C-176/12 AMS: Charter principles, subjective rights and the lack of horizontal direct effect of directives
Yesterday, the Court handed down its decision in the much anticipated Association de Médiation Sociale case. The case concerns the question of potential horizontal effect of the workers’ right to information and consultation enshrined in Article 27 of the Charter of Fundamental Rights and implemented through Directive 2002/14 establishing a framework for informing and consulting employees in the Union. We have already covered the opinion handed down by Advocate General Cruz Villalón (see here), who suggested that the Court should allow Article 27 of the Charter in combination with the Directive to be applicable and to exclude thus the application of the national norm that was contrary to EU law despite the setting of proceedings between private parties. In contrast to the Advocate General, the Court did not grant Article 27 and the Directive such effect. Rather, it decided to follow its previous case law, with the unfortunate consequence of leaving quite some questions unanswered.
The facts and the AG’s opinion
Mr Laboubi, a French worker, was suspended after his employer did not accept his nomination as a representative of a trade union because the company did not have a sufficiently high number of employees which would require the nomination of such a representative. Based on Article 1111-3 of the Code du travail, workers with particular contracts (‘contrats d’accompagnement dans l’emploi’) could be excluded from the calculation of the number of employees of companies which determined whether the requirements of Directive 2002/14 were applicable. Mr Laboubi and the trade union went to court, arguing essentially that they should be able to rely on Article 27 of the Charter and Article 3 (1) of the Directive to exclude the French norm’s application because it was incompatible with EU law.
The Advocate General had essentially argued that, at least as a matter of principle, such horizontal effect should be possible. Furthermore, Article 27 was to be considered a ‘principle’ and not a ‘right’ under the Charter’s terminology and that therefore no subjective right could be derived from the provision. However, certain implementing acts that ‘substantially and directly’ concretised a principle like Article 27 could nonetheless serve as a benchmark for legality for implementing acts in a wider sense such as the national measure at issue. Moreover, such implementing acts could also allow for an objective control of legality of national acts where they consisted in provisions of a directive in proceedings between private parties. Private parties that saw themselves burdened with unforeseen obligations as a consequence should start an action for damages against the Member State having incorrectly implemented the directive in question according to the Advocate General. The Court, however, begged to differ.
The Court’s decision
The Court started off noting that based on existing case law, Article 1111-3 of the Code du travail was clearly incompatible with Article 2 lit. d of Directive 2002/14 (paras 24-29). At least in theory, Article 3 (1) of the Directive was also capable of having direct effect: the provision provided for a certain margin of discretion for Member States as to the measures taken to implement the obligations of the Directive; however, Member States still were compelled to take into account all employees in their calculations (para 33-34).
However, according to the Court even a clear, precise and unconditional provision of a directive, which conferred rights or imposed obligations on private parties, could not apply as such in legal proceedings between private parties (para 36). AMS had to be considered a private party despite its social aims (para 37). Even the duty of conform interpretation with EU law found its limits in cases such as the present one, where an interpretation contra legem would have been necessary (para 39-40).
As a last option, the Court suggested to examine whether the situation of the case was comparable to that in the Kücükdeveci case, so that Article 27 could be made applicable in the relations between private parties by itself or in combination with the provisions of Directive 2002/14 (para 41). At least the provision of domestic law was evidently an implementation measure for the Directive and thus fell within the scope of EU law, meaning that EU fundamental rights applied. (para 43).
Article 27 itself required clearly implementation by additional provisions of EU or national law because of its open wording (paras 44-45). The clear prohibition to exclude a certain group from the calculation of the number of employees of a company enshrined in Article 3 (1) of the Directive could neither be derived as a directly applicable norm from the wording of Article 27 of the Charter nor from the Explanations to that Article (para 46). By contrast, in Kücükdeveci a subjective right for individuals could already be derived from Article 21 (1) of the Charter which contained a prohibition of discrimination on grounds of age (para 47). Consequently, Article 27 could not be made applicable in proceedings between private parties in order to exclude the application of a provision of national law (para 48). Even reading Article 27 in the context of the provisions of the Directive could not change this conclusion; if that Article could not grant an individual an enforceable subjective right on its own, such a contextual reading could not produce a different result (para 50). The party suffering a damage because of the incompatibility of national law with EU law could still start an action for damages against the Member State, as already indicated in the Dominguez case (para 50). The Court concluded thus that Article 27 of the Charter by itself or read together with the provisions of Directive 2002/14 had to be interpreted as not being applicable in legal proceedings between private parties when a provision of national law implementing the Directive was incompatible with EU law.
One can be in two minds about the Court’s decision. On the one hand, the solution suggested by the Advocate General to indeed allow some sort of horizontal direct effect of a Directive implementing a ‘principle’ in the Charter of Fundamental Rights is certainly a bold one. In that sense, it does not come as a huge surprise that the Court decided not to follow the Advocate General. On the other hand, the Advocate General had taken quite some care to integrate his proposal into the existing case law, and to provide a rather comprehensive solution to the various issues presented in the case. It is thus unfortunate that the Court decided to take a rather minimalistic approach to resolve the dispute which does not necessarily answer all that was on the table. Three points merit closer discussion in this light.
First, while the Court notes the rather programmatic wording of Article 27, it does not discuss – contrary to the Advocate General – whether Article 27 should be seen as a principle or a right. It thereby misses a good opportunity to give content to Article 52 (5) of the Charter which reads:
“The provisions of this Charter which contain principles may be implemented by legislative and executive acts taken by institutions, bodies, offices and agencies of the Union, and by acts of Member States when they are implementing Union law, in the exercise of their respective powers. They shall be judicially cognisable only in the interpretation of such acts and in the ruling on their legality.”
The case would have offered ideal conditions to give some first indications as to how rights and principles should be identified in the Charter.
This also leads us to the second point of criticism. The Advocate General had also taken great care in proposing an answer to the question how principles could be made operational. Basing himself on the second sentence of Article 52 (5) of the Charter, he developed the notion of implementing acts in the wider sense: such acts were wider in content than implementing acts in the narrow sense which exclusively aimed at giving normative content to the principle. Such implementing acts in the wider sense could thus be reviewed against the criteria of validity contained in the wording of the relevant principle and the acts of its substantial and direct concretisation, i.e. its implementing acts in the narrow sense. Now it is clear that it may be difficult in the future to define with sufficient precision the two groups of implementing acts; still, the Advocate General is arguably correct in trying to give normative content to Article 52 (5) of the Charter which maintains its effet utile of providing some sort of judicial protection for Charter principles. The Court, on the other hand, leaves aside all these issues. The central tenet for the Court is that the case is different from the situation in Kücükdeveci because Article 27 – contrary to the prohibition of age discrimination – does not contain a subjective right. This again means that the classic case law on the lack of horizontal effect of directives applies. If these dicta are upheld in future case law, one may wonder whether Article 52 (5) on the justiciability of principles still has an important role to play at all. Quite a number of the norms of Charter title IV on solidarity which are perhaps most likely to qualify as principles are after all likely to be brought up mainly in labour-related legal proceedings between private parties.
Lastly, the Court’s offer that the private party suffering a disadvantage from the lack of horizontal direct effect can still start an action for damages against the Member State offers rather little consolation because of the burdensome practicalities of pursuing such an action. While it is no perfect solution either (and there probably is none), the Advocate General’s solution of doing exactly the same thing the other way round – offering the action for damages as consolation for the party that has previously benefitted from an erroneous transformation of EU law by the Member State and now pays the price because of horizontal direct effect excluding the application of a norm of national law they had relied on – has at least a somewhat more equilibrated approach towards sharing the burden of advantages and disadvantages.