The preliminary ruling procedure has been of decisive importance for the European Court of Justice role in the development of the Community legal order. It was through this procedure that the ECJ developed the so called fundamental principles of Community Law: the direct effect and supremacy of EC law. With the aim of circumventing the limitations of the doctrine of horizontal direct effect, the ECJ has also created the doctrine of indirect effect (Von Kolson) and the doctrine of state liability (Francovich). The ECJ has recently delivered its ruling in Case C 555/07, Seda Kücükdeveci v Swedex GmbH & Co. KG where it has developed a new EU law doctrine. The Court has found another way to bypass the lack of horizontal direct effect of directives by giving direct effect to the corresponding general principle of law, principle of non discrimination on grounds of age.
The German General Law on equal treatment transposed the Directive 2000/78 establishing a general framework for equal treatment in employment and occupation. Under the German Civil Code (Bürgerliches Gesetzbuch, the BGB) the notice periods for dismissal vary according to the length of employment. Nevertheless, it specifies in the second sentence of Paragraph 622 (2) that periods of employment before the completion of an employee’s 25th year of age are not taken into account in calculating the notice period for dismissal. Ms Kücükdeveci had worked for Swedex for 10 years but when dismissed the employer calculated the notice period as if she had three years’ length of employment. Swedex had, therefore, acted in accordance with the German Law while taking no account of the periods of employment completed before Ms Kücükdeveci was 25. Ms Kücükdeveci challenged her dismissal before the Labour Court in Mönchengladbach arguing that her period of notice should have been four months which is what corresponds to 10 years’ service. According to Ms Kücükdeveci the second sentence of Paragraph 622(2) of the BGB entails discrimination on grounds of age and, consequently is contrary to EU law. As the Labour Court dismissed the case, Ms Kücükdeveci appealed to the Higher Labour Court in Düsseldorf which made a reference for a preliminary ruling to the ECJ on the compatibility of the abovementioned rule with EU law.
The ECJ recalled its case law that the Directive 2000/78 “does not itself lay down the principle of equal treatment in the field of employment and occupation, which derives from various international instruments and from the constitutional traditions common to the Member States,” but it “has the sole purpose of laying down, in that field, a general framework for combating discrimination on various grounds including age.” Hence, the ECJ confirmed its ruling in Mangold acknowledging the existence of a principle of non discrimination on grounds of age which must be regarded as a general principle of community law and that Directive 2000/78 gives expression to it. It is important to mention that there is a constitutional complaint by the company Honeywell Bremsbelag GmbH pending with the Federal Constitutional Court against the judgment of the Federal Labour Court which applied the principle of non discrimination on grounds of age as set by the ECJ in the Mangold case. According to the appellant there is no such thing as general EU principle of age discrimination consequently the ECJ’s Mangold Case is ultra vires and not applicable in Germany.
The Court also refers to the EU Charter of Fundamental Rights which prohibits any discrimination on the grounds of age. The EU Charter of Fundamental Rights has acquired legally biding force on 1 December 2009. Member States are required to comply with the Charter when implementing Community law. The Court has now jurisdiction to hear actions brought by the Commission against a Member State for infringing the Charter when implementing Community law and to give preliminary rulings on the compatibility of a Member State act while implementing Community law with the Charter. It is well known that the ECJ has been referring to the Charter for a long time, when it was non legally-binding, but it seems is now set to apply the Charter retroactively.
According to the ECJ the present case falls within the scope of EU law. The Court pointed out that the German Labour law provision at stake lays down rules on the conditions of dismissal which is a issue governed by the directive 2000/78. Moreover, the dismissal has occurred after the time for transposition of the Directive into German domestic law had elapsed. Consequently, as the Court stressed, after the expiry of the transposition period, the directive had the effect of bringing the German law on conditions of dismissal within the scope of EU law.
The Directive 2000/78 prohibits discrimination on the grounds of age, but it provides that a difference of treatment on grounds of age does not constitute discrimination “if it is justified by a legitimate aim of employment, labour market or vocational training policy, and if the means of achieving that aim are appropriate and necessary.” The Court found that the German’s rule, the second sentence of Paragraph 622 (2) of the BGB, introduces a difference of treatment on the grounds of age. The ECJ has deemed that this rule although has legitimate aims is not appropriate or necessary for achieving them. Hence, the Court ruled that EU law, in particular the principle of non-discrimination on grounds of age as set out in Directive 2000/78, precludes national legislation such as the abovementioned German rule.
It is important to bear in mind that the present dispute is between private parties. The ECJ has been ruling that a directive cannot be applied directly against an individual if it has not been properly implemented into national law. The Court recalled its case law, Marshall, Faccini Dori whereby individuals can derive from a directive, enforceable rights against the State or emanation of the State (vertical direct effect) but not against private parties (horizontal direct effect). Nevertheless, the Court also recalled that national courts are required to interpreted national law so as to be in accordance with a directive. This principle was developed in Von Colson and Marleasing where the Court held “The Member States' obligation arising from a directive to achieve the result envisaged by the directive and their duty (…) to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts.” Consequently, “(…) in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by (…).”
According to the Appellate Court the second sentence of Paragraph 622(2) of the BGB cannot be interpreted in conformity with Directive 2000/78 because it is perfectly clear and precise. However, the Court stressed that the principle of non-discrimination on grounds of age is a general principle of EU law which is given expression in Directive 2000/78 and must be given full effect by national courts. The Court held that “it for the national court, hearing a dispute involving the principle of non-discrimination on grounds of age as given expression in Directive 2000/78, to provide, within the limits of its jurisdiction, the legal protection which individuals derive from European Union law and to ensure the full effectiveness of that law, disapplying if need be any provision of national legislation contrary to that principle.”
Moreover, the Appellate Court asked whether a court, hearing proceedings between individuals, is obliged to make a reference to the ECJ for a preliminary ruling on the interpretation of EU law before it can set aside a national provision which it considers to be contrary to that law. The Court held that national courts are entitled but not obliged to make such reference. The ECJ has noted that under national law, national courts cannot set aside a national provision in force unless it has been declared unconstitutional by the Federal Constitutional Court. However, it has stated “By reason of the principle of the primacy of European Union law, which extends also to the principle of non-discrimination on grounds of age, contrary national legislation which falls within the scope of European Union law must be disapplied.” The Court ruled, therefore, that “It is for the national court, hearing proceedings between individuals, to ensure that the principle of non-discrimination on grounds of age, as given expression in Directive 2000/78, is complied with, disapplying if need be any contrary provision of national legislation, independently of whether it makes use of its entitlement, (…), to ask the Court of Justice of the European Union for a preliminary ruling on the interpretation of that principle.”
This is another example of the ECJ expanding the scope of EU law. In this case, a Directive giving expression to a general principle of EU law, prohibition of discrimination on the grounds of age, applies to a national horizontal situation binding not only the Member States but also individuals and due to the primacy doctrine national courts must not apply the national provision contrary to the general principle as expressed in the directive. Hence, the provisions of directives expressing general principles of European Union law have full direct effect, even in horizontal situations. Even the AG Mazak acknowledged, in Case C-411/05, Félix Palacios de la Villa v Cortefiel Servicios SA, that “Not only would such an approach raise serious concerns in relation to legal certainty, it would also call into question the distribution of competence between the Community and the Member States, and the attribution of powers under the Treaty in general.” Employment and Social policies are member states competences, the ECJ is, once again, interfering in member states legal systems and overriding national competences.
Obviously, this ruling will have far reaching consequences. The ECJ has recognized in its case law that fundamental rights form part of the general principles of EU law. In fact, Article 6 TEU expressly recognizes this. Therefore, do not be surprised if this new rule is “extend to all Directives implementing any of the rights enshrined in the Charter” as noticed by Pescatorius in Adjudicating Europe.
It is well known that the ECJ and the German Constitutional Court have been playing a cat and mouse game since the ECJ proclaimed the primacy of Community law as a cornerstone of European Integration. It is important to recall that last year the German Constitutional Court, in its judgment on the Lisbon Treaty, as Struan Stevenson said “(…) declared itself the highest supervisory body in conflicts between Germany and the EU, thus explicitly placing itself above the authority of the European Court of Justice.” Hence, the present ECJ ruling has been seen as a challenge to the German Constitutional Court's self declaration as final arbiter. It also remains to be seen what will be the decision of the Federal Constitutional Court in the Mangold case.
