European Union Law Lecture 2: Sources and Nature of EC Law 5 types of EU legislation: Regulation: Regulations are binding in its

s entirety on all member states in all bodies. They are directly applicable, meaning that it comes into effect in all member states immediately when it is passed. They do not need further implementation to be done by the national bodies. They are directly applicable and can be used by individuals immediately. They are instruments with general applicability (addressed to Member States and to individuals and companies), as well as direct applicability. Directives: Directives are binding as to the result to be achieved. They leave the forms and methods to member states expression. E.g. Tell member states that by 2015 to use the same type of socket. It is up to the member states to then achieve that objective. They also require national integration and are not directly applicable. They are not automatically effective. The national Parliament will have to pass an act to apply it at domestic level. They are only binding upon Member States to which it is addressed. They are more flexible than regulations. Decision: Recommendations & Opinions: Non-Binding

85% of European legislation is in directive form. Supremacy To this day, there is no Article in any part of any Treaty that states that EU law is supreme over national legislation. E.g.s in handout. It has been taken out of the Constitutional treaty but have been simply been annexed in the Reform Treaty. It is a matter of sovereignty and political sensitivity, but effectively the same. So, how do we know that it is supreme? Van Gend en Loos If you are creating a new legal order, the only way is to take power from member states and limit sovereignty, transferring them to a new body from a new legal order. Practically, this supremacy means that if you are in a National Court in the UK, you have to apply European law over the national law. Costa v ENEL Simmenthal (No. 2) Good case to illustrate this. You must set aside any contradictory national law that exists and that conflicts with EU law. At that point, National legislation becomes inapplicable. It is a violent intrusion into the National Courts. No rescission or amendments are necessary. Factortame (No. 2) National Courts have an obligation to suspend national legislation that is in conflict with EU law. It has to be suspended until it is definitively decided in the ECJ (European Courts of Justice). Direct Effect Van Gend en Loos He was a dutch importer of glue, and the tax on this was increased. He did not like that so, as an individual, he brought an action against the State. He could not rely on National Law as it was telling him to pay more tax. He discovered that Article 12 in the Treaty of Rome stating that member states should not impose taxes on importing. He relied on a provision in the Treaty of Rome. The Dutch Court stopped the case and made a reference to the ECJ for advice. The answer was a resounding Yes on whether this provision would apply. The Court makes the groundbreaking decision to say that individuals would be able to rely on the provisions in the Treaties. The aims of the Treaties are thus, to create rights and obligations which individuals, as well as the State, can rely on.

It was a fantastic creation. From the point of Human Rights, nothing could be better. Who would be the first to notice the States would be going against provisions in the provisions? It would be the person who imports the glue and is being taxed for it. This has effectively made every person in the European Union areas a policeman, and gives powers to every individual to make sure the Member states do not breach the Treaties. Every single importer can bring an action against Holland now, without having to go to the ECJ, in their national Courts. Individuals will keep an eye on member states to ensure they are compliant. Article 12 satisfies the 2 conditions for direct effect to apply in this case. Defrenne v Sabena (No 2) Individual against an employer. There was a discrimination on the retirement age of male and female stewards and stewardesses, and Defrenne was forced to retire, while males are allowed to retire at an older age. Articles and Regulations are both applicable for horizontal direct effect. Directives Directives are quite vague and general devices and it is difficult for it to fulfill the condition for direct effect. Van Duyn v Home Office Decided that directives can also be binding upon the state. He tried to rely on a European directive on the grounds of exclusion. The courts said surely they could not because they are imprecise. The Courts finally disagree. The basis was the doctrine of effet utile (useful effect doctrine). The useful effect doctrine suggests that the power/effectiveness of EU law would be weakened if Member states can conflict with them and no one can do anything about it. The case involved Mrs. Van Duyn trying to gain entry into the UK. Scientology was not as glamorous as it is now and she encountered problems with the Home Office. She wanted to work as a secretary at a laboratory on Oxford Street. She said that there were directives on the free movement of workers as well as being a Treaty provision at that. Individuals like Mrs. Van Duyn had the right to use the Treaty provisions at that. There is, however, an additional condition. You must ensure that the period of implementation of a directive has expired. Until it expires, you cannot do anything. Once, the period of implementation has expired, the directives start putting in direct effect. Assume that you are a pregnant lady employed by the state. National legislation state that you are entitled to 18 weeks of maternity leave while the EU law has said that you are entitled to 36 weeks of maternity leave. If member states do not amend the amount of maternity leave, this directive would have effect once the period of implementation has expired. You must give the State the chance to change its law in order to comply. The Courts would then face a dilemma, by facing the decision from Van Duyn, and also the national legislation. EU law would take primacy and the courts would have to apply EU law, while disapplying national legislation. However, what the court has proved very resistant to, is the idea of directives having Horizontal Direct Effect. Can an individual rely on a directive against another individual? I am a pregnant woman employed by a private company. Can I sue another individual? Marshall v Southampton and SW Hants A.H.A. She was employed by a health authority and asked if she could rely on directives against another individual. The Court had to be very consistent in its approach. It gives one reason, they said that if you look at the text of the treaty of Art. 288 it only creates obligations on member states, not private individuals. It seems the Courts are switching from a useful effect approach, to another one. Directives do not have horizontal direct effect, even if the period of implementation has expired.

Directives should have horizontal direct effect. The enforcement problem, if 85% of EU law is given in the form of directives, and private companies employ the vast majority of EU nationals, then the EU law is largely useless. For example, if you are a pregnant woman who is a national in a State that has exceeded the period for implementation can clearly bring an action against a state-owned entity, while not being able to bring an action against a private employer. Italy and Greece top the statistics for non-compliance with directives. Your rights, should never be dependant on someone bringing an action against the state. The idea of estoppel is applicable here. The state should not be able to benefit from their non-compliance with the implementation of directives. States are given the chance to implement the law, but if they fail to, you should not suffer as an individual. The inequality is not just between people that are employed by national or private organizations, but between member states that comply and those that do not comply. Imagine in Italy, all women who get pregnant only get 18 months of maternity leave. Italy is benefitting from failing to implement the directives by saving on the money they have to pay during maternity leave, giving them an advantage. In the UK, who has implemented the directives, will be paying the pregnant women who are on maternity leave for twice as long as in Italy. Instead of rewarding the member states that comply with the directives, the states that do not comply are benefitting from their non-compliance. Faccini Dori v Recreb They argued very strongly in favour of horizontal direct effect. As well as Case 316, giving a very strong decision in favour of horizontal direct effect. In the years that followed they were trying to find horizontal direct effect by the backdoor and by bending the rules. The first expansion was, to expand the idea of the state. In the case of Marshall, who was employed by the hospital. The Court decided in Marshall that he or she may be able to sue a state whether they are acting as your employer or as the State. The expansion continued in the following cases: Foster Action brought against British Gas. Interestingly enough, the Courts, in Foster, decided that British gas was under the State. There were 3 conditions: 1) It was providing a public service 2)It was under the control of the state 3) It had special powers to do so. For the purposes of direct effect, it will then be seen as an arm of the state. Is the prison services under the state? Yes because it fulfills the above 3 conditions. Doughty v Rolls-Royce plc Rolls-royce had a military contract as they were equipping the military, a public service. Also, the safe transfer of heads of state. They argued that it was not a public service, but a service to a public. They said that it was a service to the public because the members of the community cannot make use of it at all. Rolls-royce was 100% owned independently. They provide commercial services rather than public services. Incidental Horizontal Direct Effect The Court decided that the directive itself was not providing rights, but in fact, supplement national legislation. You have a piece of Community Law that can be used to disallow a right arising in national Law from contract or legislation. It has this effect of disallowing a right arising in national law, but it will not substitute a community law for the national law. It merely has an exclusionary effect. Read the case of Wells.

Unilever v Central Food Unilever sold oil to Central Foods, so they had a contract of sale. Central Food rejected the oil and did not pay for the oil, so Unilever sued them. Central Food said that the reason was that the standards of the oil was not up to their standards. Unilever said that Central Food had every opportunity to test the standard of the oil. The question for the Court, Unilever was relying on rights given by the directives. The Courts decided that the Italian law on standards should not apply, but also stated that this will not create horizontal direct effect. They are saying that Unilever is not relying on the directives, the directives are only making national law inactive. [51] It suggests that the directive itself does not create rights or obligations. They said that we are only going to allow the directives to be used to supply national law. An individual is allowed to rely on a directive that creates obligations in another individual. The Courts said that it is not horizontal direct effect because it is purely an individual relying on a directive to supply national law. It may be unjustifiable and unreasonable. The directive is operating incidentally, almost accidentally. They are saying that a directive can only be used to substitute the national law and disapply it. They said that this would somehow not be horizontal direct effect. Another way that the Courts have tried to avoid this, is to use incidental direct effect to disapply national law. General Principles Mangold v Helm Mr. Mangold was employed and the case took place in Germany. The law stated that you could use fixed-term contracts for people above 52 years of age, while it was not allowed for anyone below the age of 52. This was to enable the companies not to pay pension or insurance. Germany implemented this with a critical exception, stating that if the employee was above 52 years of age, you could apply on a fixed-term rolling contract. Mr. Mangold was 58 at the time, and his employer could employ him on this fixed term contract. Mr. Mangold brought his employers to court as a discrimination against age, whereas his employers are simply relying on national law. In this case, there is horizontal direct effect through general principles. The first one, the directives period of implementation was not expiring for another 3 years. While the period of implementation was going on, you are not able to bring up the directive. Nowadays, there is a possibility of using directives before the period even expires. The 2 nd, the court says that it is not the case of an individual, it is a case of an individual relying on another individual. There are certain general principles that we can deduce from the common law from the member states. They agreed that there is a principle that is suspended over the European Union. We were never told that such general principles would apply and that individuals would be able to rely on it. If you are relying on the directive that contains a general principle, then you are relying on the directive, not the general principle. Mangold and Helm actually staged this case, as they were both lawyers. They created this case so that the Courts would not be able to deny the effect of horizontal direct effect. At the time when Mangold was brought to Court, equal rights were at the forefront. Mangold and Helm felt that there was no way that the Courts would refuse to reverse the lack of horizontal directives. The Court never actually says that you can rely on general principles. They said what you can do is to rely on general principles once the directives put it into the European system. Kucukdeveci v Swedex GmbH & Co. KG It is a similar case where they said that they would allow the use of the principle but not the directive itself. Indirect Effect If you do not satisfy the conditions for direct effect, use indirect effect. Van Colson v Land Nordhein-Westfalen A lady was rejected from being employed by the prison services. The courts said that if you cannot use the directives, the national courts must interpret the national legislation in line with

EU Law. For example, I am a pregnant lady in Italy, and Italian law states that women should be given sufficient time to recover from childbirth while EU law provides for 36 weeks. You can rely on the directive that gives you 36 weeks against the state once the period of implementation expires. However, can I bring an action against another individual relying on national law. You can sue your employer saying that you have not been given sufficient maternity leave. The Italian Court will have to interpret their own law of Sufficient recovery time in compliance with EU law to mean 36 weeks of maternity leave. This forces the national court to interpret their own laws in a way such as to give effect to EU directives. Limits on Interpretive Obligation It has no conditions. What if there is no national law? For example new Eastern European countries which have no concept of maternity leave. What if there is national law but it is strictly contrary to EU law.

Wagner-Miret This case involved managers in a company that had gone bust. A European directive forced companies to set up insolvency funds to enable all the employees to be paid their final salary. In Spain, it is stated that managers will not be paid out of this insolvency fund. If you have the top managers being paid their final salaries, there would not be enough funds remaining to pay the other employees. Effectively, the high-ranking employees would lose out on their final salaries. They cannot use the directive on horizontal direct effect, but they also could not use national law and force the courts to interpret the domestic law in line with EU law as it is strictly in conflict. If that happens, your third line of attack is state liability. State Liability Francovich, Bonifaci & others v Italian Republic Involved the same case of insolvency funds. Francovich and Bonifaci were 2 people that lost their jobs and wanted to rely on the directives to obtain their final salaries. They could not rely on direct effect as they were private individuals. They were also not able to use indirect effect. This case suggests that if the directives were not implemented within the period, there is no point to chase the individual but to bring an action against the government of Italy for the failure to implement the directive. The State is liable in damages for this failure to implement the directive. A great number of European rights have to do with social rights that have to do with the conditions of work and living, and a lot of that cannot be compensated with money. Maternity leave and sick leave is desired and cannot be replaced by money. If I am a pregnant woman, the last thing I want to be doing is to bring an action against the state. It takes a lot of stamina and financial stamina to bring an action against the State. You should not have to take on another legal action, rather than simply going to your employer and obtaining the prescribed maternity leave. State liability, thus, have a great disincentive. If a Court makes a decision that is contrary to European law, you can also bring an action against the state. State liability has expired. This topic is examined usually on horizontal direct effect as an essay question, or a problem question such as the much-mentioned pregnant women.