Latvian State Pension for Non-Citizens Case

• Jurisdiction: Letonia
• Judge: Skudra,Balodis,Branta,Krūma,Muižniece
• Court: Supreme Court (Latvia)
• Docket Number: (Case No 2010-20-0106)

Latvia, Constitutional Court.

(Skudra, Chairman; Balodis, Branta, Krūma and Muižniece, Justices)

(Case No 2010-20-0106)

Latvian State Pension for Non-Citizens Case 1

Human rights — Right to property — Social security system — Pension system — Retirement — Obligations of State — Different treatment — Whether objective and reasonable grounds for different treatment — European Court of Human Rights — European Convention on Human Rights, 1950

Nationality — Citizens of Latvia — Non-citizens of Latvia — Ex-USSR citizens — Aliens — Stateless persons — Obligations of State — Freedom of action — USSR immigration policy

Relationship of international law and municipal law — European Court of Human Rights — Jurisprudence of Grand Chamber — Andrejeva v. Latvia finding violation of European Convention on Human Rights, 1950 — Whether distinguishable on facts — Obligations of Latvia under Convention

State succession — State continuity — Statehood — Unlawful occupation — Illegal annexation — Rights and obligations of illegally annexed State — Restoration of independence of Latvia — USSR — Bilateral agreements — The law of Latvia

Summary:2The facts:—The applicants were non-citizens of Latvia who had partly worked outside the territory of Latvia during the occupation of Latvia by the Union of Soviet Socialist Republics (“the USSR”). In calculating the applicants' pensions, including the military pension of one of the applicants, the work and the equivalent period thereof accrued outside the territory of Latvia before 31 December 1990 was not added to the period of social insurance.

A few years after the restoration of independence, Latvia introduced a new pension system based on mandatory social insurance contribution payments. Pensioners whose length of period of insurance was accrued during the USSR occupation had that period included in calculations if accretion had occurred

in the territory of Latvia. The law was then amended in respect of Latvian citizens. The Latvian State Pensions Act 1995, as amended and in force on 1 July 2008 (“the Act”),3 stated that the length of period of insurance of aliens, stateless persons and non-citizens of Latvia was equivalent to the work and the equivalent periods thereof accrued in the territory of Latvia. Periods spent outside the territory of Latvia were only counted as equivalent if they were for educational reasons or were spent in imprisonment or deportation for politically repressed persons. The time spent working outside the territory of Latvia was not made equivalent to the length of period of insurance for noncitizens, but was made equivalent for citizens

The applicants claimed that the different regulations for citizens and noncitizens violated the rights of non-citizens of Latvia because the working period and the length of obligatory military service accrued outside the territory of Latvia before 31 December 1990 was not included in the insurance period, which had a considerable effect on the pension amount.

Held:—Paragraph 1 of the transitional provisions of the Act was compatible with Article 91 of the Constitution of Latvia and Article 14 of the European Convention on Human Rights, 1950 (“the Convention”), taken in conjunction with Article 1 of Protocol No 1.

(1) By amending the pension law so as to allow for accretion of pensionable service outside the territory of Latvia during the period of USSR occupation for Latvian citizens but not for non-citizens, the legislator had established different principles for the calculation of pensions of citizens and non-citizens of Latvia. These two groups of persons were therefore treated differently (paras. 6–7).

(2) In a similar case, the European Court of Human Rights had held that Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No 1, had been violated. The case could be distinguished, however, since the facts of these two cases were significantly different; Ms Andrejeva had worked for the USSR Central Government, but had fulfilled her duties in the territory of Latvia. The same conclusions did not therefore apply. Social human rights were defined as general obligations of the State. The system of social and economic protection and its maintenance lay with the State and depended on accessible resources. A State enjoyed broad freedom of action when establishing its social security system, including its pension system (paras. 8–10).

(3) Latvia was not the successor of the rights and liabilities of the former USSR. Pursuant to the doctrine of State continuity, a renewed State was not obliged to undertake any liabilities that followed from the occupant State. Latvia's independence from Soviet occupation had been restored on the basis

of State continuity. If a State whose independence had been unlawfully discontinued restored its statehood, it had the right, based on the doctrine of State continuity, to be recognized as the State which it had been previously. Illegal annexation had no legal consequences. In internal affairs the acts of the illegally established public authorities in the field of public law were not binding on the State that had re-established its independence (paras. 10–12)

(4) In the field of social rights, a State owed its citizens a duty of care, looking after their basic needs. There were objective and reasonable grounds for calculating the pensions of citizens and non-citizens of Latvia differently.

(a) The European Court of Human Rights had stated that Article 1 of Protocol No 1 could not be interpreted as entitling a person to a particular amount of pension. Moreover, the Convention did not guarantee the right to receive a pension for work done in another State (para. 12).

(b) The preamble of Latvia's Declaration of Independence obliged the Latvian authorities to observe the doctrine of continuity, not to derogate from it. Social rights therefore had to be interpreted in that context (para. 12.1).

(c) After the restoration of independence, Latvia's State and social budgets, previously controlled by the USSR Public Bank, remained the property of Russia. This caused economic difficulties when forming a new pension system. As a result, only citizens were allowed to add to the length of period of insurance work periods accrued outside the territory of Latvia. The State enjoyed freedom of action and took into account the special link between citizens and State, as well as their ancestral contribution to the national economy. Its decision could be regarded as a manifestation of the reinstated State. Upon the restoration of independence, the legislature determined Latvian citizenship in accordance with its 1919 law. Non-citizen status was created for those persons who travelled to Latvia during the occupation, thus implementing the policy of Sovietization and Russification of the USSR communist party (paras. 12.2–13).

(d) Despite non-citizens having legal ties with Latvia, the State continuity context was determinative with regard to procedural differences in calculating the pensions of citizens and non-citizens. A State occupied as the result of aggression by another State did not have the duty to guarantee social security for persons who had travelled to its territory from the occupant State as a result of immigration policy. There was an erga omnes duty not to recognize and justify breaches of international law. Moreover, the non-citizen status was established as a temporary status enabling a person to become a Latvian citizen or to strengthen legal ties with another State (para. 13).

(5) It was not for Latvia to assume the obligations of another State in granting old age pensions for working abroad. Latvia could not expect taxpayers participating in the new pension scheme to solve issues which should be solved by interstate agreements. In any event, the applicants had not been denied the right to a pension or any other social security in old age. Like citizens of Latvia, they received the stipulated pension and additional payments thereto. A different approach was proportionate. The contested norm did therefore comply with Article 14 of the Convention taken in conjunction with Article 1 of Protocol No 1, as well as with Article 91 of the Constitution (paras. 14–15).

The following is the text of the judgment of the Court:

THE FACTS

1. On 2 November 1995, the Saeima adopted the Law “On State Pensions” (hereinafter—the Pension Law) that came into force on 1 January 1996. Para. 1 of the Transitional Provisions of the Pension Law provided the following:

The accrued work and the equivalent periods thereof of citizens of the Republic of Latvia in the territory of Latvia and outside of Latvia shall be equivalent to length of period of insurance necessary for granting State pension irrespective of social insurance payments made. This provision shall be applied to aliens and stateless persons whose place of residence as on 1 January 1991 was the Republic of Latvia only in respect to accrued work and the equivalent periods thereof in the territory of Latvia …

On 6 November 1996, the Saeima introduced amendments into the above-mentioned norm by establishing the following wording thereof:

The accrued work and the equivalent periods thereof of citizens of the Republic of Latvia, repatriates, their family members and descendants in the territory of Latvia and outside of Latvia shall be equivalent to length of period of insurance necessary for granting State pension irrespective of social insurance payments made. The length of period of insurance of aliens and stateless persons whose place of residence as on 1 January 1991 was Latvia is equivalent to the work and the equivalent periods thereof accrued in the territory of Latvia, as well as to the work and the equivalent periods thereof accrued outside the territory of Latvia referred to in sub-paragraphs 4, 5 and 10 of this paragraph …

By the Law of 20 October 2005, the Saeima established the following wording of the said norm:

The accrued work and...