C-6/90

OPINION OF MR MISCHO —JOINED CASES C-6/90 AND C-9/90

OPINION OF ADVOCATE GENERAL MISCHO delivered on 28 May 1991 *

Contents

Introduction 1-5371

T h e first question 1-5372

I — Direct effect of Directive 80/987 1-5372

B — Discussion of the reasoning 1-5380

The case-law of the Court of Justice on provisions which are directly applicable

or have direct effect 1-5381

The lessons to be drawn from the Factortame / a n d Zuckerfabrik judgments 1-5388

State liability in the case of provisions which do not have direct effect 1-5390

The substantive and formal conditions governing the action for damages 1-5395

1. Rarely has the Court been called upon to decide a case in which the adverse conse- quences for the individuals concerned of 4. The facts which gave rise to the actions failure to implement a directive were as before the national courts are as follows. shocking as in the case now before us. At the same time, the situation is far from simple from the legal point of view. The Court is asked to rule on the possible direct effect of a directive which contains Mr Francovich, the plaintiff in the main particularly complicated provisions. In the proceedings in Case C-6/90, worked for alternative, we are faced with the issue of C D N Elettronica SnC in Vicenza from 16 the liability of Member States for failure to January 1983 until 7 April 1984 but implement a directive, or, more generally, received only sporadic payments on account for failure to comply with Community law. of his wages. He therefore brought proceedings before the Pretura, which ordered the defendant undertaking to pay the sum of approximately LIT 6 million. 2. Council Directive 80/987/EEC of 20 Since Mr Francovich was not able to October 1980 on the approximation of the recover that sum from the undertaking, he laws of the Member States relating to the claimed the guarantees provided for by protection of employees in the event of the Directive 80/987 from the Italian State, or insolvency of their employer (Official in the alternative damages. Journal 1980 L 283, p. 23) provides that 'Member States shall take the measures necessary to ensure that guarantee institutions [to be established or designated by them] guarantee. . . payment of employees' outstanding claims resulting In Case C-9/90, Danila Bonifaci and 33 from contracts of employment or other employees of Gaia Confezioni Sri, employment relationships and relating to which was declared insolvent on 5 April pay for the period prior to a given date' 1985, were owed more than LIT 253 (Article 3(1)). The directive allows the million, and their debts were proved in the Member States to choose one of three dates insolvency of the undertaking. More than relating to the insolvency or the disconti- four years after the insolvency they had nuance of the employment relationship. It been paid nothing, and the receiver told also gives them the option of limiting the them that even a partial distribution in their liability of guarantee institutions. favour was highly unlikely. They therefore brought proceedings against the Italian Republic claiming that in view of its obli- gation to implement Directive 80/987 it 3. In a judgment of 2 February 1989, Case should be ordered to pay them the amounts 22/87 Commission v Italy [1989] ECR 143, due as arrears of salary at least in respect of

'According to the case-law of the Court, where the Community authorities have, by ' U n d e r the system of Community law in means of a directive, placed Member States force, is a private individual who has been under a duty to adopt a certain course of adversely affected by the failure of a action, the effectiveness of such a measure Member State to implement Directive would be diminished if individuals and 80/987 — a failure confirmed by a national courts were precluded from taking judgment of the Court of Justice — entitled it into consideration as an element of to require the State itself to give effect to Community law. Consequently, a Member those provisions of that directive which are State which has not adopted the sufficiently precise and unconditional, by implementing measures required by the directly invoking the Community legislation directive within the prescribed period may against the Member State in default so as to not plead, as against individuals, its own obtain the guarantees which State itself failure to perform the obligations which the should have provided and in any event to directive entails. Thus, wherever the claim reparation of the loss and damage provisions of a directive appear, as far as sustained in relation to provisions to which their subject-matter is concerned, to be that right does not apply?' unconditional and sufficiently precise, those provisions may, in the absence of implementing measures adopted within the prescribed period, be relied upon as against any national provision which is incompatible 6. In that question the national courts with the directive or in so far as the clearly raise two separate issues which must provisions define rights which individuals be carefully distinguished; they are the are able to assert against the State (see, in following: particular, the judgment in Case 8/81 Becker v Finanzamt Münster-Innenstadt [1982] ECR 53).' (i) Can Directive 80/987 give rise to direct 1 — Judgment in Case C-221/88 ECSC v Banem [1990] ECR effects for the benefit of individuals? 1-495, paragraph 22.

11. As to the doubts expressed by the Article 2(2) refers to national law as regards Italian Government and the Commission on the definition of the terms 'employee' and the question on whether the directive can be 'employer', as the Court indeed confirmed relied upon by Mr Francovich, since it is not in Case C-22/87, cited above, at paragraphs clear whether his former employer is 17, 18 and 19. formally insolvent, it should be stated that

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13. According to Article 3 of the directive, the guarantee institutions must guarantee According to the applicants, since the date payment of employees' outstanding claims of the 'onset of the insolvency' is logically relating to pay for the period prior to a before the date of the 'notice of dismissal given date. That date is, at the choice of the issued to the employee concerned on Member States; account of the employer's insolvency' and the date 'on which the contract of employment or the employment relationship with the employee concerned was discon- tinued on account of the employer's '— either that of the onset of the insolvency', it is the first date that provides employer's insolvency; the employee with the minimum guarantee. That is to say, in that case his claim relates to a shorter period than in the other two hypotheses. — or that of the notice of dismissal issued to the employee concerned on account of the employer's insolvency;

16. However, other provisions of the directive give the Member States the option of reducing the guarantees granted to — or that of the onset of the employer's employees. insolvency or that on which the contract of employment or the employment relationship with the employee concerned was discontinued on account of the employer's insolvency.' Under Article 4(1),

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When Member States exercise this option, 21. In support of their views the plaintiffs in they shall inform the Commission of the the main proceedings rely on the Marshall methods used to set the ceiling.' judgment and the Commission refers to the Becker and McDermott and Cotter judgments.

18. Finally, Article 10 allows the Member States to take the measures necessary to avoid abuses and to refuse or reduce the However, in paragraph 55 of the Marshall liability on the ground of the existence of judgment, 2 the Court pointed out that special links between the employee and the employer and of common interests resulting 2 — Judgment in Case 152/84 Marsball v Southampton and in collusion between them. South-Wat Hampshire Health Authority [1986] ECR 723.

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'Article 5 of Directive 76/207 does not result, that is to say equal treatment, was confer on the Member States the right to prescribed in a clear and unconditional limit the application of the principle of manner by the directive. equality of treatment in its field of operation or to subject it to conditions'.

23. In the present case, on the other hand, The Court had already arrived at a similar we are still at the stage where it must be conclusion in paragraph 39 of the Becker determined whether the provisions of the judgment. 3 directive which define the rights of indi- viduals are sufficiently precise and uncondi- tional to enable them to be relied upon in judicial proceedings. It is not a matter of the In the case now before us, on the other choice of the form and methods for hand, it is clear that Article 4 does give the achieving the required result but to a very Member States the right to restrict the large extent the definition of the result itself. liability of the guarantee institutions.

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the directive). I therefore consider that it is C — The identity of the person liable not possible to define such a 'minimum ob- ligation'. 27. Let us first examine what is provided by the directive. Article 3 states that: 25. With regard to Article 10 of Directive 80/987, on the other hand, I acknowledge the validity of the argument which the Commission draws from paragraph 32 of 'Member States shall take the measures the Becker judgment. It was necessary in necessary to ensure that guarantee that case to interpret the scope of Article 13 institutions guarantee . . . payment of B(d)l of the Sixth Value Added Tax employees' outstanding claims Directive, which provides that

'Member States shall exempt the following According to Article 5, under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions and of preventing any possible 'Member States shall lay down detailed rules evasion, avoidance or abuse: . . . for the organization, financing and operation of the guarantee institutions, complying with the following principles in particular: (d)l. The granting and negotiation of credit'. (a) the assets of the institutions shall be independent of the employers' operating The Court held that the 'conditions' capital and be inaccessible to referred to in that provision proceedings for insolvency;

'do not in any way affect the definition of the subject matter of the exemption (b) employers shall contribute to financing, conferred' (paragraph 32 of the judgment). unless it is fully covered by the public authorities;

— the determination of the manner in which it is to be financed, in particular 30. I d o not find that reasoning convincing. the role to be played by the State. There are two possibilities. Either the financing of the guarantee institution by employers is the rule and financing by the public authorities the possible alternative, in 29. The Commission, which dealt with this which case the Commission cannot argue issue in some detail, does not deny that the here, contrary to what it said in relation to State must take all those measures, but it Articles 3 and 4, that in the absence of any nevertheless does not conclude that the decision on the part of the Member State to provisions of the directive are not applicable make use of the alternative possibility it is as they stand. nevertheless that possibility that must be applied. Or the Member State must neces- sarily make a choice as to the method of financing the guarantee institution, in which According to the Commission, if it is at all case the provision in question is not uncon- possible to show that the financial liability ditional. The latter hypothesis is in my view for the benefits provided for under the the correct one. The question whether or directive is ultimately borne by the State, not the guarantee institution can be iden- the guarantee institutions may be identified tified with the State depends on a decision with the State. Accordingly, the national which must first be taken by the latter. court may order the State to pay the minimum compensation provided for by the directive.

second place, the situation where the these are not sufficiently precise and uncon- relevant provisions of Directive 80/987 are ditional to be relied upon and applied as not sufficiently precise and unconditional to they stand. be relied upon directly before the national courts; the question is whether, in that event, an individual harmed by the failure of a Member State to implement the directive may claim reparation of the loss and 3. In the event of failure to implement a damage which he may have suffered as a directive or its incorrect implementation, a result. Member State deprives Community law of the desired effect. It also commits a breach of Article 5 and the third paragraph of Article 189 of the Treaty, which affirm the binding nature of the directive and require 33. In view of the considerable length at the Member State to take all the measures which it is necessary to discuss the various necessary for its implementation. aspects of that problem, I shall begin, in a first section, by summarizing my conclusions and then, in a second section, set out in detail my reasoning, which is based essentially on the case-law of the Court. 4. Where the breach of that obligation is confirmed by a judgment of the Court of Justice delivered pursuant to Articles 169 to 171 of the Treaty, the binding authority of a judicial decision and Article 171 of the A — Summary Treaty requires the Member State, which cannot raise any obstacle whatsoever, to take all appropriate measures to make good its default and give the desired effect to Community law. In so doing it may also be 1. Although, as Community law now required to make reparation for the loss and stands, it is in principle for the legal system damage which it has caused to individuals as of each Member State to determine the a result of its unlawful conduct. legal procedure which will enable Community law to be fully effective, that State power is nevertheless limited by the very obligation of the Member States, under Community law, to ensure such effec- tiveness. 5. By virtue of Community law, it must be possible for the Member State to be held liable at least in cases where the conditions are met under which the Community incurs liability as a result of the breach of 2. That is true in respect not only of Community law by one of its institutions. In provisions of Community law which have the case of a directive which should have direct effect but of all provisions whose been implemented by means of a legislative purpose is to grant rights to individuals. The measure, it is therefore sufficient that the lack of direct effect does not mean that the relevant provisions of the directive should result sought by Community law is not to have the purpose of protecting the interests grant rights to individuals, but merely that of individuals. The condition of a suffi-

The Commission submits that a distinction 7. An action for damages is different in should be drawn between an action for nature from an action for payment pursuant payment and an action for damages. Its to the provisions of a directive which have view, in order for an action for payment to direct effect. It is not a matter of achieving be successful it must be shown that three through some roundabout means the same sets of rules have 'direct effect' ; they are the result as if the provisions of the directive following: had direct effect. The harm can be assessed by the national court 'ex aequo et bono'. T h e provisions of the directive may, however, provide it with a point of — rules which identify the beneficiaries of reference. the rights provided for by the directives;

— those which determine the scope of 8. In view of the uncertainty which has those rights; prevailed until now as regards the liability of Member States in the event of their failure to comply with Community law and the financial consequences which the — and those which identify the person judgment of the Court might entail in against whom those rights can be respect of past defaults, the effects ratione asserted.

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Conversely, again in the Commission's view, based their entire argument on the case-law in an action for damages against the State it of the Court of Justice on such provisions, it is not necessary to show that the third set of is that case-law that we must examine first rules has 'direct effect', since the person of all. liable in such a case is by definition the State.

36. In their submissions to the Court the German Government, the United Kingdom and the Italian and Netherlands 38. That protection must, however, be Governments ruled out the obligatory 'effective', as the Court pointed out in its reparation by virtue of Community law of judgment in Case 179/84 Bozzetti v loss and damage caused not only by failure īnvernizzi [1985] ECR 3201, at paragraph to implement a directive such as that in issue here but also by the breach of provisions of 6 — Sec in particular the judgement in Case 33/76 Rewe v Landwirstschaftskammer Saarland [19761 ECR 1989, Community law which are directly paragraph 5, and Case 45/76 Cornel v Produklschap voor applicable or have direct effect. Since they Siergewassen [Í97b] ECR 2043, paragraphs 12 and 13.

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17, referring to its judgment in Case 13/68 40. Where the application of national rules Salgoil [1968] E C R 453, in which it spoke contrary to directly applicable Community of 'direct and immediate' protection (at law has resulted in the levying of sums of page 463). It is a matter of ensuring the 'full money from individuals, the Member State force and effect' of Community law, and must, in accordance with the Court's any provision of a national legal system and 'case-law' on recovery of sums unduly paid, any legislative, administrative or judicial ensure reimbursement of those sums, and practice which might impair the effec- that obligation follows from the direct effect tiveness of Community law or a fortiori of the Community provision which been prevent it from having full effect are incom- infringed. 9 In other words, patible with the requirements inherent in the very nature of Community law. 7

'the law stemming from the Treaty, an inde- pendent source of law, could not, because of its special and original nature, be over- ridden by domestic legal provisions, however 42. It follows from the foregoing that the framed, without being deprived of its nature possible compensation of an individual for as Community law and without the legal loss or damage suffered as a result of the basis of the Community itself being called breach of a provision of Community law into question'. with direct effect has its foundation in the Community legal order itself. Of course, if 7 — See the judgment in Case C-213/89 Factoname I [1990] ECR 1-2433, at p a r a g r a p h s 20 and 2 1 , and the judgement in Case 106/77 Amministrazione delle Finanze dello Stato v 9 — See in particular the judgment in Case 240/87 Deville v Simmenthai [1978] E C R 629, paragraph 22. Administration des Impôts [1988] ECR 3513, paragraph 11. 8 — See the judgment in Case 106/77 Simmenthal, cited above, 10 — See in particular the judgment in Case 309/85 Barra v paragraph 21. Belgium [1988] ECR 355.

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other remedies capable of ensuring the full Accordingly, at the hearing the agents of force and effect of Community are available the United Kingdom and the German in the national legal system they may be Government began once again by trying to used, but as the Court pointed out in its refute the arguments which the Commission judgment in Case 179/84 Bozzetti [1985] sought to draw in support of its view from ECR 2301, paragraph 17, although it is the judgment in Case 60/75 Russo v AIMA [1976] ECR 45. In that judgment the Court held that

Accordingly, if the payment of compen- That case concerned an infringement of a sation is the sole means in the particular regulation on the common organization of circumstances of ensuring effective agricultural markets. protection, the Member State is under an obligation by virtue of Community law to make available to individuals an appropriate remedy enabling them to claim compen- sation. 44. It is true that the Court referred to the 'provisions of national law on the liability of the State'. The fact remains that it held that the State is liable to the injured party in respect of the consequences for him or her 43. The four governments which submitted of the breach of Community law. It seems observations argued, however, that not only to me that the Court thus laid down the does the Court in its case-law, refer to principle that the State has an obligation to national law with regard to the detailed make good the loss and damage caused, rules to which possible actions against the leaving it to national law to deal with the State for reparation may be subject but that details. If it had wished to leave the even the question of principle whether such question of principle to national law as well actions may be brought is a matter of it would certainly have said so in clear national law. According to those terms, since one of the questions referred by governments, if the national legal system is the national court in that case sought decisive in relation to a provision which has expressly to determine whether such a direct effect, it must a fortiori be decisive principle existed in Community law (see the with regard to provisions which do not. fifth question, [1976] ECR 47), and both

46. Let us take Case 33/76 Rewe v Land- wirtschafiskammer Saarland. In paragraph 5 of its judgment in that case [(1976] 'impossible in practice to exercise the rights E C R 1989) the Court did, it is true, make which the national courts are obliged to the statement cited above, which some protect'. would argue shows that as Community law now stands the liability of the State for failure to comply with its Community ob­ ligations is a matter for national law alone. It is quite obvious, however, that the Court Furthermore, in referring to Articles 100 to 11 — According to Mr Russo, 102 and 235 of the Treaty, under which any 'the principle of the obligation to make reparation is estab­ necessary measures may be taken to remedy lished in this case', while differences between the relevant provisions 'the rules for effecting reparation must continue to fall laid down by law, regulation or adminis­ within the competence of the national court' ([1976] ECR 50, beginning of the right-hand column). trative action in Member States, the Court 12 — According to the Commission, seems to me to have implicitly held that the 'national law must provide procedures for the protection of rights arising from Community rules' question of principle whether a Member and State can be liable is a matter for 'the principles of efficiency and of the uniform application of Community law require that this protection should be Community law. In so doing, it held in any appropriate and effective, without prejudice to the neutral event that Community law may provide a stance of Community law with regard to the procedure chosen' ([1976] ECR 52, third paragraph of the left-hand basis, if not for the creation of new column and top of the right-hand column). remedies other than those established by 13 — See the judgment in Case 199/82 Amministrazione delle Finanze dello Stato v San Giorgio [1983] ECR 3595, for national law, then at least for the the plaintiffs in the main proceedings, the judgment in adjustment and interpretation of existing Case 101/78 Granaria v Hooļdproduktschap voor Akker- bouwprodukten [1979] ECR 623, for the Commission and national remedies so that they can be used the Netherlands Government; and the judgment of Case to safeguard the rights which individuals 158/80 Rewe v Hauptzollamt Kiel [1981] ECR 1805, for the United Kingdom. derive from Community law.

'on the other hand the system of legal protection established by the 48. Nor can any argument be derived from Treaty . . . implies that it must be possible for the reference made by the Court to the every type of action provided for by national conditions concerning admissibility and law to be available for the purpose of procedure where it is a matter of ensuring ensuring observance of Community observance of national law. First of all, provisions having direct effect, on the same problems of admissibility and procedure conditions concerning the admissibility and arise only in relation to an existing remedy. procedure as would apply were it a question Furthermore, that reference was made in the of ensuring observance of national law.' particular context of the Rewe case (Case 158/80), after the Court had expressly observed that in the particular circumstances national law, in that case German law, granted every person affected a right of I therefore consider that a Member State action (paragraph 40 of the judgment). The cannot object to the bringing of an action Court could thus confine itself to stating for damages against the State in respect of that in such a case it must be possible to the infringement of a right granted to indi- exercise that right of action under similar viduals directly by Community law on the conditions in the context of the Community ground that its national legal system legal order. recognizes the principle of immunity of the public authorities, in particular the legis- lature; once the action for damages exists as a form of action, a Member State can no longer rely on the status of the person alleged to be liable in order to deprive indi- viduals of the possibility of bringing such an In this case, similarly, there seems to be no action and thus impair the effectiveness of doubt as to the existence of an appropriate Community law with direct effect. remedy.

'accordingly, there is no reason to suppose that the State has incurred liability' [(1979] 'the question of compensation by a national ECR 644, left-hand column). agency for damage caused to private indi- viduals by the agencies and servants of Member States, either by reason of an infringement of Community law or by an act or omission contrary to national law, in Finally, the Court pointed out that the inva- the application of Community law does not lidity of the regulation in question was not fall within the second paragraph of Article sufficient to render the Community liable 215 of the Treaty and must be determined under the second paragraph of Article 215 by the national courts in accordance with of the Treaty. In that context it is entirely the national law of the Member State normal that if the question of the possible concerned.' liability of the national agency were to be raised before a national court that court would be obliged to assess the case in accordance with national law, particularly since the application of the second The Granaria case, however, had several paragraph of Article 215 falls within the special features which must be borne in exclusive jurisdiction of the Court of Justice. mind in assessing its exact significance. First Moreover, it has been established since the of all, it in fact concerned liability for the judgment in Joined Cases 106/87 to 120/87 loss and damage caused by Community Asteris v Hellenic Republic and European legislative acts which had been declared Economic Community [1988] ECR 5515, invalid. The question of the payment of paragraphs 18, 19 and 20, that where the compensation by a national agency arose illegality of a Community measure has not

'even where the repayment of other taxes, 51. As for the judgment of Case 199/82 charges or duties levied in breach of Amministrazione delle Finanze dello Stato v national law is subject to the same restrictive San Giorgio [1983] ECR 3595, it is true conditions.' that in that case the Court reiterated its well established case-law to the effect that the substantive and formal conditions governing the repayment of national charges levied contrary to the rules of Community law is a According to the Court, even the fact that matter for national law, subject to the sole those restrictive conditions apply to all proviso that they may not be less favourable national taxes, charges and duties is not a than those relating to similar claims of an reason for withholding the repayment of internal nature and may not be so framed as charges levied contrary to Community law to render virtually impossible the exercise of (see paragraph 17 of the judgment). rights conferred by Community law. However, what seems to me to be more important in the present context is the fact that the Court observed first of all that 52. None of the judgments relied upon by the governments which submitted obser- vations to the Court thus provides a sound basis for their view that it is the national law 'entitlement to the repayment of charges of each Member State alone that must levied by a Member State contrary to the determine not only under what conditions rules of Community law is a consequence of, but also whether a Member State can be and an adjunct to, the rights conferred on held liable and obliged to make good the individuals by the Community provisions harm caused to individuals as a result of its prohibiting charges having an effect equi- infringement of the rights which they derive valent to customs duties or, as the case may from Community law.

'the interim legal protection which Community law ensures for individuals and before national courts must remain the same, irrespective of whether they contest the compatibility of national legal provisions

14 — See, to thai effect Simon, D. and Barav, A. 'Le Droit 'it therefore follows that the suspension of Communautaire et la Suspension Provisoire des Mesures enforcement of administrative measures Nationales — Les Enjeux de l'Affaire Factortame', Revue du marché commun, N o 340, October 1990, page 591 at based on a Community regulation, whilst it 596. See also Curtin, D. 'Directives: The Effectiveness of Judicial Protection of Individual Rights', Common Market is governed by national procedural law, in Law Review, 27, 1990, 709 at 735. particular as regards the making and exam-

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Article 189. 55. It is true that the Zuckerfabrik cases concerned the suspension of the operation of a national administrative measure adopted in implementation of a Community regu- lation in view of the existence of doubts as to the validity of that regulation. However, 56. It is also true that the case-law which I in paragraph 20 of its judgment, quoted have just examined in some detail is above, the Court expressly drew a parallel concerned, I should reiterate, with rules between that situation and that in the of Community law which are directly Factortame I case, which concerned the applicable, and cannot therefore simply be suspension of the application of a national transposed to situations where individuals statute because of the existence of doubts as cannot rely before the national courts on to its compatibility with Community law. As rights which they derive directly from a we have seen, the power, or indeed the ob- Community legal measure.

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parties'. 16 From the foregoing, it is necessary to bear in mind the two following points: first of all, the binding authority of a judgment in infringement proceedings concerns all the Although that statement by the Court is organs of the State concerned and it is thus very general, it clearly indicates that a binding not only on the executive but also judgment in infringement proceedings may on the legislature and the courts; secondly, provide a basis for an action for damages by all those authorities must, in the event that an individual against the Member State in the non-application of a national provision

arise. As we saw at the outset, as regards the should not include measures intended to failure to implement Directive 80/987, Italy make good the loss and damage caused by was held in default pursuant to Article 169 the State's breach of its obligations under of the Treaty by a judgment of the Court Community law. In that regard it is inter- of 2 February 1989 (Case 22/87 [1989] ECR 143). 17 — See also the judgment in Case 48/71 Commission v Italy [1972] ECR 527, paragraph 7.

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esting to note first of all that when the forgotten that a directive is binding as to the Court held for the first time that there may result to be achieved, which may be be a real interest in a judgment delivered precisely that of conferring rights on indi- pursuant to Articles 169 or 171 of the viduals. Treaty from the point of view of estab- lishing a basis for liability on the part of the State, it did so in order to reject an objection raised by the defendant State to 61. Furthermore, the application of the effect that the pursuit of the Community law differs according to infringement proceedings had no object whether the Member States do or do not since comply with their obligations and implement the directives addressed to them. In the absence of direct effect, the funda- mental requirement of the uniform application of Community law would be 'it would no longer be possible physically to observed at least in part if individuals who comply retroactively with the obligations were deprived of their rights because of the which should have been performed during failure to implement a directive were the period provided by the Community granted approximately equivalent compen- provisions in question' (see the judgment in sation. Case 39/72 Commission v Italy [1973] ECR 101, paragraph 8).

62. Finally, the Court has already had occasion to state that the object of Articles of 169 to 171 of the Treaty is to achieve the Liability on the part of the State might thus practical elimination of infringements and provide a partial remedy for the impossi- their past and fature consequences. It is true bility of giving retroactive effect to the that in its judgment in Case 70/72 measures by which the Member State in Commission v Germany [\975] ECR 813, at default seeks to comply with its obligations. paragraph 13, it added that

64. N o contrary argument can, it seems to 'that it is. . . the responsibility of the me, be derived from the later judgment of Member State alone to determine the the Court in Joined Cases 314 to 316/81 necessary measures to comply with the and 83/82 Procureur de la République v judgment of the Court so as to eliminate the Waterkeyn [1982] ECR 4337. In that results of its failure to comply' (paragraph judgment the Court stressed that 10).

'the purpose of judgments delivered under The fact that a judgment of the Court in Articles 169 to 171 is primarily to lay down infringement proceedings has only the duties of Member States when they fail declaratory effect cannot free the Member to fulfil their obligations' State from its obligation under Article 171 of the Treaty

and that

'to take the necessary measures to comply with the judgment', 'rights for the benefit of individuals flow from the actual provisions of Community law having direct effect in the Member and thus where appropriate to make good State's internal legal order' (paragraph 15). the harmful consequences of its default.

It is true that at first sight it might follow 63. That, in any event, is what is to be from the foregoing that a judgment in inferred from the judgment in Case 6/60 infringement proceedings cannot serve as a Humbletv Belgium [1960] ECR 559, at 569, basis for claims by individuals. On closer in which the Court emphasized the examination, however, it is apparent that in declaratory nature of its judgment in reply to a question concerning the effects of infringement proceedings but added that a judgment delivered previously in infringement proceedings the Court wished only to state that where there are provisions of Community law which are directly 'if the Court rules in a judgment that a applicable individuals need not wait for a legislative or administrative measure judgment in infringement proceedings in

'however, . . . the rights accruing to indi- viduals derive not from that judgment, but from the actual provisions of Community and under Community law in general. law having direct effect in the internal legal Furthermore, in Humblet the Court order'. expressly stated that the obligation to rescind the national measure which is contrary to Community law and make reparation for the effects which it may have had results from the Treaty, which has the Moreover, the rights which an individual force of law in the Member States following will seek to enforce in an action for its ratification and takes precedence over damages are not the rights provided for in the national law [(I960] ECR 569). A Member provision of Community law that has been State cannot therefore take refuge behind infringed but at most rights which compensate the principle of the immunity of the legis- for those of which he has been unlawfully lature, even if that has the status of a deprived. constitutional rule, " in order to escape its obligation under the Treaty to take all necessary measures in order to ensure that

'it falls to a Member State in accordance 'by reason solely of the judgment declaring with the general obligations imposed on the Member State to be in default, the State Member States by Article 5 of the Treaty, to concerned is required to take the necessary recognize the consequences, in its internal measures to remedy its default and may not order, of its adherence to the Community create any impediment whatsoever'. and, if necessary, to adapt its procedures for budgetary provision in such a way that they do not form an obstacle to the implemen- tation . . . of its obligations within the framework of the Treaty.' 21 66. I think it can be concluded from the foregoing that where the Court has held that a Member State has failed to fulfil its obligations by failing to implement I think that that is all the more necessary provisions of a directive in national law, inasmuch as the implementation of even provisions which do not have direct directives is not always, or in all Member effect, that Member State is obliged to make States, a matter for the legislature; to take available to the individuals on whom that refuge behind the principle of the immunity directive was intended to confer rights of the legislature would therefore give rise appropriate judicial remedies to enforce to disparities not only from one Member those rights, where necessary by means of State to another, according to whether they an action for damages against the State. recognize that principle or the implemen- tation of directives as a matter for the legis- lature, but even within Member States

circumstances which are the direct cause of above. In that judgment the Court, on its the harm suffered by the citizen, such as the own authority and in view of the funda- non-payment of wages, the insufficient mental requirement of the uniform remuneration of a woman, or the defective application of Community law, laid down nature of a product. certain conditions which must be observed by national courts when they wish to grant suspension of the operation of a national measure adopted in application of a Community regulation, and for that purpose Conversely, where the directive imposes it drew inspiration from the conditions obligations on the State itself (or on an which apply when it itself is called upon to organization which must necessarily be grant suspension of the operation of a identified with the State), its offence is Community measure pursuant to Article 185 two-fold: failure to implement the directive of the EEC Treaty. Its basis for doing so and failure to comply with the obligations was the necessary 'coherence of the system which the directive imposes. of interim legal protection' of the rights derived by individuals from Community law, by virtue of which national courts must be able to order suspension of the 68. I do not, however, think it is possible to enforcement of a national administrative make such a distinction, for the whole of measure based on a Community measure the reasoning set out above is based on the whose legality is contested under the same principle that any failure to implement a conditions as those under which the Court directive ipso facto constitutes an of Justice may order suspension of the infringement of Articles 5 and 189 of the operation of the Community measure (see Treaty, that is to say an unlawful act which paragraphs 18 and 27 of the Zuckerfabrik must be made good by the State where it judgment). The Court restricted itself, has caused harm to an individual. however, to determining uniform conditions for the grant of suspensory relief; for the rest, that is to say the rules of procedure, it referred to national law (see paragraph 26 of the judgment). 69. Since the principle of an action for damages against a State for failure to comply with its Community obligations.thus has its source or foundation in Community law, the question of the substantive and formal conditions governing such an action 71. In this case it would seem appropriate remains to be examined. that the grant of damages by a national court for breach of Community law by a Member State should be subject to the same conditions as the grant of damages by the Court of Justice for infringement of that (ii) The substantive and formal conditions same Community law by a Community governing the action for damages institution. That would make it possible to avoid a situation where, pursuant to Community law, a Member State might incur liability for breach of Community law 70. In this regard I propose that the Court by one of its authorities in circumstances adopt a solution similar to that which it where the non-contractual liability of the adopted in the Zuckerfabrik judgment, cited Community for breach of Community law

'precludes a national authority which merely implemented the Community legislative Since the first two conditions are not measure and was not responsible for its peculiar to the liability of the unlawfulness from being held liable on the Community 22 and are not directly in issue same grounds'. in this case, in which it is necessary to determine in what circumstances the Member States may incur liability as a result of their action, or rather inaction, only the last, on the unlawful nature of the conduct giving rise to the loss and damage, seems to me to require further discussion here. It is also necessary to focus more closely on the 72. I should make it clear that although, in situation where the act giving rise to the accordance with the approach I recommend, alleged loss or damage is a normative a national court could not be obliged to hold measure, since the implementation of the State liable in damages for breach of directives in national law must normally Community law in cases in which the non- take place by means of such measures, contractual liability of the Community for whether they are adopted by the breach of Community law by one of its government in its regulatory capacity or by institutions would not arise, it could never- the legislature. The relevant provisions of theless hold the State liable under more Council Directive 80/987 would in any liberal conditions if that were possible under event have required implementation in national law. In other words, the national Italian law by means of normative measures. court must hold the State liable in damages at least in the circumstances in which the 22 — Sec, to that effect, Joliét, R. Le Droit Institutionnet des Community is so liable. Communautés Européennes — Le Contentieux, Liège, 1981, p. 259.

76. Where the failure to implement a directive or to implement it correctly has 'Consequently, as the Court has held with been confirmed by a judgment of the Court regard to the Community's liability in of Justice in infringement proceedings, ascer- respect of legislative acts involving choices taining whether those conditions are met of economic policy, in the drafting of which should not pose insurmountable problems the Community institutions likewise have a for a national court. Such a judgment wide discretionary power, the unlawfulness should be sufficient to enable them to find a of a coordinating directive is not in itself 'sufficiently serious breach of a superior rule of sufficient to establish the Community's latt/, since any incorrect implementation of non-contractual liability. There is no a directive constitutes an infringement of non-contractual liability on the part of the the fundamental Treaty rules laid down in Community unless there has been a suffi- Article 5 and the third paragraph of Article ciently serious breach of a superior rule of 189 of the Treaty, which requires the law for the protection of the individual and Member States to take all the measures the institutions concerned manifestly and necessary for the correct implementation of gravely disregarded the limits on the directives in national law. (In the case of a exercise of their powers. directive which requires the Member States to provide benefits, a failure to implement it also constitutes a breach of those ob- ligations.)

power1 u that the Court has laid down the protect the interests of individuals, that is to condition that the institution should have say, as its title and the first recital in its manifestly and gravely disregarded the limits preamble indicate, those of employees in the on that power. However, with regard to the event of the employer's insolvency. implementation of directives, which are binding on the Member States as to the result to be achieved and leave them only the choice of the form and methods, there can be no question of a 'choice of economic policy' or a 'wide discretion'.

77. Let us now turn to the condition to the relation to procedures for repayment of effect that the rule of Community law money unduly paid. In order to restrict which has been breached must be a rule 'for them to an acceptable minimum, the the protection of the individual'. That application of the formal and procedural condition must necessarily be assessed in rules of national law should be made subject relation to the relevant provisions of the to the same reservations developed by the directive which have not been correctly Court in relation to the substantive and implemented.

24 — See, in relation to 'a legislative context characterized by a relating to similar claims regarding national wide margin of discretion', in particular the judgment in charges and they may not be so framed as Case 20/88 Roquette v Commission [1989] ECR 1553, paragraph 23. to render virtually impossible the exercise of 25 — In Community law it is sufficient for a simple 'interest' to rights conferred by Community law' (see be affected, and not the rights of the person harmed.

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paragraph 12 of the judgment in Case 81. In this case that task will be facilitated 199/82 San Giorgio [1983] ECR 3595). 27 by the fact that the Italian legislature has meanwhile stated which of the options provided for by the directive it wishes to adopt. At the hearing before the Court, the Agent of the Italian government stated that 79. As regards the disputes in the main Law No 428 of 29 December 1990, proceedings, it may be concluded from the referred to as 'Community law 1990', foregoing that the Italian State is obliged delegated power to the Italian Government under Community law to make good, in to adopt, within the year following entry accordance with national rules of into force of that law, a legislative decree procedure, the loss and damage suffered by for the full implementation of Directive individuals as a result of the failure to 80/987. Article 48 of that law defines implement the directive in Italian law. certain criteria with which the Italian Government must comply. If I have correctly understood the matter, it provides that the guarantee institution which will be responsible for meeting the obligations resulting from the directive (and will be 80. Is there a contradiction between that financed exclusively by employers without conclusion and the fact that I have stated any State contribution) will be required to elsewhere that the provisions of the directive cover outstanding claims relating to pay for which determine the rights of employees the last three months of the employment leave the Member States some discretion relationship occurring within a period of six and are therefore not unconditional or suffi- months preceding the date of the onset of ciently precise? the employer's insolvency.

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which it submitted to Mr Tindemans. 28 It the Member States, whether these are is not in any event too late to do so. infringements of provisions of the Treaty, of regulations or of directives with or without direct effect.

28 — Bulletin of the European Communites, Supplement 9/75 29 — Sec, most recently, the judgment in Case C-262/88 Barber p. 19. [1990] ECR 1-1889 at 1-1955.

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87. On the basis of all the foregoing 3. If the answer to Question 2 is in the considerations, I propose that the Court negative, the Court is asked to state what reply as follows to the second part of the the minimum guarantee is that the State first question referred by the two Italian must provide pursuant to Directive 80/987 courts: to an entitled employee so as to ensure that the share of pay payable to that employee may be regarded as giving effect to the directive.' 'Community law must be interpreted as meaning that individuals must be entitled to bring proceedings against a Member State before the national courts for reparation of 89. Since I have concluded that the the loss and damage caused to them by the provisions of the directive are not such as t o failure to implement the provisions of give rise to direct effect, those two questions Directive 80/987, confirmed by the Court no longer have any significance. of Justice in a judgment in infringement proceedings.

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That seems to me to be even less possible some discretion, makes it possible to temper where the State has some discretion the severity of the condition of direct effect. regarding the obligations to be imposed on Furthermore, the fact that those damages those persons, that is to say where the are payable by the State makes it possible to provisions of the directive are not uncondi- give at least approximate satisfaction to the tional and precise as to the scope of the persons intended to benefit from the rights rights which they are intended to confer. without infringing the principle that a directive which has not been implemented cannot be binding on private, natural or 92. The power which I propose that the legal persons. Finally, the proposed national courts should have to assess approach has the great advantage of damages 'ex aequo et bono', relying as providing strong encouragement for the much as possible on the provisions of the Member States to implement directives directive, even where those provisions leave within the prescribed periods.

Conclusion

93. O n the basis of all the foregoing considerations, I propose that the Court reply as follows to the three questions referred:

'(1) The provisions of Directive 80/987 are not sufficiently precise and uncondi- tional to give rise to rights which individuals can enforce in the courts.