The applicant was previously a national of the former USSR, before becoming a “permanently resident non-citizen” of Latvia, where she moved at age 12. Her case is concerned with the deprivation her of pension entitlements in respect of 17 years’ employment due to discriminatory reasons regarding her lack of Latvian nationality. The Court ruled that there had been a violation of the applicant’s rights under Article 14 taken in conjunction with Article 1 of Protocol No. 1 and Article 6 § 1 of the Convention.
The 1990 and 1995 State Pensions Acts
Soviet law (before 1991)
Article 91 and 109 of the Constitution (Satversme), as inserted by the Act of 15 October 1998
The State Pensions Act (new version)
Chapters 22 to 25 of the former Latvian Code of Civil Procedure (Latvijas Civilprocesa kodekss)
The applicant, Natālija Andrejeva, entered Latvian territory in 1954, at the age of 12, at a time when the territory was one of the fifteen “Soviet Socialist Republics” and hence de facto part of the Soviet Union. She has been permanently resident there ever since. In 1966 she took up employment in a Latvian factory.
From 1973 until November 1990 the applicant, although physically present on Latvian soil, worked for Soviet public bodies whose head offices were in Russia and Ukraine and which paid her salary every month by post office giro transfer. From November 1990 until her retirement in 1997 the applicant worked for employers based in Latvia. In August 1991 Latvia regained full independence. In December 1991 the Soviet Union, of which the applicant had previously been a national, broke up. The applicant was left without any nationality and was granted the status of “permanently resident non-citizen”.
In 1997 the Social Security Directorate calculated the applicant’s retirement pension without taking into account the 17 years during which she had worked for organisations based in Ukraine and Russia since, under the relevant legislation, only years spent working for Latvian employers could be taken into consideration in calculating the entitlement of foreign nationals and stateless persons living in Latvia. Latvian citizens, on the other hand, were entitled to a pension in respect of all periods of time worked, including those worked outside Latvian territory and irrespective of their social security contributions. As a result, she was awarded a monthly pension of 20 lati (approximately 35 euros (EUR)).
The applicant brought administrative and judicial proceedings, without success. Ultimately, the applicant’s appeal on points of law to the Senate of the Supreme Court, examined at a public hearing on 6 October 1999, was dismissed. The Senate upheld the district and regional courts’ findings that the period during which the applicant had been employed by Ukrainian and Russian companies could not be taken into account in calculating her pension.
The Supreme Court registry notified the applicant of the exact date and time of the public hearing. However, the hearing began earlier than scheduled and the Senate decided to examine the case before the parties had arrived. After hearing the opinion of the prosecutor the Senate dismissed the appeal, having observed that, according to law, anyone employed by a Latvian taxpayer was covered by the country’s compulsory insurance scheme. The applicant was not covered since her employers, who were based in Ukraine and Russia, did not pay taxes in Latvia. As she had been unable to participate in the hearing, the applicant requested the Senate to re-examine the case. The Senate refused the request with apologies.
In February 2000, the applicant was informed that, on the basis of an agreement reached between Latvia and Ukraine, her pension had been recalculated, with effect from 1 November 1999, to take account of the years she had worked for her Ukrainian-based employers.
The Chamber to which the case was assigned decided to relinquish jurisdiction to the Grand Chamber on 11 December 2007.
The applicant further pointed out that she had first come to Latvia at the age of 12 and had spent all her working life there, and that her employment during the Soviet era had involved protection of Latvia’s environment. However, the amount of the retirement pension she received was considerably lower than the amount that a Latvian citizen in the same position would receive. Nationality was therefore the sole criterion for the distinction in issue, which had no objective and reasonable justification. Firstly, the applicant pointed out that her former employers had paid social tax to the Soviet tax authorities on her behalf, on the same basis as for those who had been recognised as Latvian citizens after 1991. Had the Soviet Union not broken up, she would receive, just like them, a monthly pension of 97.50 Soviet roubles, paid from the USSR central budget. Secondly, she pointed out that the difference in treatment complained of had not existed before 1 January 1996; it had been introduced only by the State Pensions Act 1995, and no reasons had been given for this change in the law, even by the members of parliament who had proposed it.
Thirdly, the applicant submitted that the interpretation of the abovementioned Act by the Senate of the Supreme Court, as a result of which she was deemed not to have worked “in Latvia” during a period of seventeen years, was manifestly unreasonable. Before 2002 the State Pensions Act had not included any definition of the concept of “aggregate periods of employment in Latvia”. The social services had decided to interpret it restrictively, and the judges of the Supreme Court had endorsed that arbitrary interpretation. The applicant emphasised that during the period from 1966 to 1991 neither her workplace nor the nature of her work, nor even the trade union to which she had been affiliated, had changed.
In those circumstances, the applicant submitted that the distinction made by the Latvian authorities amounted to discrimination prohibited by Article 14 of the Convention. It had caused her a substantial loss since it had deprived her, as a “non-citizen”, of her pension in respect of seventeen years of employment. The applicant noted in this connection that the retirement pension was her only steady source of income. Admittedly, she also received a medical-treatment allowance and a housing allowance, but she was not able to decide freely how to spend those allowances, and they covered only an insignificant part of her expenses.
The applicant acknowledged that, under the Citizenship Act as currently applicable, she was entitled to apply for naturalisation, and that if she became a Latvian citizen she would receive a pension in respect of her entire professional career. However, in her opinion the naturalisation requirements in Latvia were too strict – especially for elderly persons – and had already been severely criticised by the Council of Europe’s Parliamentary Assembly and Commissioner for Human Rights. In any event, the fact that the applicant had freely chosen not to take Latvian citizenship was not decisive in her case; although her status as a “permanently resident non-citizen” was not a special type of Latvian nationality, the rights and obligations attached to that status were evidence of the legal ties between the persons concerned and the Latvian State.
Lastly, the applicant was not persuaded by the Government’s argument that the reckoning of periods of employment prior to 1991 was a matter to be addressed by means of international social security agreements. Even if the agreement with the Russian Federation – which had been the subject of intergovernmental negotiations for more than a decade – came into force, it would ultimately still be Latvia’s responsibility to pay the relevant portion of her pension. She further reiterated that there was no legal basis for Russia and Ukraine to provide her with a pension, since her entire working life had been spent in the territory of Latvia.
Article 6 § 1
The applicant complained, in particular, that the hearing of 6 October 1999 was held earlier than scheduled, which prevented her from taking part in the examination of her appeal on points of law, in breach of Article 6 § 1 (right to a fair hearing) of the Convention. In the applicant’s submission, her right to a fair hearing before the Senate of the Supreme Court had been infringed. The fact that only points of law were examined during cassation proceedings was immaterial in her case, since the dispute between the two parties had precisely been limited to legal issues. Admittedly, the hearing had been arranged following an appeal by the public prosecutor, but he had intervened only at the request of the applicant’s lawyer. In any event, the right to a hearing was expressly guaranteed by the Code of Civil Procedure, and it was for the applicant herself to decide whether it was advisable for her to submit her argument to the Senate.
Article 14 in conjunction with Article 1 of Protocol No. 1
Even assuming that Article 14 of the Convention was applicable in the present case, the Government were persuaded that the difference in treatment complained of fell within the broad margin of appreciation enjoyed by States in regulating their social policy. They argued that the Court should take into account the particular context of the case, which was linked to the process of restoring Latvian independence, a process that had also included reform of social policy. The Latvian authorities had had to lay the foundations of the new social welfare system, including the old-age insurance scheme, and to set a limit on the expenditure which the Latvian budget could afford in relation to the former USSR’s social welfare payments. In that connection, the Government referred to the Constitutional Court’s conclusion that, in accordance with general international law on State succession, Latvia had assumed responsibility for periods worked in Latvian territory by any of the country’s permanent residents, regardless of nationality.
As regards periods of work elsewhere, the Government asserted that Latvia was under no obligation to assume responsibility for them. If, despite everything, it had decided to do so while reserving this additional guarantee to its own citizens, that decision could not be regarded as contrary to Article 14 of the Convention. In short, the Government argued, the Latvian authorities had struck a balance between the public interest and the applicant’s private interests; there was thus a reasonable relationship of proportionality between the means employed and the aim sought to be realised.
In addition, the Government pointed out that the applicant could become a naturalised Latvian citizen at any time. If she chose to do so, the dispute in the present case would automatically be settled through the recalculation of her pension. The Government thus contended that the situation complained of was largely the fault of the applicant herself, who had refused to apply for naturalisation despite having been entitled to do so since 1998. The sooner she did so, the sooner she would receive the desired portion of her pension.
Article 6 § 1
The Government submitted firstly that it was no longer possible to verify the truth of the applicant’s allegations, since the file on the hearing in question had already been destroyed. In any event, they disputed that there had been a violation of Article 6 § 1. In the first place, the Government contended that, in view of the specific nature of cassation proceedings, which were limited to points of law, the appellant’s presence at the hearing was not always essential. Secondly, the appeal examined on 6 October 1999 had been lodged by the public prosecutor, who had adopted a similar position to that of the applicant. The Government were therefore of the view that arguments identical or similar to those which the applicant could have put forward herself had been duly submitted by the public prosecutor. Similarly, in its judgment the Senate had carried out a sufficiently thorough analysis of those arguments. The applicant’s absence during the hearing could not therefore have influenced the outcome of the proceedings.
Article 14 in conjunction with Article 1 of Protocol No. 1
With regard to the applicability of Article 1 of Protocol No. 1, the Government attached considerable importance to the difference between Soviet pensions, which were paid by the State from common budgetary resources in accordance with the solidarity principle, and the system gradually implemented from 1991 onwards, which was based on individual contributions by each beneficiary. The Court pointed out, however, that when a State chose to set up a pension scheme, the individual rights and interests deriving from it fell within the ambit of Article 1 of Protocol No. 1, irrespective of the payment of contributions and the means by which the pension scheme was funded.
Furthermore, where a State decided of its own accord to pay pensions to individuals in respect of periods of employment outside its territory, thereby creating a sufficiently clear legal basis in its domestic law, the presumed entitlement to such benefits also fell within the scope of Article 1 of Protocol No. 1. In the applicant’s case the transitional provisions of the Latvian State Pensions Act created an entitlement to a retirement pension in respect of aggregate periods of employment prior to 1991 in the territory of the former USSR, regardless of the payment of any kind of contributions, but it reserved this right to Latvian citizens. The applicant was thus refused the pension in question solely because she did not have Latvian citizenship. This sufficed for the Court to consider that the applicant’s pecuniary claim fell within the ambit of Article 1 of Protocol No. 1.
As to the merits of the case, the Court reiterated that once an applicant had established the existence of a difference in treatment, it was for the Government to show that such difference was justified. In the applicant’s case the difference in treatment pursued at least one legitimate aim compatible with the general objectives of the Convention, namely the protection of the country’s economic system. The Court proceeded to examine the proportionality of that aim and the means employed to achieve it. The national authorities’ refusal to take into account the applicant’s work “outside Latvian territory” was based solely on her nationality, as it had not been disputed that a Latvian citizen in the same position as the applicant, having worked in the same enterprise during the same period, would have been granted the disputed portion of the retirement pension.
Moreover, the parties agreed that if the applicant became a naturalised Latvian citizen, she would automatically receive the pension in respect of her entire working life. The Court observed that very weighty reasons would have to be put forward before it could regard a difference of treatment based exclusively on the ground of nationality as compatible with the Convention; it found no such reasons in the applicant’s case.
Firstly, it had not been established, or even alleged, that the applicant had not satisfied other statutory conditions entitling her to a pension in respect of all her years of employment. She was therefore in an objectively similar situation to persons who had had an identical or similar career but who, after 1991, had been recognised as Latvian citizens. Secondly, there was no evidence that during the Soviet era there had been any difference in treatment between nationals of the former USSR as regards pensions. Thirdly, the applicant was not currently a national of any State but enjoyed the status of a “permanently resident non-citizen” of Latvia, the only State with which she had any stable legal ties and thus the only State which objectively could have assumed responsibility for her in terms of social security. In those circumstances, the arguments submitted by the Government were not sufficient to satisfy the Court that there was a “reasonable relationship of proportionality” in the applicant’s case that rendered the impugned difference of treatment compatible with the requirements of Article 14.
Notwithstanding the Government’s view that the reckoning of periods of employment was essentially a matter to be addressed through bilateral inter-State agreements on social security, the Court reiterated that by ratifying the Convention, Latvia had undertaken to secure “to everyone within [its] jurisdiction” the rights and freedoms guaranteed therein. Accordingly, the Latvian State could not be absolved of its responsibility under Article 14 on the ground that it was not bound by inter-State agreements on social security with Ukraine and Russia. Nor could the Court accept the Government’s argument that it would be sufficient for the applicant to become a naturalised Latvian citizen in order to receive the full amount of her pension. The prohibition of discrimination in Article 14 was meaningful only if an applicant’s personal situation was taken into account exactly as it stood.
Article 6 § 1of the Convention
The Court noted, among other things, that the appeal on points of law had been lodged not by the applicant herself or her lawyer but by the public prosecutor attached to the Riga Regional Court. The Government argued that the favourable position adopted by the public prosecutor had relieved the Senate from having to afford the applicant the opportunity to attend the hearing herself. The Court was not persuaded by that argument, in particular since it did not appear that under Latvian law, a public prosecutor could represent one of the parties or replace that party at the hearing. The applicant had been a party to administrative proceedings which had been instituted at her request. Accordingly, as the main protagonist in those proceedings she should have been afforded the full range of safeguards deriving from the adversarial principle. The fact that the appeal on points of law had been lodged by the prosecution service had in no way curtailed the applicant’s right to be present at the hearing of her case, a right she had been unable to exercise despite wishing to do so.
The Court ruled that there had been a violation of the applicant’s rights under Article 14 taken in conjunction with Article 1 of Protocol No. 1 and Article 6 § 1 of the Convention.
The applicant was awarded EUR 5,000 in respect of all damage sustained according to Article 41 of the Convention.
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