CJEC, July 3, 1991, No C-355/89

THE COURT

1 By order of 13 November 1989, which was received at the Court on 21 November 1989, the Deputy High Bailiff' s Court, Douglas (Isle of Man), referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a number of questions on the interpretation of the provisions of Protocol No 3 on the Channel Islands and the Isle of Man (Official Journal L 73, Special Edition, 27 March 1972, p. 164, hereinafter referred to as "Protocol No 3") to the Act concerning the Conditions of Accession and the Adjustments to the Treaties (Official Journal L 73, Special Edition, 27 March 1972, p. 14, hereinafter referred to as "the Act of Accession"), annexed to the Treaty concerning the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the European Economic Community and to the European Atomic Energy Community (Official Journal L 73, Special Edition, 27 March 1972, p. 5, hereinafter referred to as "the Treaty of Accession").

2 Those questions arose in criminal proceedings instituted on the basis of charges brought by the Department of Health and Social Security (Isle of Man) against Mr Barr, in his capacity as an employee, and against Montrose Holdings Limited (hereinafter referred to as "Montrose"), in its capacity as an employer, for committing an offence contrary to certain provisions of the Control of Employment Act 1975, an Act of Tynwald (the Parliament of the Isle of Man). Mr Barr, a national of the United Kingdom, had taken up employment with Montrose as company lawyer without the work permit required for such a post by the Control of Employment Act in the case of persons who are not Isle of Man workers.

3 The defendants in the main proceedings admitted the facts specified in the summonses but pleaded that the proceedings should be dismissed in that the Isle of Man statute was contrary to Article 4 of Protocol No 3, according to which the authorities of the territories concerned "shall apply the same treatment to all natural and legal persons of the Community".

4 It is in those circumstances that the Deputy High Bailiff' s Court, Douglas, decided to stay the proceedings until the Court had given a preliminary ruling on the following questions:

"1. Whether the Control of Employment Act, 1975 (as amended), an Act of Tynwald, contravenes the terms of Protocol No 3 to the Act annexed to the Treaty of Accession of 1972 on the true interpretation of the Protocol, in so far as the said Act of Tynwald:

(a) imposes controls or restrictions on employment in the Isle of Man of persons other than Isle of Man workers as defined in the said Act of Tynwald, as amended, which discriminate in terms of the controls or restrictions imposed by reference to trade, profession or type of employment?

(b) applies treatment with regard to employment in the Isle of Man of natural and legal persons of the Community different from the rights which are enjoyed by Manxmen in the United Kingdom?

2. Whether Article 4 of the said Protocol No 3 on its true interpretation means no more than that the Isle of Man authorities shall not discriminate between natural and legal persons of the Community on the ground of nationality?"

5 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

Jurisdiction of the Court

6 It is appropriate to consider first whether the Deputy High Bailiff' s Court, Douglas, is to be regarded as a court or tribunal which is empowered to refer questions to the Court of Justice pursuant to Article 177 of the EEC Treaty even though, under English law, the Deputy High Bailiff' s Court, Douglas (Isle of Man) does not form part of the court system of the United Kingdom.

7 In that regard, it must be borne in mind that according to Article 227(5)(c) of the EEC Treaty, as amended by the Act of Accession, the provisions of the EEC Treaty are applicable to the Channel Islands and the Isle of Man only to the extent provided for by Protocol No 3.

8 Next, it must be pointed out that according to Article 1(3) of the Treaty of Accession, the provisions concerning the powers and jurisdiction of the institutions of the Communities are to apply in respect of Protocol No 3 which, according to Article 158 of the Act of Accession, forms an integral part thereof. Accordingly, the jurisdiction in preliminary ruling proceedings conferred on the Court by Article 177 of the Treaty extends to Protocol No 3.

9 Furthermore, it would be impossible to ensure the uniform application of Protocol No 3 in the Isle of Man if its courts and tribunals were unable to refer questions to the Court concerning the interpretation of that protocol, the interpretation and validity of the Community legislation to which that protocol refers, and the interpretation and validity of measures adopted by the Community institutions on the basis of Protocol No 3.

10 It follows that in order to ensure the uniform application of that protocol, the Deputy High Bailiff' s Court must be regarded as a court or tribunal empowered to refer questions on those matters to the Court of Justice pursuant to Article 177 of the Treaty.

The questions submitted for a preliminary ruling

11 It must be borne in mind that according to the established case-law of the Court, in proceedings instituted under Article 177 of the Treaty, the Court may not rule on the compatibility with Community law of a national law or regulation. However, it may provide the national court with all the criteria for the interpretation of Community law which it needs in order to enable it to assess the compatibility of the provisions in question with the rule of Community law relied upon.

The first part of the first question and the second question

12 These questions must be considered and defined in the light of the circumstances of the case, resulting from the statutes of the Isle of Man, the observations submitted to the Court and the explanations provided at the hearing.

13 According to the defendants in the main proceedings, Article 4 of Protocol No 3 precludes the application of the provisions laid down in the Control of Employment Act. That statute provides, with penalties for non-compliance, that a person may not "undertake, or become or be engaged in, any employment in the Island unless he is an Isle of Man worker", or employ any person unless the person employed is an Isle of Man worker, except under a permit granted by the Department of Health and Social Security. However, certain types of employment, which are listed in Schedule 1 to the Act but which do not include that of company lawyer held by Mr Barr, may be taken up without a permit by persons who are not Isle of Man workers.

14 The defendants in the main proceedings consider that those derogations from the requirement of a work permit have the effect of restricting the right to take up certain types of employment, such as employment in the police, the armed forces or the civil service of the Isle of Man, to United Kingdom nationals, such as Mr Barr, or to Irish nationals, thus giving rise to unequal treatment in their favour. They come to the conclusion that all the provisions of the system established by the Control of Employment Act, including the requirement of a work permit for employment of the type undertaken by Mr Barr, are contrary to Article 4 of Protocol No 3.

15 In those circumstances, the first part of the first question and the second question must in substance be regarded as seeking to ascertain whether the fact that the Isle of Man authorities require all Community nationals who wish to take up a given type of employment to hold a work permit constitutes a breach of the obligation to ensure equal treatment laid down in Article 4 of Protocol No 3, where national legislation provides for derogations from that obligation for other types of employment and the effect of those derogations, in certain cases, is to render those types of employment accessible only to nationals of two Member States.

16 In that regard it must be pointed out that, as the United Kingdom rightly emphasizes, the rule laid down in Article 4 of Protocol No 3 cannot be interpreted in such a way as to be used as an indirect means of applying on the territory of the Isle of Man provisions of Community law which are not applicable there by virtue of Article 227(5)(c) of the EEC Treaty and Article 1 of Protocol No 3, such as the rules on the free movement of workers.

17 However, contrary to the view taken by the United Kingdom, the principle of equal treatment laid down by Article 4 of Protocol No 3 is not limited exclusively to the matters governed by Community rules which are referred to in Article 1 of that protocol. Article 1 relates to the free movement of goods, whilst Article 4 applies to natural and legal persons. Article 4 must therefore be regarded as an independent provision so far as its scope is concerned. It must be interpreted as precluding any discrimination between natural and legal persons from the Member States in relation to situations which, in territories where the Treaty is fully applicable, are governed by Community law.

18 Since the right to take up employment is a matter governed by Community law, the rule laid down by Article 4 of Protocol No 3 applies to that right even though Community nationals cannot thereby obtain on the Isle of Man the benefit of the rules on the free movement of workers.

19 In the light of those considerations, the possibility that nationals of some Member States of the Community may suffer discrimination by comparison with nationals of other Member States, as regards certain types of employment, cannot be regarded as affecting the compatibility with Community law of the requirement of a work permit for other types of employment, provided that requirement is applied without discrimination to all Community nationals. Contrary to the view taken by the defendants in the main proceedings, the possibility of discrimination in the case of certain types of employment does not necessarily have the effect of rendering the entire system established by the Control of Employment Act incompatible with Community law.

20 Accordingly, the answer to the first part of the first question and to the second question must be that the fact that the Isle of Man authorities require all Community nationals who wish to take up employment on the island to hold a work permit does not constitute in the case of employment in general a breach of the obligation to ensure equal treatment laid down in Article 4 of Protocol No 3, even though national legislation provides for derogations from that obligation in the case of certain types of employment and the effect of those derogations is to give rise, in certain cases, to differences of treatment on grounds of nationality.

The second part of the first question

21 The second limb of the first question seeks in substance to ascertain whether the provisions of Protocol No 3 require the Isle of Man authorities to grant Community nationals the same treatment, with regard to employment, as that which is granted to Manxmen by the United Kingdom.

22 According to Article 2 of Protocol No 3, the rights enjoyed by Manxmen in the United Kingdom are not affected by the Act of Accession. However, that article specifies that such persons do not benefit from the Community provisions relating to the free movement of persons and services.

23 Article 2 of Protocol No 3 cannot therefore be interpreted as requiring the Isle of Man authorities to treat natural or legal persons from the Community in the same manner as Manxmen are treated in the United Kingdom. Nor is any such rule laid down elsewhere in the protocol.

24 Accordingly, the answer to the second limb of the first question must be that the provisions of Protocol No 3 must be interpreted as not requiring the Isle of Man authorities to grant to Community nationals the same treatment, with regard to employment, as that which is granted to Manxmen by the United Kingdom.

Costs

25 The cost incurred by the United Kingdom and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT

in answer to the questions referred to it by the Deputy High Bailiff' s Court, Douglas (Isle of Man), by decision of 13 November 1989, hereby rules:

1. The fact that the Isle of Man authorities require all Community nationals who wish to take up employment on the island to hold a work permit does not constitute in the case of employment in general a breach of the obligation to ensure equal treatment laid down in Article 4 of Protocol No 3, on the Channel Islands and the Isle of Man, to the Act concerning the Conditions of Accession and the Adjustments to the Treaties, annexed to the Treaty concerning the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the European Economic Community and to the European Atomic Energy Community, even though national legislation provides for derogations from that obligation in the case of certain types of employment and the effect of those derogations is to give rise, in certain cases, to differences of treatment on grounds of nationality.

2. The provisions of Protocol No 3 must be interpreted as not requiring the Isle of Man authorities to grant to Community nationals the same treatment, with regard to employment, as that which is granted to Manxmen by the United Kingdom.