EHRM, 28-06-2011, nr. 577/11

The applicant company publish a daily newspaper, called Het Financieele Dagblad (‘The Financial Daily’), which specialises in news and information aimed at a readership interested in business and commerce.

At the relevant time, the applicant company outsourced the printing of its newspapers and their distribution to subscribers to another company, Telegraaf Media Groep N.V., a media conglomerate without any institutional links to the applicant company. Telegraaf Media Groep N.V. had the applicant company's newspapers printed by a subsidiary company, B.V. Rotatiedrukkerij Voorburgwal. Actual distribution to subscribers was organised by another Telegraaf Media Groep N.V. subsidiary company, called DistriQ B.V., which delivered newspapers to depot managers (effectively sub-contractors) who employed newspaper boys to deliver them.

On various dates in April, May and June 2005 inspectors of the Labour Inspectorate (Arbeidsinspectie) found that the applicant company's newspapers were delivered to subscribers by newspaper boys of whom 39 did not have either Netherlands nationality or a nationality that allowed them to be equated with Netherlands nationals. The inspectors' findings were based on identity checks and interviews with the newspaper boys themselves, and on information obtained from the depot managers. It would appear that these newspaper boys, whose names appeared in the reports, were variously Afghan, Cameroonian, Congolese, Egyptian, Ethiopian, Moroccan, Nigerian, Sudanese, Surinamese and Togolese nationals, and that no work permit (tewerkstellingsvergunning) had been issued for any of them. Copies of the inspectors' reports were sent to the applicant company on 13 March 2006.

On 7 August 2006 the Deputy Minister (staatssecretaris) of Social Affairs and Employment (Sociale Zaken en Werkgelegenheid) wrote to the applicant company announcing the intention to impose administrative fines in an amount of 8,000 euros (EUR) for each newspaper boy, or EUR 312,000 in total.

The applicant company submitted written comments (zienswijze) disputing the statement that the newspaper boys had distributed their newspapers and arguing, as relevant, that they could not in any case be blamed for whatever might have transpired since the contracts with the newspaper boys were the responsibility of Telegraaf Media Groep N.V. or DistriQ B.V. as the case might be.

In a series of decisions dated 30 October 2006 the Deputy Minister dismissed the applicant company's arguments and imposed fines corresponding to those announced in the letters of 7 August 2006. In so doing the Deputy Minister referred to the inspectors' reports, drawn up on oath of office, for the facts; dismissed as irrelevant the applicant company's assertions that it could not be blamed; and stated that there was no reason to reduce the fines, which were in accordance with official policy.

The applicant lodged an objection (bezwaar) against the Deputy Minister's decision, largely restating the arguments set out in their written comments.

The Deputy Minister gave a decision dismissing the objection on 31 August 2007. He referred to case-law of the Administrative Jurisdiction Division (Afdeling bestuursrechtspraak) of the Council of State (Raad van State), which had held, citing the drafting history of the Foreign Nationals (Employment) Act (Wet arbeid vreemdelingen), that the mere fact that work was done on the orders or in the service of an employer was sufficient to make the employer liable under that Act, even if employment was arranged via an intermediary. In response to the applicant's suggestion that it had not been proved that any of the newspaper boys had actually delivered the applicant company's newspapers, he again pointed to the official reports of the inspectors, which had been drawn up on oath of office and whose content there was no reason to doubt. Whether or not any blame accrued to the applicant company was irrelevant; in any case, it would appear that the applicant company had not themselves checked the identities and nationalities of the newspaper boys. Finally, the fines had been set in accordance with published policy and there was no particular reason to reduce them.

The applicant company lodged an appeal with the Regional Court (rechtbank) of Amsterdam. They again argued that the inspectors had not reliably determined that the 39 newspaper boys had actually delivered their newspaper. In addition, they had mistakenly been deemed employers of the newspaper boys, whereas in fact they were so neither in fact nor in law given that the newspaper boys were actually employed on a freelance basis by DistriQ B.V.'s depot managers. They also relied on Article 6 of the Convention, submitting that the length of the proceedings could no longer be considered reasonable. Finally, they argued that the Deputy Minister's decision was disproportionate in that it apparently meant that the applicant company were supposed to check the identities and nationalities of the myriad newspaper boys working for DistriQ B.V.'s depot managers at any one time, and in that the applicant company could not in reason be blamed.

The Regional Court gave judgment on 30 September 2009. Finding that the applicant company was not, in fact, the employer of the newspaper boys given that their core business was publishing rather than distributing newspapers, it quashed the Minister's decision. It went on to order the reopening of the proceedings in order to assess the damages to be awarded to the applicant company for the length of the proceedings.

The Minister of Social Affairs and Employment lodged a further appeal (hoger beroep) with the Administrative Jurisdiction Division of the Council of State, stating inter alia that distribution of newspapers was in fact part of the applicant company's core business.

The applicant company responded, largely restating their position as set out before the Regional Court.

On 7 April 2010, after the Administrative Jurisdiction Division had given its decision in the Igweh case (see paragraph 33 below), the applicant company, who been denied permission to intervene as an interested party in that case (see paragraph 34 below), submitted an unsolicited document setting out further arguments which in their view distinguished their situation from that of the newspaper publishers held in that case to have been ‘employers’ of newspaper boys for the purposes of the Foreign Nationals (Employment) Act. In particular, they argued that for them to be considered the newspaper boys' ‘employer’ was unforeseeable and hence a violation of Article 7 § 1 of the Convention, since they had outsourced the delivery of newspapers to another company without institutional links to them. They also argued extensively that it had not been proved that the newspaper boys had actually delivered Het Financieele Dagblad, the inspectors' reports containing too little conclusive information on that point — in particular, they did not state that the inspectors had personally observed the newspaper boys delivering Het Financieele Dagblad — and being in any case impossible for the applicant company to verify. For the remainder, the fines were not proportionate to the blame, if any, attaching to the applicant company and moreover out of all reasonable proportion to the paper's very limited circulation (only 1.5% of all the newspapers circulated in the Netherlands).

The Administrative Jurisdiction Division held a hearing on 22 April 2010.

On 23 June 2010 the Administrative Jurisdiction Division decided in favour of the Minister. As relevant to the case before the Court, its decision may be summarised as follows.

It referred to its own case-law (including its decision in the Igweh case) and to the drafting history of the applicable legislation, from which it appeared that the fact that work was performed on an employer's instructions or in an employer's service was sufficient to apply the label ‘employer’ in a factual sense.

Turning to the facts, the Administrative Jurisdiction Division found that the applicant company had entered into a seven-year contract for the printing, distribution and delivery of their newspapers. That being so, the newspaper boys were in the service of the applicant company, who were accordingly their ‘employer’. The fact that the applicant company had outsourced the work made no difference in this respect, nor did the applicant company's ignorance of the fact that the newspaper boys were foreign nationals not entitled to work permits. Moreover, it appeared from the contract that the applicant company's representatives could attend meetings with the distributors, from which it appeared that they could exercise real influence.

The Administrative Jurisdiction Division dismissed the applicant company's suggestion that the fines were disproportionately high. However, it reduced them to a total sum of EUR 298,000 in view of the lapse of time that had passed from the date on which the Deputy Minister had given notice of his intention to impose the administrative fines, and of the ‘reasonable time’ requirement set out in Article 6 of the Convention.

On 1 September 2007 the distribution contract expired; the applicant company entered into a new distribution contract with a different company. The applicant company state that they were unable to stipulate that the new distributor would take sole responsibility for the consequences of any failure on the part of its staff and sub-contractors to comply with the Foreign Nationals (Employment) Act.

On 10 September 2010 the Labour Inspectorate wrote to the applicant company demanding payment of the fines plus interest and costs.

The applicant company state that they have been ordered to pay further administrative fines under the same legislation, following inspections carried out in 2006, 2007, 2008 and 2009. These amount to a total sum of EUR 246,000 thus far.

Relevant sections of the Foreign Nationals (Employment) Act provide as follows:

Section 3(1)(a) exempts from the work permit requirement foreign nationals in respect of whom the Netherlands is treaty bound to allow access to the domestic labour market. These include nationals of the member States of the European Union (temporarily, that is until 2014 at the latest, minus Bulgaria and Romania); the non-EU member States of the European Economic Area (i.e. Iceland, Liechtenstein and Norway); and Switzerland.

Section 19c makes it clear that an ‘administrative offence’ in the sense of this Act is not a criminal act (strafbaar feit) in the sense of criminal law, unless it is repeated twice within forty-eight months with an interval of not more than twenty-four months.

Section 19d sets the maximum of the administrative fine, for a first administrative offence, at EUR 11,250 if the transgressor is a natural person and EUR 45,000 if the transgressor is a legal person.

For purposes of the Foreign Nationals (Employment) Act, section 1 of this Ordinance equates with employment contracts any agreement under which a natural person binds himself or herself, for consideration, personally to render particular services or achieve a defined objective (persoonlijk enkele diensten te verrichten dan wel een bepaald werk tot stand te brengen), and which relates to work normally done under a contract of employment.

The explanatory memorandum to this Ordinance explains that the intention is to prevent employers from frustrating the implementation of the Foreign Nationals (Employment) Act by misrepresenting an employee as a self-employed worker.

The following is taken from the drafting history of the Foreign Nationals (Employment) Act (Explanatory Memorandum (Memorie van Toelichting), Lower House of Parliament, no. 23,574, 1993–94 session, no. 3):

The following is taken from the drafting history of the Foreign Nationals (Employment) (Administrative Fines) Act (Wet bestuurlijke boete arbeid vreemdelingen) (Explanatory Memorandum, Lower House of Parliament, no. 29,523, 2003–04 session, no. 3):

The Foreign Nationals (Employment) Act Fining Policy Rules (hereafter ‘Policy Rules’), first published in the Official Gazette (Staatscourant) 2004, no. 249 and renewed every year since then (as relevant to the case before the Court, Official Gazette 2005, no. 232; and Official Gazette 2006, nos. 116 and 250), set out a tariff to be applied in imposing administrative fines. A legal body which employs a foreign national without a work permit will be fined EUR 8,000; for failure to comply with an administrative formality under the Act (such as failing to keep a copy of the foreign national's identity document) the fine will be EUR 1,500. If the employer is a natural person not a legal entity, the fines are reduced by half.

On 17 March 2010 the Administrative Jurisdiction Division gave a decision (Landelijk Jurisprudentie Nummer [National Jurisprudence Number] BL7835) in a case (the ‘Igweh case’, after the name of the newspaper boy concerned) involving four publishers of major national daily newspapers and a distribution company which, although nominally separate corporate entities, belonged to a single conglomerate. As relevant to the present case, it held that the fact that work was performed under the instructions or in the service of another person (the employer) was in itself sufficient for that employer to be held liable under the Foreign Nationals (Employment) Act. It further noted the contractual relationship between the publishers and the distribution company, under which the publishers were obligated to make use of the services of the distribution company and the distribution company was obligated to distribute the publications issued by the publishers. Moreover, given the contractual relations between the various parties and the corporate links between them, the publishers could be considered to be in a position to influence matters surrounding the actual distribution of their newspapers.

The applicant company had asked to join these proceedings as an interested party. However, by a letter of 9 September 2009 the Administrative Jurisdiction Division had refused them permission on the ground that the applicant company had been ordered to pay an administrative fine of their own; it made no difference that the applicant company were at the time involved in similar proceedings.

The applicant company alleged that the proceedings against them had been unfair.

They argued, firstly, that first the Deputy Minister, then the Administrative Jurisdiction Division had based their decisions entirely on the reports of the Labour Inspectorate inspectors. However, the newspaper boys and the depot managers had been questioned by the inspectors in the absence of the applicant company's representatives. Copies of the inspectors' reports had only been transmitted to the applicant company many months later, by which time it could no longer be verified that the newspaper boys had in fact delivered Het Financieele Dagblad in addition to the newspapers published by Telegraaf Media Groep N.V. This meant that the information contained in the inspectors' reports could not be meaningfully challenged.

Secondly, they complained of not having had the opportunity to state their position before the Administrative Jurisdiction Division in the Igweh case. Since obviously the Igweh case was likely to set the precedent for future cases of this kind, the applicant company had an interest in influencing its outcome so as to reduce the impact of the resulting case-law on their own case.

Thirdly, they complained that the Administrative Division, in its decision, had paid no attention to the document prompted by the decision in the Igweh case which they had submitted on 7 April 2010.

Fourthly, they complained that the Administrative Jurisdiction Division had neglected to assess the magnitude of the fines imposed in light of what they considered the paucity of their guilt. By endorsing the fines set by the Minister's policy document, the Administrative Jurisdiction Division had in the applicant company's submission deprived itself of full jurisdiction.

The Court is not convinced that the domestic remedies have been exhausted in respect of the first of the above complaints, given that the applicant company do not at any time seem to have made any attempt to call the newspaper boys or even the depot managers as witnesses. However, in view of what is set out in paragraphs 51 and 52 below there is no need to address this question.

As to the second complaint, about the refusal of leave to intervene in the Igweh case, the Court observes that the applicant company were not among those whose had been fined in that particular connection. The Administrative Jurisdiction Division was therefore not called upon to determine either any ‘civil rights and obligations’ of the applicant company or a ‘criminal charge’ against them. Consequently Article 6 of the Convention did not compel the Administrative Jurisdiction to allow the applicant company access to those proceedings. It cannot be decisive that the case-law formed in the Igweh case was liable to weigh against their own position subsequently: it is in the nature of judicial proceedings that tribunals seek to maintain consistency by following their own precedent.

As to the third complaint, the alleged failure to respond to the arguments set out in the applicant company's unsolicited document of 7 April 2010, the Court reiterates that Article 6 § 1 of the Convention obliges courts to give reasons for their decisions, but cannot be understood as requiring a detailed answer to every argument. The extent to which this duty applies may vary according to the nature of the decision. It is moreover necessary to take into account, inter alia, the diversity of the submissions that a litigant may bring before the courts and the differences existing in the Contracting States with regard to statutory provisions, customary rules, legal opinion and the presentation and drafting of judgments. That is why the question whether a court has failed to fulfil the obligation to state reasons, deriving from Article 6 § 1, can only be determined in the light of the circumstances of the case (see, among many other authorities, Ruiz Torija v. Spain, 9 December 1994, § 29, Series A no. 303-A, and Van de Hurk v. the Netherlands, 19 April 1994, § 61, Series A no. 288; and recently, Gorou v. Greece (no. 2) [GC], no. 12686/03, § 37, ECHR 2009-…).

Turning to the particular circumstances, the Court is prepared to accept that a reasonable opportunity to make additional points in the wake of important case-law developments that could not be addressed at an earlier stage of the proceedings is desirable in principle. However, even assuming that the said document of 7 April 2010 was ignored, the Court observes that nothing prevented the applicant company from making precisely the same points therein contained orally at the Administrative Jurisdiction Division's hearing on 22 April 2010. In addition, the Court has frequently held that in dismissing an appeal, an appellate court may, in principle, simply endorse the reasons for the lower court's decision (see, among many other authorities, García Ruiz v. Spain [GC], no. 30544/96, § 26, ECHR 1999-I, and Papon v. France (no. 2) (dec.), no. 54210/00, ECHR 2001-XII (extracts)); taking this line of thought further, the Court considers that an appellate court may similarly confine itself to citing as authority earlier decisions of its own, even as the Administrative Jurisdiction Division did on this occasion.

As to the fourth complaint, the Court considers that, although Article 6 § 1 of the Convention covers the whole of criminal proceedings in issue, including the setting of any penalty (see, among other authorities, T. v. the United Kingdom [GC], no. 24724/94, § 108, 16 December 1999; and V. v. the United Kingdom [GC], no. 24888/94, § 109, ECHR 1999-IX; and more recently, Gurguchiani v. Spain, no. 16012/06, § 24, 15 December 2009, ECHR 2009-…), the actual penalty imposed by a competent court in criminal proceedings does not as such generally fall within the scope of the Convention (mutatis mutandis, Boons v. the Netherlands (dec.), no. 40717/98, 27 June 2000).

More generally, and in relation to all these complaints, the Court reiterates that it is not its function to deal with errors of fact or law allegedly committed by the national courts, as it is not a court of appeal — or, as is sometimes said, a ‘fourth instance’ — from these courts (see, as a recent authority, Seldenrijk-Raat and Others v. the Netherlands (dec.), no. 1813/09, 22 February 2011, with further references).

It follows that this part of the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

The applicant company complained of the length of the proceedings. In particular, the preliminary stages of the proceedings had taken too long: after the inspectors had recorded the alleged offences (between April and June 2005), it had taken until 30 October 2006 for the fines to be imposed. Only on 30 September 2009 had the Regional Court given its decision; the Administrative Jurisdiction Division had brought the proceedings to a close on 23 June 2010.

Although the Administrative Jurisdiction Division had acknowledged the violation of the applicant company's rights, the reduction of the total amount which the applicant company had to pay was inadequate compensation. In particular, the Administrative Jurisdiction Division had neglected to take into account the duration of the preliminary stages, taking as its starting point 7 August 2006, the date on which the Deputy Minister had given notice to the applicant company of his intention to impose the administrative fines.

The Court reiterates that in cases to which Article 6 is applicable under its criminal head, the ‘reasonable time’ referred to in Article 6 § 1 begins to run as soon as a person is ‘charged’. ‘Charge’, for the purposes of Article 6 § 1, may be defined as ‘the official notification given to an individual by the competent authority of an allegation that he has committed a criminal offence’, a definition that also corresponds to the test whether ‘the situation of the [suspect] has been substantially affected’ (see, as a recent authority, McFarlane v. Ireland [GC], no. 31333/06, § 143, ECHR 2010-…). In the instant case, such official notification was given to the applicant company on 7 August 2006 when the Deputy Minister first informed them of his intentions in their regard.

The proceedings ended on 23 June 2010, the date of the decision of the Administrative Jurisdiction Division which brought the proceedings to a close. The total length of time to be taken into consideration is therefore 3 years, 10 months and 17 days for two levels of jurisdiction.

According to the Court's well-established case-law, an applicant's status as a victim may depend on compensation being awarded at domestic level on the basis of the facts about which he or she complains before the Court, and on whether the domestic authorities have acknowledged, either expressly or in substance, the breach of the Convention. Only when those two conditions are satisfied does the subsidiary nature of the protective mechanism of the Convention preclude examination of an application. The Court has accepted that a reduction of a prison sentence commensurate with the harm complained of may constitute ‘compensation’ in this sense (see, among other authorities, Mathew v. the Netherlands, no. 24919/03, § 149, ECHR 2005-IX). The same applies if the penalty imposed is a fine not a prison sentence.

The Administrative Jurisdiction Division explicitly recognised the violation alleged by the applicant company and reduced the fines by a total of EUR 14,000, a sum which the Court considers adequate compensation in the circumstances. Consequently, if violation there be, the applicant company can no longer claim to be a ‘victim’ of it.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.