THE CONSTITUTIONAL COURT OF
THE REPUBLIC OF CROATIA
No. U-I-137/2001 etc.
Zagreb, 19 December 2001
The Constitutional Court of the Republic of Croatia, composed of Smiljko
Sokol, President of the Court, and Judges Marijan Hranjski, Petar Klarić, Mario Kos,
Jurica Malčić, Ivan Matija, Ivan Mrkonjić, Jasna Omejec, Željko Potočnjak, Agata
Račan, Emilija Rajić, Vice Vukojević and Milan Vuković, deciding in connection with
the proposal submitted by a number of applicants to initiate proceedings to review the
conformity of a law with the Constitution of the Republic of Croatia, at the session of
the Court held on 19 December 2001, passed the following
RULING
I.
The Constitutional Court has not accepted proposals to initiate
proceedings to review conformity with the Constitution of the Republic of Croatia of
the Law on Raising Pensions to Obviate Differences in the Level of Pensions
Realised in Different Time Periods (Official Gazette of the Republic of Croatia,
Narodne novine, No. 127/00).
II.
This ruling shall be published in Narodne novine.
Statement of reasons
1.
The following applicants submitted proposals to review conformity with the
Constitution of the Law, quoted in the dictum, in its entirety or particular provisions
and parts thereof:
Union of Pensioners of Croatia (from Zagreb and Dubrovnik), Croatian Pensioners’
Society, Ljubiša Anđelković, Ljubomir Aćimović, Mirko Kisić, Zvonimir Zorić, Split
Pensioners’ Party, Nikola Počuča, Ante Ugrina, Mara Bašić, Đorđo Jelača, Nikola
Trzin, Jakov Kapor, Mihailo Stanković, Viktorija Harjač, Jerka Jakus, Marija Lučić,
Nikola Vukelić, Cvjetko Miše, Anka Vukelić, Tomislav Burmas, Nikolina Ivanišević,
Dušanka Kladarin, Josip-Ivan Dropulić, Milica Dropulić, Slavka Juretić, Mate Rinčić,
Janko Cetina, Blaženko Palaversa, Milan Kokić, Gavrilo Ćorić, Kažimir Meić, Petar
Sunajko, Dragoljub Popović, Bogdan Savić, Josip Gašperov, Cvita Muslim, Jožef
Počivalšek, Beliksa Šćepanović, Ana Rajaković, Radojka Denona, Zlatan Sažunić,
Ivan Jerkunica, Željka Bezić, Ivka Bešlić, Jovanka Novković, Nikola Novković, Žarko
Pajkić, Milena Petrović, Vukota Stamatović, Delfa Knežević, Branko Knežević, Miro
Tanfara, Strahinja Đuričić, Slavko Kostić, Milka Kostić, Rina Medić, Ivanica Uljević,
Stjepan Dučić, Slavija Dučić, Ivo Lampalov, Ivan Rogulj, Ernesta Miše, Petar
Dragić, Ivan Berket, Fabijan Tomasović, Ružarij Lovrić, Ana Franić, Petar Radoš,
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Petar Karanušić, Neđeljka Grubišić, Milica Boban, Igor Franceschi, Andro Kovač,
Katica Luketin, Marija Mirić, Mirko Pažanin, Štefanija Pažanin, Vjera Piskulić, Delfina
Radić, Perica Zović, Slavko Radulović, Kata Horvat, Ivo Ganza, Rosana Ganza,
Volga Šeman, Desanka Ivić, Josip Burić, Vjera Palavršić, Anđa Balić, Kata Domazet,
Desanka Lovrić, Karlo Babić, Marija Čagalj, Mato Popović, Matilda Ostojić, Antica
Botić, Dušan Kašper, Vjekoslav Bezić, Petar Videka, Manda Maleš, Mara Božić,
Lovro Božić, Dalibor Vrandečić, Dragica Kačić, Blaženka Pavičić, Karmela Tomić,
Mirko Kovačević, Slađenka Kelam, Ana Mrčela, Vjera Mornar, Vesna Ribarović, Ante
Kriletić, Jerka Sabić, Milan Vujičić, Milan Merinić, Manda Jukić, Antun Milat, Mate
Zelenbaba, Marija Vukman, Tonka Ljubetić, Nedjeljka Kalinić, Mira Kralekić, Dominik
Kraljević, Nada Čavka, Miroslav Gubić, Petar Radulović, Alfred Petrović, Nikola
Mastrelić, Zdravka Fradelić, Ana Šerić, Jela Veić, Ika-Ivka Perica, Dome Penjak, Ivan
Čavlina, Marija Gospodnetić, Anđelka Gradiski, Marko Gabrilo, Marija Gabrilo, Ivan
Botić, Ivka Pleština, Biserka Orlandini, Nika Perkušić, Lovre Posinković, Vinko Piteša,
Lukrica Jelić, Nada Jakovčević, Antonija Fio, Cvita Minigo, Danica Frapporti, Bosiljka
Bilan, Marko Tukić, Milka Sunara, Mihail Parađina, Iva Čikato, Ante Šimičić, Nevenka
Najev, Jakov Veljača, Marija Banovac, Ivan Sviličić, Gizdava Vidović, Marijan Bulić,
Anđa Galić, Ilija Rade, Olga Vuković, Mate Čaleta, Danica Eterović, Anđa Elez, Mate
Lašić, Iva Šubašić, Tonka Jakšić, Anka Bilić, Ajka Bošnjak, Laura Asja, Milka Orlić,
Slavko Orlić, Gordana Ozretić, Tihomila Gnječ, Andrija Mrleš, Vlade Jurić, Nediljka
Polić, Marija Matić, Mate Juretić, Vladislav Gabrić, Dora Ivančić, Milka Juričić,
Zdenka Bigava, Marija Bonačić, Boja Prkut, Mihovil Radić, Marija Sokol, Jozo Botić,
Nikola Botić, Kajo Bojić, Anđelka Novaković, Milica Kaluđerović, Rozalija Kušar,
Ranka Ivković, Anđa Ivković-Šolić, Anka Mihaljević, Ivka-Ružica Mrčela, Marija
Mandić, Stipe Neveščanin, Ljuba Bartulović, Gordana Beroš, Vlade Bašić, Frane
Bezić, Ankica Blažević, Marjeta-Nikolaja Višić, Mara Jukić, Luca Palinić, Ivo Pavlov,
Tanja Goić, Nediljko Čikeš, Mirjana Gertrud Gergorec-Aparnik, Jolanka Eleonora
Nemeth, Marijan Horvatinović, Nevenka Jelić, Dubravka Majerić and Velimir
Obradović.
2. The proposals disputing some parts of the Law refer to the following legal
provisions:
- Article 1 in its entirety, or the second part of the sentence:
("This Law regulates the manner of raising pensions to obviate differences in
the level of pensions realized in different time periods, and executes the decision of
the Constitutional Court of the Republic of Croatia of 12 May 1998, in accordance
with the economic capacity of the Republic of Croatia”),
- Article 3, para. 2
("The base for raising the pension of a minimum-pension holder, in
accordance with Article 2 of this Law, is the pension the holder would have received
on 31 December 2000 had the regulation on minimum pensions not been issued."),
- Article 4 in its entirety, or paras. 1 and 3 of this Article
("(1) The raise in accordance with Article 2 para. 1 of this Law does not
include any riase in the protective allowance received with the pension, in the
minimum pension and in the highest pension determined in accordance with
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regulations on retirement and disability insurance that were in force until 31
December 1998.
(2) If the pension raised in accordance with Article 2 para. 1 of this Law
exceeds the sum of pension plus protective allowance, i.e. the minimum pension,
then the right to receive the protective allowance with the pension, i.e. the minimum
pension, shall cease on 31 December 2000.
(3) No pension raised in accordance with Article 2 para 1 of this Law may
exceed the highest pension on 31 December 2000, determined in accordance with
regulations on retirement and disability insurance that were in force until 31
December 1998."),
- Article 5
(" Pensions determined in the Law on Retirement and Disability Insurance of
Military Insurance Beneficiaries (Narodne novine, Nos. 53/91, 73/91, 18/92 and
96/93), pensions determined in accordance with provisions about determining the
pensions of representatives in the Croatian National Parliament, and pensions
determined by the Law on Retirement and Disability Insurance for Farmers (Narodne
novine, Nos. 26/83, 49/83, 57/83, 47/86, 40/90, 26/93 and 96/93) shall not be raised
in accordance with the provisions of this Law."),
- Article 6 in its entirety, or para. 2 of this Article
("(1) Pensions shall be raised in such a way that the number of personal
points of the pension holder, established on 1 January 2001, shall be increased by
the application of Article 2 of this Law.
(2) The raise of pensions in accordance with this Law shall be executed by the
Croatian Retirement Insurance Bureau, in the line of duty, without issuing a
decision.").
3.
The applicants proposed the review of constitutionality with reference to the
constitutional provisions in Articles 1, 3, 4, 5, 14, 16, 18, 19, 26, 35, 48, 50, 90 para.
2. (corresponding in content with the present Article 89 paras. 4 and 5 of the
Constitution of the Republic of Croatia - Narodne novine, No. 41/01), Article 115 (now
Article 117) and Article 134 (now Article 140) of the Constitution of the Republic of
Croatia.
4.
In essence, the applicants grounded their proposals on the following reasons:
With reference to Article 1, or the second part of the sentence in Article 1 of the Law:
The applicants allege, without any real or legal grounds, that the text of the disputed
provision implies that the procedure laid down in the disputed Law regulates the
execution (in its entirety or partly) of the Constitutional Court decision of 12 May 1998
(No. U-I-283/1997, Narodne novine, No. 20/98), which the applicants consider it does
not do. The applicants consider that the Law has only to some extent balanced
pensions acquired under equal conditions at different times, whereas the
Constitutional Court decision quoted deals with balancing pensions with the increase
in salaries in the period from July 1993 to December 1997 and returning the debt
owed to pensioners, which the disputed law does not even touch on.
4
They consider that by acting in this way, that is by erasing the rights of pensioners as
established by the Constitutional Court, a violation has been committed of Articles 3,
5, 16 and 35 of the Constitution of the Republic of Croatia (the highest values of the
constitutional order of the Republic of Croatia – with emphasis on equality, social
justice, inviolability of ownership and the rule of law: conformity of laws with the
Constitution, and other regulations with the Constitution and law; the general
obligation to obey the Constitution and laws and obey the legal order of the Republic
of Croatia: the possibility of restricting freedoms and rights only by law to protect the
freedoms and rights of other people and public order, morality and health, restricting
a freedom or right in proportion to the nature of the need for restriction in every
individual case; the constitutional guarantee of respect for and legal protection of
personal and family life, dignity, reputation and honour).
They reject the arguments of the competent government bodies, which justify their
acts by selectively quoting the Constitutional Court decision, that is, by quoting only
the part that shows the legislator unquestionably had the right to regulate the level of
economic and social rights in accordance with the economic capacity of the state,
while at the same time passing over the part of the decision whereby the legislator, in
exercising this right, may not jeopardize fundamental constitutional rights and
principles (equality, social justice and the rule of law).
The majority of the applicants consider it an undeniable circumstance that at this
moment the state does not have the economic capacity to fulfil its obligations in the
Constitutional Court decision, however, they consider it impermissible to use in the
letter of the law such formulations that imply that this obligation has been completely
or partly executed by passing the disputed Law.
Some of the applicants, starting from the assumption implied (they allege without
grounds) in the text of this provision – that it is the execution of the Constitutional
Court decision, i.e., that it also regulates returning the debt owed to pensioners - put
forward the question of who is competent, on the basis of the Constitutional Court
decision whereby the existence of this debt has been recognised, to decide about
returning this debt.
In actual fact, a large number of the applicants have also instigated proceedings
before regular courts, presently with varying degrees of success, which they consider
a violation of Article 3, Article 26 (equality before the courts, government bodies and
other bodies vested with public powers), Article 50 (property may be exceptionally
restricted or expropriated by law upon payment of compensation of its market value,
when it is required in the interests of the Republic of Croatia, nature, the human
environment and public health), Article 115, i.e. Article 117 (Judicial power shall be
exercised by courts. Judicial power shall be autonomous and independent. Courts
shall administer justice on the basis of the Constitution and law.), and Article 134, i.e.
140, of the Constitution, the latter in the context of the right to a fair trail before an
independent court, guaranteed in the European Convention for the Protection of
Human Rights and Fundamental Freedom of the Council of Europe (Narodne novine
– International Agreements, revised text, No. 6/99).
They consider that these courts have the jurisdiction to determine the amount of each
individual debt and to enforce its payment. By passing the disputed Law, they allege,
5
the legislator interfered in the competence of the judicial and executive branches
without authority and unconstitutionally, and contrary to the provisions of Article 4 (In
the Republic of Croatia government is organized on the principle of the separation of
powers into the legislative, executive and judicial branch, and is restricted by
constitutionally guaranteed law to local and regional self-government. The principle of
the separation of powers includes forms of constitutionally and legally regulated
cooperation and reciprocal verification of the holders of public authority.) and Article 5
of the Constitution.
With reference to Article 3 para. 2 of the Law (disputed in one proposal, in case No.
U-I-395/2001):
This provision, as the proposal mentions, prescribes that the 20% raise in pensions,
which the disputed Law also grants to holders of minimum pensions (earned on the
basis of full years of employment, but which when calculated according to average
yearly earnings amount to less than the minimum pension), shall be calculated from
the base formed by what their pension would have been on 31 December 2000 had
the regulation about the minimum pension not been issued, i.e. the sum which would
belong to the pensioner on that day on the basis of his/her average salary.
The applicant considers that this is contrary to Article 90 para. 2 of the Constitution
(Article 89 paras. 4 and 5 of the amended Constitution – Laws and other regulations
of government bodies and bodies vested with public powers may not have a
retroactive effect. For specially justified reasons only individual provisions of a law
may have retroactive effect.).
The applicant alleges that the disputed Law may not have a retroactive effect of the
kind that it has in the case of minimum-pensions holders, where it is not the minimum
pension that they are actually receiving that is taken as the base, but another amount
determined at the time when the right to receive a pension was recognized.
With reference to Article 4, or paras. 1 and 3 of Article 4 of the Law:
The applicants allege that these provisions have divided the same group of Croatian
citizens, in connection with the same issue – limiting the highest pension – into three
unequal categories: for the first the disputed Law has left their highest pension as it
was, regardless of other elements; for the second the highest pension is determined
with relation to years of employment in accordance with the Law on the Highest
Pension (Narodne novine, No. 162/98); and for the third (in connection with Article 5
of the disputed Law) the pension is not limited in any way (representatives in the
Parliament, defenders etc.). Of all these groups, the one to which the disputed Law
refers is the most discriminated because the limitation that refers to their pensions is
the greatest . (please check carefully)
Therefore, they interpret the contents of Article 4 of the Law in such a way that it has
created two kinds of pensioners – those who were pensioned in accordance with
regulations in force until 31 December 1998, and whose highest pension shall not be
raised according to the disputed Law, and those who were pensioned after that date.
6
They allege that the above is contrary to Article 14 of the Constitution of the Republic
of Croatia (general equality, the equality of everyone before the law) and point out
that the only proper solution would be not to limit pensions at all, or to limit them
equally for all.
With reference to Article 5 of the Law:
As has already been said, the applicants refer to the fact that in Article 5 some
categories of pensioners have been excepted from the disputed Law, and will thus
keep their status without any changes. In connection with this the applicants also
alledge that the provisions of Article 14 of the Constitution have been violated.
With reference to Article 6, or para. 2 of Article 6 of the Law:
The applicants consider that the procedure this provision prescribes for the Croatian
Retirement Insurance Bureau (Hrvatski zavod za mirovinsko osiguranje, hereinafter:
HZMO), i.e. that it shall calculate the raise of pensions in accordance with the
disputed Law by virtue of office and without submitting a decision, violates the
provisions of Articles 18 and 19 of the Constitution, whereby citizens have the right to
appeal and to the judicial supervision of decisions made by administrative agencies.
5.
The proposals to review the constitutionality of the disputed Law were
delivered to the Croatian Parliament and the Government of the Republic of Croatia,
who were invited to respond to it.
The Secretary’s Office of the Croatian Parliament informed this Court, in connection
with the above, that the proposals had been delivered to the Parliamentary
Committee for the Constitution, Rules of Procedure and Political System, which did
not respond.
The Government of the Republic of Croatia delivered to this Court, on 2 May 2001, its
response in connection with the proposals, in which it stated the following:
Concerning the issue of whether passing and applying the disputed Law executes
the decision of the Constitutional Court of 12 May 1998, the Government especially
calls attention to that part of the text of the decision whereby it is not permissible for
the legislator to use his rights to infringe equality and social justice, and points out
that the legislative situation at the time when this decision was passed was such that
it led to social inequalities (between those pensioned before 31 December 1994 and
after that date).
Because of the necessity to remove these social inequalities, the Government
considers that the disputed Law is an instrument that will, by obviating differences,
decrease social inequalities. In the opinion of the Government, the Law has balanced
the pensions of those who retired before 31 December 1998, and the level of their
pensions is now approximately the same as the level of pensions acquired after 1
January 1999 according to the new Law on Retirement Insurance (Narodne novine,
Nos. 102/98 and 127/00). Therefore, the Government considers that the disputed
formulation of the provisions of Article 1 of the Law, and the Law in its entirety, in this
7
sense – in the sense of removing social inequalities, puts into effect the decision of
the Constitutional Court of 12 May 1998.
The Government is also of the opinion that if pensions were to be raised in the
manner and form suggested by the applicants, even assuming that the gross national
product could support it, the two above groups of pensioners (before 31 December
1998 and after 1 January 1999) would suffer unequal treatment to the detriment of
the latter.
Concerning the applicants’ objection in connection with the different ways of limiting
pensions, the Government of the Republic of Croatia points out that the highest
pension is the same for all highest-pension holders, regardless of the year when they
were granted this right, that in December 2000 the highest pension amounted to
4,833.93 kn, and that it later, after the most recent regular balancing, reached
4,956.61 kn. Since pensions realized before 31 December 1998 have been raised in
accordance with the disputed Law so as to obviate differences arising from the year
when the right was realized, there was no basis to raise the highest pension as there
were no differences among the holders of these pensions. In the opinion of the
Government, had the disputed Law raised those pensions this would have led to
differences because in that case these pensions would also have been raised
according to different percentages, depending on the year when the right was
realised.
Furthermore, the Government holds that the principle as such of limiting pensions
may be a subject of discussion, but it is not and cannot be the subject of the disputed
Law. The purpose of the kind of standardisation regulated by the disputed Law in
connection with the highest pensions (limiting the size of pensions to a sum that may
not exceed the highest pension on 31 December 2000) means harmonisation with
the economic capacity of the state.
Concerning the applicants’ views that not issuing individual acts in the application of
the disputed Law infringes the rights of citizens to appeal and judiciary supervision of
the legality of these acts, the Government replies that this is not so and that citizens
will not in any way be restricted or prevented from resorting to legal remedies
provided by law, just as they are not prevented from doing so in the regular balancing
of pensions when individual decisions are not issued either.
The legislator decided not to prescribe the issuing of individual decisions for the
exclusive purpose of speeding up the procedure and making the application of the
Law more economical, which does not violate the rights of citizens guaranteed by the
Constitution and law.
The proposals are not grounded.
6.
The Constitutional Court of the Republic of Croatia has considered the content
of the proposals submitted and the content of the disputed Law from the aspect of
the constitutional provisions stated in the proposals, and has decided that there are
no reasons to query the constitutionality of the disputed Law or any of its provisions,
that is, that there is no need to initiate proceedings to review the constitutionality of
this law in the sense of Article 41 para. 1 of the Constitutional Act on the
8
Constitutional Court of the Republic of Croatia (Narodne novine, No. 99/99,
hereinafter Constitutional Act).
The Court has decided as it did for the following reasons:
All the proposals submitted express, in first place, the applicants’ views in connection
with Article 1 of the Law, that is, that the legislator acted contrary to Articles 3, 5, 16
and 35 of the Constitution by referring to the decision of the Constitutional Court of
12 May 1998, and by proclaiming that one of the reasons for passing the disputed
Law was to execute this decision.
The disputed provision states what the Law regulates and why it was passed, it
states that the law regulates the manner of raising pensions in order to obviate
differences in the level of pensions realised in different periods, and that it executes
the decision of the Constitutional Court of the Republic of Croatia of 12 May 1998 in
accordance with the economic capacities of the Republic of Croatia.
As has already been said, the applicants’ objections commence from the fact that the
subject of the Constitutional Court decision is balancing pensions with the increase of
salaries in the period from July 1993 to December 1997 and returning the debt owed
to pensioners, and this has nothing to do with the raise of pensions for their mutual
balancing, which is designated as the reason for the standardisation in the disputed
Law.
Considering the specific legal nature of the disputed provision of Article 1 of the Law,
this provision may only be interpreted in connection with the content of the Law as a
whole. It may therefore be concluded, on the basis of analysis of this legal provision
and its relation to other provisions of the Law, that the application of the disputed
Law, with the purpose defined in its Article 1, has had the effect, first – of raising the
pensions of a certain group of pensioners, and second – of removing differences
between pensions realised in different time periods
Because of this nature of the disputed provision and its relation to the other
provisions of the Law, the Constitutional Court has not established that the disputed
legal provision is contrary to the Constitutional provisions to which the applicants
refer.
With reference to the applicants’ request that the Constitutional Court find that it is
not correct that the disputed Law executes the decision of this Court of 12 May 1998,
the Court states that it is empowered, in accordance with the provisions of Article 128
sub-paras. 1 and 2 of the Constitution, in the field of the abstract control of
constitutionality and legality, to review the conformity of a law with the Constitution,
and the conformity of other regulations with the Constitution and laws, and this is
where its activities in the above sense end.
In cases when the Constitutional Court decides to repeal as unconstitutional certain
laws, certain legal provisions or other regulations, then those laws, other regulations,
or some of their provisions cease to exist in the legal sense and their application
ceases on the day when the Constitutional Court passes its decision (unless this
decision defines some other date when the disputed law or other regulation ceased
9
to be valid). The legal consequences of the Constitutional Court decision to repeal
laws or other regulations, or some of their provisions, should be interpreted only in
this sense.
This means that the legislative body is free to decide how it will fill the legal vacancy
that resulted from removing a law, other regulation, or their parts, from the legal
system, and in so doing it shall be guided in the first place by the criterion of
constitutionality, and also by other criteria (among which, for specific fields of the law,
economic capacity may be of special interest).
The Constitutional Court may therefore pass its decisions exclusively on the grounds
of reviewing conformity of a disputed act with the Constitution, and decisions that this
Court passed earlier, in themselves, cannot be a legal foundation for such a decision.
Taking this into account, the Constitutional Court considered the disputed Law from
the point of view of constitutional law and established that there is no indication that
the provision of Article 1 of that Law is not in conformity with the provisions of Articles
3, 5, 16 and 35 of the Constitution of the Republic of Croatia, as the applicants
alleged.
Bearing in mind the special position of the legislative body in relation to decisions of
repeal passed by the Constitutional Court, this Court also expresses the opinion that
the disputed Law, as one of the laws that have been passed, or that will be passed,
in the field of the retirement insurance system, resolves certain issues in connection
with the decision of the Constitutional Court of 12 May 1998, and is a step forward in
the direction of executing this decision. It must also be taken into account that other
acts were passed even before the disputed Law, such as the Law on Transferring
Assets from the State Budget to the Retirement and Disability Insurance Funds and
Balancing Pensions (Narodne novine, No. 102/98) and the Rules on Balancing
Pensions and Other Income Paid from Retirement and Disability Insurance (Narodne
novine, No. 136/98), which were also geared towards executing the Constitutional
Court decision of 1998.
7.
The content of the provision of Article 3 para. 2 of the Law is disputed from the
aspect of the constitutional principle in Article 89 paras. 4 and 5 of the Constitution,
i.e. from the aspect of the principle that laws and other regulations shall not have a
retroactive effect.
The proposal alleges that the retroactive effect of the disputed Law is seen in the fact
that in calculating the pension raise for minimum-pension holders, the disputed Law
defines as the base for calculation a sum obtained earlier, in the procedure for
recognising the right to a pension, reached on the basis of the actual average yearly
earnings, and in the case of minimum–pension holders this is exceedingly low.
In the opinion of the applicants, this sum could have represented the base only at the
moment when the right to a pension was being recognised, and be the legal
foundation for recognising the right to receive the minimum pension, and the base for
a raise according to the disputed Law can only be the minimum pension that the
minimum-pension holders are actually receiving.
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The Court has considered the disputed provision and has not established that this
provision has a retroactive effect because it prescribes that the base for raising the
pension of minimum-pension holders is the pension to which they are entitled,
calculated on a specific day on the basis of their average yearly earnings (without
applying the regulation on the minimum pension).
This means that no different or more unfavourable legal regime has been prescribed
for minimum-pension holders than the one that was in force in their case until the
time when the disputed Law entered into force.
In cases of regular balancing, the base for raising the pensions of pensioners with full
years of service, who had exceedingly low salaries during their working life, is always
the pension calculated from the average yearly earnings. The pensioner is entitled to
this pension at the moment his right is recognised and throughout his further
enjoyment of the pension, but whenever this amount is smaller than the minimum
pension determined by the act of the competent body, such pensioners receive the
value of the minimum pension, which is based on the principle of solidarity adopted
within the pension system.
Therefore, the pension calculated from the average yearly earnings is not part of
some less favourable legal regime, which ceased to be valid for a certain group of
pensioners because they have been receiving the minimum pension, and which
unfavourable legal regime the disputed Law is perpetuating at their expense. It is a
valid legal regime that refers to this category of pensioners and that has been
consistently applied.
Furthermore, the disputed Law prescribes that pension raises for other pensioners
affected by the disputed Law shall be calculated in the same way as the raise for
minimum-pension holders, so calculating the raise from the base, which is the
average yearly earnings, does not place minimum-pension holders in an
unfavourable position in relation to other pensioners who have the right to a pension
raise. If such raise were calculated on the basis of the minimum pension, this would
create differences among pension holders.
The disputed Law keeps to the same principle in the provisions of Article 4 para. 2,
whereby:
"If the pension raised in accordance with Article 2 para. 1 of this Law exceeds
(…) the minimum pension, then the right to receive (…) the minimum pension shall
cease on 31 December 2000."
8.
In disputing the constitutionality of the provisions of Article 4 of the Law, the
applicants also dispute the provisions on limiting the height of pensions.
The provisions of Article 4 prescribe, among other things, that the disputed Law does
not provide for a raise of the highest pension (determined in accordance with
regulations in force until 31 December 1998), and that a pension raised in
accordance with the disputed Law may not exceed the amount of the highest
pension on 31 December 2000 (again determined in accordance with regulations in
force until 31 December 1998).
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The Court has analysed the above legal provision and its relation to the other
provisions of the disputed Law, and has established that excepting the highest
pension from being raised may be explained in the same way as excepting the
minimum pension.
This, too, is a pension that is determined in a special way, and if all pensioners are to
be placed in the same position then the sum of their pension without applying the
regulation about the highest pension must first be established. In this way any raise
provided for in the Law applies equally to all pensioners who are affected by the
application of this Law.
With reference to the applicants’ allegations it is, however, important to emphasise
that it is not the disputed Law that introduced limiting pensions in the Croatian
pension system in general, or excepting the pensions of certain categories of
pensioners from this restriction (in connection with disputing Article 5 of the Law).
This material is regulated in other laws, which are not the subject of review in this
Constitutional Court procedure.
9.
Equally, the Court considers that there are no reasons to doubt the
constitutionality of the provisions of Article 6 para. 2 of the disputed Law, in the sense
of Articles 18 and 19 of the Constitution.
As long as the calculation and payment of raised pensions is undertaken in the same
way as any other regular balancing of pensions, when it has become the habitual
practice of many years in the Republic of Croatia not to issue any special decisions,
the Constitutional Court holds that the disputed procedure in the application of the
Law is in conformity with the Constitution.
This is so because, neither in the case of regular balancing of pensions, nor in the
application of the disputed Law, does anything prevent the dissatisfied party, if
he/she considers that the pension has not been determined in accordance with the
law, from instigating the relevant proceedings, requesting a decision to be issued in
these proceedings, and realising his/her right of appeal and judicial protection.
10.
The provision of Article 1 in the first part of the sentence, Article 2, Article 3
para. 1, Article 4 para. 2, Article 6 para 1, and Articles 7 and 8 of the Law are only in
principle disputed in the application submitted, through claims by some of the
applicants that they are disputing the Law as a whole. No specific arguments have
been offered in connection with these provisions referring to their unconstitutionality,
nor can this Court finds any relevant reasons for their unconstitutionality.
11.
In conclusion, it is also necessary to mention that the applicants, in the
proposals they submitted, claim that the disputed Law is not in conformity with the
provisions of Articles 4, 5, 26, 48, 50, 117 and 140 of the Constitution primarily, it
may be concluded, in connection with civil lawsuits that a certain number of
applicants instituted basing themselves on the decision of the Constitutional Court of
12 May 1998 as the legal grounds for their action.
12
By alleging unconformity with the quoted constitutional provisions, they are
expressing their stand that some of their rights in process and substantive law are
being denied in these proceedings and they allege that the reasons for this denial
lies, among other things, in the unauthorised interference of the legislator in the
sphere of judicial power.
In their opinion, by passing the disputed Law the legislator has pre-empted and even
made it impossible to pass legally grounded decisions in civil lawsuits that have
already been instituted before the competent courts, and which would also be based
on the decision of the Constitutional Court of 12 May 1998.
In connection with this, the Constitutional Court once more emphasises that the
review of the constitutionality of any law, including that disputed here, is possible only
from the aspect of the Constitution, as the fundamental and supreme legal act in the
Republic of Croatia, whereas the review of the constitutionality or of the legality of
individual acts of bodies of judicial power (from the aspect of the violation of the
constitutional rights of citizens) is not the subject of the proceedings for reviewing
conformity of a law with the Constitution of the Republic of Croatia.
12.
Therefore, in pursuance of the provisions of Article 41 paras. 1 and 2 of the
Constitutional Act, the Court has decided as in Item I of the disposition.
13.
The decision concerning publication (Item II of the disposition) is grounded on
the provisions of Article 28 of the Constitutional Act.
PRESIDENT
Smiljko Sokol, LLD, m. p.