FOURTH SECTION
DECISION
Application no. 49865/09
Pertti KAIKKO
against Finland
The European Court of Human Rights (Fourth Section), sitting on 4 December 2012 as a Chamber composed of:
Ineta Ziemele, President,
David Thór Björgvinsson,
Päivi Hirvelä,
George Nicolaou,
Zdravka Kalaydjieva,
Vincent A. De Gaetano,
Krzysztof Wojtyczek, judges,
and Fatoş Aracı, Deputy Section Registrar,
Having regard to the above application lodged on 30 April 2008,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Mr Pertti Kaikko, is a Finnish national, who was born in 1951 and lives in Kirkkonummi. He was represented before the Court by Mr Esko Sydänmäki who was granted leave to represent the applicant by the President of the Chamber (Rule 36 § 2 of the Rules of Court).
2. The Finnish Government (“the Government”) were represented by their Agent, Mr Arto Kosonen of the Ministry for Foreign Affairs.
A. The circumstances of the case
3. The facts of the case, as submitted by the parties, may be summarised as follows.
4. On 1 June 1970 the applicant became a civil servant employed by the Bank of Finland (Suomen Pankki, Finlands Bank; henceforth “the Bank”) where he worked until his retirement on 1 September 2006.
5. On 3 May 1977 the Trustees of the Bank (pankkivaltuusto, bankfullmäktige) introduced an equal retirement age of 60 years for all men and women who entered the service of the Bank on that date or later. The retirement age for women was thereby raised from 55 years to 60 years while for men the retirement age remained unchanged. As the rule was not retroactive, the different retirement ages for men and women still applied to those persons who had started employment before 3 May 1977.
6. On 17 June 1998 the Trustees of the Bank amended the pension rules of the Bank so that men who had joined the Bank prior to 3 May 1977 and who continued their employment until retirement were also granted an opportunity to lower their retirement age from 60 to 55-59. For each month the retirement age was lowered, and the pension accrued prior to 1 January 1994 was reduced by 0.33%. At its highest the early retirement reduction was 19.8% for five years. Under the pension rules of 13 December 1966 the retirement age for women who had joined the Bank prior to 3 May 1977 was 55 and no reductions applied to pension accrual.
7. Since 10 March 1994 the pension rules of the Bank had provided that a civil servant who applied for early retirement, who had been employed by the Bank prior to 3 May 1977 and who had 30 years of service behind him, had a right to a pension guarantee (takuueläke, garantipension) which was 60% of the salary. This pension guarantee was increased by 1.5% for each year the person’s personal retirement age (henkilökohtainen eläkeikä, individuell pensionsålder), which was 60 years for men and 55 years for women, fell short of 63 years (the personal retirement age before 1 December 1993). This guarantee was significantly reduced as from 1 January 2005.
8. On 25 August 2006 the applicant was granted a pension, which was reduced by 19.8%, or 424.54 euros (EUR) per month, on the ground that he had retired at the age of 55. This method of calculation was chosen as it was more beneficial to the applicant than calculating his pension with a 50% pension guarantee which included the increase of 4.5% as his personal retirement age was 60 years. The pension so calculated amounted to EUR 3,015.33 per month, starting from 1 September 2006.
9. On 5 October 2006 the applicant submitted a letter of appeal to the Bank, requesting that his pension be recalculated so that the years 55-63 brought him an additional pension of 1.5% per year, thus altogether 12%. He claimed that the amendments made to the pension guarantee on 1 January 2005 had led to discrimination between men and women due to the fact that the theoretical personal retirement age for men was 60 years, even if they retired earlier, whereas for women it was always 55 years. In the applicant’s situation the percentage for accrued pension was 4.5% while for a woman in the same situation it would be 7.5% higher, at 12%. He also complained about the fact that his pension had been reduced by 19.8%, or EUR 424.54 per month, on the ground that he had retired at the age of 55. As the Bank could not rectify the pension decision, it referred the case on appeal to the Insurance Court (Vakuutusoikeus, Försäkringsdomstolen) on 7 November 2006.
10. On 20 November 2006 the Bank issued a new, interim pension decision to the applicant as the pension decision of 25 August 2006, which had been appealed against to the Insurance Court, was partly rectified. The rectified pension amounted to EUR 3,031.21 per month. The applicant had no right to appeal against this interim pension decision.
11. During the Insurance Court proceedings, the court requested a statement from the Gender Equality Board (tasa-arvolautakunta, jämställdhetsnämnden). In its statement of 8 May 2009 the Board stated that there was a presumption of discrimination in two respects: different personal retirement ages for men (60 years) and for women (55 years) as well as the fact that the reduction was made only in respect of men who retired early, not in respect of women. It further stated that the Bank had not been able to give an acceptable reason for this discrimination. Moreover, the lack of transparency in the calculation of the Bank’s pensions prevented the effective supervision of the principle of equal pay.
12. The State Treasury (Valtiokonttori, Statskontoret) and the Finnish Centre of Pensions (Eläketurvakeskus, Pensionsskyddscentralen) were also asked to submit a statement in the matter. In its statement of 20 January 2009, the State Treasury stated that, had the applicant been subject to the State Pension Act (valtion eläkelaki, lagen om statens pensioner), his pension guarantee would have been calculated in exactly the same manner as in the pension decision of 25 August 2006. In its statement of 19 January 2009, the Finnish Centre of Pensions noted that the central question was whether the applicant’s personal retirement age was interpreted to be 60 or 55 years. Concerning private sector pensions, the Centre noted that there might be situations where a man’s pension remained lower than a woman’s who had a similar work history and who retired at the same age.
13. On 2 March 2010 the Insurance Court partly accepted, partly rejected the applicant’s appeal. As concerned the percentage for accrued pension, the court accepted the applicant’s appeal and ordered that the percentage be 12% instead of 4.5%. It found that in this respect the pension was not calculated in an equitable manner in regard to men and women, and that women were put in a more favourable position than men. The applicant’s personal retirement age should also have been 55 years, as was the case for women in the same position. As this inequality affected also the time after 1 January 1994, the date on which the EU rules on equal pay became applicable in respect of Finland, the applicant’s pension had been calculated in a manner contrary to EU law during the period starting from 1 January 1994 until 31 December 2004. In this respect the case was referred back to the Bank for a new decision. As to the rest of the applicant’s complaints, they were rejected. As concerned the reduction of 19.8% due to early retirement, the court found that as the reduction concerned the time before 1 January 1994, it was not contrary to EU law.
14. On 18 March 2010 the Bank issued a new pension decision to the applicant. The percentage for accrued pension was now 12%, increasing his personal pension guarantee percentage to 57.5%. The pension calculated in this manner amounted thus to EUR 3,281.60 per month. The applicant did not appeal against this decision.
15. By letter dated 5 August 2010 the applicant petitioned the Chancellor of Justice (oikeuskansleri, justitiekanslern), claiming that the Insurance Court decision was illegal as it was not adequately reasoned and thus not transparent in respect of the rejected complaints. Moreover, he complained about the fact that his pension guarantee still remained at 57.5% even though the Insurance Court had, on 25 October 2005, amended a similar pension decision in the case of Mr K.H. and granted him a pension right amounting to 60% on the ground that he fulfilled the pension guarantee requirement as he had completed 30 years of service.
16. It is not known whether the applicant’s petition is still pending before the Chancellor of Justice.
17. On 27 July 2011 the applicant lodged an extraordinary application with the Insurance Court for the reopening of the proceedings as far as they related to the decision of 2 March 2010. These proceedings are still pending before the Insurance Court.
B. Relevant domestic law
18. Article 6 of the Constitution of Finland (Suomen perustuslaki, Finlands grundlag; Act no. 731/1999) provides that:
“No one shall, without an acceptable reason, be treated differently from other persons on the ground of sex, age, origin, language, religion, conviction, opinion, health, disability or other reason that concerns his or her person.”
19. Article 15 of the Constitution provides that the property of everyone is protected.
20. Section 7 of the Act on Equality between Women and Men (laki naisten ja miesten välisestä tasa-arvosta, lagen om jämställdhet mellan kvinnor och män; Act no. 609/1986) prohibits both direct and indirect discrimination based on gender. According to its section 7, subsection 2, direct discrimination means, inter alia, putting women or men in an unequal position on the basis of gender. Section 8, subsection 1, point 3, of the same Act provides that:
“An employer’s conduct constitutes discrimination prohibited under the Act if the employer applies the pay or other terms of employment in such a way that one or more employees, because of their gender, find themselves in a less favourable position than one or more other employees performing the same work or work of equal value in the employer’s service.”
21. Section 11 of the Act on the Bank of Finland (laki Suomen Pankista, lagen om Finlands Bank; Act no. 214/1998) provides, inter alia, that:
“The Trustees of the Bank shall confirm the Bank of Finland’s Pension and Survivors’ Pension Regulations and issue regulations concerning the management of the Bank’s pension liability, upon proposal of the Directorate.”
22. Section 9 of the Act on Officials of the Bank of Finland (laki Suomen Pankin virkamiehistä, lagen om Finlands Banks tjänstemän; Act no. 1166/1998) provides the following:
“The Bank of Finland shall treat all officials in its service equally to ensure that no-one is unjustifiably treated differently because of his origin, citizenship, gender, religion, age, political or union activities, or on other comparable bases.
The Bank of Finland shall not forbid an official to join or belong to an association or pressure him to join a particular association, nor forbid him to resign from such.”
23. Section 33, subsections 1-3, of the same Act provide the following:
“An official who considers that the Bank of Finland has not rendered him the financial benefit due to him from his employment relationship may submit a written request for rectification to the Board. No request for rectification can be made in a matter that falls within the jurisdiction of the Labour Court, unless the Labour Court has decided not to settle the matter under section 1, subsection 2, of the Act on the Labour Court (646/1974).
Rectification of a decision by which the Bank of Finland has issued an official with a warning, laid him off or given him notice, cancelled the service relationship, suspended him from office or decided on a matter concerning his pension contribution or secondary occupation, as well as a decision referred to in paragraph 6 on a request for rectification referred to in paragraph 1 can be requested by appealing to the Supreme Administrative Court in accordance with the provisions of the Administrative Judicial Procedure Act (586/1996). A matter referred to in this paragraph shall be treated as urgent by the Supreme Administrative Court.
Decisions of the Board concerning pensions can be appealed against to the Insurance Court. Otherwise, as regards a request for rectification on pension, the applicable provisions of the Act on State Pensions (280/1966) shall apply.”
24. Section 58, subsection 1, of the same Act provides that
“[t]he right of an employee of the Bank of Finland to a pension paid from the Bank’s funds is determined, to the extent applicable, on the same grounds as state pension cover. State pension cover refers to the right to pensions, survivors’ pensions and other benefits which are payable from the state’s funds and the content of and eligibility for which are regulated by the State Pensions Act and the related legislation. Pensions and survivors’ pensions are granted by the Directorate of the Bank.”
25. More detailed provisions on the payment of pensions and survivors’ pensions and pension cover in other respects are contained in the Bank’s Pension and Survivors’ Pension Regulations (Suomen Pankin eläke- ja perhe-eläkesäännöt; pensionsstadgan och familjepensionsstadgan för Finlands Bank). The Trustees of the Bank of Finland, elected by the Parliament, adopt the Regulations on the basis of the Directorate of the Bank’s proposals.
26. Section 3, subsection 1, of the Pension Regulations with its earlier wording, as amended on 14 March 1972, read as follows:
“Eligibility for old age pension requires that the beneficiary has completed his or her service and reached the age of 65 years, or 60 years if the beneficiary, immediately before retirement, has been serving the Bank of Finland or its Security Printing House for at least one month, and 55 years in the case of a female employee. A beneficiary who retires as a member of the Directorate is entitled to old age pension irrespective of age.”
27. The lower retirement age of 55 years for women was applied until 3 May 1977, when the amendment of section 3, subsection 1, of the Pension Regulations entered into force. With this amendment the retirement age for women was raised from 55 to 60 years but the retirement age for men remained unchanged at 60 years. The amendment took effect as from its date of adoption so that it was applicable to beneficiaries whose service relationship with the Bank began on 3 May 1977 or thereafter.
28. For the equalisation of the retirement ages, men were granted the right to opt for a lower retirement age. On 17 June 1998 the Trustees of the Bank amended the entry into force provision of the Pension Regulations in the following manner:
“However, as of 1 January 1994, the earlier provision is applicable both to women who entered service in the Bank prior to 3 May 1977 and to men who entered service in the Bank before that date.
The beneficiary has the right to choose between the lower retirement age, based on the earlier provision, or the higher retirement age. If a man chooses the lower retirement age, the amount of his pension accrued on the basis of the duration of his service is, in respect of the service prior to 1 January 1994, reduced by 0.33 percentage units per month of earlier retirement.”
COMPLAINTS
29. The applicant complained under Articles 6, 14 and 17 of the Convention and Article 1 of Protocol No. 12 to the Convention that the difference in treatment in financial terms of men and women who had entered into the service of the Bank of Finland before 3 May 1977 when they applied for early retirement amounted to discrimination on grounds of sex.
THE LAW
A. Alleged discrimination
30. The applicant complained under Article 14 of the Convention, read in conjunction with Article 1 of Protocol No. 1 to the Convention, and under Article 1 of Protocol No. 12 to the Convention that the difference in treatment in financial terms of men and women who had joined the Bank of Finland before 3 May 1977 when they applied for early retirement amounted to discrimination on grounds of sex.
31. Article 14 of the Convention reads as follows:
“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
32. Article 1 of Protocol No. 1 to the Convention reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
33. Article 1 of Protocol No. 12 to the Convention reads as follows:
“The enjoyment of any right set forth by law shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.
No one shall be discriminated against by any public authority on any ground such as those mentioned in paragraph 1.”
34. The Government stressed that in so far as the impugned measures had taken place before Finland’s ratification of the Convention on 10 May 1990, the application was incompatible ratione temporis with the provisions of the Convention within the meaning of Article 35 § 3 (a) of the Convention and should be declared inadmissible under Article 35 § 4 of the Convention. Moreover, the Government argued that the applicant had not appealed against the decision of 18 March 2010 by the Bank to the Insurance Court but had only lodged a petition with the Chancellor of Justice on 5 August 2010. The applicant had therefore not exhausted the effective domestic remedies available to him and the application should therefore be declared inadmissible under Article 35 § 4 of the Convention.
35. The applicant pointed out that the first pension decision was given on 25 August 2006, well after 10 May 1990. As to the exhaustion of domestic remedies, the applicant argued that he had exhausted all available effective remedies although he had lodged his application with the Court prior to the delivery of the final decision by the Insurance Court on 2 March 2010. He could not appeal against the decision of 18 March 2010 by the Bank as he had been abroad at the time and had been prevented from returning to Finland due to the volcanic eruption in Iceland. In any event, this remedy would not have been effective. On 27 July 2011 he had lodged an application for reopening with the Insurance Court which was still pending before that court.
36. The Court considers that it is not necessary to examine whether this complaint is incompatible ratione temporis with the provisions of the Convention within the meaning of Article 35 § 3 (a) of the Convention as the applicant has not, in any event, exhausted effective domestic remedies in this respect.
37. The Court notes that by decision of 2 March 2010 the Insurance Court partly rejected, partly accepted the applicant’s appeal. As to the latter part, the case was referred back to the Bank for a new decision. This decision was taken by the Bank on 18 March 2010 and the applicant himself admits that he did not appeal against it to the Insurance Court. As the applicant was represented at the time and an appeal could be lodged with the Insurance Court without the applicant’s presence, the fact that he was not able to return to Finland from his trip is not a relevant or sufficient excuse for the failure to exhaust this remedy.
38. As to the alleged lack of effectiveness of the appeal to the Insurance Court, the Court notes that nothing indicates that the said remedy would not have been effective. In fact, the applicant successfully used the same remedy before and the Insurance Court had accepted some of his complaints. Nor is the applicant absolved from the requirement to exhaust this remedy simply because he has already used it, as the appealable decisions were different each time. A petition to the Chancellor of Justice or an application for the reopening of the case cannot be regarded as effective remedies (see mutatis mutandis for example Janatuinen v. Finland (dec.), no. 4692/04, 20 January 2009). Therefore, the applicant has failed to exhaust the effective domestic remedies available to him.
39. It follows that the Government’s objection is upheld and that the application must therefore be declared inadmissible under Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies.
B. Remainder of the application
40. The applicant also referred in his application to Articles 6 and 17 of the Convention without substantiating any complaints under those Articles.
41. In the light of all the material in its possession, and in so far as the matters complained of are within its competence, the Court finds that they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. Accordingly, this part of the application must be rejected as manifestly ill-founded and declared inadmissible pursuant to Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Fatoş AracıIneta Ziemele
Deputy RegistrarPresident
Full & Egal Universal Law Academy