Operation of the Courts
European courts
Legal systems across continental Europe are largely founded on Roman Law and Germanic customary law. These have been highly influential in shaping national codes and have given rise to legal frameworks that rely less on case law and ‘precedent’ than the common law jurisdictions operating in the UK and the USA.
The first comprehensive legal codifications during the modern era appeared in France during the nineteenth century (Napoleonic Law), and in the newly unified state of Germany in 1900 in the form of the German Civil Code (BGB). It is important to note that certain principles contained in the BGB are implicit elements in many other national codes today. These include the right to individual autonomy, the role of the law to redress the vulnerability of a weaker party in a commercial relationship (i.e. the employee) and the concept of ‘unjustified enrichment’.
European Union Law
- The European Union (EU) has legal personality in its own right. It may enter into contracts and defend its legal interests without intervention from any of the member states.
- The treaty that underpins the EU is primarily concerned with the economic relationship between states. From the outset, however, there has been a social dimension in the treaty. This was placed there by the founding fathers as a ‘quid pro quo’ for the wealth-generating benefits of the EU (EEC) for the corporate sector. The basic social right was the freedom of movement of labour. Every EU national is entitled to take up and pursue employment in the territory of another member state under the same conditions as the nationals of the host state (EU Treaty Art 1 and Regulation 1612/68). A host state may only exclude an individual where there is evidence that their personal conduct poses a present threat to public order. They may, however, impose conditions relating to linguistic competence where this is directly relevant to their employment (ECJ case reference C-397/87).
- Since 1969 (Strauder v City of Ulm) a ‘de facto’ body of general human rights principles has been introduced by the European Court of Justice (ECJ) to avoid clashes with national constitutional rights when making their decisions. More recently, the EU treaty has also incorporated the European Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention).
- Several fundamental rights have been recognised in ECJ case law – the right to a fair hearing (C-98/79), freedom of expression (C-260/89) and the right to privacy (C-118/75). However, when the ECJ has strayed from the Convention, problems have sometimes arisen. For instance, in a UK case concerning client confidentiality (C-55/790), the Court interpreted rights by reference to UK law and thereby inadvertently turned their ruling into a precedent for other member states. In several other well-publicised cases, the ECJ has also been willing to question constitutional rights when they have been opposed to basic economic freedoms contained in the EU treaty.
Direct Effect
- The ECJ makes its rulings binding on nations and citizens through the principal of ‘Direct Effect’ (Van Gend en Loos vs. Nederlandse 1963), and ‘Supremacy’ (Costa v ENEL 1964).
- Direct effect is an important phenomenon that gives individuals the power to claim rights conferred directly by EU treaties, regulations, decisions and directives (after their effective date) even if their member states have failed to introduce them into domestic law (Frankovitch case) or have not implemented them correctly (Factortame case). These rights may be claimed by an individual in relation to the state and related public bodies (vertical direct effect), or in relation to another individual (horizontal direct effect) because they are also subject to the same overarching framework of EU rules. However, the ECJ has been reluctant to rule in favour of horizontal direct effect in the application of directives.
Indirect Effect
- This requires the domestic court of an EU member state to interpret all national laws in the light of directives, even if the law in question was not based on the directive (Von Colson C-14/83 and Harz C-79/83). The Von Colson principle is constrained, however, from being applied where an interpretation would ‘run counter to the legitimate expectation of individuals’ in a member state by distorting the words of a national statute (C-80/86). It is irrelevant whether a national statute was enacted before or after a directive came into force (Marleasing C-106/89).
- The changing role of the ECJ and its growing body of case law has forced continental legal systems to break away from their tendency to codify all human activities in order to deal with every legal contingency. Complex ECJ rulings and the operation of direct/indirect effect procedures are forcing the courts and legal practitioners to operate more flexibly and think laterally about issues that confront them.
How does the ECHR differ from the EJC?
- The European Court of Human Rights (ECHR), based in Strasbourg, is the court established the Council of Europe to investigate and pronounce on infringements to the European Convention on Human Rights (1950) taking place in states that are members of the Council. The court is not an EU institution and has no powers of enforcement other than the moral force arising from public disclosure of its findings. The convention is also separate from EU law, though it serves as a basis for it and provides precedents which are often followed by the European Union.
- The European Court of Justice (ECJ) was established in 1952 under the ECSC treaty. The Court rules on disputes over EU treaties, directives, regulations and other EU legislation. Its decisions are binding on EU institutions and member states. A member state may be taken to court for failing to meet its obligations under EU law and substantial fines can be imposed for non-compliance with the court’s rulings. The court is made up of senior judges from each member state, who hold office for a renewable term of six years. The court is assisted by eight Advocates-General who review each case and issue an opinion prior to a final judgement from the court.
- Since 1989 the court has also heard actions brought by individuals seeking damages from European institutions, or the annulment of EU legislation which directly concerns them. It is the highest court in the European Union in matters within the remit of European Union law.
- It is the responsibility of the EJC to ensure that the law is observed in the interpretation and application of the Treaties of the European Union and of the provisions laid down by the competent Community institutions. To enable it to carry out that task, the Court has broad jurisdiction to hear various types of action:
Actions for failure to fulfil obligations
- Under Article 258 (ex Article 226) of the Nice Treaty (the Treaty), the Court of Justice may determine whether a Member State has fulfilled its obligations under Community law. The commencement of proceedings before the Court of Justice is preceded by a preliminary procedure conducted by the Commission, which gives the Member State the opportunity to reply to the complaints against it. If that procedure does not result in rectification of the failure by the Member State, an action for breach of Community law may be brought before the Court of Justice. That action may be brought by the Commission or by another Member State (although the cases of the latter kind remain extremely rare). If the Court finds that an obligation has not been fulfilled, the Member State concerned must terminate the breach without delay. If, after new proceedings are initiated by the Commission, the Court of Justice finds that the Member State concerned has not complied with its judgement, it may, upon the request of the Commission, impose on the Member State a fixed or periodic financial penalty.
Actions for annulment
- By an action for annulment under Article 263 (ex Article 230) of the Treaty, the applicant seeks the annulment of a measure (regulation, directive or decision) adopted by an institution. The Court of Justice has exclusive jurisdiction over actions brought by a Member State against the European Parliament and/or against the Council (apart from Council measures in respect of State aid, dumping and implementing powers) or brought by one Community institution against another. The General Court has jurisdiction, at first instance, in all other actions of this type and particularly in actions brought by individuals. The Court of Justice has the power to declare measures void under Article 264 (ex Article 231) of the Treaty.
Actions for failure to act
- Under Article 265 (ex Article 232) of the Treaty, the ECJ may also review the legality of a failure to act on the part of a Community institution. However, such an action may be brought only after the institution has been called on to act. Where the failure to act is held to be unlawful, it is for the institution concerned to put an end to the failure by appropriate measures.
Application for compensation based on non-contractual liability
- Under Article 268 (and with reference to Article 340) of the Treaty, the ECJ hears claims for compensation based on non-contractual liability, and rules on the liability of the Community for damage to citizens and to undertakings caused by its institutions or servants arising during the performance of their duties.
Appeals on points of law
- Under Article 256 (ex Article 225) of the Treaty, appeals on judgements given by the national referring court may be heard by the ECJ only if the appeal is on a point of law. If the appeal is admissible and well founded, the ECJ will set aside the judgement of the national court. Where the state of the proceedings so permits, the ECJ may itself decide the case. Otherwise, the Court must refer the case back to the national court – which is bound by the decision given on appeal.
References for a preliminary ruling
- References for a preliminary ruling are specific to Community law. Whilst the Court of Justice is, by its very nature, the supreme guardian of Community legality, it is not the only judicial body empowered to apply Community law.
- That task also falls to national courts, in as much as they retain jurisdiction to review the administrative implementation of Community law, for which the authorities of the Member States are essentially responsible. Many provisions of the treaty and of secondary legislation – regulations, directives and decisions – directly confer individual rights on citizens of Member States, which national courts must uphold.
- National courts are thus by their nature the first guarantors of Community law. To ensure the effective and uniform application of Community legislation and to prevent divergent interpretations, national courts may, and sometimes must, turn to the Court of Justice to ask that it clarify a point concerning the interpretation of Community law - in order, for example, to discover whether their national legislation complies with that law.
- A reference for a preliminary ruling may also seek to review of the legality of an act of Community law. The Court of Justice’s reply is not merely an opinion, but takes the form of a judgement or a reasoned order. The national court to which this is addressed is bound by the interpretation given. The Court’s judgement also binds other national courts before which a problem of the same nature is raised. References for a preliminary ruling also serve to enable any European citizen to seek clarification of the Community rules that concern him.
- Although such a reference may be made only by a national court, which alone has the power to decide that it is appropriate do so, all the parties involved – that is to say, the Member States, the parties in the proceedings before national courts and, in particular, the Commission – may take part in proceedings before the Court of Justice. In this way, a number of important principles of Community law have been laid down in preliminary rulings, sometimes in answer to questions referred by national courts of first instance.
National courts
Labour courts and court systems
Not all EU member states operate specialist labour courts. The following review outlines procedures for handling employment litigation in six countries.
Belgium
There are two levels of specialist labour court in Belgium:
- Labour tribunals: Courts of first instance dealing primarily with individual employment contract issues.
- Labour courts: These hear appeals referred by tribunals and seek to resolve significant collective disputes.
Each tribunal retains a team of labour prosecutors who may be called upon to provide opinions to the court and are also responsible for instituting criminal proceedings against employers when health and safety laws have been seriously breached.
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Denmark
Denmark operates a well established and highly complex array of courts, arbitration and conciliation machinery. Actions concerning individual employment contracts are heard by the general courts. The Labour Court Act governs the activities of the labour courts (Arbejdsretten) that hear cases involving breaches of collective agreements. However, the starting point for disputes resolution is usually the set of ‘standard rules’ that are common to almost all collective agreements. These define a number of steps to be followed as soon as a problem arises in the workplace. The parties are first obliged to negotiate, then to seek private arbitration (faglig voldgift) if required and, finally, to go to court rather than resort to strike action or lock-outs. No individual employee can bring a case, or be the sole subject of a labour court action.
The Danish government has established its own conciliation service that oversees all labour disputes. Copies of notices about work stoppages must be sent to the Conciliator covering the industry concerned, who is empowered to intervene in any dispute and demand a cooling-off period of up to two weeks.
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Germany
Around 650,000 cases are heard by labour courts each year in Germany. Of these around 90% concern individuals rather than trade unions or works councils (as collective suits). Half of all cases are settled at an initial hearing before a lower labour court, but 1,000 cases a year eventually go through the full appeals process.
There are three levels of court:
1) Labour courts (Arbeitsgerichte)
2) Higher labour courts (Landersarbeitsgerichte) – courts of appeal
3) The Federal Supreme Labour Court (Bubdesarbeitsgericht) – final court of appeal
These deal with private law disputes involving statutory rights – such as wrongful dismissal, infringements of works council procedures, wage payment problems and the interpretation of collective agreements. Social security cases are heard by separate courts of social affairs. Conflicts of interest between works councils and employers are dealt with by ad hoc settlement committees (einigunsgstelle).
There is an automatic right of appeal for all cases before the labour courts provided the award is in excess of 1200 DM. An appeal to the Federal Court requires consent from a higher labour court or (on complaint) the Federal Court itself.
Only cases that are believed to infringe constitutional rights may be sent on further appeal to the Federal Constitutional Court.
Each court contains a mixture of professional and lay judges. A court of first instance (labour court) is composed of one professional (Berufscichter) and two lay members (ehrenamtlich) drawn from both sides of industry.
A preliminary meeting is normally set in order that a labour court judge may achieve an amicable settlement without recourse to a formal hearing. If a settlement is concluded at this stage, the court will generally not charge court fees (other than the initial filing fee). Although each party must meet their own costs for legal representation before a labour court, the losing party will have to pay court fees (up to 1,000 DM) plus witness expenses.
It is not necessary to be represented by a lawyer during lower labour court proceedings. However, if cases go before the higher labour court, the parties must be represented by a lawyer, trade union official, or employers’ association official. All cases before the Federal Labour Court must be legally represented.
Cases are not generally expected to go to mediation before being heard by a labour court. The only exceptions are where the case concerns vocational training or mediation is built into a collective agreement.
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Italy
Labour courts are an integrated element of the civil court system. They are composed of professional judges who deal with a wide range of social insurance and social welfare issues as well as internal civil service disputes and labour law.
There are three levels of labour court:
1) The court of first instance
2) The appeals court
3) The Cassazione
In addition, contradictory judgements by the Cassazione are resolved by a special forum – the Corte di Cassazione a Sezioni Unite.
Before a case will be heard by a labour court, the parties must show that they have attempted to settle the dispute by all reasonable means. In collective disputes, this will normally require the involvement of public labour officials or an independent mediator. When a case reaches court, the presiding judge will also normally seek to reach an informal settlement which can then be admitted as a full decision of the court.
Court proceedings in labour courts allow for the extensive admission of evidence by the plaintiff and defendent. Moreover, the decision of the court is normally reached immediately after the conclusion of pleadings by each party.
All parties must be legally represented at every level of labour court. Both individuals and collective bodies may seek a decision by the court. However, unions may intervene in individual disputes if the case involves the interpretation of a collective agreement. Most cases that are heard by a court of first instance are permitted to go forward upon appeal.
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Netherlands
The Dutch do not operate specialist labour courts. Disputes arising from collective agreements or individual employment contracts are heard by local (canton) courts of first instance. Appeals against judgements are then heard by a district court (Rechtbank). Legal proceedings can be very lengthy and employers often apply to the courts for an interim ruling. This may, however, be overturned if the case goes to a full hearing. In cases involving dismissal, it is frequently faster and more advantagous to make an application to a local court of first instance. The canton judge’s decision is final and may not be subject to appeal. In the case of genuine redundancy, it is also usual for the court to settle compensation in the same hearing.
There is no formal disputes procedure or arbitration service operating in the private sector. Some collective agreements have established ad hoc voluntary disputes panels (geschillencommissies) and many serious cases involving strike action are heard by a district court.
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Spain
Around 300,000 cases are heard by Spanish labour courts each year. However, only 40% of all cases relate to contracts of employment, with the balance being taken up by social security disputes.
There are three levels of labour court:
1) The social courts (JS) at a provincial level.
2) The social chamber of the high courts (TSJ) at a regional level.
3) The social chamber of the Supreme Court (TS) in Madrid.
Appeals are heard by the TSJ through a process called suplicacion. The TSJ may not, however, consider matters of fact and cases must involve awards/claims in excess of 300,000 ptas before an appeal will be accepted. The Supreme Court will only consider appeals if a decision by the TSJ contradicts another very similar case and the decision has important legal ramifications.
The courts consider individual disputes about statutory rights or contracts of employment, as well as collective disputes. The latter may only be heard in the presence of a relevant employer (or employers’ association) and trades union representative. Before the courts will hear any case, they generally require the parties to have sought independent mediation. This will normally be through the offices of the Mediation, Arbitration and Conciliation Service (SMAC). Conciliation arrangements are usually provided for under major national and regional collective agreements.
At the start of a hearing before a labour court, a judge will normally seek to reach a settlement between the parties without recourse to formal proceedings. If a settlement is reached at this stage, it will be ratified by the court and will be legally enforceable. If the case moves ahead to a formal hearing, it will usually be speedily dealt with through oral submissions. Each party will be called upon to state their case, a consideration of evidence will take place, and each party will perform a summing up. The court will normally publish its decision within five days of the hearing.
The members of all courts are professional judges and there are no lay members. A natural bias tends to occur in favour of the employee during litigation because they are considered to be the weakest party in the employment relationship.
The average time delay to a hearing before the social court (JS) is three months, whilst cases on first appeal must generally wait for six months or longer.
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Links
European Court of Justice
Belgian Courts (including Labour Court)
Dutch Judicial System
Finnish Labour Court (in English: general description)
French Supreme Court of Appeal
German Federal Labour Court
Irish Labour Court
UK Employment Appeals Tribunal