EU court rules on employment case sparked by church tax rules

The ruling touches on sensitive issues in the Catholic Church in Germany.

The European Union’s highest court ruled Tuesday that a German Catholic association was wrong to fire an employee solely because she had formally left the Church.

European Court of Justice buildings in Luxembourg. Credit: Cédric Puisney/wikimedia CC BY 2.0.

The European Court of Justice in Luxembourg ruled March 17 that the Katholische Schwangerschaftsberatung, a pregnancy counselling service, had discriminated against the woman because it also employed non-Catholics, who were able to provide counselling according to a Catholic ethos despite not being Church members.

The case raises sensitive issues in the Catholic Church in Germany — one of the country’s largest employers — about disaffiliation as the grounds for dismissal and how the country’s church tax is levied on families.

The European Court of Justice case was triggered when the Diocese of Limburg requested that the complainant, identified only as JB, pay a levy in addition to Germany’s mandatory church tax. The reason for the additional levy was that she is in an interfaith marriage with a high-earning spouse.

In the Limburg diocese, JB would have paid a standard 9% on her own income tax as church tax. According to court documents, the family was also required to pay the additional levy based on joint assessed taxable income. The levy seems to have been designed by the diocese to ensure that families with a high-income non-Catholic spouse make a larger overall contribution.

The woman, a mother of five who began working for the association in 2006, took parental leave in June 2013. She made a formal declaration in October 2013 before a local authority that she wished to leave the Church, citing the additional levy.

The local authority informed the association of her decision, so it could take it into account when calculating her earnings for payroll church tax purposes. The association asked the woman to rejoin the Church, but she declined.

The organization believed that JB was required to rejoin because its employees have a “duty of loyalty” (Loyalitätspflicht) to the Church due to its mission to protect the unborn and help women to continue with their pregnancies.

The court ruling said that JB “neither distanced herself from nor rejected the precepts and fundamental values” of the Church after ceasing to be a member.

JB was on leave for a six-year period that ended on May 31, 2019. The association terminated her employment on June 1, 2019.

She challenged the decision in a labor court, which ruled that her dismissal was unfair. The association appealed to a higher labor court, which confirmed the judgment. The association then appealed to the Federal Labor Court, the court of last resort for German labor cases, which ruled that JB had experienced direct discrimination on the grounds of religion.

The European Court of Justice concluded that under EU law, a religious association cannot dismiss an employee simply for leaving a church, if it “employs other persons to carry out the same duties as those of the employee in question, without requiring that those persons be members of that church,” and if the employee “does not openly act in a manner that is antagonistic to the church concerned.”

The court said that in such cases, an occupational requirement to be a church member is not “genuine, legitimate, and justified.”

It added that the association needed to ensure that, when it dismissed employees for formally leaving the Church, “the alleged risk of undermining its ethos or its right of autonomy is probable and substantial, so that the imposition of such a requirement is necessary and proportionate.”

The court’s ruling does not resolve the dispute, which will now return to Germany’s Federal Labor Court for reassessment in light of the EU-level judgment.

Responding to the ruling March 17, the German bishops’ conference said it was “particularly significant” that the European Court of Justice recognized that employee loyalty requirements were still valid, provided they were “genuine, legitimate, and justified” in an individual case.

“This confirms the right of Church employers to apply their self-understanding and religious principles in the context of employment relationships,” it noted.

The bishops’ conference highlighted a recent ruling by Germany’s supreme constitutional court, which recalled that churches have a right to self-determination under the German Constitution (Basic Law). The court said this right must be considered when applying EU anti-discrimination law.

“Should it become apparent in the course of further proceedings that these constitutional standards have not been sufficiently observed, the Federal Constitutional Court expressly reserves the right to review the decisions,” it commented.

This appears to suggest that Germany’s churches are prepared to challenge any perceived future threat to their right to self-determination in the courts.

Bishops’ conference general secretary Beate Gilles said: “The German bishops’ conference reaffirms its commitment to continuing to strike a responsible balance between its understanding of its role as the Church and the rights of its employees.”

“The decision of the European Court of Justice provides guidance on the relationship between European anti-discrimination law and the constitutionally protected right of self-determination of the churches.”

“For us, it is crucial that Church institutions can preserve their religious identity while at the same time complying with the provisions of the Basic Law and European law. We will carefully evaluate the decision and examine the next steps.”