Douglas Harvey Barber v Guardian Royal Exchange Assurance Group.

• Jurisdiction: European Union
• Date: 30 January 1990
• Court: Court of Justice (European Union)

61988C0262

Opinion of Mr Advocate General Van Gerven delivered on 30 January 1990. - Douglas Harvey Barber v Guardian Royal Exchange Assurance Group. - Reference for a preliminary ruling: Court of appeal (England) - United Kingdom. - Social policy - Equal pay for men and women - Compulsory redundancy - Early payment of a retirement pension. - Case C-262/88.

European Court reports 1990 Page I-01889
Swedish special edition Page 00407
Finnish special edition Page 00425

Opinion of the Advocate-General

Mr President,

Members of the Court,

1 . The questions which the Court of Appeal has referred to the Court arose in a dispute between Mr Douglas Harvey Barber and the Guardian Royal Exchange Assurance Group ( hereinafter referred to as "the Guardian ") concerning the compatibility of the conditions in which Mr Barber was dismissed with the Sex Discrimination Act 1975 and Community law .

Background

2 . In 1948 Mr Barber became an employee of the Car & General Insurance Corporation Limited ( hereinafter referred to as "C & G "), a company which was subsequently taken over by the Guardian . As from 1970 Mr Barber was Deputy Head of the Guardian' s South Yorkshire Claims Bureau at Sheffield . That claims bureau was closed by the Guardian . On 31 December 1980 Mr Barber was dismissed by reason of redundancy together with a number of other employees . He was aged 52 at the time .

3 . Mr Barber was initially a member of the C & G group' s pension fund, and subsequently became a member of the Guardian Royal Exchange Pension Fund (" the pension fund "). That fund forms part of the pension scheme set up by the Guardian for its employees . It is a non-contributory occupational pension scheme, namely an occupational pension scheme financed solely by the employer' s contributions . The Guardian' s pension scheme is regarded by the competent United Kingdom authority ( the Occupational Pensions Board ) as a "contracted-out" scheme within the meaning of Part III of the Social Security Pensions Act 1975 . This means that the "contracted-out scheme" is a substitute for the earnings-related part of the State pension scheme . ( 1 )

4 . The normal pensionable age for employees of the Guardian not covered by a separate section of the pension scheme is 65 for men and 60 for women . However, for members of the Guardian' s pension fund who, like Barber, were previously members of the C & G' s pension fund, the normal pensionable age is 62 for men and 57 for women . The pension scheme further provides that all members of the pension fund may claim an immediate pension not only on reaching the normal pensionable age but also "on being retired" by the Guardian at any time during the 10 years preceding that date . ( 2 )

5 . The staff handbook issued by the Guardian states that special terms are applicable in the event of the termination of an employee' s contract of employment before he or she reaches the normal pensionable age . On that point, the staff handbook refers to the Guardian Royal Exchange Assurance Guide to Severance Terms (" the Severance Terms "), which provides that in the case of staff with at least 10 years' service the Severance Terms are deemed to form part of their contract of employment .

Where the contract of employment of the staff concerned is terminated on grounds of early retirement or redundancy and their ages do not exceed 65 ( for men ) or 60 ( for women ), they may claim application of the special conditions set out in the Severance Terms . Two of those conditions are relevant in this case, namely pension entitlement ( see paragraph 6 below ) and terminal payment ( see paragraph 7 below ).

6 . The Severance Terms confer on members of the pension fund who have attained the age of 55 ( for men ) or 50 ( for women ) - that is to say 10 years or, in the case of members of the previous C & G pension fund, 7 years preceding normal pension date - entitlement to an immediate pension to be calculated in accordance with the rules of the pension fund . In the event of a redundancy, those employees are regarded by the Guardian as having been "retired ". In accordance with the rule set out above ( paragraph 4 ) concerning entitlement to an immediate pension for staff "on being retired" at any time during the 10 years preceding normal pension date, the pension fund is obliged to grant an immediate pension to the employees concerned . In the case of members of the pension fund who have been employed by the Guardian for 10 years or more but have not attained the age of 55 ( for men ) or 50 ( for women ), the Severance Terms merely grant entitlement to a deferred pension in accordance with the rules of that fund . According to that provision, the Guardian does not regard such employees who are made redundant as having been "retired", and they can ( could ) not therefore rely on the aforesaid rule concerning retirement during the 10 years preceding normal pension date for the purpose of receiving an immediate pension . Accordingly, such employees who are made redundant actually receive pension benefits only on attaining the normal pensionable age .

7 . The Severance Terms further provide that, in the event of a redundancy, employees receive compensation, the amount of which depends on whether or not the person concerned is entitled to claim an immediate pension . If that is the case, the employee receives a terminal payment equal to the statutory redundancy payment increased by a percentage thereof which varies according to the number of years of service . If there is no entitlement to an immediate pension, employees receive, in addition to the statutory redundancy payment, an amount equal to four to five weeks' salary - depending on the number of years of service - for each complete year of accredited service with the firm, not exceeding 104 weeks' salary .

8 . As stated earlier, Mr Barber was dismissed by the Guardian by reason of redundancy at the age of 52 . He was not granted an immediate pension . He received from the Guardian a net terminal sum amounting to UKL 18 597, including the statutory redundancy payment of UKL 3 060 . Furthermore, he was granted a deferred pension payable as from the normal pensionable age, namely 62 . If Mr Barber had been a woman aged 52, he would have been regarded by the Guardian as having been "retired" and would therefore have received an immediate pension, although the amount of the terminal payment would have been lower .

9 . Mr Barber considered that he had fallen victim to discrimination . He instituted proceedings against the Guardian for breach of the Sex Discrimination Act 1975 and Community law before an Industrial Tribunal and, after his claim was dismissed, he appealed to the Employment Appeal Tribunal . That tribunal pointed out that Mr Barber may well be entitled to claim an immediate pension from the trustees of the pension fund on the ground that he was made redundant during the 10 years preceding the normal pensionable date ( paragraph 4 above ) and that, even though the contract of employment was terminated by reason of his redundancy, his position could still be equated with that of a "retired" employee . However, the Employment Appeal Tribunal considered that there was no need for it to decide the issue since the trustees of the pension fund were not parties to the proceedings before it .

The Employment Appeal Tribunal further considered that Mr Barber' s claim was unfounded for three reasons : ( 1 ) Mr Barber could not base his claim on the prohibition of discrimination laid down in the Sex Discrimination Act 1975 because, even though there was discrimination, that prohibition, according to Section 6(4 ) of the Act, was inapplicable to "provision in relation to death or retirement"; ( 2 ) in Burton ( 3 ) the Court of Justice decided that the question whether a person is entitled to a benefit under a pension scheme is one of access to pension benefits which falls to be resolved not by the principle of equal pay but by the principle of equal treatment; ( 3 ) finally, Directive 76/207 on equal treatment was not directly applicable in the United Kingdom, nor could it be relied upon for the purpose of interpreting Section 6(4 ) of the Sex Discrimination Act, inasmuch as it was unclear what the consequences of the Burton judgment in conjunction with the directive on equal treatment were with regard to a claim under an occupational pension scheme .

10 . Mr Barber appealed against the judgment of the Employment Appeal Tribunal to the Court of Appeal, which asked the Court to give a preliminary ruling on the following questions :

"( 1 ) When a group of employees are made compulsorily redundant by their employer in circumstances similar to those of this case and receive benefits in connection with that redundancy, are all those benefits 'pay' within the meaning of Article 119 of the EEC Treaty and the Equal Pay Directive ( 75/117/EEC ), or do they fall within the Equal Treatment Directive ( 76/207/EEC ), or neither?

( 2 ) Is it material to the answer to Question 1 that one of the benefits in question is a pension paid in connection with a private occupational pension scheme operated by the employer (' a private pension' )?

( 3 ) Is the principle of equal pay referred to in Article 119 and the Equal Pay Directive infringed in the circumstances of the present case if :

( a ) a man and a woman of the same age are made compulsorily redundant in the same circumstances and, in connection with that redundancy, the woman receives an immediate private pension but the man receives only a deferred private pension, or

( b ) the total value of the benefits received by the woman is greater than the total value of the benefits received by the man?

( 4 ) Are Article 119 and the Equal Pay Directive of direct effect in the circumstances of this case?

( 5 ) Is it material to the answer to Question 3 that the woman' s right to...