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Essay: Dansk Industri v Estate of Karsten Eigil Rasmussen C-441/14 (Ajos)

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  • Dansk Industri v Estate of Karsten Eigil Rasmussen C-441/14 (Ajos)
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Introduction

The case in question, Dansk Industri (DI) v Estate of Karsten Eigil Rasmussen C-441/14 (Ajos), is one which concerns the controversial area of the application of horizontal direct effect in EU directive, in this case Directive 2000/78. Although it initially seems simple it is of the upmost importance in terms of legal principle in EU law. This essay will analyse the Ajos case and will particularly focus on the response from both the Court of Justice (“CJEU’) and the Danish Supreme Court (“SCDK”) and the impact these will have on the EU’s new legal order, especially those of direct effect and primacy. It will further analyse the reasoning behind the SCDK’s behavior and will look at what this could mean for the future of EU jurisdiction as it could potentially have considerable repercussions. In order to fully understand such analysis it is important to have a full understanding of the EU’s new legal order as well as its fundamental rights, which play a sizeable role in Ajos, along with the basic facts of the case in observation. Therefore we will first begin by looking at these two aspects.

New Legal Order and Fundamental Rights

In order to critically discuss the core concepts of the EU’s new legal order in light of the Ajos case it is important to briefly define and understand the aspects that establish this and the principle of Fundamental Rights within the EU. The ‘twin pillars’ which make up the new legal order are the principles of direct Effect and primacy. Direct Effect, established in Van Gen den Loos allows individuals to invoke a provision of European law before a national or European Court regardless of whether national law exists. There are two aspects of Direct Effect; vertical and horizontal. Vertical refers to provisions which an individual can invoke against the state where as horizontal refers to those which can only be utilised against private individuals. The latter, primacy, is the doctrine that allows EU law to assert itself unconditionally over national law as developed in Costa v Enel.

Furthermore, the EU bases itself on a set of values including freedom, democracy, human dignity, equality and respect for human rights which are set out in the Charter of Fundamental Rights of the European Union (“CFREU”) and are common amongst all of the member states. These underpin much of the EU legislation and could be said to be unwritten laws which are indirectly accepted upon ascension.

Case Summary

In late June of 2009 Mr Rasmussen, upon his sixtieth birthday, was dismissed from Ajos and according to Article 2a(1) of the Law on salaried employees he was entitled to severance allowance equal to three month’s pay. Nevertheless, Article 2a(3) of the same article annulled this entitlement since it said that one was not entitled to severance payment if they were entitled to an old-age pension, Mr Rasmussen was, and had joined the pension scheme before the age of 50, which Mr Rasmussen had. Initially the Danish lower national courts extended the precedent set in Ingeniørforeningen as Article 2a(3) went against Directive 2000/78, in particular Article 1 and Article 6, and ruled in favour of Mr Rasmussen. However, DI brought an appeal to the SCDK arguing that extending the precedent of Ingeniørforeningen would be contra legem. They stated that were the SCDK to apply Ingeniørforeningen and therefore dis-apply national law would involve violating the limits of its judicial role under Article 3, separation of powers, of the Danish Constitution. The established perception in Danish Law is clear, Parliament is and will always be the supreme author of law and this would prove to be a significant complication for the CJEU and the EU’s new legal order.

As a result of such the SCDK asked the CJEU two questions in respect to the upholding of Ingeniørforeningen in this situation for a preliminary ruling:

  1. Does the general principle of EU law prohibiting discrimination on grounds of age preclude Danish legislation;
  2. Can a Danish Court balance the principle of non-discrimination on grounds of age against those of legal certainty and the related principle of protection of legitimate expectations and for the latter to take precedence?

A directive such as the one referred to in this case does not have vertical direct effect which is what creates the principal problem in the Ajos case as opposed to the Ingeniørforeningen case.

CJEU response

The CJEU proceeded to provide a thorough response to the queries of the SCDK and its rejection of applying Ingeniørforeningen through its Grand Chamber but also through the more modest comments of Advocate General (“AG”) Bot. AG Bot started his argument by reinforcing that Article 2a(3) cannot apply vertically nor horizontally due to its incompatibility with Directive 2000/78 and agreed with AG Kokott in Ingeniørforeningen that the ambiguity of Danish law made consistent interpretation in Ajos possible. Therefore AG Bot’s solution was that the SCDK could indeed interpret Danish Law alongside the Directive and reverse its anterior precedent. As a matter of fact he stated that application of indirect effect by the SCDK would not actually mean crossing the boundary of its judicial power and further reiterated that the Danish government actually believed that this was a viable interpretation.

The CJEU further reiterated that the solution of interpretation of national law in conform with EU law would be possible and not contra legem. The CJEU argued inter alia that the SCDK could not claim that consistent interpretation was unachievable if it had never interpreted it in a compatible manner. If this were not to be possible the CJEU added that the primacy aspect of EU law meant that, if necessary, the SCDK would have to completely set aside the national law and apply the EU law, disregarding the idea of legal certainty. This aspect of judicial reversal had previously seen in the Honeywell case and despite directives not allowing for horizontal direct effect, the unwritten principles of equality, as seen also in Mangold (REF) and Kucukdeveci (REF), would allow for the use of Directive 2000/78 in private situations.

SCDK

The SCDK was very rotund in its reply to the CJEU, it would not constitute primacy to EU law in this particular instance and would not follow the German court in its jurisprudence of Honeywell. (REF) This was not a first and applying secondary legislation over constitutional provisions had proven problematic in the past with jurisprudential reversal being far from simple. (REF) In referral to the first solution of indirect effect of the Directive the SCDK unanimously ruled that this would, as initially stated, be contra legem. The message was clear, the Danish parliament in transposing Directive 2000/78 did not intend for the provision of Article 2a to change. (REF) Furthermore, with regards to the CJEU’s second solution eights of the nine SCDK judges recognised that judicial reversal would surpass their sphere of competence within the national legislature. The SCDK also argued that the Accession Act of 1972 had never meant for an unwritten principle to give preference to EU law over national law because there had never been a mention from Parliament of either Mangold or Kucukdeveci in its amendment of such. (REF) Through such reasoning the SCDK emphasised that the applicability of EU law in Denmark was not down to the EU law but governed by the Accession Act. This therefore rejected the idea of the new legal order which had consistently governed the EU since Van Gend en Loos and Costa. This was not a popular decision amongst the Neo-sovereigntists and Europeaninsts alike.

Discussion

Having now established the reasoning behind each court’s decision regarding primacy and direct effect in the Ajos case we will now look at some of the possible reasons for the abrupt and rotund obstinacy of the SCDK along with the possible consequences this case could have for the EU and its legal order.

It is no secret that the rulings of Mangold and Kucukdeveci and more notably Honeywell were unpopular amongst European institutions and thus it is believed the SCDK’s preliminary reference to the CJEU was an invitation to reconsider the issues of EU law in direct effect and primacy. (REF) This is clear from the stubborn stance of the SCDK and its lack of willingness to cooperate with the CJEU. AG Bot highlights such to an extent in which he questions the manner to which a directive, intended to solely have vertical direct effect, can have horizontal direct effect and the contradictions it has with past EU law. (REF)

The principles of indirect and incidental effect are no doubt a ‘grey area’ of EU law and it can be said that direct effect and indirect effect contradict each other in their mannerisms. Although directives do not bring about horizontal direct effect through indirect effect and ‘reading in’ of words individuals can use such legislation against other private bodies, as seen in Marleasing (REF) and Litster (REF) respectively. AG Bot shows this aspect of reading in when he questions the intentions of Article 2a(3) as he ‘reads in’ whether the words ‘will receive’ actually mean ‘can receive’ in point 59 of his opinion. (REF) Therefore it seems as though the principle of indirect effect is a legal ‘loophole’ to implement horizontality when the CJEU feels necessary.

The preliminary reference of the SCDK also highlights the issues with the principle of primacy. Regardless of the clear communication from the SCDK that indirect effect would not be possible in the Ajos case the concept of Fundamental Rights meant the CJEU instructed the SCDK that EU law take preference over Danish law, which the self-restrained SCDK abruptly rejected. As such the SCDK views these unwritten principles as being ‘judge-made’ (REF) and therefore not having primacy in the constitutionally binding sphere of EU law in Danish courts. It refers to the need for legal certainty and legitimate expectations in EU law. This discontent was also highlighted partially in the Mangold (REF) and Kucukdeveci (REF) but more notably within the German Court in Honeywell where doubts were raised but later dismissed. Therefore, this once again shows a method by which the CJEU can ‘sidestep’ (REF) the issue of no Horizontality of directives. This creates further ambiguity as to whether the fair judgements of the CJEU take into account the individual interests of its member states. As such this case and the corresponding attitude of the SCDK accentuate the issues of the core concepts of the EU new legal order and the need for its reconsideration.

Nevertheless, the argument for horizontality remains a strong one in the Ajos case notably from a teleological perspective. This is because it regards a principle of equality and by entering the EU and signing treaties, especially that of the Lisbon treaty which through the Charter of Fundamental Rights (REF) makes these unspoken principles as such correspond a status of primary law, the member states adhere to unspoken principles such as equality in EU law. Therefore with the EU and its treaties fundamentally backed by these principles it corresponds that in cases such as Ajos, as seen in Mangold and Kucukdeveci, these principles are reinforced.

Another aspect which influences the stance and ruling of the SCDK in Ajos is the political change towards increased national sovereignty. This can be seen nowhere more so than in the UK with Brexit where sovereignty was one of the reasons European exit as the EU is apparently “a slow and invisible process of legal colonisation”. (REF – BBC) Moreover, there is a perception amongst member states that the fair judgements of the CJEU lack consideration of the individual rights of the member states. (REF – Lexis) We will first briefly analyse the Danish history with the EU before discussing the issue of sovereignty more thoroughly.

‘Danish membership of in the EC/EU has from the beginning been marked by reluctance, if not scepticism.’ (REF – HOWARD) Despite this resurgence of sovereignty, in terms of Denmark this history is perhaps the underlying issue within this case. Very much a dualist nation set on the culture of respectful limits of judicial power in a democratic system with a majority in Parliament the ideal type of government, a supranational institution such as the EU intervening plentifully with its laws was never going to fair well. (REF – Lexis) This is perfectly represented in the opposition of 50.7% of voters to the Maastricht Treaty in 1992 which was only signed after the Edinburgh Agreement (REF – howard). Moreover, when implementing the Lisbon Treaty no new powers were transferred to the EU from Denmark based on the government’s constitutional assessment. This all shows that Denmark has always had a sovereignty issue due to its constitutional and dualist nature thus it is clear to see that problems with the EU interference stems from much before Ajos.

With the resurrecting issue of sovereignty throughout Europe it seems as though in the Ajos case the SCDK saw a chance to in some way ‘reassert control’ of their national law. As discussed above this is a weak and controversial aspect of EU law and by challenging it the SCDK was able to not only undermine the CJEU along with its legal order but was also able to reinforce their constitutional legal system. There is no doubt that as seen in inter alia Mangold and Kucukdeveci the SCDK should have accepted the CJEU ruling, however not is all as it seems. Judicial reversal would have been awkward if not embarrassing, more so to the proud Danish judiciary system. Nevertheless, violation of EU would have potentially left them vulnerable to liability. (REF – Lexis) Therefore this manner of confrontation and dissent towards the CJEU allowed the SCDK to highlight many of the problems within the EU’s new legal order as well as allowing them to achieve some legal sovereignty. This SCDK decision was not only ground breaking but obviously also extremely controversial, it upset many Europeanists (REF) with the country but throughout Europe. Nevertheless it was welcomed with open arms by many both nationally, especially the more dualist of the population, and in Europe. Another reasons for the sovereignty claim is the recurring issue throughout this discussion is the lack of CJEU consideration of the individual rights of member states and in this the Danish court can relate as in the case of Ingeniørforeningen the CJEU ruled in favour of the individual and not that of the member state. Overall, therefore, there is a possibility that the reason or one of the reasons for the behavior of the SCDK was to regain judicial sovereignty.

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