Egenberger and Bauer: The EU Charter as a source of rights and obligations for individuals

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Sim Haket

The Egenberger and Bauer judgments concern what has been described as probably the most important development in EU fundamental rights law in a long time (Sarmiento): establishing the horizontal direct effect of some of the provisions of the EU Charter of Fundamental Rights (Charter). The Bauer judgment also established the duty of consistent interpretation in relation to the Charter. Despite the clear terms of the judgments, the role played by individuals as either beneficiaries or addressees of the Charter is worthy of further reflection; is the Charter a direct source of rights and obligations in disputes between individuals? I first discuss in a more general way the remedies of direct effect and consistent interpretation in EU law before I turn to the Egenberger and Bauer judgments and their meaning for consistent interpretation and in particular the direct effect of the Charter in disputes between individuals.

In the legendary Van Gend & Loos judgment, the European Court of Justice (ECJ) first pronounced the direct effect of EU law, i.e. individuals could rely directly on provisions of EU law. Two questions are relevant when it comes to direct effect. First, there is the question when a provision is capable of producing direct effect. It is well-established case law that this requires that the provision is sufficiently precise and unconditional. Secondly, there is the question of against whom such a directly effective provision can be invoked. The ECJ’s Marshall I judgment provided that directives (an EU legislative instrument) do not have horizontal direct effect. This rejection was based on a textual argument: Article 288 of the Treaty on the Functioning of the European Union (TFEU; which together with the Treaty on European Union constitute ‘the Treaties’) provides that a directive is only binding on the Member State to which it is addressed. By contrast, provisions of regulations (another EU legislative instrument) and the Treaties that are sufficiently precise and unconditional are capable of producing horizontal direct effect. There is of course the logical requirement that the provisions contained in those sources must in principle address individuals for them to have this effect.

In addition to direct effect, there is also the obligation for national courts to interpret national law so far as possible in conformity with EU law (see Von Colson and Kamann). An important distinction with direct effect is that where national law is interpreted in conformity with EU law the rights and obligations stipulated by EU law reach the individuals through the intermediary of the concerned provisions of national law. As a result, the proximity between the directive and the concerned national provision, as well as the scope that is available under the national interpretative rules for giving a further interpretation to the latter, control the possibility for a consistent interpretation (see further Haket and the forthcoming publication of my PhD dissertation entitled ‘The EU law duty of consistent interpretation in German, Irish and Dutch courts’).

With the Lisbon Treaty, the Charter entered the stage as a new binding source of EU law. It was previously found that provisions of the Charter that were sufficiently precise and unconditional could be invoked against a Member State implementing EU law (see, for example, Glatzel and Milkova; for a discussion when Member States implement EU law, see Tridimas and see also the judgment in Åkerberg Fransson). It has been argued by some that the horizontal direct effect of the Charter was implicitly accepted in the AMS judgment. However, this was only explicitly confirmed in the Egenberger judgment and, subsequently, in the Bauer judgment. Additionally, the obligation to interpret national law so far as possible in conformity with the Charter was mentioned in the Bauer judgment for the first time.

The Egenberger and Bauer judgments concerned proceedings in which a directive was invoked in a dispute between two individuals. In the Egenberger judgment the referring court asked whether it was obliged to disapply a provision of national law that could not be given an interpretation consistent with the Equal Treatment Framework Directive. It is clear that, should such an interpretation be impossible, the incompatibility cannot be remedied through a direct application of the directive in the horizontal dispute. However, it follows from the ECJ’s judgment that Article 21 of the Charter, concerning the prohibition of discrimination, as well as Article 47, are sufficient in themselves to have direct effect, also in horizontal disputes.

The same approach was then applied in the Bauer judgment concerning a dispute over the Working Time Directive. The ECJ reiterated that a directive cannot of itself impose obligations on an individual. If it is also not possible to adopt a consistent interpretation, the national court should give direct effect to Article 31(2) of the Charter concerning the right to paid leave. The ECJ in Bauer explicitly engaged with the counter-argument that Article 51 of the Charter, which states that its provisions are addressed to the EU and the Member States (when they implement EU law). First, it held that Article 51 does not explicitly address the position of individuals as addressees of fundamental rights obligations, so that it cannot be interpreted as precluding such a possibility. Secondly, the fact that certain provisions of EU primary law are addressed principally to the Member States does not preclude their application in horizontal disputes (indeed: also a provision such as Article 157 TFEU seemed to be addressed to the Member States only but was given horizontal direct effect). Thirdly, the ECJ referred to its judgment in Egenberger. Finally, it noted that Article 31(2) by its very nature entails a corresponding obligation on the employer. Hence, the ECJ concluded that Article 51 was not an obstacle to recognising the direct effect of Article 31(2) in these proceedings.

The establishment of the requirement to interpret national law in conformity with the Charter was not surprising. The same requirement also applies in relation to directives. It is not problematic that directives are only binding on the Member States, who must implement its provisions into national law: the result prescribed by the directive reaches the individuals only indirectly, through the intermediary of national law. For this reason Article 51 is also not an obstacle: an interpretation in conformity with the Charter does not directly impose obligations on individuals.

Yet, despite the clear wording of the Egenberger and Bauer judgments, some further reflection is necessary as far as concerns horizontal direct effect. This reflection should focus on three perspectives. First, what is the purpose of fundamental rights? Traditionally, fundamental rights were viewed as being intended to be invoked against, and as acting as a counterbalance to the powers of, the State. However, it has become more and more accepted that they are also capable of imposing obligations on individuals and if fundamental rights are viewed as inalienable rights enjoyed by individuals, it should not matter against whom they are invoked (see further De Mol). The ECJ’s judgments seem to indicate that it does not view fundamental rights as exclusively providing protection against Member States. The Bauer judgment emphasised not only the need to guarantee the Charter’s effectiveness but also the need to ensure judicial protection which individuals enjoy based on this instrument.  Arguably, these two objectives go hand in hand.

Secondly, can the judgments be reconciled with Article 51? The latter’s wording certainly seemed to favour the view that the Charter could only be relied upon against the Member States (most prominently: the Opinion of Advocate General Trstenjak in the Dominguez judgment). This conflicts with the Charter being capable of establishing obligations for individuals. A reconciliatory interpretation of the judgments could be that on both occasions it was ultimately legislation adopted by the Member State that would have to be disapplied. So it could be argued that, contrary to the situation where the incompatibility with the Charter derives from, for example, an individual’s factual acts, contractual arrangements, or occupational regulations, there is still a clear link with the activities of the Member State. Legislation adopted by the Member States in the area of private law will primarily play a role in private law disputes and it may be asked whether the Charter can be effectively enforced if an individual in such proceedings cannot invoke the national legislation’s incompatibility with the Charter.

However, turning to the third perspective, what is the concern underlying the question of whether a rule of EU law can be directly relied upon in horizontal relationships? The Marshall I judgment rejecting the horizontal direct effect of directives made it clear that, as directives are addressed to Member States, they cannot impose obligations on individuals. From this perspective, it is irrelevant whether the enforcement of the directive is sought against an individual faithfully acting in compliance with incompatible national law, or that there was no such intermediary. For example, in the Marshall I judgment, the incompatibility with EU law arose from the employer’s dismissal policy whereas in the Kücükdeveci judgment, which also states the no-horizontal-direct-effect rule, the incompatibility resulted from the applicable national rules. If this rationale is followed and its coherence maintained, this would require that it is also immaterial for the horizontal direct effect of the Charter whether the incompatibility derives from national law or is the immediate consequence of the employer’s actions. The HK Danmark judgment provides some support for this broader understanding of horizontal direct effect of the Charter as the ECJ examined – in a dispute between individuals – the compatibility of occupational retirement provisions (i.e. a purely private act) with Article 21 of the Charter. Yet it should be mentioned that the ECJ in the end did not find a violation of the Charter in that case and the judgment has been interpreted reservedly (see De Mol).

It is difficult to predict whether the first (the purpose of fundamental rights) and third (the coherence of the rationale behind the question whether EU law can have horizontal direct effect) argument would be outweighed by the second (the wording of Article 51 of the Charter); a provision similar to Article 51 is not found in other sources of EU law and could justify a distinct approach to horizontal direct effect under the Charter.

In addition to it not yet being clear which provisions of the Charter could have horizontal direct effect (a matter that was not further discussed here), the question thus remains whether it is truly a direct source of rights and obligations for individuals or whether the prerequisite remains of a connection to a Member State’s failure to comply with EU law.