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.”

Defrenne v SABENA [1976]

European Law

Defrenne v SABENA [1976]

The effects of art.119 EC and the stark inequality between men and women in the workplace were brought together in a case that showcased both the power of law and the equitability of the European Community.

Employed as an air hostess in 1963 by Belgian Société Anonyme Belge de Navigation Aérienne (SABENA), the appellant was re-contracted as a cabin steward and air hostess under the title of cabin attendant, however the contractual caveat was that unlike her male counterparts she was expected to retire from her duties at the age of forty, while termination of her employment entitled her to twelve months severance pay without pension rights.

Having been forced to retire as per the contract, the appellant initiated discrimination proceedings on a number of grounds including the assertion of her right to equal pay under the terms of art.119 EC which explains that:

“1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.”

And yet despite her contentions the Tribunal du Travail of Brussels dismissed her claims outright before her appeal to the Cour du Travail of Brussels was further dismissed with the exception of inequality of salary, however despite the court’s ability to overrule its own legislation in favour of the Treaty article, it chose instead to seek a preliminary ruling from the European Court of Justice.

For clarity, in 1957 the Treaty of Rome included the express requirement that every Member State would ensure and maintain the application of the principle that men and women should receive equal pay for equal work, and while the initial adoption period was set at two years, Belgium never amended its own legislation to reflect the values of the Treaty Article until 1967, in which s.14 of Royal Decree 40 enabled women in such situations the rights to seek remedy within the national courts.

On this occasion the Belgian government’s defence was that while art.119 conferred powers to those women paid less than men in similar roles, the effect of that principle  fell solely within the limitations of public office and not private contracts, however the claimant countered that by all accounts the direct effect of art.119 EC had existed since 1957 and so provided her with retrospective rights of recovery. 

Once before the European Court of Justice, the Advocate General clarified that direct effect relied upon the clarity of the regulation, and so when addressing sexual inequality it was clear how the principle’s purpose relied upon the differences cited, thus the Court held that going forward the national courts were to refrain from reference to art.177 EC in order to seek preliminary rulings when there was sufficient cause within art.119 EC to overrule domestic legislation under the rule of Community law, while reminding the parties that:

“Article 119, despite the fact that it is restricted to imposing an obligation on the States, is primarily concerned with the relationship between individuals. The discrimination which the provision sets out to prohibit will, in the majority of cases, consist of discriminatory action by a private undertaking against women workers.”

Wagner Miret v Fondo de Garantía Salarial [1993]

European Law

Wagner Miret v Fondo de Garantía Salarial
‘Coastal Fort, Catalonia’ by Alan Page Smith

Directive 80/987/EEC was drafted to protect the lost earnings of employees subject to the liquidation of their employers, however when a higher management employee was later made redundant through company dissolution he was subsequently denied lost earnings under Spanish law on grounds that when adopting the effects of the Directive the government had chosen to exclude domestic servants from the guarantees afforded them, and yet applied that caveat when deciding his case in the Juzgado de lo Social (Social Courts).

Having challenged the judgment in the Tribunal Superior de Justice (Superior Court of Justice) it was argued that when applying the terms of Directive 80/987/EEC the legislature had relied upon Royal Decree No.1382/85 to deliberately deny higher management the rights afforded other employees through the pay guarantee fund, as established under art.33 of Law No 8/80 (‘The Employees’ Statute’).

This left the Court unable to fully address the claim without reference to the European Court of Justice for a preliminary ruling under art.177 EC, and so three questions asked:

1. Whether the terms of Directive 80/987/EEC included all employees of the Member States?

2. Whether the failure of the Spanish government to encompass higher management staff within the annexe excluding domestic servants, provided for prevention of a claim?

3. If the answer to question 1. was yes, should the payment should come from the guarantee fund or State compensation?

With consideration of the historic debate surrounding this contentious matter the Court held that when transposing the terms of the Directive the Member States should determine what constitutes employment under the meaning of national law, and where agreed those employees were to be protected under the effects of art.1(2) of the Directive.

In relation to the exclusion of higher management it was agreed that unless expressly contained in the annexe to Directive 87/987/EEC (later amended to Directive 87/164/EEC) those occupying such roles were entitled to received compensatory payment, while with regard to the source of payment the Court clarified that in similar instances it was the role of the Member State to devolve payment to the fund created, or if no such fund existed the compensation was due from the Member State itself, before reminding the parties that:

“[I]n so far as national law classifies members of the higher management staff as employees, a Member State cannot exclude that category of employee from the scope of application of Directive 80/987/EEC, as amended by Directive 87/164/EEC, if it is not included in the Annex to that directive.”

Von Colson and Kamann v Land Nordrhein-Westfalen [1984]

European Law

 

Von Colson and Kamann v Land Nordrhein-Westfalen
‘The Prisoner’ by Jean-Leon Gerome

Sexual discrimination and the right to enforce Directive 76/207/EEC when applying for a position was unprecedented within the European Community, and so when two well-qualified female social workers applied for similar posts at the Land Nordrhein-Westfalen (a male populated prison) and were refused employment on grounds of their gender, the Arbeitsgericht Hamm (German Labour Court) referred a number of questions to the European Court of Justice under art.177 EC. 

Having referred to the principles of Directive 76/207/EEC governing equal access to employment, training, promotion and working conditions, the claimants contended that denial of this particular post was tantamount to a breach of Member State obligations and that legal remedy should constitute either six months full pay or the creation of another position within the offer of employment. 

However German law had been amended to incorporate the Directive measures with a degree of discretion, inasmuch as proof of sexual discrimination within the recruitment process only provided resulting sanctions as one incurring travel costs and not those allowing compensatory damages or the employment provision sought. 

This led to the formulation of five interrelated questions, and which asked:

1. Whether under breach of the anti-discrimination Directive, was the employer liable to provide for, and offer, employment to those parties affected? 

2. If so, was it on grounds that the claimant could provide evidence of greater qualification than those required for the position applied for?

3. Was equal competence acceptable as grounds for the provision of additional employment, or was the claimant entitled to employment irrespective of qualifying ability? 

4. Did Directive 76/207/EEC provide clear instruction as to the form of remedy awarded where discrimination occurred, but no employment was required? 

5. Could the terms of the Directive be relied upon by an individual when the discrimination was between private individuals?

When examining the exactness of the Directive it was held by the European Court of Justice that while the effects of Community law and transposition of those Directives must observe and follow the principles expressed, where discriminatory acts are proven, the Commission did not intend that an employer was imposed with any obligation to create positions beyond those advertised. 

Thus in terms of legal clarity, the Court held that further national debate was needed in order to amend the legislation in line with a fair and balanced level of compensation, while it was also held that the terms of the Directive were too ambiguous as to offer individual powers to enforce against another party where such provisions were not already in place, before reminding the parties that:

“[D]irective No.76/207 does not require discrimination on grounds of sex regarding access to employment to be made the subject of a sanction by way of an obligation imposed upon the employer who is the author of the discrimination to conclude a contract of employment with the candidate discriminated against.”