OPINION OF ADVOCATE GENERAL

BOT

delivered on 2 September 2010 ¹(1)

Case C‑232/09

Dita Danosa

v

LKB Līzings SIA

(Reference for a preliminary ruling from the Augstākās Tiesas Senāts (Latvia))

(Directive 92/85/EEC – Scope – Member of the Board of Directors of a capital company – Worker – Whether there is a relationship of subordination – Legislation permitting a member of a capital company’s Board of Directors to be removed from that post without restriction to take account of her pregnancy – Equal treatment for men and women)

1.        Council Directive 92/85/EEC (2) lays down special measures for the protection of pregnant workers. It requires Member States, inter alia, to prohibit the dismissal of such workers during the period from the beginning of pregnancy up to the end of maternity leave, other than for reasons permitted by national law which are unrelated to pregnancy.

2.        In this reference for a preliminary ruling, the Court is requested to rule on whether that provision of Directive 92/85 applies in a situation where a woman is a member of the Board of Directors of a capital company. It is therefore a matter of determining whether the woman may be regarded as a worker within the meaning of Directive 92/85.

3.        The Court has already ruled on the substance of this concept. According to the case-law, the chief characteristic of a worker’s situation within the meaning of Directive 92/85 is – as under Article 39 EC – the performance of services, in return for remuneration, for and under the direction of another person. (3)

4.        The present case relates more specifically to the last criterion of that definition. The Augstākās Tíesas Senāts (Latvia) is asking the Court whether – and, if so, to what extent – under Directive 92/85, a member of the governing body of a company can be regarded as performing the related duties in the role of a subordinate rather than as an independent service provider.

5.        The national court is also asking whether its domestic law is compatible with Directive 92/85, inasmuch as it allows a member of a capital company’s Board of Directors to be dismissed without restriction and, specifically, without regard to pregnancy.

6.        In this Opinion, I shall propose that the Court should rule that a woman who is a member of a capital company’s Board of Directors and performs directorial functions for the company in return for remuneration must be regarded as a worker within the meaning of Directive 92/85 where, by virtue of that appointment, she is an integral part of the company, she performs her duties under the supervision of company bodies which she does not herself control, such as the general meeting of shareholders and the supervisory board, and she can be removed from her post by those bodies if she loses their confidence.

7.        As I shall be pointing out, it is for the national court to determine whether those conditions have been satisfied.

8.        On the second question, I shall propose that the reply should be that Directive 92/85 precludes legislation of a Member State under which a woman worker on the board of a capital company can be removed from her post without restriction, in so far as that legislation permits dismissal on grounds relating to pregnancy.

9.        In addition, in order to be of assistance to the national court, I shall consider the scenarios in which it may consider that the applicant’s situation does not come within the scope of Directive 92/85, either because the applicant has not informed her employer of her pregnancy in accordance with national law, or because she was not in a relationship of subordination to the defendant company and must be regarded as self-employed.

10.      I shall further be saying that any termination by the company of its employment relationship with the applicant because of her pregnancy would, in any event, constitute discrimination contrary to the fundamental principle of equal treatment implemented by Council Directive 76/207/EEC (4) and, with regard to self-employed persons, by that directive read in conjunction with Council Directive 86/613/EEC. (5)

I –  Legal framework

A –    European Union (‘EU’) law

1.      Directive 92/85

11.      The ninth recital in the preamble to Directive 92/85 states that the protection of the safety and health of pregnant workers, workers who have recently given birth or workers who are breastfeeding should not treat women on the labour market unfavourably; nor should it work to the detriment of directives concerning equal treatment for men and women.

12.      According to the fifteenth recital to that directive, the risk of dismissal for reasons associated with their condition may have harmful effects on the physical and mental state of pregnant workers, workers who have recently given birth or who are breastfeeding and provision should be made for such dismissal to be prohibited.

13.      Article 2(a) of the directive defines a pregnant worker as ‘a pregnant worker who informs her employer of her condition, in accordance with national legislation and/or national practice’.

14.      Article 10 of Directive 92/85 is worded as follows:

‘In order to guarantee workers [who are pregnant, have recently given birth or are breastfeeding] the exercise of their health and safety protection rights as recognised under this Article, it shall be provided that:

(1)      Member States shall take the necessary measures to prohibit the dismissal of workers [who are pregnant, have recently given birth or are breastfeeding] during the period from the beginning of their pregnancy to the end of the maternity leave referred to in Article 8(1), save in exceptional cases not connected with their condition which are permitted under national legislation and/or practice and, where applicable, provided that the competent authority has given its consent;

(2)      if a worker [who is pregnant, has recently given birth or is breastfeeding] is dismissed during the period referred to in point 1, the employer must cite duly substantiated grounds for her dismissal in writing;

(3)      Member States shall take the necessary measures to protect workers, within the meaning of Article 2, from consequences of dismissal which is unlawful by virtue of point 1.’

2.      Directive 76/207

15.      Article 2(1) of Directive 76/207 provides that ‘[t]he principle of equal treatment shall mean that there shall be no discrimination whatsoever on grounds of sex either directly or indirectly by reference in particular to marital or family status’.

16.      The first subparagraph of Article 2(7) of Directive 76/207 provides that that directive ‘shall be without prejudice to provisions concerning the protection of women, particularly as regards pregnancy and maternity’. Furthermore, the third subparagraph of Article 2(7) of that directive provides that less favourable treatment of a woman, related to pregnancy or maternity leave within the meaning of Directive 92/85, is to constitute discrimination within the meaning of Directive 76/207.

17.      Article 3(1)(c) of Directive 76/207 provides as follows:

‘Application of the principle of equal treatment means that there shall be no direct or indirect discrimination on the grounds of sex in the public or private sectors, including public bodies, in relation to:

…

(c)      employment and working conditions, including dismissals …’

18.      Article 3(2) of Directive 76/207 provides as follows:

‘To that end, Member States shall take the necessary measures to ensure that:

(a)      any laws, regulations and administrative provisions contrary to the principle of equal treatment are abolished;

(b)      any provisions contrary to the principle of equal treatment which are included in contracts or collective agreements, internal rules of undertakings or rules governing the independent occupations and professions … shall be, or may be declared, null and void or … amended’.

3.      Directive 86/613

19.      Article 1 of Directive 86/613 provides as follows:

‘The purpose of this Directive is to ensure, in accordance with the following provisions, application in the Member States of the principle of equal treatment as between men and women engaged in an activity in a self-employed capacity, or contributing to the pursuit of such an activity, as regards those aspects not covered by Directives 76/207 … and 79/7/EEC.’ (6)

20.      Self-employed workers are defined in Article 2(a) of Directive 86/613 as all persons pursuing a gainful activity for their own account, under the conditions laid down by national law.

21.      Article 3 of Directive 86/2613 provides that, for the purposes of that directive, the principle of equal treatment implies the absence of all discrimination on grounds of sex, either direct or indirect, by reference in particular to marital or family status.

22.      Under Article 4 of that directive, as regards self-employed persons, Member States are to take the measures necessary to ensure the elimination of all provisions which are contrary to the principle of equal treatment as defined in Directive 76/207.

23.      Article 8 of Directive 86/613 provides as follows:

‘Member States shall undertake to examine whether, and under what conditions, female self-employed workers and the wives of self-employed workers may, during interruptions in their occupational activity owing to pregnancy or motherhood,

–        have access to services supplying temporary replacements or existing national social services, or

–        be entitled to cash benefits under a social security scheme or under any other public social protection system.’

4.      The Charter of Fundamental rights of the European Union

24.      Article 21 of the Charter of Fundamental Rights of the European Union prohibits any discrimination based on sex.

25.      Article 23 of that Charter provides that ‘[e]quality between men and women must be ensured in all areas, including employment, work and pay’.

B –    National law

1.      The Labour Code

26.      Article 3 of the Latvian Labour Code (Darba likums) (7) defines a worker as any natural person who performs a particular job pursuant to an employment contract, under the direction of an employer and in return for an agreed wage.

27.      Article 4 of the Labour Code defines an employer as any natural or legal person, or a partnership with legal capacity, employing at least one worker under an employment contract.

28.      Article 44(3) of the Labour Code provides as follows:

‘An employment contract shall be concluded with the members of the executive body of a capital company only if they are not engaged under another civil contract. If the members of the Board of Directors of a capital company are engaged under an employment contract, the latter shall be concluded for a fixed term.’

29.      Article 109 of the Labour Code, entitled ‘Prohibitions and restrictions on dismissal’, provides as follows:

‘(1)      An employer is prohibited from terminating an employment contract with a woman while she is pregnant and in the year following the birth or, where applicable, during the whole of the period in which the woman is breastfeeding, unless the situations provided for in points 1, 2, 3, 4, 5 and 10 of Article 101(1) apply.

…’

2.      The Commercial Code

30.      Article 221 of the Latvian Commercial Code (Komerclikums) (8) is worded as follows:

‘(1)      The Board of Directors is the directorial body of a company, by which the company is managed and represented.

…

(5)      The Board of Directors is under an obligation to provide information to the shareholders’ meeting on transactions between the company and a shareholder, a member of the supervisory board or a member of the Board of Directors.

(6)      The Board of Directors shall submit to the supervisory board, at least once in every quarter, a report on the company’s business and financial situation, and shall inform the supervisory board without delay of any deterioration in the financial situation of the company, or other essential circumstances relating to the company’s trading activities.

…

(8)      The members of the Board of Directors shall be entitled to remuneration commensurate with their responsibilities and the company’s state of finances. The amount of the remuneration shall be determined by a decision of the supervisory board or, if no supervisory board has been established, by decision of the general meeting of shareholders.’

31.      Article 224 of the Commercial Code entitled ‘Appointment and removal of Board Members’, provides as follows:

‘(1)      The members of the Board of Directors shall be appointed and removed by resolution of the general meeting of shareholders. It shall notify the commercial registry of the termination of the mandate of the members of the Board of Directors, the amendment of their rights of representation or the election of new members. A certified copy of the extract of the minutes of the general meeting at which the resolution concerned was passed shall be attached to that notification.

…

(3)      The members of the Board of Directors shall be elected for a period of three years, unless the articles of association set a shorter period.

(4)      The members of the Board of Directors may be removed by resolution of the shareholders. If the company has a supervisory board, that body may suspend the mandate of the members of the Board of Directors pending a general meeting, for a maximum period of two months.

…

(6)      The articles of association may provide that members of the Board of Directors can be removed only if there are serious grounds. Such grounds shall include misuse of powers, failure to fulfil obligations, unfitness to manage the company, the prejudicing of the company’s interests and loss of confidence.’

II –  The dispute in the main proceedings and the questions referred for a preliminary ruling

32.      By decision of 21 December 2006, relating to the establishment of LKB Līzings SIA, (9) a limited liability company, Latvijas Krājbanka AS – a public limited company – appointed Ms Danosa (10) as sole member of LKB’s Board of Directors.

33.      By decision of 11 January 2007, LKB’s supervisory board set the remuneration of the members of the company’s Board of Directors, together with other related conditions, and entrusted the chairman of the supervisory board with concluding the agreements necessary to ensure implementation of that decision.

34.      According to the order for reference, no civil contract governing the performance of the duties attaching to membership of the Board of Directors was concluded. LKB challenges that assertion and maintains that a contract of agency had been concluded with the applicant. The applicant would have liked to have had an employment contract, but LKB preferred agency as the basis on which to entrust her with the tasks of a Board Member.

35.      The general meeting of shareholders of LKB decided on 23 July 2007 to remove the applicant from her post as member of the Board of Directors. On 24 June 2007, she was sent a certified copy of the minutes of that general meeting.

36.      Taking the view that she had been unlawfully dismissed from her position, the applicant brought an action against LKB before the Rīgas Centra rajona tiesa (Riga Central District Court) on 31 August 2007.

37.      The applicant submitted before that court that, after her appointment, she had correctly discharged her professional duties as provided for in LKB’s articles of association and the rules governing its Board of Directors. She also argued that, since she had received remuneration for her work and been granted the right to take holidays, it was reasonable to assume the existence of an employment relationship based on an unwritten contract of employment between the two parties. Given that she had been 11 weeks pregnant at the time, her dismissal was in breach of Article 109 of the Labour Code, under which the dismissal of pregnant workers is prohibited.

38.      According to the applicant, Article 224(4) of the Commercial Code, under which the general meeting of shareholders may remove a member of the Board of Directors from that post at any time, conflicts with Article 109(1) of the Labour Code, which grants certain welfare guarantees to pregnant women. In considering the conflict, priority should be given to Article 109 of the Labour Code, which prohibits termination of the contract of employment of a pregnant woman.

39.      The applicant’s action was dismissed both at first instance and on appeal. She therefore appealed to the referring court on a point of law.

40.      Before that court, the applicant argued that she should be regarded as a worker for the purposes of EU law, regardless of whether she is regarded as such under Latvian law. Also, in light of the prohibition on dismissal set out in Article 10 of Directive 92/85 and the main interest which that provision seeks to protect, the Member State should – in all types of legal relationships where the legal characteristics of an employment relationship can be identified – endeavour to ensure by all means, including judicial remedies, that pregnant workers enjoy the legal and social guarantees laid down for their benefit.

41.      LKB, on the other hand, argued that members of a capital company’s Board of Directors do not perform services under the direction of another person and cannot therefore be treated as workers for the purposes of EU law. It is entirely justifiable that different levels of protection be provided for workers, on the one hand, and members of a capital company’s Board of Directors, on the other, in view of the confidence element attaching to Board membership. EU law makes an express distinction between persons who carry out their tasks under the direction of an employer and those who have power to direct, and are fundamentally representatives of the employer rather than subordinates.

42.      According to the national court, both the case-law of the Court on the concept of ‘worker’ and the objective pursued by Directive 92/85 of protecting pregnant women against dismissal support the inference that, where a member of a company’s Board of Directors comes within the scope of that concept, Article 10 of Directive 92/85 applies to that person, notwithstanding the fact that Article 224(4) of the Commercial Code places no restriction on dismissal, whether or not the Board Member holds a contract of employment.

43.      According to the referring court, both Directive 76/207 and Directive 92/85 prohibit termination of the employment relationship in the case of a pregnant woman.

44.      On the view that the dispute before it raises an issue concerning the interpretation of EU law, the Augstākās Tiesas Senāts decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:

‘(1)      Are the members of the directorial body of a capital company to be regarded as being covered by the concept of worker laid down in [EU] law?

(2)      Is Article 224(4) of the Latvian Commercial Code, under which a member of the Board of Directors of a capital company may be dismissed without any restriction, no account being taken specifically of the fact that she is pregnant, incompatible with Article 10 of Directive 92/85 … and the case-law of the Court of Justice?’

III –  Analysis

45.      By its questions, the national court seeks to ascertain, first of all, whether the applicant may be regarded as a worker within the meaning of Directive 92/85, and then, if appropriate, the scope of the protection against dismissal afforded by Article 10 of that directive.

46.      As a preliminary point, it is important to remember that, by virtue of Article 2 of Directive 92/85, the protection afforded by that directive, in particular the protection against dismissal provided for in Article 10, applies to pregnant workers who have informed their employer of their pregnancy in accordance with the legislation or practice current in the Member State.

47.      In the present case, the national court does not provide any information as to whether – and, if so, in what way – Latvian law makes that protection dependent on fulfilment of the condition that the person concerned must have given her employer prior notice of her pregnancy. LKB maintains that the applicant did not inform it of her condition until several days after the supervisory board had dismissed her from her duties as member of the Board of Directors.

48.      Whether that fact can deprive the applicant of the special protection afforded under Directive 92/85 depends on the interpretation of national law and an assessment of the facts, such as the manifest nature of the pregnancy, which are matters for the referring court.

49.      In any event, no degree of uncertainty on that point can call into question the presumption that the reference is relevant to the outcome to the main proceedings, a presumption from which, in accordance with the case-law, (11) the order for reference must benefit and which is not contested in the present case.

50.      In considering the questions referred, I shall therefore take as my starting point the premiss that the requirement that the employer be informed in accordance with the rules in force under national law is satisfied.

A –    The first question

51.      By its first question, the national court seeks to ascertain whether a member of a Board of Directors such as the applicant, who was pregnant when the general meeting of LKB’s shareholders decided to remove her from her post, is entitled to the protection against dismissal provided for under Article 10 of Directive 92/85.

52.      The question to be addressed, therefore, is whether and, if so, to what extent a member of a capital company’s Board of Directors may be regarded as a worker within the meaning of Directive 92/85.

53.      As the national court rightly stated, the concept of ‘worker’ within the meaning of Council Directive 92/85 was defined in Kiiski, by transposing to that directive the definition laid down by the Court in the context of its interpretation of Article 39 EC. According to that definition, the concept of ‘worker’ within the meaning of Directive 92/85 must therefore be attributed a uniform content within the European Union and its essential characteristic is that three conditions must be met: the performance of services, in return for remuneration, for and under the direction of another person. (12)

54.      The national court explains that only the last of those conditions is a matter of dispute between the parties. According to the information provided by that court, the applicant maintains, and her claim is not gainsaid, that she performed the duties of sole member of the Board of Directors, which were assigned to her under the articles of association of the company and the Board’s rules of procedure, a situation which may be entirely consistent with the exercise of an activity which has a specific economic value and which is effective and genuine within the meaning of the case-law. (13)

55.      It is also common ground that the applicant received remuneration; how that is described by the parties to the employment relationship and the detailed arrangements governing it are of no consequence to categorisation as a worker. (14)

56.      Accordingly, the question to be examined is whether the remunerated services supplied to LKB were provided under its direction. I therefore propose to construe the first question to the effect that the referring court is essentially asking whether – and, if so, to what extent – a woman who is a member of a capital company’s Board of Directors and who performs her directorial duties in return for remuneration is providing her services in the context of a relationship of subordination and, as a consequence, can be regarded as a worker within the meaning of Directive 92/85.

57.      In other words, the issue is whether the applicant must be regarded, for the purposes of Directive 92/85, as a paid worker covered by the protection provided for under that directive or as an independent provider of services coming under Directive 86/613. At present, there is no special regime for company directors under EU social security law for the purposes of the implementation of the principle of equal treatment as between men and women, or, more specifically, of protection in the case of pregnancy. The applicant’s situation must therefore be assessed in the context of those two alternatives and subsumed under one or other of those categories.

58.      LKB argues, as do the Greek and Latvian Governments, that members of a capital company’s Board of Directors are not to be regarded as workers within the meaning of EU law and that, in consequence, Directive 92/85 does not apply to them.

59.      LKB argues that no contract of employment was ever concluded between it and the applicant, and that in law there was no employment relationship between them. The applicant performed her obligations as a Board Member autonomously, under an agency agreement, and – unlike heads of divisions or departments, who are under the authority of a superior or the Board of Directors, whose guidelines and instructions they must observe – did not receive instructions from anybody. Furthermore, the applicant herself drew up the rules of procedure of the Board of Directors.

60.      In the same vein, the Greek Government maintains that a Board Member like the applicant, who moreover was the sole director, did not provide her services under the direction of another person, but, on the contrary, was the person under whose direction the employees of the company performed their tasks.

61.      The Latvian Government also argues that, even if Board Members perform their duties for a specified period and act in the interests of the company, their activities are not subordinate in nature but independent. The Board of Directors is the executive body of the company, which it directs and represents. It does not perform services under the direction of another person, nor does it have to obey instructions from another person. The activities of the Board of Directors should be regarded as the practical expression of the confidence placed in it by the company’s shareholders.

62.      Similarly, it is not mandatory for a capital company to have a supervisory board. Nor does such a board have any right which could give rise to a duty of subordination on the part of the Board of Directors. The supervisory board has no legal means available to it which could enable it to have any real influence on the day-to-day activities of the Board of Directors.

63.      Lastly, the Latvian Government stresses that the relationship between the shareholders of a capital company and the members of the company’s Board of Directors is based on trust, which means that it must be possible to terminate the working relationship with those members if ever there is a loss of confidence.

64.      I do not agree with the interveners’ analyses. In common with the applicant and the Hungarian Government, I believe that a member of a capital company’s Board of Directors who is in the applicant’s situation can be regarded as carrying out her duties in the context of a relationship of subordination and, accordingly, can be treated as a worker within the meaning of Directive 92/85. My position is based on the following grounds, which relate, on the one hand, to the characteristics of the working relationship between the parties and, on the other, to the objective pursued by Article 10 of Directive 92/85.

1.      The characteristics of the working relationship between the parties

65.      According to the case-law, the concept of ‘worker’ in EU law and, in particular, within the meaning of Council Directive 92/85, must be determined in the light of the objective criteria of the working relationship, account being taken of the rights and obligations of the persons concerned. (15)

66.      Recognition of the status of worker cannot therefore depend on how the parties concerned describe the working relationship or on whether a contract of employment has been entered into. As the Court stated in Kiiski, the sui generis legal nature of the employment relationship under national law is of no consequence as regards whether or not a person is a worker for the purposes of EU law. (16) Similarly, the Court has held that formal categorisation as a self-employed person under national law does not exclude the possibility that a person may have to be treated as a worker for the purposes of EU law if that person’s independence is only notional. (17)

67.      In the present case, therefore, the fact that the parties did not enter into a contract of employment and concluded a contract of agency cannot determine the categorisation of their working relationship and whether the applicant was employed or self-employed for the purposes of Directive 92/85.

68.      According to the case-law, that categorisation depends in every case on an assessment of all the elements which characterise the working relationship between the parties. (18) It is also settled case-law that the concept of ‘worker’ under EU law must not be interpreted restrictively. (19) In addition, it is recognised that there is no single definition of that concept and that, depending upon the circumstances, it can vary according to the area in which the definition is to be applied. (20)

69.      As regards more specifically the existence of a relationship of subordination, the Court has not yet to my knowledge had occasion to specify the nature and level of supervision that would be sufficient for there to be such a relationship.

70.      The Court ruled on the situation of company directors in Asscher, (21) in which it held that the director of a corporation of which he is the sole shareholder does not carry on his activity in the context of a relationship of subordination, and so is not to be treated as a worker within the meaning of Article 39 EC. (22) In his Opinion in the case which gave rise to that judgment, Advocate General Léger justified that position on the ground that such a director is not under the direction of any other person or of any company body that he does not himself control. (23)

71.      The Court went on to state that that approach was not automatically transposable to the spouse of such a director, because the personal and property relations between spouses which result from marriage do not rule out the existence, in the context of the organisation of an undertaking, of a relationship of subordination characteristic of an employment relationship. (24)

72.      The Court has also ruled that the fact that workers employed by dock-work companies responsible for unloading goods are shareholders in those companies does not preclude them from being in a relationship of subordination to the company. (25)

73.      The foregoing observations allow the following inferences to be drawn.

74.      First, performance of the duties of company director does not in itself preclude the existence of a relationship of subordination. In Asscher, as I understand it, the finding that there was no relationship of subordination in the case of the director of the company in question was not attributable to the nature of his duties, but to the fact that he was the sole shareholder of the company, so that, in his capacity as director, he was answerable for company management only to himself. The status of director cannot therefore in itself exclude the possibility that the person concerned may, owing to the way in which the undertaking is organised, be subject to its authority.

75.      Secondly, in order to assess whether such a director is in a relationship of subordination, it is necessary to take into account all the elements which characterise that person’s working relationship with the company and to have regard, in the course of that assessment, to the nature of his duties. A finding of such a relationship must therefore reflect the fact that those duties entail by their nature the exercise of very broad powers and that the person concerned has no hierarchical superior among the salaried staff.

76.      In the context of that assessment, particular importance should therefore be attached, I believe, to the conditions in accordance with which the director in question was appointed, the degree of supervision to which that person was subject and the circumstances in which the person could be removed from that post.

77.      On examining those criteria in the present case, I note, as regards the conditions in accordance with which the applicant was appointed, that she was appointed as a member of LKB’s Board of Directors for a fixed period of three years and that she was made responsible for managing the company’s assets, directing the company and representing it in all its transactions with third parties. It is also clear from information provided by the national court and by the Latvian Government that she was an integral part of LKB.

78.      In that sense, the applicant’s situation was thus clearly distinct from that of an agent, such as a lawyer or accountant, who receives a mandate from a company to perform a specific task, but remains a third party in relation to that company.

79.      As regards, next, the degree of supervision to which the applicant was subject, it can be gleaned from the order for reference and from the observations of the parties that she had to account for her management to the supervisory board and cooperate with that board. It is also undisputed that, in the performance of her duties, the applicant periodically drew up reports and information memoranda for the attention of the supervisory board.

80.      As regards, lastly, the power of dismissal, the file shows that members of the Board of Directors could be removed from their posts by decision of the shareholders, in some circumstances after being suspended from their duties by the supervisory board. It also appears that such removal could be based simply on loss of confidence.

81.      As the Latvian Government points out, it is certainly not apparent from this information that the supervisory board or the shareholders were in a position to give instructions on a day-to-day basis to Members of the Board of Directors.

82.      For all that, I find it difficult to accept that, in those circumstances, the Board Members were carrying out their duties completely independently. In fact, since they were accountable for their actions to a body which they did not themselves control, and could be removed from their posts on grounds of loss of confidence alone, which could arise as a result of the shareholders simply disagreeing with the way the company was being managed, they were under a de facto obligation to take management decisions in accordance with the expectations of the supervisory board and the shareholders.

83.      In law and in fact, the situation of the Board Members was thus closer to that of an employee than that of a self-employed person, since they were liable to have their working relationship with the company terminated if the company, through its shareholders, disagreed with decisions taken by them in the performance of their duties.

84.      It follows, to my mind, from consideration of the elements characterising the working relationship of a member of a capital company’s Board of Directors, where this is along the lines of the relationship between the applicant and LKB, and subject to verification by the national court, that the applicant is a ‘worker’. (26)

85.      That analysis is consistent with the objective pursued by Article 10 of Directive 92/85.

2.      The objective pursued by Article 10 of Directive 92/85

86.      Given the objective pursued by Article 10 of Directive 92/85, that provision logically applies to the working relationship at issue. In addition, contrary to the suggestions made by the Latvian Government and LKB in their written observations, the application of Directive 92/85 to such an employment relationship would not necessarily have the effect of removing the right of the shareholders of a company to terminate the directors’ contract on the basis of loss of confidence.

87.      On the first point, it appears from the eighth and fifteenth recitals to Directive 92/85, as well as from the case-law, that pregnant workers must be protected against the risk of dismissal based on their condition, because such dismissal could have harmful effects on their physical and mental state and it is important to prevent them from being prompted voluntarily to terminate the pregnancy in order not to lose their jobs. (27)

88.      When I look at the situation of a company director such as the applicant, it seems to me that the decisive factor is that her working relationship, by virtue of which she is an integral part of the company, can be terminated following a decision taken by a body which, by definition, she does not control and which is thus imposing upon her its wish to terminate the relationship.

89.      To my mind, that situation corresponds exactly to the context in which Article 10 of Directive 92/85 is intended to apply, since there is indeed a risk in this case that a woman’s working relationship with the company of which she is an integral part might be terminated as a result of her pregnancy. A woman company director who can be removed from her post at any time against her will could also be prompted to have an abortion, just like any other employee in a subordinate post, if there was a chance she might think that her pregnancy could cause her to lose her job.

90.      In addition, the Court – as I interpret its case-law – is committed to ensuring the effectiveness of Article 10 of Directive 92/85. Thus, it has held, inter alia, that that provision prohibits not only notification of dismissal based on pregnancy throughout the pregnancy and maternity leave; it also prohibits the taking of steps in preparation for dismissing a person on the grounds of pregnancy and/or the birth of a child. (28)

91.      According to the Court, in the context of the application of Article 10 of Directive 92/85, the Member States cannot amend the scope of the concept of ‘dismissal’, thereby negating the extent of the protection which that provision offers and compromising its effectiveness. (29)

92.      In the same way, the Court ruled in Kiiski that a woman worker who is on parental leave remains, during that period, a worker as defined by EU law, which means that she can interrupt her parental leave in order to take maternity leave under Directive 92/85. The Court thus considered that the working relationship between employee and employer during parental leave is maintained, even though the worker is no longer working and the relationship of subordination is therefore suspended. (30)

93.      It seems to me that the application of Directive 92/85 to the working relationship in the main proceedings accords with the case-law.

94.      Lastly, the second point of my argument is that such an interpretation of the scope of Directive 92/85 does not require the Member States to remove the right of a company’s shareholders to remove directors of the company from their posts at any time, if they lose confidence in them.

95.      As we shall see again when examining the second question, Article 10 of Directive 92/85 does not require the Member States to impose an absolute ban on dismissing a woman during pregnancy and up to the end of her maternity leave. It requires them to take the necessary measures to ensure that such a dismissal is not based on the pregnancy or on the birth of a child and that it can occur only in the circumstances permitted by national legislation and practices.

96.      Article 10 of Directive 92/85 was not intended, therefore, to call into question the laws of the Member States or of the European Union governing the rights and obligations of company directors, or the circumstances in which they can be removed from their posts. (31) It seeks to require Member States to provide for measures intended to secure effective application of the principle of equal treatment as between men and women, by virtue of which dismissing a woman because she is pregnant constitutes direct discrimination on grounds of sex. (32)

97.      Under Article 10(1) of Directive 92/85, a Member State may therefore provide that shareholders in a company who consider they must withdraw confidence in their director are entitled to terminate the working relationship even if the director is pregnant. However, the Member State must, pursuant to Article 10(2) of the directive, provide that the shareholders are to state the reason for the dismissal in writing. Under Article 10(3) of the directive, the Member State must also implement measures to enable a director who has been removed from her post to seek confirmation, where appropriate by means of a review by the courts, that the real reason for dismissal was not her pregnancy. Under Article 4 of Council Directive 97/80/EC, (33) Member States are also to take such measures as are necessary to ensure that, where persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it is for the other party to prove that there has been no breach of the principle of equal treatment. (34)

98.      The objection raised by LKB and the Latvian Government to the effect that the application of Article 10 of Directive 92/85 to company directors constitutes an unwarranted interference with shareholders’ rights is, in my opinion, groundless.

99.      In summary, a woman member of a capital company’s Board of Directors, such as the applicant, must be regarded as a worker if the following three conditions are met: (i) by virtue of the conditions in accordance with which she was appointed, she formed an integral part of the company; (ii) she performed her duties under the control of bodies such as the shareholders’ meeting or the supervisory board, which she did not control or over which she was unable to exercise a decisive influence; and (iii) she could be removed from her post by one or other of those bodies on the sole ground that they had lost confidence in her.

100. According to the case-law, it is for the national court to verify whether those conditions are met. (35)

101. In the light of those considerations, I therefore propose that the reply to the first question should be that a woman member of a capital company’s Board of Directors who performs directorial duties in return for remuneration can be regarded as a worker within the meaning of Directive 92/85 and, accordingly, benefit from the protection against dismissal laid down in Article 10 of that directive, where, by virtue of her appointment, she forms an integral part of the company, she carries out her duties under the supervision of company bodies which she does not herself control, such as the shareholders’ meeting and the supervisory board, and she can be removed from her post by those bodies on the sole ground that they have lost confidence in her.

B –    The second question

102. By its second question, the national court is essentially asking whether Article 10 of Directive 92/85 must be interpreted as precluding national legislation under which a member of a capital company’s Board of Directors can be removed from that post without any restriction, particularly with regard to pregnancy.

103. I have already gone some way to answering that question.

104. As we have seen, Article 10 of Directive 92/85 requires the Member States to adopt the necessary provisions to prohibit the dismissal of a woman worker on grounds relating to her pregnancy. It does not, however, prohibit terminating the working relationship during the period of protection laid down in Article 10 for women workers if termination is based on other grounds, provided for under national legislation or in accordance with national practices.

105. I agree with the governments which have intervened in the present proceedings that Article 10 of Directive 92/85 does not preclude a Member State from establishing a regime which differentiates between, on the one hand, company directors and, on the other hand, other workers who do not have the same powers or responsibilities and who, accordingly, are not in a comparable position. Nevertheless, that Member State must ensure in all cases that dismissal on grounds relating to pregnancy is prohibited.

106. In the light of those considerations, a provision of national legislation such as Article 224(4) of the Commercial Code, which places no restriction on the right of shareholders to remove members of the Board of Directors from their posts, is contrary to EU law only in so far as it permits such removal on grounds relating to pregnancy.

107. The mere fact that Article 224(4) of the Commercial Code provides a lower level of protection than the national rules applicable to other workers is not in itself contrary to Article 10 of Directive 92/85. Provided, of course, that it applies to women workers who are in different situations, (36) it is possible for that difference in treatment to be consistent with the margin of discretion that Article 10(1) of the directive expressly leaves to the Member States.

108. I propose, therefore, that the reply to the second question should be that Article 10 of Directive 92/85 precludes national legislation under which a member of a capital company’s Board of Directors may be removed from that post without restriction in so far as that legislation permits dismissal on grounds relating to pregnancy.

109. Specifically, it will be for the national court to verify that the ground or grounds for dismissing the applicant are not related to pregnancy. If, however, the national court finds that they are, Article 224(4) of the Commercial Code would not provide a lawful basis for that dismissal.

110. Admittedly, as LKB pointed out, Article 10 of Directive 92/85 cannot be applied directly in a dispute between individuals although it could in a dispute with a public-sector employer. (37) However, it is important to remember that the national court must interpret its domestic law so far as is possible in conformity with EU law so as to achieve the result envisaged by the latter and, if such an interpretation is not possible, it must disapply the provision of national law that is contrary to EU law if it has the power to do so under its procedural rules. (38)

111. It is also important to add that, in accordance with Kücükdeveci, (39) in so far as Article 10 of Directive 92/85 merely implements the fundamental principle of equal treatment between men and women by prohibiting the dismissal of a pregnant woman on grounds of pregnancy, a national court which cannot find in national procedural law a sufficient basis for disapplying the provision of national law justifying such dismissal, derives that power from the primacy of the fundamental principle. (40)

C –    Additional observations

112. In so far as the application of Directive 92/85 in the main proceedings is conditional upon the national court’s testing of the facts against the criteria to be set out by the Court in the forthcoming judgment and application of the directive is therefore contingent at this stage, it may be appropriate, in order to be of assistance to the national court, to take a position on the possible consequences, for the outcome of the case, of Directives 76/207 and 86/613. (41)

113. Article 2(1) of Directive 76/207, let it be remembered, provides that the principle of equal treatment means that there is to be no discrimination whatsoever on grounds of sex either directly or indirectly by reference in particular to marital or family status. Under Article 5(1) of the directive, application of the principle of equal treatment with regard to working conditions, including the conditions governing dismissal, means that men and women are to be guaranteed the same conditions without discrimination on grounds of sex.

114. As I have said, it is settled case-law that the dismissal of a woman worker because of pregnancy constitutes direct discrimination on grounds of sex, contrary to Article 5(1) of Directive 76/207. (42)

115. If the national court finds that, despite being a worker within the meaning of Directive 92/85, the applicant does not come within the scope of the directive because she did not inform the LKB of her pregnancy in accordance with national law, the fact remains that her situation would be covered by Directive 76/207 and that termination of her contract, if based on her pregnancy, would have to be regarded as unlawful and penalised.

116. In that connection, it should be observed that the Member States are under an obligation, pursuant to Article 6 of Directive 76/207 and in accordance with the case-law, to introduce into the national legal order the measures necessary to ensure that victims of discrimination within the meaning of the directive are afforded real and effective judicial protection and can make good their loss. (43)

117. If, on the other hand, the national court finds that the applicant was carrying out her activities as a self-employed person, her situation would be covered by Directive 86/613, which, under Article 2 thereof, applies to any person pursuing a gainful activity for their own account, under the conditions laid down by national law.

118. Article 4 of Directive 86/613 expressly refers to the principle of equal treatment as defined by Directive 76/207, Article 3 of which – it should be recalled – prohibits any discrimination on grounds of sex. In addition, Directive 76/207 requires the Member States to take the necessary measures to ensure that any provisions contrary to the principle of equal treatment which are included in rules governing the independent occupations and professions are to be, or may be, declared null and void. The determination of the extent of the protection conferred by EU law on a self-employed worker calls, therefore, for the interpretation of Directive 76/207 in conjunction with Directive 86/613. (44)

119. The grounds on which the Court and the EU legislature have laid down that the dismissal of a woman employee because of pregnancy constitutes direct discrimination on grounds of sex such as to justify special measures of protection for her can be transposed to the situation where a self-employed person’s contract is terminated for the same reason.

120. In fact, unilateral termination by the principal of an agency agreement before the expiry date initially foreseen by the parties and on grounds of the pregnancy of the agent can affect only women and thus constitutes discrimination on grounds of sex. Moreover, the potential physical and mental risk to the pregnant woman posed by the termination of such an agreement is no less than that posed by termination of an employment relationship. In both cases, the danger arises from her fear that she might lose her livelihood.

121. Lastly, any inconvenience to the principal arising from the agent’s indisposition as a result of pregnancy and childbirth is no different from that which is relied on by employers to justify termination of a contract of employment and which the Court has systematically rejected owing to the importance of the principles enshrined in Directive 76/207.

122. Thus, in paragraph 26 of Webb, (45) the Court ruled that, although the availability of an employee is necessarily, for the employer, a precondition for the proper performance of the employment contract, the protection afforded by EU law to a woman during pregnancy and after childbirth cannot be dependent on whether her presence at work during her maternity leave is essential to the proper functioning of the undertaking in which she is employed. In the Court’s view, any contrary interpretation would render the provisions of Directive 76/207 ineffective.

123. The Court stated in Tele Danmark that that analysis was transposable to the situation where the contract of employment was concluded for a fixed term. (46)

124. It is true that Directive 86/613 does not contain the range of rights guaranteed by Directive 92/85, such as the right to organisation of work, to maternity leave and maintenance of rights under the employment contract during pregnancy and maternity leave. None the less, the effectiveness of the prohibition of discrimination on grounds of sex would be compromised if a principal were entitled in law unilaterally to terminate an agency agreement before the agreed term on grounds of pregnancy.

125. In the event of the agent’s incapacity owing to pregnancy, and for the period of that incapacity, a current contract of agency can, in my view, be suspended but not terminated.

126. That interpretation would satisfy the EU legislature’s desire to align the situation of self-employed women as closely as possible with that of employed women. Thus, Directive 86/613, as an initial step, invited Member States to consider whether – and, if so, in what circumstances – self-employed women may, for the time during which their work is interrupted owing to pregnancy and motherhood, have access to replacement services enabling them to break off their professional activity or to receive benefits in cash.

127. The draft proposal for a directive to replace Directive 86/613 provides that women working on a self-employed basis must be afforded paid maternity leave in circumstances which confer comparable protection to that enjoyed by employed women. (47)

128. In the light of those considerations, I am of the view that, if based on her pregnancy, the termination by LKB of its employment relationship with the applicant would in any event constitute discrimination contrary to the fundamental principle of equal treatment implemented by Directive 76/207 and, with regard to self-employed women, by Directive 76/207 read in conjunction with Directive 86/613.

D –    Limitation of the temporal effects of the judgment to be delivered

129. The Latvian Government asks the Court to limit the effects in time of the judgment to be delivered if it declares Article 224(4) of the Latvian Commercial Code to be contrary to EU law. The Latvian Government bases its request on the fact that, under that provision, Latvian capital companies have dismissed members of their governing bodies where they have lost confidence in those people, without taking pregnancy into account.

130. In so far as I regard such dismissals as not being contrary to Article 10 of Directive 92/85 where they are not based on pregnancy, that request must, if the Court shares my view, be regarded as void.

IV –  Conclusion

131. In the light of all of the foregoing considerations, I propose that the answer to the questions referred by the Augstākās Tiesas Senāts should be as follows:

(1)      A woman member of a capital company’s Board of Directors who performs directorial duties in return for remuneration may be regarded as a worker within the meaning of Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding and, accordingly, enjoy the protection against dismissal set out in Article 10 of that directive, where, by virtue of her appointment, she forms an integral part of the company, she performs her duties under the supervision of company bodies which she does not herself control, such as the shareholders’ meeting and the supervisory board, and she can be removed from her post by those bodies on the sole ground that they have lost confidence in her.

(2)      Article 10 of Directive 92/85 precludes national legislation under which a member of a capital company’s Board of Directors can be removed from that post without restriction, in so far as that legislation permits dismissal on grounds relating to pregnancy.

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1 – Original language: French.

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2 – Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding (OJ 1992 L 348, p. 1).

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3 – Case C-116/06 Kiiski [2007] ECR I‑7643, paragraph 25.

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4 – Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (OJ 1976 L 39, p. 40), as amended by Directive 2002/73/EC of the European Parliament and of the Council of 23 September 2002 (OJ 2002 L 269, p. 15) (‘Directive 76/207’).

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5 – Council Directive 86/613/EEC of 11 December 1986 on the application of the principle of equal treatment between men and women engaged in an activity, including agriculture, in a self-employed capacity, and on the protection of self-employed women during pregnancy and motherhood (OJ 1986 L 359, p. 56).

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6 –      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 (OJ 1979 L 6, p. 24).

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7 – Latvijas Vēstnesis, 2001, No 105; ‘the Labour Code’.

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8 – Latvijas Vēstnesis, 2000, No 158/160; ‘the Commercial Code’.

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9 – ‘LKB’.

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10 – ‘The applicant’.

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11 – See, inter alia, Case C-438/00 Jiménez Melgar [2001] ECR I-6915, paragraph 28 and the case-law cited.

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12 – Kiiski, paragraph 25.

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13 – Case 66/85 Lawrie-Blum [1986] ECR 2121, paragraphs 20 and 21.

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14 – See, to that effect, Case C-3/87 Agegate [1989] ECR 4459, paragraph 36.

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15 – Lawrie-Blum, paragraph 17, and Kiiski, paragraph 25. See also Case C-94/07 Raccanelli [2008] ECR I‑5939, paragraph 36.

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16 – Kiiski, paragraph 26 and the case-law cited.

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17 – Case C‑256/01 Allonby [2004] ECR I‑873, paragraph 79.

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18 – Agegate, paragraph 36, and Case C-14/09 Genc [2010] ECR I-0000, paragraphs 26 and 27.

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19 – Genc, paragraph 19 and case-law cited.

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20 – Case C‑85/96 Martínez Sala [1998] ECR I‑2691, paragraph 31.

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21 – Case C-107/94 Asscher [1996] ECR I‑3089.

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22 – Paragraph 26.

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23 – Point 29 of the Opinion.

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24 – Case C‑337/ 97 Meeusen [1999] ECR I‑3289, paragraph 15.

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25 – Case C‑179/90 Merci convenzionali porto di Genova [1991] ECR I‑5889, paragraph 13.

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26 – See also, to that effect, Case C‑350/96 Clean Car Autoservice [1998] ECR I‑2521, paragraph 30.

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27 – See, inter alia, Case C‑460/06 Paquay [2007] ECR I‑8511, paragraph 30 and the case-law cited.

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28 – Ibid, paragraph 33.

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29 – Ibid, paragraph 32.

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30 – Kiiski, paragraphs 31 and 32.

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31 – See, with regard to the members of the body responsible for managing a European company, Article 39 of Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European company (SE) (OJ 2001 L 194, p. 1).

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32 – Paquay, paragraph 29 and the case-law cited.

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33 – Council Directive of 15 December 1997 on the burden of proof in cases of discrimination based on sex (OJ 1998 L 14, p. 6).

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34 – This might be so, for example, if the manager of a company in whom the shareholders periodically expressed confidence were to be dismissed from her position upon announcing that she was pregnant.

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35 – Raccanelli, paragraph 37.

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36 – It should be noted that the Member States must, when implementing EU law, comply with fundamental principles such as the principle of non-discrimination (Case 5/88 Wachauf [1989] ECR 2609, paragraph 19, and Case C‑303/05 Advocaten voor de Wereld [2007] ECR I‑3633, paragraph 45 and the case-law cited).

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37 – The Court held in Jiménez Melgar that Article 10 of Directive 92/85 was directly applicable (paragraph 34).

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38 – Joined Cases C-397/01 to C‑403/01 Pfeiffer and Others [2004] ECR I‑8835, paragraph 116.

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39 – Case C-555/07 [2010] ECR I-0000.

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40 – Paragraph 56.

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41 – The parties who intervened at the hearing were asked by the Court to make submissions on the relevance of those directives to the present case.

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42 – Case C‑109/00 Tele Danmark [2001] ECR I‑6993, paragraph 25 and the case-law cited.

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43 – Paquay, paragraphs 43 to 46.

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44 – Case C‑226/98 Jørgensen [2000] ECR I‑2447, paragraph 26.

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45 – Case C‑32/93 [1994] ECR I‑3567.

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46 – Tele Danmark, paragraph 30.

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47 – See the Proposal for a Directive of the European Parliament and of the Council on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity and repealing Directive 86/613/EEC (COM(2008) 636 final).