In Case C-271/91,
REFERENCE to the Court
under Article 177 of the EEC Treaty by the House of Lords for a
preliminary ruling in the proceedings pending before that court between
M.H. Marshall
and
Southampton and South West Hampshire Area
Health Authority,
on the interpretation of Council Directive
76/207/EEC of 9 February 1976 on the implementation of the principle of
equal treatment for men and women as regards access to employment,
vocational training and promotion, and working conditions (OJ 1976 L 39,
p. 40),
THE COURT,
composed of: O. Due, President, C.N. Kakouris,
G.C. Rodríguez Iglesias, M. Zuleeg, J.L. Murray (Presidents of Chambers),
G.F. Mancini, F.A. Schockweiler, F. Grévisse, M. Diez de Velasco, P.J.G.
Kapteyn and D.A.O. Edward, Judges,
Advocate General: W. Van Gerven,
Registrar: H. von Holstein, Deputy Registrar,
after considering
the written observations submitted on behalf of:
° Miss M.H. Marshall,
by Michael J. Beloff QC, and Stephen Grosz (Bindman & Partners),
Solicitor,
° Southampton and South West Hampshire Area Health
Authority, by Robert Webb QC, Andrew Lydiard, Barrister-at-law, and Le
Brasseurs, Solicitors,
° the United Kingdom, by John Collins,
Assistant Treasury Solicitor, assisted by Derrick Wyatt QC, acting as
Agents,
° the German Government, by Ernst Roeder, Ministerialrat in
the Federal Ministry for Economic Affairs, and Claus-Dieter Quassowski,
Oberregierungsrat in the same Ministry, acting as Agents,
° the
Commission of the European Communities, by Nicholas Kahn, a member of its
Legal Service, acting as Agent,
having regard to the Report for the
Hearing,
after hearing the oral observations of Miss M.H. Marshall,
Southampton and South West Hampshire Area Health Authority, the United
Kingdom, Ireland, represented by Feichin McDonagh, Barrister-at-law,
acting as Agent, and the Commission at the hearing on 8 December 1992,
after hearing the Opinion of the Advocate General at the sitting on 26
January 1993,
gives the following
Judgment
1 By order of 14 October 1991, received at
the Court on 17 October 1991, the House of Lords referred to the Court for
a preliminary ruling under Article 177 of the EEC Treaty three questions
on the interpretation of Article 6 of Council Directive 76/207/EEC of 9
February 1976 on the implementation of the principle of equal treatment
for men and women as regards access to employment, vocational training and
promotion, and working conditions (OJ 1976 L 39, p. 40, hereinafter "the
Directive").
2 Those questions were raised in connection with a
dispute between Miss Marshall and her former employer, Southampton and
South West Hampshire Area Health Authority (hereinafter "the Authority"),
concerning a claim for compensation for damage sustained by Miss Marshall
as a result of her dismissal by the Authority.
3 The claim is based on
the illegality of that dismissal which is not contested in the main
proceedings, the Court having held, in the judgment of 26 February 1986 in
Case 152/84 Marshall v Southampton and South West Area Health Authority
[1986] ECR 723, in reply to questions submitted for a preliminary ruling
by the Court of Appeal, that Article 5(1) of the Directive is to be
interpreted as meaning that a general policy of termination of employment
whereby a woman' s employment is terminated solely because she has
attained or passed the qualifying age for a State pension, that age being
different under national legislation for men and for women, constitutes
discrimination on grounds of sex contrary to the Directive.
4 The
dispute in the main proceedings arises because the Industrial Tribunal, to
which the Court of Appeal remitted the case to consider the question of
compensation, assessed Miss Marshall' s financial loss at 18 405,
including 7 710 by way of interest, and awarded her compensation of 19
405, including a sum of 1 000 compensation for injury to feelings.
5
It appears from the case-file that, according to section 65(1)(b) of the
Sex Discrimination Act 1975 ("the SDA"), where an Industrial Tribunal
finds that a complaint of unlawful sex discrimination in relation to
employment is well founded, it shall, if it considers it just and
equitable to do so, make an order requiring the respondent to pay to the
complainant compensation of an amount corresponding to any damages he
could have been ordered by a County Court to pay to the complainant. Under
section 65(2) of the SDA, however, the amount of compensation awarded may
not exceed a specified limit, which at the relevant time was 6 250.
6
It also appears from the case-file that at that time an Industrial
Tribunal had no power ° or at least that the relevant provisions were
ambiguous as to whether it had such a power ° to award interest on
compensation for an act of unlawful sex discrimination in relation to
employment.
7 The Industrial Tribunal held that section 35 A of the
Supreme Court Act 1981 entitled it to include in its award a sum in
respect of interest. In its view, compensation was the only appropriate
remedy in Miss Marshall' s case, but the limit laid down by section 65(2)
of the SDA rendered that compensation inadequate and in breach of Article
6 of the Directive.
8 Following the Industrial Tribunal' s decision,
the Authority paid Miss Marshall the sum of 5 445 in addition to the 6 250
corresponding to the abovementioned statutory limit which it had paid even
before the case had been remitted to the Industrial Tribunal. However, it
appealed against the inclusion in the award of 7 710 in respect of
interest.
9 After the Employment Appeal Tribunal allowed the
Authority' s appeal and the Court of Appeal dismissed Miss Marshall' s
further appeal, she appealed to the House of Lords, which decided to stay
the proceedings and to submit to the Court of Justice the following
questions for a preliminary ruling:
"1. Where the national legislation
of a Member State provides for the payment of compensation as one remedy
available by judicial process to a person who has been subjected to
unlawful discrimination of a kind prohibited by Council Directive
76/207/EEC of 9 February 1976 (' the Directive' ), is the Member State
guilty of a failure to implement Article 6 of the Directive by reason of
the imposition by the national legislation of an upper limit of 6 250 on
the amount of compensation recoverable by such a person?
2. Where the
national legislation provides for the payment of compensation as
aforesaid, is it essential to the due implementation of Article 6 of the
Directive that the compensation to be awarded:
(a) should not be less
than the amount of the loss found to have been sustained by reason of the
unlawful discrimination, and
(b) should include an award of interest
on the principal amount of the loss so found from the date of the unlawful
discrimination to the date when the compensation is paid?
3. If the
national legislation of a Member State has failed to implement Article 6
of the Directive in any of the respects referred to in Questions 1 and 2,
is a person who has been subjected to unlawful discrimination as aforesaid
entitled as against an authority which is an emanation of the Member State
to rely on the provisions of Article 6 as overriding the limits imposed by
the national legislation on the amount of compensation recoverable?"
10 Reference is made to the Report for the Hearing for a fuller
account of the facts, the relevant legislation and the written
observations submitted to the Court, which are mentioned or discussed
hereinafter only in so far as is necessary for the reasoning of the Court.
Scope of the questions
11 In essence, the questions put by the
House of Lords ask whether it follows from the Directive that a victim of
sex discrimination on the part of an authority which is an emanation of
the State is entitled to full reparation for the loss and damage he or she
has sustained and whether Article 6 of the Directive enables such a person
to contest the applicability of national legislation which is intended to
give effect to the Directive but sets limits to the compensation
recoverable. The fundamental problem is therefore to determine the meaning
and scope of Article 6 having regard to the principles and aims of the
Directive.
12 It should, however, be noted, given the tenor of those
questions read in the light of the preceding judgments of the Court of
Appeal and the Employment Appeal Tribunal, that the House of Lords has
refrained from asking the Court to rule on the point, raised by the United
Kingdom, as to whether a court or tribunal, such as an Industrial
Tribunal, specially established to deal with employment disputes may, or
must, disregard the statutory limits on its powers in order to satisfy the
requirements of Community law.
13 The United Kingdom and Ireland also
submitted that, even though the preliminary questions are concerned both
with the statutory limit and the issue of interest, the Court should
confine its reply to the latter issue, since the appeal brought by Miss
Marshall before the House of Lords turns solely on whether the Industrial
Tribunal has the power to grant interest and the role of the Court of
Justice is to rule on real issues, not on hypothetical questions.
14
As to that, it is for the national court, subject to the Court' s
assessment of its own jurisdiction, to determine what points of Community
law are to be put to the Court of Justice so it can rule upon all the
points of interpretation necessary to resolve the dispute pending before
the national court.
15 In this case, the House of Lords has made a
point of stating at paragraph 12 of its order that, although the appeal
concerns the power of the Industrial Tribunal to award interest in cases
of unlawful sex discrimination in connection with an employment
relationship, the limit on compensation imposed by section 65(2) of the
SDA is also in issue and was in issue before the Court of Appeal. The
House of Lords takes the view that, if that provision were applicable to
the compensation awarded to Miss Marshall, the question of interest would
thereby be resolved since the capital element of her loss exceeded the
statutory limit.
16 In those circumstances, there is nothing to
prevent all the aspects of the national court' s questions from being
considered.
Meaning and scope of Article 6 of Directive 76/207
17
As the Court has consistently held, the third paragraph of Article 189 of
the Treaty requires each Member State to which a directive is addressed to
adopt, in its national legal system, all the measures necessary to ensure
that its provisions are fully effective, in accordance with the objective
pursued by the directive, while leaving to the Member State the choice of
the forms and methods used to achieve that objective.
18 It is
therefore necessary to identify the objectives of the Directive and in
particular to see whether, in the event of a breach of the prohibition of
discrimination, its provisions leave Member States a degree of discretion
as regards the form and content of the sanctions to be applied.
19 The
purpose of the Directive is to put into effect in the Member States the
principle of equal treatment for men and women as regards the various
aspects of employment, in particular working conditions, including the
conditions governing dismissal.
20 To that end, Article 2 establishes
the principle of equal treatment and its limits, whilst Article 5(1)
defines the scope of that principle with regard specifically to working
conditions, including conditions governing dismissal, to the effect that
men and women are to be guaranteed the same conditions without
discrimination on grounds of sex.
21 As the Court held in Case 152/84
Marshall, cited above, since Article 5(1) prohibits generally and
unequivocally all discrimination on grounds of sex, in particular with
regard to dismissal, it may be relied upon as against a State authority
acting in its capacity as an employer, in order to avoid the application
of any national provision which does not conform to that article.
22
Article 6 of the Directive puts Member States under a duty to take the
necessary measures to enable all persons who consider themselves wronged
by discrimination to pursue their claims by judicial process. Such
obligation implies that the measures in question should be sufficiently
effective to achieve the objective of the Directive and should be capable
of being effectively relied upon by the persons concerned before national
courts.
23 As the Court held in the judgment in Case 14/83 Von Colson
and Kamann v Land Nordrhein-Westfalen [1984] ECR 1891, at paragraph 18,
Article 6 does not prescribe a specific measure to be taken in the event
of a breach of the prohibition of discrimination, but leaves Member States
free to choose between the different solutions suitable for achieving the
objective of the Directive, depending on the different situations which
may arise.
24 However, the objective is to arrive at real equality of
opportunity and cannot therefore be attained in the absence of measures
appropriate to restore such equality when it has not been observed. As the
Court stated in paragraph 23 of the judgment in Von Colson and Kamann,
cited above, those measures must be such as to guarantee real and
effective judicial protection and have a real deterrent effect on the
employer.
25 Such requirements necessarily entail that the particular
circumstances of each breach of the principle of equal treatment should be
taken into account. In the event of discriminatory dismissal contrary to
Article 5(1) of the Directive, a situation of equality could not be
restored without either reinstating the victim of discrimination or, in
the alternative, granting financial compensation for the loss and damage
sustained.
26 Where financial compensation is the measure adopted in
order to achieve the objective indicated above, it must be adequate, in
that it must enable the loss and damage actually sustained as a result of
the discriminatory dismissal to be made good in full in accordance with
the applicable national rules.
The first and second questions
27
In its first question, the House of Lords seeks to establish whether it is
contrary to Article 6 of the Directive for national provisions to lay down
an upper limit on the amount of compensation recoverable by a victim of
discrimination.
28 In its second question, the House of Lords asks
whether Article 6 requires (a) that the compensation for the damage
sustained as a result of the illegal discrimination should be full and (b)
that it should include an award of interest on the principal amount from
the date of the unlawful discrimination to the date when compensation is
paid.
29 The Court' s interpretation of Article 6 as set out above
provides a direct reply to the first part of the second question relating
to the level of compensation required by that provision.
30 It also
follows from that interpretation that the fixing of an upper limit of the
kind at issue in the main proceedings cannot, by definition, constitute
proper implementation of Article 6 of the Directive, since it limits the
amount of compensation a priori to a level which is not necessarily
consistent with the requirement of ensuring real equality of opportunity
through adequate reparation for the loss and damage sustained as a result
of discriminatory dismissal.
31 With regard to the second part of the
second question relating to the award of interest, suffice it to say that
full compensation for the loss and damage sustained as a result of
discriminatory dismissal cannot leave out of account factors, such as the
effluxion of time, which may in fact reduce its value. The award of
interest, in accordance with the applicable national rules, must therefore
be regarded as an essential component of compensation for the purposes of
restoring real equality of treatment.
32 Accordingly, the reply to be
given to the first and second questions is that the interpretation of
Article 6 of the Directive must be that reparation of the loss and damage
sustained by a person injured as a result of discriminatory dismissal may
not be limited to an upper limit fixed a priori or by excluding an award
of interest to compensate for the loss sustained by the recipient of the
compensation as a result of the effluxion of time until the capital sum
awarded is actually paid.
The third question
33 In its third
question, the House of Lords seeks to establish whether a person who has
been injured as a result of discriminatory dismissal may rely, as against
an authority of the State acting in its capacity as employer, on Article 6
of the Directive in order to contest the application of national rules
which impose limits on the amount of compensation recoverable by way of
reparation.
34 It follows from the considerations set out above as to
the meaning and scope of Article 6 of the Directive, that that provision
is an essential factor for attaining the fundamental objective of equal
treatment for men and women, in particular as regards working conditions,
including the conditions governing dismissal, referred to in Article 5(1)
of the Directive, and that, where, in the event of discriminatory
dismissal, financial compensation is the measure adopted in order to
restore that equality, such compensation must be full and may not be
limited a priori in terms of its amount.
35 Accordingly, the combined
provisions of Article 6 and Article 5 of the Directive give rise, on the
part of a person who has been injured as a result of discriminatory
dismissal, to rights which that person must be able to rely upon before
the national courts as against the State and authorities which are an
emanation of the State.
36 The fact that Member States may choose
among different solutions in order to achieve the objective pursued by the
Directive depending on the situations which may arise, cannot result in an
individual' s being prevented from relying on Article 6 in a situation
such as that in the main proceedings where the national authorities have
no degree of discretion in applying the chosen solution.
37 It should
be pointed out in that connection that, as appears in particular from the
judgment in Joined Cases C-6/90 and C-9/90 Francovich and Others v Italian
Republic [1991] ECR I-5357, at paragraph 17, the right of a State to
choose among several possible means of achieving the objectives of a
directive does not exclude the possibility for individuals of enforcing
before national courts rights whose content can be determined sufficiently
precisely on the basis of the provisions of the directive alone.
38
Accordingly, the reply to be given to the third question is that a person
who has been injured as a result of discriminatory dismissal may rely on
the provisions of Article 6 of the Directive as against an authority of
the State acting in its capacity as an employer in order to set aside a
national provision which imposes limits on the amount of compensation
recoverable by way of reparation.
Costs
39 The costs incurred by the United
Kingdom, the Federal Republic of Germany, Ireland and the Commission of
the European Communities, which have submitted observations to the Court,
are not recoverable. Since these proceedings are, for the parties to the
main proceedings, a step in the proceedings pending before the national
court, the decision on costs is a matter for that court.
On those grounds,
THE COURT,
in
answer to the questions referred to it by the House of Lords, by order of
14 October 1991, hereby rules:
1. The interpretation of Article 6 of
Council Directive 76/207/EEC of 9 February 1976 on the implementation of
the principle of equal treatment for men and women as regards access to
employment, vocational training and promotion, and working conditions must
be that reparation of the loss and damage sustained by a person injured as
a result of discriminatory dismissal may not be limited to an upper limit
fixed a priori or by excluding an award of interest to compensate for the
loss sustained by the recipient of the compensation as a result of the
effluxion of time until the capital sum awarded is actually paid.
2. A
person who has been injured as a result of discriminatory dismissal may
rely on the provisions of Article 6 of the Directive as against an
authority of the State acting in its capacity as an employer in order to
set aside a national provision which imposes limits on the amount of
compensation recoverable by way of reparation.
