November 18, 2019

A determine how to transpose them, disparities within the

A directive is an act of European Union law to be transposed into member
state law to achieve a certain aim, however the member state itself is not limited
to using only certain means of achieving this result1.
Unlike regulations, EU directives can have only vertical direct effect, and not
horizontal. While directives are preferred to regulations, due to the freedom
they give to Member States, as it means they are free to determine how to
transpose them, disparities within the law have arisen as this means
individuals cannot enforce their rights and take action against other
individuals even where the aim of the directive is for these individuals to be
protected. As Directives can only have vertical direct effect, a person seeking
to rely on this can only take proceedings against the State or an emanation of
the state2.
This is unfair and unjust particularly in the employment sector, as where a
person is employed in the public service, they can bring action against their
employer based on the direct effect of a directive as this will be seen as an
emanation of the state3,
whereas even if the conditions for direct effect are met, an individual cannot
rely on this to take action against their employer in the private sector. This is
evident in Marshall I4,
where the claimant succeeded in her equal pay claim against a public health
authority based on Directive 76/207/EEC, contrasted with Duke v GEC Reliance Ltd5,
where the claimant lost in a comparable claim against a private company. Not
only this, but where a directive has failed to be transposed properly by the
member state, and this directive would mean that an individual would have
certain protections, the individual would struggle to hold their private
employer accountable for not providing these protections. In order to overcome
the consequences of this and rectify these complications, the European Court of
Justice (ECJ) has developed some remedial mechanisms; namely the principles of
state liability and indirect effect, among others. But whether these devices
can harmonize the law, in such a way as to compensate for the issues created by
the fact that directives cannot have horizontal direct effect, is a question much
debated among legal scholars and academics.


The idea of indirect effect, and how this provides a solution to the
problems caused by directives not having horizontal direct effect, is most
effectively explained through the example of a case. In Seda Kucukdeveci v Swedex GmbH & Co6,
a young employee who began working at a private German company was dismissed
after 10 years. The company calculated that she had given 3 years of service,
given the fact that German legislation provided that employers should only take
into account employment after the employee reaches 25 years of age. Ms
Kucukdeveci brought action against her employer in the German courts stating
this was discriminatory based on her age and thus went against Directive
2000/78. The court then referred to the ECJ, asking whether this was illegal
discrimination, contrary to EU law and the directive, and if so, whether the
national court should disapply the national law in the dispute concerning two
private parties. The ECJ referred to Mangold
v Helm7,
stating that this case provides that the directive in question does not itself
lay down the principle of non-discrimination and equal treatment, but that this
directive implements a framework for combatting inequality. The ECJ therefore
held that the principles do apply. Then, it was to be decided whether the case
at hand fell within the scope of EU law. The ECJ recalled the general rule that
a directive cannot impose obligations on an individual and therefore cannot be
relied on against another individual8,
and therefore pointed out that usually this would not come within the remit of
European Union law. However, the court went on to recall that Member States
have an obligation arising from a directive to achieve the result envisaged by
that directive and their duty to take all measures, whether general or
particular, to ensure the fulfilment of that obligation9.
The ECJ therefore held that when it applies national law, the national court
must ensure that the result pursued by the directive in question is achieved in
light of the wording and purpose of the directive, and therefore the
requirement for national law to be interpreted in conformity with EU law
permits the national court to ensure the full effectiveness of said directive10.
This is the principle of indirect effect, whereby even where a directive does
not have horizontal direct effect, the national court should seek to achieve
the same result as if it did have such an effect when the directive gives
expression to a general principle of EU law.

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The question remains however as to whether this is a practical solution
to the lack of horizontal direct effect of directives. Since this decision,
English courts have shown willingness to abide by this judgment, and also that
of Mangold v Helm11,
as seen in X v Mid Sussex Citizens Advice
which concerned disability discrimination. The ECJ has shown and reiterated
that Directives are not capable of having horizontal direct effect, however at
the same time have granted this through ‘the back door’ under the disguise of
enforcing general principles of EU law. Although the ECJ never actually ruled
that national courts should apply Directives directly against employers, only
that they should not apply provisions of national law that conflict with Union
law, the effect and end result is the same. These judgments have created legal
uncertainty as there are certain criteria to be met for national law to be
disapplied, for example, where the national legislation must have been adopted
after the expiry of the deadline for the transposition of the directive in
question, and where the national legislation in issue is unambiguous and cannot
be interpreted in such a way as to comply with EU law. This creates an issue as
each analysis will have to take place on a case-by-case basis due to all
national law being different, which is extremely time-consuming for the courts.


The concept of state liability was first established in Francovich v Italian Republic13,
where the ECJ set out that a Member State will be liable in damages to
individuals who have suffered a loss as a result of that Member State’s
infringement of EU Law, including their failure to properly transpose an EU
directive into national law. This was further clarified in Brasserie du Pecheur SA v Federal Republic of Germany and R v Secretary of State for Transport, ex
parte Factortame Ltd14,
where the conditions for liability of a Member State were set out. This
required that the rule of law which has been breached must be one which is
intended to confer rights on individuals, this breach must be sufficiently
and there must be a direct causal link between the Member State’s default and
the loss suffered by the individual. Critically, in Dillenkofer v Federal Republic of Germany16,
the ECJ held that non-implementation of a directive within the prescribed time
limit will constitute a serious breach of EU law. Article 153(3) TFEU outlines
that Member States remain responsible even where they have entrusted
‘management and labour, at their joint request, with the implementation of
directives adopted’. Thus, Member States must ensure that ‘management and
labour have introduced the necessary measures by agreement’ and must take ‘any
measure enabling it at any time to be in a position to guarantee the results
imposed by that directive’17. State liability has seemingly wide implications for
certain areas of the law, particularly employment law. If
a private individual has a definable interest protected by a directive, and an
individual suffers damage because the state fails to act to protect that
interest, this individual could claim compensation through the principle of
state liability. The directives on equal treatment of the sexes, health and
safety at work and directives regarding workers, are a fertile field for
exploration of the scope of state liability18.


Many scholars have debated the issue of whether state liability is an
actual alternative to horizontal direct effect. For example, Ross has stated
that Francovich should not be seen as
creating a true alternative, but “as a safety net to provide individual
remedies where there has been a breakdown in securing them in the originally
designated national manner”19.
While state liability does provide a means for individuals to be protected
under directives through holding member states accountable for their implementation,
issues with this remain. For example, the requirement that the breach of the
member state must be ‘sufficiently serious’ has provided discrepancies within
the law in the past. The test for whether a breach is sufficiently serious is
whether the state has ‘manifestly and gravely’20
disregarded its obligations. It has long been regarded by the ECJ that failure
to transpose a directive would amount to a sufficiently serious breach21,
however this was challenged in Tabakfabriken
GmbH v Shatteministeriet22,
where it was held that if a domestic administrative authority had attempted to
comply with the provisions of the relevant directive, then the
non-transposition would not automatically mean a sufficiently serious breach
had taken place. This therefore further reduces the clarity of this principle
and creates issues for individuals within different member states with
differing institutions23.
Without the recognition that non-implementation of a directive will
automatically lead to a sufficiently serious breach, workers who have been
aggrieved will have more difficulty in proving to the courts that this is a
sufficiently serious breach. However, the main reason that state liability is
limited is for the glaringly obvious drawback of who it holds accountable – the
When the Working Time Directive25
was implemented, it meant that individual private employers had to give effect
to the Working Time Regulations 1998, and provide workers with the rights
provided therein. A worker who would want to enforce these rights if their
private employer was not adhering to the transposing legislation would have to
bring action against the State, and while the State holds responsibility for
the transposition of directives26,
this does seem unfair. It means that the employer could continue to deny
workers of such rights until the State decides to take some action, which seems
wholly absurd. For this reason, many public lawyers have argued that state
liability is no substitute for horizontal direct effect, and it is argued that
if individuals are provided with rights under EU law, they should be able to
enforce these rights through simpler means if they have been denied them
unjustly. An effective remedy for the inability of directives to have
horizontal direct effect is needed, but this is not it.


Overall, it seems evident that the principle of indirect effect proposes
a greater solution to the problems created by EU directives not having
horizontal direct effect than the principle of State liability. It can be
argued that while indirect effect sufficiently provides a solution for the
discrepancies in the law created by the incapability of directives to have
direct effect, state liability does not sufficiently cover the other issues
which are created, and therefore, problems still remain. While indirect effect
partially achieves the result obtainable through the rule of direct effect, and
does provide more protection for individuals than state liability, this is only
insofar as the national law is not wholly inconsistent with EU law27,
therefore it is evident that this area of the law can still lead to
unreasonable or arbitrary outcomes. The argument that horizontal direct effect
could be the answer itself has long been regarded by many Advocate Generals28
for years as a deficit in the pursuit of effective remedies. Advocate General
Van Gerven has proposed that denying horizontal direct effect of directives has
caused the ECJ to suffer, stating that it has led to ‘distortions and
inconsistencies in the law which were to the detriment of a progressive method
of extending the law’29.
Essentially, horizontal direct effect would allow individuals to hold their
domestic institutions accountable by disallowing them to withhold their
European Law rights through unclear or inaccessible enforcement processes – and
this, is what the ECJ should aim to achieve.


1 Art 288 Treaty on the
Functioning of the European Union

2 Case C-152/84 Marshall v Southampton and South-West
Hampshire Area Health Authority 1986 ECR 723

3 Case C-188/89 Foster v British Gas plc 1990 2 AC 306

4 (n 2)

5 1988 1 All ER

6 Case C-555/07 2010 IRLR 346

7 Case C-144/04 2005 All ER (EC) 383

8 (n 2)

9 Case C-14/83 Von Colson v Land Nordrhein-Westfalen 1984 ECR 1891

10 Case C-397/01-403/01 Pfeiffer v Deutsches Rotes Kreuz,
Kreisverband Waldshut eV (2005) IRLR 137

11 (n 7)

12 2012
UKSC 59, 2013 1 All ER 1038

13 Joined Cases C-6/90 and 9/90
1995 ICR 722

14 Joined Cases C-46/93 and
C-48/93 1996 QB 404

15 (n 13)

16 Joined Cases C-178,179 and
188-190/94) 1997 QB 259

17 ibid

18 Marson, J. 2004 ‘Holes in
the safety net? State liability and the need for private law enforcement’
Liverpool Law Review 25

19 Ross, M. 1993 “Beyond
Francovich” The Modern Law Review 55-73

20 Joined Cases C-83 and 94/76
and 4, 15 and 40/77 Bayerische HNL
Vermehrungsbetriebe GmbH & Co. K.G. v. Council and Commission of the
European Communities 1978 ECR 1209

21 (n 16)

22 Case C-319/96 1998
ECR I-5255

23 (n 18)

24 ibid

25 Directive 93/104/EC concerning
aspects of the organization of working time 1993

26 Article 153(3) Treaty on the Functioning of
the European Union

27 (n 6)

28 Van Gerven, W. 1993 ‘The
Horizontal Effect of Directive Provisions Revisited – The Reality of
Catchwords’ Institute of European Law Public Lecture Series

29 (n 18)


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