Week 18 European Law; Marshall v Southampton and South West Area Health Authority No. 1 (1986) and Foster v British Gas PDF

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Marshall v Southampton and South West Area Health Authority No. 1 (1986) and Foster v British Gas...

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Week 18 European Law Seminar 4 Marshall v Southampton and South West Area Health Authority No. 1 (1986) Ms. Marshall was dismissed from her post at Southampton Area Health Authority on the basis that she was over 60 years of age. This, she contended, was in breach of EC Directive 76/207 (see EU Non Discrimination Law) issued in furtherance of the EC's general policy on non-discrimination, as men did not have to retire until 65. She contended that the Directive in question created rights that could be enforced between individuals, that is, it had Horizontal direct effect. The ECJ, however, held that Directives, in general, did not have horizontal direct effect. Ms Marshall did succeed in her action, however, as the ECJ held that the Health Authority was an organ of the state, and the Directive in question could have vertical direct effect The ECJ decided in 1986 that the termination of Miss M H Marshall's employment constituted unlawful discrimination on grounds of sex: (1986 ECR 723. Miss Marshall claimed compensation under section 65 of the Sex Discrimination Act 1975, which limited an award to pounds 6,250. An industrial tribunal held that the limit rendered the compensation inadequate and in breach of article 6 of Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards working conditions. It assessed her financial loss at pounds 18,405, including pounds 7,710 for interest. THE EUROPEAN COURT OF JUSTICE said that the questions put by the House of Lords asked whether it followed from the Directive that a victim of sex discrimination on the part of an authority which was an emanation of the State was entitled to full reparation for the loss or damage he or she had sustained and whether article 6 enabled such a person to contest the applicability of national legislation which was intended to give effect to the Directive but set limits to the compensation recoverable. The fundamental problem was therefore to determine the meaning and scope of article 6 having regard to the principles and aims of the Directive. Each member state to which a Directive was addressed was required to adopt, in its national legal system, all the measures necessary to ensure its provisions were fully effective, in accordance with the objective pursued by the Directive, while leaving to the member state the choice of the forms and methods used to achieve that objective. The purpose of the Directive here was to put into effect the principle of equal treatment for men and women as regards the various aspects of employment, in particular and including the conditions governing dismissal. Article 6 put member states under a duty to take the necessary measures to enable all persons who considered themselves wronged by discrimination to pursue

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their claims by judicial process. The measures should be sufficiently effective to achieve the objective of the Directive and be capable of being effectively relied on by persons before national courts. The objective was to arrive at real equality of opportunity and could not be attained in the absence of measures appropriate to restore such equality when it had not been observed. Those measures must guarantee real and effective judicial protection and have a real deterrent effect on the employer. Where financial compensation was the measure adopted to restore a situation of equality, it must be adequate in that it must enable the loss and damage actually sustained as a result of the dismissal to be made good in full in accordance with the applicable national rules. The fixing of an upper limit could not constitute proper implementation of article 6, since it limited the amount of compensation a priori to a level, which was not necessarily consistent with the requirement of ensuring real equality of opportunity through adequate reparation for the loss and damage sustained as a result of discriminatory dismissal. Full compensation could not leave out of account factors such as the effluxion of time. The award of interest in accordance with national rules must be regarded as an essential component of compensation for the purposes of restoring real equality of treatment. A person who had been injured as a result of discriminatory dismissal might rely on article 6 as against an authority of the State acting in its capacity as an employer in order to set aside a national provision, which imposed limits on the amount of compensation recoverable by way of reparation. Foster v British Gas

Foster v British Gas plc (1990) C-188/89 is a leading EU law concerning the definition of the "state", for the purpose of determining which organisations in the private or public sector can be regarded as an organ of the state. The ECJ held a state is any manifestation or organisation under control of a central government. Ms Foster was required to retire from her job at British Gas when she was 60 years old, while men could continue until they were 65. British Gas was a nationalised industry at the time (before being privatised under the Gas Act 1986), and she and four other women claimed this was unlawful discrimination on grounds of sex, contrary to the Equal Treatment Directive (then 76/207/EEC, and now recast in 2006/54/EC). Because directives in principle only bind the member state, to which they are addressed, in order to make a direct claim against her employer, Ms Foster needed to show that British Gas was part of the state. She argued it was because the board members of British Gas were appointed by a minister in the UK government (a secretary of state), which could also issue to the board various directions

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and instruments. In addition, the board was required to submit periodic reports to the secretary of state. The European Court of Justice held that the decision on any given set of facts for what constituted part of the state was to be left to the courts of the member state in principle. The general requirements would be that the organisation had to be subject to the authority or control of the state, whatever its legal form, and whether in public or private hands. 18. ... Unconditional and sufficiently precise provisions of a Directive could be relied on against organizations or bodies, which were subject to the authority or control of the State or had special powers beyond those which result from the normal rules applicable to relations between individuals. 19. The court has accordingly held that provisions of a Directive could be relied on against tax authorities... local of regional authorities... constitutionally independent authorities responsible for the maintenance of public order and safety... and public authorities providing public health services... 20. It follows...that a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the state, for providing a public service under the control of the state and has for that purpose special powers beyond those which result from the normal rules applicable in relation between individuals, is included... among the bodies against which the provisions of a directive capable of having direct effect may be relied upon. Francovich v Italy Francovich v. Italy was a decision of the European Court of Justice which established that European Union member states could be liable to pay compensation to individuals who suffered a loss by reason of the member state's failure to transpose a EU directive into national law. It is sometimes known as the principle of state liability in European Union law. The European Court of Justice held that the Italian government had breached its obligations, and was liable to compensate the workers' loss resulting from the breach. The Court further held that the damages for such breaches should be available before national courts, and that to establish state liability on the basis of the failure the implement a directive, claimants must prove that the directive conferred specific rights on them, identifiable in its wording, and that there is a causal link between the state's failure to implement the directive and the loss suffered. An Italian company went into liquidation with, leaving Mr. Francovich and other employees with unpaid arrears of salary. Directive 80/987 required Member States to set up a compensation scheme for employees in these circumstances, but Italy had not established one. Mr. Francovich sought compensation from the Italian government. The case was referred to the Court of Justice. The Court of Justice asked (i) whether the directive had direct effect, (ii) whether the Member State was liable for the damage arising from its failure to implement the directive and (iii) to what extent it was liable for damages for violation of its obligations under Union law. The Court decided that the directive was insufficiently precise to have direct effect. However, it emphasised that the Treaty created a legal order, which

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was binding upon Member States and citizens. The effect utile (the useful effect) of Union law would be diminished if individuals were not able to obtain damages after suffering loss incurred because of a violation of Union law by a Member State. There was an implied obligation under the former Art 4(3) TEU, to compensate individuals affected by the violation.

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