8.5.2 The legal nature of the legal relationship and of the parties to it

427. The chance of successful effective judicial protection for an infringement of a right that Union law confers upon a private party depends to a large extent on the legal nature of the legal relationship, that is whether it is a horizontal or a vertical legal relationship. This issue has occurred particularly in the field of employment relationships. Cases like Dominguez and Bauer andBroûonn demonstrate that the outcome of a case can vary depending on the answer to the question whether the employer is a private employer or an employer that has the status of a public authority. Thanks to the direct vertical effect of certain provisions of directives in the realm of labour law, employees that work for a public authority have a considerably higher chance of receiving judicial protection of the rights conferred upon them by these directives than their comrades working for a private employer. After all, the latter cannot invoke these rights vis-à-vis a private employer.1 This is demonstrated in Fuûand Neidel, and Bauer in which the (former) employees could directly invoke the respective directive against their employer which had the status of a public authority.2 Unfortunately, after the Court of Justice’s ruling in Dominguez the Cour de cassation entirely overlooked the question whether or not CICOA was a public authority. If the CICOA could be qualified as an emanation of the State3, the direct vertical effect of the Directive and the Charter should have resulted in sustaining Dominguez’s claim.4

428. In horizontal proceedings the effective judicial protection depends on whether consistent interpretation is possible, whether the national court can ensure effective judicial protection by setting aside a problematic national provision,5 or whether it can directly apply a Charter provision6. As regards the disapplication of national legislation that is incompatible with a rule of Union law, the criterion phrased in AMS and confirmed in Dansk Industri, Egenberger, IR/JQ and Bauer and Broûonn is authoritative: the specific rule of Union law must be sufficient – i.e. unconditional – in itself to confer on private parties a subjective right which they may invoke as such.7 Although with this criterion we can anticipate which other Charter provisions can be invoked as such, the Court’s (future) case law remains essential to build a clear and coherent system of horizontal effects of rules of Union law. In Bauer and Broûonn the Court of Justice was confronted with the difference of the position of the employees depending on the legal nature of their employer. The Court acknowledged their different position and recalled the absence of direct horizontal effect of directives. The Court delivered a ruling in which it arrived at the same outcome for both employees.8 As regards the vertical relationship, the Court applied the method of direct vertical effect of the Directive and of Article 31(2) Charter.9 As regards the horizontal legal relationship, the Court’s considerations reflect two techniques: 1) the disapplication of legislation that is incompatible with the Charter, and subsequently, 2) direct horizontal effect of Article 31(2) Charter.10As regards the latter, the Court holds that Article 51(1) Charter does not exclude that private parties may be directly required to comply with certain provisions of that Charter.11 For both techniques the Court applies the criterion that the Charter provision in question is unconditional and sufficient in itself to confer, upon a private party, a subjective right that can be invoked as such. According to the Court, Article 31(2) Charter complies with this criterion. However, the Court’s considerations as to the potential direct horizontal effect of Article 31(2) Charter in Bauer and Broûonn and in Cresco Investigation are ambiguous.12 The Court requires national courts to ensure that the heirs receive financial compensation in lieu of days of paid leave, but for that it is not necessary to directly apply Article 31(2) to the horizontal legal relationship. After all, as demonstrated in §4.2.3 and §7.5, for the effective judicial protection to be effectuated it can suffice either to disapply the problematic legislation, or to apply remaining national legislation – insofar as necessary applying the technique of consistent interpretation. It must however be noted that, different from the technique of direct horizontal effect, which always provides for a solution, the effectiveness of the technique of disapplication of a national provision depends on whether the disapplication as such provides for a solution, or, alternatively, whether after disapplication a solution can be found by the application of remaining national law.

429. On a side note: it is noteworthy that from a series of cases on Article 8 ECHRit follows that the European Court of Human Rights abstains from awarding direct horizontal effect to Convention rights to avoid that national courts override the national legislature that is responsible for adopting legislation that governs and balances the Convention rights in horizontal legal relationships.13 Apart from the potential criticism towards either of the approaches taken, it is interesting that the approach of the European Court of Human Rights is the polar opposite of the approach taken by the Court of Justice.

430. Following the line of reasoning of the Court of Justice14, the rights related to for example Article 27 (a worker’s right to information), Article 28 (the right of collective bargaining and action), Article 30 (the right to protection in the event of unjustified dismissal) can most likely not be invoked by a private party to set aside national legislation that is incompatible with these provisions, let alone to directly impose an obligation upon the private employer. For the effective judicial protection of those rights it will still be decisive whether or not the legal relationship is vertical or horizontal. In this light, it is interesting that according to Laval and Viking Article 28 Charter can – in theory – be invoked as a legitimate aim that justifies a restriction of a fundamental freedom, but that in view of the criteria phrased in AMS, Egenberger and Bauer and Broûonn this provision cannot be invoked to require a national court to, in horizontal proceedings, set aside national legislation that is incompatible with it.

431. Apart from the preceding, the methods formulated by the Court as regards the horizontal effects of directives and Charter provisions are still considerably more challenging than invoking the direct vertical effect of a directive or Charter provision. Hence, also in terms of determining the method and formulating a claim private parties bringing horizontal proceedings are confronted with challenges that are absent in vertical proceedings. And lastly, horizontal proceedings that concern the infringement of a right conferred upon a private party by a directive that does not concern a fundamental right also fall outside the scope of these techniques. If none of the aforementioned options work out well in horizontal proceedings, the only option for an aggrieved private party to find protection is to bring an action for Member State liability for wrongful implementation. §8.4.1 however shows that that route is not at all a guarantee for success.

432. Besides the legal nature of the parties to the case, also the nature of the legal relationship is of importance. In particular when a dispute in horizontal proceedings relates to a collective regulation of horizontal legal relationships, such as a collective agreement or statutes of a private association that govern many horizontal legal relationships, the Court of Justice is inclined to assimilate such collective regulations with Member State legislation.15 A collective agreement is de facto a horizontal relationship and cannot as such be equated with legislation adopted by national legislatures. Strictly speaking, collective agreements – which surely qualify as a legal relationship between private parties – cannot be reviewed against a directive since that would be the polar opposite of the prohibition of direct horizontal effect of directives.16 Nonetheless, in a series of cases,17 amongst which HennigsandMai18 and Prigge19 the Court of Justice interpreted Directive 2000/78 and applied the interpretation directly to examine the compatibility of a clause in a collective agreement with that interpretation and the objectives pursued by that directive. In Prigge the Court of Justice states that “social partners must respect the Directive” where they adopt measures which fall within the scope of the Directive and that “it is clearly apparent from […] the Directive that collective agreements must, the same as legislative, regulatory or administrative provisions, respect the principle implemented by the Directive”.20 In Rosenbladt the Court clarified that the scrutiny of collective agreements consists of the proportionality test stipulated by Article 6 of Directive 2000/78.21 The Court applies the same proportionality test to both legislative provisions and clauses in collective agreements.22 By doing so, the Court implies that as regards the constituent elements of this proportionality test there is no difference worth mentioning between the objectives and interests involved in the adoption of legislative provisions as opposed to the interests and objectives involved in the creation of a collective agreement in which private parties are engaged. In that respect, there seems to be an exception to the absence of direct horizontal effect of directives in the sense that private instruments that regulate a large amount of horizontal legal relationships can be directly scrutinized against directives without the intervention of provisions of national law.23 Directives can thus directly impose obligations upon private entities that, like social partners, aim to regulate a large amount of horizontal legal relationships, and private parties can rely on a directive to claim the enforcement of such obligations of such private entities before a national court.

433. Accordingly, considering the above, the question arises whether it is reasonable that private parties like employees are subject to different treatment on the basis of the legal nature of their employer or of the employment contract that they are party to. In my view there is no relevant difference between employees that work for a private employer and those who work for a public authority. It would be in line with the principle of equal treatment to align the outcomes of such cases. This is one of the reasons why it has been advocated that directives that are a specific application or a concretization of fundamental rights should have direct horizontal effect.24