4.2.2.2 A substantive compatibility review with horizontal effect

150. Because the German provision at stake in Mangold – §14 III TzBfG –was originally a measure implementing Directive 1999/70, the case fell within the scope of Union law. The provision was amended in 2002. By the time of the amendment, Directive 2000/78 had already been published. The amended §14 III TzBfG, which applied to the case between Mangold and Helm, would expire a few weeks after the expiry of the implementation period of Directive 2000/78. Against this background, the Court holds that general principles of Union law are primary law and as a rule their effect is not dependent on any implementation period whatsoever. Hence, since Directive 2000/78 aims to concretise the general principle of the prohibition of age discrimination, the Court of Justice concludes firstly that the fact that the implementation period for the respective Directive has not expired yet is not of any relevance to the case.1 Secondly, the Court holds that the general principle of the prohibition of age discrimination applies as a standard of review of the compatibility of the discriminatory German provisions upon which the private parties involved in the case had based their legal relationship.2 This course of events was heavily criticised. After all, a directive cannot function as a standard of a substantive compatibility review on the basis of which the provisions of German law would be set aside in horizontal proceedings. A main point of criticism was that the Court circumvented that limited horizontal effect of directives by introducing the prohibition of age discrimination as a general principle that can function as a standard for the substantive compatibility review of provisions of national law in proceedings between private parties.3 Given the hierarchical status of general principles, which are primary Union law with a constitutional status, the approach of the Court of Justice is however not that surprising.4

151. In the years following its Mangold judgment the Court of Justice had several chances to shed some light on what it had decided in Mangold. Advocate General Geelhoed delivered a critical opinion in Chacón Navas.Geelhoed, probably alarmed by the Court’s judgment in Mangold, warned the Court of Justice for being too ‘easy-going’ with the application of general principles that would result in an extension of duties under Union law.5 In spite of Geelhoed’s Opinion, the Court gave no clarification in Chacón Navas and thus the obscure character and effect of the general principle of the prohibition of age discrimination was prolonged.6 In his Opinion to Palacios de la Villa Advocate General Mazák states that “to infer – as the Court did in Mangold – from the general principle of equality, the existence of a prohibition of discrimination on a specific ground is quite different and far from compelling”.7 Such a principle could only be complementary to Directive 2000/78. As Advocate General Mazák holds:

152. In Palacios de la Villa the Court of Justice assessed the conformity of the Spanish provisions with Article 6(1) Directive 2000/789 and concluded that the Spanish provision was in conformity with the Directive. As a result, the Spanish provision remained intact and the legal consequences of the collective agreement – the horizontal legal relationship – remained unchanged too. Because the Spanish provision was compatible with the Directive, and therefore implicitly also with the general principle prohibiting age discrimination, there was no need for the Court to focus its attention on this general principle prohibiting age discrimination. In view of a number of scholars, the approach adopted by the Court of Justice in Palacios de la Villa – and also in Lindorfer10– confirmed the presumption that Mangold had been a slip of the pen.11 But then there was Kücükdeveci.

153. In Kücükdeveci the Court of Justice confirmed the Mangold-approach: the prohibition of age discrimination constitutes a general principle of Union law against which law of national origin can be reviewed if the case falls within the scope of Union law.12 While the Court took a rather misty road in Mangold, the path taken in Kücükdeveci is much clearer and better constructed. Firstly, the Court confirmed that directives cannot be invoked by a private party against another private party.13 Subsequently, the Court stressed that national courts are obliged to interpret law of national origin in conformity with Union law.14 The Bundesverfassungsgericht already indicated that in the case of Kücükdeveci consistent interpretation was not possible. In reaction thereto, the Court of Justice first employed the obligation of national courts to ensure the legal protection of private parties15 and then stated:

The Court clarified that it is not required that national courts make a reference for a preliminary ruling before they are permitted to set aside a provision of national origin which is held to be contrary to Union law.17 Consequently, whenever a national court is of the opinion that a legislative provision falling within the scope of Union law18 is incompatible with provisions or principles of Union law and holds that there is no possibility to interpret the particular provision consistently with Union law, that court is obliged to set aside the provision at issue and, in addition, to assess the implications of that manoeuvre.19

154. Although the motives of the Court of Justice allowing the substantive compatibility review of provisions of national law in cases such as Mangold and Kücükdeveci have been elucidated, the judgment still leaves us with several questions. The judgment in Kücükdeveci leaves room for interpretation as to whether the principle of the prohibition of age discrimination serves as an autonomous standard for review, or whether it should be applied in conjunction with the directive at stake.20 In Dansk Industri the Court clarified that the general principle can function as a standard of review of national legislation in horizontal proceedings only if the case falls within the scope of a directive that concretises the principle; in this case Directive 2000/78.21 Concerning this, it is noted that in later case law the Court has used a more broadly phrased criterion, namely that “the fundamental rights guaranteed in the legal order of the European Union are applicable in all the situations governed by EU law”.22

155. In the cases discussed above the Court of Justice itself carried out the review of national legislation against the general principle prohibiting age discrimination. In essence, the substantive compatibility reviews in Mangold, Kücükdeveci, Palacios de la Villa, and Dansk Industri are vertical proportionality tests in Union law in the context of a horizontal legal relationship,23 meaning that the Court assesses whether the national legislation has a legitimate aim and whether it is appropriate, necessary and proportionate to achieve that aim.24 The outcome of the vertical proportionality test can have an impact on the underlying horizontal legal relationship, especially when the measure has to be set aside because it is disproportionate in relation to the objective pursued.25 This means that the rule of Union law against which the national legislation is reviewed can, via the substantive compatibility review, have indirect horizontal effect in the sense that the outcome of the review requires a modification of the horizontal legal relationship – which does not mean that the particular rule of Union law directly applies to this horizontal legal relationship.26