Sharpening the Teeth of EU Social Fundamental Rights: A Comment on Bauer

Tuesday was a big day in Luxembourg. The Court of Justice rendered what is probably the most important set of judgments on fundamental rights in a long time. Since the days of Akerberg Fransson, Digital Rights, Melloni, etc…, the Grand Chamber had not delivered such a principled decision on the thorny issue of fundamental rights, and it has done so in a field that has traditionally been managed with caution and circumspection by the Court: employment and social fundamental rights.

In the cases of Bauer et al (C-569/16 and C-570/16, and a total of three judgments, but dealing with the same question of principle), the Court stated that Article 31(2) of the Charter, which includes the right of “every worker […] to an annual period of paid leave”, is directly effective and has the ability to empower national courts to set aside incompatible national provisions.

It might sound rather technical, but it is a tremendous development for the sources of EU law and for fundamental rights protection in the field of social policy.

The judgment must be put in its proper context. In 2005, in the case of Mangold, the Court introduced a notable exception to its long-standing case-law on direct effect of directives. In Mangold the Court argued that, despite its traditional case-law, directives that “concretize” a general principle of EU law have direct effect and therefore can be invoked between private parties. This approach caused an uproar in several Member States, but it was basically digested and confirmed in further case-law. The approach worked perfectly well in the case of discrimination, which had several Directives applicable in the field of employment that interacted with Treaty provisions and general principles of EU law. The Court was concerned that the enactment of Directives would in the long run undermine the effectiveness of those Treaty provisions and principles on discrimination. Thus, the Mangold case-law prevailed.

Four years later, the Charter of Fundamental Rights entered into force, and as of 1 December 2009 the full array of general principles enshrining fundamental rights became written primary law. And the obvious question was: if a Directive concretizes a provision of the Charter, does the Mangold rationale apply as well? Also, the issue of horizontal protection of fundamental rights ensued, mostly inspired by the Court’s reluctance to embrace horizontal direct effect of directives. As of 2009 an interesting debate began. A debate that resonated strongly in national legal orders, which have all struggled in one way or another with the issue of enforceability of fundamental rights between private parties. This time the debate took a different twist as a result of the peculiar idiosyncrasies of EU law and its sources of law.

In Association de Médiation Sociale (AMS) the Court sent a first and worrying message. When dealing with a provision of the Charter such as Article 27 (workers’ right to information and consultation in the workplace), the Court argued that it was not a directly applicable provision and therefore its concretization by Directive 2002/14 did not deploy a Mangold effect. The Court was eager to highlight that AMS was in stark contrast with Mangold precisely because of the general principles involved: in Mangold it was a directly invokable provision (no discrimination on the grounds of age), in AMS the provision of the Charter needed further legislation to be cognizable as an invokable rule of law. The Court seemed to agree with the Advocate General by hinting that Article 27 is a “principle” and not a “right” in the sense of Article 51.2 of the Charter. But that was not explicitly nor clearly stated in the judgment.

On Tuesday, the Court seems to have reversed its restrictive approach in AMS and it has embraced a full Mangold approach for certain social fundamental rights. The case concerned Article 31(2) of the Charter and the right to paid leave, in the context of a German law disproportionately restricting the worker’s ability to claim compensation for not enjoyed days of leave prior to the termination of the contract. The Court agreed with the referring court that German legislation was not in line with Directive 2003/88, but the main proceedings concerned litigation between a worker and his employer. Thus, in a horizontal situation, the standard and traditional case-law would rule that the Directive could not be invoked directly against the employer.

The Court reversed its traditional stance and bluntly argued that Article 31(2) of the Charter is an imperative rule that can be directly invoked, even between private parties. The interaction between the Charter right and Directive 2003/88 produces that result. Thus, in a single stroke the Court allowed the national court to set aside national legislation contrary to Article 31(2), and in proceedings between private parties. It is quite an achievement, considering the history and circumstances of social rights in EU law.

On the point of horizontal effect of Article 31(2), the Court refers to its recent decision in Egenberger, in which it confirmed the horizontal application of the right to freedom of religion. However, in Bauer there is an important development, because the Court explicitly argues that in the case of social rights there is a direct reference in the written provision of the Charter to “the worker” and “the employer”. Thus, when the written rule of the Charter individualizes the addressees, it appears that there is a strong presumption in favor of horizontal application. That seems to be a first in the case-law.

And on the point of direct effect and the setting aside of national law, the Court has finally extended the Mangold rationale to social rights different to discrimination, thus opening a new playing-field in the enforcement of social rights in Europe. It is true that in Egenberger the Court extended the Mangold approach to the fundamental right to an effective legal protection. However, that right is not used in horizontal situations, but in vertical contexts between a party and a court. In Bauer et al, the Court has undergone a genuine expansion of the Mangold approach in a purely horizontal right, the right to paid leave. If AMS appeared to have cornered Mangold and leave it in the specific and isolated territory of discrimination law, Bauer et alhas reversed that situation and it has now put AMS in the isolated corner instead. Now there is a strong presumption that other Charter social rights, if “concretized” by proper EU law, will have direct effect in horizontal relations, thus empowering national courts to set aside any provision of national law in breach of the Charter right.

These are good news for the protection of social rights in Europe. These are badly needed rights not only for vulnerable groups, but also for the EU itself. The social pillar of European integration cannot be limited to vaporous rhetoric by good-willed politicians. It must also be able to bite, and sometimes it needs to bite hard. In Bauer et al the Court has taken the first step in sharpening the teeth of EU social law. Now we must wait and see if it will have the courage, in a nearby future, to take a nice bite.