The European Court of Justice (ECJ) has clarified (judgment of April 29, 2026, C-258/24) that church-affiliated welfare organizations must also comply with European equal treatment law. A dismissal solely on the basis of an employee leaving the church violates the principle of equal treatment if religious affiliation is not an essential professional requirement for the specific role. For nonprofit organizations in Germany, the decision provides important guidance for the drafting of articles of association, actual management, and corporate governance.
Charitable status and equal treatment principle as the starting point of the case
The proceedings originated from the dismissal of an employee of a church-affiliated welfare organization following her withdrawal from the Catholic Church. The claimant worked in pregnancy counseling. The employer regarded her withdrawal from the church as a serious breach of loyalty and terminated her employment. The employee argued that she had been discriminated against on the grounds of her religion or beliefs.
The German court hearing the matter referred the question to the ECJ as to whether such a dismissal is compatible with the European principle of equal treatment. This principle is enshrined in Anti-Discrimination Directive 2000/78/EC and also applies to nonprofit organizations, foundations, and associations. While EU law recognizes the churches’ right of self-determination, it permits exceptions to the principle of equal treatment only under narrow conditions.
Particularly for welfare organizations with public funding and a broader social mandate, this raises the question of how loyalty obligations can be structured in a legally sound manner without violating German association law, foundation law, or public funding regulations.
Association law, articles of association, and equal treatment in the ECJ’s reasoning
In its decision, the ECJ makes clear that dismissal on the basis of leaving the church constitutes direct unequal treatment on grounds of religion. Such unequal treatment is permissible only where religious affiliation constitutes an “essential, legitimate and justified occupational requirement.” According to the court, the decisive factor is not merely the self-perception of the church-affiliated organization, but an objective assessment of the specific role in question. National courts must fully examine whether the religious connection of the activity is so close that the work cannot credibly be performed without church membership.
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In the case at hand, the ECJ ruled otherwise. The pregnancy counseling role was primarily professional in nature, partly publicly funded, and not aimed at proclaiming the faith. Leaving the church therefore had no effect on the employee’s professional performance. The dismissal was also disproportionate because it constituted a serious interference with the employee’s freedom of profession and freedom of religion, while less restrictive measures would have been conceivable. The court expressly emphasized that blanket loyalty requirements applying to entire professional groups may violate the principle of equal treatment.
Practical example for nonprofit organizations and welfare enterprises in Germany
The practical implications can be illustrated by an example from the social services sector: A church-affiliated charitable GmbH operates both a counseling center and a central administrative office. While chaplains or religious educators directly convey church values, administrative staff or social counselors often perform professional functions that can be carried out independently of any particular denomination. If the charitable GmbH dismisses a social counselor solely because she has left the church, this will generally constitute a violation of the principle of equal treatment under the ECJ’s case law.
This also has tax implications for charitable status: employment-related measures must be consistent with the organization’s articles of association and its actual management in order to avoid risks relating to donation law, public funding regulations, or recognition of charitable status.
Comprehensive advice for church-affiliated and religious organizations
The ECJ’s judgment strengthens the principle of equal treatment and sets clear limits for church-affiliated organizations. Nonprofit organizations in Germany should review their articles of association, employment contracts, and internal policies and clearly define for which activities religious affiliation is genuinely required. A differentiated approach helps avoid liability risks and employment disputes while also strengthening transparent corporate governance. We recommend substantiating loyalty requirements in a comprehensible manner and ensuring that they remain proportionate.
Have you defined roles within your church-affiliated foundation or religious association for which loyalty obligations are intended to apply? Are these requirements compatible with the equal treatment principle and with your organization’s actual management? And are your employment-law processes aligned with charitable status requirements, association law, and public funding regulations? Our NPO team would be pleased to advise you individually and with a practical focus.
