Joined Cases C-279/96, C-280/96 and C-281/96 Ansaldo Energiaand Others, not yet published in the Court Reports).

19.
    The Court has thus recognised that it is compatible with Community law fornational rules to prescribe, in the interests of legal certainty, reasonable limitationperiods for bringing proceedings. It cannot be said that this makes the exerciseof rights conferred by Community law either virtually impossible or excessivelydifficult, even though the expiry of such limitation periods entails by definition therejection, wholly or in part, of the action brought (see, in particular, Palmisani,paragraph 28; Case C-188/95 Fantask and Others [1997] ECR I-6783, paragraph 48;and Ansaldo Energia, paragraphs 17 and 18).

20.
    Consequently, a national rule under which entitlement to arrears of remunerationis restricted to the two years preceding the date on which the proceedings wereinstituted is not in itself open to criticism.

21.
    However, with respect to the main proceedings, it is clear from the order forreference that Jennings misinformed Mrs Levez in stating that her malepredecessor had been paid a salary of UKL 10 800, which accordingly was theamount to which her salary was increased with effect from 30 December 1991. Itwas not until April 1992 that her salary was increased to UKL 11 400.

22.
    In such circumstances, according to Mrs Levez, the rule at issue manifestlyprecludes the possibility of either full compensation or an effective remedy in casesof failure to comply with the principle of equal pay, contrary to Articles 2 and 6 ofthe Directive. Mrs Levez also points out that the national court has no discretionto extend the limitation period on account of the conduct of the defendant, whodeceived her as to the remuneration received by her male predecessor; nor doesit have a general discretion to extend the time-limit on the ground that it would bejust and equitable to do so.

23.
    The Commission, too, maintains that the particular circumstances of the presentcase merit special attention. In practice, Mrs Levez was in no position to bring anequal pay claim during part of the relevant period because at that time she wasquite unaware that she had been discriminated against. In consequence, theemployer's deceit had the effect of wholly preventing the employee from exercisingher right to equal pay, and it is unreasonable to maintain that the inability of thenational court to take those special circumstances into account is justified byprinciples such as legal certainty or the proper conduct of proceedings.

24.
    The United Kingdom Government contends that Mrs Levez was aware inDecember 1991 that she had been paid less than her male predecessor, albeit shedid not know the full extent of the disparity. She could have brought proceedingsat that time, but failed to do so. At the hearing, Jennings likewise pointed out thateven though Mrs Levez did not know how much her male predecessor had beenpaid — nor, therefore, the precise amount that she could obtain by way of arrears— there was nothing to stop her from bringing proceedings before September 1993.

25.
    It should be borne in mind that Article 177 of the Treaty is based on a clearseparation of functions between the national courts and the Court of Justice, whichmeans that, when ruling on the interpretation or validity of Community provisions,the latter is empowered to do so only on the basis of the facts which the nationalcourt puts before it (see, in particuar, Case C-30/93 AC-ATEL Electronics Vertriebs[1994] ECR I-2305, paragraph 16).

26.
    Accordingly, it is not for the Court of Justice but for the national court to ascertainthe facts which have given rise to the dispute and to establish the consequenceswhich they have for the judgment which it is required to deliver (see Case 17/81Pabst & Richarz [1982] ECR 1331, paragraph 12, and AC-ATEL ElectronicsVertriebs, paragraph 17).

27.
    In the present case, the order for reference states that Mrs Levez was late inbringing her claim because of the inaccurate information provided by her employerin December 1991 regarding the level of remuneration received by men performinglike work to her own.

28.
    It is clear, therefore, that it was because of that inaccurate — or indeed, deliberatelymisleading — information provided by the employer that Mrs Levez was in noposition to realise that, even after December 1991, she had been the victim of sexdiscrimination.

29.
    As regards the period preceding December 1991, it was not until April 1993 thatMrs Levez discovered the extent of the discrimination against her.

30.
    As the Commission rightly pointed out, even though, in the present case, only partof the plaintiff's claim is affected, in a different case and in similar circumstances,the whole of a claim might be excluded by the operation of the rule at issue.

31.
    Where an employer provides an employee with inaccurate information as to thelevel of remuneration received by employees of the opposite sex performing likework, the employee so informed has no way of determining whether he is beingdiscriminated against or, if so, to what extent. Consequently, by relying on the ruleat issue in that situation, the employer would be able to deprive his employee ofthe means provided for by the Directive of enforcing the principle of equal paybefore the courts (see, mutatis mutandis, Case 109/88 Danfoss [1989] ECR 3199,paragraph 13).

32.
    In short, to allow an employer to rely on a national rule such as the rule at issuewould, in the circumstances of the case before the national court, be manifestlyincompatible with the principle of effectiveness referred to above. Application ofthe rule at issue is likely, in the circumstances of the present case, to make itvirtually impossible or excessively difficult to obtain arrears of remuneration inrespect of sex discrimination. It is plain that the ultimate effect of this rule wouldbe to facilitate the breach of Community law by an employer whose deceit causedthe employee's delay in bringing proceedings for enforcement of the principle ofequal pay.

33.
    Furthermore, it does not appear that application of the rule at issue in thecircumstances of the case before the national court can reasonably be justified byprinciples such as legal certainty or the proper conduct of proceedings.

34.
    The answer to the first question must therefore be that Community law precludesthe application of a rule of national law which limits an employee's entitlement toarrears of remuneration or damages for breach of the principle of equal pay to aperiod of two years prior to the date on which the proceedings were instituted,there being no possibility of extending that period, where the delay in bringing aclaim is attributable to the fact that the employer deliberately misrepresented tothe employee the level of remuneration received by persons of the opposite sexperforming like work.

Question 2

35.
    In the light of the reply to the first question, there would be no need to address thesecond question referred by the national court in so far as it concerns proceedingsbrought before the Industrial Tribunal. However, the United KingdomGovernment argues that, on the facts, Mrs Levez could, in proceedings before theCounty Court, successfully have claimed full compensation for the damage sufferedon account of the fact that her employer's deceit had prevented her from bringinga claim under the Act. She could have relied in such proceedings both on the Actand on the deceit committed by her employer, and the rule at issue would not haveapplied.

36.
    In the light of that information, the second question should be construed as seekingto ascertain whether Community law precludes the application of the rule at issueeven when another remedy is available but, compared with other domestic actionswhich may be regarded as similar, is likely to entail procedural rules or otherconditions which are less favourable.

37.
    As stated in paragraph 18 of this judgment, in the absence of Community rulesgoverning the matter it is for the domestic legal system of each Member State todesignate the courts and tribunals having jurisdiction and to lay down the detailedprocedural rules governing actions for safeguarding rights which individuals derivefrom Community law, provided, however, that such rules are not less favourablethan those governing similar domestic actions (Ansaldo Energia, paragraph 27).

38.
    In view of the explanations given by the United Kingdom Government, it must beheld that, where an employee can rely on the rights derived from Article 119 of theTreaty and the Directive before another court, the rule at issue does notcompromise the principle of effectiveness. It remains to be determined whether,in the circumstances of the case before the national court, proceedings such asthose which may be brought before the County Court comply with the principle ofequivalence.

39.
    In principle, it is for the national courts to ascertain whether the procedural rulesintended to ensure that the rights derived by individuals from Community law aresafeguarded under national law comply with the principle of equivalence (see also,to that effect, Palmisani, paragraph 33).

40.
    However, the Court can provide the national court with guidance as to theinterpretation of Community law, which may be of use to it in undertaking such anassessment.

41.
    The principle of equivalence requires that the rule at issue be applied withoutdistinction, whether the infringement alleged is of Community law or national law,where the purpose and cause of action are similar (see, mutatis mutandis,paragraph 36 of the judgment of 15 September 1998 in Case C-231/96 Edis, not yetpublished in the Court Reports).

42.
    However, that principle is not to be interpreted as requiring Member States toextend their most favourable rules to all actions brought, like the main action in thepresent case, in the field of employment law (see, to that effect, Edis, paragraph36).

43.
    In order to determine whether the principle of equivalence has been complied within the present case, the national court — which alone has direct knowledge of theprocedural rules governing actions in the field of employment law — must considerboth the purpose and the essential characteristics of allegedly similar domesticactions (see Palmisani, paragraphs 34 to 38).

44.
    Furthermore, whenever it falls to be determined whether a procedural rule ofnational law is less favourable than those governing similar domestic actions, thenational court must take into account the role played by that provision in theprocedure as a whole, as well as the operation and any special features of thatprocedure before the different national courts (see, mutatis mutandis, Van Schijndeland Van Veen, paragraph 19).

45.
    With respect to the main proceedings, it is necessary to consider, first, the UnitedKingdom Government's arguments that, for the purposes of the principle ofequivalence, a claim under the Act — which was adopted before the UnitedKingdom acceded to the Communities and prior to the adoption of the Directive— constitutes a form of action under domestic law comparable to an action baseddirectly on Article 119 of the Treaty. Since the Act applies to a whole series ofclaims concerned with enforcing compliance with the rule of equality of contractualterms, whether or not in relation to pay, it is reasonable for all claims to be subjectto the same limitation period. Thus, according to the United Kingdom, theprinciple of equivalence is complied with.

46.
    On that point, it should be noted that the Act is the domestic legislation whichgives effect to the Community principle of non-discrimination on grounds of sex inrelation to pay, pursuant to Article 119 of the Treaty and the Directive.

47.
    Accordingly, as the Advocate General rightly pointed out in paragraph 48 of hisOpinion, the fact that the same procedural rules — namely, the limitation periodlaid down by section 2(5) of the Equal Pay Act — apply to two comparable claims,one relying on a right conferred by Community law, the other on a right acquiredunder domestic law, is not enough to ensure compliance with the principle ofequivalence, as the United Kingdom Government maintains, since one and thesame form of action is involved.

48.
    Following the accession of the United Kingdom to the Communities, the Actconstitutes the legislation by means of which the United Kingdom discharges itsobligations under Article 119 of the Treaty and, subsequently, under the Directive. The Act cannot therefore provide an appropriate ground of comparison againstwhich to measure compliance with the principle of equivalence.

49.
    Secondly, it is necessary to consider the possibilities contemplated by the order forreference. It is there suggested that claims similar to those based on the Act mayinclude those linked to breach of a contract of employment, to discrimination interms of pay on grounds of race, to unlawful deductions from wages or to sexdiscrimination in matters other than pay.

50.
    If it transpires, on the basis of the principles set out in paragraphs 41 to 44 of thisjudgment, that a claim under the Act which is brought before the County Court issimilar to one or more of the forms of action listed by the national court, it wouldremain for that court to determine whether the first-mentioned form of action isgoverned by procedural rules or other requirements which are less favourable.

51.
    On that point, it is appropriate to consider whether, in order fully to assert rightsconferred by Community law before the County Court, an employee incircumstances such as those of Mrs Levez will incur additional costs and delay bycomparison with a claimant who, because he is relying on what may be regardedas a similar right under domestic law, may bring an action before the IndustrialTribunal, which is simpler and, in principle, less costly.

52.
    Also of relevance here is the fact mentioned by the national court that the rule atissue applies solely to claims for equal pay without discrimination on grounds ofsex, whereas claims based on 'similar‘ rights under domestic law are not limitedby the operation of such a rule, which means that such rights may be adequatelyprotected by actions brought before Industrial Tribunals.

53.
    In view of the foregoing, the answer must be that Community law precludes theapplication of a rule of national law which limits an employee's entitlement toarrears of remuneration or damages for breach of the principle of equal pay to aperiod of two years prior to the date on which the proceedings were instituted,even when another remedy is available, if the latter is likely to entail proceduralrules or other conditions which are less favourable than those applicable to similardomestic actions. It is for the national court to determine whether that is the case.

Costs

54.
    The costs incurred by the United Kingdom and French Governments and theCommission, which have submitted observations to the Court, are not recoverable.Since these proceedings are, for the parties to the main proceedings, a step in theproceedings pending before the national court, the decision on costs is a matter forthat court.

On those grounds,

THE COURT,

in answer to the questions referred to it by the Employment Appeal Tribunal,London, by order of 14 August 1996, hereby rules:

1.     Community law precludes the application of a rule of national law whichlimits an employee's entitlement to arrears of remuneration or damages forbreach of the principle of equal pay to a period of two years prior to thedate on which the proceedings were instituted, there being no possibility ofextending that period, where the delay in bringing a claim is attributableto the fact that the employer deliberately misrepresented to the employeethe level of remuneration received by persons of the opposite sexperforming like work.

2.    Community law precludes the application of a rule of national law whichlimits an employee's entitlement to arrears of remuneration or damages forbreach of the principle of equal pay to a period of two years prior to thedate on which the proceedings were instituted, even when another remedyis available, if the latter is likely to entail procedural rules or otherconditions which are less favourable than those applicable to similardomestic actions. It is for the national court to determine whether that isthe case.

Rodríguez Iglesias
Puissochet
Hirsch

Jann

Mancini
Moitinho de Almeida

Murray

Edward
Ragnemalm

Schintgen

Ioannou

Delivered in open court in Luxembourg on 1 December 1998.

R. Grass

G.C. Rodríguez Iglesias

Registrar

President


1: Language of the case: English.