EHRM, 08-10-2013, nr. 62235/12, nr. 57725/12

The applicant in the first case, Mr António Augusto da Conceição Mateus, is a Portuguese national, who was born in 1939 and lives in Aveiras de Baixo.

The applicant in the second case, Mr Lino Jesus Santos Januário, is a Portuguese national, who was born in 1940 and lives in Almeirim.

Without invoking any particular provision of the Convention, the applicants complained about the impact of the reduction of their holiday and Christmas subsidies on their financial situation and living conditions.

The Court is master of the characterisation to be given in law to the facts of the case (see Guerra and Others v. Italy, judgment of 19 February 1998, § 44, Reports of Judgments and Decisions 1998-I; Tătar and Tătar v. Romania (dec.), no. 67021/01, § 47, 5 July 2007; and Scoppola v. Italy (no. 2) [GC], no. 10249/03, § 54, 17 September 2009). In the present case, it considers it appropriate to examine the applicants' complaints from the standpoint of Article 1 of Protocol No. 1.

Pursuant to Rule 42 § 1 of the Rules of Court, the Court decides to join the applications given their similar factual and legal background.

The applicants relied, in substance, on Article 1 of Protocol No. 1 to the Convention, which reads as follows:

They alleged a breach of their right to the protection of property due to the reduction of their holiday and Christmas subsidies for 2012, which amounted to a total loss of EUR 1,102.40, in the case of the first applicant, and a total loss of EUR 1,368.04, in the case of the second applicant.

At the outset, the Court considers that following the Constitutional Court's decision of 5 July 2012, which authorized the implementation of section 25 of the 2012 State Budget Law in 2012 and which had erga omnes effect, there were no more effective domestic remedies available to the applicants within the meaning of Article 35 § 1 of the Convention.

All the principles which apply generally in cases concerning Article 1 of Protocol No. 1 are equally relevant when it comes to pensions.

This provision does not guarantee a right to become the owner of property.

By the same logic, it cannot be interpreted as securing a right to a pension of a particular amount (see Skorkiewicz v. Poland (dec.) no. 39860/98, 1^st June 1999). Article 1 of Protocol No. 1 places no restriction on the Contracting State's freedom to decide whether or not to have in place any form of social-security scheme, or to choose the type or amount of benefits to provide under any such scheme. If, however, a Contracting State has in force legislation providing for the payment as of right of a pension — whether conditional or not on the prior payment of contributions — that legislation must be regarded as generating a proprietary interest falling within the ambit of Article 1 of Protocol No. 1 for persons satisfying its requirements (see Andrejeva v. Latvia [GC], no. 55707/00, § 77, with further references, in particular to Stec v. the United Kingdom (dec.), nos. 65731/01 and 65900/01, ECHR 2005-X and to Kjartan Ásmundsson v. Iceland, no. 60669/00, § 39, ECHR 2004-IX; and Carson and Others v. the United Kingdom [GC], no. 42184/05, § 64, ECHR 2010). The reduction or the discontinuance of a pension may therefore constitute an interference with possessions that needs to be justified (see Valkov and Others v. Bulgaria, nos. 2033/04, 19125/04, 19475/04, 19490/04, 19495/04, 19497/04, 24729/04, 171/05 and 2041/05, § 84, 25 October 2011 with further references, in particular to Rasmussen v. Poland, no. 38886/05, § 71, 28 April 2009, and Panfile v. Romania (dec.), no 13902/11, § 15, 20 March 2012).

In the present case, both applicants were legally entitled to receive holiday and Christmas subsidies in 2012, which they received as usual in July and November 2012, although with a reduction amounting to 10.8% of the total annual pension benefits in the case of the first applicant and to 10.7% in the case of the second applicant. Accordingly, in respect of their holiday and Christmas subsidies both applicants had a proprietary interest falling within the ambit of Article 1 of Protocol No. 1.

Article 1 of Protocol No. 1 requires that any interference by a public authority with the peaceful enjoyment of possessions should be lawful: indeed, the second sentence of the first paragraph of that Article authorises the deprivation of possessions ‘subject to the conditions provided for by law’. Moreover, the rule of law, one of the fundamental principles of a democratic society, is a notion inherent in all the Articles of the Convention (see Former King of Greece and Others v. Greece [GC] (merits), no. 25701/94, § 79, ECHR 2000-XII; and Broniowski v. Poland [GC], no. 31443/96, § 147, ECHR 2004-V).

In the applicants' case, the Court notes that although the relevant domestic statutory provisions were declared unconstitutional, on the basis that no equivalent effort was required of citizens employed in the private sector, a decision to allow the cuts for 2012 was nevertheless adopted by the Constitutional Court on the basis of Article 282 § 4 of the Portuguese Constitution, which allows the effects of a finding of unconstitutionality to be restricted in exceptional circumstances. The cuts were therefore allowed by the Constitutional Court in accordance with domestic law within the meaning of Article 1 of Protocol No. 1.

The Court stresses that any interference with the enjoyment of the right of property must also pursue a legitimate aim in the public interest (see Broniowski, cited above, §§ 147–48, and Hutten-Czapska v. Poland [GC], no. 35014/97, §§ 163–64, ECHR 2006-VIII). In this respect, a wide margin of appreciation is usually allowed to the State under the Convention when it comes to general measures of economic or social policy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the Court will generally respect the legislature's policy choice unless it is ‘manifestly without reasonable foundation’ (see National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire Building Society v. the United Kingdom, 23 October 1997, § 80, Reports 1997-VII, and Stec and Others v. the United Kingdom [GC], nos. 65731/01 and 65900/01, § 52, ECHR 2006-VI). This margin is even wider when the issues involve an assessment of the priorities as to the allocation of limited State resources (see Pentiacova and Others v. Moldova (dec.), no. 14462/03, 4 January 2005; Huc v. Romania and Germany (dec.), no. 7269/05, § 64, 1 December 2009; and Koufaki and Adedy v. Greece (dec.), nos. 57665/12 and 57657/12, § 31, 7 May 2013).

However, the margin of appreciation enjoyed by States in these particular fields is not unlimited. The Court must be satisfied that a ‘fair balance’ has been struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights. In particular, the Court must ascertain whether by reason of the State interference the person concerned had to bear a disproportionate and excessive burden (see Hutten-Czapska, cited above, § 167; Koufaki and Adedy, cited above, § 42).

In the assessment of the proportionality of the measures taken by the State in respect of pension rights, an important consideration is whether the applicant's right to derive benefits from the social insurance scheme in question has been infringed in a manner resulting in the impairment of the essence of his right. The nature of the benefit taken away — in particular, whether it has originated in a special advantageous pension scheme available only to certain groups of persons — may also be taken into account. The assessment would vary depending on the particular circumstances of the case and the applicant's personal situation; while a total deprivation of entitlements resulting in the loss of means of subsistence would in principle amount to a violation of the right of property, the imposition of a reasonable and commensurate reduction would not (see Janković v. Croatia (dec.), no. 43440/98, ECHR 2000-X; Schwengel v. Germany (dec.), no. 52442/99, 2 March 2000; Lakićević and Others v. Montenegro and Serbia, nos. 27458/06, 37205/06, 37207/06 and 33604/07, §§ 62–63, 13 December 2011; Apostolakis v. Greece, no. 39574/07, §§ 41–42, 22 October 2009; Kjartan Ásmundsson, cited above, § 45; Valkov and Others, cited above, § 97; Maggio and Others v. Italy, nos. 46286/09, 52851/08, 53727/08, 54486/08 and 56001/08, § 63, 31 May 2011; and Frimu and 4 other applications v. Romania (dec.), no. 45312/11, §§ 42–48, 7 February 2012). In all these cases, the reductions were general measures intended to undo special privileges or to bring special pension regimes into the general one.

In the present case, the Court notes that the cuts in the holiday and Christmas subsidies provided for in the 2012 State Budget Act were intended to reduce public spending and were part of a broader programme designed by the national authorities and their EU and IMF counterparts to allow Portugal to secure the necessary short-term liquidity to the State budget with a view to achieving medium-term economic recovery (see paragraphs 4 and 11 above). The very fact that a programme of such magnitude had to be put in place shows that the economic crisis which was asphyxiating the Portuguese economy at the material time and its effect on the State budget balance were exceptional in nature, as the Constitutional Court indeed recognised in its decision of 5 July 2012.

As it recently did in similar circumstances relating to austerity measures adopted in Greece (see Koufaki and Adedy, cited above, § 41), the Court considers that the cuts in social security benefits provided by the 2012 State Budget Act were clearly in the public interest within the meaning of Article 1 of Protocol No. 1. Like in Greece, these measures were adopted in an extreme economic situation, but unlike in Greece, they were transitory.

The Court must now assess whether a fair balance has been struck between the demands of the general interest of the community and the requirements of the protection of the applicants' individual fundamental rights.

In this respect, the Courts notes that while it reduced the applicants' 13^th and 14^th month subsidies by EUR 1,102.40 and EUR 1,368.04 respectively (10.8% and 10.7% of their previous pension rights, see paragraph 7 above), section 25 of the State Budget Act left unchanged the rate of their basic pension, which they continued to receive for the full twelve months of 2012. In addition, these cuts were only applicable for a period of three years (2012–14). The interference of the 2012 State Budget Act with the applicants' right to the peaceful enjoyment of their possessions was therefore limited both in time and in quantitative terms (less than 11% of their total social security benefits). In these circumstances, it was not disproportionate to reduce the State budget deficit on the expenditure side, by cutting salaries and pensions paid in the public sector, when no equivalent cuts were made in the private sector (see Koufaki and Adedy, cited above, §§ 43–47). Moreover, since the legislator remained within the limits of its margin of appreciation and previous measures involving ‘remuneratory reductions’ contained in the State Budget Act for 2011 had proved to be insufficient, it is not for the Court to decide whether better alternative measures could have been envisaged in order to reduce the State budget deficit (see Koufaki and Adedy, cited above, § 48).

In the light of the exceptional economic and financial crisis faced by Portugal at the material time and given the limited extent and the temporary effect of the reduction of their holiday and Christmas subsidies, the Court considers that the applicants did not bear a disproportionate and excessive burden.

Therefore, the application is manifestly ill-founded and must be declared inadmissible in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

Decides to join the applications;

Declares the applications inadmissible.

Stanley Naismith

Registrar

Guido Raimondi

President