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On the interpretation of the provisions of the Constitutional Court’s ruling of 6 February 2012 related to compensation for reduced old-age pensions

Case No. 46/2010-47/2010-48/2010-49/2010-51/2010-52/2010-70/2010-77/2010-82/2010-83/2010-84/2010-85/2010-86/2010-87/2010-94/2010-100/2010-101/2010-109/2010-114/2010-123/2010-124/2010-128/2010-129/2010-133/2010-134/2010-142/2010-143/2010-1/2011-2/2011-5/2011-8/2011-16/2011-21/2011-23/2011-25/2011-29/2011-32/2011-37/2011-39/2011

 THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

 DECISION

ON THE CONSTRUCTION OF CERTAIN PROVISIONS OF THE RULING OF THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA OF 6 FEBRUARY 2012

 7 March 2014, No. KT8-S5/2014

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Toma Birmontienė, Pranas Kuconis, Gediminas Mesonis, Vytas Milius, Ramutė Ruškytė, Egidijus Šileikis, Algirdas Taminskas, Romualdas Kęstutis Urbaitis, and Dainius Žalimas

The court reporter—Daiva Pitrėnaitė

Rita Babianskaitė, Deputy Head of the Social Insurance and Funded Pensions Division of the Social Insurance and Pensions Department of the Ministry of Social Security and Labour of the Republic of Lithuania (now holding the office of a chief specialist of this division), the petitioner, who submitted a petition requesting the construction of the provisions of the ruling of the Constitutional Court of the Republic of Lithuania of 6 February 2012

The Constitutional Court of the Republic of Lithuania, pursuant to Article 61 of the Law on the Constitutional Court of the Republic of Lithuania, at the Court’s public hearing, on 11 February 2014, considered the petition of Rita Babianskaitė, Deputy Head of the Social Insurance and Funded Pensions Division of the Social Insurance and Pensions Department of the Ministry of Social Security and Labour, requesting the construction of the provisions of Item 6.5 of Section III of the reasoning part of the Constitutional Court’s ruling of 6 February 2012 and of Items 5.5 and 19.5 of Section V of the reasoning part of the said ruling.

The Constitutional Court

has established:

I

  1. In constitutional justice case No. 46/2010-47/2010-48/2010-49/2010-51/2010-52/2010-70/2010-77/2010-82/2010-83/2010-84/2010-85/2010-86/2010-87/2010-94/2010-100/2010-101/2010-109/2010-114/2010-123/2010-124/2010-128/2010-129/2010-133/2010-134/2010-142/2010-143/2010-1/2011-2/2011-5/2011-8/2011-16/2011-21/2011-23/2011-25/2011-29/2011-32/2011-37/2011-39/2011 of 6 February 2012, the Constitutional Court adopted the Ruling “On the compliance of the provisions of the legal acts of the Republic of Lithuania regulating the recalculation and payment of pensions in an extremely difficult economic and financial situation in the state with the Constitution of the Republic of Lithuania” (Official Gazette Valstybės žinios, 2012, No. 109-5528; hereinafter referred to as the Constitutional Court’s ruling of 6 February 2012).
  2. Rita Babianskaitė, Deputy Head of the Social Insurance and Funded Pensions Division of the Social Insurance and Pensions Department of the Ministry of Social Security and Labour, the petitioner, requests the construction of whether:

– the provision “the losses incurred due to the reduction of old-age <...> pensions, <...> would be compensated for within a reasonable time and in a fair manner after the said extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions” of Item 6.5 of Section III of the reasoning part of the Constitutional Court’s ruling of 6 February 2012, the provision “these elements of compensation for the reduced pensions must be established, by means of a law, by the legislature; only if understood in this way the said legal regulation is not in conflict with the Constitution” of Item 5.5 of Section V of the reasoning part of the said ruling, as well as the provision “the losses incurred, inter alia, due to the reduction of old-age pensions, would be compensated for within a reasonable time and in a fair manner after the extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions” of Item 19.5 of Section V of the reasoning part of the said ruling, mean that only the legislature, while having a constitutional duty to assure the people of social security, has the discretion to establish when and under what procedure it is possible to compensate for the losses incurred due to a legal act recognised as being in conflict with the Constitution or that decisions on how to pay the amounts accumulated due to a legal act that was applied in the past and that was later recognised as being in conflict with the Constitution may be adopted under the general procedure, i.e. after respective courts adopt a decision to compensate for losses;

– the provision “compensated for within a reasonable time and in a fair manner <...>, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions” of Item 6.5 of Section III of the reasoning part of the Constitutional Court’s ruling of 6 February 2012 and of Item 19.5 of Section V of the reasoning part of the said ruling mean that the return of pension arrears may be postponed, for example, until 2015, and, when establishing the main elements of compensation for the reduced pensions, it may be spread over a particular period of time in order to ensure the protection of the legitimate interests of persons and at the same time not to aggravate the current financial situation even further.

II

At the Constitutional Court’s hearing, Rita Babianskaitė, the petitioner, explained the reasoning of her petition and answered the questions of the justices of the Constitutional Court.

The Constitutional Court

holds that:

I

  1. Paragraph 1 of Article 61 of the Law on the Constitutional Court prescribes that the Constitutional Court officially construes its own ruling at the request of the persons that participated in the case, of other institutions or persons to whom it was sent, or on its own initiative.

Rita Babianskaitė, Deputy Head of the Social Insurance and Funded Pensions Division of the Ministry of Social Security and Labour was a representative of the Government of the Republic of Lithuania, the person concerned, in the constitutional justice case, in which the Constitutional Court’s ruling of 6 February 2012 was adopted. Thus, under Paragraph 1 of Article 61 of the Law on the Constitutional Court, she has the right to apply to the Constitutional Court with a petition requesting the construction of the said Constitutional Court’s ruling.

  1. The Law on the Constitutional Court consolidates the powers of the Constitutional Court to officially construe its own rulings (Article 61).

The Constitutional Court has held that, although the powers of the Constitutional Court to construe its own rulings and other final acts are not expressis verbis established in the Constitution, these powers undoubtedly stem from the Constitution—the entire content of the constitutional legal regulation (inter alia, the constitutional principle of a state under the rule of law); such powers of the Constitutional Court are implied by the Constitutional Court’s constitutional mission itself to administer constitutional justice, to guarantee the supremacy of the Constitution in the legal system and the constitutional legality (the Constitutional Court’s decisions of 14 March 2006, 29 November 2012, 13 March 2013, 3 July 2013, 16 January 2014, and 27 February 2014).

  1. In its acts the Constitutional Court has held on more than one occasion that the purpose of the institute of the construction of its rulings and its other final acts is to disclose the contents and meaning of the corresponding provisions of a ruling or another final act of the Constitutional Court more broadly and in more detail, if it is necessary, in order to ensure proper execution of that ruling or another final act of the Constitutional Court so that the said ruling or another final act of the Constitutional Court would be followed (inter alia, the Constitutional Court’s decisions of 14 March 2006, 20 April 2010, and 27 February 2014). The construction of a ruling or another final act of the Constitutional Court might be significant not only in order to ensure proper implementation of the decision consolidated in the operative part of that act, but also to ensure the fact that in the law-making process one would properly take account of the official constitutional doctrine formed by the Constitutional Court. The Constitutional Court has also emphasised that the purpose of the construction of a ruling and another final act is to explain more comprehensively those provisions and formulations of the Constitutional Court’s ruling or its another final act due to the meaning of which there are some uncertainties, but not how to implement it in a specific situation, inter alia, in the sphere of application of law (inter alia, the Constitutional Court’s decisions of 29 November 2012, 13 March 2013, 3 July 2013, 16 January 2014, and 27 February 2014).
  2. The Constitutional Court has emphasised on more than one occasion that the consideration of a petition requesting the construction of a ruling or another final act of the Constitutional Court does not imply any new constitutional justice case.

In this context, it should be noted that, under Paragraph 3 of Article 61 of the Law on the Constitutional Court, the Constitutional Court must construe its ruling without changing the content of the ruling. The Constitutional Court has held on more than one occasion that the said provision, among other things, means that, while construing its ruling, the Constitutional Court may not construe the content of the ruling in such a way that the meaning of its provisions, inter alia, the notional entirety of the elements constituting the content of the ruling, and the arguments and reasons upon which that ruling of the Constitutional Court is based would be changed. A ruling of the Constitutional Court is integral, and all its constituent parts are interrelated; the operative (resolving) part of a ruling is based upon the arguments of the reasoning part; while construing its ruling, the Constitutional Court is bound by the content of both the operative part and reasoning part of its ruling. When construing Paragraph 3 of Article 61 of the Law on the Constitutional Court, the Constitutional Court has stated in its acts on more than one occasion that the Constitutional Court may not construe what it did not investigate in the constitutional justice case in which the ruling, the construction of which is requested, was adopted; this would imply a matter for a separate investigation.

  1. In the Constitutional Court’s acts it has also been stated that the Constitutional Court is a legal, but not a political institution. The Constitutional Court decides the legal issues ascribed to its competence by the Constitution only by invoking legal arguments, inter alia, the official constitutional doctrine and precedents that it itself formulated. The construction of the final acts of the Constitutional Court may not be determined by accidental (from the legal point of view) factors (for example, a change in the composition of the Constitutional Court). The Constitutional Court may not construe its final acts by following, inter alia, the arguments of political expediency, the documents of political parties or other public organisations, opinions of and assessments by politicians, political science or sociological research, the results of public opinion polls. Otherwise, preconditions for challenging the impartiality of the Constitutional Court would be created, its independence and the stability of the Constitution itself, inter alia, the official constitutional doctrine, would be threatened (the Constitutional Court’s decisions of 13 March 2013 and 16 January 2014).
  2. It should also be noted that the uniformity and continuity of the official constitutional doctrine imply the necessity to construe each provision of a ruling or another final act of the Constitutional Court in the light of the entire official constitutional doctrinal context as well as of other provisions (both explicit and implicit) of the Constitution that are related to the provision (provisions) of the Constitution in the course of the construction of which the relevant provision of the official constitutional doctrine was formulated in a certain ruling or another final act of the Constitutional Court. As the Constitutional Court has held on more than one occasion, no official constitutional doctrinal provision of a ruling or another final act of the Constitutional Court may be construed in isolation, by ignoring its meaning and systemic links with the other official constitutional doctrinal provisions set forth in the relevant ruling or another final act of the Constitutional Court, or in other Constitutional Court’s acts, as well as with other provisions (explicit and implicit) of the Constitution (inter alia, the Constitutional Court’s decisions of 21 November 2006, 20 April 2010, and 27 February 2014).
  3. It has also been held in the jurisprudence of the Constitutional Court on more than one occasion that the formulation “shall be final and not subject to appeal” of Paragraph 2 of Article 107 of the Constitution, which provides that the decisions of the Constitutional Court on issues ascribed to its competence by the Constitution shall be final and not subject to appeal, also means that the Constitutional Court’s rulings, conclusions and decisions by which a constitutional justice case is finished, i.e. the final acts of the Constitutional Court, are obligatory to all state institutions, courts, enterprises, establishments and organisations, as well as officials and citizens, including the Constitutional Court itself: the final acts of the Constitutional Court are obligatory to the Constitutional Court itself, they restrict the Constitutional Court in the aspect that it may not change them or review them if there are no constitutional grounds for that.
  4. The Constitutional Court has also held on more than one occasion that in the official construction (subsequent to a petition of the parties to the case, other institutions and persons to whom the Constitutional Court’s ruling was sent, also on the initiative of the Constitutional Court itself) of the rulings and other final acts of the Constitutional Court, the official constitutional doctrine is not corrected; the correction of the official constitutional doctrine (which, undoubtedly, must always have a constitutional basis and be explicitly reasoned in the Constitutional Court’s act in question) should be linked to the consideration of new constitutional justice cases and the creation of new Constitutional Court’s precedents therein, but not to the official construction of the provisions of the Constitutional Court’s rulings and its other final acts (inter alia, the Constitutional Court’s decisions of 6 December 2007, 15 January 2009, and 27 February 2014).

II

  1. It has been mentioned that Rita Babianskaitė, Deputy Head of the Social Insurance and Funded Pensions Division of the Social Insurance and Pensions Department of the Ministry of Social Security and Labour, the petitioner, inter alia, requests the construction of whether the provision “the losses incurred due to the reduction of old-age <...> pensions, <...> would be compensated for within a reasonable time and in a fair manner after the said extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions” of Item 6.5 of Section III of the reasoning part of the Constitutional Court’s ruling of 6 February 2012, the provision “these elements of compensation for the reduced pensions must be established, by means of a law, by the legislature; only if understood in this way the said legal regulation is not in conflict with the Constitution” of Item 5.5 of Section V of the reasoning part of the said ruling, as well as the provision “the losses incurred, inter alia, due to the reduction of old-age pensions, would be compensated for within a reasonable time and in a fair manner after the extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions” of Item 19.5 of Section V of the reasoning part of the said ruling, mean that only the legislature, while having a constitutional duty to assure the people of social security, has the discretion to establish when and under what procedure it is possible to compensate for the losses incurred due to a legal act recognised as being in conflict with the Constitution or that decisions on how to pay the amounts accumulated due to a legal act that was applied in the past and that was later recognised as being in conflict with the Constitution may be adopted under the general procedure, i.e. after respective courts adopt a decision to compensate for losses.
  2. It should be noted that the petitioner requests the construction of the provisions of the Constitutional Court’s ruling of 6 February 2012 that are related to the establishment of a mechanism for compensation for the reduced old-age pensions.

The explanations of the petitioner make it clear that the uncertainties that arose to the petitioner concerning the provisions of the Constitutional Court’s ruling of 6 February 2012, which are referred to, are related not to the right of persons to defend their infringed rights in courts but to the fact who must be compensated for the losses incurred due to the reduction of old-age pensions under the mechanism for compensation for the said losses, established by the legislature.

  1. In its ruling of 6 February 2012, the construction of the provisions of which is requested by the petitioner, the Constitutional Court investigated, inter alia, the compliance of the provisions of the Republic of Lithuania’s Provisional Law on the Recalculation and Payment of Social Payments (hereinafter referred to as the Provisional Law) to the effect that they regulated the recalculation and payment of old-age pensions in an extremely difficult economic and financial situation in the state with the Constitution.

3.1. In the Constitutional Court’s ruling of 6 February 2012, inter alia, it was recognised that Paragraphs 1 and 2 (wordings of 9 December 2009 and 26 October 2010) of Article 8 of the Provisional Law, insofar as the said paragraphs had provided for the payment of the reduced old-age pensions to persons specified in those paragraphs, had been in conflict with the provision “[e]ach human being may freely choose a job or business” of Paragraph 1 of Article 48 of the Constitution.

As it was held in the aforementioned ruling, having created (by means of the legal regulation established in Paragraphs 1 and 2 of Article 8 of the Provisional Law) the preconditions for reducing old-age pensions to the recipients of old-age pensions who have a certain job or conduct a certain business to a greater extent than to those recipients of old-age pensions who do not have any job or do not conduct any business, specifically due to the fact that they have a certain job or conduct a certain business, the legislature restricted their right to freely choose a job or business, which is enshrined in Paragraph 1 of Article 48 of the Constitution, since upon implementation of this right, the old-age pension awarded to them was reduced to a greater extent than to those recipients of old-age pensions who do not work or conduct any business, only due to the fact that they had a certain job or conducted a certain business.

3.2. In its ruling of 6 February 2012, the Constitutional Court also investigated, inter alia, the compliance of Paragraph 1 of Article 6 of the Provisional Law with the Constitution; the legal regulation consolidated in the said paragraph, as it was held in that ruling, established the procedure for the recalculation of old-age pensions, which created preconditions for reducing old-age pensions awarded prior to the entry into force of this law to all persons receiving them, save those whose pensions did not exceed LTL 650.

The Constitutional Court, having held that the legal regulation consolidated in Paragraph 1 of Article 6 of the Provisional Law, which created preconditions for reducing, as a result of recalculation, the awarded old-age pensions, was established, inter alia, by following the requirements stemming from the constitutional principles of proportionality and the equality of rights, in addition, after compensation had been provided for the losses incurred due to the reduction of the said pensions, ruled the said legal regulation to be in conflict with the Constitution.

3.3. Thus, by means of the legal regulation, which is established in the Provisional Law and the compliance of which with the Constitution was investigated in the Constitutional Court’s ruling of 6 February 2012, the construction whereof is requested, old-age pensions were reduced in different ways. Only the legal regulation of reducing old-age pensions, whereby old-age pensions were reduced to a greater extent to persons who have a certain job or conduct a certain business and who are covered by the obligatory state social pension insurance, was recognised as being in conflict with the Constitution.

  1. It has been mentioned that no official constitutional doctrinal provision of a ruling of the Constitutional Court may be construed in isolation, by ignoring its meaning and systemic links with the other official constitutional doctrinal provisions set forth, inter alia, in the relevant ruling of the Constitutional Court.
  2. The provisions (the construction of which, inter alia, is requested by the petitioner) of Item 6.5 of Section III and of Item 19.5 of Section V of the reasoning part of the Constitutional Court’s ruling of 6 February 2012 are a part of the broader text set forth in the said items of the ruling.

5.1. In Item 6.5 of Section III of the reasoning part of the aforementioned Constitutional Court’s ruling, inter alia, it was held:

“<...> the correction of the legal regulation by reducing old-age pensions even due to the fact that there is an extreme situation (an economic crisis, etc.) in the state means a limitation of a  constitutional social guarantee of a person—the old-age pension; such legal regulation limits, to a certain extent, the right of ownership of the person to whom the old-age pension was awarded and paid; thus, the legislature, upon the occurrence of an extreme situation, when, inter alia, due to an economic crisis it is impossible to accumulate the amount of the funds necessary to pay old-age  pensions, must, while reducing old-age pensions, provide for a mechanism for compensation for the incurred losses to the persons to whom such pensions were awarded and paid, whereby, after the said extreme situation is over, the state would undertake an obligation to such persons to compensate them for the losses incurred due to the reduction of old-age pensions within a reasonable time and in a fair manner; <...>

In this context it needs to be emphasised that, while seeking to ensure that the losses incurred due to the reduction of old-age or disability pensions, as well as due to the reduction of state pensions to a great extent, would be compensated for within a reasonable time and in a fair manner after the said extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions.”

5.2. In Item 19.5 of Section V of the reasoning part of the aforementioned ruling, inter alia, it was held: “<...> while seeking to ensure that the losses incurred, inter alia, due to the reduction of old-age pensions, would be compensated for within a reasonable time and in a fair manner after the extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions”.

  1. It should be noted that the cited provisions of the official constitutional doctrine imply, inter alia, that:

– under the Constitution, inter alia, Articles 23 and 52 thereof, a duty stems for the state to compensate, in a fair manner, all persons whose old-age pensions were reduced due to an extreme situation (an economic crisis, etc.) in the state for the losses incurred by them;

– the aforementioned losses must be compensated for within a reasonable time after the extreme situation is over in the state by following a legal act (a law) that is adopted by the legislature, without unreasonable delay, and that provides for a mechanism for compensation for the said losses;

– the notion “without unreasonable delay”, inter alia, means that this mechanism for compensation must be established after the extreme situation is over in the state when preconditions arise for assessing, according to objective data (economic indicators, inter alia, indicators of economic growth, funds accumulated by the state), the respective capabilities of the state to ensure compensation for the losses incurred after the reduction of old-age pensions.

Consequently, a special legal act (a law) that establishes the amounts, terms and other essential elements of compensation to all persons for the losses incurred by them after the reduction of old-age pensions must be adopted immediately after the extreme situation is over in the state and after preconditions arise for assessing, according objective data (economic indicators, inter alia, indicators of economic growth, funds accumulated by the state), the respective capabilities of the state to ensure compensation for the said losses.

  1. In Item 5.5 of Section V of the reasoning part of the Constitutional Court’s ruling of 6 February 2012, where one of the provisions, the construction of which is requested, is set forth, inter alia, it is noted:

“<...> Paragraph 4 (the compliance of which with the Constitution is also being impugned by the petitioners in the constitutional justice case at issue) of Article 16 of the Provisional Law prescribes: ‘The Government of the Republic of Lithuania shall, by 1 July 2010, prepare and approve the description of the procedure for compensation for the reduced state social insurance pensions of old-age and of lost capacity to work’.

<...> In its ruling of 29 June 2010, the Constitutional Court, inter alia, held that the legal regulation established in Paragraph 4 of Article 16 of the Provisional Law should be construed as meaning that the Government was proposed to prepare and approve the procedure for compensation for the reduced state social insurance pensions of old-age and of lost capacity to work that would include no essential elements of compensation for pensions: bases, amounts, etc.; these elements of compensation for the reduced pensions must be established, by means of a law, by the legislature; only if is understood in this way the said legal regulation is not in conflict with the Constitution.”

In this context it should be noted that, in the Constitutional Court’s ruling of 6 February 2012, it was also held that the legal regulation consolidated in Paragraph 4 of Article 16 of the Provisional Law should be construed as meaning, inter alia, the legislature’s obligation to establish, by means of a law, the essential elements (grounds, amounts, etc.) of compensation for pensions, where the Government would be able to invoke such elements in the course of the preparation and approval of the description of the procedure for compensation for the losses incurred due to the reduction of state social insurance pensions of old-age and of lost capacity to work.

  1. It has been mentioned that no official constitutional doctrinal provision of a ruling or another final act of the Constitutional Court may be construed in isolation, by ignoring its meaning and systemic links with other provisions (explicit and implicit) of the Constitution.
  2. It should be noted that, under the Constitution, inter alia, under the constitutional imperative of social harmony stemming from it, a fair compensation to all persons whose old-age pensions were reduced (inter alia, by means of the provisions of a law that are recognised as being in conflict with the Constitution) due to an extreme situation (an economic crisis, etc.) in the state for the losses incurred may be ensured as appropriate only by invoking the amounts, terms and other essential elements of compensation for the losses incurred, as established by the legislature.

It should also be noted that a fair compensation for the losses incurred must be ensured as appropriate (according to the capabilities of the state) while taking account of the losses that were incurred after old-age pensions had been reduced by means of: the provisions of a law that are recognised as being in conflict with the Constitution (the said losses must be fully compensated for); and the provisions of a law that are recognised as not being in conflict with the Constitution (the said losses must be compensated for, according to the capabilities of the state, in a fair manner, but not necessarily fully).

  1. In the light of the foregoing arguments, the conclusion should be drawn that the provision “the losses incurred due to the reduction of old-age <...> pensions, <...> would be compensated for within a reasonable time and in a fair manner after the said extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions” of Item 6.5 of Section III of the reasoning part of the Constitutional Court’s ruling of 6 February 2012, the provision “these elements of compensation for the reduced pensions must be established, by means of a law, by the legislature; only if understood in this way the said legal regulation is not in conflict with the Constitution” of Item 5.5 of Section V of the reasoning part of the said ruling, as well as the provision “the losses incurred, inter alia, due to the reduction of old-age pensions, would be compensated for within a reasonable time and in a fair manner after the extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions” of Item 19.5 of Section V of the reasoning part of the said ruling, inter alia, mean that, after the extreme situation is over in the state and after preconditions arise for assessing, according to objective data (economic indicators, inter alia, indicators of economic growth, funds accumulated by the state), the respective capabilities of the state, a fair compensation must be ensured to all persons for the losses incurred by them after the reduction (inter alia, by means of the provisions of a law that are recognised as being in conflict with the Constitution) of old-age pensions; under the Constitution, inter alia, the constitutional imperative of social harmony, this may be ensured as appropriate in a fair manner only by invoking the amounts, terms and other essential elements of compensation for the losses incurred, as established by the legislature.

III

  1. It has been mentioned that Rita Babianskaitė, Deputy Head of the Social Insurance and Funded Pensions Division of the Social Insurance and Pensions Department of the Ministry of Social Security and Labour, the petitioner, inter alia, requests the construction of whether the provision “compensated for within a reasonable time and in a fair manner <...>, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions” of Item 6.5 of Section III of the reasoning part of the Constitutional Court’s ruling of 6 February 2012 and of Item 19.5 of Section V of the reasoning part of the said ruling mean that the return of pension arrears may be postponed, for example, until 2015, and, when establishing the main elements of compensation for the reduced pensions, it may be spread over a particular period of time in order to ensure the protection of the legitimate interests of persons and at the same time not to aggravate the current financial situation even further.
  2. It has been mentioned that, in Item 6.5 of Section III of the reasoning part of the Constitutional Court’s ruling of 6 February 2012 and in Item 19.5 of Section V of the reasoning part of the said ruling, inter alia, it was held that, while seeking to ensure that the losses incurred due, inter alia, to the reduction of old-age pensions, would be compensated for within a reasonable time and in a fair manner after the extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions.
  3. It has also been mentioned that, under the official constitutional doctrine, the losses incurred due to the reduction of old-age pensions must be compensated for within a reasonable time after the extreme situation is over in the state by following a legal act (a law) that is adopted by the legislature, without unreasonable delay, and that provides for a mechanism for compensation for the said losses.

It should be noted that the legislature, when it establishes a mechanism for compensation for the losses incurred due to the reduction of old-age pensions, inter alia, the starting date of the payment of compensation and a reasonable period of time during which the said losses will be compensated for, is bound by the Constitution, inter alia, the constitutional imperative of reasonableness stemming from it, thus, must take account, inter alia, of the consequences of an extreme situation and the capabilities of the state.

In this context it should also be noted that the capabilities of the state are determined by, inter alia, various obligations assumed by the state, which, inter alia, are related to financial discipline, thus, also to the imperative of balancing the revenue and expenditure of the state budget.

  1. In the light of the foregoing arguments, the conclusion should be drawn that the provision “compensated for within a reasonable time and in a fair manner <...>, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions” of Item 6.5 of Section III of the reasoning part of the Constitutional Court’s ruling of 6 February 2012 and of Item 19.5 of Section V of the reasoning part of the said ruling, inter alia, means that the legislature must establish a mechanism for compensation for the reduced (inter alia, by means of the provisions of a law that are recognised as being conflict with the Constitution) old-age pensions, inter alia, the starting date of the payment of compensation and a reasonable period of time during which the losses incurred due to the reduction of the said pensions will be compensated for, by taking account of the consequences of an extreme situation and the capabilities of the state, inter alia, various obligations assumed by the state, which, inter alia, are related to financial discipline, thus, also to the imperative of balancing the revenue and expenditure of the state budget.

Conforming to Article 102 of the Constitution of the Republic of Lithuania and Articles 1 and 61 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

decision:

  1. To construe that the provision “the losses incurred due to the reduction of old-age <...> pensions, <...> would be compensated for within a reasonable time and in a fair manner after the said extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions” of Item 6.5 of Section III of the reasoning part of the ruling of the Constitutional Court of the Republic of Lithuania of 6 February 2012 (Official Gazette Valstybės žinios, 2012, No. 109-5528), the provision “these elements of compensation for the reduced pensions must be established, by means of a law, by the legislature; only if understood in this way the said legal regulation is not in conflict with the Constitution” of Item 5.5 of Section V of the reasoning part of the said ruling, as well as the provision “the losses incurred, inter alia, due to the reduction of old-age pensions, would be compensated for within a reasonable time and in a fair manner after the extreme situation is over, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions, on the basis of which one should prepare the procedure for compensation for the reduced pensions” of Item 19.5 of Section V of the reasoning part of the said ruling, inter alia, mean that, after the extreme situation is over in the state and after preconditions arise for assessing, according to objective data (economic indicators, inter alia, indicators of economic growth, funds accumulated by the state), the respective capabilities of the state, a fair compensation must be ensured to all persons for the losses incurred by them after the reduction (inter alia, by means of the provisions of a law that are recognised as being in conflict with the Constitution) of old-age pensions; under the Constitution, inter alia, the constitutional imperative of social harmony, this may be ensured as appropriate in a fair manner only by invoking the amounts, terms and other essential elements of compensation for the losses incurred, as established by the legislature.
  2. To construe that the provision “compensated for within a reasonable time and in a fair manner <...>, the legislature must, without unreasonable delay, by means of a law, establish the essential elements (grounds, amounts, etc.) of compensation for the reduced pensions” of Item 6.5 of Section III of the reasoning part of the ruling of the Constitutional Court of the Republic of Lithuania of 6 February 2012 (Official Gazette Valstybės žinios, 2012, No. 109-5528) and of Item 19.5 of Section V of the reasoning part of the said ruling, inter alia, mean that the legislature must establish a mechanism for compensation for the reduced (inter alia, by means of the provisions of a law that are recognised as being conflict with the Constitution) old-age pensions, inter alia, the starting date of the payment of compensation and a reasonable period of time during which the losses incurred due to the reduction of the said pensions will be compensated for, by taking account of the consequences of an extreme situation and the capabilities of the state, inter alia, various obligations assumed by the state, which, inter alia, are related to financial discipline, thus, also to the imperative of balancing the revenue and expenditure of the state budget.

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

Justices of the Constitutional Court:                          Toma Birmontienė

                                                                                             Pranas Kuconis

                                                                                             Gediminas Mesonis

                                                                                             Vytas Milius

                                                                                             Ramutė Ruškytė

                                                                                             Egidijus Šileikis

                                                                                             Algirdas Taminskas

                                                                                             Romualdas Kęstutis Urbaitis

                                                                                             Dainius Žalimas