German headscarf cases at the ECJ: a glimmer of hope?

On 15 July 2021, the ECJ handed down its judgment in two joined cases, both referred by German courts, regarding the wearing of Islamic headscarves or hijabs at work: IX v Wabe eV and MH Müller Handels GmbH v MJ. These cases have been widely reported under headlines stating that European employers can dismiss employees for wearing a headscarf (e.g. France24, Aljazeera, the Times). The judgment has been criticised for fuelling Islamophobia in Europe. Although the judgment does, indeed, allow employers to ban the wearing of hijabs at work, it does so under certain conditions and contains some positive developments in clarifying its previous judgments in headscarf cases (Achbita and Bougnaoui). In this sense, the judgment presents a small indication that the ECJ is moving – even if very slowly – towards more protection of Muslim hijab-wearing employees.

1. The facts

In Wabe, a Muslim employee of a company running a number of nurseries, was asked, when returning from parental leave, to no longer wear a headscarf. During her leave, the company had introduced a neutrality policy prescribing that employees refrain from wearing any visible signs of political, ideological or religious beliefs. The employee refused to remove her headscarf and, after two official warnings, was released from work. The company’s neutrality policy did not apply to employees who did not come into contact with customers. The claimant, IX, challenged this as direct religion or belief discrimination and as discrimination on the grounds of gender and ethnic origin.

Müller concerned a Muslim employee of a company which runs a number of chemist shops. On her return from parental leave, the employee wore a headscarf, which she had not done before. Her employer asked her to remove the headscarf as it was against company rules not to wear any prominent and large-scale signs of religious, philosophical and political convictions. This rule applied to all shops and aimed to preserve neutrality and avoid conflicts between employees. After twice refusing to do so, she received instructions to come to work without the headscarf. The claimant, MJ, also challenged these instructions as discrimination.

2. The judgment

The Court first examined whether these two internal rules constitute direct or indirect discrimination. This distinction is important because direct discrimination can generally not be justified except in limited circumstances expressly laid down by law. In contrast, according to Article 2(2)(b)(i) of Directive 2000/78, indirect discrimination is not unlawful if it is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.

2.1 Direct discrimination

In relation to Wabe, the ECJ holds, confirming its decision in Achbita, that an internal rule of a private undertaking prohibiting the wearing of any visible sign of political, philosophical or religious beliefs does not constitute direct discrimination, as defined in Article 2(2)(a) of Directive 2000/78. This is true only if the rule covers any manifestation of such beliefs without distinction and treats all workers in the same way. Such a rule is not inextricably linked to religion or belief, despite the fact that some workers observe religious precepts which require certain clothing to be worn and that the application of such an internal rule causes particular inconvenience for such workers (paras 52-53). The ECJ takes into account that the defendant, Wabe, also required another employee wearing a religious cross to remove that sign and concludes that the claimant, IX, was not treated differently as compared to the other employees. Thus, there was no direct discrimination (paras 54-55). This conclusion differs from that of the referring court, which expressed the opinion that there was direct discrimination, because the unfavourable treatment suffered by IX related to a specific characteristic (religion) (para 32).

In relation to Müller, the ECJ holds that, because the neutrality policy in this case only prohibits the wearing of conspicuous, large-scale signs, this constitutes direct religion or belief discrimination because some workers will be treated less favourably than others on the basis of their religion or belief (para 73). The ECJ makes clear that a head covering is a large-sized sign (para 72).

2.2  Indirect Discrimination

The ECJ  refers to the definition of indirect discrimination in Article 2(2)(b) of Directive 2000/78 and states that it is up to the national court to verify whether the conditions mentioned there are fulfilled. However, the ECJ adds that it starts from the premise that the rule in Wabe constitutes an difference in treatment indirectly based on religion (para 59). It then examines the issue of objective justification under Article 2(2)(b)(i) of Directive 2000/78. The ECJ considers, on the one hand, that the Directive is a specific expression of the general principle of non-discrimination in Article 21 of the EU Charter (CFREU) and that the right to equality before the law and protection against discrimination constitute a universal human right (para 62). On the other, the ECJ also argues that an employer’s desire to display, in relations with customers, a policy of political, philosophical or religious neutrality is legitimate and covered by the freedom to conduct a business in Article 16 CFREU. It holds that it is legitimate, particularly where the policy only applies to workers who come into contact with customers (para 63). In this, the ECJ follows its previous judgment in Achbita, but qualifies it by stating that the mere desire of an employer to pursue a policy of neutrality is not sufficient to justify indirect religion or belief discrimination and that the employer must demonstrate that there is a genuine need (para 64).

When establishing objective justification, the ECJ states that the rights and legitimate wishes of customers must be taken into account. Here, it highlights the rights of parents to ensure their children’s education is in accordance with their own beliefs (recognised in Article 14 CFREU) and the parents’ wish to have their children supervised by persons who do not manifest their religion or belief (para 65). According to the ECJ, the latter circumstances should be distinguished from the Bougnaoui case – where no general neutrality policy was in place and the employee was dismissed following a customer complaint – and from Feryn – where direct racial discrimination arose from the discriminatory requirements of customers (para 66).

The ECJ continues that the national courts should consider whether the employer can provide evidence that, without a neutrality policy, they would suffer adverse consequences (para 67). The neutrality rule must be applied properly and in a consistent and systematic manner and must be limited to what is strictly necessary (paras 68-69).

In the Müller case, the ECJ confirms that the neutrality rule was intended to avoid social conflicts within the undertaking, particularly as such tensions had occurred in the past. Whilst this can be a legitimate aim, the rule was, however, not limited to what is strictly necessary. According to the ECJ, a neutrality rule is only legitimate if all visible manifestations of political, philosophical or religious beliefs are prohibited. Allowing some smaller manifestations, whilst prohibiting larger-scale manifestations, undermines the ability of the measure to achieve the aim pursued (paras 76-77).

2.3 More favourable national provisions

Both referring courts had also asked the ECJ whether national constitutional provisions protecting the freedom of religion may be taken into account as more favourable provisions (within the meaning of Article 8(1) of Directive 2000/78), in examining the appropriateness of a difference of treatment indirectly based on religion or belief (under Article 2(2)(b) of Directive 2000/78).

According to the German national provisions (particularly, Article 4(1) and (2) of the German Constitution), an employer’s wish to pursue a policy of religious neutrality which restricts an employee’s right to freedom of religion, is legitimate only where the company would suffer economic harm if such neutrality did not exist (para 85). The ECJ holds that such a requirement forms already part of Article 2(2)(b)(i) of Directive 2000/78 as regards the justification of an indirect discrimination based on religion or beliefs (para 85). It also holds that national provisions protecting the freedom of religion may be taken into account as more favourable provisions in Article 8(1) of Directive 2000/78, when examining what constitutes a difference of treatment based on religion or belief (para 89).

3. Comments

The Court’s decision in Wabe and Müller can be criticised for a number of reasons. Principally, the ECJ’s findings that there is no direct discrimination in Wabe, but that there is in Müller, appear to be contradictory. In her Shadow Opinion in Wabe and Müller, former Advocate General Sharpston argues that the neutrality rules in both cases very likely constitute direct discrimination. In fact, I would contend that all neutrality rules which prohibit signs of religious, philosophical or political belief constitute direct discrimination, because some workers will be treated less favourably than others on the basis of their religion or belief (see here and here and the literature referred to there). The rule in Wabe discriminates between workers from religious groups who consider themselves mandated by their religion to wear certain clothing in comparison with members of religions who do not, and in comparison with workers without religious beliefs. A partial ban, which only prohibits prominent and large-scale signs, like the one in Müller, discriminates between religions (paras 122-123 Sharpston’s Shadow Opinion).

It is also disappointing that the ECJ does not find it necessary to examine the referred question in Wabe regarding indirect gender discrimination (para 58), but focuses solely on indirect religious discrimination. The ECJ notes itself that the neutrality rule in Wabe concerns, statistically, almost exclusively female workers who wear a headscarf because of their Muslim faith. According to the ECJ, however, this constitutes an indirect difference in treatment based on religion (para 59). If the neutrality rule concerns almost exclusively female workers, would it not also constitute indirect gender discrimination? The Court regrettably provides no clarification.

The ECJ had previously considered the fact that a practice based on stereotypes and prejudice should be taken into account when deciding whether that practice constitutes direct discrimination (see CHEZ, para 82). In the present judgment, the question arises whether the employer’s wish to have a strict neutrality policy is not based on the prejudicial views of customers towards Muslims and specifically towards Muslim women wearing hijabs. The ECJ stays silent on this issue in Wabe and Müller, while it should have at least considered whether prejudice was involved. Moreover, one might ask the question whether the ECJ would say the same about the wishes of customers not to be served by an ethnic minority or disabled person. The Feryn judgment suggests that the ECJ would find acting on these wishes to be direct discrimination. Why are arguably prejudiced views on religion treated differently?

Despite its shortcomings, the CJEU’s decision in Müller and Wabe also provides some useful clarifications on the justification and proportionality test. The ECJ explains that the employer’s interests in conducting business (Article 16 CFREU) must be weighed against the restriction on the worker’s freedom of religion (Article 10 CFREU). This is a welcome development. It provides for a more rigorous justification and proportionality test than previously applied by the ECJ in its headscarf cases, where the ECJ did not appear to take account of the importance of the worker’s fundamental right to freedom of religion (for a critique on this, see here and here). In Müller and Wabe, the ECJ also appears to suggest that, where an employer restricts the worker’s freedom of religion by imposing neutrality rules, the employer must prove economic harm as part of the justification and proportionality test for indirect discrimination (para 85). This further contributes to a more rigorous test.

4. Conclusion

In Wabe and Müller, the ECJ has allowed employers to ban employees from wearing hijabs at work and it can be criticised for allowing this. It is unfortunate that the ECJ did not engage with the issue of gender discrimination and that it very easily accepted a neutrality policy based on the wishes of customers as a legitimate aim. However, the ECJ also imposed a higher burden of proof on the employer regarding the justification of neutrality rules: it gave more attention to the right of the employee to manifest their religion; and, it has made the justification and proportionality test slightly more rigorous. This must all be welcomed as it presents a small glimmer of hope that the ECJ is moving, albeit very tentatively, towards more protection of Muslim women who want to wear hijabs at work.