The Court of Justice of the European Union (the “Court of Justice of the EU” or the “Court”) delivered a judgment, on 20 February 2024, in Case C-715/20 (K.L. v X sp. z o.o.), in which it ruled as follows:
- Clause 4 of the Framework Agreement on fixed-term work concluded on 18 March 1999 (the “Framework Agreement”), which is included in the annex to Council Directive 1999/70/EC of 28 June 1999 concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP (OJ 1999 L 175, p.43, Special edition, 05/vol. 5, p. 129) must be interpreted as precluding national legislation under which the employer is not required to provide written reasons for the termination of a fixed-term employment contract on notice, although the employer is under such obligation for the termination of an employment contract of indefinite duration.
- The national court which is called upon to rule on a dispute between private parties and is not in a position to interpret the applicable national law in accordance with this clause must ensure, within the limits of its jurisdiction, the judicial protection granted to individuals under Article 47 of the Charter of Fundamental Rights of the European Union and guarantee the full effect of said Article, disregarding, in so far as necessary, any contrary national provision.
The Court of Justice of the EU delivered this judgment in the context of a reference for a preliminary ruling from the District Court of Krakow - Nowa Huta in Krakow (“Sąd Rejonowy dla Krakowa – Nowej Huty w Karkowie”), which was called upon to rule on an action for damages brought by a worker employed under a fixed-term employment contract who was dismissed in the course of the employment relationship by a written notice of termination, which did not state the reasons for the dismissal.
In this case, the Polish national court expressed doubts as to:
- the interpretation of Article 1 of Directive 1999/70 and clauses 1 and 4 of the Framework Agreement in the context of the national rules, which provided for different treatment as regards the need to state the reasons underlying the act of termination of the employment contract depending on whether it was for a fixed or indefinite period (in the particular case of a fixed-term employment contract, there was no obligation to provide reasons);
- the possibility for individuals to invoke directly before the national court the provisions of the directive and of the relevant Framework Agreement.
The Opinion of Advocate General Giovanni Pitruzzella, delivered on 30 March 2023, provided that Article 1 of Directive 1999/70/EC and clauses 1 and 4 of the Framework Agreement must be interpreted as not precluding national legislation which requires the employer to state in writing the reasons for the decision to terminate an employment contract only in relation to employment contracts of indefinite duration, provided that the national court establishes, considering it possible to interpret the national provisions in accordance with EU law, that judicial review of the well-founded nature of the reasons for the notice of termination of fixed-term employment contracts is ensured and that fixed-term workers can rely on effective judicial protection in the light of the criteria set out above. Thus, the Advocate General's Opinion stated that the failure to provide reasons for the termination of a fixed-term employment contract does not constitute an infringement of European Union law if the absence of reasons in the act of termination does not result in the court’s lack of power to assess the well-founded and lawful nature of the dismissal.
The Advocate General's Opinion could spark heated debates as regards the possibility of making up for the lack of reasons in the dismissal decision by allowing extensive verification of the reasons as part of the courts’ review process.
In its judgment of 20 February 2024, the Court of Justice of the EU ruled, however, that national rules establishing a difference in treatment between two types of employees based on the temporary nature of the employment contract (i.e. fixed-term employees vs. employees with an employment contract of indefinite duration) are not in accordance with EU law. The Court thus finds that there is less favourable treatment for the fixed-term employee, who is deprived of important information (the reasons for dismissal) for assessing whether the dismissal is unjustified and for considering his or her chances of success in a legal action.
From the perspective of national legislation, it should be noted that the Romanian law sets out, in Article 87 of the Labour Code, the principle of equal treatment as regards employment and working conditions for fixed-term employees and comparable permanent employees. In other words, all employees, regardless of the duration of their contract, have the same rights. Moreover, the provisions of Article 62 para. 3 of the Labour Code regulate the obligation to justify the dismissal decision without differentiating based on the duration of the employment contract.
While the lack of distinction in national law as regards the need to provide reasons for the dismissal decision depending on the fixed or indefinite duration of the employment contract does not give rise to doubts as to the existence of any discrimination, in the light of the recent case-law of the Court of Justice of the EU, doubts may arise, however, as to the conformity of the national rules (Article 31 of the Labour Code) with European Union law concerning the distinction which those provisions make with respect to the failure to state the reasons for the dismissal decision in the event of termination of the employment contract during or at the end of the probationary period.
The recent judgment of the Court of Justice of the EU confirms the interpretation that the employment relationship cannot be terminated at discretion during or at the end of the probationary period, and that the temporary nature of an employment relationship cannot be seen as sufficient to justify a difference in treatment.
In the light of the recent judgment of the Court of Justice of the EU, employees benefit from effective protection which, irrespective of national rules on the indication or non-indication of reasons for the termination of employment based on criteria relating to the duration of the employment relationship, allows them to benefit from a full, thorough judicial review of the dismissal decision.
Moreover, in view of the primacy of European Union law, the judgment of 20 February 2024 of the Court of Justice of the EU rules on the obligation of national courts to ensure, within the limits of their jurisdiction, the judicial protection granted to individuals under the Charter of Fundamental Rights of the European Union and therefore disregard the provisions of national regulations to the extent necessary to guarantee the full effect of this provision of the Charter (see in this respect the judgment of 17 April 2018, Egenberger, C-414/16, EU:C:2018:257, paragraph 79, as well as the judgment of 8 March 2022, Bezirkshauptmannschaft Hartberg-Fürstenfeld (direct effect), C-205/20, EU:C:2022:168, paragraph 57).
The protection of individuals referred to in the judgment of 20 February 2024 of the Court of Justice of the EU requires recognition of the full jurisdiction of the national court in exercising its Community function, as the ordinary judge of Community law (see to this effect the judgment of 9 March 1978, Simmenthal, C-106/77, EU:C:1978:49).
As a Community judge, the national judge has full power and jurisdiction, but also the responsibility to respect the requirements of EU law.
The judgment of 20 February 2024 of the Court of Justice of the EU in Case C-715/20 is thus an additional encouragement for national judges to apply, in view of Articles 11, 20 and 148 of the Romanian Constitution, national legal provisions in accordance with binding EU rules, recognising the priority of the interpretation of the latter and disregarding contrary national rules.
By Marius Ezer, Partner, and Elena Triscariu, Senior Associate, NNDKP
