Equal treatment outside

employment: access to goods and services

Lecture at the Academy of European Law,Trier

April 16, 2013

Christian Armbrüster Freie Universität Berlin

c.armbruester@fu-berlin.de

Introduction - examples for unequal treatment

Outside employment there are various examples for unequal treatment of men and women with regard to access to goods and services: Parking lots just for woman Free or reduced entry for women in dancing clubs, “Ladies Night” Opening times just for women in swimming pools or saunas Different prices for men and women at the hairdresser's or at restaurant buffets Higher premiums for women in pension, health or disability insurance Lower premiums for women in term life insurance and automobile insurance

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Test-Achats ruling

In the area of insurance premiums and benefits the ECJ ruled on 1 March 2011 that a provision in the Gender Directive that under certain conditions allowed for different premiums according to gender is invalid (Test-Achats ruling): “Article 5(2) of Directive 2004/113 implementing the principle of equal treatment between men and women in the access to and supply of goods and services is invalid with effect from 21 December 2012.” Source: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0236:EN:HTML

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Wording of the respective provision

Article 5(2) of the Gender Directive: “Notwithstanding paragraph 1, Member States may decide before 21 December 2007 to permit proportionate differences in individuals' premiums and benefits where the use of sex is a determining factor in the assessment of risk based on relevant and accurate actuarial and statistical data. The Member States concerned shall inform the Commission and ensure that accurate data relevant to the use of sex as a determining actuarial factor are compiled, published and regularly updated.[…]” (emphasis added) Source: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:373:0037:0043:EN:PDF

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Test-Achats Ruling – Reasoning

The principle of equal treatment requires that comparable situations must not be treated differently, and different situations must not be treated in the same way, unless such treatment is objectively justified (para. 28). The comparability of situations must be assessed in the light of the subject-matter and purpose of the EU measure which makes the distinction in question (para. 29). Purpose of the Gender Directive as expressed in Art. 5(1) is the application of unisex rules on premiums and benefits

recital 19 of the Directive says not applying the rule of unisex premiums is an exemption recital 18 of the Directive says that the use of sex as

an actuarial factor must not result in differences in premiums and benefits (para. 30)

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Test-Achats Ruling – Reasoning

The Gender Directive is based on the assumption that the respective situations of men and women with regard to insurance premiums and benefits are comparable (para. 30) The ECJ points out the risk that EU law may permit the derogation from the equal treatment of men and women, provided for in Art. 5(2) of the Gender Directive, to persist indefinitely (para. 31) “Such a provision, which enables the Member States in question to maintain without temporal limitation an exemption from the rule of unisex premiums and benefits, works against the achievement of the objective of equal treatment between men and women, which is the purpose of the Gender Directive, and is incompatible with Articles 21 and 23 of the Charter” (para. 32)

Criticism: The reasoning of the ECJ is based mainly on a coherence check

the ECJ just focuses on Art. 5(1) making it to the only benchmark, although the exception in Art. 5(2) is also encompassed by the legislator’s intention

Art.5(2) can be seen as a partial waiving of legislative competence by the European Council, that leaves this matter for the Member States to decide Art. 13(1) EC gave the European Council discretion about if and to what extend anti-discrimination measures should be installed, even an exemption of insurance contracts had been possible

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Test-Achats Ruling – Main Criticism

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Test-Achats Ruling – Main Criticism

The ruling of the ECJ should rather have been based only on a consistency check of the respective provision with higher-ranking European law - here with Art. 21, 23 of the Charter (CFREU).

otherwise validity is just depending on the regulatory technique of a Directive

The CFREU entered into force according to Art. 6(1) of the Treaty of European Union (TEU) on 1 Dec. 2009

it is binding even for legal acts that – like the Gender Directive – were enacted before this date, no reference by a recital of the Gender Directive to

these articles is needed, according to ECJ

Article 21, 23 EU-Charter

Art. 21: Non-discrimination 1. Any discrimination based on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation shall be prohibited.[…] Art. 23: Equality between women and men Equality between women and men must be ensured in all areas, including employment, work and pay.[…] Source: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2012:326:0391:01:EN:HTML

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Unjustified unequal treatment?

Unequal treatment? Because of the significant differences between the

genders a differentiation takes account of the principle that different situations must not be treated in the same way; on the other hand Art. 23 CFREU expressly states

the equality of men and women, and pursuits the greatest possible equal treatment of genders

In any case a consistency check with Art. 21, 23 CFREU shows that an unequal treatment can be justified by the objective reason of the statistically verifiable significant differences between the genders – especially the average life expectancy

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Unjustified unequal treatment?

This result is not challenged by the fact that gender is an unchangeable attribute

similarity to the attribute disability, that is as well unchangeable but can be a valid reason for higher premiums

No challenge by the fact that a person can have a different individual risk profile

basis of insurance is that the benchmark for the insured risk is not an individual one but a statistical probability of loss of a group

Consequences of the Ruling

Main practical questions: (1) Contracts covered by the unisex rule (2) Remaining criteria for differentiation (3) Permitted measures to control the gender mix To help the national legislator the European Commission on 22 Dec. 2011 issued guidelines on the application of the Gender Directive in the light of the Ruling (Guidelines)

Guidelines have no binding effect on the ECJ soft law

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Four categories of contracts: (1) Contract conclusion before 21 Dec. 2007 (2) Contract conclusion after 21 Dec. 2007, termination before 21 Dec. 2012 (3) Contract conclusion after 21 Dec. 2007, contract still continues after 21 Dec. 2012 (4) Contract conclusion after 21 Dec. 2012

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Covered Contracts by the Unisex Rule

Obvious Cases: (1) Contract conclusion before 21 Dec 2007: no unisex rule (4) Contract conclusion after 21 Dec 2012: unisex rule Solvable with the Test-Achats ruling itself: (2) Contract conclusion after 21 Dec. 2007, termination before 21 Dec. 2012: no unisex rule arg.: wording of the ruling “invalid with effect from 21 December 2012” Problematic - solvable with the Guidelines: (3) Contract conclusion after 21 Dec. 2007, contract still continues after 21 Dec. 2012: no unisex rule

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Covered Contracts by the Unisex Rule

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Arguments against unisex rule for existing contracts

There are strong arguments against the unisex rule for pre-existing contracts in case (4): ECJ refers to the recital 18 of the Gender Directive, which excluded the application of the Directive for existing contracts A parallel between the implementation of Art. 5(1) of the Gender Directive and the invalidity of Art. 5(2) While the Advocate General’s opinion demanded the application of the unisex rule to existing contracts, the ECJ does not refer to it in the ruling The Advocate General proposed a long transitional period of 3 years in case of invalidity of gender differentiation protection of legitimate expectation (at least till 1 March 2011)

Statement of the Guidelines to application of unisex rule

Unisex rule just shall apply to new contracts (para. 7) the date of 21 Dec. 2012 is decisive; in case of existing contracts all changes that amount to a new contract lead to implementation of the unisex rule

Distinction between existing and new contracts: autonomous and uniform European interpretation (para.9), unisex rule shall apply whenever a contractual agreement requiring the expression of consent by all parties is made, including an amendment to an existing contract and the latest expression of consent necessary for conclusion as from 21 Dec. 2012 (para. 11) 16

Statement of the Guidelines to application of unisex rule

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Main criterion of distinction is if in the existing contract a change option was predefined without being bound to a repeated consent of the parties Changes that do not amount to a new contract (para. 13): automatic extension if no notice is given by a certain deadline as a result of terms of that existing contract adjustment on the basis of predefined parameters, where the consent of the policyholder is not required

taking out of top-up or follow-on policies, where these policies are activated by a unilateral decision of the policyholder but Guidelines are non-exhaustive in this area (footnote 9) open issue: increase of sum assured

(1) Gender-related criteria Factors of a medical risk assessment, which mainly or exclusively exercise an impact on one gender – e.g. health status; family history of breast or prostate cancer; test results concerning haemoglobin or creatinine level (Guidelines para. 14, annex 3) Medical history states a specific individual risk, not just a statistic connection with gender No direct connection to gender. This may lead to different treatment of persons of the same gender Indirect discrimination can be justified if the aim is legitimate and the means are appropriate and necessary (Guidelines para. 16)

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Remaining criteria for differentiation

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Remaining criteria for differentiation

(2) Other criteria Lifestyle – e.g. nutritional habits, alcohol intake, smoking, frequency of medical checks, stress factors, level of education, income, profession, residence, type of health insurance, residential property, marital status

(1) Marketing and advertising gender related marketing/ads are admissible (Guidelines para. 14) But: questionable with regard to reputation; public awareness (2) Product design Auxiliary services in unisex rates that are more attractive for one gender are permitted (Guidelines para. 15) services exclusively or primarily offered to members of one sex can be justified by a legitimate aim and if the means are appropriate and necessary (Guidelines para. 15, footnote 12) open issue: admissibility of special advantages to one sex based just on entrepreneurial motivation (see also slide 2)

Total balance sheet approach Permitted measures to control the gender mix

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Thanks for your attention!

Thanks for your attention!

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References

Test-Achats ruling:

http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0236:EN:HTML

Advocate General’s opinion:

http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CC0236:EN:HTML

Gender Directive:

http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004L0113:EN:HTML

Guidelines:

http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2012:011:0001:01:EN:HTML