Ferreira da Silva e Brito and Others v Estado português Case C-160/14, EU:C:2015:565
Facts
Employees of a Portuguese airline lost their jobs when it was wound up and parts of its activities were taken over by its main shareholder. Litigation concerned whether there had been a transfer of an undertaking under the acquired-rights directive. The Portuguese Supreme Court rejected the employees’ position and declined a reference to the Court of Justice. The employees subsequently sought compensation from the state for the alleged EU-law error. Questions were referred about the transfer concept, the last-instance court’s reference duty and a national condition requiring prior reversal of the disputed judgment.
Legal Issue
Did the circumstances require a reference on the transfer concept, and could a damages claim for judicial breach depend on prior reversal of a final judgment?
Held
The Court explained that the continuation of relevant airline operations through the takeover of assets, staff and activities could constitute a transfer within the directive. In the circumstances, interpretative difficulty and divergent national decisions meant the last-instance court was obliged to refer rather than assume the answer was beyond reasonable doubt. The Court also rejected a prior-reversal requirement where obtaining reversal was effectively impossible. Such a rule would undermine the state-liability remedy. The judgment did not itself calculate or award damages to the employees. The domestic court had to apply the relevant liability conditions and determine the consequences of the EU-law interpretation.
⭐ Legal Principle
A last-instance court must refer where the relevant EU interpretation is not sufficiently clear in the circumstances. National procedural rules cannot make an EU judicial-liability claim effectively impossible by requiring unattainable reversal of the final judgment.
Significance
Ferreira connects preliminary references with effective compensation for judicial breaches. It should be read with Köbler: breach of a reference obligation and liability are related but distinct issues. The transfer-of-undertaking analysis also depended on the concrete economic continuation, not simply a shareholder’s involvement. The case is therefore useful for keeping the substantive EU question, the duty to refer and the eventual remedy separate.
Common exam questions about this case
Why was the refusal to refer problematic?
The interpretation of transfer of an undertaking raised genuine difficulty in the circumstances, including divergent judicial approaches. A court of last instance could not assume that its preferred answer removed reasonable doubt. The reference obligation therefore required a more careful assessment than merely stating that no clarification was needed.
Did the Court of Justice award the employees compensation?
No. It gave guidance on the substantive directive, the reference obligation and the procedural condition affecting state liability. The national court retained responsibility for applying the liability requirements and determining any award. An answer should not turn a preliminary ruling into a final domestic damages judgment.
Why could prior reversal be an unacceptable condition?
Where the challenged judgment was final and could not realistically be reversed, requiring reversal first would block the damages action altogether. EU effectiveness prevents national procedure from making the recognised remedy practically unavailable. That does not remove the claimant’s obligation to establish the other conditions for state liability.