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.”

Marshall v Southampton and South West Area Health Authority (No.1) [1986]

European Law

Marshall v Southampton
‘Abstract Women 010’ by Corporate Art Task Force

Dismissal upon grounds of sexual discrimination and the direct effect of Community law Directives in issues of state employment were the key ingredients to this matter, when a former employee of the South-West Hampshire Area Health Authority was subjected to unexpected termination of her employment, despite intimations that her post was secure beyond policy requirements.

Having joined the department in 1974 the applicant had enjoyed working as a Senior Dietician until she reached the contracted retirement age (five years earlier than her male colleagues) at which point it was agreed that she could continue working although no specific end date was discussed, however the applicant was dismissed without notice two years later upon grounds that she was a woman and so considered beyond retirement age and surplus to requirements.

Immediately after her departure the applicant sought to challenge the decision through the enforcement of Council Directive 76/207/EEC, which supports the ‘principle of equal treatment’ inasmuch as art.1(1), (2), 2(1) and 5 collectively confer Member State obligations to apply and maintain the equal treatment of men and women with regard to employment, promotion, training, working conditions, social security, dismissal and the prohibition of any discrimination (whether directly or indirectly), while these rights applied to all manner of employment arrangements.

In the first instance the industrial tribunal denied her claim under the s.6(4) of the Sex Discrimination Act 1975, which provided that discrimination by an employer was exempt under retirement conditions, and that the pensionable age of women under s.27(1) of the Social Security Act 1975 supported the age of retirement through the  availability of state pensions as of sixty years of age. 

Upon dismissal of her appeal she challenged the findings again, whereupon the Court of Appeal was forced to raise two questions with a view to a preliminary ruling under art.177 EC, namely: 

1. Whether the appellant’s dismissal after reaching retirement age on the basis that she was a woman constituted sexual discrimination under Directive 76/207?

2. That if so agreed, whether the terms of the Directive allowed for direct effect given the conflict between domestic legislation and Community law?

And so having referred the case to the European Court of Justice it was held that while the Health Authority relied upon the narrowness of meaning when determining the powers of legislation, they failed to appreciate that all Member States are obliged to adopt the principles of a Directive within a designated period (which on this occasion had long since elapsed), and that when doing so must adjust or if necessary, remove the applicable statute so as to give full effect to the meaning of the Directive. 

It was further noted how the Health Authority had sought to avoid the duties called for under Community law while expanding the terms of the Social Security Act 1975 beyond their meaning when deciding that pensionable age was a prerequisite to retirement, which amounted to nothing more than overt sexual discrimination against which the appellant had a valid and lawful right of claim.

Looking next to the effect of Directive 76/207/EEC it was argued by the Health Authority and the United Kingdom that the terms within were prescribed for the benefit or use of the Member State and not the individual, and that the terms of an non-implemented Directive excluded contracts between private parties. 

It was further argued that the State was entitled to be seen as a private employer for the purposes of the case, thus it was contended that the appellant was denied the right to bring action against the State and so a review of the Sex Discrimination Act 1975 was required before the continuation of proceedings. 

In stark contrast the Court upheld the appeal on grounds that a failure to adopt the Directive had rendered the Health Authority liable for penalty and thereby accountable at law as an emanation of the State, therefore a citizen could claim such rights within the domestic court in lieu of their non-implementation, before reminding the parties that:

“[W]herever the provisions of a Directive appear, as far as their subject matter is concerned, to be unconditional and sufficiently precise, those provisions may be relied upon by an individual against the State where that State fails to implement the Directive in national law by the end of the period prescribed or where it fails to implement the Directive correctly.”

Kolpinghuis Nijmegen BV

European Law

Kolpinghuis
’21st Century Still Life’ by Jose A Hinojos

The definition of a Directive relies upon its effect upon a Member State as opposed to individuals unless so designed, and yet on this occasion, the criminal acts of a café were punished under the powers of an as yet transposed Directive, thus prompting the District Court to seek a preliminary ruling.

In July 1980 the European Council passed Directive Directive 80/777/EEC in relation to the sourcing and sale of mineral water, which explained that:

“[O]nly waters extracted from the ground of a Member State and recognized by the responsible authority of that Member State as natural mineral waters satisfying the provisions of Annex I, Section I, of the Directive may be marketed as natural mineral waters.”

And while the transposition period was four years from the date of the Directive implementation, the Member State in question failed to adopt it into their national laws, and so on 7 August 1984 the defendant Kolpinghuis Nijmegen BV was found stocking and selling mineral water that in fact consisted of nothing more than tap water and carbon dioxide.

Indicted by the Keuringsdienst van Waren (Goods Inspectorate) the defendant was charged under art.2 of the Keuringsverodening (Inspection Regulation) for the sale of goods of unsound composition, and levied a fine of HFL 501, however with consideration of the fact that the Directive was not implemented into national law until 8 August 1985 the Officer van Justitie was of the opinion that the Directive was already legally enforceable, and so sought a preliminary ruling under art.177 EC in order to ask:

1. Can a Member State rely upon the powers of a Directive as yet unadopted into national law?

2. Where a Directive has not yet been transposed, can a national court give direct effect to its provisions despite the individual standing to gain no benefit from such an act?

3. Where a national court has the option to follow national law, should it follow the powers of an applicable Directive?

4. Should any weight be given to the first three points when the adoption threshold for the Directive was still open?

Referring to a number of similar cases such as Marshall v Southampton and South West Hampshire Area Health Authority and Von Colson and Kamann v Land Nordrhein-Westfalen the Court relied upon Pretore di Salo v X to illustrate how:

“[A] Directive cannot, of itself and independently of a national law adopted by a Member State for its implementation, have the effect of determining or aggra­vating the liability in criminal law of persons who act in contravention of the provisions of that Directive.”

This translated that while the powers contained within a Directive can indirectly assist in the enforcement of both national and local laws, it could not serve as direct source of adjudication when determining individual liability, while the Court also noted that the date upon which hearing had occurred bore no relevance to the issues in questions 1-3, as the transposition window had yet to close, thus in closing the Court reminded the parties that:

“A national authority may not rely, as against an individual, upon a provision of a directive whose necessary implementation in national law has not yet taken place.”