Dragoș Călin[1]
A recent decision of the Constitutional Court of Romania has already raised numerous debates in society and in the academic world, but the reasoning of the decision, published two weeks after its operative part was announced, is likely to surprise even the most fervent critics.
Specifically, by Decision no. 521 of 5 October 2023, the Constitutional Court of Romania admitted the objection of unconstitutionality of the provisions of Art. 2-11 of the Law on measures for the continuation of the activity by persons who meet the retirement conditions, as well as for amending and supplementing some normative acts, formulated by the High Court of Cassation and Justice – Joined Sections.
The main field of regulation of this law is the establishment, in the public sector, of the interdiction to combine pension with the allowance/salary/pay, more precisely the regulation of the obligation of the combining persons to choose between continuing work, situation leading to the suspension of pension payments, and terminating the activity, as well as the regulation of the suspension of pension payment for public sector retirees. Distinctively from the legislative solution of the interdiction to combine pension with the allowance/salary/pay in the public sector, the contested law provides for the possibility of public sector employees to continue their activity, based on the annual agreement of the employer, after reaching the standard retirement age.
Primo, the Constitutional Court of Romania disregarded its previous case law (for example, by Decision no. 1414 of 4 November 2009, it held that no constitutional provision prevented the legislator from suppressing the combining of the pension with the salary, provided that such a measure applied equally to all citizens, and any differences in treatment between the various professional categories would have a legitimate reasoning), showing that the purpose of the contested legislative act was to combat the “economic crisis, a worldwide phenomenon that structurally affects the Romanian economy”, the financial data, as well as the forecasts made by the competent authorities in the field, outlining “the image of a deep economic crisis, which can jeopardize the economic stability of Romania and, through this, public order and national security”. Therefore, since there no longer is an economic crisis of such magnitude, it is imperative to ease the rules.
Secundo, the Constitutional Court of Romania held that the legislative measure of interdicting the combining of pension with salary, in the public sector, is not based on the constitutional provisions of Art. 53, but on the idea of active aging at work, without combining pension with salary, respectively on the fact that there are 88,134 combining employees (as at 1 January 2020), respectively invoking a sociological and a statistical aspect.
Tertio, the Constitutional Court of Romania created a new constitutional right: “the retiree’s constitutional right to work”, by combining two independent fundamental rights, namely the right to work, regulated by Art. 41 paragraph (1) of the Constitution ( “The right to work cannot be restricted. The choice of the profession, job or occupation, as well as of the workplace, is free”), and the right to pension, regulated by Art. 47 paragraph (2) of the Constitution (“Citizens have the right to pension, to paid maternity leave, to medical assistance in public health units, to unemployment benefits and to other forms of public or private social insurance provided by law. Citizens also have the right to social assistance measures, according to the law”), each of which is exercised under the conditions provided by law. It has been shown that, inevitably, their simultaneous exercise generates an inter-relationship between them, but in no case in terms of exclusion from the exercise of any fundamental right or freedom.
However, as rightly indicated in the concurring opinion signed by judges Elena-Simina Tănăsescu and Laura-Iuliana Scântei, the possibility of combining the salary paid from public funds with the pension for age limit in the public pension system, in the public military pension system or with service pension is not an independent constitutional right, expressly provided for in the Constitution, but a legal benefit granted by the legislator, under conditions established by law, to people who wish to continue their work for public sector employers. Naturally, such a benefit granted by the legislator can also be retracted, also by the legislator, but in compliance with the constitutional provisions that establish the principle of non-discrimination and that require compliance with the proportionality between the objective pursued by the legislator and the means employed to attain it.
The law in question did not directly regulate an interdiction to simultaneously exercise the two fundamental rights (the right to work and the right to pension), but a real right of option between exercising the right to work, in the sense of continuing the activity in the public field, and exercising the right to pension. This right of option, once exercised by the beneficiary, leads to a subsequent legal situation in which the salary paid from the state budget or the state social insurance budget can no longer be combined with the pension for age limit, state military pension or service pension, exclusively for the period of time in which the legislator recognizes the retiree’s right to continue, respectively to carry out salaried activity in the public system.
But such a reasoning was superfluous for the Constitutional Court of Romania, which established that the combining of pension and salary represents the beneficiary’s option to capitalize on the two fundamental rights, and not the legislator’s option, as a result of some social policy measures. Sociological aspects (the idea of active aging at work, without combining), statistical aspects (the number of combining employees) or the financial impact (not cited in the case) cannot constitute reasons for restricting the exercise of fundamental rights. Therefore, the Court finds that the contested provisions violate the provisions of Art. 41 paragraph (1) of the Romanian Constitution.
Quatro, the Constitutional Court of Romania found that, once the retirement decision is issued, the citizen becomes the beneficiary of the pension, and the exercise of this right can no longer be conditioned by elements subsequent to the legal relationship already established, therefore, the suspension of the right to pension violates Art. 47 para.(2) of the Constitution and leads to a permanent legal instability for the beneficiary of the right, an aspect that is contrary to legal certainty, thus also violating Art. 1 para. (5) of the Constitution.
However, as the competing opinion justly points out, the suspension of the pension payment was only a suspensive condition established by the legislator for the continuation of the activity by a retiree under the conditions of Art. 2 of the law subject to constitutionality review, based on an individual employment contract, a work relationship or an administrative act of appointment to the position, acts that were concluded/established/issued before the entry into force of the contested law, as well as a suspensive condition for the employment of a pensioner, after the entry into force of the law, under the conditions of Art. 3, with an budgetary system employer. Therefore, the suspension of the pension payment represents legal conditions for exercising the right to continue the activity in the public system, rather than interdictions that lead to the nullification/elimination of the right to work or the right to a pension. Moreover, the legislative solution of suspending the payment of pension in cases expressly established by the legislator, including in the situation of the simultaneous/subsequent realization of other income in respect of which combining is not allowed, is not new in the special legislation in the field of the public pension system (see the cases of suspension of pension payment regulated by Art. 114 of Law no. 263/2010 on the unitary system of public pensions).
According to the competing opinion, the Constitutional Court of Romania should have found, as it did previously in its case law, that the legislative solution that gives a right of option to pension beneficiaries to continue their activity in the public system, with the condition of suspending the payment of the pension during the exercise of the activity, does not violate either the right to pension, or the right to work or the right to property and, as a consequence, the Court’s analysis should have concerned exclusively the constitutionality of the complete elimination of the legal benefit of combining the salary with the full amount of the pension in the budgetary system by reference to the principle of non-discrimination and to the principle of proportionality between the proposed legislative measure and the legitimate aim pursued by the legislator.
Finally, the public debates insisted on the fact that the judges of the Constitutional Court of Romania themselves, namely those who delivered the decision, benefited in full of the combining of salary/pension referred to by the given law, the public opinion invoking a position qualified by the Romanian press as immoral.[2]
The issue of combining the salary/pension is not a recent concern in Romania, as in 2017, the Court of Justice of the European Union itself had the opportunity to rule on the national legislation that prohibits the combining of a public pension with salary income from activities carried out in a public institution.
Thus, by the Decision of the Grand Chamber of 13 June 2017, in case C‑258/14, Eugenia Florescu and others, the European Court established that Article 6 of the Treaty on European Union and Article 17 of the Charter of Fundamental Rights of the European Union must be interpreted in the sense that they do not preclude national legislation that prohibits the combining of net pension in the public sector with the income from the activities carried out in public institutions if its level exceeds a certain threshold.
Taking into account the special economic context, the countries have a wide margin of appreciation when taking decisions in economic matters and that they are best placed to define the measures likely to achieve the objective pursued.
Thus, in Morocco, according to Art. 2 of Law no. 77-99/2001, [3] the pension or any other similar annuity ceases to be paid during the period in which the beneficiary continues to carry out his/her functions, either in the same position or another position with public authorities.[4]
By contrast, in South Africa, it is possible to combine the pension for age limit with the salary, as long as the beneficiary’s income does not exceed the threshold set by law.[5]
In Tunisia, Law no. 87-8/1987 forbids retirees to combine the pension with the income derived from carrying out a salaried activity. According to the same law, private sector retirees can only work as independent contractors or associates. People in the public sector can earn income from independent work in the field of scientific research, training, counselling or in the artistic, literary, cultural or sports fields.[6]
Finally, in France, by Decision no. 85-200 DC of 16 January 1986, the Constitutional Council established that a law regulating the combining of income obtained from the retirement pension and from a professional activity does not ignore the principle of equality, since it applies to all pension holders without taking into account the specific situation of retirees, it sets the amount of the solidarity contribution owed by retirees at the same amount, regardless of whether they receive a full or partial pension, and different rules apply in other situations. On 30 January 2020, a draft law aimed at prohibiting the combining of pension and salary for Constitutional Council judges and civil servants was rejected.[7]
[1] Ph.D., Judge, Bucharest Court of Appeal; co-president of the Romanian Judges’ Forum Association. Professional e-mail: dragos.calin@just.ro
[2] https://newsweek.ro/justitie/ccr-aproba-taierea-salariilor-de-3000-lei-dar-e-impotriva-taierii-pensiilor-speciale-de-35000-lei
[3] Loi n° 77-99 promulguée par le dahir n° 1-01-38 du 21 kaada 1421 (15 février 2001) interdisant le cumul entre le salaire, la retraite ou tout autre revenu similaire, http://bdj.mmsp.gov.ma/Fr/Document/1383-Dahir.aspx
[4] Various discussions were generated by the application of this legislative act. See the webpage https://acteurspublics.fr/articles/polemique-sur-les-retraites-des-parlementaires-au-maroc
[5] See the webpage https://www.oecd.org/fr/els/pensions-publiques/PAG2013-profil-Afrique-du-sud.pdf
[6] See the webpage https://legislation-securite.tn/fr/law/104673
[7] See the webpages https://www.assemblee-nationale.fr/dyn/15/textes/l15b1803_proposition-loi, respectively https://www.lepoint.fr/politique/la-remuneration-des-sages-restera-illegale-17-02-2021-2414470_20.php
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