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European Court Rules on Equal Benefits Case for Same-Sex Couple

Posted on: December 12th, 2013 by Art Leonard No Comments

Responding to a request from a French court for an interpretation of European law, the 5th Chamber of the European Court of Justice ruled today, December 12, that an employee of a French bank who requested leave and a marriage bonus under the employer’s policy on the occasion of his entering into a pact civil (the French equivalent of a civil union) with his same-sex partner in 2007 had suffered direct discrimination on the basis of sexual orientation by the employer’s denial of the benefit under Article 2(2) of Council Directive 2000/78/EC, which implements the obligation for Member States to prohibit sexual orientation discrimination in employment.  The unanimous decision in Hay v. Credit agricole, Case C-267/12, constitutes a preliminary ruling which returns the case to the French Court of Cassation that is now considering Frederic Hay’s appeal from an adverse ruling by a local Labor Tribunal in Saintes and the Court of Appeal in Poitiers.

The Labor Tribunal and the Court of Appeal had focused on the differences between marriage and the PACS under French law at the time these events occurred.  The PACS, which are open to both different-sex and same-sex couples, provide a limited list of rights and thus were not intended to be an equivalent status to marriage, unlike, for example, the civil partnerships presently authorized under British law for same-sex couples.  (Effective March 29, 2014, same-sex couples will be able to enter into civil marriage in Britain.)  Finding that these differences were significant, the Tribunal and the Court of Appeal found that any discrimination here was indirect on the part of the employer, and justified by the French national policy of providing a different and lesser status open to same-sex couples.

The Court of Cassation referred to the European Court the following question: “Must Article 2(2)(b) . . . be interpreted as meaning that the choice of the national legislature to allow only persons of different sexes to marry can constitute a legitimate, appropriate and necessary aim such as to justify indirect discrimination resulting from the fact that a collective agreement which restricts an advantage in respect of pay and working conditions to employees who marry, thereby necessarily excluding from the benefit of that advantage same-sex partners who have entered into a [PACS]?”

Chamber 5 of the European Court, a five-member panel made up of judges from five different member countries of the European Union, unanimously concluded that the Council Directive did apply to this kind of employee benefit, but dismissed the relevance of the difference between marriages and the PACS, writing “it is required not that the situations be identical, but only that they be comparable and, on the other hand, the assessment of that comparability must be carried out not in a global and abstract manner, but in a specific and concrete manner in the light of the benefit concerned.”  The court referred to a prior ruling involving Germany’s registered life partnerships open to same-sex couples, and comparisons could be drawn to other national laws, such as the civil unions provided for same-sex couples in Austria.

“As regards the days of paid leave and the bonus which the provisions at issue in the main proceedings grant to employees on the occasion of marriage,” wrote the court, “it is necessary to examine whether persons who enter into a marriage and persons who, being unable to marry a person of their own sex, enter into a PACS, are in comparable situations.”  The court found that the PACS is “a form of civil union under French law which places the couple within a specific legal framework entailing rights and obligations in respect of each other and vis-à-vis third parties.  Although the PACS may also be concluded by persons of different sexes, and although there may be general differences between the systems governing marriage and the PACS arrangement, the latter was, at the time of the facts in the main proceedings, the only possibility under French law for same-sex couples to procure legal status for their relationship which could be certain and effective against third parties.”

Thus, the court found that entering into a PACS by a same-sex couple was comparable to entering into a marriage for a different-sex couple.  In the court’s view, this meant that Credit agricole’s marriage leave and bonus policy was a form of direct discrimination because of sexual orientation, not indirect discrimination. This was important, because indirect discrimination may be defended by reference to legitimate government aims, but direct discrimination may only be justified by grounds listed in Article 2(5) of the Directive: public security, maintenance of public order, prevention of criminal offenses, protection of health, and protection of the rights and freedoms of others.  The court found that none of these grounds would justify excluding same-sex couples from enjoying the benefit when they enter into a PACS.  Consequently, the court advised the French Court of Cassation that Article 2(2)(a) of the directive, the provision concerning direct discrimination, “must be interpreted as precluding a provision in a collective bargaining agreement . . . under which an employee who concludes a civil solidarity pact with a person of the same sex is not allowed to obtain the same benefits, such as days of special leave and a salary bonus, as those granted to employees on the occasion of their marriage, where the national rules of the Member State concerned do not allow persons of the same sex to marry, in so far as, in the light of the objective of the conditions relating to the grant of those benefits, that employee is in a comparable situation to an employee who marries.”

The court’s decision is very narrowly focused on the situation pertaining when Mr. Hay concluded his PACS with his partner.  The following year — perhaps in response to Mr. Hay’s complaint? — Credit agricole and the unions representing its employees amended its collective bargaining agreement to extend the marriage benefits to employees who entered into PACS, and in 2010 a general agreement to this effect was included in the bank’s national collective bargaining agreement, and the French Ministry for Labor Employment and Health extended this throughout the banking sector in France.  And, of course, since then France has legislatively opened up marriage to same-sex couples, making this controversy moot as to the future IN FRANCE.  But the opinion is significant because there are many Member nations subject to the Council Directive that do not provide same-sex marriage at present but do authorize some equivalent, such as a registered partnership or civil union, for same-sex couples, so the interpretive principle established in this opinion would carry over to them.

It may also be worth noting that the Chamber phrased its ruling in terms of a country that does not provide for same-sex marriages.  Presumably this means that the ruling no longer pertains to France going forward, even though PACS are still available for same-sex couples who do not desire to embrace the full legal status of marriage.  The court’s finding of discrimination was premised on the denial of marriage to same-sex couples, leaving the PACS the only way they could form a legally recognized relationship.  Although now the banking sector of France is working under a policy of treating those who enter into a PACS as equivalent to marriage for purposes of this type of benefit, it is not clear from this opinion how the matter will be handled in other sectors that might not be subject to the same policies.

Mr. Hay’s lawyer for this appeal is A. Lamamra.  The court received submissions from lawyers for Credit agricole, the governments of France and Belgium and the European Commission, as well as the Advocate General for the Council of Europe.