Draft amendments to the EU anti-discrimination law and the freedom of economic activity

Anti-discrimination law in European Union legal system. Introduction. This analysis touches an issue of relationship between anti-discrimination law and the freedom of economic activity in the context of European Union law. In further considerations ambiguous and vague term ‘anti-discrimination law’ will be understood as all currently applicable in the European Union legal system regulations (both from acts of legislative authorities and case law), which aim is to prevent and combat discrimination, promote effective equality and putting into effect the principle of equal treatment of the all citizens and their organizations. In other words, it is explained that solutions included in the anti-discrimination laws are designed to protect persons recognized as potential victims of the discrimination – whereas the principle of equality – prohibit differential treatment that is based on certain ‘protected grounds’ such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status[1]; “the aim of non-discrimination law is to allow all individuals an equal and fair prospect to access opportunities available in a society”^[2].

Today the anti-discrimination regulations are contained in many acts with different legal status and causing various legal consequences for the addressees. It is widely regarded that the right of a person to be free from discrimination on grounds of sex (and also other protected grounds) is a fundamental right protected as a general principle of European Union law[3]. Moreover, in a literature is sometimes highlighted that the sources of the principles of equality and non-discrimination in the European Union should be sought in the common constitutional traditions of the Member States and intellectual tradition, especially enlightenment ideas of human rights[4].

From a historical point of view anti-discrimination policies in community law make a long story. Without going into detail, the principle of equality has been an element of its foundations from its early days, and first developed in the context of equality of men and women – first the Treaty of Rome of 1957 required equal pay between men and women[5]. On this ground series of ‘equality directives’ have been adopted: the Equal Pay Directive of 1975[6] and the Equal Treatment Directive of 1976[7]. Next steps included acts such as, among others: Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security[8], and Council Directive 86/378/EEC of 24 July 1986 on the implementation of the principle of equal treatment for men and women in occupational social security schemes[9]. An important moment in the long process of developing a European system of rules of anti-discrimination law was the moment Treaty of Amsterdam signing. “The European Union (EU) reached a turning point with its anti-discrimination legislation in 2000 (…) Using new competences introduced by the 1999 Treaty of Amsterdam, the Union adopted two Directives which altered the character of EU anti-discrimination law. The Racial Equality Directive prohibited discrimination on grounds of racial or ethnic origin in a wide range of areas including employment, vocational training, education, social protection, housing and the provision of goods and services. The Employment Equality Directive prohibited discrimination on a longer list of grounds (religion or belief, disability, age and sexual orientation), but across a more limited material scope (employment and vocational training)”[10].

Treaty of Amsterdam has inserted in a Treaty establishing the European Economic Community a general principle prohibiting discrimination on the basis of sex, race, ethnic origin, religion, beliefs, disabilities, age or sexual orientation. Currently, the issue of the prohibition of discrimination is contained in, among others, Charter of Fundamental Rights of the European Union (according to which discrimination based on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief and also nationality, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation shall be prohibited )[11]. Regardless of the sources of primary and secondary European Union law (treaties, conventions, agreements and legislation such as regulations, directives, decisions, recommendations and opinions), anti-discrimination standards they have already been the subject of European Court of Justice judicial activity (case-law). As will be shown below, in the process of developing European Union anti-discrimination law European Court of Justice also played an important role.

1. Principle of freedom of economic activity in EU legal system

Meanwhile freedom of economic activity will be primarily associated with concept of a ‘common market’, based on the ‘four freedoms’ of goods, services, persons and capital. In general, economic freedom (sometimes equated with economic liberty) is perceived as the essence of the market economy, understood as ability of EU citizens to undertake economic actions, in the community, regardless of place of birth, residence and across Member State borders. The general principle of economic freedom remains immanent relationship with the concept of the European Single Market (the EU Single Market is based on the principle of four economic freedoms: free trade in goods, mobility of labour, free movement of financial capital and free trade in services)^[12].

In effect freedom of economic activity on the ground of European Union legal system has many dimensions and aspects, especially – on the legal basis of the Treaty on the Functioning of the European Union – relates to abolition of economic barriers between Member States. “A cornerstone of the European Union (EU) is the principle that goods, services, capital and labour can move freely between the member states. The internal market for goods seems to function well, after the implementation of the Single Market programme in 1988. That is however not the case for the internal market in services. Service providers often experience obstacles if they want to export their services to other EU member states, or when they want to start a subsidiary company in other EU member states. The EC (2002) has concluded that these impediments are to a considerable degree caused by national regulations for service exporters, foreign investors in services, and for the service product itself. Such regulations are mostly made for domestic purposes without much regard for the interests of foreign service providers”^[13].

On the other hand, it is no accident that a key role in the development of cross-border economic liberties was played by the European Court of Justice. As an example: in Reinhard Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano^[14] The Court stated that “national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain it. Member States must take account of the equivalence of diplomas and, if necessary, proceed to a comparison of the knowledge and qualifications required by their national rules and those of the person concerned”. In other judgments^[15] have been clearly emphasized that the concept of ‘public policy’ (used in domestic law as justification for derogating from the fundamental principle of freedom of movement for workers by Member State) must be interpreted strictly, so that its scope cannot be determined unilaterally by each Member State without being subject to control by the institutions of the Community. Another time, resolving the question of admissibility the refusal by a host Member State to recognise the legal capacity of a company formed in accordance with the law of another Member State in which it has its registered office, the Court has once again sided with the cross-border economic freedom (such a measure has been recognized as outright negation of the freedom of establishment conferred on companies)^[16].

There is also no doubt that the concept of economic freedom includes the principle of freedom of contract. Some authors consider it to be as ‘general principle of  law’ because on the one hand, freedom of contract can be seen as an economic principle on which markets of all kinds are to be based and “on the other hand, freedom of contract can instead be seen as a moral principle, according to which the justification for contractual obligations is found in the choice (‘will’) of the individuals party to the contract, a vision of freedom of contract often expressed on continental Europe under the phrase ‘contractual autonomy’ or ‘the autonomy of the will’ ”[17]. The legal basis for the principle of freedom of contract is a general principle of freedom to conduct a business situated in Article 16 of Charter of Fundamental Rights of the European Union[18], although this issue has raised some controversy[19]. “The principle of a free market economy in which there is freedom of competition, enshrined in Article 4(1) EC, and contractual freedom, enshrined in the laws of the Member States and already recognised by Community law, are of fundamental importance in the Community legal order”[20]. In the jurisprudence of the European Court of Justice was, among others, stressed also that the right of parties to amend contracts concluded by them is based on the principle of contractual freedom and cannot, therefore, be limited in the absence of Community rules imposing specific restrictions in that regard[21].

However the freedom of contract is not absolute. The Court explained: “In accordance with the general principles of civil law, each contracting party is bound to honour the terms of its contract and to perform its obligations thereunder. The obligation to fulfil the contract does not therefore arise from the conclusion, specifically for that purpose, of another agreement (…) In that regard, it should be noted that the contracting parties are at liberty — subject to the mandatory rules of public policy — to define the terms of their legal relationship, including the consequences of a cancellation or breach of their obligations. Instead of defining their obligations in detail, they may nevertheless refer to the various instruments of civil law”[22]. Whether European-Union anti-discrimination rules should restrict the freedom of contract? On one hand, there is trend noticed according to which consumer law, labor law and even anti-discrimination rules intrude private law[23] (especially limit the freedom of contract principle), but on the other hand “a broadly-phrased anti-discrimination principle can at most be entertained in the area of public law, but not in private law (…) The interference with the freedom to select a contractual partner has, as a result of current anti-discrimination provisions in Community law, already reached a problematic level. With its impact on primary Community law, the entry into force of the Charter of Fundamental Rights will only further intensify this debate (…) The conflict between the anti-discrimination provisions, on one hand, and the market economy principle of unhindered selection of a contractual partner, on the other, will become even more pronounced with the entry into force of the Charter of Fundamental Rights. Anchored within the Charter is not only the freedom of contract but also the anti-discrimination provisions which extend into the freedom of contract’s very area of application. Consequently, their interrelationship at the level of primary Community law will need to be clarified. It is advisable in this regard to revert to the roots of the discrimination prohibitions, found in the iustitia distributiva of public law. A direct application in private law endangers the market economy foundation of the European Community and can therefore only exceptionally be taken into consideration”[24]. In view of the danger of reducing the importance of the principle of freedom of contract (hence the principles of freedom of economic activity in a market economy) anti-discrimination rules should only apply to a vertical relationship (in relations between individuals and the country) excluding horizontal relationships (relations between individuals).

At the outset, it should be noted that the legal principle of freedom of economic activity is certainly not synonymous with actual freedom (understood as the absence of any restrictions on entrepreneurs). In other words, the fact that there are legal exceptions and conditions of an economic activity (including the obligations on data keeping, reporting, or incurring the burden of taxation) do not exclude the legal principle of economic freedom, but weakens its practical aspect. The issue of real economic freedom depict numerous studies, which aim is to identify and measure the level of economic freedom across the EU at the turn of the 20th and 21st centuries, including in particular the assessment methods using the so-called economic freedom indexes. For example, the components forming the European Economic Freedom Index are such as inter alia: size of government (public consumption, total revenue, total expenditure), structure of the economy (quality of bureaucracy, unemployment, diffusion of information technology, conscription), legal framework (law enforcement, corruption), structure of taxation (tax pressure, taxes on wages, total taxes on labour as % of labour costs, total contributions received by government), monetary policy and price stability (money growth, inflation), credit market (credit to private sector, negative interest rates)^[25]. Consequently, the discussions on actual economic freedom requires consideration of numerous factors, some of which are dependent on the decision of the legislator, while others result from non-legal circumstances and are rather a problem of trading practices (such as habits, manners, corruption, amount of social capital), not a challenge for lawyers. On the other hand, conclusions from this analysis may differ (however according to the most common opinion: more favorable conditions for entrepreneurs in the ‘old’ EU than in the new Member States^[26]).

2. Freedom of economic activity vs. anti-discrimination rules and equality principle

Despite the fact that the process of creating a single internal market and strengthening economic cooperation between the Member States were the main impetus for the development of new European Union institutions and the creation of new supranational regulation law – the Court not only defended and developed the rules that ensure the functioning of the common market, but also opposed the discriminatory actions would infringe the principle of equality and individual rights.

Generally speaking, European Court of Justice has defined discrimination as “the application of different rules to comparable situations or the application of the same rule to different situation”[27] (definition widely used not only in relation to the situation of an individual in the context of the rights and freedoms)[28]. In practice, this means for example that the situation of a pregnant worker who is unfit for work as a result of disorders associated with her pregnancy cannot be considered to be the same (and should not be treated to the same way) as that of a male worker who is ill and absent through incapacity for work for the same length of time[29]. It is worth noting initially the principles of equality and non-discrimination relate only to the functioning of the internal market (economic dimension), nowadays are associated with the system of human rights protection in the European Union[30]. In the legal doctrine authors emphasize that in this way European citizenship has reached, beyond only the economic dimension (through the implementation of the freedoms of the internal market), also political significance (the principle of equal treatment began to shape up in connection with the concept of citizenship of the European Union)[31].

In the past, the Court has repeatedly stressed the need to counter the unacceptable discrimination based on religious beliefs, age criterion, sex and sexual orientation By way of illustration: Vivien Prais v Council of the European Communities[32] may be mentioned, in which Court stated that: “If a candidate informs the appointing authority that religious reasons make certain dates impossible for him the appointing authority should take this into account in fixing the date for written tests, and endeavour to avoid such dates. On the other hand, if the candidate does not inform the appointing authority in good time of his difficulties the appointing authority would be justified in refusing to afford an alternative date, particularly if there are other candidates who have been convoked for the test”. Considering the case Defrenne v. Sabena[33], the Court stressed the principle of equal pay for male and female workers and recognised that the elimination of discrimination between men and women forms part of the fundamental human rights protected and promoted by Community law. Another example of European Court of Justice’s intervention: P v S and Cornwall County Council[34] the Court held: “In view of its purpose and the fundamental nature of the rights which it seeks to safeguard, the scope of the Directive also applies to discrimination based essentially, if not exclusively, on the sex of the person concerned... Where such discrimination arises, as in the present case, from the gender reassignment of the person concerned, he or she is treated unfavourably by comparisons with persons of the sex to which he or she was deemed to belong before undergoing gender reassignment. To tolerate such discrimination would be tantamount, as regards such a person, to a failure to respect the dignity and freedom to which he or she is entitled, and which the Court has a duty to safeguard. Therefore, dismissal of a transsexual for a reason related to a gender reassignment must be regarded as contrary to article 5(1) of the Directive”.

Futhemore “The Court has affirmed the importance of the prohibition on age discrimination, while also linking it with the general principle of equal treatment which it now recognises as a fundamental norm of the EU legal order… the Court has clearly indicated in its Mangold, Palacios de la Villa and Age Concern judgments that the prohibition on age discrimination is to be applied with similar rigour as are other anti-discrimination norms. It has also not hesitated in its decisions in Mangold and Kücükdeveci to treat the prohibition on age discrimination as an integral aspect of a general principle of equal treatment, which the Court considers to constitute a core value of the EU legal order and which appears to encompass all of the non-discrimination grounds now protected in EU law”[35]. The principle of non-discrimination does not mean, of course, the prohibition of the introduction of any variation in the situation of individual entities (employees, service providers etc.), “nevertheless both the legislative and judicial routes allow the defendant to justify the differential treatment for objective reasons unrelated to sex”[36].

Some judgments on anti-discrimination are considered controversial because less they relate to economic issues and touch rather moral issues and strongly interfere with the solutions adopted in the national law of the Member States (eg. Richards v. Secretary of State[37], in which Court adjudicated that the principle of equal treatment for men and women in matters of social security is to be interpreted as precluding legislation which denies a person who, in accordance with the conditions laid down by national law, has undergone male-to female gender reassignment entitlement to a retirement pension on the ground that she has not reached the age of 65, when she would have been entitled to such a pension at the age of 60 had she been held to be a woman as a matter of national law).

3. Draft amendments to the EU anti-discrimination law

The European Commission presented a proposal of amendments to the EU anti-discrimination law in July 2008. If adopted the proposed Council Directive 2008/0140 “on implementing the principle of equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation” (also Directive, Proposed Directive, ETD), will expand EU discrimination law from employment into the provision of goods and services. It means, that the scope of the new directive is to be much wider than the previous four equality directives. Horizontal validity of the directive is to include a wide range of civil law relations, including relations between traders and consumers of their services. In other words it, once adopted, it will implement the principle of equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation outside the labour market.

Despite many controversial provisions, negative response of some of the Member States[38] and its large costs of implementation[39], the draft has been stayed for over eight years now. Also the example of the United Kingdom, where such law is already in force and it have significantly limited the economic freedom, freedom of contract and freedom of religion, did not result in the rejection of this project[40]. The European Commission wants to continue work on the directive while some countries, including the Federal Republic of Germany, the Netherlands and Malta expressed reservations. In this year (2016) Poland has changed its position on this draft[41].

This part will analyze some of the most problematic provisions of the Proposed Directive in the context of economic freedom. Specifically, this article will address: (1) the general comments on legislative issue of the draft amendments; (2) the unclear rules of the liability for compensation and (3) the effect of the proposed Directive on the EU law.

4. General legislative comments

First of all, the Proposed Directive rises a number of objections concerning standards for fair law. The project uses a broad and vague definitions, the contents of which cannot be precisely determined based on their ordinary meaning. This situation could lead to expansive interpretation. This also raises concerns from the perspective of compliance with the fundamental principle of legal certainty, which constitutes one of the fundamental aspects of the rule of law as expressed in art. 2 TEU.

4.1. Vague terms and legal uncertainty

According to the judgment of the European Court of Human Rights legislation must face three conditions: (a) certainty which mean that law must give anyone subject to it the ability to regulate their conduct; (b) foreseeability in turn assumes that reasonable person would be able to predict or expect the possible result of an actions; and the last one (c) predictability – that like cases are treated alike – is a fundamental component of the definition of justice[42]. Such standards are universal, they are also expressed by the courts of the Member States and judgment of the European Court of Justice. As the general principle of legal certainty is included in the general principles of law, among all other norms of the EC law, it is believed to be among the primary sources of the EC law[43].

Is the ETD meets those conditions? To answer that question few examples should be pointed out. The draft of the Proposal Directive use extremely vague terms as criteria for discrimination. According to article 2 (2) letter a of ETD discrimination occurs where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any of the grounds of religion or belief, disability, age, or sexual orientation. The term "less favorably" is so capacious that its scope can be broaden to almost every situation of everyday life. Taking into account that the occurrence of discrimination is detached from the intention of the perpetrator, the this term can includes all situations where a person is treated in a way contrary to her or his expectations. The same argument can be raised in relation to indirect discrimination (see article 2 (2) letter b of ETD). The Proposed Directive introduce also the concept of discrimination based on association (occur where a person is discriminated against or harassed due to his or her association with persons of a certain religion or belief, with a disability, of a given age, or of a certain sexual orientation) which is highly controversial.

It is also difficult to see what exactly mean term harassment. It covers all the "unwanted conduct" whose "purpose or effect of violating the dignity of a person and of creating an intimidating, hostile, degrading, humiliating or offensive environment" (see Article 2 (2) letter c of ETD). According to recital 12b “Harassment can take different forms, including unwanted verbal, physical, or other non-verbal conduct”.

Also the calculation of groups protected from discrimination rises doubts. The ETD takes into account, among others, the term "sexual orientation" (see Article 1 of the Proposed Directive) in the fields other than employment and occupation. It is not clear what is meant by the phrase “sexual orientation”[44] or what is being protected even in the judgments of European Court of Human Rights[45]. Attempts to define this term run into serious difficulties which the United Kingdom case law clearly shows[46]. Also Fundamental Right Agency admits that “sexual orientation” is a matter of subjective choice[47].

While all of these broad and vague phrases were already present in the text of four previous anti-discrimination directives, doctrine and case law still not defined their strict way of understanding, although they should[48], and this draft radically would extend the scope of their application. The provisions of the existing anti-discrimination directives of the EU Council have been interpreted by the Court of Justice of the European Union in an expansive way[49].

This leads to the first conclusion of this part that the subjective feelings and perceptions of an alleged victim of discrimination are expressed in open-ended terms. In connection to this, any conduct that will causes negative feeling of violence or discrimination could be treated as infringing the anti-discrimination. Even if such action arise, in objective terms, eg. from cultural norms. Just one example: giving up an elderly person a seat on a bus. That is why implementation of the Proposed Directive could significantly reduce certainty, foreseeability and predictability of the consequences. In practice, it would be impossible for reasonable citizen of the EU, regardless commercial or non-commercial relations, to have certainty when he act or not within the legal framework.

4.2. Presumption of guilt

Certainty, foreseeability and predictability of the consequences are also important because the Proposed Directive reverses the burden of proof. It means that anyone who is accused of any kind of discrimination in the meaning of the ETD must prove their innocence. If adopted, the reverse burden of proof, which is so far unique tool to help the weaker party of the proceeding get access to evidence (eg. employee in a dispute with the employer), becomes the rule in any case in which a claim is raised discriminatory. In other words, anyone who claims to be a victim of discrimination is automatically assumed to be one. The respondent have to prove that there has been no breach of the prohibition of discrimination (see Article 6 of the ETD).

The Proposed Directive creates the “presumption of guilt” which contradicts the standards of procedural rights, eg. the rights that apply during a trial. So far, the part of procedural right was the standard of criminal proof beyond a reasonable doubt[50]. The presumption of guilt makes a threat to this standards and would lead to weakened the presumption of innocence[51]. Taking into account fact that Courts treat selectively eg. statistics to assess the impact of a measure or practice on an individual or group as the evidence[52], it is even more important and rise doubts as to the compatibility of the ETD with fundamental human rights to the fair trial[53]. As to the judgment of the European Court of Justice, the presumption of innocence ties the Member States even when the State authorities apply EU law[54].

In the context of vague terms as criteria for discrimination, especially in the context of drafted recital 12 of the ETD which states that term discrimination includes direct discrimination or harassment based on assumptions (eg. someone thinks she/he is disable regardless the fact that she/he is not, then this would be discrimination) and possibility to its expansive interpretation, such interference of the human rights as the “presumption of guilt” seems to be unjustified in a democratic society. Legislative proposal should build adequate safeguards for protection and ensure that limitation of fundamental freedom of human is proportionate and necessary[55].

Moreover, the Proposed Directive doesn’t give any guarantees that would safeguard or balance between different categories of human rights[56]. Especially when it goes to the liability for compensation.

5. Unclear rules of the liability for compensation

There are reasonable doubts about the principles of liability for discrimination on the basis of the proposed Article 14 of the ETD. The European Commission in the two letters of formal notice concerning the implementation of the previous anti-discrimination directives (the infringement procedure No. 2007/2253 and the infringement procedure no 2007/2362) stated, in relation to Article 15 Directive 2000/43/EC and Article 17 Directive 2000/78/EC, that anti-discrimination law could be a violated even when the defendant’s conduct was not conduct was either negligent or intentional (fault-based liability). It is not clear whether, with the adoption of the proposed Directive and broadening the scope of the rules of anti-discrimination law, this rule does not extend to all areas of civil law. The introduction of strict liability would result in liability for discrimination on the basis of risk. It would generate, in relations between individuals, high risks for entrepreneurs at a level that is not possible to estimate[57]. This could lead to a dangerous precedent that proceedings would be initiated only for profit not for compensation for the damage because of discrimination based on religion or belief, disability, age or sexual orientation. It is even more significant in the context of the provision of the Article 14 of the ETD which states that compensation may not be restricted by the fixing of a prior upper limit.

This precedent can be strengthen by the unclear rules for the participation of third parties in proceedings under the provisions of the Directive. The directive includes proposals to introduce into Member States’ law rules that ensure “associations, organisations or other legal entities, which have (…) a legitimate interest in ensuring that the provisions of this Directive are complied with, may engage, either on behalf or in support of the complainant, with his or her approval, in any judicial and/or administrative procedure provided for the enforcement of obligations” of the Proposed Directive (see Article 7(2) of the ETD).

Implementation of these provisions may lead to the pathological practice. Specialized organizations will initiate unjustified litigation on a large scale, hoping eg. to be awarded with the costs of legal representation each time.

6. Scope of the proposed Directive and the EU law

One of the main principle of the rule of law is that no-one can arbitrary limit fundamental freedoms and rights of other person. Their protection, prohibition of violations and limiting by the state’s legislator, are also legal principles in the EU.

Because of the scope of the ETD (relation between individuals, known as horizontal relations) a major difficulty is economic freedom. As can be seen in the first part, an important component of a protected economic freedom is the freedom of contract and inherent right to shapes relation between parties based on autonomous decisions. It also means that no-one shall be forced to conclude or to deny agreement, or dictate to him its specific provisions, or to choose a particular contractor, unless the law provides otherwise. This restriction applies to all equally.

Restriction of freedom of contract, if the ETD will be implemented, may lead to changes in the market through a negative impact on businesses. The project significantly expands the scope of application of the principles of anti-discrimination law, including the principle of reversed burden of proof in relations between the peer entities.

The economic impact of the adoption of provisions contained in the draft Directive have not been estimated yet. Beside the costs of significant number of unjustified cases, which can be expected, the implementation will generate additional costs for companies. Implementation of the Directive is closely connected with the additional costs of adapting the workplace, eg. costs associated with additional evidences and opinions, costs of staff training, new standards and strategy, costs of legal services and risk assessment.

The scale of costs related to the implementation of the project can be based on estimates prepared by the University of Dortmund. Studies proofs that implementation of the German anti-discrimination law (Allgemeines Gleichbehandlungsgesetz) which scope covers the first four EU directives, within the first year after the entry into force in 2006, costed companies around 1.73 billion euros[58]. Estimates were based on a survey of over 500 companies of all sizes, include, among others, additional legal costs, documentation, training, strategy development and control procedures.

Costs generated in this way, specially for small and medium-sized enterprises, contradicts with the guidelines adopted by the European Commission with regard to the Lisbon Strategy [COM (2005) 551]. This document provides simplification of legal and administrative procedures. Another document [COM (2007) 23] predicts the reduction of administrative burdens for businesses which is also opposite policy to the Proposed Directive.

Other substantial doubt rises according to the Article 12 of the ETD which states that Member States should designate a body or bodies for the promotion of equal treatment. The European Commission did not show why the functions of new institutions may not be serve by existing institutions, such as. Ombudsman. This will lead to the expansions of bureaucracy not simplification of the public services.

One last argument that should be raised is that: if the ETD be adopted, any change or repeal will be problem. According to the Article 19 para 1 of the TFEU such amendments required unanimity of all EU Member States. The functioning of the EU Council indicates that it is extremely difficult to achieve.

Everything that already has been said shows that adoption of the Directive may infringe relationship, scope and boundaries of the fundamental freedom and rights of the EU citizens. The goal of the human rights is to protect certain fundamental interests not only from arbitrary state power but also from collective interests and the courts and governments should balance between those demands[59]. The ETD fails to do so and, once adopted, it would undermine fundamental freedoms such as freedom of contract, freedom of thought, conscience and religion, freedom of association, freedom of expression and also, in certain circumstances religious freedom. Moreover, the Directive could force persons to choose between their beliefs and their business. That is way the proposals contained in the draft Directive may goes beyond the scope of Article 19 of the Treaty on the Functioning of the European Union as the basis for the European Union anti-discrimination policy. The measures provided in the ETD rises doubts under the requirements of the principle of subsidiarity[60] and proportionality (Articles 4 and 5 of the Treaty on the Functioning of the European Union).

7. Summary

Analysis of the substance of the anti-discrimination law and economic freedom shows that some rules, regulations may reduce economic freedom. In a rich literature in the field of law, economics, management and other social sciences often repeated is the thesis according to which any anti-discrimination regulations that are the source of the obligations imposed on entrepreneurs are the real obstacles the person operating business must face. Focused on this topic a number of publications not only the science of law and economics (but also social thinkers and political commentators)[61] who all argue that any regulatory intervention entails not only the strengthening governance bureaucratic structures, according to the most radical thesis: “in competitive markets there is no place for the antidiscrimination norm”^[62]. This issue is also perceived by columnists and commentators, eg. “If you allow firms to refuse to service gay and lesbian individuals, then it becomes legal to refuse service to black persons as well. Precisely—at least if the legal principle is correctly stated. It would be a gross injustice of the first order to say that white people could refuse to service black people, but that black people were duty-bound to service white people. But the principle of freedom of association does not take that one-sided view of the problem. It says rather that all individuals can choose their trading partners as they see fit. This principle in effect allows for all sorts of associations to flourish”[63].

The second part of the paper investigated the draft of the Council Directive on implementing the principle of equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation. Examples were given from various fields of EC law and shows that new direction of the anti-discrimination law has uncertain foundations. Among human rights that are in conflict with this draft of Directive a major difficulty makes economic freedom and related to it freedom of contract. From this part of analysis it may be concluded that balance between equality and the principle of economic freedom is disturbed by adopting the ETD. In spite of all political declaration, bearing in mind the principle of legal certainty, it may be expected that regulation concerning such sensitive issues as balance between particular human rights need to face much greater certainty. Otherwise, they may lead to violations of human rights on a larger scale than is currently.

Authors: O. Szczypiński, K. Koźmiński