Federal Constitutional Court - Press office -
Press release no. 69/2010 of 26 august 2010
Order of 6 July 2010 – 2 BvR 2661/06 –
The Mangold judgment of the European Court of Justice does not transgress
Community competence in a constitutionally objectionable manner
The complainant is an enterprise involved in automotive supplies which
concluded several fixed-term employment contracts in February 2003 with
previously unemployed individuals without having objective reasons for
the fixed term of employment. According to the version of § 14.3
sentence 4 of the Law on Part-Time Working and Fixed-Term Contracts
(Teilzeit- und Befristungsgesetz – TzBfG) which was applicable at that
time, it was possible to deviate from the principle that objective
reasons are required to give rise to a fixed term of employment if the
employee had already reached the age of 52 on commencement of the
employment relationship.
The plaintiff of the initial proceedings, who had been employed by the
complainant on this basis, later asserted a claim vis-à-vis the
complainant with regard to the ineffectiveness of his fixed-term
employment contract. His request for a finding that the employment
relationship was to continue and for continued employment was successful
before the Federal Labour Court (Bundesarbeitsgericht).
The Federal Labour Court found that the employment relationship between
the parties had not ended as a result of its fixed-term nature. It
further stated that national courts could not apply § 14.3 sentence 4 of
the Law on Part-Time Working and Fixed-Term Contracts because they were
bound in this respect by the judgment of the European Court of Justice
of 22 November 2005 in Case C-144/04 Mangold ([2005] ECR I-9981). A
provision of national law such as § 14.3 sentence 4 of the Law on
Part-Time Working and Fixed-Term Contracts was said to be incompatible
with Anti-Discrimination Directive 2000/78/EC and the general principle
of non-discrimination in respect of age according to this judgment.
Since the judgment of the European Court of Justice was absolutely
clear, there was no need for a renewed submission. Although the
agreement on a fixed term of employment which was the subject of the
dispute was reached prior to the Mangold judgment, the Federal Labour
Court refused to apply § 14.3 sentence 4 of the Law on Part-Time Working
and Fixed-Term Contracts for reasons of the protection of legitimate
expectations under Community or national law.
The complainant considers its contractual freedom and its right to its
lawful judge to have been violated by the judgment of the Federal Labour
Court. It asserts that a violation of its contractual freedom has taken
place from two different points of view. It is said to emerge, firstly,
from the Federal Labour Court having taken the Mangold judgment of the
European Court of Justice as a material basis, with which the latter
Court was said to have transgressed its competences in several respects.
In the view of the complainant, a violation of its contractual freedom
furthermore follows from the Federal Labour Court having not granted
sufficient protection of its legitimate expectations. Finally, it is
said that the Federal Labour Court should have referred to the European
Court of Justice the question as to whether principles of protection of
legitimate expectations under Community or national law did not require
the Mangold judgment to be subject to a time restriction.
The Second Senate of the Federal Constitutional Court rejected the
constitutional complaint as unfounded. The ruling was handed down with
6:2 votes with regard to the grounds and with 7:1 votes with regard to
the outcome. Justice Landau has added a dissenting opinion to the
ruling.
In essence, the decision is based on the following considerations:
1. The complainant’s contractual freedom has not been violated because
the impugned judgment of the Federal Labour Court is based on a
non-permissible further development of the law on the part of the
European Court of Justice, and the Mangold judgment should therefore not
have been applied in Germany as a so-called ultra vires act.
As the Senate found in its Lisbon judgment, ultra vires review of acts
of the European bodies and institutions by the Federal Constitutional
Court may only be exercised in a manner which is open towards European
law. It can hence only be considered if a breach of competence on the
part of the European bodies and institutions is sufficiently qualified.
This is contingent on the acts of the authority of the European Union
being manifestly in breach of competences and the impugned act leading
to a structurally significant shift to the detriment of the Member
States in the structure of competences between Member States and the
European Union.
When reviewing acts of the European bodies and institutions, the Federal
Constitutional Court must in principle adhere to the rulings of the
European Court of Justice as providing a binding interpretation of Union
law. Insofar as the European Court of Justice has not yet clarified the
questions which have arisen, it should therefore be afforded the
opportunity to interpret the Treaties prior to the acceptance of an
ultra vires act, as well as to rule on the validity and interpretation
of the acts in question.
Measured against this, the Federal Labour Court has not ignored the
scope of the complainant’s contractual freedom. At any rate, the
European Court of Justice has not violated its competences by virtue of
the outcome found in the Mangold judgment in a sufficiently qualified
manner.
This particularly applies to the derivation of a general principle of
non-discrimination in respect of age. It is irrelevant whether such a
principle could be derived from the constitutional traditions common to
the Member States and their international agreements. For even a
putative further development of the law on the part of the European
Court of Justice that would no longer be justifiable in terms of legal
method would only constitute a sufficiently qualified infringement of
its competences if it also had the effect of establishing competences in
practice. The derivation of a general principle of non-discrimination in
respect of age would however not introduce a new competence for the
European Union, nor would an existing competence be expanded. In this
sense, Anti-Discrimination Directive 2000/78/EC had already made
non-discrimination in respect of age binding for legal relationships
based on employment contracts, and hence opened up discretion for
interpretation for the European Court of Justice.
2. The complainant’s contractual freedom has also not been violated
because the impugned judgment of the Federal Labour Court did not grant
any protection of legitimate expectations.
Confidence in the continuation of a law can be affected not only by the
retroactive finding of its invalidity by the Federal Constitutional
Court, but also by the retroactive finding of its inapplicability by the
European Court of Justice. The possibilities for Member States’ courts
to grant protection of legitimate expectations are however pre-defined
and limited by Union law. Protection of legitimate expectations can
accordingly not be granted by virtue of the Member States’ courts
applying a national provision the incompatibility of which with Union
law has been found for the time prior to the issuance of the preliminary
ruling.
No indications are found in the case-law of the European Court of
Justice, by contrast, that Member States’ courts are precluded from
granting secondary protection of legitimate expectations by
compensation. To ensure constitutional protection of legitimate
expectations, one must hence consider in constellations of retroactive
inapplicability of a law as a result of a ruling of the European Court
of Justice to grant compensation domestically for a party concerned
having trusted in the statutory regulation and having made plans based
on this trust.
Measured by this, the Federal Labour Court has not ignored the scope of
protection of legitimate expectations that is to be constitutionally
granted. Because of the primacy of application of Community and Union
law, it was allowed to not consider itself able to grant protection of
legitimate expectations by confirming the rulings of the previous
instances that had been handed down in favour of the complainant. A
claim to compensation against the Federal Republic of Germany without a
violation of the primacy of application for the loss of assets which the
complainant suffered by virtue of the employment relationship being
extended for an indefinite period of time was not the subject-matter of
the proceedings before the Federal Labour Court.
3. The complainant was, finally, not denied its lawful judge by virtue
of the Federal Labour Court not submitting the case to the European
Court of Justice. The Federal Labour Court justifiably presumed in this
respect that it was not obliged to effect such a submission.
The Federal Constitutional Court confirms its case-law in this context,
in accordance with which the standard of arbitrariness which it
generally applies when interpreting and applying competence norms also
applies to the obligation to make a reference in accordance with Art.
267.3 TFEU (see Decisions of the Federal Constitutional Court
(Entscheidungen des Bundesverfassungsgerichts – BVerfGE) 82, 159 <164>).
The Federal Constitutional Court is not obliged by Union law to fully
review the violation of the obligation to submit under Union law and to
orientate it in line with the case-law that has been handed down by the
European Court of Justice on this matter (different view in BVerfG,
Order of 3rd Chamber of the First Senate of 25 February 2010 – 1 BvR
230/09 –, NJW 2010, p. 1268 <1269>).
Dissenting opinion of Justice Landau:
Justice Landau takes the view that the Senate majority is taking too far
the requirements as to the finding of an ultra vires act by the
Community and Union bodies by the Federal Constitutional Court. The
Senate majority is said to have transgressed the consensus on which the
Lisbon judgment was based by requiring not only a “manifest”, but also a
“sufficiently qualified” breach of competences. In the Senate’s opinion,
the breach must not only be manifest, but it must additionally lead to a
structurally significant shift in the arrangement of competences between
Member States and a supranational organisation. Hence, the Senate
majority is said to be ignoring the fact that any exercise of sovereign
power had to have a democratic legitimation according to the Lisbon
judgment. This is however said not to be the case if the Community and
Union bodies violate their competences.
The European Court of Justice is said to have manifestly transgressed
the competences granted to it to interpret Community law with the
Mangold judgment. The question left open by the Senate majority, namely
whether the European Court of Justice had left the field of justifiable
interpretation, was manifestly to be answered in the affirmative. It was
said in particular to be not justifiable to derive a specific
prohibition of age discrimination from the constitutional traditions
common to the Member States or their international agreements.
Under these circumstances, it is said that the Federal Labour Court was
prevented from invoking the Mangold judgment, setting aside § 14.3
sentence 4 of the Law on Part-Time Working and Fixed-Term Contracts and
granting the action against the employment relationship being extended
for an indefinite period of time. Since the Federal Labour Court had not
been free to openly deviate in its ruling from the case-law of the
European Court of Justice, the Federal Labour Court should have debated
or deliberated on all available possibilities to solve the immanent
tensions.
This press release is also available in the original german version.
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