Justifiable discrimination

The European court of justice has been particularly active this year in
employment law, issuing judgements that directly affect cases in the UK and
also setting precedents in cases in other Member States. Keith Nuttall reviews
the most important decisions to date


Sex discrimination

Judges overturned a claim of sex discrimination by a British women who
claimed she was unfairly denied a reduced earnings allowance. Virginia Hepple
and three other women claimed they were the victims of discrimination because
they are entitled to receive the benefit only until the age of 60, while men
are eligible up to 65.

The court ruled that although discrimination occurred, it was justifiable
because the reduced earnings scheme is linked to the UK pension scheme, and
therefore to the difference between the retirement age for men and that for
women. The court ruled that as EU member states are entitled to set different
pension ages for men and women, the same may apply to reduced earnings


The court has directed that employee rights must be safeguarded when
companies are transferred within a corporate group. A Leeds employment tribunal
had referred a case to the ECJ, in which mineworkers’ terms of employment
worsened after transfers in the AMCO mining group. They had been made redundant
by one company, employed by another in the same group, then re-engaged by the
original company under terms less favourable than their first employment. The
court ruled that employees’ rights must be safeguarded when transfers take place
within a corporate group.

Compensation after bankruptcy

Member states must compensate staff based in their territory whose employers
go bankrupt, even if the company is based in another EU country, says the ECJ.
Employees of an insolvent Dublin-based shipping company Bell Lines who worked
at a branch in Bristol, took their case to Europe after being refused
outstanding pay and compensation by a British tribunal. The European court gave
a preliminary ruling stating that the responsibility for protecting employees
in the event of employer insolvency – where the company is based elsewhere in
the EU – rests with the state in which they are employed and to which they have
paid national insurance contributions.


Freedom of movement

The court has ruled that employment regulations in regions of the European
Union where more than one language is spoken may not insist that employees
produce locally issued certificates of bilingualism as a condition of work.

Its decision came in a case involving an Italian national from the
German-speaking area of Bolzano who had applied for a banking job in his home
region while studying in Austria. He was refused work because he had been
unable to secure the certificate, which is issued only in Bolzano, even though
he speaks both Italian and German. The court ruled that such regulations
discriminated against workers from other regions and so broke EU freedom of
movement laws.


Positive discrimination

The ECJ has ruled that positive discrimination schemes favouring the
employment of women are illegal under EU law. Judges found that the University
of Gîteborg, Sweden, acted wrongfully when appointing a new female professor of
hydro- spheric sciences. The case was brought by Leif Anderson and another
academic, Katarina Abrahamsson, both of whom had failed to secure the chair,
which had been awarded to one Elisabet Fogelqvist. Mr Anderson claimed he
should have been given the post, because the university’s selection board had
ranked him above Fogelqvist.

However, because the academic world is considered in Sweden to be a
profession where women are underrepresented, the university cited national
legislation that automatically grants priority to "candidates belonging to
the under-represented sex who were adequately qualified." This is "subject
only to the proviso that the difference between the merits of the candidates of
each sex was not so great as to give rise to a breach of the requirement of
objectivity in making appointments."

As a result, Anderson was not given the job and he appealed with
Abrahamsson. The ECJ ruled that positive discrimination could not be justified
where it "automatically and unconditionally gives priority to women when
women and men who are equally qualified." Judges said that there was a
"risk of arbitrary assessment of candidates’ qualifications."

The Netherlands

Tax exemptions

The court ruled that tax exemptions granted by a member state may not be
limited to income earned by a company solely within that member country. The
case involved a Dutch man, living in the Netherlands but working for a Belgian
company, who acquired shares in the company under an employees’ saving scheme.

Under Dutch law, dividends earned from shares (up to a set limit) are exempt
from income tax only if the dividends were earned by undertakings established
in the Netherlands, and on which tax had already been paid in that country. The
court ruled that the Dutch position amounted to "arbitrary
discrimination", and was contrary to the principle of free movement of
capital between member states.


Failure to implement directive

The ECJ is also used as a weapon by the European Commission in its battle to
force member states to implement employment law directives and regulations that
have been passed by the European Parliament and the European Court of Justice.
Recently, it has taken the Italian government to the ECJ over its failure to
implement fully the Working Time directive. Italy has not denied the
infringement, claiming that neither management nor workers wished to follow EU
rules and that national legislation already complied with certain provisions of
the directive. The court declared that Italy had failed to fulfil its
obligations under the Treaty of European Union and ordered its government to
pay the costs of the hearing.


Host country’s minimum wage

The ECJ has insisted that companies employing staff temporarily in another
EU member state must pay the host country’s minimum wage. The court was asked
to provide guidance after two managers of French construction companies,
employing staff temporarily in Belgium, were prosecuted under Belgian law.

Their defence was that they had met the terms of employment demanded by
French law. The court ruled that the host state could impose a minimum wage,
and could require an employer to comply with national safety legislation.
However, it could not force the employer to pay employers’ contributions, keep
employee registers or retain employees’ documents for five years.

Freedom of movement and establishment

Belgium has been heavily criticised by the ECJ for its restrictive laws
governing security firms. The Belgian government insists all private and
internal security firms must be based in Belgium, and that all employees must
be Belgian residents and carry Belgian identity cards. The ECJ said the rules
restricted basic EU employment rights, namely the freedom of movement of
workers, freedom of establishment and freedom to provide services.


Treatment of foreign nationals

Germany has been warned by the Commission that it must change its treatment
of foreign EU nationals or face legal action. Its policy of automatically
deporting non-German citizens who have committed certain crimes, on grounds of
public policy, violates EC law.

About 70 Italian nationals with criminal convictions, some born in Germany
and speaking no Italian, have been expelled. The commission has claimed that
applying the "Auslandergesetz law" to EU nationals violates freedom
of movement principles.

Brussels has issued Germany with a "reasoned opinion," a formal
note that it should take action to bring its regulations in line with EU law or
possibly face a case being brought at the ECJ within two months. The commission
has claimed that Germany should look at the personal conduct of the individuals
concerned and how it may have changed subsequently, before deporting an

It has added that the law is too heavy handed, violating the European law principles
of proportionality and the protection of family life.


Failure to protect young people

The ECJ has found that Luxembourg has failed to implement the council
directive 94/33/EC on the protection of young people at work and has ordered
the Grand Duchy to bring its national laws in line with European legislation.
The court has also ordered it to implement directive 95/30/EC on the protection
of workers from risks related to exposure to biological agents at work.

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