Ajos (Dansk Industri) –A challenge to the primacy of EU law?

Martina Benackova – 3rd year LLB student at UCL

In the Ajos case[1], the Supreme Court of Denmark (SCDK) referred to the European Court of Justice (ECJ) two questions relating to the compatibility of paragraph 2a(3) of the Danish Salaried Employees Act with Directive 2000/78/EC, establishing a general framework for equal treatment in employment and occupation[2].

Despite the clear instructions received from the ECJ, the SCDK refused to set aside the conflicting provision of national law, giving precedence to national law over EU law instead.[3]

This paper shortly summarises the facts of the case and the reasoning of the SCDK, discussing them in the framework of the Treaty principles of supremacy of EU law and loyal cooperation. It then maintains that the decision of the SCDK in Ajos is an illustration of judicial disobedience of a national Court vis-à-vis the ECJ, which threatens the doctrine of the primacy of EU law as established by the European Court in the landmark decision Costa v ENEL[4].

Case summary

The EU Directive 2000/78/EC (the “Directive”) provides the general framework for equal treatment in employment law in which Member States must develop their own labour policies. The Directive inter alia prohibits any direct and indirect discrimination of workers on the ground of age.

In Ajos, the claimant challenged the compatibility of Paragraph 2a(3) of the Danish Salaried Employees Act (DSEA) with the Directive before the national Court. According to the national provision, severance allowance is not payable to dismissed employees when they are (i) entitled to an old-age pension from the employer, and (ii) the employee had joined a pension scheme before turning 50.

The facts of the case are straightforward.

Mr Rasmussen, a Danish citizen, was dismissed by his employer, Ajos, at the age of 60. He sought the payment of a severance allowance equal to three months’ salary under paragraph 2a(1) of the DSEA. Ajos opposed to such request arguing that Mr Rasmussen’s position did not fulfil the conditions set by the national legislation. Indeed, Ajos argued, Mr Rasmussen both had joined the pension scheme before 50 and also was eligible for an old-age pension from his employer. Mr Rasmussen’s heirs took the case before the Danish national Court, arguing that the refusal to provide the claimant with the severance allowance amounted to discrimination on the ground of age, in violation of the Directive.

Eventually, the case reached the SCDK, which, in turn, referred two questions to the ECJ. Firstly, the Danish Court asked whether the general principle of EU law of non-discrimination on the ground of age can be interpreted as precluding the application of the national legislation in question. Secondly, it enquired whether in a dispute between private parties the SCKD could weight up the unwritten general principle of non-discrimination on the ground of age against the principles of legal certainty and the protection of legitimate expectations and whether it could decide that the latter principles take precedence over the principle of non-discrimination on the ground of age.

The European Court responded that the SCDK should interpret national law in the light of the Directive. Was such interpretation not possible, the SCDK should “disapply any provision of national law which is contrary to the EU law”.[5] Consistently with its case law, the ECJ also recalled that the principle of non-discrimination is not to be considered an unwritten general principle of EU law. Such principle, which finds its origin in international instruments and in the constitutional traditions of the Member States, is indeed given concrete expression in Directive 2000/78.[6]

Despite the clear instructions received from the ECJ, the SCDK refused to set aside the conflicting provision of national law, giving precedence to national law over EU law instead.[7]

 

The reasoning of the Danish Supreme Court

In Ajos, the SCDK firstly recalled that Article 2a(3) of the Salaried Employees Act had already been found incompatible by the ECJ with Directive 2000/78/EC in Ingeniørfereningeni Danmark[8]. Specifically, in Ingeniørfereningeni, the ECJ held that Article 2a(3) of the DSEA goes beyond what is necessary to achieve social policy aims. On that occasion, the ECJ also specified that an established interpretation of national law by the national Courts was not sufficient to consider such law unambiguous for the purpose of excluding its consistent interpretation with EU law.[9]

However, in Ajos the SCDK refused to follow the decision of the ECJ. The Danish Court maintained that an interpretation of the challenged article 2a(3) of the DSEA in the light of the Directive was not possible as contra legem. Indeed, the SCDK argued that the Danish National Parliament, the supreme lawmaker of the land[10], when transposing the Directive into national legislation clearly did not intend to amend Article 2a(3). Thus, being domestic law unambiguous, a consistent interpretation with EU law was not possible.[11]

The SCDK then went on with its reasoning, giving preference to national law over EU law. Arguing on the basis of the principle of separation of powers, the national Court maintained that disapplying national law in favour of the Directive would fall outside the scope of its powers. Indeed, the SCDK suggested that contradicting the explicit will of the national Parliament would mean overstepping its constitutional role.[12]

Further, as far as the general principle of non-discrimination on the ground of age was concerned, the SCDK ignored the decision of the ECJ and held that such principle is to be considered as unwritten, since it does not have any Treaty basis. Thus, it is not automatically part of Danish Law. Indeed, after analysing the Danish EU Accession Act and its amendments, the SCDK concluded that, since the Parliament had never explicitly mentioned Mangold and Kücükdeveci judgments in its amendments, “the ECJ did not have the competence or legal basis to give precedence to the unwritten principle prohibiting discrimination on grounds of age in a case where this was contrary to the national law”.[13]

 

Discussion

The decision of the SCDK can be considered as an example of judicial disobedience against the ECJ and raises a question of how national courts of Member States currently perceive the role of EU law. It also appears to violate both the constitutional principles of EU law of supremacy, sincere cooperation[14], and the general principle of EU law of equal treatment[15].

With regards to supremacy and loyal cooperation, it is worth remembering that such principles constitute two pillars of the system of EU law since Costa v ENEL[16]. Specifically, according to doctrine of supremacy, due to its special nature, EU law cannot be overridden by domestic legislation. Indeed, when Member States join the EU, they limit their sovereignty in favour of the latter and are therefore required to respect – and ensure the precedence of – EU law over provisions of domestic law. Such obligation is also supported by the Treaty principle of sincere cooperation, according to which Member States are mutually obliged to “assist each other in carrying out the tasks which flow from the Treaties[17].

The SCDK also misunderstood the intrinsic importance of the general principle of non-discrimination on the ground of age to EU law. It is well known that general principles of EU law have their source in the constitutions of Member States and in international instruments, such as the Convention for the Protection of Human Rights and Fundamental Freedoms. According to the European Court, general principles have the status of primary law of the European Union[18] of which they constitute a structural element.[19] Their function is to supplement the Treaties and provide an aid for interpretation and application of EU law.

In Ajos, the SCDK refused to recognize the established function and legal value of general principles in EU law. Indeed, by arguing that giving precedence to the general principle of EU law of non-discrimination on the ground of age would run counter the division of powers, not only the SCDK disregarded the established constitutional importance of general principles in EU law. Also, it ignored that the principle of age non-discrimination is explicitly implemented in the provisions of the Directive. Therefore, it no longer can be considered merely abstract and unwritten (at least with regards to the scope of application of the Directive).

 

Conclusion

The SCDK decision in Ajos is troubling for a number of reasons.  Firstly, if national courts decided to follow the example of the SCDK, the unwritten general principles of EU law would be prevented from performing their constitutional role under EU law. Secondly, the interpretation by national courts of the will of national legislatures may in itself politicise the process of judicial review.[20]

In support of the SCDK, it may be counter-argued that judicial review is already a political process, as national courts give preference to EU law over provisions of domestic law. However, the aim of the doctrine of primacy of EU law is itself built on Member States’ commitment to ensure the uniform application, and therefore the effectiveness, of EU law across Europe.

Furthermore, should the SCDK’s decision in Ajos become the rule, this would change the same legal nature of EU law. Indeed, EU law would cease to be a supreme autonomous order, becoming a merely residual one. Such change would ultimately require an amendment of the EU Treaties.[21]

For the time being, the systemic consequences of the SCDK’s decision in Ajos remain unclear. What seems of the greatest importance here is to stress that, in the preliminary reference procedure, national courts should acknowledge that, by accessing the EU, Member States have willingly and consciously decided to exercise their powers in accordance with EU law as interpreted by the ECJ. Also, national courts should remember that the rationale behind EU rights and general principles is to fill the gaps in the EU legal system and to create an additional and complementary layer of protection of rights for the Union’s citizens all.

[1]Case C-441/14, Dansk Industri v Rasmussen [2016], EU:C:2016:278.

[2]Council Directive 2000/78/EC of 27 November 2000

[3]Case no. 15/2014 Dansk Industri (DI) acting for Ajos A/S vs. The estate left by A

[4]Case C-6/64 Costa v ENEL [1964], EU:C:1964:66.

[5]S. Klinge,’Dialogue or disobedience between the European Court of Justice and the Danish Constitutional Court? The Danish Supreme Court challenges the Mangold-principle’ (2016) EU Law Analysis, http://eulawanalysis.blogspot.sk, accessed 29 May 2017.

[6]n1, para 22, “the source of the general principle prohibiting discrimination on grounds of age, as given concrete expression by Directive 2000/78, is to be found, as is clear from recitals 1 and 4 of the directive, in various international instruments and in the constitutional traditions common to the Member States”

[7]Case no. 15/2014

[8]Case C-499/08 Ingeniørfereningeni Danmark v Region Szddanmark [2010], EU:C:2010:600.

[9]Ibid, para 34, “the national court cannot validly claim that it is impossible for it to interpret the national provision at issue in a manner that is consistent with EU law by mere reason of the fact that it has consistently interpreted that provision in a manner that is incompatible with EU law

[10] Madsen, Olsen, Sadl,’Competing Supremacies and Clashing Institutional Rationalities: The Danish Supreme Court’s Decision in the Ajos Case and the National Limits of Judicial Cooperation’(2017) iCourts Working Paper Series, No. 85, https://papers.ssrn.com, accessed 29 May 2017

[11]n3.

[12]n10.

[13] n3.

[14] Article 4(3)TEU

[15] Article 19 TFEU

[16] n4.

[17] n16.

[18] Ibid.

[19] G. Zaccaroni, ‘More on the horizontal direct effect of the principle of non-discrimination on the ground of age: Dansk Industries (DI)‘, (2016) EU Law Analysis, http://eulawanalysis.blogspot.sk accessed 29 May 2017.

[20]M. R. Madsen, H. P. Olsen and U. Sadl,’Legal Disintegration? The ruling of the Danish Supreme Court in AJOS’, (2017) Verfassungsblog, http://verfassungsblog.de accessed 29 May 2017.

[21]Ibid.

Comments are closed.