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Opinion of Advocate General Kokott delivered on 7 May 2020

Opinion of Advocate General Kokott delivered on 7 May 2020

Data

Court
Court of Justice
Case date
7 mei 2020

Opinion of Advocate General

Kokott

delivered on 7 May 2020(1)

Case C‑223/19

YS

v

NK

(Request for a preliminary ruling from the Landesgericht Wiener Neustadt (Austria))

"(Request for a preliminary ruling - Social policy - Equal treatment of men and women in matters of pay and social security - Directive 2006/54/EC - Occupational pension provision - Special pensions - Occupational pensions in the form of a direct defined benefit pension from the employer - Withholding of a pension security contribution - Lack of increase in special pensions - Indirect discrimination against men - Directive 2000/78/EC - Age discrimination - Charter of Fundamental Rights of the European Union - Article 20 - Article 21 - Prohibition of discrimination on grounds of sex, property and age)"

I. Introduction

1. Are men, as the primary recipients of particularly large pensions compared to women who receive substantially smaller pensions on average, indirectly discriminated against by national legislation which introduces, inter alia, a contribution from particularly large ‘special pensions’ in order to secure the pension revenue?

2. This is the central question which is the subject of the present request for a preliminary ruling.

3. In order to secure the long-term financing of pension entitlements, the Austrian legislature has carried out various reforms since the end of the 1990s. In this case, in addition to the statutory pension insurance scheme and the pensions of civil servants, occupational pension agreements in the form of what are known as direct defined benefit pensions from State-controlled undertakings can also indirectly influence the state of public funds. This is because, in this respect, an undertaking is directly obliged to pay the beneficiary a predetermined amount each month after retirement. Particularly large obligations on the part of public undertakings therefore also affect the public revenue via smaller distributions to their shareholders.

4. The applicant in the main proceedings (‘the applicant’) receives such an occupational pension in the form of a direct defined benefit pension from an undertaking with State majority participation. Since 2015, his former employer has firstly been withholding what is known as a pension security contribution from his occupational pension. Secondly, in the scope of the pension adjustment of 2018, State-controlled undertakings were prohibited from making the contractually established annual increase in those occupational pensions if the total pension income of the beneficiary exceeds a certain amount.

5. As the legislation described allegedly affects more men than women and more old people than young people, the applicant considers it to be discriminatory and therefore contrary to EU law. The Court of Justice will therefore have to clarify in the present proceedings whether the anti-discrimination directives and the provisions of the Charter, in particular Articles 20 and 21 thereof, preclude such national legislation.

II. Legal context

A. EU law

1. Directive 2000/78/EC

6. Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (‘Directive 2000/78’)(2) has the purpose, according to Article 1 thereof, of laying down a general framework for combating discrimination ‘on the grounds of religion or belief, disability, age or sexual orientation’.

7. Article 3(1) of that directive defines its scope as follows:

‘1.

Within the limits of the areas of competence conferred on the Community, this Directive shall apply to all persons, as regards both the public and private sectors, including public bodies, in relation to:

…

  1. employment and working conditions, including dismissals and pay; …’

2. Directive 2006/54/EC

8. Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) (‘Directive 2006/54’)(3) contains, according to Article 1 thereof, inter alia, provisions in relation to ‘working conditions, including pay’ and ‘occupational social security schemes’.

9. Article 2 of that Directive states the following:

‘1.

For the purposes of this Directive, the following definitions shall apply:

  1. “direct discrimination”: where one person is treated less favourably on grounds of sex than another is, has been or would be treated in a comparable situation;

  2. “indirect discrimination”: where an apparently neutral provision, criterion or practice would put persons of one sex at a particular disadvantage compared with persons of the other sex, unless that provision, criterion or practice is objectively justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary;

…

  1. “pay”: the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his/her employment from his/her employer;

  2. “occupational social security schemes”: schemes not governed by 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 whose purpose is to provide workers, whether employees or self-employed, in an undertaking or group of undertakings, area of economic activity, occupational sector or group of sectors with benefits intended to supplement the benefits provided by statutory social security schemes or to replace them, whether membership of such schemes is compulsory or optional.’

10. Article 4 of Directive 2006/54 states the following:

‘For the same work or for work to which equal value is attributed, direct and indirect discrimination on grounds of sex with regard to all aspects and conditions of remuneration shall be eliminated.

In particular, where a job classification system is used for determining pay, it shall be based on the same criteria for both men and women and so drawn up as to exclude any discrimination on grounds of sex.’

11. Article 5 of Directive 2006/54 reads as follows:

‘Without prejudice to Article 4, there shall be no direct or indirect discrimination on grounds of sex in occupational social security schemes, in particular as regards:

…

  1. the calculation of benefits, including supplementary benefits due in respect of a spouse or dependants, and the conditions governing the duration and retention of entitlement to benefits.’

B. National law

1. Law on occupational pensions

12. Occupational pension provision in Austria is regulated in the Betriebspensionengesetz (Law on occupational pensions, ‘BPG’)(4).

13. Pursuant to Paragraph 1(1) BPG, this applies to defined benefit pensions provided by an employer to an employee in the scope of an employment relationship under private law in order to supplement the statutory pension insurance scheme.

14. Paragraph 2 BPG provides the following under the title ‘Types of defined benefit pension’:

‘Defined benefit pensions within the meaning of Paragraph 1(1) are obligations on the part of the employer resulting from unilateral declarations, individual agreements or collectively agreed norms

  1. to pay contributions to a pension fund or to a facility within the meaning of Paragraph 5 point 4 of the Pensionskassengesetz (Law on pension funds) … on behalf of the employee and his/her survivors; …

  2. to provide benefits directly to the employee and his/her survivors (direct defined benefit pension);

  3. to pay premiums for a life insurance policy taken out on behalf of the employee and his/her survivors.’

2. Provisions regarding the withholding of pension security contributions

15. The withholding of pension security contributions is based on the Sonderpensionenbegrenzungsgesetz (Law on the limitation of special pension arrangements, ‘SpBegrG’)(5) of 1 January 2015. As an extensive collective amendment, it changed various federal laws, including the Bundesverfassungsgesetz über die Begrenzung von Bezügen öffentlicher Funktionäre (Federal constitutional law on the limitation of remuneration of holders of public office, ‘BezBegrBVG’)(6). This provides for the introduction of upper limits for the remuneration of certain federal civil servants and public officials. It also authorises the federal legislature to introduce pension security contributions from the retirement and pension benefits of those civil servants and from the direct defined benefit pensions of former employees of legal entities subject to the control of the Court of Auditors, if those benefits or entitlements exceed a certain upper limit. Paragraph 10(6) BezBegrBVG authorises the provincial legislatures to introduce such a pension security contribution at provincial level.

16. On the basis of that authorisation, the province of Lower Austria enacted Paragraph 24a of the Niederösterreichisches Landes- und Gemeindebezügegesetz (Lower Austrian Law on provincial and municipal remuneration, ‘NÖ Landes- und GemeindebezügeG’)(7). That provision reads as follows:

‘(1)

Beneficiaries of retirement and pension benefits from defined benefit pensions

  1. from legal entities established under provincial law,

  2. from legal entities which, on account of a majority participation or effective control on the basis of financial, economic or organisational measures of the province of Lower Austria, one or more Lower Austrian municipalities or an association of municipalities, are subject to the control of the Court of Auditors,

have to make a pension security contribution for the proportion which exceeds the amount of the monthly maximum contribution basis pursuant to Paragraph 45 [Allgemeines Sozialversicherungsgesetz (General Law on social security, ASVG)]. This shall also apply to special payments.

(2)

The pension security contribution is to be withheld by the paying body and paid to the legal entity established under provincial law or the undertaking from which the retirement or pension benefits are received.

(3)

The pension security contribution amounts to

  1. 5% for the proportion exceeding 100% of the monthly maximum contribution basis, but not exceeding 150%,

  2. 10% for the proportion exceeding 150% of the monthly maximum contribution basis, but not exceeding 200%,

  3. 20% for the proportion exceeding 200% of the monthly maximum contribution basis, but not exceeding 300%, and

  4. 25% for the proportion exceeding 300% of the monthly maximum contribution basis.’

17. It is apparent from the order for reference that only direct defined benefit pensions within the meaning of Paragraph 2 point 2 BPG fall under the term ‘defined benefit pension’ in Paragraph 24a(1) NÖ Landes- und GemeindebezügeG. This is because only those direct defined benefit pensions are covered by Article 1 SpBegrG and therefore by the authorisation basis of Paragraph 10(6) BezBegrBVG.(8)

3. Provisions regarding the limitation of the pension increase

18. Under Paragraph 108f and Paragraph 108h of the Allgemeines Sozialversicherungsgesetz (General Law on social security, ‘ASVG’),(9) the statutory pension amounts are to be adjusted annually in accordance with the development of consumer prices by means of what is known as an adjustment factor.

19. For the 2018 calendar year, the Pensionsanpassungsgesetz 2018 (Law on pension adjustment 2018, ‘PAG 2018’)(10) modifies this adjustment mechanism. Specifically, the PAG 2018 introduced Paragraph 711 ASVG, which provides for the following staggered increase in pensions:

‘(1)

By way of derogation from the first sentence of Paragraph 108h(1) and Paragraph 108h(2), the pension increase for the 2018 calendar year is to be applied not by means of the adjustment factor, but as follows:

The total pension income (subparagraph 2) is to be increased

  1. by 2.2%, if it does not exceed EUR 1 500 per month;

  2. by EUR 33, if it is above EUR 1 500 and up to EUR 2 000 per month;

  3. by 1.6%, if it is above EUR 2 000 and up to EUR 3 355 per month;

  4. by a percentage which decreases linearly between the values mentioned from 1.6% to 0%, if it is above EUR 3 355 and up to EUR 4 980 per month.

If the total pension income exceeds EUR 4 980 per month, no increase shall be applied.

(2)

The total pension income of a person is the sum of all his/her pensions under the statutory pension insurance scheme, to which entitlement existed under the provisions applicable on 31 December 2017 … The total pension income also includes all benefits covered by the [SpBegrG], if the person in receipt of the pension is entitled thereto on 31 December 2017.

…

(6)

… (Constitutional provision) The adjustment for the 2018 calendar year of benefits which are covered by the [SpBegrG] may not exceed the increase under subparagraph 1 on the basis of the total pension income (subparagraph 2).’

III. Facts and preliminary ruling proceedings

20. The applicant is a former employee of NK, the defendant in the main proceedings (‘the defendant’). The defendant is a listed public company in which the province of Lower Austria holds a majority participation of 51%.

21. On 2 March 1992, during his ongoing employment relationship, the applicant concluded a pension contract with the defendant, which contains a direct defined benefit commitment. This is to be understood as a unilateral obligation on the part of the employer to directly pay the employee, after the employment relationship comes to an end, an occupational pension of a certain amount which is financed from the undertaking’s reserves. The applicant’s contract also contains what is known as an index-linking clause, under which the amounts payable increase each year by the same percentage as that of the increase in the salaries of the highest category of employment provided for by the collective agreement applicable to the defendant’s employees.

22. Since 1 April 2010, the applicant has been in retirement and received various pension benefits on this basis. Inter alia, the defendant has, since 17 December 2010, paid him an occupational pension on the basis of the direct defined benefit pension as set out on 2 March 1992.

23. Since 1 January 2015, the defendant has retained part thereof as a pension security contribution pursuant to Paragraph 24a NÖ Landes- und GemeindebezügeG.

24. Furthermore, the defendant did not increase the amount payable in 2018 in accordance with the index-linking clause, since that is affected by the provisions of the PAG 2018, in particular the new Paragraph 711(6) ASVG, which provides that certain pension entitlements are not to be increased if a person’s total pension income exceeds an amount of EUR 4 980.

25. In the main proceedings, the applicant opposes the withholding of the pension security contributions and the failure to adjust his occupational pension in 2018. He essentially argues that the national legislation on which the two measures are based discriminates against him on the grounds of his sex, age and property and is contrary to the directives on equal treatment and the Charter of Fundamental Rights of the European Union. This is because that legislation leads above all to reductions in particularly large pension benefits under existing contracts and concerns a significantly higher number of men than of women.

26. Against that background, the Landesgericht Wiener Neustadt (Regional Court of Wiener Neustadt, Austria) seised of the dispute decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

  • Does the scope of [Directive 79/7/EEC(11)] and/or of [Directive 2006/54] include legislation of a Member State if the effect of that legislation is that the former employer is to withhold sums of money from a considerably higher proportion of men entitled to an occupational pension than from women entitled to an occupational pension when those occupational pensions are paid out and those sums may be freely used by the former employer, and are such provisions discriminatory within the meaning of those directives?

  • Does the scope of [Directive 2000/78] include legislation of a Member State that discriminates on the ground of age because the financial burden is borne exclusively by older people who are entitled under private law to the benefits of an occupational pension that was agreed as a direct defined benefit pension, whereas young and relatively young people who have entered into occupational pension contracts are not financially burdened?

  • Are the provisions of the [Charter], in particular the prohibitions of discrimination laid down in Articles 20 and 21 of the Charter, to be applied to occupational pensions even if the Member State’s legislation does not cover forms of discrimination as prohibited pursuant to [Directives 79/7, 2000/78 and 2006/54]?

  • Are Article 20 et seq. [of the Charter] to be interpreted as precluding legislation of a Member State that implements Union law within the meaning of Article 51 [of the Charter] and that discriminates, on grounds of sex, age, property or on other grounds, such as, for example, on the basis of the former employer’s current ownership, against persons entitled under private law to an occupational pension as compared with other persons entitled to an occupational pension, and does the [Charter] prohibit such forms of discrimination?

  • Are national rules that place only a small group of people who are contractually entitled to an occupational pension in the form of a direct defined benefit pension under an obligation to make financial payments to their former employer also discriminatory on the basis of property within the meaning of Article 21 [of the Charter] if they cover only people with relatively large occupational pensions?

  • Is Article 17 [of the Charter] to be interpreted as precluding legislation of a Member State that provides for expropriatory intervention, directly by law and without compensation, in an agreement relating to an occupational pension in the form of a direct defined benefit pension entered into between two private parties to the detriment of a former employee of a company that has made provision for the payment of the occupational pension and is not experiencing financial difficulties?

  • Does a statutory obligation on the part of the former employer of a person entitled to an occupational pension not to pay out parts of the agreed remuneration (of the agreed occupational pension) represent, as an infringement of freedom of contract, an interference with the employer’s right to property?

  • Is Article 47 [of the Charter] to be interpreted as precluding legislation of a Member State that expropriates directly by law and makes no provision for any challenge to the expropriation other than by way of a claim against the beneficiary of the expropriation (the former employer and the debtor under the pension contract) for damages and reimbursement of the expropriated sum of money?’

27. In the proceedings before the Court of Justice, written observations have been submitted by the applicant, the Republic of Austria and the European Commission. These parties concerned and the defendant were represented in the hearing of 22 January 2020.

IV. Legal assessment

28. At the centre of these preliminary ruling proceedings are two pieces of national legislation affecting the amount of the occupational pension received by the applicant on the basis of what is known as a direct defined benefit pension from his employer, a State-controlled undertaking.

29. Until the introduction of the occupational pension fund on 1 July 1990, such direct defined benefit pensions were the standard form of occupational pension provision in Austria. In this case, the employer is obliged to make a monthly payment of a certain amount to the employee after retirement. Employees in management positions were hereby often able to achieve particularly lucrative occupational pension agreements. Most employers have now switched to making monthly payments into an occupational pension fund or life insurance scheme during the employment relationship.

30. Firstly, since 2015, what is known as a pension security contribution is now being withheld from occupational pensions such as that of the applicant, the amount of which exceeds a certain limit. Secondly, the applicant’s occupational pension for 2018 was not increased, contrary to the contractually agreed index-linking clause, because his overall pension, which also includes, in addition to the statutory pension, direct defined benefit pensions from State-controlled undertakings, exceeds the limit of EUR 4 980.

31. According to the referring court, this legislation statistically affects more men than women, more old people than young people and more wealthy people than non-wealthy people. This raises the question of whether the legislation is compatible with the prohibitions of (indirect) discrimination on grounds of sex and age contained in Directives 79/7, 2000/78 and 2006/54. It is also considering breaches of Articles 17, 20, 21 and 47 of the Charter.

32. Specifically, by its first two questions, the referring court essentially seeks to ascertain whether the said directives are applicable (see A. below) and whether the national legislation constitutes indirect discrimination on grounds of sex (see B. below) or of age (see C. below). In addition, it raises the question of the applicability of the Charter in the main proceedings and, if this is answered in the affirmative, of the interpretation of the aforementioned fundamental rights with regard to the legislation at issue (see D. below).

A. Scope of Directives 79/7, 2000/78 and 2006/54 (first part of the first and second questions referred)

33. By the first part of its first two questions referred, which are initially to be examined together, the referring court seeks to ascertain whether legislation such as that at issue in the main proceedings falls within the scope of Directives 79/7, 2000/78 and 2006/54.

34. With regard to Directive 79/7, it is apparent from Article 3(1)(a) thereof that it only applies to statutory schemes.(12) In contrast, the standards of Paragraph 24a NÖ Landes- und GemeindebezügeG and of Paragraph 711(6) ASVG that are at issue in the main proceedings concern defined benefit pensions, which, according to the legal definition in Paragraph 1(1) BPG, are contractual in nature.

35. Such occupational pensions fall within the scope of Directives 2000/78 and 2006/54.

36. This is because, as contractual obligations, the purpose of which consists, inter alia, in granting the employees of an undertaking additional entitlements alongside the statutory pension insurance scheme, they constitute an occupational social security scheme within the meaning of Article 1(2)(c) of Directive 2006/54. Furthermore, according to settled case-law, occupational pensions fall under the concept of pay of Article 3(1)(c) of Directive 2000/78 and Article 1(2)(b) of Directive 2006/54.(13)

37. In the opinion of the Austrian Government, the standards at issue should nevertheless not fall within the scope of those directives, because they constitute a type of special tax on particularly large pension entitlements. It bases this on the judgment of the Court in the C case, in which the latter ruled that the introduction of a supplementary tax on retirement pension income above a certain amount does not fall within the scope of the directives due to the lack of any link to the contract of employment.(14)

38. However, in response thereto, it must firstly be pointed out that, in the C case, the Court took account of the fact that the levying of a tax does not concern the question of the procedure or the conditions for determining the amount of the benefits paid to the worker by reason of his former employment relationship. It is therefore unconnected to the determination of ‘pay’ within the meaning of Directive 2000/78.(15)

39. In contrast, Paragraph 24a NÖ Landes- und GemeindebezügeG and Paragraph 711(6) ASVG directly affect the amount of the occupational pension that the employer owes to the former employee concerned on the basis of the corresponding supplementary agreements to the contract of employment. This is because, as a result of the deduction of the pension security contribution and the prohibition of the increase corresponding to the index-linking clause, the employer has to pay his former employee a sum less than that agreed in the contract.

40. Secondly, the Court of Justice based the repudiation of the scope of the directives on a formal concept of taxation and on the fact that the taxation of retirement pension income falls within the exclusive competence of the Member State in matters of tax law.(16) However, the sole purpose of the provisions at issue, which is to increase the public revenue and thereby ensure the long-term financial feasibility of pension entitlements, does not make them fiscal regulations.

41. It follows from the foregoing considerations that Directives 2006/54 and 2000/78 are applicable.

B. Indirect discrimination on grounds of sex (first question referred)

42. By the second part of its first question, the referring court firstly seeks to ascertain whether Article 4(2) and Article 5(c) of Directive 2006/54 are to be interpreted as precluding national legislation which provides for the withholding of a pension security contribution for recipients of certain ‘special pensions’, namely direct defined benefit pensions, which are paid out by State-controlled undertakings and exceed an amount fixed by law, if the entitlements of more men than women are above that limit.

43. The referring court secondly asks whether Article 4(2) and Article 5(c) of Directive 2006/54 preclude legislation which results in the total exclusion, for 2018, and for overall pension incomes of EUR 4 980 and above, of the contractually stipulated increase in a direct defined benefit pension from a State-controlled undertaking, if more men than women are entitled to that amount.

44. Article 4(2) and Article 5(c) of Directive 2006/54 prohibit any direct or indirect discrimination on grounds of sex with regard to aspects of remuneration and in occupational social security schemes, in particular with regard to the calculation of benefits.

45. Direct discrimination on grounds of sex is excluded in the present case, since neither Paragraph 24a NÖ Landes- und GemeindebezügeG nor Paragraph 711(6) ASVG links the obligation to make a pension security contribution or the absence of an increase in the occupational pension to the sex of the beneficiaries.

46. However, pursuant to Article 2(1)(b) of Directive 2006/54, indirect discrimination can be taken to occur where an apparently neutral provision, criterion or practice would put persons of one sex at a particular disadvantage compared with persons of the other sex.(17)

47. The existence of indirect discrimination is accordingly established in two steps. It must first be examined whether there is a difference in treatment on the basis of a ‘neutral’ criterion of differentiation (see 1. below).(18) Only if this is established is it to be examined, in a second step, whether the disadvantage brought about by the legislation particularly concerns members of one sex compared with members of the other sex (see 2. and 3. below).(19) The question of possible justification finally arises where appropriate (see 4. below).

1. Existence of a difference in treatment on the basis of ‘neutral provisions, criteria or practices’

48. Paragraph 24a NÖ Landes- und GemeindebezügeG and Paragraph 711(6) ASVG link the obligation to make a pension security contribution and the exclusion of the increase in the occupational pension to three (neutral) conditions: firstly a person must be entitled to a direct defined benefit pension, secondly that pension must come from a State-controlled undertaking and thirdly the entitlement must exceed EUR 5 370(20) or EUR 4 980(21).

49. In the opinion of the referring court, the legislation at issue therefore brings about a difference in treatment of pensioners on account of the type of their defined benefit pension, on account of the type of legal entity which is liable to pay the defined benefit pension and on account of the amount of their entitlement.

50. This is because neither the beneficiaries of other occupational pensions which exceed the respective limits, namely of a defined pension fund or of a life insurance policy (differentiation according to type of defined benefit pension), nor the beneficiaries of direct defined benefit pensions in the corresponding amount from private undertakings (differentiation according to type of legal entity), nor the recipients of direct defined benefit pensions of State-controlled undertakings whose entitlements are below the limit concerned (differentiation according to amount of entitlement) are obliged to make a pension security contribution or are affected by the exclusion of the pension increase under Paragraph 24a NÖ Landes- und GemeindebezügeG and Paragraph 711(6) ASVG.

51. With regard to the first two differentiations, the existence of a difference in treatment is already doubtful. This is because it is settled case-law that a difference in treatment only exists where different rules are applied to comparable situations.(22) The assessment of comparability must in turn take account of the objectives of the specific measure.(23)

52. In this regard, it must be remembered that, according to the Austrian Government, the legislation at issue has the particular objective of increasing the public revenue. This is because, even though direct defined benefit pensions are not paid directly by the State, but from reserves of the undertaking concerned, particularly large obligations reduce the undertaking’s profit and therefore also its distributions to the public sector. The withholding of a pension security contribution and the lack of increase in the occupational pensions of particularly high-performing former employees of State-controlled undertakings would therefore also indirectly benefit the public sector.

53. For this reason, the scope of the legislation is limited to direct defined benefit pensions from State-controlled undertakings. This is because occupational pensions which are paid out from a pension fund or an insurance scheme no longer constitute obligations on the part of the employer. Therefore, those types of occupational pension, even in the case of State-controlled undertakings, have absolutely no indirect impact on the state of public funds. This applies in any case to occupational pension obligations on the part of private undertakings.

54. In view of the objectives of the measures, the situation of recipients of other types of occupational pension and of former employees of private undertakings does not therefore appear to be comparable with the situation of recipients of direct defined benefit pensions from publicly controlled undertakings.

55. In any event, in the opinion of the referring court, it is precisely the link to the amount of benefit entitlement which is the decisive criterion giving rise to indirect discrimination against men, since more men than women enjoyed such large entitlements. It is true that, as regards the difference in treatment of persons with benefit entitlements below and above the corresponding limits, the question could also be raised as to whether their equal treatment as regards a contribution to securing the pension revenue is even appropriate in view of their different financial capacity. However, in my opinion, this question only becomes relevant in the scope of any examination of justification. As a consequence, it is firstly necessary to examine whether the condition relating to the amount of benefit entitlement does in fact have an indirectly discriminatory effect.

2. Particular discrimination against men through the link to the apparently neutral criterion

56. As regards the establishment of indirect discrimination, it is typically difficult to assess whether the link to an apparently neutral criterion puts members of one sex at a particular disadvantage.

57. According to the case-law, statistical data, inter alia, may be used for that purpose.(24) In that regard, it is necessary to form two ratios, that is to say to determine percentages, in order to establish whether the criterion at issue puts more men than women at a disadvantage.(25)

58. In contrast, it is not sufficient to consider absolute figures, since these depend on the number of working people in a Member State as a whole as well as the percentages of men and women employed in that State.(26)

59. In this context, it must firstly be found that the referring court appears to have confined itself to such a consideration of absolute figures. It merely found — without providing precise figures in this regard — that more men than women have made a pension security contribution or failed to receive an increase in their occupational pension under Paragraph 711(6) ASVG.

60. The referring court therefore appears to have compared the number of men who are subject to the obligation to make a pension security contribution and to the lack of increase in their occupational pensions with the number of women affected.(27) In other words, it therefore only considered the group of people meeting the criterion at issue, that is to say those whose benefit entitlements exceed the limits set. However, if the necessary ratios are formed with regard to this group, 100% of men and 100% of women are inevitably affected.

61. A simple comparison of these absolute figures can also be distorted by short-term, industry-specific or other factors. In the present case, for instance, these figures depend on how many women and how many men worked in management positions in State-controlled undertakings until the end of the 1990s. This is because, in all likelihood, only these people were practically in a position to negotiate entitlements which exceed the limit of EUR 5 730 or EUR 4 980.(28)

62. The Court has therefore already ruled that the referring court must take into account all workers subject to the national legislation in which the difference in treatment has its origin, and that the best approach to the comparison is to consider, on the one hand, the respective proportions of male workers who are affected by the disadvantage at issue and, on the other, to compare those proportions as regards female workers.(29) In other words, it is necessary to determine the impact on the members of one sex compared to those of the other sex in relation to the category of persons determined by the scope of the provision at issue.(30) This does not necessarily correspond to all the workers or pensioners of the Member State concerned.(31)

63. Only through such a limitation of the category of persons considered can it be determined whether the provision concerned and the criterion at issue therein actually have an indirectly discriminatory effect and, at the same time, ruled out that the results are influenced by other factors.

64. The situation underlying the main proceedings provides a particularly good illustration of this point. If the number of men and women subject to the obligations at issue were in each case placed in relation to, on the one hand, all current male pensioners and, on the other hand, all female pensioners, this would give a distorted picture. Namely no account would be taken of the fact that, among the people who, until the 1990s, were able to conclude an occupational pension agreement, it is likely that there were considerably more men. Women who worked at that time but who, for instance, by reason of the nature or scope of their employment were not offered an occupational pension agreement in addition to the statutory pension, would likewise be included in the ratio. The result of the comparison would therefore only illustrate the social conditions of the time in question, but not the potentially indirectly discriminatory effect of the provisions at issue.

65. The referring court must therefore firstly place the number of men whose benefit entitlement exceeds the limit in question in relation to the total number of men who receive a direct defined benefit pension from a State-controlled undertaking. The percentage determined in this way is to be compared with the percentage of women whose benefit entitlement exceeds the limit in question in relation to the total number of women who receive a direct defined benefit pension from State-controlled undertakings.

66. If the result of this is that the percentage of women affected out of a possibly relatively small total number of women who even fall within the scope of the legislation is not much smaller than the percentage of men affected out of a possibly vastly larger group of men, it would therefore not be permissible to conclude that the legislation at issue has the effect of indirect discrimination on grounds of sex.

67. The referring court has exclusive jurisdiction for finally assessing the question of whether the figures determined in this way are valid.(32)

68. In the present case, doubts regarding the validity of the figures could, for instance, arise if the distribution of men and women in the scope of the provisions were anomalous, that is to say unexpected. However, there are no indications of this in the order for reference. In particular, the referring court does not appear to rely on figures according to which, in relation to the gender distribution among pensioners in general, a particularly high number of men are found among the former employees of State-controlled undertakings. Nor does it appear to have figures according to which, in the group of recipients of occupational pensions, a greater percentage of men than women receive a direct defined benefit pension. On the contrary, it is apparent from the order for reference that, until the 1990s, direct defined benefit pensions were the standard model for occupational pensions, that is to say that 100% of men and 100% of women offered an occupational pension at that time received a direct defined benefit pension.

69. It also follows from those considerations that the limitation of the scope of the provisions at issue to direct defined benefit pensions from State-controlled undertakings (to the exclusion of other types of occupational pension and private employers) does not appear, as such, to give rise to indirect discrimination on grounds of sex.(33)

3. Establishment of particular discrimination against men in the specific case

70. In the hearing, the defendant pointed out that the statistical data required may not be available. This is because, as the benefit entitlements resulted from individual contracts, it is not possible to generally ascertain how many men and how many women receive direct defined benefit pensions from State-controlled undertakings and how many of those have entitlements exceeding the limits fixed in Paragraph 24a NÖ Landes- und GemeindebezügeG and Paragraph 711(6) ASVG.

71. Data could at best be provided on how many men and women receive a direct defined benefit pension from the defendant and how many of those are in each case affected by the obligation to make a pension security contribution or by the exclusion of the increase in their entitlements.

72. In that regard, it should be borne in mind that statistical data are in no way the only means of demonstrating indirect discrimination. According to the case-law, they merely have an indicative effect.(34) The fundamental reservations concerning the use of statistical data in this regard have already been explained elsewhere.(35) That is why national law may provide that indirect discrimination may be proved by any means.(36)

73. The Court has also already ruled that the inaccessibility of relevant statistical data in the scope of proving discrimination may not lead to the achievement of the objective pursued by the directive being compromised and the latter being deprived of its effectiveness.(37) Against that background, the Court ruled in the Schuch-Ghannadan case that other, available data could possibly be used.(38)

74. It is ultimately decisive whether the referring court, which alone has jurisdiction to assess the facts, is convinced, when assessing such alternative data, that they are valid, representative and significant and do not illustrate purely fortuitous or short-term phenomena.(39) If it uses the defendant’s data, it would therefore have to assess whether the distribution of men and women within the group of people who receive benefits on the basis of a direct defined benefit pension from the defendant corresponds, for instance, to the distribution of men and women within the group of people falling within the scope of Paragraph 24a NÖ Landes- und GemeindebezügeG and Paragraph 711(6) ASVG.

4. Justification for any discrimination on grounds of sex

75. If the referring court reaches the conclusion that the interference with the pension entitlements at issue constitutes indirect discrimination on grounds of sex, it must finally examine whether this is objectively justified by a legitimate aim unrelated to any discrimination on grounds of sex, and whether the means chosen to achieve that aim are appropriate and necessary.(40)

76. It should firstly be pointed out here that, if the referring court is able to establish that the provisions have an indirectly discriminatory effect, this is at most linked to an already existing state of inequality. This is because a predominant impact on men would in all likelihood have to be solely attributed to the fact that men, on average, still earn more than women and are over-represented in management positions. Therefore, unlike in the cases previously ruled on, the existing economic inequality between the sexes is not exacerbated further in the present case.(41) It follows that the requirements regarding the justification of any indirect discrimination are correspondingly lower.

77. According to the Austrian Government, the legislation at issue essentially pursues two objectives. Firstly, there is to be a reduction of the burden on the public budget caused by particularly large pension obligations in the public and semi-public sectors.(42) Secondly, the legislation pursued the objective of generally aligning the pension level against the background of the significant differences in the amount of pension entitlements, which are considered to be unfair.

78. The Court fundamentally recognises maintaining the functionality and ensuring the financial balance of contribution-financed schemes as legitimate social policy objectives.(43) It also grants the Member States a broad discretion with regard to the aims that they wish to pursue in the field of social and employment policy.(44) However, according to settled case-law, they must apply the chosen means in a consistent and systematic manner when pursuing those objectives.(45)

79. With regard to the objective of reducing the burden on the public budget, it must firstly be found here that the SpBegrG also contains regulations on the general limitation of the emoluments of civil servants and public officials, as well as provisions on the withholding of pension security contributions from those groups, whose pension benefits are directly financed through public funds.(46) In addition, Paragraph 711(1) ASVG also introduces, for 2018, a levelling pension increase for beneficiaries of the statutory pension insurance scheme, which provides for a total exclusion of the increase above the limit of EUR 4 980. The legislature therefore appears to be pursuing the objective of reducing the burden on public funds in a comprehensive and systematic manner.

80. Secondly, it is true that it was emphasised several times in the hearing that the legislation at issue does not oblige the State-controlled undertakings to use the amounts saved to form pension reserves. For that reason, there is no guarantee that the provisions even contribute towards financing the pensions. However, it must be pointed out in this regard that, in the case of State majority participation, the public authorities could in any case force a profit distribution. In this way, it can be guaranteed, in case of doubt, that there is no threat of an additional burden on the public funds if an undertaking does not use the savings accordingly.

81. Thirdly, account must be taken of the fact that the legislation at issue configures the lack of increase in entitlements and the obligation and extent of making a pension security contribution in consideration of the financial capacity of the people affected. Only very large entitlements, which according to the Austrian Government are more than 290% above the average pension level, are even affected and the extent of the contribution to be made is also proportionate to the amount of the entitlement.

82. Against that background and in view of the broad discretion enjoyed by the national legislature in matters of social policy, referred to above, the legislation cannot therefore, in any event, evidently be regarded as inappropriate or inconsistent.

5. Conclusion

83. It follows from the foregoing considerations that Article 4(2) and Article 5(c) of Directive 2006/54/EC are to be interpreted as possibly precluding, in principle, national provisions which, in respect of recipients of occupational pensions in the form of direct defined benefit pensions from State-controlled undertakings, provide for the withholding of a pension security contribution and the lack of the contractually stipulated increase in their entitlements, if those entitlements exceed a certain amount fixed by law. That presupposes, however, that the percentage of the members of one sex whose entitlements exceed that amount out of the total number of members of that sex in the group of people entitled to the type of occupational pension concerned is significantly higher than the corresponding percentage of the members of the other sex, and that fact cannot be justified by an objective reason unrelated to any discrimination on grounds of sex.

C. Indirect discrimination on grounds of age (second question referred)

84. By the second part of its second question referred, the referring court essentially seeks to ascertain whether Article 2(1) of Directive 2000/78 precludes national provisions such as the interference with pension entitlements at issue if it is mainly older people over the age of 60 who are affected by the obligation provided for therein to make a pension security contribution and by the lack of increase in their occupational pension.

85. For the purposes of Directive 2000/78, indirect discrimination must be established according to the same principles as also apply to Directive 2006/54.(47)

86. It follows from the foregoing considerations that it must fundamentally be determined, in relation to the entirety of all the people to which the national legislation at issue applies, whether the differentiation made within that legislation puts old people at a particular disadvantage.(48)

87. However, it is not apparent from the order for reference in this respect that there is a greater percentage of older people over the age of 60 among the people who, under the provisions in question, have to make a pension security contribution, or whose entitlements are not increased, than among those to which this does not apply due to the amount of their entitlements.

88. The referring court instead considers that indirect discrimination on grounds of age is to be recognised in the fact that the interference with pension entitlements at issue applies, irrespective of the specific disadvantages resulting therefrom, from the outset solely to recipients of direct defined benefit pensions, who are inevitably older than recipients of other types of occupational pension, the former having in practice been agreed only until the end of the 1990s. Following the introduction of occupational pension funds, employers de facto switched to offering other types of occupational pension.

89. However, it should be noted in this regard that it is in the nature of things that people to whom a later legal situation applies are younger than those who fall under the earlier legal situation. However, this does not constitute indirect discrimination on the grounds of age.(49)

90. Therefore, the second question referred is to be answered to the effect that Article 2(1) of Directive 2000/78 is to be interpreted as meaning that national provisions which provide, in respect of recipients of occupational pensions of a certain type whose amount exceeds a limit fixed by law, for the withholding of a pension security contribution or the lack of the contractually stipulated increase in their entitlements do not constitute indirect discrimination on grounds of age within the meaning of that provision where, after a certain point in time, that type of occupational pension was no longer operated and, therefore, beneficiaries of other types of occupational pension, which were operated later, do not fall within the scope of those provisions.

D. Fundamental rights of the Charter (third to eighth questions referred)

91. By its third to eighth questions referred, which are to be examined together, the referring court essentially seeks to ascertain how Articles 17, 20, 21 and 47 of the Charter are to be interpreted with regard to national legislation such as the interference with pension entitlements at issue.

92. Specifically, it firstly asks by its fourth and fifth questions whether the equal treatment requirements of Articles 20 and 21 of the Charter preclude such legislation, in particular whether discrimination on grounds of property within the meaning of Article 21(1) of the Charter is to be seen therein. It then seeks to ascertain, by its sixth and seventh questions, whether freedom of contract and property could preclude such legislation. Finally, by its eighth question, it seeks to ascertain whether, in the present case, Article 47 of the Charter could preclude the circumstance of there being no possible direct legal recourse against Paragraph 24a NÖ Landes- und GemeindebezügeG and Paragraph 711(6) ASVG.

93. However, it must firstly be clarified to what extent the Charter is even applicable in the main proceedings (see 1. below). It is true that, by its third question, the referring court merely asks, in this respect, whether application of the Charter comes into consideration even if the legislation at issue does not give rise to indirect discrimination within the meaning of Directives 2000/78 and 2006/54. However, in this respect, it is also necessary to examine the Commission’s objections regarding the applicable provisions of the Charter.

94. Only when that examination is concluded is it possible to discuss the significance of the individual provisions of the Charter with regard to legislation such as that at issue in the main proceedings (see 2. below).

1. Scope of the Charter (third question referred)

95. In the opinion of the referring court, the Charter is applicable in the main proceedings irrespective of whether indirect discrimination within the meaning of Directive 2006/54 or Directive 2000/78 is established, because the interference with pension entitlements at issue concerns occupational pensions that are covered by the material scope of those directives.(50)

96. In this regard, it should be borne in mind that the applicability of the Charter requires action by the Member States within the scope of EU law.(51) However, it is not sufficient in this respect that a national measure comes within an area in which the European Union has powers.(52) It is instead necessary, according to settled case-law, that EU law in the subject area concerned imposes certain obligations on Member States with regard to the situation at issue in the main proceedings.(53)

97. Therefore, the mere fact that the national legislation at issue concerns occupational pensions is not sufficient for the Charter to be applicable.

98. However, in so far as the legislation at issue actually introduces indirect discrimination on grounds of sex with the calculation of the benefits, which requires justification,(54) it is subject to specific requirements of EU law with regard to the configuration of occupational pensions. Under Directives 2006/54 and 2000/78, the allocation and calculation of benefits in occupational social security schemes must namely be free from discrimination. In this respect, the provisions at issue therefore constitute implementation of EU law within the meaning of Article 51(1) of the Charter.(55)

99. However, in the opinion of the Commission, even if the legislation at issue gave rise to indirect discrimination on grounds of sex, only Article 21(1) of the Charter would be applicable, and specifically only in so far as it prohibits discrimination on grounds of sex. This is because, as Directive 2006/54 gives specific expression to Article 21 of the Charter in this regard,(56) the Member State is therefore also only implementing EU law in this respect.

100. However, it firstly corresponds to the spirit and purpose of the binding effects of the Charter for the Member States when they are implementing EU law that these binding effects are comprehensive. Pursuant to Article 51(1) of the Charter, the institutions of the Union are namely bound by the Charter in all their actions and therefore comprehensively. However, the binding effects for the Member States ‘when they are implementing EU law’ is precisely intended to ensure that they do not breach fundamental rights as ‘agents’ of the Union.(57) The Charter’s binding effects thereon must accordingly correspond in scope to those of the Union.

101. Secondly, the case-law of the Court according to which the anti-discrimination directives give specific expression to Article 21 of the Charter does not mean that they determine the normative content of that fundamental right, with the result that fundamental rights protection can go no further than the directives.(58) According to that case-law, the directives are instead to be interpreted in the light of Article 21 of the Charter. This means that, where a breach of the former is established, it is no longer necessary to separately examine an infringement of Article 21 of the Charter from the same perspective.(59) However, respect for other fundamental rights of the Charter remains, of course, mandatory.

102. The Court has accordingly already ruled that the Member States are obliged to comply with Article 28, Article 15 and Article 16 of the Charter within the scope of Directive 2000/78.(60) It also referred, for instance within the scope of Directive 2004/38/EC,(61) to the obligation of the Member States to comply with Article 7 and Article 24(2) of the Charter.(62)

103. Consequently, the third question is to be answered to the effect that Article 51(1) of the Charter is to be interpreted as meaning that an implementation of EU law lies in the legislative configuration of occupational pensions falling within the scope of Directives 2006/54 and 2000/78 if this introduces discrimination requiring justification within the meaning of those directives.

2. Interpretation of the individual fundamental rights

(a) Article 21(1) of the Charter (fourth and fifth questions referred)

104. It has already been explained above that, even if the referring court comes to the conclusion that the legislation at issue gives rise to indirect discrimination on grounds of sex that requires justification, Article 21(1) of the Charter is no longer to be examined from the perspective of sex or age discrimination.(63) It is therefore not necessary to answer the fourth question referred in this respect.

105. However, it would have to be examined how Article 21(1) of the Charter is to be interpreted from the perspective of discrimination on grounds of property with regard to the legislation at issue.

106. This is not precluded by the fact that Directive 2000/78 does not list property as a ground for discrimination and Article 21(1) of the Charter cannot extend the scope of that directive to include a ground for discrimination that is not provided for therein.(64) This is because the present context does not involve the examination of a breach of Directive 2000/78, but instead compliance with provisions of the Charter in the implementation of EU law by a Member State, specifically in the case of discrimination within the meaning of Directive 2006/54.

107. As far as is apparent, the Court of Justice has not yet had the opportunity to rule on the question of discrimination on grounds of property.

108. However, in the present case, the answer to the question of which concrete measures the prohibition mentioned could specifically preclude can, in my opinion, remain open as, with regard to the justification of any discrimination on grounds of property, it is in any case not possible for any standards other than those in respect of discrimination on grounds of sex to apply.(65) As a result, any discrimination on grounds of property would therefore at least have to be regarded as justified.

(b) Articles 16 and 17 of the Charter (sixth and seventh questions referred)

109. In the opinion of the referring court, Article 17(1) of the Charter could also preclude the legislation at issue, as the latter constituted ‘an expropriatory intervention directly by law and without compensation’ in the right to property of the pensioners affected. The referring court also considers the right to property of the former employers to be affected, because their freedom of contract would be impaired in so far as, contrary to the contractual agreements, they were not allowed to increase the occupational pension entitlements.

110. According to the case-law of the Court, freedom of contract is part of the freedom to conduct a business which is established in Article 16 of the Charter. This includes the freedom to fix(66) or agree the price for a service. In so far as the interference with pension entitlements at issue regulates the amount of the contractually agreed occupational pension which, according to the case-law, is to be regarded as an aspect of remuneration,(67) it therefore constitutes a limitation on the freedom to conduct a business.

111. The concept of property of Article 17(1) of the Charter includes all rights with an asset value creating an established legal position under the legal system, enabling the holder to exercise those rights autonomously and for his benefit.(68) From the employee’s point of view, this also fundamentally includes pension entitlements. However, according to the case-law of the Court, the right to property cannot be interpreted as entitling a person to a pension of a particular amount.(69) In particular, merely future, uncertain prospects of an increase in value, such as the annual adjustment of the occupational pension, cannot be regarded as a specific item of property. However, withholding a part of entitlements already acquired is to be regarded as a limitation on the use of property within the meaning of the third sentence of Article 17(1) of the Charter.

112. Article 52(1) of the Charter provides that such a limitation on the fundamental right to property and the freedom to conduct a business must be provided for by law and must respect the essence of those rights. In observance of the principle of proportionality, it may be imposed only if it is necessary and genuinely meets objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others.(70)

113. Reference may also be made here, in principle, to the comments on the justification of any indirect discrimination.(71) In particular, the Court has also granted the Member States broad discretion in connection with a limitation on rights to property which pursued the objective of reducing public sector wage costs and reforming the pension system.(72) In the present case, respect for the essence of the right to property and the proportionality of the limitation is supported by the fact that only entitlements above a certain limit are affected by the obligation to make a pension security contribution and the scope of that obligation is, in turn, dependent on the amount of the entitlement.(73)

(c) Article 47 of the Charter (eighth question referred)

114. Finally, the referring court is of the opinion that an infringement of Article 47 of the Charter is to be seen in the fact that pensioners affected cannot directly take action against the constitutional provisions of the SpBegrG and the regulations based thereon and assert an infringement of EU law, but are instead relegated to making a claim against their former employers for damages or reimbursement of the amounts withheld.

115. It is sufficient to note in this regard that, according to the case-law of the Court, an indirect possibility of reviewing observance of the fundamental right resulting from Article 47 of the Charter is sufficient if, in the scope of that possibility for action, the compatibility of the national provisions with EU law can be clarified as a preliminary issue.(74) That is evidently the case here.

V. Conclusion

116. In view of the foregoing considerations, I propose that the Court reply as follows to the questions referred by the Regional Court of Wiener Neustadt (Austria):

  1. Article 4(2) and Article 5(c) of Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation are to be interpreted as possibly precluding, in principle, national provisions which, in respect of recipients of occupational pensions in the form of direct defined benefit pensions from State-controlled undertakings, provide for the withholding of a pension security contribution and the lack of the contractually stipulated increase in their entitlements, if those entitlements exceed a certain amount fixed by law. That presupposes, however, that the percentage of the members of one sex whose entitlements exceed that amount out of the total number of members of that sex in the group of people entitled to the type of occupational pension concerned is significantly higher than the corresponding percentage of the members of the other sex, and that fact cannot be justified by an objective reason unrelated to any discrimination on grounds of sex.

  2. Article 2(1) of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation is to be interpreted as meaning that national provisions which provide, in respect of recipients of occupational pensions of a certain type whose amount exceeds a limit fixed by law, for the withholding of a pension security contribution or the lack of the contractually stipulated increase in their entitlements do not constitute indirect discrimination on grounds of age within the meaning of that provision where, after a certain point in time, that type of occupational pension was no longer operated and, therefore, beneficiaries of other types of occupational pension which were operated later do not fall within the scope of those provisions.

  3. Article 51(1) of the Charter of Fundamental Rights of the European Union is to be interpreted as meaning that an implementation of EU law lies in the legislative configuration of occupational pensions falling within the scope of Directives 2006/54 and 2000/78 if this introduces discrimination requiring justification within the meaning of those directives.

  4. Article 16 of the Charter is to be interpreted as meaning that a limitation on the freedom of the employer to agree the remuneration for the work performed by an employee is to be regarded as justified if, in observance of the principle of proportionality, it is necessary and genuinely meets an objective of general interest, such as maintaining the financial feasibility of the pension systems. The same is true of a limitation of use of the property of an employee, within the meaning of Article 17(1) of the Charter, brought about by the withholding of part of a company pension entitlement, where that entitlement exceeds a certain threshold value and the amount of the contribution to be made depends on the amount of the entitlement.

  5. Article 47 of the Charter is to be interpreted as not requiring the national legal order of a Member State to provide for a free-standing action for an examination of whether national provisions are compatible with EU law, provided that other effective legal remedies, which are no less favourable than those governing similar domestic actions, make it possible for such a question of compatibility to be determined as a preliminary issue.