JUDGMENT OF THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LATVIA OF 22 JUNE 2010 in the Matter No. 2009-111-01

On the compliance of the second sentence of Paragraph 7 and the second sentence of Paragraph 20 of the Transitional Provisions of the Law On Judicial Power (restated on 16 June 2009) and the third sentence of Paragraph 20 with Articles 1, 83 and 107 of the Constitution of the Republic of Latvia

The Constitutional Court of the Republic of Latvia, composed of: the Chairman of the court sitting Gunārs Kūtris, Judges Kaspars Balodis, Juris Jelāgins, Kristīne Krūma and Viktors Skudra,

with the secretary of the court sitting Līva Rozentāle,

with the participation of Inese Nikuļceva, the representative of the applicants of the constitutional complaints and

the sworn advocate Jūlija Jerņeva, the representative of the institution - the Saeima - which issued the disputed act,

on the basis of Article 85 of the Constitution of the Republic of Latvia, Section 16, Clause 1, Section 17, Paragraph one, Clause 11 and Section 19.² of the Constitutional Court Law,

on 18 May 2010, in Riga, adjudicated the following case in an open sitting of the court:

On the compliance of the second sentence of Paragraph 7 and the second sentence of Paragraph 20 (restated on 16 June 2009) and the third sentence of Paragraph 20 of the Transitional Provisions of the Law On Judicial Power with Articles 1, 83 and 107 of the Constitution of the Republic of Latvia.

Findings

1. The procedures for the calculation of work remuneration for judges were prescribed by the Law of 19 June 2003 "Amendments to the Law On Judicial Power", which came into force on 1 July 2003. The reform of the remuneration of judges commenced by the referred to Law was based upon the Concept "Remuneration of Judges and Judicial Employees", approved by the Cabinet Order No. 706 of 19 December 2002 (hereinafter - Concept). The main objective of the Concept was to create a system of work remuneration for judges, on which the existence of an independent, professional and fair court would be based.

1.1. In accordance with Section 119.¹ of the Law On Judicial Power, the monthly base salary of a judge was referenced to the average monthly gross work remuneration of employees working in the State of the previous year, applying the coefficient 4.5. Concurrently, gradual transition to the amount of remuneration specified in the Law was provided for. Until 2006, the monthly base salary of a judge was calculated from the average monthly gross work remuneration of employees in 2001. Moreover, in accordance with the Transitional Provisions of the Law On Judicial Power (hereinafter also - Transitional Provisions), 60, 70 and 80 per cent of the calculated base salary were paid in 2003, 2004 and 2005 respectively.

1.2. The amendments to the Law On Judicial Power of 23 February 2006 prescribed that the base salary is referenced to the average monthly gross work remuneration of employees in 2001 not up to year 2006, but up to 31 December 2006. Similarly, it was prescribed in the second sentence of Paragraph 7 of the Transitional Provisions that the monthly base salary of a judge will be calculated in 2007 and 2008, taking into account the average monthly gross work remuneration of employees in 2005, but in 2009 - taking into account the average monthly gross work remuneration of employees in 2006, with the coefficient 4.5 remaining unchanged.

1.3. With the Law of 14 November 2008 "Amendments to the Law On Judicial Power", Paragraph 7 of the Transitional Provisions was restated. The second sentence of this Paragraph determined that: "In 2007, 2008 and 2009, the monthly base salary of a judge, except the monthly base salary of a judge of Land Registry Offices, shall be calculated taking into account the average monthly gross remuneration for work for the workforce in 2005, with the coefficient of 4.5 remaining unchanged."

1.4. On 12 December 2008, the Saeima adopted the Law "Amendments to the Law On Judicial Power", by which Paragraph 7 of the Transitional Provisions was supplemented, providing that "in 2009, the monthly base salary of a judge, except the monthly base salary of a judge of Land Registry Offices, shall be determined in accordance with Paragraph 20 of the Transitional Provisions" and the Transitional Provisions were supplemented with Paragraph 20 in the following wording: "In accordance with this Law the remuneration prescribed (monthly base salary, bonuses etc.) in 2009 shall be determined in accordance with the Law On Remuneration of Officials of State and Local Government Institutions in 2009."

1.5. On 16 June 2009, the Saeima adopted the Law "Amendments to the Law On Judicial Power" by which the operation of the mechanism for the calculation of the base salary provided for in the second sentence of Paragraph 7 of the Transitional Provisions was extended till the end of 2010. In turn, Paragraph 20 of the Transitional Provisions was supplemented and subsequently provided for the following: "From the day of the coming into force of amendments to the Law On the State Budget for 2009 adopted in June 2009, the remuneration of judges and judges of Land Registry Offices shall be determined in the amount of 85% of the work remuneration specified in accordance with Paragraphs 7 and 17 of these Transitional Provisions (hereinafter - the disputed second sentence of Paragraph 20).

1.6. On 1 December 2009, the Saeima adopted the Law "Amendments to the Law On Judicial Power", which came into force on 1 January 2010.

With these amendments the operation of the mechanism for the calculation of the base salary provided for in the second sentence of Paragraph 7 of the Transitional Provisions was extended till the end of 2011: "In 2007, 2008, 2009, 2010 and 2011 the monthly base salary of a judge, except the monthly base salary of a judge of Land Registry Offices, shall be calculated, taking into account the average monthly gross remuneration for work for the workforce in 2005, with the coefficient of 4.5 remaining unchanged" (hereinafter - the disputed second sentence of Paragraph 7).

In turn, the disbursement of remuneration in the amount of 85 per cent specified in the second sentence of Paragraph 20 of the Transitional Provisions was specified up to 31 December 2009 and this Paragraph was supplemented with the third sentence: "From 1 January 2010 to 31 December 2011 the remuneration of judges and judges of Land Registry Offices shall be determined in the amount of 73 % of work remuneration specified in accordance with Paragraphs 7 and 17 of these Transitional Provisions, but not exceeding the remuneration of the Prime Minister specified in accordance with the Law On Remuneration of Officials of State and Local Government Institutions (hereinafter - the disputed third sentence of Paragraph 20). The disputed second sentence of Paragraph 7, the disputed second sentence of Paragraph 20 and the disputed third sentence of Paragraph 20 (hereinafter also - the disputed norms).

1.7. By the Judgment of 18 January 2010 in Case No. 2009-11-01, On the compliance of the second sentence of Paragraph 7 and Paragraph 17 of the Law On Judicial Power (restated on 14 November 2008) with Articles 1, 83 and 107 of the Constitution of Republic of Latvia (hereinafter - Judgment of 18 January 2009), the Constitutional Court adjudged the second sentence of Paragraph 7 of the Transitional Provisions of the Law On Judicial Power, restated on 14 November 2008, 16 June 2009 and 1 December 2009, as not complying with Article 83 of the Constitution of the Republic of Latvia and invalid from 1 January 2011.

2. The applicants - Dace Ābele, Madara Ābele, Inga Akmeņlauka, Dzintra Amerika, Sandra Amola, Ingūna Amoliņa, Ilze Amona, Lolita Andersone, Dzintra Apine, Ilze Apse, Lala Apšeniece, Aija Āva, Ina Baiko, Daina Baltā, Dzintra Balta, Brigita Baltraite, Doloresa Bambere, Alfs Baumanis, Jānis Bazēvičs, Marika Bebriša, Inese Belicka, Svetlana Beļajeva, Kaspars Berķis, Santa Bernharde, Anita Bērziņa, Dagnija Bērziņa, Iveta Bērziņa, Mārtiņš Birkmanis, Intars Bisters, Ingrīda Bite, Maruta Bite, Dace Blūma, Stella Blūma, Olita Blūmfelde, Līga Blūmiņa, Dina Bondare, Tatjana Bormane, Helmuts Brasovs, Sandra Briķe, Iveta Brimerberga, Tamāra Broda, Rita Bruce, Skaidrīte Buivide, Brigita Būmeistere, Ilze Celmiņa, Andis Celms, Dzintra Danberga, Signe Dektere, Uldis Danga, Agita Dmitrenoka, Vilis Donāns, Diāna Dumbre, Imants Dzenis, Anita Dzērve, Diāna Dzērviniece, Aiga Freimane, Gunta Freimane, Ilze Freimane, Ilze Freimane, Juris Freimanis, Viesturs Gaidukēvičs, Ligita Gavare, Boriss Geimans, Sandra Gintere, Solvita Glaudāne, Smaida Gļazere, Inese Grauda, Lelde Grauda, Elita Grigoroviča, Ērika Gulbe, Līga Hāzenfuse, Rihards Hlevickis, Biruta Horuna, Skaidrīte Hrebtova, Aelita Ignatjeva, Baiba Jakobsone, Ināra Janēviča, Dace Jansone, Irīna Jansone, Baiba Jēkabsone, Inta Jēkabsone, Ingrīda Junghāne, Agnese Jurevica, Daiga Kalniņa, Inta Kalniņa, Signe Kalniņa, Kristīne Kalvāne-Radziņa, Irina Kaļiņina, Sanita Kanenberga, Līga Karlsone, Dace Kantsone, Adrija Kasakovska, Karīna Kazārova, Astra Klaiše, Dainis Pēteris Kļaviņš, Regīna Knabe, Juris Kokins, Iluta Kovaļova, Renāte Krasovska, Irēna Krastiņa, Karina Krastiņa, Laima Kraule, Iveta Krēvica, Guna Krieviņa, Inga Krigena-Jurkāne, Iveta Kromāne, Sandra Krūmiņa, Agija Kudrēviča, Zita Kupce, Ļubova Kušnire, Ligita Kuzmane, Guntars Kveska, Biruta Ķeire, Dace Ķeire, Zinaida Lagzdiņa, Selga Lapejeva, Gundega Lapiņa, Ilze Lazdiņa, Elmārs Lenšs, Rinalda Liepiņa, Staņislavs Linkevičs, Irēna Logina, Svens Lorencs, Sarmīte Lucava, Irīna Makovska, Valērijs Maksimovs, Svetlana Maršāne, Dzintars Melbārdis, Iveta Meldere, Sandra Meliņa, Sandra Mertena, Rudīte Migla, Anna Mihailova, Una Mihailova, Andrejs Mihaļčenko, Irēna Millere, Maija Miltiņa, Anita Misiuna, Anita Moļņika, Inese Mudele, Aina Nicmane, Margarita Osmane, Ilze Ošiņa, Arvīds Ozerskis, Ineta Ozola, Sanita Ozola, Sigita Ozola, Baiba Ozoliņa, Gunta Ozoliņa, Roze Paegle, Agita Papule, Aija Pāvele, Zane Pētersone, Ilona Petrovska, Lidija Pliča, Kornēlija Poča, Ojārs Priedītis, Viktors Prudņikovs, Inguna Preisa, Solvita Pujāte, Inga Putra, Vineta Ramba, Ieva Reikmane, Silva Reinholde, Aija Reitupe, Gunta Rezgoriņa, Kaspars Rinčs, Normunds Riņķis, Iveta Risberga, Ināra Rozīte, Inta Rubene, Inese Rubina, Sanita Rūtenberga, Silvija Sēbriņa, Rinalds Silakalns, Velta Silamiķele, Vija Siliniece, Inese Siliņeviča, Juris Siliņš, Dace Skrauple, Inese Skudra, Līvija Slica, Santa Sondare, Visvaldis Sprudzāns, Kārlis Stārasts, Elita Stelte-Auziņa, Sanita Strakše, Ināra Strautiņa, Ziedonis Strazds, Inese Strelča, Sandra Strence, Inese Strode, Iveta Stuberovska, Juris Stukāns, Guntars Stūris, Jānis Stūrmanis, Elga Sudāre, Dina Suipe, Mārtiņš Sviķis, Marita Šalta, Ineta Škutāne, Mairita Šķendere, Māris Šļakota, Gatis Štauers, Ināra Šteinerte, Lauma Šteinerte, Marianna Terjuhana, Daina Treija, Aivars Uminskis, Gvido Ungurs, Vineta Vaiteika, Sarmīte Vamža, Ilze Vanaga, Kristīne Vanaga, Aelita Vancāne, Valdis Vazdiķis, Linda Vēbere, Agnese Veita, Linda Vēbere, Žaneta Vēvere, Iveta Vīgante, Aldis Vīksne, Signe Vilne, Daiga Vilsone, Gunta Viļumsone, Linda Vīnkalna, Rita Vīva, Vita Vjatere, Lauma Vol berga, Vivita Voronova, Inta Zaļā, Aivars Zāģeris, Zaiga Zaiceva, Sanita Zakrevska, Jolanta Zaškina, Milda Zelmene, Dzintra Zemitāne, Inese Laura Zemīte, Valda Zommere, Antra Zute, Dzintra Zvaigzneskalna-Žagare, Ārija Ždanova un Žanete Žimante (hereinafter - Applicants) are of the opinion that the disputed norms determine less favourable regulation in comparison with the previous regulation in force, because until 31 December 2009 the remuneration of a judge was specified in the amount of 85 per cent, whereas, in turn, from 1 January 2010 - in the amount of only 73 per cent of the calculated work remuneration. Moreover, in the opinion of the Applicants, by amending the procedures for the calculation of the work remuneration for judges and by repeatedly reducing the amount of the remuneration of judges, the principle of solidarity has not been observed in determination and reduction of the remuneration in all branches of power.

2.1. The Applicants note that it follows from Article 107 of the Constitution of the Republic of Latvia (hereinafter - Constitution) which, inter alia, determines the right for every employed person to receive, for work done, commensurate remuneration, that commensurate remuneration is such which also reflects the nature of the work done. Therefore, in order for remuneration to be commensurate, the work of a person to be performed and the skills required for the performance thereof, as well as the responsibility, the restrictions specified and the significance of the decisions taken should be taken into account. It also follows from the right to commensurate remuneration for the work done that, upon determining the remuneration of a judge, the principle of the independence of the judiciary should be taken into account. I.e., the remuneration of a judge would only be recognised as commensurate to the work performed, if, in the determination thereof, the principles of the independence of the judiciary had been taken into account. The remuneration of a judge should be commensurate with the dignity and the load of responsibility of the office of a judge.

A situation where the remuneration of State administrative officials, which prepare administrative statements or control the lawfulness thereof, exceeds the remuneration of the judges which control the work of these officials, indicates that the amount of the remuneration of judges is not commensurate. An incommensurate reduction of the salary of a judge makes this office unattractive for highly qualified lawyers.

2.2. The Applicants are of the opinion that, in determining the remuneration of a judge, the principle of legitimate expectations, the principle of legal certainty (Article 1 of the Constitution) and the principle of the independence of the judiciary (Article 83 of the Constitution) have been violated.

The reliance of judges on the regulation for the determination of the base salary included in the Law On Judicial Power should be protected, as several factors related to the office of a judge should be taken into account. The career of a judge is a long-term decision, therefore. stable guarantees are important. Very strict restrictions with regard to the combination of offices have been set for the office of a judge, therefore, judges are particularly affected by the changes in remuneration, as they have little opportunity of finding another way of earning extra income. If the career of a judge is temporarily suspended, the office is not preserved, and the building of the career of a judge has to be started anew. The Applicants indicate that judges were not given sufficient time to allow them to adapt to the reduction in remuneration, i.e., to re-plan their everyday life in relation to the satisfation of their basic needs and the basic needs of their family members, and to review any liabilities undertaken.

The Applicants emphasise that the disputed norms also entail the violation of the principle of legal certainty. By amending the procedures for the calculation of the base salary specified in the Law On Judicial Power, the Applicants are denied the opportunity to base their future activities on the regulatory enactments in force and to efficiently plan their income and expenditure.

2.3. The Applicants do not see any logical or legal grounds for the restriction specified in the disputed third sentence of Paragraph 20, i.e., that the remuneration of a judge may not exceed the remuneration of the Prime Minister. Such interpretation of the principle of equality, as a result of which an identical level of remuneration to all branches of power is set, is unacceptable. Taking into account different factors, for example, the nature of the work, the level of stability in performing the duties of the office, the authorisation related to the functions to be performed and the period of holding the office, there are no grounds for the comparison of offices and demanding that the officials belonging to one branch of power earn the same amount as the officials belonging to another branch of power.

2.4. In addition Inese Nikuļceva, the representative of the Applicants, noted during the court sitting that it follows from Article 107 of the Constitution in conjunction with Article 83 that even under the conditions of economic crisis, judges should be ensured with such conditions for them to able to hear a court case without any pressure, impartially and independently, so that they would have certain financial security and economic independence. Even in the conditions of crisis, the remuneration should be commensurate with the responsibility, qualification requirements, dignity and prestige of the office and the restrictions connected to the office. A situation where the State reduces the remuneration of judges to the extent that a judge who has undertaken financial liabilities commensurate with the work remuneration, becomes insolvent or that his or her independence comes under threat, is inadmissible. Referring to the case law of the Federal Constitutional Court of Germany, I. Nikuļceva indicated that the income of civil servants should be such as to ensure their legal and economic independence and not only meeting their basic needs, but also the minimum level of comfortable living.

I. Nikuļceva emphasised that the principle of the division of power demands the observation of the balance between all three branches of State power, therefore, when deciding upon the financing of the judicial power, several criteria should be observed. The legislator should have listened to the representatives of the judicial power, evaluated their arguments, as well as provided justification if the opinion of the representatives of the judicial power had not been taken into account. In adopting the disputed norms, the legislator did not observed these criteria, therefore, the principle of the division of power was violated.

During the discussion, I. Nikuļceva expressed the opinion that judges do not live in a social vacuum and they are also affected by the situation existing in the State. She indicated that judges are ready to participate morally and legally in overcoming the economic crisis alongside with other social groups, as well as to attest their social solidarity, taking into account the circumstances and principles referred to in the Appeal of the Conference of Judges. It means that judges have never considered themselves to be in special or exceptional circumstances. Judges had expressed the opinion that under the conditions of economic crisis, the remuneration of judges may be reduced, if this measure is temporary, it has a serious social objective and if the principles specified by the Constitution are observed. However, in adopting the disputed norms, the referred to principles were violated, therefore, the disputed norms do not comply with the Constitution.

3. The institution which issued the disputed norms - the Saeima - requests to adjudicate the disputed norms as complying with the Constitution.

In the answering note, the Saeima indicated that the adoption of the disputed norms was related to rapid economic recession, which is not over yet. In order to compensate for the lack of finances, Latvia took international loans, for the receipt and use of which several conditions were set forward, including conditions applicable to the reduction of remuneration in the institutions financed by the State budget, as well as the provision of the proportionality of remuneration in all fields of employment. Therefore, the measures for the prevention of economic recession were aimed towards reaching the objective referred to in Article 116 of the Constitution - the achievement of the protection of the rights of other people and public welfare. Moreover, the disputed norms had a fixed term.

3.1. Concurrently, the Saeima indicated that the principle of the independence of the judiciary cannot be linked only to the amount of work remuneration of judges specified in regulatory enactments. The compliance with this principle should be evaluated in a complex and systemic way. The independence of the judicial system (institutional dimension) and the independence of judges (individual dimension) arises from numerous criteria: non-interference of other branches of power (executive power and legislative power) in the adjudication of a court, sufficient funding for the performance of organisational and administrative functions of the judicial system, the social security and operational guarantees of judges (selection of candidates for the office of a judge, the irrevocability of a judge from the office), impartial allocation of cases, review of court adjudications in accordance with the procedures specified in regulatory enactments etc.

The Saeima emphasised that currently the work remuneration of judges specified in the State is commensurate with the nature of the work to be performed, the skills and responsibility required for the performance of the office, the requirements and restrictions prescribed by the law, moreover, it is well-balanced with the status and work remuneration of other officials of the judicial system, as well as with the general level of salaries in the State. Thus, there are no signs of violation of Article 107 of the Constitution.

3.2. In the opinion of the Saeima, the determination of remuneration falls within the sphere of social rights, which is inseparably linked to the financial possibilities of the State. Therefore, the legislator has been granted wide discretionary power in the field of exercising social rights and it may not subjected to as strict requirements in relation to the provision of other human rights.

Taking into account that remuneration was reduced for everyone to whom it is paid from the State budget, including the President, the Prime Minister, ministers and deputies of the Saeima, the Saeima considered that, upon adoption of the disputed norms, the principle of solidarity was observed.

3.3. The Saeima also disagreed with the opinion of the Applicants that the disputed norms are inconsistent with the principle of legitimate expectations. The principle of legitimate expectations is one of the cornerstones of a democratic state, however, it does not prohibit to make amendments, which conform to certain requirements, to the existing legal framework.

The Saeima emphasised that neither the principle of legal certainty, nor the principle of equity prohibits derogation from the previous practice. It is not only permissible but even necessary in cases when the most suitable and appropriate solution should be chosen for a specific situation. In the opinion of the Saeima, deviation from the legal framework most favourable for a person was permissible in the particular situation, because the individual was given an opportunity to understand the motivation behind these actions, as well as whether such framework under these conditions is objectively necessary and whether the violation is not arbitrary.

3.4. During the court sitting, Jūlija Jerņeva, the sworn advocate representing the Saeima, in addition to the arguments already referred to regarding the necessity and proportionality of the disputed norms, indicated that the principle of legitimate expectations in this case should be considered in the context of the principle of equality, i.e., leaving the "benefits" granted to one group of persons intact or increasing thereof automatically means a decline in the material status of another group of persons. Therefore, it is not permissible for the reduction in remuneration to affect all persons employed in the public sector, while not affecting the representatives of the judicial power, thus causing an even higher reduction in remuneration to other persons employed in the public sector.

J. Jerņeva expressed the opinion that in this case the scope, in which the compliance of the disputed third sentence of Paragraph 20 with the legal norms of higher legal power should be assessed, should be specified more precisely. With reference to the calculations provided in the annotation to the draft law, the Saeima expressed the opinion that none of the fundamental rights of the Applicants prescribed by the Constitution were affected by the words in the disputed third sentence of Paragraph 20, "but not exceeding the monthly salary of the Prime Minister specified in accordance with the Law On Remuneration of Officials of State and Local Government Institutions". Therefore, within the framework of the case, only the words "from 1 January 2010 until 31 December 2011 the remuneration of judges and judges of Land Registry Offices shall be determined in the amount of 73 % of work remuneration specified in accordance with Paragraphs 7 and 17 of these Transitional Provisions" in the disputed third sentence of Paragraph 20 should be examined, insofar as they determine the remuneration of judges.

3.5. In the answering note in Case No. 2010-24-01 the Saeima indicated that Article 83 of the Constitution only provides for one specific threshold of remuneration, which should be ensured for all judges in order to protect the independence of courts and judges and that all judges might "feel equally protected and called to fulfil their duty - to administer justice fairly". The opinion of the Saeima was as follows: "The Constitution imposes an obligation to the legislator to ensure at least such irreducible remuneration to all judges, which would ensure the independence of courts and judges. However, the legislator has discretionary power in developing a detailed system of remuneration of judges in conformity with the findings of the management theory of its time."

The Saeima did not have at its disposal "information that, after adoption of the disputed norms, such situation would develop that courts would be uncapable of administering justice independently. In this respect it can be established that the limits of the discretionary power of the legislator have not been exceeded."

As regards the consultations with the judicial power, the Rules of Order of the Saeima are binding to the Saeima, and they "do not prescribe mandatory consultations regarding the adoption of the disputed norms with the representatives of the judicial power, nor they grant the veto rights to the representatives of the judicial power". Concurrently, it was indicated in the answering note that regular meetings and dialogue with the representatives of the judicial power were held.

The Saeima believed that "the legal regulation on the monthly base salary of judges was not characterised by sufficient stability, which might have encouraged judges to have legitimate expectations to the application of Section 119.¹ of the Law On Judicial Power in a specific year. The action of the legislator, by consistently extending the transition period for determination of the monthly base salaries of judges, did not ensure legitimate expectations to an extent that persons might have relied upon the invariability of the normative regulations."

3.6. Moreover, J. Jerņeva indicated: if the Constitutional Court were to adjudicate the disputed norms as non-compliant with the Constitution and they were revoked from the date of the coming into force thereof, as requested by the Applicants, then additional 36.5 million lats would be required from the State budget to cover the difference in remuneration. It would mean a necessity to look for the monetary funds by reviewing the expenditure allocated as remuneration to other social groups. However, in the situation of crisis, everybody should observe the principle of solidarity with regard to reduction of remuneration.

4. The invited person - Guntis Bērziņš, the chairperson of the Budget and Finance (Taxation) Committee of the Saeima - indicated during the court sitting that at the end of 2008 the Cabinet was forced to adopt the so-called crisis budget for 2009, as well as to request assistance from the International Monetary Fund and the European Commission in the amount of 7.5 million EUR. According to the forecasts of that time, the gross domestic product would decrease by 12 per cent, however, few months later the estimated decrease reached 18 per cent. Therefore, consolidation in the amount of 500 million lats had been necessary, i.e., either an increase in revenues or a decrease in expenditure was needed.

When adopting the budget, it was estimated that the revenue in 2009 would be approximately 5.3 billion lats, however, the actual revenue was only 3.9 billion lats. The difference between the estimates and reality at the end of 2009 had been 1.4 billion lats or 26 per cent. The case being adjudicated is part of this general economic situation.

During the first three months of 2010, the average work remuneration was LVL 431 - 26.3 per cent less than in 2008. It almost precisely coincided with the reduction included in the disputed norms.

The base salary of a judge is currently LVL 808. The remuneration of only ten per cent of the persons employed in the public sector exceeds LVL 800, therefore, the remuneration of judges is considered as adequate. It is commensurate with the requirements set out for the office of a judge, as well as with the professionalism and social status of a judge.

In evaluating the disputed norms at meetings of the Budget and Finance (Taxation) Committee, none of the representatives of the judicial power had been heard, but G.Bērziņš explained that it was not customary for the interested persons to be invited to express their opinion at the respective committee. However, during the meetings of June and November 2009, the committee had been informed that the matter of salaries of judges had been discussed with judges. For example, at the end of 2009, the matter of work remuneration of judges had been discussed during several Cabinet meetings, with the participation of representatives of the judicial power.

5. The invited person - Solvita Āboltiņa, the Chairperson of the Saeima Subcommittee of the Legal Affairs Committee for Working on the Judicial Structure Law - pointed out during the court sitting that the disputed norms had been adopted in order to consolidate the budget for 2010, saving the State from bankruptcy. The purpose thereof had not been to turn against judges. In adopting the amendments, the compliance thereof to the Constitution had been evaluated. In the situation of economic crisis, such reductions in remuneration were justifiable. The financial situation in the State had deteriorated considerably and the resulting situation had been much worse than at the end of 2008, when the remuneration of judges had been frozen.

S.Āboltiņa did not agree that hearing the opinions of judges had not been ensured prior to adoption of the disputed norms. Dialogue with judges was ongoing in both the Legal Affairs Committee and the Subcommittee for the Judicial Structure Law. When working on the draft Judicial Structure Law and preparing amendments to the Law On Judicial Power, judges were regularly heard. On many occasions, the opinions of judges were not unanimous. Similarly, in each specific case, the Association of Judges found an opportunity to express the opinion thereof to the committee.

S. Āboltiņa indicated that at the Conference of Judges in April 2009 the issue of reduction of the remuneration for judges was discussed and the judges were invited to create a working group, which would participate in the development of amendments to the respective Law. The judges did not form such group, indicating that the extent of the dialogue was sufficient. Similarly, Mareks Segliņš, the Minister for Justice, met with and discussed the issue of remuneration with all chief judges. Moreover, Senator Pāvels Gruziņš, the Deputy Chief Justice of the Supreme Court, had participated in the Cabinet meeting, during which the respective amendments were discussed, and expressed support to reduction in remuneration, preserving the remuneration system of judges within the scope of the Law On Judicial Power.

Judges were also among those State officials whose social guarantees were preserved. The office of a judge is sufficiently remunerated which is also attested by the fact that several applicants compete for one position of a judge.

Looking back at the remuneration system of judges, which was incorporated in the Law On Judicial Power, S. Āboltiņa indicated that until 2003 the remuneration of judges had not been commensurate.

6. The representative of the invited person - the Ministry of Justice - Kristīne Drēviņa, the Director of the Department of the European Court of Justice of the Ministry of Justice, indicated that the Ministry of Justice agrees with the opinion expressed by the Saeima that the disputed norms do not contain a violation of the rights specified in Articles 1, 83 and 107 of the Constitution.

K. Drēviņa emphasised that the office of a judge is still sufficiently prestigious, sufficiently well remunerated and endowed with sufficient social guarantees. Therefore, there are no grounds to consider that judges will leave their office due to their remuneration. It is also confirmed by several figures: in 2007 12 judges left their office upon their own will, in 2008 - seven, however, in the critical year 2009 - only two judges left, but in 2010 to date, only one judge has left the office upon his or her own will. Since 4 June 2009 until the day of the court sitting, nine new judges have been appointed. On average 4.36 candidates applied for one position of a judge in the competitions.

The income of other highly qualified lawyers is also rapidly decreasing at present. For example, the average monthly base salary of a notary in 2009, in comparison with 2008, has reduced by 29 per cent. In turn, the base salary of the State secretary of the Ministry of Justice has reduced by 40 per cent since November 2008. On average the salary in the Ministry of Justice has been reduced by 29 per cent, for the management staff - by 30 per cent and salary of every employee has been reduced by not less than 20 per cent.

K. Drēviņa indicated that the obligation to consult with the judicial power was fulfilled, for example, on 6 March 2009 meetings with chief judges of district courts and regional courts were organised, the issue of remuneration of judges was discussed at the annual Conference of Judges, whose participants, inter alia, agreed that they would not delegate their representative for further negotiations, and emphasised the good previous co-operation with the Ministry of Justice. An appeal to the President, the Saeima and the Cabinet was adopted during this Conference, in which the readiness of judges to participate jointly in overcoming the economic crisis was attested.

On 19 May 2009, the Minister for Justice invited chief judges of district courts and regional courts to a discussion regarding the national economic situation and the impact of reduction of the budget expenditure on the work of courts. In turn, on 21 September the Ministry of Justice informed the courts in writing regarding the appeal expressed by the Cabinet to carry out joint reduction and requested the chief judges to provide recommendations for the best way for implementation thereof. Moreover, on 13 and 16 October 2009, the Cabinet acknowledged the objections expressed by Senator P. Gruziņš, the Deputy Chief Justice of the Supreme Court, against the inclusion of the office of a judge into the unified remuneration system, and, therefore, included the reduction of the respective salary in the Law On Judicial Power.

K. Drēviņa emphasised that the Ministry of Justice had also examined several alternative solutions. For example, reduction of the remuneration of judges by 20 or 30 per cent was not supported and it was planned to decrease the workload of the courts. Moreover, State fees were increased, and this measure allowed to collect additional 1.5 million lats. The referred to resources were shifted for reduction of the work remuneration of judges in as considerate a manner as possible.

The representative of the Ministry of Justice, the State Secretary Mārtiņš Lazdovskis, drew attention to the fact that the reduction of the remuneration of judges was an integral part of the reduction of the budget of the Ministry of Justice. Without reducing the remuneration of judges, it would be impossible to ensure the implementation of the functions of the Ministry of Justice within the scope of the budget allocated.

7. The representative of the invited person - the Ministry of Finance - Mārtiņš Brencis, the Director of the Legislative Department of the Ministry of Finance, described the financial situation in the State. It had been necessary to finance the budget of 2009 from a loan, therefore, extreme fiscal disciplinary measures had been performed in the State.

Reduction in remuneration affected a large part of the society: work remuneration was reduced by 25 per cent for all State administration, but by 33 per cent in central institutions of ministries. The average salary (in March - LVL 440) was also by 25 per cent lower than at the end of 2008. The reduction also affected judges, because the financing for the Ministry of Justice was significantly reduced in the State budget. The actual reduction for a judge of a district court was 28 per cent, for a judge of a regional court - 20 per cent, and a judge of Land Registry Office - 32 per cent. In turn, the remuneration of the deputies of the Saeima was reduced by 15 per cent on 1 March 2009 and remains frozen. The remuneration of members of the Cabinet has also been reduced by 20 per cent since 1 July 2009 and remains frozen.

Upon developing the unified remuneration system, in which it was also planned to include employees of the judicial power, the remuneration of the Prime Minister was singled out as the highest remuneration. However, representatives of the judicial power did not support such solution, insisting on retention of the existing system of remuneration of judges within the scope of the Law On Judicial Power. Upon accepting the disputed norms, the opinion of the representatives of the judicial power was respected, however, their remuneration was restricted by the size of the remuneration of the Prime Minister. In this way the remuneration of judges was comparable with the remuneration of State administrative employees.

In turn, during the court sitting, the representative of the Ministry of Finance Inga Ošiņa, the Head of the Division for the Policy of Remuneration of Employees in the Public Sector of the Management and Methodology Department, upon examining the process of the creation of the unified remuneration system, emphasised that historical aspects should also be taken into account. Virtually no reforms in the field of work remuneration have been performed in the State administration since 1998. The remuneration increased at the cost of the increase in the level of the minimum salary and institutional budget. It led to a situation where very little difference existed between qualified employees and employees without qualification and performing physical work. The reform of salaries commenced seriously in 2005, when the catalogue of offices was developed, and from 2006 to mid-2007 a system of remuneration for work was also introduced to full extent. Financing for the increase of salaries was provided for in the State budget of 2007 and 2008.

I. Ošiņa indicated that the remuneration of the Prime Minister was initially referenced to the average national remuneration, multiplying it by the coefficient 9. Over the course of time, it changed several times, and currently the remuneration of the Prime Minister is specified in the amount of LVL 1908. Within the scope of the unified remuneration system it has been specified as the highest remuneration with the coefficient 4.05 from the average national work remuneration. Lower coefficients have been specified for other employees in the public sector.

I. Ošiņa acknowledged that determination of the remuneration of the Prime Minister had been a political decision. It is possible to change it depending on the political situation in the country. Moreover, the remuneration of the Prime Minister is not based on calculations or objective criteria.

The representative of the Ministry of Finance Ilonda Stepanova, the Director of the Budget Department, indicated that a decision was taken to reduce the expenditure intended for remuneration by 20 per cent for all institutions. Upon taking such decision, no calculations were performed regarding the impact thereof on different groups of persons. The institutions themselves implemented such reduction. In turn, the Ministry of Justice, when planning the expenditure thereof, specified the first reduction in the remuneration of judges in the amount of only 15 per cent, as it had found an opportunity for increasing the revenue thereof from the collected State fees.

8. The representative of the invited person - the Ombudsman's Office of the Republic of Latvia - Santa Tivanenkova, legal advisor, indicated that the disputed norms comply with Articles 1, 83 and 107 of the Constitution.

S. Tivanenkova emphasised that Article 107 of the Constitution should be evaluated in conjunction with the UN International Covenant on Economic, Social and Cultural Rights. The provisions of the referred to Covenant require for Member States to recognise that everyone has the right to work and the protection thereof so that everyone would have an opportunity to earn their living by freely chosen or accepted work.

The concept "commensurate remuneration for work done" included in Article 107 of the Constitution may be interpreted in such a way that the remuneration of a judge should comply with the qualification of a judge and the requirements set forth for judges, i.e., for education, work experience and impeccable reputation, and this work should be remunerated according to the load placed thereupon and the necessary qualification.

Upon accepting the amendments to Paragraphs 7 and 20 of the Transitional Provisions of the Law On Judicial Power, the legitimate objective of the legislator had been the protection of the State welfare and the retention of the economic stability, and the relevant restriction was accepted on the grounds of the Law in relation to urgent public requirements.

S. Tivanenkova indicated that judicial power, although independent, still functions while being tied to the source of financing thereof. The State budget and conditions of the economic recession of the national economy may affect the remuneration of judges.

In 2002, when the Concept was adopted, it was not possible for the government to anticipate that, under the influence of the global economic crisis of 2008, the national economic situation would decline to such an extent that reduction in the remuneration of all employees in institutions financed by the State budget would be necessary. Therefore, the suspension of operation of the Concept in crisis situation was a logical measure, which cannot be perceived as a violation of the principle of legitimate expectations. The benefit gained by the society from this measure is definitely larger than the restriction imposed on judges.

The remuneration of judges should not be recognised as unfair. In accordance with the provisions of the European Social Charter, bonuses and other benefits, including social guarantees, are included in remuneration. Several social guarantees are provided for judges in the Law On Judicial Power: a five-week vacation and granting of additional vacation after five years of service in the office of a judge and the possibility to receive life and health insurance. Thus, the disputed norms are compliant with Articles 1 and 107 of the Constitution.

In turn, the compliance with Article 83 of the Constitution should be evaluated in conjunction with the Basic Principles of the Independence of the Judiciary, approved by the UNO. This document does not contain references to work remuneration as the basis for the independence of the judicial power. Therefore, the State should strive to ensure appropriate remuneration for judges, however, it cannot be related to the perception of fairness and guaranteeing of the independence for judges. The remuneration in effect is commensurate and does affect the independence of judges, therefore, also complies with Article 83 of the Constitution.

Conclusions

I

9. One of the claims included in the applications, is as follows: to evaluate the compliance of the disputed second sentence of Paragraph 7 with Articles 1, 83 and 107 of the Constitution.

The Constitutional Court passed a judgment on 18 January 2010 in Case No. 2009-11-01, adjudicating the second sentence of the Transitional Provisions of the Law On Judicial Power, restated on 14 November 2008, 16 June 2009 and 1 December 2009, as non-compliant with Article 83 of the Constitution and invalid from 1 January 2011.

Section 29, Paragraph one, Clause 5 of the Constitutional Court Law decrees that judicial proceedings of a matter may be terminated until pronouncement of the judgment at the decision of the Constitutional Court, if a judgment has been pronounced in another matter regarding the same subject matter of a claim.

Thus, the claim included in the case regarding the compliance of the disputed second sentence of Paragraph 7 with Articles 1, 83 and 107 of the Constitution should be considered as already adjudicated and the judicial proceedings for this claim should be closed.

II

10. In the answering note and during the court sitting, the Saeima requested the termination of the judicial proceedings of the case in the part regarding the compliance of the words in the disputed third sentence of Paragraph 20, "but not exceeding the monthly salary of the Prime Minister specified in accordance with the Law On Remuneration of Officials of State and Local Government Institutions" with Articles 1, 83 and 107 of the Constitution as this claim does not comply with the requirements of Section 19.², Paragraph one of the Constitutional Court Law.

Section 29, Paragraph one, Clause 3 of the Constitutional Court Law provides that judicial proceedings of a matter may be terminated until pronouncement of the judgment at the decision of the Constitutional Court, if the Constitutional Court establishes that a decision regarding initiation of a matter does not comply with the requirements of Section 20, Paragraph five of the Constitutional Court Law. This Section, inter alia, determines that a constitutional application should conform to the requirements of Section 19.² of the Constitutional Court Law. In turn, it arises from Section 19.², Paragraph one that a person may turn to the Constitutional Court only if there is a direct connection between the restrictions of the fundamental rights of this person and the legal norms disputed in the application.

The Constitutional Court has indicated recurrently that a constitutional complaint may be submitted in cases when, firstly, the infringement of the fundamental rights is direct and specific, the disputed norm infringes upon the applicant himself or herself and, secondly, infringes at the time of submitting the application (see, for example, the Judgment of the Constitutional Court of 20 May 2002 in Case No. 2002-01-03 and the Decision of 11 November 2002 regarding the termination of judicial proceedings in Case No. 2002-07-03) or if an aggregate of conditions exist, which requires the adjudication of the case "now" (see, for example, Paragraph 2.4 of the Conclusions of the Judgment of the Constitutional Court of 22 February 2002 in Case No. 2001-06-03).

With reference to the calculations provided in the annotation to the draft law, the Saeima is of the opinion that none of the fundamental rights of the Applicants specified in the Constitution are infringed by the wording of the third sentence of Paragraph 20 "but not exceeding the monthly salary of the Prime Minister specified in accordance with the Law On Remuneration of Officials of State and Local Government Institutions".

Therefore, the Constitutional Court will ascertain whether the quoted words of the disputed third sentence of Paragraph 20 infringe the fundamental rights of the Applicants.

The referred to words were incorporated in the draft law, the calculations provided in the annotation of which were based on the norms which were found anti-constitutional in the Judgment of 18 January 2010 and invalid from 1 January 2011. Therefore, from 1 January 2011 the remuneration of judges will be calculated in accordance with Section 119.¹ of the Law On Judicial Power, taking into account the disputed third sentence of Paragraph 20, i.e., that the base salary shall be determined in the amount of 73 % of work remuneration provided for by Law, but not exceeding the remuneration of the Prime Minister specified in accordance with the Law On Remuneration of Officials of State and Local Government Institutions. Thus, also if the base salary of a judge is determined in the amount of 73 per cent, the restriction in relation to the maximum amount of remuneration may infringe upon several of the Applicants - judges of district and regional courts with higher levels of qualification.

The finding that an infringement which may be expected in the future or is possible should be acknowledged as an infringement of the fundamental rights has been established in the case law of the Constitutional Court (see Paragraph 2.4 of the Conclusions of the Judgment of the Constitutional Court of 22 February 2002 in Case No. 2001-06-03. and the Judgment of the Constitutional Court of 20 May 2002 in Case No. 2002-01-03). The legal doctrine includes the opinion that the theory of infringement of the fundamental rights also allows the recognition of an infringement expected in the future and a potential infringement as real. I.e., a potential infringement, as well as an infringement expected in the future means that there is a substantiated and feasible possibility that the application of the disputed norm may cause an unfavourable outcome for the applicants of the constitutional complaint. In evaluating the restrictions of the rights of a person, the risk that this restriction will irrevocably infringe upon the particular person and the potential infringement of legal interests of the person should also be taken into account (see Paragraph 12.1 of the Judgment of the Constitutional Court of 18 February 2010 in Case No. 2009-74-01).

The majority of the Applicants are judges who have been appointed to the office by the decision of the Saeima for an unlimited term of office. From 1 January 2011, the disputed third sentence of Paragraph 20 will apply to these Applicants. Therefore, the matter regarding the restriction specified in the disputed third sentence of Paragraph 20 should be adjudicated within the scope of the case to be reviewed.

Therefore, the judicial proceedings in the case in this section should be continued.

11. The Applicants request to evaluate whether the restriction included in the disputed third sentence of Paragraph 20 - i.e., that the work remuneration of judges shall not exceed the remuneration of the Prime Minister - complies with the principle of equality arising from Article 1 of the Constitution.

The Constitutional Court has indicated in several judgments that the principle of legal equality prohibits State institutions from issuing such norms which allow differential treatment of persons in similar and comparable conditions without reasonable justification (see, for example, Paragraph 3 of the Conclusions of the Judgment of the Constitutional Court of 5 December 2001 in Case No. 2001-07-0103). Concurrently, the Constitutional Court has emphasised that the principle of legal equality allows and even requires differential treatment of persons in different circumstances. Only if it is determined that there is an impartial and reasonable basis for it, the principle of equality allows differential treatment of persons in similar circumstances, or equal treatment of persons in different circumstances (see, for example, Paragraph 14 of the Judgment of the Constitutional Court of 2 November 2006 in Case No. 2006-07-01).

In order to ascertain the compliance of the disputed norm with the principle of legal equality, it should be evaluated whether persons are in similar and comparable circumstances, whether the disputed norm provides for differential or equal treatment and whether the differential treatment has an impartial and reasonable basis, i.e., whether it has a legitimate objective and whether the principle of proportionality - proportionate (commensurate) relationships between the resources chosen and the objectives set forward - has been observed.

11.1. The system of work remuneration of judges was developed with the aim of promoting the development of the career of judges and provides for different remuneration of court judges at different levels, thus ensuring commensurate work remuneration. A judge, when transferring to a job at a higher level in the court, must have higher qualification, as the complexity of cases being adjudicated and the significance of the adjudication being made is increasing, therefore, a higher base salary is also anticipated. Thus, a judge is oriented towards his or her development and raising of his or her qualification (see Paragraph 17.3 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01. The principle that judges of different courts have different work remuneration operates in all democratic states. The difference between the lowest and the highest level of remuneration of court judges in different states is not the same. In the European Union it differs ,on average, by more than two times, but in some states - even more than three times [see European judicial systems, Edition 2008 (data 2006): Efficiency and quality of justice, Council of Europe, September 2008, pp. 185, 186]. In Latvia this difference is 2.3 times.

Different remuneration is provided for by the law also for court judges of one level, as well as for chief judges and deputy chief judges who are also judges concurrently.

As higher qualification is required for a court of higher level, and, furthermore, the complexity of cases to be adjudicated is increasing, judges of different courts are not in similar and comparable circumstances. Also the judge and chief judge of the respective court are in different circumstances, as the chief judge manages the work of the institution along with the fulfilment of the duties of a judge.

11.2. The Constitutional Court already established that the restriction, which does not allow the remuneration of the Prime Minister to be exceeded, from 1 January 2011 will apply to judges with higher qualification, among them many chief judges.

Therefore, such situation will arise where equal remuneration will be determined for courts of different levels and judges with different qualifications for different workloads.

12. In order to establish whether differential treatment has impartial and reasonable grounds, it should be ascertained whether it has a legitimate objective and if the principle of proportionality is being observed.

The legitimate objective of the restriction related to the remuneration of the Prime Minister included in the disputed third sentence of Paragraph 20 is neither indicated in the answering notes of the Saeima, nor it can be established from case materials. The Constitutional Court concedes that the objective of the restriction was to organise the system of work remuneration in the State administration. The Prime Minister manages the work of the Cabinet and is the highest official of the executive power, therefore, the decision of the legislator to determine his or her monthly salary as the highest in the State administration would be completely justified and logical.

13. On 15 May 2008, the Saeima adopted the Law On the Structure of the Cabinet, in which the monthly salary of the Prime Minister was determined, which, in the opinion of the legislator, was commensurate with the work performed by the Prime Minister. The legal framework currently in force provides for the remuneration of the Prime Minister, which is more than two times lower than the remuneration initially provided for by the legislator. During the court sitting, the representative of the Ministry of Finance indicated that it had been a political decision. In her opinion, the remuneration of the Prime Minister is not adequate, taking into account his duties.

However, both the selection of the candidate for the Prime Minister and the confirmation of the Prime Minister, as well as his or her term of office and remuneration may be the case of a political choice, therefore, it is not necessary for the legislator to legally justify and substantiate the amount of the monthly salary of the Prime Minister.

The Constitutional Court, within the scope of the case to be adjudicated, neither evaluates the size of the monthly salary of the Prime Minister, nor the system of work remuneration in effect in the State administration.

14. Determination of any of the base salaries paid from the State budget is within the competence of the legislator and to a certain extent it is always a political resolution. However, political decisions are also restricted by the Constitution, therefore, the extent of the discretionary power of the Saeima, upon taking decisions regarding the remuneration of the Prime Minister and judges, is not the same.

It is permissible that the remuneration of the Prime Minister is determined freely, without evaluation. In turn, determination of the remuneration of judges only on the basis of the political will of the legislator is in conflict with the principle of the division of power and the independence of the judiciary. If the legislator was to be given unrestricted rights to affect the salaries of judges according to its political choice, the concept of the judicial independence would lose its meaning (see Paragraph 11.3 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

The condition that the level of remuneration for judges should be such as to protect judges from pressure is recognised as important also in the European Charter on the Statute of Judges, and it is not specified that the level of remuneration should be harmonised with the remuneration of the highest official of the legislative power or executive power as such comparison is not possible (see European Charter on the Statute of Judges and Explanatory Memorandum, Council of Judges, 8-10 July 1998, para.6.1.)

15. The Constitutional Court concluded in the Judgment of 18 January 2010 that the "principle of the division of power does not decree special arithmetic proportions between the levels of remuneration in different branches of power […]. Taking into account various complicated factors, which are typical to the office, it is always controversial to compare offices in different branches of power. These are often completely different jobs, which have a different extent of responsibility. The nature of the work, the degree of stability in fulfilling the duties of the office, the authorisation related to the functions to be performed and the length of holding the office also differ to the same great extent. It is not justifiable to compare offices due to these and other similar reasons and request that officials belonging to one branch of power earn the same as the officials belonging to a different branch of power" (Paragraph 21.4 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

Several Constitutional Courts (for example, in Estonia, Canada and Poland), when resolving matters related to the remuneration of judges, have indicated that the equalisation of remuneration in different branches of power should not be set forward as an objective (see Paragraph 21.4 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

The Constitutional Court already established that there is no reason to doubt the decision of the legislator to determine the monthly salary of the Prime Minister as the highest in the State administration (see Paragraph 12 of this Judgment). Such restriction is included in several laws. However, concurrently, such restriction is not applied to the remuneration of the deputies of the Saeima, as well as to the remuneration of officials of several independent institutions and State undertakings.

The Constitutional Court already established that such restriction does not ensure differential treatment of judges of different levels of court and qualification, i.e., persons in different circumstances. Such equalisation of remuneration, similarly to mechanical equalisation of remuneration in different branches of power, does not have impartial and reasonable grounds.

Therefore, the restriction included in the disputed third sentence of Paragraph 20 - i.e., that work remuneration of judges shall not exceed the remuneration of the Prime Minister specified in accordance with the Law On Remuneration of Officials of State and Local Government Institutions - does not comply with the principles of equality and the division of power.

Thus, the words "but not exceeding the monthly salary of the Prime Minister specified in accordance with the Law On Remuneration of Officials of State and Local Government Institutions" in the disputed third sentence of Paragraph 20 do not comply with Article 1 of the Constitution.

III

16. On 10 December 2009 the Constitutional Court initiated Case No. 2009-111-01 On the compliance of the second sentence of Paragraph 7 and the second sentence of Paragraph 20 of the Transitional Provisions of the Law On Judicial Power (restated on 16 June 2009) with Articles 1, 83 and 107 of the Constitution of the Republic of Latvia. Paragraph 20 of the Transitional Provisions of the Law On Judicial Power in the wording which was in force up to 1 January 2010 is disputed in the referred to case. In turn, on 9 April 2010 Case No. 2010-24-01 was initiated, in which the norm of Paragraph 20 of the Transitional Provisions of the Law On Judicial Power, which regulates the remuneration of judges from 1 January 2010, is disputed.

Norms are disputed in Cases No. 2009-111-01 and No. 2010-24-01 insofar as they relate to the remuneration of judges. The applications include a request to evaluate whether the percentage reduction and restriction of the remuneration of judges, which does not allow to exceed the remuneration of the Prime Minister, complies with Articles 1, 83 and 107 of the Constitution. Therefore, the second and the third sentence of Paragraph 20 is not evaluated within the scope of this case, insofar as it relates to judges of Land Registry Offices.

The percentage reduction in the remuneration of judges is determined both in the disputed second sentence of Paragraph 20, providing for the remuneration to be determined in the amount of 85 per cent of work remuneration from 1 July 2009 to 31 December 2010 (in the subsequent amendments to the Law this date was replaced with 31 December 2009) and in the disputed third sentence of Paragraph 20, providing for it to be determined in the amount of 73 per cent of work remuneration from 1 January 2010 to 31 December 2011.

The percentage reductions in the remuneration of judges concern different periods of time, as well as reduce the work remuneration of judges differently - by 15 and by 27 per cent. These reductions have been performed from the base salary of a judge, which has been frozen since 2007 and which has been found as non-compliant with Article 83 of the Constitution in the Judgment of the Constitutional Court of 18 January 2010. However, neither the Applicants, nor the Saeima have indicated the differences in the actual circumstances, in which both disputed sentences of Paragraph 20 were adopted, and the lawful considerations, due to which these norms should be evaluated separately. Also information, which would attest that the disputed percentage reductions cause essentially different infringements to the Applicants, has not been provided.

Thus, when evaluating the compliance of the disputed norms with the norms of the Constitution, the percentage reduction in force, which relates to the remuneration of judges already recognised as non-compliant with Article 83 of the Constitution, (hereinafter - percentage reduction in the remuneration of judges) should be evaluated.

17. It was concluded in the Judgment of the Constitutional Court of 18 January 2010 that Article 83 of the Constitution includes the prohibition to reduce the remuneration specified for a judge by the law during his or her term of office. Concurrently, the Constitutional Court indicated that in special circumstances - in the situation of economic recession when the State is forced to perform a comprehensive reduction of remuneration in institutions financed from the budget - derogation from the principle of the prohibition of the reduction of remuneration of judges may be allowed (see Paragraphs 10.2 and 10.3 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

The disputed third sentence of Paragraph 20 provides for the disbursement of remuneration of judges for a limited duration in the amount of 73 per cent - by 31 December 2011. Thus, the percentage reduction of the remuneration of judges is permissible provided that the principles arising from the Constitution are observed (see Paragraph 16 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

18. The Applicants dispute the compliance of the percentage reduction of the remuneration of judges with the principles of legitimate expectations (legal stability) and solidarity arising from Article 1 of the Constitution, with the principle of the independence of the judiciary arising from Article 83 of the Constitution and with Article 107 of the Constitution.

Although the applications contain a request to evaluate the compliance of the disputed norms with Article 107 of the Constitution in general, it arises from the applications and that expressed by the representative of the Applicants during the court sitting that essentially the compliance of this norm with the words "every employed person has the right to receive, for work done, commensurate remuneration" in Article 107 of the Constitution is being disputed.

19. In order to evaluate the compliance of the percentage reduction of the remuneration of judges with Article 107 of the Constitution, it should be verified whether this reduction restricts the right to receive commensurate remuneration for work done within the meaning of Article 107 of the Constitution.

19.1. Observing the conclusions in the Judgment of 18 January 2010, such work remuneration of judges should be regarded as commensurate, which is commensurate to the responsibility and load of the office, the restrictions arising from the office, as well as the rank of the office in the constitutional legal order (see Paragraph 21 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). Such work remuneration should be considered as commensurate to the office of a judge which, "in the first instance, is sufficiently competitive in order to attract capable and competent lawyers to the office of the judge. Secondly, [...] is sufficient so that, taking into account the significance and impact of the decisions taken by judges, the prohibition of the combination of offices specified by the law, as well as the extent of the work of a judge, judges might enjoy appropriate economic independence" (Paragraph 20 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

19.2. The rights included in Article 107 of the Constitution relate to the sector of social rights. The Constitutional Court already concluded that this Article also protects the right of judges to receive remuneration which is commensurate to the work done. Concurrently, adequate work remuneration of judges is also included in the content of the independence of judges included in Article 83 of the Constitution (see Paragraphs 6 and 8.2 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). The Constitutional Court already concluded in the Judgment of 18 January 2010 that the matter regarding determination of the remuneration of judges is not only incorporated in the sector of social rights where the legislator has broad discretionary power, but also in such field where the discretionary power of the legislator has stricter restrictions (see Paragraph 20 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

Thus, compliance with the right included in Article 107 of the Constitution to receive remuneration commensurate to the work done should be evaluated in conjunction with the requirement of independence included in Article 83 of the Constitution.

19.3. Although the Constitution does not determine expressis verbis the amount of the remuneration of judges, the content of the principle of the independence of the judiciary included in Article 83 of the Constitution contains a requirement for the legislator to guarantee the financial security of judges (see Paragraph 8.2 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). In 2003, the legislator, upon developing the system of work remuneration of judges, which was capable of guaranteeing the financial security of judges to the extent that it would protect the independence of judges, and including it in Chapter 20 of the Law On Judicial Power, selected a solution that a base salary commensurate to the office should be calculated, taking into account the average monthly gross work remuneration of the persons employed in the State as published in the official statistical notification of the Central Statistical Bureau of the previous year and applying the coefficient 4.5 thereto.

The legislator, upon approving this system, acknowledged that it should be regarded as commensurate to the office of a judge, i.e., firstly, it provides for work remuneration, which is sufficiently competitive in order to attract capable and competent lawyers to the office of the judge. Secondly, a salary determined in such a way is sufficient so that, taking into account the significance of the decisions taken by judges, the prohibition of the combination of offices specified by the law, as well as the amount of the work of judges, judges could enjoy adequate economic independence (see Paragraph 20 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

Such system conforms to the balance of the branches of power and ensures that the judicial power does not have to discuss the size of the salary of judges with the executive power or the legislator, which could pose a threat to the independence of the judicial power. Concurrently, such system is also flexible - it ensures the adjustment of the amount of the salary of a judge to the average work remuneration in the State.

Thus, the legislator has already established that such remuneration should be regarded as remuneration commensurate to the work done by a judge, which provides him or her with adequate economic independence and which is 4.5 times higher than the average monthly gross work remuneration of the persons employed in the State during the previous year.

19.4. At the time, the system of work remuneration of judges was developed because such situation had developed in the State where the work remuneration of judges did not correspond to their work duties and responsibility. Upon introducing this system, it was indicated in the annotation to the draft law that the overly low work remuneration of judges serves as the basis for the lack of serious competition to the office of a judge, and, therefore, it is not possible to ensure the attraction of highly qualified lawyers for work in courts, as well as in addition conditions for corruption are created (see Paragraph 17 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

The annual reports prepared by the European Commission, in which the progress of Latvia as a candidate state of the the European Union in the implementation of the criteria for accession was analysed, in 2000, 2001 and 2002, included an indication to the low remuneration of judges, the insufficient financing for the judicial system and the risks related thereto [see Regular Report on Latvia's Progress Towards Accession, Brussels, 9.10.2002., SEC(2002) 1405, 13.11.2001., SEC(2001) 1749, 8.11.2000., http://www.mfa.gov.lv/lv/eu/3883/3903/, accessed on 26 May 2010]. In turn, the Monitoring Report of 2003 included a positive evaluation that, upon resolving the problems of the independence of courts, amendments to the Law On Judicial Power had been developed and came into force on 1 July 2003, providing for gradual increase in remuneration of judges by year 2006,when the salary of a judge would be several times higher than before the commencement of the reform of work remuneration of judges (see Comprehensive Monitoring Report on Latvia's Preparations for Membership, http:www.mfa.gov.lv/lf/eu/3883/3903/, accessed on 26 May 2010). S. Āboltiņa also indicated during the court sitting that the remuneration of judges prior to the reform of salaries of judges performed in 2003 was not commensurate to the office of a judge (see Vol. 5, p. 123 of the case materials).

In evaluating the amount of remuneration of judges prior to the introduction of the work remuneration system of judges, the Constitutional Court establishes that the base salary of a judge was 1.8 to 2.5 times higher than the average monthly gross work remuneration of persons employed in the State as published in the official statistical notification of the Central Statistical Bureau in the previous year. It may be concluded that both the experts of the European Commission and the legislator found that the base salary of a judge, which was calculated, applying the coefficient 1.8 to 2.5, was not commensurate to the office of a judge.

The remuneration of a judge of a regional court in 2010, similarly as in 2007, 2008 and 2009, is calculated, applying the coefficient 4.5 from the average monthly gross work remuneration of employees in 2005. By the disputed norms this remuneration is reduced by another 27 per cent. Thus, the general reduction in remuneration is caused by the percentage reduction, as well as the base salary of judges in 2010 being calculated by applying a coefficient to the average monthly gross work remuneration of 2005 and not of 2008. Therefore, the amount of the base salary of the judge of the regional court in 2010 is the same as it would have been if it had been calculated from the average monthly gross work remuneration in 2008, applying the coefficient 1.7.

Thus, in 2010, upon determining the remuneration of judges, the coefficient 1.7 is actually applied, which is almost three times lower than the coefficient specified by the legislator for the calculation of a commensurate base salary.

19.5. During the court sitting, the representative of the Ministry of Justice mentioned that in the last year on average 4.36 candidates had applied per one vacancy for the position of a judge in a competition. The Constitutional Court indicates that the number of candidates does not attest that, even in the current circumstances in the State, with a high level of unemployment, true and sufficient competition exists in the State in order to allow the selection of the most qualified lawyers for the office of the judge. Moreover, according to the information provided by the Ministry of Justice, 28 positions out of 529 judge positions are still vacant (see Vol. 5, p. 181 of the case materials).

The Constitutional Court already indicated in the Judgment of 18 January 2010: in order to attract the most competent and knowing specialists to the office of a judge, judges should receive adequate work remuneration in comparison with the work remuneration of other highly qualified lawyers. Concurrently, the Court drew attention to the remuneration of a judge not being directly comparable with the income of advocates, legal advisors or notaries. It is understandable that the objective of such comparison is to attract highly qualified lawyers to the office of a judge, however, a direct comparison would not be correct, taking into account the risks and additional expenditure caused by the financial independence of the referred to offices. In order to determine whether the level of remuneration of judges is adequate, it should be evaluated in conjunction with the general trends and proportion of the level of remuneration in the public sector. Similarly, the Court established that a reasonable commensurability for the determination of remuneration of judges and persons employed in the field of public administration in the legal profession should be ensured (see Paragraphs 21.5 and 21.6 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

During the court sitting, the representatives of both the Saeima and ministries, upon trying to provide arguments for the commensurability of the remuneration of judges, compared it to the average salary of persons working in the State administration and in institutions financed from the State budget, as well as the remuneration of employees of other professions, for example, the remuneration of physicians, teachers and prison guards, however, they did not provide justification in relation to why such social groups should be comparable. The Constitutional Court already indicated that only such comparison with other salaries should be used for the evaluation of the commensurability of work remuneration of judges, which is considered as justified (see Paragraph 21.3 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). Considering the rank of the office of a judge in the constitutional legal order, the responsibility of this office, the requirements for the competence, qualification and experience applied to this office, as well as the requirement for independence and the restrictions arising from the office of a judge, it should be concluded that the remuneration of a judge is not directly comparable with the remuneration of any referred to group. Also it is not correct to compare the size of the average salary as persons employed in the public sector perform work of different qualification, and the remuneration of highly qualified employees, whose proportion is not too high, exceeds the average remuneration considerably. Moreover, the legislator, upon developing the system of work remuneration of judges, already recognised that the remuneration of a judge should be evaluated in relation to the average monthly gross work remuneration of persons employed in the State.

During the court sitting, the representative of the Ministry of Justice indicated that the law provides for social guarantees for judges, including life and health insurance which should also be taken into account in evaluating the commensurability of the work remuneration of judges. It follows from the case materials that, for example, the State paid LVL 159 for health insurance of a district court judge in 2010 and less than LVL 20 - for life insurance (see Vol. 5, p. 62 of the case materials). Undoubtedly, health and life insurance for judges is an additional social guarantee, however, considering the costs thereof per judge, it cannot be regarded that this guarantee significantly increases the remuneration of judges.

Concurrently, the Constitutional Court establishes that the base salary of a judge is considerably lower than the base salary of the head of the legal department of a ministry and the salary of other legal specialists working in other branches of power and independent institutions (see Vol. 5, 1.-61. pp. 1-61 of the case materials). Therefore, the remuneration of a judge is not such that it would attract the most qualified lawyers to the office of the judge.

19.6. It had already been indicated in the annotation to the "Amendments to the Law On Judicial Power" (restated on 14 November 2008) that "remuneration commensurate to the amount and nature of work of judges and judges of Land Registry Offices will not be ensured in 2009". The same risks were also indicated in the summaries of the Law of 16 June 2009 and the Law of 1 December 2009. However, neither the Saeima, nor the representatives of ministries were able to provide information regarding how the referred to risks had been evaluated during the course of the acceptance of the laws and how it had been intended to reduce or prevent them.

Similarly, no materials have been submitted to the Constitutional Court, which would justify the conclusion expressed in the answering note of the Saeima that "currently the work remuneration of judges in the State is commensurate to the nature of the work to be done, the skills and responsibility necessary for the performance of the duties of the office, the requirements and restrictions of law and is balanced with the work remuneration and status of other officials of the judicial system, as well as the general work remuneration in the State (see Vol. 2, p. 6 of the case materials). Already in 2008, when deciding on freezing the base salary of judges, the potential risks were indicated in the annotation to the draft law. However, neither the legislator, nor the executive power evaluated these risks, but performed purely mechanical reduction in the remuneration of judges. Only on 10 February 2010, during the meeting of the Legal Affairs Committee of the Saeima when a decision on the implementation of the Judgment of the Constitutional Court of 18 January 2010 was being taken, the deputies invited the Ministry of Finance and the Ministry of Justice to evaluate the balance of the work remuneration, for the first time (see Vol. 4, pp. 69-76 of the case materials).

Thus, the right of judges included in Article 107 of the Constitution to receive remuneration commensurate to the work done, upon evaluation thereof in conjunction with the requirement of independence included in Article 83 of the Constitution, is restricted.

20. In order to verify whether the restriction of the fundamental rights comply with Article 107 of the Constitution, the Constitutional Court should verify whether the restriction is determined by the law, whether the restriction has a legitimate objective and whether the restriction is commensurate.

21. The disputed norms are included in the Law On Judicial Power with the laws adopted by the Saeima on 16 June 2009 and 1 December 2009, "Amendments to the Law On Judicial Power". The laws have been published in the newspaper Latvijas Vēstnesis [the official Gazette of the Government of Latvia] and are in force.

Restriction for the right to receive remuneration commensurate to the work done is determined by the law.

22. The Constitutional Court already concluded that the prevention of the economic recession, upon the State being in a complicated financial situation, is regarded as such action, which is aimed towards the protection of the rights of other persons and the public welfare, and, therefore, can be recognised as striving towards a legitimate objective.

Thus, the disputed restriction has a legitimate objective.

23. In order to evaluate the commensurability of the restriction, it should be taken into account that the rights included in Article 107 of the Constitution are social rights, as well as that the requirement to determine adequate (commensurate) remuneration of a judge arises from Article 83 of the Constitution. Therefore, the Constitutional Court should verify whether the reduction of work remuneration of judges can be regarded as commensurate and fair, i.e., whether the Saeima, upon accepting the disputed norms, has respected the limits of the discretionary power of the legislator and observed the principles arising from the Constitution (see Paragraphs 11.4, 11.5, 16 and 20 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

24. The Applicants dispute the compliance of the percentage reduction of the remuneration of judges with the principles of legitimate expectations (legal stability) and solidarity arising from Article 1 of the Constitution and with the principle of the independence of the judiciary arising from Article 83 of the Constitution.

25. Article 1 of the Constitution determines that Latvia is an independent, democratic republic. It follows from the notion of the democratic republic included in this Article that the State has a duty to observe a number of basic principles of lawful state and the principle of legitimate expectations (see, for example, the Conclusions of the Judgment of the Constitutional Court of 10 June 1998 in Case No. 04-03(98) and Paragraph 3 of the Conclusions of the Judgment No. 04-07(99)).

The Constitutional Court has indicated that, according to the principle of legitimate expectations, State authorities should be consistent in relation to the regulatory enactments issued thereby and should observe legitimate expectations which may be caused to persons in accordance with a specific legal norm. In turn, an individual, in accordance with this principle, may rely on the permanence and invariability (legal stability) of a lawfully issued legal norm. He or she may confidently plan his or her future in connection with the rights granted by this norm (see, for example, Paragraph 3.2 of the Conclusions of the Judgment of the Constitutional Court of 19 March 2002 in Case No. 2001-12-01and Paragraph 21 of the Judgment of 8 November 2006 in Case No. 2006-04-01).

However, the principle of legitimate expectations does not exclude the possibility for the State to amend the existing legal framework. An opposite approach would result in the inability of the State to respond to changeable living conditions. However, also upon amending the legal framework, the legislator should take into account the limits of its discretionary power.

The Constitutional Court established in the Judgment of 18 January 2010 that the legislator, upon determining the work remuneration of judges, has a certain discretionary power, however, it has strict restrictions in this field (see Paragraph 20 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). Taking into account the principle of the division of power and the principle of the independence of the judiciary, as well as that one of the components of the independence of the judiciary and judges is the stability of the salary, the discretionary power of the legislator, when deciding upon the salary of judges, is different from the discretionary power when deciding upon restrictions in other public fields (see Paragraph 11.4 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

In evaluating the compliance of any legal norm with the legal principles arising from the constitutional fundamental values specified in Article 1 of the Constitution, it should be taken into account that the expression of this principle may differ in different legal fields. The nature of the disputed norms, the link with other norms of the Constitution and the place in the judicial system also inevitably affects the control implemented by the Constitutional Court. I.e., the discretionary power of the legislator in regulation of a specific matter may be wider or narrower and the Constitutional Court should evaluate whether the extent of the discretionary power exerted by the Saeima complies with that prescribed by the Constitution (see Paragraphs 15.2 and 15.3 of the Judgment of the Constitutional Court of 8 November 2006 in Case No. 2006-04-01). Thus, in this case the compliance of the disputed norms with the principle of legitimate expectations should be evaluated in conjunction with Article 83 of the Constitution and the claims arising therefrom for the financial security of judges, which is guaranteed by a stable system of remuneration (see Paragraph 11.3 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

In order to evaluate whether the legal act which has determined the derogation from the rights granted to a person complies with the principle of legitimate expectations, the following should be clarified:

1) whether legitimate expectations have arisen to a person in relation to retention or implementation of specific rights, and

2) whether an adequate balance between the protection of the legitimate expectations of a person and the ensuring of the public interests has been observed (see Paragraph 23 of the Judgment of the Constitutional Court of 26 November 2009 in Case No. 2009-08-01).

26. In the answering note the Saeima indicated that the "normative regulation of the monthly base salary of judges has not been characterised by sufficient stability, which might create legitimate expectations in judges in relation to the application of Section 119.¹ of the Law On Judicial Power in a specific year.. The action of the legislator, consistently extending the transition period for the determination of the monthly base salaries of judges, does not ensure legitimate expectations to such an extent that persons might have relied on the invariability of the normative regulation".

The Constitutional Court already adjudicated in its Judgment of 18 January 2010 that the remuneration system of judges should be stable in the long-term (see Paragraph 11.5 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). Concurrently, it also established that the legislator had recurrently made changes to the legal framework, extending the period for the coming into effect of the remuneration system of judges and, thus, had affected the actual value of the remuneration of judges. Observing the conclusions included in the Judgment of 18 January 2010, such action of the legislator restricts the principle of the independence of the judiciary. Therefore, it cannot be grounds for the same repeated action of the legislator.

27. The Constitutional Court indicated in the Judgment of 18 January 2010 that the regulation contained within the Law On Judicial Power provided judges with the right to rely on their base salaries being disbursed in full amount from 2010, i.e., in accordance with Section 119.¹ of the Law On Judicial Power (see Paragraph 17.8 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

Concurrently, upon evaluating to what extent the legitimate expectations of judges to the remuneration specified by the law are protected by the Constitution, it should be taken into account that a temporary reduction in the remuneration of judges is permissible, if there are serious, socially justifiable reasons and it is reduced, observing the principles reinforced in the Constitution. The legislator has decreed that judges will receive full work remuneration from 2012. Therefore, the percentage reduction has a fixed term.

Within the scope of the case to be adjudicated there is no dispute that in 2009 remuneration was also reduced in other branches of power. It can be determined from the case materials that the average reduction of remuneration in the State budget institutions was approximately 20-30 per cent (see Vol. 4, pp. 95-106 of the case materials).

The Constitutional Court emphasised in the Judgment of 18 January 2010 that "the system of work remuneration of judges itself already provides for automatic reduction of their remuneration in such situation and it would be unfair to allow repeated reduction of work remuneration of judges - both concurrent with the reduction of work remuneration of persons employed in other State institutions and also on the basis of the reduction of the average monthly gross work remuneration (Paragraph 17.2 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). However, in the conditions of economic recession, the decision of the legislator to reduce the work remuneration of judges concurrently with the salaries of persons employed in the public sector was understandable and justifiable due to a lack of funds. However, the legislator should have taken into account the possible outcome of the double reduction and, observing the amounts of reduction, should have evaluated the fairness of the decision taken.

The percentage reduction of the remuneration of judges is permissible, if it is performed in an amount of percentage equivalent to the reduction of the remuneration in other branches of power and is calculated from the work remuneration of judges which they could lawfully expect.

As a result of the percentage reduction of remuneration of judges, the coefficient to be applied to the calculation of the base salary of judges was reduced from 4.5 to 1.7. Therefore, the work remuneration, which the judges could lawfully and justifiably expect, had been actually reduced by 62 per cent.

Therefore, the percentage reduction of the remuneration of judges determined in the disputed norms, although it is temporary, cannot, however, be regarded as commensurate and does not comply with the principle of legitimate expectations.

28. The Constitutional Court established in the Judgment of 18 January 2010 that, even in the conditions of economic recession, financing may only be reduced in such a way that constitutional principles are observed, including the principle of solidarity (see Paragraph 19 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

In accepting the disputed norms which provide for the percentage reduction of the remuneration of judges, neither the legislator, nor the executive power evaluated or justified the amount of the reduction separately for each group of persons employed in the public sector and the attitude towards other groups of the society has not been compared and evaluated either. During the court sitting, the representatives of ministries provided information regarding the evaluation currently performed. I.e., the comparison provided was only information regarding the results of the reduction in work remuneration and only regarding the average salary. It did not take into account the fact indicated in the Judgment of 18 January 2010 that, in recent years, prior to the acceptance of the disputed norms, the work remuneration of persons employed in the State administration was increased considerably, however, the base salary of judges was frozen for several years (see Paragraph 21.6 of the Judgment of the Constitutional Court of 18 January 2010 in Case No.2009-11-01). Therefore, the comparison of changes in work remuneration indicated by the ministries is not justified. It is also not correct to use the average salary as a criterion (see Paragraph 19.5 of this Judgment).

The Constitutional Court already established in the Judgment of 18 January 2010: "Upon deciding on an equal and joint reduction in work remuneration, not only the amount of remuneration of a specific person, but also the volume of work, the different functions, the requirements and restrictions of the office of the representatives of all branches of power - judges, legislative power and executive power, as well as independent institutions, should be taken into account, moreover, a possibility to refuse the fulfilment of any function or a possibility to reduce the number of positions should also be considered. Solidarity has not been observed in the reduction of the salary, if it relates to absolutely all persons employed in the public sector, but the amount of reduction has not been evaluated and justified individually for each group persons employed in the public sector" (Paragraph 19 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

Therefore, solidarity had not been observed in the reduction of salaries.

29. Article 83 of the Constitution determines that: "Judges are independent and only subject to the law". The independence of judges and the court determined in this constitutional norm is one of the basic principles of democratic and lawful state.

The Constitutional Court adjudicated in the Judgment of 18 January 2010 that the independence of judges is closely linked to the implementation of the principle of the division of power (see Paragraph 7.3 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). Therefore, the action of the legislator in the determination of work remuneration of judges is regulated, inter alia, by the principle of the division of power. In order to ascertain whether the legislator, upon accepting the disputed norms, has observed the independence of the branches of power contained within the principle of division of State power, the Constitutional Court should evaluate the procedures for adoption of the disputed norms.

29.1. In both the annotation to the draft law, with which the remuneration of judges was determined in the amount of 85 per cent, and the annotation to the draft law, with which it was reduced to 73 per cent, it is indicated that consultations with the judicial power did not take place. Moreover, justification as to why they did not take place has not been provided. The Ministry of Justice claims otherwise. I.e., the Minister for Justice had participated in the annual Conference of Judges, meetings with the chief judges had been organised and replies had been provided to letters of judges (see Vol. 2, pp. 167-211 of the case materials).

The Constitutional Court indicated in the Judgment of 18 January 2010 that the legislator, prior to taking decisions regarding the operation of courts - both in matters connected to the budget and the implementation of other judicial functions - should give an opportunity to the judicial power or independent institution, representing the judicial power, if such institution has been established, to express the opinion thereof regarding matters which affect the operation of courts (see Paragraphs 8.1 and 11.5 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01). The requirement that it is the duty of the legislator to give the judicial power an opportunity to express the opinion thereof regarding matters which affect the operation of courts, however, resolution of which is within the competence of the legislator, does not prevent the executive power from communicating with the institution representing the judicial power or with the judicial power itself in matters important thereto. However, such relationship of the executive power and the judicial power do not replace the communication implemented by the legislator itself.

Moreover, the Constitutional Court already indicated in the Judgment of 18 January 2010: hearing the opinion of the judicial power within the meaning of the division of power means that, in case this opinion is not taken into account or is only partially taken into account, the legislator has a duty to provide justification for its action to such extent that, if the court had to evaluate the compliance of the action of the legislator (the decision taken) with the Constitution, this justification would provide all the information necessary for the inspection of commensurability (see Paragraph 11.5 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

Concurrently, it should be indicated that the involvement of individual representatives of the judicial power in the resolution of the matters related to remuneration of judges may affect the trust of the society in the independence and impartiality of courts. In discussing budget matters, the judicial power, undoubtedly, is in weaker position than other branches of power. Therefore, direct negotiations between the legislator and individual representatives of the judicial power regarding these matters are not the most suitable way for mutual communication of the branches of power, as during such negotiations the legislator has a possibility to even seemingly affect the judicial power and the adjudications accepted thereby, but even such seeming possibility is not permissible [see the Judgment of the Supreme Court of Canada of 18 September 1997 in the Case of Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island (1997) 3 S.C.R.3].

29.2. Both the Saeima in its answering note and the representatives of the Ministry of Justice during the court sitting, with reference to the Judgment of the Constitutional Court of 13 May 2005 in Case No. 2004-18-0106, indicated that hearing the opinion of the judicial power is comparable to consultations with any person or group of the society and, thus, the conflicting interests of different members of the society are being balanced. The Constitutional Court indicated in the referred to judgment that the principle of equity requires the achievement of as equal balance as possible between the conflicting interests of different members of the society. One of the ways for implementation of this principle is to ensure that the right of a person to participate in taking of different decisions and the development of political will is observed. The Constitutional Court, without evaluating the efficiency of the policy, concurrently indicated that the disputed norm could not be adjudicated as compliant with Article 1 of the Constitution, if the development and adoption process thereof did not comply with the principles of democratic republic (see Paragraph 7 of the Judgment of the Constitutional Court of 13 May 2005 in Case No. 2004-18-0106).

The legislator has a duty to hear the opinion of the judicial power for resolution of matters important to the functioning thereof, and this duty arises from the principle of the division of power. Therefore, not only the extent of the discretionary power of the legislator, i.e., the duty to hear the judicial power and justify the decision thereof, but also the competence of the Constitutional Court when evaluating whether the opinion of the judicial power has been heard and taken into account and whether justification has been provided in cases where this opinion has not been taken into account or has only been taken into account partially, differs significantly(see Paragraph 29.1 of this Judgment).

29.3. It can be determined from the case materials that information regarding the potential problems and risks was provided in the annotations of the draft law "Amendments to the Law On Judicial Power (both the Law of 16 June 2009 and the restated Law of 1 December 2009) submitted to the Saeima. It was indicated therein that "[…] in performing repeated reduction of the work remuneration of judges, the principle of the independence of the judiciary may be affected, […] remuneration commensurate to the nature and volume of the work will not be ensured for judges in 2010 and 2011, [..] negative consequences in relation to further development of the judicial system are possible, including difficulties in filling the positions of judges and judges of Land Registry Offices, […] changing the procedures for the calculation of the monthly base salary prescribed by the Law, the principle of the independence of the judicial power and judges, prescribed in Article 83 of the Constitution and in the Law, is indirectly affected, as well as the principle of legitimate expectations is also affected." The Saeima was informed that the Supreme Court had expressed objections against the reduction of remuneration of judges. The legislator had also received the resolution of the meeting of 20 November 2009 of the Latvian Association of Judges of Latvia, in which it was pointed to the non-compliance of the remuneration of judges, as well as to the budget planning and discussion of the draft law related thereto, taking place in a way unacceptable in a democratic and lawful state (see Vol. 4, p.49 of the case materials).

The case materials and the information provided during the court sitting attests that the legislator had been aware of the risks which existed in connection with the disputed norms, as well as it had been informed regarding objections of the judicial power, however, did not evaluate the respective situation - neither the actual circumstances, nor the legal arguments.

Such situation where the legislator does not take the risk forecasts expressed by specialists in sufficiently serious account and does not take timely risk assessment measures, is not permissible in a lawful state. Without eliminating risks in a timely manner, the judicial system may be weakened to the point where recovery of normal functioning thereof would take a longer period of time and require much more resources. Moreover, doubts might occur as to whether the State is actually lawful.

Therefore, when accepting the disputed norms, the legislator had not respected the principle of the division of power.

30. The percentage reduction of the remuneration of judges in 2009 was performed twice, moreover, from the base salary of judges, which has been frozen since 2007 and which has been found non-compliant with Article 83 of the Constitution in the Judgment of the Constitutional Court of 18 January 2010. The Constitutional Court concluded that the total reduction was incommensurably large and, in determining it, the principle of legitimate expectations had been violated.

In relation to the principles of solidarity and the independence of the judiciary, the Constitutional Court concluded that, in accepting the disputed norms, the procedure was violated.

The legislator has not observed the limits of its discretionary power, the disputed total percentage reduction of the remuneration of judges is incommensurate and does not comply with Article 107 of the Constitution in conjunction with Article 83 of the Constitution.

31. The Law does not only provide authorisation to the Constitutional Court but also imposes responsibility that judgments thereof should ensure legal stability, clarity and peace in social reality (see Paragraph 35.1 of the Judgment of the Constitutional Court of 21 December 2009 in Case No. 2009-43-01 and Paragraph 30 of the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01).

The Constitutional Court has already concluded that it should ensure as far as possible that the situation which could arise from the time when the disputed norms become invalid, an infringement of the fundamental rights guaranteed to the Applicants and other persons by the Constitution, as well as significant damage to the interests of the State or the society are not caused (see Paragraph 35.1 of the Judgment of the Constitutional Court of 16 December 2005 in Case No. 2005-12-0102 and Paragraph 35.1 of the Judgment of the Constitutional Court of 21 December 2009 in Case No. 2009-43-01).

32. The principle of equity requests the achievement of as equal balance as possible between the conflicting interests of different members of the society (see Paragraph 7 of the Conclusions of the Judgment of the Constitutional Court of 13 May 2005 in Case No. 2004-18-0106 and Paragraph 23 of the Judgment of 15 March 2010 in Case No. 2009-44-01). In the particular situation the Constitutional Court should consider the interests of the society in relation to the provision of the stability of the State basic budget, the right of judges to receive remuneration commensurate to the work done and the interests of the society in relation to fair and independent court.

The legislator needs time to eliminate the violations determined in this judgment. Usually the Constitutional Court determines a time period of six months for the development of substantial law amendments or for resolution of budget matters, therefore, the legislator would require time up to 1 January 2011 for these purposes.

If the Constitutional Court decided that the disputed percentage reduction of the remuneration of judges should be repealed from the date of the coming into effect thereof, the disbursement of the base salary of judges in full amount and the reimbursement of the entire undisbursed amount may significantly threaten the stability of the State basic budget and, therefore, the welfare of the whole society, including the Applicants themselves.

It should also be taken into account that the following was determined in the Judgment of 18 January 2010: the second sentence of Paragraph 7 of the Transitional Provisions of the Law On Judicial Power, restated on 14 November 2008, 16 June 2009 and 1 December 2009, is repealed from 1 January 2011. Therefore, from 1 January 2011 the remuneration of judges will be determined in the amount of 73 per cent of the payment commensurate to the work of a judge specified in Section 119.¹ of the Law On Judicial Power. Moreover, the reduction referred to has a fixed term - until 31 December 2011 (see Paragraph 17 of this Judgment). Therefore, when evaluating the lawful outcome of this Judgment, the adjudication in the Judgment of 18 January 2010 should be taken into account.

The Constitutional Court also takes into account the readiness expressed by the Applicants to be solidary with the entire society (see Vol. 5, p. 179 of the case materials). Moreover, it is necessary to ensure natural inclusion of the judicial power in the society. The appreciation and respect of the society towards the judicial power could be undermined, if, in a situation where remuneration is reduced for all groups of the society, it would not be applied to judges.

Thus, the percentage reduction of remuneration of judges provided for in the Law is permissible and should be regarded as joint, if it is temporary and is made on the basis of the remuneration provided for in the Law, which judges could expect lawfully in accordance with that specified in the Judgment of the Constitutional Court of 18 January 2010.

Verdict

On the basis of Section 29, Paragraph one, Clause 5 and Articles 30-32 of the Constitution, the Constitutional Court decided:

1. To find the words in the second sentence and the third sentence of Paragraph 20 of the Transitional Provisions of the Law On Judicial Power, "from 1 January 2010 to 31 December 2011 the remuneration of judges shall be determined in the amount of 73 % of work remuneration specified in accordance with Paragraph 7 of these Transitional Provisions" as compliant with Articles 1, 83 and 107 of the Constitution of the Republic of Latvia, if the work remuneration is determined and disbursed from 1 January 2011 in accordance with Section 119.¹ of the Law On Judicial Power, i.e., in accordance with the Judgment of the Constitutional Court of 18 January 2010 in Case No. 2009-11-01..

2. To find the words in the third sentence of Paragraph 20 of the Transitional Provisions of the Law On Judicial Power, "but not exceeding the remuneration of the Prime Minister specified in accordance with the Law On Remuneration of Officials of State and Local Government Institutions" as non-compliant with Article 1 of the Constitution of the Republic of Latvia and invalid from 1 January 2011.

3. To close the judicial proceedings on the compliance of the second sentence of Paragraph 7 of the Transitional Provisions of the Law On Judicial Power with Articles 1, 83 and 107 of the Constitution of the Republic of Latvia.

This judgment is final and not subject to appeal.

This judgment shall come into force on the date of its proclamation.

Chief Justice G.Kūtris

 

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