Introduction

Under Austrian law, Good Friday is a paid public holiday only for members of four specific churches (ie, the Evangelical Church Augsburg Confession, the Evangelical Church Helvetic Confession, the Old Catholic Church and the United Methodist Church). However, the Supreme Court concluded that this legal framework might be discriminatory and requested a preliminary ruling from the European Court of Justice (ECJ).

In his 25 July 2018 opinion, Advocate General Michal Bobek not only confirmed that the Austrian regulation is discriminatory, but also concluded that each affected employee could claim holiday pay for past periods, unless such claims were already time barred, in which case claims could be brought against the Austrian state (for further information please see "Good Friday and direct discrimination on religious grounds"). Under Austrian law, this could have meant millions of employees requesting holiday compensation from the government, which would have likely amounted to backpay of several hundred million euros.

This prospect was apparently too dire to swallow, as the ECJ has come to Austria's rescue.

Questions referred to advocate general and ECJ

The following four questions were referred to the ECJ for a preliminary ruling. However, the advocate general and ECJ did not uniformly resolve all of the questions.

Does EU law preclude Austrian rule? The first question referred to the ECJ was whether EU law precludes a national rule under which only members of four churches are afforded an additional paid holiday on Good Friday and double pay where a church member performs work on that day.

On this first question, the advocate general concluded that the statutory provision entitling only members of four churches to additional pay in respect of Good Friday constitutes direct discrimination on grounds of religion.

The court concurred.

Was the exception for a relatively small group of church members justified? The second question considered by the ECJ was whether the exception for a relatively small group of church members was justified because it concerned a measure that was necessary to ensure the protection of the rights and freedoms of others, particularly the right to freely practice religion.

The court confirmed the advocate general's position that employees who are members of a favoured church are comparable to all other employees, because the grant of holiday pay on Good Friday depends only on whether the employee is a formal member of a church and not on an obligation or need to celebrate the religious festival.

Was the exception justified because it was a positive and specific measure? The third question considered by the court was whether the exception was justified because it was a positive and specific measure in favour of the members of the four churches, designed to guarantee their full equality in working life.

Both the advocate general and the court denied this claim. The court clarified that such legislation cannot be justified either as a measure necessary for the protection of the rights and freedoms of others or as a specific measure intended to compensate for disadvantages linked to religion.

Should all employees receive the same rights? Finally, the court was asked to consider whether (assuming discrimination):

  • Austrian employers must provide the same rights regarding Good Friday to all employees, regardless of their religious affiliation (so-called 'levelling up'); or
  • the discriminating provision must be disapplied in its entirety so that those rights are not to be granted to any employees (so-called 'levelling down').

The advocate general opined that for past periods – that is, where the indemnity (ie, holiday pay) had been granted only to the favoured group – the appropriate remedy was levelling up, resulting in claims for backpay that are not yet time barred. Given that Austrian employers were complying with national statutes, any actions for damages would have to be brought against the Austrian state as the party at fault for failing to adopt non-discriminatory legislation. The advocate general invoked Francovich and subsequent ECJ case law, under which it was decided that a member state can become liable for any loss incurred due to a failure to provide a legal framework compliant with EU law.

The court was less generous, advocating for a solution that would likely result in a levelling down.

While denying that an EU directive can be relied on in a dispute between individuals for the purpose of setting aside legislation of an EU member state that is contrary to that directive, the ECJ also stated that Article 21 of the Charter of Fundamental Rights of the European Union prohibits all discrimination on grounds of religion or belief, and that this is mandatory as a general principle of EU law. Therefore, the charter confers on individuals a right "which they may rely on as such in disputes between them in a field covered by EU law". Further, the court ruled that in order to restore equal treatment, private employers must also grant other employees a public holiday on Good Friday, but only if they have sought prior permission from their employer to be absent from work on that day. Only then are those employees entitled to a payment in addition to their regular salary for work performed on Good Friday where their employer has refused to agree to such a request.

As a consequence, and absent new legislation, Austrian employers will have to make additional payments (normal salary plus extra holiday pay) if their staff work on Good Friday (19 April 2019) or grant a paid day off.

Although this sounds like levelling up, the Austrian government will likely introduce legislation to avoid employers having to provide double pay.

Further, there are no realistic claims for past periods, because it is hardly conceivable that employees who were not members of any of the four churches had sought permission from their employers to be absent from work on that day.

It is tempting to conclude "much ado about nothing".

Comment

While the advocate general's position on compensation for past discrimination was well-reasoned, the ECJ did not even bother to discuss it, let alone provide convincing reasons for the requirement that employees' compensation claims must rest on prior permission to be absent from work on Good Friday.

Such a request is entirely unrealistic, and it seems that it was introduced to create an escape from the financial burden that a levelling up would entail in a scenario like the one before the court.

In response to the ECJ's decision, the Austrian government initially planned to introduce a paid holiday over Good Friday for all employees, while abolishing another public holiday. Although this solution would have complied with the ECJ's ruling, and would have spared employers from having to shoulder the cost of discrimination claims that they had not initiated in the first place, it has prompted protests from various stakeholders – in particular, unions. The Austrian government's new resolution provides all employees with a half-day off work on Good Friday, starting at 2:00pm on that day. Although this was thought to be a compromise, protestants in particular are now protesting, since this solution puts them in a worse position than before – something the government had promised to avoid.

In addition, some collective bargaining agreements provide for a day off on Good Friday, which is yet another discriminatory set of rules waiting to be made compliant.

A religiously neutral solution might be to simply abolish Good Friday altogether and grant an additional paid day off instead, allowing protestants to take this leave on Good Friday and all other employees whenever they wish.

If the government cannot reach a compromise with the stakeholders involved (ie, Christian churches, labour unions and employer organisations) soon, Austrian employees – regardless of their religion or beliefs – are well-advised to request permission not to work on Good Friday.

For further information on this topic please contact Jakob Widner at Graf & Pitkowitz Rechtsanwälte GmbH by telephone (+431 401 17 0) or email (widner@gpp.at). The Graf & Pitkowitz website can be accessed at www.gpp.at.

For further information on this topic please contact Donna M ParisiGeoffrey B Goldman or Azam H Aziz at Shearman & Sterling LLP by telephone (+1 212 848 4000) or email (dparisi@shearman.comgeoffrey.goldman@shearman.com or aaziz@shearman.com). The Shearman & Sterling LLP website can be accessed at www.shearman.com.