By Dr. Ronan McCrea, Senior Lecturer in Law, University College London

Background

The Court of Justice issued a significant decision concerning the balance between religious organizations’ autonomy and the right of their employees (or potential employees) to be free from discrimination.

In 2012, Vera Egenberger applied for a temporary position with the Evangelisches Werk für Diakonie und Entwicklung, an organization affiliated with the Evangelische Kirche in Deutschland (a German Protestant church). The position involved preparing a report on Germany’s compliance with the United Nations International Convention on the Elimination of All Forms of Racial Discrimination. Ms. Egenberger, possessing considerable experience in this area, applied but encountered a significant obstacle. As someone without religious beliefs, she did not meet the advertised requirement of membership in a Protestant church or a church belonging to the Arbeitsgemeinschaft Christlicher Kirchen in Deutschland (Cooperative of Christian Churches in Germany) and identification with their welfare mission. Her application was unsuccessful, and she initiated legal action in German courts, alleging religious discrimination.

Since employment discrimination based on religion falls under EU law, specifically Directive 2000/78 (which also prohibits discrimination based on disability, age, or sexual orientation in employment), the Bundesarbeitsgericht (Federal Labour Court) referred the case to the Court of Justice. The key question was whether the exemption granted to religious organizations under German law, allowing them to discriminate based on religion or belief, aligned with Directive 2000/78.

Article 4(2) of the Directive addresses exemptions for religious employers from the prohibition of religious discrimination, stating:

‘…. in the case of occupational activities within churches and other public or private organisations the ethos of which is based on religion or belief, a difference of treatment based on a person’s religion or belief shall not constitute discrimination where, by reason of the nature of these activities or of the context in which they are carried out, a person’s religion or belief constitute a genuine, legitimate and justified occupational requirement, having regard to the organisation’s ethos. This difference of treatment shall be implemented taking account of Member States’ constitutional provisions and principles, as well as the general principles of Community law, and should not justify discrimination on another ground.’ (emphasis added).

The implementing German law states:

‘….a difference in treatment based on religion or belief shall also be admitted in the case of employment by religious societies, by institutions affiliated therewith, regardless of legal form, or by associations whose purpose is to foster a religion or belief in the community, where a given religion or belief constitutes a justified occupational requirement, having regard to the employer’s own perception, in view of the employer’s right of autonomy or by reason of the nature of its activities.’ (paragraph 9(1) of the Allgemeine Gleichbehandlungsgesetz, emphasis added).

This legislation is interpreted in light of the German constitution, which guarantees that:

‘Religious societies shall regulate and administer their affairs independently within the limits of the law that applies to all. They shall confer their offices without the involvement of central government or local authorities.’ (Grundgesetz Article 140).

This has resulted in a consistent approach by German courts to defer to religious employers’ judgment on whether a particular role necessitates a specific faith. The courts’ role has been limited to reviewing the plausibility of this decision based on the religion’s self-defined beliefs.

The national court expressed uncertainty regarding the compatibility of German law, which allows religious employers to determine faith-based job requirements subject only to plausibility review, with the Directive. Consequently, the court referred the case to the Court of Justice under Article 267.

The Ruling: A More Balanced Approach Needed

The Court of Justice’s ruling stated that German law had granted excessive leeway to religious employers by allowing them to dictate whether a job could be reserved for individuals of a particular faith.

The Court highlighted that Article 4(2) of the Directive permits religious discrimination solely if, considering the nature of the activity and its context, “religion or belief constitutes a genuine, legitimate, and justified occupational requirement, having regard to the organization’s ethos.” The Court concluded:

‘if review of compliance with those criteria were, in the event of doubt as to that compliance, the task not of an independent authority such as a national court but of the church or organisation intending to practise a difference of treatment on grounds of religion or belief, [this provision of the Directive] would be deprived of effect.’

It is worth noting that although the employer cited both the freedom of religion or belief (Article 10 of the Charter of Fundamental Rights) and Article 17 of the Treaty on the Functioning of the European Union, which emphasizes the Union’s respect for the status of churches and religious associations under national law, the Court relied heavily on constitutional principles to support its finding that German law granted undue latitude to religious employers.

The Court emphasized that Directive 2000/78 represents a specific application within its scope of the broader non-discrimination principle enshrined in Article 21 of the Charter. It also noted that Article 10 of the Directive places the burden of proof on the respondent to demonstrate the absence of a breach when an individual presents facts before a national court suggesting direct or indirect discrimination. Consequently, limiting the national courts’ ability to scrutinize an employer’s decision to impose a discriminatory requirement would contradict EU law, particularly the right to effective judicial protection of EU law rights under Article 47 of the Charter.

Furthermore, the Court asserted that Article 4(2) of the Directive aimed to strike a balance between the autonomy of religious organizations and employees’ right to be free from discrimination. The Directive outlines the criteria for this balancing act, and national courts must have the power to review this process in case of disputes. According to the Court, the commitment to respecting the status of religious organizations under Article 17 of the Treaty cannot override this conclusion.

The function of that article, the Court stated, was:

‘to express the neutrality of the European Union towards the organization by the Member States of their relations with churches and religious associations and communities […] [and] is not such as to exempt compliance with the criteria set out in Article 4(2) of Directive 2000/78 from effective judicial review.’

Guidance on the Test to Be Applied

Having established the incompatibility of German legislation with the Directive, the Court addressed two additional points. First, it provided guidance to the national court on conducting the “fair balancing” act and advised on implementing the ruling’s consequences.

Regarding the “fair balancing” process, the Court acknowledged that the European Court of Human Rights (ECHR) case law prevents states from evaluating the legitimacy of religious organizations’ beliefs. However, it also emphasized the need to ensure that any occupational requirement based on religion or belief is “genuine, legitimate and justified, having regard to [the] ethos [of the religious employer],” as stipulated by the Directive. Therefore, the Court had to reconcile the subjective requirements of the employer’s ethos with the seemingly objective criteria of the “genuine, legitimate and justified” test.

The Court adopted a more objective approach than German law, establishing a test requiring religious organizations to demonstrate “an objectively verifiable existence of a direct link between the occupational requirement imposed by the employer and the activity concerned.” To satisfy Article 4(2)’s requirement of “genuine, legitimate and justified” differences in treatment based on religion, the Court determined:

To be considered ‘genuine’: ‘professing the religion or belief on which the ethos of the church or organisation is founded must appear necessary because of the importance of the occupational activity in question for the manifestation of that ethos or the exercise by the church or organisation of its right of autonomy.’

To be considered ‘legitimate’ it found that the national court must ‘ensure that the requirement of professing the religion or belief on which the ethos of the church or organisation is founded is not used to pursue an aim that has no connection with that ethos or with the exercise by the church or organisation of its right of autonomy.’

And to be considered justified the CJEU set down that ‘the church or organisation imposing the requirement is obliged to show, in the light of the factual circumstances of the case, that the supposed risk of causing harm to its ethos or to its right of autonomy is probable and substantial, so that imposing such a requirement is indeed necessary.’

Furthermore, while Article 4(2) does not explicitly mention proportionality (unlike other articles within the Directive), the Court maintained that this principle, being a general principle of EU law, applies to the exemption granted by Article 4(2).

Applying the Ruling

Anticipating a potential conflict between German law and the Directive, the German court sought guidance on how to proceed if aligning domestic law with the Directive proved impossible. This consideration factored in the contra legem exception in the Marleasing case law on the indirect effect of Directives, which states that national courts cannot be compelled to interpret national law in line with a Directive if it means disregarding the explicit wording of national law.

The Court expressed doubts about the impossibility of an interpretation consistent with EU law. It emphasized that the obligation to interpret national law in harmony with EU law includes a duty for national courts to reconsider established case law if necessary (citing the DI judgment on age discrimination). Nevertheless, the Court stated that if a consistent interpretation proved impossible, national courts should disregard national law and apply the relevant EU law rights directly.

The Court grounded this position in the fact that Directive 2000/78 does not establish the right to equal treatment itself but provides a framework for combating discrimination. The right to equal treatment, according to the Court, constitutes a general principle of law and is enshrined in Article 21 of the Charter. Consequently, Article 47 of the Charter, which mandates adequate judicial protection for such rights, requires national courts to safeguard the judicial protection afforded to individuals under Articles 21 and 47 of the Charter. This entails ensuring the full effectiveness of those articles by potentially disapplying any conflicting national provisions. This approach builds upon previous case law concerning the direct effect of the Charter, notably the AMS case; it also reaffirms the UK case law on the direct effect of Article 47 (Vidal-Hall and Benkharbouche).

Conclusion

The Court of Justice’s interpretation of the Directive in this case was noticeably constitutional in nature. It invoked the Charter and general principles of law to introduce a proportionality test into Article 4(2) despite the absence of explicit language. The Court emphasized proportionality as the framework for achieving a “fair balance” between the autonomy of religious employers and the equal treatment rights of employees.

This approach contrasts with recent trends in the Strasbourg Court’s case law. In cases like Fernandez Martinez v Spain, the European Court of Human Rights appeared to shift away from the balancing of rights, moving closer to the “ministerial exemption” model employed in the United States. This model grants religious organizations absolute exemption from non-discrimination laws concerning roles with religious functions. However, given the EU legal order’s strong emphasis on proportionality, it is unsurprising that in Egenberger, the Court of Justice clearly favored the balancing approach.

The Court’s assertion that EU non-discrimination law essentially codifies a self-executing (and horizontally directly effective) constitutional principle of non-discrimination reflects a continuation of the controversial line of cases originating from Mangold, an approach that has drawn significant criticism, including from national courts, due to potential legal uncertainties. In this case, the Court of Justice clearly affirmed that the EU’s commitment to proportionality means religious organizations can impose discriminatory conditions on employees only when proportionate. National courts are responsible for ensuring that religious employers do not exercise their right to discriminate disproportionately.

This stance clashes with the German legislature’s approach, which, based on constitutional guarantees of religious autonomy, granted limited powers to the courts to scrutinize the decisions of religious bodies. With the apparent tension between EU law and German constitutional norms, it will be interesting to observe how the national court implements this ruling. The German constitutional provisions on religious autonomy, dating back to the Weimar constitution, are deeply ingrained. While it might be an overstatement to view them as representing the kind of core “constitutional identity” that could lead German courts to refuse the primacy of EU law, their significance remains undeniable.

Barnard & Peers: chapter 9, chapter 20

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