Thursday, 14 July 2016

More on the horizontal direct effect of the principle of nondiscrimination on the ground of age: Dansk Industries (DI)



Giovanni Zaccaroni, Ph.D (University of Bologna), Junior lawyer FratiniVergano 

In the recent DI case, the Court of Justice has added another chapter to the saga of the difference between the extents of the application of the rights arising from Directive 2000/78/EC on non-discrimination and the general principle of non-discrimination on the ground of age in employment (the Directive also prohibits discrimination in employment on grounds of religion, disability and sexual orientation).

The previous chapters were the notorious cases Mangold and Kucukdeveci, in which the Court dealt with the question of the application of the duty not to discriminate against a person on the ground of his age, which was denied by the national legislation in those cases. The Court faced the issue of the application of the obligation of non-discrimination arising from EU secondary legislation to cases involving two private parties. As it is widely known, there is a case law of the Court of Justice (the Marshall and Dominguez case law) pointing out that directives are not applicable to private parties’ litigation (the horizontal direct effect), as these legal acts cannot establish obligations on individuals, but only on States. In general, the Court has always solved the issue (as in Mangold and Kucukdeveci) declaring the applicability to horizontal litigation of the principle of non-discrimination. In other cases, the Court (as perhaps in Deckmyn) the Court has ordered the national Court to interpret the national legislation in a way which is not contrary to EU law, assuring “the uniform interpretation of EU law”.

This however stays at odd with the fact that general principles should have, according to the doctrine of international law, only an interpretative value, and should not be able to convey rights. How this can be possible, considering that the directive itself is not applicable, and the ratio is precisely to leave to Member states a certain margin of discretion in the application of EU law? And how it is possible to draw a clear distinction between the uniform interpretation of EU law, the application of directives, and the application of the principle of non-discrimination? The answer to the question leads to two different reflections.

The uniform interpretation of the obligation of non-discrimination

The first pertains to the uniform interpretation of the obligations of non-discrimination established in the Treaties and of the effet utile of those provisions. The uniform interpretation and the effet utile of the obligations of non-discrimination have the scope of avoiding that Member States invoke in an instrumental way the limits to the application of European Union law in order to avoid the implementation of its obligations. This was the case in Dansk Industry, where the legislation of the Member state did not provide to the applicant the indemnity for early termination of the working relationship. The worker was at the same time eligible, at the moment of the termination of the contract, for the retirement pension (having reached the age of 60).

In that case, the national judge argued that it was not possible (and this was the reason for the question for preliminary ruling) to apply the directive to the private party litigation. First, because this was contrary to the legitimate expectation of the employer, who, when refusing the indemnity for early termination, was relying on the national legislation in force. Secondly because, as that judge maintained, there is always the possibility to raise an action for damages in the appropriate court in order to obtain the proper compensation from the Member State. Accordingly, the judge wanted to know if it was appropriate to invoke the principle of non-discrimination and not apply the national legislation, given that the principle can be retained as having the same scope of application (if not wider) of the directive.

The Court, as well as the Advocate General, answered that the national judge was right in considering the Directive as such was not applicable, given that the case involved litigation between private parties. However, the Court also maintained that the national judge has always the duty to interpret national law in a way that it is consistent with the directive. In this case, clearly, this was not possible, as there was legislation in force that explicitly excluded the right to indemnity for those workers already entitled to retirement pension. The Court said that while it is not possible to apply the national legislation according to EU law, then the national judge should rely, without asking the Court of Justice permission, on the obligation arising from the principle of non-discrimination on the ground of age in order to disapply the national provision which is discriminatory.

It is most likely the first time in which the Court state in such a clear way the difference between the application of uniform interpretation and the application of the general principles. In cases as Mangold and Kucukdeveci, the Court referred to the general principle, giving the impression that the Directive and the general principle were very similar in scope and binding force, leaving an open inconsistency between the solution provided and its Marshall and Dominguez case law.

In this DI judgment, however, the Court makes a step further. The Court holds that the principle of non-discrimination is applicable as long as the directive is not applicable, providing it with a subsidiary direct effect. Many scholars were already theorizing the existence of such a subsidiary direct effect (and the President of the CJEU, Lenaerts, clarified that in his article: The principle of equal treatment and the European Court of Justice, Il Diritto dell’Unione Europea, 461–482) but this theoretical construction was not substantiated by the legal reasoning of the Court. Now it is clear that, even if the directive establishing the obligation of non-discrimination is not applicable, then the principle can be applied.

The singular importance of the principle of non-discrimination

The reason for this application is to be found in the second point discussed by the Court, which is what makes this case particularly important. The principle of non-discrimination (on the ground of age) has been explicitly declared by the Court as an example of a justiciable rule in AMS. On the other hand, in the same case the Court ruled that the principle of collective action contained in Article 27 of the Charter of Fundamental Rights of the European Union did not create free-standing rights in a similar way.

But why is the non-discrimination principle to be considered so important that it can be triggered when other principles do not enjoy the same privilege? Moreover, why this is done in a way which gives to the Court of Justice a formidable weapon to require national courts to disapply the national provision even in cases in which the EU legal act (the Directive) has been conceived to leave to Member States a wide margin of discretion?

The reason is the importance of the principle of non-discrimination, which takes inspiration from the equality principles embodied in the various national constitutions. This principle is even more important for the history of the process of the European Union integration, up to the point that it is not simply a general principle (which is, by the way, an extremely important legal instrument) but that it is a structural and fundamental principle, which informs the whole European Union action. Under this perspective it is easy to imagine how many of the international agreements the EU has already negotiated or it is about to negotiate (as TTIP or the EU-Turkey Joint Statement on migration) can be challenged in front of the Court. It is, for instance, quite easy to predict what will be the fate of provisions who allow for the mutual recognition or the presumption of compliance of EU-US standards in the free movement of services or of workers, or of provisions which favor a specific category of migrants against all the others.

In all these cases it is not just the Court of Justice which has the power to disapply the EU provision which discriminates against the specific category of people, but every single EU national court as regards national provisions. This conclusion, which can sound obvious to many of the EU law geeks, it is not easily understood at national level, as many courts (understandably) don’t feel  confident in exercising what in practice is a “diffuse control of constitutionality” (i.e. the compliance of national and EU legislation with a parameter which lies at the top of the hierarchy of the sources of law).

Conclusion

The Court of Justice, with its interpretation of the notion of general principles, has provided the national courts with an extremely effective weapon that confers on each single national judge the power to be the guardian of the unwritten EU constitution. However, there are still many open questions arising in the mind of a lawyer forged in the tradition of codification: should we imply that the same importance is to be accorded to all the different grounds of discrimination included in the Charter (more than 14) or listed in the Treaty (Article 19 TFEU)? This is not an easy question and, for the supporter of consistency as a fundamental legal argument in the reasoning of the Court, should bring to the conclusion that at the present date there is a “differentiation” in the application of the equality principle in the EU.

Barnard & Peers: chapter 9, chapter 20

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