The Gazette 1992

GAZETTE

JUNE 1992

For as long as a directive has not

been properly transposed into

national law, individuals are unable

to ascertain the full extent of their

rights, notwithstanding a judgment

of the Court of Justice that the

Member State has failed in its

obligations or that the provisions of

the directive have direct effect. Since

only the proper transposition of a

directive will bring that state of

uncertainty to an end, until such

time as a directive has been properly

incorporated a defaulting Member

State may not rely on an individual's

delay in initiating proceedings to

protect rights conferred thereon by a

directive. Time will not begin to run

against a plaintiff until the Member

State has effectively implemented the

directive in question.

Francovich

"Rarely has our Court had to

judge a matter in which the negative

consequences of the non-transposition

of a directive were, for the individuals

in question, as serious as they were in

this case."

The objective of Council Directive

80/987 of 20 October 1980

is to

protect employees in the event of an

employer's insolvency, in particular

as regards the recovery of unpaid

earnings. To this end Member States

are required to take such measures as

are necessary to ensure that

guarantee institutions, as created or

designated thereby, can ensure the

payment of outstanding claims for

earnings prior to an employer's

insolvency. What constitutes an act

of insolvency for the purposes of the

directive is to be chosen by each

Member State from among three

options.

On 2 February, 1989, the Court

condemned Italy for its failure to

transpose Directive 80/987 into its

domestic law by 23 October, 1983.

Having only received part of his

salary during 15 months

employment, Mr. Francovich

obtained judgment for 6 million

Italian Lire (c. IR£3,000) but was

unable to recover this amount from

his employer. He commenced

proceedings against Italy seeking

either to obtain the benefit of the

guarantees provided for by Directive

80/987 or an award of an equivalent

sum in damages.

Mrs. Bonifaci's employers went into

receivership on 5 April, 1985, owing

253 million Lire (c. IR£126,500) to

some 34 employees. After four years

of fruitless waiting, they took the

same road as Mr. Francovich.

T\vo issues of Community law arose.

Could the rights created by Directive

80/987 be invoked by the plaintiffs

in an Italian court notwithstanding

Italy's failure to transpose the

directive into Italian law? If not,

could the plaintiffs recover damages

for the losses they sustained by

reason of Italy's failure to implement

the directive?

To see whether the rights established

by Directive 80/987 satisfied the

Requirements for direct effect,

Advocate General Mischo and the

Court attempted to first determine

their content before going on to

identify to whom the rights were

given and upon whom duties were

imposed under the directive.

Since

the latter group could not be divined

from the text of the directive, the

Court had to consider the second

question.

Advocate General Mischo argued

that Member States are required to

give full effect to Community law,

although it is up to national law to

determine how this duty is to be

discharged. This obligation extends

to all provisions having the aim of

conferring rights upon, or protecting

the interests of, individual persons,

even where those measures do not

give rise to direct effect.

Member States which fail to, or

inaccurately, implement a directive

are in breach of both the general

obligation to ensure the full effect

of Community law and the specific

obligation laid down in Articles 5

and 189(3)

of the EEC Treaty.

Where, as a result of an action

taken against a Member State, the

Court of Justice finds there has been

a breach of this obligation, the

Member State is obliged to take all

appropriate measures to put its

house in order. This may require

payment of compensation for

damage sustained by private persons

arising from the failure to implement

Community legislation. Such claims

for compensation may be

Doyle Court Reporters

Principal:

Áine O'Farrell

Court and Conference Verbatim Reporting

Specialists in Overnight Transcription

2, Arran Quay, Dublin 7. *

Tel: 722833 or 862097

(After Hours)

Fax: 724486

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