In the German case of Kratzer v R+V Allgemeine Versicherung AG C-423/15 the European Court of Justice (ECJ) looked at whether an individual who applies for a job with the sole intention of seeking compensation - rather than obtaining employment - is afforded protection under discrimination law or whether it is viewed as an abuse of rights under EU law.
EU discrimination law
The Equal Treatment Framework Directive prohibits discrimination in employment for the protected characteristics of age, disability, religion or belief and sexual orientation. Sex, marriage and civil partnership, pregnancy and maternity, and gender reassignment discrimination are prohibited by the Recast Equal Treatment Directive. Protection from discrimination is also extended to job applicants, covering the conditions for access to employment, including selection criteria and recruitment conditions. EU Member states are required by these Directives to introduce measures to compensate victims of discrimination. The Directives were implemented in the UK by the Equality Act 2010.
R+V Allgemeine Versicherung AG (RV) advertised for graduate trainee positions in the fields of economics, mathematical economics, business informatics and law. The advertisement specified that applicants must have a good university degree in one of the specified fields, completed either in the last year, or due to be completed in the coming months, and relevant practical vocational experience acquired, for example, as an apprentice, trainee or student worker. Applicants in the legal field were required to have passed both state examinations and an employment law option, or have medical law knowledge.
Mr Kratzer applied for a trainee position in the legal field emphasising that, as a lawyer and former manager with an insurance company, he fulfilled all the requirements set out in the advertisement. In addition, he stated that he was attending a training course to become a lawyer specialising in employment law and that, owing to the death of his father, he had dealt with a very large medical law file and therefore had extensive experience in this field.
When RV rejected his application, Mr Kratzer wrote complaining of age discrimination and demanded 14,000 euros in compensation. RV then invited Mr Kratzer to an interview with its Head of HR, explaining that its rejection of the application had been automatically generated and did not accord with its intentions. Mr Kratzer declined the invitation, suggesting that his future with RV could be discussed after his compensation claim had been satisfied.
Mr Kratzer brought an age discrimination claim. When he later discovered that all four positions had been given to female applicants, despite the 60 applicants being an equal mix of men and women, he claimed an additional 3,500 euros for sex discrimination.
The question considered by the ECJ
Mr Kratzer’s claims were rejected in the German courts and were eventually referred to the ECJ. The question put to the ECJ was: does Article 3(1)(a) of the Framework Directive and Article 14(1)(a) of the Equal Treatment Directive provide protection against discrimination to an individual whose application makes it clear that they are not seeking recruitment or employment but just the status of a job applicant, in order to bring a claim for compensation? If so, should this be considered an abuse of rights under EU law?
The ECJ held that where an application for employment is submitted with the sole purpose of entitling the individual to claim compensation for discrimination, this does not come within the scope of the Directives. The individual would therefore not be entitled to claim protection or compensation. In reaching its decision, the ECJ took the following into consideration:
- The title, preamble, content and purpose of the Directives make it clear that their aim is to lay down a general framework for equal treatment in employment and occupation. Protection is provided to those “seeking employment”. An individual applying for a post with the sole purpose of bringing a claim could not be said to be “seeking employment” within the meaning of the Directives, as they do not want the post applied for. Such an individual could not, therefore, rely on the protection offered by the Directives.
- An individual in those circumstances would not be entitled to compensation, as they would not be a “victim” of discrimination or a “person injured” who had sustained loss or damage within the meaning of the Directives.
- It is settled case law that EU law cannot be relied on for abusive or fraudulent ends. A finding of abusive ends requires a combination of objective and subjective elements. The objective element requires a finding that, despite formal observance of the conditions laid down by EU rules, the purpose of those rules has not been achieved. The subjective test requires it to be apparent from a number of objective factors, including the artificial nature of the actions taken, that the aim has been to obtain undue advantage.
The ECJ held that it was for the national court to determine, in accordance with the applicable national rules of evidence, whether the factors evidencing abuse were present in the case before it. The national court would be entitled to determine that Mr Kratzer was attempting to rely abusively on the protection of the Directives if it appeared to it that the objective of the Directives has not been achieved and that Mr Kratzer had artificially applied for a position with RV with the essential aim of not actually taking up the post but of relying on the protection offered by the Directives with a view to obtaining undue advantage.
There have been a number of UK cases involving serial litigants actively looking for job advertisements using terminology that indicates they are seeking younger applicants (such as “school leavers” or “recent graduates”) in order to bring a claim. It is therefore important that employers are careful about the terminology used in their job advertisements. Caution should also be exercised if applying automated selection criteria to bulk job applications, as unintentional discrimination against applications could occur. However, it must be remembered that this type of sham application is a relatively rare occurrence and employers should be wary of raising any suspicion that an applicant is not genuine, unless they have compelling evidence. Having said that, this is a helpful decision for employers.