Competencies of the EU and Members States

Under the Maastricht Treaty (1992) the European Union was structured into what were referred to as THREE PILLARS.

Pillar I - the Economic Community

Pillar 2 - Common Foreign and Security Policies

Pillar 3 - Police and Judicial Co-operation in Criminal Matters

Under the Treaty of Lisbon - effective from 1st December 2009 - the pillar structure was abandoned since one of the aims of the Lisbon Treaty is to simplify the EU structure and functioning. 

Under Lisbon, the EU acquired its own distinct legal personality (Article 47 of the TEU) – “The Union shall have legal personality”.  However, there is a distribution of competences so that the EU has exclusive competence in some areas of policy.  In other policy areas, competence is either shared between the EU and member states (“shared competence”) or the EU may carry out actions to support, coordinate or supplement the actions of member states (“supporting competence”).

When the EU has an exclusive competence member states are not permitted to make their own laws concerning that area.

If the EU has a shared competence both the EU and the member states may make laws, but EU law has primacy over any adopted national law, and may override the right to make national laws in the area covered by an EU law.

Article 3 TFEU of the Lisbon Treaty defines the following areas as exclusive EU competences: customs union; the competition rules necessary for the functioning of the internal market; the monetary policy for those member states whose currency is the euro;  the conservation of marine biological resources under the common fisheries policy; the common commercial policy and the conclusion of international agreements – re the latter see TFEU Art 3(2).

Article 4 TFEU sets out the principal areas where there is shared competency:

(a) internal market;

(b) social policy, for the aspects defined in this Treaty;

(c) economic, social and territorial cohesion;

(d) agriculture and fisheries, excluding the conservation of marine biological resources;

(e) environment;

(f) consumer protection;

(g) transport;

(h) trans-European networks;

(i) energy;

(j) area of freedom, security and justice;

(k) common safety concerns in public health matters, for the aspects defined in the TFEU.

Under TEU Art 4, any competence not conferred on the EU remains with the members states.  Under TEU Art 5 the limits of Union competences are governed by the principle of conferral. The use of Union competences is governed by the principles of subsidiarity and proportionality.

Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein.

Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.

The institutions of the Union shall apply the principle of subsidiarity as laid down in the Protocol on the application of the principles of subsidiarity and proportionality. National Parliaments ensure compliance with the principle of subsidiarity in accordance with the procedure set out in that Protocol.

Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties. The institutions of the Union shall apply the principle of proportionality as laid down in the Protocol on the application of the principles of subsidiarity and proportionality.

European Laws etc.

See - TFEU Article 288

To exercise the Union's competences, the institutions adopt regulations, directives, decisions, recommendations and opinions.

A regulation has general application - i.e. it is binding in its entirety and directly applicable in all Member States.  Directly applicable means that the regulation becomes part of the law of each member state without the need for national legislation to implement it.

A directive is binding, as to the result to be achieved, upon each Member State to which it is addressed, but it is left to the national authorities to decide the choice of form and methods.

A decision is binding in its entirety. A decision which specifies those to whom it is addressed shall be binding only on them.

Recommendations and opinions have no binding force.

EU Official Journal - divides into the L series (legislation), the C series (information and notices) and a supplement containing invitations to tender for various contracts.  The L and C series are published daily (except Sunday).

EUR-lex – access to European legislation

Hence, the Treaties are the primary source of EU law.  Secondary sources of EU law are Regulations, Directives, Decisions, Recommendations and Opinions.  The processes within the EU for actually making legislation are complex.  Every piece of EU legislation must have a basis in one of the Treaties.

Regulation

 Directive

Decision

Recommendation and Opinion

 Implementing EU Law in the UK

Within the United Kingdom, it is the European Communities Act 1972 which ensures that EU law is effective.  This Act provides that the treaties and regulations have force within the U.K.  The Act also enables subordinate legislation to be made to give effect to EU acts such as directives.

As an example, the recent Employment Equality (Age) Regulations 2006 were passed under section 2(2) of the 1972 Act.  These Regulations implement the European directive relating to age discrimination in employment.  The Directive is the EC Equal Treatment Framework Directive 2000/78 of 27th November 2000

It should be noted that the meaning of the word “Regulations” in national law is very different to the meaning of the same word in the EU treaties.

The Supremacy (or primacy) of European Community Law

The Treaties delimit the powers of the EU.  The treaties are international agreements entered into voluntarily by national governments.  It has long been clear that the aims of the EU would not be successfully achieved without there being a single system of law governing their activities.  The supremacy of European Community law derives from this.  Indeed, EU law has an existential need to be supreme within the various fields of endeavour covered by it.

Interestingly, the fact of supremacy is not spelled out in simple terms in the treaties.  However, the supremacy was recognised by the Court of Justice as long ago as 1962 in Van Gend en Loos (Case 26/62) [1963] ECR 1.  It was further asserted in Costa v E.N.E.L. in 1964 – (Case 6/64) [1964] ECR 585 and in various other cases. 

Perhaps, for the United Kingdom, the most striking assertion of supremacy was in the Factortame litigation in the 1980s and early 1990s.  This litigation, fiercely fought by the British government, resulted in the possibility of the courts being able to grant relief against the application of an Act of Parliament where the Act is considered to be in breach of Community Law.  This important litigation is explained more fully at The Factortame Cases and at EU Law .

The U.K.’s higher judges undoubtedly struggled to come to terms with the clash between the English law notion of the Supremacy of Parliament and the European position.  Hence, the higher English courts tended at first to try to read English legislation in a way which, as far as possible, met the European position.  However, if that was not possible then they would apply the English legislation.  This approach has been referred to as the “constructionist” approach.  It was an approach which was eventually bound to fall foul of the position adopted by the court of justice of the EU.

Whilst the supremacy of European Community law is recognised, it is squared with the Supremacy of Parliament by recognising the fact that Parliament has the right to withdraw the U.K. from the European Communities.  Such a decision would have massive consequences in many areas.

References to the Court of Justice of the EU

Court of Justice – notice regarding Preliminary references under TFEU Art. 267

The TFEU Article 267 – [previously EC Treaty Article 234 and before that Article 177] makes provision for national courts to refer questions of law to the Court of Justice of the EU - (CJEU) for a “preliminary ruling.”  Art. 267 states:-

“The Court of Justice shall have jurisdiction to give preliminary rulings concerning:

a)      the interpretation of the Treaties;

b)      the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union.

Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon.

Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court.

If such a question is raised in a case pending before a court or tribunal of a Member State with regard to a person in custody, the Court of Justice of the European Union shall act with the minimum of delay.

The procedure therefore permits any national court or tribunal to make a reference to the CJEU.  Within the U.K. the majority of references have come from the higher courts but there have been some references from Magistrates’ Courts etc. – see for example, Torfaen Borough Council v B & Q plc (Case 145/88) [1989] ECR 3851.  [This case was concerned with restrictions in the Shops Act 1950 on Sunday trading.  Ultimately, English law was amended by the Sunday Trading Act 1994 ].

Where the point of EU law arises before a court from which there is no national judicial redress (e.g. the Supreme Court of the United Kingdom or, previously, the House of Lords) then the reference “shall” be made.  Although Art. 267 uses the word “shall”, the House of Lords is not actually required to refer every point of EU law.  It would only do so if the House of Lords considered the point not to be already clear.  This is referred to as the “acte clair” doctrine.  Although some Judges and academic commentators have heartily endorsed “acte clair” it is controversial.

In Commissioners of Customs and Excise v Samex [1983] 1 All ER 1042, Lord Bingham urged caution and suggested that a reference should be made unless the national court can “with complete confidence” resolve the issue itself.  However, in R v Chief Constable of Sussex ex parte International Trader’s Ferry Ltd [1998] 3 WLR 1260, the House of Lords did not make a reference on the interpretation of the EC Treaty.

Where a reference is made, it is the CJEU which interprets EU law and it is for the national court to then apply that interpretation.  The procedure seeks to achieve uniformity in the interpretation of EU law.  Once the CJEU has made a ruling, it would set a precedent for the courts and tribunals of all Member States.  However, the CJEU itself is not bound by its' own previous decisions.

Direct Effect

Direct effect is concerned with the relationship between the citizens of the Member States and the Community.  Direct effect is another element in ensuring that EU law is applied throughout the Member States.  Just as “supremacy” is not explicitly stated in the Treaties, neither is “direct effect” defined by the Treaties.

Direct effect refers to the “enforceability” within national courts of EU law (of whatever type).  To have direct effect, a European measure must create rights or obligations for individuals.  Hence, Treaty articles, Regulations and Directives and even Decisions may have “direct effect.”

Direct effect is another creation of the CJEU.  Thus, in Van Gend en Loos (Case 26/62) [1963] ECR 1 the former European Court of Justice held that what was then Article 12 of the EC Treaty created rights which individuals could enforce in national courts.  [The Judges went against the opinion of the Advocate-General].  Hence, it was not merely States which could enforce such articles in the Treaty.  By giving individuals such a right the court made sure that the treaties were more likely to be enforced.

Since the Van Gend en Loos case, the court has gradually developed the criteria by which a provision might be directly effective.  Basically:-

• The provision must be sufficiently clear and precisely stated
• The provision must be unconditional or “non-dependent” – i.e. neither dependent on the intervention of another body nor requiring further legislative action either by the Community or by member States
• There must be an identifiable right granted by the provision on which the citizen can rely.

Vertical Direct Effect

Suppose that an individual is involved in a legal case where the other party is the State (or an “emanation of the State”).  The citizen is entitled to take advantage of any provision of EU law which has direct effect.  This form of direct effect is known as VERTICAL DIRECT EFFECT. 

Horizontal Direct Effect

May one individual rely on a directly effective provision in an action against another individual?  In Defrenne v SABENA [1976] ECR 455 the court ruled that a Treaty Article requiring equal pay was enforceable by an employee against the employer.  This form of direct effect is referred to as HORIZONTAL DIRECT EFFECT.

Treaty articles may have direct effect provided that the conditions for direct effect exist.  Furthermore, treaty articles can have direct effect both vertically and horizontally.  The court has so ruled in many cases since Van Gend en Loos – e.g. in relation to free movement of workers and of goods, rights of establishment and freedom to provide services, equal pay etc.

Regulations may also have direct effect – both vertical and horizontal.

Directives have proved to be the more difficult area in relation to direct effect. 

Directives bind member States as to the results to be achieved but leave to the State a choice of form and method.  Usually, there is a time period permitted for States to take implementation action.   Thus, directives are not “directly applicable” (since States have to implement them).  Directives cannot automatically create substantive rights which citizens are able to enforce.

However, the court has developed the law so that directives may, subject to certain requirements, have vertical direct effect: Van Duyn v Home Office [1974] ECR 1337; Marshall v Southampton and South West Hampshire Area Health Authority (Case 152/84) [1986] QB 401 etc. 

During the implementation period the rights conferred by a directive are not enforceable by citizens: see Pubblico Ministero v Ratti [1979[ ECR 1629.  After the implementation date, the directive will may have vertical direct effect so that it is enforceable against the State (or “emanations” of the State).

As regards the implementation period, it should be noted that the Member States must not introduce measures which go against the purpose of the directive: see Inter-Environnement Wallonie v. Region Wallonne Case C-129/96 [1997] ECR I-7411.    Once a directive is addressed to the Member States they have legal effects for the States though they do not have direct effect until after the implementation date has passed.

Emanations of the State are bodies which provide a public service and which are under the control of the State and are able to exercise powers not available to a private body – see Foster v British Gas [1990] ECR I-3313; Doughty v Rolls-Royce plc [1992] 1 CMLR 1045 and Griffin v South West Water [1995] IRLR 15.

Other means by which the Court of Justice has developed the law

The court developed an interpretative rule in cases such as Von Colson [1984] ECR 1891 and Marleasing [1990] ECR I-4135.  This rule requires national courts to interpret and apply all national law so far as possible to give full effect to EU law including provisions in directives.  This interpretative rule is sometimes referred to as “Indirect Effect.”

The court also developed State Liability for non-implementation (or faulty implementation) of directives: Francovich v Italy [1991] ECR I-5257: Brasserie du Pecheur (Case C-46/93) and Factortame (Case C-48/93) [1996] ECR I-1029.  The conditions which must apply are:

• The rule of community law infringed must be intended to confer rights on individuals
• The breach must be sufficiently serious to justify imposing State liability
• There must be a direct causal link between the breach of the obligation imposed on the State and the damage actually suffered by the applicant.

Although the principle of State Liability first appeared in relation to directives (see Francovich), the principle is now of wider application and extends to breach by the State of any community obligation.