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.”