Information Note on the Court’s case-law 210
August-September 2017
Fábián v. Hungary [GC] - 78117/13
Judgment 5.9.2017 [GC]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Peaceful enjoyment of possessions
Suspension of State pension for pensioner employed in the civil service: no violation
Article 14
Discrimination
Difference in entitlement to continued payment of State pension for pensioners employed in civil service and pensioners employed in private sector: pensioners employed in private sector: no violation
Facts – In 2012 the applicant, who was already in receipt of an old-age pension, took up employment as a civil servant. In 2013 an amendment to the Pension Act 1997 entered into force suspending the payment of old-age pensions to persons simultaneously employed in certain categories of the public sector. The amendment did not apply to pensioners working in the private sector. As a consequence, the payment of the applicant’s pension was suspended. His administrative appeal against that decision was unsuccessful. In the Convention proceedings, the applicant complained of an unjustified and discriminatory interference with his property rights.
In a judgment of 15 December 2015 (see Information Note 191) a Chamber of the Court held, unanimously, that there had been a violation of Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1 (and therefore that it was not necessary to consider the complaint under Article 1 of Protocol No. 1 only). In particular, the Chamber held that the Government’s arguments to justify the difference in treatment between publicly and privately employed retirees were unpersuasive and thus not based on any “objective and reasonable justification”.
On 2 May 2016 the case was referred to the Grand Chamber at the Government’s request.
Law
Article 1 of Protocol No. 1: The lawfulness of the interference was not in dispute and the Court found no reason to doubt that the prohibition on the simultaneous disbursement of salaries and pensions to which the applicant was subjected served the general interest of the protection of the public purse. The question was whether the interference struck a fair balance between the demands of the general interests of the community and the requirements of the protection of the individual’s fundamental rights.
In examining whether the national authorities had acted within their margin of appreciation, the Court had to have particular regard to the factors which its case-law relating to the reduction, suspension or discontinuance of social-security pensions, had identified as being of relevance, namely the extent of the loss of benefits, whether there was an element of choice, and the extent of the loss of means of subsistence.
The case at hand did not concern the permanent, complete loss of the applicant’s pension entitlements, but rather the suspension of his monthly pension payments. The suspension was of a temporary nature and was resumed when the applicant left State employment. It did not therefore strike at the very substance of his right and the essence of the right was not impaired. Once the legislation at issue had entered into force, the applicant was able to choose between discontinuing his employment in the civil service and continuing to receive his pension, or remaining in that employment and having his pension payments suspended. He opted for the latter. It was clear that when the applicant’s old-age pension payments were suspended he continued to receive his salary. The suspension of his pension payments by no means left him devoid of all means of subsistence.
A fair balance had thus been struck between the demands of the general interest of the community and the requirements of the protection of the applicant’s fundamental rights and he had not been made to bear an excessive individual burden.
Conclusion: no violation (unanimously).
Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1: The first issue was whether the applicant, as a person in receipt of an old-age pension subsequently employed in the civil service, was in an analogous or relevantly similar situation compared with a person in receipt of an old-age pension subsequently employed in the private sector. The elements which characterised different situations, and determined their comparability, had to be assessed in the light of the subject-matter and purpose of the measure which made the distinction in question.
Three of the elements to be taken into account had been widely reflected in a long-standing line of the Court’s case-law recognising a distinction between civil servants and private employees.* Firstly, Contracting Parties, by necessity, enjoyed wide latitude in organising State functions and public services, including such matters as regulating access to employment in the public sector and the terms and conditions governing such employment. Secondly, for institutional and functional reasons, employment in the public sector and in the private sector was typically subjected to substantial legal and factual differences, not least in fields involving the exercise of sovereign State power and the provision of essential public services. Thirdly, it could not be assumed that the terms and conditions of employment, including the financial ones, or the eligibility for social benefits linked to employment, would be similar in the civil service and in the private sector, nor could it therefore be presumed that those categories of employees would be in relevantly similar situations in that regard. The applicant’s case revealed a need to take a fourth factor into account, namely the role of the State when acting in its capacity as employer. In particular, as employers, the State and its organs were not in a comparable position to private-sector entities either from the perspective of the institutional framework under which they operated or in terms of the financial and economic fundamentals of their activities; the funding bases were radically different, as were the options available for taking measures to counter financial difficulties and crises.
Both State and private sector employees were affiliated to the compulsory social-security pension scheme to which they contributed in the same way and to the same extent. Nevertheless, that was not in itself sufficient to establish that they were in relevantly similar situations. Following the amendment to the Pensions Act 1997, it was the applicant’s post retirement employment in the civil service that entailed the suspension of his pension payments. It was precisely the fact that, as a civil servant, he was in receipt of a salary from the State that was incompatible with the simultaneous disbursement of an old-age pension from the same source. As a matter of financial, social and employment policy, the impugned bar on simultaneous accumulation of pension and salary from the State budget had been introduced as part of legislative measures aimed at correcting financially unsustainable features in the pension system of the respondent State. That did not prevent the accumulation of pension and salary for persons employed in the private sector, whose salaries, in contrast to those of persons employed in the civil service, were funded not by the State but through private budgets outside the latter’s direct control.
The applicant had not demonstrated that, as a member of the civil service whose employment, remuneration and social benefits were dependent on the State budget, he was in a relevantly similar situation to pensioners employed in the private sector.
Conclusion: no violation (eleven votes to six).
(See also Béláné Nagy v. Hungary [GC], 53080/13, 13 December 2016, Information Note 202; Valkov and Others v. Bulgaria, 2033/04, 25 October 2011, Information Note 145; Khamtokhu and Aksenchik v. Russia [GC], 60367/08 and 961/11, 24 January 2017, Information Note 203; Panfile v. Romania (dec.), 13902/11, 20 March 2012)
* See for example Valkov and Others v. Bulgaria, 2033/04, 25 October 2011, Information Note 145; Heinisch v. Germany, 28274/08, 21 July 2011, Information Note 143; and Vilho Eskelinen and Others v. Finland [GC], 63235/00, 19 April 2007, Information Note 96.
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This summary by the Registry does not bind the Court.
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