C-355/89

4. Like the Channel Islands, the Isle of Man The Isle of Man ' is not part of the United Kingdom, nor is it a colony. It is usually described as a dependency of the British Crown, although this term has no precise legal significance. The island has its own legislature, known as 2. The Isle of Man is situated in the Irish Tynwald, which consists of the House of sea and is roughly equidistant from Keys (lower house) and the Legislative England, Wales, Scotland, Northern Ireland Council (upper house). The representative of the Crown on the island, the Lieutenant- * Original language: English. Governor, is a member of the Legislative 1 — In preparing this section of my Opinion, I have derived Council. particular assistance from the written observations submitted in these proceedings and from the following works: Simmonds, The British Islands and the Community; II —The Isle of Man' (1970) 7 CMLRev 454; the Report of the Royal Commission on the Constitution (1973), Cmnd. 5460, Vol. I; Horner, The Isle of Man and the Channel Islands — A Study of their Status under Constitutional, International and European Law, EUI Working Paper No 98 (1984); Plender, The 5. Tynwald enjoys a substantial degree of Protocol, the Bailiwicks and the Jersey Cow' in Plender (ed.), Legal History and Comparative Law (1990), p. 193. autonomy in respect of matters which do See also the judgment of the European Court of Human not transcend the frontiers of the island. Rights dated 25 April 1978 in Tyrer v United Kingdom, Series A, No 26. However, Acts of Tynwald, like Acts of the

6. The corollary of the jurisdiction of Tynwald to legislate on purely domestic matters is the practice of the United 9. The United Kingdom Government is Kingdom Parliament at Westminster not to responsible for the international relations of legislate without the agreement of the the Isle of Man and for its defence. The island's authorities on matters which only former responsibility gave rise to concern in affect the island. However, the Royal the island when the United Kingdom Commission on the Constitution concluded applied to join the Community. At the that, as a matter of law, Parliament had origin of that concern lay Article 227(4) of unlimited power to legislate for the island the EEC Treaty, which states: 'The without its consent. provisions of this Treaty shall apply to the European territories for whose external relations a Member State is responsible'. Thus, in the absence of special arrangements, the EEC Treaty would have become applicable in its entirety to the island on the accession of the United Kingdom to the Community. 7. The Isle of Man is not represented in the United Kingdom Parliament. Acts of Parliament do not extend to it auto- matically, but only where they expressly apply to the island or do so by necessary implication. When an Act of Parliament is 10. The islanders considered that the result intended to apply to the island, this is not would be to cause damage to the island's usually done directly but by the inclusion in economy. Accordingly, special arrangements it of a section providing for its extension to were negotiated by the United Kingdom to

Similar provisions were inserted in the other treaties: see Articles 79(c) of the ECSC Section 2(2) (which does not seem to be at Treaty and 198(d) of the Euratom Treaty. issue in the main action) provides a defence The extent to which the EEC and Euratom to an employer who 'satisfies the court that Treaties are applicable in the Isle of Man is he believed that the person he employed was specified by Protocol No 3 to the 1972 Act an Isle of Man worker and that he took all of Accession. It is on the interpretation of reasonable steps to verify the accuracy of his that Protocol that the referring court seeks belief'. The expression 'Isle of Man worker' guidance in these proceedings. is defined in section 1. Broadly speaking, it encompasses those who meet such conditions as birth on the island or long periods of continuous residence there. By virtue of section 2(3), the prohibition The facts and the questions referred contained in section 2(1) does not apply to any of the employments specified in Schedule 1 to the Act.

11. In the main action, Christopher Stewart Barr and Montrose Holdings Limited are 12. Mr Barr is a British citizen. He is not being prosecuted by the Department of an Isle of Man worker within the meaning Health and Social Security (Isle of Man) of section 1 of the Control of Employment ('the DHSS') under section 2(1) of the Act 1975 and he was employed in the island Control of Employment Act 1975 (as by Montrose Holdings Limited between 1 amended), an Act of Tynwald. That September 1988 and 1 January 1989. The subsection provides as follows: DHSS had not issued a permit under the

B. Whether Article 4 of the said Protocol No 3 on its true interpretation means no more than that the Isle of Man Authorities shall not discriminate 13. It appears from the order for reference between natural and legal persons of the that all the material facts are admitted by Community on the ground of both defendants. Their only defence is that nationality?' the 1975 Act is inconsistent with Protocol No 3, which is given legal force in the Isle of Man by the European Communities (Isle of Man) Act 1973, an Act of Tynwald. T h e 14. The Court clearly cannot answer the following questions have therefore been first question as framed, for it asks for a referred to the Court for a preliminary ruling on the compatibility with Community ruling: law of a specific piece of Isle of Man legis- lation. It is well established that the Court has no jurisdiction under Article 177 to give such a ruling. It is possible, however, to formulate an answer to both questions which should enable the referring court to 'A. Whether the Control of Employment give judgment. Act, 1975, (as amended), an Act of Tynwald, contravenes the terms of Protocol N o 3 to the Act annexed to the Treaty of Accession of 1972 on the The jurisdiction of the Court true interpretation of the Protocol insofar as the said Act of Tynwald :

15. Before the substance of the questions referred can be addressed, it is necessary to consider whether the Court has jurisdiction to entertain the reference. It is clear from Article 1(2) and (3) of the Treaty of 1. imposes controls or restrictions on Accession and from Article 158 of the Act employment in the Isle of Man of of Accession that the Court has jurisdiction persons other than Isle of M a n to give preliminary rulings on the interpre- workers as defined in the said Act of tation of Protocol No 3 where it is asked to Tynwald, as amended, which do so by a court or tribunal of a Member discriminate in terms of the controls State. However, as I pointed out above, the or restrictions imposed by reference Isle of Man is not part of the United to trade, profession or type of Kingdom. The question therefore arises employment? whether the referring court is to be

16. There is no doubt that, at the time of the United Kingdom's accession to the Community, Tynwald took the. view that this question was to be answered in the 17. I consider that the view taken by affirmative. Thus, section 2(1) of the Tynwald was correct. It is supported by European Communities (Isle of Man) Act Article 227(5)(c) of the Treaty, according to 1973 provides in part that: which the Treaty applies to the Isle of Man 'to the extent necessary to ensure the implementation of the arrangements' set out in Protocol No 3. T o that extent, therefore, Article 177 applies to the Isle of Man: it perhaps follows, for that reason alone, that '. . . all such remedies and procedures from courts and tribunals in the island enjoy the time to time provided for by or under the right to make use of the facility provided by Treaties, as (having regard to the provisions Article 177. o f . . . the Act annexed to the Treaty of Accession and to the provisions of the Protocol) in accordance with the Treaties are without further enactment to be given legal effect or used in the Isle of Man shall, in the Isle of Man, be recognized and 18. In any event, in order to ensure that the available in law, and be enforced, allowed Protocol is properly applied, it is in my view and followed accordingly . . . ' essential that courts and tribunals in the island should be entitled to ask this Court for guidance on its terms. As the DHSS and the United Kingdom Government, which have submitted joint observations, point out, Section 3(1) states: if Manx courts and tribunals were denied the right to invoke Article 177, it would be difficult to ensure the uniform interpretation and application of the provisions of Community law which are, by virtue of 'For the purposes of all legal proceedings, Protocol No 3, applicable in the island. In any question as to the meaning or effect of view of the paramount need to ensure the any of the provisions of the Treaties having achievement of that objective, I consider effect in the Isle of Man, or as to the that the expression 'court or tribunal of a validity, meaning or effect of any Member State' in Article 177 should be Community instrument having effect in the interpreted broadly as extending to judicial Isle of Man, shall be treated as a question of bodies situated in any territory to which the law (and if not referred to the European Treaty applies, even if only partially, by Court, be for determination as such in virtue of Article 227. Otherwise, courts or accordance with the principles laid down by tribunals in such territories which are and any relevant decisions of the European responsible for applying Community law Court...)'. would be deprived of any means of seeking

19. The Treaty rules on the free movement of workers, the right of establishment and the freedom to provide services do not apply to the Isle of Man. The only reference to those rules in Protocol No 3 is to be found in Article 2, which provides: 'The rights enjoyed by Channel Islanders or Manxmen in the United Kingdom shall not be affected 21. Before examining this argument, I must by the Act of Accession. However, such consider whether the situation with which persons shall not benefit from Community the referring court is confronted falls within provisions relating to the free movement of the scope of Community law. In Case persons and services.' (The term 'Manxman' 175/78 Saunders [1979] ECR 1129, means essentially any British citizen who paragraph 11, the Court stated that the has certain particularly close links with the provisions of the Treaty on the free island: see Article 6 of the Protocol and the movement of workers did not apply 'to situ- declaration by the United Kingdom ations which are wholly internal to a Government on the definition of the term Member State, in other words, where there 'nationals', Official Journal 1983 C 23, is no factor connecting them to any of the p. 1.) Thus, Manxmen retain their tradi- situations envisaged by Community law' tional rights of residence in the United (see also Joined Cases 35/82 and 36/82 Kingdom and of access to the job market Morsoti and/hanjan [1982] ECR 3723; Case there, but they have no rights of free 180/83 Moser [1984] ECR 2539; Joined movement in the rest of the Community. Cases C-297/88 and C-197/89 Dzodzi, Nationals of the Member States, including judgment of 18 October 1990). The same nationals of the United Kingdom who are limitation applies to the Treaty provisions not Manxmen, have no rights under on the right of establishment and the Community law to enter the island to seek freedom to provide services: see e.g. Case or to take up employment, to establish 115/78 Knoors [1979] ECR 399. The instant themselves on a self-employed basis or to case does not concern the rules laid down in provide services. the Treaty on the free movement of persons for, as I have explained, those rules do not apply to the island. However, since it involves the right of a British national to take up employment in the Isle of Man, it 20. For this reason, the defendants rightly might be thought that the provisions of do not seek to rely on the provisions of the Protocol No 3 are also excluded here by Treaty relating to freedom of movement. reason of the situation being wholly internal

to a Member State. Indeed the joint obser- 23. I therefore turn to the defendants' vations of the D H S S and the United argument that the Control of Employment Kingdom suggest that that may be so since Act 1975 is incompatible! with Article 4 of the essential point at issue is the claim of a Protocol No 3. The gist M that argument is national of the United Kingdom to take that some of the employments listed in employment in a territory for whose Schedule 1 to the 1975 Act, which persons external relations the United Kingdom is who are not Isle of Man workers may take responsible and in which the Community's up without permits, are in practice only rules relating to the free movement of open to nationals of the United Kingdom workers do not apply. and Ireland. As is agreed by all those submitting observations, the effect of Article 4, where it applies, is to prohibit discrimi- nation on the ground of nationality. The defendants conclude that the system of exempted employments is incompatible with Article 4 because it discriminates against nationals of Member States other than the United Kingdom and Ireland. They concede, however, that, if the 1975 Act affected United Kingdom nationals, other than Manxmen, and Irish nationals in the same way as nationals of the other Member States, it would be consistent with Article 4. 22. I do not think that suggestion can be In other words, they do not challenge the accepted. Circumstances such as those at legality of the discrimination operated by issue in these proceedings are not 'wholly the 1975 Act against persons who are not internal to a Member State', for, as I have Isle of Man workers. explained, the Isle of Man is not part of the United Kingdom. Moreover, Article 4 of the Protocol, in requiring the Isle of Man auth- orities to apply the same treatment to all natural and legal persons of the Community, manifestly applies in relation to the nationals of all the Member States including the United Kingdom. It cannot therefore be said, as the Court said in Saunders, that there is no factor connecting this case to any of the situations envisaged by Community law. The effect of Saunders 24. The defendants examine the contents of is that a national of the United Kingdom Schedule 1 to the 1975 Act in some detail, may enjoy fewer rights vis-à-vis the United but in my view there are two reasons why it Kingdom than nationals of other Member is not necessary for the Court to do so. The States. However, there is no suggestion in first is that Mr Barr is a British national. Protocol No 3 that nationals of the United Whether or not the defendants are correct Kingdom enjoy fewer rights under in their analysis of the exempted Community law vis-à-vis the Isle of Man employments, he has not therefore been the than the nationals of other Member States. I victim of any discrimination on the basis of conclude that the circumstances of this case his nationality. The second reason is that, as are not to be regarded as 'wholly internal to counsel for the defendants explained at the a Member State' and that they therefore fall hearing, Mr Barr was employed by within the scope of Community law. Montrose Holdings Limited, whose main