Overview of recent cases before the Court of Justice of the European Union (March –September 2022)

Abstract

In this case note, nine judgments of the Court will be discussed. The first two judgments discussed concern the principle of equal treatment in relation to family benefits (S v Familienkasse and Commission v Austria). Additionally, both the first and third judgments reported relate to the interpretation of the Citizenship Directive (Directive 2004/38) (S v Familienkasse and VI). The other judgments on social security deal with the calculation of old-age pension (CC) and the legislation applicable for flight and cabin crew (INAIL and INPS) under Regulation 883/2004. The four remaining judgments are cases of discrimination on grounds of sex in the context of pensions (KM v INSS and EB v BVAEB), on grounds of age (A v HK Danmark and HK/Privat) and between temporary agency workers and ‘regular’ workers (Luso Temp).

In this case note, nine judgments of the Court will be discussed. The first two judgments discussed concern the principle of equal treatment in relation to family benefits (S v Familienkasse and Commission v Austria). In S v Familienkasse (C-411/20), the Grand Chamber of the Court dealt with the aftermath of its Dano case law in Germany and ruled that economically inactive EU citizens must benefit from equal treatment with regard to access to family benefits during their first three months of residence in the host Member State. In Commission v Austria (C-328/20), the Court ruled that the indexation of family benefits for children of EU workers residing outside Austria was indirectly discriminatory and incompatible with EU law.

Additionally, both the first and third judgments reported relate to the interpretation of the Citizenship Directive (Directive 2004/38) (S v Familienkasse and VI). In VI (C-247/20), the Court clarified that the requirement of having ‘comprehensive sickness insurance coverage’ under Directive 2004/38 may be fulfilled by obtaining either private or public insurance. In that latter case, the public insurance does not have to be provided free of charge.

The other judgments on social security deal with the calculation of old-age pension (CC) and the legislation applicable for flight and cabin crew (INAIL and INPS) under Regulation 883/2004. In CC (C-576/20), the Court found that the ‘sufficient close link’ test developed in its previous case law for the purpose of taking into account child-raising periods completed in other Member States in the calculation of an old-age pension was applicable, alongside the criteria of Article 44 of Regulation 987/2009. In INAIL and INPS (C-33/21), the Court clarified which social security legislation applies to flight and cabin crew of an airline (Ryanair) who are based in an airport where they work for only 45 minutes per day.

Lastly, the four remaining judgments are discrimination cases on grounds of sex in the context of pensions (KM v INSS and EB v BVAEB), on grounds of age (A v HK Danmark and HK/Privat) and between temporary agency workers and ‘regular’ workers (Luso Temp). In KM v INSS (C-625/20), the Court provided guidance to the national court on the methodology regarding statistical data used for establishing a case of indirect discrimination on grounds of sex in relation to occupational pensions. In EB v BVAEB (C-405/20), the Court considered that the indirect discrimination on grounds of sex in cases of refusal to increase (generous) pensions for civil servants was justified and proportionate. In A v HK Danmark and HK/Privat (C-587/20), the Court held that an age limit for eligibility to stand for election as sector convenor laid down in the statutes of an organisation of workers falls within the scope of Directive 2000/78. Finally, in Luso Temp (C-426/20), the Court essentially found that temporary agency workers should be treated equally with directly recruited workers who occupy the same job for the same duration in the hiring company when it comes to the compensation of untaken annual paid leave and holiday bonus.

Equal treatment with regard to access to family benefits for economically inactive EU citizens: S v Familienkasse ¹

The S v Familienkasse case concerned the refusal by the German Family Allowance Fund to grant family benefits to S, an economically inactive EU citizen, for her two children during their first three months of residence. According to a legislative amendment from July 2019 to the German law applicable for the family benefits in question, a national of a Member State other than Germany cannot obtain family benefits during the first three months of residence when he or she cannot provide proof of gainful employment. ² Such a proof is not required for German nationals returning to Germany. According to the German legislature, that differential treatment could be based on Article 24(2) of Directive 2004/38, which allows Member States to derogate from the principle of equal treatment found in Article 24(1) of the same Directive when it comes to the grant of social assistance during the first three months of residence. ³ Unsure about the compatibility of that differential treatment with EU law, the referring court asked the Court of Justice whether Article 24 of Directive 2004/38 and Article 4 of Regulation 883/2004 on equal treatment precluded such legislation.

The Court, sitting in a Grand Chamber, started its judgment with few preliminary observations relating to the legal residence of the applicant and the qualification of the benefits as ‘family benefits’ and not ‘social assistance’.

After recalling the fundamental status of Union citizenship, the Court recalled that every citizen of the Union can rely on the prohibition of discrimination on grounds of nationality on the basis of Article 18 TFEU, but also Article 4 of Regulation 883/2004 and Article 24 of Directive 2004/38, in all situations that fall within the material scope of EU law (paragraphs 28-29). The Court noted that S and her children were legally resident in Germany during the first three months of residence on the basis of Article 6(1) and Article 14(1) of Directive 2004/38 (paragraphs 31–33). Under Article 6(1) of Directive 2004/38, Union citizens and their family members are entitled to a right of residence in another EU Member State for a period up to three months without any conditions or formalities other than being in possession of a valid identity card or passport. Article 14(1) of the same Directive adds the condition that Union citizens and their family members should not become a burden on the social assistance of the host Member State.

Concerning the benefits in question in this case, the Court considered them to be family benefits within the meaning of Article 3(1)(j) in conjunction with Article 1(z) of Regulation 883/2004, since they were intended to meet family expenses and were granted automatically to families meeting certain objective criteria relating in particular to the size, income and capital resources without any individual and discretionary assessment of personal needs (paragraphs 24-25).

Although the German government did not consider the family benefits in question as ‘social assistance’, it argued for the ratio legis of Article 24(2) of Directive 2004/38 on social assistance to be applied to social security benefits. The Court refused that interpretation of Article 24(2). Since Article 24(2) is a derogation to the principle of equal treatment found in Article 24(1) of Directive 2004/38, it must be interpreted strictly. Considering the wording but also the regulatory context and the objectives of the Directive, the Court held that there was nothing that could support the interpretation proposed by the German government. Hence, the derogation to equal treatment that is provided by Article 24(2) of Directive 2004/38 is limited to ‘social assistance’ and cannot be extended to social security benefits.

As Article 24(2) of Directive 2004/38 was not applicable to the situation at hand, the Court turned to the principle of equal treatment, as enshrined in Article 4 of Regulation 883/2004. The Court referred to its Dano line of case law ⁴ to state that Member States can prevent entitlement to benefits within the scope of Regulation 883/2004 to economically inactive Union citizen who do not satisfy the conditions of lawful residence under Directive 2004/38. However, in this particular case, S and her children were lawfully resident during the first three months of residence on the basis of Article 6(1) read in conjunction with Article 14(1) of Directive 2004/38 (paragraphs 31–33 and 63). Hence, S and her children were entitled to equal treatment under Article 4 of Regulation 883/2004. The Court considered that they had been subject to direct discrimination on the basis of nationality (paragraph 67). Since Regulation 883/2004 does not provide for any derogation to the principle of equal treatment, it ruled that such discrimination could not be justified (paragraph 68).

This judgment is certainly a victory for the principle of equal treatment and for the free movement right of economically inactive EU citizens in general. Supported by the opinion of the Advocate General Spzunar that is worth reading, the Court put a stop in the limiting and discriminating attitude of the Member States towards economically inactive EU citizens. While upholding the principle of equal treatment, the Court also addressed the concerns of some Member States in its last paragraphs by adding that in order to be able to rely from the equal treatment provision of Regulation 883/2004, the EU citizen, during the first three months of residence in a Member State, ⁵ must have established his or her habitual residence in that Member State and not be resident there temporarily. As under Regulation 883/2004, the concept of ‘residence’ means ‘actual’ residence.

Indexation of family benefits for children residing in other EU Member States: Commission v Austria ⁶

This case was an infringement proceeding brought by the European Commission (the Commission) against Austria for its indexation mechanism applicable to family benefits as well as social and tax benefits for children residing outside Austria. Since 1 January 2019, Austria has applied an indexation mechanism operating an upward and downward adjustment based on the place of residence of those children residing outside Austria. After sending a reasoned opinion to Austria, the Commission brought the matter to the Court of Justice, arguing that the indexation mechanism breached EU law on two grounds. Firstly, the Commission considered that it infringed Articles 7 and 67 of Regulation 883/2004 which prohibit the withdrawal or reduction of benefits on the basis of the place of residence. Secondly, the Commission asserted that the indexation of family benefits was indirectly discriminatory, thereby infringing Article 4 of Regulation 883/2004 and Article 7(2) of Regulation 492/2011.

On the first ground for infringement, the Court highlighted that it was not disputed that the family allowances and the child tax credit in question were family benefits for the purpose of Regulation 883/2004. Article 7 demands that no reduction, amendment, suspension, withdrawal or confiscation of benefits take place due to the fact that the beneficiary or his/her family members reside in a Member State other than the State which provides the benefits in question. Furthermore, Article 67 states that a person may claim family benefits for members of his or her family who reside in a Member State other than the one paying those benefits, as if they resided in the latter Member State. The Court referred to one of its latest judgments concerning family benefits in Austria, the Finanzamt Österreich (Family benefits for development aid workers), ⁷ and noted that the purpose of Articles 7 and 67 is to prevent Member State from making entitlement to, or the amount of, family benefits dependent on the fact that the family members of the worker reside in the Member State providing those benefits. Hence, the adjustment of family benefits based on the State of residence of the beneficiaries’ children constituted an infringement of Regulation 883/2004 (paragraph 51). The Court noted that the indexation mechanism put in place in Austria only concerned the recipients of family benefits whose children resided outside Austria and not those residing in the different regions of Austria, although the differences in price levels between those regions were comparable to the differences in price levels between Austria and other Member States (paragraph 52). Furthermore, the Court observed that it could not be established that the amount of family benefits matched the costs of living or the expenditure actually incurred since those benefits were allocated on a flat-rate basis by reference to the number and age of the children or by reference to a disability they might have (paragraph 53).

On the second ground for infringement relating to the indirectly discriminatory character of the Austrian legislation, the Court considered the issue to fall under both Article 4 of Regulation 883/2004 and Article 7(2) of Regulation 492/2011, which need to be interpreted in the same way and in accordance with Article 45 TFEU. The Court recalled its previous case law, ⁸ according to which a distinction based on residence constituted indirect discrimination on the ground of nationality. Such indirect discrimination is allowed only if objectively justified by appropriate means that do not go beyond what is necessary. Austria argued that the indexation system had a supportive function for the families and ensured fairness of the social system overall. One of the arguments made by Austria was that the adjustment of the amount of benefits was intended to better match the actual costs incurred by the families with children residing abroad. The Court completely dismissed that argument by pointing out that the family benefits as well as the social and tax advantages in question were not calculated on the basis of the actual costs incurred for the maintenance of the children but on the number and age of those children (paragraphs 102 and 105). Furthermore, the Court stressed again that the Austrian government did not apply this adjustment to beneficiaries residing in Austria even though disparities between regions existed (paragraph 105). Finally, the Court pointed out that migrant workers contribute to the financing of the social security system of the host Member State through their social security and tax contributions. As a result, the Court emphasised that they should be able to profit from them under the same conditions as national workers (paragraphs 109-110). Overall, concurring with the AG, ⁹ the Court found that the differential treatment arising from the indexation mechanism was neither appropriate nor necessary for the purpose of ensure the supportive function and the fairness of the social system.

Besides the Austrian context, this case must be seen as an end to a long political debate, also witnessed by the number of intervening parties in this case. ¹⁰ That political debate originated in the context of the EU's desperate attempt to prevent Brexit by offering a settlement agreement in 2016 at the European Council. ¹¹ In that settlement agreement, European leaders asked the Commission to submit a proposal for revision of Regulation 883/2004 whereby the possibility of the indexation of family benefits would be added. Brexit happened and this settlement agreement never materialised, leaving some Member States, such as Austria, discontented. With its judgment in Commission v Austria, the Court put an end to the debate. The Court clearly stated that a mechanism of indexation of family benefits is not only incompatible with Regulation 883/2004 and Regulation 492/2011 but also with Article 45 TFEU itself (paragraph 57), thereby precluding any prospect that the indexation of family benefits would ever be made a possibility under the revision of Regulation 883/2004.

The requirement of comprehensive sickness insurance under Directive 2004/38 can be met by affiliation in a public sickness insurance system: VI ¹²

VI is a Pakistani national who is the mother of a child with EU citizenship. They reside together with the father of the child and three other children, all of Pakistani nationality, in Northern Ireland (United Kingdom). VI was denied Child Tax Credit and Child Benefit for the period prior to 17 August 2006, when her son, who is an EU citizen, did not yet have the right to permanent residence in the UK under Article 16(1) of Directive 2004/38, and for the period after he acquired permanent residence. The reason for exclusion from Child Tax Credit and Child Benefit was that VI was not covered by comprehensive sickness insurance and therefore could not derive a right of residence in the UK. Although they were covered free of charge by the public health insurance system (the National Health Service (NHS)), the national immigration regulations implementing Directive 2004/38 required the insurance to be privately funded. In that context, the national referring court asked the Court of Justice whether a child with permanent residence status, and the primary carer of that child, were required to have comprehensive sickness insurance in order to maintain a right to reside, and whether the national regulations were compatible with Directive 2004/38 and Article 21 TFEU.

The Court clearly separated the two periods. First, it ruled that for the period when the child with EU citizenship has acquired a right of permanent residence under Article 16(1) of Directive 2004/38, his family members are no longer required to maintain a comprehensive sickness insurance in order to retain their right to reside and rely on equal treatment in relation to social security benefits (paragraphs 53–60).

Second, regarding periods before the EU citizen child acquired permanent residence, the Court clarified that the requirement of comprehensive sickness insurance under Article 7(1)(b) of Directive 2004/38, as outlined in case A, is also met when the citizen is affiliated free of charge with the public sickness insurance system of the host Member State (paragraphs 68-69). In light of the circumstances of the case, namely, that the third-country national parents had worked and paid taxes on their income in the host Member State, the Court held that affiliating them to the public health insurance system could not be regarded an unreasonable burden on the public finances of that State (paragraph 70). Thus, the Court clarified that the requirement of ‘comprehensive sickness insurance coverage‘ in the meaning of Directive 2004/38 may be fulfilled by obtaining a private health insurance, but it also can be met through affiliation in a public sickness insurance system, such as the NHS in this instance (paragraph 78).

The case of VI further clarifies the A judgment from July 2021 from the Court. In A, the Court ruled that while a Member State cannot exclude an economically inactive EU citizen from its public sickness insurance system, it does not have to grant access free of charge. ¹³ With VI, the Court continued with this line of reasoning, stating that citizens may be affiliated with their public health insurance system in exchange for proportional payment, but in situations where a Member State chooses to affiliate a citizen free of charge, the requirement of comprehensive sickness insurance is also met.

Child-raising periods completed in other Member States must be taken into account for calculating old-age pension: CC v Pensionsversicherungsantalt ¹⁴

The CC v Pensionsversicherungsantalt case is about the legacy of the Court's case law in Elsen, ¹⁵ Kauer, ¹⁶ and most predominantly in Reichel-Albert, ¹⁷ rendered in the context of the application of Regulation 1408/71. The question asked of the Court in CC was ultimately whether a situation where a Member State has to take into account child-raising periods completed in another Member State for the purpose of calculating old-age pension is solely regulated by Article 44(2) of Regulation 987/2009, or if previous case law of the Court based on Regulation 1408/71 and Article 21 TFEU has to be considered as well.

CC was an Austrian national who was self-employed in Austria until 30 September 1986, before moving to the UK for her studies. She then moved to Belgium in November 1987, where she gave birth to two children. From the birth of her first born (5 December 1987) until her return to Austria (8 February 1993), CC dedicated herself to raising her children. During that time, the family also resided in Hungary and in the UK. Upon returning to Austria, CC worked as a self-employed person, taking a one-year break for raising her children, until she retired. On 11 October 2017, she applied to the Austrian Pension Insurance Institution for an old-age pension. The Pension Insurance Institution took into account the one-year child-raising period completed in Austria for the purpose of calculating her pension but dismissed the child-raising periods completed in Belgium and Hungary as she did not meet the conditions of Article 44 of Regulation 987/2009. Upon appeal, CC argued that even though she did not meet the conditions of that provision, the child-raising periods completed in Belgium and Hungary should be taken into account due to their ‘sufficient close link’ with the Austrian social security scheme, on the basis of Article 21 TFEU and the case law of Reichel-Albert. The case ultimately reached the Austrian Supreme Court which decided to refer the question to the Court of Justice. The first question, which was reformulated by the Court of Justice, was essentially whether a Member State has to take into account child-raising periods completed in another Member State on the basis of Article 21 TFEU, even though those periods do not fulfil the conditions for being recognised under Article 44(2) of Regulation 987/2009. In other words, what is the relationship between Article 44 of Regulation 987/2009, which provides for the specific rules on taking into account child-raising periods completed in other Member States, and the case law of the Court of Justice based on Article 21 TFEU and predating the application of Regulation 987/2009?

Whereas the Advocate General proposed applying exclusively the conditions of Article 44(2) of Regulation 987/2009 to a situation falling ratione temporis within its scope, ¹⁸ the Court of Justice went in a different direction. The Court considered that, although the situation in the case fell within the scope ratione temporis of Regulation 987/2009, Article 44 of Regulation 987/2009 does not govern exclusively the taking into account of child-raising periods. First of all, according to the Court, the wording of Article 44 does not state that it governs the matter exclusively. Although the ‘sufficient close link’ developed by the Court in Elsen and Kauer has not been expressly codified by the EU legislator in Article 44(2) of Regulation 987/2009, the judgment of Reichel-Albert was delivered after the entry into force of Regulation 987/2009 and could therefore not have been taken into account in by the EU legislator in that Regulation (paragraphs 42-43). The Court held that such an interpretation was also supported by the context and objective of that provision. First, the context of Article 44(2) of Regulation 987/2009 is the establishment of an additional rule for increasing the likelihood that a person has his or her child-raising periods recognised for the purpose of calculating his or her old-age pension (paragraph 47). Then, the objective of Regulation 987/2009 and Regulation 883/2004 is ultimately about free movement of persons (paragraphs 48–51). In light of the fact that the Advocate General proposed the complete opposite interpretation, the Court simply ruled that ‘where a provision of EU law is open to several interpretations, preference must be given to the interpretation which ensures that the provision retains its effectiveness’ (paragraph 54).

After establishing that Article 44 of Regulation 987/2009 did not govern exclusively the taking into account of child-raising periods in another Member State, the Court considered whether the case law of Reichel-Albert could be applied to the situation of CC. In Reichel-Albert, the Court held that a sufficiently close link between the child-raising periods and the periods of insurance required by the Member State whose legislation is applicable for the purpose of the granting of old-age pension can be established when the person has worked and paid contributions exclusively in that Member State only, both before and after transferring his or her place of residence to another Member State where he or she never worked or paid contributions. ¹⁹ The Court highlighted that the facts in CC were comparable to those giving rise to the judgment of the Court in Reichel-Albert. Hence, similarly, there was a sufficiently close link between the child-raising periods completed by CC in Belgium and Hungary and the periods of insurance completed in Austria (paragraph 63). Furthermore, if CC had not left Austria and completed those child-raising periods there, they would have been taken into account. As a result, she was disadvantaged solely due to the fact that she exercised her free movement right under Article 21 TFEU (paragraph 64). In conclusion, the Court found that, pursuant to Article 21 TFEU, the Member State responsible for payment of a person's old-age pension must take into account the child-raising periods of that person in other Member State(s) when that person has worked and paid contributions exclusively in the first Member State, both before and after the transfer of place of residence to the other Member State(s) where the person has completed his or her child-raising periods (paragraph 65).

What the Court did essentially in its CC judgment was to extend the Reichel-Albert case law, from a situation where Regulation 987/2009 was not applicable ratione temporis, to a situation where Regulation 987/2009 is applicable. Hence, the Court confirmed that the requirement of taking into account child-raising periods completed in another Member States on the basis of Article 21 TFEU lives alongside the rules of Article 44(2) of Regulation 987/2009. Siding with the European Commission and contrary to what the Advocate General had proposed, the Court was correcting the (purposely) forgotten codification by the EU legislator of the Court's ‘sufficient close link’ test. In light of the current negotiations concerning the revision of Regulation 884/2004 and Regulation 987/2009, it is a strong signal to the EU legislator that the Court's case law based on the free movement provisions cannot be ignored.

Social security legislation applicable to flight and cabin crew of an airline (Ryanair): INAIL and INPS ²⁰

The case involved 219 Ryanair employees assigned to the Orio al Serio airport in Bergamo, Italy. The flight and cabin crew resided nearby the airport. The crew worked 45 minutes per day in that airport's premises, and for the remainder of their working time, they were on board the airline's aircraft. Furthermore, crew members were not issued with E101 certificates ²¹ providing that they were insured under the Irish social security legislation. Based on these circumstances, the INSP (Istituto nazionale della previdenza sociale) and the INAIL (Istituto nazionale per l‘assicurazione contro gli infortuni sul lavoro) required Ryanair to pay social security contributions and insurance premiums for the workers, as in their view, the workers should be insured under Italian law. Ryanair challenged this decision before the referring court, the Supreme Court of Cassation in Italy. The referring court essentially asked the Court of Justice which social security legislation would be applicable in these circumstances to the flight and cabin crew. Since the dispute concerned social security payment due for periods from 2006 until 2013, the Court examined those periods separately, first under Regulation 1408/71 and then under Regulation 883/2004.

First of all, for the period of June 2006 until February 2010, under Article 14(2)(a)(i) of Regulation 1408/71, a person who is a member of the flight and cabin crew of an airline operating international flights and is employed by a branch or permanent representation owned by that airline in the territory of a Member State other than that in which it has its registered office or place of business, is subject to the legislation of the Member State in whose territory such branch or permanent representation is situated. The Court found that the two cumulative conditions under this provision were met. First, the Court held that the Italian premises used by the Ryanair staff constituted a branch or permanent representation, due to the stability and continuity of economic activities of that establishment (paragraph 55). Secondly, the Court found that the work relationship of flight and cabin crew of that airline had a significant connection with the place from which they principally discharged their obligations to their employer (paragraph 58). Therefore, pursuant to Regulation 1408/71, the staff would be subject to Italian social security legislation (paragraph 59).

Next, the Court examined the period after May 2010, when Regulation 883/2004 entered into force. Under Article 13(1)(a) of Regulation 883/2004, a person who normally pursues an activity as an employed person in two or more Member States is to be subject to the legislation of the Member State of residence if he or she pursues a substantial part (more than 25%) of his or her activity in that Member State. Although it is up to the national court to verify this based on the facts of the case, the Court noted that it did not appear that staff members pursued a substantial part of their working time in Italy based on the fact that staff premises were used for 45 minutes a day (paragraph 64).

Finally, after the amendment of 2012, pursuant to the conflict rule enshrined in Article 11(5) of Regulation 883/2004, the activity of a member of the flight crew or cabin crew performing air passenger or freight services is to be deemed to be an activity pursued in the Member State where the home base is located. The Court pointed out that the workers in question started and completed their day at the Orio al Serio airport, and had to reside within one hour from that airport. Based on these circumstances, the Court concluded that, subject to the verification by the referring court, the premises intended to be used by the Ryanair staff located at the Orio al Serio airport in Italy constituted a home base with the result that those employees, in accordance with Regulation 883/2004, were subject to Italian social security legislation (paragraph 73).

Ryanair has been criticised over the years for unfair competition due to its low prices and avoidance of higher social security contributions by remaining subject to Irish legislation. Now, subject to confirmation by the referring court, based on the broad interpretation of the Court of Justice of the concept of the ‘home base‘, Ryanair will have to pay social security contributions in Italy for those crew members for whom it could not provide E101-certificates.

Methodology and reliability of data in cases of indirect discrimination on grounds of sex: KM v INSS ²²

A couple of months after its judgment in CJ v TGSS, ²³ the Court was called again, in KM v INSS, to rule on indirect discrimination on grounds of sex in Spanish law, this time with regard to the entitlement to invalidity pensions.

In KM v INSS, the applicant was awarded a total occupational invalidity pension by the INSS in respect of her occupation as an administrative assistant. She was also later awarded another total occupational invalidity pension in relation to her other occupation as a nursery assistant. However, the INSS found that she was not allowed to combine two total occupational invalidity pensions so she was entitled to only one of them. The legal ground for the INSS’ refusal to combine the pensions was Article 163 of the Law on the General Social Security Scheme (LGSS), which prohibits the combination of two total occupational invalidity pensions within that scheme. On the other hand, due to an a contrario interpretation of that law by the Spanish Supreme Court, a combination of an invalidity pension under that general social security scheme (RGSS) and an invalidity pension under the scheme for self-employed persons (RETA) is allowed. Given the fact that there was a smaller proportion of women than men under the RETA, the applicant argued that Article 163 of the LGSS was indirectly discriminatory on the grounds of sex. In doubt, the referring court asked whether the Spanish legislation was contrary to Article 4 of Directive 79/7 ²⁴ and Article 5 of Directive 2006/54, ²⁵ both on the prohibition of discrimination.

As in its judgment in CJ v TGSS, the Court started by clarifying that since the legislation at issue fell within the scope of Directive 79/7, it was automatically excluded from the scope of Directive 2006/54 (paragraphs 27-28).

On the question of the compatibility of the Spanish legislation with Article 4(1) of Directive 79/7, the main dispute in front of the Court of Justice in KM v INSS related to what statistical data needed to be taken into account for establishing indirect discrimination on grounds of sex and the reliability of the data produced during the proceedings. As a reminder, a case of indirect discrimination on grounds of sex arises when an apparently neutral provision, criterion or practice puts persons of one sex at a particular disadvantage compared with persons of the other sex. Indirect discrimination can be justified by a legitimate aim if the means for achieving that aim are appropriate and necessary. In order to show that persons of one sex are at a particular disadvantage compared with persons of the other sex, statistical data can be relied upon. The Court of Justice held that the national legislation at issue was not applicable to all workers affiliated to the different Spanish social security schemes but only those who had satisfied the conditions for the grant of at least two total occupational invalidity pensions (paragraph 43). Hence, in paragraph 46, the Court detailed its methodology for the determination of the data. The Court held that only the workers who have obtained the right to more than one total occupational invalidity pension need to be taken into account. Within that group, a comparison must be made between male workers who are allowed to combine those pensions and male workers who are prevented from doing so. The same comparison made be done for female workers. Once a proportion is obtained for male workers and one for female workers, they need to be compared in order to assess whether there is a significant difference between the proportion of male and female workers negatively affected by the legislation in question.

Although the data were submitted to the Court at its request during the proceedings, the Court warned that the data might be limited (paragraphs 48–51). The Court left it up to the referring court to verify the completeness and reliability of the data (paragraphs 53–55). If the referring court was to reach the conclusion that the national legislation at issue would constitute indirect discrimination based on sex, the Court of Justice offered guidance with regard to its potential justification. As in CJ v TGSS, the legitimate aim put forward by the Spanish government was essentially a budgetary one concerning the viability of the social security system. The Court provided the same answer as it did in CJ v TGSS. The Court found that while the long-term funding of the social security system could be considered as a legitimate social policy objective, the means to achieve that aim did not seem appropriate. Indeed, the Court noted that the combination of pensions under the same scheme, particularly where the worker concerned had acquired the right to both pensions due to her different contribution periods, did not seem to impact the budget of the State appreciably more than the combination of pensions under different schemes (paragraph 64).

The specificity of this case relates to the discussion on the methodology for determining the data in cases of indirect discrimination on grounds of sex. For the rest of its ruling, the Court followed its long series of judgments on the (lack of) compliance of the Spanish social security legislation with the principle of non-discrimination on grounds of sex. ²⁶

Discrimination on grounds of sex in cases of lack of index-related increases of (generous) pensions for civil servants: EB v BVAEB ²⁷

Similar to the Commission v Austria case discussed above, in EB v BVAEB, an index-related increase Austrian measure was under scrutiny. ²⁸ Although the indexation issue at hand differed from the case on the indexation of family benefits, the rationale of the Austrian government was the same: cutting public expenses to ensure the stability of its social security system.

Three male pensioners who had received particularly generous civil service pensions were refused by the BVAEB (insurance fund for civil servants) an index-related increase in their pensions. According to Article 711 of the Austrian general law on social security (ASVG), pensioners who receive a certain gross amount for their pensions do not benefit from the automatic index-related increase of pensions. As a result, two of the applicants’ pensions were not increased at all, while the third received a very small increase of 0.2989%. Since the vast majority of the pensioners affected by the measure were men, the applicants argued that the Austrian law was indirectly discriminatory on grounds of sex. The case went to the Austrian Supreme Administrative Court which sent a preliminary ruling question to the Court of Justice on the interpretation of the principle of equal pay between men and women enshrined in Article 157 TFEU and Article 5 of Directive 2006/54. ²⁹

Discrimination on grounds of sex in cases of calculation of occupational pensions is prohibited under Article 5(c) of Directive 2006/54. The Court recalled that cases of indirect discrimination can be established by any means, such as statistical evidence. There is indirect discrimination on grounds of sex when a greater proportion of people from one sex (in this case, men) are more affected than people from the other sex (in this case, women) unless the measure can be justified by objective factors, is appropriate, and does not go beyond what is necessary. The Court pointed out that the statistical evidence in this case was undisputed at national level and left the exercise of finding a disadvantage to the national court (paragraphs 48 and 50). Provided that the national court would find a particular disadvantage for men, the Court discussed the potential objective factors and appropriateness of the measure in order to determine whether the measure could be justified. Recalling that Member States enjoy a large margin of discretion in defining their measures of social and employment policies, the Court held that the objectives put forward by the Austrian government to ensure the long-term funding of retirement benefits and of closing the gap between pension levels could be regarded as legitimate (paragraphs 56–58). On the proportionality assessment, the Court considered that the measure was applied systematically and coherently (paragraphs 59–69).

An age limit laid down in the statutes of an organisation of workers for eligibility to stand as sector convenor falls within the scope of Directive 2000/78: A v HK Danmark and HK/Privat ³⁰

In A v HK Danmark and HK Privat, the Court of Justice applied a broad interpretation of the scope of the Anti-Discrimination Directive (2000/78). ³¹ A was recruited as a union representative in a local branch of a Danish organisation, HK/Privat. From 1993 onwards and every four years, she was elected as sector convenor until 2011, when she reached the maximum age of 63 for standing for the election, as laid down in the statutes of HK/Privat. A lodged a complaint with the Equal Treatment Board, claiming that she had been discriminated against on grounds of age. Uncertain whether the post of politically-elected sector convenor fall under the scope of the Anti-Discrimination Directive 2000/78, the High Court of Eastern Denmark (Østre Landsret) referred the question for preliminary ruling.

Pursuant to Article 3(1)(a), the Directive applies to all persons in relation to conditions of access to employment, self-employment or occupation. While it was not disputed that an age condition was a ‘condition of access’, there were opposing views between the parties on whether the post of politically-elected sector convenor could be considered as falling within the concept of ‘employment‘ or ‘occupation’ or whether those concepts should be solely applicable to ‘workers’ within the meaning of Article 45 TFEU. The Court considered that a broad interpretation to Article 3(1)(a) of Directive 2000/78 was required so that it should not be understood as being solely applicable to ‘workers’ within the meaning of Article 45 TFEU (paragraph 28). Instead, it should apply to conditions for access to any occupation (paragraph 27) in both private and public sectors, in whatever branch of activity (paragraph 29). Furthermore, the Court noted that the Directive does not explicitly exclude political posts from its scope (paragraph 38). Therefore, the Court stated that the method of recruitment has no bearing on the application of that Directive, neither does the political nature of the post (paragraphs 38-39).

Although not asked by the referring court, the Court of Justice added that the situation at hand also fell within the scope of Directive 2000/78 through its Article 3(1)(d). Article 3(1)(d) provides that the Directive applies to ‘involvement’ in an organisation of workers. The Court considered that standing for election as sector convenor, and holding that position once elected, constitutes ‘involvement’ within the meaning of Article 3(1)(d) of the Directive (paragraphs 49–51).

With these findings, the Court concluded that an age limit laid down in the statutes of an organisation of workers for eligibility to stand for election as sector convenor of that organisation falls within the scope of the Directive 2000/78 on the basis of both sub-section (a) and (d) of its Article 3(1) (paragraph 54).

Equal treatment in relation to compensation for untaken annual leave and holiday bonuses for temporary agency workers: Luso Temp ³²

Two workers were employed by Luso Temp under temporary agency contracts for approximately two years. After the end of their employment, the workers brought an action against Luso Temp for unpaid compensation for untaken annual leave days, as well as holiday bonuses. Luso Temp considered that temporary agency workers were not subject to the general provisions on paid leave. Consequently, they would be entitled to fewer paid leave days and a lower holiday bonus than those workers who were recruited directly by the company in which the temporary agency workers were working. The referring court, District Court of Braga (Tribunal Judicial da Comarca de Braga, Portugal) asked the Court of Justice whether, in these circumstances, the national legislation that led to the differential treatment of temporary agency workers and those recruited directly would be compatible under Directive 2008/104 on temporary agency work. ³³

First, the Court assessed whether the compensation for untaken paid annual leave and corresponding holiday bonuses falls within the meaning of ‘basic working and employment conditions’ under the equal treatment provision of Article 5(1) of Directive 2008/104. Based on its case law on the protection of temporary workers’ rights in the context of atypical work ³⁴ and organisation of working time, ³⁵ the Court found that the text and objectives of the Directive requires the inclusion of compensation for untaken paid annual leave and holiday bonuses to fall within the meaning of ‘basic working and employment conditions’ under Article 5(1).

Concerning the potential differential treatment, the Court of Justice left it up to the national court to establish the working and employment conditions, and more specifically the compensation for untaken annual paid leave that would be applicable to the temporary agency workers had they been recruited directly by the hiring company. Then the referring court should verify whether there is a difference in the entitlement to compensation for untaken annual paid leave between ‘directly recruited workers’ and temporary agency workers who perform the same job for the same duration in the hiring company (paragraph 50). On those verifications by the national court, the Court concluded that under Article 5(1) of the Directive, temporary agency workers must enjoy conditions that are at least equal to those that would be applicable to them if they had been recruited directly by that undertaking for the same position for the same period of time (paragraph 61).

Although it was the first time that the Court had to interpret the concept of ‘working […] conditions’ under Article 5(1) of Directive 2008/104, the Court relied extensively on its case law on other instruments such as the Framework Agreement on part-time work ³⁶ and the Framework Agreement on fixed-term work. ³⁷ It made a broad interpretation of ‘working […] conditions’ in light of Article 31 of the Charter, therefore requiring equal treatment between temporary agency workers and ‘normal’ workers when it comes to the compensation for untaken paid annual leave and corresponding holiday bonuses.