A German law providing older fixed term workers with fewer legal protections than their younger counterparts was unlawful age discrimination. Although the German government had a legitimate aim – the vocational integration of unemployed older people – the way in which it had sought to achieve that aim (by excluding those over a particular age from certain legal protections) was not proportionate.
Another important aspect of this decision was the ECJ’s ruling that the German government had acted illegally in implementing an age discriminatory law even though the deadline for implementing the age strand of the 2000 EC Anti-discrimination Framework Directive had not yet expired.
The case revolved around German laws which set restrictions on the length of fixed-term contracts and the number of times they can be renewed. These rules are relaxed where the contract is with a worker who is over a certain age, giving them less job protection. In 2001, German legislators changed the age at which these restrictions were relaxed from 60 to 52 (it will change again to 58 from the end of 2006) at the same time as they implemented the 1999 EC Fixed-term Work Directive into German law.
The ECJ upheld an argument that this was unlawful as it discriminated against older workers contrary to EU law. At first sight this might not seem that surprising. However, Germany, like the UK, has perfectly legitimately deferred implementation of the age strand of the Anti-discrimination Directive until the end of 2006. The ECJ was unconcerned that Germany had not yet implemented its age discrimination laws nor that the deadline for them to do so had not yet expired.
The German Government sought to argue that its fixed-term contract age limits were, in any event, compatible with the Anti-discrimination Directive. To succeed, it had to show:
- that the limits served to advance a legitimate aim; and
- they were a proportionate means of achieving that aim.
The ECJ accepted that Germany’s aim - ‘the vocational integration of unemployed older workers, in so far as they encounter considerable difficulties in finding work’ – was a legitimate ‘public-interest objective’ which was capable of justifying age discrimination.
However, the Court was not persuaded that the limits were ‘appropriate and necessary’ as required by the Directive. It was unhappy that the limits applied to all workers over age 52 ‘whether or not they were unemployed before the contract was concluded and whatever the duration of any period of unemployment’. In the Court’s view, this infringed the principle of proportionality (which requires a fair balance to be struck between the advantage to the employer of achieving its legitimate aim and the disadvantage to the employee of the discriminatory treatment).
The case is interesting partly because of the Court’s comments as to the potential for age discrimination to be justified; and partly because of the implication that age discrimination is potentially unlawful in EU member states regardless of the implementation of domestic age laws.
Justifying age discrimination
This case gives us a first glimpse of the ECJ’s likely approach to age discrimination claims. Worrying, too, it must be for the UK Government.
It seems certain to make it more difficult for employers to justify policies which treat people differently purely by reason of their age (such as pre-65 retirement ages, for example). It also calls into question some of the Government’s thinking, most notably the discriminatory national minimum wage rates for young people. The DTI’s stated aim (set out in its Coming of Age consultation document) of encouraging employers to take on young workers echoes ominously the arguments of the German Government that were thrown out by the ECJ.
Age discrimination laws in the EU
The ECJ gave the following two reasons for holding that age discrimination is potentially unlawful in EU member states, regardless of the implementation of domestic age laws:
- during the period of transposition of a Directive, member states must not take steps that derogate from its objectives; and
- the prohibition on age discrimination is ‘a general principle of Community law’ emanating from ‘various international instruments and in the constitutional traditions common to the member states’.
The first explanation is understandable, although the ECJ seemed to take a different view in a later Greek case, Adeneler v.Ellinikos Organismos Galaktos (C-212/04, 4 July 2006). In that case, the ECJ (which contained four of the same judges who made the decision in Mangold) held that Directives were effective only from the end of the transposition period (save, of course, where the Directive has direct effect).
It is the ECJ’s second explanation, however, that has caused European lawyers to scratch their heads and raise questions such as:
- What are these ‘general principles of Community law’? Does this mean there is now some form of EU ‘common law’? If so, what else might it include?
- Is the ECJ’s ruling restricted to cases where domestic law, which is inconsistent with a yet–to-be-implemented Directive, is introduced during the period for transposition? If so, its impact would be greatly limited.
- Does the ruling apply only to inconsistent domestic laws that derive from EU law, such as the rights of fixed-term workers to which the case related? That would mean, for example, that the UK’s unfair dismissal and national minimum wage laws – which are not based on EU directives – could not yet be challenged as age discriminatory.
The ECJ concluded: ‘it is the responsibility of the national court, hearing a dispute involving the principle of non-discrimination in respect of age, to provide, in a case within its jurisdiction, the legal protection which individuals derive from the rules of Community law and to ensure that those rules are fully effective, setting aside any provision of national law which may conflict with that law’.
On the face of this wording, individuals might potentially have been able to bring age discrimination cases in the UK before the UK Regulations came into force.
Mangold v Helm  IRLR 143 (ECJ); Adeneler v Ellinikos Organismos Galaktos (C-212/04, 4 July 2006).