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Economic Activity - Dissertation Sample

16 Mar 2017Dissertation Samples

Movement of persons within the EU are very much still dependent on economic activity

The European Union largely grew out of the European Economic Community (hereafter the “EEC”), which was established in 1957. The EEC was, as its title suggests, an exclusively economic association of Member States and as such the rights and liabilities that it settled had an exclusively economic identity or origin. It can come as no surprise therefore that the original right of free movement was bestowed only on economically active citizens, namely EEC workers.

However, since 1957 and in particular since Maastricht  (the Treaty of the European Union) in 1992, several Treaties have intervened to amend EC law with the aim of further integrating the Member States and deepening the concept of Union between them. Quite early in this process a meaningful and valuable concept of EU citizenship was identified as an important goal and an essential ingredient in the continuing integration of the Member States. The Treaty of Amsterdam, 1997 declared as follows:

 "Citizenship of the Union is hereby established. Every person holding the  nationality of a Member State shall be a citizen of the Union. Citizenship of  the Union shall complement and not replace national citizenship.'

As a consequence, Article 17 EC now sets down the political declaration that every person holding the nationality of a Member State shall be a citizen of the Union. Some of the rights of the EU citizen are conterminous with those bestowed on economically active nationals of Member States.  Article 18 EC provides that:

 “Every citizen of the Union shall have the right to move and reside freely  within the territory of the Member States, subject to the limitations and  conditions laid down in this Treaty and by the measures adopted to give it  effect.”

Moreover, the Treaty of Amsterdam incorporated the Schengen  provisions into the framework of the European Union, thus eliminating checks at internal borders between those Member States that have signed the Schengen Agreement (this currently does not include the United Kingdom).

Casual travel around the European Union

All citizens of a Member State of the European Union, are entitled to enter any other EU country without the need to comply with special formalities. All that is needed is an identity card or valid passport. The right to travel does not depend on the individual circumstances of the citizen. Whether an EU citizen intends to travel for private or professional or reasons, whether he or she is working in an employed or self-employed capacity or whether a citizen is merely a tourist, the right to travel anywhere in the European Union is now enshrined in EU law.

A citizen’s right to travel around the European Union may be restricted only on grounds of public policy, public security or public health. A citizen’s family members are entitled to travel with the applicant even if they are not themselves nationals of a Member State of the European Union. It is unnecessary to apply for a residence permit if the citizen’s stay in a Member State other than his or her own does not exceed three months. The only obligation which may legally be imposed in certain states is the requirement for a travelling citizen to notify the authorities of his or her presence. Typically this obligation is fulfilled automatically when a citizen checks into a hotel or when a landlord completes a declaration regarding a new tenancy.

Article 39 EC

Freedom of movement became a core component of the Single Market and is undeniably still today one of the most important aspects of EC law. The Treaty of Rome established the right of free movement around the European Economic Community in what is now Article 39 EC.  Article 39  sets down the following provision:

 “1. Freedom of movement for workers shall be secured within the  Community.

 2. Such freedom of movement shall entail the abolition of any discrimination  based on nationality between workers of the Member States as regards  employment, remuneration and other conditions of work and employment.

 3. It shall entail the right, subject to limitations justified on grounds of public  policy, public security or public health:

 (a) to accept offers of employment actually made;

 (b) to move freely within the territory of Member States for this purpose;

 (c) to stay in a Member State for the purpose of employment in accordance  with the provisions governing the employment of nationals of that State laid  down by law, regulation or administrative action;

 (d) to remain in the territory of a Member State after having been employed in  that State, subject to conditions which shall be embodied in implementing  regulations to be drawn up by the Commission.

 4. The provisions of this Article shall not apply to employment in the public  service.”

A fundamental economic freedom, Article 39 includes in particular: the right to obtain employment in another Member State; the right to move to that Member State; the right to settle in the other Member State for the purpose employment; the right to remain in the Member State for the purpose of that employment; and the right not to be discriminated against while carrying out that employment.

The Treaty does not elaborate on the meaning of ‘worker’, presumably to leave the European Court of Justice a free hand to apply its contextual and purposive brand of interpretation so as to afford the concept the widest possible definition in case law. True to form, the European Court has produced a generous interpretation of who will qualify as a worker in the cases that have come before it. In Lawrie-Blum v Land Baden-Württemberg  the essential characteristic of a worker was found to be:

 “the performance of services for and under the direction of another in return  for remuneration during a certain period of time.”

Due to concerns that disparate national definitions would obfuscate and confuse the application of the freedom of movement, the Court has ensured that the concept of worker remains the exclusive province of EC law. Levin v Staatsecretaris van Justitie , underlined the fact that the definition of worker is not to be determined by the national laws of the member states, which inevitably would vary from state to state causing anomalies and creating uneven labour rights across Europe, defeating the overarching scheme of the Single Market.

Also in Levin v Staatsecretaris van Justitie the European Court ruled that the term worker embraces part-time workers as long as the employment concerned is genuine work of an economic nature and not merely nominal in nature. Moreover the cases of Kempf v Staatsecretaris van Justitie  and Steymann v Staatsecretaris van Justitie  and underscore the Court of Justice’s purposive and inclusive attitude to this criterion, buttressing the observation that relatively minimal and limited economic activity will nonetheless justify recognition of the rights provided by Article 39.

In any discussion of the rights of free movement it is important to note the derogation provision set down in Article 39(3) and 39(4). These provisions may justify exclusion of the free movement right on grounds of public policy, public security or public health and both free movement and non-discrimination at work rights can be denied where the public service exemption is justified. In brief, these provisions are narrowly construed so as to give the fullest possible scope and effect to the free movement rights deemed so important to the integrity of the Single Market and the broader plan of EU integration.

One illustrative case in point on the public policy derogation is Rutili v Ministre de L’Interieur,  which concerned the rights of an Italian political activist. The European Court of Justice held that restrictions on the movement of an EC national under Article 39(3) cannot be justified unless the behaviour of the individual constitutes a genuine and sufficiently serious threat to public policy in the sense of the interests of democratic society.

Citizenship and Free Movement: Recent Case Law of the European Court

As stated above the orthodox approach to the EC law on free movement has resulted in the attachment of rights flowing from the EC Treaty and EC legislation to an economically active “worker”, and the equivalent rights of others, such as family members, have typically been derived from the worker.

In a series of relatively recent decisions, the European Court of Justice has challenged this traditional approach to the allocation and protection of EC free movement rights. In the seminal case of Rudy Grzelczyk v Centre Public d'Aide Sociale d'Ottignes-Louvain-la-Neuve,  in which a student was refused a Belgian social security benefit purely on the ground of his French nationality. Despite the fact that this action by the Member State was technically lawful under the relevant EC legislation, the European Court ruled that the claimant’s status as a citizen of the EU entitled him to be treated in precisely the same way as Belgian citizens in this context.

The Court famously declared that citizenship of the European Union:

 “is destined to be the fundamental status of nationals of the member states,  enabling those who find themselves in the same situation to enjoy the same  treatment in law irrespective of their nationality, subject to such exceptions as  are expressly provided for” .

Thus, in this ground breaking decision the European Court confirmed the existence of a broad new avenue for the bestowal of EU rights. Although Grzelczyk was neither a worker in the sense of Article 39 nor a person whose status entitled him to the benefit under Belgian law, EC law was found in this purposive interpretation to require the claimant to be treated in the same way as Belgian citizens on the strength of his European Union citizenship.

Other recent cases have elaborated on the potential scope of European Union citizenship rights. The central issue in Collins v. Secretary of State for Work & Pensions  was whether the stipulation of United Kingdom law that entitlement to a certain social security benefit was subject to proof of “habitual residence” in the UK was compatible with EC law. The applicant was an Irish citizen who had resided in the UK for a short time in the1980s but had spent most of the intervening period in the United States of America.

On his return to the United Kingdom, the applicant was denied the benefit Jobseekers’ Allowance on the grounds that he was not habitually resident in the UK. The Court of Justice found that as a citizen of the European Union, the applicant enjoyed a prima facie right not to be discriminated against on the grounds of his residence and benefited from a right to be treated on an equal footing with other ordinary citizens of the UK. The Court required the United Kingdom to demonstrate that the test of habitual residence was objectively justified in so far as it constituted a potential discrimination against citizens of other EU member states.

The Court of Justice developed this line of authority in Chen v. Secretary of State of the Home Department, . Here the claimant was a Chinese national who entered the United Kingdom when she was six months pregnant, then travelled to Ireland and gave birth to her daughter. Under the normal operation of the nationality rules of the Republic of Ireland, the baby became an Irish citizen and as a consequence also a citizen of the European Union. The claimant and her daughter thereafter sought permission to remain in the United Kingdom. The European Court of Justice concluded that Article 18 EC provided that the baby, as an EU citizen, possessed the right to long term residence in the UK, and that her mother also enjoyed that right as her primary carer - at least where neither would prove to be a burden on the public finances of the United Kingdom.

The cases of Grzelczyk, Collins and Chen demonstrate that European Union citizenship rights are slowly being developed by the Court of Justice so as to establish a European area in which nationals of Member States are entitled to move freely across borders and reside in other member states. They also indicate that when such a right is exercised the citizen in question is entitled to be treated equally with that of the host state’s nationals.

This jurisprudence constitutes a significant and highly purposive development of the EC Treaty’s rules on free movement of workers and it is submitted that the applicable case law and legislation on Article 39 had by this point in time begun to be subsumed or supplanted by the general implications of EU citizenship rights.

In the D’Hoop case , which was decided in 2002, Ms D’Hoop, a Belgian citizen, finished her secondary education in France, where she obtained a diploma recognised by the Belgian State as equivalent to the Belgian upper secondary education certificate which permitted students access to higher education. After studying at university in Belgium, she made an application for a tideover allowance. She was however refused that allowance on the ground that she did not comply with domestic requirements.

In its judgment, the Court of Justice adhered to the Opinion of Advocate General Geelhoed in analysing the position from two different perspectives: first, traditional free movement of worker provisions were considered; and, secondly, the concept of citizenship of the Union was applied to the facts.

The European Court ruled that Ms D’Hoop was neither entitled to rely on the rights conferred by the Treaty upon migrant workers nor the derived rights bestowed upon the members of the families of such workers. In point of fact the Court found that the application of Community law to freedom of movement for workers in the context of national rules regarding unemployment insurance requires that a person seeking to rely upon the freedom ‘must have already participated in the employment market’, except in circumstances where young people are seeking their first employment.

Regarding the citizenship aspect of the case, the European Court of Justice ruled that, because an EU citizen is entitled to enjoy in all Member States the same treatment in law as that accorded to the nationals of those Member States who find themselves in the same circumstances, it follows that it would not be compatible with the right of freedom of movement if a citizen, in the Member State of which he is a national, to receive treatment less favourable than he or she would enjoy if he had not taken the opportunities offered by the Treaty in connection with freedom of movement. Moreover, the Court stated that this consideration is particularly important in the field of education.

The Court of Justice noted that Belgian legislation had created a disparity in treatment between Belgian nationals who had done all their secondary education in Belgium and those who, having taken advantage of their freedom to move, had obtained their diploma of completion of secondary education in a different Member State. Accordingly the Court found that such inequality of treatment was contrary to the principles which underpin the status of citizen of the Union.

However, the Court conceded that the condition at issue could be justified, provided that it was based on material and objective considerations independent of the nationality of the persons concerned and that it was proportionate to the legitimate aim of the national provisions.

Therefore, after acknowledging that the disputed tideover allowance was intended to facilitate the transition from education to the employment market for the benefit of young people, the Court conceded that it was legitimate for the national legislature to insist on a tangible connection between the applicant for that allowance and the geographic employment market concerned. However, notwithstanding this concession, the European Court of Justice found that a single condition concerning the place where the qualification had been obtained was too exclusive and general in nature to be defendable, that it improperly favoured a characteristic that was not necessarily representative of the true quality and level of connection between the applicant and the relevant employment market, and that it was disproportionate to the end to be achieved, in that it went beyond what was necessary to attain the stated objective.

Concluding Comments

It is the opinion of this commentator that the concept of EU citizenship is no longer in its infancy. To address the quote featured in the title to this paper, for many years citizenship of the European Union did indeed offer little more than a hollow glimpse hope. However, from the perspective of 2006 it is submitted that EU citizenship has now grown in status and legal efficacy to constitute an essential and fundamental component of the EU legal order. The boundaries of the European Community have long since been rolled back from their original, exclusively economic horizons and the scope of European Union reach and activity seems to extend with every passing year. The European Court has unleashed the full force of its purposive and teleological interpretative policy to invigorate the legal significance of the concept of citizenship. In terms of free movement and residence law, citizenship appears to be slowly manoeuvring the qualification of economic activity out of its previously dominant and unchallenged position in the legal hierarchy.

As the Court grandly stated in Grzelczyk, EU citizenship is destined to become the “fundamental status of nationals of Member States”. This portentous phrase has become a mantra of the Court of Justice, and several opportunities have been taken to restate it in the same terms: see for example Bidar v London Borough of Ealing . By 2005 the Advocates General responsible for advising the Court had been left in no doubt that their Opinions should reflect the growing scope and legal significance of EU citizenship. In his Opinion in Standesamt Stadt Niebüll  in which the substantive issue concerned the name of a child and a conflict between two national legal systems, Advocate General Jacobs stated that:

 “It thus seems to me totally incompatible with the status and rights of a citizen  of the European Union – which, in the Court’s phrase, is ‘destined to be the  fundamental status of nationals of the Member States’ – to be required to bear  different names under the laws of different Member States… A rule of a  Member State which does not allow a citizen of the European Union, whose  name has been lawfully registered in another Member State, to have that name  recognised under its own laws is not compatible with Articles 17 and 18(1)  EC.”

The European Commission has also affirmed that Union citizenship should constitute the fundamental status of EU nationals. That said, this is obviously a controversial position, in particular in Member States where levels of so-called Euro-scepticism run high, and as a consequence there are many national governments  unwilling to support the assertions of these two key European Union institutions.

The recent case law discussed above represents a purposive and focused development of the EC Treaty provisions on free movement of workers and as stated it is submitted that the applicable case law and legislation on Article 39 is now likely to be subsumed and or rendered nugatory by the general implications of EU citizenship rights.  It is submitted that more Court of Justice decisions will clarify this trend and allow more specific conclusions to be drawn. At the point of writing further cases on the meaning and effect of Article 17 EC and in particular Article 18 EC are at various stages of the legal pipeline  and the rulings ultimately handed down in their resolution will prove informative in the debate on which this paper centres. It is confidently submitted that these anticipated decisions will further extend the boundaries of the rights inherent in EU citizenship and continue to develop the utility and efficacy of this nascent status.

How such decisions will be received by sceptical Member States is another matter, and the future evolution of EU citizenship probably depends more on the national political consensus than it does on the pro-activity of the European Court of Justice and the will of the other EU institutions. In the meantime, the economic gateway criteria entailed in Article 39 are still important, but how long they will remain influential is a matter for debate. Ultimately, it is submitted, citizenship will become the foundation for the bestowal of all rights and duties, in particular those of free movement and establishment, but we are not there yet.

BIBLIOGRAPHY

  • The Treaty of Rome (1957 as amended)
  • The Treaty of the European Union (Maastricht Treaty) (1992)
  • The Treaty of Amsterdam (1997)
  • Reich, Norbert (2005) The Constitutional Relevance of Citizenship and Free Movement in an Enlarged Union, European Law Journal 11 (6), 675-698
  • Shuibhne, Niamh, (2004) Legal implications of enlargement for the individual: EU citizenship and free movement of persons, ERA - Forum vol. 3, pp. 355-369
  • Textbook on EC Law, Steiner and Woods, (2003) Blackstone
  • Iliopoulo, A., and Toner, H., A new approach to discrimination against free movers? D’Hoop v Office National de l’Emploi, European Law Review, (2003), pp. 389 et seq.
  • Law of the European Union, Kent, P., (2001) Longman
  • Text, Cases and Materials on European Union Law, Tillotson and Foster, (2003) Cavendish
  • Europa: Gateway to the European Union
  • EC Legislation 2005-2006, Foster (2005) Blackstones Statutes
  • EU Law- Text Cases and Materials, Craig and de Burca, (2003), Oxford University Press
  • Cases and Materials on EU Law, Weatherill, (2005) Oxford University Press

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