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clarity led to a preliminary ruling request under art.234EC, however the application for preliminary ruling was later withdrawn and judgment made against the claimant on grounds that the salary increments were tantamount to bonuses, and were thereby exempt from the protection of art.48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.”