European Union judges had already warned that the Spanish rule could be unfair
The Constitutional Court has annulled this Wednesday the mechanism for calculating pensions for those who have worked part-time. Unanimously, its 12 judges understand that this formula discriminates against those who work part-time compared to those who work full-time. And, in addition, it considers that this method is sexist as it is particularly prey to women, who make up 75% of the three million hourly employees in Spain. The ruling is in line with that issued by the Court of Justice of the European Union in May for the case of a worker in Castilla y León, which already warned that the Spanish formula could be illegal.
Social Security and the way it grants pensions to those who have worked part-time have once again come into conflict with the Constitutional Court (TC). In a well-known ruling, the high court annulled the mechanism that calculates the period of contributions by part-time workers. The ruling will affect those who retire from now on and those who have open claims for this reason before the Administration or the courts, but not those who are already receiving the benefit, said sources from Social Security, who said they are studying the ruling.
The judges point out that the current regulation, in force since 2013, is “discriminatory” by penalizing part-time employees twice. The text, whose rapporteur was Cándido Conde-Pumpido, points out that it is logical that these workers have lower pensions because they contribute less. What they do not see clearly is that the reduction is applied in two ways: the regulatory base of the pension and the calculation of the contribution period.
Calculation for those who contribute by hour
For the Constitutional Court, it only makes sense that the reason for the lower pension comes from the regulatory base. Until now, for full-time employees, Social Security calculates the time worked based on calendar months and years. On the other hand, for those who contribute by hours, it is done by applying a “partial coefficient” that reduces the calendar days worked, since they do not contribute for the entire workday.
Both the regulatory base and the contribution period are two of the parameters that Social Security uses to calculate the amount of the pension at the time of retirement. Another is the retirement age. The regulatory base of the worker is an index that is calculated based on the contribution bases - a reference that coincides with the gross salary of the worker - during the last 22 years of contributions. Once this regulatory base is reached, Social Security uses the contribution period to determine whether the pensioner is entitled to 100% of this base, if he or she reaches 35.5 years of contributions, or less (it is reduced to 50% if he or she has only contributed for 15 years).
Women represent 74.51% of part-time workers in Spain
The application of the coefficient of partiality is the first cause of discrimination that the Constitutional Court saw and would affect the entire group. The second is the so-called “indirect discrimination”, which consists of concluding that there is an unjustified difference between men and women not because of the wording of the law, which is neutral in principle, but because of the de facto situation that generates reality. This doctrine has especially affected everything surrounding the regulation of part-time employment, since women are 74.5% of these workers in Spain.
The European Court of Justice had already stated in May that the Spanish law could be discriminatory for this reason. It did so in response to a preliminary question from the High Court of Justice of Castile and Leon. The European judges left the final decision to that court, but the Constitutional Court's ruling came earlier.
The impact of the measure
Social Security is still calculating the impact of the measure both in terms of the number of beneficiaries and in terms of money, so it is difficult to know how many people the ruling may affect. However, it can be noted that within the group of part-time workers there are three groups.
The first group includes those who contribute for only a few hours and upon retirement would be entitled to a pension so low that they would need a supplement to reach the minimum. For this group, the impact will be zero. At the other extreme are those who work part-time for a good part of the day (67% or more). They are not affected either because the coefficient of part-time work compensates them. It will benefit those who are in between the two cases, which are tens of thousands of employees, although it is difficult to specify the figure further.
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