Information Note on the Court’s case-law No. 129
April 2010
Vörður Ólafsson v. Iceland - 20161/06
Judgment 27.4.2010 [Section IV]
Article 11
Article 11-1
Freedom of association
Liability of non-member to pay contribution to private industrial federation: violation
Facts – The applicant was a master builder and a member of the Master Builders’ Association. Under the Industry Charge Act (Law no. 134/1993 – “the 1993 Act”) he was required to pay a levy known as the “industry charge” of 0.08% on his industrial activities to the Federation of Icelandic Industries (“the FII”), a private organisation with between 1,100 and 1,200 members. The applicant was not a member of that organisation and the Master Builders’ Association was not affiliated to it. More than 10,000 persons paid the industry charge, the revenue from which was to be used by the FII in the promotion and development of Icelandic industry. The applicant brought proceedings in the domestic courts challenging his liability to the charge. His claims were rejected after the Supreme Court ruled, inter alia, that the arrangement for payment of the industry charge did not involve obligatory membership of the FII and that the legislature had not exceeded its powers as the FII was under a legal duty to use revenue generated by the charge for the promotion of Icelandic industry and, therefore, for the benefit of the activities being taxed.
Law – Article 11: The first issue was whether the statutory obligation to pay the industry charge to the FII was tantamount to compulsory membership adversely affecting the negative aspect of the applicant’s freedom of association. While neither the applicant nor the Master Builders’ Association to which he belonged had been compelled “to join” the FII in the sense of becoming members, the obligation to which the applicant was subject did have an important feature in common with that of joining an association, namely that of contributing financially to its funds. The applicant was obliged by statute financially to support a private-law organisation that was not of his own choosing and which advocated policies which he considered fundamentally contrary to his own political views and interests. While the individual contributions involved may have been modest, the industry-charge scheme represented a large-scale system of finance accruing to a single recipient organisation, the FII. In addition, unlike the members of other organisations, FII members were able to deduct their membership fees from the amounts they had paid by way of the industry charge. Accordingly, the FII and its members were treated more favourably than other organisations and their members. In sum, the statutory obligation on the applicant to pay the industry charge had amounted to an interference with his right not to join an association. That obligation had been prescribed by law and pursued the legitimate aim of protecting the rights and interests of others.
As to whether the interference was necessary in a democratic society, the Court accepted that relevant reasons had been given for introducing the measure, namely to promote Icelandic industry through the allocation of funds to a single broad federation (the FII) embracing a wide variety of businesses in all branches of industry rather than dispersing them between many smaller ones. As to the further issue of whether the reasons were also sufficient, the Court observed that not only did the relevant national law define the FII’s roles and duties in an open-ended manner, in that it failed to set out specific obligations for the FII, there had also been a lack of transparency and accountability vis-à-vis non-members such as the applicant as to the use made of the revenue from the charge. The definition of the FII’s role and duties (“to promote industry and industrial development in Iceland” and to “annually provide a report to the Ministry of Industry on the use of the revenues”) was very broad and unspecific. There were no specific obligations owed to non-members who paid the charge. Nor was the FII subject to substantial and systematic supervision: it had unrestricted power to decide how the charge was allocated and so long as it remained within the framework of the law the Ministry of Industry, to which it was required to report, could not interfere. The Court was not therefore satisfied that there had been adequate safeguards against the FII favouring its members and placing the applicant and other non-members like him at a disadvantage. The Icelandic authorities had thus failed to give sufficient reasons for the interference with the applicant’s freedom of association and had not struck a proper balance between his right not to join an association on the one hand and the general interest in promoting and developing Icelandic industry on the other.
Conclusion: violation (unanimously).
Article 41: No claim made in respect of damage.
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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