4.2.3 Post-Mangold court decisions in follow-up cases

166. In a case that in broad strokes is similar to Mangold, the Bundesarbeitsgericht shed its light on the Court of Justice’s judgment in Mangold and the consequences following from the disapplication from §14 III no. 4 TzBfG.9 In 200410an employee filed a complaint against his employer, Honeywell, to challenge his fixed-term contract. He argued that §14 III no. 4 TzBfG was contrary to Directive 2000/78 and that, as a result, the fixed-term duration of his employment contract was ineffective. The employee claimed that after 31 March 2004 he could continue working upon the same employment conditions. The Arbeitsgericht Lübeck rejected the claims of the employee, and so did the Landesarbeitsgericht Schleswig-Holstein in appeal. However, in last instance, the Bundesarbeitsgericht sustained the claims and held that §14 III no. 4 TzBfG was inapplicable due to incompatibility with EU law.11

167. The Bundesarbeitsgericht concludes that the limitation to the contract is ineffective (unwirksam12).13 The Bundesarbeitsgericht amplifies that the ineffectiveness of §14 III no. 4 TzBfG is a manifestation of the Anwendungsvorrang – the principle of Union law that on the basis of the principle of supremacy any national rule that is incompatible with Union law should be disapplied.14 The Bundesarbeitsgericht clarifies that the Anwendungsvorrang,which thus stems from Union law, is differentiated from the Geltungsvorrang, which is regulated by Article 100 Grundgesetz which gives the Bundesverfassungsgericht the exclusive competence to the Bundesverfassungsgericht to review the constitutionality of legislative provisions and to declare a provision null and void in case it is incompatible with the German constitution.15 The Anwendungsvorrang falls within the limits of the constitutionally arranged relation between Germany and the European Union as entrenched in Article 23 Grundgesetz.16 The Bundesarbeitsgericht notes that contrary to the to Geltungsvorrang the Anwendungsvorrang does not lead to nullity of the particular German provision.17 There are, in the case at hand, no justifications for the limitation of the contract on the basis of §14 I TzBfG.18 The conditions for a limitation without reason (§14 II TzBfG) are not met.19 The employer cannot invoke §14 III no. 4 TzBfG in order to justify the limitation to the contract, because §14 III no. 1 and no. 4 TzBfG are in conflict with Union law and should therefore be disapplied.20 Furthermore, the employer cannot successfully invoke the protection of his legitimate interests.21 One of the considerations of the Bundesarbeitsgericht in this respect is that German literature highly questions the compatibility of the respective provision with Union law.22 Apparently, the Bundesarbeitsgericht expects employers to be aware of German literature on labour law.

168. According to the Bundesarbeitsgericht, the Court of Justice has not exceeded its competences in the decision of the Mangold case.23 Imposing an obligation upon national courts to disapply any national provision that is in conflict with this new general principle does according to the Bundesarbeitsgericht not constitute an ultra vires act by the Court of Justice, neither on the basis of Union law24 nor on the basis of Article 23 Grundgesetz, which is also known as the Zustimmungsgesetz (Act of Approval).25 Some years later this view was confirmed in the same case by the Bundesverfassungsgericht.26 According to the Bundesarbeitsgericht national courts thus have to disapply §14 III no. 4 TzBfG. In order to disapply a provision of national law, the national court is not obliged to await action of the legislature or the Bundesverfassungsgericht.27

169. Like in Mangold, also in the case at hand the period for the implementation of Directive 2000/78 had not expired yet. Still the case fell within the scope of Union law, because the provision originally implemented Directive 1999/70. In this respect, the Bundesarbeitsgericht concludes that the Court of Justice acted within the borders of its competences when it decided that the objectives of Directive 2000/7828 have to be respected and promoted by Member States and their national courts, even before the expiry of the implementation deadline – so-called Vorwirkung.29 The Bundesarbeitsgericht discusses Vorwirkung in terms of the obligations of Member States.30 In relation to the horizontal case in Mangold, the Bundesarbeitsgericht seems to assume that the Court of Justice founded the obligation to disapply the domestic provision on the principle of sincere cooperation and the concept of Vorwirkung of directives and their objectives, rather than on the effect of the substantive compatibility review of the domestic provision against the general principle of non-discrimination on the basis of age as an autonomous standard of review.31

170. As regards the protection of legitimate expectations, the Bundesarbeitsgericht starts by saying that only the Court of Justice is competent to restrict in time the effects of its judgments and that it did not do so in the case of Mangold. Accordingly, national courts are obliged to set aside any national provision that is in conflict with the general principle prohibiting age discrimination as given concrete expression in Directive 2000/78 from the date upon which the Directive entered into force.32 It is debatable whether the obligation of national courts to set aside problematic legislation materialises from the date upon which the directive enters into force or on the date upon which the implementation period expires. The Bundesarbeitsgericht seems to solve this issue with the application of the concept of Vorkwirkung, which is in line with the approach taken by the Court of Justice in Mangold.The Bundesarbeitsgericht holds that, in this context, Union law does thus not provide for the protection of legitimate expectations.33 But even if the national court would have had the possibility to restrict the effects of the Court’s judgment by applying the German concept of the protection of legitimate expectations, the Bundesarbeitsgericht concludes that in this very case, the employer would not have succeeded in plausibly arguing that he had any interests worth protecting in the enforcement of the fixed-term contract at issue.34

171. After the final ruling by the Bundesarbeitsgericht Honeywell filed a constitutional complaint (Verfassungsbeschwerde) and claimed that the ruling by the Bundesarbeitsgericht was incompatible with the freedom of contract, a basic right entrenched in Article 12(1) and 2(1) Grundgesetz. The Bundesverfassungsgericht ruled in line with the Bundesarbeitsgericht that the disapplication of the German provision that is incompatible with Union law and the continuation of the employment contract do not violate the freedom of contract.35 Also, the Bundesverfassungsgericht holds that the Court of Justice’s ruling in Mangold is not ultra vires and the obligation imposed upon national courts is compatible with the German Grundgesetz.36 In that respect, the Bundesverfassungsgericht recalls that the Anwendungsvorrang, which results in the disapplication of a provision that is incompatible with Union law, is different from the Geltungsvorrang, which results in the nullity of a legislative provision that is incompatible with the Grundgesetz.37

172. As regards Vertrauensschutz,the Bundesverfassungsgericht holds that the Court of Justice has not limited the temporal effect of its ruling in Mangold. Therefore, the interpretation of Union law has ex tunc effect, and applies also to legal relationships established before the date on which the ruling in Mangold was delivered. The Bundesverfassungsgericht states that the Court of Justice limits the temporal effect of rulings only in exceptional circumstances. When it does not limit the temporal effect, the Bundesverfassungsgericht continues, national courts cannot protect the legitimate interests of the private party that relied on the rule of national law that is incompatible with Union law and therefore has to be set aside. After all, argues the Bundesverfassungsgericht, such a Vertrauensschutz would practically result in the limited temporal effect of the Court of Justice’s interpretation.38 However, the Bundesverfassungsgericht also states that in the case law of the Court of Justice there are no indications that national courts are prohibited to grant “secondary protection of legitimate expectations”.39 That is, it is possible that a private party suffering damage as a result of the disapplication of a national legislative provision that is incompatible with Union law, claims compensation from the Member State that adopted or maintained the incompatible legislation.40 But, the Bundesverfassungsgericht notes, it is unsure whether such a claim is already embedded in the existing State liability system.41

173. In this case42 §622 II 2 BGB takes the centre stage43: as was demonstrated before in relation to the case of Kücükdeveci – which took place a couple of years after the case at hand – this provision constitutes direct discrimination on the basis of age because it unjustifiedly eliminates the period of employment completed before the employee’s 25th birthday in the calculation of the term of notice for dismissal.44

At 21 years of age an employee was employed for clerical work at a law firm and administrative office. A little over five years later, the employer accused the employee of having taken cash from the office’s till. The employer promptly dismissed the employee – i.e. the employee was fired on the spot (fristlos). As a subsidiary alternative, in the written notice of dismissal the employer employs a term of notice of less than one month (“zum nächtszulässigen Termin”). In the calculation of this term, the years of employment before the 25th birthday of the employee are not taken into consideration. The employee claims that the dismissal is ineffective, that the alternative term of notice was too short and constitutes discrimination on account of age and, finally, the employee claims compensation for the too short term of notice applied by the employer. The Arbeitsgericht sustained the employee’s claims. The employer brought an appeal before the Landesarbeitsgericht Berlin-Brandenburg.

174. According to the Landesarbeitsgericht the employment contract has not ended in conformity with the requirements for a summary dismissal. It goes without saying that theft would have been a weighty argument for such a dismissal. However, the employer has neither in first instance nor in appeal proven the supposed theft by the employee. Consequently, the employer fails to meet the conditions allowing for a summary dismissal pursuant to §626 I BGB.45 Next, the employment contract has not ended in conformity with the alternative notice period as indicated by the employer in the notice. The Landesarbeitsgericht Berlin-Brandenburg states that §622 II 2 BGB should be disapplied because it is contrary to Union law, in particular to the principle of non-discrimination on account of age.46 Therefore, the dismissal can be effective only with the application of a term of notice of two months.47

175. The Landesarbeitsgericht explains that the general principle has been concretised and made explicit by Article 2 Directive 2000/78.48 The Landesarbeitsgericht crystallises the discriminatory character of the German provision by stating that it places young employees as well as employees that started before their 25th year in a considerably less favourite position than older employees who started working at the company after their 25th birthday. Subsequently, the Landesarbeitsgericht balances the objective of the relevant German provisions against the aim of the Directive and the principle of non-discrimination on the basis of age. Then the Landesarbeitsgericht rules that the discrimination is not justified in conformity with Article 6 Directive 2000/78.49 The Landesarbeitsgericht argues that §622 II 2 BGB, being an implementation measure, can be made subject to a substantive compatibility review against the general principle of non-discrimination.50 The Landesarbeitsgericht concludes, with reference to Mangold and the decision of the Bundesarbeitsgericht discussed above51, that §622 II 2 BGB is in conflict with the general principle of non-discrimination on the basis of age and should therefore be disapplied.52

176. In relation to the competences of the Court of Justice, the Landesarbeitsgericht follows in the footsteps of the Bundesarbeitsgericht (later confirmed by the Bundesverfassungsgericht): taking into consideration the roots of the principle of age discrimination53 as well as Article 23 Grundgesetz, the requirement to disapply any provision of domestic law (Anwendungsvorrang) that is contrary to the principle of non-discrimination on the basis of age is not ultra vires.54

177. Then again the question on Vertrauensschutz is raised. The Landesarbeitsgericht responds to it brief and to the point: the employer does not qualify for the protection of his legitimate expectations. Although the dismissal as such is effective, the employer is ordered to pay an amount equivalent to two months of pay in order to comply with the statutory term of notice that applies ex post facto to the case, the calculation of which includes all years of employment.55

178. Like in the former case and in Kücükdeveci also in this case §622 II 2 BGB at stake. The case concerned an employee who was employed as a baker. After eight years of employment the baker was dismissed. The term for notice respected by the employer constituted one month only. The baker was employed a few years before his 25th birthday and consequently, those years were, in conformity with §622 II 2 BGB, disregarded in the calculation of the term of notice. The young baker brought the case before the Arbeitsgericht Neubrandenberg. He claimed that the dismissal was without motives and therefore invalid, and further he claimed that the short term of notice on the basis of §622 II 2 BGB concerned an unjustified discrimination on the basis of age.

179. The Arbeitsgericht Neubrandenburg requested the Bundesverfassungsgericht to carry out a constitutional review (verfassungsrechtlichen Prüfung) of §622 II 2 BGB against Article 3 I and III Grundgesetz: the provision entrenching the prohibition of discrimination.56 The Bundesverfassungsgericht declared the request inadmissible (unzulässig).57 First and foremost the dismissal as such (Kündigung) is considered to be effective (wirksam)58, so the only question requiring an answer concerns the term of notice that should be respected. Although age discrimination is not explicitly prohibited by Article 3 Grundgesetz, the objective of the provision allows for a broader interpretation, covering discrimination on the basis of age. The principle of non-discrimination has been concretised further by the German General Equal Treatment Act (Allgemeine Gleichbehandlungsgesetz = AGG), which has the aim to eliminate all kinds of discrimination, including different treatment on account of age. The age discrimination on the basis of §622 II 2 BGB could in earlier times be justified, but according to the Arbeitsgericht those foundations nowadays cannot be maintained any longer. Consequently, §622 II 2 BGB is deemed to be in conflict with the prohibition of discrimination on the basis of age.59

180. The Bundesverfassungsgericht briefly recalls the prerequisites for a request for constitutional review60 and concludes that for multiple reasons the request of the Arbeitsgericht Neubrandenburgdoes not meet these prerequisites. The Bundesverfassungsgericht holds against the Arbeitsgericht that it has used few words announcing that §622 II 2 BGB nowadays is deprived from objective foundation.61 Also, the Bundesverfassungsgericht argues that the Arbeitsgericht has not assessed the compatibility of the provision with Union law, whilst, according to the Bundesverfassungsgericht, if even without a preliminary ruling from the Court of Justice it is clear that a domestic provision is in conflict with Union law, the particular provision is not suitable for a constitutional review by the constitutional court any longer.62 In the limpid and sturdy wordings of the Bundesverfassungsgericht:

It is noteworthy that the Bundesverfassungsgericht seems to employ the supremacy of Union law to reject the request for a constitutional review.64 When a national court has, on the basis of the Anwendungsvorrang set aside a provision of German law that is incompatible with Union law, that provision is according to the Bundesverfassungsgericht no longer relevant to a decision based on Article 100 Grundgesetz (Geltungsvorrang).Unfortunately it is unclear whether the Arbeitsgericht Neubrandenburg delivered a ruling or whether parties eventually settled the case.