Developments in Austrian and European case law on gender discrimination in occupational pension schemes
Dr Hans Laimer
ZFZ Zeiler Rechtsanwälte, Vienna
ZFZ Zeiler Rechtsanwälte, Vienna
The principle of equal pay for men and women for equal work is one of the most significant contributions of European Union law to the national law of each Member State. With its introduction in 1957, the EU was also a pioneer in gender equality.
The Court of Justice of the European Union (CJEU) clarified in the well-known Barber case in as early as 1990 that all forms of occupational pensions fell under the term ‘pay’ within Article 157 of the Treaty on the Functioning of the European Union (TFEU). Thus, the principle of equal pay for men and women applies to them.
More than 30 years after this fundamental decision, there are still many open questions as to which differentiations or arrangements in occupational pension schemes fall under the principle of equal pay. There are many uncertainties, particularly in connection with indirect discrimination. On the one hand, this is because cases of indirect discrimination are not easy to identify. On the other hand, there is the possibility of justification in the case of indirect discrimination. However, whether the grounds at hand are sufficient is a case-by-case decision and depends on a variety of factors.
The CJEU therefore continues to be confronted with a larger number of cases on the issue of occupational pensions and gender discrimination.
In Austria, there is a large body of case law about gender discrimination and occupational pensions. Many cases deal with occupational pensions, which constitute inadmissible direct discrimination in connection with the different Austrian statutory retirement age between men and women.
Most recently, the Supreme Court ruled that a regulation requiring a five-year longer waiting period for men of the same age at the cut-off date and a correspondingly earlier entry date for women violates the prohibition of discrimination. The Court explicitly held in this case that such measures cannot be justified by different statutory retirement ages.
The CJEU recently also had to deal with a case from Austria, which concerned indirect discrimination against men in connection with an occupational pension. In this case, the question arose whether the withholding of an amount from the occupational pension and the cancellation of the contractually agreed indexation to secure the continuity of state-funded pensions constitute a form of indirect discrimination. In this decision, the CJEU also dealt in detail with the possibility of justifying indirect discrimination.
This decision shall be discussed in more detail below.
Court of Justice of the European Union ruling
The plaintiff is a former employee of NK, a limited liability public company in which the province of Lower Austria holds a participation of approximately 51 per cent. The plaintiff concluded an occupational pension contract with NK in the form of a direct defined benefit pension, which was financed from the employer’s reserves. Additionally, the agreement contained an index-linking clause, according to which the pension benefits would increase by the same percentage as that of the increase in the salaries of the highest category of employment as provided in the collective agreement applicable to the employees of the Austrian undertakings in the relevant industry. The plaintiff retired in April 2010 and received the agreed direct defined benefit pension as of December 2010.
In 2015, Austria adopted diverse legal measures to reduce imbalances created by ‘special’ pensions, which are supplementary pensions outside ordinary pension schemes and to ensure the long-term funding of retirement benefits. However, these measures only apply if the benefit exceeds a certain threshold.
For the plaintiff, these legal measures had the effect that on the one hand, the agreed index clause did not lead to an increase in the year 2018. On the other hand, part of the agreed direct defined benefit pension was withheld directly by NK as a pension security contribution as of 1 January 2015.
The plaintiff argued that this led to an indirect discrimination on grounds of sex as the adopted legal measures affected far more male than female recipients.
The Court confirmed that there was no direct discrimination as the measures applied without distinction to male and female employees. If employees of state-controlled undertakings receive a ‘direct defined benefit pension’, of which the amount exceeds a certain threshold, they are put at a disadvantage by the national legislation. The neutral criterion is therefore the amount of the benefit defined.
In general, the appreciation of the facts from which it may be presumed that there has been indirect discrimination is the task of the national court. Statistical evidence can be used by the national court to assess whether there is indirect discrimination or a purely fortuitous, short-term inequity.
Nevertheless, in case the national court concludes that an indirect sex discrimination is given, the indirect discrimination can be justified by objective factors which are wholly unrelated to any discrimination based on sex.
The objectives for the national legislation measures presented in the case were on the one hand to reduce the imbalance created by special pensions, and on the other, to ensure the long-term funding of retirement benefits. In general, budgetary considerations cannot justify discrimination on the ground of sex. However, the CJEU found that these objectives constitute legitimate social-policy objectives and could – subject to verification by the national court – justify the potential indirect discrimination in this case.
It is to be expected that gender equality issues in occupational pensions will continue to arise in the future, both in the European and national spheres. A case-by-case decision must be made based on the specific circumstances of the case, particularly in the case of indirect discrimination. A general statement as to when indirect sex discrimination in occupational pensions can be justified can therefore not be made.
 CJEU 17.05.1990, C-262/88, Barber/Guardian Royal Exchange Assurance Group.
 Austrian Supreme Court of Justice 27.02.2019, 9 ObA 25/18v.
 CJEU 24.09.2020, C-223/19, YS/NK AG.