by José Ricardo Sousa, student of the Master's degree in EU Law of UMinho

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Keywords: social policy; liability; directive implementation; failure to fulfil an obligation; compensation.

Court: CJEU | Date: Nov. 19th 1991 | Case: 6/90 | Applicants: Andrea Francovich vs Italian Republic

Summary: The Directive 80/897 goal was to assure a minimum protection for all European workers in case of bankruptcy of a company. For this purpose, it predicted specific guarantees for the payment of claims relating to debt remuneration. Italian Government didn’t implement the mentioned policy in time. Mr Francovich and Mrs Bonifaci filed in court arguing that it was the Italian Government’s obligation to implement the Directive 80/897 and so they claimed a state compensation. The national court suspended the case and referred the following questions to CJEU:

“Under the system of Community law in force, is a private individual who has been adversely affected by the failure of a Member State to implement Directive 80/897 — a failure confirmed by a judgment of the Court of Justice — entitled to require the State itself to give effect to those provisions of that directive which are sufficiently precise and unconditional, by directly invoking the Community legislation against the Member State in default so as to obtain the guarantees which that State itself should have provided and in any event to claim reparation of the loss and damage sustained in relation to provisions to which that right does not apply?”

CJEU began to argue that this question had two important issues. The first issue was referring to Direct Effect. CJEU stated that, in normal conditions, any Member State that didn’t implement some directive in internal jurisdiction couldn’t refuse that particulars moved actions to defend their rights given by the respective directive if the invocated provisions were unconditional or sufficiently precise. Then, CJEU analysed the provisions related to worker’s rights content included in the Directive and concluded that the identity of the persons entitled to the guarantee provided and the content of that guarantee were unconditional and sufficiently precise, but the identity of the person liable to provide the guarantee wasn’t unconditional because it was impossible to identity liability and the State cannot be considered liable just because it failed to accomplish the deadlines. So, particulars couldn’t enforce those rights against the State.

The second issue is the liability of the State for loss and damage resulting from breach of its obligation. According to CJEU, this issue must be considered with the general principles of the Treaty. CJEU remembered that EU had their own legal system recognized by the Member States. If particulars couldn’t defend their rights the effectiveness of the EU Community law would be weakened. Thus, the possibility given for the State to repair the error is also indispensable. So, according to the principle of liability of the State and article 5 of the Treaty, it’s their obligation to repair the losses of the individuals.

The decision can be accessed here and the conclusion of AG here.