Ray's Employment Discrimination

1. Advise the parties how EU Law applies to their situations

Ray

The issue with respect to Ray is whether the rejection of his application for the post of the Chief Accounting Officer for his company for the grounds mentioned is justified or open to challenge; and whether the refusal to give him the annual bonus amounts to discrimination and open to challenge.

In the case of non-EU family members, the right to work and establishment is guaranteed by Articles 23 and 24 of Directive 2004/38/EC. Therefore, as Ray is married to an Italian, he has a right to work in Italy as provided in Directive 2004/38/EC. Recital 20 of the Directive is relevant here because it provides that union citizens or their family members shall not be subjected to discrimination and shall be treated equally as nationals. Also relevant is Article 24(1) of the Directive which gives right to enjoy equal treatment with nationals to the third country family members of union citizens. As Ray is a Canadian married to an Italian and living in Italy with his wife, Article 24(1) of the Directive 2004/38/EC protects his right to be treated equally as other nationals of Italy. For those needing guidance on similar cases or seeking law dissertation help, understanding these provisions is crucial. This would be relevant to ascertaining the validity of the rejection of his application.

The first question is related to regulated activity and whether accounting in Italy would fall in that category. Directive 89/48/EEC is applicable to the question of what is regulated activity in the member state. The status of regulation of the profession depends on the conditions prevalent in the employment market of the state. Accounting will be considered to be a regulated activity in Italy as the Italian Financial Regulation Board (IFRB, fictitious) regulates entry into the profession and also determines the recognition of professional qualifications. Article 7 of the Directive 89/48/EEC allows the use of the professional title of the state after formal recognition under Article 3. Even if the activity is not regulated within the meaning of the Directive 89/48/EEC, the assessment of the equivalence of qualifications should be prompt and in good faith and should be followed by a reasoned decision that can be challenged before a national court. In this case, Ray’s professional title is obviously recognised as he is working as a financial officer in the corporation.

The questions that follow now are whether the grounds on which the application of Ray for Chief Financial Officer was refused were justified or discriminatory. This is discussed now. The first ground on which Ray’s application was rejected is his lack of fluency in Italian. Requirements as to knowledge of or fluency in language of the host Member state can be a measure of indirect discrimination unless there is an objective justification for requiring the proficiency in the language. Article 3(1) Regulation 1612/68/EEC is relevant to this point. Under this provision, employers are barred from impeding the right of foreign nationals to take up and pursue employment by imposing a language requirement unless linguistic knowledge is required by reason of the nature of the post to be filled. In Groener, the court held that in order for linguistic requirement to be valid, it should not be discriminatory and should be proportional in relation to the aim pursued; in that case, the aim of preserving the national language was held to be proportionately achieved by imposing a linguistic requirement for full time teaching jobs in Ireland. The principle on which language restrictions can be based is that it should be proportional to the aim pursued. In this situation, the company itself is a multinational and English is commonly spoken, the reason given by the company is that Ray’s Italian is not fluent enough for him to occupy a leading role in the company. This does not seem to be justified because the linguistic restriction does not seem to be proportionate.

The second ground on which Ray’s application was rejected is that his accountancy qualification, while valid to practice accountancy in Italy, is not valid for a Chief Financial Officer role, which requires specific qualifications in compliance and fraud prevention. The Vlassopoulou judgment is relevant here. In this case, the CJEU has ruled that any education and training received by the migrant should be considered by the decision making authority while deciding recognition of qualification and in case of equivalence, qualification obtained in another Member State and relevant practical professional experience of the migrating professional should be recognised. However, as Ray is not an EU national, this case may not be applicable to him. However, as he is married to an Italian, he has the right to work in Italy under Articles 23 and 24 of Directive 2004/38/EC. At the same time, the extra qualifications that are required in compliance and fraud prevention may be considered as part of Ray’s qualification and experience.

Ray also has the right to not be subjected to unequal treatment as compared to other nationals as Article 24(1) of the Directive 2004/38/EC is applicable to him and protects his right to be treated equally as other nationals of Italy. This is relevant to the decision to not give Ray his annual bonus, which was due for review in June this year. The company’s decision to not give him his annual bonus because he is not an Italian citizen can be challenged by Ray. Although the company says that bonuses can only be given to non-Italian citizens who have lived in Italy for five years or more. In Ugliola, the CJEU held that there is a bar against discrimination of workers based on nationality. Requirements as to residence can be considered to be discrimination as has been done in some cases by the CJEU. Even in cases of third country nationals, the residence requirement can be considered to be discrimination.

To conclude this section, Ray can challenge the rejection of application to the post of CFO and denial of bonus on the ground of discrimination under Article 24(1) of the Directive 2004/38/EC.

Dan, Peter and James

The issue with relevance to Dan is whether the refusal of his application to join Ray in Italy is justified. The issue with relevance to Peter is whether he has the right to residence on account of being Ray’s son and whether the application refusal is justified or can be challenged. The issue with relevance to James is whether the refusal of entry on arrival at the airport in Italy, because he is displaying symptoms of COVID-19 is justified. Directive 2004/38/EC is applicable here. Directive 2003/86/EC is not applicable because it is not relevant to third country nationals who are family members of EU citizens as per Article 3 of the Directive. Therefore, the discussion in the forthcoming sections is concerned only with Directive 2004/38/EC.

Directive 2004/38/EC of 29 April 2004 relates to the right of EU citizens and their family members to move and reside freely in the EU. With regard to third country nationals who are family members of an EU national, states can make national legislation regulating this area, however, the CJEU has held that it has jurisdiction under Article 267 TFEU to interpret provisions of the Family Reunification Directive. Furthermore, Article 8 of the ECHR is also relevant because it provides the right of family and private life. Furthermore, Article 7(2) of Directive 2004/38 provides the right of residence to the family members who are not nationals of a Member State.

Article 2 (2)(d) of Directive 2004/38 defines ‘family member’ as ‘the dependent direct relatives in the ascending line and those of the spouse or partner’. Therefore, Dan as the brother of the EU national’s spouse and Peter and James as his sons would come within the definition of family member. Directive 2004/38/EC Article 3 is also relevant to Dan’s situation. Article 3 defines family members to include ‘other beneficiaries’ which may be members of family who are dependant or sick. These beneficiaries may be dependent or have lived in the same household as EU citizens. In in Rahman and Others, the CJEU has held that states are required to facilitate entry for ‘any other family members’ dependants on an EU citizen. In this situation, Dan is Chiara’s brother in law and Ray’s brother. Chiara is an EU citizen and Dan can be considered to be a dependant family member under Article 3 of the Directive. He has multiple sclerosis and is in deteriorating health. He can no longer work and he needs financial and physical support.

Directive 2004/38/EC, Article 2(2) is relevant to Peter and James. It defined the term ‘family member’ for the purpose of the directive. Such family members can use Article 2(2) it they are able to prove dependency. The CJEU has ruled that for determination on whether a family member is ‘dependant’, the host state has to assess whether the applicant is in a position to support themselves in the state of origin or in the host state, or receiving financial assistance without which sustenance is not possible. Both Peter and James come within the scope of Article 2(2) because they are 18 years of age and need the guidance and support of their father for the time being.

Peter’s application into Italy is refused because he has a drugs conviction for possession of cannabis. Article 27(1) Directive 2004/38 gives states the power to restrict freedom of movement and residence on grounds of public policy, public security or public health. This can include laws restricting entry to third country nationals who have history of criminal law conviction. In Hristo Gaydarov, the CJEU observed that states can make national legislation restricting entry to individuals with prior conviction of a serious criminal offence also presents continuing threat; in this case, a narcotic drug trafficking conviction was held to be serious enough to allow the state to bar entry. Article 27 (2) of Directive 2004/38 provides that any measures taken on grounds of public policy or public security should be in accordance with the principle of proportionality and based exclusively on the personal conduct of the individual concerned and that previous criminal convictions in themselves are not constitutive of grounds for taking such action. In Peter’s case, the conviction was for possession of cannabis which is not a serious offence and does not present a continuing threat to the host country.

With reference to James, he is displaying symptoms of COVID-19. Under the provisions of Article 27(1) Directive 2004/38, entry can be denied on grounds of public health. Article 29 of the Directive allows the state to deny entry if the individual has a contagious disease. On the other hand, this decision may be challenged on the ground that the father has the right to take care of the son who is sick and may be in need of medical attention. Article 28 of the Directive does not allow expelling of minors. Therefore, denial of entry to James may be challenged on the ground of medical care.

2. Advise them on how best they can enforce their EU Law rights

This section discusses the principles of direct effect, indirect effect, and state liability as these are relevant to the ways in which the EU law rights of the parties concerned can be enforced in this scenario. The preliminary reference procedure is also discussed.

The principle of direct effect was laid down by the CJEU in Van Gend en Loos. The principle means that EU law is directly effective on the national courts and can be invoked directly before the courts in the Member State. Doctrine of direct effect applies to Directives, as well as EU regulations and EU court decisions. As per the principle laid down in Van Gend en Loos, national courts have the responsibility to provide legal protection to individuals as per the rules of Community law and to give effectiveness to the rules. The principle of direct effect is applicable where the EU law is sufficiently clear and precise, unconditional and independent, and confers a specific right upon which a claim can be founded. If these conditions are applicable to the situation, the individuals have recourse to remedies under the EU law.

The doctrine of state liability has been applied by the CJEU to allow individuals to enforce EU directives in remedies asked against non-public bodies. In situations where EU directives have not been implemented, then state liability can extend to giving compensation to the individuals. However, for liability to arise, the decision should be given by the court of last resort in the state. The doctrine of state liability allows individuals to enforce an EU directive as against a non-public body, if horizontal effect is not applicable in the case. For state liability to arise, the breach of EU law must be sufficiently serious and the national court’s infringement must be manifest, which may happen when the court intentionally ignored the EU law and the EU law itself was express and clear on the point at issue.

In the case of rejection of Ray’s applications for the post of CFO and annual bonus, as the employer is a private corporation, the application will be of horizontal direct effect which allows application of EU legislation against private individuals. As Directives have vertical effect but do not have horizontal effect, these are not applicable as against private individuals. In such situations, doctrines of indirect effect and state liability can be applied. In Van Duyn, it was held that individual can enforce the EU directive against the UK. In Defrenne v Sabena, the court held that employer has an obligation to comply with EU law. Accordingly, Ray can seek to enforce his rights against the corporation under the doctrine of indirect effect. State liability may not be applicable at this point because the court of last resort has not as yet heard the matter. In the case of the IFRB, if the body fails to apply the EU law to Ray while considering the matter of rejection of his application for the CFO post, then the issue of state liability will become relevant.

In the case of rejection of applications to entry of Dan, Peter and James, as the rejection is by the public bodies, vertical direct effect is applicable here; this means that EU law can be enforced against the state. This allows individuals to rely on treaty and secondary legislation to enforce EU law in national courts against public authorities. An individual can rely on the EU directive, as per the provisions of Article 288 TFEU. If the state has failed to transpose the EU law, then the individuals can ask for compensation from the state. Compensation can be asked for if there is a directive that granted rights to individual, the content of the rights was identified on the basis of the provisions and breach of obligation to provide the right led to damage suffered by the individual. In this situation, Directive 2004/38 gives certain rights to family members of EU citizens. In the cases of Dan, Peter, and James, these rights can be enforceable as against the state under the principle of direct effect. That means, the parties can first approach national courts for remedies against the decision of the state to deny their applications to enter Italy.

Furthermore, the preliminary reference procedure is applicable here because when the parties approach the national courts, the national courts may be under an obligation to refer the question involving EU law (in this case, related to Directive 2004/38) to the CJEU under Article 267 of the TFEU. The preliminary reference procedure makes it either possible or in some cases mandatory for national courts to refer a question involving EU law interpretation to the CJEU. Under Article 267(2), the national court may make such reference if there is a doubt as to the meaning or scope of an EU provision. Under Article 267 (3), it is mandatory to make such reference if the national court is the court of last resort in the state and the domestic law allows no further appeal. In such a situation, failure to make a reference can lead to liability in damages. The national court may not make such reference if question regarding EU law is irrelevant, has already been interpreted, or correct application of law is obvious (acte clair doctrine). Therefore, even when the question comes before the national courts as to the issues involved in this case, the national court may be under an obligation to refer the question to the CJEU.

Assume Ray appeals to the IFRB about his accountancy qualification. Advise the IFRB on whether it can or must refer a question about the recognition of his qualification to the Court of Justice of the European Union

The issue raised in this question is whether the IFRB is required to refer the question about the recognition of his qualification to the CJEU. Article 267 of the TFEU is relevant to this issue and is discussed below before application to the case scenario.

Article 267 TFEU is applicable to the situations in which a national court or judicial body may be obliged to make a preliminary reference to the CJEU or may choose to make such a reference. In the former case, the reference to the CJEU is mandatory jurisdiction. In the latter case, it is permissive. The mandatory jurisdiction of the CJEU is provided under Article 267 (3) TFEU under which the national court or tribunal is under an obligation to refer the issue or question to the CJEU. Such mandatory reference is to be made under situations where a question on EU law interpretation is raised before a national court or tribunal and there is no appeal from the decision of the national court under the national law. In other words, the mandatory reference to the CJEU is made in situations where the national law does not have a further appeal from the decision of the court or tribunal. The permissive jurisdiction of the EJEU is provided under Article 267 (2) TFEU. This is applicable in situations where the national court or tribunal is required to interpret a provision of EU law, and it is of the opinion that it is necessary to make a reference to the CJEU as there is a doubt or ambiguity as to the meaning or scope of the EU provision and a preliminary ruling by the CJEU on that question would be necessary to enable the national court to give its judgment in the case. Therefore, the first point to note is that while reference can be made in any case where a question of EU law interpretation is raised, such a reference is mandatory if the national court or tribunal is the court of last resort under the national law under Article 267 (3) TFEU. In this case, a question of EU law is involved as Directive 2005/36 (recital 10) allows member states to recognise professional qualifications acquired outside of EU by a non EU national. Furthermore, the access of the non-EU spouse to the European labour market is regulated in Article 23 and 24 of Directive 2004/38/EC.

Failure to make a reference under Article 267 (3) TFEU makes the member state liable in damages. There are certain exceptions under which mandatory reference need not be made by the national court to the CJEU. The first situation under which the national court is under no obligation to refer the matter to the CJEU under Article 267 (3) TFEU is if the question related to the EU law is irrelevant. The second situation is where the CJEU has already interpreted the same question on EU law in a previous case with materially identical facts. The third situation is under the acte clair doctrine, which applies in the situation where the correct application of the EU law is obvious and has no scope for reasonable doubt.

In this situation, Ray has appealed to the IFRB against the employer’s decision for further recognition of his accountancy qualification. The IFRB regulates entry to the accountancy profession and adjudicates on the recognition of professional qualifications. Relevant to the application of the mandatory reference to the CJEU under Article 267 (3) TFEU is the point that decisions made by the IFRB are final and cannot be challenged in the national courts of Italy. This opens the scope for the application of Article 267 (3) TFEU. However, the next question is whether any of the exceptions discussed above are also applicable to this case: is the question related to the EU law irrelevant?; or has the CJEU already interpreted the same question on EU law in a previous case with materially identical facts?; or is the acte clair doctrine, applicable here?

The question related to EU law is relevant to the appeal made by Ray. Although the CJEU has interpreted similar questions related to recognition of qualifications for EU nationals, the question related to Recital 10 of Directive 2005/36 is not as yet explored by the CJEU. Therefore, the national court may not be able to justify its decision to not refer the matter to CJEU as it is the court of last resort. To conclude, the IFRB must refer the question to the CJEU.

Table of cases

Anita Groener v. Minister for Education and the City of Dublin Vocational Educational Committee [1989] ECR 3967.

Aranitis v. Land Berlin [1996] ECR I-135.

C and A [2018] ECLI:EU:C:2018:876.

Da Costa en Schaake NV, Jacob Meijer NV, Hoechst-Holland NV v Netherlands Inland Revenue Administration (1963) ECR 1.

Defrenne v Sabena [1976] ECLI:EU:C:1976:56.

Flora May Reyes v Migrationsverket [2014] ECLI:EU:C:2014:16.

Foster v British Gas Plc [1990] ECLI:EU:C:1990:313.

Francovich and Bonifaci v Italy (1991) ECR I – 5357.

Gebhard v. Consiglio dell'Ordine degli Avvocati e Procuratori di Milano [1995] ECR I- 1465.

Hristo Gaydarov v Director na Glavna direktsia ‘Ohranitelna politsia’ pri Ministerstvo na vatreshnite raboti [2010] ECLI:EU:C:2011:749.

Ian William Cowan v Trésor public. Reference for a preliminary ruling: Tribunal de grande [1989] ECLI:EU:C: 1989:47.

Kobler v Austria [2003] ECLI:EU:C:2003:513.

Peterbroeck, Van Campenhout & CeSCS v. Belgium [1995] E.C.R. 1-4599.

Pfeiffer v Deutsches Rotes Kreuz, Kreisverband Waldshut eV [2005] ECLI:EU:C:2004:584.

Pubblico Ministero v Ratti [1979] ECLI:EU:C:1979:110.

R (Factortame Ltd) v Secretary of State for Transport, [1991] 1 All ER 70.

Rheinmuhlen-Dusseldorf Case [1974] ECR 33.

Secretary of State for the Home Department v Rahman and Ors [2012] ECLI:EU:C:2012:519.

Teresa Fernández de Bodadilla v. Museo National del Prado [1999] ECR I-4773.

Van Duyn v Home Office [1974] ECLI:EU:C:1974:133.

Van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1.

Vlassopoulou v. Ministerium für Justiz, Bundes- und Europaangelegenheiten Baden-Württemberg [1991] ECR I-2357.

Württembergische Milchverwertung-Südmilch AG v Salvatore Ugliola [1969] ECLI:EU:C:1969:46.

Books

Craig P and De Búrca G, EU law: text, cases, and materials (Oxford University Press 2011).

Craig PP, de Búrca G, EU Law: Text, Cases and Materials (Oxford University Press 2008).

Journals

Davies G, ‘The EU legislature as an agent of the European Court of Justice’ (2016) 54(4) JCMS: Journal of Common Market Studies 846.

Sweet AS and Brunell T, ‘The European Court of Justice, state noncompliance, and the politics of override’ (2012) 106 (1) American Political Science Review 204.