Industrial Law Journal Volume 39

Non-regression Clauses: The Fig Leaf Has Fallen

1.   INTRODUCTION

Much EU employment law legislation contains so-called ‘non-regression’ clauses, which

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generally specify that the implementation of the Directive concerned cannot constitute
valid grounds for reducing the general level of worker protection in the field covered by
that Directive (see, for instance, Clause 8(3) of the fixed-term workers’ Directive: Directive
1999/70, [1999] OJ L 175/43, and the examples in the Opinion in Case C-144/04 Mangold
[2005] ECR I-9981, at note 23). This paper demonstrates that in light of recent case law,
these clauses cannot be effective in preventing reductions of national employment law
standards, and examines the possibility of developing alternative strategies to this end.

2.   CASE LAW

To date, non-regression clauses have been examined in four judgments of the Court of
Justice. Mangold, Angelidaki (Joined Cases C-378-380/07, [2009] ECR I-3071) and Sorge
(Case C-98/09, judgment of 24 June 2010) concerned the non-regression clause in the
fixed-term workers’ Directive (on Angelidaki in particular, see C. Kilpatrick, ‘The European
Court of Justice and Labour Law in 2009’, 39 ILJ 287). There have been two court orders
on the same point (Case C-519/08 Koukou, 24 April 2009, and C-162/08 to 164/08
Lagoudakis, 23 November 2009). Finally, Bulicke (Case C-246/09, judgment of 8 July 2010)
concerned the non-regression clause in the employment equality Directive (Directive
2000/78, [2000] OJ L 303/16).
These cases have raised five issues, which will be considered in turn: the scope of the
non-regression rule, the question of whether changes in national law are linked to
‘implementation’ of the EU legislation concerned, the issue of whether those changes
lower the ‘general level of protection’, the legal effect of non-regression clauses; and the
underlying objectives of those clauses.
First of all, as for the scope of the rule, the case law has addressed the question of whether
the non-regression rule in the fixed-term work Directive also applies to the reduction of
standards as regards a first or only fixed-term work contract, given that the main focus of
the Directive is the regulation of abuse as regards successive fixed-term contracts (see
Article 5, Directive 1999/70). Implicitly, the Court assumed in the Mangold case that the
non-regression rule also applied to a first or only fixed-term work contract, and this was
confirmed in Angelidaki (paragraphs 108–21). The non-regression rule applies also to
social partners, where relevant (paragraph 209, Angelidaki case; see Article 153(3) TFEU).
As regards the employment equality Directive, the Court of Justice ruled in Bulicke that a

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reduction in the procedural standards relating to discrimination on grounds of sex was

outside the scope of that Directive, and that therefore the non-regression rule in that
Directive did not apply. The issue relating to sex discrimination had been raised in order to
argue that the time limit for an age discrimination claim breached the non-regression
clause in that Directive because that time limit was shorter than a previously applicable
time limit relating to sex discrimination.
Next, as regards the requirement of a link to the ‘implementation’ of the legislation, the
Court has interpreted this to mean that non-regression clauses apply not just when the
Directive is first implemented by a Member State but also ‘cover all domestic measures
intended to ensure that the objective pursued by the directive may be attained, including

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those which, after transposition in the strict sense, add to or amend domestic rules
previously adopted’ (Mangold, paragraph 51). However, the non-regression clauses do not
apply when the reduction of standards ‘is in no way connected to the implementation of
the Directive concerned’ (Mangold, paragraph 52). A series of reductions in the age above
which older workers had less protection as regards fixed-term work contracts were
‘justified, not by the need to put the [Directive] into effect but by the need to encourage
the employment of older persons in Germany’ (paragraph 53, Mangold). On the other
hand, in Angelidaki and Sorge, the impugned measures indisputably formed part of a
measure implementing the Directive concerned, and so in principle satisfied this criterion
(paragraphs 131 and 132, Angelidaki; paragraphs 38 and 41, Sorge).
Thirdly, the Court ruled on the definition of the reduction of the general level of
protection for the first time in the Angelidaki case, which concerned reductions of standards
as regards the conversion of fixed-term contracts into indefinite contracts for public-sector
workers. In the Court’s view, ‘only a reduction on a scale likely to have an effect overall on
national legislation relating to fixed-term employment contracts’ would be likely to
infringe the non-regression clause (paragraph 140); this meant that where a reduction in
standards (as in this case) only applied to those persons who were both public-sector
workers and had only a single fixed-term contract, the non-regression clause was unlikely
to apply, since those persons were probably not a ‘significant proportion’ of all persons
with fixed-term work contracts, although it was up to the national court to confirm this
point (paragraph 142). Similarly, in the Sorge case, the reductions in standards only applied
to a particular category of persons (workers replacing others on fixed-term contracts), and
so again these changes were unlikely to infringe the non-regression obligation (paragraphs
43–4). It follows from this line of reasoning that the changes to national law in the Mangold
case would probably not have breached the non-regression clause either, even if they had
been connected to the implementation of the Directive, since they only applied to a
proportion of older workers.
Furthermore, the Court in Angelidaki developed a second aspect to the interpretation of
whether the general level of protection had been reduced. The assessment on this point
must take into account whether the national legislature had also simultaneously introduced
the safeguards required by the Directive (in this case, as regards abuse of successive fixed-
term contracts). In effect, such improvements in standards required by the Directive
could offset any reductions in standards in connection with its implementation (paragraphs

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144–6). The Court reiterated this point in the Sorge case (paragraphs 46 and 47 of the
judgment).
In the case of Bulicke, it must be noted that the employment equality Directive does not
limit the non-regression obligation to cases where the ‘general’ level of protection is
lowered, but applies whenever there is merely a ‘reduction in the level of protection’
(Article 8(2), Directive 2000/78). Notwithstanding this, the Court’s judgment referred to
the case law on the fixed-term work Directive, including the requirement that there must
be a reduction in the general level of protection for the clause to apply. The judgment
therefore gave the impression that the Court wished to apply this principle to the non-
regression clause in the employment equality Directive as well, ignoring the difference in

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the wording of the two Directives. However, it is impossible to be certain of the Court’s
interpretation on this point, given that it was in any event unnecessary to interpret the
substance of the non-regression clause since the subject matter of the dispute was outside
the scope of the Directive.
As to the legal effect of non-regression clauses, first of all, the Court of Justice has
assumed that non-regression clauses in the body of EU employment law Directives are
binding, a point explicitly asserted in the Opinion in Mangold (paragraphs 58 and 59).
However, it is clear that the non-regression clauses do not constitute a ‘standstill’,
preventing any (unfavourable) changes in national law in the field concerned by each
Directive (see the Mangold opinion, paragraph 61, and the Angelidaki opinion, paragraph
68), but rather establish a more limited rule as described above.
As for the enforceability of that rule, the Court stated in Angelidaki (paragraphs
210–12) that non-regression clauses do not have direct effect, but are subject to the principle
of indirect effect (ie the obligation to interpret the national law in question in light of the
Directive as far as possible, if this did not contradict the wording of the national law in
question). Furthermore, the Court confirmed in the Sorge judgment that national courts
were not obliged to set aside any national legislation which infringed the non-regression
rule (paragraphs 54 and 55).
The fifth and final issue is the underlying objective of non-regression rules. In his Opinion
in the Mangold case (paragraph 61), Advocate-General Tizzano argued that the main
purpose of such rules is not to prevent the reduction of standards as such, but rather to
ensure transparency, ie to ensure that if standards were reduced, that reduction could not
be (wrongly) blamed on the need to transpose EU legislation, but rather justified by
Member States’ governments on purely national law grounds. It would be for Member
States to demonstrate such grounds (paragraph 62). He justified this interpretation not
only on the basis of the wording of the legislation but also on the basis of the nature of the
EU’s competence, which is to ‘support and complement’ the actions of Member States
(then Article 137(1) EC, now Article 153(1) TFEU). A fully-fledged standstill requirement
would ‘tie their hands completely in the field of social policy’ (paragraphs 64 and 65). The
Opinions in Angelidaki and Sorge also referred to the ‘transparency’ objective (respectively
paragraphs 68 and 98, Angelidaki and paragraph 40, Sorge).
As for the Court, in the Angelidaki judgment, it referred to the purpose of the non-
regression rule as being to prohibit Member States or social partners from ‘justifying . . . a
reduction in the general level of protection of workers by the need to put’ EU legislation

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into effect (paragraph 209). However, in Sorge (paragraph 40), the Court referred also to
the question of whether a Member State was trying to ‘counter-balance’ the extra costs for
employers resulting from an EU measure by means of reducing other standards applicable
to the field.

3.   COMMENTS

It is now clear from the case law that the non-regression clauses in EU social legislation are
entirely, or very nearly entirely, ineffective. This is largely due to the drafting of these

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clauses—although the Court seems to be more concerned to stick to the wording of those
clauses than it has been in other employment law cases (cf the line of case law on the
definition of ‘working time’, starting with Case C-303/98 SIMAP [2000] ECR I-7963)—and
partly due to the Court’s approach to interpreting those clauses.
First of all, while the ruling as regards the wide scope of the non-regression rule in the
fixed-term work Directive is welcome, and reflects the wording of the legislation concerned,
this approach to interpretation in fact makes the non-regression rule harder to apply, given
the Court’s interpretation of the requirement that the general level of protection must be
lowered (see below).
Secondly, the requirement that the application of the rule must be linked to the
implementation of the Directive concerned, which might occur on a number of occasions,
also gives the rule a wide scope and is justified by the wording of the legislation concerned.
The problem comes when the Directive does not simply rule out any lowering of standards
in connection with implementation of the Directive concerned, but rather states that the
Directive merely cannot serve as ‘valid grounds’ for such a reduction. This leaves it open to
a Member State to justify a reduction in standards even in connection with the
implementation of a Directive, as long as it can claim it had another objective in mind for
such changes, rather than implementation. While the German government’s argument to
this end was convincing in the Mangold case, due to the evidence of prior legislative
changes which were consistent with the further changes made when implementing the
Directive concerned (see paragraph 76 of the opinion), it would be useful for the case law
to clarify the burden and standard of proof which should apply as regards this point.
As suggested in the Mangold opinion (see above), it must be for the Member State
concerned to demonstrate its alternative objective, as it is not realistic to expect an
individual employee or aggrieved trade union to obtain evidence as to the government’s
real intentions. It would be reasonable for the government to be required to prove its
alternative objectives on the balance of probabilities. As to the evidence required, there
should be objective evidence of policy and/or legislative measures backing up the
government’s assertions about its alternative objectives (as there was in the Mangold
case). If mere assertions by politicians about their intentions were sufficient, it would
effectively be impossible to enforce the non-regression rule. Furthermore, since it is harder
to believe that an alternative policy objective genuinely came into being for the first time
at the same time that the Member State was obliged to implement the Directive concerned,
there should be a rebuttable presumption against this.

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As to the substance of the alternative policy grounds for measures reducing standards,
the Mangold judgment is problematic on two points. First of all, the judgment accepts that
a Member State can reduce standards simply because it wishes to encourage employment
of a particular category of workers. But of course, any reduction in employment standards
can be justified as a means to encourage employment of some or all categories of workers.
So this imposes no effective constraint on the reduction of standards—although it must be
admitted that the wording of the Directive does not limit the ‘grounds’ which can be used
to justify such reductions of standards. Secondly, as is well-known, the Court ultimately
rejected the German justification for the policy in the Mangold case, in the context of the
general principles of EU law regarding age equality. Why should a policy which fails such

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a proportionality test justify a valid reduction in employment standards in the context of
the non-regression clause?
Next, as for the requirement that the general level of protection has to be affected, the
wording of the rule does suggest that a ‘significant proportion’ of workers would have to
be covered by a change. It would be useful to clarify in the case law whether this must
constitute a majority of workers concerned, or whether a sizable minority would be
sufficient. Another open question is whether it would be a breach of a non-regression
clause for a Member State to reduce standards for a ‘significant proportion’ of workers, ie
to reduce the general level of protection, if it does so in phases. Arguably, this would breach
the non-regression clause if each of these phases were linked to the implementation of the
Directive concerned, but it is hard to argue that it would breach the non-regression clause
if some of these phases were not linked to the implementation of that Directive.
More problematic is the Court’s interpretation that any reduction in standards can be
offset against any improvement in standards resulting from the application of the Directive
concerned. While this interpretation is not expressly ruled out by the non-regression
clauses, it can be seen that it effectively renders the non-regression clause largely ineffective.
This is because the non-regression clause only applies when the Directive concerned is
being implemented, and so therefore there will always be some improvement in standards
to offset against the reduction which the Member State wishes to bring about. More
broadly, this interpretation ignores the underlying context of non-regression clauses—
which, as the Court recognised in Sorge, is to limit Member States’ attempts to counter-
balance increases in social protection resulting from the implementation of EU employment
legislation with other measures which simultaneously reduce standards in the same field.
However, Member States should still be permitted to offset reductions in standards with
increases in standards that do not implement a Directive as such, or which go beyond the
minimum standards set out in the Directive.
Finally, on this point, with respect, it is not acceptable for the Court to ignore differences
in the wording of the non-regression clauses, as it apparently did in the Bulicke case (see
above). Admittedly, this point works both ways, ie the Court should also take account of
cases where the legislation concerned includes a non-regression rule which is less
favourable for workers, or contains no such clause at all.
Next, as to the legal effect of the non-regression clauses, the Court’s judgments contrast
with the Mangold and Kücükdeveci judgments (Case C-555/07, judgment of 19 January
2010), in which the Court held that national courts have obligations to set aside national

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laws which infringe the general principle of equality, as manifested in the employment
equality Directive, even where the principle of direct effect is inapplicable because the
dispute in question concerned two private parties. The Court made no attempt in the Sorge
judgment to distinguish this line of case law.
It would presumably be possible to enforce the non-regression rule through infringement
proceedings brought by the Commission, or by means of applications for injunctions or
similar proceedings brought in the national courts against new legislation arguably
infringing the clauses. However, these proceedings would be of limited practical effect in
the long term, given that Member States or social partners would still be free to introduce
the law reducing standards again, if this time it was not linked to implementation of the

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Directive, and/or different grounds were given for it.
It is also possible to bring proceedings before the implementation date of a Directive on
the basis that a Member State’s actions as regards reducing standards would seriously
compromise the obligation to implement the Directive concerned (see, for instance, Case
C-212/04 Adeneler [2006] ECR I-6057), although this would only be relevant to non-
regression clauses where the reduction in standards was linked to a measure intended to
implement the Directive concerned. In any event, the Advocate-General’s Opinion in
Angelidaki argues that this obligation is no more onerous than the non-regression
obligation (paragraph 73).
We are therefore left with the principle of indirect effect, which is of limited use as
regards non-regression clauses, given that the principle anyway applies to the substantive
provisions of the Directive concerned, and that the specific provisions of national law
concerned, while falling within the scope of the subject regulated by that Directive, will not
in fact be intended to implement it. Presumably, the principle at least means that any
reductions in standards must be interpreted narrowly.
As for the rationale of non-regression clauses, the wording of the clauses, in light of the
context of Articles 9 and 151 TFEU (see below), suggest that there are dual objectives: a
first objective of ensuring transparency as regards the real reasons for reducing standards,
and a second economic objective of ensuring as far as possible that standards are not
reduced. The combination of these objectives suggests that non-regression clauses should
be interpreted as ruling out in principle reductions in standards unless the conditions for
such reductions, as interpreted above, are made out. But as we have seen, the conditions, as
the Court of Justice has interpreted them, are quite easy to satisfy.
As for the political context of the non-regression clauses, while legally it is clear that
implementation of EU social policy could never serve as a justification for lowering
standards, because EU employment legislation can only set minimum standards (see
Article 153(2)(b) and (4) TFEU), not all politicians or civil servants understand that point—
and some may even take the opportunity to be dishonest about the legal context. The
transparency obligation therefore should in principle have the effect of making debates on
this issue more honest, and perhaps therefore making it harder in political terms to justify
reductions in employment law standards—as it becomes clearer that EU obligations can
never serve as a pretext.
In light of the clear ineffectiveness of the non-regression clauses, should future EU
employment legislation go further in order to establish stronger non-regression obligations

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(for example, by removing some of the conditions which now apply to such clauses), or
even to establish standstills as regards employment law? It should be noted that standstills
are directly effective, prevent the reduction of national standards absolutely, have the
effect of reviving prior national law if necessary and are not subject to any form of ‘offset’
principle (see Case C-228/06 Soysal [2009] ECR I-1031).
The starting point here is whether the EU has competence to do this. The argument in
the Mangold and Sorge opinions (see respectively above and paragraph 19, Sorge opinion)
that the EU’s limited competence as regards employment law limits the extent of the
obligations which it can place on Member States is justified up to a point. Certainly, the EU
cannot establish non-regression or standstill obligations directly relating to the areas which

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it is prohibited from regulating—ie pay and trade union regulation, according to Article
153(5) TFEU, as interpreted in (for instance) the Impact judgment (Case C-268/06 [2008]
ECR I-2483). Equally, for matters subject to unanimity in Council according to Article
153(2) TFEU, the EU would have to follow the applicable voting rules if it wished, for
instance, to establish a non-regression rule as regards national law on termination of
employment. But the reference to supporting and complementing Member State action in
Article 153(1) TFEU should not be understood as meaning that the EU essentially lacks
competence to regulate employment law issues. This interpretation is confirmed by the
general rules on competence introduced by the Treaty of Lisbon, which confirm that the
EU has competence (shared with the Member States) to harmonise social policy, ‘for the
aspects defined in this Treaty’ (Article 4(2)(b) TFEU; for the concept of ‘shared
competence’, see Article 2(2) TFEU), alongside the more limited power to coordinate
national employment and social policies (Article 5(2) and (3) TFEU; see also Article 2(4)
TFEU).
Applying these principles in practice, the EU surely enjoys the power to adopt not only
non-regression obligations but also fully-fledged standstill obligations whenever it adopts
employment law Directives. It is also arguable that the EU could establish independent
non-regression or standstill obligations in some, or even all, areas of employment law that
it has otherwise not (yet) regulated, subject to the limits on the EU’s competence and the
applicable decision-making rules in Article 153(2) and (5) TFEU. While the principles of
subsidiary and proportionality would still apply to such measures, the Court has not
insisted on very stringent application of those principles as regards employment law (Case
C-84/94 UK v Council [1996] ECR I-5755), although it would remain to be seen whether
national parliaments might raise objections on these grounds under the procedures
introduced by the Treaty of Lisbon. It would be odd, if the EU is competent to set minimum
standards as regards specified employment law issues at a potentially high standard (UK v
Council cited above), that it could not establish non-regression or standstill clauses as
regards the same areas of law. This interpretation is supported by the tenor of Article 151
TFEU, referring to ‘improved living and working conditions, so as to make possible their
harmonisation while the improvement is being maintained’, (emphasis added) as well as
the general ‘social clause’ introduced by the Treaty of Lisbon (Article 9 TFEU; see also, as
regards discrimination law, Articles 8 and 10 TFEU).
It should finally be noted that, with great respect, the assertion that a standstill clause
would tie Member States’ hands completely as regards social policy is simply hyperbole,

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given that individual Directives only regulate specific aspects of the field of employment
law, that the EU is not competent to regulate the entire field, and that Member States
would always be able to raise standards (Article 153(4) TFEU, second indent).

4.   CONCLUSIONS

It is now clear that inserting non-regression clauses in EU employment legislation is not an

effective way of maintaining existing employment standards, at least from a judicial point
of view; the effect of these clauses upon national legislatures is harder to assess. The Sorge

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and Bulicke judgments have worsened the position by respectively limiting the legal effect
of the clauses and interpreting the stronger non-regression clauses consistently with the
weak ones. Anyone who wishes to maintain employment standards therefore needs to
develop an alternative strategy, consisting of stronger non-regression clauses or even
standstill clauses.

STEVE PEERS
University of Essex
speers@essex.ac.uk doi:10.1093/indlaw/dwq022

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