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How are Employers protected against false claims of discrimination at the Recruitment stage?

How are Employers protected against false claims of discrimination at the Recruitment stage?

Published: 6 September 2016

The impact of the Brexit is still resonating in peoples ears, and many in the employment field are saying that EC Rules and Directives that currently apply, will have no place in the UK, once we formally leave the EU, however, we are a long way off that date, and for now all rulings from the European Court of Justice (ECJ) will continue to have direct effect on our domestic employment law.

In a recent German case, published only this month (August 2016) we have been given further guidelines on what is applicable in claims of discrimination against employers. For those Employers who fear that there will be a flood of claims against them by potential employees who are either EU or non EU members claiming discrimination on one of the protected characteristics (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief and sex) this case serves to lay those fears to rest. At least in the first instance, at the recruitment stage.

In Kratzer v R + V Allgemeine Versicherung, the ECJ has held that where an individual applies for a job only in order to seek compensation for discrimination, and not to obtain employment, they will be outside the scope of both the Equal Treatment Framework Directive and the Equal Treatment Directive.

Although the Equal Treatment Framework Directive and the Framework Directive prohibits discrimination in employment for the protected characteristics as mentioned above, there are specific circumstances when protection is afforded to individuals.

The Framework Directive and Article of the Equal Treatment Directive extend protection from discrimination to job applicants, covering the conditions for access to employment, including selection criteria and recruitment conditions.

By the way, the Directives are implemented in the UK by the Equality Act 2010, sections 39 and 40 dealing specifically with discrimination in recruitment.

The facts of this case are as follows:

In March 2009, R + V Allgemeine Versicherung AG (AV) advertised for graduate trainees in the fields of economics, mathematical economics, business informatics and law. Applicants in the legal field were required to have passed both state examinations and an employment law option, or have medical knowledge.

Mr Kratzer applied for a trainee position in the legal field emphasising that he fulfilled all the requirements set out in the advertisement. He also stated that he was attending a training course to become a lawyer specialised 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 that field.

On 19 April 2009, AV rejected Mr Kratzer's application, stating that it was currently unable to offer him a post.

On 11 June 2009, Mr Kratzer sent a written complaint to AV demanding compensation of €14,000 for age discrimination. AV then invited Mr Kratzer to an interview at the beginning of July 2009 with its head of human resources, stating that the rejection of his application had been automatically generated and was not in line with its intentions. Mr Kratzer declined the invitation, suggesting that his future with AV could be discussed after his compensation claim has been satisfied.

Mr Kratzer brought an age discrimination claim, claiming compensation of €14,000 in the local Labour Court. He later amended his claim to include a claim for further compensation of €3,500 for sex discrimination, on the basis that AV had taken on four female trainees.

Local Labour Court dismissed Mr Kratzer's claims and his appeal to Regional Labour Court was also dismissed. Mr Kratzer appealed to the Federal Labour Court who stayed the proceedings and referred the following questions to the ECJ:

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 Decision

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, it took the following into account:

The Directives make it clear that their aim is to lay down a general framework for equal treatment in employment and occupation. Their aims are to provide protection 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".

It was 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 court held that it was for the national court to determine, in accordance with the applicable national rules of evidence. The national court would be entitled to determine that Mr Kratzer was attempting to rely abusively on the protection of the Directives. Mr Kratzer had artificially applied for a position with AV 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 an undue advantage.

What Employers should do.

Employers should be aware that there are individuals out there trying to make money out of false discrimination claims, particularly when advertising for jobs during the recruitment process, but they should also not be too worried as this case clearly demonstrates that if an individual’s sole purpose is for compensation and not the opportunity of seeking employment the claim will fail. This ECJ judgment in the German case supports the view taken in an earlier English case: Keane v Investigo & Others that job applicants who would not be interested in accepting the role if they were offered it, cannot claim discrimination if the application is not successful.

Employers should review their recruitment and selection processes regularly and for each vacancy being advertised externally, they should also apply objective criterion in the short listing stages, a fair and transparent recruitment process is essential to avoid potential vexatious claims of this sort.

Cyril Dennemont – Partner and Head of Employment Law Department