Direct horizontal effect of the EU Charter of Fundamental Rights: CJEU Bauer
November 16, 2018
In its recent judgment in the joined cases of Stadt Wuppertal v Bauer and Willmeroth v Broßonn, the Court of Justice of the EU for the first time explicitly recognised the direct horizontal effect of a Charter provision in a dispute between private parties governed by an EU Directive.
Following the CJEU’s earlier judgments in the cases of Mangold and Kücükdeveci, the question had arisen to what extent private parties may rely on EU fundamental rights in cases in which it is not possible to interpret national law in conformity with the EU Directive applicable to their case. In these cases, the CJEU famously held that parties could rely on the right to non-discrimination because of age, as a general principle of EU law that is by now codified in Article 21 of the Charter. While the Court gave some further guidance on the possibility to circumvent the prohibition on direct horizontal effect of Directives by referring to the Charter in its decision in Association de Médiation Sociale, it stopped short of giving direct horizontal effect to the Charter (Article 27) in that case.
In Bauer, the CJEU has now further clarified its views on the relationship between EU Directives and Charter provision in private legal disputes. The joined cases regarded two widows’ right to payment of an allowance in lieu of the paid annual leave not taken by their spouses before their death. The Court specifically addressed the employers’ responsibility to pay such allowances in light of Article 31 of the Charter:
’85 The right to a period of paid annual leave, affirmed for every worker by Article 31(2) of the Charter, is thus, as regards its very existence, both mandatory and unconditional in nature, the unconditional nature not needing to be given concrete expression by the provisions of EU or national law, which are only required to specify the exact duration of annual leave and, where appropriate, certain conditions for the exercise of that right. It follows that that provision is sufficient in itself to confer on workers a right that they may actually rely on in disputes between them and their employer in a field covered by EU law and therefore falling within the scope of the Charter (see, by analogy, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 76).
86 Article 31(2) of the Charter therefore entails, in particular, as regards the situations falling within the scope thereof, first, that the national court must disapply national legislation such as that at issue in the main proceedings pursuant to which the death of a worker retroactively deprives him of his entitlement to paid annual leave acquired before his death, and, accordingly, his legal heirs of the entitlement to the allowance in lieu thereof by way of the financial settlement of those rights, and, second, that employers cannot rely on that national legislation in order to avoid payment of the allowance in lieu which they are required to pay pursuant to the fundamental right guaranteed by that provision.
87 With respect to the effect of Article 31(2) of the Charter on an employer who is a private individual, it should be noted that, although Article 51(1) of the Charter states that the provisions thereof are addressed to the institutions, bodies, offices and agencies of the European Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing EU law, Article 51(1) does not, however, address the question whether those individuals may, where appropriate, be directly required to comply with certain provisions of the Charter and cannot, accordingly, be interpreted as meaning that it would systematically preclude such a possibility.’
Where it is impossible to interpret a national rule such as that at issue in the main proceedings in a manner consistent with Article 7 of Directive 2003/88 and Article 31(2) of the Charter of Fundamental Rights, the national court, before which a dispute between the legal heir of a deceased worker and the former employer of that worker has been brought, must disapply that national legislation and ensure that the legal heir receives payment from the employer of an allowance in lieu of paid annual leave acquired under those provisions and not taken by the worker before his death. That obligation on the national court is dictated by Article 7 of Directive 2003/88 and Article 31(2) of the Charter of Fundamental Rights where the dispute is between the legal heir and an employer which has the status of a public authority, and under the second of those provisions where the dispute is between the legal heir and an employer who is a private individual.
While this may only seem a small step from AMS, the explicit recognition of the possibility to require private actors to comply with Charter provisions signifies a rather big jump in the development of fundamental rights protection in European private law. Furthermore, the CJEU’s judgment in Bauer gives the work of national courts a new European dimension, insofar as judges under certain circumstances will have to disapply national legislation in order to guarantee effective protection of Charter rights.