Benefits for unemployed EU citizens: the CJEU may complicate David Cameron’s renegotiation strategy

 

Steve Peers

The issue of the free movement (or ‘immigration’) of EU citizens between Member States has become highly controversial politically, especially in the UK. In particular, their access to benefits remains highly contentious. The CJEU has the chance to clarify some key issues on this point, in the pending case of Alimanovic, in which an Advocate-General issued an opinion today.

Today’s opinion is not binding, so we must wait to see if the CJEU is willing to follow it. But if it does, the Court will complicate the Conservative party’s strategy to renegotiate the UK’s EU membership. Even if the result of the upcoming UK general election means that the Conservative party’s plans are moot, the judgment will still be relevant to the Labour party’s less far-reaching plans to restrict EU citizens’ access to benefits.

Background

The CJEU ruled in November 2014 in the well-known Dano judgment (discussed here) that unemployed EU citizens who moved to another Member State could not access social benefits there, if they were not looking for work. This ruling did not apply to other categories of unemployed EU citizens: those who moved to another Member State and were looking for work there, and those who had worked there already and become unemployed. Today’s opinion concerns both of these categories.

According to the EU citizens’ Directive,unemployed EU citizens looking for work in another Member State cannot obtain social assistance benefits from another Member State if they have not worked in that State. However, the case law of the CJEU states that those citizens can rely on the free movement of workers rules in the EU Treaty in order to claim benefits related to the labour market.

As for those EU citizens who have worked in that Member State and become unemployed, the Directive says that they retain worker status (and therefore access to benefits, including social assistance) if they have worked there more than one year. They also retain worker status if they have worked there for less than that period, although in that case they only keep that status for six months. However, again relying on the Treaty free movement rules, the CJEU has ruled that worker status can be retained in other cases too, for instance by women who have stopped work briefly due to maternity (see discussion here).

The Conservative party position is that EU citizens working in a Member State should have to wait four years to get access to tax credits, social housing and housing benefits, as well as no taxpayer support for job-seekers. As I discussed before, these are the first and eighth of Cameron’s nine objectives in the planned renegotiation of EU membership (in so far as it concerns ‘migration’ from the rest of the EU). The Labour party position is that EU citizens should have to wait two years for benefits.

The case concerns Swedish citizens (a mother and her children) who had lived in Germany before, left for a number of years, and then returned there. The mother and oldest child then worked in Germany briefly, but became unemployed. Do they have access to benefits?

The Opinion

The Advocate-General first clarifies that the benefits are social assistance, not labour-market related. So job-seekers in general do not have access to them; only former workers do. But as part of this analysis, he reaffirms the current rule that the Treaty gives job-seekers access to labour-market related benefits.

Then he examines whether people who become unemployed after short periods of work in a host Member State can be considered former workers – and therefore retain access to social assistance benefits – in cases besides those listed in the Directive. He argues that they can, in part on the basis of the EU Treaties, and that any Member State which refuses to extend such benefits to them automatically breaches EU law. Instead, a Member State must consider the benefit request on a case-by-case basis, assessing whether there is a sufficient link with the labour market of that State.

Comments

If it is followed by the CJEU, the Opinion makes both the Conservative and Labour plans to renegotiate UK membership as regards EU citizens’ access to benefits harder to achieve. The crucial point is the extent to which renegotiation concerns a Treaty amendment, which is far harder to achieve (unanimous agreement of all Member States, and national ratification) than an amendment to EU legislation, like the citizens’ Directive (qualified majority of Member States, proposal from Commission and agreement of European Parliament).

First of all, the Opinion reaffirms that the Treaty requires that all job-seekers get access to labour-market related benefits. So only a Treaty amendment could overturn that rule.

Secondly, the Opinion asserts that the Treaty requires that former workers might have access to benefits, on a case-by-case basis, if they have stopped work in circumstances other than those listed in the Directive. This goes further than the status quo, since the CJEU has only established this point as regards women interrupting work for maternity. The workers concerned have only been employed in Germany for short periods, well below the four-year waiting period that the Conservatives want, or even the two-year period that Labour supports.

It remains to be seen whether the Court will accept today’s opinion, or instead opt for a judgment that more obviously reflects the political sensitivities surrounding unemployed EU citizens’ access to benefits – as it plainly did in the Dano judgment.

 

Barnard & Peers: chapter 13

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The Cameron express: could there be a ‘fast-track’ Treaty amendment on the free movement of workers?

 

Steve Peers

For EU law geeks, the Treaty amendment process is the World Cup, the general election and the second coming of the Millennium Falcon rolled into one. Following the Treaty of Lisbon, it seemed unlikely that there would be another significant Treaty amendment for years. But following David Cameron’s demand to renegotiate EU free movement rules (which was echoed to a lesser extent by the UK Labour party), it has become rather more likely.

So we must move on to the next question: what type of Treaty amendment would it be?  Before the Treaty of Lisbon, there was only one form of Treaty amendment set out in Article 48 of the Treaty on European Union (TEU). However, it was also possible to amend the Treaty by means of accession treaties, and there were sundry forms of minor Treaty amendment (such as amendments to the EU Court’s Statute) scattered around the rest of the Treaties.

Since the Treaty of Lisbon came into force five years ago today, this situation is considerably more complicated. The previous Treaty amendment process has been revised, and there are two variations of it; it’s now called the ‘ordinary revision procedure’. There are two entirely new ‘simplified revision procedures’. Furthermore, there are additional possibilities for minor Treaty amendment scattered around the rest of the Treaties, and it’s still possible to amend the Treaties via means of an accession treaty.

These distinctions are important because if Cameron’s plans could be put into place by using a simplified revision procedure, the process would be speeded up at EU level – although not necessarily at national level.

The changes were so fascinating that, in an explosion of EU law geekiness, I took over 100 pages to analyse them in an article for the Yearbook of European Law. I won’t subject you to all of my analysis there, but it’s the basis for my following comments on which Treaty amendment process would apply to Cameron’s reforms.

Legal framework

There’s no accession to the EU planned for the next five years. So even if an accession treaty could address David Cameron’s renegotiation demands (and I don’t think it could), that prospect is irrelevant, since they couldn’t be addressed by this route before the deadline he has set for a referendum on the UK’s membership of the EU (end of 2017). The minor Treaty amendment processes aren’t relevant to any of his renegotiation demands either.

That leaves us with the ordinary revision procedure and the two simplified revision procedures set out in Article 48 TEU. These have been discussed in posts on other blogs over the weekend, in particular the 'Boiling the Frog' blog. I’ll respond below to some of the points made there.

The ordinary revision procedure requires a ‘Convention’ to be called, consisting of representatives of national parliaments, Member State governments, the European Parliament and the Commission. The Convention meets for a while (the details have to be worked out on a case-by-case basis) and recommends Treaty amendments. An Inter-Governmental Conference (IGC) of Member State representatives then convenes to consider the proposed amendments. If the IGC reaches agreement by the ‘common accord’ (ie the positive support) of all Member States, then the resulting Treaty amendment must be ‘ratified by all Member States, in accordance with their respective constitutional requirements’.

As a variation on this procedure, it’s possible to skip the Convention stage if a simple majority (15/28) Member State governments think that it’s unnecessary, in light of the limited extent of the proposed amendments. But an (inevitably short) IGC and Treaty ratification process is still necessary. If governments want to skip the Convention stage, they must convince the European Parliament to consent to it.

What about the two simplified procedures? The first simplified procedure, set out in Article 48(6) TEU, is the only one that might be relevant to Cameron’s proposed amendments. It provides that a Decision to amend the treaties can be adopted by the ‘European Council’, ie the EU body consisting of Heads of State and Government (Cameron, Merkel, et al), acting unanimously. This Decision then has to be ‘approved by all Member States, in accordance with their respective constitutional requirements’. This procedure applies to amendments of ‘all of part of Part Three’ of the Treaty on the Functioning of the European Union (TFEU), the second of the two main Treaties establishing the EU (more below on what’s in Part Three of the TFEU). This process ‘shall not increase the competences conferred on’ the EU.

The second simplified procedure, set out in Article 48(7), provides for a shift away from unanimous voting of Member States to qualified majority voting, or for changes in the type of legislative procedure, as regards most (but not all) of the two main EU Treaties. Again, the decision concerned would be adopted by the European Council, acting unanimously. But instead of ratification or approval by national parliaments, the Decision could be adopted if no national parliament objected within six months.

Obviously the second procedure couldn’t apply to Cameron’s proposed amendments, since increasing qualified majority voting in the EU is the last thing on his mind. This means that the curtailed role for national parliaments in the second procedure would not apply to the amendments which Cameron is seeking. The Boiling the Frog blog post gets this point wrong.

Since the entry into force of the Treaty of Lisbon, Article 48 has been used four times for Treaty amendments. (There’s also been an accession treaty and some minor Treaty amendments). The ordinary revision procedure was used on three occasions, as regards: a Protocolincreasing the number of Members of the European Parliament temporarily; a Protocolon the concerns of the Irish people about the Treaty of Lisbon; and a Protocollimiting the effect of the EU Charter of Fundamental Rights in the Czech Republic.  The first of these Protocols entered into force in 2011; the second Protocol is still being ratified; and the ratification of the third Protocol stopped after a new Czech government withdrew its request, because it no longer wanted to limit the effect of the Charter.

The other Treaty amendment was based on Article 48(6). It consisted of a Decision adding a single paragraph to the TFEU in order to provide for Member States to adopt a treaty establishing a European Stabilisation Mechanism (ESM), ie a bailout fund for Eurozone Member States. This Decision entered into force in 2013.

The key questions about the possible use of the simplified Treaty amendment procedure set out in Article 48(6) for Cameron’s suggested changes are twofold. Firstly, how much easier is it to use than the usual Treaty amendment process? And secondly, when exactly can it be used? I’ll address these procedural and substantive questions in turn.

Procedural simplification

The simplified procedure doesn’t require a Convention to discuss the Treaty amendments. Furthermore, it allows a Convention to be skipped without the European Parliament’s consent; the Parliament only gets to be consulted on the Treaty amendment. There’s no IGC either, although inevitably there is some discussion among Member States, within the framework of the European Council, about the text which the European Council should adopt.

What about transparency? The last few IGCs have been fairly transparent, but when the European Council drew up an Article 48(6) amendment in 2010, no drafts of the Decision were published, and the European Council staff simply ignored my requests for access to the documents. Let’s hope this obnoxious attitude wouldn’t be applied to future cases. For a starting point, it was illegal to ignore my requests for access, since the EU’s access to documents rules apply to documents of the European Council. Furthermore,  while those rules allow for access to be refused in the interest of the institution’s decision-making efficiency, that interest can be overridden in the greater public interest. Obviously the public interest in scrutinising and debating planned Treaty amendments should take precedence.

While it's been suggested that a European Council Decision can be quietly adopted and presented as a fait accompli, that isn’t legally accurate or politically realistic. On the legal side, Article 48(6) expressly makes clear that the Decision will have to be ratified at national level. For the UK, if Cameron is doing the negotiating, that would also necessarily mean that the Conservative party either had obtained a majority at the next election or had done a deal with one or more parties to allow it to govern. In the scenario, an Act of Parliament providing for a ‘Brexit’ referendum would surely be on the statute books by the time the renegotiation of membership takes place.  

In the event of a Labour (or Labour-dominated) government, there would be no commitment to a Brexit referendum (unless that party changes its current policy). So the Treaty amendment in question would be subject to the European Union Act 2011, which requires an Act of Parliament for its ratification (see s. 3 of that Act; such a Treaty amendment is not among the list of changes which would require a referendum, according to s. 4 of that Act).

On the political side, if David Cameron secured a Treaty amendment and said he would not hold a Brexit referendum after all, he would not remain as Conservative party leader for more than 24 hours.  Anyway, since the referendum Act would presumably be on the books already, it’s hard to imagine a scenario in which a Conservative-dominated House of Commons would vote to rescind it. Equally, the Labour party says that it supports the European Union Act 2011, and if it has enough votes in the House of Commons to form a government, it should probably have enough votes to pass an Act of Parliament approving the Treaty amendment.

It’s often thought that all Treaty amendments require referendums in some other Member States, at least in Ireland. But that isn’t the case: the post-Lisbon Treaty amendments mentioned above didn’t require one. The crucial issue, according to Irish constitutional case law (see the Crottycase), is whether there is a fundamental change in the basis of Irish participation in the EU. It might be argued that a cut back in the rights of free movement of workers would constitute such a change; but the favourable immigration status of Irish people in the UK derives originally from UK domestic law, not the EU Treaties. On the other hand, an amendment to the Treaties would leave more flexibility for the UK to change that domestic law if it wished to.

Substantive issues

As a reminder, Article 48(6) can only be used if a Treaty amendment would revise Part Three of the TFEU, and would not increase the EU’s competences. Part Three of the TFEU is the biggest part of that Treaty, and sets out the main rules on the internal market, along with other EU internal policies on issues such as Justice and Home Affairs and the environment. Obviously, this means that the Treaty amendment could not be used to amend the separate TEU Treaty, or to amend the other six Parts of the TFEU.

What do these two legal constraints mean exactly? An interesting feature of Article 48(6) is that the CJEU has jurisdiction to rule on whether the European Council Decisions are valid or not. That’s because these particular Treaty amendments take the form of decisions of an EU institution, whereas the ordinary revision procedure results in acts of the Member States. The CJEU can rule on the validity of the former, but not the latter.

Challenges to the European Council Decision could come from the European Parliament (which might want to argue that the ordinary revision procedure should have been used), or via the national courts, which would send a question on validity to the CJEU. The latter process was indeed invoked when the Article 48(6) process was used before. In the case of Pringle, the CJEU was asked (among other things) whether the Treaty amendment relating to the ESM treaty was valid.

According to the Court, it was; and its judgment gives us some insight into the limits of Article 48(6). First of all, the Court assessed whether the Treaty amendment only amended Part Three TFEU. Formally speaking, that was an easy question to answer, since the amendment took the form of a new paragraph added to Article 136 TFEU concerning economic and monetary policy, and Article 136 is within Part Three. But the CJEU went further than that, and examined whether there was an indirect amendment to other provisions of the Treaties. This is surely the right approach, because otherwise it would be possible for an amendment placed in Part Three of the TFEU to limit the scope of an EU competence described in Part One of the TFEU, or to alter the Treaty amendment procedure as set out in the TEU (a separate Treaty).  

The importance of this point is that it could crop up again in respect of Cameron’s planned Treaty amendment. It could be argued, for instance, that a limit on EU workers’ rights might take the form only of an amendment to Article 45 TFEU (which sets out the basic rules on free movement of workers), it might impact upon the rules on EU citizenship and non-discrimination, which are set out in Part Two of the TFEU. Arguably, it might also impact upon the objectives of the EU, which include the free movement of workers, as set out in Article 3 TEU. Someone might also argue that it violates the EU Charter of Rights, which is separate from the Treaties but has the same legal value.

Furthermore, it’s clear that Cameron still wants to make changes to EU law besides the free movement rules. He confirmed this in his speech, when he said that he stood by every word of his Bloomberg speech of January 2013. The other changes he wants, such as a weakening of the ‘ever closer union’ rule and some changes relating to EU regulation, might not require a Treaty amendment, as I suggested earlier this year. But if Cameron did seek one, that would be problematic. The ‘ever closer union’ rule appears in the preamble, and Article 48(6) TEU cannot be used to amend the preamble either directly or indirectly. Arguably, any curtailment of the ‘ever closer union’ rule affects the entirety of the Treaties anyway. It would be easier to use Article 48(6)TEU as regards regulation issues, since the rules on the internal market and employment policy both appear in Part Three TFEU. But again it might be argued that such amendments have an indirect impact upon the objectives set out in Article 3 TEU, or the Charter.

What if the amendments took the form of a Protocol? Arguably Article 48(6) cannot be used to add, amend or repeal a Protocol, even if the content of that Protocol relates only to Part Three TFEU. The reason for this interpretation is that Protocols are attached to the entirety of both of the main EU Treaties, rather than to any Part of the TFEU as such.

That still leaves the issue of increasing EU competences. In Pringle, the CJEU ruled that the relevant Treaty amendment was acceptable on this point, since it simply confirmed the existence of competences that the Member States already had. Applying this to Cameron’s planned Treaty amendments, they could probably not take the form of permitting the EU institutions to pass legislation to curtail the free movement rules, since that might be described as a new competence for the EU, given that the institutions would be able to provide for more limits than they can at the moment.

So the amendments would have to take the form of a new power for the Member States to curtail workers’ free movement rights. In principle this should be acceptable legally, since the prohibition on increasing EU competences set out in Article 48(6) surely implies that this process can be used to decreasesuch competences. But remember, in Pringle, the CJEU stressed that the Treaty amendment was acceptable because it confirmed existing powers of Member States. The amendments to the rules on the free movement of workers would be giving Member States new powers. While this also seems to fall within the scope of Article 48(6), the CJEU sometimes takes unusual approaches to the interpretation of Treaty rules.

Conclusion

A simplified Treaty amendment for Cameron’s free movement plans is possible, but only if they remain tightly restricted to amending rules set out in Part Three TFEU, provide for powers for Member States (rather than the EU institutions), and (probably) do not take the form of a Protocol. In any event, there would likely be a legal challenge, either from those who do not like the proposed changes or who think they do not go far enough (or both). It’s possible that they would survive such a legal challenge, but it might be politically unhelpful.

Barnard & Peers: chapter 2 

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Amending EU free movement law: What are the legal limits?

Steve Peers

Much public debate in recent weeks has centred upon the possible amendment of EU rules on the free movement of people. In particular, the think-tank Open Europe and the UK Labour party have set out policies on this issue, and Prime Minister David Cameron is expected to make an announcement of his views soon. While most of the discussion focuses on the political and economic aspects of these proposals, there is also an important legal dimension to the debate, because EU law determines how easy (or difficult) it would be to put any potential changes into effect.

In particular, there are three principal ways to change the EU free movement rules: (a) by changing national law, while still remaining consistent with EU law; (b) by changing EU legislation; or (c) by amending the EU Treaties. The first course of action needs only (at most) a national parliamentary majority; the second course of action needs a Commission proposal and support from the European Parliament and a qualified majority in the Council; but the third route needs unanimous support from all 28 Member States’ governments, then ratification in national parliaments.

So it’s important to know which of these categories the proposed reforms fall into. For the reasons set out in this blog post, some of the proposals of Open Europe fall into the second category (EU legislative amendment). But contrary to their arguments, the most significant proposals made by Open Europe fall into the third category (Treaty amendment), making them much more difficult to accomplish than their authors suggest.

As for the Labour party proposals, they broadly reflect the Open Europe suggestion to impose a waiting period on access to in-work benefits for EU migrants. Finally, it’s obviously not possible to comment on David Cameron’s proposals for EU policy reform (which might go beyond EU free movement law) until he makes them. So this blog will return to the issue after his forthcoming speech.

This blog post is in three parts: an analysis of the proposals on cutting back benefits for workers, job-seekers and former workers;  an examination of the other proposals made by Open Europe; and my suggested text for proposed amendments to EU legislation to implement those Open Europe proposals which are (in my view) both desirable and legally feasible.  

Cutting back workers’ benefits

The central proposal of Open Europe today is that newly-arrived EU citizens should be denied equal treatment as regards out-of-work or in-work non-contributory benefits, social housing and apprenticeship schemes for a period of between one and five years, to be negotiated. This suggestion builds upon another recent Open Europe paperwhich suggests further details of changes to EU legislation on these issues. My comments are mainly directed at the latter paper, which sets out the legal reasoning underpinning today’s proposal. As noted already, the Labour party proposals reflect Open Europe's suggestions, and so the following comments equally apply to those proposals.

I won’t mince words: there’s a fundamental legal problem at the core of these proposals. The Open Europe paper suggests that both in-work and out-of-work benefits could be limited simply by amending EU legislation. This is true for those EU citizens who are not workers, and who have never looked for work or held work in the host Member State, as the CJEU has recently clarified in the ‘benefit tourism’ case of Dano (see discussion here). But look at the Court’s reasoning: it deferred to the wording of EU legislation in that case because the Treaty rules on the rights of EU citizens (Articles 20 and 21 TFEU) defer to the limitations on EU citizens’ rights ‘defined by the Treaties and the measures adopted thereunder’, and ‘laid down in the Treaties and in the measures adopted to give them effect’. Equally the Court referred to Article 18 TFEU, which provides for non-discrimination against EU citizens ‘[w]ithin the scope of application of the Treaties, without prejudice to any special provisions contained therein’.

For people like Ms. Dano, there are no Treaty rules which govern their legal situation, because she was not a worker, and was not a job-seeker or former worker either. Neither was she a self-employed person, service provider or student. Therefore the Court only looked at her position under EU free movement legislation.

But the vast majority of EU citizens in another Member State do fall within one of those other categories – most notably as workers, including job-seekers and former workers. The crucial point here is that all of those other categories of EU citizens have rights not just pursuant to EU legislation, but also pursuant to the Treaties. Indeed, that point is recognised in the very wording of Articles 18, 20 and 21 TFEU: Article 18 defers to the special rules on non-discrimination in the rest of the Treaty, while Articles 20 and 21 defer equally to the Treaties and secondary legislation. The intention of the Treaty drafters is perfectly clear.

So what does this mean for the position of workers? (I’ll concentrate on them, since they are the main focus of the Open Europe proposals). The specific Treaty provision regulating workers’ free movement is Article 45 TFEU, which first specifies that ‘Freedom of movement for workers shall be secured within the Union’. Article 45(2) further specifies that free movement entails the abolition of discrimination between EU workers as regards ‘employment, remuneration and other conditions of work and employment’. Article 46 TFEU then confers powers to adopt legislation ‘setting out the measures required to bring about freedom of movement for workers’. Article 48 TFEU sets out powers to adopt rules to coordinate social security for workers.

The wording of these Treaty articles doesn’t defer to the legislation in order to set out workers’ rights, and this has long been recognised by the Court of Justice. So free movement of workers (and the associated right to equal treatment) has long been recognised in CJEU jurisprudence as a directly effective Treaty right, precisely because it is not dependent on the adoption of further measures. This also means that the CJEU controls the definition of ‘worker’, and extends it to cover also those who are former workers or job-seekers.

Indeed, as recently as this summer, in the Saint-Prix case (discussed here), the CJEU expressly asserted that the definition of former workers (and therefore the access to benefits) as defined in EU legislation didn’t matter, since the Court would determine which former workers still qualified for access to benefits. So the Court ruled that female workers who were former workers at the time when they gave birth still had access to benefits (as long as they got work soon afterward), even though the legislation did not define them as former workers.

So unless the CJEU does a U-turn on this issue, there would be little point in trying to amend the legislation in order to require former workers to wait longer for benefits. At the moment, EU citizens retain worker status, and access to benefits, if they become involuntarily unemployed after working for more than one year in a Member State. If they become unemployed before that point, they retain worker status for a maximum of six months. There are also several other cases where they retain that status.

What about job-seekers who were not formerly employed in the host State? Well, there’s no need to amend EU legislation in order to refuse them some types of benefits, since the EU citizens’ Directive expressly makes clear that they are entitled to no equal treatment as regards ‘social assistance’ at all. However, the CJEU has said (in the Collinscase) that, pursuant to the Treaties, job-seekers cannot be refused equal treatment as regards benefits which are intended to facilitate access to employment. And in the Vatsourascase, it expressly distinguished this type of benefit from ‘social assistance’ benefits which job-seekers are not entitled to pursuant to the citizens’ Directive.

The CJEU will have a chance to clarify the position in the pending case of Alimanovic. It might possibly do a U-turn on this issue in its judgment on that case. If it doesn’t, then again, in order to cut back on such labour-market benefits for job-seekers, a Treaty amendment would be necessary.

Next, as regards workers, the key free movement rule, and the equal treatment right, are laid down in the Treaty itself. When ruling on workers’ equal treatment rights, the Court regularly refers to the Treaty rule and the relevant legislation, and both of these confer equal treatment as regards benefits: see the judgment in O’Flynn, for instance. Since the right to workers’ equal treatment is expressly set out in the Treaties, then removing in-work benefits for workers – the core of the Open Europe proposal – would be manifestly contrary to the Treaties, and would require a Treaty amendment.

Of course, a Treaty amendment is not impossible; it’s simply much more difficult than a legislative amendment. It would most likely take the form of a Protocol which sets out a derogation from the Treaty rules.

Other Open Europe proposals

The Open Europe paper suggests an amendment to EU legislation to specify that EU law cannot derogate from national powers as regards matters such as social assistance. It’s not possible for EU secondary legislation to limit EU powers as defined in the Treaties, but an amendment to EU secondary legislation could refer to such limits. This is my suggested amendment 1 below.

In the context of a waiting period for benefits, the Open Europe paper correctly mentions that the time period spent in detention in the home State for committing offences does not count for this purpose. This rule is set out in the case law, but it could also be added to EU legislation. This is suggested amendment 2 below.

Next, the Open Europe paper suggests a number of protections for national workers as regards unfair competition from other Member States. It is suggested here that the EU posted workers’ Directive provides such protection, but this isn’t always the case. So I suggest an amendment to that Directive in order to overturn the controversial CJEU judgment in Laval (amendment 3).

The specific suggested amendments relating to unfair recruitment standards, living wages et al can best be addressed by amendments to the specific Regulation on the free movement of workers. My suggestions to this end are set out in amendment 4.  

Finally, the Open Europe paper gets round to suggesting some protection for migrant EU workers in areas other than employment, on the grounds that the proposed three-year waiting period for equal treatment ‘might contribute to a sense of vulnerability on their part’. The report’s authors should win an award for their contribution to the great British art of understatement here. One could equally say that the Titanic’s collision with an iceberg might have contributed to a sense of dropping body temperature on the part of its passengers.

Open Europe's specific suggestion is to adopt EU legislation protecting EU migrant workers against discrimination on grounds of nationality as regards supply of goods and services. This is possibly superfluous in light of the non-discrimination rules in the Treaty. But to be on the safe side, I have suggested amendment 5, to the Regulation on migrant workers.

Finally, a number of specific statements in the Open Europe paper need correction or clarification. On page 3, there are more than two ‘important protections’ (for States) as regards exceptions from equal treatment for benefits. Nor is sickness insurance a requirement for all EU citizens, only those who are not workers or self-employed. The Brey judgment (text at note 6) has been effectively overturned by Dano, which was delivered after this paper was published. Equal treatment applies only to those EU citizens who are legally resident. Former workers are entitled to benefits not just in the cases referred to in note 9. On page 9, the CJEU has yet to rule whether Article 31 of the EU Charter of Fundamental Rights creates justiciable rights; this issue is the subject of the pending Fenollcase. It’s an overstatement to say that national law giving effect to Charter social rights is always protected by EU law, as the CJEU judgments in Laval, Viking Line and Alemo-Herronmake clear.

Proposed amendments

Amendment 1

Add a new Article 1(2) to the citizens’ Directive:

This Directive shall not affect Member States’ competence to define national rules on social assistance and social security (including pensions), public health, public education and employment policies, in accordance with the Treaties.

Amendment 2

Add a new sentence to Article 21 of the citizens’ Directive:

Periods spent in prison as the consequence of a conviction for a criminal offence shall not be taken into account.

Amendment 3

Add a new sentence to Article 2(10) of the posted workers’ directive:

In particular, equality of treatment as regards pay shall be assured as regards all collective agreements, whether or not they are covered by the definition set out in paragraph 8.  

Amendment 4

Regulation 492/2011 on the free movement of workers should be amended to add a new Section 1a, ‘Equal treatment of host State workers’, consisting of a new Article 6a:

Member States shall not permit recruitment of or advertising for employment to nationals of other Member States only.

A new sentence should be added to Article 7(1):

The principle of equal treatment in working conditions applies in particular to any rule relating to wages, including a minimum wage or living wage requirement in the host Member State, as well as any rules relating to health and safety.

A new Article 7(5) should be added:

In order to ensure a dignified standard of living for workers exercising free movement rights, Member States may prohibit bonded agreements or tied housing.

Amendment 5

A new Article 7(6) should be added to Regulation 492/2011:

Workers shall enjoy equal treatment without discrimination on grounds of nationality as regards access to and supply of goods and services which are available to the public.

*Note: This would be enforceable in the way that the Open Europe paper suggests, by means of the Directive on enforcement of migrant workers’ rights, adopted in 2014.

 

Barnard & Peers: chapter 13

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Is Free Movement in Europe an Anomaly? The New Open Borders Policy in South America

 

 

Dr Diego Acosta Arcarazo, Lecturer in Law at the University of Bristol, and member of the research project Prospects for International Migration Governance (MIGPROSP)

 

 

Free movement of people in the European Union (EU) is currently under attack by certain political and media sectors across Europe, with proposals arising on how to limit its scope. At the same time, other regions in the world are adopting free movement regimes. This is important to highlight as it allows us to demonstrate that the EU’s free movement regime is not an anomaly as its opponents often argue. It also enables us to compare how different regions function which can lead to ideas and proposals for refining legislation and policies. As such, current debates on the construction of a South American citizenship as well as the MERCOSUR Residence Agreement, effectively establishing an open border area in the region, deserve our attention in Europe.

 

Free movement of citizens in South America

 

In South America, instances of regional free movement can be traced back to at least the 1970s when one regional organisation, the Andean Community, sought to regulate the issue with little success. Free movement was also introduced to the agenda of MERCOSUR (another regional organisation created in 1991, now consisting of Brazil, Argentina, Paraguay, Venezuela and Uruguay, although Paraguay is currently suspended).

 

In 2002 the MERCOSUR Residence Agreement was adopted. Implemented in 2009, the Agreement’s main objective is dealing with the situation of intra-regional migrants and it has transformed the migration regime for South Americans. It provides that any national of a MERCOSUR or Associate Member State may reside and work for a period of two years in a host State. After two years, the temporary residence permit may be transformed into a permanent one if the person proves legitimate means of living for himself or herself and any family members. It also lays down a number of rights including the right to work and equal treatment in working conditions, family reunion or access to education for children. All countries in South America (ie, not just MERCOSUR countries) have ratified the agreement and apply it with the exception of Venezuela, where it is currently in discussion, and Surinam and Guyana where it is yet to be adopted.

 

Differences between the MERCOSUR Residence Agreement and the Directive on EU citizens

 

MERCOSUR’s Residence agreement differs from the EU’s free movement regime in various ways. First, there are differences in terms of who can move under both pieces of legislation. In contrast to the EU, where there is an obligation to be working or to prove sufficient resources in order to be able to reside in another Member State for longer than 3 months, citizens in South America may reside for up to two years by simply providing an identification document and proof of a clean criminal record for the previous five years. However, under the MERCOSUR agreement the burden is on the individual to prove that they are not a threat to public policy or security by producing such a clean criminal record. In Europe, by contrast, the responsibility lies with the national authorities to demonstrate that the person endangers public policy or public security of the State.

 

Second, there are also conceptual and implementation differences. Free movement of people does not constitute a fundamental freedom in South America. It is rather the result of an international treaty, the MERCOSUR Residence Agreement, for which there are no coercive intra-regional mechanisms to ensure implementation or impose sanctions for violations. In other words, MERCOSUR does not have a Commission capable of launching infringement proceedings or a Court of Justice having the final word on interpretation disputes. If disputes arise they are rather informally solved at the level of the MERCOSUR Migration Forum composed of government officials in charge of migration portfolios. This, in turn, leads to great variation regarding the implementation of the agreement, with some countries applying it without restrictions, e.g. Argentina or Brazil; others only implementing it for nationals of a reduced group of countries, e.g. Chile; and others still, such as Ecuador, imposing very high fees to obtain the residence permits (230 and 350 U.S. dollars for the temporary and permanent residence permits respectively – something which would not be possible in the EU). Finally, Uruguay implements it more generously and has recently adopted legislation by which nationals of MERCOSUR and Associate States will be able to directly obtain permanent rather than temporary residence, by simply proving their citizenship.

 

Also, the agreement is unclear in many aspects. It does for example grant a right to family reunification without establishing who are considered to be family members. It also provides equal treatment with regards to all social, economic and cultural rights, without however developing further such an important provision.  As is well known, these two issues have been and continue to be the subject of constant litigation at EU level. Finally, the agreement does not provide for any extra protection against expulsion for regional citizens, as it is the case in the EU. Moreover, if the individual concerned fails to transform his or her temporary residence permit into a permanent one after two years, his or her residence status falls outside the scope of the agreement and it is regulated by national law alone.

 

The future of citizenship in South America

 

The MERCOSUR Residence agreement is one of the various ongoing measures being proposed and adopted in South America towards the establishment of a new regional citizenship by 2020. Two other proposals for regional agreements at the MERCOSUR and Andean Community level would, if approved, grant further free movement rights not only to regional citizens but also to third-country national residents. This would go well beyond the EU’s current regime and would materialize the vision to extend free movement to extra-regional migrants, which has been long defended in Europe by scholars, NGOs, think tanks and certain MEPs.

 

Finally, South America’s liberal migration discourse during the last 15 years, as represented by the 2013 Buenos Aires declaration calling on the human right to migration, the recognition of migrants as subjects of Law and therejection of any attempt to criminalize irregular migration, makes scrutinising these developments worthwhile, because of the potential policy lessons which may emerge in both directions and which may challenge established assumptions on how to regulate mobility.


Further reading on the topic:

1. D. Acosta Arcarazo and F. Freier, ‘Turning the immigration policy paradox up-side down? Populist liberalism and discursive gaps in South America’ (2014) International Migration Review.

2. D. Acosta Arcarazo and A. Geddes, 'Transnational Diffusion or Different Models? Regional Approaches to Migration Governance in the European Union and MERCOSUR’ (2014) 16 European Journal of Migration and Law 19-44.

 

 

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Benefit Tourism by EU citizens: the CJEU just says No

 

 

Steve Peers

 

The CJEU has today delivered a pivotal judgment in the case of Dano, concerning access to social welfare benefits by EU citizens who move to another Member State. The Court's approach to the issues in this case (and other judgments on EU citizens with criminal convictions, decided earlier this year) is stricter than usual, so we can deduce from this that it is taking account of the broader political debate on the free movement of EU citizens. However, some aspects of the issues remain to be clarified in later case law.

 

The judgment

 

Mrs. Dano is a Romanian citizen who applied for job seekers benefits in Germany. She has not worked in Germany, and is not looking for work either.

 

The type of benefit she was applying for is a 'special non - contributory benefit' under the EU regulation on social security regulation. Also, the EU citizens' Directive provides that EU citizens are entitled to equal treatment regarding benefits on the territory of another Member State, except during their first three months of entry, if they are job-seekers or if they are seeking student grants before five years residence.

 

The CJEU said that these exceptions to the equal treatment rule did not apply to Mrs. Dano. However, the Court then ruled that she could nevertheless not invoke the equal treatment rule, since she did not qualify to be covered by the citizens Directive in the first place.

 

The directive applies to workers, self employed persons, students and others who have sufficient resources. While Article 8(4) of the Directive seems to provide for some flexibility as regards what might be considered as sufficient resources, the Court definitively rules that Mrs Dano doesn't have them. Indeed, the Court ruled firmly that the requirement in question 'seeks to prevent economically inactive Union citizens from using the host Member State's welfare system to fund their means of subsistence'.

 

While previous judgments had relied upon the equal treatment rules in the Treaties to suggest that impecunious EU citizens might still be entitled to benefits, today the Court ruled that unequal treatment was an 'inevitable consequence' of the EU rules.

 

Finally, the Court ruled that the EU's Charter of Fundamental Rights was not applicable, since the rules on access to special social security benefits fall outside the scope of the relevant regulation.

 

Comments

 

Earlier this year, the CJEU rule in the cases of G and Onuekwere that EU citizens who were sentenced to prison in a host Member State could not count the period of imprisonment either towards the five-year period needed to qualify for permanent residence in the host Member State or the ten year period needed to qualify for further enhanced protection against expulsion. The judgments were delivered shortly after the transition period on the free movement of Romanians and Bulgarians ended, at a time of great public debate about the free movement of EU citizens in the UK.

 

That debate has increased further since. The Court judgment in Dano provides a clear rejection, as compared to the prior case-law, of access to benefits by those who have never worked and who are not looking for work. In particular, in this judgment the Court now defers to the EU legislature and accepts the limits on access to benefits set out in the EU Directive, rather than insist (as it did before) that any legally resident EU citizen can in principle claim equal treatment as regards access to benefits based on the Treaties (On this point, see further the separate blog post on the historical context of the judgment).

Since the EU legislature is now in charge of access to benefits by EU citizens, it is more easy to amend the relevant rules to tighten them up, since amending the citizens' Directive would only need a Commission proposal and a qualified majority vote in the Council and agreement of the European Parliament. If access to benefits were still defined by the Treaties, then only a Treaty amendment could change the relevant rules, requiring agreement of all Member States and ratification by national parliaments. The judgment has therefore facilitated a possible renegotiation of the EU free movement rules on this issue, and more broadly a renegotiation of the UK's membership of the EU.

 

However, it leaves open the question of what restrictions might be placed on job-seekers or former workers' access to benefits or students' access to grants. Nor does it impact upon the strong obligation to give equal treatment to those who are working. As recently as June, the CJEU insisted in the Saint-Prix case (see discussion here) that it (and not the EU legislature) would still determine the meaning of 'worker', including former workers (as well as job-seekers, according to previous case law).

 

Furthermore, the judgment doesn't as such address the possible expulsion of persons in Mrs Dano's situation, still less the prospect of denying her re-entry. As I have pointed out before, the citizens Directive places considerable constraints on the former, and does not permit the latter. (See now also my separate blog post on the question of whether this judgment affects expulsion of unemployed EU citizens).

 

So it doesn't address some of the key issues in the debate. Nor could it address the question of whether a Member State could introduce quotas for workers coming from other Member States. That is clearly illegal under EU law as it now stands.

 

Having said that, the Court judgment sends a clear message that Member States can act against at least the most blatant types of benefit tourism. The tone of the judgment suggests that the CJEU's judges, as Americans say, read the morning papers.

 

 

Barnard and Peers: chapter 13, chapter 16

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Cameron’s ‘emergency brake’: killing the free movement of persons, or saving it?

 

Steve Peers

Imagine that pro-Europeans in Britain had a time machine, but only enough power to use it once. Where (or rather, when) should they go? There’s only one possible answer: they should go back to 2004, and move heaven and earth to convince the British government of the day not to allow immediate free movement of workers from all of the new Member States about to join the European Union. For despite the economic benefits of this decision, it has been an unmitigated political disaster as regards public support for the UK’s EU membership (and, it should be added, for the UK Labour Party).

We don’t have a time machine – although I often wonder if Nigel Farage might have used one, to go back and somehow trick Tony Blair into making that fateful decision. Instead, we have to deal with a situation in which the free movement of people is being increasingly painted as a fundamental flaw with the EU, which the UK should either leave the EU to escape or demand to be renegotiated.

In his earlier discussion of his renegotiation strategy, such a major change in free movement of people was not foremost in David Cameron’s agenda. So, as I suggested at the time, it might be possible to address the UK’s renegotiation issues by a Decision of Heads of State and Government, as was the case for the Danish and Irish concerns about previous treaty amendments.

Now that significant change to the free movement rules is a ‘red line’ for the Conservative party in the renegotiations (if it is in a position to carry them out after next year’s general election), this would no longer be sufficient. So it’s time to take a fresh look at Cameron’s renegotiation positions, looking in turn at the free movement of people and the other issues he has raised. Then I will answer a critical political question:  should pro-Europeans support such changes?

Free movement of people

The basic rules on free movement of people appear both in the Treaties and in secondary legislation. Treaty provisions set out the basic right of EU citizens to move and reside freely, which is allied to a right of non-discrimination on grounds of nationality. There are also specific provisions on free movement of workers, the self-employed, service providers and recipients and (implicitly) students. In addition, there is secondary legislation, principally (but not only) the citizens’ Directive and the Regulationon social security coordination.

The legislation could be changed much more easily than the Treaties. In particular, it would need only a qualified majority vote in the Council and agreement in the European Parliament to change the legislation (the Commission would also have to be persuaded to propose the amendments).

However, there’s a limit to what legislative change could accomplish. For instance, some of the details of access to benefits could be changed in principle. But the underlying rule of the free movement of people is set out directly in the Treaties, which are directly effective and take priority over conflicting national law and conflicting EU secondary legislation. That means that EU legislative changes would be invalid if they restricted free movement rights too severely, or amounted to discrimination between EU citizens (for an example of a change to the social security rules which was struck down by the EU Court of Justice, see the Pinna case).

Some changes could come about by the Court’s own jurisprudence. Earlier this year, it gave a restricted reading of the free movement rights of convicted criminals. In November, it will deliver a potentially important ruling on EU citizens’ access to benefits. (I’ll blog later on both points). But again, this can’t affect the fundamental rules of free movement.

The citizens’ Directive and the Treaties allow for free movement to be restricted on grounds of public policy, public security and public health, but it’s clear from the Court’s case law (and the text of the Directive) that this can only apply in individual cases, and never on economic grounds.
 
So to overturn the core of free movement rights, the Treaty would have to be amended. This would entail ratification by all Member States of the treaty amendment (which would probably take the form of a protocol to the existing Treaties).

What could such a protocol include? There’s a wide range of options. It could simply establish a power to derogate from free movement rules, leaving the details to be agreed afterward. This would probably not be enough to satisfy the critics of free movement in the UK, who would question whether the limitations would ever actually be put in place.

It could, as Cameron has suggested, provide for an ‘emergency brake’ on the numbers of people. Some have compared this to the ‘emergency brakes’ already in the Treaty regarding the adoption of legislation in some areas, such as criminal law and social security. As a limitation on a substantive right, it should better be described as a safeguard clause. But let’s stick with Cameron’s phrase, to avoid any confusion.

There are prior examples of such clauses. One good example is the agreement between the EU and Norway, Iceland and Liechtenstein on the extension of the common market to those states – the European Economic Area(EEA) treaty.

That treaty allows safeguard measures to be taken unilaterally, if there are ‘serious economic, societal or environmental difficulties of a sectorial or a regional nature’ which are ‘liable to persist’. Those measures must be proportionate to the problem in question. A party which wants to invoke this clause must inform the other parties and consult with them, and wait one month after the notification before implementing them. The other parties can reciprocate with ‘proportionate rebalancing measures’. As far as I know, this clause has never been invoked.

Another example is the accession treaties with newer Member States. The  transitional clauses in these treaties permit the free movement of workers to be suspended during the transitional period of seven years after accession, if a Member State ‘undergoes or foresees disturbances on its labour market which could seriously threaten the standard of living or employment in a given region or occupation’. Its intention must be approved by the Commission, but any Member State could appeal the Commission’s decision to the Council, which can overturn it by qualified majority. This provision has been used by Spain.

The latter limitation is the best template for any new provisions, since it relates specifically to the free movement of workers. Of course, this begs the question as to whether any Treaty renegotiation should only permit limitations as regards workers, or other categories of persons as well. If the limits only apply to workers, what happens if a person enters as a student, and then gets a part-time job or drops out and seeks employment? Equally, how to count a family member of an EU citizen who was not economically active when he or she entered the country (or who was born there), but who looks for a job later on?  

There’s no need to follow the existing template exactly, of course. The notion that the Commission and/or Council is in charge of invoking the derogation might be a difficult ‘sell’ in the UK, for instance. Having said that, even if the Commission or Council has no role in approving the decision, the Commission would be able to challenge the use of the clause by means of an infringement action; equally the invocation of the safeguard could be challenged in the national courts.

Furthermore, other Member States might want the rules on invoking the derogation to be more precise, for instance referring to increased movement and/or rates of unemployment and lower rates of growth. There might be a rule on proportionality (as in the EEA provision). 

More radical suggestions are that Member States should be allowed to apply a points system for EU immigration, or apply immigration quotas (as suggested by Boris Johnson). Such approaches would entirely destroy the idea of free movement, and so are unlikely to be accepted by other Member States. After all, why should they sign up to a Treaty amendment which would effectively mean that (as far as free movement of people is concerned) the UK is not a member at all? What advantage does that have (for them) as compared to letting the UK leave the EU?

Other issues

David Cameron has also suggested changing the rules on ‘ever closer union’. There’s useful wording on this issue in the June European Council conclusions which could simply be inserted into the Treaties. As for equal treatment of non-eurozone States (another Cameron bugbear),the UK’s concerns on this front could also be addressed by amending the special Council voting rules, or by adapting the wording of the clauses governing the use of enhanced cooperation in the Treaties.

More generally, any Treaty amendments which the UK requests would raise questions of the quid pro quo that should be offered in return. Possibly, any use of the free movement derogation would trigger an obligation to make payments into the unemployment or welfare systems of other Member States, and the protection for non-eurozone States would have to be accompanied by treaty amendments permitting those States to go ahead more easily with further integration among themselves.

What should pro-Europeans do?

The initial reaction from pro-Europeans to any and all suggestions that free movement rules should be changed is to defend the status quo. In principle, this is understandable. Personally, I agree with the free movement of people: in the words of Rene Zellweger, the idea ‘had me at “hello”’. Objectively, there are sound economic reasons to support the concept.

However, as democrats we cannot simply ignore the widespread public concern about free movement. Pro-Europeans should therefore support some form of reform of the free movement rules – either the legislative amendments described above, or a limited possibility for an emergency brake.  Simply refusing to accept any change will allow the real enemies of free movement (and the EU more generally) to paint pro-Europeans as undemocratic elitists.

Some might argue that pro-Europeans should not in any way accept the arguments being made by Nigel Farage, given the racist and misogynistic attitudes of some members and supporters of the UK Independence party. But that’s not a reason to resist any reform of free movement law. Exactly the opposite: it’s the reason to embrace reform. A pro-European case can be made for limited legislative reform, or the imposition of a safeguard clause in exceptional circumstances, which keeps intact the core free movement rules. That way, pro-Europeans can still make the case for the value of these rules, while responding to public concern about those rules. A refusal to accept any reform increases the risk that there will soon be no free movement (and no EU membership) at all. Free movement of people, and the UK’s membership of the European Union, cannot be sustained without democratic consent.  

 

Barnard & Peers: chapter 2, chapter 13

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