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Free Movement of Non-EC Nationals: A Review of the Case-Law of the Court of Justice
II. Derived Rights and Benefits
A large number of regulations and directives grant certain rights to members of the family of EC nationals, irrespective of their own nationality. In addition, it appears from two of the cases listed above that non-EC nationals may derive certain benefits from the fact that they are employed by an EC firm exercising its freedom to provide services.
A. Relatives of EC Nationals
Freedom of movement of EC nationals requires that obstacles to their mobility shall be eliminated, in particular as regards their right to be joined by their family and the conditions for the integration of that family into the host country.3 Consequently, there are numerous regulations4 and directives5 which seek to facilitate the free movement of employees, self-employed persons, students and EC nationals who wish to reside in a Member State other than their own, and these measures grant rights to their relatives as well.
The circle of beneficiaries of derived rights is not always exactly the same. In most cases, it comprises the spouse of the holder of the original right and their descendents who are dependants. Often it also includes the dependent relatives in the ascending line of the holder of the original right and his spouse. The term `spouse', contained in these regulations and directives, refers to a marital relationship only; however, if a Member State grants certain advantages to unmarried companions of its nationals, it cannot refuse to grant them to those workers who are nationals of other Member States without being guilty of discrimination on grounds of nationality, contrary to Articles 7 and 48 of the EEC Treaty.6
Where there is no holder of an original right, there cannot be a beneficiary of a derived right. This has been the core of the rulings in Joined Cases 35 and 36/82 Morson and Jhanjan, in Case 283/83 Meade and in Joined Cases C-297/88 and C-197/89 Dzodzi.
Mrs Morson and Mrs Jhanjan had applied for permission to reside in the Netherlands in order to install themselves with their daughter and son respectively. Since these were Dutch nationals who were employed in their own country and who had never exercised their right to freedom of movement within the Community, the cases had, as the Court said, no factor linking them with any of the situations governed by Community law. Accordingly, the Treaty provisions on freedom of movement and the rules adopted to implement them did not apply.7
Mr Meade, a US national, Mrs Meade, a UK national who was not an employed person, and their two children, UK nationals, had been resident in France where Mr Meade was self-employed. The Court ruled that in these circumstances neither Regulation 1408/71 nor Article 48 of the Treaty prevented family allowances from being withdrawn pursuant to French legislation on the ground that one of the children was pursuing studies in the United Kingdom.8
On the same ground as in the Morson and Jhanjan case, the Court held that Mrs Dzodzi, widow of a Belgian national, could not rely on Regulation 1612/68, Directive 68/360, Regulation 1251/70 and Directive 64/2219 for her application to remain in Belgium.10 However, under Article 40 of the Belgian Law on access to the territory of the State (for aliens) and the residence, establishment and expulsion of aliens, the foreign spouse of a Belgian national is treated as a Community national irrespective of his or her nationality. The Court of Justice held that if the national court considers that, as a result of this reference, a provision of Community law is applicable to a purely domestic situation, the Court of Justice has jurisdiction to give a preliminary ruling on the interpretation of that provision of Community law.11 Acting on this basis, the Court of Justice defined, in its Dzodzi judgment, the right of residence and the right to remain in the territory which Directive 68/360 and Regulations 1612/68 and 1251/70 confer upon the spouse of a worker who is a national of a Member State, employed or previously employed in the territory of another Member State; and the scope of the legal protection required by Articles 8 and 9 of Directive 64/221.12
These derived rights include the right of non-EC nationals to install themselves with the holder of the original right,13 a conditional right to remain permanently in the host state,14 admission to normal education on the same conditions as the nationals of that state,15 the right to take up work,16 and access to benefits under the social security system of that state.17
Moreover, Article 7(2) of Regulation 1612/68 provides that a worker, who is a national of a Member State, shall enjoy in the territory of another Member State the same social and tax advantages as national workers. The Court of Justice has held that this principle of equal treatment is also intended to prevent discrimination against the worker's widow and against his dependent relatives in the descending and in the ascending line.18 As a result, this provision bestows a wide range of benefits upon the worker's relatives, including reduced railway fares for large families,19 interest free loans on the birth of a child,20 a guaranteed income for old persons21 and unemployment benefits for school leavers.22 In Case 94/98 Deak the Court has stated that this principle applied without regard to the nationality of those family members.23
In Case 267/83 Diatta, the Court has ruled that a member of a migrant worker's family is not required to live permanently with him in order to qualify for a right of residence under Article 10 of Regulation 1612/68. Mrs Diatta was married to a French national working in Berlin. After some time she had separated from him with the intention of divorcing. The Court held that Article 10 must not be interpreted restrictively. Its interpretation of that provision corresponds to the spirit of Article 11 of the same Regulation, which gives the member of the family the right to take up any activity as an employed person throughout the territory of the Member State. Moreover, the marital relationship cannot be regarded as dissolved so long as it has not been terminated by the competent authority.24
Article 11 of Regulation 1612/68, under which the spouse and the children of a
national of a Member State, who is pursuing an activity as an employed or self-employed person in another Member State, are entitled to take up any activity as an employed person throughout the territory of that same state, even if they are not nationals of any Member State, was the subject matter of Case 131/85 Gül. The Court held that, in order to pursue an occupation such as the medical profession, the spouse of a migrant worker who is a national of a non-member country must meet the same requirements as those imposed by the host Member State on its own nationals. He may rely on the principle of non-discriminatory treatment, provided for in Article 3(1), first indent, of Regulation 1612/68. It was held to be immaterial whether his medical qualifications are recognized under the legislation of the host Member State alone or pursuant to Directive 75/363.25
In respect of social security, the Court has stressed, in Case 40/76 Kermaschek, that Regulation 1408/71 refers to two clearly distinct categories: the workers on the one hand, and the members of their families and their survivors on the other. The persons belonging to the second category can only claim derived rights of social security, acquired through their status as a member of the family or a survivor of the holder of the original right. As a result, the spouse of a worker cannot claim, under Article 67 et seq., unemployment benefits on account of her own unemployment; she is only entitled to the benefits provided by the national legislation for the members of the family of unemployed workers. The Court added expressly that the nationality of the members of the family does not matter for this purpose.26 This principle has been confirmed in Case 94/84 Deak. A national of a non-member country who is the member of a family of a national of a Member State cannot rely on Regulation 1408/71 in order to claim unemployment benefits granted, under the legislation of the host state, to young persons seeking employment.27 However, as has been mentioned above, such benefits constitute a social advantage to which he is entitled under Article 7(2) of Regulation 1612/68.
B. Employees of a Firm Providing Services in another Member State
Under Articles 59 and 60 of the EEC Treaty, a firm established in a Member State is allowed to provide services in another Member State under the same conditions as are imposed by that state on its own nationals. The Court has made it clear that this freedom carries with it the right for such a firm to use its own staff, regardless of their nationality, for that purpose.
Joined Cases 62 and 63/81 Seco was concerned with a Luxembourg legislation governing contributions to old-age and invalidity insurance. By virtue of the Social Insurance Code, workers employed in Luxembourg are in principle compulsorily insured. Half of the contributions must be paid by the employer and half by the worker. However, the Government may exempt from insurance foreigners who are temporarily resident in the Grand Duchy. In that case the employer is nevertheless liable for his share of contributions, although they do not entitle the worker concerned to any social benefit. It appeared from the papers before the Court that the reason for this was, on the one hand, that it would be unfair to collect contributions from workers residing in Luxembourg only temporarily, whilst, on the other hand, the temptation for employers to use foreign labour in order to alleviate the burden of paying their share of social security contributions must be avoided. However, practice revealed that the employer's share is no longer required to be paid in respect of workers who are temporarily in Luxembourg, if they are nationals of a Member State.
Seco and Dequenne were French undertakings carrying out work in the Grand Duchy, employing for that purpose workers who were not nationals of a Member State and who remained compulsorily affiliated to the French social security scheme during the entire duration of the work carried out in Luxembourg. The Court held that the extension of the obligation to pay the employer's share of social security contribution to employers established in another Member State, who are already liable under the legislation of that state for similar contributions in respect of the same workers and the same periods of employment, constituted a discrimination prohibited under Articles 59 and 60(3) of the Treaty. As a consequence of this legislation employers established in another Member State in fact have to bear a heavier burden than those established within the national territory. It added that a Member State's power to control the employment of nationals of non-member countries may not be used to impose a discriminatory burden on an undertaking from another Member State enjoying the freedom to provide services.28
The problem in Case C-113/89 Rush Portuguesa, resulted from the fact that, while the freedom of providing services was already fully applicable between Portugal and the older members of the Community, Article 216 of the Act of Accession of Spain and Portugal provided for a derogation from freedom of movement for workers until 1 January 1993. When a Portuguese undertaking arranged for Portuguese workers to come to France for the purpose of carrying out work which it had subcontracted in that country, the French immigration office claimed payment from it of the special contribution payable by an employer employing foreign workers in breach of the provisions of the labour code.
The Court declared that Articles 59 and 60 EEC preclude a Member State from prohibiting a provider of services established in another Member State from freely travelling within its territory with the whole of its staff, or from making the movement of the staff in question subject to restrictions such as a requirement to carry out on the spot recruitment or to obtain work permits. To impose such conditions on the provider of services of another Member State would be to discriminate against him in relation to his competitors established in the host country who are able to avail themselves of their own staff and would, moreover, affect his capacity to provide the services. However, the derogation of Article 216 of the Act of Accession applies whenever the access by Portuguese workers to the employment market of other Member States and the system governing the entry and residence of Portuguese workers requiring such access, were in issue. It would also preclude workers coming from Portugal from being made available through the intermediary of an undertaking providing services.29
It appears from these two judgments that the freedom to provide services in another Member State implies the right to employ non-EC nationals for that purpose and that the host state may not make this freedom subject to restrictive conditions. It is too early to define the precise scope of this principle. It seems, however, that it can only be relied upon by the provider of services established in another Member State, even if it may result in benefits for non-EC nationals by facilitating their temporary employment elsewhere in the Community.
3 Preamble to Regulation No. 1612/68.
4 Council Regulations 1612/68 on freedom of movement for workers within the Community, OJ (1968) L 257/2; Commission Regulation 1251/70 on the right of workers to remain in the territory of a Member State after having been employed in that state, OJ (1970) L 142/24; Council Regulation 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, last consolidated text in OJ (1983) L 230/8.
5 Council Directive 64/221 on the coordination of special measures concerning the movement and residence of foreign nationals which are justified on the grounds of public policy, public security and public health, OJ 1964/850; Council Directive 68/360 on the abolition of restrictions on movement and residence within the Community for workers of Member States and their families, OJ (1968) L 257/13; Council Directive 72/194 extending to workers exercising the right to remain in the territory of a Member State after having been employed in that state the scope of Directive 64/221, OJ (1972) L 121/32; Council Directive 73/148 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, OJ (1973) L 172/14; Council Directive 75/34 concerning the right of nationals of a Member State to remain in the territory of another Member State after having pursued therein an activity in a self-employed capacity, OJ (1975) L 14/10; Council Directive 75/35 extending the scope of Directive 64/221 to include nationals of a Member State who exercise the right to remain in the territory of another Member State after having pursued an activity in a self-employed capacity, OJ (1975) L 14/14; Council Directive 77/486 on the education of children of migrant workers, OJ (1977) L 199/32; Council Directive 90/364 on the right of residence, OJ (1990) L 180/26; Council Directive 90/365 on the right of residence for employees and self-employed persons who have ceased their occupational activity, OJ (1990) L 180/28; Council Directive 90/366 on the right of residence for students, OJ (1990) L 180/30.
6 Case 59/85, Reed, [1986] ECR 1283, at 1300 and 1303.
10 Joined Cases C-297/88 and C-197/89, Dzodzi, (judgment of 18 October 1990, not yet reported) at paras. 20-28.
13 Art. 10(1) Reg. 1612/68; Art. 1 Dir. 73/148; Art. 1 Dir. 75/34; Art. 1 of Directives 90/364, 365 and 366.
15 Art. 12 Reg. 1612/68; Art. 2 Dir. 77/486.
18 Case 32/75, Cristini, [1975] ECR 1085, at 1095; Case 63/76, Inzirillo, [1976] ECR 2057, at 2068; Case 261/83, Castelli, [1984] ECR 3199, at 3213; Case 256/86, Frascogna, [1987] ECR 3431, at 3443.
19 Case 32/75, Cristini, [1975] ECR 1085.
20 Case 65/81, Reina, [1982] ECR 33.
21 Case 261/83, Castelli, [1984] ECR 3199.
22 Case 94/84, Deak, [1985] ECR 1873.
24 [1985] ECR 567, at 589-591.
25 Case 131/85, Gül, [1986] ECR 1513, at 1588-1594.
26 [1976] ECR 1669, at 1676-1678.
27 [1985] ECR 1873, at 1884-1885.
28 [1982] ECR 223, at 232-236.
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