M.V. and U-M.S. v. FINLAND

FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 43189/98
by M.V. and U-M.S.
against Finland

The European Court of Human Rights (Fourth Section), sitting on 28 January 2003 as a Chamber composed of

SirNicolas Bratza, President,
MrM. Pellonpää,
MrA. Pastor Ridruejo,

MrsV. Strážnická,

MrR. Maruste,

MrS. Pavlovschi,

MrL. Garlicki, judges,
and Mr M. O’Boyle, Section Registrar,

Having regard to the above application lodged with the European Commission of Human Rights on 9 April 1998,

Having regard to Article 5 § 2 of Protocol No. 11 to the Convention, by which the competence to examine the application was transferred to the Court,

Having deliberated, decides as follows:

THE FACTS

The applicants, Ms M.V., and Ms U.-M.S., are Finnish nationals, who were born in 1930 and 1929, respectively, and live in Helsinki. The first applicant is represented before the Court by the second applicant.

The facts of the case, as submitted by the applicants, may be summarised as follows.

A.  Background information about the Finnish pensions system

Until 31 December 1995 at the time of retirement a person was granted, inter alia, (a) an employment pension which was counted on the basis of his or her salary earned prior to the retirement, amounting to a maximum of 66 per cent of that salary, and (b) a national pension’s basic amount (kansaneläkkeen pohjaosa, folkpensionens basdel), if the person was entitled thereto on the basis of his age and/or number of years of employment.

From 1955 to 1957, employees were obliged by law to deposit part of their salaries in individual accounts kept by the Social Insurance Institution for the purpose of accumulating employment pensions for their retirement. From 1957 onwards these contributions were no longer deposited on accounts earmarked for the employees themselves but went into the general pension fund.

The two parts of the pension (the above-mentioned (a) and (b)) were considered together with the result that a pensioner’s employment pension was reduced by the amount of the national pension’s basic amount so that the total amount did not exceed the maximum limit of 66 per cent of his salary. The national pension’s basic amount was granted to all persons entitled to it without their requesting it (although it was apparently possible to refuse it), reducing automatically the amount of the employment pension.

In 1995 the National Pension Act was amended (Act no. 1491/1995) as a budgetary savings measure to the effect that, as from 1 January 1996 onwards, the national pension such as the old-age pension was to be replaced by a pension calculated with reference to new criteria. Those whose total income in the form of other pensions and various entitlements exceeded certain ceilings would no longer be entitled to a national pension. In such a case the so-called basic amount of their national pension would be reduced by 20 per cent annually between 1996 and 2001, when payment thereof would cease.

Following a public debate on the matter the Finnish Parliament passed a Compensation Act (635/2002) on 18 June 2002, according to which pensioners whose employment pension has been twice reduced on the basis of their national pension’s basic amount, are entitled to receive a compensation for their loss as from 1 October 2003 onwards. The compensatory amount will be between 5 and 50 euros per month, depending on the amount of the pension at issue. The applicants in the present case will not benefit from the new Act as their pensions were reduced only once. So they will not receive any compensation for their loss.

B.  The facts of the present case

The applicants are two retired social workers. They both worked for the City of Helsinki for a period of 35 years until their retirement in 1990 when they were granted an employment pension but no national pension’s basic amount as they had not yet reached the required age. Their employment pensions amounted to 66 per cent of their salaries.

In 1995, when they reached the age of 65, they were granted a national pension’s basic amount of FIM 445 (about 75 euros) per month. The two pensions (a) and (b) were, however, considered together with the result that the total amount of the two pensions was the same as the earlier pension had already been (66 per cent of the applicants’ salaries).

In 1996 their national pension’s basic amounts were affected by the Act 1491/1995 as described above. That lead to a situation in which the applicants now only receive a pension which is about 60 per cent of their salaries on which their pensions were originally based.

The applicants have used all domestic remedies. The appeal instance decisions were given by the Insurance Court in October 1997. According to the decisions of the domestic courts, it is impossible to revoke the reduction of the pensions which is based on the amendment to the National Pension Act as the courts cannot override a law. The applicants have also complained to the Parliamentary Ombudsman without any success.

COMPLAINTS

1.  The applicants complain, under Article 1 of Protocol No. 1 to the Convention, that they were deprived of their possessions as they lost the full amount of their pensions only because they were granted an additional basic amount for the period of a few months (the basic amount was granted in 1995 and reduced gradually as from 1 January 1996 onwards). When that additional basic amount ceased to exist also their employment pensions, which they had already earned and received in full amount earlier, were permanently left at a lower level.

2.  They also complain, under Article 14 of the Convention that they were discriminated against on the basis of their age as the basic amount was not withdrawn from those pensioners who were born in 1938 or earlier.

3.  Finally, the applicants complain under Article 13 of the Convention that they had no effective remedy at their disposal as they have no right to have the dispute concerning the reduction of the basic amount of their old-age pensions examined fairly by an independent and impartial tribunal as the domestic courts cannot provide a review of the conformity of legislation with the Convention.

THE LAW

1.  The applicants complain that their right to the peaceful enjoyment of their possessions was violated as they were deprived of part of their pensions without compensation. They invoke Article 1 of Protocol No. 1 to the Convention, which 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.”

Article 1 of Protocol No. 1 to the Convention guarantees the right of property. It comprises three rules. The first rule, which is set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property. The second rule, which is set out in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions. The third rule, which is set out in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The three rules are connected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and are therefore to be construed in the light of the general principle enunciated in the first rule.

The Court recalls that, according to the Convention organs’ established case-law, the right to an old-age pension or related pension benefits is not included as such among the rights and freedoms guaranteed by Article 1 of Protocol No. 1 or any other provisions of the Convention. The Convention organs have nevertheless recognised that payment of contribution to a compulsory pension fund may, at least in certain circumstances, create a property right in a portion of such a fund and that such a right might be affected by the manner in which the fund is distributed (see Aunola v. Finland (dec.), no. 30571/96, ECHR, 15 March 2001, unreported). The Court notes in the present case that the applicants have made contributions to the pension fund to finance their benefits. Thus, the Court accepts that the reduction of the applicants’ pensions have affected their property interests protected by of Article 1 of Protocol No. 1. Although the contested measures undoubtedly reduced the applicants’ pension rights by depriving them of the national pension’s basic amount, the Court considers that in the circumstances of the present case they should be regarded as a control of the use of the applicants’ possessions within the meaning of the second paragraph of that provision.

To be compatible with the second paragraph, such control must be based on “laws” which the State “deems necessary” for the furtherance of “the general interest”. In this case there can be no doubt that the interference with the applicants’ pension rights was based on law, namely the amendment on the National Pension’s Act (1491/1995).

As to the condition of “general interest”, the Court notes that in this respect the Convention leaves a wide margin of appreciation to the national legislator. The Court will respect the legislator’s judgment as to what it deems to be in the general interest unless that judgment be “manifestly without reasonable foundation” (see, mutatis mutandis, the judgment of 21 February 1986 in the case of James and Others v. the United Kingdom, Series A no. 98, § 46). The Finnish Parliament’s opinion that, because of the State’s financial situation, the amendment to the National Pensions Act was in “the general interest” cannot in the Court’s view be considered to transgress the margin of appreciation left to the State in this regard.

Even so, the Court must also satisfy itself that there is a reasonable relationship of proportionality between the means employed and the aim pursued and that a fair balance is struck between the public and private interests involved. In the present case the Court notes that the reduction of the applicants’ pensions, although it amounted to the national pension’s entire basic amount, nevertheless left some 90 per cent of the applicants’ co-ordinated pension rights intact. This being so, the Court finds that the applicants were not obliged to bear an unreasonable burden within the meaning of its case-law (see, inter alia, the Božidar Janković v. Croatia (dec.), no. 43440/98, ECHR, unreported).

Considering that the Convention does not guarantee a right to a pension of a certain amount and the State’s margin of appreciation in the field of social and economic law (see, inter alia, the Gascon Moreno v. Spain (dec.), no. 49151/99, ECHR, unreported) there is, in these circumstances, no appearance of a violation of Article 1 of Protocol No. 1.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

2.  The applicants also complain, under Article 14 of the Convention, that they were discriminated against on the basis of their age as those pensioners who were born before the year of 1939 are still receiving a pension which amounts to 66 per cent of their earnings. 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.”

Taking into account that the applicants were born in 1929 and 1930, the Court finds this part of the application to be unsubstantiated.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

3.  The applicants complain further, under Article 13 of the Convention, about the lack of an effective remedy as the domestic instances could not override a law. That provision reads as follows:

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

In this connection the Court recalls, in conformity with its established case-law, that Article 13 does not guarantee a remedy whereby a law as such can be challenged before a domestic organ. It follows from the terms of the applicants’ submissions that it is basically the legislation as such which they attack. However, as stated above, Article 13 does not guarantee a remedy for such complaints. Insofar as the applicants can be understood to complain that they did not have an effective remedy for the alleged violation of Article 14, the Court recalls that it has found the Article 14 complaint to be manifestly ill-founded. In these circumstances, the applicants cannot be said to have an “arguable claim” of a violation of that provision. As Article 13 only applies if the individual can be said to have an “arguable claim”, Article 13 is not applicable here.

It follows that this complaint is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.

For these reasons, the Court unanimously

Declares the application inadmissible.

Michael O’BoyleNicolas Bratza
RegistrarPresident

Full & Egal Universal Law Academy