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Home > Blogs > Social welfare updates > Case updates > Self-employed EU citizens can retain that status under Article 7(3)(b) Directive 2004/38

Self-employed EU citizens can retain that status under Article 7(3)(b) Directive 2004/38

20 December 2017, by Desmond Rutledge

Desmond Rutledge

Florea Gusa v Minister for Social Protection, Ireland, Attorney General, Case C‑442/16, J.L. da Cruz Vilaça, A. Tizzano, E. Levits, A. Borg Barthet and M. Berger, CJEU (Fifth Chamber), 20 December 2017

The claimant was a Romanian national who entered the territory of Ireland in October 2007.

From October 2008 until October 2012, he worked as a self-employed plasterer and, on that basis, paid taxes in Ireland, as well as pay-related social insurance and other levies on his income.

In October 2012, he ceased working due to an absence of work caused by the economic downturn in Ireland, and registered as a jobseeker with the relevant Irish authorities.

His application for jobseeker’s allowance was refused on the basis that the provision for retaining worker status under Article 7(3)(b) of Direction 2004/38 only applied to employed persons and excludes those who have worked as self-employed persons.

The Supreme Court (Ireland) made a reference to the Court of Justice of the European Union (CJEU) asking whether someone in the claimant’s position retained the status of a self-employed person under Article 7(1)(a) of Directive 2004/38, pursuant to Article 7(3)(b) or otherwise.

The CJEU in its judgment noted that:

  • (i). the phrase “after having been employed” was used in the English-language version of Article 7(3)(b) but other language versions were formulated in more neutral terms, relating to a person who had been in an “‘occupational activity”;
  • (ii). the Directive drew a distinction between economically active citizens and inactive citizens and students (article 7(1) but it did not draw a distinction between citizens working as employed persons and those working as self-employed persons.

Against this background the CJEU concluded that an interpretation of Article 7(3)(b) which only covered those who had worked as employed persons and which excluded those who had worked as self-employed persons would run counter to the objectives of the Directive. Moreover, such an interpretation would introduce an unjustified difference in the treatment between the two categories of persons:

“Such a difference in treatment would be particularly unjustified in so far as it would lead to a person who has been self-employed for more than one year in the host Member State, and who has contributed to that Member State’s social security and tax system by paying taxes, rates and other charges on his income, being treated in the same way as a first-time jobseeker in that Member State who has never carried on an economic activity in that State and has never contributed to that system.

It follows from all of the foregoing that a person who has ceased to work in a self-employed capacity, because of an absence of work owing to reasons beyond his control, after having carried on that activity for more than one year, is, like a person who has involuntarily lost his job after being employed for that period, eligible for the protection afforded by Article 7(3)(b) of Directive 2004/38. As set out in that provision, that cessation of activity must be duly recorded” (paras 44-45).

The Court of Justice of the European Union’s judgment is available here: Florea Gusa v Minister for Social Protection, Ireland, Attorney General, Case C‑442/16

Comment

The effect of the ruling is that EU citizens who cease self-employment due to circumstances beyond their control, who then register as unemployed, can now access income-based Jobseeker’s Allowance or Universal Credit as someone who has retained their worker status, and hence their right to reside. R(Tilianu) v Secretary of State for Work and Pensions [2010] EWCA Civ 1397 should no longer be followed.

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