CEDH · CASELAW;CLIN;ENG — 9 juin 2022

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Latvia [GC] - 49270/11 Judgment 9.6.2022 [GC] Article 14 Discrimination Very weighty reasons for exclusion of employment periods accrued in other former USSR states in state pension calculation for permanently resident non-citizens, in contrast to Latvian citizens: no violation Facts – The applicants were born in different territories of the Soviet Union and came to Latvia at a later date, when it was one of the Soviet Socialist Republics of the Soviet Union. Following the restoration of Latvia’s independence they became “permanently resident non-citizens”. Upon their retirement, the applicants’ years of service outside Latvia during the Soviet era were not included in the overall period of employment, for the purpose of calculating their pensions, pursuant to Paragraph 1 of the transitional provisions of the State Pensions Act of 1996. In contrast, pensions for people with Latvian citizenship were awarded on the basis of work done anywhere in the former USSR. In Andrejeva v. Latvia [GC], 2009, the Court found this difference of treatment to amount to a breach of Article 14 taken in conjunction with Article 1 of Protocol no.1. Following this judgment, several of the applicants applied to have their pensions re-calculated but their requests were dismissed. Eventually all five applicants complained to the Constitutional Court, arguing that the law on state pensions was incompatible with the prohibition of discrimination. In February 2011 the Constitutional Court declared the impugned provision compatible with the Constitution and the Convention. It admitted that the legislator had established different principles in respect of Latvian nationals and “non-citizens”, and that these two groups were treated differently when calculating the overall period of employment. However, it drew a clear distinction between Andrejeva and the present case, as Ms Andrejeva had resided in the territory of Latvia over the disputed periods. In contrast, the applicants had worked outside the territory of Latvia for various periods and could not have acquired legal ties with Latvia. Having examined, inter alia , the question of State continuity, and noting that Latvia was not the successor of the rights and obligations of the Soviet Union, it found that the difference had objective and reasonable grounds. Law – Article 14 in conjunction with Article 1 of Protocol No. 1: The Court found no reason to depart from the relevant findings made in the Andrejeva case, namely that Article 14 read in conjunction with Article 1 of Protocol No. 1 was applicable and that “nationality”, or rather the absence of Latvian citizenship on the applicants’ part, had been the sole criterion for the distinction complained of. Accordingly, very weighty reasons had to be adduced to justify a difference in treatment in such cases, taking into account, however, the specific circumstances of the case in determining the scope of the respondent State’s margin of appreciation. Further, the applicants could be considered to have been in a relevantly similar situation to persons with the same employment history but possessing Latvian citizenship. The impugned difference of treatment, as ruled by the Constitutional Court, had pursued two legitimate aims. The first and most important one was safeguarding the constitutional identity of the State by implementing the doctrine of State continuity . According to this doctrine, Latvia (as well as Lithuania and Estonia) had been a victim of aggression, unlawful occupation and annexation on the part of the former Soviet Union, starting from 1940. It was not thus a successor state to the USSR; it retained the statehood that existed when its independence had been lost de facto in 1940 as a result of a blatant breach of international law but which nevertheless had remained in place de jure throughout the entire Cold War period. The underlying arguments for this doctrine had informed the setting up of the impugned system of retirement pensions following the restoration of Latvia’s independence. The Court acknowledged that the aim in that context was to avoid retrospective approbation of the consequences of the immigration policy practised in the period of unlawful occupation and annexation of the country. In this specific historical context, such an aim, as pursued by the Latvian legislature when establishing the system of retirement pensions, had been consistent with the efforts to rebuild the nation’s life following the restoration of independence. The second aim, as the Court established in the Andrejeva case, was the protection of the country’s economic system. The core issue in the present case was whether the legitimate aims pursued by Latvia could justify the difference made between those holding Latvian citizenship and those holding the status of “permanently resident non-citizens”, and whether there was sufficient justification for this difference in treatment in the light of all the circumstances of the case. The Court had thus to determine whether there were any good reasons in the instant case, especially in the light of the expanded reasoning adduced by the Constitutional Court in its judgment of 17 February 2011, to depart from its findings in the case of Andrejeva. Having undergone unlawful occupation and subsequent annexation, a State was not required to assume the public-law obligations accrued by the illegally established public authorities of the occupying or annexing power. Latvia had thus been neither automatically bound by such obligations based on the Soviet period nor obliged to undertake obligations emanating from obligations of the occupying or annexing State. Once, however, it had put in place a system of occupational retirement pensions in 1996 which allowed for periods of employment accrued outside its territory to be counted towards the pension for Latvian nationals, it had been bound, as from the date on which the Convention entered into force in respect of Latvia (that is, 27 June 1997), to comply with Article   14 taken in conjunction with Article 1 of Protocol No. 1. The Court first determined that a wide margin of appreciation applied in the specific circumstances of the present case, having regard to the following considerations derived from its case-law: – While the scope of the margin of appreciation could not be the same as regards the adoption of general measures of economic and social policy and as regards the introduction, in that context, of differences in treatment based solely on criteria such as nationality, it was reasonable to consider that in a field where a wide margin was, and must be, granted to the State in formulating general measures, even the assessment of what might constitute “very weighty reasons” for the purposes of the application of Article 14 might have to vary in degree depending on the context and circumstances. The Court had previously acknowledged that there might be valid reasons for giving special treatment to those whose link with a country stemmed from birth within it or who otherwise had a special link with a country. In the present case, the special status of “permanently resident non-citizens” had been created by the Latvian legislature following the restoration of Latvia’s independence with a view to addressing the consequences of a situation which had arisen from an occupation and subsequent annexation in breach of international law. – The specific temporal scope and context of the impugned measure was a factor to be taken into account. The present case concerned past periods of employment, completed outside the respondent State before the introduction of the occupational pension scheme. The Court had previously accepted a difference in treatment based on nationality for reasons relating to the date from which the applicants had developed ties with the respondent State. – The present case was characterised by the specific background to the impugned transitory measure concerning this pension system. The choices made by the Latvian legislature when setting up the employment-based retirement pension system and determining the criteria for entitlement therein had been directly linked to the particular historical and demographic circumstances of Latvia’s situation at the relevant time, together with the constraints imposed by the severe economic difficulties prevailing at the time. The Court had already acknowledged the need for a wide margin of appreciation in the context of such fundamental changes to a country’s system as the transition from a totalitarian regime to a democratic form of government and the reform of the State’s political, legal and economic structure, phenomena which inevitably involved the enactment of large-scale economic and social legislation. Furthermore, it could have regard to facts prior to the ratification of the Convention by the respondent State where such circumstances could be considered to have created a situation extending beyond that date or might be relevant for the understanding of facts occurring after that date. – The margin of appreciation might also depend on whether the impugned measure entailed a loss of individual contributions paid by or on behalf of the individual affected by the measure. – Lastly, it was relevant whether the lack of entitlement had left the individual in question without social cover. The Court then proceeded to carry out the proportionality assessment against the background of the wide margin of appreciation applicable in this case. In particular it found as follows: Firstly, the ground for the impugned difference in treatment which had been introduced in the transitional provisions of the occupational pension system set up by the Latvian legislature was directly linked with the primary aim relied on by the Latvian Constitutional Court. The preferential treatment accorded to those possessing Latvian citizenship in respect of past periods of employment performed outside Latvia had therefore been in line with that legitimate aim. Secondly, the difference in treatment depended on the possession or, rather the lack, of Latvian citizenship, a legal status distinct from the national origin of the persons concerned and available to the applicants as “permanently resident non-citizens”. This status had been devised as a temporary instrument so that the individuals concerned could obtain Latvian citizenship or choose another State with which to establish legal ties. In this respect, the Court could accept that in the context of difference in treatment based on nationality there might be certain situations where the element of personal choice linked with the legal status in question might be of significance with a view to determining the margin of appreciation left to the domestic authorities, especially in so far as privileges, entitlements and financial benefits were at stake. It did not appear from the case file that any of the applicants had ever tried to obtain citizenship of or that they had done so but had been met with obstacles. Naturalisation depended on the fulfilment of certain conditions and might require certain efforts. This did not, however, alter the fact that the question of legal status, namely the choice between remaining a “permanently resident non-citizen” and acceding to citizenship, was largely a matter of personal aspiration rather than an immutable situation, especially in the light of the considerable time-frame available to the applicants to exercise that option. Thirdly, the difference in treatment only concerned past periods of employment, completed prior to the introduction of the pension scheme in question. The choices made by the Latvian legislature when determining the criteria for entitlements in the employment-based retirement pension system had been directly linked to the particular historical, economic and demographic circumstances, notably five decades of unlawful occupation and annexation. In contrast to the case of Andrejeva , the difference in treatment had been limited to periods of employment completed by the applicants outside Latvia, before they had settled in Latvia or had any other links with that country. Fourthly, the impugned difference in treatment had neither concerned the applicants’ entitlement to basic pension benefits, accorded under Latvian law irrespective of the individual’s employment history, nor had it entailed any deprivation, or other loss, of benefits based on financial contributions made by the applicants in respect of the employment periods in question. Lastly, with particular regard to the second legitimate aim pursued (the protection of the economic system), the Latvian system of employment pensions at issue was based on social insurance contributions and functioned according to the principle of solidarity, in the sense that the total amount of contributions collected was used to fund the current disbursement of pensions, payable to all the beneficiaries at a given time. Thus, determining the scope of eligible periods of employment inevitably had had an impact on the level of the benefits and the contributions required to fund them. These types of trade-offs in social welfare systems generally called for a wide margin of appreciation. Given the particular difficulties and the complex policy choices facing the Latvian authorities after the restoration of independence, the Court could not but recognise, in its overall assessment, a substantial degree of deference to be afforded to the Government. In sum, in the light of all the above circumstances and the respective margin of appreciation, the impugned difference in treatment had been consistent with the legitimate aims pursued and the grounds relied upon by the Latvian authorities to justify it could be deemed to amount to very weighty reasons. Accordingly, the respondent State had not overstepped its margin of appreciation with regard to the applicants and the Court had to reach a different conclusion from that of the Andrejeva case. Conclusion : no violation (ten votes to seven). (See also Abdulaziz, Cabales and Balkandali v. the United Kingdom, 9214/80 et al., 28 May 1985; Andrejeva v. Latvia [GC], 55707/00, 18 February 2009, Legal Summary ; Bah v. the United Kingdom , 56328/07, 27 September 2011, Legal Summary ; British Gurkha Welfare Society and Others v. the United Kingdom , 44818/11, 15 September 2016, Legal Summary )   © Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court. Click here for the Case-Law Information Notes