Refusal to conclude or renew a contract may not be based on sexual orientation

New decision: In its decision (C-356/21) of 12 January 2023, the Court of Justice of the European Union held that it was contrary to Council Directive 2000/78/EC on equal treatment in employment and occupation that an enterprise under public ownership did not want to conclude new contracts with a self-employed person because this person had published a music video on YouTube promoting tolerance towards same-sex couples.

The case in brief

The self-employed person had since 2010 engaged in a business relationship with the enterprise under public ownership, which operated a nation-wide public television channel in Poland, on handling assignments for the editorial office of the enterprise involving the preparation of audiovisual material as well as the editing of trailers and segments for the programmes for an enterprise. The sole shareholder of the enterprise was the Polish State. The business relationship was based on multiple contracts for specific work that the self-employed person concluded with the enterprise within the framework of the self-employed person’s independent economic activity.

In December 2017, the self-employed person and his partner published a music video aimed at promoting tolerance towards same-sex marriage. Shortly after this, the self-employed person was informed that his one-week shift on the channel had been cancelled. A new contract was subsequently not concluded between the self-employed person and the television channel on the provision of services for the channel.

According to Polish law, the prohibition against discrimination on the basis of sexual orientation does not apply to the freedom to choose one’s contracting party, provided that this choice is not based on gender, race, ethnic origin or nationality.

The case was brought before the courts in Poland. The Court of First Instance in Warsaw subsequently referred a preliminary question to the Court of Justice of the European Union, concerning whether the situation at issue in the main proceedings is covered by the scope of the directive on equal treatment in employment and occupation (the Employment Directive). The referring court also inquired whether the Directive prevents national legislation that, on the basis of the contracting parties’ free choice, excludes refusal on the basis of sexual orientation from protection against discrimination of a self-employed person.

Ruling by the Court of Justice of the European Union

The Court of Justice of the European Union held that the Directive on Equal Treatment must be interpreted broadly and covers access to every commercial activity, and added that the Directive seeks to eliminate all discriminatory obstacles to access to livelihoods and the capacity to contribute to society through work out of consideration for social and public interests, irrespective of the legal form in which it is provided.

Activities consisting of the provision of goods or services to one or more recipients were, in the opinion of the Court of Justice of the European Union, as a general rule not covered by the scope of the directive.  As such, commercial activities covered by the scope must be real and carried on in a legal relationship with a certain level of stability in order to be covered. As the plaintiff, who carried on commercial activities as a self-employed trader, performed the work personally and exclusively for the benefit of one and the same enterprise and which in full or in part provided access to subsistence, the self-employed person was, according to the Court of Justice of the European Union, covered by the scope of the directive.

Similarly, the Court of Justice of the European Union found that the concept “employment and working conditions, including dismissals and pay” in the sense of the directive is also to be interpreted broadly so that it includes the terms applicable to all forms of occupation or self-employment irrespective of the legal form in which it is exercised.

Against this basis, the Court of Justice of the European Union concluded that the decision not to renew the contract due to the sexual orientation of the self-employed person falls within the scope of the Employment Directive.

In its decision, the Court of Justice of the European Union stated that the Polish legislation did in fact pursue a legitimate objective on the protection of the rights and freedoms of others as described in the same Article 2(5).

However, the Court of Justice of the European Union was of the opinion that the national provision giving enterprises the right to refuse renewal of a contract on the basis of its right to choose its own contracting parties was not necessary to protect the rights and freedoms of others in a democratic society in accordance with Article 2(5).

In conclusion, the Court of Justice of the European Union found that by accepting that an enterprise may refuse to conclude or renew a contract with a person on the basis of that person’s sexual orientation, the directive would be robbed of its effect, which is the prohibition of all types of discrimination with respect to employment and occupation.

Comments by Bech-Bruun

It follows from the decision of the Court of Justice of the European Union that not only employment relationships but also the access to self-employment is covered by the scope of the Employment Directive to the extent such activities are performed in a personal manner and pursued in the context of a legal relationship characterised by a degree of stability.

The recent decision of the Court of Justice of the European Union comes in continuation of the Court’s decision of 2 June 2022 (C-587/20). In that case, the Court of Justice of the European Union found that the statutes of a union stipulating that only candidates who are under the age of 60 on the date of the election may be elected for the position as chairman of a union sector were contrary to the Employment Directive’s prohibition against discrimination on the grounds of age.