Effects of Derivatives in National Legislation

Effects of Derivatives in National LegislationIn the character before us the United region has failed to transpose the repointive into national practice of law, resulting in a detrimental inwardness for both Rachel and Jose. The fact that the UK government voted against the Directive when it was adopted in the council of ministers by QMV1 and believes that vivacious legislation adequately covers teachers rights is of no consequence if the read of the law doesnt give loading to the guiding.Initially it was envisaged that the infraction procedure as set out in oblige 2262 EC treaty would be the primary means of enforcement of union law against ingredient renders3. Article 226 proved itself to be ineffective at the date lacking render4 to impose penalties on member secerns. Article 226 is also incap commensurate of safeguarding the rights of individuals (a compensation order shadownot be made against the defaulting state in favour of the aggrieved individual)5. Due to t he inadequacy of Article 226 in the case of Van Gend en Loos 19626 the principle of direct effect was born. Van Gend en Loos had had a customs duty impose on his goods by the Dutch contrary to Article 25 breaching rules in relation to the free movement of goods. Van Gend brought proceeding against the Dutch government in the national motor hotels claiming reimbursement of the customs duties. The Dutch move sought a preliminary ruling from the ECJ7 who first of all considered whether treaty provisions could confer directly effective rights upon individuals. The ECJ held that community law not wholly imposes obligations on individuals but is intended to conferrights which be acclaim part of their profound inheritance (arising) not only where they are expressly granted by the treaty, but also by reason of obligations which the treaty imposes in a clearly define way upon individuals as well as upon member states.Article 249 provides that a directing is rachis as to the result to be achieved but not as to the method employed by the state8. The direct effect of directives was first recognised by Van Duyn v Home Office9. Van Duyn was a scientologist ref accustomd entry to the UK as the UK government had imposed a ban on foreign scientologists entering the UK. Van Duyn challenged the ban as falling foul of Directive 64/221/ europium which required that any ban be based on the personal conduct of an individual. The ECJ held that it would be incompatible with the binding effect attributed to a directive by Article 249 to exclude, in principle, the possibility that the obligation which it imposes whitethorn be invoked by those concerned (particularly where a directive) has imposed on member states obligations the useful effect (of which) would be weakened if individuals were prevented from relying on it before their national courts. Another justification for direct effect of directives is that of estoppel10 it would be wrong for a member state to be capable to r ely on and gain advantage through their also-ran to implement an obligation low a directive they are thus estopped from denying the direct effect of directives once the deadline for transposition has passed.The estoppel argument has one very important implication as direct effect is based on the fault of the member state in failing to implement the directive it follows that parties may invoke and rely on the directive against the state only (i.e. only vertical not crosswise direct effect). Where a directive is properly implemented individual rights flow from the implementing legislation and not the directive itself.The limit to vertical direct effect can be best illustrated by the case of Marshall11 a directive may not of itself impose obligations on an individual and that a provision of a directive may not be relied upon against such a person.An important requirement is that it is necessary to examine in every case, whether the nature, general scheme and enunciation of the prov ision are capable of having direct effect12 the provisions must be unconditional and sufficiently precise1314.So, Rachel, working for an entity of the state (a state school) may be able to enforce her right to a break with direct effect through the English courts the teachers employment rights directive imposes on member states obligations to ensure that teachers are afforded a 3 hour break. Clearly as the directive has not been transposed Rachel has been deprived of this right and the English decide should rule in favour of her right to a break. The directive also fulfils the Becker test it is unconditional and sufficiently precise.Jose, ostensibly will not be able to enforce his rights through the English courts, although he is being denied his break he works for a private institution, a problem insofar as direct effect of directives is permitted only vertically (individual v the state15) and not horizontally (individual v individual). This two tier legal system, affording increa sed rights to public sector employees has come under a barrage of criticism from the judiciary and academia alike16. Conversely to allow horizontal direct effect would render the distinction between directives and regulations meaningless so as to be effectively one and the same17. Although a directive has in certain cases been used as a shield in a deviation between private parties to prevent provisions of conflicting national being invoked against each other18Jose may though be able to claim direct effect if, although he works for a private institution it has a public function a body which has been made responsible for providing a public attend under the control of the state is included among the bodies against which the provision of a directive capable of having direct effect may be relied on19. So in the case of Jose it is a question of fact whether he may be able to rely on the directive.The concept of state liability stems from the case of Francovich20. The all-embracing eff ectiveness of community rules would be impaired and the protection of the rights granted would be weakened if individuals were unable to obtain redress when their rights are infringed by breach of community law for which a member state can be held responsible21 state liability for loss and damaged caused to individuals is therefore inherent in the treaty22In Francovich the court held that in cases where there was a failure to implement community law under Article 249 that there was a right to compensation provided (a) the result which had to be attained by the directive involved rights conferred on individuals. The directive undoubtedly confers rights (better working conditions on both Rachel and Jose) (b) the contents of the rights could be identified from the provisions of the directive (this is satisfied as the directive is clear and unambiguous as to the applicable rights) (c) there must exist a casual link between the failure by the member state to fulfill its obligations and the damage suffered by the person affected (clearly if Rachel and Jose are dismissed because they refuse to work without the break provided for in the directive and so there is a casual link). On the face of it Rachel (and Jose) would be able to bring an action for damages against the British government. It is for the national courts to ensure legal protection which persons derive from community law2324. In anycase in the case of Jose, if he is not able to enforce his rights directly (and a complaint to the management is a lengthy process-see below) industrial action by his trade union could be an attractive alternative.Article 226 plays the leading role in the centralised enforcement of EU law (as opposed to direct effect for instance at the national level)25. 226 provides that if the commission considers that a member state has failed to fulfil an obligation under this treaty, it shall deliver a reasoned credit on the matter after giving the state concerned the opportunity to s ubmit its observations if the state concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the court of justice. In addition Article 227 provides that a memberstate which considers that another member state has failed to fulfil an obligation under the treaty may bring the matter before the Court of Justice. The use of Article 227 has been rare though, member states preferring to leave it to the commission to take action under Article 22626. The infrequent use of Article 22727 can best be attributed to politics, especially with the increased use of QMV making it even more imperative to maintain good relations with fellow member states28. Also in the case before us the failure to implement correct break times for teachers lecturers in the UK is probably not of much concern to the Spanish government go to article 226 the procedure compromises two elements the administrative stage and the judicial stage. The Commi ssion, upon being notified of the member states infringement by a member state or a individual initiates matters with an informal letter to the member state government outlining the reasons upon which it suspects and infringement.The member state government is then invited to reply and to submit further information.This is then followed by a formal request to the member state to submit its observations (the letter of notice). Ideally the commission and the member state will negotiate an agreement by this stage, especially if it is the case that the member state is genuinely unaware of the infringement or is simply buying time before implementing the directive. In the UK as there is a chronic shortage of teachers the implementation may well have far reaching applications, for this reason the UK may well call commissions bluff and cease from implementing the directive for a period of time.Only if no agreement is reached in the early stage will the commission deliver its reasoned opin ion. Then only if the infringement continues will the commission move from the administrative phase to the judicial phase. It is of note that only a minority of cases will reach the judicial phase, in 2002 approximately ten percent and in 2003 approximately thirteen percent29.It is worth noting that the Commission is under no obligation to take action with regards to Article 226. If the member state takes no heed of the reasoned opinion then the Commission may begin the judicial stage but there is no time limit that the commission must adhere to in doing so30. Once the ECJ has judged against the member state failure to observe the terms of that judgment will constitute a breach of Article 228(1). The state may be required to remedy, introduce or revoke national law to comply with the courts judgment.If the state continues to be in breach of the judgment then the commission may invoke fresh proceedings under Article 228(2). The three administrative stages of Article 226 will then app ly. If the commission decides to progress to the judicial stage then the commission will recommend a lump sum and or penalty payment31 to be imposed against the defaulting member state (although I issue the caveat that this is only a recommendation to the court and there is no upper limit on the sum total that may be fined).The Court of justice has consistently imposed fines on member states in Art 228(2) proceedings. In the case of Commission v Graeco-Roman Republic32 the ECJ held that although Article 228(2) did not specify the period in which the judgment had to be complied with the importance of immediate and uniform application of community law meant that the process of complaisance had to be initiated at once and completed as soon as possible33.The process of Article 228(2) is a very long and drawn out one, with legion(predicate) cases taking a decade or more. Given that several socio-economic classs or more may elapse between the initial complaint to the commission and t he hearing before the court of justice, the commission, in circumstances where continuing damage is being caused while the case is processed may well apply to the court for interim relief. The court may apply interim relief under Art 243 the court of Justice may in any cases before it regulate any necessary interim measures. In the present scenario the issue of interim relief is, seemingly academic as they have not yet been sacked, kind of I mention it to try and give a broader view of the area.In summation the commissions actions under Art 226 (or in the unlikely case of a state art 227 actions) are long, drawn out processes and will be of little use to Rachel and Jose who will have long moved on before their protests come to fruition.BibliographyChalmers, D. Hadjiemmanuil, C. Monti, G. Tomkins, A. (2006) European Union Law. Cambridge Cambridge University Press.Craig, P. Directives Direct effect, collateral effect and the construction of national legislation. E.L. Rev. 1997, 22(6 ), 519-538Fairhurst, J. (2005). Law of the European Union. Harlow Pearson Longman.Harden, I. What future for the Centralised enforcement of community law? (2002) 55 CLP 495Harlow, C. Rawlings, R. business and law enforcement The centralised EU infringement procedure. E.L. Rev. 2006, 31(4), 447-475Meltzer, D. Member state liability in Europe and The United States. 2006 Jan 4 Intl J. const. L. 39Pachnou, D. Direct and Indirect effect of directives and state liability their applicability in relation to procurement remedies. P.P.L.R. 2000, 5, 251-260Weatherill, S. Breach of Directives and Breach of contract. (2001) 26 European Law review 177-183Footnotes1 Qualified legal age Voting2 Formerly article 1693 Chalmers, Hadjiemmanuil, Monti and Tomkins, 2006, p3654 Subsequently amended by the TEU Article 228(2)5 Fairhurst, 2006, p2346 Van Gend en Loos v Nederlandse Administratie der Belastingen Case 26/62 IN affinity TO A TREATY ARTICLE7 European Court of Justice8 A directive is addressed to the state and NOT its citizens, As opposed to regulations (addressed to its citizens) which are binding as to both the method of implementation and the result to be achieved.9 Case 41/7410 First employed in Ratti Case 1487811 Marshall v Southampton and SW Hampshire Area Health Authority (1986) Case 152/84 at parity 4812 Van Duyn v Home Office. Case 41-74 at Para 1213 Ursula Becker v Finanzamt Mnster-Innenstadt. Reference for a preliminary ruling Finanzgericht Mnster Germany. Direct effect of directives. Case 8/1981 at Para 2514 See also Craig, 1997, 52215 See Faccini Dori v Recreb Case 91/9216 See for instance Case 316/93 Vaneetveld v Le Foyer and Faccini Dori v Recreb Case 91/9217 See Faccini Dori v Recreb Case 91/92 at Para 2418 Weatherill, 2001, p17719 Foster v British shoot a line Case 188/8920 Joined cases C-6 and 9/90 Francovich and Bonafici v Italy21 Ibid at Para 3322 Ibid at Para 3423 R v secretary of State for Transport ex parte Factortame Ltd Case 218/8924 Meltzer, 2006, 5925 Harden, 495, 200226 Harlow and Rawlings, 2006, 45127 As yet on only two occasions see Case 141/178 France v United Kingdom and Case 388/95 Belgium v Spain28 Chalmers, Hadjiemmanuil, Monti and Tomkins, 2006, p34929 European Commision 21st Annual report on the application of Community law, COM (2004) 83930 See the 6 year wait in Commision v Germany Case 422/9231 See Case 304/0232 Case 387/9733 Pachnou, 2000, 256