Constitutional Law of the European Union - Case Study Example

The provisions of the EC Treaty which explicitly provide for individuals to enforce rights derived from European Community law are limited in their scope. The European Court of Justice (ECJ) has therefore developed a number of principles which widens this scope. The European Community had a significant impact upon the legal systems of the Member States. It regulates the rights and interests of its members by developing its own institutions and a unique and autonomous legal system that bind each member. This is accomplished fundamentally through Treaties, a crucial form of EC legislation that has become the root of all other European Law. Individuals were given the right to bring actions before the ECJ for judicial review of the acts of Community institutions under Article 173. However, as a means of enforcing individual rights, this Article has limited utility as, first, individuals are not permitted to bring actions against Member States and therefore have no rights or remedies where a State violates their Community law rights and, secondly, individuals are required to demonstrate that the measure is a decision which is of direct and individual concern to the applicant. An individual cannot challenge regulations unless it is demonstrable that it is merely a decision in the garb of a regulation1. The individual must show that the effects of the decision apply directly to the applicant without depending on the exercise of discretion by another body2. Moreover, the decision must affect the individual's legal position3. The ECJ has taken its own view as to the nature and effect of treaties known as the doctrine of 'direct effect.' The concept of Direct Effect of EC law was developed by the ECJ to allow individuals and organisations to use the provisions of EC law within their Member States' domestic courts without having to wait for the Member State to fulfil some obligation which it had omitted to do. Although, individuals could complain to the Commission, nevertheless they could not compel the Commission to ensure that their rights were enforced if the Commission was chary of doing so4. The implication of this jurisprudential concept is that individuals can obtain the required mandate directly from community law, for enforcement in their own national courts. It also places control in the hands of ordinary individuals, as per the provisions of Article 226 EC, which enables the Commission to initiate proceedings against Member States for breaches. Direct effect has in this manner empowered every citizen of the Union to participate actively and in this manner has brought the community into their lives. Its legal foundations were established in Van Gend En Loos 5 in which the Court held that an individual was entitled to invoke Article 25 EC in order to prohibit Member States from introducing new customs duties on imports and exports and other charges having equivalent effects. The Court held that Article 25 EC was directly effective and could be challenged by individuals in the national courts. However the ECJ reasoned that direct effect exists and that the individuals may have the rights conferred upon them directly under EC treaties. This reasoning was based on the need to carry out the political and legislative programme that the treaties had set out to create a community not only of states but also of personsthat calls for the participation of everybody. The spirit of the preamble to the EC implies that reference has to be made not only to member governments but also to individuals, and is therefore, more than an agreement which creates mutual obligations between the contracting states. In this way it is distinct from other international treaties and constitutes a new legal order of international law for the benefit of which the stated have limited their sovereign rights, although within limited fields, the subjects of which comprise not only member states but also their nationals. Therefore it was concluded that, community lawis intended to confer upon individuals rights which become part of their legal heritage. In its subsequent case law, the ECJ went further and held that secondary legislation could also create directly effective rights which individuals could rely upon in litigation in their national courts. Thus in Van Duyn v Home Office6, Mrs Van Duyn, a Dutch national, was entitled to invoke the provisions of EC Directive 64/221 to challenge a refusal to allow her to work in the United Kingdom, and in Grad v Finanzamt Traunstein7 a decision addressed to the German government was held to be directly effective. Directives, which are measures of secondary legislation addressed to Member States and providing a time limit for the States to implement their provisions, have direct effect as a result of the ECJ case law. In Pubblico Ministero v Ratti8, the Court confirmed that Directives are directly effective once the time limit has expired. In Verbond van Nederlandse Ondernemigen v Inspecteur der Invoerrechten en Accynzen9, the Court extended the scope of direct effect to Directives which had been incompletely implemented. In Commission v Italy10, the ECJ enforced the direct effect of regulations and criticised the attempts by member states to alter the requirements of a community regulation. Article 249 EC directives bind any member state as to the result to be achieved while leaving domestic agencies competence as to form and means. They are flexible and provide states with discretion and scope for national differences. Their true purpose must be properly secured and failure to do so constitutes a breach. From this it appears that the very nature of directives is incompatible with the notion of direct effect as laid down in Van Gend En Loos; it grants some discretion to member states and requires further state action for its implementation and sets out its term in general terms since it is merely a framework. However, this failed to deter courts from considering whether directives may still give rise to direct effect and they developed on this fundamental question through a succession of important cases. The ECJ contended that it would be incompatible with the binding effect attributed to a directive by Article 249 to exclude the possibility that the obligation which it imposes may be invoked by those concerned and may be invoked by individuals in the national courts. It also held that each provision had to be examined in its context in order to determine whether its purpose was to grant rights to individuals and whether it was sufficiently clear and precise to be capable of being applied directly by the national courts. Limitations placed on the doctrine of direct effect are not strictly applied. In Van Duyn, the ECJ stated that if there was doubt as to how a particular provision of Community law should be interpreted, the national court could utilize the preliminary reference procedure in order to refer the question to the ECJ. The legal basis for the direct effect of Directives is highly controversial. The challenge to its legitimacy came from the Conseil d'Etat, the highest court in France dealing with administrative law, which refused to give effect to it11 and from the Bundesfinanzhof, the German federal tax court12. The direct effect of directives was constrained by the concepts of vertical and horizontal effect. Van Duyn and Ratti affirmed that directives only have vertical effect so that an individual who is affected by the states' failure to implement a directive properly or not at all only has rights against the state and not against a non-state entity or other individuals as the directive imposes the obligation of implementation upon the state. Therefore a horizontal limitation was placed upon the scope of the direct effect of directives. This principle was addressed in Marshall v Southampton and South West Hampshire Health Authority13, in which the applicant who was employed by the Health authority, was required to retire at 62 when men doing the same work did not have to retire until 65. Although under national law, by virtue of the Sex Discrimination Act, this was not discriminatory, she succeeded in her claim for unfair dismissal by relying on the Equal Treatment directive, which had not been implemented in the UK. The directive was sufficiently clear to have direct effect but the courts took the opportunity to confirm that, that a directive may not of itself impose obligations on an individual and that a provision may not be relied upon as such against such a person. Therefore since the health authority was an organ of the state, the directive had vertical direct effect. Even more controversial was the question of whether Directives could be invoked against private individuals as well as the State or if they had horizontal as well as vertical direct effects. In Defrenne v SABENA14 it was discussed whether Treaty provisions, in this case the provision of equal pay for equal work in Article 119, could be invoked against private employers. However, while the concept of horizontal direct effect added further protection to individuals' Community law rights, it appeared to breach the principle of legal certainty. Since Marshall, the position has been confirmed by subsequent case law and in Duke v GEC Reliance15, Mrs. Duke was unable to rely upon the Equal Treatment Directive, as Mrs. Marshall had, because her employer was a private individual. Similarly in Paola Faccini Dori v Recreb srl16, the Italian Government failed to implement a directive in respect of consumer rights to cancel certain contracts negotiated away from business premises. Dori having concluded a contract at a railway station was unable to rely on the directive to claim a right of cancellation as the court refused to extend the concept of direct effect to the sphere of relations between individuals. Clearly, such decisions illustrate an unfair distinction between the rights of state employees and those of private employees, but the ECJ firmly held that such a distinction may easily be avoided if the member state concerned has correctly implemented the directive into national law. The manner, in which an individual can enforce a directive when the barrier to horizontal direct effect is encountered, was established in Francovich,17 in which it was declared that Member States may be liable to make good damage for failure to implement a directive. The doctrine of direct effect has clearly had a significant impact on the legal systems of all Member States, providing a means for individuals to enforce rights derived from community legislation in their own national courts and in this sense can be considered a liberating concept. However, the position, particularly with regards to directives, remains complex and even highly volatile, undermining to some extent the certainty and effectiveness of community legislation that the concept set out to achieve. Although it is certainly a significant feature of the EC, the ECJ does lack jurisdiction over some areas of community law and therefore cannot determine the legal effect and nature of certain provisions. It should be noted that the principles of direct and indirect effect, and the principles of State liability established in Francovich apply only to European Community law, and not to European Union law as a whole. The ECJ lacks jurisdiction over the second pillar of the Union, the Common Foreign and Security Policy, for which there is no judicial enforcement whatsoever. The third pillar, justice and the interior will not be held to be directly effective, since Article 34 of the Treaty of European Union has explicitly stated that the legislative decisions adopted under the provisions of the third pillar shall not have direct effect. On the whole, the legal basis for the enforcement by individuals of Community law rights does not derive from the EC Treaty. The real basis for the principles of direct and indirect effect and State liability is the purposive reasoning employed by the ECJ as a means of furthering its own aims for the Community. Section 3 of the European Communities Act 1972 makes it obligatory for all the courts to interpret EC law according to the rulings of the ECJ. The UK courts though unreluctant to apply directly effective provisions have nevertheless been clearly unwillingness to apply the Von Colson principle.18 In United Kingdom v Council,19 the Article 118a of the EC's time procedure under which the employee is supposed to work was established. The UK disagreed to accept this proposal with a contention that the legislative competence was not taken into account. Whilst acknowledging EU's competence in that area, it nevertheless argued that the correct treaty provision should be what is at present Article 89 EC or Article 308 EC. However, the ECJ held that limiting working hours means that making an attempt to consider the employee's health and safety. It is assumed that an Article 2(2) of an (imaginary) Directive adopted by the Community on 1st April 2003 entitled "Teachers' Employment Rights", exists and that it states that "Teachers employed in schools and in higher education establishments and working in the territory of any of the Member states shall have the right to take a meal break of a minimum duration of one hour after every single teaching session lasting two and a half hours or at the end of any series of consecutive teaching sessions lasting a total of three hours." This imaginary Directive was to have been implemented by the 30th of June 2005; however, the UK government did not comply as it contends that the Education Act 2000, which addresses the issue of teachers' working hours, is already in force. Article 226 of the ECT deals with the legal situation on the basis of exchange of information between the Commission and the Member State concerned to arrive at an agreeable solution to avoid the possible breach of EC law. Article 226 ECT advocates voluntary compliance, whereas Article 233 EC interacts with the stringent protective measures that are compatible with the EC Treaty. With regard to the Horizontal Direct effect, the Article 232 EC of the Treaty states that, "in case the European Parliament, the Council or the Commission, in infringement of this Treaty, fail to act, the Member States and the other institutions of the Community may bring an action before the Court of Justice to have the infringement established". Further, the Article 233 EC states that any institution whose act has been declared void or whose failure to act has been declared contrary to the Treaty will have to take such measures as necessary to comply with the judgment of the Court of Justice. The member state has to take stricter measures and not just different measures. Articles 232 EC and 233 EC do not permit Member States to introduce whatever measures they want and as such the internal market is well protected from measures that unduly restrict trade20. Rachel's Case. Rachel a teacher was told by her headmistress that she would be required to teach economics to four consecutive classes of one hour each from 9am to 1pm, to this she objected that this was unreasonable. The headmistress threatened her with immediate dismissal by the school governors. The UK had not implemented the imaginary Directive into its national law. Rachel can file a suit in the national courts for her rights under EC Law to be enforced under the Vertical Direct Effect procedure. In case the UK Courts fail to reinstate her, she can approach the EC for redressal of her grievance. The failure of the UK to implement the Directive makes it liable for any damages or inconvenience caused to Rachel in the course of her employment. As such Rachel is legally protected and she can proceed against the UK Government as well as the school authorities in the event of her dismissal which automatically becomes an unfair dismissal. Jos Case. Jos a Spanish citizen works for a private institution in London. Jos was required by his head of department to deliver a three-hour lecture without a break. He told his employers that he was not prepared to work for so long without a break, and that he would deliver two separate lectures of one and a half hours each as he had done in previous years. Jos was threatened with instant dismissal if he refused to comply. His father, a leading EC lawyer in Barcelona, told him that the UK could be compelled to implement the Directive and that he was therefore making representations to senior EC and Spanish government officials in this regard. Three conditions are to be met in case an individual's claims for damages against a member state regarding non implementation or incorrect implementation of a directive. (a) The intent of the Community legislation should have been the conferring of rights on individuals, (b) there must be a serious breach by the member state21 and (c) the breach and the damage suffered must be causally linked. In Brasserie de Pcheur22 and R v Secretary of State for Transport, ex parte Factortame (No. 4)23 the Court extended the Francovich principle and made it possible to claim damages against a state, in instances where it had passed a law which was in serious breach of EC law. According to the ECJ the state had to compensate the damages caused and that the conditions laid down for such claims of damages must not be less favourable than for a domestic claim and further, the member state has to refrain from making this claim process difficult or impossible. In R v H.M. Treasury, ex parte British Telecommunications plc24, the ECJ held that damages could be claimed by individuals who had suffered loss as a consequence of an incorrect enactment of a directive by a state. Where a State has failed to fulfill its obligations in regard to directives, whether by non-implementation or inadequate implementation, an individual will not be able to rely on the horizontal direct effect of a Directive against another individual. The court however, held that according to the decisions inCompagnie des Forges de Chtillon v High Authority, which stated that, "A measure emanating from the competent authority, intended to produce legal effects and constituting the culmination of procedure within that authority, whereby the latter gives its final ruling in a form from which its nature can be identified25." A further concept which facilitates the enforcement of individual Community law rights, and again is a creation of the ECJ, is that of indirect effect. This concept was first introduced in the cases of von Colson and Kamann v Land Nordrhein-Westfalen26 and Harz v Deutsche Tradax GmbH27, which came before the Court on the same day. The plaintiffs in both cases sought to invoke the provisions of Directive 76/207 (the Equal Treatment Directive) in almost identical circumstances. The distinction was that in von Colson the Directive was being invoked against the German prison service (a public body) and in Harz the Directive was being invoked against a private employer. Therefore, Jos can initiate legal action against the school in UK Courts, even though it is in the private sector, for infringing the Work Time Directive. Further, if his grievance is not properly redressed by the UK Courts and as the European Commission itself contributes to the compliance effort by making a much more systematic use of infringement procedures and applies pressure on Member States to discharge their Community obligations; he can approach the EC to make the UK Government implement its Work Time Directive. Art 5 EC requires that the Community act within the limits of the powers conferred upon it by this Treaty. In areas where it does not have exclusive competence, it shall act according to the principle of subsidiarity, only if the objectives of the proposed action cannot be sufficiently achieved by the Member States and can be better achieved by the Community. The UK had failed to implement the Directive. This is similar to the Francovich case. The ECJ has held that in such cases the sufficiently serious breach condition will be automatically satisfied. Therefore, as the complainants have shown that the Directive confers rights on individuals and that the loss they have suffered is directly caused by the UK's failure to implement the Directive, they have to be awarded damages by the UK government. The UK cannot escape this liability by resorting to the principle of subsidiarity. Bibliography. 1. Duffy, P., "Damages against the State: A New Remedy for Failure to Implement Community Obligations," 17 E.L. Rev. 133 (1992). 2. Caranta, R., "Governmental Liability after Francovich," 52 Camb. L.J. 272 (1993). 3. Caranta, R., "Judicial Protection Against Member States: A New Jus Commune Takes Shape," 32 CML Rev. 703 (1995). 4. Caruso, D., "The Missing View of the Cathedral: The Private Law Paradigm of European Legal Integration," 3 E.L.J. 3 (1997). 5. Craig, P.P., "Francovich, Remedies and the Scope of Damages Liability," 109 L.Q.R. 594 (1993). 6. Craig, P. & de Brca, G., "EU Law: Text, Cases, and Materials," (New York: Oxford University Press) (1998). 7. Emiliou, N., "State Liability under Community Law: Shedding More Light on the Francovich Principle" 21 E.L. Rev. 399 (1996). 8. Hanft, J.E., " Francovich and Bonifaci v. Italy: EEC Member State Liability for Failure to Implement Community Directives," 15 Fordham Int. L.J. 1237 (1992). 9. Harlow, C., "Francovich and the Problem of the Disobedient State," 2 E.L.J. 199 (1996). 10. Hartley, T.C., "The Foundations of European Community Law," (Oxford University Press) (1998). Read More