Santoro (Social policy - Advocate Generals opinion) [2017] EUECJ C-494/16

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(Request for a preliminary ruling
from the Tribunale civile di Trapani (Civil District Court, Trapani, Italy))

(Reference for a preliminary ruling — Social policy — Fixed-term work — Contracts concluded with an employer in the public sector — Measures to penalise the misuse of fixed-term contracts — Principles of equivalence and effectiveness)

1. This request for a preliminary ruling concerns the interpretation of Council Directive 1999/70/EC of 28 June 1999 concerning the Framework Agreement on fixed-term work concluded by ETUC, UNICE and CEEP and the Framework Agreement on fixed-term work concluded on 18 March 1999 (‘the Framework Agreement’), which appears in the annex to that directive. (2) It is one of a number of references made by Italian courts concerning the compatibility with EU law of the prohibition on the conversion of fixed-term contracts into a single contract of indefinite duration in the public sector in the event of misuse by an employer of the former type of contract. (3)

2. However, in contrast to the previous requests, in the present case the referring court is asking about measures to be adopted in order to penalise the misuse of fixed-term contracts, which will enable the Court to expand upon its earlier case-law concerning Directive 1999/70 and the Framework Agreement.

3. Article 1 of Directive 1999/70 states that the purpose of the directive is ‘to put into effect the Framework Agreement … concluded between the general cross-industry organisations (ETUC, UNICE and CEEP)’.

‘Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive [and shall] take any necessary measures to enable them at any time to be in a position to guarantee the results imposed by this Directive. ...’

5. Clause 5 of the Framework Agreement, entitled ‘Measures to prevent abuse’, provides:

‘1. To prevent abuse arising from the use of successive fixed-term employment contracts or relationships, Member States, after consultation with social partners in accordance with national law, collective agreements or practice, and/or the social partners, shall, where there are no equivalent legal measures to prevent abuse, introduce in a manner which takes account of the needs of specific sectors and/or categories of workers, one or more of the following measures:

(a) objective reasons justifying the renewal of such contracts or relationships;

(b) the maximum total duration of successive fixed-term employment contracts or relationships;

2. Member States after consultation with the social partners and/or the social partners shall, where appropriate, determine under what conditions fixed-term employment contracts or relationships:

6. Directive 1999/70 was transposed into Italian law by decreto legislativo n. 368 — Attuazione della direttiva del Consiglio del 28 giugno 1999, n. 1999/70/CE relativa all’accordo quadro CES, UNICE, CEEP sul lavoro a tempo determinato (Legislative Decree No 368 transposing Directive 1999/70) of 6 September 2001 (GURI No 235 of 9 October 2001). Article 5(2) of the legislative decree, in the version applicable at the material time, provides:

‘If the employment relationship continues beyond the thirtieth day for contracts for a term of less than six months, or beyond the overall period referred to in paragraph 4-bis, or beyond the fiftieth day in other cases, the contract shall be considered to be of indefinite duration once those terms have elapsed.’

‘Without prejudice to the rules on successive contracts set out in the preceding paragraphs, where, as a result of a succession of fixed-term contracts for the performance of equivalent tasks, an employment relationship between the same employer and the same worker continues for an overall period of more than 36 months, including any extensions and renewals, disregarding any breaks between one contract and another, the employment relationship shall be regarded as being a relationship of indefinite duration within the meaning of paragraph 2 ...’

8. Article 36 of decreto legislativo n. 165 — Norme generali sull’ordinamento del Lavoro alle dipendenze delle amministrazioni pubbliche (Legislative Decree No 165 laying down general rules concerning the organisation of employment in public authorities) of 30 March 2001 (Ordinary Supplement to GURI No 106 of 9 May 2001) is worded as follows:

‘1. For requirements connected with their everyday needs only, public authorities shall recruit exclusively by means of employment contracts of indefinite duration …

2. To meet temporary and exceptional requirements, public authorities may make use of the flexible forms of contract for the recruitment and employment of staff provided for in the Civil Code and the laws on employment relationships in undertakings, in accordance with existing recruitment procedures.

5. In any event, infringement of mandatory provisions on the recruitment or employment of workers by public authorities cannot lead to the creation of employment contracts of indefinite duration with those public authorities, without prejudice to any liability or sanction which those authorities may incur. The worker concerned shall be entitled to compensation for damage suffered as a result of working in breach of mandatory provisions …’

9. Article 32(5) of legge n. 183 — Deleghe al Governo in materia di lavori usuranti, di riorganizzazione di enti, di congedi, aspettative e permessi, di ammortizzatori sociali, di servizi per l’impiego, di incentivi all’occupazione, di apprendistato, di occupazione femminile, nonche’ misure contro il lavoro sommerso e disposizioni in tema di lavoro pubblico e di controversie di lavoro (Law No 183 delegating powers to the Government regarding heavy and arduous work, reorganisation of entities, leave, availability and authorised absences, social protection measures, employment services, measures on employment incentives, training and the employment of women, measures to combat undeclared work and provisions regarding employment in the public sector and labour disputes) of 4 November 2010 (Ordinary Supplement to GURI No 262 of 9 November 2010), provides:

‘In cases in which a fixed-term contract is converted, the court shall order the employer to pay to the employee overall compensation of between 2.5 and 12 monthly payments at the rate of his last actual overall salary payment, having regard to the criteria laid down in Article 8 of Law No 604 of 15 July 1966.’

10. From 1996 to 2002, Ms Giuseppa Santoro worked as a provider of socially useful services for the Comune di Valderice (municipality of Valderice, Italy). She then worked for that municipality under a continuous and coordinated contractual relationship until the end of 2010. On 4 October 2010 she entered into a part-time contract of employment with that municipality, which was due to end on 31 December 2012. The contract, which was extended three times, ended on 31 December 2016 and thus lasted in total more than five years.

11. Considering that those successive fixed-term employment contracts were unlawful, Ms Santoro brought proceedings before the referring court, seeking inter alia, as her main claim, conversion of those contracts into a contract of indefinite duration as from the end of the 36^th month and, in the alternative, compensation for the loss she had suffered.

12. The referring court states in that regard that, according to Article 36(5) of Legislative Decree No 165, infringement by the public authorities of the prohibition on repeated conclusion of fixed-term employment contracts cannot lead to conversion of those contracts into a contract of indefinite duration. Consequently, Ms Santoro, being a public-sector worker, can seek compensation only for the loss she has suffered, which, under Article 32(5) of Law No 183, is limited to payment of comprehensive compensation of between 2.5 and 12 monthly payments at the rate of the last actual overall salary payment, whereas private-sector workers are entitled to such compensation and to the conversion of their fixed-term contracts into a single contract of indefinite duration.

13. However, the Corte suprema di Cassazione (Court of Cassation, Italy) Combined Chambers, held in its judgment No 5072/2016 of 15 March 2016 that, in cases of misuse of fixed-term contracts by a public authority, which is unlawful due to the prohibition laid down in Article 36(1) of Legislative Decree No 165, a worker who has been harmed is entitled, in addition to the lump sum compensation referred to above, to compensation for ‘loss of opportunity’, which may be awarded where it is established that the worker concerned has lost the opportunity of enjoying stable employment.

14. That judgment was delivered in proceedings in which the court of first instance had asked the Court of Justice whether the fact that successive fixed-term contracts concluded with a public authority are precluded from being converted into a single contract of indefinite duration was compatible with EU law. In the judgment in Marrosu and Sardino, (4) the Court replied that such preclusion was not incompatible with the clauses of the Framework Agreement annexed to Directive 1999/70, as long as the legal order provides for the application of ‘another effective measure to prevent and, where relevant, punish the abuse of successive fixed-term contracts by a public-sector employer.’

15. Following that judgment, the court of first instance granted the workers affected not only compensation equal to a minimum of five monthly salary payments but also ‘reinstatement compensation’ equivalent to fifteen monthly payments at the rate of the last actual overall salary payment. Upheld on appeal, that measure was found to be ‘inappropriate’ by the Corte suprema di Cassazione (Court of Cassation) in judgment No 5072/2016.

16. It is in context set out above that the Tribunale civile di Trapani (Civil District Court, Trapani, Italy) decided to stay the proceedings and to refer the following questions to the Court:

‘(1) Is the granting of compensation of between 2.5 and 12 monthly payments of the last overall salary payment (Article 32(5) of Law No 183) to a public sector employee who is a victim of the unlawful successive renewal of fixed-term contracts and who may obtain full compensation only by proving the loss of other employment opportunities or by proving that, if he had participated in an open competition, he would have been successful, an equivalent and effective measure for the purpose of the judgments of 7 September 2006, Marrosu and Sardino (C‑53/04, EU:C:2006:517) and of 26 November 2014, Mascolo and Others (C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401)?

(2) Must the principle of equivalence referred to by the Court of Justice (inter alia) in the judgments of 7 September 2006, Marrosu and Sardino (C‑53/04, EU:C:2006:517) and of 26 November 2014, Mascolo and Others (C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401) be interpreted as meaning that, when the Member State decides not to apply the conversion of the employment relationship (as awarded in the private sector) to the public sector, it must nevertheless provide the worker with the same benefit, if necessary in the form of compensation which must relate to the value of the employment contract of indefinite duration?’

17. Written observations were lodged by Ms Santoro, the Comune di Valderice, the Italian Government and the Commission, all of whom also appeared at the hearing held on 13 July 2017.

18. The Italian Government contends in its written observations that the facts of the case were not properly set out by the referring court and the questions referred are therefore inadmissible. That government states that the request for a preliminary ruling fails to specify either the public sector in which the applicant in the main proceedings worked under various forms of contract or the duties assigned to her, even though that information is needed in order to understand whether the extensions of the employment contracts at issue were justified by any ‘objective reason’ within the meaning of clause 5(1)(a) of the Framework Agreement.

19. I am unsure whether the Italian Government is merely expressing doubts as to the admissibility of the questions referred or whether it is raising a formal objection on this point. Regardless of that uncertainty, the Italian Government’s arguments cannot be accepted.

20. First of all, it should be noted that the order for reference serves as the basis for the proceedings before the Court, and thus it is essential that the national court should give in the reference, inter alia, the factual and legislative context of the case in the main proceedings. (5)

21. Furthermore, it is not for the Court, in the context of a reference for a preliminary ruling, to give a ruling on the interpretation of provisions of national law or to decide whether the interpretation of those provisions given by the national court is correct. The Court must take account, under the division of jurisdiction between the European Union Courts and the national courts, of the factual and legislative context in which the questions put to it are set, as described in the order for reference. (6)

22. In that regard, I note that the referring court states that Ms Santoro was working under a fixed-term contract for a period that exceeded the 36-month limit laid down in Directive 1999/70. Moreover, the referring court itself states that the questions referred do not concern assessment of the lawfulness or unlawfulness of employment contracts extended by public authorities beyond the authorised limits, but solely the specific determination of a ‘deterrent’ to be applied where successive fixed-term employment contracts are renewed unlawfully in the public sector.

23. Thus, it seems that the position of the referring court is unequivocal in finding that the Comune of Valderice misused fixed-term contracts, and it is for that reason that its request for a preliminary ruling concerns only measures to penalise such misuse.

24. Therefore, it seems to me that the facts supplied by the referring court do enable the Court of Justice to give a preliminary ruling on the questions referred and I am of the view that those questions must be considered admissible.

25. Clause 1 of the Framework Agreement states that the agreement’s purpose is to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships. In order to carry out this task, Member States are required, under clause 5 of the Framework Agreement, to adopt measures to prevent the misuse of fixed-term contracts.

26. Where such misuse has taken place, however, it must be possible to apply measures to penalise that misuse. A measure of that type, involving conversion into a single contract of indefinite duration, is expressly referred to in clause 5(2)(b) of the Framework Agreement.

27. Therefore, national legislation adopted in order to guarantee the results imposed by Directive 1999/70 and the Framework Agreement may comprise two types of measures: measures to prevent abuse, provided for in clause 5(1) of the Framework Agreement, and measures to penalise abuse, which are provided for in particular in clause 5(2)(b) of that agreement. (7)

28. However, the Court has consistently held that the Framework Agreement must be interpreted as not, in principle, precluding national legislation which, where there is abuse arising from the use of successive fixed-term employment contracts or relationships by a public-sector employer, precludes their being converted into contracts or relationships of indeterminate duration, as provided for in clause 5(2) of the Framework Agreement, even though such conversion is provided for in respect of employment contracts and relationships with a private-sector employer, where that legislation includes another effective measure to prevent and, where relevant, punish the abuse of successive fixed-term contracts by a public-sector employer. (8)

(1) The purpose of the questions referred for a preliminary ruling with regard to the principle of equivalence, the positions of the parties and some preliminary observations

29. By its first question, the referring court asks whether the compensation measures referred to by the Corte suprema di Cassazione (Court of Cassation) in judgment No 5072/2016 are measures that are equivalent and effective. In that regard, the referring court recalls the wording of the judgments in Marrosu and Sardino (9) and Mascolo and Others (10) and equates those two requirements to the principles of equivalence and effectiveness. In its second question, the referring court returns to the principle of equivalence and requests the Court to give a ruling on the amount of the compensation for loss of opportunity awarded to a public-sector worker in a case where, in contrast to what is provided for in the private sector, a Member State decides not to convert such a worker’s employment relationship. Therefore it seems to me that, from the viewpoint of the principle of equivalence, those two questions may be analysed together.

30. The referring court considers that in the present case observance of the principle of equivalence must be assessed in relation to the situation of employers in the private sector. On the basis of this premiss, the referring court challenges the position of the Corte suprema di Casazzione (Court of Cassation), which held that compensation for loss of opportunity must correspond to compensation for actual damage, which is the case under national civil law. The referring court also states that the compensation can relate only to the value of the employment contract of indefinite duration.

31. The Commission challenges the referring court’s premiss. It considers that the compatibility of the measures referred to in the request for a preliminary ruling with the principle of equivalence must be analysed in the light of what is provided for under national law in respect of similar cases concerning the same category of public authority workers.

32. First of all, it should be recalled that the principle of equivalence is based on the idea that individuals asserting rights conferred by EU law must not be treated less favourably than those asserting rights of a purely domestic nature. Measures adopted by a national legislature in order to carry out obligations under Directive 1999/70 to penalise the misuse of fixed-term contracts by private-sector employers continue to implement EU law even though other measures applicable to the public sector may be provided for under national law. Therefore, the rules governing the two types of measures cannot be compared in the light of the principle of equivalence, since those measures relate exclusively to the exercise of rights conferred by EU law.

33. In the light of the above, as regards the principle of equivalence, if a Member State makes provision solely in the private sector for compensation measures to act as penalties for the purposes of clause 5(2) of the Framework Agreement and precludes conversion of the employment relationship, which is allowed in the private sector, those two situations cannot be compared in order to establish whether that principle is being observed since, in both those cases, the rights being exercised are rights conferred by EU law.

34. It could be asked, in the alternative, whether the referring court’s doubts concerning the equivalence of the measures provided for in the public sector and the private sector might not be based, in essence, on the general principle of equal treatment and non-discrimination, which requires that comparable situations should not be treated differently, and different situations not treated in the same way, unless such treatment is objectively justified.

35. In that regard, I would point out, as does the Commission, that the Court has previously held that clause 5 of the Framework Agreement does not preclude, in principle, treating misuse of successive fixed-term employment contracts or relationships differently according to the sector or category to which the staff in question belong, provided that the law of the Member State concerned provides, in that sector or with respect to that category of staff, another effective measure to prevent and penalise abuses. (11)

36. It follows that, in the context of Directive 1999/70, the measures available to workers belonging to different categories may be different and that, in that context, the question of equality in the broad sense of the term board does not arise, at least directly. It is the effectiveness of the penalties which ensures that such workers are not treated in a way that is contrary to EU law.

37. Those observations notwithstanding, I think that it will be useful to pursue my analysis concerning the principle of equivalence, since it seems to me that it is above all the search for suitable comparisons which might give rise to doubts for the referring court when referring to that principle.

38. It is settled case-law that, in order to identify suitable comparisons, it is for the national court — which alone has direct knowledge of the procedural rules governing actions in the field of employment law — to determine both the purpose and the cause of action and essential characteristics of allegedly similar domestic actions. (12) However, with a view to the appraisal to be carried out by the national court, the Court may provide guidance for the interpretation of EU law.

39. Thus, in Transportes Urbanos y Servicios Generales, (13) the Court held that an action for damages against the State alleging breach of the country’s Constitution and an action for damages against the State alleging breach of EU law may be regarded as similar. Specifically, the Court held that compensation for the loss suffered by the person harmed as a result of an act or an omission on the part of the State constituted the common purpose of the actions concerned, (14) whilst the requirement to exhaust all remedies was to be regarded as their essential characteristic. (15) Furthermore, according to Advocate General Poiares Maduro, the actions concerned were based on the same cause of action, namely the unlawfulness of the harmful conduct. (16)

40. Moreover, in Pontin, (17) whilst leaving final consideration to the national court, the Court, in its task of providing guidance for the interpretation of EU law, proposed a comparison of the procedural rules concerning an action for nullity and reinstatement of a pregnant employee who has been dismissed during her pregnancy, based on EU law, with the procedural rules concerning, first, actions for damages available to any other employee who has been dismissed and, secondly, actions for nullity and reinstatement of an employee dismissed on the ground of her marriage. Similarly, in Bulicke (18) the Court addressed the comparison of a provision laying down a limitation period for bringing an action for damages arising from infringement of the prohibition on discrimination on grounds of age with provisions concerning protection against wrongful dismissal, and an action to have a fixed-term employment contract declared invalid.

41. It is true that the interpretative guidance provided in those two judgments is less clear than the guidance given in Transportes Urbanos y Servicios Generales, (19) particularly as it is not exhaustive because the Court cannot take the place of the national court and determine whether the principle of equivalence has been observed. It seems to me that the alleged similarity of the actions concerned in Pontin (20) and Bulicke (21) was not based on the fact that their purpose was, strictly speaking, the same. Indeed, some of the actions concerned compensation for loss suffered, whilst others concerned the reinstatement of a female employee. However, those two judgments confirm that where the purposes, causes of action and essential characteristics are similar, that is sufficient for the actions to be regarded as similar as regards the principle of equivalence.

42. The Commission thus contended in its written observations that, as regards the principle of equivalence, the purpose of the compensation measures provided for under Italian law is to provide compensation for the harm resulting from the wrongful conduct of a public-sector employer. However, in my view, the search for similar situations should not be limited to situations concerning the same category of public authority workers.

43. In Edis, (22) the Court based its findings with regard to observance of the principle of equivalence by the national provisions governing the limitation period applicable to actions for the recovery of charges or other levies based on Community law by reference not to the more favourable rules concerning actions between private individuals for the recovery of sums paid but not due, also mentioned by the referring court, but to the rules applicable for challenging the imposition of charges and other levies. However, the Court’s position was not based on the idea that those more favourable rules did not meet the similarity criterion for purposes of the principle of equivalence. On the contrary, the Court justified its choice by stating that that principle cannot be interpreted as obliging a Member State to extend its most favourable rules under national law to all actions based on rights conferred by EU law. (23)

44. Therefore, where the principle of equivalence is in issue, the similarity sought does not reside in the same parties having access to the measures concerned but in the fact that the purposes, causes of action and essential characteristics of the measures are comparable. It is in the light of those considerations that it is necessary to determine whether the rules concerning the burden of proof for the purpose of obtaining compensation for loss of opportunity, the amount of that compensation and the amount of the compensation payable as a lump sum constitute rules that are less favourable than those governing similar domestic situations and do not therefore comply with EU law. (24)

45. According to the judgment in Palmisani, (25) if the national court were unable to undertake any relevant comparison between the conditions relating to the claim at issue and the conditions relating to similar claims of a domestic nature, the conclusion would have to be drawn, subject to verification concerning observance of the principle of effectiveness, that EU law does not preclude the national legislation concerned. That approach would seem to me to have been reaffirmed, at least indirectly, by the Court in its judgment in Impact, (26) concerning Directive 1999/70 and the Framework Agreement. (27) In that case, the referring court had raised questions relating to the principles of equivalence and effectiveness. Advocate General Kokott, like the referring court, had addressed the problem concerned in the light of those two principles, (28) considering that in that case, they had not been observed by the national law. (29) However, the Court in its judgment referred only to the principle of effectiveness and its infringement. (30)

46. Whilst leaving final consideration to the referring court, in the light of the above considerations, I take the view that there is nothing in the order for reference to indicate that the principle of equivalence was not observed, especially since that court has failed to point to any situations under domestic law — apart from the situation of private-sector workers — that may be regarded as comparable. I note in that regard that, according to the explanation given by the Italian Government at the hearing, compensation for loss of opportunity, which is subject to the same standard of proof, is generally accepted in national law. Moreover, the referring court states that compensation for the damage actually suffered is also provided for under Italian law in civil cases. The Commission notes in its written observations that compensation — the limits for which have been laid down in advance by Italian legislation — also seems to be provided for in domestic law where it is established that the conditions for dismissal with good cause or on justified grounds have not been met. However, in those cases, the minimum and maximum amounts of compensation increase according to length of service, a point which should be taken into account by the referring court when considering whether the principle of equivalence has been observed, if it considers that such an action is similar to that in the main proceedings.

(1) The purpose of the first question in the light of the effectiveness of Directive 1999/70 and of the principle of equivalence

47. As I observed in point 29 above, by its first question the referring court also seeks to ascertain, quoting the wording of the judgments in Marrosu and Sardino (31) and Mascolo and Others (32), whether the compensation measures referred to by the Corte suprema di Cassazione (Court of Casstion) in its judgment No 5072/2016 observe the principle of effectiveness.

48. The referring court considers that, contrary to the principle of effectiveness, the possibility of proving the loss of an opportunity to obtain a better job is purely theoretical, so that compensation payable as a lump sum of between 2.5 and 12 monthly salary payments constitutes the only means of protection for a worker who has been the victim of the misuse of fixed-term contracts. However, according to that court, such lump sum compensation cannot be considered to be an effective deterrent.

49. The Commission contends in its written observations that the compensation measures at issue may be compatible with the principle of effectiveness, provided the compensation is not purely symbolic and constitutes full and adequate reparation for the loss incurred.

50. I note that, in referring to the concept of an ‘equivalent and effective measure’ for the purposes of Marrosu and Sardino (33) and Mascolo and Others, (34) the referring court would appear to be referring to paragraphs 53 and 79 of those judgments, respectively, in which the Court held that ‘where abuse of successive fixed-term contracts has taken place, a measure offering effective and equivalent guarantees for the protection of workers must be capable of being applied in order duly to punish that abuse and nullify the consequences of the breach of Community law’. (35)

51. That form of words, used consistently by the Court in its judgments relating to the Framework Agreement, is a synthesis of two premisses. Thus, first, the Court always states that, in the context of Directive 1999/70, it is incumbent on the national authorities to adopt penalties that must be not only proportionate but also sufficiently effective and a sufficient deterrent to ensure that the provisions adopted pursuant to the Framework Agreement are fully effective. Secondly, the Court states that, in the absence of EU legislation in this area, the rules implementing such provisions are a matter for the internal legal order of the Member States by virtue of the principle of their procedural autonomy and must therefore be consistent with the principles of equivalence and effectiveness. (36)

52. It could be argued that the concept of ‘effectiveness’ is used by the Court in two different contexts: first in relation to the effectiveness of EU law in the broad sense of the term (effet utile) and, secondly, in relation to the principle of effectiveness, conveying the limits imposed by EU law on the procedural autonomy of the Member States. It would appear that it is primarily the effectiveness of EU law (effet utile) which requires Member States to adopt measures that are sufficiently effective and a sufficient deterrent to ensure that the provisions adopted pursuant to the Framework Agreement are fully effective, whilst the principle of effectiveness is limited to ensuring that the rules implementing rights conferred by EU law do not make it in practice impossible or excessively difficult to exercise those rights.

53. That approach is reflected in the judgment in Angelidaki and Others (37) and in the orders in Vassilakis and Others (38) and Koukou, (39) in which the Court held that Member States must take all necessary steps enabling them, first, to be in a position at any time to guarantee the results imposed by Directive 1999/70 and, second, to provide that the rules implementing the measures adopted pursuant to the Framework Agreement, guarantee the right to effective judicial protection in compliance with, inter alia, the principle of effectiveness. (40)

54. In the light of the above considerations, the concerns of the referring court regarding the effectiveness of the measures referred to by the Corte suprema di Cassazione (Court of Cassation) may be construed as seeking to ascertain, first, whether the evidence to be supplied in order to obtain compensation for loss of opportunity is compatible with the principle of effectiveness and, second, whether or not the effet utile of Directive 1999/70 and of the Framework Agreement preclude the amounts that may be awarded under the compensation measures at issue.

(2) Does the burden of proving loss of opportunity deprive a penalty of effectiveness?

55. Compensation for loss of opportunity, according to the referring court, is purely theoretical, since it is legally impossible for a worker to prove, even with the help of conjecture, as required by the Corte suprema di Cassazione (Court of Cassation) in judgment No 5072/2016, that if the public authority had held a competition, he would have been successful, or that he was deprived of other employment opportunities as the result of successive fixed-term employment contracts. The referring court indicates that, contrary to what is stated in judgment No 5072/2016, conjecture is of no real assistance to a worker who has been harmed and that, furthermore, the authorities never hold a competition.

56. As regards the obligation to prove loss of employment opportunities and the loss of income resulting from this, the Court held in the order in Papalia, (41) whilst leaving final consideration in that regard to the national court, that it cannot be excluded that that requirement is such as to make it impossible in practice or excessively difficult for such a worker to exercise the rights conferred by EU law.

57. The same applies in the main proceedings, so that it is also for the national court to carry out the necessary verifications in that regard.

(3) Does the amount of compensation for loss of opportunity deprive a penalty of effectiveness?

58. As regards the amount of compensation for loss of opportunity, the referring court considers that the adoption of effective penalties cannot be restricted to compensation for actual loss, as provided for by national civil law, but must reflect the value of the work performed under a contract of indefinite duration.

59. The Court has consistently held that where a Member State chooses to penalise a breach of EU law by the award of compensation for loss, such compensation must be effective and a sufficient deterrent to ensure adequate and full compensation for the loss sustained. (42) However, those requirements do not mean that the person injured by the breach of EU law should be awarded punitive damages which go beyond full compensation for the loss and damage actually sustained and constitute a punitive measure. (43)

60. If follows that Directive 1999/70 and the Framework Agreement do not require that compensation for loss of opportunity should be of a larger amount than the actual loss sustained by a worker who is the victim of misuse of fixed-term contracts.

(4) Does the amount of lump sum compensation constitute a sufficiently effective penalty and a sufficient deterrent?

61. With regard to the lump sum compensation of between 2.5 and 12 monthly payments at the rate of the last salary payment provided for in Article 32(5) of Law No 183, according to the indications given by the referring court, where a fixed-term contract is converted in the private sector, such compensation replaces only the income that would have been received ‘pending’ a successful outcome for the worker. However, so far as the public sector is concerned, lump sum compensation, although purely ancillary, is in practice the only measure for penalising abuse and cannot therefore be regarded as an effective deterrent.

62. In a case of misuse of fixed-term contracts, it may be that the infringement has been repeated and systematic over a number of years. (44) Conversion of such contracts into a single contract of indefinite duration would make it possible to penalise such misuse and permanently nullify its consequences, irrespective of when it took place. However, in the present case, there is no such possibility and the compensation measures provided for in Italian law appear to apply without distinction to all forms of abuse within the limits laid down in Article 32(5) of Law No 183.

63. However, according to the judgment in Asociația Accept, (45)the severity of penalties so far as equal treatment in employment and occupation is concerned must be commensurate with the seriousness of the breaches for which they are imposed and such measures must have in particular a genuinely deterrent effect, while respecting the general principle of proportionality. It seems to me that those requirements are applicable not only in the context of discrimination against workers, and are therefore applicable in the context of Directive 1999/70. First, as I noted in point 52 above, the same criteria of proportionality and deterrence as those referred to in Asociația Accept (46) are reflected in the case-law relating to the Framework Agreement and clause 5(2) thereof. Secondly, when taking into account the relationship between the proportionality of penalties and their deterrent effect in that judgment, the Court made reference, inter alia, to the case-law on collective dismissal, which suggests that the same solutions also apply mutatis mutandis outside the context of the directives on discrimination.

64. It is true that under Article 32(5) of Law No 183, the final amount of the lump sum compensation of between 2.5 and 12 months’ pay is set by the national court, taking into account the criteria laid down in Italian law, which allows the circumstances of the case to be taken into account in determining the amount of compensation. In that regard, the Commission has stated that those criteria also relate to the ‘conduct’ of the employer — which makes it impossible to support the view that lump sum compensation was not intended as a penalty measure — and, hence, that they permit the duration of the abuse to be taken into account.

65. However, when the abuse reaches a certain level, the penalty comes up against a ceiling. As a result, earlier infringements are not penalised proportionately in cases of manifest abuse. Also, this standardising of penalties, instead of making it possible to avoid repetition of abuse, may encourage it, owing to the existence of a universal limit that cannot be exceeded, despite the repeated nature of the abuse. I share the Commission’s view that the lack of proportion between the potential extent of the abuse, which may have had consequences over a number of years, and the lump sum compensation, which cannot exceed twelve monthly salary payments, is likely to weaken the deterrent effect of the penalties.

66. Therefore, in order to remedy persistent abuse, the limits of the lump sum compensation could be adjusted to take into account the length of the period of employment under fixed-term contracts entered into in breach of the rights conferred by EU law, while at the same time respecting the general principle of proportionality.

67. The referring court observed that the Corte suprema di Cassazione (Court of Cassation), in judgment No 5072/2016, accepted as capable of fulfilling the conditions laid down in the case-law of the Court not only the compensation measures but also measures concerning the liability of the manager to whom the unlawful use of a fixed-term contract may be attributed. In that context, I wonder whether such penalties can offset the deficiencies of lump sum compensation which stem from the fact that such compensation does not constitute a sufficient deterrent permitting earlier infringements to be penalised and repeated infringements to be avoided.

68. It is apparent from the national regulatory framework described by the Italian Government that the Italian legislature adopted at least three measures in respect of persons responsible for the misuse of fixed-term contracts. Curiously, those provisions were not taken into account by the referring court in its request for a preliminary ruling. However, it seems to me that it is not each of the penalties taken individually but the whole system of penalty measures which needs to be sufficiently effective and a sufficient deterrent.

69. Such a solution would appear to me to be consistent with the logic of the Framework Agreement. The wording of clause 5(1) of the Framework Agreement makes clear that the Member States, in order to prevent abuse of successive fixed term employment contracts or relationships, are required to adopt ‘one or more … of the measures’ provided for in that clause. In that regard, the discretion enjoyed by Member States is even broader since they may choose to rely on one or more of the measures listed in clause 5(1) of the Framework Agreement or on existing equivalent legal measures. (47) It seems to me that the same applies as regards the penalties referred to in clause 5(2) of the Framework Agreement. Member States are therefore also free in their choice of penalties. Moreover, no type of penalty is automatically excluded. (48)

70. Furthermore, useful clarification may be found on this point in the case-law relating to Directive 76/207/EC, (49) concerning equal treatment for men and women in the field of employment. That directive, like Directive 1999/70, does not impose any particular form as regards penalties for the infringement of rights conferred by the directive. However, where a Member State has chosen to penalise infringements by granting a right to compensation, provisions giving adequate financial compensation may, as the Court has previously observed, be ‘backed up’ by a system of fines. (50)

71. It follows that a number of measures may, by their combined effect, appropriately penalise infringements of EU law. Therefore, the deterrent effect of penalties should be assessed taking into account not only those that are provided for the benefit of workers who are victims of the misuse of fixed-term contracts but all the measures available.

72. However, it should be noted that at least one of the penalties provided for in the national legislation described by the Italian Government is conditional on the misuse of fixed-term contracts being intentional or resulting from serious misconduct. It is for the referring court to assess whether or not, in practice, such a condition does in fact make it possible for those responsible to evade the penalties systematically, which would deprive the measures concerned of any effectiveness or deterrent effect. The same applies with regard to any exemptions from liability that may be granted by the authorities when they decide on the consequences of abuse for managers.

73. Moreover, the plurality of penalty measures must not lead to dilution of the effectiveness of any one of the measures concerned by rendering it incompatible with EU law. Member States are required to guarantee the result imposed by EU law. In any event, the principle of effectiveness and — if an appropriate comparison can be found in domestic law — the principle of equivalence, must be guaranteed. The discretion conferred on the Member States must also be exercised in compliance with EU law and its general principles, (51) in particular, where the right of appeal is at issue, the principle of effective judicial protection. It follows that, notwithstanding the plurality of penalty measures, where a Member State has introduced compensation measures, a token penalty can never be regarded as constituting proper and effective implementation of the Framework Agreement, since negligible compensation cannot constitute adequate redress. For the same reasons, although lump sum compensation may be introduced by a national legislature, it cannot totally replace full compensation for the loss sustained. (52)

74. In the light of all the above considerations I propose that the answer the Court should give to the questions submitted by the referring court should be that Directive 1999/70 and the Framework Agreement, and their effet utile, do not preclude national legislation, such as that at issue in the main proceedings, which, in the event of misuse by a public employer of successive fixed-term employment contracts, does not allow conversion of an employment relationship in the public sector, even though such conversion is accepted as a penalty in the private sector, and provides instead:

– for lump sum compensation of between 2.5 and 12 monthly payments at the rate of the last salary payment, granted to a worker in the public sector who is the victim of unlawful successive renewal of fixed-term employment contracts, provided that such compensation constitutes a sufficient deterrent, which may be ensured inter alia by determining the limits of the compensation by reference to the duration of the misuse of fixed-term employment contracts or by the combined effect of any other penalty provided for by national law;

– that it is possible for the worker to obtain compensation for the loss actually sustained, where the right to such compensation is conditional on a requirement that the worker should provide evidence that he has lost the opportunity of stable employment or that, if he had participated in an open competition held by the public authority, he would have been successful.

Subject to those qualifications, none of the information supplied in the order for reference suggests that in the present case the principles of effectiveness and equivalence were not observed by the national legislation. Nonetheless, it is for the national court to give final consideration to that point.

75. In light of the above considerations, I propose that the Court should answer the questions submitted by the Tribunale civile di Trapani (Civil District Court, Trapani, Italy) as follows:

Council Directive 1999/70/EC of 28 June 1999 concerning the Framework Agreement on fixed-term work concluded by ETUC, UNICE and CEEP and the Framework Agreement on fixed-term work contained in the annex to that directive, and their effet utile, do not preclude national legislation, such as that at issue in the main proceedings, which, in the event of misuse by a public employer of successive fixed-term employment contracts, does not allow conversion of an employment relationship in the public sector, even though such conversion is accepted as a penalty in the private sector, and provides instead:

3 See judgments of 7 September 2006, Marrosu and Sardino (C‑53/04, EU:C:2006:517); of 7 September 2006, Vassallo (C‑180/04, EU:C:2006:518); of 3 July 2014, Fiamingo and Others (C‑362/13, C‑363/13 and C‑407/13, EU:C:2014:2044, paragraphs 62 to 64); and of 26 November 2014, Mascolo and Others (C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401). See also the order of the President of the Court of 16 March 2010, Affatato (C‑3/10, not published, EU:C:2010:144).

5 Order of 3 July 2014, Talasca (C‑19/14, EU:C:2014:2049, paragraphs 20 and 21).

6 Judgment of 23 April 2009, Angelidaki and Others (C‑378/07 to C‑380/07, EU:C:2009:250, paragraph 48).

7 See, to that effect, my Opinion in Mascolo and Others (C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2103, point 61) and Opinion of Advocate General Poiares Maduro in Marrosu and Sardino (C‑53/04, EU:C:2005:569, point 29).

8 Judgment of 7 September 2006, Vassallo (C‑180/04, EU:C:2006:518, paragraph 42).

10 Judgment of 26 November 2014 (C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401).

11 Judgment of 14 September 2016, Martínez Andrés and Castrejana López (C‑184/15 and C‑197/15, EU:C:2016:680, paragraphs 40, 41 and 48).

12 See judgments of 1 December 1998, Levez (C‑326/96, EU:C:1998:577, paragraphs 41 and 43), and of 16 May 2000, Preston and Others (C‑78/98, EU:C:2000:247, paragraphs 55 and 56).

14 Judgment of 26 January 2010, Transportes Urbanos y Servicios Generales (C‑118/08, EU:C:2010:39, paragraph 36).

15 Judgment of 26 January 2010, Transportes Urbanos y Servicios Generales (C‑118/08, EU:C:2010:39, paragraph 37).

16 Opinion of Advocate General Poiares Maduro in Transportes Urbanos y Servicios Generales (C‑118/08, EU:C:2009:437, point 30).

17 Judgment of 29 October 2009 (C‑63/08, EU:C:2009:666, paragraphs 55 and 59).

23 Judgment of 15 September 1998, Edis (C‑231/96, EU:C:1998:401, paragraphs 36 and 37).

24 See, to that effect, with regard to exemplary or punitive damages, judgment of 13 July 2006, Manfredi and Others (C‑295/04 to C‑298/04, EU:C:2006:461, paragraph 99), and, with regard to limits on lump sum compensation, judgment of 22 April 1997, Draehmpaehl (C‑180/95, EU:C:1997:208, paragraphs 29 to 31).

27 See, to that effect, Póltorak, N., European Union Rights in National Courts, Wolters Kluwer, Warsaw, 2015, p. 74.

28 See Opinion of Advocate General Kokott in Impact (C‑268/06, EU:C:2008:2, points 54 to 79).

29 See Opinion of Advocate General Kokott in Impact (C‑268/06, EU:C:2008:2, point 80).

30 See judgment of 15 April 2008, Impact (C‑268/06, EU:C:2008:223, paragraphs 45 to 55).

32 Judgment of 26 November 2014 (C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401).

34 Judgment of 26 November 2014 (C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 79).

36 See judgments of 4 July 2006, Adeneler and Others (C‑212/04, EU:C:2006:443, paragraphs 94, 95 and 102); of 7 September 2006, Marrosu and Sardino (C‑53/04, EU:C:2006:517, paragraphs 51 to 53); of 7 September 2006, Vassallo (C‑180/04, EU:C:2006:518, paragraphs 36 to 38); of 23 April 2009, Angelidaki and Others, C‑378/07 to C‑380/07, EU:C:2009:250, paragraphs 158 to 160); of 3 July 2014, Fiamingo and Others (C‑362/13, C‑363/13 and C‑407/13, EU:C:2014:2044, paragraphs 62 to 64); and of 26 November 2014, Mascolo and Others (C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraphs 77 to 79). See also orders of 12 June 2008, Vassilakis and Others (C‑364/07, not published, EU:C:2008:346, paragraphs 125 to 127); of 24 April 2009, Koukou (C‑519/08, not published, EU:C:2009:269, paragraphs 64 to 66); of 16 March 2010, Affatato (C‑3/10, not published, EU:C:2010:144, paragraphs 45 to 47); and of 12 December 2013, Papalia (C‑50/13, not published, EU:C:2013:873, paragraphs 20 to 22).

37 Judgment of 23 April 2009 (C‑378/07 to C‑380/07, EU:C:2009:250, paragraph 176).

38 Order of 12 June 2008 (C‑364/07, not published, EU:C:2008:346, paragraph 149).

39 Order of 24 April 2009 (C‑519/08, not published, EU:C:2009:269, paragraph 101).

40 See orders of 12 June 2008, Vassilakis and Others (C‑364/07, not published, EU:C:2008:346, paragraph 149), and of 24 April 2009, Koukou (C‑519/08, not published, EU:C:2009:269, paragraph 101).

41 See order of 12 December 2013 (C‑50/13, not published, EU:C:2013:873, paragraph 32).

42 See judgments of 10 April 1984, von Colson and Kamann (14/83, EU:C:1984:153, paragraph 28); of 2 August 1993, Marshall (C‑271/91, EU:C:1993:335, paragraph 26); and of 17 December 2015, Arjona Camacho (C‑407/14, EU:C:2015:831, paragraph 33).

43 See, to that effect, with regard to discrimination on grounds of gender, judgment of 17 December 2015, Arjona Camacho (C‑407/14, EU:C:2015:831, paragraph 34).

44 It is stated in the order for reference that Ms Santoro was employed by the Comune di Valderice for over five years under fixed-term contracts and, if one also takes into account the other contracts entered into with the same authority previously and without interruption, for no less than twenty years, namely from 1996. It is also clear from the undisputed factual background to the order of 12 December 2013, Papalia (C‑50/13, not published, EU:C:2013:873, paragraphs 8 and 9), that Mr Papalia had worked without any interruption for a Comune under successive fixed-term employment contracts for almost thirty years, from 1983 to 2012.

45 Judgment of 25 April 2013 (C‑81/12, EU:C:2013:275, paragraph 63 and the case-law cited).

47 Judgment of 26 February 2015, Commission v Luxembourg (C‑238/14, EU:C:2015:128, paragraph 38).

48 See Opinion of Advocate General Kokott in Angelidaki and Others (C‑378/07 to C‑380/07, EU:C:2008:686, point 91).

49 Council Directive 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).

50 See judgments of 10 April 1984, von Colson and Kamann (14/83, EU:C:1984:153, paragraph 18), and of 10 April 1984, Harz (79/83, EU:C:1984:155, paragraph 18).

51 See, to that effect, with regard to clause 5(1) of the Framework Agreement, judgment of 10 March 2011, Deutsche Lufthansa (C‑109/09, EU:C:2011:129, paragraph 37).

52 See, concerning the relationship between lump sum compensation measures and measures based on the principle of full compensation for damage, judgment of 22 April 1997, Draehmpaehl (C‑180/95, EU:C:1997:208, paragraphs 32 to 37).

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Santoro (Social policy - Advocate Generals opinion) [2017] EUECJ C-494/16_O (26 October 2017) URL: http://www.bailii.org/eu/cases/EUECJ/2017/C49416_O.html Cite as: [2017] EUECJ C-494/16_O, EU:C:2017:822, ECLI:EU:C:2017:822

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