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   Barber v GRE (1990)
  Barber v GRE (1990)
  Background   Article 119 amendments
  Court judgement   
    
    

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Background
Mr. Barber was an employee of Guardian Royal Exchange (GRE) and a pension scheme member. The GRE pension was established as a contracted out non contributory scheme with a normal pensionable age of 62 for men and 57 for women. On redundancy an immediate pension income would be paid at age 55 for men and 50 for women.

Mr. Barber was made redundant at the age of 52 receiving cash benefits and statutory redundancy payments but was not entitled to the GRE retirement benefits due to his age in contrast to similarly aged women that would receive an immediate pension.

Mr. Barber complained that this difference was sex discrimination and in breach of article 119 of the Treaty of Rome concerning equal pay for equal work when the case was referred to the European Court of Justice (ECJ). Initially in European law the burden of proof is on the employee to show that they are doing similar work in similar employment, or that for similar work the other contract contains more faviourable terms.


Court judgement
The ECJ first considered whether the benefits paid to Mr. Barber by the employer as a result of his redundancy could fall under the concept of 'pay' in article 119. This concept required a consideration in cash or benefits in kind payable immediately or in the future in respect to his employment with the employer. For Mr. Barber the court held that as compensation was made as a result of his redundancy this constituted pay and so the case did fall under the concept of article 119. The ECJ then considered whether the concept of pay could be extended to retirement benefits in the form of pension income paid by a contracted out scheme.

The ruling established in Defrenne v Belgium (1971) showed that article 119 does not apply to social security schemes where a pension income is governed by legislation and have a compulsory element without agreement. The court ruled that in the case of Mr. Barber and the employer the private occupational pension scheme represents either an agreement or a unilateral decision by the employer whereby the pension scheme forms part of the consideration to the employees. This consideration is not compulsory and although it conforms to legislation, it will be governed by their own scheme rules as determined by the company and applied by scheme trustees.

The retirement benefits for Mr. Barber therefore form part of his terms of employment and his remuneration will be covered by article 119. The European Court of Justice also held that by allowing a man to have only a deferred pension at the normal pension age (NPA) where women would receive an immediate pension income and this being due to Mr. Barber's age based on sex, the action of the employer was contrary to article 119. The principle of transparency also meant that the system appeared to operate to the substantial disadvantage of one sex and therefore the onus of proof is now on the employer to prove that their system of pay difference is not discrimination.

The ECJ rules of direct effect and primacy would ensure that European law would apply to national courts in a similar case in the future. The ECJ decision would apply only to pensionable service from the ruling being the 17 May 1990. This decision meant that now an occupational pension scheme and redundancy pay count as 'pay' under article 119 as well as equalisation rules requiring the equalisation of retirement ages for men and women, this being incorporated in the UK through the Pensions Act 1995.


Article 119 amendments
Further development by the European Court of Justice to counter discrimination based on sex has been formalised in a legal sense through the Treaty of Amsterdam that came into force on the 1 May 1999. Here the Treaty states that the Community will aim to eliminate inequalities and promote equality between men and women.

The Treaty broadens article 119 from 'equal pay' to article 141 referring to 'equal pay for male and female workers for equal work or for work to which equal value is attached'. It also goes on to state that where a job classification system is used for the determination of pay, there must not be discrimination based on sex and the same criteria used for both men and women. This has been the instruction of the Equal Pay Directive to member states to ensure national legislation conforms with European law.

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