Council of Civil Service Unions v Minister for the Civil Service [1985]

English Constitutional Law

Council of Civil Service Unions v Minister for the Civil Service [1985]
‘Yarra Bank (Trade Union) Meeting’ by Patrick Harford

Executive powers and national security form the footing of this call for judicial review under the argument that changes to civil servant working conditions were executed without due consideration for those affected.

In a relationship with a chequered history it was decided by the Minister of the Civil Service (aka Prime Minister Mrs Thatcher) that since the previous strike actions of key staff within the Government Communications Headquarters (GCHQ) had proven destructive, it was necessary to execute instructions to ban any affiliation by government employees with trade unions of any sort, and while this unprecedented move was carried out under legitimate sovereign powers, it directly conflicted with the principle that governmental decisions were first offered to consultation with the trade unions as an inherent duty to exercise fairness when carrying out executive function.

On this occasion the instructions were carried out under art.4 of the Civil Service Order 1982 but orally released within the House of Commons, and so greeted with natural anger and confusion, while the aim of this sudden prohibition was simply to circumvent open discussion in lieu of avoiding future strike actions now considered a significant threat to national security.

When heard at court level the presiding judge had held that the instructions were issued on grounds demonstrating no effort toward consultation and were therefore invalid in their application, while under challenge the Court of Appeal had held that the executive action itself was not exempt from judicial review because the order came from prerogative powers rather than statute, and that despite the latter source forming the premise for most reviews, the Court saw no distinction between a self-executed order and that of an act of Parliament.

In response the defence used by the Minister for the Civil Service relied upon operational safety measures, and how under those circumstances it was felt that the same people responsible for the previous compromises were right to be excluded from using consultation as leverage to create further damage, while it was further argued that any discussions between trade unions and Government would have amounted to the same outcome regardless of protests by those affected. 

This position was further supported by the fact that s.(a) and (a)(ii) of art.4 of the Order in Council 1982 allowed the Minister to create regulations controlling the conduct of those employed, therefore denial of trade union membership lawfully fell within those remits.

When the Court upheld the Minister’s actions, the appellants pressed the issue, whereupon the House of Lords sought to establish whether (i) judicial review was necessary, and (ii) whether the respondents had acted in manner that precluded fairness and a duty to follow precedent, after which it was held that while the avoidance of discussion demonstrated a clear breach of that duty, it was not the responsibility of the courts to determine what constituted a threat to national security and that the executive itself was empowered to prove or disprove itself as to its own actions, all of which led the House to conclude that:

“[W]here a question as to the interest of national security arises in judicial proceedings the court has to act on evidence.”

Viamex Agrar Handels GmbH v Hauptzollamt Hamburg-Jonas [2008]

European Law

Viamex Agrar Handels GmbH v Hauptzollamt Hamburg-Jonas [2008]
‘Cross Town Traffic’ by Debbie Beukema

Proportionality and the transport of live animals for sale beyond the borders of the EC  underpin a joint request for a preliminary ruling under art.234 EC, when on this occasion two claims were brought before the Finanzgericht (Fiscal Court) Hamburg by livestock exporters refused export refunds on grounds that the manner in which they were transported breached Community law. 

In the first claim it was found that while art.1 of Regulation 615/98/EC determines the criteria in which a business can claim export cost refunds, it was applied in conjunction with art.3(1) of Directive 91/628/EEC, which outlined animal travel-time limitations and further governance of their physical wellbeing through nutrition and hydration. 

Upon submission of their paperwork the Hauptzollamt Kiel (Customs Office) discovered that contrary to the prescribed rest periods set out under art.48(5) of Chapter VII of the Annexe to Directive 91/628/EEC the animals had been given insufficient treatment to meet the terms set, while the claimants contested they had been acting under instruction of the official veterinarian at the outset of the journey.

In the second claim it was found that while advanced reimbursement of export costs had been granted prior to the animals exportation, the subsequent paperwork revealed how the latter half of the drive had exceeded the fourteen-hour threshold found in the same Annexe of Directive 91/628/EEC and thereby rendered them void of any refund and the Customs Office seeking recovery of payment with interest.

When presented with the material facts the Finanzgericht asked the European Court of Justice:

1. Did the power of Regulation 615/98/EC enable jurisdiction over the terms of Directive 91/628/EEC?

2. If so, was it tantamount to a violation of the principle of proportionality inasmuch as the terms of a Directive must override any subsidiary limitations (i.e. refusal of export costs in lieu of a breach)?

Having examined the case history behind both concerns it was agreed by the Court that while Regulation 615/98/EC ran parallel to the Directive, its purpose was purely animal protection and the enforcement of Member State conformity, while it was also agreed that this caveat served legal certainty and so complimented the Directive’s objectives.

In relation to the matter of Community law ‘proportionality’ it was held that while the terms of Regulation 615/98/EC conferred a right to deny export cost refunds, it was executed with the express intention that national courts and legislature applied discretion when determining a claimant’s right to recover costs where no animal had been harmed, thus the Court urged the parties to remember that:

“[W]hen there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued.”

Van Gend en Loos v Nederlandse Administratie de Belastingen [1963]

European Law

Van Gend en Loos v Nederlandse Administratie de Belastingen [1963]
‘Dutch Windmills’ by Eugene Louis Boudin

When a Dutch importer of ureaformaldehyde fell victim to domestically manipulated customs tariffs, the question of both ‘direct effect’ and the individual right to challenge an abuse of EU Treaties became subject to a preliminary ruling under art.177 EC. 

Because of the supranational nature of the case it was first believed inapplicable when challenges to increased (or recategorised) tax rates were put into effect by national statutes, however the argument made was that at the time of the abuse the original Treaty taxation of the affected product was set at just three percent, and so when domestic reclassification set to increase the rate to eight percent the claimant challenged the adjustment by citing art.12 of the Treaty of Rome, which explains that:

“Member States shall refrain from intro­ducing between themselves any new customs duties or imports or exports or any charges having equivalent effect and from increasing those which they already apply in their trade with each other.”

While noting how in addition to the terms of art.12, art.95 EC states that:

“A Member State shall not impose, directly or indirectly, on the products of other Member States any internal charges of any kind in excess of those applied directly or indirectly to like domestic products.”

During the preliminary ruling hearing the European Court of Justice noted that if the protective principles of Community law were to remain excluded from violations of Member States it would defeat their very purpose, thus it was held that the inherent meaning and purpose of art.12 was to afford unequivocal rights to individuals, who when taking issue with such matters, would do so in the knowledge that they were protected by the national courts.

In closing it was held by the Court that all Member States would thereon refrain from increasing levies and customs duties conflicting with those put forward in the original Treaty of Rome, and that because the recategorisation of that specific tariff was now found to be illegal, the matter was referred back to the national courts in order to establish how best to reclassify the products, while the Court reminded the parties that:

“[A]ccording to the spirit, the general scheme and wording of the Treaty, Article 12 must be interpreted as providing direct effects and creating individual rights which national courts must protect.”

Simmenthal SpA v Italian Minister of Finance [1978]

European Law

Simmenthal SpA v Italian Minister of Finance [1978]
‘White Cow’ by Nic Dartnell

This brief yet pivotal case turned upon the unfair application of import fees regardless of existing Community law enabling the free movement of goods between Member States, when under guidance of art.32 of the Italian consolidated health laws, a Monza-based meat supplier was subjected to inspection fees for a beef consignment purchased in France despite operating within the framework of Community law. 

Having waited almost three years, the supplier sought action against the Italian government on grounds that it had acted beyond the limits of its Member State obligations, and so in the first instance the local court (Pretura di Susa) sought a preliminary ruling in the European Court of Justice under art.177 EC, whereupon it was held by the Court that importation charges levied against its citizens amounted to little more than quantitive restrictions within the scope of art.30 EC and were therefore illegal and repayable with interest.

In response the Amministrazione Delle Finanze Dello Stato (Finance Administration) appealed the judgment while citing incompatibility with Italian national law (no.1239/70), a challenge that resulted in the issue of ‘direct effect’ and the reluctance of Member States or their Constitutional courts to enforce Community laws when national laws obstructed the blanket protections afforded individual citizens. 

At the time of discussion the only options available to the judiciary were the immediate repeal of the relevant legislation or declaration of incompatibility by the Constitutional Court, and while the latter approach doubtless favoured the Italian government, it was later held by the European Court of Justice that the ‘principle of the precedence of Community law’ must be held in the highest regard, therefore in order for that doctrine to continue it was paramount that the lower courts were to be given powers to enforce Community law regardless of any jurisdictional contradictions presented, while further reminding the parties that:

“[D]irectly applicable Community provisions must, notwithstanding any internal rule or practice whatsoever of the Member States, have full, complete and uniform effect in their legal systems in order to protect subjective legal rights created in favour of individuals…”

R v Ministry of Agriculture, Fisheries and Food ex p Hedley Lomas [1991]

European Law

R v Ministry of Agriculture, Fisheries and Food ex p Hedley Lomas
‘The Sheep Farmer’ by Barry Ross Smith

The application of a Treaty article while a harmonising Directive precludes the right to endorse sanctions for Member State non-compliance, results in a loss of licence for Ireland, when exporting sheep for slaughter. This led to a preliminary ruling to ascertain if such a Directive could reasonably deny, or even restrict, exportation to Member States failing to uphold the aims of the assigned article.

For clarity, art.43 EC and art.100 EC were designed to reduce the suffering of animals sent for slaughter through the use of stunning and killing within specific guidelines under Directive 74/577/EEC, while art.36 EC includes restrictive measures surrounding the importation and exportation of products (including livestock) when acting in the interests of public safety, security and protection of human, animal and plant life.

When Spain transposed Directive 74/577/EEC it mirrored the terms of art.1 of the Directive with the exception of sanctions for non-compliance,  and so the UK Ministry of Agriculture, Fisheries and Food prohibited sheep exportation to Spain through the denial of specific export licences, which left an Irish sheep farmer unable to export his livestock to a fully compliant Spanish slaughterhouse.

Having sought judicial review and damages in the High Court, the court requested a preliminary ruling under art.177 EC, and so asked the European Court of Justice: 

1. Did the terms of Directive 74/577/EEC prevent restrictive measures under art.36 EC? 

2. Did the effects of art.36 EC have universal effect, or were they subject to specific criteria?

3. Where ineffective, was the Member State applying the article liable for compensation where an export licence was denied?

Whereupon the Court held that:

1. Although the terms of Directive 74/577/EEC did not expressly outline the penalties for non-compliance, it did confer those measures to the Member States in order for legislative powers to ensure the observation of those terms, however the actions taken by the UK were entirely subjective as opposed to evidence-based, therefore to rely upon the effects of art.36 EC was to act without authority when denying the free movement of goods by another Member State.

2. The terms of art.36 EC did not allow one Member State to exercise restrictive powers over another, while the route taken must be one of either action, or complaint to the Commission under art.170 EC or art.186 EC, while continuing to allow the movement of goods unless or until proven correct.

3. When acting in breach of art.43 EC it is the obligation of the acting Member State to provide reparation for damage caused by the breach, as was established in Francovich and others v Italy and Van Gend en Loos v Nederlandse Administratie de Belastingen, and that when deciding the measure of compensation it must rely upon its own domestic legislation observe the principles of non-discrimination and effective remedy when discussing the matter in the courts and calculating the amount payable, while further reminding the parties that:

“A Member State cannot take unilateral action against defaults by other Member States. The Treaty of Rome created an original legal order in which the procedures necessary for establishing and penalizing a breach of its provisions are strictly regulated.”

Marleasing SA v La Comercial Internacional de Alimentación SA [1990]

European Law

Marleasing SA v La Comercial Internacional de Alimentación SA [1990]
‘Sunset Over Sagrada Familia’ by Ana Maria Edulescu

The composition and function of incorporated companies and the fraudulent and deceptive manner in which their assets are contained, becomes central to a contention between founders and creditors when nullity is sought before the national court.

When creditor and claimant (Marleasing SA) discovered that one of the three founders of La Comercial Internacional de Alimentación SA had used the firm to avoid third party recovery of assets, it took action against them in order to expose the company as an illegally created organisation as defined under arts.1261 and 1275 of the Spanish Civil Code.

In response the defendant founder sought the protection of art.11 of Directive 68/151/EEC (also known as the ‘First Directive’), which included an exhaustive list of qualifying conditions for company nullity, yet none of which included the grounds relied upon by the claimant, and so when debated by the Juzgado de Primera Instancia e Instrucción it was agreed that as transposition of the Directive had not been undertaken, the issue remained unsolved without reference to the European Court of Justice under art.177 EC, and so on this occasion the court asked:

1. Were the relevant terms contained in art.11(2) of Directive 68/151/EEC enforceable between individuals despite a failure to adopt them into national Spanish law?

After observing the disparities between existing domestic statute and the meaning of the Directive, the Court explained that no terms of a Directive could be used between individuals under Community law, however a failure to transpose a Directive could result in individual action against the Member State where clarity and specificity of the Directive was shown, on grounds that it remained the Member State’s obligation to align the principles of the Directive against existing statute in order that the Directive’s effect superceded domestic laws.

Going further still, the Court also held that in relation to the protection of nullity under art.11(2)(b) of Directive 68/151/EEC nullity may be provided for where the objects of the company are unlawful or contrary to public policy, or where the number of founding members is less than two, and so in conclusion the Court finally outlined how art.12 nullity entailed dissolution and thereby failed to affect the validity of the company or its dealings despite the presence of unlawful operation or intent, therefore it was down to the discretion of the national courts to determine how best to meet the needs of both the claimant and the defendant, while observing the meaning and effect of Directive 68/151/EEC, before clarifying to the parties that:

“[O]bligation on the part of the national courts to interpret their national law in conformity with a Directive, which has been reaffirmed on several occasions, does not mean that a provision in a Directive has direct effect in any way as between individuals.”

Köbler v Austria [2003]

European Law

Köbler v Austria
‘The Professor’ by Pino Daeni

art.48 EC and liability for breach of Community law by a Supreme Court, form the basis of an indirect dissemination case, when having worked as an Austrian university professor for over a decade, the claimant sought an application for a conditional length-of-service salary increment available to those serving for a period of fifteen years or more. 

While the terms of this benefit expressed that any qualifying employment must occur within Austria, the claimant applied on grounds that his employment had been within the European Community, therefore refusal for inclusion constituted indirect discrimination under art.48 EC (freedom of movement for workers) (now art.39 EC) and Regulation 1612/68/EEC (freedom of workers within the Community).

Following a rejection by the deciding authorities under para.50(a) of the 1956 Salary Law his claim was brought before the Verwaltungsgerictschof (Supreme Administrative Court), where despite his citing discrimination under Community law, insufficient clarity led to a preliminary ruling request under art.234EC, however the application for preliminary ruling was later withdrawn and judgment made against the claimant on grounds that the salary increments were tantamount to bonuses, and were thereby  exempt from the protection of art.48 EC.

In response the claimant instead sought compensation in the Landesgericht für Zivilrechtssachen Wien (State Court) for the loss of earnings arising from a national judgment which stood contrary to the effects of art.48 EC, while the respondents opposed the claim on grounds that the decision of a Supreme Court does not provide for State liability where proven unlawful, yet despite this the court agreed to seek a preliminary ruling and so asked:

1. Did a breach of Community law by a national court apply to all courts? 

2. If such a breach was applicable to a Supreme Court did the classification of a special length-of-service benefit under an employee bonus constitute a breach of art.48 EC?

3. Did the effects of art.48 EC enable individual claims before a national court? 

4. Did the Supreme Court have jurisdiction enough to answer the questions raised, or did the State Court need to pass judgment?

Upon which the European Court of Justice held that:

1. Irrespective of arguments for the narrowness of Community law upon Member State judiciaries, the findings in Francovich and others v Italy and R v Secretary of State for Transport ex p Factortame had clearly established the liability for reparation by Member States to individual claims, and that such scope included the courts when categorising public authorities.

2. The nature of the breach was vital to the right to individual remedy and while excusable (or inexcusable) errors weigh heavily on the the burden of liability, the circumstances of this claim required little adjudication other than recognition of a clear violation of art.48 EC through the withdrawal of a reference to the Court.

3. With regard to the damage caused by the breach it was held that evidence of the breach constituted sufficient grounds for damages payable by the State under individual claim, and that such reparation must come from domestic legislation provided it offered equal rights as prescribed under the Treaty.

4. As with any preliminary ruling it was not for the Court to determine the method of legal summation, but to simply to advise how best to serve the principles of Community law. 

Thus the Court held that on this occasion it was the duty of the state courts to review and establish the appropriate measure for compensation through the existing case law provided, while further reminding the parties that:

“[M]anifest breach by a Supreme Court of an obligation to make a reference for a preliminary ruling is, in itself, capable of giving rise to State liability.”

Internationale Handelsgesellschaft mbH v Einfuhr-und Vorratsstelle für Getreide und Futtermittel [1970]

European Law

Internationale Handelsgesellschaft mbH v Einfuhr-und Vorratsstelle für Getreide und Futtermittel
‘Wheat Field’ by Darko Topalski

In this instance the implementation of regulatory measures was questioned by the German courts when an import/export firm fell subject to forfeiture of a deposit under Community law. 

Under art.12(1) of Regulation 120/67/EEC the equilibrium of the European market is protected through the issuing of export and import licences, and so in order to allow for the stability of grains, cereals and rice values it was established by the European Council that traders wishing to operate in this specific field must obtain a time restricted licence clarifying the amounts and costs of those products.

The reason for this window was to enable the Commission to anticipate and adjust market prices in order to protect the Member States from over saturation of non-community products and to allow for the effects of art.40(3) and art.43 EC to be applied, while these principles followed the aims of art.39 EC inasmuch as it provided that Member States were to maintain and help stabilise agricultural markets in order to ensure fair living standards via reasonable pricing. 

In addition to this, art.40(3) EC further focussed on the need to apply certain measures where necessary, which on this occasion included the forfeiture of licence deposits where no planned exportation or importation had occurred during the licence period, and so after the claimant continued exporting maize beyond their licence expiration date a percentage of their deposit was forfeited by the Einfuhr-und Vorratsstelle für Getreide und Futtermittel under the terms of art.12(1) of Regulation 120/67/EEC. 

When later challenged in the national courts, uncertainty emerged when reconciling German law with the Treaty Regulations, therefore a preliminary ruling was sought under art.177 EC, whereupon two questions asked:

1. Whether the requirement to forfeit licence deposits subject to the terms of art.12(1) was legal?

2. Whether art.9 of Regulation 473/67/EEC (which had been adopted in conjunction with Regulation 120/67/EEC) was legal, in that it included the exclusion of forfeiture in matters subject to force majeure?

It was also argued that while the terms of Community law were inherent to the existence of a Member State, it was felt that the superiority of German constitutional law contradicted the presence of deposit forfeitures on grounds that such measures were considered penal as opposed to valuable to the aims of German freedom laws.

When evaluating the views of the court and the questions set down for clarification, it was first held by the European Court of Justice that under no circumstances did the forfeiture of deposits serve any other purpose than that of market stability, as outlined in art.40(3) EC, which translated that Regulation 120/67 was legal and thus did not interfere with the aims and objectives of arts.40 and 43 EC.

Secondly, with regard to the exemption of forfeiture under the presence of force majeure (frustrations beyond control of the licence holder) it was held that while the context of the exemption was subject to wider meaning, it was deliberate in that it allowed for a number of prevailing circumstances to determine whether in each instance the claimant had taken sufficient steps to apply for the licence before citing any inability to use it, which by extension allowed for full support of the aims prescribed in art.39 EC, while the Court further reminded the parties that:

“The legality of a Community measure can be judged only in the light of the ordinary law, whether written or unwritten, but never in the light of the national law, even if that is a constitutional law.”

Francovich and others v Italy [1991]

European Law

Francovich and others v Italy [1991]
‘Azov Steel Mill’ by Konstantin Shurupov

The adoption of EU Directives is a prerequisite for all Member States, and so an when ignorance of the duty to transpose those obligations into the fabric of national and Community law remained unaddressed, the perfect vehicle emerged with which to underline it.

The importance of employee rights is one frequently contested in all forms of commerce, and so when Italy failed to adopt Directive 80/987/EEC, it was the joint action of a group of factory workers that directed the European Community’s attention towards the heart of industry and the anger of those being abused within the market system.

After serving as a loyal employee for an electronics firm, the claimant found himself redundant through the process of liquidation and yet left unpaid for work undertaken and uncompensated for his loss of earnings, and so in a conjoined hearing, Danila Bonifaci and thirty-three other employees (case C-9/90) sought recompense within the same matter.

In the first instance the Pretore di Vicenza and Pretore di Bassano del Grappa both sought a preliminary hearing under art.177 EC, and so the first approach taken by the European Court of Justice was to determine if the respondent’s failure to adjust their domestic laws in line with Directive 80/987/EEC had rendered itself liable to individual enforcement of accountability for payment of lost earnings, or whether the pecuniary losses sustained by the claimants were sufficient enough to award damages based upon state avoidance.

Through an examination of the qualifying criteria for ‘direct effect’ claims, the Court established that this particular case satisfied those terms, and yet noted how the respondent’s non-adoption had failed to fulfil a key element of the Directive requiring proper identification of the companies subscribed to those duties, which left the Commission unable to determine who the two employers were, and how they would be obliged to provide payment or legally defer the onus to the Italian government. 

However the Court also noted how in Simmenthal SpA v Italian Minister of Finance they had held that:

“[D]irectly applicable Community provisions must, notwithstanding any internal rule or practice whatsoever of the Member States, have full, complete and uniform effect in their legal systems in order to protect subjective legal rights created in favour of individuals…”

Which showed that the inability to reflect EU laws will be used as an example when serving the interests of the Community, thus the Court unanimously held that all Member State national courts were held to a duty to redress the inequity of failed transposition, thus full state funded compensation was now due, while reminding the parties that:

“[W]herever the provisions of Directive appear, as far as their subject matter is concerned, to be unconditional and sufficiently precise, those provisions may, in the absence of implementing measures adopted within the prescribed period, be relied upon as against any national provision which is incompatible with the Directive or in so far as the provisions define rights which individuals are able to assert against the State.”

Foster v British Gas [1986]

European Law

Foster v British Gas [1986]
‘British Gas Works on the River Spree’ by Adolf Meckel von Hemsbach

In the same way that Marshall v Southampton and South West Area Health Authority [No.1] determined the rights of female employees under the protections of Directive 76/207/EEC, this class action matter extended its scope to allow damages for dismissal under the guise of retirement.

When six former workers were subjected to forced retirement at the age of sixty, they sought remedy through the industrial tribunals on grounds that the respondent had violated its obligation to observe the Directive’s principles of equality, and thus they were entitled to compensatory payment in lieu of their significant financial losses.

In the first instance the appellants claims were dismissed on the strength that since 1986 the British Gas Corporation had become a private entity, and therefore it fell beyond the scope of the Directive, while a subsequent appeal to both the Employment Appeal Tribunal and the Court of Appeal proved futile.

Undeterred, the appellants presented their case to the House of Lords, who sought a preliminary ruling from the European Court of Justice under art.177 EC, whereupon two questions asked: 

1. Whether the manifestation of British Gas Plc (at the time of the claim) was within the terms of the meaning “state”? 

2. And if so, what form the award might take? 

Having evaluated the facts, the House held that when Directive 76/207/EEC first came into force it was ignored by the United Kingdom and subsequently failed to become part of domestic legislation within the provided timeframe, therefore the respondents were state owned and thereby subject to the terms of the Gas Act 1972, while the state’s failure to transpose the terms of the Directive left it open to the Community law doctrine that ‘no state can profit from its own failure’.

This resulted in a judgment for the appellants on grounds that the terms of the Directive were fully applicable to the respondents as they qualified as an emanation of the state and were subject to the effects provided under it, while the Court reminded the parties that:

“[T]he State may not benefit from its default in respect of anything that lies within the sphere of responsibility which by its own free choice it has taken upon itself, irrespective of the person through whom that responsibility is exercised.”