The Right is... Conditional

Citizens of the European Union now enjoy the right of free movement and residence within the territory of Member States. However, the exercise of this right is conditional upon claimants meeting certain requirements for the acquisition and retention of residence rights. Those conditions sometimes appear to be a significant barrier for the development of the free movement of persons.

A Legal-Historical Overview

Legal records can be traced back to the 1951 Treaty of Paris which already contained some basic provisions on the free movement of workers within the EU. One must however note that the right referred only to qualified workers in the coal and steel industries and not to the whole workforce. It was only the 1957 Treaty of Rome that provided for the free movement of workers and services in general.

For the modern observer, the principle of free movement of workers is enshrined in Article 45 TFEU and it has been developed through secondary legislation, namely Regulation 1612/68, Directive 2004/38 (the Citizenship Directive) and Directive 2005/36 and by the case law of the European Court of Justice (ECJ).

The Development of the Concept of Worker

Regulation 1612/68 concerned exclusively the economically active persons. It also lacked a legal definition of the concept of worker. This situation was resolved in 1964 in the Hoekstra1 case which affirmed that the concept of worker needs a Community meaning. In 1982 in the Levin2 case, the ECJ went further to discuss the concept of worker and stated that the concepts of “worker” and “activity as an employed person” may not be interpreted restrictively. Furthermore, the motives are of no account as regards its rights to enter and reside provided that the worker pursues (or wishes to pursue) an effective and genuine activity. In 1986 in the Lawrie-Blum3 case, the ECJ finally introduced a guiding definition of a worker as a person who “for a certain period of time performs services for and under the direction of another person in return for which he receives remuneration.” To make things clear, the ECJ held in the Kempf4 case (1986) that a limited income does not prevent a person from being treated as a worker provided he is involved in effective and genuine work. In 1988 in the Steymann5 case (confimed in 2004 in Trojani6) benefits in kind were held to fall into the category of remuneration in so far as they are given for genuine and effective work.

From the above analysis, it is clear that the ECJ has constantly held that a person must pursue an activity of economic value which is “effective and genuine work” excluding activities on such a small scale as to be regarded as purely marginal and accessory. Furthermore, the ECJ has taken a very liberal approach to the notion of “worker” to give a useful effect to the fundamental principle of free movement of workers.

Conditions under Directive 2004/38 (Citizenship Directive)

Citizenship Directive specifies the conditions which must be met by EU citizens and their families in order to be in a position to exercise their right to move and reside freely within the Member States and the restrictions on these rights on grounds of public policy, public security and public health.

The Directive distinguishes three stages of residence: residence for up to three months7 (the “initial period”), residence for more than three months8 (the “extended period”) and permanent residence.9 The general expectation is that the claimants should be economically active or self-sufficient and not be a burden.

The initial period is unproblematic unless a person becomes an unreasonable burden on the social assistance system of the host State. During the extended period a right of residence is secure as long as the person is a “worker” or a “self-employed person”. Finally, the right of permanent residence is available for those who are in a position to satisfy social integration criteria.

It is not difficult to agree that the right to reside is not an option for economically inactive residents. While they are guaranteed the right of freedom and residence, such arrangements are subject to two specific conditions: they must have sufficient resources and comprehensive sickness insurance.10 What has been said so far might suggest that some groups, including students, pensioners and the unemployed are more vulnerable.

Recent report11 on the application of the Citizenship Directive described the transposition of the directive as disappointing. The problem with the implementation of the Directive is that it does not clearly define when an EU citizen becomes an “unreasonable burden” on the social assistance system. As a result, states need to apply a proportionality test, which requires them to examine the duration of residence, the personal circumstances and the amount of aid granted.12

Restrictions on the freedom of movement

In accordance with Article 27 of the Citizenship Directive the freedom of movement and residence may be restricted on the grounds of public policy, public security and public health.

An interesting case to examine is the Jipa13 case where the ECJ held that “illegal residence” may represent a valid ground for the restriction of the freedom of movement only if the personal conduct constitutes a “genuine, present and sufficiently serious threat to one of the fundamental interests of society.” On the facts of the case, the restriction was found disproportionate.

The very different approach was adopted in the Tsakouridis14 case where the fight against crime involving dealing in narcotics is covered by the concept of “serious grounds of public policy and public security” so that a restriction could be justified.

It must be mentioned that the line between the concepts of public policy and public security is not always clear. It is certainly true that Member States are given “considerable latitude to determine the requirements of public policy and public security in the light of their own national needs.”15 However, this is not to say that the two concepts are actually identical. Though it is logical to suggest that “public security threat will also cause exceptionally serious public policy concerns and vice versa.”16

Obstacles to Free Movement

The building of a single market implies the elimination of the barriers to free movement within the Member States. The states involved will have to decide “how far they want to go in their pursuit of an unencumbered single market and thus what kind of barriers they will address.”17

Those barriers are usually divided into two categories — distinctily applicable and indistinctly applicable. The latter are often the most problematic since they are otherwise perfectly legitimate exercises of national regulatory autonomy. For instance, the legislature may wish to make sure that people who want to work as lawyers know enough about national law, or that doctors have the necessary insurance coverage.18 The recognition of diplomas and qualifications forms an important instrument for fostering the mobility of workers in the EU.

The mechanisms for recognising diplomas were implemented gradually. A helpful tool in this matter is secondary legislation. To begin with, sectoral directives for specific professionals (ie doctors19, veterinary surgeons20, dentists21, nurses22, midwives23, hairdressers24, architects25, pharmacists26); then two general system directives27 on the recognition of higher education diplomas, one on completion of professional education and the other on training of at least three years duration.

Surprisingly enough, the TFEU pays no particular attention to the taxation aspects although they usually have a strong impact on the flows of workers inside the EU. With the lack of legal basis, the principal reference points are still the case law of the ECJ. The legality of tax barriers was first tested in the Bachmann28 case which considered the indirect discrimination in fiscal matters objectively justified “by the need to safeguard the cohesion of the applicable tax system.” Conversely, the ECJ changed its approach in the Schumacker29 case which held that a person is entitled to have his marital status taken into account and pay less income tax. The rejection of the “Bachmann defence” in the Schumacker case is very encouraging for the apologists of the single market. Hopes were raised that each subsequent case involving tax discrimination will be carefully examined on its own merits.

Conclusion

It would be facile to assume that there is an “ideal” single market with people exercising their rights of free movement and residence unrestrictedly. From the legal perspective, free movement has created the necessary legal conditions for integration of Community workers into the host society via TFEU and relevant secondary legislation. Furthermore, the ECJ has significantly promoted free movement through its case work.

Nevertheless, critics point out that there are still practical and legal obstacles which limit the effective exercise of the right of free movement. In the lights of the analysis presented, additional steps are needed for tax arrangements, social security scheme and recognition of qualifications. One might safely suggest that collaboration on these fronts may remove existing barriers to the mobility of the workforce and other categories of persons (e.g. pensioners and students).

_____________________________________________________

1Case 75/63 Unger [1964] ECR 177.

2Case 53/81 Levin [1982] ECR 1035.

3Case 66/85 Lawrie-Blum [1986] ECR 2121.

4Case 139/85 Kempf [1986] ECR 1741.

5Case 196/87 Steymann [1988] ECR 6159.

6Case C-456/02 Trojani [2004] ECR I-7573.

7Art.6 Directive 2004/38.

8Art.7 Directive 2004/38.

9Art.16-18 Directive 2004/38.

10Art.7 (1)(b) Directive 2004/38.

11COM(2008) 840 final of 10.12.2008.

12Recital 16 Directive 2004/38.

13Case C-33/07 Jipa [2008] ECR I-5157.

14Case C-145/09 Tsakouridis [2010] ECR I-11979.

15Anagnostaras, G., ‘Enhanced protection of EU nationals against expulsion and the concept of internal public security: comment on the PI case’ (2012) 37 European Law Review 5, p.629.

16Ibid., p.639.

17Hinarejos, A,, ‘Free movement, federalism and institutional choice: a Canada-EU comparison’ (2012) 71 Cambridge Law Journal 3, p.539.

18Ibid., p.540.

19Council Directive 93/16.

20Council Directive 78/1026.

21Council Directive 78/686.

22Council Directive 77/452.

23Council Decision 80/156.

24Council Directive 82/489.

25Council Directive 85/384.

26Council Directive 85/433.

27Council Directives 89/48 and 92/51.

28Case C-204/90 Bachmann [1992] ECR I-249.

29Case C-279/93 Schumacker [1995] ECR I-225.