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A new dawn for the Charter? Bumper CJEU Round-Up,  Part 1

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In a two-part blog, Cloisters’ Schona Jolly QC and Sarah Fraser Butlin look at important new developments from the CJEU on the Charter of Fundamental Rights, religion or belief discrimination and working time.

It’s been something of a bumper few weeks at the European Court of Justice in Luxembourg (‘CJEU’) where an expansive use of the Charter of Fundamental Rights has been bubbling back to the forefront of decision making in employment law – just in time to get some further clarity before we are banished to a post-Brexit world in which we will be arguing before domestic courts whether future CJEU case law is relevant to the cases we are arguing in front of them.

The recent slew of CJEU decisions and AG opinions give rise to two themes that we are going to explore.  In Part 1 of this blog, we will be considering the use of the Charter of Fundamental Rights as a means to provide horizontal rights within Directives.  Is this a major new development or the natural onwards flow from decisions such as Mangold [1], Kücükdeveci [2] and Dansk Industri [3]In Part 2, out next week, we will look at the cases through the lens of balancing rights and the scope of the “GOR” (genuine occupational requirement) in religion or belief discrimination.

Using the Charter in discrimination claims

It is a basic principle of EU law, reinforced through a long line of authority, that Directives do not have horizontal direct effect, i.e. they are not enforceable as between two private parties. However, at least since the controversial decision in Mangold, and subsequently in Kücükdeveci and Dansk Industri, inroads have been made into that principle, generating vigorous debate as to whether it remains true.  In those cases, the CJEU held, and built upon, its conclusion that the principle of non-discrimination constituted a general principle of EU law and therefore could be relied upon directly between private parties in the sphere of employment. The Court has repeatedly stated that the source of the non-discrimination principle is not the Framework Directive itself but a provision found in the constitutions of Member States and in various international instruments, thus building a constitutional foundation for equality and non-discrimination.  

The particular status of non-discrimination and equality became still more entrenched after Association de Mediation Sociale [4], a case in which trade unions challenged a private employer’s refusal to engage with worker consultation pursuant to Directive 2002/14 on workers’ rights to information and consultation, and in which they relied on Article 27 of the Charter (the right for workers to be informed and consulted). This time, the CJEU declined to do for Article 27 what it had done previously for Article 21, and it did not permit Article 27 to be relied upon in conjunction with the Directive to disapply national law in a dispute between private parties. Instead, it distinguished Kücükdeveci and held that the principle of non-discrimination, as provided in Article 21, was ‘sufficient in itself to confer on individuals an individual right which they may invoke as such’, something which the Court did not consider true of Article 27 which needed to be given ‘more specific expression in European Union or national law.’

In a series of four recent cases, the Court and the Advocates General have considered the interplay between Directives and the Charter in conjunction with the rights of private parties.  Is this a new dawn for the Charter, just as Britain may be preparing to leave it behind us, or do these cases represent a continuation of a line of cases now firmly entrenching the direct horizontality of a select few Charter provisions?

First up is Egenberger v Evangelisches Werk für Diakonie und Entwicklung eV (C-414/16) [5], in which Ms Egenberger applied for a fixed-term post offered by the EWDE (in English, Protestant Work for Diaconate and Development, Germany). The post-holder was required to produce a report on the UN Convention on the Elimination of All Forms of Racial Discrimination in order to ensure the proper representation and advocacy of the Respondent’s views within the wider political context. The post holder was required to be a member of a Protestant church or a church belonging to the [Working Group of Christian Churches in Germany].  Ms Egenberger professed no religious denomination and when she was not called to interview, she brought proceedings in the German courts for discrimination on grounds of religion or belief.

The Federal Labour Court in Germany referred the case to Luxembourg.  The fundamental issue related to the balance between ensuring a worker’s right not to be discriminated against because of religion or belief set against the right of autonomy of a church (or organisation whose ethos is based on religion or belief).  Importantly, the right of autonomy of churches (and other organisations whose ethos is based on religion or belief), must be taken into account, as recognised by Article 17 TFEU and Article 10 of the Charter of Fundamental Rights.

The Court considered how to determine whether a requirement was truly a GOR [6], which we will address is Part 2 of this blog.  The Court then had to determine whether, in a dispute between individuals, a national court is required to disapply a provision of national law where it is not possible to interpret it in conformity with Directive 2000/78.  In this case, the German general law on equal treatment, Allgemeines Gleichbehandlungsgesetz of 14 August 2006 provides in Paragraph 9:

  1. 1.   Without prejudice to Paragraph 8 [of this law], a difference of treatment on grounds of religion or belief in connection with employment by religious societies, institutions affiliated to them regardless of their legal form, or associations which devote themselves to the communal nurture of a religion or belief shall also be permitted if a particular religion or belief constitutes a justified occupational requirement, having regard to the self-perception of the religious society or association concerned, in view of its right of self-determination or because of the type of activity.
  2. 2.   The prohibition of difference of treatment on grounds of religion or belief shall not affect the right of the religious societies, institutions affiliated to them regardless of their legal form, or associations which devote themselves to the communal nurture of a religion or belief, mentioned in subparagraph 1, to be able to require their employees to act in good faith and loyalty in accordance with their self-perception.

The Grand Chamber emphasised first of all, that it was for national courts to decide whether and to what extent a national provision, like Paragraph 9 above, could be interpreted in conformity with Directive 2000/78.  It was for them to seek to do so in accordance with the whole body of rules of national law and by applying methods of interpretation recognised by that law, including the obligation for national courts to change their established case law (at paras 71 and 72).  Thus, in essence, the ability to disapply national law is a matter of last resort.

Nevertheless, the Grand Chamber still had to consider whether disapplication was required:

  1. 75. In the event that it is impossible to interpret the national provision at issue in the main proceedings in conformity with EU law, it must be pointed out, first, that Directive 2000/78 does not itself establish the principle of equal treatment in the field of employment and occupation, which originates in various international instruments and the constitutional traditions common to the Member States, but has the sole purpose of laying down, in that field, a general framework for combating discrimination on various grounds, including religion and belief, as may be seen from its title and from Article 1 …
  2. 76. The prohibition of all discrimination on grounds of religion or belief is mandatory as a general principle of EU law. That prohibition, which is laid down in Article 21(1) of the Charter, is sufficient in itself to confer on individuals a right which they may rely on as such in disputes between them in a field covered by EU law (see, with respect to the principle of non-discrimination on grounds of age, judgment of 15 January 2014, Association de médiation sociale, C176/12, EU:C:2014:2, paragraph 47).
  3. 77. As regards its mandatory effect, Article 21 of the Charter is no different, in principle, from the various provisions of the founding Treaties prohibiting discrimination on various grounds, even where the discrimination derives from contracts between individuals (see, by analogy, judgment of 8 April 1976, Defrenne, 43/75, EU:C:1976:56, paragraph 39; of 6 June 2000, Angonese, C281/98, EU:C:2000:296, paragraphs 33 to 36; of 3 October 2000, Ferlini, C411/98, EU:C:2000:530, paragraph 50; and of 11 December 2007, International Transport Workers’ Federation and Finnish Seamen’s Union, C438/05, EU:C:2007:772, paragraphs 57 to 61).

The Court recalled that Article 47 of the Charter, giving the right to effective judicial protection, did not require any additional legislative provisions to give it effect.  Drawing on it alongside Article 21, the Court concluded that the national court would be required to disapply any contrary provision of national law, even where balancing of rights was required. Intriguingly, this even includes the application of the principle of proportionality (which will be discussed in part 2).

Importantly for our purposes, when seeking to balance those rights and ensure that the Charter is complied with, the national court must “take into consideration the balance struck between those interests by the EU legislature in Directive 2000/78, in order to determine the obligations deriving from the Charter in circumstances such as those at issue in the main proceedings” (at para 81). Earlier the Court had noted that “The directive is thus a specific expression, in the field covered by it, of the general prohibition of discrimination laid down in Article 21 of the Charter” (at para 47). It is worth noting, however, that there is no reference to the Framework Directive in Article 21 itself or the explanations to it. Inevitably, questions flow from this decision: How much assistance does it really provide to national courts in striking that balance before disapplying a provision of national law? And, in a situation concerning private parties, how does this fit with other Charter rights, such as Article 10 (freedom of thought, conscience and religion as per Article 9 ECHR) or even Article 16 (freedom to conduct a business), which have found favour in the other more recent set of religion decisions concerning the Framework Directive, Achbita [7] and Bougnaoui [8] and even more broadly regarding TUPE in Alemo Herron? [9] And where does this leave religion or belief discrimination amongst the protected grounds?

Hot on the heels of Egenberger comes a new Opinion from AG Wathelet in IR v JQ [10] on 31 May 2018 which concerned the legality of the dismissal of the Head of the Internal Medicine Department of a Catholic hospital subject to the supervision of the Catholic Archbishop of Cologne, on the sole ground that he divorced and remarried in a civil ceremony, even though he would not have been dismissed had he not been Catholic. The question arose as to whether a lawful distinction could be drawn between employees of a private employer who professed belonging to the church, and those who belonged to another faith or none at all. If so, the German Federal Labour Court wanted to know whether such a provision of domestic law (paragraph 9(2) of the AGG) nevertheless could be disapplied for its breach of EU law.

In answering the question of disapplying non-compliant national law, the AG drew expressly on Egenberger and noted that:

  1. 83. That solution may perfectly well be transposed to the dispute in the main proceedings, which is also between private parties, although it does not fall within the scope of the Charter ratione temporis.
  2. 84. Indeed, in comparable situations dating from before the entry into force of the Charter, the Court applied the general principle of non-discrimination on grounds of age and held that it granted private persons an individual right that could be invoked as such in disputes between private persons and required national courts to set aside the application of national provisions not in line with that principle.
  3. 85. This also applies for the principle of non-discrimination on grounds of religion or belief which, given the historical context in which the European Union was founded, constitutes a fundamental constitutional value of the EU legal order, which the Court has recognised as a general principle of EU law. ….
  4. 87. For all of those reasons, I consider that …a national court hearing a dispute between two private parties is obliged, where it is not possible for it to interpret the applicable national law in conformity with Article 4(2) of Directive 2000/78, to ensure within its jurisdiction the judicial protection deriving for individuals from the general principle of non-discrimination on grounds of religion and to guarantee the full effectiveness of that principle by disapplying, if need be, any contrary provision of national law.

In re-emphasising the availability of horizontal direct effect of the equality and non-discrimination principles in the Charter, these two cases show a continuation of the trajectory found in Mangold and Kücükdeveci whereby horizontal direct effect has been given to Directive 2000/78 in all but name.   By viewing Directive 2000/78 as the articulation of the Article 21 and Article 47 Charter rights, the Court and the AG have created a powerful tool for equality claims.  In many ways this recent judgment and AG Opinion continue to build the constitutional case for equality and entrench it more deeply into the EU legal order.  While there may be concerns about how that operates across all the strands, and consistency, this represents a major step forward in constitutionalising equality more formally at EU level.

This has also been reflected in our own courts. In Walker [11] the Supreme Court held that domestic law was to be disapplied because it was incompatible with the Framework Directive.  In Benkharbouche [12], the Supreme Court were positively blasé about disapplying national law.  They held that ss4(2)(b) and 16(1) of the State Immunity Act 1978 were incompatible with Article 6 of the European Convention on Human Rights.  The Government had accepted that if this was so, then on the facts of Benkharbouche, the Charter was also violated.  Lord Sumption, at para 71, said that consequently, “It follows that there is no separate issue as to article 47 of the Charter. The only difference that it makes is that a conflict between EU law and English domestic law must be resolved in favour of the former, and the latter must be disapplied; whereas the remedy in the case of inconsistency with article 6 of the Human Rights Convention is a declaration of incompatibility.”

So in one sense it is all well and good when one is dealing with questions of equality and non-discrimination: these are long recognised general principles of EU law.  Nevertheless, the challenge is two-fold: precisely what does this mean when interpreting the detailed provisions of the Directive and how far does this go when trying to analyse, for example, the scope of a GOR? [13] Secondly, does it stretch beyond Directive 2000/78 to other Directives?

A more surprising turn of events to come?

AG Bot has addressed the second of those questions in two further opinions also released last week.  These are arguably more surprising and potentially more controversial should the CJEU follow his Opinions. [14]

In the Joined cases of Stadt Wuppertal v Maria Elisabeth Bauer and Volker Willmeroth als Inhaber der TWI Teschnische Wartng und Instandsetzung Volker Wilmeroth e.K v Martina Broßonn [15], AG Bot considered whether surviving spouses of deceased workers should be entitled to receive payments of annual leave allowance that had not been taken by the workers before their deaths.  He had to consider the question of whether someone was entitled to an annual leave allowance where annual leave had simply been untaken, in the Kreuziger v Land Berlin case. [16]  In both cases, he advised that national law preventing these scenarios should be disapplied.

The interesting point is his stance in relation to the right to paid annual leave itself.  He argued that the right to paid annual leave is not simply a particularly important principle of EU social law, rather it should be considered a fundamental social right in and of itself, as enshrined by Article 31(2) of the Charter.

At paragraphs 4 and 5 in Wuppertal, AG Bot had already noted that the unavailability of direct horizontal effect of directives, “may appear to be such as to undermine the practical effectiveness of fundamental social rights in the disputes which national courts are called upon to resolve.” Notwithstanding that, he said that this “difficulty may, however, be eased or even neutralised where a provision of primary EU law, and more specifically a provision of the Charter, possesses the qualities needed to be relied on directly in a dispute between individuals.”  This lead directly into the most controversial point:

  1. 52. Since Paragraph 7(4) of the [national provisions] implements Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time which was codified by Directive 2003/88, Article 31(2) of the Charter is intended to apply in the main proceedings.
  2. 53. … I consider that a national court hearing a dispute between two individuals is obliged, where it is not possible for it to interpret the applicable national law in conformity with Article 7 of Directive 2003/88, to ensure within its jurisdiction the judicial protection deriving for individuals from Article 31(2) of the Charter and to guarantee the full effectiveness of that article by disapplying if need be any contrary provision of national law. In my view, Article 31(2) of the Charter possesses the qualities needed for it to be relied on directly in a dispute between individuals in order to disapply national provisions which have the effect of depriving a worker of his right to an annual period of paid leave. I therefore propose that the Court adopt a solution similar to that which it adopted with regard to the general principle prohibiting discrimination on grounds of age and then in relation to Articles 21 and 47 of the Charter.

And so, in line with the developments in respect of Article 21 and the Framework Directive, AG Bot now commends to the CJEU an approach that perceives Directive 2003/88 as the codification of Directive 93/104, itself the articulation of a right within the Charter.  And so it may be that the Working Time Directive in essence becomes horizontally directly effective.  Where national law cannot be interpreted to be in compliance with the Directive, he considered that it must be disapplied.

At first glance, this would represent a departure from the judgment in Association de Médiation Sociale in which the Court remained firm that Directives do not have horizontal direct effect.  It also held that Articles of the Charter would only be effective as between private parties if the particular Article granted an individual an enforceable right on its own.  However, in flat contrast, AG Bot turned the reasoning on its head and said that:

“According to that logic, it is impossible for a directive which does not have direct horizontal effect to impart that quality to a provision of the Charter. In order for there to exist such a possibility of relying on it directly, the relevant provision of the Charter must, on the basis of its inherent qualities, as clearly expressed in its wording, be mandatory and sufficient in itself. The fundamental right to an annual period of paid leave, as set out in Article 31(2) of the Charter, is undoubtedly mandatory in nature. The Court has consistently emphasised in its case-law both the importance and the mandatory nature of the right to paid annual leave, by stating that it is ‘a particularly important principle of European Union social law from which there can be no derogations’. That right must therefore apply not only to the action of public authorities, but also to employment relationships established between private individuals. … Moreover, as I have already stated, the relevant provision of the Charter must be sufficient in itself, which means that it must not be necessary to adopt a supplementary provision of EU or national law to render applicable the fundamental right recognised by the Charter. In other words, the relevant provision of the Charter requires no supplementary measure to be adopted in order directly to produce effects as regards individuals.  Indeed, I consider that, in the light of its wording, Article 31(2) of the Charter requires no supplementary measure to be adopted in order directly to produce effects as regards individuals. In such circumstances, the adoption of an act of secondary EU law and/or implementing measures by the Member States may certainly be useful to allow individuals to benefit in practice from the fundamental right concerned. That said, the adoption of such measures, which is not required by the wording of the relevant provision of the Charter, is not necessary in order for that provision directly to produce its effects in disputes which must be resolved by national courts.”

So the major question is whether the CJEU will follow AG Bot’s Opinion or apply a more restrictive reading to the use of Directives in understanding and enforcing Charter rights.   If the Court follows this path, we are likely to see a new, no doubt controversial, dawn of social rights in the EU being ushered in.  Of course, whether we, in the UK will see the advantage of such developments is quite another question.

Next week …

Part 2 of this blog, analysing the impact of Egenberger and IR on religion or belief discrimination, and the genuine occupational requirement, will follow next week.

 

[1] Mangold v Helm (C-144/04) EU:C:2005:709

[2] Kücükdeveci v Swedex GmbH and Co KG (C-555/07) EU:C:2010:21

[3] Dansk Industri (DI) v Rasmussen’s Estate (C-441/14) EU:C:2016:278

[4] Association de mediation sociale v Union locale des syndicats CGT (C-176/12) EU:C:2014:2

[5] EU:C:2018:257

[6] Answering the third question that was referred, before returning to question two.

[7] Achbita v G4S Solutions NV (C-157/15) EU:C:2017:203

[8] Bougnaoui v Micropole SA (C-188/15) EU:C:2017:204

[9] Alemo Herron and Others v Parkwood Leisure Ltd (C-426/11)

[10] Case C-68/17

[11] Walker v Innospec Ltd [2017] UKSC 47

[12] Benkharbouche v Secretary of State for Foreign and Commonwealth Affairs [2017] UKSC 62

[13] We will explore this in part 2 of this blog.

[14] In Fenoll the Court declined to give any direct horizontal effect to the Working Time Directive but this was because MrFenoll’s claim related to a period before the date of entry into force of the Lisbon Treaty and hence, before the date from which the Charter acquired the same legal value as the Treaties.

[15] C-569/16 and C-570/16, 29 May 2018.

[16] C-619/16.

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