Free Movement of Workers

From Max-EuP 2012

by Oliver Remien

1. Meaning and structure

The directly applicable principle of the free movement of workers contained in Art 45 TFEU/39 EC grants the right of free movement of persons to dependent employees and thus is the equivalent to the freedom of establishment of the self-employed according to Art 49 TFEU/43 EC. The term ‘worker’ ‘may not be interpreted differently according to the law of each Member State but has a Community meaning’ (ECJ Case 75/63 – Unger [1964] ECR 383, 396; ECJ Case 66/85 – Lawrie-Blum [1986] ECR 2121, para 16); it must be interpreted broadly. Irrespective of the public or private nature of employment, a worker is a person who performs services for a certain period of time—also of smaller but not purely marginal and ancillary amount—for and under the direction of another person in return for which he receives remuneration (ECJ Case 66/85 – Lawrie Blum [1986] ECR 2121, paras 17, 20; ECJ Case C-94/07 – Raccanelli [2008] ECR I-5939). The remuneration can also be payment in kind. Civil servants, junior teachers due for a second state examination, articled clerks, trainees—provided that they are working as employed persons—and interns are considered to be workers, as well as professional sport players (ECJ Case C-415/93 – Bosman [1995] ECR I-4921), as long as their sport constitutes an economic activity (ECJ Case C-519/04 – Meca Medina [2006] ECR I-6991).

The free movement of workers can be invoked by workers who have a cross-border activity and possess the nationality of a Member State, so-called migrant workers, but also even by employers (ECJ Case C-350/96 – Clean Car [1998] ECR I-2521) and private-sector recruitment agencies (ECJ Case C-208/05 – Innovative Technology Center GmbH [2007] ECR I-181). Even in the case of a Belgian woman working for the German state in Algeria, the ECJ has applied Art 45 TFEU/39 EC (ECJ Case C-214/94 – Boukhalfa [1996] ECR I-2353). Family members are protected by specific rules of secondary law; moreover, secondary law is of great importance in the entire area. Today, due to the Union citizenship a right of free movement is also granted to non-workers and from this the European Court of Justice (ECJ) has drawn important consequences even for private law.

A cross-border situation is, as always, a precondition; however, a worker can rely on the right of free movement of persons also against his own national state if he has already exercised the freedom in another Member State (ECJ Case C-19/92 – Kraus [1993] ECR I-1663; ECJ Case C-419/92 – Scholz [1994] ECR I-505). Article 39(4) TEC/45(4) TFEU provide an exception for employment in the public service. The exception is interpreted restrictively on a functional basis and only comprises activities that include a direct or indirect participation in the exercise and performance of public authority that are of relevance for the interests of the state and other public bodies. Furthermore, it only applies to the access to employment.

According to Art 45(2) TFEU/39(2) EC, the free movement of workers entails the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work. It also grants the right to entry, stay and remain, as stated in Art 45(2) TFEU/39(3) EC. Articles 7–9 of Reg 1612/68 provide more detailed rules concerning equality in work and employment conditions and guarantee the same social and tax advantages as for national workers, ranging from separation allowances (ECJ Case 172/73 – Sotgiu [1974] ECR 153) to funeral payments (see ECJ Case C-237/94 – O’Flynn [1996] ECR I-2617). According to settled case law, every form of hidden discrimination is also prohibited (see ECJ Case C-400/02 – Merida [2004] ECR I-8471). Limits on the duration of contracts of employment for foreign language assistants, which mainly affect citizens of other Member States (ECJ Joined cases C-259/91, C-331/91 and C-332/91 – Allué [1993] ECR I-4309), residence requirements (ECJ Case C-15/96 – Schöning [1998] ECR I-47; ECJ Case C-350/96 – Clean Car [1998] ECR I-2521) and other cases have been held to be hidden discriminations. Even provisions applicable without distinction but which deter a citizen of a Member State from leaving his country of origin in order to make use of his right of free movement constitute a restriction, but only if they affect the access of the employee to the labour market (ECJ Case C-190/98 – Filzmoser Maschinenbau GmbH [2000] ECR I-493). Where the effect is too uncertain and indirect, there is no restriction (ECJ Case C-431/01 – Martens [2002] ECR I-7073). Article 45(3) TFEU/39(3) EC explicitly provides that limitations may be justified on grounds of public policy, public security or public health. In the case law of the ECJ, a justification on grounds of mandatory requirements of public interest is also acknowledged with regard to non-discriminatory measures.

2. Addressees and binding effect on private persons

The prohibition of discrimination in Art 45 TFEU/39EC is worded in general terms and, according to the opinion of the ECJ, is not addressed specifically to the Member States alone. It also applies to contracts and other agreements of non-governmental bodies, particularly collective regulations in the area of gainful employment and the provision of services; thus not only to measures of public authorities (ECJ Case 36/74 – Walrave [1974] ECR 1405). Otherwise, inequality in the application of the prohibition against discrimination could arise. Rules laid down by sporting associations concerning the transfer of professional sportsmen (ECJ Case C-415/93 – Bosman [1995] ECR I-4921) or rules prohibiting professional basketball players’ participation due to non-compliance with transfer deadlines (ECJ Case C-17696 – Lehtonen [2000] ECR I-2681) are thus subject to review in accord with the fundamental freedoms. The European Court of Justice recently had to decide whether a scheme which required a young football player to compensate the club which trained him if, on completion of training, he contracted as a professional player with a club in another Member State was permissible. It held that such a scheme is not precluded if it is suitable to attain the objective of encouraging the recruitment and training of young players. However, this presupposes that damages are not calculated in a way which is unrelated to the actual costs of the training (ECJ Case C-325/08 – Olympique Lyonnais v Newcastle UFC, nyr.

According to Art 7(4) of Reg 1612/68, discriminatory clauses in collective (collective labour agreements) or individual agreements or in any other collective regulation are null and void. In Angonese the ECJ even declared that the prohibition of discrimination based on citizenship in Art 45 TFEU/39 EC also extends to private persons. The facts of the case were that in a job selection process, an employer demanded the applicants to provide proof of their language fluency exclusively with a specific diploma certified in only one province (South Tyrol) of the Member State where, in the view of the ECJ, the obtainment of that diploma was ‘an almost compulsory step as part of normal training’ (ECJ Case C-281/98 – Angonese [2000] ECR I-4139). Furthermore, the behaviour in the conclusion of contracts of a private association, such as the (publicly funded) Max Planck Society, must observe the principle of non-discrimination (ECJ Case C-94/07 – Raccanelli [2008] ECR I-5939). Thus, for certain groups it is acknowledged that the free movement of workers is also binding for private persons. These persons can then also rely on the grounds of justification of Art 45(3) TFEU/ 39(3) EC, mandatory requirements of public interest and fundamental rights (ECJ Case C-415/93 – Bosman [1995] ECR I-4921).

3. Private law and the free movement of workers

In certain circumstances, private law rules have already been assessed under the free movement of workers. The limit on the duration of contracts for foreign language assistants to a maximum of six years (ECJ Case C-33/88 – Allué I [1989] ECR 1591) and the use of one-year contracts for foreign language assistants with possibility of renewal have been considered an indirect discrimination (ECJ Joined Cases C-259/91, C-331/91 and C-332/91 – Allué [1993] ECR I-4309). These judgments have even led to the concern that private law as a whole could come under far-reaching review pursuant to European Union law, but this has hardly occurred so far. National legislation refusing to grant an entitlement to compensation on termination of employment to a worker who terminates his contract of employment himself was held not to affect the access to the labour market and therefore was held not to be a restriction (ECJ Case C-190/98 – Filzmoser Maschinenbau GmbH [2000] ECR I-493). Probably, in that case the lack of compensation for the (German) employee of an (Austrian) machine factory really did not constitute a hindrance to his taking up new employment (in Germany). Where discrimination occurs in the conclusion of a contract, the legal consequences appear to be unclear; the European Court of Justice has simply referred to national legislation on non-contractual liability (ECJ Case C-94/07 – Raccanelli [2008] ECR I-5939). Subsequent rectifications of certificates on the civil status of persons from another Member State need not be treated as equivalent to domestic certificates, but they must be accepted unless their accuracy is seriously undermined by concrete evidence relating to the individual case in question (ECJ Case C-336/94 ‑ Dafeki [1997] ECR I-6761). As to aspects not noted above, the effect of the free movement of workers on private law remains undetermined.

Literature

Ernst Steindorff, ‘Anmerkung zu EuGH verb. Rs. 259, 331 und 332/91 Allué II’ (1994) JZ 95; Friedl Weiss and Frank Wooldridge, Free Movement of Persons within the European Community (2002); Oliver Remien, Zwingendes Vertragsrecht und Grundfreiheiten des EG-Vertrages (2003); Christof Kerwer, Das europäische Gemeinschaftsrecht und die Rechtsprechung der deutschen Arbeitsgerichte (2003); Torsten Körber, Grundfreiheiten und Privatrecht (2004); Ulrich Becker, ‘Free Movement of Workers’ in Dirk Ehlers and Ulrich Becker (eds), European Fundamental Rights and Freedoms (2007); Catherine Barnard, The Substantive Law of the EU—The Four Freedoms (2nd edn, 2007).

Retrieved from Free Movement of Workers – Max-EuP 2012 on 15 August 2022.

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