Opinion of the Advocate-General
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A - Introduction
1 This reference for a preliminary ruling has been made by the Raad van State (State Council) of the Netherlands. The questions relate to the application and interpretation of Article 4(1) of Directive 79/7/EEC on the progressive implementation of the principle of equal treatment for men and women in matters of social security. (1) That provision embodies an expression of the prohibition of discrimination on grounds of sex. The national court seeks a preliminary ruling in order to determine whether the conditions of access to social welfare schemes are lawful. The relevant benefit schemes objectively lie on the borderline between social security and social assistance.
2. The main proceedings are based on two administrative proceedings relating to a claim made by Mrs Laperre (`the appellant') for unemployment benefits. Until 1 June 1989 she was paid benefits under the Rijksgroepsregeling Werklose Werknemers (National Group Scheme for Unemployed Workers, `the RWW'). It was decided to terminate payment of that benefit on the ground that the appellant's resources exceeded the statutory exempt amount.
3. The appellant's application for benefit under the Wet Inkomensvoorziening Oudere en Gedeeltelijk Arbeidsongeschikte Werkloze Werknemers (Law on Income Support for Older and Partially Incapacitated Unemployed Workers, `the IOAW') was turned down on the ground that she did not fulfil the conditions for entitlement to benefit laid down in Article 2(1)(a) of the Law.
4. The two administrative decisions were upheld by the Bestuurscommissie Beroepszaken in de Provincie Zuid-Holland (Commission for Social Security Matters of the Province of South Holland, `the respondent').
5. In her appeal the appellant argued that the requirement relating to previous employment laid down in the IOAW, in conjunction with the age condition, indirectly discriminated against women, on the ground that women were in a position to fulfil those conditions much less frequently than men. She claimed that the means test (2) applied in order to terminate the payment of the RWW benefit ought to be disregarded, inter alia, in the case of women who had reached 50 years of age and that Article 2(1)(a) of the IOAW was not binding.
6. The relevant benefit schemes constitute tiered alternatives. One thing which they have in common is that they guarantee that beneficiaries' income attains the minimum level for subsistence. The RWW, which was adopted pursuant to the Algemene Bijstandswet (General Law on Social Assistance, `the ABW'), constitutes the legal basis for benefits for unemployed workers, of which the conditions for entitlement are largely comparable to those applying to social assistance benefit granted under the ABW. Accordingly, no entitlement to benefit exists where the claimant's resources exceed a particular exempt amount and he or she therefore has sufficient means of subsistence. Unlike the pure social assistance benefit granted under the ABW, additional incentives are given to encourage claimants to maintain themselves by their own efforts in that, for instance, potential recipients of benefit must keep themselves available for work.
7. In contrast, the IOAW benefits are tailored to a particular circle of persons and subject in some respects to stricter conditions of access. By comparison to the RWW, the IOAW is the more specific legislation. As far as taking resources into account is concerned, the entitlement conditions for an IOAW benefit are less strict, since the availability of resources does not preclude entitlement.
8. The circle of persons entitled under the IOAW consists of older workers who have become unemployed and partially incapacitated unemployed workers. One of the conditions for entitlement to an IOAW benefit is that entitlement to benefits under the Werkloosheidswet (Law on Unemployment, `the WW') must have been exhausted. Potential beneficiaries are therefore the long-term unemployed, who, as a result of their age and/or their partial incapacity for work, experience particular difficulties in getting back into the employment market. The IOAW benefit constitutes a transitional scheme for such persons until they reach pensionable age.
9. The condition for access to an IOAW benefit, which is easier to fulfil than that for an RWW benefit in that it does not require the claimant not to have resources, is intended to protect potential recipients of benefit from having to consume resources saved over a long working life, given that it is very improbable that they will ever rebuild such resources by resuming gainful employment.
10. The intention is that a beneficiary under the IOAW will not have to `beggar himself' before he can qualify for State income support.
11. The national court has referred the following questions to the Court:
`(1) Must Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 be interpreted as meaning that that article in principle precludes a provision of national legislation, such as that contained in the IOAW, from offering an income supplement at the level of the social minimum whereby, in so far as is relevant, for the purposes of the grant of the benefit resources are not taken into account and entitlement to the benefit is dependent, briefly, on previous employment and age, whilst under other national legislation, such as that contained in the social assistance provisions of the RWW, which also affords provision at the level of the social minimum, account is taken of resources, where it is common ground that a significantly greater number of men than women are eligible for the more favourable benefit under the IOAW?
(2) Can the application of the IOAW, under which a far greater number of men than women are exempted from the means test in the social assistance legislation, be justified on the ground that the target group of that legislation has little chance on the labour market and therefore is not or is rarely in a position to rebuild resources once they have been depleted?' (3)
12. In order to clarify the scope of the first question, the Court put the following question to the Netherlands Government and the Commission, which have taken part in the proceedings:
`To what extent may the existence of possible indirect discrimination caused by a scheme, such as that established by the IOAW, depend on the existence of a scheme such as that adopted pursuant to the ABW and the RWW?'
13. In the course of examining this case I shall refer to the views expressed by
the national government and the Commission.
B - Opinion
14. The national court wishes to ascertain whether the manner in which the conditions of access to an IOAW benefit are formulated constitutes indirect discrimination on grounds of sex contrary to Article 4(1) of Directive 79/7.
15. The national court mentions, among the factual circumstances concerning justification for the grant of IOAW benefit, that it appears from statistics of the Central Statistical Office that in 1989 a considerably greater number of men than women received such a benefit. In the Netherlands, very many more men than women are in employment. It can therefore be conjectured that at that time a considerably greater number of men than of women satisfied the conditions of access laid down in Article 2(1)(a) of the IOAW as regards - in brief - employment and having attained a particular age.
16. It must first be determined whether the present case falls within the scope of Directive 79/7.
Article 2 defines the scope ratione personae of the directive as `the working population - including self-employed persons, workers and self-employed persons whose activity is interrupted by illness, accident or involuntary unemployment and persons seeking employment - and (...) retired or invalided workers and self-employed persons'. In view of the fact that the appellant formerly received an RWW benefit, it must be assumed, in the absence of information to the contrary, that she is to be classed as a member of the working population seeking employment within the meaning of the directive.
17. The scope ratione materiae of the directive is laid down by Article 3 of the directive. The directive applies, according to Article 3(1)(a), to, inter alia, statutory schemes which provide protection against the risk of unemployment and, according to Article 3(1)(b), to social assistance, in so far as it is intended to supplement or replace the schemes referred to in Article 3(1)(a). The IOAW benefits can readily be seen to be unemployment benefits. In classifying IOAW benefits in the comparable legislative setting of Regulation (EEC) No 1408/71, (4) the Court has already held that they were directly related to the risk of unemployment. (5) Even if it were sought to query the legal nature of IOAW benefits in terms of whether they are social security or social assistance benefits, IOAW benefits would be covered by Article 3(1)(b) of the directive as a welfare scheme applying after WW benefits. This consideration must also apply to RWW benefits, which, for their part, are intended - in the alternative to IOAW benefits - to secure the subsistence of unemployed workers.
18. The prohibition of discrimination enshrined in Article 4(1) of the directive reads as follows:
`The principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex either directly or indirectly (...), in particular as concerns:
- the scope of the schemes and the conditions of access thereto (...)'.
19. As the Court has consistently held, (6) indirect discrimination contrary to Article 4(1) of the directive is present where a national measure, although formulated in neutral terms, works to the disadvantage of more women than men, unless that measure is based on objectively justified factors unrelated to any discrimination on grounds of sex. (7)
20. In that respect, the possibility of justifying an objectively indirectly discriminatory measure constitutes a factor which has to be considered in relation to discrimination. The national court's second question relates directly to this aspect.
21. In the first place, the question arises as to whether indirect discrimination on grounds of sex may be discerned in the design of the benefits at issue. Such unequal treatment could be identified (a) in the definition of entitlement to IOAW benefits laid down in Article 2(1)(a) of the IOAW and (b) possibly in the coexistence of the RWW and IOAW schemes, each having different conditions of access. The question put by the Court to the Netherlands Government and the Commission refers to the latter aspect.
22. I shall turn first to the conditions for entitlement to an IOAW benefit laid down in Article 2(1)(a) of the IOAW. It must be considered whether that provision is characterized by neutral wording but typically covers only members of one sex and hence has a specific effect with regard to the group of persons concerned.
23. A person entitled to benefits within the meaning of Article 2(1)(a) of the IOAW is a person who
(1) is unemployed and has not yet reached 65 years of age,
(2) became unemployed after his 50th birthday but before attaining 57.5 years of age, and
(3) during the full benefit period within the meaning of Articles 42(1) and (2) and 43(2) and 49(1) and, so far as applicable, Article 76 of the WW, received benefit in respect of loss of earnings and follow-up benefit pursuant to that law.
24. Before I go any further, I should like to point out that no element of discrimination is discernible in the fact that a link is made with any kind of previous employment, not even where in the past a considerably larger proportion of the male than the female population was actively involved in the world of employment, since the context of a social security benefit payable in the event of unemployment is bound to be employment. (8) Article 2(1)(a)(1) and (2) of the IOAW each lay down sexually-neutral age limits. Neither is any differentiation on the basis of sex directly discernible in Article 2(1)(a)(3). That provision lays down the condition that benefits under the WW must have been exhausted before entitlement will arise under the IOAW. Only the criterion of the `full benefit period' is a potential source of difficulties.
25. It cannot be ascertained with certainty from the information provided to the Court by the Raad van State or the parties what this expression in the national legislation means. It appears beyond doubt to me that in any event the person concerned must have been entitled to benefit under the WW. The duration and amount of the benefits - benefits in respect of loss of earnings and follow-up benefit - are dependent upon the previous employment.
26. The Commission stated that the minimum duration of benefit in respect of loss of earnings is six months (Article 43(1)). That duration will, however, be extended on account of each previous five-year period of employment. The maximum time for which benefit may be received is five years for persons who were in employment for 40 years or more (Article 43(2)). Irrespective of the duration of the previous employment, `follow-up benefit' is granted for one year following periods for which benefit in respect of loss of earnings was granted. (9)
27. What is questionable is whether the requirement for a `full benefit period' means that there must have been just any entitlement to a WW benefit which has been exhausted or that the maximum period for which benefits could be granted must have been reached before an entitlement to IOAW benefit can arise.
28. The matter turns on this distinction because, in my view, linkage with any form whatsoever of previous entitlement - albeit only for the minimum duration - raises no problems of sex discrimination. The requirement that the person concerned should have been previously in employment is in itself - as I have already indicated - innocuous. The situation would basically be different if the maximum period for which a WW benefit could be granted had to be exhausted. This is because we know from experience that women's employment histories have gaps significantly more often than men's because of their having to fulfil family obligations. To require a more or less uninterrupted employment record, particularly between the ages of around 20 and 45, as a condition for achieving a `full benefit period' would certainly discriminate against women.
29. It is quite likely that access to an IOAW benefit is conditional on a substantial number of years of employment. The request for a preliminary ruling refers to income from employment for a `considerable period'. (10) The Netherlands Government's observations and its answer to the Court's question refer repeatedly to a long period (11) of employment as being a characteristic of entitlement to an IOAW benefit.
30. However, no definite conclusion can be reached from the documents before the Court as to whether the condition relating to previous employment has discriminatory effects. (12) This is a question of the interpretation of national law and/or a question of fact, which, in the end, the national court will have to clarify.
31. Since the meaning of the term `full benefit period' cannot be conclusively clarified, I would assume in my subsequent consideration of the case that this constitutes a condition of access to an IOAW benefit which is discriminatory in its effects.
32. I would now consider the question of the relevance of the coexistence of the RWW and IOAW as the second area constituting a potential source of discrimination. It appears that the appellant regards it as discriminatory that the schemes are interdependent in so far as she argued in the main proceedings that the means test in the ABW ought to be disregarded in the case of women over the age of 50 and that Article 2(1)(a) of the IOAW should not be binding.
33. The national court seems not to have concurred with this reasoning, since in its question concerning the interpretation of the conditions of access to an IOAW benefit it accepts the RWW as the reference scheme.
34. This is the background to the Court's question to the Netherlands Government and the Commission concerning the extent to which the coexistence of the schemes may constitute indirect discrimination on grounds of sex.
35. The Netherlands Government, which in its observations initially did not state a view on whether there was discrimination, adopts the following standpoint in its reply to the Court's question.
36. It describes the IOAW, the RWW and the ABW as tiered alternatives. Only persons not entitled to a `prior-ranking' IOAW benefit can claim an RWW benefit. Likewise, only persons not entitled to a prior-ranking RWW benefit can claim an ABW benefit. Access to an IOAW benefit is not configured in a manner constituting discrimination on grounds of sex. A person who does not satisfy these conditions will fall within the scope of the RWW or the ABW. Nevertheless, the existence of alternative benefit schemes under the RWW or the ABW are not such as to cause the conditions of access to an IOAW benefit to be regarded as indirectly discriminatory. This is clarified by assuming that there are no RWW or ABW benefits. In that event, if an IOAW benefit were refused, there would be no claim to any other benefit. In that case, the matter would turn solely on whether the refusal was possibly indirectly discriminatory.
37. The Netherlands Government construes the Court's question as seeking an explanation as to why apparently a considerably greater number of men than of women are in practice entitled to an IOAW benefit, whilst women tend more frequently to fall within the scope of the RWW. The Netherlands Government puts forward two explanations for this phenomenon. First, there is the definition of the conditions of access, which are dependent upon (a) the employment history of the person entitled and (b) his having insufficient income. It is, it argues, a social fact that at the time of life of persons entitled to benefit under the scheme considerably more men have worked practically all their lives, whilst this is not normally the case with women. As far as income is concerned, it has to be assumed that in the case of married persons the incomes of both spouses are taken into account and that hence where the husband is in receipt of an income the couple will have no entitlement to an IOAW benefit. Moreover, that factor also applies to RWW benefits, with the result that, in view of the structure of society, a relatively higher percentage of women as compared with men have no entitlement to an RWW benefit.
38. The Netherlands Government's second explanation for the apparent over-representation of men in the group of persons entitled to an IOAW benefit is the method of compiling the relevant statistics. If a married couple qualify for an IOAW benefit, the statistics record the person in respect of whom the claim arose, and that person will generally be a man. The Government considers, however, that it is important to note that, where an IOAW benefit is granted to a married couple, each spouse is entitled to `his or her share' of the benefit.
39. The Commission's reply to the Court's question may be set out as follows.
In the first place, it emphasizes that there can only be any question of indirect discrimination if proportionately a considerably smaller number of women are entitled to an IOAW benefit than that of men. In order to be able to answer the Court's question, a distinction must be drawn depending on whether the two statutory schemes apply alongside each other or successively.
If they apply alongside each other, no indirect discrimination can arise as a result of the coexistence of the schemes. This state of affairs underlies the circumstances of the case before the national court. Persons ineligible for an IOAW benefit would `fall back' into the alternative RWW and ABW schemes. If this were so, it would only have to be considered whether access to an IOAW benefit was designed so as not to be discriminatory.
If the schemes apply successively, it may be assumed that they are in a relationship of reciprocal dependency, with the result that the discriminatory nature of the scheme most recently applied ensues directly from the discriminatory nature of the system first applied. In the case before the national court, the IOAW would then constitute an extension of the WW in the sense that the claimant would be entitled to an IOAW benefit only if she had formerly received a WW benefit. If it had to be assumed - contrary to that which the Commission assumes - that Article 2 of the IOAW is a source of indirect discrimination from the point of view of the condition relating to previous employment, the basis for this would be the conditions which had to be satisfied in order to obtain full unemployment benefit under the WW. Accordingly, the WW would give rise to indirect discrimination, which would continue at the next level.
In the result, the Commission considers that the reply to the Court's question should be that any indirect discrimination does not depend on the existence of the RWW and ABW schemes.
40. To my mind, it cannot be concluded from an overall consideration of the alternative IOAW, RWW and ABW schemes that the mere coexistence of the schemes - resulting in potential claimants falling like a cascade in the larger, but also lower, basins until they end up receiving ABW social assistance benefits - gives rise to indirect discrimination going beyond that which may result from the way in which the conditions of access to IOAW benefit are defined. Since that possibility cannot, however, be ruled out, the question arises as to whether it may possibly be objectively justified on grounds unrelated to discrimination on grounds of sex, with the result that any objective discriminatory element would not have to be regarded as prohibited discrimination on grounds of sex.
41. According to the Court's case-law, justification may exist in so far as the measures chosen reflect a legitimate social policy aim of the Member State, are appropriate to achieve that aim and are necessary in order to do so. (13)
42. The Netherlands Government submits as follows in order to justify the provisions at issue. The IOAW grants subsistence benefit in the sense that it guarantees the worker concerned an income at the level of the social minimum where, as a result of the loss of his job, he no longer has sufficient income from or connected with employment, irrespective as to whether he has resources. The reason why resources are not taken into account is that the legislature determined a level of protection which it sought to grant older former employees who had been unemployed for a relatively long time and had been in work for a long time before they lost their jobs. The conditions for IOAW benefit were formulated in such a way that only persons falling into that category could qualify for IOAW benefit and not just anyone whether he be young or old or whether or not he had previously worked.
43. In the final analysis, the Netherlands Government considers that the Law pursues a justified aim (14) in regard to social policy and that the formulation of the conditions of access are appropriate to achieve that aim and are necessary in order to do so.
44. On the basis of the judgments in Teuling, (15) Molenbroek (16) and De Weerd and Others, (17) the Commission also takes the view that providing social cover for long-term unemployed persons over the age of 50 is an aim which has nothing to do with discrimination on grounds of sex and comes under the social policy of a Member State. Not only is the aim of the measure lawful, the means employed are appropriate and proportionate.
45. It now falls to be considered whether the measure at issue pursues a legitimate social policy aim of the Member State concerned. (18) A social policy aim of a Member State is to be regarded as justified if it does not conflict with Community law. As has been mentioned on several occasions, in adopting the IOAW in January 1987 the Netherlands legislature pursued the aim of providing cover during the transitional period following loss of entitlement to unemployment benefit and entitlement arising to a pension for the older long-term unemployed who had maintained themselves (and in some cases their families) during most of their lives out of income which they themselves had earned from employment. The intention was to take account of the special situation of that target group, namely persons who had become employed through no fault of their own. The idea was to afford such people, who, in view of their age or their state of health, were faced with particular difficulties impeding, if not completely precluding, their reintegration into the employment market, a benefit which, as regards its conditions of access, was situated above the social assistance level. The benefits are pitched only at subsistence level. However, the intention was to protect this group of persons from having to use up any resources saved up over their working life in order to preserve them from complete impoverishment in old age.
46. This legislative aim should definitely be regarded as a legitimate national social policy aim. The only question is whether the access conditions consisting of a long period of previous employment coupled with ignoring any resources available as income are appropriate and necessary. The intention that the only persons to qualify for benefit should be those who were in employment for a `long period' is put into effect by requiring that `full benefit' under the WW must have been exhausted. Since WW unemployment benefit is linked to previous employment and the time for which that benefit is payable is related to previous employment, the criterion is appropriate in order to achieve the aim pursued.
47. The further intention of leaving any resources saved unaffected is achieved appropriately by the fact that the conditions for entitlement take no account of any resources.
48. In the final analysis, the two characteristics are also necessary in order to achieve the aim pursued. If the characteristic of previous long-duration employment were not stipulated in the way in which it is, the benefit would be potentially opened up to a wider circle of persons and this is a result which was expressly intended to be avoided. Likewise, the only way of leaving any resources to hand untouched was to leave resources out of account when defining the entitlement conditions.
49. In the result, any indirect discrimination against women resulting from the stipulation of those conditions of access must be regarded as being justified by objective criteria unrelated to any discrimination on grounds of sex.
C - Conclusion
50. In view of the foregoing considerations, I propose that the Court should reply as follows to the national court's questions:
1. Article 4(1) of Council Directive 79/7/EEC must be interpreted as being in principle compatible with a provision of national legislation, such as that contained in the IOAW, which provides for an income supplement at the level of the social minimum whereby for the purposes of the grant of the benefit resources are not taken into account and entitlement to the benefit is dependent on certain conditions relating to age and previous employment, whilst under other national legislation, such as that contained in the social assistance provisions of the RWW, which also affords provision at the level of the social minimum, account is taken of resources, even if it is established that a significantly greater number of men than women are eligible for the more favourable benefit under the IOAW.
2. The IOAW, the application of which results in a far greater number of men than women being exempted from the means test in the social assistance legislation, can be justified on the ground that the target group of that legislation has little chance on the labour market and therefore is not or is rarely in a position to rebuild resources once they have been depleted.
(1) - Council Directive of 19 December 1978 (OJ 1979 L 6, p. 24).
(2) - The means test is laid down by Article 7(1)(b) of the Algemene Bijstandswet (General Law on Social Assistance, `the ABW'), which is the legal basis of the RWW.
(3) - Emphasis added; the translation of the national court's questions differs slightly from that published in OJ 1994 C 59, p. 9.
(4) - Consolidated version of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (OJ 1992 C 325, p. 1).
(5) - Judgment in Case C-66/92 Acciardi [1993] ECR I-4567, paragraph 17.
(6) - See, for example, Case C-229/89 Commission v Belgium [1991] ECR I-2205, paragraph 13, and Case C-343/92 De Weerd and Others [1994] ECR I-571, paragraph 33.
(7) - De Weerd and Others, cited in footnote 6, paragraph 33.
(8) - I am aware that, for example, support benefits for unemployed young persons are not necessarily conditional on previous gainful activity, but that availability for employment may suffice. However, the benefit schemes at issue are not concerned with such cases.
(9) - See the Commission's observations, p. 4.
(10) - See p. 7 of the request for a preliminary ruling; the original reads `geruime tijd een inkomen uit arbeid'.
(11) - See the Commission's observations, which reads in the original Dutch on p. 6: `werknemers die geruime tijd een inkomen uit arbeid hebben'; p. 7: `werknemers die lange tijd hebben gewerkt'; p. 9: `werknemers die (...) lange tijd gewerkt'. Reply from the Netherlands Government to the Court's question (p. 2): `(...) die een aanmerkelijk arbeidsverleden hebben (...)'.
(12) - The fact that only in extremely rare cases will a worker of between 50 and 57.5 years of age within the meaning of Article 2(1)(a)(2) of the IOAW be able to look back on 40 years of employment is an argument against assuming that a `full benefit period' within the meaning of Article 2(1)(a)(3) of the IOAW signifies the maximum duration of a WW benefit.
(13) - See Case C-229/89 Commission v Belgium, paragraph 19, and De Weerd and Others, paragraph 34, both cited in footnote 6.
(14) - `Gerechtvaardigde doelstelling'.
(15) - Case 30/85 Teuling [1987] ECR 2497.
(16) - Case C-226/91 Molenbroek [1992] ECR I-5943.
(17) - Cited in footnote 6.
(18) - De Weerd and Others, paragraph 34, cited in footnote 6.
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