Anti-discrimination cases decided by the Court of Justice of the EU in 2023

1. Introduction

This case law update summarises the cases decided by the Court of Justice of the EU in 2023 in the field of EU anti-discrimination law. Only a handful of judgments were delivered in this field in 2023, ¹ all but one concerning the interpretation of Directive 2000/78. ² Among them, three stand out and are likely to have a wider impact on further developments in anti-discrimination and labour law. One of them concerns conditions for access to self-employment, where a contractual relationship for the provision of services on a personal and regular basis was terminated on grounds of sexual orientation (case C-356/21, TP). ³ This case provides, to some extent, much needed clarifications on the status and rights of self-employed persons, with the potential to fortify equality and labour law protections for all those who perform ‘personal work’. ⁴ Another case concerning the policy of neutrality in the workplace, for the first time in the public sector, was decided by the Court in 2023 (case C-148/22, Commune d’Ans). Once again, the factual background of this case shows how the strict neutrality policies primarily affect Muslim women, and once again, the gender dimension was swept aside apparently for the want of a better reference. The third important case clarifies the situations in which individual wishes can justify age discrimination in recruitment (case C-518/22, AP Assistenzprofis). The three remaining cases involving interpretation of Directive 2000/78 deal with age discrimination in the Austrian remuneration and grading system, as well as the pension system for civil servants (cases C-650/21, Landespolizeidirektion Niederösterreich and Finanzamt Österreich; C-52/22, BF v BVAEB; and C-681/21, BVAEB v BB). Lastly, an important case concerns the interpretation of Directive 79/7, ⁵ in particular its Article 6 on the scope of compensation for the harm occurring as a result of discrimination (case C-113/22, DX v INSS & TGSS). This case is also about the consequences, in a national legal system, of a judgment rendered by the Court in a preliminary reference procedure, and the obligation of all national authorities to give effect to it, without imposing additional burdens on all those claiming their rights under it.

2. Access to self-employment: Case C-356/21, TP ⁶

In TP, the Court provided guidance for interpretation of the concepts of ‘conditions for access’ and ‘employment and working conditions’ under Article 3(1)(a) and (c) of Directive 2000/78. The case concerned sexual orientation discrimination, where this was particularly relevant because the protection against discrimination on this ground does not extend, under the current EU rules, to the field of the provision of goods and services. The Court's clarification of these concepts is, however, a relevant point of reference for the rights of self-employed persons in general, including for the delimitation of the material scope of sex equality Directives in relation to self-employed workers, especially for further interpretation of Article 14(1)(a) of Directive 2006/54, ⁷ Articles 1(1) and 4 of Directive 2010/41, ⁸ and Article 3(4) of Directive 2004/113. ⁹

The applicant in the main proceedings was a self-employed worker engaged on consecutive short-term contracts in the context of his independent economic activity for seven years with TP, a public TV station, when the company refused to sign a new contract. From the facts of the case, the cancellation occurred two days after the applicant and his partner published on their YouTube channel a Christmas music video aimed at promoting tolerance towards same-sex couples and showing same-sex couples celebrating Christmas. The applicant instituted the proceedings for compensation of damages, claiming that the company's refusal to renew the contract was based on his sexual orientation. The Polish law on equal treatment excludes from the scope of application the freedom of choice of parties to a contract so long as that choice is not based on sex, race, ethnic origin or nationality (sexual orientation is not included). The same law prohibits discrimination on grounds of, inter alia, sexual orientation, with respect to ‘the conditions for taking up and pursuing economic or professional activities, including in particular in the context of an employment relationship or work performed under a civil-law contract.’ The referring Polish court (Sąd Rejonowy dla m. st. Warszawy w Warszawie) therefore doubted the compatibility of the Polish exclusion, in relation to the freedom of contractual parties, from the protection against discrimination on grounds of sexual orientation.

The question was whether self-employed persons, such as the applicant, offering their work by personally providing goods and/or services, should be considered as self-employed workers and, as such, be protected against discrimination on grounds of sexual orientation under Directive 2000/78. AG Ćapeta suggested that the term ‘self-employment’ from Directive 2000/78 should cover ‘the provision of goods and services, when the provider engages in personal work’ (Opinion, ¹⁰ para. 88). The Court sidelined this suggestion, shifting the focus to the concept of ‘conditions of access’, rather than the term ‘self-employment’ itself. According to the Court's reasoning, the concept ‘conditions for access’ should be given a uniform interpretation, regardless of the nature of the occupational activity in question (employment, self-employment, or occupation). The Court thus refrained from defining the term ‘self-employment’ in the straightforward manner suggested by AG Ćapeta in her Opinion, and from referring to the concept of ‘personal work’ in the provision of goods and services as a distinguishing characteristic delineating self-employment from the provision of goods and services. However, throughout its analysis, the Court highlighted that the protection conferred by Directive 2000/78 cannot depend on the formal categorisation of an employment relationship under national law or on the choice made at the time of the appointment of the person concerned between one type of contract and another (para. 55). The judgment is therefore mostly praised as a landmark ruling capable of extending labour and equality law protections to all who engage in ‘personal work’, especially given the ongoing transformation of the world of work. ¹¹ It remains to be seen whether the future case law development will fulfil this expectation. ¹²

Relying on textual and teleological interpretation, the Court found that the Directive 2000/78 covers conditions for access to any occupational activity, whatever its nature and characteristics, provided that the occupational activities are genuine and pursued in the context of a legal relationship characterised by a degree of stability (para. 45), which is for the referring court to assess.

The Court provided some guidelines for this assessment based on the factual circumstances of the case at hand. Where it is clear that the applicant pursues a ‘genuine and effective occupational activity’, ‘on a personal and regular basis for the same recipient’, which enables him ‘to earn his livelihood, in whole or in part,’ the question of whether the conditions for access to such an activity fall within Article 3(1)(a) of Directive 2000/78 does not depend on the classification of that activity as ‘employment’ or ‘self-employment’ (para. 47). The Court stressed the importance of distinguishing activities covered by the Directive from those consisting ‘in the mere provision of goods and services to one or more recipients’ which are outside of its scope (para. 45). However, many questions remain open. What is the standard for differentiation between the ‘mere’ provision of goods and services, and the provision of goods and services which represents a ‘genuine and effective occupational activity’? Should the provision of goods and services ‘on a personal and regular basis’ to two, three or more of the same or different recipients be regarded as the ‘mere’ provision of goods or services, or a genuine and effective occupational activity? Does it mean that pursuing occupational activity on a personal basis, but occasionally or intermittently for the same recipient, affects the assessment? Could this mean that the same person would be covered by Directive 2000/78 in some situations, and not in others? It seems possible that the Court avoided providing a clear-cut definition of self-employment in view of the national legal context underlying this case. The distinction between ‘self-employment’ and the ‘mere provision of goods and services’ in the context of EU equality law requires further clarification.

The Court's broad reading of the phrase ‘conditions for access’ to self-employment covers, ‘in everyday language, circumstances or facts the existence of which is essential in order for a person to be able to pursue a particular self-employed activity’. For a person to be able to pursue his occupational activity effectively, the conclusion of a contract for specific work ‘constitutes a factor the existence of which may be essential’, where there is evidence of a stable professional relationship between the client and the provider (paras. 47, 49–50). This teleological interpretation, which is in line with the purpose and objectives of Directive 2000/78, extends to ‘employment and working conditions’ from Article 3(1)(c) of Directive 2000/78 as well. The fact that, unlike subparagraph (a), subparagraph (c) of Article 3(1) of Directive 2000/78 does not expressly refer to ‘self-employment’ is irrelevant, since Directive 2000/78 does not seek to protect only workers as the weaker party in an employment relationship, but seeks to eliminate, on grounds relating to social and public interest, all discriminatory obstacles to access to livelihoods and to the capacity to contribute to society through work, irrespective of the legal form in which it is provided. The protection afforded by that Directive covers ‘the professional relationship concerned in its entirety’ (para. 56). It follows from a teleological interpretation of Article 3(1)(c) of Directive 2000/78 that the concept of ‘employment and working conditions’ in that provision refers, in a broad sense, to the conditions applicable to any form of employment or self-employment, whatever the legal form in which it is pursued (para. 58), including the conditions for pursuing and terminating that activity. The express reference to ‘dismissal’ in Article 3(1)(c) of Directive 2000/78 serves only as an example. While it is true that it generally refers to the termination of an employment relationship, it may also include a situation of an involuntary termination of activity of a self-employed person, who is obliged to stop working due to his or her contractual counterparty and finds himself or herself in a comparably vulnerable position (paras. 61–65). Again, this is for the referring court to determine.

The Court further examined the applicability of Article 2(5) of Directive 2000/78 concerning legitimate public policy objectives as exceptions to the prohibition of discrimination. It found that the Polish provision on the freedom of contract could a priori fall under the concept of national measures which are necessary in a democratic society for the ‘protection of the rights and freedoms of others’. However, freedom to conduct a business, as guaranteed under Article 16 of the Charter of Fundamental Rights of the European Union, is not an absolute right, and it is circumscribed by its social function. The very fact that the Polish law provides for a number of exceptions to the freedom to choose a contracting party shows that the Polish legislature considered that discrimination on the grounds enumerated is not necessary for the purpose of safeguarding the freedom of contract in a democratic society. According to the Court, it is irrelevant that sexual orientation is not expressly enumerated among those grounds, as otherwise Directive 2000/78 would be deprived of its practical effect.

3. The policy of neutrality and public sector employment: Case C-148/22, Commune d’Ans ¹³

Following the Bougnaoui ¹⁴ and Achbita ¹⁵ cases of 2017, WABE/Müller ¹⁶ of 2021, and SCRL ¹⁷ of 2022, in 2023 the Court decided another preliminary reference concerning the compatibility of neutrality policies at work with Directive 2000/78. Unlike the previous cases that all involved private employers’ neutrality policies, the Commune d’Ans case was about public sector employment. The Court confirmed that the issue fell within the scope of Directive 2000/78, which in accordance with its Article 3(1) applies to all persons, as regards both the public and private sectors, including public bodies (para. 23). The contested internal rule on ‘exclusive neutrality’ must be regarded as falling within the scope of ‘employment and working conditions’, within the meaning of Article 3(1)(c) of the said Directive.

The applicant in the main proceedings had worked for the Belgian municipality Commune d’Ans since 2016, as a head of back office, without being in contact with users of the public service. In February 2021, her request to wear a headscarf at work was rejected, and the municipal board provisionally prohibited her from wearing, in the exercise of her professional activity, signs revealing her religious beliefs until the adoption of general rules for that purpose by the municipal administration. Thereafter, the municipality amended its terms of employment on 21 March 2021 to impose ‘a requirement of ‘exclusive neutrality’ in the workplace, understood as prohibiting all municipal workers from wearing, in that workplace, any visible sign that might reveal their beliefs – religious or philosophical in particular – whether or not they were in contact with the public’ (para. 15). Considering that the rule at issue was ‘exclusive’ as regards the applicant in the main proceedings and ‘more inclusive’ for her colleagues with other beliefs, the referring court (Tribunal du travail de Liège) doubted its compatibility with Article 2(2)(a) and (b) of Directive 2000/78. Its first question was basically about the interpretation of these provisions in view of strict neutrality requirement even for staff not in direct contact with the public, whereas the second question was about the impact of neutral prohibition on women in particular, raising the issue of indirect sex discrimination.

The Court declared the second question inadmissible, relying on formalistic arguments (see paras. 48–49), thus (once again) missing the opportunity to assess the connection between gender and religious discrimination in the context of a headscarf ban. The Court also ruled out the necessity to interpret Article 2(2)(a) of Directive 2000/78 on direct discrimination, since the rule at issue ‘provided that it is applied in a general and undifferentiated way, does not establish a difference in treatment based on a criterion that is inextricably linked to religion or to those beliefs’ (para. 27). The Court added that this might be the case if, despite the general and undifferentiated wording of the rule at issue, the applicant had been treated differently from other workers who were permitted to manifest their religious or philosophical beliefs and wear visible signs revealing such beliefs or in some other way (para. 28). This is consistent with the approach taken in its previous case law, which considered the neutrality policies primarily within the context of indirect discrimination (see, e.g., cases C-157/15, Achbita, para. 34; C-804/18, WABE, para. 59; C-344/20, S.C.R.L., para. 37).

Thus, the employer's internal rule prohibiting the visible wearing in the workplace of any sign of beliefs may constitute a difference of treatment indirectly based on religion or belief, if it is established that the apparently neutral obligation contained in that rule in fact puts persons adhering to a particular religion or belief at a particular disadvantage (para. 29). In accordance with Article 2(2)(b)(i) of Directive 2000/78, such a difference in treatment does not, however, amount to indirect discrimination if it is objectively justified by a legitimate aim and if the means of achieving that aim are appropriate and necessary (para. 30). Concerning the legitimate aim, the Court stressed that the rule at issue put into effect the principle of neutrality of the public service, which has its legal basis in the constitutionally guaranteed principles of impartiality and neutrality of the State (para. 32). There is a notable difference here in comparison to the other headscarf cases decided by the Court and involving the private sector employer's neutrality policies: in the case at hand, it was the principle of (State) neutrality that constituted a legitimate aim. Can it be concluded that, where such principle exists, public sector employers will not have to establish the existence of ‘genuine need’, which, according to the existing case law, is required of private sector employers, and which differentiates a ‘mere desire’ to pursue a policy of neutrality from an objectively justified legitimate aim (see cases C-344/20, S.C.R.L., para. 40; C-304/18 and C-341/19, WABE/Müller, para. 64)? The Court did not mention this standard in the judgment at all, unlike AG Collins who suggested that the municipal authority should bear the burden of proof to demonstrate, ‘to the requisite legal standard that its choice of an exclusive conception of the principle of State neutrality responds to a genuine need’ (Opinion, ¹⁸ para. 68). In addition, AG Collins expressed some concerns regarding the foundations and scope of the principle of neutrality, as well as different and even conflicting conceptions of neutrality that exist in Belgium, from ‘exclusive’ (both public employees’ actions and appearance must be neutral) to ‘inclusive’ (public employees’ actions, and not their appearance, must be neutral), and ‘midway’ conceptions applied by various public authorities (Opinion, para. 66). The Court did not raise any issue concerning the status of the principle of neutrality, nor the necessity to establish a ‘genuine need’. It simply acknowledged a considerable margin of discretion for public authority to design the policy of neutrality ‘depending on its own context and within the framework of its competences’ (para. 33). This apparently includes a choice in either direction: to implement a policy of exclusive neutrality, with a view to establishing within it an entirely neutral administrative environment; to grant a general and undifferentiated permission for the wearing of visible signs of beliefs, including in contacts with users; or to prohibit the wearing of such signs limited to situations involving such contacts.

The Court highlighted that the EU legislature has left it to the Member States, their courts and infra-State bodies to achieve the necessary reconciliation between the freedom of thought, conscience and religion and the legitimate aims that may be invoked to justify unequal treatment for the purposes of Article 2(2)(b)(i) of Directive 2000/78 (para. 35). However, the margin of discretion thus afforded to the Member States and, where appropriate, to their infra-State bodies, in the absence of consensus at EU level, must be subject to supervision, by the national and EU judicature, determining whether such measures are justified in principle and proportionate.

To determine whether the rule at issue is appropriate, the objective of ‘exclusive neutrality’ has to be genuinely pursued in a consistent and systematic manner, and the prohibition is limited to what is strictly necessary for achieving that aim (para. 36), which is for the referring court to establish. However, the Court pointed out that a policy of exclusive neutrality, which aims at creating ‘an entirely neutral administrative environment can be effectively pursued only if no visible manifestation of beliefs – philosophical or religious in particular – is allowed when employees are in contact with users of the public service or with other employees, since the wearing of any sign, even a small-sized one, undermines the ability of that measure to achieve the aim allegedly pursued and therefore calls into question the consistency of that policy’ (para. 39).

Is this the last we will hear of the policy of neutrality or the headscarf cases? Not likely. The conceptual objections concerning differentiation between direct and indirect discrimination ¹⁹ still remain, together with some new issues concerning objective justification in cases involving public sector employers. However, the most difficult question which the Court has managed to avoid so far, namely, that involving neutrality policies at the intersection ²⁰ between gender and religious discrimination, is yet to be addressed.

4. Age requirement for personal assistants: Case C-518/22, AP Assistenzprofis ²¹

In this case, the Court interpreted Article 2(5) of Directive 2000/78 in the light of Article 26 of the Charter of Fundamental Rights of the European Union and Article 19 of the United Nations Convention on the Rights of Persons with Disabilities.

The crux of the issue concerned the interpretation of the concept of the ‘protection of the rights and freedoms of others’, which is listed as one of the legitimate policy objectives that are capable of justifying discrimination on grounds covered by Directive 2000/78. The question to be addressed by the Court was whether the individual wishes of a person with a disability who is entitled to personal assistance services justify age discrimination in the context of recruitment.

Under German law (Sozialgesetzbuch I, IX), assistance services for disabled persons are intended to enable the self-determined and independent management of everyday life, and include services associated with general everyday tasks, such as household management, forming social relationships, planning daily, social, cultural, sports and leisure activities, etc. When deciding on services and in their performance, the legitimate wishes of persons entitled to service should be respected, in so far as they are reasonable, taking into account their personal circumstances, age, sex, family, and religious and philosophical needs.

AP Assistenzprofis is a company which offers disabled persons assistance and advisory services. In July 2018, that company published a job offer stating that A., a 28-year-old female student, was looking for a female personal assistant, ‘preferably between 18 and 30 years old’, to help her in all areas of everyday life. The applicant in the main proceedings, J.M.P., who was born in 1968, applied for the job and was rejected. She sought payment of compensation for alleged discrimination on grounds of age. In its preliminary reference, the referring German Federal Labour Court (Bundesarbeitsgericht) sought to clarify the extent to which a balance should be struck between the applicant's right to effective protection against discrimination on grounds of age and the disabled person's right to effective protection against discrimination based on disability. For the referring court, it was clear that the situation involved direct age discrimination. However, it pondered the relevance of several provisions of Directive 2000/78 in this context, notably the application of the public policy exceptions of Article 2(5), the genuine and determining occupational requirement justification of Article 4(1), the legitimate aim justifications for age discrimination of Article 6(1), and a positive action measure under Article 7 thereof.

Finding that the issue fell under Directive 2000/78 as it concerned ‘conditions for access to employment … including selection criteria and recruitment conditions’ under Article 3(1)(a) of that Directive, and that it involved direct discrimination on grounds of age within the meaning of its Article 2(2)(a), the Court proceeded to examine whether the difference of treatment could be justified. From the outset, it concentrated on the examination of Article 2(5) of Directive 2000/78, which prescribes that the ‘Directive is to be without prejudice to measures laid down by national law which, in a democratic society, are necessary for public security, for the maintenance of public order and the prevention of criminal offences, for the protection of health and for the protection of the rights and freedoms of others’. The Court reiterated its interpretation from previous case law (case C-356/21, TP, para. 70, and case law cited there), to establish the legislature’s intention to exempt certain measures incorporating differences in treatment on grounds covered by Directive 2000/78 from the application of the principle of equal treatment, where such measures are necessary for the attainment of one of those objectives. In adopting that provision, ‘the EU legislature, in the area of employment and occupation, intended to prevent and adjudicate on a conflict between, on the one hand, the principle of equal treatment and, on the other, the necessity of ensuring public order, security and health, the prevention of criminal offences and the protection of individual rights and freedoms, which are necessary for the functioning of a democratic society’ (para. 52).

However, such exceptions should be interpreted strictly. Firstly, the measure must be laid down by national law (para. 54). ²² In the present case, the wording of the German legislation at issue was found to be ‘sufficiently precise in its nature’ in requiring that the disabled person's individual wishes be respected (para. 56) by the providers of personal assistance when deciding on or in the performance of personal assistance services. The difference of treatment on grounds of age in the case at hand therefore resulted from a measure ‘laid down by national law’ within the meaning of Article 2(5) of Directive 2000/78. The Court went on to examine whether the measure pursued one of the legitimate policy objectives enumerated in that provision, in particular the ‘protection of the rights and freedoms of others’. It found that the legislation at issue, under which that measure was adopted, pursued an objective of protecting the self-determination of persons with disabilities, in accordance with which those persons must be able to choose how, where and with whom they live (paras. 58–59). That right necessarily means that they must be able to shape the service that will be provided to them, which includes determining the selection criteria for the person entrusted with that service and being actively involved in the process of hiring that person. This is a specific expression of the right of persons with disabilities to measures aimed at ensuring their independence, social and occupational integration and participation in the life of the community, in accordance with Article 26 of the Charter of Fundamental Rights of the European Union (para. 61). The Court reiterated that Directive 2000/78, including its Article 2(5), must be interpreted, to the extent possible, in a manner consistent with the UN Convention on the Rights of Persons with Disabilities, and its objective enshrined in Article 19 concerning the respect for the self-determination of persons with disabilities.

Secondly, the measure must be necessary for the protection of the rights and freedoms of others. The necessity test under Article 2(5) of Directive 2000/78 does not imply a proportionality review. It suffices that the measure is found necessary, in a democratic society, for the protection of the enumerated legitimate public policy objectives. The Court found that, in a situation such as that in the main proceedings, the preference for a certain age is necessary for the protection of the rights and freedoms of others, inasmuch as it contributes to the respect of the right to self-determination, and it appears reasonable to expect that a person within the same range as the disabled person will fit more easily in that person's personal, social and university circle, which is subject to the verification of the referring court.

5. Age discrimination in the remuneration system for civil servants: Case C-650/21, Landespolizeidirektion Niederösterreich and Finanzamt Österreich ²³

The Austrian legal framework on the remuneration and advancement of civil servants has been amended on a number of occasions, on account of incompatibility of some of its provisions with EU law, more specifically, the prohibition of discrimination on grounds of age, as confirmed by the CJEU in cases Hütter, ²⁴ Schmitzer, ²⁵ Leitner, ²⁶ and Österreichischer Gewerkschaftsbund. ²⁷ It is currently based on a grading by reference to seniority, which replaces the previous remuneration system based on the advancement reference date, which was determined without taking into account periods of service completed by a civil servant prior to the age of 18. The current remuneration system includes transitional arrangements and ‘regrading mechanisms’ for civil servants employed after or before a certain date. The appellants in the main proceedings, FW and CE, challenged the determination of their seniority in the remuneration scale, even after legislative amendments were introduced to rectify previous age discrimination. According to the observation of the referring Verwaltungsgerichtshof (Supreme Administrative Court), the current remuneration system continues to be based on a mechanism for determination of seniority which was deemed contrary to the prohibition of age discrimination, and results in differentiation between civil servants depending whether regrading procedure was finalised before or after the entry into force of the amendments. Without going into intricacies of these highly complex and technical rules, the two key inferences from this judgment can be summarised as follows.

First, the corrective measure taken to rectify previous age discrimination concerning the taking into account of accreditable service periods completed before the age of 18, which further differentiates those periods completed after the age of 18 in the manner that limits their recognition, is contrary to Article 2 of Directive 2000/78, read in conjunction with Article 21 of the Charter of Fundamental Rights of the EU. Although budgetary and administrative considerations may guide particular social policy choices, they cannot in themselves constitute a legitimate aim capable of justifying differences in treatment on grounds of age within the meaning of Article 6(1) of Directive 2000/78. The same is true even where the adjustments made are meant to protect the acquired rights and legitimate expectations of civil servants treated more favourably prior to the introduction of the legislative amendments, where those adjustments do not appear capable of establishing a non-discriminatory system for civil servants disadvantaged by the previous remuneration system (para. 71).

Second, the principle of equal treatment, as enshrined in Article 20 of the Charter of Fundamental Rights, and the principle of legal certainty require identical and predictable treatment for all civil servants who are chronologically in the same situation, and cannot depend on circumstances not attributable to the civil servants concerned, such as the length of time taken to process their applications. Those principles must be interpreted as precluding national legislation which results in different treatment of civil servants depending on whether their seniority scale regrading procedure has been completed or is still pending at the time of legislative amendments.

Apart from the above, the Court scrutinised the national legislation whereby the periods of apprenticeships are taken into account in their entirety for the purposes of determining the comparison reference date only where the civil servant concerned was recruited by the state after a certain date. Unlike the previous considerations in view of accreditable service periods linked to the age of the civil servants, the Court highlighted that this criterion (date of entry into service) constitutes an objective and neutral factor which is manifestly unconnected to the age of person recruited, and there is nothing to indicate the existence of indirect age discrimination. Therefore, Articles 1, 2 and 6 of Directive 2000/78, read in conjunction with Article 21 of the Charter of Fundamental Rights, must be interpreted as not precluding such national legislation.

6. Age discrimination in the Austrian pension system: Case C-52/22, BF v BVAEB; ²⁸ Case C-681/21, BVAEB v BB ²⁹

In both preliminary references, the compatibility of various provisions within the Austrian pension system with Directive 2000/78 was at stake. The issues mainly resulted from the reform of the Austrian pension system, starting with the adoption of the Pensionsharmonisierungsgesetz (Law on the harmonisation of pensions) of 15 December 2004 (BGBl. I, 142/2004) and the introduction of the Allgemeines Pensionsgesetz (General Law on pensions), which entered into force on 1 January 2005, providing for a new uniform pension scheme for anyone born after 1 January 1955, including, in principle, federal civil servants, who were previously exclusively covered by the pension schemes of the Bundesgesetz über die Pensionsansprüche der Bundesbeamten, ihrer Hinterbliebenen und Angehörigen (Pensionsgesetz 1965) (Federal Law on the pension rights of federal civil servants, their survivors and members of their families (Law on pensions 1965)) of 18 November 1965 (BGBl. 340/1965). The reform entailed the application of pension adjustment mechanisms and further legislative amendments, which were first scrutinised by the Court in connection with discrimination on grounds of sex in the case EB and others v BVAEB, ³⁰ which was decided in 2022. In the two cases decided in 2023, the issue of age discrimination arose in connection with the application of the pension adjustment which differentiates between two categories of civil servants, depending on the date of commencement of entitlement to the retirement pension (case C-52/22, BF v BVAEB); and in connection with the retroactive application of the pension adjustment rule, which treats the previously advantaged category of retired civil servants in the same way as the previously disadvantaged category of civil servants (case C-681/21, BVAEB v BB). Both cases will be presented in more details below.

In case C-52/22 (BF v BVAEB), reference was made by the Austrian Federal Administrative Court (Bundesverwaltungsgericht) in proceedings between BF and the Versicherungsanstalt öffentlich Bediensteter, Eisenbahnen und Bergbau (BVAEB) (Insurance fund for civil servants and officials of the public authorities, the railways and the mining sector, Austria) concerning the amount of BF's retirement pension. The referring court sought to ascertain whether Article 2(1) and 2(2)(a) and (b) and Article 6(1) of Directive 2000/78 preclude national rules on pension adjustment, which differentiate between two categories of civil servants, based on different pension calculation rules applicable in the relevant period. As a result of this differentiation, BF was in a category entitled to the first pension adjustment one year later than those belonging to another category.

The Court established that the national rule at issue, adopted with the aim of gradually aligning the pension scheme for civil servants with the general pension scheme, falls within the scope of Article 3(1)(c) of Directive 2000/78. It referred to its earlier judgment in case C-405/20 (EB and others v BVAEB), where it found that the retirement pension of Austrian federal civil servants paid under the same legislation at issue in the present case, falls under the notion of ‘pay’ within the meaning of Article 157 TFEU, and consequently, Article 3(1)(c) of Directive 2000/78, because it depends on periods of service and equivalent periods and on the salary received, and because it constitutes a future cash payment, paid by the employer to its employees, as a direct consequence of their employment relationship (para. 43). The same finding applied in the present case, even though a minimal share of the applicant's retirement pension was paid under the general pension scheme (Allgemeines Pensionsgesetz) (para. 44).

However, the national rule does not give rise to direct discrimination, since it applies irrespective of the age of the federal civil servants concerned and refers only to the date from which such civil servants may enforce their right to a retirement pension (para. 47). The question of whether the date of the commencement of entitlement to the retirement pension, as an objective point in time, is seen as an apparently neutral criterion which establishes an indirect difference in treatment between civil servants based on age is left to the ultimate verification of the national court. The Court reiterated that indirect discrimination exists where the legislation has a negative effect on a significantly higher proportion of persons of certain age compared with other persons (which does not seem likely in the case at hand). The mere fact that a new legal framework has been applied in respect of persons under certain age cannot give rise to indirect age discrimination. Should the referring court nevertheless conclude that the distinction made by that legislation represents an indirect age discrimination, it is required to examine whether it would be justified in the light of Article 6(1) of Directive 2000/78. The Court highlighted that the alignment of retirement pension adjustment schemes intended by the national legislation at issue is capable of constituting a legitimate employment policy and labour market objective that may justify, within the meaning of Article 6(1) of Directive 2000/78, for a transitional period, the difference in treatment based on age between federal civil servants who retired before or after a certain date. That legislation takes a fair account of the time that has elapsed between the taking of retirement and the first adjustment, aiming to treat the various retirement pension adjustment schemes similarly and prevent a gap between various pension schemes. It is true that there is an economic rationale behind the contested rule (increasing the purchasing power of former federal civil servants by taking into account depreciating value of money and rising living costs, as well as ensuring long-term funding of the pension system). While budgetary considerations cannot justify discrimination on grounds of age, the objectives of ensuring the long-term funding of retirement benefits and narrowing the gap between State-funded pension levels can be considered to constitute legitimate social policy objectives ‘wholly unrelated to any discrimination based on age’ (para. 48). Member States enjoy a broad discretion in pursuing legitimate policy aims, as well as in the choice of measures capable of achieving them, as long as they are appropriate and necessary. This requirement seems satisfied, as the national rule has the effect of compensating for the disadvantages which federal civil servants who retired after 1 January 2022 must bear as a result of the reforms of the pension scheme and the lower levels of pensions compared with those of federal civil servants who retired earlier, thereby reducing the gaps between those pension levels (para. 60).

The Court therefore interpreted Article 2(1) and 2(2)(a) and (b) and Article 6(1) of Directive 2000/78 as not precluding national legislation which, with a view to gradually aligning the pension scheme for civil servants with the general pension scheme, provides that the first adjustment of the amount of the retirement pension of one category of civil servants is to be made as from the second calendar year following the commencement of entitlement to a pension, whereas, for another category of civil servants, that adjustment is to be made from the first calendar year following the commencement of that entitlement.

In the case C-681/21 (BVAEB v BB), the issue of compatibility with Directive 2000/78 arose in connection with national legislation which was adopted in order to end previously established discrimination on grounds of age. Under the previously applicable rules, the retired civil servants were divided into three categories, each subject to a different scheme for adjustment of the retirement pension: the first category comprising of those born before 1 January 1955 to whom pension adjustment cap was applicable, the second born on or after 1 January 1955, in respect of whom a parallel pension calculation applied, and the third including those born on or after 1 January 1955, to whom neither pension adjustment cap, nor the parallel calculation applied. Considering it contrary to Article 2 of Directive 2000/78, the legislative amendments from 2018 assimilated the legal status of the third with the first category, with retroactive effect from 1 January 2011. As a result, BB henceforth belonged to the previously disadvantaged category, and was required to refund to the state a certain amount of an overpayment of the retirement pension.

The referring Verwaltungsgerichtshof (Supreme Administrative Court, Austria) doubted whether the retroactive effect of the new rules was compatible with Directive 2000/78. It based its question on the premise that the previously applicable rules constituted direct discrimination on grounds of age for civil servants born before 1 January 1955, and the Court examined the issue in the light of that premise. The Court reiterated its settled case law, according to which where discrimination contrary to EU law has been established, observance of the principle of equality can be ensured only by granting to persons within the disadvantaged category the same advantages as those enjoyed by persons within the favoured category, but only in so far as measures reinstating equality have not been adopted by the national legislature (paras. 44–46). Considerations made in the context of interpretation of Article 157 TFEU extend to Directive 2000/78, to allow for a reduction of the level of advantages of the previously favoured persons to that of the previously disadvantaged persons. The ‘levelling down’ approach is, however, acceptable only if imposed under the national legislative measures. In accordance with Article 16 of Directive 2000/78, Member States are obliged to ensure that any laws, regulations or administrative provisions contrary to the principle of equal treatment are abolished. However, that Article does not require Member States to adopt specific measures in the event of a breach of the prohibition of discrimination but leaves them free to choose, from among the different solutions suitable for achieving its intended objective, the one which appears to them to be the most appropriate for that purpose (para. 50).

Still, the principle of legal certainty precludes a measure implementing EU law from having retroactive effect, unless an overriding reason of public interest so demands, and where legitimate expectations of those concerned are duly respected. Although, in principle, the risk of seriously undermining the financial balance of the pension system could be considered as an overriding reason in the public interest, this was not put forward as a justification of the retroactive effect of the national legislation at issue in the main proceedings. A fair sharing of burdens between older and younger civil servants is not sufficient to establish that treating the retirement scheme for civil servants within the previously advantaged category retroactively in the same way as that of civil servants within the previously disadvantaged category was necessary in order to avoid seriously undermining the financial balance of the pension scheme concerned. The Court concluded that there appeared to be no objective justification for the retroactive application of that measure, which was nevertheless for the referring court to ascertain. The legitimate expectations of the persons concerned were deemed sufficiently protected by the fact that the rule requires overpayments resulting from the application of these rules to be repaid to the state solely if they were not received in good faith.

Considering the above, the Court found that Article 2(1) and (2)(a) and Article 6(1) of Council Directive 2000/78 must be interpreted as precluding, in the absence of an overriding reason in the public interest, national legislation which, in order to end discrimination on grounds of age, provides for the retirement pension scheme for a category of civil servants previously advantaged by the national legislation relating to retirement pension rights to be treated, with retroactive effect, in the same way as the retirement pension scheme for the category of civil servants previously disadvantaged by that legislation.

7. Administrative practice maintaining the effect of discriminatory legislation and effective compensation for harm: Case C-113/22, DX v INSS & TGSS ³¹

In this case, the Court provided important guidelines for national authorities concerning the restitution of damages and other expenses incurred as a result of the application, by the national administrative authorities, of national legislation which is found to be discriminatory on grounds of sex, where such administrative practice is discriminatory in itself because it maintains the effect of the discriminatory legislation. The applicant in the main proceedings, DX, was a father of two children, who was awarded an absolute permanent invalidity benefit by the INSS as of 10 November 2018. On 12 December 2019, the Court rendered a judgment in the case INSS, ³² where it found that Directive 79/7 precludes Spanish legislation which reserves the grant of a certain pension supplement only to women who have at least two biological or adopted children. Relying on that judgment, DX applied to the INSS on 10 November 2020 for recognition of his entitlement to the same supplement, which was rejected. The rejection was apparently based on the administrative position that, pending the adaptation of national legislation to the Court's judgment in case C-450/18 (INSS), INSS would continue to apply that national legislation only to women, without prejudice to the obligation to implement final judicial decisions recognising the same entitlement to men. In other words, men would have to seek the entitlement in court proceedings until national legislation was adopted to end direct sex discrimination. In subsequent proceedings brought by DX, the national court recognised DX's right to the pension supplement at issue, from 10 August 2020 (three months preceding his application), while dismissing DX's claim for compensation for the harm suffered as a result of direct sex discrimination. Hearing the appeal lodged by DX and the INSS against that judgment, the referring court, the Tribunal Superior de Justicia de Galicia (High Court of Justice, Galicia), sought interpretation of Directive 79/7, in particular Article 5 and 6 thereof, to clarify whether the administrative practice at issue constituted a separate, ‘administrative’ breach of the principle of equal treatment, and whether and to what extent it gave rise to the compensation of damages resulting from such a breach.

From the outset, the Court reiterated its settled case law that, where discrimination contrary to EU law has been established, as long as measures reinstating equal treatment have not been adopted, observance of the principle of equality can be ensured only by granting to persons within the disadvantaged category the same advantages as those enjoyed by persons within the favoured category. This includes the obligation of a national court, as well as any other state organ, including administrative authorities, to set aside any discriminatory provision of national law, without having to request or await its prior removal by the legislature, and apply to members of the disadvantaged group the same arrangements as those enjoyed by the persons in the other category (paras. 41–42). Any subsequent administrative practice governing procedural conditions for the grant of entitlement, which continues to apply the national legislation deemed directly discriminatory on grounds of sex until it is replaced by new legislation, as well as individual decisions based on that practice, are liable to lead to direct sex discrimination, irrespective of the substantive conditions for the entitlement. In the case at hand, men would have to be subject to judicial proceedings to assert their entitlement without discrimination, which would involve additional time and costs.

In line with Article 6 of Directive 79/7, measures taken by the Member State to allow all persons who consider themselves wronged by discrimination on grounds of sex to pursue their claims must be sufficiently effective to achieve the objective of that Directive, restore equality, provide effective and efficient judicial protection and have a genuine deterrent effect on the body which has committed the discrimination. Where financial compensation is awarded, it must be adequate and enable the loss and damage actually sustained to be made good in full in accordance with the applicable national rules, and capable of ensuring that such loss or damage is effectively compensated or compensated in a way which is dissuasive and proportionate (paras. 50–51). A retroactive recognition of the right to the pension supplement, such as that in the case at hand, restores equal treatment, but it may not be appropriate for remedying all the harm resulting from the discriminatory nature of a national administrative practice. All the costs incurred as a result of discrimination, including the lawyer's fees, form an integral part of full compensation in accordance with Article 6 of Directive 79/7. Consequently, those costs should not be subject to limitations arising from the national procedural rules concerning the award of costs in judicial proceedings. This interpretation will be important for comparable provisions on effective compensation from other equality directives.

8. Conclusion

As diverse as the above presented cases may be, their analysis provides a basis for four tentative conclusions. First, the area of employment and occupation continues to be the most prolific environment for discrimination, resulting in both novel legal issues, as well as the necessity to revisit the established jurisprudence. On the one hand, the changing world of work is challenging the existing labour law paradigms and requires the assurance of application of equality law protections to all those who work. Case TP opens up the window of opportunity for further developments in this direction. On the other hand, the Court's lack of consideration for the intersection of sex, religion and ethnicity in Commune d’Ans continues, but at the same time calls for further engagement that might change this approach. Second, we witness a continued inflow of preliminary references concerning discrimination on grounds other than sex, with age as the most common ground for discrimination in the area of employment and occupation. Third, as illustrated by the several Austrian cases and the case DX v INSS & TGSS, national legislation and administrative practices in certain areas may ((un)intentionally) perpetuate discriminatory effect of previous rules, which necessitates repeated preliminary references to clarify the impact of established EU legal principles and interpretation of EU norms by the Court in the national legal system. Lastly, the decline of preliminary references in anti-discrimination cases continues from the previous period, resulting in fewer groundbreaking rulings with wider impact, and opening up the floor for discussion concerning the underlying causes of this trend.