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Denmark – The impact of discrimination on grounds of sexuality that predated the Employment Directive must be reversed

Written by
Norrbom Vinding, the largest labour and employment law practice in Scandinavia and the market leader in Denmark.
The European Court of Justice has ruled that the legal effects of a disciplinary sanction constituted illegal discrimination on the grounds of sexual orientation within the meaning of the Employment Directive even though the penalty was originally imposed before the Employment Directive was implemented.

Under the provisions of the Employment Directive, employers in the EU must not discriminate against employees because of their sexual orientation. The prohibition on discrimination applies to both direct and indirect discrimination. But is it illegal discrimination against an employee when the employee was subjected to a disciplinary sanction before the Directive came into force? The European Court of Justice has recently ruled on this matter.

The case concerned an Austrian civil servant police officer who received a disciplinary sanction in 1975 for having failed to fulfill his professional obligations when he was convicted of attempted abusive behavior against two underage boys the year before. The disciplinary sanction entailed forced retirement from his position as police officer and a reduction of his pension by 25%.

The special aspect of this case was that the police officer had violated a provision of the Austrian Criminal Code in force at the time. The provision stipulated that a male person over the age of 19 who was involved in sexual acts with a person of the same sex over 14 years but under the age of 18 must be punished by imprisonment. However, in July 2002, the Austrian administrative court ruled that this provision of the Austrian Criminal Code was unconstitutional and it was therefore repealed.

The retired police officer considered that the legal effects of the disciplinary punishment were illegal as a result of the prohibition of discrimination on grounds of sexual orientation in the Employment Directive. Therefore, the case resulted in a preliminary reference from the Austrian administrative court to the European Court of Justice on the issue.

The question for the European Court of Justice was whether the Employment Directive precludes the maintenance of the effects of the disciplinary sanction and, if so, whether the retired policeman should be put in the position as if he had been in active employment, including with the right to a full retirement pension, from the date when he retired.

Right to full pension

The European Court of Justice ruled that Article 2 of the Directive must be interpreted as meaning that the provision applies to future legal effects of a disciplinary decision, even if the decision was taken before the entry into force of the Directive.

The European Court of Justice pointed out initially that the disciplinary rules under which the disciplinary penalty was imposed applied to both heterosexual and homosexuals. However, the disciplinary punishment related to a provision of the Criminal Code, which only applied to homosexuals. The disciplinary punishment therefore constituted unequal treatment on the basis sexual orientation, which is direct discrimination in breach of the Employment Directive.

The European Court of Justice then stated that the rules of the Employment Directive apply to both future effects of past legal situations and new legal situations. The payment of a reduced pension to the policeman therefore constituted illegal discrimination on the basis of sexual orientation. The Austrian administrative court was therefore required to reassess the reduction of the police officer’s pension in order to determine the amount to which he would have been entitled had there been no discrimination on grounds of sexual orientation.

Norrbom Vinding notes

This judgment shows that, the continued legal and economic effects of an act or decision that is contrary to the prohibition of discrimination in the Employment Directive can be reversed, even if the act or decision took effect before the enactment of an EU directive.