Cyprus pension law puts migrant workers at disadvantage – ECJ
Cyprus has failed to put migrating workers’ pension rights on equal footing to those of employees remaining within the country, according to the European Union’s highest court.
The European Court of Justice (ECJ) said the Republic of Cyprus failed to allow the free movement of workers after it left in place a clause allowing for civil servants under 45 to be treated differently to those above the age.
The disputed clause allowed for those over 45 and with a pensionable service record exceeding five years to receive a lump sum payment on leaving the civil service, and draw their accrued pension from 55, whereas those under 45 are merely entitled to a lump sum payment.
In its judgment for case C‑515/14, the ECJ said that, by failing to repeal the clause with retroactive effect from the day Cyprus joined the EU in 2004, it left in place a law deterring workers from leaving the country to work in another member state.
This resulted in “unequal treatment” of migrant workers, the court said, which violates the EU treaties.
The clause no longer applies to new recruits, following a reform of civil service pensions effective from late 2011.
The ruling notes: “Although member states retain the power to organise their social security schemes, they must, nonetheless, when exercising that power, observe EU law and, in particular, the provisions of the EC Treaty on freedom of movement for workers and the right of establishment.”
The case was brought by the European Commission in 2013 as part of its regular referrals to the ECJ over member state failure to comply with EU law.