The Kratzer v R+V Allegemeine Versicherung AG [2016] case was also reviewed by Scott Alexander, Head of L&D at Legal-Island here.

Vexatious litigants have troubled the legal system from as far back as the late nineteenth century prompting the introduction in the United Kingdom of the “Vexatious Actions Act 1896” known as “an Act to prevent the abuse of the process of the High Court and other courts by the institution of vexatious legal proceedings”.[1] This Act gave leave to the Attorney General to apply to the High Court (and other courts) for an Order prohibiting an individual from issuing legal proceedings without leave from the court, not unlike the use of the Isaac Wunder Order in this jurisdiction.[2]

The recent decision of Kratzer v R & V Allgemeine Versicherung AG (“Kratzer”) is an interesting extension of such enquiry and permits a court/tribunal to consider at the outset the bona fides of a claimant seeking statutory protection in EU Law.

This case centred on the application of Article 3(1) of Directive 2000/78 on equal treatment in employment and occupation which provides that the anti-discrimination principles embodied therein apply to: “conditions for access to employment, to self-employment or to occupation, including selection criteria and recruitment conditions, whatever the branch of activity and at all levels of the professional hierarchy, including promotion” and Article 14(1)of Directive 2006/54 on equal treatment between men and women in employment and occupation which applies similar anti-discrimination principles to “(a) access to employment, including promotion, and to vocational training”.[3]

The Plaintiff in this case applied for a trainee position at the Defendant insurance company, aimed at law, mathematical economics, business informatics and economics graduates. The requirements in the job advertisement were for a very good university degree in one of the above areas recently completed and relevant practical vocational experience. The Plaintiff applied for a traineeship in the legal field and emphasised his valuable experience as a lawyer and former manager for an insurance company and that he was attending a training course to become an employment law specialist. On 19th April 2009, the defendant rejected the Plaintiff’s application stating that it was unable to offer him a post. On 11th June 2009, the Plaintiff sent a written complaint to the Defendant demanding compensation of €14,000 for age discrimination. In response the Defendant then invited the Plaintiff to an interview at the beginning of July 2009, stating that the rejection of his application had been automatically generated and was not in line with its intentions. The Plaintiff rejected the invitation and suggested that any discussion over his future employment with the Defendant occur after his claim for compensation had been satisfied. The Plaintiff then brought an action seeking compensation for age discrimination of €14,000 before the Arbeitsgericht Wiesbaden (Wiesbaden Labour Court, Germany). After learning that the Defendant had appointed four trainee posts to women only (although the sixty-plus applicants had been divided almost equally between men and women), the Plaintiff further sought compensation for sex discrimination of €3,500.

His claim was dismissed by the Arbeitsgericht and he appealed this decision to the Hessisches Landesarbeitsgericht (Hesse Regional Labour Court, Germany) which in turn dismissed the Plaintiff’s claim. The Plaintiff then appealed on a point of law to the Bundesarbeitsgericht (German Federal Labour Court) which referred the following questions to the CJEU for a preliminary ruling under Art 267 TFEU:

“1. On a proper interpretation of Article 3(1)(a) of Directive 2000/78 and Article 14(1)(a) of Directive 2006/54, does a person who, as is clear from his application, is seeking not recruitment and employment but merely the status of applicant in order to bring claims for compensation also qualify as seeking “access to employment, to self-employment or to occupation

If the answer to the first question is in the affirmative:

2. Can a situation in which the status of applicant was obtained not with a view to recruitment and employment but for the purpose of claiming compensation be considered as an abuse of rights under EU law?”

In the Judgment of the CJEU (First Chamber) the CJEU began by restating the fundamental proposition underlying the Court’s approach to preliminary reference rulings namely that “the national court alone has jurisdiction to find and assess the facts in the case in the main proceedings”.[4]  On this  basis the CJEU found that :-

“[I]t is apparent from [the decision of the referring court] that the dispute in the main proceedings is characterised by the fact that Mr Kratzer’s application for a trainee position with R+V was not submitted with a view to obtain that position but only with a view to obtaining the formal status of an applicant with the sole purpose of claiming compensation on the basis of Directives 2000/78 and 2006/54.

A factual situation with characteristics such as those described in the abovementioned decision is, in principle, outside the scope of Directives 2000/78 and 2006/54.”[5]

The Court adopted a purposive approach, noting that as the purpose of both Directives is to provide employment equality protections in employment and occupation and in particular in relation to “access to employment”, a person not seeking to obtain employment cannot rely on those protections. Such a person cannot be considered a “victim” within the meaning of Article 17 of Directive 2000/78 and Article 25 of Directive 2006/54 or a “person injured” having sustained “loss” or “damage”, within the meaning of Article 18 of Directive 2006/54.[6]

Furthermore, the court held that EU Law cannot be relied upon for abusive and fraudulent ends and held that it was for a National Court to verify in accordance with the rules of evidence of National Law whether the facts before it constitute “abusive practice” or not as the case may be.  For this to exist there would be required to be both an objective and subjective element namely:-

-that despite compliance with the conditions laid down in the Directive, the objective of the rules had not been adhered to (“the objective element”)and

-the intention of the applicant is to obtain an undue advantage (“the subjective element”).[7]

In the circumstances the court held that the Plaintiff had “applied artificially for a post with the essential aim of not actually taking up that post but of relying on the protection offered by those Directives with a view to obtaining an undue advantage”.[8]

The Judgement does not set out in any great detail the circumstances of the case and/or circumstances in which a job applicant might  fall into this category (i.e. applying for a job for the sole purpose of seeking compensation not employment). However, a subsequent press release[9] of the Bundesarbeitsgericht did shed some light on the background and facts of the case. It reported that the Plaintiff was a lawyer who specialised in anti-discrimination litigation. It was alleged that he had made a habit of applying for job vacancies in which he was not interested. When his application was rejected, he would file a lawsuit against the company. According to Der Spiegel, a German weekly newspaper, the Plaintiff’s case against the Defendant was only one of countless others, some of which he had successfully won or settled.[10]

While the extent of the application of Kratzer remains to be seen, it certainly lends support if not authority for the proposition that an applicant must be genuine before a statutory disadvantage can be suffered, at least under EU law. However, this may have very real and practical implications:-

(i)  It illustrates the type of scrutiny that claimants can expect to receive from the CJEU and the National Courts if taking vexatious or bogus claims. Indeed such an approach was developing in the UK well before Kratzer in Keane v Investigo[11] where the applicant in this case was an accountant who had applied for a number of jobs online aimed at and described as suitable in one form or another for “newly qualified accountants”. The Tribunal, in this case, conducted a forensic examination and analysis of the claimant's conduct and dismissed her claim on the basis that she had no interest in the vacancies and that she was applying for the jobs with a view to bringing a claim for compensation and had therefore suffered no detriment. On appeal, the UK EAT dismissed the claimant's appeal and upheld the findings of the Tribunal. Furthermore, the EAT held that as the claims were brought with an ulterior motive, the award for costs made against the claimant was also unimpeachable.

(ii) Despite whatever comfort employers may get from Kratzer, they should continue to be careful not to use discriminatory language in advertising employment vacancies and adopt fair procedures in their selection criteria. As held by the then ECJ in Bilka-Kaufhaus v Weber von Hartz,[12] indirect discrimination in employment can only be tolerated where it is objectively justified. Thus, when assessing any job application, employers should consider each in a fair manner and avoid using predetermined or automated selection criteria which could potentially constitute indirect discrimination and ensure that each application is considered on its merits to avoid conscious or unconscious bias. This could potentially cause problems for larger employers. In Kratzer there was 60 plus applicants. What of a situation where there might be 200, 500 or maybe more? Is an employer obliged to review each application on its merits without first automatically reducing the numbers by strictly applying the selection criteria?

(i) Training positions targeted at university graduates are at the very least indirectly discriminatory on the age ground, given that the majority of university graduates are young adults. However, training posts provide young people with valuable experience when joining the labour market for the first time. In a hierarchically structured labour market whereby longevity correlates with success,[13] these training posts are seen to be vital to ensure a fair entry to and exit from the labour market of young graduates at one end and older retirees at the other. Such roles have therefore been accepted as being objectively justified by the CJEU.[14] However, it is worth emphasising that in advertising such roles, phrases such as “young and dynamic” should be avoided as this has been held to violate the equal treatment guarantees contained in the Directives and the Equality Act 1998.[15] Indeed, in one case, a job advertisement targeted at candidates with “two or three years’ experience” was held to be indirectly discriminatory against a candidate with some twenty years’ experience.[16]

(iii) One would have a concern that in deferring to the national court in instances such as this potentially provides a degree of discretion on employers to reject off-hand legitimate discrimination claims where they suspect that the person applied for the job solely to obtain compensation. In the current economic climate, one could readily envisage a middle-aged worker being made redundant, completing a third level institute training or re-training course and subsequently applying for “recent graduate” positions. In such a situation, it would be convenient for employers to reject off-hand such applications where the older applicant may legitimately have no other employment opportunities available. Perversely workers in these situations could potentially be detrimentally affected and suffer age discrimination by virtue of the decision in Kratzer, thus having a chilling effect on the strength of the employment equality guarantees enshrined in Irish and EU law.