- the Member States do not enjoy absolute discretion when reforming their civil service, notwithstanding its causes and rationales
- reforms of the civil service must be adequately regulated, for instance, by introducing a regime which enables a fair and equitable transition from the old to the new regime
- the Member States may design such transitional arrangements with a view to their technical and financial viability
- the treatment of civil servants (civil service pay restructuring) falls within the scope of Directive 2000/78/EC and it must comply with the ground-rule of non-discrimination
- ‘seniority’, if inadequately regulated, may be an illegitimate principle of pay regulation in civil service
- the legal implications of large scale discriminatory treatment are for the national courts (and authorities) to determine, and in the case when the group of favoured and mistreated people cannot be identified there is no obligation on courts under EU law to grant, in absence of remedial measures adopted by domestic governments, the same advantages to both groups in their own jurisdiction
The judgment of the EU Court (Joined Cases C-501/12 to C-506/12, C-540/12 and C-541/12) was delivered in a case which dealt with the 2009 reform of the remuneration of federal civil servants and the 2011 reform of the remuneration of the civil servants of Berlin. The new provisions brought to the fore the inadequacies of the old regime – that in determining basic pay it took into account the age of the civil servant concerned (i.e., the length of time in civil service), and they reclassified existing civil servant positions and established their new remuneration in a transitional period on the basis of the discriminatory provisions of the old regime. The questions put before the EU Court debated, in particular, whether seniority – a traditional element in civil service pay scale systems – could be maintained in the domestic regulation of civil service remuneration and what constraints the Member State face in regulating transition between the old and the new regime of civil service remuneration.
First, the Court held that the treatment (the remuneration) of civil servants falls within the scope of Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ 2000 L303, p. 16) despite the exception under Article 153(5) TFEU excluding EU social policy to intervene with Member State policy discretion in matters of pay. It argued that while that exception applies to direct interferences by EU law with the determination of pay in the Member States, it does not cover just ‘any question involving any sort of link with pay’. On this basis, Article 3(1) of the Directive determining that the Directive applies to all persons, whether in the public or the private sector including public bodies, as regards ‘employment and working conditions’ (including, for example, dismissals and pay), cannot be regarded as constituting a direct interference with setting the level of pay (the amount of pay for each grade and step of civil service remuneration) at domestic level, rather it must be viewed as a clause referring to the general conditions of employment – which inevitably will include pay – affecting the national rules governing the methods of allocating the grades and steps of civil service remuneration.
Secondly, the Court held with reference to the old remuneration regime that determining the basic pay within each service grade solely on the basis of the civil servant’s age constitutes age discrimination and, thus, a violation of the Directive. The ‘seniority’ component of the German remuneration system, which was indeed supplemented by components capable of introducing the factors of experience, expertise and performance in determining the pay of individual civil servants, was found discriminatory because it resulted in awarding different basic pay to civil servants of the same or equivalent quality appointed on the same day in the same grade on the basis of their different age at the time of their appointment. Although it recognised the broad discretion of the Member States in the field of social and employment policy and regulation, the Court refused to accept the justifiability of the discriminatory treatment in question. It argued that despite the fact that the aim of rewarding experience that enables a worker to perform his duties better is a legitimate aim of national wages policy, the ‘seniority’ element of the German system was inadequately regulated as at the time of appointment it was applied to reward the age and not the experience of the candidate.
Thirdly, the Court ruled that the reclassification of civil servants under the new provisions, in which the pay step that they were allocated had been determined solely on the basis of the amount received by way of basic pay under the old system, was in breach of the Directive. It argued that despite the availability of arrangements enabling transition from the old to the new regime and that under the new regime advancement to the next step is dependent exclusively on the experience acquired, by determining the basic pay on the basis of seniority the transitional and the new system perpetuated a discriminatory situation. It enabled that some civil servants receive lower pay than other civil servants, even though they are in comparable situations, solely on account of their age at the time of appointment. The Court, nevertheless, found that the protection of acquired rights could justify the particular regulation of transition and that the national measures were suitable to prevent civil servants losing salaries guaranteed by the old regime. Regarding the regulation of transition, the Court accepted that although an increase in financial burdens and possible administrative difficulties cannot justify discriminatory treatment, the Member States may refuse to introduce transitional arrangements which are not viable technically and economically (e.g., the individual examination of each civil servant’s case when the transition affects a high number of civil servants). The Member States may validly claim that avoiding excessive complexity and there being a high risk of error could justify transitional arrangements which involve some degree of discriminatory treatment. The Court also suggested that there must be significant damages caused to the person concerned, which cannot be mitigated or eliminated subsequently, for such arrangements to be found unjustifiable.
Regarding the legal implications of finding discriminatory treatment, the Court adopted a rather lenient approach. It argued that this is a matter for the domestic court to assess and in that assessment it must take into account whether it is possible to identify the group of persons favoured by the discriminatory legal provisions. Since in the present case the latter was not possible, the Court rejected to follow its previous jurisprudence (Terhoeve (EU:C:1999:22) and Landtová (EU:C:2011:415)) where it held that for as long as measures reinstating equal treatment have not yet been adopted, observance of the principle of equality can be ensured only by granting to the persons within the disadvantaged category the same advantages as those enjoyed by the persons within the favoured category. The issue whether the state could be sued for damages under EU law, having indicated how the relevant legal test may be applied in prospective cases, was deferred by the Court to the jurisdiction of national courts.
The views expressed above belong to the author and do not in any way represent the views of the HAS Centre for Social Sciences.