Flemish Decree on Use of Languages is Disproportionate to Aims Pursued and Incompatible with Freedom of Movement for Workers

In a judgment of 16 April 2013, the Court of Justice of the European Union (“ECJ”) held that the Decree of the Flemish Community (Vlaamse Gemeenschap, communauté flamande) of 19 July 1973 on the use of languages in relations between employers and employees and also in company documents and papers that are required by law and by regulation (Decreet tot regeling van het gebruik van de talen voor de sociale betrekkingen tussen de werkgevers en de werknemers, alsmede van de voor de wet en de verordeningen voorgeschreven akten en bescheiden van de ondernemingen/Décret réglant l'emploi des langues en matière de relations sociales entre employeurs et travailleurs, ainsi qu'en matière d'actes et de documents d'entreprise prescrits par la loi et les règlements) (the “Decree”) is not in line with the freedom of movement for workers within the European Union.

The Decree applies to persons and legal entities having a place of business in the Dutch-speaking region. It stipulates that the language to be used for relations between employers and employees, as well as for company acts and documents required by law, should be Dutch.

Documents or acts that are contrary to the provisions of this Decree are considered null and void. However, a finding of nullity cannot adversely affect the employee and is without prejudice to the rights of third parties. The employer will be liable for any damage caused by these documents or acts to the employee or third parties.

The Labour Court of Antwerp was asked to give judgment on a claim for an additional indemnity in lieu of notice from an employee due to the fact that the cross-border employment contract between the company and the employee had been drafted in another language than Dutch.

In the case at hand, Mr. L., a Dutch national residing in The Netherlands, had been employed for an unlimited period of time as Chief Financial Officer by a Belgian company established in Antwerp, Belgium. The contract of employment (drafted in English) stipulated that Mr. L. had to carry out his work in Belgium although some work would be done in The Netherlands.

Mr. L. was dismissed with immediate effect in a letter drafted in English. Pursuant to Article 8 of the employment contract, the Belgian company paid Mr. L. an indemnity in lieu of notice equal to three months’ salary and an additional payment equal to six months’ salary.

However, Mr. L. argued that the employment contract, including Article 8 concerning the severance payments due to Mr L., had not been drafted in Dutch and should therefore be deemed null and void in accordance with the Decree, as the Belgian company is an undertaking whose established place of business is located in the Dutch speaking region of Belgium. Mr L. concluded that the parties were not bound by the terms of Article 8 of the employment contract and that he was therefore entitled to a higher compensation.

The Labour Court of Antwerp decided to refer the following question to the ECJ for a preliminary ruling:

‘Does the [Decree on Use of Languages] infringe [Article 45 TFEU] concerning freedom of movement for workers within the European Union, in that it imposes an obligation on an undertaking established in the Dutch-speaking region when hiring a worker in the context of employment relations with an international character, to draft all documents relating to the employment relationship in Dutch, subject to the sanction of nullity?’

Article 45 TFEU precludes any national measure which, even though applicable without discrimination on grounds of nationality, is capable of hindering or rendering less attractive the exercise by Union nationals of the fundamental freedoms guaranteed by the Treaty.

The ECJ held that the Decree is liable to have a dissuasive effect on non Dutch speaking employees and employers from other Member States and therefore constitutes a restriction on the freedom of movement for workers.

As regards the justification for such a restriction, according to well established case-law, national measures capable of hindering the exercise of the fundamental freedoms guaranteed by the Treaty may be allowed only if they pursue a legitimate objective in the public interest, are appropriate to ensuring the attainment of that objective, and do not go beyond what is necessary to attain the objective pursued.

The ECJ held that the legislation of a Member State which would not only require the use of the official language of that Member State for cross-border employment contracts, but which also, in addition, would permit the drafting of an authentic version of such contracts in a language known to all the parties concerned, would be less prejudicial to the freedom of movement for workers than the current legislation while being appropriate for securing the objectives pursued by that legislation.

The ECJ thus held that the Decree goes beyond what is strictly necessary to attain its objectives and cannot therefore be regarded as proportionate.

Notwithstanding this judgment, the Decree still applies and should continue to be observed in order to avoid litigation. It is now up to the Flemish Parliament to decide on the requisite amendments to the Decree in order to bring its legislation in line with the freedom of movement for workers.