Mangold Recast? The ECJ’s Flirtation with Drittwirkung in Egenberger
By Eleni Frantziou
In its recent ruling in Egenberger (C-414/16), the Court’s Grand Chamber has redrawn the boundaries of a constitutional problem German courts are rather familiar with: the horizontal application of the right not to be discriminated against in situations coming within the scope of EU law. The case raises two important constitutional issues: firstly, whether the horizontal effect of EU fundamental rights must be direct; and, secondly, how the balance between conflicting fundamental rights should be reached in a private dispute. This post argues that, on the one hand, in Egenberger,the Court offers a methodologically more principled account of the horizontal effect of fundamental rights than its case law has provided to date. On the other hand, its approach towards the balance between religious freedom and non-discrimination is problematic because it does not offer the degree of clarity and guidance that is needed to accommodate horizontal conflicts of rights under the Charter framework.
The facts of the case are relatively straightforward. Ms Egenberger had applied for a post with the Evangelisches Werk für Diakonie und Entwicklung, a private employer, which forms part of the Protestant Church in Germany. Interestingly, the job was the preparation of a report on combatting discrimination (though only of racial discrimination). In addition to details about the post, the job description stated:
‘We presuppose membership of a Protestant church or a church belonging to the [Working Group of Christian Churches in Germany] and identification with the diaconal mission. Please state your church membership in your curriculum vitae.’
Ms Egenberger was of no denomination. While she was shortlisted, she was not invited to interview and the job was eventually offered to a candidate who was a ‘Protestant Christian active in the Berlin regional church’. [§26] She brought a case before German courts, seeking compensation for unlawful discrimination on grounds of religion.
The relevant law
In EU law, Article 4(2) of Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation allows for a limited exception to be made to the principle of non-discrimination for 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 in the context of occupational activities within such organisations
‘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.’ (my emphasis)
German law limits judicial review of occupational requirements to a mere plausibility review, rather than a rigorous check by a court or other public authority. Pursuant to paragraph 9(1) of the Allgemeines Gleichbehandlungsgesetz (General Law on equal treatment), which transposes Art 4(2) of the Equality Directive,
‘-… 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.’ (my emphasis)
The right of self-determination mentioned in the above paragraph is a reference to German constitutional law, which affords a broad right to any religious body, inter alia,to ‘administer its affairs independently within the limits of the law’ without involvement of the state (Art 137 WRV, forming part of the German Basic Law in line Art 140 thereof). Furthermore, in accordance with the settled case law of the German Constitutional Court, constitutional rights enjoy indirect third party effect (Drittwirkung), and courts must interpret private law in their light (see the Lüth case – BVerfGE 7, 198).
In essence, this dispute can be reconstructed as a disagreement about which constitutional right should drive the interpretation of the Directive and, by implication, the national law implementing it, as well as reviving the question of what should happen in case German constitutional law and EU law came to a real clash.
The Protestant Church argued that Art 4(2) of the Directive should be interpreted in the light of its constitutional right to self-determination, protected in EU law under Article 10 EUCFR (the freedom of thought, conscience and religion) and Article 17 TFEU, which provides:
‘1. The Union respects and does not prejudice the status under national law of churches and religious associations or communities in the Member States.
2. The Union equally respects the status under national law of philosophical and non-confessional organisations.
3. Recognising their identity and their specific contribution, the Union shall maintain an open, transparent and regular dialogue with these churches and organisations.’
By contrast, Ms Egenberger argued that Article 4(2) of the Directive must be interpreted in the light of Articles 21 and 47 EUCFR which protect, respectively, the right not to be discriminated against and the right to an effective remedy.
The questions and judgment
Considering that the resolution of the dispute depended on the correct interpretation of Article 4(2) of the Directive, the Bundesarbeitsgericht referred three questions to the ECJ (paraphrased here for conciseness):
1) Does the Directive allow a church or religious organisation itself authoritatively to determine (i.e. without substantive judicial scrutiny) whether religious affiliation constitutes a genuine occupational requirement?
And, if not,
2) Should Article 9(1) of the of the Allgemeines Gleichbehandlungsgesetz be disapplied?
3) What considerations should be taken into account to ensure that an occupational requirement is genuine, legitimate and justified, having regard to the organisation’s ethos, in accordance with Article 4(2) of Directive 2000/78/EC?
Following the Opinion of Advocate General Tanchev, the Court’s judgment answers these questions in a methodical and careful manner.
The answer to the first question is in the negative. While, in introducing an exception in Article 4(2) of the Directive, the legislator certainly took into account the special position of churches and other religious and philosophical bodies in the Member States, that exception cannot be interpreted in a manner that undermines the general purpose of the Directive, that of non-discrimination, or the right to an effective remedy. It must be read in their light. For this reason, where a church or religious body asserts, because of its ethos, that religious belief constitutes a genuine occupational requirement for employment, it must at least ‘be possible for such an assertion to be the subject, if need be, of effective judicial review by which it can be ensured that the criteria set out in Article 4(2) of that directive are satisfied in the particular case.’ [§59]
In its answer to the third question, which it examined second, the Court elaborates further on the meaning of ‘genuine, legitimate and justified’ occupational requirements in EU law. An occupational requirement is ‘genuine’ if, ‘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.’ [§65] The Court thereby recognises that, to maintain the exception in a meaningful sense, judicial oversight in the application of Article 4(2) must depend not on an abstract standard of reasonableness but a situated one, which acknowledges the subjectivity of an institution promoting religious belief. However, review of the legitimacy and justifiability of a requirement that a religious body considers genuine should be deeper. Such a requirement can only be considered ‘legitimate’ where ‘the ethos upon which 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.’ [§66] Last but not least, an occupational requirement must be ‘justified’, in the sense 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.’ [§67] In other words, the requirement must comply with the principle of proportionality, in line with the reference in that provision to the general principles of European Union law. [§68]
Finally, the answer to the second question, which was examined last, is 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 4(2) of Directive 2000/78, to ensure within its jurisdiction 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.’ [§82]
Through its last finding, the Court affirms unequivocally that fundamental rights in EU law (or, to be more precise, at least the rights to non-discrimination and effective judicial protection enshrined, respectively, in Articles 21 and 47 EUCFR) are capable of producing horizontal direct effect. We already knew that Article 21 can do this through its specific expression in Directive 2000/78/EC, but Egenberger goes further in stating that Article 47 is a right that is sufficient ‘as such’, i.e. even without further elucidation in secondary legislation [§78]. What is, in my view, especially important in this case, is that the direct horizontality of these rights becomes relevant only ‘if need be’, i.e. if the national court cannot ‘guarantee the full effectiveness of those articles’ indirectly, through interpretation [§79] – and the Court has offered an unusually detailed account of how such interpretation could be reached, in the light of EU fundamental rights.
The constitutional context and significance of the case
The Egenberger ruling is situated within a terse constitutional context, especially vis-à-vis German courts. Over ten years ago, in Mangold, the ECJ found that non-discrimination on grounds of age constituted a general principle of EU law that could be relied upon directly in disputes between private parties, even before the Equality Directive entered into force. This approach was criticised extensively, most notably by the German Constitutional Court itself in its Honeywell ruling (2 BvR 2661/06), which highlighted the precariousness of the primacy of EU law in cases of potential conflict with the German Basic Law. In the end, the GCC showed its teeth but did not bite: whilst Mangold was considered an almost ultra vires act, it was just short of manifestly being so, as it fell in principle within one of the Union’s attributed competences, namely the regulation of discrimination in the sphere of employment. Still, the GCC was scathing in its discussion of Mangold, which it had found to be methodologically flawed in its creation of an ‘advance effect’ of directives and disregard of the principles of legitimate expectations and contractual freedom. For the GCC, Mangold was problematic, both because there was a substantive disagreement regarding the nature of discrimination on grounds of age and, crucially, because the ruling was constitutionally unprincipled. It made a demand of the primacy of EU law, but at the same time entailed the erosion of the constitutional structures through which national courts deliver it. Egenberger appears to speak, in part, to this concern.
The ECJ never substantively stepped away from Mangoldand, instead, expressly reaffirmed it in cases that followed, such as Kücükdeveci. At first glance, it makes the same appeal to Mangold in Egenberger [§81-82]. However, when looking closer, a turning point in its methodology in respect of the horizontal effect of fundamental rights is now identifiable, which can be traced back to the Dominguez ruling, takes clearer shape in Dansk Industri and now returns before German courts in this decision. In Egenberger, the Court allows a much greater procedural leeway to national courts to give effect to fundamental rights in private disputes in the way that national constitutional law recognises. While the Court does affirm that fundamental rights in EU law still have horizontal direct effect, it does not merely jump to this conclusion, but first explains the parameters of indirect effect in a systematic way. It works through what the application of the EU fundamental rights to non-discrimination and an effective remedy (Articles 21 and 47 EUCFR) to private relations through Article 4(2) of the Directive would mean. It thus allows national courts to carry out the balance between the freedom of religion and non-discrimination, based on an explicit and (fairly) detailed explanation of the criteria listed in Article 4(2) of the Directive, i.e. that an occupational requirement should be genuine, legitimate and justified, taking into account both national and EU constitutional law, including the general principle of proportionality. Furthermore, it should be noted that, in this case, the Court does not pull the general principles discourse out of thin air (a key criticism of the Mangold approach). A reference to general principles is made in Art 4(2) of the Directive and proportionality is undoubtedly one of them, even if one might disagree with its relevance in cases concerning religious belief.
In this sense, unlike Mangold, Egenberger offers a methodology for assessing the application of fundamental rights in disputes between private parties that is capable of reconciling the effectiveness of EU law with national constitutional structures. It rightly emphasises the importance of, and engages in detail in, statutory interpretation, and marks a more discursive form of constitutional reasoning than the Court has previously used in this field.
However, while the Court’s flirtation with indirect effect in Egenberger is constitutionally welcome, there still remains a problem of conceptual coherence in the latter parts of the Court’s fundamental rights reasoning, where horizontal direct effect is ultimately considered [§77ff]. Whereas, as the Court points out, it is indeed for the national court to assess whether national law reaches an adequate balance between different interests in line with the definition of occupational requirements discussed above [§80], the Court does not clearly assess the implications of the alternative claim in EU law (direct effect) if the national court does not, in the end, manage to reconcile these interests through interpretation. Egenberger affirms, for instance, that ‘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’ [§77]. Yet, one is left wondering: since the dispute is between private parties, is there not a constitutional duty at that stage also to apply, in those contracts, if not Article 17 TFEU, at least Article 10 EUCFR, just as much as Article 21?
If horizontal direct effect does come into the picture, the case entails a horizontal clash of equally fundamental constitutional rights, rather than merely an interplay of different interests in the interpretation of existing law. By allowing religious belief to disappear from its discussion of direct horizontal effect entirely in the last part of the ruling, the Court seems to avoid the more difficult constitutional question: how does the Charter – an instrument which, for better or worse, sets both a floor and a ceiling for fundamental rights protection in the Union – positively protect religion? Here, the ECJ’s reasoning is likely to be found wanting. It may very well be that the outcome that aggregately best serves fundamental rights in this dispute would weigh in favour of non-discrimination – after all, it is clear that the Court only asks for greater safeguards and not for a blanket erosion of the autonomy of churches. For this reason, as other commentators have pointed out already, in this post and this post (in German), it seems unlikely that the German courts would challenge primacy in respect of this question, as they will, most probably, be able to accommodate the Court’s earlier analysis. Still, the ECJ could be more nuanced in respect of Article 10 – a provision that remains under-defined in a series of recent rulings concerning religion in employment.
Overall, Egenberger represents, in my view, a cautious but generally welcome adjustment of the Court’s methodology in respect of the horizontal effect of fundamental rights in the Charter era. More detail on the proper application of direct effect where different fundamental rights are in conflict would be a much-needed further improvement.