The Self-employed and the EU Court of Justice: towards new social protection of vulnerable EU citizens?

1. Introduction

In the EU legal system, Member States control the configuration and distribution of social rights. Member States have the role of ‘Lord of Solidarity’, whereas the EU Treaties attribute to the European Union the generic task of promotion and normative competence ¹ in respect of welfare state support and the realisation of the organisation and provision of social benefits. In other words, this division demonstrates the limited powers of intervention of the European Union and the prevalent role of Member States in the construction of the European social dimension. ² EU action should be confined to the coordination of social rights for mobile citizens and to the development of anti-discrimination legislation, while on the other hand redistributive policies such as education, health policies and other social rights remain anchored at the national level – at least in theory. ³ Moreover, the EU lacks the power to impose socioeconomic redistributive norms on Member States. It follows that the EU lacks the authority to implement measures concerning the redistribution of wealth. Indeed, the decisions on socioeconomic redistributive norms touch upon aspects of social policy that remain within the competence of the Member States. ⁴ Within the Member States, the redistribution policy is operated through the pooling of tax resources in a national budget, which are then transferred between various regional and local authorities, social groups and from rich to poor individuals. In the European multilevel system, Member States are the actors responsible for operating policies to reduce inequalities and ensure a satisfactory level of social and territorial cohesion. If we consider that the total EU budget is limited to 1% of the global wealth produced in Europe, it is possible to say that the European Union does not have the capacity and legitimacy to operate a real redistribution of wealth on European territory. The redistributive dimension remains within the competence of the Member States. In other words, the idea that social solidarity materialises through tax transfers between Europeans is not acquired like that currently present inside the Member States. ⁵

The EU fiscal rules approved during the crisis changed the context and brought changes to the way social rights are accessed. Not taking into account the EU social acquis, these measures resulted in a deterioration in the living conditions of EU citizens. ⁶ In order to stop the negative effects of the crisis, Member States and the European institutions introduced, to the certain extent, austerity measures, ⁷ which had the effect of shrinking the national welfare state. ⁸ These measures pervaded the European area of meticulous binding provisions and determined the limitation and conditioning of the organisation of social security systems. ⁹

In this context, Member States were obligated to take care of their budgetary imbalances and to recover their economic parameters such as efficiency and competitiveness. In response, Member States reduced the cost of social benefits, causing a rise in tension between national solidarity and European integration. ¹⁰ In particular, the problems concerning the free movement of European citizens in the Union and access to social rights from a transnational perspective, increased discrepancies between Member States with consolidated, generous and expensive welfare states and Member States with low labour costs, limited regulation and weak welfare states. The national reforms resulted in problems for the sustainability of social welfare ¹¹ and contributed greatly to making the economic crisis evolve into a full-scale social crisis, ¹² having a negative impact on the enjoyment on a wide range of social rights, particularly for certain groups, for instance children, women, the young and pensioners. ¹³ The social crisis occurred through the restriction of access to numerous fundamental rights protected by the Charter of Fundamental Rights ¹⁴ such as education, healthcare, housing and some rights to work. ¹⁵

EU citizenship operates in this difficult context. The economic crisis imposed changes on all categories of European citizens using their right to free movement. In particular, European citizens found it somewhat difficult to access welfare in the host Member States. ¹⁶ These problems also affected both workers and self-employed workers. Fortunately, the context changed recently. The Court of Justice has made some rulings that have strengthened the protection of the most vulnerable self-employed workers. In particular, these rulings are changing the course taken in the Dano case, which rendered many European citizens vulnerable to the risk of social exclusion. This article contains three sections. The first contains the theoretical framework on the free movement and access to welfare of European workers and the self-employed (Section 2). The second illustrates the recent approaches of the European institutions and the Member States to the problems affecting workers and self-employed workers in the economic crisis (Section 3). The third part focuses on recent case law of the Court of Justice on self-employed migrant workers. This study demonstrates that the new approach of case law could improve the access to the welfare state also for other categories of vulnerable European citizens (Section 4).

2. The asymmetric social protection of European Union citizens and the privileged situation of workers

EU citizenship (Article 20 TFEU) ¹⁷ allows to citizens of the Member States to move freely, reside legally within the territory of the European Union (Article 21, paragraph 1 TFEU) and not to be discriminated against on grounds of nationality (Article 18 TFEU). These rights are subject to the conditions provided by EU primary law and EU derivative law, especially by Directive 2004/38/EC. ¹⁸ In this way, the exercise of freedom of movement, the right of residence and the application of the principle of non-discrimination are not uniform for all categories of European citizens. There is a substantial asymmetry in the enjoyment of these rights between workers and economically inactive Union citizens. ¹⁹

The worker enjoys a wide freedom of movement and residence, because it is the central element of the single market. In the EU legal system, the original reason for recognising these freedoms to workers was economic. It has been regarded, since the Treaty of Rome, ²⁰ as one of the four fundamental freedoms on which the internal market should be based. The EU law guarantees to European citizens and their families the right to enter and reside in another Member State to pursue a job as a worker or as self-employed without discrimination (Article 45 TFUE). ²¹ In particular, the EU citizen worker is entitled to move freely in order to respond to job offers in Member States, and has the right to stay in a Member State to work in accordance with national law, national regulations and national administrative provision.

In the legal system of the European Union, the right to free movement of workers is a fundamental right, ²² which has full direct effect both vertically and horizontally. The first effect of this right involves equal treatment ²³ between workers who are nationals of Member States and those who are migrant European citizens, in respect of employment contracts, remuneration and other working conditions. ²⁴ Expressly, the right to receive fair treatment means, for the worker, the recognition of the social rights guaranteed by the host Member State and allows this European citizen to access welfare without being discriminated against on the ground of nationality. This is the core of EU social citizenship, ²⁵ which allows the worker to access social protection in the host Member State without differences in treatment in comparison with nationals, to integrate better into the host society and to fully benefit from the freedom of movement.

However, the EU Treaty does not define clearly the notion of worker. In this regard, the case law of the Court of Justice has clarified the concept of worker. The Court of Justice has set out a notion of the worker in an autonomous and uniform means. It has reconstructed the notion in light of the principles that characterise the EU legal system ²⁶ and based on criteria that characterise the employment relationship in terms of the rights and obligations of the persons concerned. ²⁷ In particular, a European worker is a person who provides, for a certain period, to another, and under the direction of the same, services in return for which he receives remuneration. ²⁸ Therefore, this definition includes three relevant criteria: the performance of work, the subordinate nature of the employment relationship and the perception of payment of a salary for the activity performed. According to the literature, only the second condition contributes to identifying and qualifying a relationship as employment, to distinguish it from self-employed activities. ²⁹ The first and second conditions are aimed at identifying the actual economic nature of the service performed by the worker. ³⁰

In other words, the Court of Justice has reinforced the Treaty provisions by defining a worker as any person engaged in economic activity. This general definition ensures that all EU Treaty provisions covering the free movement of workers also apply to self-employed citizens, but the literature underlines that the employee is seen as a person carrying out particular work under the supervision and authority of their employer in return for a wage. ³¹ Meanwhile, genuine self-employment covers economically active people providing services to one or more beneficiaries. Although the employee works for the benefit of the employer under their authority, the self-employed worker works independently for the benefit of their clients. ³² Furthermore, the Court of Justice underlines the relationship of subordination as the most important element distinguishing between dependent employment and self-employment. ³³ Despite this, employment remains in the ‘grey area’ when the self-employed worker does not provide services for a client but does work for an employer, and the work relationship is one of subordination. This ‘grey area’ is variously referred to as dependent self-employment, bogus self-employment, ³⁴ false self-employment, quasi self-employment and involuntary self-employment. The literature explains that this occurs because by employing somebody as self-employed rather than in subordinate employment, employers can avoid the rights and entitlements associated with the employment of an employee, as well as taxes, which leads this practice to be considered a form of social dumping and also a type of precarious work. ³⁵

In this grey area, the challenge for governments is to achieve a difficult balancing act between the protection of self-employed workers and the fight against bogus self-employment. The national governments have to find deterrents to forms of bogus self-employment and ensure a fair balance between flexibility and security on the labour market. To achieve this, Member States must take specific legislative initiatives to develop criteria to define whether an employment relationship is actually self-employment and also to reduce incentives to intentionally classify an employment relationship as self-employment ³⁶ . For example, Latvian case law has converted false self-employment into a dependent employment relationship. Consecutively, Latvian law states that in cases where people are self-employed but still have to carry out tasks on the instruction of employers, these employers should conclude work agreements with the worker and they should pay no less than minimum wage. ³⁷ In addition, the government of the Netherlands has declared unacceptable the replacement of new permanent employment contracts with fixed-term employment contracts. Moreover, some Member States have introduced a test to detect situations of false self-employment. For Example, in Romania a range of criteria were introduced to define independent, own-account activity or self-employment. ³⁸ In the UK, there is a list of questions used in court decisions as well as four tests, namely, control, integration, economic reality and mutuality of obligation, which are used to classify employment relationships. ³⁹ However, it is clear that EU legislative reform is needed. Such reform will provide a clear definition of self-employment and will leave no room for these ambiguous forms of classification.

In the EU Treaty, the self-employed also find specific discipline in the rules on freedom of establishment and the freedom to provide services. The EU Treaty ensures the free movement of self-employed workers of the Member States (professionals and service providers), giving them the right to move to another Member State to carry out their activities on a stable and continuous basis (freedom of establishment, Article 49 TFEU) or occasionally (freedom to provide services, Article 55 TFEU). The right of establishment presupposes that a citizen of the EU resides within a host Member State to carry out self-employed activity stably and continuously, while the freedom to provide services implies the occasional and limited transfer over time of an EU citizen who habitually carries out his activity on the territory of the host Member State. Article 57, paragraph 3 TFEU expressly speaks of a temporary exercise of the service. In any case, these freedoms are only relevant if the economic activity being provided is a cross-border or transactional activity. In other words, these freedoms are relevant in situations which involve the borders of a single Member State being crossed. It is clear that legislative reform is needed which provides a sufficiently solid definition of self-employment.

Member States have to organise social protection in terms that do not penalise or discourage the exercise of the freedom of movement of workers. Moreover, Article 48 TFEU provides that the European institutions can adopt the social security measures necessary for the effective enjoyment of this freedom by both workers and the self-employed. Initially, Regulation 1408/71/EEC ⁴⁰ regulated the rights of European migrant workers within the European Community. Subsequently, it was replaced by Regulation 883/2004/EC, ⁴¹ which regulates social security schemes for the employed and their family members who have moved within the EU. Some principles form the basis of Regulation 883/2004/EC: the principle of non-discrimination and equal treatment, the principle of the uniqueness of the applicable law and the aggregation of insurance periods. Regulation 883/2004/EC includes all the rules concerning social security benefits: sickness benefits; maternity, paternity, and disability benefits; benefits for accidents at work and occupational diseases; death grants; unemployment benefits; early retirement; and family benefits. ⁴² Furthermore, EU law allows the worker and his family members to enjoy equal treatment also in respect of social benefits and advantages that are not related to the employment relationship. ⁴³ In addition, the worker enjoys other rights. In accordance with Directive 2003/88/EC, ⁴⁴ which regulates aspects relating to the organisation of work, for example, workers enjoy a paid holiday period of at least four weeks, ⁴⁵ a minimum rest period of 11 consecutive hours during each 24-hour period, ⁴⁶ scheduled breaks if the working day exceeds six hours, and the adequate distribution of both day and night shifts. While Directive 89/391/EC ⁴⁷ guarantees minimum health and safety requirements across the Union for workers, Member States are authorised to maintain or establish stricter measures.

The situation is different for cross-border jobseekers. The ambiguous formulas contained in secondary EU legislation create numerous problems for jobseekers in host Member States. The jobseeker acquires and retains the right to reside in the host member State until he can prove that he has a ‘good chance’ of getting a job (Article 14, paragraph 4, letter b Directive 2004/38/EC). ⁴⁸ In addition, the jobseeker cannot be removed from the host Member State even in the event that this stay places an excessive burden on the host welfare state. ⁴⁹

However, the meaning of having a ‘good chance’ of finding a job is not specified in Directive 2004/38/EC or the case law of the Court of Justice. The measure of expulsion may only be justified if the jobseeker is objectively unable to access work. This happens, for example, when the jobseeker is sick. Directive 2004/38/EC does not specify whether it is necessary to examine the individual situation of the European citizen, or whether it could be based on general considerations relating to the labour market of the host Member State. The absence of clarifications limits the possibility of the EU citizen to stay on the territory of a Member State to look for employment. ⁵⁰ From this perspective, EU law appears as a specification of the (overrated) need to protect national welfare systems from the phenomenon of social tourism. ⁵¹ Also, migrant jobseekers do not enjoy the same right to equal treatment as workers. They are subject to the derogation contained in Article 24, paragraph 2 of Directive 2004/38/EC. ⁵² Although the Member State cannot expel jobseekers when they use social benefits, it does not have to give these individuals the same social benefits to which they are entitled. Recently, Member States have restricted access to the national welfare state using these ambiguous formulas and exploiting the weakness of the European institutions.

Furthermore, EU law regulates the free movement, residence and access to welfare of economically inactive European citizens in an ambiguous and restrictive way. These European citizens enjoy the freedom of movement and the unconditional right of residence only for a period of three months (Art. 6, paragraph 1, Directive 2004/38/EC). Nonetheless, host Member States both during this period and subsequently are not obliged to grant social benefits to these citizens (Art. 24, paragraph 2, Directive 2004/38/EC). For the period following the three months and until they achieve permanent resident status, the regulation of their stay is complex. ⁵³ Before obtaining the right of permanent residence, the free movement and right of residence of economically inactive citizens are subject to the possession of a certain degree of economic sufficiency ⁵⁴ and sickness insurance. This is necessary to avoid them becoming an unreasonable burden on the welfare system of the host Member State (Art. 7, paragraph 1, Directive 2004/38/EC). However, the recourse by an economically inactive EU citizen and his family members to the social assistance system does not automatically give rise to a removal order (Art. 14, paragraph 3, Directive 2004/38/EC).

3. Economic crisis and the social protection of workers and the self-employed: Possible changes

In the EU legal system, the privileged position of workers is not immutable. ⁵⁵ Article 46 TFEU authorises the European institutions to adopt Directives and Regulations to implement the free movement of European workers and provides a non-exhaustive list of issues to be addressed. ⁵⁶ Besides, Article 48 TFEU provides for the competence to adopt the measures in the field of social security necessary to guarantee the free movement of workers. The boundaries of legislative autonomy have emerged through jurisprudence. The EU Treaty does not forbid the European legislator from restricting the free movement of workers. Reform of the free movement legislation is not impossible, but requires careful negotiation of the political objectives and legal constraints of the proposals, which must be legally defensible and solid. ⁵⁷

Currently, there are two approaches to the free movement of workers within the European Union.

On the one hand, Member States try to limit the movement of workers within EU borders. Indeed, the privileged position of EU workers has been weakened by the economic crisis and Brexit. These changes opened up to possible reform the right to free movement and the principle of non-discrimination of workers. In particular, some Member State has opened a new debate. Indeed, in the conclusions of the European Council of February 2016, ⁵⁸ the Heads of State and government agreed on the guidelines to follow to reform the legislation by introducing discrimination against EU workers. Brexit may have partially justified a pragmatic response towards the easing of the normative and ideological rigidity attributed to the preservation of the free movement of workers. The decision was influenced by the will of the northern Member States to restrict the freedom of movement to ‘defend themselves from the invasion’ of Eastern European citizens. This perception of an invasion is not supported by solid and consistent data but is supported by the perceived or projected effects.

Although it is a non-legislative act, the February 2016 decision exemplifies the refusal to consider the importance of the evidence that could lead to the disconnection between the freedom of movement and equal treatment in host Member States. ⁵⁹ The decision also challenged the principle of non-discrimination between European and national workers. Failure to recognise equal treatment will irreparably damage the free movement of migrant European citizens. Furthermore, it crosses the red line marked by the case law of the Court of Justice. In the Coonan ⁶⁰ case, the Court of Justice ruled that the main purpose of Regulation 1612/68/EC (now Regulation No. 492/2011/EU) was to ensure that workers in each host Member State received equal treatment to that of national workers in respect of all employment and working conditions. ⁶¹ The February 2016 decision targets this evolution. Paragraph 2, letter b) of the decision introduces an alert and safeguard mechanism to stop possible anomaly situations of an influx of workers from other Member States into the host Member State. Also, the host Member State would thus be authorised by the Council to limit the access of EU citizens to non-contributory benefits linked to the performance of a job for a total period of up to four years from the start of the employment relationship.

On the other hand, European institutions push for greater protection. Indeed, the European Commission has proposed to the Council to adopt a recommendation to improve access to social protection for workers in times of crisis.

The Council’s Recommendation ⁶² on access to social protection for workers and the self-employed is important because it proposes new measures to protect EU citizens. In line with the European Pillar of Social Rights, this proposal aims to set a direction for the Member States to support access to social protection for all workers and the self-employed, in particular for those who – due to their employment status – are not sufficiently covered by social security schemes. It is recommended that Member States ensure access to adequate social protection for all workers and self-employed persons in respect of unemployment benefits; sickness and healthcare benefits; maternity and equivalent paternity benefits; invalidity benefits; old-age benefits and survivors’ benefits and benefits in respect of accidents at work and occupational diseases. In light of national circumstances, it is recommended that this objective be achieved by improving the formal coverage and extending it to all workers, regardless of the type of employment relationship, on a mandatory basis; for the self-employed, at least on a voluntary basis, and where appropriate, on a mandatory basis. Moreover, it is recommended that Member States ensure effective coverage for all workers, regardless of the type of employment relationship; and for the self-employed, under social benefits, while also preserving the sustainability of the system and implementing safeguards to avoid abuse.

The European institutions have understood that the crisis has also exposed migrant workers to social risks. Specifically, the crisis has had negative consequences for various categories of self-employed workers. In particular, the difficult economic context has diminished the social protection, career opportunities and job security of self-employed workers. This made the intervention of the Court of Justice necessary to ensure better protection for European citizens who are self-employed.

4. The Court of Justice and EU self-employed citizens: Evolutionary case law ‘in small steps’

Despite the economic crisis, the Court of Justice has issued important rulings on the social protection of the self-employed. Studies of recent case law support the thesis that European judges have tried to put aside the Dano ⁶³ jurisprudence in favour of better protection for some categories of vulnerable European citizens. In the Dano case, the Court of Justice reversed the function of the principle of solidarity and it disconnected the freedom of circulation from the principle of non-discrimination. ⁶⁴ It is now aimed at defending national welfare systems from the hypothetical risks of financial destabilisation resulting from the free movement of economically inactive citizens. ⁶⁵ The Dano case law strand restores residence criteria and emphasises the aim of the Directive to protect the national social system. ⁶⁶ This jurisprudence is one of the most serious indicators of the social crisis at the EU level. Indeed, this case law could have possible negative consequences in terms of placing further restrictions on the free movement regime in general, which might be seen in the current debate on the free movement of workers. ⁶⁷

The Court has changed its approach in recent cases on the self-employed. The EU Court has begun to take small steps towards developing a new evolutionary jurisprudence. In recent cases concerning the conservation of worker status, which precedes the request for social benefits in the host Member State, the Court of Justice has expansively interpreted the content of Article 7 of Directive 2004/38/EC. It should be noted that retaining worker status - and the corresponding right to reside legally on the territory of the host Member State - does not automatically mean that social assistance will be provided by the host welfare state. This status allows the workers to apply for social benefits and receive the same treatment and response as a national. This proves that the Member States are free to organise their own welfare systems, but cannot set out rules or practices which discriminate on nationality in access to social benefits. ⁶⁸

In the Florea Gusa ⁶⁹ case the Court of Justice viewed the principle of non-discrimination as a necessary tool to facilitate the social inclusion of EU migrant citizens, to remove the interpretative uncertainties contained in Directive 2004/38/EC and to guarantee good protection of the self-employed. ⁷⁰ The Court affirmed that the self-employed worker retains worker status when he is forced to stop working due to a lack of work (duly proven) caused by reasons beyond his control and if he is registered at the competent employment office as a jobseeker. Therefore, the migrant European citizen who has had to stop work due to economic crisis retains worker status, after having resided regularly and worked for about four years as self-employed in a host Member State. ⁷¹

According to the Court of Justice, Article 7, paragraph 3 of Directive 2004/38/EC does not refer only to workers who have lost their jobs for reasons beyond their control after having worked for over a year. Indeed, the rule in question also refers to the self-employed who were in the same situation as workers. The Court’s reasoning is central to the notion of ‘unintentional unemployment’. This concept is connected both to a situation of inactivity due to the loss of employment resulting from a layoff and to the conclusion of an employment or self-employment activity caused by a lack of work related to reasons that are beyond the control of the migrant European citizen, as can happen in times of economic crisis. ⁷²

Directive 2004/38/EC aims to overcome the approach that characterised the previous Directives, which distinguished between the worker and the self-employed. ⁷³ The Court stated that Article 7, paragraph 3 of Directive 2004/38/EC must be read following paragraph 1 of the same rule, which concerns both the worker and the self-employed.

An interpretation that includes only workers would be limiting and would create unjustified inequality of treatment between migrant European citizens and those self-employed who are in the same situation of unemployment. ⁷⁴ Consequently, self-employed workers could find themselves in a vulnerable situation comparable to that of a worker who has been fired. ⁷⁵ Setting up such a difference in treatment would be even less justifiable in a situation where the migrant EU citizen has contributed – through his self-employment – to the financing of the social and fiscal system of the host Member State. ⁷⁶ For this reason, the Court of Justice has affirmed that Article 7, paragraph 3, letter b of Directive 2004/38/EC must be interpreted as meaning that a European citizen retains the self-employed status for the purposes of Article 7, paragraph 1, letter a) of Directive 2004/38/EC where, after having lawfully resided and worked as a self-employed person in the host Member State for approximately four years, they have ceased that activity, because of a duly recorded absence of work owing to reasons beyond their control. The only conditions are that the migrant European citizen provides proof of the cessation of the activity and registers himself at the competent employment office as a jobseeker. ⁷⁷

The Tarola ⁷⁸ case allowed the Court of Justice to further signal a return to a leading role in reconciling the conflicting interests of the Member States with those of migrant European citizens who need access to the host welfare state. ⁷⁹ The Court of Justice affirmed that Article 7, paragraph 1, letter a) and the paragraph 3, letter c) of Directive 2004/38/EC must be interpreted as meaning that an EU citizen who, having exercised his right to free movement, acquired, in another Member State, worker status within the meaning of Article 7, paragraph 1, letter a) of that Directive, on account of the activity he pursued there for a period of two weeks, other than under a fixed-term employment contract, before becoming involuntarily unemployed, retains worker status for a further period of no less than six months under those provisions, provided that he has registered as a jobseeker with the relevant employment office. ⁸⁰ The Court set this principle by stating that the national judge may determine whether – following the principle of equal treatment guaranteed in Article 24(1) of Directive 2004/38/EC – the migrant EU citizen is, as a result, entitled to receive social assistance payments or, as the case may be, social security benefits, on the same basis as if he were a national of the host Member State. ⁸¹

The Court of Justice proceeded to extensively interpret the provisions of Directive 2004/38/EC. The Court considered that Article 7, paragraph 3 of Directive 2004/38/EC does not exhaustively list the circumstances in which a migrant European citizen who ceases to be a worker or self-employed in the host Member State retains worker status for the purposes of Article 7, paragraph 1, letter a) and the rights deriving from this status. This provision establishes a gradual system. The migrant EU citizen retains worker status based on the cause of his inactivity. This depends on whether the he is unable to work due to illness or injury, is in a state of involuntary unemployment or is attending a vocational training course.

The retention of worker status depends on the duration of the inactivity and, particularly whether it is greater or less than one year. ⁸² For this reason, on the one hand, the worker or self-employed worker continues to be regarded as employed for an indefinite period if they are affected by a temporary disability resulting from an illness or an accident (Article 7, paragraph 3, letter a), Directive 2004/38/EC). On the other hand, the migrant European citizen retains worker status if he has performed a subordinate or autonomous activity in the host Member State for over a year before becoming involuntarily unemployed (Article 7, paragraph 3, letter b) Directive 2004/38/EC). ⁸³ Furthermore, he continues to be regarded as a worker if he completes a professional training course (Article 7, paragraph 3, letter d), Directive 2004/38/EC). ⁸⁴ A migrant EU citizen who has pursued an activity in an employed or self-employed capacity in the host Member State for a period of less than one year retains his status of worker only for a period which that Member State may determine, provided it is not less than six months. ⁸⁵

In the Tarola judgment, the Court of Justice strengthened the right to free movement and residence without compromising the aim of Directive 2004/38/EC to protect the finances of the Member States from undue burdens. Moreover, this argument is consistent with the specific objective of Article 7, paragraph 3 of the Directive 2004/38/EC described in the Florea Gusa case law: protecting the right of residence of EU citizens who have lost their job due to circumstances beyond their control. ⁸⁶ Additionally, the thinking of the EU judges reflects the initial intentions of the European legislator. Analysis of the preparatory work of Directive 2004/38/EC ⁸⁷ shows that the will of the EU legislator is to extend the benefit of retaining worker status to people who are in involuntary unemployment after having worked for less than one year. ⁸⁸

In the last part of the judgment, the Court follows the line of argument indicated by the Advocate General in his conclusion. According to this interpretation, the self-employed migrant worker – who preserves the right to reside under Article 7, paragraph 3 – is entitled to receive the same treatment as a national of the host Member State. Therefore, if a national self-employed worker who worked only for a short time is excluded from social benefits, the exclusion also applies to migrant European self-employed workers. For these reasons, the Court of Justice argued that the national Court may determine whether the migrant European citizen has the right to receive the social benefits required in the light of national law and based on the principle of equal treatment.

The conclusions of the Court of Justice in the Dakneviciute ⁸⁹ judgment do not deviate from the evolutionary interpretations in previous decisions (i.e. Florea Gusa and Tarola). This ruling allows self-employed women to retain the right to legally reside in a host Member State during pregnancy and the period following the childbirth, enjoying access to child benefits, tax credits, assistance for the homeless, social housing and other related social benefits. The ruling has a broad value. The Court has extended the protections guaranteed to employed workers also to self-employed workers. This jurisprudence helps to ensure greater protection of self-employed workers and of the most vulnerable categories of workers who use their right free movement to work in a Member State other than their own.

In this case, the Court of Justice adequately protected the position of women and newborns, opposing the controversial arguments of the United Kingdom government. The United Kingdom had argued that women who could not personally perform the duties associated with self-employment due to limitations relating to the last stages of pregnancy and childbirth may be temporarily replaced by another person. If the United Kingdom’s position had been supported by the Court of Justice, many women could lose their jobs at a critical moment in their lives. Instead, the Court recognised that self-employed women are a category of vulnerable migrant European citizens both physically and economically in a host Member State. ⁹⁰ For these reasons, the European judges stated that self-employed migrant workers who are pregnant and those who have recently given birth need special protection. This evolutionary interpretation could result in the revival of further protective interventions in favour of other vulnerable figures who use their right to free movement, such as the unemployed, jobseekers, underpaid workers, and economically inactive citizens. ⁹¹

Starting from the principles expressed in the Tarola judgments, the Court of Justice considers that Article 7, paragraph 3 of Directive 2004/38/EC does not contain an exhaustive list of circumstances suitable for retaining worker status. Moreover, in Dakneviciute the Court followed the ruling in Saint Prix. It emphasised that Article 45 TFEU must be interpreted as meaning that a woman who gives up work, or seeking work, because of the physical constraints of the late stages of pregnancy and the aftermath of childbirth retains the status of worker, within the meaning of that Article, provided she returns to work or finds another job within a reasonable period after the birth of her child. ⁹² According to the Court, both pregnant workers and self-employed workers must enjoy the same protection under EU law. ⁹³

Furthermore, the Court also used the previous case law relating to Article 49 TFEU. In past rulings, the Court stated that EU law precludes national measures that disadvantage European citizens in the exercise of their occupation in the territory of a host Member State. ⁹⁴ This past case law allowed the Court to affirm that an EU citizen does not exercise her right to move freely in the EU if she risks losing her status as a self-employed worker in the host Member State, especially if her pregnancy results in her giving up work. ⁹⁵ Therefore, a migrant EU citizen who is in the same condition as the claimant must be able to retain self-employed status and access to the welfare state.

The interpretation of the Court of Justice in the Dakneviciute case is reinforced by Article 8, paragraph 1 of Directive 2010/41/EU. This rule provides that the Member States shall take the necessary measures to ensure that female self-employed workers and female spouses and life partners may, following national law, be granted a sufficient maternity allowance enabling interruptions in their occupational activity owing to pregnancy or motherhood for at least 14 weeks. The reasoning of the Court is further supported by Article 16, paragraph 3 of Directive 2004/38/EC. Indeed, if an absence for an important event such as pregnancy or childbirth does not affect the continuity of the five years of residence in the host Member State required for the awarding of the right of permanent residence, according to the Court of Justice the physical constraints of the late stages of pregnancy and the immediate aftermath of childbirth, which require a woman to give up work temporarily, cannot, a fortiori, result in that woman losing her self-employed status. ⁹⁶

Having regard to these considerations, the Court of Justice claims that Article 49 TFEU must be interpreted as meaning that a woman who stops self-employed activity in circumstances where there are physical limitations in the late stages of pregnancy and the aftermath of childbirth retains self-employed status, provided that she returns to the same or another self-employed activity or employment within an appropriate length of time after the birth of her child. ⁹⁷

Adding to Florea Gusa and Tarola, the Dakneviciute case law confirms the new interpretative trend of the Court of Justice towards greater protection of the self-employed migrant workers who need to access the welfare of the host Member State in a period of vulnerability. The recommendation is that this trend continues, allowing us to overcome the restrictive jurisprudence developed in Dano.

5. Conclusion

The new case law of the EU Court of Justice recovers the notion of a European citizen as a promoter of European integration. It has abandoned the notion of social tourist or an unreasonable burden. This shows that the integration process is not directed towards a deconstruction of European social citizenship. The overcoming of the acute phase of the economic crisis confirmed that the jurisprudential change made by the Court of Justice with the Dano ruling was aimed at responding to the needs of the socio-economic contexts of the EU and its Member States. ⁹⁸ This means that a significant improvement in the economic context of the European Union could lead to a definitive return to evolutionary jurisprudence, but with a new balance in favour of a more supportive structure.

The experience of the economic crisis must teach the Court of Justice that it is necessary to build a more inclusive transnational solidarity model, which also allows vulnerable European citizens – such as self-employed workers residing in a host Member State – to easily access social benefits. ⁹⁹ It would be appropriate for the Court to recover the solidarity spirit that characterised its jurisprudence before the economic crisis and to extend the boundaries of national solidarity to develop true transnational social citizenship.

The Florea Gusa, Tarola and Dakneviciute cases could constitute a revival of the evolving case law of the Court of Justice applicable to other categories of vulnerable European citizens. The next rulings will be important to understand whether this orientation will be confirmed and if the will of the Court is to continue along the path towards the creation of a strong EU social citizenship, which would be the pivot of the new social space of the Union, and could allow European citizens to move at a supranational level across borders marked by pluralism, tolerance, social justice, and solidarity. However, the path towards greater protection of the rights of European citizens, workers and self-employed workers must find a compromise between the conflicting interests of market development and the safeguarding of the national welfare system. The examples to follow are the conditions imposed by the Posting Worker Directive 2018/957/EU on cross-border service providers, which are respectful of Art. 9 TEU; and which states that the Union must take into account the requirement of adequate social protection in the definition and implementation of its policies and activities. ¹⁰⁰ Indeed, the new Directive 2018/957/EU, while containing mechanisms to combat false self-employed workers, requires Member States to ensure that these workers do not remain in a disadvantaged situation compared to posted workers (Art. 5, Directive 2018/957 / EU). This could be the way forward.