What Happens When a Country Breaks EU Law?

the block's democratic standards. Poland Supreme Court is considering making a U turn and halting a controversial disciplinary regime for judges that would comply with the ruling by the EU's top tribunal, But the Prime Minister of Hungary is proposing a referendum to push back against EU pressure to change a Hungarian anti lgbt Q law that sparked a furious reaction in the Block. Will the EU's executive arms start using recently one sanctioning powers to freeze funding including COVID

nineteen bailouts for the errant member states? Joining me is Ronan McCrae, Professor of Constitutional and European Law at University College London. So let's start with some basics. In the United States, we have federal law and state law. How does EU law work with the law of country members. In some ways, it's actually not that different from the

situation in the US. So like in the US the preemption, when the EU legislates in a particular area, the member states lose their right to legislate in that area, and EU law takes precedents. So under EU laws there's a clash between national law and ELA. E law takes precedence, and EULO will also be enforced by domestic courts, so you don't have to go to the European Court for every case. In theory, your local court will enforce your EU law rights. In the United States, we have common

law and then we have statutory law. Is EU law all statutory no, so the law it's really like a constitutional system. So there's the Treaty, which is the founding documents that's like the constitution that sets out the powers of the EU, but also has a lot of constitutional principles,

mainly fundamental rights principles in it. And then there's also then the secondary legislation that's produced by the EU legislature, which is the States and European Parliament and the European Commission together produce legislation in various areas of law in which the EU has competence. So then if a country's law, let's say Italy, if Italy's laws conflict with EU laws, then Italy has to change their laws. Yes, there's two

things that can happen. First, the Commission can take Italy to the European Court of Justice and get the declaration that they've violated their duties under EU law. And if Italy doesn't bring its law into line, they can then be subject to repeat unlimited fine from the court. The second way, and in ways the more important a is that an Italian individual can go to their local court, they have a case and insist that eulaways applied in

that case. And the Court of Justice has for a really forty years, the Court of European Court of Justice, the Supreme Court has ruled that in the case where there's a conflict between national law and EU law, EU law must take precedence and in the individual local national judge must apply EU law to the case. That's what makes the law so different from other forms of international law. You don't have to go to the international court. It's

directly enforceable in your local court. How many EU courts are there well, that's a good questions. So there are two main EU courts to the General Court, which deals with issues about kind of when you call antitrust law, bearious other areas, and then there it's decisions can be appealed to the European Court of Justice, which is the

supreme court. But because the European Court of Justice has ruled that national courts have to enforce the law in cases before them, in theory, all of the courts of

the Member States are also EU courts. And what happens is the Court of Justice says that any national court that has issue of EU law before it and doesn't know how to interpret you law in the case, they can stop the case, make a reference to the European Court ask how should I apply EU law in this case, and the court will give them the answer and then

they'll apply it. So there isn't a separate system of federal and state courts like you have in the US, just all the Member states have their own legal systems. And then there's on top of it at the European Court of Justice, who answers all EU law queries, but which expect the Member of state courts then to apply its rulings. When is it that the courts enforce laws and when is it that the European Commission enforces laws? So the courts will enforce the law in a concrete

case before it. So what happens is you know you might be fired from your of work and you think that there's a lot of the laws, a lot of competence in labor law. You may take the case to the court and insist that the law is applied in that case. What the European Commission can do is where there's no case just in period as a breach of the EU law, they can they can then take a complaint. So for the Commission to act, they don't need a concrete violation in an individual case, they can follow up

any abstract one. But for national courts they would need an actual dispute in front of it. And the Court of Justice is rude, but they they won't rule on theoretical disputes, and national courts they have an actual dispute involving in the EU law issue before it before the national court can invoke EU law. So tell me what happened last year when the e use General Court ordered the annoyment of the thirteen billion euro tax order against Apple.

Why did that happen? Well, what they found was because the EU has quite limited competence in matters of tax, but they do have a lot of power in areas could of what's called state aid, which is where states giving subsidies two companies, and the European Commission had argued that Irelen's favorable treatment of Apple in relation to tax matters was so favorable that it effects the amounted to

a subsidy state subsidy. And so because EU look Bay prohibits state subsidies, the European Commission imposed that fine and says, you can't do this. Apple has to pay back the tax is amounts to a subsidy. But the general courts that actually, no, this is a matter of tax, not a matter of subsidy policy, and so they annulled the imposition of that thirteen billion. So tell me how Germany's Constitutional Court took the EU Court of Justice on in

and what happened there. As part of the kind of economic crisis, the European Bank is not allowed to fund to give money to states to kind of fund their spending, but it is allowed fixed interest rates, and the European

Bank Central Bank. During the kind of economic crisis the last ten years, the bank bank has decided that although they're allowed directly financed governments, they can buy unlimited amounts of state debt in order to ensure that the interest rate states are charged is not doesn't deviate much from the interest rates set by the European Central Bank, and the German court says this is disguised financing of the states by the European Central Bank and that that's something

that the EU Bank does not the power to do so. When Drum politicians took this case, saying the European Central Bank, by funding member states in this way buying their debt, has gone beyond its powers. The German Constitutional Court after the European Court of Justice, does the European Central Bank have the power to do this under the EU treaties. The Court of Justice said yes it does and send

the case back to the Constitutional Court. But the German Constitutional Court said, actually, we don't think you've exercised a strict enough review of the limits of the powers of central bank. We disagree. Therefore, the German Central Bank, which is part of the European central bank system, and provide

some of the money cannot participate in this project. Now, the issue with that is it was the first time that a national court had refused to accept the ruling of the European Court of Justice on what were the limits of the powers of the EU institution. European Court Justice has always said, if we have twenty seven states, we have to have one court, European put a justice which provides a definitive answer to what are the powers

of the institutions. And here the German court was refusing to accept that, and that went against fifty years of e U k S law, where they've been saying any conflict in national law and EU law is resolved in favor of you law. This is a problem in itself because they were worried about the European Central Banks bomb

buying program, but they've they've kind of faded recently. But it's a bigger structural issue because if national constitutional courts start refusing to accept the primacy of EU law, then the whole system, the illegal system, begins to fall apart. And that's particularly important because the EU is in the midst of and very heated clashes with two members states Hungry and Poland over the independence of their courts tell us about the conflicts between the EU and Hungary and Poland.

So the Hungarian government and the Polish government have an act that a series of performs, the substance of which is to undermine the independence of the judiciary, and the European Court of Justice has issued several rulings saying because EU law requires national judges to implement the EU law, the EU requires the judges are independent, so they're able

to enforce the EU law against the government. Therefore, your measures which under find the independence of the courts in Hungary in Poland violated U law and you have to you have to disapply them. Now, this means when the German Constitutional Court is kind of reasonably why you respected in Europe, ruled that it was not accepting a Court of Justice ruling. The Polish and Hungarian governments were delighted

because they were like brilliant. Our courts now will say they don't have to accept Court of Justice rulings in relation toudicial independence, which is what happens. Last week. The Polish Supreme Court or Constitutional Court has rules that it does not accept the European Court of Justice ruling which said that the Disciplinary Chamber they have for judges, where

government appointees can discipline judges for ruling against it. European Court of Justice has said that disciplinary chamber is against the EU law and must be shut down, and Polish Constitutional Court has now said, well, just like the Germans, we retained the right not to accept Court of Justice rulings if we think they go against our constitution and

therefore we don't accept this ruling. So this is a big, big, kind of slow burned threat to the European Court adjustice because over the years there's been some gray areas about whether their national courts accepted that EULA always took primacy, but by and large they have accepted the primacy of

the law, and without the primacy of you law. If national courts are not going to follow you law and are going to disapply it when they feel like it, or if they think they're sufficiently important reasons to do so, then the legal unity of the EU is really undermined. The EU of two things. It's a sit on political cooperation between member states and the system of shared legal rules.

Once the shared legal rules go, if national courts stopped enforcing them, then the EU retreats doing something much more like a classic international organization rather than what it is now, which is something which is halfway between a state and an international organization. So where does the situation now with the German Constitution Court. Well, the German Constitutional Court gave

itself a kind of way out. It said that, well, we don't accept that the European Court of Justice has been strict enough than policing the boundaries of the powers of European Central Bank. But if the German Bank can provide us with various factual information about how this bond buying program works, then we might be happy to accept that it's within the powers of the European Central Bank.

And the europ German Central Bank did issue various clarifications and gave the courts and factor information and the Court has said okay, well now Germany can participate. So on the fact the kind of danger to the bond buying program has disappeared. But that level of principles, the damage is done because now the threat to the authority of the European Court of Justice is established when a well respected founding Member States Supreme Court goes against the Court

of Justice. Because remember there's no national Guard in the EU. You know when the European Court of just just rules while their case is clear that the legal obligation to enforce their ruling, they have no way of forcing a national court that doesn't want to enforce a ruling to do so. The only thing that can happen is they can impose financial sanctions on the member states, and they are now. The European Commission this week has said that

they're going to go for financial sanctions against Poland. But there is no national guard. There's no way that the European Court of Justice can enforce compliance with rulings. It's dependent on the cooperation of national courts. So then if Poland or Hungary says we're not going to pay the sanctions, nothing can be done. Can they be kicked out of the EU? No? Well, so they can. This natural sanctions are real, and not least because Pope. Both Poland and

Hungary receive very significant substitutes in the EU. So the EU is lucky and that the two countries that are kind of creating the most trouble at the moment are both big net beneficiaries of EU spending, so that they will have to pay the fine. There is new EU legislation says when judicial independence is not respected, if that threatens the integrity of the EU budget, you can cut funding. So they may lose funding, but there is no way

to expel a member states from the European Union. In fact, in that regards to the unhelpful case came up during the Brexit process where some pro EU British politicians took a case to the European Court of Justice asking if Britain could withdraw its notification that it wants to leave the EU, and in a wider ruling in passing, the court said, well, there's no there's no mechanism for kicking a member state out of the European Union against its will,

so you can't kick them out of the European Union. The one thing that can happen is, I mean the EU because it legislates in so many areas now labor, loan, by mental law, agriculture, economic policy. You know, there's an awful lot of ways in which member states can make other member states lives uncomfortable. So over the next few months will be hundreds of issues that the E will be deciding on. If put in the home, we really look like they're kind of in danger of bringing down

the whole system. The other member states can extract long low revenge by blocking every single initiative that's important to them. So that is a possibility. It's not a very dramatic one, but member states are aware that there is long term cost for going against but the member states. And the one thing we learned from the Brexit process was how much the Union means to the political elites in Europe.

In fact, we saw this again the financial crisis to there are a lot of commentators in the US like Paul Krugman and Just Stiglets who are wondering why the Eurozone didn't collapse. You know, the order doesn't really make sense to have a single currency without a single economic policy. But what they underestimated is the political commitment of EU leaders to maintaining the union. They would do whatever it

takes to keep it together. And in the Brexit process, despite all the fights between different member states, when one member state left, the other twenty seven member states formed kind of a block and negotiating there was no deviation. There was no picking one member state off by the British. So you member state governments are very committed to protecting

the union. There will be a high political price for Poland and Hungry to pay if they're seen is threatening it, but there is no way of expelling them even if they reach YOU law. What may happen if courts may start national courts may start saying that they don't recognize Polish and Hungarian decisions. So a lot of you law is the duty to recognize the judgments and decisions of

other member states. And what may happen is over time other courts may start saying, well, actually, we don't think your courts are independents, so we won't give you that benefit. It's already in the case of Ireland years ago, where a Polish prisoner EU law makes the transfer prisoners between states much easier. A Polish prisoner was meant to be sent for trial in Poland, the Irish court said, we're not sure we can send you actually, because we don't

think the Polish courts are independent. And tell us a little about the conflict with Hungary and it's LGBT law. The Hungarian government has really for the last ten years being undermining judicial independence. They've placed the wife of a rooting party politician as head of the judiciary. They gave her the power to promote and fire judges allocate cases. I think variously they've suddenly dropped the retirement age of judges by ten years to get rid of once they

didn't like. So they've been attacking the independence of judiciary in Hungary for a while. But there's also been a cultural clash, and recently they passed the law that would be abandoned the provision of any information about gay more transgender people to people under eighteen and links it by implication to be the fedia that hast gone down very poorly in Western European states and in the Baltic states. So there's a real divide on this issue, and the

European Commission is trying to sue Hungry for that. The difficulty they face is, you know, the European Union only has competence in certain areas, and that kind of area is something that the EU have fairly limited competence in relation to. But they're trying to think creatively about areas which might be touched by this law, like some elements of broadcasting law or things like that, where the Union does have competence and there they're going to try and

take a case on that basis. So interesting. Thanks for being on Bloomberg Law. Ronan. That's Ronan McCrae, a professor of Constitutional and European law at University College London. The pandemics test of telework for office workers has reached an inflection point as returned to work mandates are put in place and legal battles loom over employee request to stay at home. Joining me is Aaron mulvaney, Senior legal reporter

at Bloomberg Law. Are a lot of companies mandating that workers returned to the office or is there a split among major companies? There absolutely are a lot of companies that do you want a returned to the office UM for their workforce? UM, while they're being cautious, there's been a there have been CEOs that have come out like JP Morgan or UM Microsoft CEOs that have said office culture is very important to how they operate and UM. Then there have been other companies that have been more

flexible and our suggesting permit hybrid options. And there are really big names in that group to like Twitter, Facebook, City Group, UM have considered kind of more flexible options

as well. So there's definitely a divide among even major corporations of how they're responding to kind of this new normal which workers have to go back to work, have no excuse, and which workers can make a legal case right and and to be clear, since you brought this up, we're of course talking about office workers who were kind

of teleworking during the whole the entire pandemic. And the reason that's been important is because of course there's a lot of workers out there that you know, we're essential and needed to go in and there was a business necessity to being actually in person, and so there is a case to be made. So by and large, an employer can fire anyone who doesn't follow a return to

office handate. Most private employers have that right, um. But there are exceptions to that because there are protections under the American Disabilities Act, and if you that's probably the most powerful one. Um. If there is a legitimate reason and a concern that a person with a disability can't return to an office, there could potentially be an accommodation that's made, and there's kind of a balancing test that comes into play if that makes it up to the court.

The first thing that happens is the worker says, I don't want to go back to work because or I can't go back to work because and is there an

internal process first? Absolutely, So the way it would work is that if there's a mandate to return to the office, there could be and really this is for any kind of accommodation, like even if you want a more ergonomic desk, like the entire interactive process happened UM first with your company doesn't always go immediately to the court obviously, but so this would be a pretty big request or request

for telework UM when everyone else is going back. UM would be something that you first from to your company and then they would go through an interactive process to see if that's an accommodation they can make and if that would be appropriate UM and not be an undue burden on their business operations. What kind of workers have brought lawsuits? A lot of these cases that do rise

to the level of courts. Of course that you know a little early in the process, but we are already seeing lawsuits in charges filed UM arguing that the company should have granted a telework request. There are different categories

of them. You know. Initially when there were kind of mandates to return to the office, some people were concerned with the immediate if they had UM, say asthma or a disease, that would made them more AMUNO compromised and more vulnerable to the actual coronavirus, you know, fearing going back while the virus is still very active and raging

and before vaccines were widely available. UM. And then there's there's also the types of UM lawsuits were where people say that you know, the pandemic exacerbated their mental health and going into an office would increase the anxiety and that capacity. UM. There are absolutely those cases as well.

And there's the other type of case where UM, somebody might have difficulty coming to the office because of a mobility issue or the like, and that would be something they could request and say it would just be I can work just as well from home because I've proven, you know, our whole office proven proved that we can, and trying to make that request so there, and that would be something that might happen more in perpecuity potentially, UM.

I take it the request due to physical disability is easier to prove than the request due to mental health disability. I think typically a doctor would be involved in giving the information, you know, providing a note or you know, a recommendation for what would be an appropriate accommodation for somebody with stahts D or an anxiety disorder or depression. So it would be similar. And I think it's always about the remedy. You know, what is the remedy for

making you more comfortable at work? Like what can the

employer do? They could come back and say, Okay, you don't want to be around people, will give you your own office away from people, as opposed to having you telework with people with mobility issues, the issue might be the lack of public transportation available or the risk that there would be at this time maybe using those So they're the A D A cases always have this kind of interactive process where all these different factors are balanced, and then when we're talking about when they make it

up to the court level, the court will weigh those factors as well and kind of try to determine what would be an undue burden on the company. Was there a decline in productivity during the work from home during the pandemic, A lot of companies still reported UM positive numbers, you know, and there was even a study that Price Waterhouse Coopers did that said productivity didn't see a decline during the pandemic. Office workers you know, effectively worked from

home um. And I think there was kind of um for the pandemic that built in bias or fear um that people would slack off for be lazy if they're at home, like it's a day off. And so many office workers were forced all at once to work at home. It kind of automatically removed that stigma, at least potentially. UM. It is interesting though, because I think companies still hold on to and say despite that office culture is important,

being around people is important. Our company is well on about personal relationships and we can't do that over zoom and so that's why it's kind of an interesting cultural class right now. UM. But you know there's when we when we talk about people with disabilities. Um, there's an extremely low employment rate um for people with disabilities, and some experts day that remote options and being like widely

available could potentially help that down the line. And I suppose that now that workers can point to, look what I did during the pandemic, everything worked out fine, that that is you know, an added boost to their cases. I had a lawyer teld me that it's just you know,

she doesn't know the full legal landscape yet. We'll see how these cases turn out and or but it'll be so much more challenging for an employer to show that working on site is an essential function of the job because that didn't happen for so many office workers for you know, more than a year UM, so that that could be a potential silver lining for you know, uh, either people have disabilities or even people with caregiving responsibilities, which you know, so it could be a bit of

a silver lining from the pandemic for for certain groups that actually benefited from teleworking. Being a caregiver, that's not what I normally think about when I think about the Americans with Disabilities Act. Is there a provision for caregivers? No, that's kind of a can of worms. To be honest

with you. What I would say about caregivers is we saw an unprecedented amount of women drop from the workforce, and many of them were mothers um according to you know, data from the pandemic, and I think that there will be consequences from that. And it's still really hard to actually make a claim UM for caregiver discrimination because that's not an inherently protected um characteristic at least under like

the main federal civil rights laws like UM. I guess the closest claim would probably be something under Title seven if there was a sex discrimination claim UM. But but no, UM. Actually caregiving is not covered under the the A d A, even if there is a UM there. There was one case that I mean, it's also being debated in the courts about whether UM, you you have a claim for UM if you have an amino compromised person that is living in your house and you didn't want to see

bringing the disease back to them. UM. And that's that's also a very unclear area of the law. UM. The the ADA doesn't explicitly protect UM people in your household that may have a disability. You write that before the COVID pandemic, employers generally one the majority of rulings about disability accommodations tell me about that and what may be shifting there, right, and so we don't. We do have some indication that it's a harder case for a company

that employs a lot of office workers to make. But we we did see generally employers won these rulings because I think it was that idea that cords were really sympathetic to a company's argument that work needed to happen in person, even if it was office work and computers

can be um. You know, the the e o C actually fought a case on that and they kind of had an opposite point of view or and we're trying to say that like telework should be considered, especially in these office environments, and they lost um because and you know, if you look at courts, they happened in person so often, and you know, and that obviously changed during the pandemic as well. So there's there's there's potential for a shift on on that question and how it will be interesting

to see how courts respond to it. Um. There was a case that happened last fall and in a Massachusetts a Massachusetts federal court allowed and asthmatic workers telework accommodation to move forward um, you know, siding with the worker over the company. And a lot of attorneys were pointing to that case and saying that's an early indication that

courts may be more sympathetic to those arguments. And you know, in that case, there was a worker who's feared going back into the office because it would she'd be vulnerable to the virus and courts. You know, a court I thought that was a reasonable request and she clearly proved that she could work from home for a year was something that was cited. That case did settle, so we didn't see it moving, you know, all the way through the process. But um, but yeah, it should be a

really interesting shift right now. Tell me about Conrad Reynoldson. It's he's got an interesting case. Yeah. So Conrad Um is a disabilities rights attorney in Seattle and he um he is someone who has a disability and a mobility disability. And he actually said he really likes going into the office and he's really looking forward to the return um.

And he said his staff wants to return Um. He currently can't for his health because he needs the US to reach a higher level of immunity according to his doctors, and he's currently allowing his staff to have the option. But he made a really interesting point. He said, you know, he was able to do a full argument before a federal appeals court um during the pandemic, and that I'm previously possible. And he said that right now, is the courts all shut off and refused to go remote, he

wouldn't be able to really argue anymore. And she said, but that's clearly clearly the argument against being remote and being flexible in that way or being undermined. And he was kind of interesting because he was a person who said, I totally get it, I want to be in an office, but he's not the right time. UM. So I think I think he did have a really interesting point. And UM, it'll be interesting to see if how how things change

moving forward. In the April hearing of the e o C on COVID discrimination issues, did anything come out at

that hearing? That's that was you know important. At the April hearing, there were stakeholders, there were attorneys and experts, um, kind of talking about this clash that we're talking about right now, and UM, they definitely did focus a lot of the themes that we've been talking about today about the disabilities and the A d A and the legal cases that would come up moving forward, and what the pandemic would mean for the future of these civil rights

UM cases and courts. UM. You know, we I there was an attorney who talked about what we were talking about about how sixty percent of the cases that he has coming in from the last year related to the pandemic, or about an employer rejecting telework accommodation. I think a lot of the attorneys on both sides were we're saying that there's kind of an inflection point right now for employers making these decisions, but what they're going to do for a return to office keeping all of the the

civil rights issues in their minds moving forward? And UM, the e e O C S. You know, guidance has been slowly kind of evolving as the pandemic UM has has gone forward, and UM they've acknowledged that UM this time could serve as a trial period UM to show whether or not an employee the disability could perform all their essential functions while working remotely. UM, and employers should

consider all new requests in light of disinformation. So it's, you know, it's somewhat vague what they're what they're recommending, and their guidance is only guidance, But a lot of employment attorneys pay really close attention to how the e O s UM advises on these issues. So UM, some of them even asked for clearer guidance and more definitive UM point of view. But UM, we'll see, you know, the EOC is also the one who can bring lawsuits, so I think that's one reason they pay attention to them.

But guidance is just guidance um from from that agency. Thanks Sarah. That's Aaron mulvany of Bloomberg Law and that's it for the Bloomberg Law Show today. Remember you can always at the latest legal news on our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, and www dot Bloomberg dot com slash podcast Slash Law. I'm June Grasso. Thanks so much for listening, and please tune into The Bloomberg Law Show every weeknight at ten pm Eastern right here on Bloomberg Radio.