When is an applicant an applicant? — About the potential abuse of non-discrimination law, ‘Equality Law-Hoppers’ and the EU equality law directives

By Dr Jule Mulder, Lecturer in Law (University of Bristol Law School).

sparbuch-DW-WebWelt-SchwerinIn its Kratzer judgment of 28 of July 2016,[i] the Court of Justice of the European Union (CJEU) responded to the German Federal Labour Court’s preliminary reference concerned with the question what qualities are required to be an applicant who seeks access to employment, to self-employment or to occupation within the meaning of Article 3(1)(a) of the Framework Directive 2000/78/EC and Article 14(1)(a) Recast Directive 2006/54/EC. In it, the CJEU essentially rules that unserious applicants who do not actually seek employment but only apply for the purpose of claiming compensation do not fall under the scope of the directives and their respective articles. The case does not mention Article 3(1)(a) Race Directive 2000/43/EC but there is no reason to believe the conclusion would be any different regarding its application to employment and occupation.

The brief judgment, which was decided without prior opinion of the Advocate General, is unlikely to stir-up the European-wide debate on equality and non-discrimination law and may seem all too obvious to many commentators. However, for the German legal context, the judgment is very significant because it approves the national courts’ case law on the so called Equality Law-Hoppers (AGG-Hoppers) and leaves significant discretion to the national courts to counteract apparent as well as alleged abuses of the General Equal Treatment Act (Allgemeine Gleichbehandlungsgesetz, hereafter AGG)[ii] implementing the EU equality directives.

Ever since the inception of the AGG, which implemented the EU equality directives with some delay, German academia, the German judiciary, as well as some parts of the public have been concerned with the question of how the feared flood of lawsuits abusing the AGG could be curtailed. Within the debate, the prototype abusing the new law was a somewhat illusive character who combs through the job market to uncover discriminatory job-advertisements only to be able to claim damages for discrimination. The AGG was considered to potentially enable a large number of frivolous law suits lodged by people who never had the intention or desire to be employed but rather to exploit the naïveté of some employers who continue to advertise jobs for a ‘female secretary’ or a ‘young trainee’. While there has never been much evidence supporting such a flood of claims, national courts have developed a long line of case law to counteract this alleged danger of abuse. Accordingly, unserious applicants (the so called AGG-Hoppers), who only seek the status of applicant to claim damages, are not considered employees within the meaning of § 7 AGG or applicants with the meaning of § 6(1)(2nd sentence). In the past, the lower courts have considered unserious applicants that lodged a large number of similar claims against a multitude of employers, or doubted the seriousness if the applicant was clearly overqualified for the advertised position.

In Kratzer, the applicant reacted to a job-advertisement which required ‘a very good university degree […] either completed within the last year or completed in the coming month, and relevant practical vocational experience acquired, for example, as an apprentice, trainee or student worker’. Once his application was rejected, he claimed age discrimination based on the job advisement—which makes discrimination plausible. Most ‘recent university graduates’ will certainly be younger than Mr Kratzer, who was born in 1973 and passed his law exam in 1999. Mr Kratzer added a claim of sex discrimination once it transpired that all four trainee positions were filled with female applicants even though a comparable number of men and women applied for the traineeship. In court, the claimant was unsuccessful because of his lack of seriousness.

The Federal Labour Court,[iii] while considering the number of claims lodged against discriminatory advertisements not conclusive, emphasised that the phrasing of the claimant’s application did suggest that he had no intention to be hired as ‘trainee’, in particular as he repeatedly referred to his managerial experience, which was contrary to the job specifications. He thus provoked a rejection. In its preliminary reference, the Federal Labour Court explains that the effective judicial protection and deterrent effect required by the equality directives[iv] makes AGG-claims in damages unique because they do not only compensate for actual financial loss. Applicants can thus receive compensation even if they would not have received a job-offer in a discrimination free procedure, albeit limited to three-month pay (§ 15(2) AGG). The norm is thus deterrent; it aims to prevent that the defended-employer commits future discriminatory acts, as well as dissuading third parties from commiting discriminatory acts. However, to fulfil the purpose of the sanction and ensure proportionality of the remedy, the applicant needs to be serious. In the preliminary reference, the Federal Labour Court then asks whether EU law adopts a similar understanding of the meaning of applicant/employee under the scope of the equality directives and, secondly, whether an application purely made for the purpose of claiming compensation constitutes an abuse of rights under EU law.

In its judgment, the CJEU overall agrees with the approach of the Federal Labour Court. Firstly, it relatively briefly holds that unserious applicants who do not seek employment do not fall under the scope of the Framework Directive or Recast Directive, which respectively aim to ‘guarantee equal treatment in employment and occupation’ and ‘equal opportunities and equal treatment of men and women in matter of employment and occupation’. This does not include a person who only aims to reach the formal status as an applicant to claim damages. A different conclusion would be contrary to the objectives pursued, namely to ensure equal treatment within the area of employment and occupation. Furthermore, the CJEU also emphases that such a person cannot be considered a ‘victim […] or a person injured having sustained loss or damages’ within the meaning of the directives. This is interesting as the court, while not mentioning its case law on effective judicial protection under the scope of directives and the required deterrent effect of the judicial remedies, it seems to accept the Federal Court’s limitation. This excludes a large number of potential claimants whose inclusion could surely increase the deterrent effect. Only those who actually suffered discrimination can claim damages.

The CJEU also agrees that EU law cannot be relied upon for abusive or fraudulent ends. With reference to SICES and Others,[v] the CJEU continues that abuse can only be established if an objective as well as subjective element is satisfied. It first needs to objectively be ascertained whether the purpose of the directive has not been achieved and secondly the intention of the operators needs to be reviewed. In that regard, it is relevant whether the transaction is only concerned with ‘obtaining an undue advantage’ or whether the activity ‘may have some explanation other than the mere attainment of an advantage’. In the case, the CJEU seems to be satisfied that the ‘artificial application’ to the traineeship demonstrates that Mr Kratzer was only interested in obtaining an undue advantage. The CJEU states that ‘it is for the national court to verify, in accordance with the rules of evidence of national law, provided the effectiveness of EU law is not undermined, whether the factors constituting an abusive practice are present in the case before it’ (para. 42). There is thus little reason for the German courts to rethink their approaches towards unserious applicants.

However, the principle of effectiveness should potentially encourage national courts to review alleged abuse and the applicant’s seriousness critically. It should not quickly be assumed that applicants who repeatedly react to discriminatory job advertisements or lodge a multitude of claims for compensation based on the AGG are only pursuing economic reward or financial settlements. After all, vulnerable minority groups within our society are much more likely to experience serious and reoccurring disadvantages during recruitment processes and national law needs to provide an effective remedy to challenge such discriminatory practices, including discriminatory job advertisement.

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Jule’s recent monograph entitled EU Non-Discrimination Law in the Courts Approaches to Sex and Sexualties Discrimination in EU Law compares German and Dutch courts’ approached towards EU non-discrimination law. The monograph will be published with Hart Publishing in early 2017.

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[i] Kratzer, C-423/15, EU:C:2016:604 (28 July 2016).
[ii] AGG in English available online: http://www.antidiskriminierungsstelle.de/SharedDocs/Downloads/DE/publikationen/AGG/agg_in_englischer_Sprache.html.
[iii] 8 AZR 848/13-A (18.06.2015) DE:BAG:2015:180615.B.8AZR848.13A.0.
[iv] Asociaţia Accept, C-81/12, EU:C:2013:275 (25 April 2013); Draehmpaehl v Urania Immobilienservice, C-180/95 EU:C:1997:208 (22 April 1997).
[v] SICES and Others, C-155/13, EU:C:2014:145 (13 March 2014).

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