Key facts of the case:
Reference for a preliminary ruling – Equal treatment in employment and occupation – Directives 2000/78/EC and 2006/54/EC – Scope – Prohibition of indirect discrimination on grounds of age or sex – Justifications – National legislation providing for an amount to be withheld from pensions paid directly to their recipients by undertakings in which the State has a majority participation and for the cancellation of the indexation of the amount of those pensions – Articles 16, 17, 20 and 21 of the Charter of Fundamental Rights of the European Union – Applicability – Discrimination on grounds of property – Infringement of the freedom of contract – Infringement of the right to property – Article 47 of the Charter of Fundamental Rights – Right to an effective remedy.
Outcome of the case:
On those grounds, the Court (Third Chamber) hereby rules:
1) This request for a preliminary ruling concerns the interpretation of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ 2000 L 303, p. 16), of Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (OJ 2006 L 204, p. 23) and of Articles 16, 17, 20, 21 and 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’).
30) In those circumstances the Landesgericht Wiener Neustadt (Wiener Neustadt Regional Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
3. Are the provisions of the [Charter], in particular the prohibitions of discrimination laid down in Articles 20 and 21 of the Charter, to be applied to occupational pensions even if the Member State’s legislation does not cover forms of discrimination as prohibited pursuant to [Directives 79/7, 2000/78 and 2006/54]?
4. Are Article 20 et seq. [of the Charter] to be interpreted as precluding legislation of a Member State that implements Union law within the meaning of Article 51 [of the Charter] and that discriminates, on grounds of sex, age, property or on other grounds, such as, for example, on the basis of the former employer’s current ownership, against persons entitled under private law to an occupational pension as compared with other persons entitled to an occupational pension, and does the [Charter] prohibit such forms of discrimination?
5. Are national rules that place only a small group of people who are contractually entitled to an occupational pension in the form of a direct defined benefit pension under an obligation to make financial payments to their former employer also discriminatory on the basis of property within the meaning of Article 21 [of the Charter] if they cover only people with relatively large occupational pensions?
6. Is Article 17 [of the Charter] to be interpreted as precluding legislation of a Member State that provides for expropriatory intervention, directly by law and without compensation, in an agreement relating to an occupational pension in the form of a ‘direct defined benefit pension’ entered into between two private parties to the detriment of a former employee of a company that has made provision for the payment of the occupational pension and is not experiencing financial difficulties?
8) Is Article 47 [of the Charter] to be interpreted as precluding legislation of a Member State that expropriates directly by law and makes no provision for any challenge to the expropriation other than by way of a claim against the beneficiary of the expropriation (the former employer and the debtor under the pension contract) for damages and reimbursement of the expropriated sum of money?’
76) By its third to seventh questions, which it is appropriate to examine together, the referring court asks, in essence, whether Articles 16, 17, 20 and 21 of the Charter must be interpreted as precluding legislation of a Member State pursuant to which recipients of a pension that a State-controlled undertaking is contractually bound to pay them directly and that exceeds certain thresholds set in that legislation are deprived of (i) an amount withheld from the part of that pension exceeding one of those thresholds and (ii) the benefit of a contractually agreed indexation of that pension.
77) In that regard, it must be borne in mind that the scope of the Charter is defined in Article 51(1) thereof, providing that, with regard to action by the Member States, the provisions of the Charter are addressed to those States only when they are implementing EU law.
78) It should also be borne in mind that the fundamental rights guaranteed by the Charter are applicable in all situations governed by EU law and that they must, therefore, be complied with inter alia where national legislation falls within the scope of EU law (judgment of 21 May 2019, Commission v Hungary (Rights of usufruct over agricultural land), C‑235/17, EU:C:2019:432, paragraph 63 and the case-law cited).
81) It follows that the national legislation at issue constitutes implementation of EU law within the meaning of Article 51(1) of the Charter, so that it must respect the fundamental rights guaranteed by the latter.
82) In that regard, in the first place, Article 20 of the Charter enshrines the principle that everyone is equal before the law. Under Article 21(1) of the Charter, any discrimination based on grounds of, inter alia, sex, age or property is prohibited.
85) So far as concerns discrimination on grounds of property, assuming that it can be shown that the difference in treatment identified in paragraph 46 of the present judgment – namely that the national legislation at issue affects only pensions the amount of which exceeds a certain threshold – puts persons with a certain amount of property at a particular disadvantage, such a situation is capable of being justified in the present case for the reasons set out in paragraphs 61 to 66 of the present judgment, subject to the verifications to be carried out by the referring court. To that extent, such legislation does not involve infringement of Articles 20 and 21(1) of the Charter in that respect.
86) As regards, in the second place, Article 16 of the Charter, it should be borne in mind that the freedom to conduct a business enshrined in that article includes the freedom of contract, which is the subject of the seventh question referred for a preliminary ruling (see, to that effect, judgment of 22 January 2013, Sky Österreich, C‑283/11, EU:C:2013:28, paragraph 42). As was noted by the Advocate General in point 110 of her Opinion, that freedom includes the freedom to fix or agree the price for a service.
88) However, the freedom to conduct a business does not constitute an unfettered prerogative, but must be examined in the light of its function in society, and may thus be subject to interventions on the part of public authorities which may limit the exercise of economic activity in the public interest. In addition, in accordance with Article 52(1) of the Charter, any limitation on the exercise of the rights and freedoms recognised by the latter must be provided for by law and respect the essence of those rights and freedoms and, in compliance with the principle of proportionality, must be necessary and actually meet objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others (see, to that effect, judgment of 4 May 2016, Pillbox 38, C‑477/14, EU:C:2016:324, paragraphs 157 to 160).
89) In that regard, it must be stated that the limitation on the freedom of contract referred to in paragraph 87 of the present judgment has been provided for by law and respects the essence of that freedom, as it leads to only a very small part of the occupational pensions negotiated and agreed between the undertaking concerned and its workers being withheld. Moreover, subject to verification by the referring court, such withholding reflects the objectives of general interest of ensuring the long-term funding of State-funded retirement pensions and narrowing the gap between the levels of those pensions. Lastly, as is apparent from paragraphs 61 to 66 of the present judgment, it must be held that that limitation complies with the principle of proportionality, so that it is not contrary to Article 16 of the Charter.
90) Regarding, in the third place, Article 17(1) of the Charter, enshrining the right to property, it should be borne in mind that the protection granted by that provision applies to rights with an asset value creating an established legal position under the legal system, enabling the holder to exercise those rights autonomously and for his or her benefit (see, to that effect, judgment of 22 January 2013, Sky Österreich, C‑283/11, EU:C:2013:28, paragraph 34).
91) It must be held that the conclusion of a contract relating to an occupational pension generates a proprietary interest with respect to the recipient of that pension. In addition, the withholding by the undertaking concerned of part of the contractually agreed amount and the non-application of the contractually agreed indexation affect that proprietary interest. Nevertheless, the right guaranteed by Article 17(1) of the Charter is not absolute, so that it cannot be interpreted as entitling a person to a pension of a particular amount (see, to that effect, judgment of 13 June 2017, Florescu and Others, C‑258/14, EU:C:2017:448, paragraphs 50 and 51).
93) Having regard to the foregoing, the answer to the third to seventh questions is that Articles 16, 17, 20 and 21 of the Charter must be interpreted as not precluding legislation of a Member State pursuant to which recipients of a pension that a State-controlled undertaking is contractually bound to pay them directly and that exceeds certain thresholds set in that legislation are deprived of (i) an amount withheld from the part of that pension exceeding one of those thresholds and (ii) the benefit of a contractually agreed indexation of that pension.
94) By its eighth question, the referring court asks, in essence, whether Article 47 of the Charter must be interpreted as precluding a Member State’s failure to provide, in its legal system, for a free-standing legal remedy for, primarily, an examination of whether national provisions implementing that right are compatible with EU law.
96) However, the Court has held that the principle of effective judicial protection guaranteed by Article 47 of the Charter does not require it to be possible, as such, to bring a free-standing action which seeks primarily to dispute the compatibility of national provisions with EU law, provided one or more legal remedies exist, which make it possible to ensure, indirectly, respect for an individual’s rights under EU law (judgment of 21 November 2019, Deutsche Lufthansa, C‑379/18, EU:C:2019:1000, paragraph 61 and the case-law cited).
98) Consequently, the answer to the eighth question is that Article 47 of the Charter must be interpreted as not precluding a Member State’s failure to provide, in its legal system, for a free-standing legal remedy for, primarily, an examination of whether national provisions implementing that right are compatible with EU law, provided that it is possible for such examination to take place indirectly.
99) Since these proceedings are, for the parties to the main proceedings, a step in the action before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
On those grounds, the Court (Third Chamber) hereby rules: