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Kratzer v RAV AG: Access to Employment versus access to compensation

Kratzer v RAV AG: Access to Employment versus access to compensation

By Chris Milsom

Those with long memories will recall a Mr John Berry (alias) who was said to have made ET litigation a veritable cottage industry. Mr Berry’s modus operandi was to locate advertisements (principally placed by recruitment agencies) for roles across the UK which contained terminology allegedly targeting younger people such as “school leavers” or “recent graduates.” Estimates suggest that Mr Berry presented over 60 such claims, several of which led to financial settlement. A number of these claims ultimately made their way to Underhill P in Berry v Recruitment Revolution and ors UKEAT/0419/10/LA etc. On that occasion the EAT determined that an individual who has not applied for a role advertised in discriminatory terms and was not deterred from so applying had no right to compensation. As Underhill P put it:

(T)he purpose of the (Age) Regulations is not to provide a source of income for persons who complain of arguably discriminatory advertisements for job vacancies which they have in fact no wish or intention to fill, and that those who try to exploit the Regulations for financial gain in such circumstances are liable…to find themselves facing a liability for costs.

In the post-fees era such practices are rare indeed but the spirit can be detected in C-423/15 Kratzer v R+V Allgemeine Versicherung AG.

The Facts

In March 2009 R+V advertised trainee positions for graduates. Mr Kratzer applied. On 19 April he received a rejection which duly formed the basis of a complaint from Mr Kratzer on 11 June in which he sought EUR 14,000 compensation on the grounds of age discrimination. In early July R+V invited him to interview, explaining that the rejection had been automatically generated and did not reflect its intentions. Mr Kratzer declined to attend the interview and suggested that payment of compensation was a pre-requisite for any further dealings. He later discovered that despite the applicants being an even mix of gender the four trainee posts were offered to women: this formed the basis of a subsequent application for EUR 3,500 on the basis of sex discrimination.

Mr Kratzer’s claims were dismissed by the German Labour Court: so too were his appeals until the Federal Labour Court posed the following questions to the CJEU:

-        “On a proper interpretation of Article 3(1)(a) Directive 2000/78 and Article 14(1)(a) Directive 2006/54 does a person who, as is clear from his application, is seeking not recruitment and employment but merely the status of applicant in order to bring claims for compensation also qualify as seeking “access to employment, to self-employment or to occupation?”

-        If so, “Can a situation in which the status of applicant was obtained not with a view to recruitment and employment but for the purpose of claiming compensation be considered as an abuse of rights under EU law?”

The CJEU decision

Both the absence of an opinion from the Advocate General and the brevity of the CJEU judgment speak volumes. The CJEU started from the principle that the Directives pertain to employment and occupation. On the facts as found by the domestic courts Mr Kratzer’s application was made not with a view to obtaining the position “but only with a view to obtaining the formal status of an applicant with the sole purpose of claiming occupation” [29]. This was outside the scope of the Directives and as such he could not rely upon their protection. He was not a “victim” in the sense envisaged by Article 7 of the Directive.

Alternatively, there were grounds to consider that Mr Kratzer’s conduct was abusive. The Court provided helpful analysis on abuse in this context, which essentially comprises two elements. Firstly, there must be objective circumstances “that, despite formal observance of the conditions laid down by EU rules, the purpose of these rules has not been achieved” [39]. Secondly, there is a subjective element, “namely that it must be apparent from a number of objective factors that the essential aim of the transactions is to obtain an undue advantage” [40]. This second element may be satisfied where there is a “purely artificial nature (to) the transactions concerned” [41]. It is for the national courts to consider whether there has been abusive practice and if so take appropriate action so as to ensure that the effectiveness of EU law is not undermined.

Analysis

Two points can be discerned from the judgment. Firstly, as recent decisions make plain concepts of employment and occupation are broad. The notion of worker in EU law is flexible: see Fenoll v Centre d'aide par le travail “La Jouvene” and anor [2016] IRLR 67. Further the coverage of work placements and vocational training so as to ensure “access to employment” necessitated a Marleasing approach in Blackwood v Birmingham & Solihull Mental Health NHS Foundation Trust [2016] EWCA Civ 607, [2016] All ER (D) 168 (Jun). There is, however, a clear limit: where there is no legitimate interest in the employment or occupation in issue an individual cannot avail himself of the Directive’s protection.

Secondly, the CJEU’s recognition that the cause of employment protection may readily be undermined by abuse bears emphasis. Much of the rhetoric surrounding the abuse of employment rights has been unsavoury for many years and has been used as a straw dog to justify a host of measures from tribunal fees to the increased qualifying service period. This rhetoric bears little relation to the reality in the overwhelming majority of instances. Where abuse is present, therefore, the CJEU is right to remind national courts that they are not only entitled but required to stamp it out. The objective of equality demands no less.

Cloisters has significant expertise in advising and representing organisations and individuals in all aspects of equality and discrimination as well as employment law.

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