JUDGMENT OF 14. 12. 1995 CASE C-317/93 JUDGMENT OF THE COURT 14 December 1995 * In Case C-317/93, REFERENCE to the Court under Article 177 of the EEC Treaty by the Sozialgericht Hannover (Germany) for a preliminary ruling in the proceedings pending before that court between Inge Nolte and Landesversicherungsanstalt Hannover, on the interpretation of Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (OJ 1979 L 6, p. 24), THE COURT, composed of: G. C. Rodriguez Iglesias, President, C. N. Kakouris (Rapporteur), D. A. O. Edward and G. Hirsch (Presidents of Chambers), F. A. Schockweiler, J. C. Moitinho de Almeida, P. J. G. Kapteyn, J. L. Murray, P. Jann, H. Ragnemalm and L. Sevón, Judges, * Language of the case: German. I - 4650
NOLTE v LANDESVERSICHERUNGSANSTALT HANNOVER Advocate General: P. Léger, Registrar: D. Louterman-Hubeau, Principal Administrator, after considering the written observations submitted on behalf of: Landesversicherungsanstalt Hannover, by Jörg Kayser, Director, the German Government, by Ernst Röder, Ministerialrat in the Federal Ministry of Economic Affairs, acting as Agent, the United Kingdom, by S. Lucinda Hudson, Assistant Treasury Solicitor, acting as Agent, and Nicholas Paines, Barrister, the Commission of the European Communities, by Karen Banks, of its Legal Service, and Horstpeter Kreppel, a German civil servant seconded to its Legal Service, acting as Agents, having regard to the Report for the Hearing, after hearing the oral observations of the Landesversicherungsanstalt Hannover, represented by Jörg Kayser; the German Government, represented by Ernst Röder; the Irish Government, represented by Donal O'Donnell, Barrister; the United Kingdom, represented by Nicholas Paines; and the Commission, represented by Horstpeter Kreppel, at the hearing on 8 March 1995, I - 4651
JUDGMENT OF 14. 12. 1995 CASE C-317/93 after hearing the Opinion of the Advocate General delivered at the sitting on 31 May 1995, gives the following Judgment 1 By order of 25 May 1993, received at the Court on 16 June 1993, the Sozialgericht (Social Court) Hannover referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (OJ 1979 L 6, p. 24, hereinafter 'the directive'). 2 Those questions were raised in proceedings between Mrs Nolte and the Landesversicherungsanstalt Hannover (hereinafter 'the LVA') in which she seeks the annulment of the decision by which that institution rejected her application for retirement with an invalidity pension. 3 It appears from the order for reference that, according to German law on social insurance, an insured person suffering from incapacity to work is entitled to the grant of an invalidity pension if he can show that he paid at least three years' contributions in the five years preceding the onset of invalidity in respect of employment or an activity subject to compulsory insurance. 4 Those conditions were laid down by Paragraph 1247(2a) in conjunction with indent 1 of the first sentence of Paragraph 1246(2a) of the Reichsversicherungsordnung (the former Reich Insurance Code, hereinafter 'the RVO'), which have been repealed but remain applicable to applications submitted before 31 March 1992. I - 4652
NOLTE v LANDESVERSICHERUNGSANSTALT HANNOVER The provisions at present in force (Paragraph 44 of Volume VI of the Sozialgesetzbuch, Social Insurance Code, hereinafter 'the SGB') have the same content as the paragraphs repealed, with the exception of some drafting changes. 5 In addition, under Paragraph 1228(4) of the RVO, which corresponds to the present provisions of Paragraph 8(1)(1) of Volume IV of the SGB in conjunction with Paragraph 5(2) of Volume VI of the SGB, minor employment is not subject to the statutory old-age insurance scheme. 6 According to the case file, employment is regarded as being minor where it is regularly engaged in for fewer than 15 hours a week and the monthly remuneration does not regularly exceed one-seventh of the average monthly salary of persons insured under the statutory old-age insurance scheme during the preceding calendar year. That ceiling is adjusted annually. In 1993 it was DM 530 a month in the original Länder and DM 390 in the new Länder. 7 Mrs Nolte, who was born on 14 May 1930, worked until 1965 and paid compulsory insurance contributions. On account of having to bring up her children and subsequently having been in minor employment, she ceased paying compulsory contributions. Between 1977 and March 1987, when she stopped working, Mrs Nolte continued to be in minor employment (as a cleaner). 8 Since June 1988 she has been afflicted by a severe illness, with the result that she is no longer able to undertake regular paid work. 9 On 28 November 1988 she applied to the LVA for retirement and an invalidity pension. I - 4653
JUDGMENT OF 14. 12. 1995 CASE C-317/93 10 By decision of 14 August 1989, the LVA rejected her application on the ground that, out of the 60 calendar months preceding the onset of invalidity, Mrs Nolte could not show that she had paid 36 months' contributions in respect of employment subject to compulsory insurance. 1 1 Following an unsuccessful complaint, Mrs Nolte brought proceedings before the Sozialgericht Hannover for the annulment of the decision rejecting her complaint. 12 The Sozialgericht takes the view that the exclusion of minor employment from compulsory old-age insurance constitutes indirect discrimination contrary to Article 4(1) of the directive and that the plaintiff in the main proceedings should be treated as if she had paid contributions to the old-age insurance scheme before the onset of invalidity. 13 Article 4(1) provides as follows: 'The principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns: the scope of the schemes and the conditions of access thereto, the obligation to contribute...'. I - 4654
NOLTE v LANDESVERSICHERUNGSANSTALT HANNOVER 1 4 Considering that the outcome of the proceedings turned on the interpretation of the directive, the Sozialgericht Hannover stayed the proceedings and referred the following questions to the Court for a preliminary ruling: '1. Does a national provision which excludes employment normally involving less than 15 hours per week and remuneration of up to one-seventh of the monthly reference amount from the statutory old-age insurance scheme Paragraph 8(1)(1) of SGB IV, Paragraph 5(2)(1)(1) of SGB VI entail discrimination on grounds of sex contrary to Article 4(1) of Directive 79/7/EEC if considerably more women than men are thereby affected? 2. If the answer to Question 1 is in the affirmative, is Article 4(1) of Directive 79/7/EEC to be interpreted as meaning that entitlement to a pension on account of incapacity for work (Paragraph 44(1)(2) of SGB VI) exists even in the absence of compulsory contribution periods if, in the five years prior to the occurrence of the incapacity for work, employment of up to 15 hours a week, not subject to social insurance under national law, has been engaged in for at least three years, in the course of which the stipulated earnings thresholds have not been exceeded, and the exclusion from benefits associated with this form of part-time work affects considerably more women than men?' 15 Before answering those questions, it must be considered whether a person in Mrs Nolte's situation who is in employment of the type referred to in the national court's questions falls within the scope of the directive. I - 4655
Scope ratione personae of the directive JUDGMENT OF 14. 12. 1995 CASE C-317/93 16 According to Article 2, the directive 'shall apply to the working population including self-employed persons, workers and self-employed persons whose activity is interrupted by illness, accident or involuntary unemployment and persons seeking employment and to retired or invalided workers and self-employed persons'. 17 It follows from that provision that the definition of the working population is very broad, since it covers any worker, including persons who are merely seeking employment. In contrast, according to the Court's case-law, the directive does not apply to persons who have never been available for employment or who have ceased to be available for a reason other than the materialization of one of the risks referred to by the directive (Joined Cases 48/88, 106/88 and 107/88 Achterberg-te Riele and Others v Sociale Verzekeringsbank [1989] ECR 1963, paragraph 11). 18 The German Government argues that persons in minor employment are not part of the working population within the meaning of Article 2 of the directive, in particular because the small earnings which they receive from such employment are not sufficient to satisfy their needs. 19 That argument cannot be upheld. The fact that a worker's earnings do not cover all his needs cannot prevent him from being a member of the working population. It appears from the Court's case-law that the fact that his employment yields an income lower than the minimum required for subsistence (see Case 53/81 Levin v Staatssecretaris van Justitie [1982] ECR 1035, paragraphs 15 and 16) or normally does not exceed 18 hours a week (see Case C-102/88 Ruzius-Wilbrink [1989] ECR 4311, paragraphs 7 and 17) or 12 hours a week (see Case 139/85 Kempf v Staatssecretaris van Justitie [1986] ECR 1741, paragraphs 2 and 16) or even 10 hours a week (see Case 171/88 Rinner-Kühn [1989] ECR 2743, paragraph 16) does not prevent the person in such employment from being regarded as a worker I - 4656
NOLTE v LANDESVERSICHERUNGSANSTALT HANNOVER within the meaning of Article 48 (the Levin and Kempf cases) or Article 119 of the EEC Treaty (the Rinner-Kühn case) or for the purposes of Directive 79/7 (the Ruzius-Wilbrink case). 20 The German Government further argues that a different view ought to be taken in this case, since what is at issue is not the concept of a worker within the meaning of Article 48 of the Treaty, as in particular in the Levin case, but the concept of a worker within the meaning of social security law. The definition of the concept of a worker in the latter sphere falls within the competence of the Member States. 21 It should be observed in that connection that as long ago as the judgment in Case 75/63 Hoekstra (née Unger) [1964] ECR 177 (paragraph 1 of the operative part) the Court ruled that the concept of 'wage-earner or assimilated worker' referred to in Regulation No 3 of the Council of 25 September 1958 concerning social security for migrant workers (Journal Officiel 1958, 30, p. 561) had, like the term 'worker' in Articles 48 to 51, a Community meaning. Consequently, the fact that the Levin, Kempf and Rinner-Kühn cases do not relate to social security law and are not concerned with the interpretation of Article 2 of Directive 79/7 cannot call in question the finding made in paragraph 19, since those judgments define the concept of a worker in the light of the principle of equal treatment. 22 It follows that persons in minor employment of the type referred to in the national court's questions are part of the working population within the meaning of Article 2 of the directive and therefore fall within its scope ratione personae. 23 The German Government and the United Kingdom observe that in this case Mrs Nolte does not fall within the scope ratione personae of the directive for another reason: she had completely stopped working, for reasons which are not known, more than a year before she became incapable of working, and there is nothing to suggest that she was looking for work at that time. I - 4657
JUDGMENT OF 14. 12. 1995 CASE C-317/93 24 In putting forward that argument, Germany and the United Kingdom are in fact contesting the utility of the national court's questions, since, in their view, Mrs Nolte is excluded in any event from the scope ratione personae of the directive. However, it should be noted that, according to the order for reference, Mrs Nolte could be granted an invalidity pension under the German legislation if the periods during which she was in minor employment were to be regarded as being subject to compulsory insurance. 25 Consequently, the national court, which alone is competent to determine whether the questions referred are relevant, considers that the reply to those questions is useful to it in order to decide the case pending before it. The first question 26 By this question, the national court essentially seeks to establish whether Article 4(1) of the directive is to be interpreted as meaning that national provisions under which employment regularly consisting of fewer than 15 hours' work a week and regularly attracting remuneration of up to one-seventh of the average monthly salary is excluded from the statutory old-age insurance scheme constitute discrimination on grounds of sex where considerably more women than men are affected thereby. 27 It is common ground that the national provisions at issue in the main proceedings are not directly discriminatory, since they do not exclude persons in minor employment from the statutory scheme at issue on the ground of their sex. It must therefore be considered whether such provisions may constitute indirect discrimination. 28 As the Court has consistently held, Article 4(1) of the directive precludes the application of a national measure which, although formulated in neutral terms, I - 4658
NOLTE v LANDESVERSICHERUNGSANSTALT HANNOVER works to the disadvantage of far more women than men, unless that measure is based on objective factors unrelated to any discrimination on grounds of sex. That is the case where the measures chosen reflect a legitimate social policy aim of the Member State whose legislation is at issue, are appropriate to achieve that aim and are necessary in order to do so (Case C-343/92 De Weerd, née Roks and Others [1994] ECR I-571, paragraphs 33 and 34). 29 In this case the German Government argues, in particular, that the exclusion of persons in minor employment from compulsory insurance corresponds to a structural principle of the German social security scheme. 30 In support of the German Government's arguments, the United Kingdom and the Irish Government stressed in particular that contributory schemes, such as that at issue, require equivalence to be maintained between the contributions paid by employees and employers and the benefits paid in the event of the materialization of one of the risks covered by the scheme. The structure of the scheme could not be maintained in its present form if the provisions in question had to be abolished. Serious problems would arise as a result, and the scheme would no longer be able to function on an exclusively contributory basis. 31 The German Government further explains that there is a social demand for minor employment, that it considers that it should respond to that demand in the context of its social policy by fostering the existence and supply of such employment and that the only means of doing this within the structural framework of the German social security scheme is to exclude minor employment from compulsory insurance. 32 In addition, the German Government contends that the jobs lost would not be replaced by full-or part-time jobs subject to compulsory insurance. On the contrary, there would be an increase in unlawful employment ('black' work) and a rise I - 4659
JUDGMENT OF 14. 12. 1995 CASE C-317/93 in circumventing devices (for instance, false self-employment) in view of the social demand for minor employment. 33 The Court observes that, in the current state of Community law, social policy is a matter for the Member States (see Case C-229/89 Commission v Belgium [1991] ECR I-2205, paragraph 22). Consequently, it is for the Member States to choose the measures capable of achieving the aim of their social and employment policy. In exercising that competence, the Member States have a broad margin of discretion. 34 It should be noted that the social and employment policy aim relied on by the German Government is objectively unrelated to any discrimination on grounds of sex and that, in exercising its competence, the national legislature was reasonably entitled to consider that the legislation in question was necessary in order to achieve that aim. 35 In those circumstances, the legislation in question cannot be described as indirect discrimination within the meaning of Article 4(1) of the directive. 36 Accordingly, it should be stated in reply to the first question that Article 4(1) of the directive must be interpreted as not precluding national provisions under which employment regularly consisting of fewer than 15 hours' work a week and regularly attracting remuneration of up to one-seventh of the average monthly salary is excluded from the statutory old-age insurance scheme, even where they affect considerably more women than men, since the national legislature was reasonably entitled to consider that the legislation in question was necessary in order to achieve a social policy aim unrelated to any discrimination on grounds of sex. I - 4660
The second question NOLTE v LANDESVERSICHERUNGSANSTALT HANNOVER 37 In view of the reply given to the first question, there is no need to answer the second question. Costs 38 The costs incurred by the German and Irish Governments, the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. On those grounds, THE COURT, in answer to the questions referred to it by the Sozialgericht Hannover, by order of 25 May 1993, hereby rules: Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security must be interpreted as not precluding national provisions under which employment regularly consisting of fewer than 15 hours' work a week and regularly attracting remuneration of up to one-seventh of the average monthly salary is excluded from the statutory oldage insurance scheme, even where they affect considerably more women than I - 4661
JUDGMENT OF 14. 12. 1995 CASE C-317/93 men, since the national legislature was reasonably entitled to consider that the legislation in question was necessary in order to achieve a social policy aim unrelated to any discrimination on grounds of sex. Rodríguez Iglesias Kakouris Edward Hirsch Schockweiler Moitinho de Almeida Kapteyn Murray Jann Ragnemalm Sevón Delivered in open court in Luxembourg on 14 December 1995. R. Grass G. C. Rodríguez Iglesias Registrar President I - 4662