Gusa v Minister for Social Protection (Special non-contributory cash benefits - Jobseeker’s allowance : Opinion) [2017] EUECJ C-442/16

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(Reference for a preliminary ruling - Regulation (EC) No 883/2004 - Special non-contributory cash benefits - Jobseeker’s allowance - Directive 2004/38/EC - Article 7(3)(b) - EU citizen who has lived and worked as a self-employed person in a host Member State - Cessation of the status of self-employed person)

1. The present request for a preliminary ruling raises, principally, the question of whether a Member State may exclude from eligibility for non-contributory subsistence benefits under Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, (2) as amended by Regulation (EC) No 988/2009 of the European Parliament and of the Council of 16 September 2009 (3) (‘Regulation No 883/2004’), a national of another Member State who has worked as a self-employed person in its territory for more than a year or whether the national in question retains the status of ‘worker’ (4) under Article 7(3)(b) of Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC. (5)

2. More fundamentally, the various questions raised by the referring court gives the Court an opportunity to clarify the scope of EU citizenship and to dispel any points of uncertainty which may have been left unresolved by the judgments of 11 November 2014, Dano (C-333/13, EU:C:2014:2358), of 15 September 2015, Alimanovic (C-67/14, EU:C:2015:597), of 25 February 2016, García-Nieto and Others (C-299/14, EU:C:2016:114), and of 14 June 2016, Commission v United Kingdom (C-308/14, EU:C:2016:436).

3. Article 3 of Regulation No 883/2004, entitled ‘Matters covered’, is worded as follows:

‘1. This Regulation shall apply to all legislation concerning the following branches of social security:

2. Unless otherwise provided for in Annex XI, this Regulation shall apply to general and special social security schemes, whether contributory or non-contributory, and to schemes relating to the obligations of an employer or shipowner.

3. This Regulation shall also apply to the special non-contributory cash benefits covered by Article 70.

4. Article 4 of Regulation No 883/2004, entitled ‘Equality of treatment’ provides:

‘Unless otherwise provided for by this Regulation, persons to whom this Regulation applies shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof.’

5. Chapter 9 of Title III of Regulation No 883/2004 deals with ‘special non-contributory cash benefits’. It consists only of Article 70, which is entitled ‘General provision’, and provides:

‘1. This Article shall apply to special non-contributory cash benefits which are provided under legislation which, because of its personal scope, objectives and/or conditions for entitlement, has characteristics both of the social security legislation referred to in Article 3(1) and of social assistance.

2. For the purposes of this Chapter, “special non-contributory cash benefits” means those which:

(i) supplementary, substitute or ancillary cover against the risks covered by the branches of social security referred to in Article 3(1), and which guarantee the persons concerned a minimum subsistence income having regard to the economic and social situation in the Member State concerned; or

(ii) solely specific protection for the disabled, closely linked to the said person’s social environment in the Member State concerned,

(b) where the financing exclusively derives from compulsory taxation intended to cover general public expenditure and the conditions for providing and for calculating the benefits are not dependent on any contribution in respect of the beneficiary. However, benefits provided to supplement a contributory benefit shall not be considered to be contributory benefits for this reason alone,

3. Article 7 and the other chapters of this Title shall not apply to the benefits referred to in paragraph 2 of this Article.

4. The benefits referred to in paragraph 2 shall be provided exclusively in the Member State in which the persons concerned reside, in accordance with its legislation. Such benefits shall be provided by and at the expense of the institution of the place of residence.’

6. Annex X to Regulation No 883/2004, entitled ‘Special non-contributory cash benefits’, contains, in the section relating to Ireland, point (a), which covers ‘jobseeker’s allowance (Social Welfare Consolidation Act 2005, Part 3, Chapter 2)’.

‘(1) Citizenship of the Union confers on every citizen of the Union a primary and individual right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaty and to the measures adopted to give it effect.

(2) The free movement of persons constitutes one of the fundamental freedoms of the internal market, which comprises an area without internal frontiers, in which freedom is ensured in accordance with the provisions of the Treaty.

(3) Union citizenship should be the fundamental status of nationals of the Member States when they exercise their right of free movement and residence. It is therefore necessary to codify and review the existing Community instruments dealing separately with workers, self-employed persons, as well as students and other inactive persons in order to simplify and strengthen the right of free movement and residence of all Union citizens.

(4) With a view to remedying this sector-by-sector, piecemeal approach to the right of free movement and residence and facilitating the exercise of this right, there needs to be a single legislative act to amend Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community and to repeal the following acts: Council Directive 68/360/EEC of 15 October 1968 on the abolition of restrictions on movement and residence within the Community for workers of Member States and their families, Council Directive 73/148/EEC of 21 May 1973 on the abolition of restrictions on movement and residence within the Community for nationals of Member States with regard to establishment and the provision of services, Council Directive 90/364/EEC of 28 June 1990 on the right of residence, Council Directive 90/365/EEC of 28 June 1990 on the right of residence for employees and self-employed persons who have ceased their occupational activity and Council Directive 93/96/EEC of 29 October 1993 on the right of residence for students.’

8. Article 7 of Directive 2004/38, entitled ‘Right of residence for more than three months’, provides as follows:

‘1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:

(b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State; or

(d) are family members accompanying or joining a Union citizen who satisfies the conditions referred to in points (a), (b) or (c).

3. For the purposes of paragraph 1(a), a Union citizen who is no longer a worker or self-employed person shall retain the status of worker or self-employed person in the following circumstances:

(b) he/she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with the relevant employment office;

9. Under Article 14 of Directive 2004/38, entitled ‘Retention of the right of residence’:

‘1. Union citizens and their family members shall have the right of residence provided for in Article 6, as long as they do not become an unreasonable burden on the social assistance system of the host Member State.

4. By way of derogation from paragraphs 1 and 2 and without prejudice to the provisions of Chapter VI, an expulsion measure may in no case be adopted against Union citizens or their family members if:

(b) the Union citizens entered the territory of the host Member State in order to seek employment. In this case, the Union citizens and their family members may not be expelled for as long as the Union citizens can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged.’

10. Article 16 of Directive 2004/38 sets out the general rule relating to the right of permanent residence for Union citizens and their family members. According to paragraph 1 of that article, ‘Union citizens who have resided legally for a continuous period of five years in the host Member State shall have the right of permanent residence there. This right shall not be subject to the conditions provided for in Chapter III’.

11. Finally, Article 24 of that directive, entitled ‘Equal treatment’, states:

‘1. Subject to such specific provisions as are expressly provided for in the Treaty and secondary law, all Union citizens residing on the basis of this Directive in the territory of the host Member State shall enjoy equal treatment with the nationals of that Member State within the scope of the Treaty. The benefit of this right shall be extended to family members who are not nationals of a Member State and who have the right of residence or permanent residence.

2. By way of derogation from paragraph 1, the host Member State shall not be obliged to confer entitlement to social assistance during the first three months of residence or, where appropriate, the longer period provided for in Article 14(4)(b), nor shall it be obliged, prior to acquisition of the right of permanent residence, to grant maintenance aid for studies, including vocational training, consisting in student grants or student loans to persons other than workers, self-employed persons, persons who retain such status and members of their families.’

12. Directive 2004/38 was transposed into Irish law by the European Communities (Free Movement of Persons) Regulations 2006. (6)

‘(a) Subject to Regulation 20, a Union citizen may reside in the State for a period longer than 3 months if he or she -

(c) Subject to Regulation 20, a person to whom subparagraph (a)(i) applies may remain in the State on cessation of the activity referred to in that subparagraph if -

(i) he or she is temporarily unable to work as the result of an illness or accident,

(ii) he or she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with a relevant office of the Department of Social and Family Affairs and FÁS [Foras Áiseanna Saothair, Irish National Training and Employment Authority].’

14. Jobseeker’s allowance in Ireland is provided for in Section 139 of the Social Welfare Consolidation Act 2005 (as amended). (7)

15. Section 141 of the 2005 Act as applicable at the time of the facts of the main proceedings sets out the criteria for eligibility to the allowance, including a means test of the applicant and verification that the applicant is habitually resident in the State. It is not in dispute, however, that both workers and self-employed persons are eligible for jobseeker’s allowance. (8)

16. Under Section 246(5) of the 2005 Act, a person who does not have a right to reside in Ireland is not, for the purposes of that Act, to be regarded as being habitually resident in that State.

17. Section 246(6) of the 2005 Act provides that the persons presumed to have right to reside in Ireland for the purposes of paragraph 5 of that Section include persons who have a right to enter and reside in the State under the 2006 Regulations.

18. Mr Florea Gusa, a Romanian national, arrived in Ireland in October 2007. During his first year of residence in Ireland, he was supported by his children, who also lived in Ireland. Then, from October 2008 until October 2012, he worked as a self-employed plasterer.

19. According to the order for reference, Mr Gusa had to stop working because of the lack of customers caused by the economic downturn. He therefore made an application for jobseeker’s allowance which was refused by decision of 22 November 2012.

20. The reason given for the refusal was that Mr Gusa did not habitually reside in Ireland, since the status of habitual resident was subject to possession of a right to reside within the meaning of the 2006 Regulations. However, he was considered to have lost that right on cessation of his self-employment. Moreover, Mr Gusa had not demonstrated that he had sufficient resources to support himself or comprehensive sickness insurance cover. Consequently, the decision found that Mr Gusa no longer satisfied the conditions laid down in Section 6(2)(a) of the 2006 Regulations (which transposes Article 7(1) of Directive 2004/38 into national law). What is more, as a self-employed person, he no longer benefited from the protection afforded by Section 6(2)(c)(ii) of the 2006 Regulations (which transposes Article 7(3)(b) of Directive 2004/38 into national law).

21. Mr Gusa was granted leave to bring an action for annulment before the High Court (Ireland), which confirmed the decision refusing his application. Mr Gusa then brought an appeal against that decision before the Supreme Court (Ireland).

22. Pursuant to Article 64 of the Irish Constitution, that appeal was transferred to the referring court, which has sought the assistance of the Court of Justice because the applicable [national] provisions implement several provisions of EU law. It therefore decided to stay the proceedings and make a reference to the Court for a preliminary ruling.

23. By order of 29 July 2016, received at the Court on 8 August 2016, the Court of Appeal therefore decided to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Does an EU citizen who (1) is a national of another Member State; (2) has lawfully resided in and worked as a self-employed person in a host Member State for approximately four years; (3) has ceased his work or economic activity by reason of absence of work and (4) has registered as a jobseeker with the relevant employment office retain the status of self-employed person pursuant to Article 7(1)(a) whether pursuant to Article 7(3)(b) of Directive 2004/38/EC or otherwise.

(2) If not, does he retain the right to reside in the host Member State not having satisfied the criteria in Article 7(1)(b) or (c) of Directive 2004/38/EC or is he only protected from expulsion pursuant to Article 14(4)(b) of Directive 2004/38/EC.

(3) If not, in relation to such a person is a refusal of a jobseekers allowance (which is a non-contributory special [cash] benefit within the meaning of Article 70 of Regulation 883/2004/EC) by reason of a failure to establish a right to reside in the host Member State compatible with EU law, and in particular Article 4 of Regulation 883/2004/EC.’

24. Written observations were submitted by the appellant in the main proceedings, the Irish, Czech, Danish, French, Hungarian and United Kingdom Governments and the European Commission.

25. Moreover, with the exception of Danish and Hungarian Governments, all of the aforementioned parties presented oral argument at the hearing held on 14 June 2017. The German Government, which had not submitted written observations, was also able to present its arguments at that hearing.

A. Preliminary observations on the applicability of Article 16(1) of Directive 2004/38

26. As regards the division of jurisdiction between the Court of Justice and the courts of the Member States, it is in principle for the national court to determine whether the factual conditions triggering the application of a rule of EU law are fulfilled in the case pending before it. However, the Court has acknowledged that, when giving a preliminary ruling, it may, where appropriate, provide clarification to guide the national court in its interpretation. (9)

27. In the present case, the referring court seeks, in essence, to ascertain how to interpret the conditions under which a Union citizen has a right of lawful residence under Directive 2004/38.

28. In that context, it appears to rule out the possibility that Mr Gusa has acquired a right of permanent residence. After all, the referring court starts from the principle that the appellant in the main proceedings has not submitted that he was entitled to invoke permanent residence in November 2012. (10) In his written observations, Mr Gusa himself confirms that he does not claim to have fulfilled the conditions laid down in Article 7 of Directive 2004/38 during his period of residence prior to October 2008. (11) That position was confirmed at the hearing of 14 June 2017.

29. I am surprised by those assertions. According to Article 16(1) of Directive 2004/38, after all, Union citizens who have resided legally for a continuous period of five years in the host Member State are to have the right of permanent residence there.

30. According to Article 7(1)(b) of Directive 2004/38, a Union citizen is legally resident [in another Member State], after the first three months, if he has sufficient resources not to become a burden on the social assistance system of the host Member State during his period of residence and has comprehensive sickness insurance cover in the host Member State.

31. That provision does not lay down any requirement whatsoever as to the origin of those resources. The Court has previously held that the expression ‘have sufficient resources’ in that provision must be interpreted as meaning ‘that it suffices that such resources are available to the Union citizen, and that that provision lays down no requirement whatsoever as to their origin, since they could be provided inter alia by the third-country national’. (12) This is particularly true where the resources in question come from a Union citizen.

32. According to the referring court, it was Mr Gusa’s children, legally resident in Ireland, who supported their father during the first year of his residence in Ireland. (13) Far from disputing that information, the respondents in the main proceedings reiterate it as a matter of fact in their written observations. (14)

33. The fact that Mr Gusa considers that the support he received was limited and insufficient for the purposes of Directive 2004/38 (15) does not seem to me to be relevant to the assessment of the applicability of Article 16(1) of that directive.

34. After all, from the point at which Mr Gusa stopped relying on the Irish social assistance system for financial support during his first year of residence, the resources that were available to him must be presumed to have been sufficient. They cannot be retrospectively regarded as having been insufficient for the purposes of Directive 2004/38, given that the Union citizen in question was not, to use the wording of that directive, a ‘burden on the social assistance system of the host Member State’.

35. Consequently, I take the view that the first year of Mr Gusa’s residence in Ireland was legal. Now, if that first period preceded without interruption the four years during which Mr Gusa worked as a self-employed plasterer, he must be regarded as having enjoyed a right of permanent residence in Irish territory, pursuant to Article 16(1) of Directive 2004/38, since October 2012. (16)

36. In that event, the question of whether or not Mr Gusa retained the status of worker within the meaning of Article 7(3) of Directive 2004/38 no longer arises, since the conditions laid down in Article 7 do not apply to the right of permanent residence. For, according to Article 16(1) of Directive 2004/38, that right is not to be subject to the conditions provided for in Chapter III of that directive.

38. It follows from the foregoing that the questions raised by the referring court remain relevant only if the examination of the facts of the main proceedings shows that Mr Gusa’s right of residence was interrupted in such a way as to render Article 16(1) of Directive 2004/38 inapplicable. There is, however, nothing whatsoever in the documents before the Court to indicate that any such interruption took place. (17) I shall examine the questions referred with these preliminary observations in mind.

39. By its first question, the referring court asks whether a Union citizen who has lawfully resided and worked as a self-employed person in a host Member State for approximately four years retains the status of self-employed person under Article 7(1)(a), whether pursuant to Article 7(3)(b) of Directive 2004/38 or otherwise, having ceased his work or economic activity by reason of an absence of work and having registered as a jobseeker with the relevant employment office.

40. Given that the second question raised by the referring court also has to do whether a right of residence is retained in the case where a Union citizen in the same situation as the appellant in the main proceedings satisfies neither the criteria of Article 7(3)(b) of Directive 2004/38 nor the criteria of Article 7(1)(a) of Directive 2004/38, I shall, in the context of the first question, deal only with the interpretation of Article 7(3)(b) of Directive 2004/38. After all, eligibility for a right of residence on the basis of Article 7(1)(a) of Directive 2004/38 is excluded inasmuch as it is common ground that, at the material time, Mr Gusa was no longer a ‘worker’ within the meaning of that provision. The question being asked is, precisely, whether he was able to retain that status even though he was no longer working (as an employed or self-employed person), as Article 7(1)(a) of Directive 2004/38 requires. I shall, however, examine Mr Gusa’s eligibility for a right of residence on a basis other than Article 7(3)(b) of Directive 2004/38 in the context of the second question.

41. According to Article 7(3)(b) of Directive 2004/38, a Union citizen retains the status of worker - and therefore the right to reside in the territory of an EU Member State for a period longer than three months - where ‘he/she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with the relevant employment office’.

42. The referring court considers that, if it were to interpret the legislation transposing Article 7(3)(b) Directive 2004/38 into Irish law in line with the usual meaning of ‘having been employed’, that legislation would not include the situation of a self-employed person. Nevertheless, the referring court is also sensitive to the argument put forward by Mr Gusa. According to him, that consequence is not compatible with the intention behind the provisions of the FEU Treaty and the legislation enacted to implement them.

43. The referring court’s doubts are therefore prompted by any contradiction that may exist between the wording of the applicable legislation and the objective pursued by the EU legislature.

44. Mr Gusa, the Danish and Hungarian Governments and the Commission consider that no distinction may be drawn between workers and self-employed persons in the application of Article 7(3)(b) of Directive 2004/38. The Irish, Czech, French and United Kingdom Governments, on the other hand, consider that only workers are covered by that provision.

45. According to the Court’s settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part. (18)

46. After all, while ‘the wording of a provision … is invariably the starting point of, and at the same time the limit attaching to, any interpretation’, (19) a teleological interpretation becomes optional only where the text in question is absolutely clear and unambiguous. (20)

47. Neither should it be forgotten, moreover, that the European Union has the specific feature of being multilingual, as a result of which the wording used in one language version of a provision of EU law cannot serve as the sole basis for the interpretation of that provision, or be made to override the other language versions. The provisions of EU law must be interpreted and applied uniformly in the light of the versions established in all the language versions of the European Union. Consequently, where there is divergence between the various language versions of an EU legislative text, the provision in question must be interpreted by reference to the general scheme and the purpose of the rules of which it forms part. (21)

48. In the present case, it is perfectly clear that the different language versions of Article 7(3)(b) of Directive 2004/38 do not support the idea that the legislature meant to limit the right to retain the status of ‘worker’ exclusively to citizens who have worked as an employed person for more than one year. On the contrary, a comparison of the language versions gives the impression that that provision is neutral as regards the basis on which the occupational activity was exercised.

49. What is certain, in any event, is that, contrary to the submissions of several Member States which have intervened in the proceedings, the reference to the fact of ‘having been employed’ does not appear in all of the language versions. While that form of words is found in the Spanish (‘haber estado empleado’), English (‘having been employed’), French (‘avoir été employé’) and Slovenian (‘ko je bil zaposlen’) language versions, other language versions use entirely neutral terms or expressions. Thus, for example, the Dutch (‘te hebben gewerkt’) and Finnish (‘työskenneltyään’) language versions use the expression ‘having worked’, the Greek-language version (‘επαγγελ μ ατική δραστηριότητα’) refers to the pursuit of an ‘occupational activity’, while the Italian-language version goes so far as to refer simply to the pursuit of an ‘activity’ in general (‘aver esercitato un’attività’). Finally, taking into account the context of the provision in which they appear, the Bulgarian word ‘zaet’ and the German word ‘Beschäftigung’ can also be translated by the general term ‘occupation’, without further connotations.

50. In the light of that disparity between the different language versions of Article 7(3)(b) of Directive 2004/38, regard must be had to the general scheme of that provision and the objective pursued by that legislation. Both confirm that Article 7(3)(b) of Directive 2004/38 is to be interpreted as being indifferent to the way in which the Union citizen pursued the economic activity that earned him the status of ‘worker’ within the meaning of Article 7(1)(a) of Directive 2004/38.

51. While I do not deny that Directive 2004/38 serves a number of different objectives, these sit within a hierarchy.

52. It is clear from the first four recitals of Directive 2004/38 that the latter is intended, first and foremost, to ‘facilitate and strengthen the exercise of Union citizens’ primary right to move and reside freely within the territory of the Member States’. (22) This is reflected, moreover, in the title of that directive. Another objective is expressed in recital 10 of that directive, according to which, ‘[p]ersons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence’. That second objective nonetheless exists only by reason of the first: since the directive aims to facilitate the exercise of the right of residence, the Member States felt it necessary to ensure that the financial burden of that freedom be kept under control.

53. Union citizenship reflects that compromise. Thus, when the Court first used the phrase ‘Union citizenship is destined to be the fundamental status of nationals of the Member States’, (23) it went on to say that that status enabled Member State nationals who found themselves in the same situation to obtain the same treatment in law irrespective of their nationality, ‘subject to such exceptions as are expressly provided for’. (24) In doing so, the Court recognised the possibility of restricting the exercise of Union citizenship. (25)

54. This is the construction to be placed upon the judgments of 11 November 2014, Dano (C-333/13, EU:C:2014:2358); of 15 September 2015, Alimanovic (C-67/14, EU:C:2015:597); and of 25 February 2016, García-Nieto and Others (C-299/14, EU:C:2016:114).

55. It is true that, in paragraph 74 of the judgment of 11 November 2014, Dano (C-333/13, EU:C:2014:2358), the Court held that ‘to accept that persons who do not have a right of residence under Directive 2004/38 may claim entitlement to social benefits under the same conditions as those applicable to nationals of the host Member State would run counter to an objective of the directive, set out in recital 10 in its preamble, namely preventing Union citizens who are nationals of other Member States from becoming an unreasonable burden on the social assistance system of the host Member State’. However, this does not by any means amount to an about-turn in the approach to understanding Directive 2004/38. If, in that judgment, the Court attaches importance to the secondary objective pursued by Directive 2004/38, this is because of the subject matter of the request for a preliminary ruling which had been submitted to it. After all, the cases which gave rise to the three judgments cited in the previous point in this Opinion were primarily concerned not with the issue of the right of residence but with the specific question of the right to receive social benefits in the host State. This was therefore a question which had arisen at a point in time subsequent to the exercise of freedom of movement but was nonetheless indissociable from the legality of residence.

56. In the case in the main proceedings, on the other hand, the question referred to the Court relates first and foremost to the legality of residence, being concerned as it is with that provision of the directive which deals with the issue [of right of residence] from the point of completion of a three-month stay to the point of acquisition of a right of permanent residence. (26) The legislature expressly sought to address the issue of the right of free movement and residence by ‘remedying [the] sector-by-sector, piecemeal approach’ (27) which had prevailed in the past, with a view to ‘facilitating the exercise of this right’. (28) Consequently, the unifying ambition of that directive, which is based on the fundamental notion of Union citizenship, militates in favour of a universal approach to the principles, extensions and limits relating to the freedom of movement and right of residence of Union citizens. (29)

57. I would reiterate that, ‘having regard to the context and objectives of Directive 2004/38, the provisions of that directive cannot be interpreted restrictively …’. (30)

58. Accordingly, to distinguish between the respective situations of employed and self-employed persons in the application of Article 7(3)(b) of Directive 2004 would be to deny the will of the EU legislature, which expressly indicated in recital 3 [of that directive] that it was ‘necessary to codify and review the existing Community instruments dealing separately with workers, self-employed persons, as well as students and other inactive persons in order to simplify and strengthen the right of free movement and residence of all Union citizens’. (31)

59. The Court recently drew attention once again to that aim of the directive in the case which gave rise to the judgment of 19 June 2014, Saint Prix (C-507/12, EU:C:2014:2007, paragraph 25). In that judgment, moreover, the Court summarised the scope of Article 7(3) of Directive 2004/38 by setting out the four situations envisaged in that provision without distinguishing between workers and self-employed persons. The Court held, on the contrary, that ‘Article 7(3) of Directive 2004/38 provides that, for the purposes of paragraph 7(1)(a) of that directive, a Union citizen who is no longer a worker or self-employed person shall nevertheless retain the status of worker or self-employed person in specific cases, namely where he is temporarily unable to work as the result of an illness or accident, where, in certain situations, he is in involuntary unemployment, or where, under specified conditions, he embarks on vocational training’. (32)

60. That interpretation of Article 7(3)(b) of Directive 2004/38, to the effect that it makes no difference whether the Union citizen pursued his occupational activity for one year under a contract of employment or as a self-employed person, is supported by the structure of that article.

61. Article 7 of Directive 2004/38 governs the right of residence for more than three months. Its structure is logical. First of all, paragraph 1 establishes that principle by setting out the three scenarios in which Union citizens have a right to reside in the territory of another Member State for longer than three months. The first of those scenarios arises where Union citizens are ‘workers or self-employed persons’, the second where they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State and have comprehensive sickness insurance cover, and the third where they are students. Next, paragraph 2 extends the benefit of that right to the family members of a citizen in one of the scenarios provided for in paragraph 1 who are not nationals of a Member State (subject to the limitations imposed by paragraph 4). Finally, paragraph 3 creates a legal fiction by maintaining the effects of the first scenario provided for in paragraph 1 - that of workers or self-employed persons - in four exhaustively listed situations.

62. There is no doubt that, when read in its entirety, Article 7(3) of Directive 2004/38 draws no distinction between citizens who have engaged in paid employment and those who have pursued an activity as a self-employed person. On the one hand, Article 7(1)(a) of Directive 2004/38, to which paragraph 3 refers, expressly provides for both situations. On the other hand, the four scenarios catered for in Article 7(3) are all introduced by the same introductory clause. This too refers, without distinction, to ‘a Union citizen who is no longer a worker or self-employed person’. Moreover, that clause expressly reiterates that that citizen ‘[will] retain the status of worker or self-employed person’ (33) in the four situations which that provision lists without distinction.

63. What is more, that reading of Article 7(3) of Directive 2004/38 is supported by the general scheme of Directive 2004/38, which is based not only on Articles 12 and 18 EC (now Articles 18 and 21 TFEU), concerning the prohibition of discrimination on grounds of nationality and the right of Union citizens to move and reside within the territory of the Member States, and Article 40 EC (now Article 46 TFEU), concerning freedom of movement for workers, but also on Articles 44 and 52 EC (now Articles 50 and 59 TFEU), concerning the freedom of establishment and the freedom to provide services. (34)

64. In the light of the structure of Article 7(3) of Directive 2004/38 and the principal objective which it pursues, I consider that point (b) of that provision is directed at Union citizens who have pursued an economic activity for one year, whether as an employed or a self-employed person.

65. More specifically, that provision therefore applies to a Union citizen who, like Mr Gusa, has lawfully resided and worked as a self-employed person in a host Member State for approximately four years, has ceased his work or economic activity by reason of absence of work and has registered as a jobseeker with the relevant employment office. Such a Union citizen retains the status of self-employed person pursuant to Article 7(1)(a) of Directive 2004/38.

66. Under the contrary interpretation, a Union citizen who has pursued an economic activity as an employed person for a year would be better ‘protected’ than another Union citizen who has pursued an economic activity and contributed towards the financing of the tax and social security system of the host Member State for four years, but as a self-employed person (the activity in question being potentially, depending on the circumstances, the same in both cases).

67. The second question arises only in the event that Article 7(3)(b) of Directive 2004/38 is interpreted by the Court as excluding self-employed persons from its scope. I shall therefore examine it only briefly, for the sake of completeness.

68. By that question, the referring court asks, in essence, whether a Union citizen who has lawfully resided and worked as a self-employed person in a host Member State for approximately four years and who has ceased his work or economic activity by reason of absence of work retains the right to reside in the host Member State without having satisfied the criteria in Article 7(1)(b) or (c) of Directive 2004/38, or whether he is only protected from expulsion pursuant to Article 14(4)(b) of Directive 2004/38.

69. I should say at the outset that I endorse the interpretation of Article 14(4)(b) of Directive 2004/38 put forward by the referring court at the end of its second question. For, contrary to what is suggested by paragraph 58 of the judgment of 15 September 2015, Alimanovic (C-67/14, EU:C:2015:597), (35) the structure of Article 14 of Directive 2004/38 and the wording of Article 14(4)(b) of that directive do not support a view of that provision as providing the basis for a right of residence.

70. Article 14 of Directive 2004/38 is entitled ‘Retention of the right of residence’. That situation is provided for in the first two paragraphs of that article, which are directed at circumstances in which Union citizens and their family members ‘have the right of residence’, which Article 14(4) of that directive is not. Moreover, Article 14(4)(b) of Directive 2004/38 expressly provides for a situation obtaining ‘by way of derogation’ from the first two paragraphs, that is to say, therefore, one in which the right of residence no longer exists. In that situation, Union citizens who have entered the territory of the host Member State in order to seek employment there are nonetheless protected from expulsion as long as they can provide evidence that they are continuing to seek employment and they have a genuine chance of being engaged.

71. That point having been made clear, I would submit, in reply to the question raised, that a Union citizen who is in the situation described by the referring court qualifies for far more than mere protection from expulsion.

72. In actual fact, the issue raised by the referring court is not entirely unprecedented. The Court has already held that it does not follow from either Article 7 of Directive 2004/38 or from the other provisions of that directive that a citizen of the Union who does not fulfil the conditions laid down in that article is, therefore, systematically deprived of the status of ‘worker’ within the meaning of Article 45 TFEU. The Court inferred from this that it could not be argued that Article 7(3) of Directive 2004/38 lists exhaustively the circumstances in which a migrant worker who was no longer in an employment relationship may nevertheless continue to benefit from that status. (36)

73. Clearly, that analysis of Directive 2004/38, and in particular Article 7(3) thereof, also applies to the situation of a self-employed person who has exercised the freedom of establishment guaranteed by Article 49 TFEU. After all, no distinction may be drawn in this regard according to the basis on which the Union citizen pursued the economic activity in question (as an employed person or a self-employed person), since ‘the provisions of the [FEU] Treaty on freedom of movement for persons are intended to facilitate the pursuit by [Union citizens] of occupational activities of all kinds throughout the [European Union], and preclude measures which might place [EU] nationals at a disadvantage when they wish to pursue an economic activity in the territory of another Member State’. (37) Moreover, that interpretation is consistent with the Court’s case-law to the effect that Articles 45 and 49 TFEU afford the same legal protection and the classification of the basis on which an economic activity is pursued is thus without significance. (38)

74. I would also make the point, for the sake of completeness, that the right ‘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’, (39) which Article 45(3)(c) guarantees for EU citizens, is general and afforded without distinction.

75. Consequently, if Article 7(3) of Directive 2004/38 has been interpreted as not listing exhaustively the circumstances in which a migrant worker who no longer pursues an activity as an employed person may nonetheless continue to benefit from that status, the position cannot be otherwise in the case of a migrant worker who no longer pursues an activity as a self-employed person.

76. Furthermore, if this were not the case, [a migrant worker no longer pursuing an activity as a self-employed person] would be treated as a first-time jobseeker who has never paid any contributions, even though he has contributed to the tax and social security system of the host Member State in the same way as an employed person.

77. Finally, that interpretation of Article 7(3) of Directive 2004/38 is of a piece with the Court’s case-law, since the judgment of 26 February 1991, Antonissen (C-292/89, EU:C:1991:80, paragraph 13), to the effect that the free movement of workers entails the right for nationals of Member States not only to move freely within the territory of the other Member States but also to reside there for the purposes of seeking employment. So it was that the Court held, on the basis of that case-law, that the fact that a person has been temporarily absent from the employment market on account of imprisonment (40) or maternity leave, (41) for example, does not mean that that person ceased to belong to that market during that period, provided that he finds new employment within a reasonable period.

78. That approach is consistent with the objective pursued by the provisions of Chapters 1 to 3 of Title IV TFEU, which seek to ensure the free movement of persons and services within the European Union. A Union citizen would be deterred from exercising his right to freedom of movement if, in the event that his economic activity were to slow down through no fault of his own, if only for a short period, he ran the risk of losing his status as a worker in that State. (42)

79. In consequence, and in the light of the foregoing considerations, I take the view that a Union citizen who has lawfully resided and worked as a self-employed person in a host Member State for approximately four years and has ceased his work or economic activity by reason of absence of work retains the status of ‘worker’, and therefore the right of residence in the host Member State, provided that he seeks employment, resumes his economic activity or finds other employment within a reasonable period following the end of his previous activity as a self-employed person, pursuant to Articles 45 and 49 TFEU.

80. The third question arises only in the event that the Court answers the first two questions in the negative. For, in that event, the referring court asks whether, in relation to a person who is in a situation similar to that of the appellant in the main proceedings, a refusal of a jobseeker’s allowance (which is a special non-contributory cash benefit within the meaning of Article 70 of Regulation No 883/2004) by reason of a failure to establish a right to reside in the host Member State is compatible with EU law, and in particular Article 4 of Regulation No 883/2004.

81. In order to reply to that third question, the situation under consideration must be precisely defined as being one in which a Union citizen who no longer has a right of residence in the territory of the host Member State but is protected from expulsion from that territory pursuant to Article 14(4)(b) of Directive 2004/38.

82. It is also necessary, moreover, to determine the nature of the benefit sought. This is a matter for the referring court. According to that court, it seems that the jobseeker’s allowance claimed is a special non-contributory cash benefit within the meaning of Article 70 of Regulation No 883/2004 which also constitutes social assistance within the meaning of Article 24(2) of Directive 2004/38. (43)

83. In such a specific situation involving an allowance exhibiting that dual nature, the Court has held that Article 4 of Regulation No 883/2004 does not preclude legislation of a Member State under which nationals of other Member States are excluded from entitlement to those benefits, although those benefits are granted to nationals of the Member State concerned who are in the same situation. (44)

84. If, on the other hand, the referring court were ultimately to take the view that the predominant function of the benefits at issue in the case in the main proceedings is to facilitate access to the labour market, the same reasoning could not be applied. (45)

85. It is the settled case-law of the Court, after all, that, ‘in view of the establishment of citizenship of the Union and the interpretation in the case-law of the right to equal treatment enjoyed by citizens of the Union, it is no longer possible to exclude from the scope of Article [45(2) TFEU] - which expresses the fundamental principle of equal treatment, guaranteed by Article [18 TFEU] - a benefit of a financial nature intended to facilitate access to employment in the labour market of a Member State’. (46)

86. In paragraph 38 of its judgment of 4 June 2009, Vatsouras and Koupatantze (C-22/08 and C-23/08, EU:C:2009:344), however, the Court held that it was ‘legitimate for a Member State to grant such an allowance only after it has been possible to establish a real link between the job-seeker and the labour market of that State’.

87. If the existence of such a link may be determined, in particular, by establishing that the person concerned has, for a reasonable period, in fact genuinely sought work in the Member State in question, (47) the same is particularly true in the case where the person has performed work there - whether as an employed person or self-employed person - for several years.

88. That interpretation is not contradicted by the judgment of 14 June 2016, Commission v United Kingdom (C-308/14, EU:C:2016:436). In that judgment, the Court took the view that there is nothing to prevent national legislation which makes the grant of social security benefits to economically inactive citizens subject to the substantive condition that those citizens meet the requirements necessary for possession of a right to reside lawfully in the host Member State. The Court also held, however, that such legislation would nonetheless be indirectly discriminatory. (48) Consequently, in order to be justified, that legislation must pursue a legitimate objective and not go beyond what is necessary to attain that objective.

89. In that regard, the Court held that only a systematic checking of compliance with the conditions laid down by Directive 2004/38 for the existence of a right of residence would be contrary to the requirements of Article 14(2) of that directive. (49) The prohibition of systematic checking necessarily implies that the checking must to some extent be case-specific. Thus, in the context of the legislation submitted for its assessment in the case giving rise to the judgment of 14 June 2016, Commission v United Kingdom (C-308/14, EU:C:2016:436), the Court was able to find that ‘it is only in specific cases that claimants are required to prove that they in fact enjoy a right to reside lawfully’. (50) Consequently, if the Union citizen concerned does not have the opportunity to demonstrate the legality of his residence, on the basis of either Directive 2004/38 or another provision of EU law, national legislation which makes the grant of social security benefits subject to the condition of lawful residence cannot be regarded as being proportionate to the objective pursued.

90. In those circumstances, if the jobseeker’s allowance at issue in the case in the main proceedings is a social security benefit within the meaning of Regulation No 883/2004, Article 45(2) TFEU and Article 4 of that regulation must be interpreted as meaning that they preclude legislation of a Member State which excludes from eligibility for a jobseeker’s allowance (which is a special non-contributory cash benefit within the meaning of Article 70 of Regulation No 883/2004) nationals of other Member States who have a genuine link with the employment market in that State but do not have the opportunity to demonstrate it.

91. In the light of the foregoing considerations, I propose that the Court’s answers to the questions referred for a preliminary ruling by the Court of Appeal (Ireland) should be as follows:

(1) Article 16(1) of Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC must be interpreted as meaning that it confers a right of permanent residence on a Member State national who has resided in the territory of the host Member State for an uninterrupted period of five years without relying on the social assistance system of that host Member State.

(2) Article 7(3)(b) of Directive 2004/38 must be interpreted as meaning that it applies to Union citizens who have pursued an economic activity in the host Member State for one year, whether as an employed or a self-employed person.

(3) Articles 45 and 49 TFEU must be interpreted as meaning that a Union citizen who has lawfully resided and worked as a self-employed person in a host Member State for approximately four years and who ceased his work or economic activity by reason of absence of work retains the status of ‘worker’, and therefore the right to reside in the host Member State, provided that he seeks employment, resumes his economic activity or finds other employment within a reasonable period of time following the end of his previous activity as a self-employed person.

(4) Article 24 of Directive 2004/38 and Article 4 of Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, as amended by Regulation (EC) No 988/2009 of the European Parliament and of the Council of 16 September 2009, must be interpreted as meaning that they do not preclude legislation of a Member State which excludes from eligibility for certain ‘special non-contributory cash benefits’ within the meaning of Article 70(2) of Regulation No 883/2004 which also constitute ‘social assistance’ within the meaning of Article 24(2) of Directive 2004/38 nationals of other Member States who are in a situation such as that provided for in Article 14(4)(b) of that directive, even though those benefits are guaranteed for nationals of that Member State who are in the same situation.

Article 45(2) TFEU and Article 4 of Regulation No 883/2004, on the other hand, must be interpreted as meaning that they preclude legislation of a Member State which excludes from eligibility for a jobseeker’s allowance (which is a ‘special non-contributory cash benefit’ within the meaning of Article 70 of Regulation No 883/2004 but does not satisfy the definition of ‘social assistance’ within the meaning of Article 24(2) of Directive 2004/38) nationals of other Member States who have a genuine link with the employment market in that State but do not have the opportunity to demonstrate it.

4 For the purposes of the present Opinion, the word ‘worker’, used without any qualification, refers generally to a person who pursues an economic activity either in an employed or a self-employed capacity.

5 OJ 2004 L 158, p. 77, and corrigenda OJ 2004 L 229, p. 35, and OJ 2005 L 197, p. 34.

6 European Communities (Free Movement of Persons) (No 2) Regulations 2006 (SI No 656/2006, ‘the 2006 Regulations’).

9 See, to that effect, the judgment of 4 June 2009, Vatsouras and Koupatantze (C-22/08 and C-23/08, EU:C:2009:344, paragraph 23).

12 Judgment of 16 July 2015, Singh and Others (C-218/14, EU:C:2015:476, paragraph 74), emphasis added. For recent confirmation, see the judgment of 30 June 2016, NA (C-115/15, EU:C:2016:487, paragraph 77).

14 See paragraph 3 of the written observations submitted by the Minister for Social Protection, Ireland, and the Attorney General.

16 I note that the French Republic and the Commission put forward a similar line of argument in their written observations. See paragraphs 42 to 50 of the written observations submitted by France and paragraph 18 of the written observations submitted by the Commission.

17 At the hearing on 14 June 2017, Mr Gusa’s representative said that there had been an interruption in Mr Gusa’s self-employment between October 2008 and October 2012, which had lasted four months. However, that interruption does not seem to have any bearing on the legality or regularity of Mr Gusa’s residence, given that he appears to have been working as an employed person during that time (the same would be true even if he had not worked at all, since he did not rely on the social assistance system).

18 See, in particular, the judgments of 16 July 2015, Lanigan (C-237/15 PPU, EU:C:2015:474, paragraph 35); of 25 January 2017, Vilkas (C-640/15, EU:C:2017:39, paragraph 30); and of 15 March 2017, Flibtravel International and Leonard Travel International (C-253/16, EU:C:2017:211, paragraph 18).

19 Opinion of Advocate General Trstenjak in Agrana Zucker (C-33/08, EU:C:2009:99, point 37), emphasis added.

20 See, to that effect, the Opinion of Advocate General Léger in Schulte (C-350/03, EU:C:2004:568, point 88).

21 See, for a recent reiteration of that case-law, the judgment of 1 March 2016, Alo and Osso (C-443/14 and C-444/14, EU:C:2016:127, paragraph 27).

22 Judgment of 19 September 2013, Brey (C-140/12, EU:C:2013:565, paragraph 71). See also, to that effect, the judgment of 25 July 2008, Metock and Others (C-127/08, EU:C:2008:449, paragraph 82).

23 Judgment of 20 September 2001 Grzelczyk (C-184/99, EU:C:2001:458, paragraph 31).

24 Judgment of 20 September 2001 Grzelczyk (C-184/99, EU:C:2001:458, paragraph 31). See also, to that effect, the judgments of 11 July 2002, D’Hoop (C-224/98, EU:C:2002:432, paragraph 28), and of 11 November 2014, Dano (C-333/13, EU:C:2014:2358, paragraph 58).

25 See, to that effect, Thym, D., ‘When Union Citizens Turn into Illegal Migrants: The Dano Case’, European Law Review, vol. 40, 2015, pp. 249 to 262, in particular p. 255.

26 On the question of the right of permanent residence after five years, see section A, Preliminary observations, above.

29 See, to that effect, Iliopoulou-Penot, A., ‘Deconstructing the former edifice of Union citizenship? The Alimanovic judgment’ Common Market Law Review, vol. 53, 2016, pp. 1007 to 1036, in particular p. 1024; and Thym, D., ‘The Elusive Limits of Solidarity: Residence Rights of and Social Benefits for Economically Inactive Union Citizens’, Common Market Law Review, vol. 52, 2015, pp. 17 to 50, in particular p. 18.

30 Judgment of 25 July 2008, Metock and Others (C-127/08, EU:C:2008:449, paragraph 84).

32 Judgment of 19 June 2014, Saint Prix (C-507/12, EU:C:2014:2007, paragraph 27). Emphasis added.

34 On the impact of the legal basis on the concept of ‘employee’, see the judgment of 6 September 2012, Czop and Punakova (C-147/11 and C-148/11, EU:C:2012:538, paragraph 31).

35 According to paragraph 58 of the judgment of 15 September 2015, Alimanovic (C-67/14, EU:C:2015:597), ‘it follows from the express reference in Article 24(2) of Directive 2004/38 to Article 14(4)(b) thereof that the host Member State may refuse to grant any social assistance to a Union citizen whose right of residence is based solely on that latter provision’ (emphasis added).

36 See, to that effect, the judgment of 19 June 2014, Saint Prix (C-507/12, EU:C:2014:2007, paragraphs 31 and 38).

37 Judgment of 18 January 2007, Commission v Sweden (C-104/06, EU:C:2007:40, paragraph 17). Emphasis added.

38 See, to that effect, the judgments of 5 February 1991, Roux (C-363/89, EU:C:1991:41, paragraph 23), and of 15 December 2005, Nadin and Nadin-Lux (C-151/04 and C-152/04, EU:C:2005:775, paragraph 47).

40 See, to that effect, the judgment of 29 April 2004, Orfanopoulos and Oliveri (C-482/01 and C-493/01, EU:C:2004:262).

41 See, to that effect, the judgment of 19 June 2014, Saint Prix (C-507/12, EU:C:2014:2007).

42 See, to that effect, the judgment of 19 June 2014, Saint Prix (C-507/12, EU:C:2014:2007, paragraph 44).

44 See the judgment of 15 September 2015, Alimanovic (C-67/14, EU:C:2015:597, paragraph 63 and the operative part).

45 See, by converse inference, the judgment of 15 September 2015, Alimanovic (C-67/14, EU:C:2015:597, paragraphs 45 and 46).

46 Judgment of 25 October 2012, Prete (C-367/11, EU:C:2012:668, paragraph 25). See also, to that effect, paragraph 49 of the same judgment and the judgments of 23 March 2004, Collins (C-138/02, EU:C:2004:172, paragraph 63); of 15 September 2005, Ioannidis (C-258/04, EU:C:2005:559, paragraph 22); and of 4 June 2009, Vatsouras and Koupatantze (C-22/08 and C-23/08, EU:C:2009:344, paragraph 37).

47 See, to that effect, the judgments of 23 March 2004, Collins (C-138/02, EU:C:2004:172, paragraph 70); of 4 June 2009, Vatsouras and Koupatantze (C-22/08 and C-23/11, EU:C:2012:668, paragraph 39); and of 25 October 2012, Prete (C-376/11, EU:C:2012:668, paragraph 46).

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Gusa v Minister for Social Protection (Special non-contributory cash benefits - Jobseeker’s allowance : Opinion) [2017] EUECJ C-442/16_O (26 July 2017) URL: http://www.bailii.org/eu/cases/EUECJ/2017/C44216_O.html Cite as: ECLI:EU:C:2017:607, EU:C:2017:607, [2017] EUECJ C-442/16_O

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