According to a recent decision of the European Court of Justice (ECJ), employers may prohibit employers from wearing any visible sign of political, ideological, or religious conviction in the workplace under narrow conditions. After the decision, prohibiting employees from wearing headscarves remains impermissible.

On July 15, 2021, the ECJ decided in two preliminary rulings that an internal company rule prohibiting employees from wearing visible signs of political, philosophical, or religious convictions at the workplace does not constitute direct discrimination on the grounds of religion or spiritual belief. Such rules that apply to employees who follow certain dress codes on the basis of religious precepts would not be discriminatory provided that the rule is applied generally and in a nondiscriminatory manner, i.e., applied to employees of all religions and spiritual beliefs.

Under the rulings, an employer may justify such an internal rule if it is pursuing a policy of ideological neutrality for customers or users the neutrality policy meets a genuine need of the employer, the difference in treatment is appropriate to ensure the proper application of the neutrality policy, and the prohibition is limited to what is strictly necessary. The employer must therefore demonstrate that there was or currently is a sufficiently concrete risk, such as the risk of unrest within the company or a loss of earnings, that the internal rule mitigates.

The Hamburg Labor Court (ECJ: C-804/18) and the Federal Labor Court (ECJ: C-341/19) each submitted questions regarding religious-neutrality policies to the ECJ for preliminary rulings.

The first case (C-804/18) concerns a special-needs teacher who is of Muslim faith. Her employer, an interdenominational children’s daycare center, has a policy of ideological  neutrality. This policy, which applies to employees with customer contact, requires that they not make any external political, ideological, or religious statements to parents, children, and third parties. It also prohibits employees from wearing visible signs of political, ideological, or religious conviction if they have contact with parents or children.

The daycare center contends that the aim of the instruction is to ensure that teachers do not influence the children in their care with regard to their beliefs. A Muslim employee twice appeared at the workplace wearing an Islamic headscarf. The daycare center issued warnings after she refused to remove the headscarf. The employee took legal action against the daycare center challenging the instruction and requesting that the daycare center remove the warnings from her personnel file.

The second case (C-341/19) concerns an employee of a German drugstore chain. The employee, who is of Muslim faith, wore an Islamic headscarf to work. The employer requested that the employee remove the headscarf while at the workplace several times in the course of her work. She declined to remove her headscarf, and the employer assigned her to another position “for which she was not required to remove her headscarf.” Subsequently, the employee received a directive from her employer, instructing her not to wear conspicuous ideological signs at the workplace.

The directive was based on an internal company guideline establishing neutrality and prohibiting employees from wearing any visible sign of religious, political, or ideological belief. According to the employer, the internal guideline was intended to prevent social conflicts within the company, as tensions had arisen in the past. The employee filed a lawsuit seeking a court’s  declaration that the directive was invalid and requesting compensation for the nonmaterial damage she had suffered as a result of the directive.

The judgments reached through the preliminary ruling proceedings of the ECJ are binding on the German courts in each case. The courts must interpret the questions referred for preliminary ruling in compliance with the rulings of the ECJ. In doing so, however, the national courts retain a margin of interpretation. When examining whether indirect unequal treatment on the grounds of religion or spiritual belief is appropriate, the courts may take into account more favorable national regulations for the protection of religious freedom.

Ogletree Deakins will continue to follow the two proceedings before the Hamburg Labor Court and the Federal Labor Court.