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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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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In light of the Dano judgment, when can unemployed EU citizens be expelled?

 

Steve Peers

Yesterday’s important CJEU judgment in Dano concerned an application for access to benefits, not expulsion. So it has no direct impact upon the latter issue. Nevertheless, it is possible that the judgment has an indirect impact on that issue, due to the Court’s interpretation of the EU citizens’ Directive.

Earlier this year, I wrote a detailed blog post on the issue of when unemployment could justify expulsions and entry bans of EU citizens. The following supplements that analysis in light of the Dano judgment.   

Rules on expulsion

The bulk of the rules on expulsion (and also denial of entry or exit) appear in Title VI of the EU citizens’ Directive, Articles 27-33. These rules concern expulsions or entry bans on grounds of ‘public policy, public security or public health’. However, they can’t be used to justify expulsions or entry bans of unemployed people, because Article 27(1) says that they ‘shall not be invoked to serve economic ends’.

Having said that, the Directive clearly does allow for the expulsion of unemployed EU citizens and their family members.  Article 15(1) states that some of the procedural rules applicable to expulsion on grounds of public policy, et al, ‘shall apply by analogy to all decisions restricting free movement of Union citizens and their family members on grounds other than public policy, public security and public health’ (my emphasis). On the other hand, the Directive clearly rules out entry bans for such persons: Article 15(3) states that ‘Member States may not impose a ban on entry in the context of an expulsion decision’ within the scope of Article 15(1).   

So when exactly can EU citizens and their family members be expelled other than on grounds of public policy, et al? Article 14(4) says that ‘an expulsion measure may in no case be adopted’ against EU citizens or their family members who are workers or self-employed persons, or who entered the territory as job-seekers, provided that (in the latter case) the EU citizens ‘can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged’. So Member States can expel job-seekers, provided that the job-seekers fail to meet that particular condition.

What about formerworkers or self-employed persons, ie those who have lost their job in the host State? Article 7(3) specifies that the status of worker or self-employed person (and therefore, presumably, the protection against expulsion) is retained in a number of cases, such as retraining, or if the worker has worked for at least a year. Earlier this year, the CJEU confirmed that the list of cases where this status is retained is non-exhaustive: it also applies, for instance, to those who quit work due to maternity, for a limited period (see my analysis of the Saint-Prix judgment). But Member States could clarify in their national law that the status of worker or self-employed person is lost in any case where the Directive or the case-law permits it to be lost.

It should also be mentioned that once EU citizens or their family members become permanent residents, due to five years’ legal residence, they have full equal treatment as regards social assistance and need no longer meet the conditions which apply to the initial right of residence. So it obviously follows that they cannot be expelled on grounds of unemployment.

Another important rule in the Directive is Article 14(3), which specifies that ‘an expulsion measure shall not be the automatic consequence of…recourse to the social assistance system of the host Member State’ by the EU citizen or family member.

The impact of Dano

A key element of the Danoruling was the scope of the equal treatment rule in the Directive, which applies to social assistance. The Court ruled that the equal treatment rule only applied where a person had a ‘right to reside’ under the Directive, ie the right to stay for an initial three-month period without any conditions besides holding a passport, or for a longer period if they are a worker, self-employed person, student or have ‘sufficient resources…not to become a burden on the social assistance system’. In the latter two cases, they must also have medical insurance; students must submit a declaration as regards sufficient resources. It should be noted that according to the Court’s case law, ‘sufficient resources’ need not be generated by the EU citizen himself or herself, but could be provided by someone else, such as a family member.

Does the Court’s ruling mean that persons without a ‘right to reside’ under these provisions of the Directive have no protection against expulsion? The answer is absolutely not: the judgment does not in any way prevent such persons from relying on the protection set out in Articles 14 and 15.

Let’s look at the reasons why that’s the case. First of all, there’s the wording of the judgment itself: the Court states that its ruling applies ‘so far as concerns access to social benefits’, as regards the ‘equal treatment’ rules. The Court is careful to refer to equal treatment and social benefits throughout its ruling, rather than exclusion from the scope of the Directive entirely.

Secondly, there’s the wording of the Directive, which the Court relies on to justify its ruling. The right to equal treatment in Article 24(1) applies to ‘all Union citizens residing on the basis of the Directive’. But no such qualification applies to Articles 14(3), 15(1) or 15(3).

Thirdly, there’s the overall logic of the Directive. As regards Article 15(1) and (3) in particular, since those who qualify for a right to reside cannot be expelled on grounds other than public policy et al, those provisions would have no meaning unless they applied to people who don’t have a right to reside. Similarly, since an application for social assistance could mean that the EU citizen loses a right to reside, Article 14(3) would have little or no relevance unless it applied to those without such a right.

Finally, the Court of Justice already ruled that EU law rules on expulsion protected those who did not have a right to reside under the EU free movement rules that preceded the Directive, in the Commission v Netherlands case. In particular, the Court ruled that:

To exclude from the benefit of those substantive and procedural safeguards [on expulsion] citizens of the Union who are not lawfully resident on the territory of the host Member State would deprive those safeguards of their essential effectiveness.

Logically the same applies here. Indeed, the rules on expulsions on grounds of public policy et al are also not limited in scope to those who have a ‘right to reside’ under the Directive, other than Article 28(2), which applies only to those who have permanent residence. This wording suggests an a contrario reading of the rest of the rules on expulsion.  

Types of residence in another Member State

It may sound odd to say that parts of the Directive (such as the expulsion rules) can be invoked by all EU citizens, whereas other parts of the Directive (such as the equal treatment rules) can be invoked only by those who have a ‘right to reside’ under it. But there are other circumstances in which EU citizens reside in another Member State, even if there is not a ‘right to reside’ under the Directive.

One such case is where they are children of a former worker, or the parent carer of such children. In that case, they will sometimes have rights not under the Directive, but under the separate Regulation on the free movement of workers (see the Alarapejudgment).

Secondly, they might also have the right to reside under national law, but not EU law (see the Ziolkowskijudgment), although their right to claim equal treatment as regards social assistance in such cases (developed since the judgment in Martinez Sala) seems to have been implicitly overruled by the Dano judgment, which links such equal treatment to the right to reside under the Directive only.

Thirdly, they might be residing irregularly on the territory of the host Member State.

Finally, they might have a child who has the nationality of the host State, due to a prior relationship with a national of that State. In that case, the interesting question arises whether there might be a parallel with the Ruiz Zambrano judgment, in which the Court ruled that the third-country national parent of an EU citizen child could not be expelled, since that would de facto result in the removal of an EU citizen from the territory of the EU. Could an analogous rule apply to the de facto removal of a national of the home Member State to the territory of another Member State? Or would that be unobjectionable, since the child in question would still, as an EU citizen, remain within the territory of the Union?

We can look forward to some interesting jurisprudence from the Court of Justice.

 

Barnard & Peers: chapter 13, chapter 16

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Free movement and social benefits for economically inactive EU citizens: The Dano judgment in historical context

 

Géraldine Renaudière, Trainee at the CJEU, within the cabinet of the Court Vice-President, Koen Lenaerts. (This post reflects the author's view only). 

In yesterday’s judgment in Elisabeta Dano and Florin Dano v Jobcenter Leipzig, the CJEU once again addresses the highly sensitive issue of the exclusion by national legislation of economically inactive Union citizens, from special non-contributory cash benefits, although these are provided to nationals of the respective Member States who are in the same situation. One year after its controversial Brey decision, the Court attempts to redefine the relationship between two primordial EU law instruments: Directive 2004/38 on the right of citizens of the Union to move and reside freely within the territory of the Member States (the citizens’ Directive) and Regulation 883/2004 on the coordination of social security systems. The broader political context of the judgment has been discussed in the separate post by Steve Peers, but it is also important to examine the judgment in the historical context of the development of the case-law on EU citizens' access to benefits.

Background

In this regard, it might be noted that although the Maastricht Treaty marked an important milestone in the field of free movement of persons by expanding the right to move and reside freely within the EU (formerly the exclusive preserve of people exercising an economic activity) to all Union citizens, the traditional “economically-oriented” approach has never entirely disappeared from the EU legal landscape. So the right of free movement remains subject to limitations and conditions, as laid down in Articles 20, (2) and 21 TFEU. On several occasions, the CJEU was called upon to clarify those conditions (now specifically provided by Directive 2004/38) while at the same time it had to deal with the closely related issue of the (equal) access for EU citizens to social assistance and minimum subsistence benefits in the State of residence.

The least one can say is that, so far, the Court hardly achieved the right balance between the rights of economically inactive migrants and the legitimate interest of Member States to protect their welfare systems from so-called benefit tourism. Even more, it has caused further confusion regarding the very existence of a “right” to social benefits for European students, retired people or in a particular state of need. The question now is whether the Dano judgment departs from the previous logic and to what extent it ensures greater legal certainty and a fairer balance of the interests at stake.

Judgment

In the case at hand, the Sozialgericht Leipzig of Germany requested a preliminary ruling in a case concerning the refusal from the German authorities to grant Mrs. Dano and her son, Romanian nationals and non-economically active, subsistence benefits, social allowance as well as contribution to accommodation and heating costs. In reply to questions raised by the national judge, the Court starts to recall that such “special non-contributory cash benefits” fall within the scope Article 4 of Regulation 883/2004. This provision, corresponding to the specific expression of the principle of non-discrimination embodied in Article 18 TFEU (applying to Union citizens who invoke in the host Member State such category of social benefits) must however in the present case be interpreted in the light of Article 24 of Directive 2004/38 which sets out an equal treatment rule for Union citizens exercising their right to move and reside freely within the EU territory.

Essentially following the Advocate General’s observations, the Court admits for the first time that when it is apparent that the applicant does not meet the conditions set out in Article 7(1) of Directive 2004/38 (i.e. does not have sufficient resources to meet his own basic needs and the needs of his family) he does not fall within the scope ratione personae of Article 24(1) and (2) of the Directive. Therefore, as far as social benefits are concerned, a Union citizen is not entitled to claim equal treatment with nationals of the host Member State once it is established that his right of residence in the territory of that State does not comply with the conditions of the Directive 2004/38.

Comments

In a series of judgments rendered prior to the entry into force of Directive 2004/38, the usual approach adopted by the CJEU was to consider the right to equal treatment and non-discrimination on grounds of nationality in the host State as the corollary of the status of citizen of the Union, both principles being consecrated by the TFEU (see the Martinez Sala judgment). In that sense, it enabled those who found themselves in the same situation to enjoy the same treatment in law, irrespective of their nationality, and therefore to be granted social assistance benefits (minimexor family benefits) independently of a right to reside and to move freely within the territory of the Member States in the meaning of EU Law (see the Grzelczyk and Trojani judgments). Regarded as a cornerstone of Union citizenship, only restrictive and proportionate differential treatments were deemed acceptable whilst forgetting that Article 18 TFEU additionally requires a situation to fall “within the scope of application of the Treaties”.

Having been criticised for this “too generous” approach, the Court progressively allowed more flexibility to Member States which, depending on the case, could render the access to social benefits for economically inactive EU migrants conditional upon the demonstration of a genuine link to the employment market (Collinsand Vatsouras), a certain degree of integration into the host society by the person concerned (Bidar and Forster) or temporary financial difficulties unlikely to place an unreasonable burden on the State’s public finances (Grzelczyk again).

While this balanced and individual approach is to be welcomed, this case-law, still referring to vague and general concepts and leaving a wide margin of appreciation to national authorities, somewhat undermined the legal certainty and predictability of the Court’s decisions. Yet the Court adopted the same logic in Brey, albeit the issue at stake was a bit more complex. In that case, a compensatory supplement was refused to a retired German national on the ground that he didn’t have sufficient resources to establish his lawful residence in Austria in the meaning of Article 7 (1) (b) of Directive 2004/38 while the benefit requested was listed among the “special non-contributory benefits” provided by Regulation 883/2004.  

According to the Court in its Brey judgment, Member States remain free to determine the conditions to be met in order for inactive EU migrants to receive such benefits, notably having a legal right to reside for more than three months within the meaning of EU law. But paradoxically, when assessing whether such conditions have been fulfilled, national authorities must take into account additional elements, especially the social benefit requested (in this case, intended to ensure minimum means of subsistence of the person concerned: see Skalka) and assess whether being eligible for such benefit could jeopardize the right of residence of the migrant and place an unreasonable burden on the national social assistance system as a whole.

 

In such circumstances, it appeared almost impossible to clearly define the beneficiaries of those special non-contributory benefits. On the contrary, the judgment in Dano (also dealing with the relationship between the Directive and the Regulation, especially in terms of equality of treatment) is much less confusing on that point: Member States can decide to exclude inactive European Union citizens from accessing non-contributory benefits when they do not have a proper right of residence pursuant to Article 7(1) of Directive 2004/38. More importantly, the condition of having sufficient resources not to become an “unreasonable” burden on the social assistance system of the host Member State, is to be appreciated in the light of individual circumstances but without taking into account of the social benefits claimed.

 

By proceeding in this way, the Court clearly distinguishes people who have acquired a legal right of residence of more than three months, but who, owing to circumstances, are temporarily unable to fulfill the necessary conditions, from people who have arrived in a Member State without fulfilling such conditions and are therefore not entitled to rely on equality of treatment to get (unconditional) access to such benefits. Any other interpretation would, in the Court’s view, defeat the object and purpose of the Directive 2004/38 seeking to prevent economically inactive citizens from using the host Member State’s welfare system to fund their means of subsistence.

 

It remains now to be seen whether this last case, beyond the legal clarification, will put an end to the practical difficulties which might result from the interpretation of concepts such as “sufficient resources” or “unreasonable burden” (when the very right of residence within EU law is contested or when financial issues of the inactive migrant are no longer “temporary”…) and whether, in practical terms, a fair and reasonable balance between EU inactive migrants’ rights and Member States’ legitimate interests has finally been achieved…

 

Barnard & Peers: chapter 13, chapter 16

 

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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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The new Directive on discrimination against EU citizen workers: spitting into the wind?

Steve Peers

Surprisingly enough, despite the public controversy about the number of EU citizens who are workers ('EU workers') who move between Member States, the Council and the European Parliament have recently agreed on new legislation on this issue. This new Directive, which concerns the enforcement of the rules banning discrimination against EU workers, was approved by the European Parliament this week, and will likely be formally adopted by the Council shortly. Member States will have two years to transpose it.

The Directive makes clear that its subject matter is the enforcement and application of the rights conferred by Article 45 TFEU and Regulation 492/2011 upon EU workers. In other words, it doesn't amend the substantive rights on this issue. This presumably explains why it has not run into opposition from the Member States with more misgivings about free movement, such as the UK.

As for the scope of the Directive, it applies to the rules on access to employment, working conditions, social advantages, trade unions, training, housing and the education of children for EU workers. Notably, it doesn't apply to family reunion issues. Nor does it apply to EU citizens more generally.

Next, the rules on enforcement first of all oblige Member States to make available judicial procedures to enforce these rights. They also require Member States to permit associations, organisations or other legal entities to enter into legal proceedings, either in support of or on behalf of the worker and his/her family. But these rules are without prejudice to national rules on time limits, as along as those limits do not render the application of EU law virtually impossible or excessively difficult. There is no reference to legal aid.

More generally, Member States must ensure that a body of some sort promotes equal treatment, as well as the abolition of non-discriminatory obstacles to free movement, for EU workers and their family members. This may be an existing equality body. The equality bodies must have competence as regards the provision of legal advice or assistance (in which case, their assistance must be free of charge), the conduct of independent surveys, the publication of independent reports, and the publication of relevant information. There shall also be a dialogue with relevant actors at national level. Finally, Member States must disseminate information on issues relating to the free movement of EU workers.

Comments

This Directive is obviously inspired by EU legislation on sex equality and race equality in particular. However, as compared to that legislation, it is missing provisions on compensation (as compared to the sex equality law) and burden of proof. So while the Directive does provide for access to court, some key aspects of the litigation process (evidence rules and concrete remedies) are not addressed. In some ways it is stronger than the general framework employment equality Directive (which lacks rules on equality bodies), but in other ways weaker (since the framework Directive includes rules on the burden of proof). The lack of a general rule on legal aid will also prevent some workers from accessing courts in practice, except where they are able to obtain the support of an equality body. But it is unlikely that such bodies will have a huge budget to spare on litigation. 

The comparison with other equality laws suggests an attempt to change the mindset of the debate - implicitly equating discrimination against EU workers with discrimination on grounds of sex, race et al, which has become widely regarded as socially unacceptable. But while the EU legislation as regards those issues to some extent followed the trend of public opinion, the new Directive arguably pushes against the prevailing trend, at least in some Member States. We will see in practice whether an equality Directive can still have an impact when it is spitting into the political wind.

The new Directive will also have the consequence of making EU workers' rights easier to enforce in practice, and to that extent it can only be welcomed. However, it is questionable why the Directive should not address the position of EU citizens more broadly, and of the admission of workers' family members in particular. For many years, EU law has moved towards a global model of EU citizenship, in place of categorising different groups of citizens depending on their type of activities, although admittedly those EU citizens who exercise economic activities are a relatively privileged category under the EU citizens' Directive. In that context, the additional relative privilege conferred upon workers in this new Directive is a step backwards.

It might also be questioned, since free movement of workers has been guaranteed in principle since 1968, why it took so long for the EU Commission to propose this legislation. Surely the difficulty in practice of enforcing EU workers' rights in practice is not a phenomenon of the last few years?  At least, why was this issue not addressed when the current comprehensive legislative framework on equality rights was established by the EU, over a decade ago?

Finally, to the extent that the new Directive borrows concepts from other equality Directives, the relevant case law should be relevant by analogy. This could lead to interesting results, given that hostility to EU workers has become more openly expressed in some Member States than prejudice against workers on grounds of sex, race, religion and so on. For instance, in the Feryn judgment the CJEU ruled that an employer advertising that it would not hire ethnic minorities was in breach of the race equality Directive. What would it now make of a British Prime Minister who declares, "British jobs for British workers"?


Barnard & Peers: chapter 13 

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The CJEU secures asylum seekers' right to family housing

Steve Peers

What obligations do Member States have to ensure that asylum-seeking families are housed adequately? The Court of Justice of the European Union (CJEU) has today usefully clarified the minimum standards which Member States must observe on this issue, in its judgment in Saciri. This judgment is a welcome confirmation that whatever the practical difficulties facing Member States in managing their reception for asylum-seekers, families cannot simply be left homeless or forced to live in grossly inadequate conditions by means of the refusal of support for financial assistance to obtain housing.

Judgment

The case concerns a family of asylum-seekers (two parents and three children) who needed accommodation in Belgium while their asylum application was being considered. The Belgian agency responsible for reception of asylum-seekers replied that it could not provide reception, and referred them to the social assistance agency. Since the Saciri family could not pay the rent being charged for private properties, they asked the social assistance agency for financial support.

But there was a 'Catch-22': the agency refused to give them support, since the family was not living in accommodation provided for by the reception agency - even though the reception agency had told them that it could not help them. A lower court in Belgium ruled that the reception agency had to pay them financial support, and that agency appealed to the referring court, which asked the CJEU questions about the EU's first-phase reception conditions Directive.

First of all, the CJEU pointed out that the Directive allows for support for asylum-seekers either in kind (ie providing housing directly) or by providing financial allowances. Then it confirmed its prior case law (Cimade and GISTI) to the effect that benefits must be provided as soon as the asylum application is made, in particular in light of the right to human dignity set out in the EU Charter of Fundamental Rights.

Next, as for the amount of the financial allowances, regardless of how the aid is provided, the Directive states that it must ensure a dignified standard of living for applicants' health, as well as subsistence. Member States must also, according to the Directive, take account of those with special needs (including minors), entailing a requirement to preserve family unity as well as the best interests of the child. The CJEU confirmed that these principles meant that applicants must be able to obtain housing on the private market if necessary, although this did not mean that asylum-seekers could make their own choice of housing.

The CJEU then ruled that, although the specific rules in the Directive relating to housing only apply where the housing is provided in kind by Member States, it still followed that any allowances provided to assist with housing had to ensure the unity of the family.

Finally, the Court ruled that where accommodation facilities are overloaded, it was open to Member States to refer asylum-seekers to the authorities responsible for public assistance, provided that the latter authorities ensure that the minimum standards in the Directive are met.

The Court concluded by noting that 'saturation of the reception networks [is not] a justification for any derogation from meeting' the standards in the Directive.

Comments

The CJEU's judgment neatly addresses the 'Catch-22' created by national law, which to some extent reflects the structure of the Directive. On the one hand, the Directive lays out general rules on reception support, but then on the other hand, it only lays out detailed rules as regards housing where the State provides such housing in kind. What if the State does not, or cannot, provide for housing in kind?

The Court's answer to this question takes account of the definition of 'material reception conditions' in the Directive, which expressly includes 'housing'. So it logically follows that such material support must include assistance to obtain housing, where no housing is provided for in kind.

Moreover, it is expressly clear from the Court's judgment that a family of asylum-seekers is entitled to support to obtain family housing on the private market, although the Court does recognise that the asylum-seekers do not have a fully free choice of where they may be housed. This necessarily means that, if there is no publicly-provided accommodation available, the authorities must ensure that a family of asylum-seekers has enough support to afford to rent a property at market rates, which is big enough to house their family in dignity. But the house need not be palatial. Probably this means that a family of five cannot demand enough financial support to rent a four-bedroom house; but neither can they all be expected to sleep on the same sofa.

The Court's answer to these questions was not affected by the overloading of the Member State's reception system. This had practical consequences, in that asylum-seekers can be referred to the social assistance agency instead of the reception agency, and be provided with a financial allowance instead of housing in kind. But the basic obligation to provide enough assistance to ensure a minimum dignified level of accommodation, including family unity, cannot be derogated from.

Finally, it should be noted that the judgment takes a stronger approach to family unity than the wording of the Directive, which states only that family unity shall be ensured 'as far as possible', and only where Member States provide for accommodation in kind. The Court's judgment means instead that families of asylum-seekers must be able to live together in all cases, if necessary in private accommodation, even if this means some additional cost or administrative inconvenience for Member States. This can only be welcomed, as it is an essential step to ensure the protection of the family life of some of the most vulnerable people in the European Union.


Barnard & Peers: chapter 26

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