4.1 Introduction

134. Besides the Treaties, the general principles of Union law as well as the Charter of Fundamental Rights and Principles of the European Union are sources of primary Union law that are relevant to horizontal legal relationships. In essence, general principles of Union law are principles that are fundamental to the legal system of the European Union. They can have an institutional, constitutional or a substantive character.1 A number of general principles of Union law are adopted in the Treaties2 and in the Charter3, which as from December 2009 enjoys the same legal status as the Treaties.4

Apart from a number of general principles codified by the Union legislature in instruments of Union law, also the Court of Justice develops general principles of Union law and defines their content and scope of application.5 As regards the recognition and content of general principles of Union law, in his Opinion in Palacios de la Villa Advocate General Mazák somewhat philosophically notes:

With these words Mazák expresses his concern about the Court of Justice’s approach in Mangold, in which the Court of Justice firstly classified the prohibition of age discrimination as a general principle of Union law and subsequently held that this general principle can be invoked by a private party in the context of horizontal proceedings in order to disapply national legislation that is in conflict with this general principle. This general principle is, together with prohibitions of discrimination on other grounds, codified in Article 21 Charter. In the same way as the approach in Mangold, pursuant to Kücükdeveci, AMS and Dansk Industri the prohibition of age discrimination as codified in Article 21 Charter provision can be invoked by a private party in horizontal proceedings in order to have disapplied a national provision that is incompatible with this prohibition.7 Thus far, Article 21 Charter,8 Article 31(2) Charter9 and the right to effective judicial protection as codified in Article 47 Charter10 have been successfully invoked this way, and the Court has opened the door for other principles and Charter provisions to be invoked in the same way.11

135. I recall that the disapplication of a provision of national law in the context of horizontal proceedings as a result of incompatibility with a general principle of Union law or a Charter provision is a type of indirect horizontal effect12 from a private law perspective.13 That is, instead of assessing the horizontal legal relationship as such, the principle directly applies to the legislation that applies to this legal relationship. As regards direct horizontal effect of general principles and Charter provisions I recall the following. The Court has implied in relation to the principle prohibiting abuse of rights in combination with the proportionality principle that these principles can directly apply to a horizontal legal relationship.14 Further, in Egenberger, IR/JQ, Bauer and Broûonn and Shimizu, four cases delivered in 2018, and in Cresco Investigation, delivered in January 2019, the Court of Justice has clarified that certain Charter provisions can directly impose obligations upon private parties.15 At the same time, in each of these cases the Court concluded that a national court “will therefore be required” – or words of identical import – to set aside national legislation that is incompatible with the respective Charter provisions and that cannot be interpreted consistently with Union law.16 Therefore, it is not entirely certain whether the Court of Justice with these cases indeed confirmed that certain Charter provisions can have direct horizontal effect in the sense that they, without the intervention of another legislative provision, apply to a horizontal legal relationship, like for example the free movement of workers, the freedom to provide services, Article 101 TFEU and Article 157 TFEU. From a private law perspective, in Egenberger, IR/JQ, Bauer and Broûonn and Shimizu, the Court brackets direct horizontal effect together with the obligation to disapply incompatible national legislation, which from a private law perspective is a form of indirect horizontal effect.17

136. The ruling in Cresco Investigation indeed strongly hints at the direct horizontal effect of Article 21 Charter.18 Yet, the technique dictated by the Court of Justice still seems to differ from the technique that applies to the Treaty provisions that have direct horizontal effect. After all, the horizontal applicability of Article 21 Charter seems to depend on 1) the applicability of an instrument of Union law such as a directive19, 2) the impossibility to interpret national law in conformity with Union law20 and 3) the fact that Article 21 Charter can only be invoked as such until the Member State in question has adopted legislation compliant with Union law21. Those conditions are absent in relation to the direct horizontal effect of the Treaty provisions mentioned above.

In the literature it has been argued that a number of general principles and Charter provisions are indeed apt to have direct horizontal effect.22 Especially in view of the current limited regime for justifications of infringements of Union rights and freedoms, several authors advocate the direct horizontal effect of the Charter provisions that are relevant to horizontal legal relationships.23

137. Be it as it may, this chapter focuses on the use of general principles and Charter provisions as the standard of review of a judicial assessment of national provisions. The judicial assessment of the compatibility of the content of a national provision with Union law can be referred to as a substantive compatibility review.24 Cases in which a court in horizontal proceedings concludes that the national legislation is compatible with the rule of Union law are, in the context of this book, not very relevant.25 Horizontal cases in which a court deems a national legislative provision incompatible with a rule of Union law are all the more interesting. The fate of such a national provision depends on the specific rule of Union law with which it is incompatible. For example, if the national legislation is incompatible with a directive, the court cannot disapply it in horizontal proceedings, at least not on the basis of Union law.26 On the contrary, and as is discussed in the preceding chapter, courts in horizontal proceedings are obliged to disapply national law that is incompatible with Article 56 TFEU.27 The same obligation exists in relation to a number of general principles and Charter provisions.

138. This chapter analyses a series of seminal judgments of the Court of Justice and national courts on the substantive compatibility review of national legislation against general principles or Charter provisions. Firstly, the Court of Justice’s rulings in Mangold, Kücükdeveci, AMS and Dansk Industri are discussed. Together with the more recent judgments in Egenberger, Bauer and Broûonn and Cresco Investigation, these cases frame the current set of requirements formulated by the Court of Justice as regards the disapplication of national legislation that is incompatible with a general principle or a Charter provision. Subsequently, the relevant follow-up rulings delivered by the national courts in the first four cases are analysed. These rulings illustrate the legal consequences of the disapplication of the problematic national provision for the underlying horizontal legal relationship. Lastly, the chapter maps out the plausible routes that parties and courts can take under Dutch law.