Case C-128/12, Sindicato dos Bancários do Norte – does slashing public sector pay discriminate? [order 2013, ECLI:EU:C:2013:149]

Can a Member State cut its public deficit, slash public sector pay, and not infringe EU law?

Facts
The CJEU’s summary of the case indicates that in 2008 a private Portuguese bank was in such financial trouble that the State nationalised the bank. The bank, of course, remained an employer. As an employer, it formed part of the collective bargaining procedure that had produced the collective agreement applicable to every employer and employee in the banking sector.

Despite the collective agreement, in 2011 the bank decided to lower the wages of its employees and ignore parts of the collective agreement. The bank sought to justify this by relying on Article 19 of the 2010 Portuguese Budget Act. The Portuguese Act permitted the rapid implementation of horizontal and sectoral measures in order to reduce public spending and to ensure Portugal’s compliance with Article 104 EC Treaty, and the Stability and Growth Pact, as laid out in EU Regulations 1466/97 and 1467/97.

The claimants brought a claim for the loss of pay and invoked Article 31 of the EU Charter, which relates to fair and just working conditions.

Questions Referred
According to the Eurlex website, the Portuguese court asked:

1. Must the principle of equal treatment, from which the prohibition of discrimination derives, be interpreted as being applicable to public sector employees?

2. Is the salary cut made by the State, by means of the Lei do Orçamento de Estado para 2011, applicable only to persons employed in the public sector or by a public undertaking, contrary to the principle of prohibition of discrimination in that it discriminates on the basis of the public nature of the employment relationship?

3. Must the right to working conditions that respect dignity, laid down in Article 31(1) of the Charter of Fundamental Rights of the European Union, be interpreted as meaning that it is unlawful to make salary cuts without the employee’s consent, if the contract of employment is not first altered to that effect?

4. Must the right to working conditions that respect dignity, laid down in Article 31(1) of the Charter of Fundamental Rights of the European Union, be interpreted as meaning that employees have the right to fair remuneration which ensures that they and their families can enjoy a satisfactory standard of living?

5. As a salary cut is not the only possible measure and is not necessary and fundamental to the efforts to consolidate public finances in a serious economic and financial crisis in the country, is it contrary to the right laid down in Article 31(1) of the Charter of Fundamental Rights of the European Union to put at risk the standard of living and the financial commitments of employees and their families by means of such a reduction?

6. Is such a salary cut by the Portuguese State contrary to the right to working conditions that respect dignity in that it was unforeseeable and unexpected by the employees?

Update
Similar issues arise in Case C-264/12, Sindicato Nacional dos Profissionais de Seguros e Afins. According to the Curia website, the Tribunal do Trabalho do Porto has asked:

1. Must the principle of equal treatment, from which the prohibition of discrimination derives, be interpreted as being applicable to public sector employees?
2. Is the non-payment by the State of previously due holiday and Christmas allowances, by means of the Lei do Orçamento de Estado para 2012, applicable only to persons employed in the public sector or by a public undertaking, contrary to the principle of prohibition of discrimination in that it discriminates on the basis of the public nature of the employment relationship?
3. Must the right to working conditions that respect dignity, laid down in Article 31(1) of the Charter of Fundamental Rights of the European Union, be interpreted as meaning that it is unlawful to make salary cuts without the employee’s consent, if the contract of employment is not first altered to that effect?
4. Must the right to working conditions that respect dignity, laid down in Article 31(1) of the Charter of Fundamental Rights of the European Union, be interpreted as meaning that employees have the right to fair remuneration which ensures that they and their families can enjoy a satisfactory standard of living?
5. As the suspension of payment of holiday and Christmas allowances is not the only possible measure and is not necessary and fundamental to the efforts to consolidate public finances in a serious economic and financial crisis in the country, is it contrary to the right laid down in Article 31(1) of the Charter of Fundamental Rights of the European Union to put at risk the standard of living and the financial commitments of employees and their families who did not reckon with a reduction in their annual income in the amount of two months’ salary?
6. Is such a reduction in the amount of two months’ salary by the Portuguese State contrary to the right to working conditions that respect dignity in that it was unforeseeable and unexpected by the employees?
7. Is the abovementioned Lei do Orçamento de Estado para 2012, which establishes that the rules governing suspension of the payment of the allowances referred to above cannot be derogated from by collective regulatory agreements and takes precedence over such agreements, contrary to the right to collective bargaining?

In Romania, similar issues arose in Case C-134/12, Corpul Naţional al Poliţiştilor – Biroul Executiv Central. The Curtea de Apel Constanţa had asked:

1. Must the provisions of Articles 17(1), 20 and 21(1) of the Charter of Fundamental Rights of the European Union be interpreted as precluding reductions in remuneration such as those imposed by the Romanian State under Law No 118/2010 and Law No 285/2010?
2. Must the provisions of Article 15(3) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, whereby the Romanian Government was required to inform the Secretary General of the Council of Europe of its intention to adopt measures to reduce remuneration and to specify the time-limit laid down for implementing them, be interpreted as rendering invalid Law No 118/2010 and Law No 285/2010?

However, by Order of the Court (Sixth Chamber) dated 10 May 2012, it was declared that the CJEU had no jurisdiction to deal with this reference from Romania.