Evidence from CJEU case law
| Author | Directorate-General for Justice and Consumers (European Commission), EY |
| Pages | 42-89 |
EVALUATION ON THE APPLICATION OF DIRECTIVE 79/7/EEC ON THE PROGRESSIVE
IMPLEMENTATION OF THE PRINCIPLE OF EQUAL TREATMENT FOR MEN AND WOMEN IN MATTERS OF
SOCIAL SECURITY
42
The Directive requires the adoption of the principle of equal treatment in Member States’
social security systems, which has a major effect on the definition of new regulatory
provisions. The implementation of a fundamental right, such as gender equality, does not
generate direct monetary costs49 for citizens or businesses but mainly indirect non-
monetary benefits for all.
administration of those Member States which amended non-compliant regulatory
frameworks. For citizens and businesses the costs are mainly indirect (i.e. long-term
social security costs related to taxation) and cannot be isolated and associated to the
Directive.
In addition, as regards Member States entering the EU after 198450 (i.e. after the
expiration date for transposition), the process of compliance with the Directive occurred
in conjunction with the accession process. Thus, the quantification of costs was not
feasible due to the complexity of isolating any cost related to the Directive from the
overall costs hold by the Member State during the accession process.
In terms of measurement of the benefits, the implementation of a fundamental right
generates non-monetisable benefits51, which, by definition, cannot be isolated and
quantified. This means that benefits are mainly related to a generally increased well-
being of the population which cannot be directly considered as a direct and specific
outcome of the Directive.52
Thus, our analysis has been limited to a discussion on the beneficiaries of the
implementation of the Directive and reports the opinion of experts on the burden
generated on public administrations which contributed to its implementation.
5 EVIDENCE FROM CJEU CASE LAW
Regulation of social security systems at both European and Member State levels has
been, and continues to be, complex. Jurisprudence of the CJEU has played a key role in
interpreting the Directive and associated European legislation in the aim of a progressive
49 By “direct costs” we refer to regulatory charges (including fees, levies, taxes), substantive compliance costs
(costs requiring investments and expenses faced by businesses and citizens in order to comply with the
regulation) and administrative burdens - which are borne by businesses, citizens, civil society organisations and
also public authorities as a result of administrative activities performed to comply with information obligations
included in legal rules (European Commission, Better Regulation Toolbox, http://ec.europa.eu/smart-
regulation/guidelines/toc_tool_en.htm).
50 In 1986: Spain and Portugal; in 1995: Austria, Finland, Sweden; in 2004: Cyprus, the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia; in 2007: Bulgaria and Romania; in 2013:
Croatia.
51 Renda, A., Sc hrefler, L., Luchetta, G., & Zavatta, R. (2013). Assessing the Costs and Benefits of Regulation.
Bruxelles: Centre for European Policy Studies. http://ec.europa.eu/smart-regulation/impact/commission_gui
delines/docs/131210_cba_study_sg_final.pdf (Last update: 01.06. 2014).
52 The principle of equal treatment is grounded in the Charter of F undamental Rights of the European Union
(art. 21 on “Non-discrimination” and art. 23 on “Equality between women and men”) thus the overall
improvement in terms of well-being generated by the non-discrimination between women and men is also due
to the implementation of this fundamental right in the regulatory framework of each Member State.
EVALUATION ON THE APPLICATION OF DIRECTIVE 79/7/EEC ON THE PROGRESSIVE
IMPLEMENTATION OF THE PRINCIPLE OF EQUAL TREATMENT FOR MEN AND WOMEN IN MATTERS OF
SOCIAL SECURITY
43
implementation of the principle of equal treatment in this area. This helped to deal with
the high complexity of both EU and Member States’ regulations concerni ng social security
systems.
As evident in CJEU jurisprudence, complexity is related – among other aspects – to the
interplay between the concept of equal treatment in employment conditions and social
security and the concept of equal pay, as well as to interpretations of the scope and
The key decisions of the CJEU have helped to clarify some aspects of complexity and in
interpreting the Directive’s provisions.
This section focuses on how the jurisprudence of the CJEU has, at least to some extent,
impacted upon the application of Directive 79/7/EEC with a view toward highlighting how
key concepts ought to operate. Specific relevance is given to those aspects that impact
the evolution of the scope and modernisation of the Directive.
The analysis also provides input to the Member State-level analysis presented in chapter
6.
5.1 The context of statutory social security
Box 7 – Synthesis of case law on pay and statutory social security
The CJEU case law has first of all clarified the distinction between pay, as enshrined in Article 157
TFEU, and statutory social security, clarifying the context of the latter. In summary:
What is pay and what is social security? ‘[S]ocial security schemes or benefits directly
governed by legislation without any element of agreement within the undertaking or the
occupational branch concerned, which are obligatorily applicable to general categories of
workers’53 do not fall within the concept of pay within the meaning of Article 157 TFEU.
What is occupational social security? Schemes applying only to certain categories of
workers, ‘even if [...] are established in conformity with national legislation and consequently
satisfy the conditions laid down by it for recognition as contracted-out schemes’ cannot be
excluded from the concept of pay’.54 In particular, ‘[a] though the concept of pay within the
meaning of Article 141 [now 157 TFEU] of the Treaty does not encompass social security
benefits, it is now clearly established that a pension scheme for public servants falls within the
scope of the principle of equal pay if the benefits payable under the scheme are paid to the
worker by reason of his/her employment relationship with the public employer, notwithstanding
the fact that such scheme forms part of a general statutory scheme’.55
Are privately managed statutory social security schemes covered by the Directive?
Statutory social security schemes established for the general working population, which are
privately managed according to national legislation, are covered by the Directive (for example
53 Case 80/70, Gabrielle Defrenne v Belgian State, 1 [1971] ECR 445.
54 Case C-262/88, Douglas Harvey Barber v Guardian Royal Exchange Assurance Group , ECR 1990 Page I-
01889.
55 Directive 2006/54/EC recital 14.
EVALUATION ON THE APPLICATION OF DIRECTIVE 79/7/EEC ON THE PROGRESSIVE
IMPLEMENTATION OF THE PRINCIPLE OF EQUAL TREATMENT FOR MEN AND WOMEN IN MATTERS OF
SOCIAL SECURITY
44
1st pillar bis pension schemes and private insurance companies managing statutory social
security).56
May redundancy schemes be covered by the derogations of the Directive? A voluntary
compulsory/mass redundancy should be considered as dismissal and therefore fall under the
scope of Directive 2006/54/EC.57
May tax concession be covered by the derogations of the Directive ? Tax concessions do
not fall under the scope of Directive 79/7/EEC in that they are not social security benefits.58
Besides clarifying the scope of the Directive, from a more analytical perspective, Case Barber
showcases how the jurisprudence of the CJEU may influence the evolution and modernisation of the
EU legislation, overshadowing some of its provisions, as was the case for the derogations set by
Directive 86/378/EEC, absorbed after Barber within the principle of equal pay and thereby deprived
of their effect.
Most notably, Case X provides input to the modernisation of the Directive by clarifying that
statutory social security remains within its scope also when it is privately managed, a solution that
gains ever more popularity.
Section 2.1 provides a broad overview on the development of EU legislation in the field of
gender equality, highlighting how the concepts of equal pay and equal treatment have
evolved.
Their development helped to clarify the respective scope of the concept of equal pay,
occupational social security and equal treatment in statutory social security. The case law
on the theme is particularly copious.
The landmark decision of the CJEU in this area was Defrenne,59 which clarified that
‘although consid eration in the nature of social security benefits is not in
principle alien to the concept of pay, there cannot be brought within this
concept, as defined in Article 119 [now Article 157 TFEU], social security schemes or
benefits, in particular retirement pensions, directly governed by legislation without any
element of agreement within the undertaking or the occupational branch concerned,
which are obligatorily applicable to general categories of workers’. It is important from
the outset to identify what is governed by Directive 79/7/EEC and what is not. Equal pay,
occupational social security and equal treatment in employment conditions fall outside of
security. This report now turns to consider case law decided before the CJEU which has
helped to shape the approach to social security through judgments that identify
distinctions between these different contexts.
56 Case C-318/13, Proceedings brought by X, ECLI:EU:C:2014:2133, Para 25.
57 See section 5.1.1.
58 See section 5.1.4.
59 Case 80/70, Gabrielle Defrenne v Belgian State, 1 [1971] ECR 445.
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