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On dismissing legal proceedings in a case

Case No. 01/08

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

DECISION

ON DISMISSING THE LEGAL PROCEEDINGS IN THE CASE SUBSEQUENT TO THE PETITION OF A GROUP OF MEMBERS OF THE SEIMAS OF THE REPUBLIC OF LITHUANIA, THE PETITIONER, REQUESTING AN INVESTIGATION INTO WHETHER ARTICLE 8 OF THE REPUBLIC OF LITHUANIA’S LAW ON APPROVING THE FINANCIAL INDICATORS OF THE 2007 STATE BUDGET AND MUNICIPAL BUDGETS IS NOT IN CONFLICT WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA, WHETHER A CERTAIN PROVISION OF THE RESOLUTION OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA (NO. 382) “ON INCREASING THE WORK REMUNERATION OF EMPLOYEES OF ESTABLISHMENTS AND ORGANISATIONS FUNDED FROM THE BUDGET, AS WELL AS THE BASIC PENSION OF THE STATE SOCIAL INSURANCE AND THE MINIMUM SIZES” OF 1 APRIL 1998 IS NOT IN CONFLICT WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA AND THE REPUBLIC OF LITHUANIA’S LAW ON INDIVIDUAL INCOME SECURITY

23 September 2008
Vilnius

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Armanas Abramavičius, Toma Birmontienė, Pranas Kuconis, Kęstutis Lapinskas, Zenonas Namavičius, Egidijus Šileikis, Algirdas Taminskas, and Romualdas Kęstutis Urbaitis

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, in its procedural sitting, considered the petition of a group of members of the Seimas of the Republic of Lithuania, the petitioner, which was composed of Vytautas Bogušis, Jonas Čekuolis, Algis Čaplikas, Arminas Lydeka, Raimondas Šukys, Henrikas Žukauskas, Rimantas Remeika, Algirdas Monkevičius, Nijolė Steiblienė, Remigijus Ačas, Saulius Lapėnas, Vaclovas Karbauskis, Alvydas Ramanauskas, Vydas Gedvilas, Jadvyga Zinkevičiūtė, Saulius Bucevičius, Ona Valiukevičiūtė, Vida Marija Čigriejienė, Arimantas Dumčius, Loreta Graužinienė, Virginija Baltraitienė, Manfredas Žymantas, Jonas Ramonas, Dailis Alfonsas Barakauskas, Vytautas Kamblevičius, Rimantas Smetona, Zenonas Mikutis, Petras Gražulis, and Raimundas Palaitis, requesting an investigation into:

whether Article 8 of the Republic of Lithuania’s Law on Approving the Financial Indicators of the 2007 State Budget and Municipal Budgets is not in conflict with Paragraph 2 of Article 30 of the Constitution of the Republic of Lithuania, and the constitutional principles of the equality of rights of all persons and a state under the rule of law;

whether the provision “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month” of the Resolution of the Government of the Republic of Lithuania (No. 382) “On Increasing the Work Remuneration of Employees of Establishments and Organisations Funded from the Budget, as Well as the Basic Pension of the State Social Insurance and the Minimum Sizes” of 1 April 1998 is not in conflict with Paragraph 2 of Article 30 of the Constitution of the Republic of Lithuania, the constitutional principles of the separation of powers, the equality of rights of all persons and a state under the rule of law, and Paragraph 1 of Article 2 of the Republic of Lithuania’s Law on Individual Income Security.

The Constitutional Court

has established:

I

1. A group of members of the Seimas, the petitioner, have applied to the Constitutional Court with the petition requesting an investigation into whether:

Article 8 of the Law on Approving the Financial Indicators of the 2007 State Budget and Municipal Budgets (hereinafter also referred to as the Law) is not in conflict with Paragraph 2 of Article 30 of the Constitution, and the constitutional principles of the equality of rights of all persons and a state under the rule of law;

the provision “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month” of the Government Resolution (No. 382) “On Increasing the Work Remuneration of Employees of Establishments and Organisations Funded from the Budget, as Well as the Basic Pension of the State Social Insurance and the Minimum Sizes” of 1 April 1998 (hereinafter also referred to as government resolution No. 382 of 1 April 1998) is not in conflict with Paragraph 2 of Article 30 of the Constitution, the constitutional principles of the separation of powers, the equality of rights of all persons and a state under the rule of law, and Paragraph 1 of Article 2 of the Law on Individual Income Security.

This petition was received at the Constitutional Court on 3 January 2008.

2. By the 9 January 2008 ordinance (No. 2B-04) of the President of the Constitutional Court, subsequent to the petition of a group of members of the Seimas, the petitioner, the preparation case No. 01/08 was begun for the Constitutional Court’s hearing.

II

1. Article 8 of the Law on Approving the Financial Indicators of the 2007 State Budget and Municipal Budgets provides: “To stipulate that as from 1 January 2007 the minimum subsistence level shall be 130 litas per resident of the Republic of Lithuania per month.”

2. Item 2 of government resolution No. 382 of 1 April 1998, inter alia, provides: “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month.”

III

The petition of the petitioner is substantiated by the following arguments.

1. The minimum subsistence level (hereinafter also referred to as the MSL) established both in Item 2.3 of government resolution No. 382 of 1 April 1998 and in Article 8 of the Law does not meet the actual minimum subsistence level, which is much higher. In addition, the MSL established by the impugned legal regulation is not indexed under procedure established by the Law on Individual Income Security. Article 1 (wording of 1 July 2003) of the Law on Individual Income Security provides, inter alia, that the minimum subsistence level (MSL) is the amount of a family’s monthly income falling upon one person per month and guaranteeing the satisfaction of generally socially acceptable minimum level of needs that meet the bodily needs for food according to physiological norms, as well as the minimum needs for clothes, footwear, furniture, household, sanitary and hygiene articles, as well as apartment, communal, household, transport, communications, cultural and educational services. The impugned legal regulation violates the constitutional principle of legal security, thus, also the constitutional principle of a state under the rule of law, since the state has not fulfilled its duty to secure the certainty and stability of the legal regulation, to protect the rights (including the acquired rights) of subjects of legal relations, and to respect legitimate interests and legitimate expectations.

2. Since the size of the MSL is employed in the establishment of sizes of harm, which is subject to compensation, inflicted by violent crimes, as well as sizes of fines for criminal deeds and for administrative violations of law, one does not ensure the actual and adequate protection of violated human rights and freedoms. Thus, Article 8 of the Law and the provision “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month” of government resolution No. 382 of 1 April 1998 are in conflict with Paragraph 2 of Article 30 of the Constitution wherein it is prescribed that compensation for material and moral damage inflicted upon a person shall be established by law.

3. In the course of application of the constitutional principle of equality of rights of persons it is required that law entrench the main rights and duties equally to everyone. When the prices of various goods and services are increasing, and when the size of the MSL established in the legal acts remains unchanged, when it is not indexed, the persons who are victims of criminal deeds receive a comparatively smaller compensation than the compensation which was received by the persons who were victims under analogous conditions earlier. Besides, the person who is punished by a monetary fine pays less for the same violation of law in comparison with a person who was punished some time ago. Thus, the impugned legal regulation consolidated both in the Law and in government resolution No. 382 of 1 April 1998 violates the constitutional principle of the equality of rights of persons.

4. The provision “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month” of government resolution No. 382 of 1 April 1998 is in conflict with the constitutional principle of the separation of powers and Paragraph 1 of Article 2 of the Law on Individual Income Security, which provides that the minimum subsistence level shall be approved by the Supreme Council of the Republic of Lithuania on the recommendation of the Government at least once every five years. By approving the applicable MSL by means of the impugned resolution, the Government unreasonably took over the functions which are commissioned to the legislature by law. In addition, it is prohibited to regulate, by means of legal acts of lower legal force, those public relations that can be regulated only by means of legal acts of higher legal force. It is also prohibited to establish any such legal regulation in legal acts of lower legal force, which would compete with the legal regulation established in legal acts of higher legal force.

IV

In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were received from the representatives of the Seimas, a party concerned, who were Seimas member Irena Degutienė and Sigita Krutkevičienė, a senior advisor to the Legal Department of the Office of the Seimas, as well as from the representatives of the Government, a party concerned, who were Vita Safjan, Director of the Strategic Planning and Social Inclusion Department of the Ministry of Social Security and Labour of the Republic of Lithuania, and Vida Marija Zabarauskienė, Head of the Law Division of the same ministry.

1. According to the representatives of the Seimas, a party concerned, Article 8 of the Law is not in conflict with Paragraph 2 of Article 30 of the Constitution, the constitutional principles of the equality of rights of persons and a state of law. Their position is substantiated by the following arguments.

1.1. The notion of the MSL is rather widespread in the legal system of Lithuania. Although in its essence this notion should rather be linked with the legal relations regulating social security and assistance, however, certain socio-economic circumstances and the practice of drafting legal acts determined that the notion of the MSL was begun to be used also in other legal acts, which do not regulate social security and assistance; for instance, the legal acts regulating compensation for damage, or regulating legal liability for commission of violations of law or for commission of crimes. The concept of the MSL as presented in the Law on Individual Income Security gradually lost its meaning. The MSL was begun to be used as a certain basic coefficient. The representatives of the Seimas, a party concerned, substantiate their position, inter alia, by the doctrinal provisions of the Constitutional Court’s ruling of 20 March 2007 and point out that the use of the MSL in the legal system should be considered legally incorrect, however, this fact alone may not serve as the grounds for the recognition that the impugned legal regulation is in conflict with the Constitution.

1.2. Although the MSL established by the impugned legal regulation does not meet the actual MSL which should secure the minimum needs of residents enumerated in the Law on Individual Income Security, the legitimate expectations and, alongside, the constitutional principle of a state under the rule of law, one elements of which is the principle of legal security, were not violated, since part of the payments were increased not by increasing the MSL itself, but by increasing the coefficient of computation of the payments.

1.3. The limits of fines established in laws are rational, while the court that imposes the fine is granted the right to assess the circumstances which have the legal significance in the case, and to take account of these circumstances.

The obligation to compensate the material and moral damage inflicted upon a person appears in civil legal relations, as well as when norms of administrative and criminal law have been violated. The laws do not relate the size of the damage, which is subject to compensation, with the MSL, save the situations when, in situations provided for in the Republic of Lithuania’s Law on Compensation for Damage Inflicted by Violent Crimes, the damage is compensated from state funds. The fact whether the compensation for damage from state funds is sufficient is not an issue of the compliance of the Law with the Constitution.

2. According to the representatives of the Government, a party concerned, the provision “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month” of government resolution No. 382 of 1 April 1998 is not in conflict with Paragraph 2 of Article 30 of the Constitution, and the constitutional principles of the separation of powers, the equality of rights of persons and a state under the rule of law, as well as with Paragraph 1 of Article 2 of the Law on Individual Income Security. Their position is substantiated by the following arguments.

2.1. The arguments regarding the compliance of the provision of government resolution No. 382 of 1 April 1998 with the Constitution are virtually the same as the arguments of the representatives of the Seimas, a party concerned, regarding the compliance of Article 8 of the Law with the Constitution.

2.2. The size of the MSL was reasonably approved by means of government resolutions, since this was determined by the necessity to apply such size immediately. Right after the entry of the Constitution into effect, there was a special legal situation, where most of the laws which had to regulate the powers of the Government had not been adopted yet, therefore, the Government used to adopt such resolutions the adoption of which, according to the laws, was not within the powers of the Government.

V

In the course of the preparation for the case for the Constitutional Court’s hearing, written explanations were received from Petra Baguška, Minister of Justice of the Republic of Lithuania, and Rimantas Šadžius, Minister of Finance of the Republic of Lithuania.

The Constitutional Court

holds that:

1. On 1 April 1998, the Government adopted the Resolution (No. 382) “On Increasing the Work Remuneration of Employees of Establishments and Organisations Funded from the Budget, as Well as the Basic Pension of the State Social Insurance and the Minimum Sizes”, which came into force on 4 April 1998. Item 2 of this resolution, inter alia, provides: “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month.”

On 7 December 2006, the Seimas adopted the Law on Approving the Financial Indicators of the 2007 State Budget and Municipal Budgets, which came into force on 19 December 2006. Article 8 of this law provides: “To stipulate that as from 1 January 2007 the minimum subsistence level shall be 130 litas per resident of the Republic of Lithuania per month.”

Both Article 8 of the Law and the provision “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month” of government resolution No. 382 of 1 April 1998, which are impugned by the petitioner, are designed for establishment of the size of the MSL. The notion of the MSL as a certain institute of law is entrenched in Article 1 of the Law on Individual Income Security. The MSL is the amount of a family’s monthly income falling upon one person per month and guaranteeing the satisfaction of generally socially acceptable minimum level of needs that meet the bodily needs for food according to physiological norms, as well as the minimum needs for clothes, footwear, furniture, household, sanitary and hygiene articles, as well as apartment, communal, household, transport, communications, cultural and educational services.

It needs to be noted that the MSL as an institute of law per se is not entrenched in the Constitution.

2. It needs to be mentioned that, on 6 December 2007, the Seimas adopted the Republic of Lithuania’s Law on Approving the Financial Indicators of the 2008 State Budget and Municipal Budgets, which came into force on 15 December 2007. Article 8 of this law provides: “To establish that in 2008 the minimum subsistence level shall be 130 litas per resident of the Republic of Lithuania per month.” Such legal regulation is virtually analogous to that entrenched in Article 8 of the Law on Approving the Financial Indicators of the 2007 State Budget and Municipal Budgets, which is impugned by the petitioner.

3. On 15 July 2008, the Seimas adopted the Republic of Lithuania’s Law on the Indexation of the Sizes of the Minimum Remuneration for Work, Social Security Payments and of the Basic Size of Punishments and Penalties (hereinafter also referred to as the Law on Indexation), which, together with certain exceptions, came into force on 1 August 2008. This law establishes reference indicators for social security payments, the procedure of the approval of the indicators, the basic size of punishments and penalties and its application, the indexation of the sizes of the minimum remuneration for work, that of reference indicators for social security payments, that of state pensions of officials and servicemen, and that of state pensions for service (years of service) and pensions for lost ability to work of the officials and servicemen who were appointed prior to 1 July 1991, and that of state pensions of judges (Article 1 of the Law on Indexation).

4. It needs to be noted that upon the entry into force of the Law on Indexation, the indicator “minimum subsistence level”, or the “MSL”, which is employed in other legal acts, is, as it is specified in Paragraph 3 of Article 10 of the Law on Indexation, “identical and equal to the basic social payment”, while it is indicated in Paragraph 4 of Article 10 of the Law on Indexation that the indicator “minimum subsistence level”, or the “MSL”, employed in the legal acts regulating the qualification of criminal deeds and administrative violations of law and the definition and computation of the sizes of punishments and penalties, is “identical and equal to the basic size of punishments and penalties”.

It also needs to be noted that upon the entry into effect of the Law on Indexation, the Law on Individual Income Security, in which the concept of the legal institute of MSL was entrenched, became no longer valid (Article 9 of the Law on Indexation).

4.1. Under Item 1 of Paragraph 2 of Article 2 of the Law on Indexation, the basic social payment is an indicator to define and compute social security payments and other sizes established in legal acts. Paragraph 1 of Article 3 of the Law on Indexation provides that the basic size of punishments and penalties is an indicator applied to qualify criminal deeds and administrative violations of law and to define and compute the sizes of punishments and penalties.

The indexation of the indicators of social security payments (while the basic social payment is one of such payments) is established in Articles 4 and 6 of the Law on Indexation. The procedure for the indexation of the basic size of punishments and penalties is established in Articles 4 and 7 of the Law. It needs to be mentioned that, under Paragraph 5 of Article 10 of the Law on Indexation, until 1 August 2008, the initial size of punishments and penalties shall be approved by the Government.

4.2. Paragraph 2 of Article 10 of the Law on Indexation provides that on the day of entry into force of this law, the size of the basic social payment shall be equalled to the size of the MSL valid on the same day. Thus, under the Law on Indexation, the basic social payment and the MSL were equalised in their numerical meaning, however, the identity of the numerical meaning between the basic social payment and the MSL does not imply the identity between the institutes of the social payment and the MSL, i.e. in their content these institutes are not identical.

As mentioned before, the basic social payment and the basic size of punishments and penalties are certain indicators in order to define and compute social security payments and other sizes established in legal acts and to qualify criminal deeds and administrative violations of law and to define and compute the sizes of punishments and penalties; they are not linked with the concept of the institute of the MSL which was consolidated in the Law on Individual Income Security. As mentioned before, under the Law on Individual Income Security, the MSL is the amount of a family’s monthly income falling upon one person per month and guaranteeing the satisfaction of generally socially acceptable minimum level of needs that meet the bodily needs for food according to physiological norms, as well as the minimum needs for clothes, footwear, furniture, household, sanitary and hygiene articles, as well as apartment, communal, household, transport, communications, cultural and educational services.

In this context it needs to be noted that the legal regulation impugned by the petitioners has not been formally abolished, however, upon adoption of the Law on Indexation, the said legal regulation was amended in the aspect that the institute of the MSL disappeared.

5. The doubts of the petitioner regarding the compliance of the impugned legal regulation with the Constitution are linked with the purpose and concept of the institute of the MSL, inter alia, with the fact that the MSL as established in Item 2.3 of government resolution No. 382 of 1 April 1998 and Article 8 of the Law, is, from the standpoint of the concept of this institute, of unrealistic size.

6. Taking account of what has been set forth above, the conclusion should be drawn that after the Law on Indexation came into force, the legal institute of the MSL, with which the legal regulation entrenched in government resolution No. 382 of 1 April 1998 and the Law is related, and which is impugned by the petitioner, ceased to exist. Thus, there is not any matter of investigation in the constitutional justice case at issue.

7. Paragraph 2 of Article 80 (regulating a refusal of the Constitutional Court to examine an inquiry) of the Law on the Constitutional Court provides that if in the course of the consideration of the inquiry a matter of the consideration ceases to exist, the Constitutional Court shall dismiss the instituted legal proceedings on the grounds thereof.

This provision of the Law on the Constitutional Court is applicable mutatis mutandis to the consideration of petitions requesting an investigation into the compliance of a legal act with the Constitution (another legal act of higher legal force) and to the adoption of respective decisions (the Constitutional Court’s rulings of 21 September 2006, 6 September 2007 and its decision of 13 November 2007).

8. Taking account of the arguments set forth, it should be held that in the constitutional justice case at issue the instituted legal proceedings must be dismissed.

Conforming to Paragraphs 3 and 4 of Article 22, Article 28, Article 66, Paragraph 4 of Article 69 and Article 70 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania adopts the following

decision:

To dismiss the instituted legal proceedings in Case No. 01/08 subsequent to the petition of a group of members of the Seimas, the petitioner, requesting an investigation into whether Article 8 of the Republic of Lithuania’s Law on Approving the Financial Indicators of the 2007 State Budget and Municipal Budgets is not in conflict with Paragraph 2 of Article 30 of the Constitution of the Republic of Lithuania, and the constitutional principles of the equality of rights of all persons and a state under the rule of law, also whether the provision “As from 1 May 1998, to confirm the following: <…> 2.3. the applicable minimum subsistence level—125 litas per resident of the Republic of Lithuania per month” of the Resolution of the Government of the Republic of Lithuania (No. 382) “On Increasing the Work Remuneration of Employees of Establishments and Organisations Funded from the Budget, as Well as the Basic Pension of the State Social Insurance and the Minimum Sizes” of 1 April 1998 is not in conflict with Paragraph 2 of Article 30 of the Constitution of the Republic of Lithuania, the constitutional principles of the separation of powers, the equality of rights of all persons and a state under the rule of law, and Paragraph 1 of Article 2 of the Republic of Lithuania Law on Individual Income Security.

This decision of the Constitutional Court is final and not subject to appeal.

The decision is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court: Armanas Abramavičius
                                                                      Toma Birmontienė
                                                                      Pranas Kuconis
                                                                      Kęstutis Lapinskas
                                                                      Zenonas Namavičius
                                                                      Egidijus Šileikis
                                                                      Algirdas Taminskas
                                                                      Romualdas Kęstutis Urbaitis