The relationship between the EU Charter of Fundamental Rights and Directives in horizontal situations

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

Photo credit: The Dugger Law Firm, PLLC

Religious discrimination at work: Can employees be fired for getting divorced?

Ronan McCrea, Professor of Constitutional and European Law at University College London

The Framework Directive on Discrimination in Employment came into force in 2003 but it took 14 years for the Court of Justice to issue its first major decision on its religion-related provisions. However, we have now had four major decisions in the last year and a half so the precise impact of the Directive’s religion-related provisions is now becoming clear.

We now know that a consistently-applied neutrality requirement that prevents employees wearing symbols of religion or belief at work will be considered to be indirectly, not directly discriminatory (the Achbita case), that the court takes a narrow view of what counts as a genuine and determining occupational requirement justifying direct discrimination on religious grounds (Bougnaoui and Egenberger cases) and that the ability of religious employers to restrict roles to co-religionists in order to protect their ethos was subject to a proportionality test (the Egenberger  case.) (On Achbita and Bougnaoui, see discussion here; on Egenberger, see previous discussion on this blog here)

The latest judgment, in the case of IR v JQ addressed the matter of discrimination on grounds of religion addressed by the Court in Egenberger, but also covered the final major outstanding issue in relation to the religion-related provisions of the Directive; the scope for those employers, termed organisations ‘the ethos of which is based on religion or belief’ by the Directive, to impose an obligation on their employees to behave with loyalty towards the religious ethos of their employer.

However, it did so in a slightly unusual way because in this case the employee in question contested the fact that he had been placed under a greater duty of loyalty to his employer’s ethos because he belonged to the same faith as his employers. In other words, he alleged that the obligation of loyalty had been applied to him in a discriminatory way rather than simply alleging that an excessive obligation had been imposed.

In this case the employee, ‘JQ’, was the head of internal medicine in a hospital run by ‘IR’. IR is a not-for-profit, Catholic organization that runs a number of organisations including hospitals as part of what the Court of Justice called ‘an expression of the life and nature of the Roman Catholic Church’. JQ is a Roman Catholic. He was married in a Roman Catholic ceremony but divorced in early 2008. He subsequently married a new partner in civil ceremony. When his employer became aware of this he was fired from his post in March 2009.

His former employer argued that the dismissal of JQ was justified because by remarrying, he had breached the duty (contained in his contract) to be loyal to the ethos of the Catholic Church. JQ argued that his dismissal amounted to impermissible discrimination on the basis that an employee who was not a Catholic would not have been fired for entering into a second marriage.

EU law does allow (but does not require) Member States maintain in force exemptions from the duty not to discriminate. Article 4(2) of the Directive states: 

‘…. in the case of occupational activities within churches and other public or private organisations the ethos of which is based on religion or belief, a difference of treatment based on a person's religion or belief shall not constitute discrimination where, by reason of the nature of these activities or of the context in which they are carried out, a person's religion or belief constitute a genuine, legitimate and justified occupational requirement, having regard to the organisation's ethos. This difference of treatment shall be implemented taking account of Member States' constitutional provisions and principles, as well as the general principles of Community law, and should not justify discrimination on another ground.’ 

  

The key issue in the reference was whether the scope of the exemption from the duty not to discriminate on grounds of religion or belief granted by German law to religious organisations was compatible with Directive 2000/78. JQ’s Catholic employers believed it necessary to place employees with managerial roles who shared their Catholic faith under a greater obligation of loyalty than that placed on non-Catholic employers. German law implementing Directive 2000/78 provides them with significant scope to do so. It provides that:

  

‘The prohibition of a difference of treatment on grounds of religion or belief shall not affect the right of the religious communities mentioned in subparagraph 1, institutions affiliated to them, regardless of their legal form, or associations that devote themselves to the communal nurture of a religion or belief, to require their employees to act in good faith and with loyalty in accordance with their self-perception.’(paragraph 9(2) of the Allgemeine Gleichbehandlungsgesetz,)

This legislation has been interpreted in the light of the German constitutional guarantee that states: 

‘Religious societies shall regulate and administer their affairs independently within the limits of the law that applies to all. They shall confer their offices without the involvement of central government or local authorities.’ (Grundgesetz Article 140).

The German courts have consistently taken the approach that, in the light of this constitutional guarantee of self-determination, religious institutions may decide in accordance with their own faith-defined self-perception what is necessary to fulfil their religious mission. This means that religious employers may themselves definitively determine (subject only to plausibility review by the courts) what constitutes acting ‘in good faith and with loyalty to the ethos of the organisation’ within the meaning of Article 4(2) of the Directive.

The litigation between JQ and IR spent several years moving between various levels of the German court system (including a hearing before the Bundesverfassungsgericht (Federal Constitutional Court) which did not refer the matter to the Court of Justice).

When it came before the Bundesarbeitsgericht (Federal Labour Court) for the second time, the court decided to make a reference to the Court of Justice under Article 267 in order to ascertain whether the broad scope granted by German law to religious employers to determine the scope of the duty of employees to be loyal to the employers’ ethos was compatible the provisions of Article 4(2) of the Directive. In particular, the national court wanted to know whether a religious employer of a particular faith was entitled to apply a more stringent duty of loyalty in respect of employees who are also members of the faith than is applied to those who are of a different religion or of no religion.

The Court found that German law provided excessive scope to religious employers in this regard. This was not surprising as the Court of Justice had recently come to the a similar conclusion in the Egenberger case where a non-religious woman had been denied a job in a Protestant foundation.

In that case, the Court of Justice ruled that a decision by a religious employer to discriminate against an individual on grounds of their religion must satisfy a proportionality test. This test included an obligation on the religious employer to show that discriminating on grounds of religion was necessary because of the importance of the job in question for ‘the manifestation of the religious body’s ethos or its right of autonomy’.

In addition, the Egenberger ruling stressed that the right to effective judicial protection under Article 47 of the Charter of Fundamental Rights meant that an employee claiming to be the victim of discrimination must be able to contest whether such discrimination complied with the tests of genuineness, necessity and justification before national courts. Compliance with such tests could not be decided definitively by the religious body itself, something which goes against the German approach of allowing the self-perception of the religious institution to determine this issue, subject only to plausibility review by the courts.

The Egenberger ruling therefore made it clear that discriminatory decisions by employers must be subject to objective justification, including compliance with a proportionality test (rather than the self-perception of the religious body) as well as being contestable before an independent court.

The key question in JQ v IR was whether the principles outlined in Egenberger by the Court of Justice for dealing with cases of less favourable treatment on grounds of religion in general, would also apply when the less favourable treatment related to the imposition of an obligation of loyalty towards the ethos of the employer. Unsurprisingly, the Court held that the same principles apply and held that where an employee has been accorded less favourable treatment on account of his religion (in this case by requiring greater loyalty to the employer’s Catholic ethos from Catholic employees), such discrimination must comply with a proportionality test and that compliance must be capable of being assessed by an independent court, not the religious body itself. It noted that the ability of employers to impose a duty ‘to act in good faith and with loyalty to organisation’s ethos’, provided by Article 4(2) is subject to the proviso that this duty can be imposed only ‘provided that [the Directive’s] provisions are otherwise complied with’.

This means that the lawfulness of a difference in treatment depends not on the self-perception of the employer but:

‘on the objectively verifiable existence of a direct link between the occupational requirement imposed by the employer and the activity concerned. Such a link may arise either as a result of the nature of the activity, for example where it involves taking part in the determination of the ethos of the church or organisation in question or contributing to its evangelising mission, or of the circumstances in which the activity is to be carried out, for instance, where it is necessary to ensure that the church or organisation is presented in a credible fashion to the outside world’

In addition the difference in treatment must be shown to be genuine, legitimate and justified. In this regard, the Court reiterated its ruling in Egenberger that:

‘”genuine” means that professing the religion or belief on which the ethos of the church or organisation is founded must be necessary because of the importance of the occupational activity in question for the promotion of that ethos or the exercise by the church or organisation of its right of autonomy, as recognised by Article 17 TFEU and Article 10 of the Charter’

‘”legitimate” shows that the EU legislature intended to ensure that the requirement of professing the religion or belief on which the ethos of the church or organisation is founded is not used to pursue an aim that has no connection with that ethos or with the exercise by the church or organisation of its right of autonomy’

‘”justified” implies not only that a national court can review whether the criteria laid down in Article 4(2) of Directive 2000/78 are being complied with, but also that the church or organisation imposing the occupational requirement is obliged to show, in the light of the factual circumstances of the individual case, that the alleged risk of undermining its ethos or its right of autonomy is probable and substantial, so that the imposition of such a requirement is necessary’.

This means that the imposition of a greater duty of loyalty on Catholic employees only be justified if ‘bearing in mind the nature of the occupational activities concerned or the context in which they are carried out, the religion or belief is a genuine, legitimate and justified occupational requirement in the light of that ethos’.

While it acknowledged that it was ultimately for the national court to reach a conclusion on the facts, the Court of Justice gave a strong steer to the national court noting that:

‘Adherence to that notion of marriage does not appear to be necessary for the promotion of IR’s ethos, bearing in mind the occupational activities carried out by JQ, namely the provision of medical advice and care in a hospital setting and the management of the internal medicine department which he headed. Therefore, it does not appear to be a genuine requirement of that occupational activity within the meaning of the first subparagraph of Article 4(2) of Directive 2000/78’

And that:

‘that positions of medical responsibility entailing managerial duties, similar to that occupied by JQ, were entrusted to IR employees who were not of the Catholic faith and, consequently, not subject to the same requirement to act in good faith and with loyalty to IR’s ethos’

The Court also confirmed the position it took in Egenberger that the acknowledgement in Article 17 of the Lisbon Treaty that the Union respects the status of churches and religious associations under national law merely ‘expresses the neutrality of the European Union towards the organisation by the Member States of their relations with churches and religious associations and communities, that article is not such as to exempt compliance with the criteria set out in Article 4(2) of Directive 2000/78 from effective judicial review’.

Giving Effect to the Ruling: Indirect Effect and Mangold Principles

The national court also asked a number of questions in relation to its ability to give effect to the Directive as interpreted by the Court of Justice. When making its reference, the national court indicated that it suspected, correctly as it turned out, that German law was inconsistent with the Directive. As this was a dispute between two private parties, vertical direct effect of the Directive per se was not available. In its ruling the Court of Justice took the opportunity to remind the national court that the obligation of consistent interpretation set out in Marleasing and subsequent cases, included an obligation to adapt established national case-law.

Interestingly, the Court ruled that even if it was not possible to interpret German law consistently with the directive, the national court could still give effect to Directive 2000/78 in this case by disapplying the relevant national law. In doing so it relied, as it had in Egenberger, on the controversial line of cases arising from the Mangold ruling in which the Court held that Directive 2000/78 merely codified a pre-existing EU legal obligation to respect the general principle of equal treatment which was not dependent on any implementing measures by the Member State. This obligation applied notwithstanding the fact that JQ had been fired before the Charter of Fundamental Rights came into force because the principle of equal treatment was already binding as it was a general principle of law arising from the common constitutional traditions of the Member State.

Significance

With four major rulings in 18 months, the outlines of the approach of the Court of Justice to the religion-related provisions of Directive 2000/78 are now reasonably clear, giving us a clearer picture of the approach of the Union to religion’s role in the legal system more generally.

First, it is clear that the Court is committed to an approach that involves balancing of clashing rights through the framework of proportionality. Under EU law there is a sliding scale of religious autonomy with decreasing autonomy for religious employers the more distant a role is from the core religious functions. Furthermore, any discriminatory decisions must be capable of being challenged in a meaningful way before the courts. Religious bodies cannot determine for themselves the degree of exemption from anti-discrimination rules necessary to protect their ethos.

This is in contrast to the approach of the US Supreme Court which has adopted an approach based on the idea of a ‘ministerial exemption’ under which the state has no right to assess decisions of religious bodies in relation to roles that have a religious element and indeed, to the approach of the European Court of Human Rights which upheld, in cases such as Fernández-Martínez v Spain, an arrangement under which the automatic termination of the contract of a religion teacher in a public school on foot of decision of a local bishop to withdraw his endorsement of that teacher was subject to very limited review. The commitment of the Court to proportionality as a means to resolves clashes in this area means that it is likely that, when it is faced with a case of the non-discriminatory application of an ethos-loyalty obligation to an employee, it will insist that such an obligation be limited in order to ensure that it does not have a disproportionate impact on other fundamental rights such as the right to privacy of freedom of expression.

Second, the Court is keen to limit its tolerance of policies that have potentially discriminatory implications on grounds of religion, to instances where the policy is consistently applied. Thus, in Achbita and Bougnaoui it stressed that neutrality policies would be considered indirectly rather than directly discriminatory only if consistently applied to all statement of all forms of religious, philosophical and political belief. Similarly, in JQ v IR it found fault in the fact that the loyalty obligation would not have been applied to a non-Catholic in JQ’s role. The Court has also made it clear that, as in Bougnaoui, in cases where a policy is shown to be directly discriminatory it will not give a wide interpretation to the concept of a ‘genuine and determining occupational requirement’. This approach also involves a commitment to treat religious and non-religious beliefs equally, something that sets EU law apart from approaches in many other areas of the world.

Finally, the Court regards the Treaty commitment in Article 17 to respect the status of religious bodies in national law not as a mandate to exempt the legal privileges of religious bodies from review for their compliance with EU legal norms but as a statement of the EU’s neutrality in relation to the different ways in which Member States organise their relations with churches and religious bodies.

Finally, for EU law more generally, recent religion cases have underscored the Court’s determination to persevere with its controversial approach of regarding Directive 2000/78 as doing no more than giving specific expression to an already self-executing general principle of non-discrimination in EU law.

Barnard and Peers: chapter 9, chapter 20

Photo credit: Lifenews.com

Salvation outside the church? The ECJ rules on religious discrimination in employment

Dr Ronan McCrea, Senior Lecturer in Law, University College London

Background

The Court of Justice has issued its first major ruling on the reconciliation of the autonomy rights of religious organisations with the right of employees (or potential employees) of such organisations to be free of discrimination.

In 2012 Vera Egenberger applied for a fixed term post advertised by the Evangelisches Werk für Diakonie und Entwicklung, which is a body associated with the Evangelische Kirche in Deutschland (a German Protestant church). The post advertised sought a person who could prepare a report on Germany’s compliance with the United Nations International Convention on the Elimination of All Forms of Racial Discrimination. Ms. Egenberger had significant experience in this area and applied for the post. However, there was a problem. Ms. Egenberger is a person who does not have a religious faith and the relevant advert included the following statement:

‘We require membership of a Protestant church, or of a church which is a member of the Arbeitsgemeinschaft Christlicher Kirchen in Deutschland (Cooperative of Christian Churches in Germany), and identification with the welfare mission. Please state your membership in your curriculum vitae.’

Ms. Egenberger was not called for interview. She took a case in the German courts alleging discrimination on grounds of religion.

As discrimination in employment on grounds of religion is regulated by EU law, in the form of Directive 2000/78 (which also bans discrimination on grounds of disability, age or sexual orientation in employment), when the case came before the Bundesarbeitsgericht (Federal Labour Court) it decided to make a reference to the Court of Justice to clarify the interpretation of EU law. The key issue in the reference was whether the scope of the exemption from the duty not to discriminate on grounds of religion or belief granted by German law to religious organisations was compatible with Directive 2000/78.

The issue of exemptions from the prohibition on discrimination on grounds of religion for religious employers is addressed by Article 4(2) of the Directive which states:

‘…. in the case of occupational activities within churches and other public or private organisations the ethos of which is based on religion or belief, a difference of treatment based on a person's religion or belief shall not constitute discrimination where, by reason of the nature of these activities or of the context in which they are carried out, a person's religion or belief constitute a genuine, legitimate and justified occupational requirement, having regard to the organisation's ethos. This difference of treatment shall be implemented taking account of Member States' constitutional provisions and principles, as well as the general principles of Community law, and should not justify discrimination on another ground.’ (emphasis added).

The relevant German law implementing the directive provided that:

‘….a difference in treatment based on religion or belief shall also be admitted in the case of employment by religious societies, by institutions affiliated therewith, regardless of legal form, or by associations whose purpose is to foster a religion or belief in the community, where a given religion or belief constitutes a justified occupational requirement, having regard to the employer’s own perception, in view of the employer’s right of autonomy or by reason of the nature of its activities.’ (paragraph 9(1) of the Allgemeine Gleichbehandlungsgesetz, emphasis added).

This legislation, has been interpreted in the light of the German constitutional guarantee that states:

‘Religious societies shall regulate and administer their affairs independently within the limits of the law that applies to all. They shall confer their offices without the involvement of central government or local authorities.’ (Grundgesetz Article 140).

This has meant that the consistent approach of the German courts has been that the decision as to whether a particular role within a religious organization needs to be limited to those of a particular faith was for the religious employer to take. The role of the courts has been limited to plausibility review, on the basis of a religion’s self-conception defined by belief.

The national court harboured doubts as to whether the approach of German law in allowing the religious employer to determine for itself, subject only to plausibility review by the courts, whether its beliefs required a particular role to be reserved to those of a particular faith, was compatible with the directive and therefore made a reference to the Court of Justice under Article 267.

The Ruling: A More Balanced Approach Needed

The Court of Justice’s ruling made it clear that German law had gone too far by allowing such a wide scope for religious employers to determine for themselves whether a particular job could be reserved to those of a particular faith.

It noted that Article 4(2) of the Directive allowed the discrimination on grounds of religion only if having regard to the nature of the activity concerned or the context in which it is carried out, ‘religion or belief constitute[s] a genuine, legitimate and justified occupational requirement, having regard to the organisation’s ethos’ and concluded that:

‘if review of compliance with those criteria were, in the event of doubt as to that compliance, the task not of an independent authority such as a national court but of the church or organisation intending to practise a difference of treatment on grounds of religion or belief, [this provision of the Directive] would be deprived of effect.’

Interestingly, although the employer had cited both the guarantee of freedom of religion or belief (Article 10 of the Charter of Fundamental Rights) and Article 17 of the Treaty on the Functioning of the European Union, which provides that the Union ‘The Union respects and does not prejudice the status under national law of churches and religious associations or communities in the Member States’, the Court also relied heavily on constitutional principles to bolster its conclusion that excessive leeway had been granted to religious employers by German law.

The Court noted that Directive 2000/78 was merely a ‘specific expression, in the field covered by it, of the general prohibition of discrimination laid down in Article 21 of the Charter’ (which sets out a general ban on discrimination). It also noted that that when an individual establishes before a national court facts from which it may be presumed that there has been direct or indirect discrimination then, under Article 10 of the Directive, it is for the respondent to prove that there has been no breach of that principle. Thus, the need under Article 47 of the Charter to provide effective judicial protection of EU law rights meant that restricting the ability of the national courts to review the decision of an employer to impose a discriminatory requirement would be contrary to EU law.

Next, the Court held that the objective of Article 4(2) of the Directive was to ensure “a fair balance” between the autonomy rights of religious organisations and the right of workers to be free from discrimination. The Directive “sets out the criteria to be taken into account in the balancing exercise” and in the event of a dispute it must be possible for the balancing exercise to be reviewed by a national court. For the Court, the commitment to respecting the status of religious organisations in Article 17 of the Treaty could not change this conclusion.

That article’s function was:

‘to express the neutrality of the European Union towards the organization by the Member States of their relations with churches and religious associations and communities […] [and] is not such as to exempt compliance with the criteria set out in Article 4(2) of Directive 2000/78 from effective judicial review.’

Guidance on the Test to Be Applied

Having found that the German legislation was not compatible with the Directive the Court then had to address two further interesting issues. First, it had to give guidance to the national court on the question of how the ‘fair balancing’ ought to be carried out and then it had to advise on how to implement the consequences of its finding in the case.

In relation to how to carry out the ‘fair balancing’ the Court had to walk a tightrope. It acknowledged that under ECHR case law, states are precluded from assessing the legitimacy of the beliefs of a religious organization. However, it also had to ensure that the imposition of an occupational requirement relating to religion or belief was, in the words of the Directive ‘genuine, legitimate and justified, having regard to [the] ethos [of the religious employer]’. Thus it had to decide how to recognize the necessarily subjective requirements of the ethos of the employer, with the seemingly objective requirements of the ‘genuine, legitimate and justified’ test.

The Court adopted an approach that is significantly more objective than the approach taken in German law. It set out a test under which religious organisations must show an ’objectively verifiable existence of a direct link between the occupational requirement imposed by the employer and the activity concerned.’ Thus, in order to meet Article 4(2)’s requirements that the difference in treatment on grounds of religion be ‘genuine, legitimate and justified’ the Court held that:

‘To be considered ‘genuine’: ‘professing the religion or belief on which the ethos of the church or organisation is founded must appear necessary because of the importance of the occupational activity in question for the manifestation of that ethos or the exercise by the church or organisation of its right of autonomy.’

To be considered ‘legitimate’ it found that the national court must ‘ensure that the requirement of professing the religion or belief on which the ethos of the church or organisation is founded is not used to pursue an aim that has no connection with that ethos or with the exercise by the church or organisation of its right of autonomy.’

And to be considered justified the CJEU set down that ‘the church or organisation imposing the requirement is obliged to show, in the light of the factual circumstances of the case, that the supposed risk of causing harm to its ethos or to its right of autonomy is probable and substantial, so that imposing such a requirement is indeed necessary.’

Finally, although a proportionality requirement is not included in the text of Article 4(2) (and is included in other Articles of the Directive), the Court held that as proportionality is a general principle of EU law, the exemption given by Article 4(2) is to be read as being subject to a proportionality requirement.

Applying the Ruling

Given the possibility of a clash between German law and the requirements of the Directive the German court asked for guidance on how it should proceed if it proved impossible to interpret domestic law so as to comply with the Directive (bearing in mind the contra legem exception in the Marleasing line of case-law on the indirect effect of Directives; ie a national court cannot be required to interpret national law consistently with a Directive to the extent of ignoring the express wording of national law).

The Court seemed to doubt that an interpretation consistent with EU law was impossible, noting that the duty to interpret national law consistently with EU law included a duty for national courts ‘to change their established case-law where necessary’ (referring to the DI judgment on age discrimination, discussed here). However, it went on to say that should consistent interpretation prove impossible then the Court should disapply national law and give effect to the relevant EU law rights itself.

It justified this position on the basis that Directive 2000/78 did not establish the right to equal treatment. Rather it sets out a framework for combatting discrimination on various grounds. The right to equal treatment is, the Court held, a general principle of law and is enshrined in Article 21 of the Charter. Given that Article 47 of the Charter requires that adequate judicial protection be given to such rights, national courts have to ensure ‘the judicial protection deriving for individuals from Articles 21 and 47 of the Charter and to guarantee the full effectiveness of those articles by disapplying if need be any contrary provision of national law.’ This develops earlier case law on the issue of when the Charter itself does (and does not) have direct effect, in particular the AMS case discussed here; and it confirms the UK case law on the direct effect of Article 47 (Vidal-Hall and Benkharbouche, discussed here and here).

Conclusion

The Court of Justice has given a notably constitutionalized interpretation of the Directive in this case. It has relied on the Charter and general principles of law to read a proportionality test into Article 4(2) that did not appear in the text. It has insisted on proportionality as the framework within which the ‘fair balancing’ of the autonomy rights of religious employers and equal treatment rights of employees must take place.

This approach is in tension with recent trends in the caselaw of the Strasbourg Court. In cases such as Fernandez Martinez v Spain, the Court of Human Rights had moved away somewhat from the balancing of rights seen in its earlier caselaw and had moved closer to the ‘ministerial exemption’ model used in the United States, under which religious organisations have an absolute exemption from non-discrimination laws in respect of roles that include religious functions. Given the strong emphasis placed on proportionality by the EU legal order, unsurprisingly, in Egenberger, the Court of Justice has clearly come down in favour of the balancing approach (see R. McCrea “Singing from the Same Hymn Sheet? What the Differences between the Strasbourg and Luxembourg Courts Tell Us about Religious Freedom, Non-Discrimination and the Secular State” Oxford Journal of Law and Religion (2016) 5(2) 183-210, 198-99).

The Court’s insistence that EU non-discrimination law merely codifies a self-executing (and horizontally directly effective) constitutional general principle of non-discrimination law represents a continuation of the controversial line of cases beginning in Mangold which has attracted significant criticism, including from national courts given the potential for legal uncertainty that such an approach involves. Here, the Court of Justice has made it clear that the EU’s constitutional commitment to proportionality means that religious bodies may only impose discriminatory conditions on employees when it is proportionate to do so and national courts must be empowered to ensure religious employers do not exercise their right to discriminate in a disproportionate way.

This is in tension with the approach adopted by the German legislature which, in the light of German constitutional guarantees of religious autonomy, gave very restricted powers to the courts to second guess the decisions of religious bodies in this way. Given that EU and German constitutional norms appear to be in tension with each other in this way it will be interesting to see how this ruling is applied by the national court. The German constitutional provisions on religious autonomy go all the way back to the Weimar constitution and are taken very seriously, though it may be an exaggeration to view them as constituting the kind of core ‘constitutional identity’ that might trigger a refusal by the German courts to give primacy to EU law.

Barnard & Peers: chapter 9, chapter 20

Photo credit: Wikimedia Commons

A Vanishing Breed? Walker v Innospec Ltd - The UK Supreme Court Disapplies a Statutory Provision on the Grounds of Incompatibility with EU Equality Law

Colm O’Cinneide, Professor of Law, UCL

Last week’s decision of the UK Supreme Court (UKSC) in the same-sex pension rights case of Walker v Innospec Ltd [2017] UKSC 47 generated plenty of excited commentary in the UK media. This mainly focused on the UKSC’s finding that it constitutes direct discrimination on the basis of sexual orientation – and thus a breach of EU law - for the rules of a employer’s contributory benefit scheme to deny payment of a ‘spouse’s pension’ to a surviving member of a same-sex married couple, in circumstances where such a pension would be paid to the surviving member of an opposite-sex married couple. This finding is obviously significant, both for its application at national level of the prohibition on direct discrimination on the basis of sexual orientation set out in Article 2 of the Framework Equality Directive 2000/78/EC, and also its concrete impact on the acquired pension rights of same-sex married couples in the UK. However, the media coverage glossed over two other important elements of the judgment, which are of especial interest from the perspective of EU law.

One of those elements relates to the complex issue of the temporal effects of a finding that national law is incompatible with EU legal requirements – namely the Court’s conclusion that, in Lord Kerr’s words at para. 56, ‘the point of unequal treatment occurs at the time that the pension falls to be paid’ and not when the benefit in question was accrued, and that no basis existed for limiting the retrospective effect of the judgment in line with the ECJ’s approach in Case C-262/88, Barber v Guardian Royal Exchange Assurance Group [1990] ECR I-1889.

The other neglected dimension to the case is of more general interest, especially in the run-up to Brexit – namely how the case resulted in the Supreme Court disapplying the provisions of Schedule 9 para. 18 of the UK Equality Act 2010, insofar as they permitted the type of discriminatory treatment at issue in the circumstances. In other words, in Walker, the obligation on national courts to give direct effect to the requirements of EU anti-discrimination legislation resulted in incompatible national legislation being set aside – perhaps one of the last times this happens before Brexit insulates UK parliamentary legislation from legal challenges based on EU law or other fundamental rights standards.

The case involved a legal challenge by a former employer of Innospec Ltd against their refusal to agree to pay a survivor’s pension to his same-sex spouse if he died first, even though such a benefit would have been paid out to Mr Walker’s spouse had she been a woman. Innospec Ltd justified this exclusion in part by reference to the provisions of Schedule 9 para. 18 of the 2010 Act, which permitted employers to restrict access to occupational benefits where the right to that benefit accrued before 5 December 2005 (the date same-sex couples became legally entitled to enter into civil partnerships).

At first instance, Mr Walker won his claim that he had been subject to direct and indirect discrimination on the grounds of sexual orientation, with the Employment Tribunal concluding that Schedule 9 para. 18 could be applied in a manner compatible with the relevant requirements of Directive 2000/78/EC. Subsequently, however, Innospec appealed successfully against that decision, with the Court of Appeal concluding that Mr Walker had been subject to direct discrimination on the basis of his sexual orientation but that the principles of ‘non-retroactivity’ and ‘future effect’ as developed in the case-law of the CJEU meant that the prohibition on discrimination applied only to benefits accruing after the transposition of the Directive in December 2003. (Mr Walker had taken early retirement in March 2003.)

This conclusion was criticised by Robert Wintemute amongst others, in particular in a case-note in the Industrial Law Journal in 2016 (‘Unequal Same-Sex Survivor’s Pensions: The EWCA Refuses to Apply CJEU Precedents or Refer’ (2016) 45(1) Ind Law J 89-100), and his criticisms were subsequently explicitly cited by Lord Kerr in giving the judgment of the majority of the Supreme Court reversing the decision of the lower court.

In brief, the Supreme Court initially applied the established case-law of the CJEU in cases such as Case C-267/06, Maruko [2008] 2 CMLR 32 and Case C-147/08, Römer [2011] ECR I-3591, and confirmed that less favorable treatment by an employer of same-sex partners as compared to opposite-sex partners who have entered into the same or equivalent type of legally recognised relationship will constitute direct discrimination on the grounds of sexual orientation.

Turning to the question of the remedy and by extension the legal effect of Schedule 9 para. 18, the UKSC went on to survey the relevant case-law of the CJEU dealing with issues of the retrospective effect of judgments. It concluded that the ECJ’s decision to restrict the temporal effect of its finding of sex discrimination in the occupational benefits case of Barber was a judicial technique that should only be applied ‘in the most exceptional circumstances and where the impact [of a judgment] would be truly “catastrophic”’ (para. 44).

The Supreme Court further concluded that the CJEU case-law established that the discriminatory treatment in question should be viewed as taking effect at the time when the pension was due to be paid, in part because it was only at that point of time that the spousal obligations at issue crystallised into tangible form. In so doing, they rejected suggestions by counsel based on views expressed by AG Van Gerven in Case C-109/91, Ten Oever [1993] ECR I-4879 that pension entitlements accrued as they were earned, and therefore that any discrimination occurring would have predated the date of transposition of the Directive. The UKSC therefore concluded that the provisions of Schedule 9 para. 18 of the 2010 Act could not be applied insofar as they precluded liability arising for the discriminatory behaviour in question, which was incompatible with the requirements of Directive 2000/78/EC and the general principle of equal treatment as confirmed to exist by the CJEU in case C-555/07, Kücükdeveci [2010] 2 CMLR 33.

The Walker judgment is thus particularly interesting for three reasons: (i) the faithful application by the UKSC of the case-law of the CJEU in relation to discrimination against same-sex partners; (ii) the Supreme Court’s interpretation of the relevant CJEU case-law relating to the temporal effect of findings of discrimination in the context of occupational benefits, which gives strong effect to the principle of non-discrimination; and (iii) the way in which it illustrates how parliamentary legislation can be disapplied if its conflicts with fundamental rights secured under EU law, in particular the right to non-discrimination.

After the process of Brexit is complete, this form of legal protection of equality is likely to fall away, along with the supremacy of EU law in general. Walker may thus mark one of the last instances where EU law takes effect as a trump card within the British legal system; as such, it is striking that its effect was to disapply a statutory provision designed to limit liability for discriminatory behaviour.

Photo credit: BBC.co.uk
Barnard & Peers: chapter 27, chapter 20, chapter 6