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					 GOVERNEMENT OF SPAIN                                   DIRECTORATE GENERAL III – SOCIAL COHESION
 MINISTRY OF LABOUR AND IMMIGRATION                                    SOCIAL POLICY DEPARTMENT
                                                                           Social Security Division


Strasbourg, 25 November 2008                                          TCSS(2008)20




               TRAINING COURSE ON STANDARD-SETTING INSTRUMENTS
                         IN THE FIELD OF SOCIAL SECURITY




                          Tesorería General de la Seguridad Social
                                    C/ Cruz del Sur n° 2
                                        Madrid, Spain
                                     5-7 November 2008


                                        _____________




                                  Compilation of contributions
                                                           TABLE OF CONTENT




Programme ...................................................................................................................................................... 3

Social security: a human right ....................................................................................................................... 7

Giving effect to the right to social security : ILO Social Security Standards............................................... 19

Setting Social Security Standards in a Global Society. An analysis of present state and practice and of
future options for global social security standard setting in the International Labour Organization ........... 30

The European Code of Social Security and its Protocol: Background, overall structure, supervisory
machinery ..................................................................................................................................................... 31

The European Code of Social Security: calculation of periodical payments (Part XI of the Code) ............ 37

The European Code of Social Security: Benefits in kind in case of sickness (Part II), maternity (Part
VIII) and employment injury (Part VI) ........................................................................................................ 41

The European Code of Social Security: Short-term cash benefits in case of sickness (Part III),
maternity (Part VIII) and employment injury (Part VI) ............................................................................... 47

Long-term Benefits in Case of Old Age (Part V), Invalidity (Parts VI and IX) and Death (Parts VI
and X) pursuant to the European Code of Social Security and its Protocol ................................................. 51

The European Code of Social Security: Unemployment benefit (part IV), and Family benefit (part
VII) ............................................................................................................................................................... 57

Impact of the Code: implications for the individual, the social partners, governments and
courts/tribunals. Developments in social security systems and main issues in relation to the Code ........... 61

The role of National Courts in applying international Social Security Standards ........................................ 69

The Revised European Code of Social Security .......................................................................................... 75
  Programme

                                        TUESDAY 4 NOVEMBER 2008


18.00 - 19.00   Registration of participants
Hotel Colon



                                      WEDNESDAY 5 NOVEMBER 2008


09.00 - 10.30   Registration of participants
Hotel Colon

11.00 - 11.30   OPENING - Opening session and introduction to the course
Plenary
                Mr Andres HARTO MARTINEZ, Deputy Director General, Tesorería General de la Seguridad
                Social

                Mr Jose Ignacio TEJERINA ALONSON, Deputy Director General, Ordenación de la Seguridad
                Social

                Ms Verena TAYLOR, Head of Social Policy Department, General Directorate III – Social
                Cohesion, Council of Europe


11.30 - 12.30   SESSION I – Chair: Ms Eva PEDERSEN, Head of International Relation Division, Ministry of
                Social Welfare of Denmark, Chair of the Council of Europe Committee of Experts on Social
                Security (CS-SS)

                The Spanish social security system:

                Mr Jose Ignacio TEJERINA ALONSON, Deputy Director General, Ordenación de la Seguridad
                Social

                Mr Andres HARTO MARTINEZ, Deputy Director General, Tesorería General de la Seguridad
                Social

                Questions

12.30 - 14.00   Lunch
                                          WEDNESDAY 5 NOVEMBER 2008


14.00 -17.30       SESSION II – Chair : Ms Lis WITSOE-LUND, Senior Adviser, International Relation Division,
Plenary            Ministry of Social Welfare of Denmark, Chair of the Council of Europe Committee for Social
                   Cohesion (CDCS)

14.00 - 16.00      Social security: a human right

14.00 - 14.45      Review of the relevant instruments: the Universal Declaration of Human Rights, the Philadelphia
                   Declaration, the UN International Covenant on Economic Social and Cultural Rights, the
                   European Convention on Human Rights, the European Social Charter and the Revised European
                   Social Charter

                   Ms Michèle AKIP, Head of Social Security Division, General Directorate III – Social Cohesion,
                   Council of Europe

                   Questions and discussion

14.45 - 15.30      Giving effect to the right to social security: ILO Conventions Nos 102, 121, 128, 130, 168 and
                   183, the European Code of Social Security and the European Code of Social Security (Revised)

                   Ms Emmanuelle ST PIERRE, Legal Officer, Social Security Department, ILO, Geneva

                   Questions and discussion

15.30 - 16.00      Coffee break

16.00 - 17.00      The European Code of Social Security and its Protocol

16.00 - 16.30      Background, overall structure, supervisory machinery

                   Ms Michèle AKIP, Head of Social Security Division, General Directorate III – Social Cohesion,
                   Council of Europe

                   Questions

16.30 - 17.30      Standards to be complied with by periodical payments (Part XI of the Code)

                   Ms Elisabeth IMESCH, Social Security Expert, Switzerland

                   Questions and discussion

17.30              End of the first day


Visit of the historical centre of Madrid and dinner offered by the Spanish authorities:
                                          THURSDAY 6 NOVEMBER 2008



09.30 - 12.45     SESSION III – Chair: Ms Ms Maria José TARRERO MARTOS, Secretary General, Tesoreria
                  General de la Seguridad Social, Spain

                  The European Code of Social Security and its Protocol: focus on Parts II to X (including
                  Part XII Common provisions)

09.30 - 10.30     Theoretical presentation on:
Plenary
                  - benefits in kind in case of sickness (Part II), maternity (Part VIII) and employment injury (Part VI)

                  Mr Francis KESSLER, Professor, University Paris 1 Panthéon-Sorbonne, Paris, France

                  - short term cash benefits in case of sickness (Part III), maternity (Part VIII) and employment
                  injury (Part VI)

                  Ms Elisabeth IMESCH, Social Security Expert, Switzerland

10.30 - 10.45     Coffee break

10.45 - 11.45  Practical examples: groups work on Parts II, III, VI and VIII
Working Groups

11.45 -12.45      General discussion: interpreting the standards for Parts II, III, VI and VIII, with the practical
Plenary           examples as a starting point

                  Mr Francis KESSLER, Ms Elisabeth IMESCH and Mr Albrecht OTTING
                  Participants


12.45 - 14.00     Lunch

14.00 - 17.30     SESSION IV – Chair: Ms Maria Paz BARQUERO DOBLAS, Head of Department, Subdirección
                  General de Ordenación Jurídica de la Seguridad Social, Spain

14.00 - 15.00     Theoretical presentation on:
Plenary
                  - long term cash benefits in case of old-age (Part V), invalidity (Parts VI and IX) and death (Parts
                  VI and X)

                  Mr Albrecht OTTING, Ministry of Labour and Social Affairs, Germany

                  - benefit in case of unemployment (Part IV) and family benefit (Part VII)

                  Mr Francis KESSLER, Professor, University Paris 1 Panthéon-Sorbonne, Paris, France


15.00 - 15.15     Coffee break

15.15 - 16.30  Practical examples: groups work on Parts IV, V, VI, VII, IX and X
Working Groups

16.30 - 17.30     General discussion: interpreting the standards for Parts IV, V, VI, VII, IX and X, with the practical
Plenary           examples as a starting point

                  Mr Albrecht OTTING, Mr Francis KESSLER and Ms Elisabeth IMESCH
                  Participants


17.30             End of second day


                                                                                                             5
                                          FRIDAY 7 NOVEMBER 2008



09.30 - 12.30   SESSION V – Chair : Ms Verena TAYLOR, Head of Social Policy Department, General
Plenary         Directorate III – Social Cohesion, Council of Europe

09.30 - 10.30   Impact of the Code: implications for the individual, the social partners, governments and
                courts/tribunals

                Developments in social security systems and main issues in relation to the Code

                Ms Ana GOMEZ, Administrator, Social Security Division, Directorate III – Social Cohesion, Council
                of Europe, Strasbourg

                The role of the national courts/tribunals in applying international social security standards

                Mr Teun DE VRIES, Judge, Central Appeals Court of Netherlands

                Questions and discussion

10.30 - 11.00   Coffee break

11.00 - 11.45   Presentation on the European Code of Social Security (Revised)

                Ms Elisabeth IMESCH, Social Security Expert, Switzerland

                Questions and discussion

11.45 - 12.15   General Discussion

12.15 - 12.30   Close of the meeting




                                                                                                          6
Social security: a human right


by Michèle AKIP
Social Security Division, Directorate III – Social Cohesion
Council of Europe, Strasbourg, France




                                                              7
Introduction

What’s what

The Council of Europe:
          an international organisation founded in 1949, with its headquarters in Strasbourg
and 46 member states; it was set up to promote democracy and protect human rights and the
rule of law in Europe


The European Union:
        based in Brussels, it currently comprises 27 Member States, all of which belong to the
Council of Europe



The European Council:
      regular meeting (at least twice a year) of the heads of state or government from the
member states of the European Union for the purpose of planning Union policy




                                                                                             8
Introduction

Human beings have always had to contend with a number of social risks: sickness, invalidity,
unemployment, the cost of supporting a family, old age, etc. In this context, effective social
protection is a key factor in social inclusion, which is why social security is seen as being both
a moral imperative and an economic necessity.

A driving factor in the growth of social security has been the conclusion of international
conventions and instruments which recognise it as a basic human right. This particular
aspect of social security is what I will be looking at in my first presentation.

Human rights are the concept that every human being possesses universal rights that are
inherent to the individual. These rights are generally enshrined in international conventions or
constitutional standards, thereby enabling them to be enforced, including against the state if
necessary.

The content of human rights was long a matter of debate. What has been termed the “first
generation of human rights” concerned civil and political rights, rights that the individual can
invoke against the state. Already present in embryonic form in the English Bill of Rights of
                                                      th
1689, these rights gained prominence in the late 18 century and were recognised in the
American revolution of 1787 and the French revolution of 1789.

In the 20th century, they were extended to include the so-called “second-generation” rights
whose implementation requires state intervention: individuals can demand action from the
authorities. These are social, economic and cultural rights.

Human rights develop over time and in line with changes in society. The 1980s, for example,
saw the emergence of what some have described as “third-generation” rights, such as
environmental rights or bioethical considerations.

These somewhat outmoded terms are no longer used today. The debate has moved on and
there is now broad agreement on the universal, indivisible and interdependent nature of
human rights. It is important to note, however, that although human rights are recognised as
being universal, their implementation remains rather uneven.

        Some key dates

        10 December 1948: Universal Declaration of Human Rights
        4 November 1950: European Convention for the Protection of Human Rights and
        Fundamental Freedoms of the Council of Europe
        18 October 1964: European Social Charter
        16 December 1966: International Covenant on Civil and Political Rights and
        International Covenant on Economic, Social and Cultural Rights
        3 May 1996: Revised European Social Charter
        31 March 2004: Revised Strategy for Social Cohesion




                                                                                                9
I. United Nations

1. Philadelphia Declaration

As early as 1944 the International Labour Conference meeting in Philadelphia (USA) adopted
a declaration redefining the aims and purposes of the International Labour Organization (ILO)
which had been founded in 1919.

This declaration unanimously adopted on 10 May 1944 by representatives of states,
employers and workers recognised, at international level, the importance of economic and
social issues. The International Labour Organization is officially responsible for implementing
worldwide programmes to achieve

“the extension of social security measures to provide a basic income to all in need of such
protection and comprehensive medical care” (Section III, paragraph f, of the Declaration).

2. Universal Declaration of Human Rights

The Universal Declaration was the first international instrument to recognise social security as
a human right, through the wording of Article 22 which states that:

“ Everyone, as a member of society, has the right to social security”.

Article 25 is even more specific:

1. Everyone has the right to a standard of living adequate for the health and well-being of
himself and of his family, including food, clothing, housing and medical care and necessary
social services, and the right to security in the event of unemployment, sickness, disability,
widowhood, old age or other lack of livelihood in circumstances beyond his control.

2. Motherhood and childhood are entitled to special care and assistance (…)

Although the Universal Declaration carried considerable moral weight, it did not impose any
specific legal obligations on states.

That did not happen until 1966 when the General Assembly of the United Nations adopted the
International Covenant on Civil and Political Rights and the International Covenant on
Economic, Social and Cultural Rights. These elaborated on the rights set out in the Universal
Declaration of Human Rights and made them legally binding.

It is often said that these instruments bear the mark of the ideological debates of the period:
western states, with their focus on freedom, were more inclined to ratify the first covenant
whereas the former communist states were more concerned with economic and social rights.
It will further be observed that the European instruments have common historical roots.

It was mainly for political reasons, therefore, that human rights were codified in separate
instruments, be it the UN instruments or those produced by the Council of Europe.




                                                                                             10
3. International Covenant on Economic, Social and Cultural Rights

The Covenant guarantees rights that generally involve the provision of a benefit by the state
in respect of individuals, such as the right to work, the right to family protection, the right to an
adequate standard of living, the right to enjoy the highest attainable standard of health or the
right to education.

The right to social security is expressly mentioned in Article 9 which states that:

“The States Parties to the present Covenant recognize the right of everyone to social security,
including social insurance”.

The definition given in the Covenant, however, contains no specific provision explaining the
normative content of the right. This gap will be filled following the adoption of General
Comment No. 19, which I will tell you about in a moment.

The Covenant provides for the introduction of an international monitoring procedure. The
competent UN body, the Committee on Economic, Social and Cultural Rights, set up in 1985,
is the body of independent experts (18 at present) that monitors implementation of the
Convention by the States Parties.

States are obliged to submit regular reports to the committee on how the rights enshrined in
the Covenant are being implemented. States must report initially within two years of accepting
the Covenant and thereafter every five years. The reports indicate the measures taken and
the progress made, and also any problems encountered by states in implementing the rights.

After examining the report, the committee addresses its concerns and recommendations to
the state concerned in the form of “concluding observations”. The committee also publishes
its interpretation of the provisions of the Covenant in the form of “general comments” (see
below).
The committee cannot consider individual complaints, although a draft Optional Protocol to
the Covenant is under consideration which could give the committee competence in this
regard. The committee meets in Geneva and normally holds two sessions per year,
consisting of a three-week plenary and a one-week pre-sessional working group.

General Comment on the right to social security

To help states fulfil their obligations under the Covenant, the Committee on Economic, Social
and Cultural Rights decided in 1988 to formulate General Comments explaining how the
provisions were to be interpreted. Although not binding, these General Comments are a
source of case-law for the committee and give the Covenant a dynamic and up-to-date
interpretation.

General Comment No. 19 adopted in November 2007 clarifies the scope of the right to social
security set out in very broad terms in Article 9.

It thus focuses on the key features of any social security system:

    -   the redistributive character of social security and its role in promoting social inclusion;

    -   the need to also take account of non-contributory schemes;

    -   the fact that social security should be treated as a social good. This requires that a
        system of social security covering the nine branches set out in ILO Convention No.
        102 be available and in place;

    -   responsibility of the public authorities for the effective administration and supervision
        of the system;

    -   respect for the principle of non-discrimination;

                                                                                                  11
    -   up-to-date examples of implementation such as adequate maternity and paternity
        leave and “parental” leave;

    -   the requirement for States Parties “to ensure access to a social security scheme that
        provides a minimum essential level of benefits to all individuals and families that will
        enable them to acquire at least essential health care, basic shelter and housing,
        water and sanitation, foodstuffs, and the most basic forms of education.”

II. Council of Europe

1. European Convention on Human Rights

The Council's most significant achievement is the European Convention on Human Rights,
which was adopted in 1950 and came into force in 1953. It sets out a list of rights and
freedoms which states are under an obligation to guarantee to everyone within their
jurisdiction (among other things, the right to life, to protection against torture and inhuman
treatment, to freedom and safety, to a fair trial, to respect for one's private and family life and
correspondence, to freedom of expression (including freedom of the press), thought,
conscience and religion).

Protocols have added other rights to those set out in the Convention, such as the abolition of
the death penalty (Protocol No. 6).

The rights guaranteed are mainly civil and political ones although some are of a social and
economic nature, as we will see below.


The European Court of Human Rights

The Convention establishes international enforcement machinery in the form of the European
Court of Human Rights. States and individuals, regardless of their nationality, may refer
alleged violations by contracting states of the rights guaranteed in the Convention to this
judicial institution in Strasbourg. The Court’s jurisdiction is compulsory for all contracting
parties. It sits on a permanent basis.

The Court consists of a number of judges equal to the number of contracting states to the
Convention. Although candidates are initially put forward by each government, judges sit in
their individual capacity and do not represent the states which proposed them. The Court’s
judgments are binding on the states concerned which must take the necessary measures to
avoid further violations and pay the applicant the just satisfaction awarded by the Court.
Monitoring the Court's judgments in which a violation is found is the task of the Committee of
Ministers.


What’s what

European Court of Human Rights:
based in Strasbourg, it comprises 47 judges. This is the only truly judicial organ
established by the European Convention on Human Rights. It ensures, in the last
instance, that contracting states observe their obligations under the Convention.

Court of Justice of the European Communities:
meets in Luxembourg and ensures compliance with the law in the interpretation and
application of the European Treaties of the European Union

International Court of Justice:
judicial body of the United Nations which meets in The Hague.




                                                                                                12
Example of case-law in the social field

Traditionally, the European Court of Human Rights is not meant to deal with social rights. In
1979, however, in the case of Airey v. Ireland (a married woman sought legal aid in order to
obtain a judicial separation and maintenance), the Court held that there was no “no water-
tight division” between social rights and political rights.

From that point on, the Court slowly but surely began to give ever more attention to social
rights and social protection.

At first it relied on Article 6 which guarantees a fair trial, taking the view that a dispute relating
to social security concerns civil rights obligations which must be able to form the subject of a
fair trial. Accordingly, cases relating to the granting of social benefits were brought before the
Court of Human Rights by citizens who believed they had not had a fair trial before their
domestic courts, because for example the proceedings had been excessively long or because
the decision handed down by the domestic courts was not executed.

A few years later, the Court referred to Article 1 of the Additional Protocol which guarantees
property rights. On the face of it, the connection between property rights and social protection
may appear rather remote but the Court held that a claim or a legitimate expectation of being
able to receive a sum of money fell within the scope of Article 1 of Protocol 1.

The case of Gaygusuz v. Austria in 1996 was a decisive step in this direction. It involved a
Turkish worker who had paid regular contributions to the Austrian social security system and
who was denied social security benefit because of his nationality. The Court held that social
benefits were “possessions” within the meaning of the Convention provided that they were
sufficiently established to be enforceable. While emphasising that states were not obliged
under the Convention to award a social benefit, the Court noted that once they did so, such
benefits must be granted without discrimination.

Although the Court initially held that contributory benefits were a “possession”, after some
debate and hesitation, it widened this view to include non-contributory benefits and social
assistance. In a Grand Chamber judgment in 2006 (Stec and Others v. the United Kingdom),
the Court unequivocally confirmed this shift in case-law. It may thus be concluded that the
applicability of certain provisions of the European Convention on Human Rights is now the
rule in the social security field.




                                                                                                   13
2. European Social Charter and revised Charter

The European Social Charter, which guarantees social and economic rights, is the natural
counterpart to the Convention on Human Rights.

The Charter sets out rights and freedoms and establishes a supervisory mechanism
guaranteeing their respect by the States Parties.
 Following its revision, the 1996 revised European Social Charter, which came into force in
1999, is gradually replacing the original 1961 treaty. The revised Charter is now widely
recognised as one of the main international instruments in the field of economic and social
rights.


What’s what

European Social Charter:
The Council of Europe’s Social Charter guarantees social and economic rights and is
the counterpart to the European Convention on Human Rights


The Charter of Fundamental Rights: charter adopted by the European Union in
December 2000 at the European Council of Nice



The rights guaranteed by the Charter concern individuals in their daily lives, including
housing, health, education, employment, legal and social protection, movement of persons
and non-discrimination.


The right to social security is recognised in Article 12.

        “Article 12 – Right to social security

        With a view to ensuring the effective exercise of the right to social security, the
        Contracting Parties undertake:

        1. to establish or maintain a system of social security;
        2. to maintain the social security system at a satisfactory level at least equal to that
           necessary for the ratification of the European Code of Social Security;
        3. to endeavour to raise progressively the system of social security to a higher level;
        4. to take steps, by the conclusion of appropriate bilateral and multilateral
           agreements, or by other means, and subject to the conditions laid down in such
           agreements, in order to ensure:

        a. equal treatment with their own nationals of the nationals of other Parties in
           respect of social security rights, (…)
        b. the granting, maintenance and resumption of social security rights (…)”.


The first three paragraphs of Article 12 establish the standards that are to be observed by
national systems of social security, i.e. the content of the rights. Paragraph 4 deals with the
arrangements for extending the right to social security to non-nationals, what is commonly
referred to as the co-ordination of social security.

The link between the Charter and the European Code of Social Security is specifically
referred to in paragraph 2 of Article 12.

The 1961 Charter required social security to be maintained at “a satisfactory level at least
equal to that required for ratification of International Labour Convention No. 102”. The revised
Charter of 1996 is more demanding and requires states to establish and maintain the social
security system at a satisfactory level at least equal to that necessary for ratification of the
Code. This means accepting a greater number of parts than in ILO Convention No. 102.
                                                                                             14
In the case of states which have ratified the European Code of Social Security, the
supervisory committee has regard to the resolutions of the Committee of Ministers. Failure to
comply with the Code leads to a finding of non-conformity with Article 12§2. Where the state
concerned has not ratified the Code, the committee makes its own assessment.


The European Committee of Social Rights

The European Committee of Social Rights (ECSR) checks whether member states have
honoured their undertakings under the Charter.
Its fifteen independent, impartial members are elected by the Council of Europe Committee of
Ministers for a period of six years, renewable once.
The committee determines whether or not the situations in the States Parties are in
conformity with the Charter.


A monitoring procedure based on national reports

Every year the States Parties submit a report indicating how they implement the Charter in
law and in practice. Each report concerns some of the accepted provisions of the Charter.
The committee examines the reports and decides whether situations in the countries
concerned are in conformity with the Charter. Its decisions, known as “conclusions”, are
published every year.
If a state takes no action on a committee decision to the effect that it does not comply with the
Charter, the Committee of Ministers addresses a recommendation to that state, asking it to
change the situation in law and/or in practice.




                                                                                              15
Revised European Social Charter - 1996
                   Supervisory mechanisms
  Government reports                                Observations
on the implementaion of the                 by the social partners and non-
         Charter                             governmental organisations


                European Committee of Social Rights
 Determines, from a legal standpoint, whether national law and practice are
                      in conformity with the Charter

                        Governmenal Committee
                        Prepares the decisions of the
                          Committee of Ministers

                          Comittee of Ministers
          Makes recommendations to states, asking them to bring
           their national law and/or practice into line with the
                                 Charter
                                                                              16
A collective complaints procedure

Under a protocol opened for signature in 1995, which came into force in 1998, complaints of
violations of the Charter may be lodged with the European Committee of Social Rights.
The organisations entitled to lodge complaints with the committee are the European Trade
Union Confederation (ETUC), BUSINESSEUROPE (formerly UNICE) and the International
Organisation of Employers (IOE).

Non-governmental organisations (NGOs) with participatory status with the Council of Europe
which are on a list drawn up for this purpose by the Governmental Committee can also lodge
complaints with the committee, as can national NGOs in some cases.

The committee examines the complaint and decides whether it is admissible. It then takes a
decision on the merits of the complaint, which it forwards to the parties concerned and the
Committee of Ministers.


Examples of case-law concerning Article 12

A system of social security, within the meaning of the Charter, should cover the traditional
risks, be collectively financed, which means funded by contributions from employers and
employees and/or by the state’s budget, and cover a significant percentage of the population.

The social security benefits should be adequate, i.e. represent a reasonable proportion of the
previous income and should never fall below the poverty threshold defined as 50% of median
equivalised income.

Few states fully satisfy the requirements of Article 12 of the Charter. Most of the criticisms
made by the European Committee of Social Rights concern the amount of benefit, which is
often found to be inadequate, or certain conditions of entitlement which are considered overly
restrictive.

For example, in 11 European countries (Austria, Bulgaria, the Czech Republic, Estonia,
Finland, Ireland, Malta, Poland, Romania, Spain and the United Kingdom) the European
Committee of Social Rights found that certain social security benefits were manifestly
inadequate, especially for single persons.

In five countries, furthermore (Denmark, Germany, Norway, Malta and Poland) the legislation
on unemployment was found to be in breach of the Charter as there was no reasonable initial
period during which an unemployed person could refuse a job that did not match their
previous occupation and skills without losing their unemployment benefits. The period of
entitlement to unemployment benefit was also deemed to be too short.

Lastly, in one country (Turkey) a high percentage of the economically active population do not
have any social security arrangements as the existing system covers neither all the branches
nor a significant percentage of the population.

3. A strategy for social cohesion
                                                        nd
Social cohesion was identified back in 1997 by the 2 Council of Europe Summit of Heads of
State and Government as a priority and an essential complement to human dignity. A
Strategy for Social Cohesion, adopted in 2001 and revised in 2004, provided the Council with
a practical framework in this social field.

As understood by the Council of Europe, social cohesion is the capacity of a society to ensure
the welfare of all its members, minimising disparities and avoiding polarisation. Emphasis is
also placed on the need to manage diversity and provide social protection for all.

As regards social security, the Strategy clearly indicates what the responsibilities of the state
are in this area.

According to paragraph 20 of the Strategy, it is for the state to restore:
“a sufficient degree of equity in the distribution of wealth through mechanisms of
solidarity such as redistributive taxation and social security. Social security systems,
indeed, are one of the most powerful institutional expressions of social solidarity. The
establishment or maintenance of a well developed social security system, based on
solidarity is seen as one of the principal means of fostering social cohesion. A
strategy for social cohesion must therefore have as a main aim the strengthening of
sustainable social security systems, especially at a time when many questions are
posed about their future development and financing.”
                rd
Tasked by the 3 Council of Europe Summit in 2005 with framing a long-term vision of social
cohesion, a High-Level Task Force made a number of recommendations in 2007.

The first of these focuses on the importance of reinvesting in social rights, promoting these
rights more strongly in Europe, renewing efforts to widen ratification of the Council of
Europe’s legal instruments and investing in the implementation of these instruments. Only
through these combined efforts will it be possible to turn social security into an everyday
human right.




                                             18
Giving effect to the right to social security : ILO Social Security
Standards


by Emmanuelle St. Pierre
Social Security Department, International Labour Organisation (ILO) Genena




                                            19
20
21
22
23
24
25
26
29
Link to the document:
Setting Social Security Standards in a Global Society. An analysis of present state
and practice and of future options for global social security standard setting in the
International Labour Organization

In English : http://www.ilo.org/public/english/protection/secsoc/downloads/policy/policy2e.pdf
In Spanish : http://www.ilo.org/public/spanish/protection/secsoc/downloads/policy/policy2s.pdf




                                                 30
The European Code of Social Security and its Protocol: Background, overall
structure, supervisory machinery


by Michèle AKIP
Social Security Division, Directorate III – Social Cohesion
Council of Europe, Strasbourg, France




                                                       31
I.      Some background

The European Code of Social Security is one of the oldest Council of Europe instruments in the social field,
together with the European Social Charter.

As I explained in my first presentation, the codification of human rights reflects the political history of the post-
war era. Although political moves along these lines began at the same time, the process of enshrining social
rights took longer. The European Convention on Human Rights was drafted very quickly in a little over 18
months whereas the European Social Charter and the Social Security Code needed 15 years of negotiation.

At its very first session, in 1949, however, the Council of Europe Assembly held a wide-ranging exchange of
views about possible ways of improving Europeans' standard of living, concluding that, alongside political,
economic and technological improvements, the development of social security would play a vital role.

After the adoption of the European Convention on Human Rights, the Consultative Assembly of the Council of
Europe, in Recommendation No. 28 of 24 April 1950, declared itself “in favour of the establishment of a
European Code of Social Security, the effect of which would be not the standardisation of the social security
legislation in the different countries, but the raising, by various methods, of social security in every country to
an equally high level.”

The Assembly was also of the view that this Code should be prepared by the Council of Europe in the form of
a convention in close consultation with the ILO. Around the same time, the International Labour Organization
adopted the1952 Social Security (Minimum Standards) Convention (Convention No. 102), which was very
similar, in character and scope, to the code which the Council of Europe was planning.

The Parliamentary Assembly recommendation was accepted by the Committee of Ministers of the Council of
Europe and a committee of experts instructed to put it into effect.

This was not accomplished until 11 March 1964 when the Committee of Ministers adopted the Code
containing minimum standards, accompanied by a Protocol "involving a higher level of social security, to
which those Members which are able to do so may adhere and which will constitute the European level of
social security that all Members will strive to achieve." The Code was revised in 1990.

The Code and the Protocol were opened for signature on 16 April 1964 and came into force on 17 March
1968, a year after the third instrument of ratification had been deposited in accordance with Article 77.2 of the
Code.

By 1 July 2007, 20 states had ratified the Code and 7 the Protocol.




                                                         32
II.      Overall structure of the Code and the Protocol

The Code is divided into 14 parts that can be broken down into 5 sections:

         1. General provisions
         2. Contingencies
         3. Calculation of periodical payments
         4. Common provisions
         5. Miscellaneous provisions

1. General provisions

The Preamble refers to:

      - the statutory aim of the Council Europe, namely to achieve a greater unity between its members for the
             purpose of facilitating social progress
      - its social programme which encourages members to develop their systems of social security further
      - harmonisation between member states: the objective being harmonisation as opposed to unification,
             the Code seeks to ensure a minimum standard of protection while leaving each member state free
             to set higher standards if it so wishes.
                                         1
Part I contains a number of definitions and explains the ratification process (Art. 2).

The Code is rather like a menu, with states allowed to pick and choose which parts will apply to them. They
have nine contingencies (also known as "risks") from which to choose. In order to ratify the Code, each state
must select six contingencies; medical care counts as two and old age counts as three, however.

2. Contingencies

- Part II: medical care
- Part III: sickness benefit
- Part IV: unemployment benefit
- Part V: old-age benefit
- Part VI: unemployment injury benefit
- Part VII: family benefit
- Part VIII: maternity benefit
- Part IX: invalidity benefit
- Part X: survivors’ benefit

The nine parts lay down minimum rules with regard to:
- the type of risk: description of the contingency covered
- the persons protected: category of persons and percentage of the population
- conditions of entitlement to benefit
- type of benefit
- level of benefit
- period of entitlement to benefit
- waiting period.

3. Calculation of periodical payments

Part XI establishes the minimum levels that periodical cash payments must attain as percentages of a
reference amount (the wage of a skilled male manual employee or of an ordinary adult male labourer).


1
  “prescribed”: determined by or in virtue of national laws or regulations;
- “wife”: a wife who is maintained by her husband;
- “widow”: a woman who was maintained by her husband at the time of his death;
- “child”: a child under 15 years of age, but if a country’s compulsory schooling ends later, then the higher age
is taken as the upper limit;
- “qualifying period”: a period of contribution or a period of employment or a period of residence, or any
combination of them, before benefits are granted.

                                                       33
4. Common provisions

Part XII lays down the grounds on which a benefit may be suspended or terminated.

This part also lays down the arrangements for exercising the right of appeal.

Lastly, it lays down a number of rules on the financing and management of social security schemes.


5. Miscellaneous provisions

Part XIII lays down the monitoring procedure while Part XIV describes the procedure by which states can
ratify and denounce the code.

The Code also has an annex and two addenda.

The purpose of the annex is to enable contracting parties to apply their own legislation on suspension of
unemployment benefits. Addendum 1 contains the international standard industrial classification of all
economic activities.
Addendum 2 lists supplementary services or advantages that states wishing to ratify the Code may grant in
one or other of the nine branches in order to satisfy the conditions for ratification laid down in Article 2.

The Protocol does not cover all the rules laid down in the Code. Its stipulations modify only those articles of
the Code where there is provision for higher standards .

The Protocol thus calls for a higher percentage of protected persons, a wider range of benefits and a higher
wage-replacement rate for pensions and other periodical payments.

States may not sign or ratify the Protocol without first having done likewise in respect of the Code.

Conditions for ratification of the Protocol are stricter. States that wish to accept both the Code and Protocol
are required to sign up to at least eight Parts. As in the Code, medical care and old age count as two and
three parts respectively.

A state which does not accept all the parts cannot regard its ratification as final. Instead, it will be encouraged
to ratify more parts of the Code or the higher standards of the Protocol. The procedure for ratifying further
parts simply involves notifying the Secretary General of the Council of Europe.




                                                        34
III. Supervisory procedure for the Code and the Protocol

The effectiveness of international treaties largely depends on the effectiveness of the supervisory procedure.
The Code establishes a control system based on national reporting at regular intervals.

There are two types of reports: reports on parts that have been accepted (Article 74) and reports on
provisions that have not been accepted (Article 76).

1. Reports on parts that have been accepted:

Article 74 of the Code requires the contracting parties to prepare a national report every year covering the
period from 1 July to 30 June of the following year.

The reports are prepared by the national administrative authorities which complete a very detailed form. The
contracting states are asked to submit “detailed reports” providing an update on their legislation and practice
once every four years. In the intervening years, they draw up “general” annual reports which simply
summarise any change in their legislation. The first report that a country submits in the year following
ratification is always a “detailed report”.

The reports are examined by the ILO’s Committee of Experts on the Application of Conventions and
Recommendations. This is an example of institutionalised co-operation between the Council of Europe and
the ILO to ensure harmonised application of the Code and of Convention No. 102.

Next, the Council of Europe’s Committee of Experts on Social Security studies the ILO committee’s
conclusions and the supplementary information provided by states. It then submits a report with its own
conclusions to the Committee of Ministers which has to decide by a two-thirds majority whether a contracting
party has fulfilled its obligations. On that basis, the Committee of Ministers adopts annual resolutions in
respect of each country. If it decides there has been failure to comply, it will request the party concerned to
rectify the situation.

Illustration: a typical control cycle

February 2008
The Secretary General of the Council of Europe invites a state to submit its report (period: 1 July 2007 to 30
June 2008) by 31 July 2008

March to June 2008
The contracting party prepares a report

July 2008
The report is sent to the Council of Europe in Strasbourg

August 2008
The report is forwarded to the ILO

December 2008
The ILO’s Committee of Experts on the Application of Conventions and Recommendations meets in Geneva
and adopts its conclusions

January 2009
The ILO committee’s report is forwarded to the Council of Europe’s Committee of Experts on Social Security
↓
April 2009
The Committee of Experts on Social Security meets in Strasbourg and adopts its conclusions.

May 2009
The conclusions of the Committee of Experts on Social Security are forwarded to the Committee of Ministers
↓


                                                       35
July 2009
The Committee of Ministers assesses the contracting parties’ compliance with standards and adopts the
appropriate Resolutions.

2. Reports on non-accepted parts:

As explained above, the Code is a menu-type instrument, allowing contracting parties to pick and choose
which of its provisions shall be applicable.

Article 76 requires them to report every two years on their legislation and practice in relation to those parts
of the Code that they have not yet accepted.

The reports on non-accepted provisions are assessed by a group of independent experts appointed by the
Council of Europe. These experts look at whether the law and practice comes up to the minimum standards
provided for in the Code and if not, then it gives suggestions on how compliance could be secured. The
experts’ conclusions are then forwarded to the Council of Europe’s Committee of Experts on Social Security.
The purpose of this procedure is to make states realise that the requirements of the Code have already been
met or could be satisfied with only a small amount of effort.




                                                      36
The European Code of Social Security: calculation of periodical payments (Part XI of
the Code)

by Elisabeth IMESCH
Social Security Expert, Switzerland




                                         37
        Only cash benefits, that is monetary benefits paid on a regular basis, are concerned here. These
periodical benefits are of two kinds: short-term (sickness, maternity and unemployment benefits) and long-
term (old-age, invalidity and survivors' benefits). The latter are generally referred to as pensions.

         So as to ensure that the persons protected have sufficient means of subsistence in the event of the
materialisation of an insured risk, the Code and the Protocol establish the minimum level that cash benefits
must reach in relation to reference amounts. Firstly, they refer to the ordinary wage level in the country
concerned and, secondly, they determine the percentage of this wage that cash benefits must represent for
each standard beneficiary. This system of reference makes it possible to ascertain, for each contingency
giving rise to the award of cash benefits, whether the social security system of the State Party guarantees an
adequate replacement rate.

       The Code and the Protocol use the three verification methods set out in ILO Convention No. 102,
which are in keeping with the various social security systems usually found in countries.

         In this connection, a distinction is drawn between:
    systems paying benefits that are proportional or partly proportional to the previous earnings of the
     beneficiary or the beneficiary's family breadwinner,
    systems paying benefits at uniform rates or involving a minimum guaranteed amount, and
    systems paying benefits according to the beneficiary's means during the contingency covered.

         The application of these three verification methods to the different kinds of social security systems
gives comparable results and guarantees sufficient equivalence since the Code and the Protocol create a link
between the calculation methods and the personal scope. It is only where the protection extends to all
residents that cash benefits can be reduced or be awarded solely on the basis of a means test applying upper
limits determined in accordance with Article 67.

a)      Standard beneficiary

        To make it possible to determine whether cash benefits reach a sufficient level in relation to wages,
the Code begins by defining the standard beneficiary for each benefit. This is a hypothetical entity - more
often than not a family unit comprising a man with a spouse and two children - and the aim is to show that, in
the event of the materialisation of an insured risk, this entity receives benefits reaching at least the
percentage set by the Code. The table appended to Part XI of the Code and the Protocol defines the
standard beneficiary for each kind of benefit.

        The standard beneficiary varies according to the contingency covered. In the event of sickness,
unemployment, invalidity, a work accident or an occupational disease, the standard beneficiary is a man
with a spouse and two children. In the event of maternity, it is the woman herself. For old-age benefit, it is a
man with a wife of pensionable age. For survivors' benefit, it is a widow with two children.

       Other beneficiaries must be entitled to benefits bearing a "reasonable relation" to the benefit for the
standard beneficiary (Art. 65, §5; Art. 66, §6). This provision concerns people without family reponsibilities or
those with more or less family responsiiblities than the standard beneficiary.

         One frequently voiced criticism concerning the Code is that, since the standard beneficiary is usually
a man, it is an outdated instrument that discrimates against women. The Code undeniably reflects the era
when it was drawn up. At the time, the family breadwinner was most frequently a man, who was therefore by
definition the standard beneficiary. However, before saying that the Code is disciminatory, let us consider its
real impact. The Code requires countries to pay pensions which are a percentage of a reference wage, and
this reference wage is that paid to a man. Bearing in mind that in our countries women's wages are frequently
lower than men's, regardless of the branch of activity concerned, it is clearly in the interests of beneficiairies
(whether men or women) that the standard should refer to a man's wage. The pension, which is a percentage
of that wage, will be higher than it would have been if it had been based on a woman's wage or an average of
a man's wage and a woman's wage in a given occupation.

        The table also determines, for each standard beneficiary, the minimum rate which the benefit must
reach. For short-term benefits, the Code sets a rate of 45% for sickness, unemployment and maternity (50%


                                                       38
under the Protocol) and of 50% for a work accident or occupational disease. For pensions, the Code sets
rates of 40% for old-age and survivors' pensions (45% under the Protocol) 40% for invalidity (50% under the
Protocol) and 50% for an invalidity pension payable as a result of a work accident or an occupational disease.
For historical reasons, national legislation often provides that work accidents/occupational diseases shall be
compensated at a higher rate than other risks, and the Code reproduced this particularity, although it can be
asked why the invalidity pension payable as a result of a work accident should be higher than that due in the
case of a traffic accident.

        With regard to old-age, invalidity and survivors' pensions, the rates stipulated in the Code or the
Protocol must be reached after a fairly long qualifying period of 30 years of contributions or employment in the
case of old-age, or 15 years of contributions or employment in the case of invalidity or survivors' benefits.

        Where the beneficiary or the family breadwinner has completed half of the qualifying period when the
contingency materialises, partial benefits must be payable.

b)       Article 65 of the Code

        This article stipulates the first formula for verifying periodical payments. It applies to both short-term
and long-term benefits. Article 65 concerns social security systems which pay benefits proportional or partly
proportional to the total previous earnings of the beneficiary or the beneficiary's family breadwinner. The
amount of periodical benefit awarded, together with any family benefits provided in the course of the
contingency, must, for the standard beneficiary, be equal to the percentage of total previous earnings set for
each contingency, increased by any family benefits payable to a protected person with the same family
responsibilities as the standard beneficiary. Where the standard beneficiary is assumed no longer to have
dependent children (old-age) family benefits are no longer taken into account.

         Where national law stipulates a maximum amount for the benefit or for the earnings taken into
account for calculating the benefit, the amount of benefit paid to the standard beneficiary cannot be lower
than the standard set by the Code (§3) for a skilled manual male employee, as defined in the Code (§6).
Under these calculation rules, the benefit is proportional to previous earnings but cannnot be lower than a
minimum amount. However, if the beneficiary's previous earnings were higher than those attributed to a
skilled manual male employee, as defined in the State Party, the percentage of the benefit in relation to those
earnings could be lower than that set by the Code.

       The previous earnings of the beneficiary or the beneficiary's breadwinner, the wage of the skilled
manual male employee, the cash benefits and the family benefits must be calculated on the same time basis
(§4).

         For other beneficiaries the benefit will be determined in such a way that it bears a "reasonable"
relation to the benefit for the standard beneficiary (§5). Neither the Code nor the Protocol say anything about
the percentages to be reached by benefits paid to unmarried persons, childless couples or couples with more
than two children.

         Paragraph 6 of Article 65 defines the skilled manual male employee whose wage constitutes the
ceiling in relation to which the replacement rates provided for in the Code must be respected. States Parties
have a choice of three definitions, all based on statistical data:

     -   a fitter or turner in the manufacture of machinery other than electrical machinery;
     -   a male skilled manual worker chosen from the wage category in which the largest number of male
         workers protected for the contingency in question are employed. So as to define the male skilled
         manual worker, the country must utilise the international standard industrial classification of all
         economic activities adopted by the Economic and Social Council of the United Nations;
     -   or a worker whose earnings are equal to 125% of the average earnings of all the persons protected.
         This calculation must be based on the statistics on earnings subject to contributions for each of the
         social insurance sectors concerned. Under this formula, it is no longer a male skilled manual worker
         that is defined, but a wage deemed to be adequate. The other two formulae are based on general
         wage statistics.




                                                       39
        The three methods are intended to give equivalent results as regards the amount of earnings to be
taken into consideration.

        To sum up, the calculation formula laid down in this article is as follows:

       Benefit + family allowances = % of previous earnings (possibly subject to a ceiling) + family
allowances

c)      Article 66 of the Code

         This article stipulates the second formula for verifying periodical payments. It applies above all to
social security systems paying flat-rate benefits, that is to say calculated at uniform rates. In this case, the
periodical amount of the benefit awarded to the standard beneficiary, together with any family benefits
provided in the course of the contingency, must be at least equal to the percentage of earnings, including
family benefits, set by the Code for an ordinary adult male labourer. A country which applies this article
must indicate the minimum amount of the benefit, the percentage the benefit represents in relation to the
wage of an ordinary male labourer, the percentage which benefits awarded to other beneficiaries represent in
relation to benefits paid to standard beneficiaries and, lastly, whether the minimum amount is also paid to
standard beneficiaries whose previous earning were lower than those of an ordinary adult male labourer.

       The ordinary adult male labourer will be either a person deemed typical of unskilled labour in the
manufacture of machinery other than electrical machinery or a person deemed typical of unskilled labour
chosen in the wage category employing the largest number of men protected against the contingency
concerned in the branch of activity that itself employs the largest number of protected persons.

        To sum up, the calculation formula laid down in this article is as follows:

        Benefit + family allowances = % of wage of ordinary male labourer + family allowances.

d)      Article 67 of the Code

        This article stipulates the third formula for verifying periodical payments. It applies solely to legislation
protecting all residents and making the award of benefits subject to means testing. Such systems are scarce
and usually concern pensions. However, systems of this kind have also been set up alongside a contributory
pensions scheme, so as to guarantee everyone sufficient means of subsistence, particularly where they have
an incompete insurance history. All of these social protection systems qualify as social assistance, since they
are usually financed exclusively by the public authorities.

         Under such systems the benefit can be reduced or suspended if the beneficiary's means exceed a
prescribed ceiling. However, Article 67 of the Code lays down a number of safeguards with which such
systems must comply. For instance, the amount of the benefit must be determined using a scale set by
national legislation or determined by the competent public authorities. Those authorities must not have
discretionary power to award benefits or determine their amounts, since beneficaries must have an objective
entitlement to the benefit, which they must be able to assert before a judicial authority.

         A state which applies Article 67 must prove that the sum of the benefits awarded to standard
beneficiaries and of any resources exempted from the means test reach, for each contingency, the rates
prescribed in the Code or the Protocol in relation to the wage of an ordinary adult male labourer. At the same
time, the amount of the benefit payable to the beneficiary, to which his/her other means will be added, after
deduction of the "substantial amounts" referred to in sub-paragraph b of Article 67 must be "sufficient to
maintain the family of the beneficiary in health and decency, and shall not be less than the corresponding
benefit calculated in accordance with the requirements of Article 66" (sub-paragraph c).




                                                         40
The European Code of Social Security: Benefits in kind in case of sickness (Part II),
maternity (Part VIII) and employment injury (Part VI)

by Francis KESSLER
University Paris 1, Panthéon-Sorbonne, Paris, France




                                                   41
Background:

                               2
Parts II to X of the Code contain the provisions on the nine traditional branches of social security, namely:

- Part II: medical care;
- Part III: sickness benefit;
- Part IV: unemployment benefit;
- Part V: old-age benefit;
- Part VI: employment injury benefit;
- Part VII: family benefit;
- Part VIII: maternity benefit;
- Part IX: invalidity benefit;
- Part X: survivors’ benefit.

Each of these parts is organised along the same lines and defines:

- the contingency covered;
- the personal scope, i.e. the persons protected;
- the material scope, i.e. the type of benefits provided;
- the conditions for entitlement to benefits;
- the level of benefit;
- the period of entitlement to benefit;
- the maximum permissible waiting period, if any.

Part XII “Common provisions” determines
    - the grounds on which a benefit may be suspended. The supervisory bodies have taken the view that
         benefits may also be refused or stopped permanently only in the circumstances described in Article
         68;
    - the arrangements for the right of appeal;
    - the rules on the financing of social security schemes and their administration.

The Protocol does not affect all the rules contained in the Code. Only certain articles, paragraphs and sub-
paragraphs are amended, through the introduction of higher standards.

In particular, the Protocol calls for a higher percentage of persons protected, a wider range of benefits and a
higher replacement ratio in the case of periodical cash benefits.




2
 European Code of Social Security, Strasbourg, 16.IV.1964 (hereafter “the Code”), Protocol to the European Code of Social Security
16.IV.1964 (hereafter “the Protocol”)


                                                                 42
Benefits in kind

Part II: Medical care

1) contingency covered

Each state which accepts this part must secure to the persons protected the provision of benefit in respect of
a condition requiring medical care (Art. 7).

Under Article 8 of the Code, the contingency covered includes “any morbid condition, whatever its cause”,
including pregnancy, confinement and their consequences. This definition is very wide and covers all
possible morbid conditions, all causes combined (ordinary illness, employment injury, invalidity, etc.).
A condition is “morbid” as long as it requires medical care.

States are free to decide how benefits should be provided (health insurance, national health service, accident
insurance, invalidity insurance, etc.).

2) personal scope

To meet the requirements of this part, states must provide for the protection of certain prescribed classes of
persons (Art. 9):

- certain classes of employees, constituting not less than 50 per cent of all employees, and also their wives
and children; or
- certain classes of the economically active population, constituting not less than 20 per cent of all residents,
and also their wives and children; or
- certain classes of residents, constituting not less than 50 per cent of all residents.

These three alternatives are designed to accommodate the features of the various schemes in force:
occupational schemes and universal ones.

The percentages prescribed by the Protocol are 80%, 30% and 65% respectively.

3) material scope

Article 10, paragraph 1, of the Code indicates what the benefit must include at a minimum in the case of a
morbid condition (paragraph 1.a.) and in case of pregnancy and confinement and their consequences
(paragraph 1.b.).

It must include at least:
- general practitioner care, including domiciliary visiting;
- specialist care;
- the “essential” pharmaceutical supplies, provided they have been prescribed by medical or other qualified
practitioners (and “all necessary non-proprietary pharmaceutical supplies” under the terms of the Protocol);
- pre-natal, confinement and post-natal care either by medical practitioners or by qualified midwives; and
- hospitalisation where necessary (the Protocol refers to maintenance, nursing and other auxiliary services
required).

The Protocol further covers (conservative) dental care (for the children protected), and also “pharmaceutical
supplies” in case of pregnancy, confinement and their consequences.

4) conditions for entitlement to benefits

The Code allows states to impose “such qualifying period as may be considered necessary to preclude
abuse” (Art. 11).

5) level of benefit

Under Article 10, paragraph 2, of the Code, the beneficiary or his breadwinner may be required to share in the
cost of the medical care received “in respect of a morbid condition” (no such cost-sharing is permitted in the
case of pregnancy, confinement and their consequences).


                                                       43
The Code does not specify the extent to which costs may be shared. It merely states that “the rules
concerning such cost-sharing shall be so designed as to avoid hardship”.
It does not indicate whether the burden thus imposed is to be assessed overall or by category of care.

The Protocol sets ceilings on the co-payments that can be levied:
- 25% for care outside hospital wards by general practitioners and specialists;
- 25% for hospital care;
- 25% of the average cost of pharmaceutical supplies;
    1/3
- 33 % for conservative dental care.
In the case of pregnancy, confinement and their consequences, co-payments may be levied only on
pharmaceutical supplies, up to a maximum level of 25% on average. No co-payments may be levied on
maternity-related medical care received by women in or outside hospital.

6) period of entitlement to benefit

Generally speaking, medical treatment must continue throughout the contingency, except that, in case of a
morbid condition, its duration may be limited to 26 weeks in each case. In the case of pregnancy,
confinement and their consequences, no such limitation may be imposed.

Medical care cannot be suspended, however, as long as the beneficiary continues to receive sickness benefit.
In the case of diseases recognised as entailing prolonged care, provision must be made through national laws
or regulations to extend the period during which benefit is payable (Art. 12).

Under the Protocol, hospital care may only be limited to 52 weeks in each case or to 78 weeks in any
consecutive period of three years.

No waiting period may be imposed before benefits are granted after a contingency has occurred.




                                                    44
Part VI: Employment injury benefit

1) contingencies covered

Each state which accepts this part must secure to the persons protected the provision of employment injury
benefit:

- in case of a morbid condition;

- in case of incapacity for work resulting from such a condition and involving suspension of earnings, as
defined by national laws or regulations;

- in case of total loss of earning capacity or partial loss thereof in excess of a prescribed degree, likely to be
permanent, or corresponding loss of faculty; and

- in case of loss of support suffered by the widow or child as the result of the death of the breadwinner; in the
case of a widow, the right to benefit may be made conditional on her being presumed, in accordance with
national laws or regulations, to be incapable of self-support (Art. 32).

Only the first two contingencies, for which short-term benefits are payable, are considered below.

2) personal scope

To meet the requirements of this part, states must provide for the protection of certain classes of employees,
constituting not less than 50 per cent of all employees (Art. 33).

The Protocol sets this percentage at 80%.

3) material scope

In case of a morbid condition, Article 34, paragraph 2, specifies the medical care which the benefit must
comprise.

It is more extensive than that described in Part II and includes:
- general practitioner and specialist in-patient care and out-patient care, including domiciliary visiting;
- dental care;
- nursing care at home or in hospital or other medical institutions;
- maintenance in hospitals, convalescence homes, sanatoria or other medical institutions;
- dental, pharmaceutical and other medical or surgical supplies, including prosthetic appliances, kept in repair,
and eyeglasses; and
- the care furnished by members of such other professions as may at any time be legally recognised as allied
to the medical profession, under the supervision of a medical or dental practitioner.

The benefits in kind must be afforded with a view to maintaining, restoring or improving the health of the
person protected and his ability to work and to attend to his personal needs (Art. 34, § 3).

The beneficiary cannot be required to share in the cost of the medical care received.

In the case of incapacity for work resulting from a morbid condition and involving suspension of earnings, as
defined by national laws or regulations, the benefit must be a periodical cash benefit (Art. 36).

4) conditions for entitlement to benefits

No minimum qualifying period may be imposed in respect of entitlement to benefits for employment injuries.

The benefit must be secured at least to a person protected who was employed on the territory of the
Contracting Party at the time of the accident or at the time of contracting the disease (Art. 37).




                                                       45
5) level of benefit

Under Article 36 of the Code, the amount of benefit must be calculated in accordance with the requirements
of Part XI.

6) period of entitlement to benefit

Generally speaking, the benefits must be provided throughout the contingency.

The benefits in kind (medical care) must be provided for an unlimited period until the recipient has fully
recovered or at least until his condition has stabilised.

Part VIII: Maternity benefit

1) contingency covered

The contingency covered is pregnancy, confinement and their consequences, and suspension of earnings, as
defined by national laws or regulations (Art. 47).

2) personal scope

To meet the requirements of this part, states must provide for the protection of certain prescribed classes of
women (Art. 48):

- all women in prescribed classes of employees, which classes constitute not less than 50 per cent of all
employees, and for maternity medical benefit, also the wives of men in these classes; or
- all women in prescribed classes of the economically active population, which classes constitute not less than
20 per cent of all residents and, for maternity medical benefit, also the wives of men in these classes.

The percentages prescribed by the Protocol are 80% and 30% respectively.

3) material scope

Article 49 of the Code indicates what the medical benefits must include at a minimum in the case of
pregnancy, confinement and their consequences. These benefits are substantively the same as those
specified in Part II.

4) conditions for entitlement to benefits

Under the Code, women may be required to have completed “such qualifying period as may be considered
necessary to preclude abuse” (Art. 51).

5) level of benefit

Under Article 50 of the Code, the amount of benefit must be calculated in accordance with the requirements
of Part XI.

6) period of entitlement to benefit

Generally speaking, the benefits must be provided throughout the contingency.

No waiting period may be imposed before benefits are granted after a contingency has occurred.




                                                      46
The European Code of Social Security: Short-term cash benefits in case of sickness
(Part III), maternity (Part VIII) and employment injury (Part VI)

by Elisabeth IMESCH
Social Security Expert




                                        47
Part III: Sickness benefit

a) contingency covered

This part of the Code requires the States Parties to provide through their laws or regulations for the payment
of cash benefits (Art. 13) in case of a morbid condition resulting in incapacity for work involving suspension of
earnings (Art. 14).

The incapacity for work must be caused by a morbid condition and should generally consist in the person
protected being unable to carry on their usual activity. Since it is left to national legislation to define what
constitutes “suspension of earnings”, this may be total, although national legislation can, of course, provide for
reduced benefits to be paid in the case of partial incapacity. A condition is “morbid” as long as it requires
medical care. Once the condition has stabilised, if the incapacity for work and earning incapacity continues,
invalidity benefit or employment injury benefit may be substituted for sickness benefit, in which case Part IX or
VI of the Code will apply, as the case may be.

b) personal scope

Article 15 of the Code determines who is protected:

    -    prescribed classes of employees, constituting not less than 50 per cent of all employees; or
    -    prescribed classes of the economically active population, constituting not less than 20 per cent of all
         residents; or
    -    all residents whose means during the contingency do not exceed limits prescribed in accordance with
         Article 67.

The Protocol sets higher standards for the first two (80% and 30% respectively).

c) material scope

The benefit must take the form of a periodical cash benefit payable daily or at other intervals.

The supplementary advantages which must be provided for by the Parties if they make use of Article 2,
paragraph 2, as regards sickness benefit, are listed in Addendum 2 to the Code and the Protocol.

d) conditions for entitlement to benefit

Under Article 17 of the Code, national legislation may impose a qualifying period. Such period, however, may
be no more than is considered “necessary to preclude abuse”. It is for the supervisory body to decide
whether a qualifying period is excessive.

e) level of benefit

Article 16 of the Code indicates to the State Party, depending on who is protected, which article of Part XI of
the Code (calculation of periodical payments) it should apply. Where classes of employees or classes of the
economically active population are protected, the benefit will be a periodical payment calculated in
accordance with the requirements either of Article 65, or of Article 66. Where all residents whose means
during the contingency do not exceed prescribed limits are protected, the benefit shall be a periodical
payment calculated in accordance with Article 67. The standard beneficiary is a man with a wife and two
children and the benefit that is paid to him must be equal to or greater than 45% of the reference amount
(Protocol: 50%).

f) period of entitlement to benefit

As a rule, sickness benefit should be paid for the entire duration of the morbid condition. Under Article 18,
however, such payments may be limited to 26 weeks in each case of sickness. States can also impose a
qualifying period, in that payment of sickness benefit need not be paid for the first three days of suspension of
earnings. The Protocol sets the period of entitlement to sickness benefit at 52 weeks minimum in each case
of sickness or 78 weeks minimum in any consecutive period of three years.




                                                       48
Where the law allows sickness benefit to be replaced by invalidity benefit, before the period of 26 (52 or 78)
weeks has expired, such benefit must be at least equal to the rate prescribed for sickness benefit and its
award may not be made conditional on a longer qualifying period than that stipulated for sickness benefit.


Part VIII: Maternity benefit

a) contingency covered

The contingency covered, under Article 47 of the Code, is pregnancy, confinement and their consequences,
and suspension of earnings, as defined by national laws or regulations, resulting therefrom.

b) personal scope

Article 48 states that, in the case of cash benefits, the persons protected must include:

- all women in prescribed classes of employees, which classes constitute not less than 50 per cent of all
employees (Protocol: 80%); or
- all women in prescribed classes of the economically active population, which classes constitute not less than
20 per cent of all residents, (Protocol: 30%).

c) material scope

In the case of suspension or loss of earnings resulting from pregnancy, the women protected must receive
maternity benefit in the form of periodical payments (Art. 50).

d) conditions for entitlement to benefits

Maternity benefit may be made conditional on such qualifying period as may be considered necessary to
avoid abuse (Art. 51).

Provision of maternity benefit without qualifying period is a supplementary advantage taken into consideration
by the Code for ratification on the terms laid down in Article 2, paragraph 2 (Addendum 2).

e) level of benefit

Article 50 of the Code indicates to the State Party, depending on who is protected, which article (65 or 66) of
Part XI of the Code (calculation of periodical payments) it should apply. The standard beneficiary is a woman
and, during suspension of earnings resulting from pregnancy, confinement and their consequences, the
benefit paid must be equal to or greater than 45% of the reference amount (Protocol: 50%).

f) period of entitlement to benefit

The benefit must be granted throughout the contingency covered. Payment of maternity benefit may be
limited, however, to a period of not less than 12 weeks. Where a longer period of abstention from work is
required or authorised by national laws or regulations, payment of maternity benefit must be ensured over this
longer period (Art. 52).




                                                       49
Part VI: Employment injury benefit

a) contingencies covered

Under Article 32 of the Code, benefits are to be provided in the following circumstances:
- a morbid condition;
- incapacity for work resulting from such a condition and involving suspension of earnings, as defined by
national laws or regulations;
- total loss of earning capacity or partial loss thereof in excess of a prescribed degree, likely to be permanent,
or corresponding loss of faculty; and
- the loss of support suffered by the widow or child as the result of the death of the breadwinner; in the case of
a widow, the right to benefit may be made conditional on her being presumed, in accordance with national
laws or regulations, to be incapable of self-support.


Only the second contingency gives rise to short-term cash benefits.

Temporary incapacity for work (initial phase of the stoppage of work) resulting from a morbid condition and
involving suspension or loss of earnings is defined by national legislation. Generally speaking, this means
total incapacity for work in one’s usual occupation. National legislation, however, may also provide for a
reduced daily benefit to be paid in the case of partial incapacity for work. In general, incapacity for work
continues as long as the person’s condition requires medical care and until he has fully recovered or until his
condition has stabilised.

b) personal scope

The Code requires only employees to be protected. Article 33 stipulates that the persons protected must
comprise prescribed classes of employees, constituting not less than 50 per cent of all employees (80%
under the Protocol).

c) material scope

The cash benefits must take the form of periodical payments if the employment injury or occupational disease
results, inter alia, in temporary incapacity for work.

Addendum 2 to the Code contains no provision that would allow supplementary advantages to count towards
ratification on the basis of Article 2, paragraph 2.

d) conditions for entitlement to benefits

No qualifying period may be imposed for entitlement to employment injury benefit. The benefit must be
secured, in the case of an employment injury, at least to persons protected who were employed on the
territory of the Contracting Party concerned at the time of the accident. In the case of an occupational
disease, national legislation may require that the person protected was employed on the national territory at
the time of contracting the disease (Art. 37).

e) level of benefit

Under Article 36 of the Code, the benefit will be a periodical payment calculated according to Article 65 or 66
of Part XI of the Code (calculation of periodical payments). The standard beneficiary is a man with a wife and
2 children and, in the case of incapacity for work, the benefit paid must be equal to or greater than 50% of the
reference amount (Protocol: ditto).

f) period of entitlement to benefit

The cash benefit awarded in case of incapacity for work (daily benefits) must be paid until the person is once
again capable of working or until it is confirmed that the total or partial loss of earning capacity is likely to be
permanent. National legislation may impose a waiting period (first three days of suspension of earnings)
during which the benefits will not be paid (Art. 38).




                                                        50
Long-term Benefits in Case of Old Age (Part V), Invalidity (Parts VI and IX) and Death
(Parts VI and X) pursuant to the European Code of Social Security and its Protocol

by Albrecht OTTING
Ministry of Labour and Social Affairs, Germany




                                                 51
Requirements of the Code with respect to long-term benefits

The Parts II to X of the Code lay down minimum conditions for the classic nine branches of social security.
Each of these nine parts is organised along the same lines, defining

         the contingency covered (definition of the risk)
         the persons covered (personal scope)
         the kind of benefits to be provided (material scope)
         the conditions of entitlement to a benefit (qualifying period)
         the required amount of benefit (replacement rate)
         the duration of benefits payment, and, where appropriate,
         the accepted maximum length of any waiting period.

The Code does not use the notions of long-term and short-term benefits, but it establishes a distinction
between both types of benefits by treating them differently. Long-term benefits – according to the Code – are
periodical payments in respect in respect of old-age, employment injury (except in case of incapacity for
work), invalidity and death of the breadwinner. The Code requires that
     
                                                                               3
          these pensions shall be payable throughout the contingency , i.e. it does not accept any limitation in
          time, and it requires that
         these benefits shall be reviewed “following substantial changes in the general level of earnings where
                                                                           4
          these result from substantial changes in the cost of living.” Such a regular adjustment in not required
          for short-term pensions.


The contingency covered

Old-age benefit (Part V) shall be paid where a protected person survives a “prescribed age”. As a general
rule, this age shall not be more than 65 years. However, taking into account he increasing longevity of the
population, a specific demographic clause provides that the age may be increased to such higher age that the
number of residents having attained that age is not less than 10 per cent of the number of residents under
that age but over 15 years of age. However, the Protocol rules out the possibility of prescribing an age higher
than 65 years where only prescribed classes of employees are protected. Old-age benefit may be made
subject to an income test, i.e. it may be suspended or reduced where person is engaged in any prescribed
                                                                                      5
gainful activity or where the earnings of the beneficiary exceed a prescribed amount.

Old-age pensions are regarded as the most important part of social security, accounting for three Parts for the
purpose of attaining the minimum quorum of ratification (according to Article 2).

Employment injury (Part VI) comprises four different contingencies where they are due to an industrial
accident or an occupational disease, namely:

         where the industrial accident or the occupational disease result in a “morbid condition”, medical care
          shall be provided,
         where they result in “incapacity for work involving suspension of earnings” a (short-term) cash benefit
          shall be provided,
         where they result in a total or partial loss of earning capacity likely to be permanent, a (long-term)
          cash benefit shall be provided, and


3
  Articles 30, 38, 58, 64
4
  Articles 65 (10), 66 (8)
5
  Article 26


                                                          52
         where they result in the death of the breadwinner, cash survivors’ benefits shall be provided.

Thus only the last two contingencies give rise to the payment of long-term benefits.

Survivors’ benefits are only prescribed for the widow (not for the widower!) and the children of the deceased
person. Under the Code, but not the Protocol (!), the widow’s benefit can be made subject to an income test.

Invalidity (Part IX) is defined as “inability to engage in any gainful activity which is likely to be permanent or to
                                                    6
persist after the exhaustion of sickness benefit”. Whereas the Code leaves it open to the national legislation
to prescribe the extent of invalidity which gives rise to a benefit, the Protocol provides that “the prescribed
extent of such inability shall not exceed two-thirds.” In any case, the definition is based on the concept of
general invalidity, namely a general lack of earning capacity in relation to any gainful activity rather than on
that of occupational invalidity, which is assessed according to the person’s inability to perform his or her
previous job.

In case of employment injury (Part VI), the contingency is defined as "total loss of earning capacity or partial
                                                                                                          7
loss thereof in excess of a prescribed degree, likely to be permanent, or corresponding loss of faculty".

Survivors’ benefit (Parts VI and X) shall be paid in the case of “loss of support suffered by the widow or child
                                               8
as the result of the death of the breadwinner.” This definition is still based on the old “sex-biased” concept of
the man being the breadwinner of the family and the wife depending on his income. Therefore, the payment of
a widower’s benefit is not prescribed. Moreover, if a widow is, according to national legislation, presumed as
“capable of self-support”, her benefit may be suspended. This applies also where a survivor is engaged in
gainful activity or her earnings exceed a prescribed amount.


Personal scope of protection

The Code tries to encompass three different concepts of social security which were commonly found in
developed countries at the time of its adoption, namely
                                                                                                                   th
- the classic social insurance concept as first developed in Germany ("Bismarck") at the end of the 19
century,
- the comprehensive social insurance approach developed by Beveridge during the second World War and
- the social assistance concept developed in some countries such as Australia, New Zealand, South Africa
and Iceland.

In order to take account of the particular position of these different approaches, the Code does not define the
classes of person protected in purely legal terms, i.e. in terms of type of contract or branch of economic
                                                                                          9
activity, but simply requires that a specified percentage of the population be covered. These percentages
relate either

         to all employed persons;
         to the whole working population (including self-employed persons); or
         to all residents subject to a means test.

The first alternative is narrower in scope of coverage than the others; it was included in order to take into
consideration systems which are restricted to employees (i.e. the classical “Bismarck” approach). A State who
avails itself of this alternative must prove that its scheme covers prescribed classes of employees constituting
not less than 50% of all employees (80 % under the Protocol).

The second alternative was designed to take account of the “universal social insurance” type of system
(“Beveridge”); it requires that prescribed classes of the economically active population (i.e. including the self
employed) constituting not less than 20% of all residents (30% under the Protocol) be protected.


6
  Article 54
7
  Article 32.c
8
  Articles 32.d, 60
9
  Articles 27, 55, 61


                                                         53
The third alternative was intended for the non-contributory universal type of systems (social assistance
approach) covering all residents.

These alternatives apply to old-age, invalidity and survivors’ benefits, whereas Article 33 dealing with
employment injury benefits only provides for the first alternative.


Qualifying periods

In most social security schemes, entitlement to benefits has been made conditional on the completion of a
certain number of periods either of insurance or residence, or any combination thereof. The Code admits the
                                        10
imposition of such a “qualifying period” within prescribed limits, the only exception being employment injury
benefits, which should be awarded without any qualifying period.

With regard to “long-term benefits", the Code prescribes basically two alternative methods of fixing qualifying
periods. The standard rate of old-age benefit should be made available subject to a qualifying period of no
more than 30 years of contribution or employment, or 20 years of residence. A reduced rate shall be secured,
however, after at least 15 years of contribution or employment. Where a contributory scheme covers, in
principle, all economically active persons, there is an alternative formula – a prescribed yearly average
                                                  11
number of contributions over a prescribed period.

Similarly, standard rates of invalidity or survivors’ benefit should be available after not more than 15 years
of contribution or employment, or 10 years of residence. A reduced rate should be secured, however, after at
least 5 years of contribution or employment. In the comprehensive contributory scheme, there is an
                                                                                                 12
alternative formula – a prescribed average number of contributions over a period of three years.

In addition to these two main methods mentioned above, a third alternative has been included in the Code.
Under this alternative, the requirements of the Code in respect of long-term benefits shall be deemed to be
satisfied, if a ratifying State, on the basis of relatively short qualifying periods (5 years of contribution,
employment or residence in respect of invalidity and survivors’ pensions; 10 years of contribution or
employment or 5 years of residence in respect of old-age) provides pensions which are not more than 10
points lower than the standard rtes. In other words under the above circumstances, an old-age, invalidity and
survivors’ pension for a standard beneficiary must not be less than 30 percent of the earnings to be taken into
account.

In case of employment injury, however, the Code does not accept any qualifying period.

The qualifying periods according to the Protocol are exactly the same under the Code.


Amount of benefits

Benefits may be either benefit in kind or cash benefits. Benefits in kind are awarded under the medical
care, the maternity, the employment injury and the family benefit branch, whereas cash benefits are –
sometimes as an alternative – provided in all branches except for Part II (medical care).

The guidelines for determining the standard minimum rates of periodical cash benefits are tied to a schedule
                                                       13
of “standard beneficiaries” and “indicated percentages” :




10
   The term "qualifying period" is defined in Article 1.1 as "a period of contribution, or a period of employment, or a period of
residence, or any combination thereof, as may be prescribed."
11
   Article 29
12
   Articles 57, 63
13
   Schedule to Part XI


                                                                   54
Prescribed minimum rates of periodical long-term cash benefits (percentages)

     Contingency                               Definition of standard beneficiary                 Code      Protocol
                                                                                                                  14
     Old age                                   Man with wife of pensionable age                    40          45

     Invalidity as a result of
     employment injury:
     a) in general                             Man with wife and two children                       50          50
     b) where constant attendance              Man with wife and two children
        is required                                                                                 -           66 2/3

     Invalidity                                Man with wife and two children                                        15
                                                                                                    40          50
     Survivors                                 Widow with two children
                                                                                                    40          45²

The standard beneficiary is a family unit the composition of which varies according to the contingency.

The indicated percentages may relate either to the wage of a “skilled manual male employee” or to the wage
of an “ordinary adult male labourer”.
                                                      16
A skilled manual male employee is defined                  as either

      (a) a fitter or turner in the manufacture of machinery other than electrical machinery; or

      (b) a person deemed typical for skilled labour, i.e. “a person employed in the major group of economic
          activities with the largest number of economically active male persons protected in the contingency in
          question”,                                                                                          or

      (c) a person whose earnings are equal to 125 per cent of the average earnings of all persons protected.
                                     17
An ordinary adult male labourer           is either

      (a) a person deemed typical of unskilled labour in the manufacture of machinery other than electrical
          machinery; or

      (b) a person deemed typical of unskilled labour, selected according to the same criteria as described
          above under (b).

Basically, the following situations may arise

Where the rate of benefit is calculated by reference to previous earnings of the beneficiary or covered
person, the rate of benefit payable to a standard beneficiary, together with any family allowance involved,
should be not less than the indicated percentage of the previous earnings plus family allowance, calculated
for the same period. An upper limit may be set to the rate of benefit, or to the level of reckonable earrings.
However, this ceiling should not be set below the earrings of a skilled manual male employee or at least in
such a way, that the benefit of a skilled manual male employee does not reach the prescribed replacement
rate (Article 65).

Where the benefits are at a flat rate, i.e. determined irrespective of previous earnings, the rate of benefit
payable to a standard beneficiary, together with any family allowance involved, should be not less than the
indicated percentage of the wage, plus family allowance, of an ordinary adult male labourer calculated for the
same period (Article 66).



14
   These rates are required only for a protected person who has completed a qualifying period of 30 years of contribution or
employment or 20 years of residence. A reduced benefit shall be secured at least after 15 years of contribution or employment.
15
   These rates are required only for a protected person who has completed (or whose breadwinner has completed) a qualifying period
of 15 years of contribution or employment or 10 years of residence. A reduced benefit shall be secured at least after 5 years of
contribution or employment.
16
   Article 65 (6)
17
   Article 66 (4)


                                                                       55
In a third situation, where all residents are covered, the rate of benefit may be determined by taking into
account the means of the beneficiary and his family, according to a prescribed scale. This formula has been
designed to apply to non-contributory, tax-financed universal systems of social security which are frequently
subject to a means test. In such a case, the prescribed rules should allow substantial amounts of the other
means of the family to be disregarded before the scale of benefit is reduced. The total of benefits, and other
means (if any) over and above the amount disregarded, should be comparable with the benefit calculated
elsewhere under the “flat-rate” formula (Article 67).

The Code also provides for a regular adjustment of these pensions: All periodical payments in respect of old-
age, employment injury (except in case of mere incapacity for work), invalidity and death of the breadwinner
(i.e. all long-term benefits) shall be reviewed “following substantial changes in the general level of earnings
                                                                    18
where these result from substantial changes in the cost of living.”


Form and duration of benefit

In all contingencies, the cash benefit shall be a periodical payment. In case of partial permanent incapacity
due to employment injury, however, it may be commuted for a lump sum

         where the degree of incapacity is slight (e.g. less than 40%); or
     
                                                                                                19
          where the competent authority is satisfied that the lump sum will be properly used.

Unlike short-term benefits which may be limited in time, the Code establishes the principle that all long-term
                                                                        20
cash benefits should be paid for the whole duration of the contingency.


Common and miscellaneous matters

The Code lays down a number of general rules regarding the financing and the administration of social
security schemes. As a general rule, the Code admits that a scheme is financed either by contributions or by
taxes. It only sets a general framework by prescribing that

         the cost of benefits and administrative costs are borne collectively by means of insurance
          contributions or taxation, or both, in manner which avoids hardship to persons of small means;
         the total of the insurance contributions borne by the employee shall not exceed 50% of the total of the
                                                                                                       21
          financial resources allocated to the protection of employees and their wives and children.

Furthermore, the Code establishes a right of appeal for every clamant in case of refusal of benefit or
complaint as to its quality and quantity. An exception to this rule is admitted, however, when a claim is settled
by special tribunal established to deal with social security questions and on which persons protected bare
represented. In special cases the right of appeal may be replaced by a right of complaint where this is
                                          22
investigated by an appropriate authority.

Where the administration of social security is not entrusted to a government department responsible to a
legislature, the Cod provides that representatives of the persons protected shall participate in the
                                                                23
management or be associated with it in a consultative capacity.

The governments shall, moreover, accept general responsibility for the proper administration of the social
security institutions and services. They must ensure that actuarial studies and calculations concerning the
                                                                    24
financial equilibrium of an insurance scheme are made periodically.


18
   Articles 65 (10), 66 (8)
19
   Article 36 (3)
20
   Articles 30, 38, 58, 64
21
   Article 70
22
   Article 69
23
   Article 71 (1)
24
   Article 70 (3), Article 71 (2)


                                                         56
The European Code of Social Security: Unemployment benefit (part IV), and Family
benefit (part VII)

by Francis KESSLER
University Paris 1, Panthéon-Sorbonne, Paris, France




                                                   57
1. Unemployment benefit

1.1 European Code of Social Security

Definition of the personal scope and the type of contingency:

The contingency is defined as the “suspension of earnings”, as defined by national laws or regulations,

What constitutes “suspension of earnings” is left to the national legislation.

The definition also refers to persons being “capable of, and available for, work”; in some respects this is a
definition of the conditions of entitlement. No guidance is provided by the Code on the meaning of these
terms.

The Code refers to the concept of “suitable work” as opposed to the concept of “any work”.

Personal scope:

Two types of systems according to the type of unemployment benefit:

- The first is that based upon employment, in which case at least 50% of all employees must be covered;

- The second is that based upon means tests. Systems that base entitlement upon means tests in this
fashion must ensure that at least 50% of all employees are guaranteed payment of an unemployment benefit
that is not means tested but the level of this benefit is not prescribed.

The period of entitlement to benefit:

- For systems based upon employment, states are allowed to choose between providing benefits:
        - Throughout the contingency or over a period of at least thirteen weeks during any period of twelve
        months;
        - Or throughout the contingency or over a period of at least thirteen weeks for each case of
        suspended earnings.

- Systems that are based on means tests applied to residents seeking employment are obliged to pay the
benefit throughout the duration of that contingency or for at least twenty-six weeks in any twelve-month
period. They must also guarantee non-means-tested benefits to at least 50% of all employees; the minimum
duration in respect of these employees must be equal to that established for systems based on employment;

- Some systems limit the duration of benefits in accordance with how long the claimant has been paying
contributions or how much benefit has already been paid to the claimant on a previous occasion. Systems
that vary the maximum duration of benefits according to periods of contribution or previous payment of
benefits shall fulfil their obligations if the average maximum duration of payment is equal to at least thirteen
weeks within any twelve-month period.

The waiting period:

Seven days at the most for each period of suspended earnings.


1.2. Changes stemming from the Protocol to the European Code of Social Security

Personal scope:

The Protocol increases the minimum personal coverage for those schemes based upon employment from
50% to 55% of all employees.

Type of benefit:

The Protocol imposes a new obligation upon the contracting parties to facilitate re-employment through the
provision of facilities such as labour exchanges, vocational training and assistance in moving districts in order
to find work.


                                                        58
The period of entitlement to benefit:

- For those systems based upon employment the maximum duration of unemployment benefit is twenty-one
weeks for each suspension of earnings or twenty-one weeks within in any twelve months;

- For those systems based upon residence and means tests, under the Protocol the benefit must be provided
throughout the contingency;

- Where the duration of the benefit varies according to the periods of contribution fulfilled by the recipient or
the amounts of benefit previously paid to the recipient, the average duration of benefits must equal twenty-
one weeks within any twelve month period.

The waiting period:

The protocol gives them a choice between:

- Three days per case of suspension;

- The first six days within any period of twelve months.


2. Family benefit

2.1 Provisions of the European Code of Social Security

Definition of the personal scope and the type of contingency:

The social risk covered by this contingency is the financial responsibility for the maintenance of children. The
concept of “child” is defined in Article 1 of the Code as including either “those under school-leaving age or
those under fifteen years of age”. The right to benefit is not bestowed upon the children themselves.

Personal scope:

Where entitlement is based upon the person’s status as an employed person, at least 50% of all employees
must be covered and protection ensured for their children. Where entitlement is based upon the performance
of economic activity, then at least 20% of all residents must be entitled to benefits in respect of their children.


Type of benefit:

The Code provides for cash benefits and/or benefits in-kind. Unlike the other contingencies covered by the
Code, family benefits are not calculated in accordance with the provisions in Part XI thereof but are dealt with
in a special way. The minimum amount is established in three steps:

- Step one: calculate the monthly/weekly wage of the ordinary adult male labourer; guidance on how this can
be done is found in Article 66 of the Code;

- Step two: multiply this amount by the number of children of all the residents in the contracting state;

- Step three: calculate 1.5% of this amount and that is the total amount that the contracting party must spend
on all of the protected children in its territory.

No minimum level of benefit is set.


Conditions for entitlement to benefits:

The maximum qualifying period is established as either one month of employment/contributions or six months
of residence




                                                        59
The period of entitlement to benefit:

The benefit is paid throughout the contingency

- Either until the age of 15;

- Or until school-leaving age

Waiting period:

No waiting periods for benefits are permitted.


2.2. Changes stemming from the Protocol to the European Code of Social Security

Definition of the personal scope and the type of contingency:

The protocol redefines the concept of “child”, as either:

- A person under 16 years of age; or

- A person under school-leaving age or under 15 years provided that those who are continuing their
education, working as apprentices or suffering from permanent incapacity are protected until they reach 18
years of age.

Personal scope:

- Schemes based on employment have to ensure coverage for at least 80% of all employees;

- The minimum personal scope of schemes that are based on economic activity is 30% of all residents.

The calculation method used for periodic cash benefits:

The minimum amount of total spending on family benefit is 2%.




                                                        60
Impact of the Code: implications for the individual, the social partners, governments
and courts/tribunals. Developments in social security systems and main issues in
relation to the Code

by
Ana GOMEZ HEREDERO
Social Security Division, Directorate III – Social Cohesion
Council of Europe, Strasbourg, France




                                                       61
Since the adoption of the European Code of Social Security and the Protocol in 1963, social security systems
have changed a great deal in Europe. The Committee of Ministers Resolutions (CSS) on the application of
the code and the protocol by the Contracting Parties reflect these changes.

This report provides a summary of the main trends in social security as they appear from the CSS
Resolutions produced under the monitoring procedure for the code and the protocol.

Health care

In the health field for example, most European countries are having to cope with a growing health insurance
deficit. Measures are being taken to control spending and increase income while preserving quality of care.
As a result there is a tendency to ask patients to contribute increasingly to the cost of medical treatment
themselves.

Some states require patients to make a contribution to the cost of their treatment. The reason often given for
this is the need to raise extra income for the health system and to encourage insured persons to make less
use of medical care and show greater responsibility when they do use it.

In accordance with the relevant rules of the European Social Charter, the revised Charter, the European Code
of Social Security, its Protocol and the revised Code, a system of health care accessible to all requires that
                                                              25
the participation required of patients should not be too great .
Widespread use of the system of patients' contributions in Europe has made the bodies which monitor the
code particularly vigilant on this front. Their comments relate especially to the sharing of the cost of medical
appointments and medicines, and of the costs associated with confinement.

Article 70.1 of the code in fact provides for collective funding of benefits "which avoids hardship to persons of
                                                                                                        26
small means and takes into account the economic situation […] of the classes of persons protected" .

Article 10.2 of the code nevertheless allows the beneficiary of medical care in the event of sickness (or his
breadwinner if the system is based on derived rights) to be required to pay a share of the cost. It sets no
limits on this participation, merely stating that the rules on cost-sharing must not cause hardship.

The protocol is more precise and defines in respect of each kind of care an exact percentage that may not be
exceeded by the patient’s share of the cost: 25% of the full cost of outpatient care by general practitioners
                                                                                          27
and specialists and of the cost of inpatient care; an average of 25% for medicines , and 33.3% for
conservative dental care.

Under the protocol, there can be no patient's contribution in respect of pre-natal, confinement and post-natal
care, but such a contribution may be required in respect of the related pharmaceutical supplies, although it
may not exceed 25% of the cost of those supplies.

The example of Belgium

In its 1995 Resolution, the Committee of Ministers noted that the share to be paid by the beneficiary had risen
from 20 to 30% in respect of charges for visits to general practitioners and from 25 to 40% in respect of fees
for visits to specialists, rates which were higher than the upper limit of 25% allowed by the aforementioned
provision of the protocol.
Belgium was therefore asked to reduce the level of cost-sharing by beneficiaries to the level permitted by the
protocol.


1. The (revised) code specifies that medical treatment should not "impose hardship or render medical and social
protection less effective" (Article 10.2). As it does not, as the protocol does, specify a maximum percentage, the
(revised) code is closer to the former system used in the code itself, whereby the rules on cost-sharing should "avoid
hardship". It will be possible for the supervisory bodies to look beyond a specific percentage and consider the way in
which the patient contribution system as a whole functions. Of course, there is nothing to prevent them from concluding
that such a system contravenes the new provisions of the (revised) code, even if it falls below the percentage set by the
protocol. Basically, the (revised) code allows more extensive investigations.
2. Resolution CSS(2005)6 on the application of the European Code of Social Security by France, 21 September 2005.
3. Under Article 10.1.a of the code as amended by the protocol, only medicines regarded as essential and supplied in
accordance with a doctor's prescription, have to be covered.


                                                           62
Belgium introduced remedial measures, including tax and social exemptions.
The cumulative effect of these measures has been to allow a reduction in the insured person's share of the
cost of appointments with general practitioners. They ensure that a large number of socially vulnerable
beneficiaries pay a far lower individual share than the level permitted by the protocol, thus protecting them
from hardship, in line with the main objective of Article 10.2.a.i of the code. According to the supervisory
bodies, however, the threshold set by the protocol must also protect ordinary insured persons who cannot
benefit from such special advantages, and who constitute the great majority of the persons covered by
                                           28
Belgium's general social security scheme . For this reason, the Committee of Ministers has, in its most
recent resolutions, asked the Belgian Government systematically to include in its reports on application of the
code the measures taken with a view to full application of this provision of the protocol.

Sickness and invalidity

Loss of earnings due to sickness is one of the “traditional” risks covered by social security. In recent years,
the “sickness” branch has undergone major reforms in an effort to reduce a deficit caused partly by
absenteeism. In some countries, employers have been given more responsibility for benefit provision to
encourage them to pursue an active policy of prevention and return to work, as even if an enterprise is not to
blame for a worker becoming sick, it can influence the duration of the leave and reduce the number of claims.

The privatisation of certain branches of social security, starting with sickness, represents a radical departure
from the principles laid down in the European Code of Social Security and its protocol and has prompted
numerous comments and questions from the supervisory bodies.

The case of the Netherlands

In the Netherlands the Sickness Benefit Act (ZW), which provided collective cover if a worker was absent for
                                                                                                          29
the first year of sickness, has been largely abolished. With the reform of the Civil Code in 1996 ,
responsibility for paying benefits was mostly transferred from the social security scheme to enterprises.
                                                                                   30
The new act can be said to have introduced a system of free “market forces” in respect of the Sickness
Benefits Act (ZW), which had been privatised to a large extent. From a monopoly market in which private
insurers were not allowed to participate, the country has thus moved to a deregulated market where private
companies are free to offer policies to enterprises.

The former Sickness Benefits Act (ZW) still exists as a safety net in cases where the employer cannot be held
responsible for the payment of wages to sick employees, such as bankruptcy of the employer, temporary
work, expiration of the employee’s contract or if the employee loses their job during the first year of sickness.

The privatisation of the sickness scheme was followed in 1998 by similar changes to the invalidity benefit
        31
scheme .

The reform process has continued, however, with further measures being taken to curb absenteeism due to
sickness and to stem the growth in the number of people claiming invalidity benefit.

Encouraging workers to reduce the number of days of absence caused by sickness and invalidity was very
important in the Netherlands where the number of absences due to these two causes was much higher than
in other comparable countries. It was expected that market forces and competition would prove to be more
effective in achieving this goal. At the same time, the Dutch government maintained the basic social security
benefits and took a number of additional legislative measures to mitigate the negative effects of market
forces, which tend to discriminate against the weak and vulnerable and undermine the basic spirit of solidarity
inherent in any social security system.

Such measures, however, throw up questions about the general principles of organisation and financing as
laid down by international legal instruments on social security for ensuring the co-ordinated development of
social security systems in Europe.

4. Resolution CSS(2004)1 on the application of the European Code of Social Security and its Protocol by Belgium, 9
September 2004.
5. Act of 8 February 1996.
6. As recognised by the Dutch government. Report on ILO Convention No. 128 in 2001 – Aims of the reform.
7. Measures introduced by the PEMBA Act, which changed the way employers' contributions are financed under the
Disablement Benefits Act (WAO).

                                                       63
Usually wages are replaced by benefits if a person becomes sick but in the Netherlands, the Civil Code
requires the continued payment of wages in such cases. Sickness benefit applies only in a subsidiary
manner and in a limited number of cases (employees who have lost their job or whose contract of
employment has expired, temporary workers and in the event of the bankruptcy of the employer).

This is the first time social security has been privatised in this way in Europe. It is a radical, unprecedented
reform that threatens to undermine the foundation and the spirit of social security, with the supervisory bodies
warning that protection could be reduced if payment of sickness benefit were to depend directly on the
employer.

They point out that the European Code of Social Security, while it is designed to be flexible and allows the
                                                    32
requisite protection to be ensured by such methods , does nevertheless lay down certain general criteria as
regards the organisation and operation of social security systems.

The code’s supervisory bodies have accordingly focused on the following three areas: the organisation and
governance of such mixed systems (privatisation and basic social security), the participation of workers’
representatives in the management of the social security system and protection of the most vulnerable
groups.

A little over ten years after this reform was introduced in the Netherlands, the government, management and
labour concluded that it had in fact helped to reduce absenteeism; wages in case of sickness are paid by
employers in a regular manner and the reform does not appear to have given rise to any cases of
discrimination. The supervisory bodies are keeping the situation under close review, however, in case new
developments occur that would be contrary to the principles of the code. Wherever there is a redistribution of
responsibilities, in fact, the supervisory bodies ask the government concerned to report how “it plans to
monitor the operation of the new scheme in terms not only of achieving its objectives in diminishing long-term
absence from work due to sickness, but also in terms of precluding possible discrimination by the employers
                                     33
of workers with a medical history” .

Still with a view to reducing absence from work on long-term sick leave, there is a tendency to introduce
measures that are designed to actively reintegrate people into the labour market. A number of responsibilities
have been transferred to claimants who are now required, for example, to attend work-focused interviews, or
                                          34
draw up a recovery and rehabilitation plan .

In Luxembourg, the 2004 reform sought to identify as early as possible ways of getting individuals back to
work. At the end of the tenth week of incapacity for work, irrespective of its nature (sickness, accident,
occupational disease, work accident), the person must undergo a medical and social assessment to see how
they might be reintegrated.

Another way of encouraging people on incapacity benefit to return to work is to give them financial incentives.
That is the thinking behind the new “Pathways to Work” package introduced in the United Kingdom in 2008.
One of the main innovations of this scheme is the Return to Work Credit (RTWC): an earnings supplement
                                                                  35
available to incapacity benefit recipients who move into paid work .

Unemployment

Incentives to return to the labour market have also been built into the rules on unemployment benefit. One
tendency is to ask individuals to constantly improve their employability. In the new context of active labour


8. Resolution CSS(97) 9 on the application of the European Code of Social Security and its Protocol by the Netherlands,
30 October 1997.

9. Resolution CSS(2006)14 on the application of the European Code of Social Security and its Protocol by Sweden, 6
September 2006.
10. Resolution CSS(2007)10 on the application of the European Code of Social Security and its Protocol by
Luxembourg, 13 June 1997.
35. This supplement amounts to £40 per week for a maximum of 52 weeks and is payable to persons who have been
receiving benefit for at least 13 weeks, who have found a job of at least 16 hours per week and who earn less than
£15,000 per annum.


                                                          64
market policies, unemployed persons have to be available for work straightaway.           Such availability has
become a key condition for entitlement to unemployment benefit in many countries.

Around the mid-1990s some countries tightened their laws and required unemployed persons to be more
receptive to job offers, on the principle that they should be directed into work rather than on to unemployment
benefits.

In some countries such as Denmark, Germany, Norway, Sweden and the United Kingdom, lawmakers have
replaced the term “suitable employment” (the concept referred to in Article 20 of the code and ILO Convention
No. 168) with concepts that provide a greater degree of flexibility.

These new provisions have attracted numerous comments from the code’s supervisory bodies with respect to
the unemployment branch.

In the case-law of the code and the Social Charter, the rules on the availability of job-seekers have been
found to be very stringent, virtually compelling unemployed persons on pain of loss of benefits to accept a job,
regardless of the occupational field, from the first day of unemployment. According to the supervisory bodies,
the concept of suitable employment provided for in the code is designed to protect the occupational status of
the unemployed.

Following comments from the supervisory bodies to the effect that certain national provisions regarding
unemployment benefit were incompatible with the code and the protocol, member states have amended their
legislation. In December 2005, for example, the Norwegian Minister of Labour and Social Affairs told the
Council of Europe that statutory provisions requiring unemployed persons to accept jobs offering less income
than the unemployment benefit or to generate income from self-employment had been repealed.

For the record, the Council of Europe’s Committee of Experts on Social Security (CS-SS) is studying the
concept of suitable employment and is expected to adopt a guide on how the concept of suitable employment
is understood and applied in the various Council of Europe member states when it meets in 2009.

In many countries, too, the obligation to be available for work is changing: where it used to be fairly passive
(suitable employment could not be refused), it is now turning into an active obligation to seek work.

At the same time, countries have introduced support arrangements to make workers more employable:
among these are training facilities designed to improve job-seekers' skills or to provide them with new skills
needed on the labour market, as well as various occupational integration measures (subsidised jobs,
assistance with job-seeking).

The objective is firstly to provide the unemployed with a better service, thanks to personalised assistance with
their return to the labour market (case management), and secondly to make them more responsible and
penalise them if they do not take the required steps.

The active labour market measures cited below are not necessarily incompatible with the code and the
protocol. They do, though, shift the emphasis of unemployment, sickness and invalidity benefit schemes from
passive income maintenance to active measures to get the unemployed back into work. Care must be taken
in this area, however, in order to avoid losing sight of the objectives of the code.

Employment injury

The “employment injury” branch is extremely complex as it encompasses several types of benefits, both
short-term and long-term (Article 32 of the code). Under the terms of the code, moreover, the protection
provided for employment injuries is wider than that required for injuries which are not related to occupation.
The supervisory bodies see to it that this more extensive protection is effectively provided.

The development of this branch mirrors the changes that have occurred in its structure. In countries such as
Estonia, Greece and the Netherlands, for example, occupational risks are no longer covered by a specific
branch but come under the general scheme instead.




                                                      65
In the opinion of the Committee of Ministers, Part VI of the code “does not require the establishment of a
specific branch for employment injury benefit” but it is important that national legislation, whether on sickness
                                                                                36
insurance or pensions insurance, satisfies all the provisions of the said Part.

In some countries such as Sweden and Denmark, the risk of work accidents is borne by the employer
whereas occupational diseases remain covered by public insurance.

There is also ever closer co-ordination between occupational risk insurance and other types of insurance
covering wider populations for more common risks, as in Sweden.
                                                                                       37
This co-ordination is also provided for in Article 3.3 of the revised code                  and Article 32.1 taken in conjunction
                          38
with Articles 37.2 and 44 .

It will also be observed that many of the problems experienced in other branches, such as the privatisation of
benefit provision, are being felt in the “employment injury” branch as well.

Lastly, new work patterns (engendered by the transition from an industrial to an information society), the
growing role played by private insurance companies and the prevention of work accidents are the main
challenges facing this branch in the coming years.

Family benefit

Family or child allowances are the main type of family benefit in cash, and are intended to supplement income
rather than replace it.

In Europe, there are two different views of family benefit:
– family benefit as a worker’s right. This is the approach taken in Articles 39 to 41 of the European Code of
Social Security, under which family benefit is to be granted to prescribed classes of employees or of the
economically active population which have dependent children.

– family benefit as a personal right of the child, where entitlement is not conditional upon the parents’
contribution record. Articles 45 and 46 of the revised European Code of Social Security which stipulate that
                                                        39
the persons protected are the children, not the workers, reflect this shift.

The family benefit branch is probably the most “outdated” part of the code given the way in which national
family policies have evolved since the 1960s, with the introduction of tax reductions, etc.

Under Article 42 of the code, family benefit can be provided in cash or in kind. In the case of cash benefits, a
periodical payment is made throughout the contingency (Article 45 of the code). This rules out benefits such
as lump sums and tax reductions, which are increasingly popular in Europe. The revised code does accept
such benefits, however, and is in that sense better geared to the changes taking place in Europe.


12. Resolution CSS(97)6 on the application of the European Code of Social Security and its Protocol by Greece, 30
October 1997.
13. According to this article, Contracting States which accept the Parts relating to medical care (II), sickness benefit
(III), invalidity benefit (IX) and survivors’ benefit (X) of the revised code and also apply them to victims of work
accidents or occupational diseases and to their survivors are deemed to comply with the obligations of Part VI.
Entitlement to benefit may not be made subject to qualifying periods, however. According to the explanatory report to
the revised code, “this flexibility clause should facilitate acceptance of the commitments embodied in Part VI by States
which have abolished distinctions of any kind in their compensation for accidents and diseases, whether or not of
occupational origin.”

14. Similarly, Article 32.1 allows states which provide medical care under a general scheme to comply simply with the
provisions of Part II (medical care). Likewise, states which provide temporary incapacity benefit under a general
sickness benefit scheme must comply with the provisions of Part III (sickness benefit). International monitoring will
thus be carried out only in relation to these two Parts, except for the provisions on qualifying period.

15. The revised code contains some significant departures from the code and the protocol. The emphasis is on individual rights rather
than derived ones and the range of persons covered has been widened to include the children of residents. For example, Article 46 of
the revised code expressly refers to the obligation to cover the children of employees, the children of economically active persons and
the children of residents, rather than merely employees and economically active persons.



                                                                 66
Maternity benefit
                     th
Since the early 20 century, the world has seen major progress in this area, with “maternity protection” the
                                                            40
subject of one of the first ILO conventions, adopted in 1919 . Revised in 1952, it was replaced by a new
                   41
convention in 2000 .

The contingencies covered are pregnancy, confinement and their consequences and the resulting suspension
of earnings. Provision is thus a combination of benefits in kind (medical care) and benefits in cash (maternity
allowance).

Maternity benefit differs from family benefit in terms of the kind of protection afforded. Whereas family benefit
is intended to offset the cost of supporting children, maternity benefit is designed to make up for the loss or
reduction of the mother’s earnings while she is on maternity leave.

Although it has a limited scope, the large number of women in the labour market and growing concern about
demographic and social issues mean that the maternity branch is becoming ever more important, with falling
birth rates prompting many countries to improve their maternity benefits in an effort to encourage people to
have more children.

Maternity benefit has attracted little comment from the supervisory bodies who, in an example of how they
can highlight positive as well as negative trends, frequently find that benefits have improved (extension of
maternity benefit, creation of new benefits such as paternity benefit and parental leave). A number of
countries have accordingly been invited to accept Part VIII of the code or the protocol.

Pensions


Pensions are generally used to provide protection against the risks of old age, invalidity and survival beyond a
prescribed age. Pension insurance, in particular retirement pension, is a key component of social security
systems in Europe. A number of current socio-economic factors, however, such as the length of time for
which schemes have been in existence, the ageing population, variations in unemployment rates and volatility
on the financial markets, are putting severe pressure on retirement funding. Ensuring the viability of pensions
has thus become a primary concern of European governments, who see pension reform as vital to achieving
this goal.

In order to ensure the viability of old-age pensions, most western European countries have introduced
                                                     42
“parametric” reforms to their pay-as-you-go schemes (raising the retirement age, extending the contribution
                                                                                                            43
periods, introducing “notional accounts” with defined contributions). In addition, various types of funding
(complementary and private schemes) have been introduced, in varying proportions. Discussions are under
way with a view to introducing universal schemes that would provide a social pension for residents who have
insufficient means of support.

It has become increasingly common for individuals to be asked to build up additional savings with private
pension funds to supplement their pensions. As a result, private insurers are now managing people’s pension
funds and providing a supplementary insurance that corresponds to the reduction in the state’s contribution to
pension funding.

In its resolutions the Committee of Ministers has warned governments about the risks that these measures
may entail. The prime concern is that the public authorities and insured persons are excluded from taking
part in the management or administration of private insurance schemes, and insured persons are exposed to
major financial risks but have no guarantee that the benefits owed to them will actually be paid.


16. Maternity Protection Convention, 1919, No. 3.
17. Convention No. 3 was revised first in 1952 by Convention No. 103 and then again in 2000 by Convention No. 183.
18. In pay-as-you-go schemes, the pensions paid to retirees are financed from contributions made by economically
active persons, without building up savings for the payment of future pensions. Depending on the method of calculating
pensions, a further distinction is made between “annuity-based” and “points-based” schemes.
19. In funded schemes, economically active persons build up savings and finance their future pensions through the
creation of “defined-benefit” or “defined-contribution” pension funds.

                                                              67
In this connection, the Committee of Ministers argues that the code is worded in sufficiently broad terms to
take account of a diverse range of protection mechanisms and allow a certain reallocation of risks and
responsibilities which used to be borne entirely by the state to society’s main economic players. However, it
does also stress the need to preserve at all times the balance of responsibilities between beneficiaries and
providers, whether the latter are public or private.

In response to demographic problems, most western European countries have adopted reforms to ensure the
continued viability of their benefits systems, particularly their old-age pension schemes. These reforms are
often designed to prevent the long-term increase of contribution rates in pay-as-you-go systems.

For the most part, they involve gearing existing systems to the new circumstances by raising retirement ages,
adjusting indexation systems, lowering replacement rates or extending the length of contributions. They have
a considerable impact on the amounts of pensions and can be at variance with minimum social security
standards requiring a certain replacement rate in relation to a reference wage.

The supervisory bodies ensure that the need to make pension systems viable is reconciled with the guarantee
of an adequate pension. When contribution periods are extended or the retirement age is raised, they
recalculate the pension to check that the prescribed replacement rate is reached after the number of years
required by the code. They also check that pensions are actually index-linked so as to ensure that pensioners’
purchasing power and living standards do not decline.

They keep a watch on countries adopting reforms altering the approach to calculating pensions
recommended by the code, particularly those planning to move from a defined-benefit to a defined-
contribution scheme or considering total or partial privatisation of the pension scheme.

To assess compliance with the requirements of the code, the supervisory bodies begin by checking whether
the first, pay-as-you-go pillar is sufficient to provide the benefits required by the code. If this is not the case,
they consider the benefits provided by the other pillars. Some fully privatised schemes can cause problems
when it comes to calculating the amount of pension to be paid to beneficiaries but neither the code nor the
protocol prohibit such schemes if they abide by the principle of solidarity between all insured parties.

Other changes have occurred in the area of long-term contingencies. For example, in some countries, the
“invalidity” and “survivors” branches have been incorporated into other social benefits. Here again, the code is
sufficiently flexible to accommodate such arrangements provided that beneficiaries are covered against these
risks by other social branches or benefits.


Conclusion

Progress in human rights and democracy needs to be accompanied by increased protection in the social
sphere. Since social security is, by its very purpose and its impact on the general population, the key element
in social protection in Europe, it is primarily here that action needs to be taken. For an effective system of
social security is a means of ensuring general development, poverty reduction, social cohesion and political
stability.

The European Code of Social Security, its Protocol and the revised Code set minimum or higher standards for
the nine traditional branches of social security. They reflect the idea that the fundamental right to social
security needs to be protected by the rule of law and include machinery for monitoring compliance.

Since these conventions were adopted, most European countries have reformed their social security systems
to a greater or lesser extent, yet despite these ongoing improvements, the basic principles of the code, the
protocol and the revised code still hold good today.

In order to guarantee the right to social security, preserve social cohesion and prevent exclusion, it is
essential to maintain the level of social protection and to safeguard the fundamental principles governing the
organisation and management of social security systems, as embodied in these instruments.

The ratification of international legal instruments such as the code and the protocol are evidence of a state’s
steadfast determination to raise the standard of its social security system.




                                                        68
The role of National Courts in applying international Social Security Standards

by Mr Teun de VRIES
Judge, Central Appeals Court of Netherlands




                                              69
Ladies and gentlemen.

I thank the organizers of this training course for inviting me to tell you about my experiences as a judge in
applying international treaties about social and economic rights.

First of all I would like to make three introductionary remarks:

- I’m working as a judge in the international chamber of the Central Appeals Court in Holland. This Court is
the highest court for social security cases and cases about civil servants in my country. My chamber (with four
judges) handles all cases in which international laws are invoked. The international chamber was founded
about 16 years ago, because international laws are in general very complicated and its impossible for all
judges of my Court to follow all developments and jurisprudence in that field. The second reason for this
special chamber was to ensure unity in the judgements of my Court in the interpretation of international laws.

- My lecture is based on my experiences with the interpretation and application of several international
treaties about social and economic rights, and in particular: some ILO-conventions in the field of social
security, the European Code of social security, the (revised) European Social Charter (ESC) and the
International Covenant on economic, social and cultural rights (ICESCR), which are all ratified by the Dutch
State. The number of cases in which these treaties are invoked for my Court is limited. Most of these cases
are however very important for the Dutch system of social security, because if a judge rules that a national
law is in violation with an international convention, his judgement will often set a legal precedence for a lot of
similar cases. The financial consequences of a judgement can be enormous for the state. That will be the
reason why the Dutch State has tried to denounce some ILO-conventions resulting from judgements of my
Court and did denounce this year part VI of the Code after a judgement of my Court in 2006.

- Although the experiences I will illustrate today are based on my work in the Central Appeals Court I would
like to emphasise that they are only my personal experiences and my personal opinions about desired
developments. I’m not speaking here as the representative of my Court.

First of all some remarks about the impact of conventions in general.
To be able to understand the problems for the judges in the interpretation of conventions I’m obliged to give
some information about the Dutch constitutional system. According to article 93 of the Constitution
(Grondwet) “Provisions of conventions and decisions made by international organisations that, according to
their contents, can bind everyone, have direct effect after publication”. If a provision in a national law is
inconsistent with such a binding provision, it must not be applied according to article 94 of the Constitution.
This means that Holland has a monist system, in which no transformation of international conventions into
national laws is necessary. All conventions are applicable laws in Holland, including ILO-conventions and
ICESCR. The only question to be answered is whether a provision in a convention has direct effect. It ’s up to
the judges to decide whether a provision “can bind everyone”. In countries with a dualist system there is of
course an other situation.
There is some discussion in the Dutch academic world about the question when a provision can bind
everyone. According to jurisprudence and most writers this is in general the case when the wording of a
provision creates a subjective (personal) entitlement for a citizen which is unconditional and concrete enough
to have direct effect. If there are any doubts hereabout judges can take into account other aspects, like the
intentions of the contracting parties with the convention and the context of the provision with other articles in
the convention.
A new development in the discussions on this subject is that in case of provisions with a broad lead way for
states, according to some writers judges have to examine whether the legislator exceeds the given room.
A very famous example of direct effect with great influence in the Dutch legal practice was a judgement of the
Supreme Court about collective actions of workers (the right to strike). The Supreme Court judged that article
6, sub 4, of the European Social Charter has direct effect and since then this article plays a very important
role in the Dutch jurisprudence about the right to strike.

What to do as a judge if an article in a convention does not have direct effect? In general that article cannot
have any influence in the national procedure. But it’s not as simple as that. Under circumstances the judge
has the possibility (or even the obligation) to interprete the national law in conformity with the Convention.
There are a lot of examples of this “interpretation in conformity” in jurisprudence of the Court of Justice of the
EU, but also in the application of economic rights we see some examples. Again an example of the Dutch
Supreme Court. That Court ruled that article 7 of ICESCR does not have direct effect, but choose for an
interpretation in conformity with this article in a dispute about the justification of unequal wages for married
and unmarried persons. So even if an article has no direct effect it can have influence in judgements of
national courts.


                                                        70
The impact of the Code in Dutch legal practice.
The above mentioned criteria for direct effect are also applicable to the Code and the Charter. In legal
practice in Holland it’s not uncommon that judges are rather reluctant in accepting direct effect of the Code
and the Charter as well as of other international norms on social security, like ILO-conventions. Before
jumping to conclusions about the reasons why it is rather difficult to accept direct effect of these conventions, I
would like to illustrate this with some examples of cases in which the Central Appeals Court did and did not
accept direct effect.

First of all I will describe you the 3 cases in which my Court ruled that articles in the Code or an ILO-
convention on social security did have direct effect.

The oldest of these cases is a judgement of May 1996, about contributions from women in the costs of
their (medical) treatment in the case of pregnancy and delivery in a hospital. In the Dutch law about medical
health care was stipulated, that in these situations women had to pay a contribution in the costs of their
treatment in a hospital. The reason for this rule was that women delivering a child at home (which is the
normal situation in Holland) had to pay a contribution for the assistance they get at home during the first 10
days after a delivery. It should not be made (financially) attractive, because of the cost of the health care, to
deliver a child in a hospital. Therefore a contribution was also obliged in case of a delivery in a hospital, while
for other medical treatments no contributions were obliged. Three women argued for my Court that this rule
was a violation of article 10.1,b of the Code and of ILO-convention 102.
In these articles is stipulated which benefits should at least be given in the case of “a morbid condition” (1a)
and in the case of “pregnancy and confinement and their consequences” (1b). In sub 2 of this article is ruled
that the beneficiary may be required to share in the cost of medical care he receives in respect of a morbid
condition, but about cost sharing in case of pregnancy and confinement nothing is stipulated in this article.
The Central Appeals Court ruled that these articles have direct effect, because of the facts that the benefits in
case of pregnancy and delivery are mentioned very clear and these articles are formulated imperatively.
Together with the minimumstandard of the Code and ILO-convention 102 in general and of the benefits in
particular, the Court judged that these articles give a personal entitlement for the benefits mentioned in article
10.
About the required contribution the Court considered that the Committee of Experts of the ILO has given the
opinion that the Dutch rules were in violation with the conventions 102 and 103 and that the Dutch
government had already changed the laws in 1995 in accordance with the Code and the convention for new
cases, but not for contributions paid before.
In fact is was rather easy for my Court in this case to judge that the Dutch law was also before 1995 not in
accordance with the Code and convention. For the 3 women who started this procedure this judgment had a
positive result: the article about contributions in the Dutch law could not be applied in their cases.

The second example of direct effect is less important for the European Code. It concerned a new Dutch
law that limited the export of Dutch supplements to other countries. This law stated that supplements on the
basis of the Supplements Act (Toeslagenwet) were no longer exportable (with a temporary exception for
people living within the EU). Supplements on the basis of this law are paid to persons who receive regular
benefits (f.i. disability benefits) if that benefit is lower than the legally defined social minimum. As a result of
this law a lot of persons living outside the Netherlands (especially a lot of migrant workers from the
Mediterranean countries) lost their supplements. Among them also hundreds of persons living in Turkey, a
country that ratified ILO-convention 118.
In article 5 of this convention it is stated that a member state has to pay the benefits falling within the scope of
the convention to persons residing in other member states that ratified convention 118. Amongst others an
important point of dispute was if article 5 has direct effect. The Central Appeals Court judged that this article
gives an unconditional and concrete obligation to the member states to guarantee export of benefits both to
its own nationals and to the nationals of any other member state. The Social Security Board pleaded in this
case that the obligation is not unconditional because it depends according to article 5, sub 2, on further
agreements between contracting states. About this argument the Court considered that the Committee of
Experts of the ILO has stated in 1977 that the prohibition of export does not depend on any further agreement
between member states and that there are no other indications for a possible limitation of this obligation.
As a result of this judgement the Turkish migrant workers, eventually after a long delay, received their
supplements again. But not for a long time. After this judgement the Dutch government notified the
Supplements Act to the Director General of the ILO as a non-contributory benefit mentioned in article 2, subs
6, of that Convention and withdrew the supplements again in 2003. Now we have hundreds of new cases of
Turkish migrant workers about the withdrawal of their supplements. In those cases one of the points of
dispute is if a late notification of the Supplements Act makes it invalid, but the Committee of Expert of the ILO
has answered that from the date of notification it has effect. After a complaint of a Turkish Union the

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Governing body of the ILO set up a Committee of three expert which advised that art. 5.2 of Conv-118 is
applicable in this situation. This advice has resulted in a new decision of my court in which is ruled that the
limitation of the export of supplement is in accordance now with the Convention. In the same judgement we
now asked preliminary question to the CoJ in Luxembourg about the Association agreement EU with Turkey
and Decision 3/80.

The third case concerns a very recent judgement of my Court (September 8 2006), which shows a lot of
similarities with the judgement of 1996. The case pertains to a worker that became incapable to work as a
result of a workrelated accident. The effect of this accident was that he got serious psychiatric problems and
since 1990 he has been residing permanently in a psychiatric clinic for medical treatment. He had to pay a
monthly contribution for this treatment, since he is staying in the clinic for a prolonged time. This contribution
is based on a Dutch law for special medical care (AWBZ). His attorney pleaded in the procedure that this
contribution is a violation of Part VI of the European Code. In this case Convention 102 was not applicable
anymore because of the ratification by the Dutch State of Convention 121.
Part VI of this code contains rules about benefits and benefits in kind in case of work related injuries. After a
medical examination during the procedure both parties agreed that the medical treatment of this worker is a
result of a work-related injury. In this procedure the question had to be answered if the Dutch law that obliged
the worker to pay a contribution in the costs of his medical treatment was in accordance with the European
Code. The articles in Part VI of the Code don’t mention the possibility of contributions, while in Part II of the
Code, which handles about medical care in general, such a possibility is mentioned explicitly. In the articles
31, 32 and 34 of the Code is ruled that each member state shall secure, in case of a morbid condition due to
a work related injury, that the benefit for the worker shall be medical care, which comprises of general
practitioner and specialist in-patient care and out-patient care (inside and outside hospitals).
The Central Appeals Court judged that these articles give concrete rules for the persons protected to claim for
medical care. Therefore the Court gave direct effect to these articles. It judged that the contribution the worker
has to pay for his medical care is a violation of the articles 32 and 34 of the Code, because in Part VI of the
Code the possibility of contributions is not mentioned. The Court refers in this judgement as a support of its
interpretation of the Code to a resolution of the Ministers of the Council of Europe in which is written: “Since
the code makes no provision for sharing by insured persons in the cost of medical care in cases of
occupational injury, it should be made clear (that a Swiss law about contributions) applies in practice only to
the victims of non-occupational accidents”.
So the article about contributions could not be applied in this case. This judgement resulted in problems for
the Dutch State because a special article would be necessary in the Dutch law for contributions in case of
occupational injuries.There are no special rules for this kind of injuries in the Dutch law and that is probably
the reason for denouncing this part of the Code by the Dutch state


The three cases mentioned until now are the only cases in which the Central Appeals Court has given direct
effect to articles of the European Code or ILO-conventions. It may be more interesting to look at cases in
which my Court has not given direct effect or has rejected the claims based on the Code. The number of
those cases is much higher than three. In these cases we haven’t always given considerations to direct effect.
If the invoked articles can’t have the result a person wants to reach, we sometimes judge (implicitly or
explicitly) that even if the article has direct effect, the argument fails in that situation. Then we give
considerations to why the article can’t have the aimed result. In a lot of cases the invoked articles could have
a positive result, then we must give considerations about direct effect. I will mention one case today, in which
we have given a judgement about direct effect that may be disputed.

This case handles about a new Dutch law for Survivors benefits. According to that law these benefits are as
from 1996 means tested (before that date survivors received fixed amounts). This law ruled that if a person
received an other benefit most of these benefits had to be deducted entirely from the survivors-benefit. In our
case a widow whose unemployment benefit had been completely deducted from her survivors-benefit invoked
article 28, sub b of ILO-convention 128, and art. 67, sub b, of the Code which rules:
“in the case of a periodical payment the rate of the benefit may be reduced only to the extent by which the
other means of the family of the beneficiary exceed prescribed substantial amounts..”
Parties agreed in this case that this article had to be interpreted so that anyway a complete deduction of the
unemployment benefit was a violation of the Convention. The question was if this article had direct effect.
The Central Appeals Court ruled: NO. Three main arguments were given for this decision. First of all the
Court repeated a previous judgement about other articles of this new law in which was stated that the relevant
provisions of Conventions 121 and 128 and the Code in general don’t satisfy the conditions for direct effect.
They are insufficiently concrete, need to be interpreted and the provisions leave room for the legislator to
make his choice.



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Secondly the Court concluded from a letter of the International Labour Bureau (ILB) that the Dutch rules about
deductions of the unemployment benefit were not consistent with the convention, and that the Dutch legislator
might have chosen an other way to regulate deductions of benefits, leading to the same result for the persons
involved, that would be consistent with the convention.
The third argument of my Court was that the Committee of Experts of the ILO has given as her opinion about
article 28, sub d of Convention 128 that a state is considered to satisfy the requirements of that convention if
the collective level of protection is adequate without having to investigate what is paid in the individual case.

Interpretation in conformity a solution?
As mentioned above there is a tendency in the jurisprudence of international courts that articles about social
and economic rights in treaties, that don’t have direct effect, still can play an important role in individual cases.
The most clear examples of this tendency you can find in the jurisprudence of the ECHR. In those cases the
ECHR rules that an article (in the Convention) should be interpreted in the light of f.i. the Convention on
Protection of Children (Pini 2004/82) or that the obligations of a State imposed by a Convention should at the
same time be complying with their international obligations, f.i. arising unde the Convention for the Rights of
the Child (Mayeka en Mitunga). This Court also often mentions articles in ILO-conventions and the ESC as a
guideline for the interpretation of articles in the European Convention on human rights. The same tendency
you can see with the Luxemburg Court of Justice.

A recent example of an “interpretation in conformity of my Court is a judgement about social assistance for
“minor children living in my country whose parents don’t have a resident status. The CAC ruled that art. 2.1 of
the Convention on the Rights of the Child, an anti-discrimination-clause, has direct effect. About the question
if the unequal treatment between illegal minor children (no social assistance) and legally residing minor
children (who can get assistance only in exceptional circumstances) has a lawful aim the Court was clear:
yes, the Koppelingswet has the lawful aim to avoid that illegal people continue their stay in Holland. But, for
the group of children whose parents are allowed to stay in Holland till the end of their aleins-procedure the
refusal of social assistance is according to that judgment in the light of the art.3 and 27 of CRC (which haven’t
direct effect) not proportionate. These articles leads for children to an other result than for their parents.

A hughe problem in our country is now the position of childeren of illegal people who have to leave the
country but just stay. They only get education and medical care in exceptional circumstances. Is this in
accordance with the CRC?

Conclusions about the application of the Code and ILO-conventions in Holland.
For Dutch judges the direct effect of articles in Treaties and Conventions is already difficult in general, but it is
more difficult when the direct effect of the Code and ILO-conventions is at stake. Some conventions (like 118)
are more or less coordination instruments, which can sometimes give concrete rights to individuals. Most
conventions are however more aspirations standards which are primarily made for states which have to
ensure that the national laws are consistent with the conventions.
Articles in these social security conventions are written as generally formulated standards, which give much
room for national legislators to interpret these standards and to make their own choices. Especially difficult in
this respect are articles which prescribe that persons protected shall comprise “not less than 50% of all
employees”.
What to do as a judge, if a national law protects 90% of all employees and one person (out of the 10% not
protected) complaints to the national judge about the application of that law towards him and invokes the
Code? Taken strictly the national law isn’t in force with the convention. In some similar situations the
Committee of Experts has stipulated that there is a violation and then it is more easy for a national judge to
decide to direct effect of that article. Without a that like opinion of an important international committee it is
difficult for the national judge to decide to direct effect just based on the wording of an article.
Even if the wording of an article is rather concrete there are mostly doubts about the direct effect of those
articles. Than judges need more information about that article from the preparatory works on the conventions
or from other sources.

The role of the Committees of Experts for the judges.
As you might have noticed during my speech until now, especially in some of the above mentioned cases, the
role of the Committee is very important for judges in Holland. In most of the cases in which ILO-conventions
are invoked we carefully study the reports of the ILO-Committee, if we have indications (from parties or own
knowledge) that we might find relevant information in the reports. It is however impossible to read all the
reports in individual cases to find out if there might be information in the reports useful for a decision in that
case. An important aspect to consider is that the ILO-reports are not easily available to us; the library of the



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    Central Appeals Court doesn’t have these reports, so we have to borrow them from other libraries (especially
    from the FNV-library).
    From the Committee of Expert of the CoE we can only see the results in the conclusions of the European
    Committee of Social Rights or in resolutions of the Committee of Ministers of the CoE.
    The remarks of the ILO-Committee and the conclusions or resolutions of the Council of Europe have played a
    very important role in the cases in which my Court decided that articles in conventions/Code had direct effect.
    Also in a lot of cases in which we have rejected claims based on the Code/conventions or decided that the
    articles at stake did not have direct effect, we often used the reports or conclusions of the Committees.
    My conclusion about the role of the Committees is simple: we see the Committees as very authoritative
    bodies and its reports and conclusions are a very important source for decisions of judges in national
    procedures.

    Conclusions and advices.
    The conclusion of my speech can also be rather simple. In general the posibilities for judges to apply
    Conventions on economic and social rights are limited because of the fact that the conventions are mainly
    aspiration standards. They give general rules with rather broad lead ways (possibilities) for states to ensure
    that national laws are consistent with the conventions. This is an important aspect in the reluctance of judges
    to apply these conventions in individual cases. This reluctance might be reduced if judges have more
    information and opinions available about these conventions. For judges (but may be more important also for
    all members of the legal profession) it is difficult to find information about the preparatory works of the
    conventions and about reports or conclusions of the Committee on a specific article in a convention. Some
    web-sites of f.i. the UN and the Council of Europe are very good, but not all relevant (especially older)
    information is available and on some websites you need to be an wizzkid to be able to find the information.

    When judges get more affinity with international laws they might be less reluctant in applying conventions
    and, more important, they will have more skills to interpret articles with direct effect in conformity with articles
    without. Very interesting in this respect are recent judgements of the ECHR.

   These remarks lead me to three wishes from a point of view of judges which may improve the interpretations
   of the Conventions.
1.                  The information about the Conventions should be more easily accessible for all persons.
   Especially all available information about a specific convention, and about articles in that convention, should
   be compiled (brought together) in a manual. In this information era it must be possible to realise this, in the
   way that if you look for a specific article in a convention, you find the preparatory works and all conclusions
   and resolutions about that article together in one place.
2.                  It would be very interesting to have any information about judgements in other member states
   about the conventions. This information could influence judges in other member states and (more important)
   could lead to a more uniform interpretation of conventions in different countries.
3.                  International courts like the Court of Justice of the European Comunity, the European Court
   on human rights and the UN-committees on human rights and discrimination of women, have played a very
   important role in the development of international rules. These courts are often able to help national judges
   with their doubts about the interpretation of articles in treaties, regulations and conventions. For the Code and
   other similar Conventions on economic and social rights such a Court does n’t exist, at least not for
   preliminary rulings and for individual complaints. I think that one or more specialised international
   Courts/committees for conflicts about these conventions would be an instrument that could improve the
   impact of them for the protection of employees and persons protected in general. Is n’t this one of the main
   aims of these conventions?
   Very interesting in this respect is to look at the developments about an optional protocol with ICESCR. There
   are concrete intentions of a majority of the member states to establish, in an optional protocol with that
   covenant, the right for individuals to complain about violations of the covenant. The experiences of such a
   committee for complaints can give a good impression of the possibilities and problems of introducing the
   same procedure for individual complaints about economic and social rights in other conventions.

    Ladies and gentlemen. I hope that I have been able to articulate in my speech a glimpse of a judge’s
    perspective of the issues that pertain to Conventions on economic and social rights. It is often very
    complicated work, but in my view any new case is a new challenge for the judges in realising a more
    righteous international legal system. I thank you for your attention.

    Teun de Vries
    7 november 2008



                                                            74
The Revised European Code of Social Security

by Elisabeth IMESCH
Social Security Expert, Switzerland




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Historical background

The question of the revision of the European Code of Social Security and its Protocol was raised as early as
1973, less than 10 years after it came into force. National social security systems had changed significantly
since 1964 : new benefits, extension of coverage, rise in the level of benefits, equal treatment between men
and women, individualisation of benefits (abolition of certain derived rights), etc. The revision work was
geared to two aims: to improve standards and introduce greater flexibility. Work began in 1979 and ended
with the adoption of the European Code of Social Security (revised) on 6 November 1990.

14 states have signed the revised Code, and yet, 18 years after its adoption, it is still not in force. Why? The
question is relevant. With the Netherlands planning to ratify it, and knowing that ratification by at least one
other country is needed for it to come into force, it is interesting to take a close look at this instrument which
sought to set standards for modern social security. The revised Code was supposed to be in tune with the
situation prevailing in the 1980s. What about now? Does it allow countries to make the changes and
adjustments to their social security which are necessary to take account of such factors as ageing of the
population, rapidly rising health costs, funding problems, labour market difficulties, work-life balance and
dependency?

Generally, looking at Parts II to X of the revised Code, concerning the benefits to be guaranteed, we see that
the revised Code raised standards all round. Hence, the contingency covered is often defined more broadly,
the personal and substantive scope is wider, and the level of benefits is higher. But this improvement in
standards is accompanied by so-called “flexibility” provisions.

The question that arises for states contemplating ratification of the revised Code is whether their social
security system is compatible with the instrument. For individuals, ie the persons “protected” by the revised
Code, the question is whether it guarantees better protection than the Code. It is not always easy to answer
these questions and it would be hasty to conclude that the revised Code is “better” than the Code, all the
more so as, the revised Code having not come into force yet, the machinery for monitoring its application is
not yet operational, which means that the instrument has not yet been confronted with the reality of national
legislation.

Structure

Unlike the Code, which is supplemented by a Protocol containing higher standards than the basic instrument,
the revised Code consists of only one instrument. It is divided into 15 parts, whereas the Code only has 14.
This additional part is interesting because it provides for the possibility of amending the Code and specifies
the procedure for so doing. Otherwise, the revised Code has exactly the same structure as the Code. It
comprises a preamble, a Part I containing general provisions, Parts II to X concerning the benefits payable
upon occurrence of the contingency, Part XI dealing with the calculation of periodic payments, Part XII laying
down common provisions, Part XIII containing miscellaneous provisions, Part XIV providing for amendments,
and Part XV setting out the final provisions.

Parts II to X of the revised Code follow the same pattern as Parts II to X of the Code, viz :
- contingency covered (risk)
- personal scope (range of persons protected)
- substantive scope (type of benefits to be guaranteed)
- conditions of entitlement (qualifying period)
- level of benefit (replacement rate)
- duration of payment of benefit and, where appropriate, waiting periods.

Ratification conditions

The revised Code, like the Code, sets out the conditions for ratification of the instrument. The Code was
already very flexible because it was unnecessary to accept all its parts in order to ratify it, but the revised
Code increased this flexibility still further because, subject to certain conditions, acceptance of only one of
Parts II to X is sufficient.

Articles 3, 6 and 7 of the revised Code are also of interest when a state is considering which branches to
accept.




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States which accept parts of the revised Code are deemed, subject to certain conditions, to comply with the
obligations of other parts of the revised Code relating to branches of social security which are not included in
their national system (Art 3, paras 3 and 4).

For example, countries which accept Parts II (medical care), III (sickness cash benefit), IX (invalidity benefit)
and X (survivors’ benefit) and which pay benefits also to the victims of work accidents/occupational diseases
are deemed to comply with the obligations of Part VI provided their legislation does not require any qualifying
period. In practice this means that a country availing itself of this provision will not have to submit a report on
Part VI and will therefore be able to derogate from certain provisions of Part VI, such as that stipulating that
the beneficiary may not be required to contribute to the cost of care in the case of a work accident. This
provision may be of interest to countries which provide care in the case of work accidents/occupational
diseases under the sickness scheme.

Similarly, countries which accept Parts V (old-age benefit), VII (family benefit) and IX (invalidity benefit) are
deemed to comply with the obligations of Part X (survivors’ benefit) if their legislation protects the total
economically active population where old age and invalidity are concerned and grants family allowances to all
the children of that population.

In order to comply with some parts of the revised Code, optional insurance may be taken into account. For
this purpose:
- such insurance must be supervised by the public authorities or administered, in accordance with prescribed
rules, by employers and employees, or, where appropriate, by self-employed or non-active persons, and
- must comply, in conjunction with other forms of protection, where appropriate, with the relevant provisions of
the revised Code (Art 6).

Lastly, Article 7 introduced derogations in order to allow for adaptation to the specific characteristics of
national legislation, but these derogations are offset by compensatory measures or equivalence provisions in
order to avoid a lowering of standards.

Content

It is interesting to analyse the content of the revised Code in terms of its two main characteristics, namely
improved standards and flexibility provisions.

Improvement of standards

This can be seen mainly in two aspects: the percentage of persons protected and the rise in the level of
benefits. But other improvements were made: clearer provisions, new beneficiaries, new benefits, and easier
access to benefits.

The percentage of persons protected

In each of the nine parts of the Code and revised Code, the persons protected are the same. Depending on
the case, they may be employees, economically active persons or, sometimes, residents. The great
difference between the two instruments is that the revised Code considerably increased the percentage of
persons protected in each category.

In Part II (medical care), the revised Code provides for protection of all employees (together with their
spouses and children), or all economically active persons (together with their spouses and children), or all
residents. However, it allows states to exclude 5% of employees, or 10% of economically active persons, or
10% of residents. At the same time, it extends protection in respect of medical care to persons receiving
invalidity, old-age and survivors’ benefit, to those receiving benefit for permanent disablement or survivors’
benefit in the case of a work accident or occupational disease, and to those receiving unemployment benefit.
Another derogation is possible provided a compensatory measure is guaranteed in accordance with Article 7,
para 1. This compensation consists in the provision of long-term care to all residents. If this is the case, the
personal scope may be more restricted and the state may protect only 80% of employees, or 75% of
economically active persons, or 70% of residents (Art 9).

Parts V (old-age benefit), IX (invalidity benefit) and X (survivors’ benefit) offer states the same possibility of
choosing between the different classes of persons to be protected and require the same percentages to be
covered. The revised Code provides for protection of all employees, or at least 80% of the economically



                                                        77
active population, or all residents. The Code specifies, respectively, 50%, 20% and residents on a means-
tested basis. The revised Code, however, allows 10% of employees or 10% of residents to be excluded.

In Part VI (work accidents and occupational diseases), the revised Code did not confine itself, as in most of
the other parts, to raising the percentage of persons to be protected in the chosen category. It also introduced
a new class of persons: persons belonging to the economically active population. The Code provided only for
protection of employees.

The level of benefits

In order to guarantee the protected persons sufficient means of subsistence upon the occurrence of the
insured contingency, the revised Code, like the Code, establishes the minimum level which cash benefits
must attain in relation to certain reference values. On the one hand, reference is made to the normal wage
level in each state, and on the other, the percentage of that wage which cash benefits must represent for
each standard beneficiary is laid down. This reference system makes it possible to verify, for each
contingency giving rise to the award of cash benefits, whether the state’s social security system guarantees
an adequate replacement rate.

In Part XI, the revised Code uses the three verification methods set out in ILO Convention No 102, which can
be adapted to the different national social security systems generally encountered. A distinction is drawn
between schemes paying out benefits proportional or partly proportional to the previous earnings of the
beneficiaries or their breadwinner, schemes whose benefits are set at uniform rates or comprise a guaranteed
minimum amount, and schemes awarding benefits according to the beneficiaries’ income during the
contingency covered.

Compared with the Code, the revised Code generally increased the replacement rate for the standard
beneficiary with dependants. In the case of short-term cash benefits, the rates of 45 and 50% laid down in the
Code rose to 65% in the revised Code. In the case of long-term benefits, the Code lays down a rate of 40%
for old age, invalidity and death and 50% for work accidents/occupational diseases. The revised Code raised
the replacement rate to 65% for these benefits too.

It is also interesting to note that the revised Code does not allow Article 73 to be used for the calculation of
old-age benefit. This article is the equivalent of Article 67 of the Code, which makes it possible to determine
the rate of benefit by applying a scale and means-testing the beneficiary.

The revised Code also differs from the Code insofar as the provisions of paragraphs 5 and 6 of Article 71 and
paragraphs 3 and 4 of Article 72 of the former have no equivalent in the corresponding Articles 65 and 66 of
the Code. These provisions determine which earnings are to be taken into consideration depending on
whether the benefits are subject to payment of tax or contributions, or are exempt from them, under national
legislation.

Clearer provisions

With regard first of all to definitions, the revised Code supplemented, clarified and modernised them, often
adapting them to the definitions given in ILO conventions after Convention No 102.

A good example of these improvements is the definition of the term “qualifying period”.

The term “qualifying period” is generally used in connection with the conditions of entitlement to benefit. But
this term has two meanings in the Code, which is not helpful to an understanding of some provisions. In some
cases “qualifying period” refers to a period of contribution or activity in order to be entitled to a benefit of a
certain amount, in others it is a minimum period of contribution or activity for entitlement to benefit. The
revised Code removed the ambiguity: it uses the term “qualifying period” to refer to the minimum period of
contribution or activity to be completed in order to be entitled to a benefit.

In Parts II and III, the revised Code did away with the concept of “morbid condition”, retaining only the need
for medical care, or incapacity for work resulting from an illness or accident.

In Part VI, the revised Code, unlike the Code, requires states to formulate a definition of work accident
(including accidents on the way to or from work) and occupational disease.




                                                       78
For the sake of coherence, the revised Code removed pregnancy and confinement and their consequences
from the contingency covered by Part II (sickness benefit), taking the view that benefits in kind and cash
benefits relating to maternity should be dealt with under Part VIII (maternity benefit).

New beneficiaries

In Part IV (unemployment benefit), the personal scope of the Code differs from that of the revised Code: the
Code protects employees and residents on a means-tested basis, whereas the revised Code protects
employees and economically active persons. The revised Code also requires protection of at least two
classes of persons from among the eight proposed, which are: young people having completed their studies
or their vocational training or having been discharged from compulsory military service, divorced persons or
persons whose spouse is deceased, disabled persons who have completed their occupational rehabilitation,
parents at the end of a period devoted to bringing up a child after the end of maternity leave, and discharged
prisoners.

Still in Part IV, the revised Code introduced a real innovation in relation to the Code as it affords protection to
some classes of persons who have never worked, and no longer only to those who have lost their job, as was
the case with the Code. Whereas the Code spoke of “suspension of earnings”, the revised Code refers to
“absence of earnings”. Also, the revised Code differentiates between cases of total unemployment and cases
of unemployment other than total, which must both be covered by national legislation.

In Part IX (invalidity benefit), the revised Code extended the contingency covered, which is no longer only
incapacity to work as in the Code, but also the inability to engage in the activities of private life and the
incapacity of a child resulting from congenital disability or from invalidity occurring before the school-leaving
age.

New benefits

In Part II, under medical care, the revised Code introduced medical care of a preventive nature, leaving it to
national legislation to determine the nature and scope thereof.

In Parts II and VIII, the medical care to be provided under the revised Code includes, in addition to that to be
provided under the Code, care provided by a member of a profession allied to the medical profession,
maintenance in a hospital or any other medical institution, dental care, including dental prostheses, medical
rehabilitation, including the supply of prosthetic and orthopaedic appliances, and transport of the patient.

In Part III, the revised Code provides for the award of a grant for funeral costs in the case of the death of a
person who was in receipt of sickness benefit. It qualifies this requirement by adding a flexibility clause to the
effect that any state which has ratified Part X is deemed to comply with it (Art 18).

In Part IV, the revised Code introduced a requirement for states to provide occupational guidance, training,
retraining, integration and re-integration services to help persons to keep or obtain suitable employment. To
encourage recourse to these services, states must also grant aids to occupational mobility and, wherever
necessary, geographical mobility (Art 25).

In Part VI, the revised Code extends the list of medical care to include the cost of transport of the victim and,
wherever possible, the provision of a care service at the place of work. Furthermore, the revised Code
requires states to provide increased or special benefit for beneficiaries whose condition necessitates the
attendance of another person. In case of death, it provides for the award of a grant for funeral costs to the
victim’s survivors. Lastly, the revised Code requires states to take measures to prevent work accidents and
occupational diseases, to provide occupational rehabilitation facilities and take measures to facilitate the
placement of disabled persons in suitable employment.

The increase in the scope of the contingency covered in Part IX of the revised Code led to an increase in the
range of benefits payable. A periodical benefit must be awarded to persons incapable of engaging in their
usual activities and the benefits granted to children in the case of invalidity must include either cash
allowances for education or adaptation or specific measures to assist progress at school or at work, or
additional grants.




                                                        79
Qualifying periods

Regarding the qualifying periods which national laws may require for entitlement to benefit, in some cases the
revised Code raised the standard in relation to the Code by reducing the prescribed period.

As far as Parts II, III and IV are concerned, the revised Code is the same as the Code. Both instruments
leave states free to set a qualifying period prior to the award of benefits, specifying merely that this period
must not be longer than is considered necessary to prevent abuse. Neither the Code nor the revised Code
attempted to stipulate the length of the period in question, leaving discretion to the supervisory body to
assess this.

With regard to Part V, the revised Code, unlike the Code, introduced a qualifying period provision and
specified that this period could not exceed fifteen years. The same applies in Parts IX and X, where the
qualifying period may not exceed five years.

In Part VI, the revised Code specifies that no qualifying period may be required for victims of work accidents.

Part VII of the revised Code is a little unusual in that if the circle of persons covered by national legislation is
wide (residents), national legislation may provide for a qualifying period prior to the award of benefits,
whereas it cannot do so if the circle is narrow (employees). The Code provides for the possibility of a
qualifying period in all cases.

Lastly, in Part VIII, the revised Code distinguishes between medical care (no qualifying period) and cash
benefits (qualifying period possible), whereas the Code allows a qualifying period for both types of benefit.

Duration of payment of benefit and waiting periods

Under both the Code and the revised Code, benefits are in principle paid once the contingency has occurred
and for as long as it lasts. There are, however, some exceptions to this rule.

The possibility of limiting the duration of payment of benefit in Part II of the Code to 26 weeks per case was
removed in the revised Code, which even provides that, under conditions to be prescribed by national
legislation, entitlement to benefit may be maintained for persons who cease to belong to one of the classes of
persons protected.

In Part III, the Code allows the duration of payment of cash benefits to be limited to 26 weeks per case. The
revised Code raises this limit to 52 weeks for each case of illness and 78 weeks in any consecutive period of
three years.

In Part IV, the duration of payment of benefit may be limited, under the Code, to 13 weeks within a period of
12 months or to 13 weeks in each case of unemployment where employees are protected, and to 26 weeks
within a period of 12 months where all residents whose means during the contingency do not exceed
prescribed limits are protected. The revised Code increased the duration of payment of benefit.

Again in Part IV, benefit need not be paid for a waiting period which, in the Code, is limited to the first 7 days
for each case of unemployment and, in the revised Code, either to the first 3 days for each case of
unemployment or to the first 6 days within a period of 12 months.

In Part V, both the Code and the revised Code stipulate that benefit must be paid throughout the contingency.

In Part VI, both instruments provide that benefit must be paid throughout the contingency. Under the Code,
however, benefit need not be paid for the first three days of a temporary or initial incapacity for work.

Maternity benefit (Part VIII) must be paid throughout the contingency. However, the payment of benefit may
be limited to 12 weeks under the Code and to 14 weeks under the revised Code, unless a longer period of
abstention from work is provided for by national legislation, in which case payment may not be limited to a
shorter period.

Flexibility provisions

The flexibility of the revised Code lies mainly in its ratification conditions. As we have seen, acceptance of
only one of Parts II to X is sufficient for a state to ratify the revised Code, provided it is bound by the Code or


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by Article 12, paras 1, 2 and 3 of the Social Charter. Where other states are concerned, acceptance of three
of Parts II to X is sufficient. The revised Code also did away with the greater weighting given by the Code to
Parts II and V: all now carry the same weight.

Furthermore, the revised Code established bridges between the different branches and a state which accepts
some branches is “deemed to comply with” the obligations of the other branches, even if its legislation does
not cover the branches in question. We have seen that acceptance of Parts II, III, IX and X enables the
obligations of Part VI to be complied with, provided the victims of work accidents/occupational diseases are
also entitled to benefits under Parts II, III, IX and X. The flexibility lies in the fact that Part II allows provision to
be made for the beneficiary to share in the cost of medical care, whereas Part VI prohibits this. Should Parts
II, III, IX and X be accepted, however, the state will be deemed to comply with the obligations of Part VI
without any check being made on its legislation in this regard.

We have also seen that while the revised Code generally increased the percentage of persons protected, it
also introduced numerous possibilities of excluding certain classes of persons, sometimes subject to
compensatory measures.

The Code and the revised Code give the same definition of the contingency covered in Part V (old-age
benefit): survival beyond a prescribed age. Both instruments set that age at 65, but whereas the Code only
allows that age to be raised if a quantifiable demographic criterion is satisfied, the revised Code refrains from
quantifying the demographic criterion and adds economic and social criteria, ultimately leaving national
legislation free to increase the age of entitlement to old-age benefit.

The revised Code does, however, offset this great flexibility to some extent. For example, if the pensionable
age is 65 or higher, it must be lowered in at least one of the four situations described in the instrument. But at
the same time the revised Code introduces possibilities of derogating from this obligation to lower the
pensionable age (Art 27). We are faced here with a fairly complex provision which shows a concern on the
part of the authors of the revised Code to take account of all the possibilities offered by national legislation of
drawing an early pension.

Another flexible element introduced by the revised Code is the definition of the standard beneficiary.

The standard beneficiary as defined by the Code varies according to the contingency covered and the type of
benefit. The standard beneficiary of benefits for loss of earnings in the case of sickness, unemployment, work
accident/occupational disease and invalidity is a man with a wife and two children. In the case of old age, it is
a man with a wife of pensionable age; in the case of death, it is a widow with two children. In the case of
maternity, the beneficiary is the woman herself, as the payment of cash benefits is justified solely by the
suspension of earnings which she suffers as an economically active person.

The revised Code took up this definition of the standard beneficiary. But it added a second category of
standard beneficiary: the person considered alone. States can choose whichever of the two possibilities is
most compatible with their system. The replacement rate which the benefit must attain in relation to the
reference salary obviously varies according to whether the person alone or the person with dependants is
considered.

Also, where the standard beneficiary with dependants is concerned, the revised Code, unlike the Code, no
longer assumes the family breadwinner to be a man. Henceforth, therefore, it is a person with a spouse and,
depending on the contingency, two children. One of the criticisms commonly levelled against the Code is that,
because the standard beneficiary is a man, the Code is an outdated instrument that discriminates against
women. Before saying that the Code is discriminatory, we should consider its real impact. The Code requires
states to pay pensions which are a percentage of a reference salary and that reference salary is that of a
man. If we consider that women’s salaries are often lower than men’s, whatever the branch of activity, we
realise that beneficiaries (men and women) have every interest in the standard being linked to a man’s salary.
In making it possible for account to be taken of a man’s or a woman’s salary or an average of the two, the
revised Code certainly introduced an element of equality between men and women, but perhaps to the
detriment of the standard.

With regard to the provisions dealing with the financing of social security, the revised Code did not incorporate
                   nd
in Article 76 the 2 paragraph of Article 70 of the Code, which provides that total employee contributions must
not exceed 50% of the resources allocated to their protection and that of their wives and children.




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