Constitutional Court

KO190/19, Applicant: The Supreme Court of the Republic of Kosovo, Constitutional review of Article 8, paragraph 2 of Law no. 04/L-131 on Pension Schemes Financed by the State in conjunction with Article 5 and 6 of the Administrative Instruction (MLSW) no. 09/2015 on Categorization of Beneficiaries of Contribute Paying Pensions according to Qualification Structure and Duration of Payment of Contributions

The Constitutional Court of the Republic of Kosovo reviewed the Referral KO 190/19, submitted by the Supreme Court of the Republic of Kosovo, whereby was requested the constitutional review of Article 8, paragraph 2 of the Law no.04/L-131 on Pension Schemes Financed by the State in conjunction with Articles 5 and 6 of the Administrative Instruction (MLSW) No. 09/2015 for Categorisation of Beneficiaries of Contribute Paying Pension According to Qualification Structure and Duration of Payment of Contributions – Pension Experience.

Based on the referral submitted by the Supreme Court of the Republic of Kosovo in accordance with paragraph 8 of Article 113 [Jurisdiction and Authorized Parties] of the Constitution of the Republic of Kosovo, the Court assessed the constitutionality of paragraph 2 of Article 8 (Conditions and criteria for recognition of the right to age contribution-payer pension) of Law no. 04/L-131 on Pension Schemes Financed by the State in conjunction with Article 5 (Qualification of beneficiaries of contribute-paying pension) and Article 6 (Required documents for recognition of the right to contributors pensions) of Administrative Instruction (MLSW) no. 09/2015 on “Categorization of Beneficiaries of Contribute Paying Pensions According to Qualification Structure and Duration of Payment of Contributions-Pension Experience”.

The Court, unanimously, decided that (i) the referral is admissible; and (ii) paragraph 2 of Article 8 of Law no. 04/L-131 on Pension Schemes Financed by the State in conjunction with sub-paragraph 2.3 of paragraph 2 of Article 6 of Administrative Instruction no. 09/2015 on “Categorization of Beneficiaries of Contribute Paying Pensions According to Qualification Structure and Duration of Payment of Contributions-Pension Experience”, are not in compliance with Article 24 [Equality Before the Law] in conjunction with Article 14 (Prohibition of discrimination) and Article 1 (General prohibition of discrimination) of Protocol no. 12 of the European Convention on Human Rights.

The Court emphasizes that the referring court, based on five (5) cases pending before it and which are related to the right of the respective parties to contribution-payer pension, requested the assessment of the constitutionality of the applicable Law in conjunction with the Administrative Instruction challenged in this case, regarding the application of the criterion of fifteen (15) years work experience before 1 January 1999, in the historical and political circumstances of the ‘90s, during which the vast majority of employees were dismissed from the respective working places based on discriminatory laws.

In the context of the allegations of the referring court, the Court first clarifies that the subject of the constitutional review in this case, is only the relevant provision of the challenged Law in conjunction with the respective Administrative Instruction and which only relates to the contribution-payer pension category and not to the other pension categories defined by the same law, or the other special laws which constitute the entirety of the pension schemes currently applicable in the Republic of Kosovo.

Whereas, regarding the contribution-payer pension category, the Court clarifies that the latter originates from the Law on Pension and Disability Insurance no. 011-24/83 published in the Official Gazette of SAPK no. 26/83 and which the Assembly of the Republic of Kosovo incorporated into the legal order through the Law on Pension Schemes Financed by the State. The latter determines the validity of this category of pensions only for the work experience until 1 January 1999, specifying that in order to be entitled for this category of pensions, citizens must prove pension experience/contribution according to the above-mentioned law of the former SAPK. However, the Law on Pension Schemes Financed by the State, categorizes the potential contribution-payer pension beneficiaries into two groups. The first group, stipulated by paragraph 6 of Article 8 of the challenged Law, consists of “employees of education, health and others who have worked in the system of the Republic of Kosovo”, and to whom the contested Law, “recognizes the work experience on contribution-payer pension for the years 1989-1999”. Whereas, the second group, stipulated by paragraph 2 of Article 8 of the challenged Law, consists of all other citizens who could qualify for the right to the contribution-payer pension, however the criteria for exercising this right, are delegated to the level of the sub-legal act, which defines the categorization of citizens/users of contribution-payer pension “according to the duration of the payment of contribution according to the qualification structure”. The duration and qualification structure is established through the challenged Administrative Instruction, which, among others, establishes the criterion of fifteen (15) years of work experience/payment of contributions to the respective former pension insurance fund, as determined through the above-mentioned law of the former SAPK. However, regardless of the difference between these two categories as defined in the challenged Law and/or the duration of the payment of contributions until 1 January 1999, the financial means for this category of pensions, namely for the two groups mentioned above, are provided by the budget of the Republic of Kosovo.

Based on the aforementioned context and the allegations of the referring court, the Court emphasizes that the essence of this constitutional referral is to assess whether, contrary to Article 24 of the Constitution in conjunction with Article 14 and Article 1 of Protocol no. 12 of the European Convention on Human Rights, (i) the second group of citizens who can qualify for the right to a contribution-payer pension are discriminated against those of the first group, respectively “employees of education, health and others who have worked in the system of the Republic of Kosovo” and “the work experience on contribution-payer pension” for the years 1989-1999 of whom is recognized; and (ii) whether the application of the criterion of fifteen (15) years work experience/contribution throughout the ‘90s, during a time when the employment relationships of the vast majority of the  employees were terminated as a result of discriminatory laws, is a reasonable and proportional criterion.

For this purpose, the Court elaborated and applied the criteria stemming from the case-law of the European Court of Human Rights and that of the Court pertaining to the discrimination test, based on which, it must first be assessed if there is a “difference in treatment” between individuals/ groups and which are in similar and/or analogous situations, and if this is the case, to assess whether the relevant difference in treatment (i) is “prescribed by law”; (ii) pursues a “legitimate aim”; and (iii) is “proportional”.

In this context, the Court, among others, emphasized that (i) it is not disputed that there is a “difference in treatment” between two groups/categories of citizens and who are in similar and/or analogous situations in terms of the contribution-payer pension category and that this “difference in treatment” is “prescribed by law”, namely for the first group through paragraph 6 of Article 8 of the challenged Law, while for the second group through paragraph 2 of Article 8 of the challenged Law in conjunction with Article 6 of the challenged Administrative Instruction; (ii) this “difference in treatment” pursues a “legitimate aim”, namely and among other, that of the financial and economic stability of the state; but that (iii) the latter is not reasonable and proportionate. This is because (i) the challenged Law distinguishes between two categories of citizens in the context of the contribution-payer pension category, determining, on the one hand, that the work experience for contribution-payer pension for the years 1989-1999 is recognized for “the employees of education, health and others who have worked in the system of the Republic of Kosovo”, while on the other hand, establishing that the criteria for recognition of the corresponding contribution-payer experience must be determined through a sub-legal act for the other categories of citizens who can qualify for the right to contribution-payer pension; (ii) despite the fact that the challenged Law, in paragraph 2 of its Article 8, specifies that the criteria and conditions for being entitled to the right to a contribution-payer pension are determined according to the “duration of the payment of contribution” through a sub-legal act, the latter, namely the challenged Administrative Instruction, applies the criterion of fifteen (15) years of evidence of experience/contribution in a completely formalistic manner into the historical and political circumstances, in the context of which, fulfilling this criterion was impossible based on discriminatory laws applied to the vast majority of citizens; (iii) the entire category of citizens who do not meet the criterion of fifteen (15) years of experience/contribution, are treated the same as all others who have not made any payment of contributions for the pension period before 1999; and (iv) without taking into account the contributions of the relevant citizens, including the duration of their contribution, to the respective former pension fund based on the Law of the former SAPK, the entire category of citizens who may be beneficiaries of the contribution-payer pension category, is financed by the budget of the Republic of Kosovo. In support of the conclusion pertaining to the lack of proportionality between the limitation and the aim pursued, the Court also took into account the ex officio Report with Recommendations no. 235/2018 of the Ombudsperson regarding “the category of citizens who worked before 1999 and did not benefit from the age contribution-payer pension, because they do not meet the eligibility criteria of 15 years of pension experience as a consequence of discriminatory dismissal from work”.

Regarding the effects of this Judgment, the Court first emphasizes that, based on paragraph 3 of Article 116 [Legal Effect of Decisions] of the Constitution of the Republic of Kosovo, the repeal of the relevant law or provision is effective on the day of the publication of the Court’s decision, unless otherwise decided by the Court. The latter, in accordance with the principles stemming from the relevant Opinions of the Venice Commission, allows the Court the necessary flexibility to determine the temporal effects of its Judgments. However, taking into account the specific circumstances of the present case and the potentially unpredictable consequences of the immediate repeal of the unconstitutional provisions and the subsequent legal gap thereto, and with the aim of striking a balance between fundamental rights and freedoms and the principle of legal certainty, the Court referred to the relevant Opinions of Venice Commission and also requested the opinions of the Constitutional Courts members of the Forum of the Venice Commission.

The common denominator of the respective answers received, in principle, reflects that (i) Constitutional Courts have a certain flexibility regarding the determination of the temporal effects of a Judgment; (ii) in principle, the relevant laws/provisions which have been found as contrary to the Constitution, must be repealed immediately and eliminated from the relevant legal system; but that, (iii) in specific circumstances, and to avoid potential consequences as a result of the immediate repeal of the challenged law/provision, it is sometimes necessary to postpone the implementation/entry into force of a Judgment of the Constitutional Court, leaving the possibility for other branches of government, namely the executive and legislative, to take the necessary measures to amend the provision declared unconstitutional in accordance with the Constitution and the relevant Judgment of the Constitutional Court; and finally, (iv) in principle, the retroactive effects of the relevant Judgments should be avoided, with an emphasis on the final court decisions, in favor of the principle of legal certainty.

Based on these principles and clarifications elaborated in the Judgment to be published, the Court assessed that in the circumstances of the present case, legal certainty is more effectively protected by deciding to repeal the provisions assessed as contrary to the Constitution after a period of six (6) months, namely by 15 July 2023, so that (i) a legal gap, which can, among others, negatively affect citizens who can benefit from the relevant provisions of the challenged Law in conjunction with the challenged Administrative Instruction, is avoided; and (ii) to provide a reasonable period of time to the Assembly and the Government of the Republic of Kosovo, respectively, to take the necessary measures to supplement and amend Article 8 of the Law on Pension Schemes Financed by the State, in accordance with the Constitution and this Judgment.