4.2.1.1 The case of Mangold

139. Mr Mangold, 56 years old, was employed on a fixed-term contract in a full-time job at the law firm of Mr Helm. In German law fixed-term contracts are unlawful, unless the contract can be objectively justified. This requirement of objective justification does however not apply if the employee in question is older than 52 years, except when there is a close connection to an earlier contract of indefinite duration concluded with the same employer.1 Since he did not have an earlier employment contract with Helm and there was no objective justification, Mangold holds that his fixed-term contract is unlawful.

The case falls within the scope of Directive 1999/70 concerning the Framework Agreement on fixed-term contracts2 and Directive 2000/78 on equal treatment in employment.3 For reasons connected to the need to encourage employment of older persons, the German legislature had lowered the age above which fixed-term contracts could be concluded without restrictions from 58 to 52 years. The Court of Justice carried out a substantive compatibility review of the German provision against Directive 2000/78 and concluded that the legislative provision of national origin cannot be justified by the proportionality principle as codified by Article 6(1) Directive 2000/78 and that it should therefore be set aside.4 The implementation term of the Directive on equal treatment had not yet expired by the time of the conclusion of the fixed-term contract. The Court of Justice argued on the basis of Inter-Environnement Wallonie that the fact that the implementation period had not yet elapsed, was immaterial to the conclusion that the German provision was at variance with Article 6(1) Directive 2000/78.5 After all, on the basis of Inter-Environnement Wallonie Member States must refrain from taking any measures liable to seriously compromise the attainment of the result prescribed by that directive.6

140. The Court of Justice first carries out a substantive compatibility review of the German provision against the Directive. It concludes that the German provision at stake is incompatible with the Directive. However, in horizontal proceedings a Directive cannot be invoked in order to disapply national legislation that is incompatible with it.7 The Court finds an alternative route to hold that the national provision must be set aside:

In sum, the Court recognises the principle prohibiting age discrimination as a general principle of Union law and holds that national courts are obliged to set aside national legislation that is incompatible with this principle, also in proceedings between private parties. The fact that the Court awarded indirect horizontal effect to a general principle of Union law by way of accepting the substantive compatibility review of a provision of national law against the general principle, was by many scholars perceived as a circumvention of the prohibition of direct and indirect horizontal effect of directives.9 On the other hand, it is argued that the status and fundamental character of the principle of non-discrimination, including the prohibition of age discrimination, justify the effect given to it by the Court. In this light it may have been more remarkable if the Court would have decided that the limited horizontal effects of directives would stand in the way of the scope of protection of a fundamental principle.10