L.S. Rossi, Judge of the Court of Justice of the European Union
The Kücükdeveci ambiguity: “derivative” horizontal direct effects for directives?
According to Article 6(1) TEU, the Charter of Fundamental Rights of the European Union (hereinafter, the “Charter” or “CFR”) has the same legal value as the Treaty. After the entry into force of Treaty of Lisbon, the question therefore arises as to whether the ECJ case-law on the direct effects of EU primary law provisions, dating back to Van Gend en Loos, may be extended also to the rights contained in the Charter.
According to a well-established jurisprudence of the Court, which has recently been reaffirmed by the ECJ in its Hein ruling (paras 48-52), the precondition for such direct effects to arise is the existence of an actual conflict of EU and national norms. In other words, direct effects may come into play only when it is impossible to interpret national legislation at issue in a manner consistent with the Charter. In this case, the direct effects of (some of) the Charter’s rights could be inferred from a contrario interpretation of Article 52(5) CFR, as opposed to those provisions of the Charter containing principles, which (according to Article 52(5)) may only be invoked in relations with the implementing European Union or national legislation.
Indeed, the Court already clarified that some provisions of the Charter that have a prescriptive content should in principle have direct effect in vertical situations (ie against State organs). This is, for example, the case of the principles of equal treatment and non-discrimination under Articles 20 and 21 CFR (cf. Glatzel C-356/12 para 43 and Milkova C-406/15, paras 55 and 64).
However, the question of whether the Charter’s rights could also have horizontal direct effects (ie against private parties) has, until recently, remained unresolved. An argument in favour of such effects could, after all, be drawn from the preamble of the Charter, which states that the enjoyment of the rights reaffirmed by the CFR “entails responsibilities and duties with regard to other persons, to the human community and to future generations”.
The ECJ seemed initially to acknowledge a sort of “derivative” horizontal direct effect to some provisions of the Charter, mediated by the directives which give them concrete effect, and anchored to the general principles of EU law or to the constitutional traditions common to the Member States (see, for instance, as for the principle of non-discrimination on grounds of age, Dansk Industri, C‑441/14, paras 22 and 27, reaffirming Mangold, C-144/04, paras 75-78 and Kücükdeveci, C‑555/07, paras 50-51).
As AG Bot has pointed out in his Opinion in Bauer (C‑569/16 and C‑570/16, para 75), this has resulted in an ambiguity, in that the Kücükdeveci case-law could have been construed as recognising to directives giving concrete expression to a general principle codified by the Charter the capacity to be invoked in disputes between private parties. This was in open contradiction with the settled ECJ case-law according to which even a clear, precise and unconditional provision of a directive conferring rights or imposing obligations on individuals, while giving rise to an obligation of consistent interpretation on the part of the national court, cannot of itself be relied upon in disputes between private parties, including for the purpose of setting aside conflicting national legislation (see Faccini Dori, C-91/92, paras 20 and 26, Pfeiffer, C-397/01 to C-403/01, para 109 and Dominguez, C‑282/10, para 42).
From AMS to Max-Planck: the horizontal direct effects of the Charter
It was only very recently that the ECJ case-law shed some light on the unclear legal relationship between the rights contained in the Charter and the directives on which those rights are based and by which they are given concrete expression when invoked in horizontal disputes.
The starting point of the Court’s line of reasoning is represented by the Association de mediation sociale (C‑176/12, paras 45-49). The Court ruled out the possibility to infer from the wording of Article 27 of the Charter, alone and in conjunction with directive 2002/14, a directly applicable rule of law capable of being invoked in a dispute in order to disapply a conflicting national provision. That conclusion was reached on the ground that it was “clear from the wording of Article 27 of the Charter” – which subordinates the workers’ right to information and consultation within the undertaking to the cases and the conditions provided for by EU law and national laws and practice – “that, for this article to be fully effective, it must be given more specific expression in European Union or national law”. In so doing, the ECJ also made clear that it is only the primary law provision and not the directive concretizing it which may have horizontal direct effect, so that the latter “cannot confer on [the former] the qualities needed for it to be relied on directly in a dispute between individuals” (cf. AG Bot in Bauer, point 74).
Nevertheless, AMS left open the question of the possible direct effects of other provisions of the Charter that, unlike Article 27 CFR, make no reference to the respect of “the conditions provided for by national laws and practices”.
In a series of judgments inaugurated by Egenberger in April 2018 (C-414/16, paras 76-79) and followed by IR (C-68/17, paras 69-70), Hein (C-385/17, paras 76-78) and Cresco Investigation (C-193/17, paras 76 and 77), the ECJ has then admitted the possibility of relying on certain rights conferred by the Charter in dispute between private parties. The provisions of the Charter concerned were, precisely, the prohibition of all discrimination on grounds of religion or belief under Article 21(1) CFR, as well as the right to effective judicial protection under Article 47 TFEU. These provisions were deemed to be “mandatory as a general principle of EU law” in the same way as the “the various provisions of the founding Treaties prohibiting discrimination on various grounds”, “ and “sufficient in itself to concern on individuals a rights which they may rely on as such in disputes between them in a field covered by EU law”.
A final and decisive step forward has been marked by the Bauer (C-569/16 and C-570/16, paras 84-86) and Max-Planck (C-684/16, paras 73-75) rulings of November 2018, in which the Court has drawn the same conclusions with respect to the right to a period of paid annual leave affirmed by Article 31(2) CFR, which is not only a social right contained in title IV of the Charter on ‘solidarity’ but is also considered by the Court itself as an “essential principle of EU social law”.
In particular, the Court held that “by providing, in mandatory terms, that ‘every worker’ has ‘the right’ ‘to an annual period of paid leave’ without referring in particular in that regard — like, for example, Article 27 of the Charter […] — to the ‘cases’ and ‘conditions provided for by Union law and national laws and practices’, Article 31(2) of the Charter, reflects the essential principle of EU social law from which there may be derogations only in compliance with the strict conditions laid down in Article 52(1) of the Charter and, in particular, the fundamental right to paid annual leave”. This right “is thus, as regards its very existence, both mandatory and unconditional in nature, the unconditional nature not needing to be given concrete expression by the provisions of EU or national law, which are only required to specify the exact duration of annual leave and, where appropriate, certain conditions for the exercise of that right. It follows that that provision is sufficient in itself to confer on workers a right that they may actually rely on in disputes between them and their employer in a field covered by EU law and therefore falling within the scope of the Charter”.
These judgments appear to have developed a general test to be applied to all the rights protected by the Charter, a test similar – albeit with a different wordings – to that initially set out by the same Court for determining the direct effects of the provision of the Treaty (van Gend en Loos, 26/62, p. 13) and then of directives (van Duyn, 41/74, paras 12-13). This test is based on a twofold condition, according to which the provisions of the Charter are liable to have – not only vertical, but also horizontal – direct effects where they are both (i) unconditional in nature, and (ii) mandatory.
The first condition requires the provisions of the Charter to be “self-sufficient” (cf. AG Bot in Bauer, point 80 and Lenaerts), in that they must not need “to be given concrete expression by the provisions of EU or national law”. The Court has nonetheless stated that the secondary law may specify certain characteristics of the right concerned, such as its duration, and lay down “certain conditions for the exercise of that right” (see Max-Planck, para 74 and Bauer, para 85).
It follows that the numerous provisions of the Charter which refer to rights “as provided for in national laws and practice” are, in principle, deprived of such horizontal direct effect, as the Court has made it clear in AMS (paras 44-45) and confirmed in Max-Planck (para 73) and Bauer (para 84). Although the ECJ has made no explicit reference to it, this can be viewed as an expression of Article 52(6) CFR, according to which “full account shall be taken of national laws and practices as specified in this Charter” (as to the “horizontal reservations” of the Charter, cf. my article in GLJ).
Reference to national laws and practices is made not only by a series of provisions of the Charter concerning social rights, including articles 27 (workers' right to information and consultation within the undertaking), 28 (right of collective bargaining and action), 30 (protection in the event of unjustified dismissal), 34 (entitlement to social security and social assistance), 35 (right of access to preventive health care and the right to benefit from medical treatment), 36 (access to services of general economic interest), but also by articles 9 (right to marry and right to found a family), 10(2) (right to conscientious objection), 14 (freedom to found educational establishments) and 16 (freedom to conduct a business).
The first condition of the Max-Planck test a fortiori rules out also those Charters’ provisions which, by laying down principles to be implemented by legislative and executive acts taken by EU institutions and Member States, are judicially cognisable only in the interpretation of such acts and in the ruling on their legality, pursuant to Article 52(5) CFR. According to the Explanations relating to the Charter, this is, in particular, the case of Articles 25, 26 and 37, while other provisions of the Charter, such as Articles 23, 33 and 34, “may contain both elements of a right and of a principle”.
As regards the second condition – the mandatory nature of the provisions of the Charter – it appears not only to refer to the absolute nature of the right at issue, from which there can be no derogation, but also to incorporate the traditional criteria of clarity and precision required for having direct effects (see Garlsson, paras 65-66 and cited case-law, with regards to the (vertical) direct effect of Article 50 CFR). In so doing, the Court could have implicitly ruled out the horizontal direct effects of those “rights recognised by this Charter for which provision is made in the Treaties” which, in light of Article 52(2) CFR, “shall be exercised under the conditions and within the limits defined by those Treaties.”
Finally, the fact that certain Charter’s provisions may be capable of having horizontal direct effects should not overlook the existence of general constraints to legal effect of the Charter, flowing from the ECJ case-law and the rules governing the interpretation and application of the Charter laid down by Articles 51 and 52 CFR.
The Directives as “pull factor” allowing (horizontal) direct effects of the Charter under Article 51 CFR
As far as Article 51 CFR is concerned, it should first be noted that in its latest case-law the Court has addressed the issue of whether, by limiting the applicability of the Charter to EU institutions and the Member States, the first paragraph of this article could preclude the Charter from being invoked in disputes between private parties.
In Max-Planck (paras 76-79) and Bauer (para 87-90) the Court has held that “although Article 51(1) of the Charter states that the provisions thereof are addressed to the institutions, bodies, offices and agencies of the European Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing EU law, Article 51(1) does not, however, address the question whether those individuals may, where appropriate, be directly required to comply with certain provisions of the Charter and cannot, accordingly, be interpreted as meaning that it would systematically preclude such a possibility”. Based on Egenberger, the Court has acknowledged that “the fact that certain provisions of primary law are addressed principally to the Member States does not preclude their application to relations between individuals”. Moreover, as regards, more specifically, Article 31(2) CFR, the Court emphasised that “the right of every worker to paid annual leave entails, by its very nature, a corresponding obligation on the employer”.
Secondly, the Court has acknowledged in Max-Planck that, although Article 51(1) CFR does not “systematically preclude” that private individuals may be directly required to comply with certain provisions of the Charter, this is without prejudice to the precondition for invoking such a horizontal direct effect, that is, that the legal situation shall fall within the scope of the Charter. According to the same Article 51 CFR as interpreted by the settled ECJ case-law, this is the case when the relevant legal situations are governed by EU law and the national legislation falls within the scope of Union law (see Åkerberg Fransson, C‑617/10, paras 19-21 and AGET Iraklis, C‑201/15, paras 62-64), which cannot be extended by the Charter itself.
The recent ECJ case-law shows how directives and the Charter, notably in horizontal situations, mutually benefit from the respective legal effects in this respect.
When certain rights contained in the Charter are based on and materialised by directives, it is by means of the same directives that the specific legal situation falls within the scope of application of EU law and therefore enters into the orbit of the Charter.
The Charter’s rights, in turn, – insofar as they are applicable and fulfil the relevant conditions laid down by the ECJ case-law – may be invoked in disputes between private parties concerning national provisions implementing or derogating from the corresponding secondary law. This applies also to those rights which were founded on international instruments and in the constitutional traditions common to the Member States and are now enshrined in provisions of the Charter which are ultimately based on directives, even if the latter cannot of itself enjoy such direct effect.
In other words, the Charter cannot confer horizontal direct effects to directives, since the latter, by their very nature, are unable to have such effects. But, as was the case in Max-Planck, the existence of a directive can attract a horizontal situation in the scope of the Charter.
In the synergic functioning of Charter and directives, special attention should be paid not to go beyond their respective scope of application.
Indeed, while the fact that directives and the Charter reinforce each other should be welcomed, there is an inherent risk that this two-way legal relationship may lead to a circular reasoning. This risk could materialise in two situations.
Firstly, as evidenced by the Explanations relating to the Charter, certain rights contained therein are “based” or draws on directives, which in turn concretise these rights. This is notably the case of articles 8 (protection of personal data), 11(2) (freedom of expression and information), 23(1) (equality between women and men), 31 (fair and just working conditions), 32 (protection of child labour and protection of young people at work), 33(2) (family and professional life), but also of article 27 (workers’ right to information and consultation within the undertaking), referring to directives 2002/14/EC, 98/59/EC, 2001/23/EC and 94/45/EC among the “considerable Union acquis in the field” and article 30 (protection in the event of unjustified dismissal), which in addition to the European Social Charter also refers to directives 2001/23/EC and 80/987/EEC.
It is therefore clear that while directives can be assessed, interpreted and applied in the light of the Charter, the latter could not extend the scope of the former, in particular where its own scope is defined by those directives.
Secondly, a risk of circular reasoning may occur when the situations in which fundamental rights protected by the Charter are not covered in their entirety by the relevant directives and could therefore fall (partly) outside the scope of EU law. This holds true especially for minimum harmonization directives, where the higher standards of protection granted by the Charter cannot be invoked against conflicting national legislation which goes beyond the scope of application of the relevant directives.
In such cases, it should not be possible to extend the reach of the relevant directives beyond their scope in order to ensure the effectiveness of the fundamental right granted by the Charter (cf., along this line, Opinion of AG Pitruzzella in CCOO, points 36, 39, 51 and 95-96). In fact, applying by analogy the latter to situations which fall outside the scope of the former, could lead to circumvent Article 51(1) CFR. In order to avoid such a circular reasoning, it would seem appropriate to emphasised that the Charter can only apply (and therefore have horizontal direct effect) to situations which fall within the scope of EU law.
It is to be noted, however, that the Court has already pointed out in Milkova (C‑406/15, paras 52-54) that, when Member States are not required by a Directive to maintain or adopt a given measure but have discretion in that regard, the national legislation that may have been adopted falls within the scope of EU law, resulting in the Charter being applicable. The Court will be able to clarify this point in the cases C-609/17, TSN and C-610/17, AKT, currently pending before it.
Article 52(1) CFR: striking the balance between conflicting rights in horizontal situations
With regard to Article 52 CFR, its first paragraph enables Member States to introduce legislative limitations on the exercise of the rights recognised by the Charter, insofar as they respect the essence of those rights (see Bauer, para 84 and Max-Planck, para 73). According to the same provision, when evaluating these limitations in light of the principle of proportionality, national judges are called to assess whether they “are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others”.
Protecting the rights of other parties is even more a delicate issue in cases where the Charter is deemed to be applied in horizontal situation, and national judges are therefore called on to strike a balance between competing individual rights accordingly (cf. Egenberger, para 80). The question therefore arises as to which court should be competent to strike such a balance, which, in light of Article 52(1) CFR, could also result in possible limitations of the rights protected by the Charter.
When the different rights or interests at the stake are both covered by the Charter, the ECJ can be regarded as the best placed to balance them (see, among others, Sky Österreich, C‑283/11, paras 46-66 and AGET Iraklis, paras 70-104). In any other cases, it can be argued that it is the national court which is called to apply the allegedly directly effective right who is primarily responsible to strike this balance in concreto, after referring a preliminary question to the Court, where appropriate.
The intervention of the ECJ would be necessary not only to verify whether and to what extent the specific provisions of the Charter may have horizontal direct effects and to determine the obligations stemming from the Charter in the specific circumstances, but also to clarify what balance has been struck by the legislature between the competing interests involved in the directive(s) which gives concrete expression to the provision of the Charter at issue (see, in this sense, Egenberger, para 81).
The latest ECJ judgments in Hein and Cresco Investigation, however, indicate the Court’s intention to steer this balancing exercise itself.
In Hein (paras 51 and 61-62), the ECJ recalled that, in order to interpret national legislation in accordance with the Charter’s rights and before eventually disapplying it, national courts are under an “obligation to change established case-law, where necessary, if it is based on an interpretation of national law that is incompatible with the objectives of a directive”. National courts are also prohibited from protecting the legitimate expectation of the losing private party that the case-law of the highest national courts confirming the lawfulness of the contested national provisions will continue to apply, so as to avoid indirectly limiting the temporal effects of the ECJ interpretation.
As for Cresco Investigation (paras 79-86), in order to clarify the scope of the national courts’ obligation to guarantee individuals the legal protection afforded to employees under Article 21 CFR, the Court held that the referring court must not only set aside any discriminatory national legislation, but also apply to members of the disadvantaged group the same advantages as those enjoyed by persons within the favoured category. Furthermore, until measures reinstating equal treatment have been adopted by the national legislature, employers are under an obligation to ensure equal treatment among their employees and notably to recognize to those employees who are not members of any churches entitlement to a public holiday on Good Friday or the corresponding pay.
In cases like these, it seems likely that the national constitutional courts will enter into a debate with the domestic courts concerning the protection of the different rights at stake as well as the outcome of the balancing exercise, assessing the conflicting rights in light of the respective national Constitution: in the new scenario opened by the Max-Planck ruling, new questions of constitutional nature and value will emerge.
Barnard & Peers: chapter 6, chapter 9, chapter 20
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