''Francovich v Italy'' (1991) C-6/90 was a decision of the
European Court of Justice which established that
European Union Member States could be liable to pay compensation to individuals who suffered a loss by reason of the Member State's failure to
transpose
In linear algebra, the transpose of a matrix is an operator which flips a matrix over its diagonal;
that is, it switches the row and column indices of the matrix by producing another matrix, often denoted by (among other notations).
The tr ...
an EU
directive into national law. This principle is sometimes known as the principle of state liability or "the rule in ''Francovich''" in
European Union law.
[UK Legislation]
European Union (Withdrawal) Act 2018
Schedule 1 accessed 8 July 2018
Facts
Under the
Insolvency Protection Directive 80/987 (now 2008/94/EC) EU Member States were expected to enact provisions in their national law to provide for a minimum level of insurance for employees who had wages unpaid if their employers went
insolvent
In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet i ...
. Mr Francovich, who had worked in
Vicenza
Vicenza ( , ; ) is a city in northeastern Italy. It is in the Veneto region at the northern base of the ''Monte Berico'', where it straddles the Bacchiglione River. Vicenza is approximately west of Venice and east of Milan.
Vicenza is a thr ...
for CDN Elettronica SnC, was owed 6 million Lira, and Mrs Bonifaci and 33 of her colleagues were owed 253 million Lira together after their company, Gaia Confezioni Srl, had gone bankrupt. The Directive was meant to be implemented by 1983, but five years later they had been paid nothing, as the company liquidators had informed them that no money was left. They brought a claim against the
Italian state, arguing that it must pay damages to compensate for their losses instead, on account of a failure to implement the Directive.
Judgment
The European Court of Justice held that the Italian government had breached its obligations, and was liable to compensate the workers' loss resulting from the breach. The Court further held that the damages for such breaches should be available before national courts, and that to establish state liability on the basis of the failure to implement a
directive, claimants must prove that the directive conferred specific rights on them, identifiable in its wording, and that there is a causal link between the state's failure to implement the directive and the loss suffered.
Enforcement
The court stipulated that national procedures should determine how each Member State's liability was to be enforced.
[European Foundation for the Improvement of Living and Working Conditions]
Francovich principle
published 11 March 2007, accessed 15 November 2022
See also
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United Kingdom labour law
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European labour law
European labour law regulates basic transnational standards of employment and partnership at work in the European Union and countries adhering to the European Convention on Human Rights. In setting regulatory floors to competition for job-creatin ...
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Direct effect
In European Union law, direct effect is the principle that Union law may, if appropriately framed, confer rights on individuals which the courts of member states of the European Union are bound to recognise and enforce.
Direct effect is not e ...
*
Incidental effect
Incidental effect is a concept in European Union law that allows the use of indirect effect Indirect effect is a principle of the European Union (EU) law, whereby national courts of the member states of the EU are required to interpret national ...
*
Indirect effect Indirect effect is a principle of the European Union (EU) law, whereby national courts of the member states of the EU are required to interpret national law in line with provisions of EU law. The principle of indirect effect contrasts with the pri ...
Notes
{{Reflist
External links
''Francovich and Bonifaci v Republic of Italy''(Cases C-6 and 9/90)
991ECR I-5375
Court of Justice of the European Union case law
1991 in case law
1991 in Italy
Italian case law