4.2.2.3 National courts must disapply problematic national legislation

156. There are a number of possible consequences of a substantive compatibility review of a provision of national origin against a provision or principle of Union law in the context of a dispute between private parties.1 First, should the provision of national law be in line with Union law, the provision remains intact. The provision of national law remains applicable to the horizontal relationship at stake, like in, for example, Palacios de la Villa, HK Danmark and Abercrombie & Fitch.2 Another option is that the provision of national origin is incompatible with the rule of Union law it is reviewed against. If that rule of Union law is sufficient in itself to confer upon a private party a subjective right that can be invoked as such3, the provision of national law should, on the basis of the principle of supremacy4, be disapplied by the national court. This situation is illustrated by Mangold, Kücükdeveci,Dansk Industri, Egenberger, Bauer and Broûonn and Cresco Investigation. The disapplication of the provision can impact the legal relationship between private parties. Several scenarios are possible as regards the question how this impact manifests.5 Firstly, it is conceivable that the disapplication suffices for solving the dispute between private parties at hand (scenario 1).6 Alternatively, the consequences of the disapplication of the problematic national provision may be regulated by remaining law.7 In that respect, the disapplication of a rule that is incompatible with Union law can result in, for example, the application of the rule of Union law with which the latter national provision was incompatible (scenario 2); another rule of Union law with direct horizontal effect (scenario 3)8; another rule of national law applicable to horizontal legal relationships, that is compatible with and/or can be interpreted in conformity with Union law (scenario 4).

157. It is not excluded that more rules are applicable to one case. In case of concurrent application of the European and national rules applicable to the horizontal legal relationship, national courts must take into consideration the principles of supremacy, effectiveness and equivalence.9 Lastly, it is possible that the disapplication does not suffice for the dispute between private parties to be solved and that neither European nor national law provides for concrete rules that can be applied to determine the consequences of the disapplication of the problematic rule for the underlying horizontal legal relationship (scenario 5). In such an event, the national court or the parties to the case have to find a solution that is reasonable, possibly applying an open norm based on reasonableness and fairness.10

158. In sum, the scenarios depend on the answer to the question whether other sources of law are needed to regulate the consequences of the disapplication of the national provision for the horizontal legal relationships and, if affirmative, which sources of law can be invoked in the horizontal legal relationship to determine the consequences of the disapplication of the problematic national provision.

159. In the cases of Mangold and Kücükdeveci the disapplication of the problematic German provisions did not in itself suffice to solve the disputes in question – thus, scenario 1 does not apply. Because neither the principle of non-discrimination nor another rule of Union law specifically regulates the duration and termination of employment contracts, scenarios 2 and 3 do not apply either: apart from questions of direct horizontal effect,11 neither the principle of non-discrimination on the basis of age nor any other rule of Union law as such regulates the duration and termination of employment contracts between private parties. Scenario 4 is illustrated by the case law following Mangold and Kücükdeveci discussed in §4.2.3. In §4.2.8 scenarios 4 and 5 are discussed in the context of plausible routes in Dutch law.

160. Lastly, in relation to the obligation of national courts to set aside any national provision that is deemed incompatible with the general principle prohibiting age discrimination, it is recalled that pursuant to Dansk Industri national courts cannot rely on the principle of the protection of legitimate expectations in order to continue to apply that problematic provision of national law. The effective judicial protection of the principle prohibiting age discrimination outweighs the legitimate expectations of a private party that relied on the national provision that is incompatible with the former principle.12