FOURTH SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 37212/02
by Timothy WALKER
against the United Kingdom
The European Court of Human Rights (Fourth Section), sitting on 16 March 2004 as a Chamber composed of:
MrM. Pellonpää, President,
SirNicolas Bratza,
MrsV. Strážnická,
MrJ. Casadevall,
MrS. Pavlovschi,
MrJ. Borrego Borrego,
MrsE. Fura-Sandström, judges,
and Mr M. O'Boyle, Section Registrar,
Having regard to the above application lodged on 17 October 2001,
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
The applicant, Mr Timothy Walker, is a United Kingdom national, who was born in 1942 and lives in Shipston on Stour, Warwickshire. He was represented before the Court by Mr A. Gask of Liberty, London.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
Under current United Kingdom law, the state pension age is 65 for men and 60 for women. Until these ages, men and women who work are required to pay national insurance contributions if their earnings are above a threshold amount, currently 385 pounds sterling (GBP) per month.
The applicant is over 60 years old and works as an administrator. Since he has not reached the state pension age for men of 65, he is required to pay national insurance contributions on his earnings. His monthly salary is above GBP 2,535 and he therefore pays the maximum level of national insurance contributions (Class 1), amounting to GBP 215 per month and GBP 2,580 per annum. The applicant will be required to pay national insurance contributions from his earnings until he reaches the age of 65.
A woman of 60 years or more who continued to work would not be required to pay any national insurance contributions on her earnings.
The applicant has written to his Member of Parliament and the Paymaster General complaining about the difference in treatment for men and women. Both replied stating that since liability to pay national insurance contributions is linked to the state pension age, the treatment of men and women would equalise in 2020 when the state pension age will equalise.
B. Relevant domestic law and practice
The National Insurance Act 1946, which first established the basis for the national social security scheme in the United Kingdom, set out a system of funding under which all employers and the majority of the working population, whether employed or self-employed, are liable to pay compulsory national insurance (“NI”) contributions. This legislation has since been replaced, most recently, by the consolidating provisions of the Social Security Contributions and Benefits Act 1992 (“SSCBA 1992”) and the Social Security Administration Act 1992.
Section 1(2) of the SSCBA 1992 sets out the various classes of NI contribution. Of these, the largest category is Class 1 contributions which consist of earnings related contributions paid by employers and employees. Such contributions are levied as a percentage of earnings which varies according to the employee's earnings band. The NI scheme is financed on “a pay as you go” basis, that is, current NI contributions fund current benefits: thus an individual's contributions fund not his or her own benefits but those of others (R. (Carson) v. Secretary of State for Work and Pensions [2002] 3 All ER paragraphs 25-26).
A substantial contribution has been made to the National Health Service from the National Insurance Fund for many years. Following the National Insurance Act 2002, which imposed an additional deduction of 1% of earnings above the upper earnings limits, the element of calculation of the NHS allocation was increased from 1.05% of earnings paid in the tax year to 2.05%.
Section 6(2) of the Act provides that only those under the state pension age are liable to pay national insurance contributions from their earnings. The state pension ages are currently set as 65 for men and 60 for women according to section 122.
Section 126 of the Pensions Act 1995 provides for the equalisation of state pension ages for men and women to the age of 65. The state pension age for women will increase gradually from 2010 and the equalisation will be complete in 2020. At the same time, the age until which women are liable to pay national insurance contributions will gradually increase in line with the increase in the state pension age.
Section 51(a) of the Sex Discrimination Act 1975 provides that any act done to comply with legislation passed before the Sex Discrimination Act is not unlawful under that Act. Therefore, the difference in state pension ages does not constitute sex discrimination for the purposes of the legislation.
C. European Union law
Council Directive 79/7/EEC of 19 December 1978 provides for the progressive implementation of the principle of equal treatment for men and women in matters of social security. However, in Article 7(1)(a) the Directive provides for derogation in the matter of “the determination of pensionable age for the purposes of granting old-age and retirement pensions and the possible consequences therefore for other benefits”.
In the Case C-9/91 The Queen v. Secretary of State for Social Security, ex parte Equal Opportunities Commission [2000] ECR I-3701 (“the EOC case” concerning reference for a preliminary ruling from the High Court), the European Court of Justice found that:
- Article 7(1)a had to be interpreted as authorising the determination of a statutory pensionable age which differs according to sex for the purposes of granting old-age and retirement pensions and also forms of discrimination which are necessarily linked to that difference;
- Inequality between men and women with respect to the length of contribution periods required to obtain a pension constitutes such discrimination where, having regard to the financial equilibrium of the national pension system in the context in which it appears, it cannot be dissociated from a difference in pensionable age;
- In view of the advantages allowed to women by national pension systems, in particular as regards statutory pensionable age and length of contribution periods, and the disruption that would necessarily be caused to the equilibrium of those systems if the principle of equality between the sexes were to be applied from one day to the next in respect of those periods, the Community legislature intended to authorise the progressive implementation of that principle by the Member States and that progressive nature could not be ensured if the scope of the derogation authorised by Article 7(1)a were to be interpreted restrictively. (Summary of judgment).
COMPLAINT
The applicant complained under Article 14 of the Convention that he is required to pay national insurance contributions from his earnings while a 60 year old woman who was working would not have to pay such contributions. These contributions now include an extra 1% added under the National Insurance Act 2002, the proceeds of which are included within the National Health Service allocation.
THE LAW
The applicant complains that he is required to pay national insurance contributions whereas a woman of the same age who was working would not. The relevant provisions of the Convention provide:
Article 14 of the Convention:
“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.”
Article 1 of Protocol No. 1:
“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.”
A. Article 34 of the Convention – victim status
The Government submitted that as the applicant was not complaining that he should not pay contributions but that women in his position should and as legislation had been introduced to achieve “levelling up” by 2020, the application would produce no concrete legal effects for the applicant and his complaints were abstract and in the nature of an actio popularis.
The applicant argued that he was a man over 60 in employment who had to pay NI contributions, including an additional 1% since 2002, which a woman of the same age in employment did not have to pay. Whether or not the Government removes the discrimination by “levelling up” or “levelling down”, he must be regarded as victim of a difference of treatment meanwhile.
The Court notes that there is no question in this case that the authorities have acknowledged, either expressly or in substance, the breach of the Convention and afforded redress (Eckle v. Germany, judgment of 15 July 1982, Series A no. 51, § 66) such as would render the applicant no longer a victim of any alleged breach of his rights. While the Government have already passed legislation which will end the differential treatment between men and women concerning the age of eligibility for the state pension and equalise the ages at which NI contributions are obligatory, it remains the case that the applicant, as a man over 60 who is working, is subject to a difference of treatment as regards women of the same age who are in the same position. The question as to whether the applicant can claim any pecuniary or non-pecuniary damage as a result of this difference in treatment falls to be dealt with under Article 41 of the Convention.
The Court rejects the Government's preliminary objection on this ground.
B. Article 35 § 1 of the Convention – exhaustion of domestic remedies
The Government submitted that the applicant could have taken judicial review proceedings arguing that as a matter of EC law, the derogation in Article 7(1)(a) of Council Directive 79/7/EEC of 19 December 1978 did not justify discrimination in the form of absolving from NI contributions those women who chose to extend their “working life” by working between the age of 60 and 65 and that changed social and economic conditions required speedier removal of differential retirement ages, in particular the increased contribution element to the National Health Service to which the applicant referred. He could also argue, as before this Court, that the raising of such funding through NI contributions was not necessarily structurally linked to the state pensionable age.
They further submitted that the applicant could have applied to the High Court arguing that his liability to pay contributions was inconsistent with his human rights as set out in the Human Rights Act 1998, seeking a declaration of incompatibility under section 4. This would trigger special powers authorising Ministers to change primary legislation by secondary legislation where possible and where any change could only be made by primary legislation, the making of the declaration invariably led to the prioritisation of such remedial legislation. Thus a successful case would produce real, practical remedies. As the applicant had not brought his complaints, even in substance, to any domestic court and tribunal which were best placed to deal with such complex disputes, they submitted that he had not complied with the requirement to exhaust domestic remedies under Article 35 § 1 of the Convention.
The applicant submitted that a claim based upon the Directive would not constitute an effective remedy as the EOC case (see European Union law section above) established that the United Kingdom's differential contribution periods did not breach the Directive, as it was intended not to require States to undertake an immediate general restructuring of their pension systems. In any event, he considered that the Directive would not apply to any challenge by the applicant to his obligation through contributions to the NIF to fund the NHS as it applied only to schemes of social security. The applicant also argued that seeking a certificate of incompatibility was not a remedy which was “sufficiently effective” as to be capable of providing redress for his complaint, citing Hobbs v. United Kingdom (no. 63684/00, (dec.) 6 June 2002). A certificate would have no effect upon the validity, continuing operation or enforcement of the provisions in issue and no binding legal effect upon the parties to the litigation in which it would be made. Insofar as a declaration could lead to a change in legislation for the future, this did not produce real and concrete results for the individual applicant, who does not obtain redress in relation to the past breach of his rights.
The Court reiterates that the rule of exhaustion of domestic remedies referred to in Article 35 § 1 of the Convention obliges applicants to use first the remedies that are normally available and sufficient in the domestic legal system to enable them to obtain redress for the breaches alleged. The existence of the remedies must be sufficiently certain, in practice as well as in theory, failing which they will lack the requisite accessibility and effectiveness. Article 35 § 1 also requires that the complaints intended to be brought subsequently before the Court should have been made to the appropriate domestic body, at least in substance and in compliance with the formal requirements laid down in domestic law, but not that recourse should be had to remedies which are inadequate or ineffective (for example, Akdivar and Others v. Turkey, no. 21893/93, §§ 65-67, ECHR 1996-IV; Aksoy v. Turkey, no. 21987/93, §§ 51-52, ECHR 1996-VI).
Regarding the Government's arguments that the applicant should have taken judicial review proceedings invoking the equality provisions in the EU Directive, the Court notes that Article 7(1)(a) provides a specific derogation in respect of discrimination linked to the existence of different pensionable ages and that in the EOC case this was found to extend to forms of discrimination necessarily linked to that difference. While the parties' submissions to this Court indicated differences of view as to whether the obligation to pay NI contributions should be regarded as necessarily linked to different pensionable ages, the European Court of Justice has held that the derogation is not to be interpreted restrictively, emphasising the purpose of the provision as being to enable States to make progressive changes to their systems without disturbing their equilibrium. The United Kingdom has acted with due reliance on this position in gradually phasing in equalisation of its present system, which currently links pension age and NI contributions. The Court is not persuaded in these circumstances that a challenge under the Directive would stand any realistic prospect of success.
Nor is the Court minded to change the view expressed in its previous cases that a declaration of incompatibility issued by the domestic courts to the effect that the legislation infringed provisions of the Convention cannot be regarded as an effective remedy within the meaning of Article 35 § 1. As stated in Hobbs (cited above):
“In particular, a declaration is not binding on the parties to the proceedings in which it is made. Furthermore, by virtue of section 10(2) of the 1998 Act, a declaration of incompatibility provides the appropriate minister with a power, not a duty, to amend the offending legislation by order so as to make it compatible with the Convention. The minister concerned can only exercise that power if he considers that there are 'compelling reasons' for doing so.”
The Government's arguments have not given any basis for departing from this analysis in the present case.
Consequently, the Court considers that the Government have failed to establish that either of the domestic remedies referred to is sufficiently “effective” so as to be capable of providing the applicant with redress for his complaint, and so as to require exhaustion under Article 35 § 1 of the Convention.
The Court therefore rejects the Government's preliminary objection.
C Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1
The Government accepted that Article 1 of Protocol No. 1 applied to the case and that Article 14 was applicable to any discrimination in relation to the incidence of the obligation to make NI contributions. They claimed that it was not possible to dissociate the obligation on working males between 60 and 65 to pay NI contributions from the different state retirement ages for men and women. The level and duration of NI contributions were necessarily linked to the assumed working life and thus the fixed state retirement age for men. While it was true that women aged 60-65 were able to defer their state pensions and continue to work without paying NI contributions, men aged 65-70 also had that possibility.
The Government pointed out, that along with other EC and Contracting States, they were in the process of phasing out differing pensionable ages for men and women and whilst doing so was protected as a matter of EC law. By phasing out differential treatment in a measured and controlled fashion that maintained the financial equilibrium of the social security system and protected the expectations of older women who had planned to retire and receive their state pension at age 60, the Government submitted that they were acting in an objectively and justified and proportionate manner. It was an area undoubtedly attracting a very broad margin of appreciation as it involved complex economic and social judgments as well as economic management. Therefore the applicant's complaints disclosed no discrimination contrary to Article 14 in conjunction with Article 1 of Protocol No. 1.
The applicant disputed that there was any direct or necessary link between the age of entitlement to the basic state pension and liability to pay NI contributions. Employers had to pay for female employees regardless of their ages and it was open to women to defer their state pension after the age of 60 and to continue to make contributions to enhance their contribution record. He submitted that “very weighty reasons” had to be provided for sex discrimination and that the more lenient test under Article 1 of Protocol 1, whereby only measures “manifestly without reasonable foundation” are challengeable, did not apply in such cases. There was no reason why he should have to pay towards the NHS for a longer period than women, which obligation had no objective connection with the state pension age. The recent increase in deductions from the fund for NHS funding purposes was manipulating NI contributions as a general taxation source which aggravated the existing inequality. As the NIF was not in fact self-financing but could be topped up by money from general taxation, it could not be said that changes in contributions would prejudice the equilibrium of the scheme. If women were required to pay, it would in fact boost the amount of funds. Any differences in entitlement are a consequence only of the way in which the Government have chosen to structure the benefit system.
Having regard to the applicant's complaints and the parties' submissions, the Court finds that serious questions of fact and law arise, the determination of which should depend on an examination of the merits. The application cannot be regarded as manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other grounds for declaring it inadmissible have been established.
For these reasons, the Court unanimously
Declares the application admissible, without prejudging the merits of the case.
Michael O'BoyleMatti Pellonpää
RegistrarPresident
Full & Egal Universal Law Academy