JUDGMENT OF THE COURT (Sixth Chamber)

11 December 1997 (1)

(Equal pay for male and female workers — Article 119 of the EC Treaty —Protocol No 2 annexed to the Treaty on European Union — Occupational socialsecurity schemes — Exclusion of part-time workers from status conferringentitlement to certain additional pension benefits — Date from which suchbenefits must be calculated — National procedural time-limits)

In Case C-246/96,

REFERENCE to the Court under Article 177 of the EC Treaty by the Office ofthe Industrial Tribunals and the Fair Employment Tribunal, Belfast, for apreliminary ruling in the proceedings pending before that court between

Mary Teresa Magorrian,

Irene Patricia Cunningham

and

Eastern Health and Social Services Board,

Department of Health and Social Services ,

on the interpretation of Article 119 of the EC Treaty and of Protocol No 2concerning Article 119 of that Treaty, annexed to the Treaty on European Union,

THE COURT (Sixth Chamber),

composed of: R. Schintgen, President of the Second Chamber, acting for thePresident of the Sixth Chamber, G.F. Mancini (Rapporteur), P.J.G. Kapteyn, J.L.Murray and G. Hirsch, Judges,

Advocate General: C. Cosmas,

Registrar: L. Hewlett, Administrator

after considering the written observations submitted on behalf of:

—    Mrs Magorrian and Mrs Cunningham, by J. O'Hara, Barrister-at-law, andE. McCaffrey, Solicitor,

—    the United Kingdom Government, by S. Ridley, of the Treasury Solicitor'sDepartment, acting as Agent, and by R. Weatherup QC, and N. Paines,Barrister,

—    the Commission of the European Communities, by C. Bury, M. Wolfcariusand C. Docksey, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Mrs Magorrian and Mrs Cunningham, of theUnited Kingdom Government and of the Commission at the hearing on 5 June1997,

after hearing the Opinion of the Advocate General at the sitting on 10 July 1997,

gives the following

Judgment

1.

    By order of 9 July 1996, received at the Court on 17 July 1996, the Office of theIndustrial Tribunals and the Fair Employment Tribunal, Belfast, referred to theCourt for a preliminary ruling under Article 177 of the EC Treaty a number ofquestions on the interpretation of Article 119 of the EC Treaty and of Protocol No2, concerning that provision, annexed to the Treaty on European Union.

2.

    Those questions have been raised in proceedings between Mrs Magorrian and MrsCunningham and the Eastern Health and Social Services Board and theDepartment of Health and Social Services in relation to certain additional benefitsunder a contracted-out retirement pension scheme.

The national provisions

3.

    Under Section 2(4) of the Equal Pay Act (Northern Ireland) 1970 ('the EPA‘),claims concerning equal pay must be brought within six months of the end of therelevant period of employment. Section 2(5) of the EPA provides that, inproceedings brought in respect of a failure to comply with an equal pay clause, awoman is not to be entitled to be awarded any payment by way of arrears ofremuneration or damages in respect of a period earlier than two years before thedate on which the proceedings were instituted.

4.

    Section 56 of the Social Security Pensions (Northern Ireland) Order 1975 providesthat, in the case of a public service pension scheme, the Minister, governmentdepartment or other person or body concerned with its administration are to takesuch steps as are open to them for bringing the rules of the scheme into conformitywith the requirement of equal access.

5.

    Regulation 12 of the Occupational Pension Schemes (Equal Access toMembership) Regulations (Northern Ireland) 1976 No 238 ('Occupational PensionRegulations‘), amending the EPA, provides that, in proceedings concerning accessto membership of occupational pension schemes, the right to be admitted to thescheme is to have effect from a date no earlier than two years before the institutionof proceedings.

6.

    Regulation 3 of the Health and Personal Social Services (Superannuation)Regulations (Northern Ireland) 1984 ('the Superannuation Regulations‘) definesa mental health officer ('MHO‘) as a whole-time officer on the medical or nursingstaff of a hospital used wholly or partly for the treatment of persons suffering frommental disorder who devotes the whole or substantially the whole of his time to thetreatment of such persons.

7.

    Under regulation 50(2) of the Superannuation Regulations, where a person hasreached or passed the age of 50 and has worked as a mental health worker for aperiod of 20 years and continues to work as a mental health officer, his or hersubsequent service is reckoned for pension purposes at twice its length and theright to a pension is obtained at the age of 55 instead of the normal age of 60.

The main proceedings

8.

    Mrs Magorrian and Mrs Cunningham were employed as qualified nurses in themental health sector by a public-sector health board responsible for supplyingmedical and other services in a region of Northern Ireland.

9.

    They commenced their careers working full-time with MHO status. When theirfamily responsibilities increased, they both commenced working part-time and

therefore lost that status. Each of them was nevertheless in charge of a hospitalward and as such responsible for full-time nurses.

10.

    The difference between part-time work and full-time work was very small. In fact,as a result of a re-organization of work in 1981, the working hours for part-timenurses were set at 31 hours 5 minutes per week, whilst full-time hours werereduced from 40 hours to 37 hours and 30 minutes per week.

11.

    Both of the applicants in the main proceedings were affiliated to and contributedto the Health and Personal Social Services Superannuation Scheme ('theSuperannuation Scheme‘), a voluntary contracted-out pension scheme to whichboth the employer and the employee contribute. Since 1973 this scheme has beenopen to part-time workers working a specified number of hours and, since 1991, allpart-time workers have been entitled to join the scheme regardless of the hoursworked. Under the scheme, persons affiliated receive a lump-sum payment onretirement, followed by monthly payments.

12.

    On 18 October 1992, Mrs Magorrian retired at the age of 59 years and 355 days,having completed 9 years and 111 days of full-time work as an MHO between 1951and 1963, and the equivalent of 11 years and 25 days of part-time service between1979 and 1992. She had also worked part-time between 1969 and 1979, but forhours not reckonable for pension purposes.

13.

    Mrs Cunningham retired in April 1994 at the age of 56 years and 80 days, havingcompleted 15 years and 175 days of full-time service as an MHO between 1956 and1974, and the equivalent of 11 years and 105 days of part-time service between1980 and 1994. She had also worked part-time between 1974 and 1980 for hoursnot reckonable for pension purposes and had elected not to make pensioncontributions during that period.

14.

    Mrs Magorrian therefore interrupted her career between her full-time employment and her part-time work, whilst Mrs Cunningham went directly from full-time workto part-time work without interruption.

15.

    On their retirement, the applicants in the main proceedings received the lump sumsto which they were entitled, together with their basic retirement pensions, but werenot given certain additional benefits to which they would have been entitled underregulation 50(2) of the Superannuation Regulations if they had had the status ofmental health officers at the time of their retirement. It was made clear at thehearing that, if the applicants had had that status, they would have obtained theadditional benefits without having to pay additional contributions.

16.

    By application dated 22 September 1992 the applicants in the main proceedingsbrought the matter before the national court, relying on Article 119 of the Treatyin support of their claim for additional benefits on the basis of their length ofservice calculated from 8 April 1976, the date of the judgment in Defrenne (Case

43/75 [1976] ECR 455) or, in the alternative, from 13 May 1986, the date of thejudgment in Case 170/84 Bilka-Kaufhaus v Weber von Hartz [1986] ECR 1607). They claim that there is no justification for limiting the calculation of their lengthof service to the period of two years laid down in the EPA, or to 17 May 1990, thedate of the judgment in Case C-262/88 Barber v Royal Guardian Exchange [1990]ECR I-1889, since to do so would deprive them of any effective legal remedy.

17.

    It is clear from the order for reference that all the parties agree that payment ofthose benefits under the applicants' occupational pension scheme constitutes 'pay‘for the purposes of Article 119 of the Treaty and Council Directive 75/117/EEC of10 February 1975 on the approximation of the laws of the Member States relatingto the application of the principle of equal pay for men and women (OJ 1975 L 45,p. 19). The national file also shows that the applicants both lodged their claimsbefore leaving their employment.

18.

    In its interlocutory judgment of 12 September 1995 the national court found thatthe exclusion of part-time psychiatric nurses from MHO status constituted indirectdiscrimination based on sex, since a considerably smaller proportion of women thanmen working in the mental-health sector in Northern Ireland were in a position tosatisfy the requirements imposed by full-time working. It further found thatdiscrimination to be unjustified.

The preliminary questions

19.

    Taking the view that the outcome of the dispute depended on the interpretationof Community law, the national court decided to stay the proceedings and to referthe following questions to the Court for a preliminary ruling:

'In circumstances where:

(a)    a worker has been employed by a Health Board which is part of the State,in employment concerned with the care of the mentally ill to which anoccupational pension scheme applies;

(b)    the worker has at all material times either been a member or been eligibleto be a member of the pension scheme;

(c)    the pension scheme contains a term according to which those who work full-time and devote all or substantially all their working hours to the care of thementally ill (who are described as ”Mental Health Officers”) are entitled toadditional benefits not available to those doing the same work part-time, asfollows:

        where a person has reached or passed the age of 50 and has workedas a Mental Health Officer for 20 years (here referred to as the”qualifying service”) and continues to work as a Mental HealthOfficer, then

        (i)    their subsequent service is reckoned for pension purposes attwice its length (here referred to as the ”double-time service”);and

        (ii)    they have the right to a pension at the age of 55 instead of thenormal age of 60;

(d)    the worker is deprived of the status of Mental Health Officer and theadditional benefits attached thereto solely on the ground that heremployment was part-time;

(e)    the national tribunal has held that the provisions described at (c) and (d)constitute discrimination on grounds of sex against women working part-time in the care of the mentally ill;

(f)    the pension which the worker receives and the additional benefits whichthey claim, are only payable to them as from their respective retirements in1992 and 1994, after their claims have been brought before the nationaltribunal; and

(g)    the calculation of the additional benefits from their respective retirementdates in 1992 and 1994 would involve counting their years of service priorto 1992

Question 1: From what date should the service of the workers be counted for the        purpose of calculating the additional benefits to which they areentitled:

        (i) 8 April 1976

        (ii) 17 May 1990

        (iii) some other and, if so, what date?

Question 2:    Where the relevant national legislation restricts back-datingentitlement in the event of a successful claim to a period of 2 yearsprior to the date on which the claim was made, does this amount tothe denial of an effective remedy under Community law and is theIndustrial Tribunal obliged to disregard such provision in domestic lawif it feels it necessary to do so?‘

The first question

20.

    By its first question the national court essentially seeks to ascertain the date asfrom which the periods of service of part-time workers who have suffered indirectdiscrimination based on sex must be taken into account for the purpose ofcalculating the additional benefits to which they are entitled.

21.

    It must be emphasized first of all that it is common ground that payment ofadditional benefits under an occupational scheme such as that under considerationin the main proceedings falls, as a matter of principle, within the concept of pay forthe purposes of Article 119 of the Treaty.

22.

    In Defrenne, cited above, the Court held that the principle of equal pay underArticle 119 may be relied on before national courts and that those courts have aduty to ensure the protection of the rights which that provision vests in individuals. However, the Court also stated, at paragraphs 74 and 75 of that judgment, thatimportant considerations of legal certainty affecting all the interests involved, bothpublic and private, meant that the direct effect of Article 119 could not be reliedon in order to support claims concerning pay periods prior to the date of thatjudgment, 8 April 1976, except as regards workers who had already brought legalproceedings or made an equivalent claim.

23.

    On the other hand, in paragraphs 20 and 22 of Bilka, cited above, the Court foundthat, where an occupational pension scheme, although adopted in accordance withthe provisions laid down by national legislation, was based on an agreement withworkers or their representatives and the public authorities did not contribute to itsfinancing, such a scheme did not constitute a social security scheme governeddirectly by statute and therefore fell outside the scope of Article 119, and that thebenefits paid to employees under such a scheme constituted consideration receivedby the employee from the employer in respect of his employment, as referred toin the second paragraph of Article 119.

24.

    Although those principles were upheld in the judgment Barber in relation to'contracted-out‘ occupational pension schemes, the Court also stated, atparagraphs 44 and 45 of that judgment, that overriding considerations of legalcertainty precluded reliance being placed on the direct effect of Article 119 of theTreaty in order to claim entitlement to a pension with effect from a date prior todelivery of the judgment in that case, except in the case of persons who had in themeantime taken steps to safeguard their rights.

25.

    As the Court stated in paragraphs 19 and 20 of its judgment in Case C-109/91 TenOever [1993] ECR I-4879, by virtue of the Barber judgment, the direct effect ofArticle 119 of the Treaty may be relied on, for the purpose of claiming equaltreatment in the matter of occupational pensions, only in relation to benefitspayable in respect of periods of employment subsequent to 17 May 1990, the date

of the judgment in that case, subject to the exception in favour of workers or thoseclaiming under them who have before that date initiated legal proceedings or raisedan equivalent claim under the applicable national law.

26.

    That limitation is also to be found in Protocol No 2 annexed to the Treaty onEuropean Union, which provides that: 'For the purposes of Article 119 of thistreaty, benefits under occupational social security schemes shall not be consideredas remuneration if and in so far as they are attributable to periods of employmentprior to 17 May 1990, except in the case of workers or those claiming under themwho have before that date initiated legal proceedings or introduced an equivalentclaim under the applicable national law.‘

27.

    However, in Case C-57/93 Vroege [1994] ECR I-4541, paragraphs 20 to 27, andCase C-128/93 Fisscher [1994] ECR I-4583, paragraphs 17 to 24, the Court took theview that the limitation of the effects in time of the Barber judgment concernedonly those kinds of discrimination which, owing to the transitional derogations forwhich Community law provided and which were capable of being applied tooccupational pensions, employers and pension schemes could reasonably haveconsidered to be permissible (Case C-435/93 Dietz [1996] ECR I-5223, paragraph19).

28.

    As far as the right to join an occupational scheme was concerned, it also stated thatthere was no reason to suppose that those concerned could have been mistaken asto the applicability of Article 119.

29.

    In fact, it has been clear since the judgment in Bilka that any discrimination, basedon sex, in the recognition of that right infringes Article 119 (Vroege, cited above,paragraph 29, Fisscher, paragraph 26, and Dietz, paragraph 20).

30.

    Therefore, as the judgment in Bilka included no limitation of its effects in time, thedirect effect of Article 119 may be relied on, as from 8 April 1976, the date of thejudgment in Defrenne, in which that article was first held to have direct effect, inorder retroactively to claim equal treatment in relation to the right to join anoccupational pension scheme (Dietz, paragraph 21).

31.

    According to the United Kingdom Government, the main proceedings concern theamount of a retirement pension paid under an occupational social security schemeand not the right to belong to such a scheme: consequently, Article 119 applies onlyin order to alter the level of benefits to which a person in the situation of theapplicants in the main proceedings is entitled and only periods after 17 May 1990should be taken into account for the purposes of that calculation.

32.

    As regards the right to receive benefits additional to a retirement pension underan occupational scheme such as that involved in the main proceedings, the Courtfinds that, even if the persons concerned have always been entitled to a retirementpension under the Superannuation Scheme, nevertheless they were not fully

admitted to that contributory scheme. Solely on account of the fact that theyworked part-time, they were specifically excluded from MHO status which givesaccess to a special scheme under the Superannuation Scheme.

33.

    It is sufficient to recall in this regard that, at paragraph 23 of its judgment in Dietz,the Court has already stated that membership of a scheme would be of no interestto employees if it did not confer entitlement to the benefits provided by the schemein question. In a situation such as that involved in that case, the Court took theview that entitlement to a retirement pension under an occupational scheme wasindissolubly linked to the right to join such a scheme.

34.

    The same is true where the discrimination suffered by part-time workers stemsfrom discrimination concerning access to a special scheme which confersentitlement to additional benefits.

35.

    In light of those considerations, the reply to be given to the first question must bethat periods of service completed by part-time workers who have suffered indirectdiscrimination based on sex must be taken into account as from 8 April 1976, thedate of the judgment in Defrenne, for the purposes of calculating the additionalbenefits to which they are entitled.

The second question

36.

    By its second question the national court is asking essentially whether Communitylaw precludes the application to a claim based on Article 119 of the Treaty of anational rule under which entitlement, in the event of a successful claim, is limitedto a period which starts to run from a point in time two years prior tocommencement of proceedings in connection with the claim.

37.

    The Court has consistently held that, in the absence of relevant Community rules,it is for the national legal order of each Member State to designate the competentcourts and to lay down the procedural rules for proceedings designed to ensure theprotection of the rights which individuals acquire through the direct effect ofCommunity law, provided that such rules are not less favourable than thosegoverning similar domestic actions and are not framed in such a way as to renderimpossible in practice the exercise of rights conferred by Community law (see, tothat effect, Case 33/76 Rewe [1976] ECR 1989, paragraphs 5 and 6, Case 45/76Comet [1976] ECR 2043, paragraph 13, Fisscher, cited above, paragraph 39, andCase C-410/92 Johnson [1994] ECR I-5483, paragraph 21).

38.

    According to the applicants in the main proceedings, there is nothing in Fisscher tojustify restricting the extent of the benefits which may be awarded to them, at leastin relation to the period subsequent to 1976. In fact, there would appear to belittle point in holding that persons in the applicants' situation have the right tobecome members of an occupational social security scheme if the benefits which

they derive under it can be calculated only by reference to their employment from1990 onwards.

39.

    At the hearing the Commission maintained that regulation 12 of the OccupationalPension Regulations in fact prevents the applicants in the main proceedings fromvindicating their rights under Article 119 of the Treaty and that, consequently, theapplication of that rule runs counter to the principle of legal protection.

40.

    The United Kingdom Government, on the other hand, argues that a restrictivenational rule of the type at issue in the main proceedings has the effect of limitingthe scope of a retroactive claim relating to a period preceding commencement ofthe proceedings and that it is therefore comparable to the rule at issue in Johnson.

41.

    As far as this issue is concerned, it must be stated that application of a proceduralrule such as regulation 12 of the Occupational Pensions Regulations whereby, inproceedings concerning access to membership of occupational pension schemes, theright to be admitted to a scheme may have effect from a date no earlier than twoyears before the institution of proceedings would deprive the applicants in the mainproceedings of the additional benefits under the scheme to which they are entitledto be affiliated, since those benefits could be calculated only by reference toperiods of service completed by them as from 1990, that is to say two years priorto commencement of proceedings by them.

42.

    However, it should be noted that, in such a case, the claim is not for the retroactiveaward of certain additional benefits but for recognition of entitlement to fullmembership of an occupational scheme through acquisition of MHO status whichconfers entitlement to the additional benefits.

43.

    Thus, whereas the rules at issue in Case C-338/91 Steenhorst-Neerings v Bestuur vande Bedrijfsvereniging voor Detailhandel [1993] ECR I-5475 and in Johnson merelylimited the period, prior to commencement of proceedings, in respect of whichbackdated benefits could be obtained, the rule at issue in the main proceedings inthis case prevents the entire record of service completed by those concerned after8 April 1976 until 1990 from being taken into account for the purposes ofcalculating the additional benefits which would be payable even after the date ofthe claim.

44.

    Consequently, unlike the rules at issue in the judgments cited above, which in theinterests of legal certainty merely limited the retroactive scope of a claim forcertain benefits and did not therefore strike at the very essence of the rightsconferred by the Community legal order, a rule such as that before the nationalcourt in this case is such as to render any action by individuals relying onCommunity law impossible in practice.

45.

    Moreover, the effect of that national rule is to limit in time the direct effect ofArticle 119 of the Treaty in cases in which no such limitation has been laid down

either in the Court's case-law or in Protocol No 2 annexed to the Treaty onEuropean Union.

46.

    Finally, the argument put forward by the United Kingdom Government that thepurpose of a temporal limitation is to contribute to legal certainty by encouragingclaimants to be diligent cannot invalidate that conclusion. Suffice it to state in thatregard that the national rules in question apply even to persons who, like MrsMagorrian and Mrs Cunningham, brought proceedings before leaving theiremployment and being admitted to the occupational retirement pension scheme inquestion.

47.

    Accordingly, the reply to be given to the second question must be that Communitylaw precludes the application, to a claim based on Article 119 of the EC Treaty forrecognition of the claimants' entitlement to join an occupational pension scheme,of a national rule under which such entitlement, in the event of a successful claim,is limited to a period which starts to run from a point in time two years prior tocommencement of proceedings in connection with the claim.

Costs

48.

    The costs incurred by the United Kingdom Government and the Commission of theEuropean Communities, which have submitted observations to the Court, are notrecoverable. Since these proceedings are, for the parties to the main proceedings,a step in the proceedings pending before the national court, the decision on costsis a matter for that court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Office of the Industrial Tribunalsand the Fair Employment Tribunal, Belfast, by order of 9 July 1996, hereby rules:

1.    Periods of service completed by part-time workers who have sufferedindirect discrimination based on sex must be taken into account as from8 April 1976, the date of the judgment in Case C-43/75 Defrenne, for thepurposes of calculating the additional benefits to which they are entitled.

2.    Community law precludes the application, to a claim based on Article 119of the EC Treaty for recognition of the claimants' entitlement to join anoccupational pension scheme, of a national rule under which suchentitlement, in the event of a successful claim, is limited to a period which

starts to run from a point in time two years prior to commencement ofproceedings in connection with the claim.

Schintgen Mancini Kapteyn         Murray                            Hirsch

Delivered in open court in Luxembourg on 11 December 1997.

R. Grass

H. Ragnemalm

Registrar

President of the Sixth Chamber

1: Language of the case: English.