Communication from the Commission - Free movement of workers : achieving the full benefits and potential
Date: 2002-12-11
Institutions: European Commission
Subjects: European citizenship, civil service, equal treatment, free movement of workers, frontier worker, infringement of EU law, recognition of diplomas, social security

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11.12.2002
COM(2002) 694 final

COMMUNICATION FROM THE COMMISSION

Free movement of workers – achieving the full benefits and potential

Table of Contents

1. Introduction ............................................................................................................................ 3

2. Free Movement of Workers ................................................................................................... 5

2.1. Introduction ......................................................................................................................... 5

2.2. Residence and expulsion ..................................................................................................... 6

2.3. Access to employment and equal treatment in employment............................................... 6

2.4. Tax and social advantages................................................................................................... 8

2.5. Family Members ................................................................................................................. 8

2.6. Future prospects .................................................................................................................. 9

3. Social Security...................................................................................................................... 10

3.1. Introduction ....................................................................................................................... 10

3.2. Non-exportability of special non-contributory benefits .................................................... 12

3.3. Health Care........................................................................................................................ 13

3.4. Social Security Contributions............................................................................................ 15

4. Frontier workers ................................................................................................................... 16

4.1. Introduction ....................................................................................................................... 16

4.2 Retired frontier workers ..................................................................................................... 17

4.3. Taxation............................................................................................................................. 17

5. Public Sector ........................................................................................................................ 17

5.1. Introduction ....................................................................................................................... 17

5.2.Access to employment in the public sector........................................................................ 18

5.3. Recognition of professional experience and seniority ...................................................... 20

5.4. Recognition of qualifications and diplomas...................................................................... 23

6. Conclusion............................................................................................................................ 24

2

1. INTRODUCTION

The  aim  of  the  present  Communication  is  to  describe  in  practical  terms  some  of  the  most
important  issues  for  migrant  workers  and  their  families,  and  the  way  the  Commission  does
and  will  deal  with  them,  in  view  of  the  case  law  of  the  Court  of  Justice  of  the  European
Communities ("the Court") and the daily experience of the Commission services in examining
complaints from citizens.

It is intended to bring the Union closer to its citizens by informing them of their Community
law rights in the field of free movement, and enabling them to better enforce those rights. In
this  respect  it  should  be  noted  that  the  fundamental  principle  of  non-discrimination  on
grounds of nationality contained in the Treaty is not only binding upon public authorities but
also upon private parties.

Free movement of persons is one of the fundamental freedoms guaranteed by Community law
and includes the right to live and work in another Member State. Initially, this freedom was
essentially directed towards economically active persons and their families. Today the right of
free  movement  within  the  Community  also  concerns  other  categories  such  as  students,
pensioners  and  EU  citizens  in  general1.  It  is  perhaps  the  most  important  right  under
Community law for individuals, and an essential element of European citizenship.

Free movement is a means of creating a European employment market and of establishing a
more  flexible  and  more  efficient  labour  market,  to  the  benefit  of  workers,  employers  and
Member States. It is common ground that labour mobility allows individuals to improve their
job prospects and allows employers to recruit the people they need. It is an important element
in achieving efficient labour markets and a high level of employment

Social security is a key issue for persons exercising their right to free movement2. By ensuring
that  the  principle  of  equal  treatment  is  guaranteed  and  that  persons  moving  within  the
Community  do  not  suffer  disadvantages  in  their  social  security  rights  this  fundamental
freedom  becomes  of  real  and  tangible  value.  True  free  movement  therefore  is  not  possible
without protecting the  social  security  rights  of  migrant  workers  and  their  families,  which  is
one  of  the  aims  of  Regulation  1408/713  on  the  co-ordination  of  social  security  systems  for
people who move within the Union.

It is, however, true that many practical, administrative and legal barriers still prevent citizens
of the Union from exercising their freedom of movement. It is also clear that they stand in the
way  of  the  full  benefits  and  potential  of  geographical  mobility  for  workers  and  employers.
This  is  borne  out  by  the  large  number  of  letters  from  citizens  concerning  the  correct

1

2

3

For example Case C-184/99, Grzelczyk and Case C-85/96, Martinez-Sala ECR [1998] I-02691
See  Guide  "The  Community  provisions  on  social  security  -  your  rights  when  moving  within  the
European Union
Council  Regulation  (EEC)  1408/71  of  14.06.1971  on  the  application  of  social  security  schemes  to
employed  persons,  to  self-employed  persons  and  to  members  of  their  families  moving  within  the
Community,  OJ  L  149,  5.07.1971  p.  2,  last  codified  by  Council  Regulation  (EC)  118/97,  OJ  L  28,
30.01.1997

3

                                                
application  of  the  Community  rules  on  free  movement  or  their  national  implementing
measures4, and the increasing number of judgments of the Court in this field.

The  Commission  therefore  considers  that  the  attention  of  both  citizens  and  Member  States
should be drawn to some of the main areas of difficulty which are still encountered in practice
by migrant workers and their families. The Commission will explain the way those issues are
dealt  with,  in  view  of  the  case  law  of  the  Court  and  the  daily  experience  the  Commission
services have gained in examining individual cases in this area.

In this respect, in its role as guardian of the Treaties, the Commission is fully committed to
ensuring that rights granted by the Treaty or secondary legislation to EU citizens are complied
with by the Member States and the public authorities at national, regional and local level.

This  Communication  follows  and  complements  previous  reports  and  texts  related  to  free
movement, such as the Commission's 1990 Communication on Frontier Workers5, the Report
of  the  High  Level  Panel  on  the  free  movement  of  persons  (the  "Veil  Report")  of  1997,  the
Commission's Action Plan for Free Movement of Workers6, the Resolution of the Council and
the  Member  States  concerning  an  action  plan  for  mobility7,  the  Recommendation  of  the
European  Parliament  and  of  the  Council  on  Mobility8,  Commission  Communication  on  a
mobility  Strategy  for  the  European  Research  Area9,  the  Communication  on  New  European
Labour Markets10 and the Commission's Action Plan for Skills and Mobility11.

It will be focused  on 4 separate but inter-related  issues which  cause particular  problems  for
citizens  or  have  been  dealt  with  by  the  Court.  The  first  deals  with  some  of  the  current
obstacles encountered by migrant workers and their families, such as access to employment,
language requirements, equal treatment and social advantages, as well as  administrative  and
legal  problems  in  connection  with  residence  rights.  Certain  questions  concerning  taxation,
non-statutory occupational pension schemes12 and family members will also be touched upon.
The  second  issue  deals  with  social  security  matters  with  regard  to  Regulation  1408/71,
including residence requirements for benefits, and health care in another Member state.  The
third  item  relates  to  frontier  workers  who,  because  they  do  not  reside  in  the  State  of
employment, constitute a specific category of migrant workers, and face particular problems
such as those related to health care, social security and taxation. And finally, as major issues
arise  in  respect  of  working  in  the  public  sector  of  another  Member  State,  the  fourth  part
therefore  deals  with  questions  such  as  access  to  the  public  sector  and  the  recognition  of
previous professional experience acquired in another Member State.

4

5

6

7

8

9

10

11

12

In  2002  the  unit  of  the  Directorate-General  for  Employment  and  Social  Affairs  responsible  for  free
movement of workers and the co-ordination of social security schemes received nearly 2000 letters, the
majority of which concerned problems encountered by individual citizens.
Communication  from  the  Commission  on  the  living  and  working  conditions  of  Community  citizens
residing in frontier regions, with special reference to frontier workers, COM(1990)561 final.
COM(1997)586 final.
Resolution  of  the  Council  and  the  Representatives  of  the  governments  of  the  Member  States  of  14
December 2000, concerning an action plan for mobility, OJ C 371, 23.12.2000
Recommendation of the European Parliament and of the Council on mobility within the Community for
students, persons undergoing training, volunteers, teachers and trainers, OJ L 215, 09.08.2001
COM/2001/0331 final
COM(2001) 116.
COM(2002) 72.
See  the  Communication  from  the  Commission  launching  the  first  stage  consultation  of  the  social
partners  on  the  portability  of  supplementary  pension  rights  (12.06.2002)  and  the  Commission
Communication  on  the  elimination  of  tax  obstacles  to  the  cross-border  provision  of  occupational
pensions, COM (2001) 214 final, 19.04.2001.

4

                                                
This  Communication  is  not  meant  to  be  an  exhaustive  document  covering  all  the  rights
deriving from Community law on free movement, and therefore it does not deal with general
issues of citizenship.

2. FREE MOVEMENT OF WORKERS

2.1. Introduction

Every national of a Member State has the right to work in another Member State13. The term
“worker” was not defined in the Treaty, but has been interpreted by the Court as covering any
person who (i) undertakes genuine and effective work (ii) under the direction of someone else
(iii)  for  which  he  is  paid.  This  will  cover  somebody  who  works  ten  hours  a  week14  and
trainees15. However, a person who is the director of a  company in which he is  also  the sole
shareholder  is  not  a  worker  because  of  the  absence  of  subordination16.  A  person  remains  a
worker even if his salary is lower than the minimum  level set in the  host Member State  for
subsistence17. As the definition of "worker" defines the scope of the fundamental principle of
freedom  of  movement,  it  must  not  be  interpreted  in  a  restrictive  way18.  People  with  fixed-
terms  contracts  will  be  workers  as  long  as  they  satisfy  the  above  three  conditions.  Civil
servants and employees in the public sector are also workers in this context. The Community
rules on the  free  movement of  workers do not apply  to purely internal  situations.  However,
people who have exercised their right of free movement and then return to their Member State
of origin are covered by the Community rules19.

After the enlargement of the European Union, the rules on the free movement of workers will
only apply to nationals of the new Member States subject to a transitional period20. However,
nationals of the new Member States who are legally working with a contract of 12 months or
over in a current Member State at the time of accession of their country to the EU will benefit
from  the  right  to  free  access  to  the  labour  market  of  that  Member  State.  In  addition,  the
Community rules on the co-ordination of social security schemes will apply from the day of
accession.

13

14

15

16

17

18

19

20

Article  39  EC  and  Regulation  1612/68  (OJ  L  257,  19.10.1968),  which  guarantees  for  example  equal
treatment  in  access  to  employment  (including  assistance  from  employment  offices),  pay  and  working
conditions, membership of trade unions, housing and access of children to education. Limitations exist
in relation to public order, public security and public health, as well as to the public sector (see section 5
below)
Case 171/88, Rinner-Kuhn ECR [1989] 2743.
Case C-27/91, Le Manoir ECR [1991] I-5531
Case C-107/94, Asscher ECR [1996] I-3089.
Case 139/85, Kempf [1986] 1741.
Case 53/81, Levin ECR [1982] 01035.
Case  115/78,  Knoors  ECR  [1979]399,  Case  C-370/90,  Singh  ECR  [1992]  I-4265  &  Case  C-18/95,
Terhoeve ECR [1999] I-00345.
The current EU Member States will apply national rules on access to their labour markets for the first 2
years following accession of the new Member States (with the exception of Cyprus and Malta). There
will  be  a  review  by  the  Commission  at  the  end  of  the  first  2  years,  after  which  the  current  Member
States can decide to apply the Community rules on free movement of workers to nationals from the new
Member  States,  or  they  can  continue  with  their  national  rules  for  a  further  3  years.  5  years  after
accession  nationals  of  the  new  Member  States  should  fully  benefit  from  free  movement,  unless  a
current  Member  State  experiences  serious  disturbances  on  its  labour  market,  or  the  threat  thereof,  in
which  case  it  can  apply  its  national  rules  for  a  further  2  years.  For  further  information  see:  "Free
movement 
enlarged  European  Union:
http://europa.eu.int/comm/enlargement/negotiations/chapters/chap2/55260_practica_guide_including_c
omments

practical 

persons 

guide 

for 

for 

an 

a 

- 

5

                                                
Under  Community  law  as  it  now  stands21,  third  country  nationals  do  not  benefit  from  free
movement  of  workers,  although  if  they  are  family  members  of  an  EU  national  who  has
exercised his or her right to free movement (the latter is referred to in this Communication as
an "EU migrant worker") they have the right to reside and work in the Member State where
the EU migrant worker is employed. The Commission has proposed legislation on the rights
of third country nationals to enter the Member States  for  work purposes, and to  extend  free
movement rights to long-term resident third country nationals22.

2.2. Residence and expulsion

The right of residence goes hand in hand with the right to work in another Member State and
Member  States  must  grant  migrant  workers  a  residence  permit  as  proof  of  the  right  of
residence23.  The  Commission  still  receives  large  numbers  of  complaints  from  citizens
required  to  produce  documents  (such  as  tax  returns,  medical  certificates,  salary  slips,
electricity  bills  etc)  other  than  those  permitted  under  Community  law  (identity  card  or
passport  and  proof  of  employment).  Member  States  are  not  allowed  to  issue  temporary
permits, for which a fee is payable, before issuing a  residence permit24,  a point upon  which
the Commission also receives complaints.

The  right  to  work  is  not  conditional  upon  obtaining  the  residence  permit.  The  Commission
continues to receive complaints from citizens who are required to produce a residence permit
before being allowed to start working, contrary to Community law.

In  addition,  the  Commission  has  received  numerous  complaints  from  involuntarily
unemployed workers who receive social assistance, and who find that the host Member State
refuses to renew their residence permit and then threatens them with expulsion. If a five year
residence permit has been renewed once, the Member State may not refuse to renew it again
on grounds of involuntary unemployment, and therefore may also not expel a person in such
circumstances.  The  Commission  considers  that  workers  whose  fixed-term  employment
contract has come to an end should be categorised as involuntarily unemployed. Public policy
reasons may not be invoked to justify such expulsions25.

2.3. Access to employment and equal treatment in employment

An EU national working in another Member State must be treated in exactly the same way as
his  colleagues  who  are  nationals  of  that  State  as  concerns  working  conditions,  covering  for
example pay, training, dismissal and reinstatement.

This right to non-discrimination on grounds of nationality also applies to rules which, unless
objectively  justified  and  proportionate  to  their  aim,  are  intrinsically  liable  to  affect  migrant

21

22

23

24

25

Proposal for a European Parliament and Council Directive on the right of citizens of the Union and their
family members to move and reside freely within the territory of the Member States, COM(2001)0257
final
Proposal  for  a  Council  Directive  concerning  the  status  of  third-country  nationals  who  are  long-term
residents, COM (2001) 127 final, OJ C 240E, 28.8.2001, p.79-87 & proposal for a Council Directive on
the conditions of entry and residence of third country nationals for the purpose of paid employment and
self-employed activities, OJ C (2001) 386 final, OJ C 332E, 27.11.2001, p.248 - 256
Case 48/75, Royer ECR [1976] 497.
Case C-344/95, Commission v Belgium ECR [1997] I-01035.
Communication  from  the  Commission  to  the  Council  and  the  European  Parliament  on  the  special
measures  concerning  the  movement  and  residence  of  citizens  of  the  Union  which  are  justified  on
grounds of public policy, public security or public health, COM(1999)372 final.

6

                                                
workers  more  than  national  workers  and  consequently  risk  placing  migrant  workers  at  a
particular  disadvantage  (usually  referred  to  as  "indirect  discrimination")26.  As  the  Court
recently  recalled  in  the  Gottardo  case  27,  this  fundamental  right  to  equal  treatment  requires
that  when  a  Member  State  concludes  a  bilateral  convention  on  social  security  with  a  third
country (which provides for account to be taken of periods of insurance in the third country
for the acquisition of entitlement to benefits), it must grant nationals of other Member States
the same advantages as those enjoyed by its own nationals28.

The ability to communicate effectively is obviously important, and a certain level of language
may  therefore  be  required  for  a  job,  but  the  Court  has  held  that  any  language  requirement
must be reasonable and necessary for the job in question, and must not be used as an excuse
to exclude workers from other Member States29. While employers (whether private or public)
can  require  a  job  applicant  to  have  a  certain  level  of  linguistic  ability,  they  cannot  demand
only a specific  qualification as proof30. The Commission has  received  numerous complaints
about  job  advertisements  which  require  applicants  to  have  as  their  "mother  tongue"  a
particular language. The Commission considers that while a very high level of language may,
under  certain  strict  conditions,  be  justifiable  for  certain  jobs,  a  requirement  to  be  mother
tongue is not acceptable.

Migrant  workers  may  have  problems  relying  on  national  qualifications  in  other  Member
States, so a system of mutual recognition of qualifications and diplomas was put in place. A
national of a Member State who is fully qualified to exercise a regulated profession (i.e. one
that cannot be practised without certain specified professional qualifications) in one Member
State can have his qualification recognised in another Member State. However if the training
or  the  field  of  activity  of  the  profession  in  question  is  substantially  different  in  the  host
Member State, it can require him to undergo a period of adaptation or to take an aptitude test,
the  choice  being  in  principle  the  migrant  worker's.  Automatic  recognition  of  diplomas  is
provided  only  for  a  few  professions,  mainly  in  the  field  of  health  professions.  Recently  the
Commission  has  proposed  a  directive  which  will  consolidate  in  a  single  text  the  existing
directives on the recognition of professional qualifications in order to make the system easier
to understand  and  apply31.  The  proposal  also  seeks  to  introduce  simple  and  easy  conditions
for  cross  frontier  service  provision  in  particular.  In  addition,  the  Council32has  acted  to
enhance co-operation  between  the  Member  States  in  order  to  facilitate  the  transferability  of
qualifications  and  skills  within  the  regulated  and  non-regulated  professions,  and  thus
contribute to increased mobility as well as the promotion of lifelong learning.

The  Commission  is  very  much  aware  of  the  problem  that  the  lack  of  true  "portability"  of
occupational  pensions  between  Member  States  causes  workers33.  The  initial  legislation  at
Community level on safeguarding the existing occupational pension rights of employed  and

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29

30

31

32

33

Case C-237/94, O'Flynn ECR [1996] I-2617
Case C-55/00, judgment of 15.01.2002, nyr
The  Commission  has  raised  this  issue  with  the  Member  States  in  the  context  of  the  Administrative
Commission on social security for migrant workers
Case 379/87, Groener ECR [1989] 3967.
Case C-281/98, Angonese ECR [2000] I-04139.
COM (2002) 119 final.
Resolution  on  the  promotion  of  enhanced  cooperation  in  vocational  education  and  training  of  12
November 2002
Communication  from  the  Commission  "Towards  a  single  market  for  supplementary  pensions
(COM(1999)  134  final)  &  Communication  from  the  Commission  to  the  Council,  the  European
Parliament  and  the  Economic  and  Social  Committee  on  the  elimination  of  tax  obstacles  to  the  cross-
border provision of occupational pensions, OJ C 165, 8.6.2001 p. 4-13, COM (2001) 214 final

7

                                                
self-employed persons moving  within the Community34 is currently  being  followed  up  by  a
consultation of the social partners on the portability of occupational pension rights35.

2.4. Tax and social advantages

Migrant workers have the right to the same tax and social advantages as nationals of the host
Member State36. The Court has held that this means all the advantages which, whether or not
linked  to  a  contract,  are  generally  granted  to  national  workers  primarily  because  of  their
objective  status  as  workers  or  by  virtue  of  the  mere  fact  of  their  residence  on  the  national
territory and whose extension to workers who are nationals of other Member States therefore
seems likely to facilitate the mobility of such workers within the Community37. This has been
held to cover, for example, public transport fare reductions for large families38, child raising
allowances39, funeral payments40 and minimum subsistence payments41.

Where  national  law  allows  tax  deductions  in  relation  to  contributions  for  an  occupational
pension  and  private  sickness  and  invalidity  insurance,  it  is  discriminatory  not  to  allow
equivalent deductions in relation to contributions paid in a migrant worker's Member State42
of origin.

2.5. Family Members

Family members are defined43 as the spouse of the worker, their descendants who are under
the age of 21 or are dependant, and dependant relatives in the ascending line. The Court has
held that "spouse" means married partner44 and does not cover cohabiting partners45. Married
partners who are separated but not yet divorced still retain their rights as family members of a
migrant  worker46.  The  Commission  has  been  asked  about  same  sex  marriages  celebrated  in
Member  States  where  such  marriages  have  the  same  status  as  "traditional"  marriages  in
relation to free movement rights. The Court has not yet been called upon to pronounce on this
specific  point,  but  it  has  previously  held  that  as  there  is  no  consensus  among  the  Member
States  whether  same  sex  partners  can  be  assimilated  to  spouses  of  a  traditional  marriage,  it
should  be  concluded  that  same  sex  spouses  do  not  yet  have  the  same  rights  as  traditional
spouses for the purposes of Community law on the free movement of workers47.However, it
should be noted that if a Member State accords advantages to its own nationals who live as

34

35

36

37

38

39

40

41

42

43

44

45

46

47

Directive  98/49/EC,  OJ  L  209,  25.07.1998,  p.  46,  and  see  Communication  mentioned  in  previous
footnote)
SEC/2002/597 published on 27/05/2002
Article 7(2) of Regulation 1612/68
Case C-85/96, Martinez Sala (see footnote 1 above)
Case 32/75, Cristini v SNCF ECR [1975] 1085
Martinez Sala (see footnote 1 above)
Case C-237/94, O'Flynn [1996] I-2617
Case 75/63, Hoekstra ECR [1964] ECR 177 & Case 22/84, Scrivner ECR [1985] 1027
Case  C-204/90,  Bachmann  ECR  [1992]  I-249,  on  the  way  the  Court  has  since  refused  to  accept  as
justification the need to ensure the coherence of the tax system, see also Case C-80/94, Wielockx ECR
[1995] I-02493 and Case C-130/00 Danner, judgment 03.10.2002, nyr
Article 10 of Regulation 1612/68
Case 59/85, Netherlands v Reed ECR [1986] 1283
Case T-264/97, D v Council ECR staff cases [1999] p.1a
Case 267/83, Diatta v Land Berlin ECR [1985] 567
Reed  case  (see  footnote  44  above).  This  reasoning  was  also  reflected  in  D  v  Council  (footnote  45
above)

8

                                                
non-married couples, under the principle of equal treatment in social advantages (see section
2.4 above) the same advantages must be granted to migrant workers48.

Family members, whatever their nationality, have the right to reside with the migrant worker
and to receive residence permits of the same length as the worker. The Commission receives
complaints, in particular concerning third country national family members, on this point. In
addition,  if  third  country  nationals  can  prove  that  they  are  family  members  of  a  migrant
worker, and that they present no threat on public policy grounds, the host Member State may
not refuse them entry or residence, even if they do not have a valid visa49. Where nationals of
a Member State have exercised their right of free movement in another Member State, upon
return  to  their  home  Member  State  their  third  country  national  family  members  are  also
covered by the Community rules on residence rights of migrants and their families50.

The children of migrant workers, whatever their nationality, have the right to education in the
host Member State51on the same terms as its nationals. This includes a right to equal treatment
as  compared  to  children  of  national  workers  in  relation  to  study  grants52,  even  when  this
means  returning  to  the  Member  State  of  origin53,  a  topic  on  which  the  Commission  also
receives complaints.

Children  will  retain  their  right  of  residence  even  if  the  migrant  worker  leaves  the  host
Member  State,  and  a  third  country  national  parent  will  retain  his  or  her  right  of  residence,
even  if  he  or  she  is  divorced  from  the  EU  migrant  worker,  in  order  that  the  children  can
continue  to  enjoy  their  right  to  education54.  The  spouse  and  children  of  the  migrant  worker
have  the  right  to  work  in  the  host  Member  State  and  benefit  from  the  provisions  on  the
recognition of qualifications55.

2.6. Future prospects

The basic legal texts on free movement date from the 1960s, which have been supplemented
by  many  judgments  of  the  Court.  This  situation  led  the  Commission  to  propose  a
consolidation of the jurisprudence and a extension of migrant workers’ rights in 198856, but
Member  States  failed  to  reach  an  agreement  on  this  proposal.  Ten  years  later,  the
Commission,  with  the  support  of  the  European  Parliament,  presented  a  new  proposal  as  a
follow-up to the 1997 Action Plan, which the Member States have failed so far to discuss57.

In 2001, the Commission proposed a major piece of legislation to replace most of the existing
texts  on  residence  rights  of  migrant  workers  and  other  categories  of  EU  citizens  aimed  at
facilitating their right of free movement58.

48

49

50

51

52

53

54

55

56

57

58

Reed judgment
Case C-459/99, MRAX judgment of 25.07.2002, nyr
Case C-370/90, Singh ECR [1992] I-4265
Article 12 of Regulation 1612/68
Case 9/74, Casagrande ECR [1974] 773
Case C-308/89, Di Leo ECR [1990] I-4185
Case C-413/99, Baumbast, judgment of 17.09.2002, nyr
Case 131/85, Gül ECR [1986] 1573
COM (1988) 815 final OJ C 100,  21.04.1999, p. 6
COM (1998) 394 Final, OJ C 344 12.11.1998, P. 0012
Proposal for a European Parliament and Council Directive on the right of citizens of the Union and their
family members to move and reside freely within the territory of the Member States, COM(2001) 257
final

9

                                                
3. SOCIAL SECURITY

3.1. Introduction

Community  legislation  on  social  security  is  a  sine  qua  non  for  exercising  the  right  to  free
movement of persons. The necessity of a system of co-ordination between the social security
systems  of  the  Member  States  to  provide  free  movement  was  already  recognised  in  the
original Treaty of Rome59.

Community  law  provides  for  co-ordination  but  not  harmonisation  in  the  field  of  social
security and therefore does not detract from the powers of the Member States to organise their
social security schemes60. Social assistance is not covered by this co-ordination at Community
level61.  Each  Member  State  is  therefore  free  to  determine  who  is  to  be  insured  under  its
legislation62 and which benefits are granted and under what conditions63.

To  ensure  that  the  application  of  the  different  national  social  security  schemes  does  not
adversely  affect  persons  exercising  their  right  to  free  movement,  Regulation  1408/71
establishes  certain  common  rules  and  principles.  The  objective  of  these  is  to  ensure  that  a
person who has exercised his/her freedom to move within the Community is not placed in a
worse  position  than  one  who  has  always  resided  and  worked  in  a  single  Member  State.  In
order  to  achieve  this  goal,  co-ordination  rules  provide  for  a  mechanism  based  on  the
following principles:

-

-

-

-

equality of treatment between nationals and non-nationals, so that a person residing
in  the  territory  of  one  Member  State  shall  be  subject  to  the  same  obligations  and
enjoy the same benefits as the nationals of that Member State without discrimination
on grounds of nationality64.

aggregation  of  periods  so  that  periods  of  insurance,  employment  or  residence
completed  under  legislation  of  one  Member  State  are  taken  into  account,  where
necessary, for entitlement to benefits under the legislation of another Member State.

export of benefits so that benefits can be paid to persons residing in another Member
State.

determination of the Member State whose social security legislation is applicable; in
principle only one social security legislation at a time is applied, so that a person may
enjoy proper social security coverage without being subject to the legislation of two
Member States at the same time and having to pay double contributions, or none at
all.

These principles have demonstrated their ability to enable insured persons to move from one
Member  State  to  another.  For  instance,  the  principle  of  equal  treatment  and  non-
discrimination  for  Community  workers  has  been  held  not  only  to  prohibit  direct
discrimination overtly based on nationality, but also indirect discrimination based on criteria
other  than  nationality  which  particularly  affect  nationals  of  other  Member  States  to  their

59

60

61

62

63

64

Article 42 EC (ex article 51).
Case C-70/95, Sodemare ECR [1997] I-3395
"social assistance" benefits are discretionary payments based on need
Case C-349/87, Paraschi ECR [1991] I-4501
Joint cases C-4/95 and C-5/95, Stöber and Piosa Pereira ECR [1997], I-511
Case C-185/96, Commission v Greece ECR [1998] I-6601

10

                                                
detriment65. It also includes the assimilation of facts66, so that situations which occur in other
Member  States  are  to  be  treated  as  though  they  took  place  in  the  Member  State  whose
legislation applies67.

The  aim  of  Regulation  1408/71  being  to  make  it  easier  for  those  persons  covered  by  it  to
exercise the freedoms provided by the Treaty, the Court has always interpreted the provisions
of  the  Regulation  in  view  of  the  fundamental  freedom  of  movement  for  workers68,  the
freedom  of  establishment69  and,  more  recently,  also  the  free  movement  of  persons70.  These
fundamental  freedoms  can  also  preclude  the  application  of  national  legislation71.  This  is
particularly  relevant  in  those  cases  where,  notwithstanding  the  protection  offered  by
Regulation 1408/71, persons who have moved from one Member State to another lose social
security advantages, because Community law leaves in being differences between the social
security  schemes  of  Member  States.  This  particularly  affects  people  who  move  frequently
between the various Member States throughout their career.

As  this  would  hamper  the  right  to  free  movement,  and  because  Member  States,  national
authorities and national Courts have to take all the measures necessary to ensure fulfilment of
the  obligations  under  the  Treaty,  the  Court  held  that  national  courts  must  interpret  national
legislation in the light of these Treaty aims so as not to discourage persons from  moving to
another Member State72. In the Engelbrecht73 case it even found that if such an interpretation
is not possible a national must, if necessary, disapply a provision of national legislation and
apply Community law instead.

To take account of the consequences of the Court's interpretations and other developments at
Community  level,  but  also  in  view  of  the  frequent  changes  at  national  level,  Regulation
1408/71 has been adapted, improved  and extended many times: for example it initially only
covered  workers  and  members  of  their  family.  It  was  then  extended  to  self-employed
persons74,  to  every  European  citizen  who  had  sickness  insurance  coverage  for  sickness
benefits during a temporary stay75 and to students76. Since 1998, following the ruling in  the
Vougioukas case77, special schemes for civil servants have also been included in Regulation
1408/7178.

65

66

67

68

69

70

71

72

73

74

75

76

77

78

Case  C-124/99,  Borawitz  ECR  [2001]  I-7293;  it  was  unlawful  for  German  pension  payments  to
beneficiaries  living  in  another  Member  State  to  be  lower  than  those  made  to  beneficiaries  living  in
Germany
Case  C-45/92,  Lepore  and  Scamuffa  ECR  [1993]  I-6497  &  Case  C-290/00,  Duchon,  ECR  [2002]  I-
3567; a migrant worker must be able to rely on national legislation which treats periods of invalidity as
periods of active employment for insurance purposes, even if he was working in another Member State
when the invalidity arose
Case  C-131/96,  Mora  Romero  ECR  [1997]  I-3659,  a  Member  State  must  take  into  account  military
service completed in another Member State for the purposes of entitlement to orphan's benefit
Case C-266/95, Merino Garcia ECR [1997] I-3279; Case C-290/00, Duchon ECR [2002] I-3567
Case 53/95, Kemmler ECR [1996] I-703
Case C-135/99, Elsen ECR [2000] I-10409
See e.g. case C-10/90, Masgio ECR [1991] I-1119, joint  cases  C-4/95  &  5/95  Stöber  &  Pereira  ECR
[1997] I-511, case C-226/95, Merino Garcia ECR [1997] I-3279
Case C-165/91, van Munster ECR [1994] I-4661
Case C-262/97, ECR [2000] I-07321
Regulation (EEC) 1390/81 of 12.5.1981, OJ L 143 of 29.5.1981
Regulation (EC) 3095/95 of 22.12.1995, OJ L 335 of 30.12.1995
Regulation (EC) 307/1999 of 8.2.1999, OJ L 38 of 12.2.1999
Case C-443/93, ECR [1995] I-4033
Regulation (EC) 1606/98 of 29.6.1998, OJ L 209 of 25.7.1998

11

                                                
These  numerous  amendments  have  made  the  Regulation  very  complex  and  difficult  to  deal
with. The Commission recognised that it was essential  to  make  the rules more  efficient  and
user-friendly  and  presented,  in  December  199879,  a  proposal  to  simplify  and  modernise
Regulation  1408/71.  This  proposal  is  currently  being  discussed  by  the  co-legislators,  the
Council and the European Parliament, on the basis of an agreed set of parameters, i.e. basic
options in the light of which the Regulation is to be modernised. Some of these parameters are
very specific and aim to improve the  rights  of insured persons,  e.g. by including non-active
persons  and  pre-retirement  benefits,  by  improving  cross-frontier  access  to  medical  care  for
retired  frontier  workers,  by  extending  the  unemployment  chapter  to  cover  self-employed
schemes  and  by  extending  pensioners'  and  orphans'  rights  as  regards  family  benefits.  This
proposal  is  expected  to  be  adopted  before  the  end  of  2003.  In  addition,  the  Commission's
proposal  to  extend  the  provisions  of  Regulation  1408/71  to  legally  resident  third  country
nationals should come into force at the beginning of 200380.

3.2. Non-exportability of special non-contributory benefits

Under  Regulation  1408/71,  the  general  rule  is  that  social  security  benefits  must  be  paid  in
whichever Member State the beneficiary resides81. However this does not apply to a particular
category  of  benefits  linked  to  the  social  environment  of  the  Member  State,  called  "special
non-contributory benefits"82. These are benefits which fall between the traditional categories
of  social  assistance  and  social  security,  aimed  at  particular  problems  such  as  care  for  the
disabled  or  the  prevention  of  poverty.  These  benefits,  if  listed  in  a  specific  Annex  of  the
Regulation (Annex IIa), are subject to special co-ordination rules and are only payable in the
Member  State  that  provides  them,  and  cannot  be  "exported"  by  a  beneficiary  to  another
Member State. However, an EU citizen who moves to another Member State will be entitled
to that State's special non-contributory benefits, although these may not be equivalent. This is
a subject on which the Commission receives many complaints and requests for information.

These provisions  have  been  the  subject  of  a  great  deal  of  litigation  before  the  Court.  In  the
Snares case83 the Court was asked about the validity of the non-exportability of this kind of
benefit  under  Regulation  1408/71,  and  ruled  that  this  derogation  from  the  principle  of  the
exportability of social security benefits was compatible with EC law.

However, not until 2001 did the Court consider whether the listing of a benefit by a Member
State as non-exportable was compatible with Community law. The Court examined whether
the  particular  benefit  actually  satisfied  the  conditions  for  non-exportability,  in  other  words
was  it  truly  "special"  and  non-contributory?  Or  did  it  have  the  characteristics  of  a  benefit
falling within the traditional branches of social security systems, which would be exportable?
In its judgment in the Jauch84 case the Court held that payment of the Austrian care allowance
(Pflegegeld) could no longer be restricted to Austrian territory. The benefit in question gave a
legally defined right to recipients and was intended to supplement sickness insurance benefits.
In  addition  it  was  indirectly  based  on  contributions  paid  for  sickness  insurance.  The  Court

79

80

81

82

83

84

COM (1998) 779 final, OJ C 38 of 12.02.1999
Proposal for a Council Regulation extending the provisions of Regulation (EEC) 1408/71 to nationals
of third countries who are not already covered by those provisions solely on ground of their nationality,
COM (2002) 59 final, OJ C 126E, 28.5.2002, P. 285-389
Article 10 of Regulation 1408/71
Articles 4(2a), 10a and Annex IIa to Regulation 1408/71, introduced by Regulation 1247/92, OJ L136,
19.05.1992
Case C-20/96, Snares ECR [1997] I-06057
Case C-215/99, ECR [2001] I-1901

12

                                                
found  that  this  benefit  was  neither  "special"  nor  "non-contributory"  and  that  therefore,  the
normal co-ordination rules should apply. As a result, the care allowance was re-qualified as a
cash  sickness  benefit  under  the  general  provisions  of  Regulation  1408/71,  and  so  had  to  be
paid  to  beneficiaries  living  in  other  Member  States.  In  addition  a  Luxembourg  maternity
allowance was also held by the Court to be incorrectly listed as non - exportable85. The Court
held that in order to be "special" a benefit had to be closely linked to the social environment
of the Member State in question, which this was not.

As a consequence of these judgments, and in order to ensure legal certainty and transparency,
it is clear that all the benefits currently listed as non-exportable must be re-examined to see if
they  really  are  "special"  and  "non-contributory".  In  the  light  of  the  criteria  set  out  by  the
Court, it appears that only benefits for preventing poverty and protecting the disabled having
a close enough link to the social and economic environment of the Member State should be
classified  as  "special",  and  therefore  non-exportable  (assuming  that  they  are  properly  non-
contributory as well). The Commission plans to put forward a legislative proposal to amend
Regulation  1408/71  to  achieve  this  aim  at  the  beginning  of  2003.  In  addition,  it  should  be
noted that a number of cases are currently pending before the Court on the non-exportability
of  some  Member  States'  benefits86.  Furthermore,  it  should  be  recalled  that  the  non-
exportability  of  benefits  from  certain  Member  States  is  often  not  matched  by  eligibility  for
equivalent benefits in the Member State to which the person wants to move. While Member
States should be able to restrict payment of certain benefits to their own territory, for the sake
of legal certainty, this should be strictly in accordance with the clear and objective criteria of
the  Regulation  as  interpreted  by  the  Court.  In  this  way  compliance  with  Community  law  is
ensured.

3.3. Health Care

Regulation  1408/71  has  specific  provisions  on  health  care,  setting  out  the  conditions  under
which individuals have access to it when they move within the European Union.

Simply  put,  anyone  temporarily  staying,  or  residing,  in  a  Member  State  other  than  the  one
where  they  are  insured  against  sickness,  is  entitled  to  receive  sickness  benefits  in  kind
according  to  the  legislation  of  this  Member  State  as  if  he  were  insured  there,  but  at  the
expense of the institution of insurance. Depending on the status of the persons and/or the type
of stay, there is a right to immediately necessary care87, to care which becomes necessary88, or
to all sickness benefits in kind89.

For anyone wishing to go to another Member State specifically to obtain treatment, the costs
will,  under  the  co-ordination  system  set  up  by  Regulation  1408/71,  only  be  covered  by  the
Member State where they are insured if they received prior authorisation. This Member State
has  broad  discretion  to  grant  or  refuse  the  authorisation,  but  it  may  not  be  refused  if  two
conditions  are  simultaneously  met:  (a)  where  the  treatment  in  question  is  among  the
treatments provided for  by the health scheme of the  Member  State  of  insurance  and  (b)  the
person  cannot  be  treated  within  the  time  normally  necessary  for  obtaining  this  treatment,
taking  into  account  his  current  state  of  health and  the  probable  course  of  the  disease.  If  the
authorisation is granted, the care is provided according to the legislation, including tariffs, of

85

86

87

88

89

Case C-43/99, Leclere ECR [2001] I-04265
Case C-158/02, Marcaletti & Case C-160/02, Skalka OJ C169 13.07.2002
e.g. tourists
e.g. students and posted workers
e.g. workers, self-employed or pensioners residing in a Member State other than the competent one

13

                                                
the  Member  State  where  the  care  is  provided,  but  at  the  expense  of  the  institution  of  the
Member State in which the person is insured.

However,  in  the  recent  Vanbraekel90  case  the  Court  examined  the  question  of  which
reimbursement  rate  a  person  who  went  to  another  Member  State  for  planned  medical
treatment  could benefit  from,  where  the  reimbursed  costs,  according  to  this  Member  States'
legislation, were  lower than the person  would  have  been  entitled  to  in  the  Member  State  of
insurance.  Although  the  Court  confirmed  that  under  the  rules  of  Regulation  1408/71
reimbursement  could  only  be  made  according  to  the  tariffs  of  the  Member  State  where  the
treatment was provided, it held  that, under  the  principle  of  freedom  to  provide services, the
insured person was entitled to additional reimbursement from the Member State of insurance
if  the  latter's  legislation  would  have  provided  for  a  higher  level  of  reimbursement  had  the
hospital treatment been received there.

For patients seeking medical treatment in another Member State the Court, in the Kohll91 and
Decker92  cases,  made  reference  to  further  fundamental  freedoms  of  the  Treaty,  i.e.  the  free
movement of goods and freedom to provide services. In these two cases and a further case93
which  –  unlike  the  first  two  cases  –  concerned  medical  treatment  in  a  hospital,  the  Court
confirmed Member States' ability to freely organise their own health care systems but recalled
that they have to respect basic Community rules such as the freedom to provide and receive
services in doing so. The Court explicitly stated that medical and hospital care were services
within  the  meaning  of  the  Treaties.  However  the  Court  also  concluded  that,  although  the
national  system  of  prior  authorisation  concerned  constituted  a  barrier  to  the  freedom  to
provide  services,  overriding  reasons  like  the  maintenance  of  the  social  security  system's
financial stability and of a balanced medical and hospital service open to all could justify such
a barrier. Nevertheless, for a prior administrative authorisation scheme to be justifiable it must
be based on objective, non-discriminatory criteria which are known in advance. These criteria
must  circumscribe  the  exercise  of  the  national  authorities'  discretion  so  that  it  is  not  used
arbitrarily. An easily accessible procedural system must ensure that a request for authorisation
will  be  dealt  with  objectively  and  impartially  and  within  a  reasonable  time,  and  refusals  to
grant authorisation must be open to challenge in judicial or quasi-judicial proceedings.

This jurisprudence does not mean that insured persons have a general right under Community
law,  after  receiving  medical  treatment  abroad,  to  be  reimbursed  for  the  costs  incurred.  It  is
only  in  respect  of  treatment  which  the  social  insurance  system  of  the  Member  State  where
they  are  insured  would  normally  pay  for  that  patients  may  ask  that  the  costs  of  medical
treatment abroad be taken in charge or reimbursed.

One  of  the  most  frequent  reasons  why  patients  seek  medical  treatment  in  another  Member
State is the delay in receiving the treatment required by the insured person’s state of health.
Although the issue of waiting lists is  at stake in  a currently  pending  preliminary question94,
the Court, in relation to the Dutch legislation  at  issue  in  the  Smits/Peerbooms  case,  already
gave some indications  on the notion of  "undue delay".  In particular it considered that  when
determining  whether  an  equally  effective  treatment  could  be  obtained  without  undue  delay,
the national authorities must take into account all the circumstances of each specific case, i.e.
not only the patient's medical condition but also his past health record.

90

91

92

93

94

Case C-368/98, ECR [2001] I-5363
Case C-158/96, ECR [1998] I-1931
Case C-120/95, ECR [1998] I-1831
Case C-157/99, Geraets-Smits/Peerbooms ECR [2001] I-5473
Case C-385/99, Müller-Fauré and van Riet

14

                                                
It is now for the Commission and the Member States to take account of this judgment and to
face questions of interpretation when implementing it, as well as the related judgments95, in
the  light  of  the  patients'  interests.  In  order  to  have  a  concerted  and  coherent  approach,  the
Commission has initiated a constructive dialogue with Member States and other stakeholders.
As  foreseen  by  one  of  the  parameters  under  the  proposal  for  simplifying  and  modernising
Regulation 1408/71, the Commission and the Members States will also think about the need
to adapt the Regulation in the light of this case law to make the present rules more transparent
and more reliable for patients seeking medical treatment in another Member State.

The  Commission  has  furthermore  taken  an  initiative  to  establish  a  high-level  reflection
process on health care developments in the European Union, including the free movement of
patients.  The  aim  is  to  provide  an  informal  and  flexible  forum  bringing  together  relevant
stakeholders for joint reflection on issues affecting health and health services in the internal
market, and to make recommendations to guide future work at Community and Member State
level,  without  duplicating  or  substituting  for  discussions  within  the  formal  institutional
structures of the EU.

The Commission considers that this case law, by enabling insured persons to receive medical
treatment in another Member State and by determining rules on the reimbursement of hospital
costs,  gives  additional  protection  to  insured  persons  and  represents  a  concrete  step  forward
towards achieving a social Europe.

3.4. Social Security Contributions

In  order  to  avail  themselves  of  the  right  of  free  movement,  it  is  essential  for  the  persons
involved to know in which Member State he or she will be insured, and where contributions
will have to be paid. Regulation 1408/71 contains detailed rules on the determination of the
Member State whose social security legislation is applicable, based on two basic principles:

-

-

a person is subject to the legislation of only one Member State at a time

a person is normally covered by the legislation of the Member State where he
or she pursues a professional activity (lex loci laboris).

Having to pay contributions in more than one Member State at a time may discourage persons
from  making  use  of  their  right  to  free  movement.  Only  the  Member  State  where  the
professional activity is pursued may claim social security contributions. Therefore, if a person
pursues  a  professional  activity  in  one  Member  State,  which  is  then  competent  for  social
security benefits, but resides in another Member State, the Member State of residence may not
claim  social  security  contributions.  This  reasoning  was  followed  by  the  Court  as  regards  a
levy which under national law was construed as a tax: it is to be considered a social security
contribution  under  Community  law  if  it  actually  serves  to  directly  finance  branches  of  the
social  security  system96.  The  same  principle  applies  for  health  insurance  contributions  of
pensioners: only the Member State which is responsible for paying for the costs of pensioners'
health care may levy the corresponding contributions97.

95

96

97

Case C-158/96 Kohll, C-120/95 Decker, C-368/98 Vanbraekel
Case  C-169/98,  Commission  v  France  ECR  [2000]  I-1049  and  C-34/98,  Commission  v.  France  ECR
[2000] I-995
Case C-389/99, Rundgren ECR [2001], I-3731 point 53.

15

                                                
It  should  be  noted,  however,  that  under  Regulation  1408/71  special  rules  apply  to  persons
who are simultaneously employed in one Member State and self-employed in another: these
persons may actually be subject to the social security legislation of two Member States  at a
time98. Although this implies that they may therefore have to pay social security contributions
in  two  Member  States  the  Court  confirmed  the  validity  of  this  rule  in  the  recent
Hervein99case.  It  held  that  the  Treaty  does  not  guarantee  that  the  extension  of  a  person's
activities  in  more  than  one  Member  State  is  neutral  as  regards  social  security.  However,  it
recalled  that  the  Member  States  whose  legislation  applies  simultaneously  must  nevertheless
ensure  compliance  with  the  Treaty  principles  of  free  movement  of  workers  and  freedom  of
establishment.  In  particular,  each  of  the  Member  States  concerned  must  facilitate  the
aggregation of benefits provided under the two sets of applicable legislation and ensure that it
does not charge social security contributions on which there is no return.

4. FRONTIER WORKERS

4.1. Introduction

Frontier workers are people who live in one Member State and work in another. As a general
rule,  they  enjoy  all  the  benefits  granted  to  migrants  workers  in  the  Member  State  of
employment. However, frontier workers are entitled to unemployment benefits from the State
of residence rather than  that  of  employment100, and they can chose  to  be covered for health
care  in  either  State101.    The  family  members  of  a  frontier  worker  are  only  covered  by  the
health  care  system  of  the  State  of  residence,  and  once  a  frontier  worker  retires  he  can  no
longer  be  covered  by  the  State  of  employment,  but  that  of  residence.  This  rather  complex
arrangement can cause practical problems, for example if a worker starts a lengthy course of
treatment in the State where he works, when he retires he will no longer have access to that
health care but must find treatment in the State where he lives. The Commission's proposal to
modify  and  simplify  Regulation  1408/71102  envisaged  allowing  retired  frontier  workers  to
maintain their rights to health care in the Member State of previous employment. The Council
is now examining this proposal.

Frontier workers often face specific problems, because of residence conditions, in particular
as regards social security and social advantages, as the Commission has noted on a number of
occasions103.  The  justification  of  residence  clauses  for  social  advantages  is  that  they  aim  to
help  the  integration  of  the  migrant  worker  and  his  family  in  the  host  Member  State.  As
frontier workers do not live in the State of employment, Member States have argued that they
should  not  benefit  from  the  same  social  advantages  as  "normal"  migrant  workers.  These
arguments have been rejected by the Court, which held that no residence requirement could be
applied to the child of a frontier worker, who was entitled to tuition under the same conditions
as  applicable  to  children  of  nationals  of  the  State  of  employment104.  The  Commission  is

98

99

100

101

102

103

104

Article 14(c) of Regulation 1408/71
Joint cases C-393/99 and C-394/99, Hervein and Lorthiois ECR [2002], I-2829, paragraphs 60 and 61
Article 71 Regulation 1408/71
Article 20 Regulation 1408/71
COM (1998) 779 final
Communication  from  the  Commission  on  the  living  and  working  conditions  of  Community  citizens
residing  in  frontier  regions,  with  special  reference  to  frontier  workers,  COM(1990)  0561  final,  1997
Action Plan on Free movement of workers, & the Commission's proposal to amend Regulation 1612/68
(COM(1998)  394  final,  OJ  C  344  12.11.1998  p.  0012)  which  envisaged  lifting  residence  clauses  for
social advantages for frontier workers
Case C-337/97, Meeusen ECR [1999] I-3289

16

                                                
considering  infringement  procedures105  against  several  Member  States  which  impose
residence conditions on social advantages for migrant workers.

4.2 Retired frontier workers

The above-mentioned problems are particularly acute for retired frontier workers, whose State
of residence does not change upon retirement,  and therefore do not benefit from the ban  on
discrimination which applies to migrant workers who retire in the Member State where they
worked106.  However,  the  Court  has  ruled  that  retired  workers  may  claim  social  advantages
from  the  State  where  they  previously  worked,  such  as  special  compensation  payments  for
losing a  job107,  as  long  as  these  relate  to  their  previous  employment.  In  such  circumstances
Member States may not make payment of social advantages subject to a residence condition.
However, the Court has held that new rights which are unrelated to the previous experience,
such  as  child  raising  allowance,  do  not  have  to  be  granted  by  the  Member  State  where  the
frontier  worker  was  previously  employed108.  The  Commission's  1998  proposal  to  amend
Regulation 1408/71 envisaged lifting, for pensioners, residence clauses for all family benefits,
not only for family allowances as is the case at present.

4.3. Taxation

The  ability  of  frontier  workers  to  rely  on  the  right  of  equal  treatment  can  also  apply  to
questions of income tax. For example, a frontier worker employed in one Member State but
living with his family in another State cannot be required to pay more tax than a person living
and  working  in  the  State  of  employment,  where  that  worker’s  main  family  income  comes
from the State of employment109. In addition, rules which make it more beneficial to be taxed
as  a  couple  than  as  a  single  person  must  apply  to  frontier  workers  in  the  same  way  as  for
couples in a similar situation in the Member State of employment and may not be conditional
upon both spouses being resident in the State of employment.110.

5. PUBLIC SECTOR

5.1. Introduction

As civil servants and employees in the public sector are workers in the sense of Article 39 EC,
the  rules  on  free  movement  of  workers  in  principle  apply  to  them.  However,  there  is  one
exception and some specific problems:

-

-

105

106

107

108

109

110

Member States authorities are allowed to restrict to their own nationals those posts in
which  the  exercise  of  public  authority  and  the  responsibility  for  safeguarding  the
general interest of the State is involved (Article. 39(4) EC).

In  several  Member  States  rules  exist  which  are  very  specific  to  public  sector
employment (e.g. about access, recognition of professional experience and seniority;

under article 226 EC
Regulation 1251/70, OJ L 142, 30.06.1970
Case C-57/96, Meints ECR [1997] I-6689
Case C-43/99, Leclere ECR [2001] I-04265 and Case C-33/99, Fahmi & Esmoris Cerdeiro-Pinedo ECR
[2001] I-02415
Case C-279/93, Schumacker ECR [1995] I-225
Case C-87/99, Zurstrassen ECR [2000] I-03337

17

                                                
recognition  of  diplomas  etc)  and 
discrimination which do not occur in the same way in the private sector.

therefore  cause  additional  problems  of

The  Commission  still  receives  large  numbers  of  complaints  on  this  issue,  particularly
concerning  the  taking  into  account  of  professional  experience  acquired  in  another  Member
State as regards the access to the public sector and the determination of salary etc. Therefore
the Commission proceeds with numerous infringement procedures against the Member States
concerned.  At  the  request  of  the  Member  States,  the  Commission  also  advises  the  Member
States' authorities in the framework of an intergovernmental working group established by the
Member States' Directors General for Public Administration.

5.2.

Access to employment in the public sector

For  a  long  time  problems  in  relation  to  the  free  movement  of  workers  in  the  public  sector
concerned  exclusively  access  and  nationality  conditions.  Article  39(4)  of  the  ECTreaty
provides  that  the  free  movement  of  workers  does  not  apply  to  employment  in  the  public
service. However, the derogation has constantly been interpreted in a very restrictive way by
the Court111 and the Commission has actively promoted increased access to the public sector,
and continues to do so. In a number of early judgments the Court developed its interpretation
of  Article  39(4)  EC:  the  Member  States  are  only  allowed  to  restrict  public  service  posts  to
their  nationals  if  they  are  directly  related  to  the  specific  activities  of  the  public  service,
namely those involving the exercise of public authority and the responsibility for safeguarding
the  general  interest  of  the  State  including  those  of  public  bodies  such  as  local  authorities.
These  criteria  have  to  be  evaluated  in  a  case-by-case  approach  in  view  of  the  nature  of  the
tasks and responsibilities covered by the post. In these judgments the Court ruled that e.g. jobs
such  as  postal  or  railway  workers,  plumbers,  gardeners  or  electricians,  teachers,  nurses  and
civil researchers may not be restricted to nationals of the home State. In order to monitor the
application  of  this  jurisprudence,  in  1988  the  Commission  launched  an  action112which  was
focussed  on  access  to  employment  in  four  sectors  (bodies  responsible  for  administering
commercial  services,  public  health  care  services,  teaching  sector,  research  for  non-military
purposes). The sector-approach was an important starting point for the control of the correct
application of EC law which was followed by numerous infringement procedures initiated by
the Commission. The effect of the 1988 action and the infringement procedures was that the
Member  States  undertook  extensive  reforms  opening  their  public  sectors.  Only  three
infringement  procedures  finally  had  to  be  referred  to  the  Court,  which  fully  confirmed,  in
1996113, its previous jurisprudence.

Free  movement  of  workers  in  the  public  service  is  independent  of  any  specific  sector;  it  is
only post-related. Therefore only two categories of posts can be distinguished: those which do
involve  the  exercise  of  public  authority  and  the  responsibility  for  safeguarding  the  general
interest of the State and those which do not.

111

112

113

Case 152/73, Sotgiu ECR [1974] 153; Case 149/79, Commission v Belgium I ECR [1980] 3881; Case
149/79, Commission v Belgium II ECR [1982] 1845; Case 307/84, Commission v France ECR [1986]
1725;  Case  66/85,  Lawrie-Blum  ECR  [1986]  2121;  Case,  225/85  Commission  v  Italy  ECR  [1987]
2625; Case C-33/88, Allué ECR [1989] 1591; Case C-4/91, Bleis ECR [1991] I-5627; Case C-473/93,
Commission v Luxembourg ECR [1996] I-3207; Case C-173/94, Commission v Belgium ECR [1996]
I-3265; Case C-290/94, Commission v Greece ECR [1996] I-3285
"Freedom of movement of workers and access to employment in the public service of Member States -
Commission  action  in  respect  of  the  application  of  Article  48(4)  of  the  EEC-Treaty"  OJ  C-72/2  of
18.03.1988
Case  C-473/93,  Commission  v  Luxembourg  ECR  [1996]  I-3207;  Case  C-173/94,  Commission  v
Belgium ECR [1996] I-3265; Case C-290/94, Commission v Greece ECR [1996] I-3285

18

                                                
An additional question arises in relation to private sector posts which involve some exercise
of public authority. In a recent judgment the Court stated that private security guards do not
form part of the public service and that therefore Article 39(4) EC is not applicable to them,
whatever the duties of the employee114. Whether the same reasoning applies to private sector
posts  to  which  the  State  assigns  public  authority  functions  (e.g.  captains/first  officers  of
merchant and fishing ships who exercise police functions) is currently at stake in preliminary
questions pending before the Court115.

Although these developments  have  led  to  a  fairly  wide  opening  of  the  public  sectors  to  EU
nationals  116in  the  Member  States,  the  benefit  of  the  principles  derived  from  the  Court's
jurisprudence is not yet always guaranteed to migrant workers.

The  Commission  still  receives  complaints  about  posts  restricted  to  nationals  of  the  host
Member  State  which  clearly  do  not  involve  public  authority  and  responsibility  for
safeguarding  the  general  interests  of  the  State  (e.g.  gardener,  electrician,  librarian  etc).  In
these  cases  the  legislation  has  either  not  or  not  totally  been  adapted  to  EClaw  or  the
application is not correct; e.g. national framework rules on opening up the public sector have
not yet been transposed by adopting the necessary application rules. Therefore these Member
States  must  either  amend  their  existing  legislation  and/or  better  control  internally  its
application.

The  Commission  still  considers  (as  stated  in  1988)  that  the  derogation  in  Article  39(4)  EC
covers specific functions of the State and similar bodies such as the armed forces, the police
and  other  forces  of  the  maintenance  of  order,  the  judiciary,  the  tax  authorities  and  the
diplomatic corps. However, not all posts in these fields imply the exercise of public authority
and  responsibility  of  the  safeguarding  the  general  interests  of  the  State;  for  example:
administrative  tasks;  technical  consultation;  maintenance.  These  posts  may  therefore  not  be
restricted to nationals of the host Member State.

In  relation  to  posts  in  State  ministries,  regional  government  authorities,  local  authorities,
central  banks  and  other  public  bodies,  which  deal  with  the  preparation  of  legal  acts,  their
implementation,  monitoring  their  application  and  the  supervision  of  subordinate  bodies,  the
Commission takes a stricter approach than it did in 1988. These functions were then described
in a general way giving the impression that all posts linked to such activities were covered by
the derogation of Article 39(4) EC. This would have allowed Member States to restrict nearly
all  posts  (apart  from  administrative  tasks,  technical  consultation  and  maintenance)  to  their
nationals, a point of view which has to be re-examined in the light of the Court'sjurisprudence
of  the  1990's.  It  is  important  to  note  that  even  if  management  and  decision-making  posts
which involve the exercise of public authority and responsibility for safeguarding the general
interests of the State may be restricted to nationals of the host Member State, this is not the
case in relation to all jobs in the same field.  For  example,  the post  of  an official who helps
prepare decisions on granting planning permission should not be restricted to nationals of the
host Member State.

Member  States  are  also  not  allowed  to  exclude  migrant  workers  from  recruitment
competitions unless all posts accessible via that competition fulfil the criteria of Article 39(4)

114

115

116

Case C-283/99, Commission v Italy ECR 2001 I-4363
see pending Case C-405/01 and Case C-47/02
More  information  about  Member  States'  rules  and  administrative  practices  concerning  access  to  the
public sector can be found in the Report of the Mobility Group adopted by  the  Directors  General  for
Public Administration in November 2000 in Strasbourg.

19

                                                
EC  (e.g.  a  competition  for  judicial  posts  could  be  restricted  to  nationals,  whereas  a
competition for senior posts in general administration should in principle be open to migrant
workers).  After  the  competition  the  hiring  authority  then  has  the  duty  to  evaluate  the
fulfilment of those criteria according to the tasks and responsibilities of the post in question.

Member States do not have to open up internal recruitment procedures to migrant workers, as
long as nationals who are not working in the same service of the public sector would also not
be allowed to apply to these kind of posts or competitions. All other recruitment procedures
have  to  be  open;  for  example,  it  is  not  acceptable  if  numerous  organisations  (e.g.  15  state
hospitals)  are  regrouped  for  the  purposes  of  recruitment  and  only  staff  already  working  for
one of the organisations may apply for posts in one of the other organisations.

Furthermore,  Member  States  are  not  allowed  to  refuse  migrant  workers  the  status  of  civil
servant, if relevant, once they have been integrated in the public sector.

On all these points the Commission intends to monitor closely the relevant national rules and
practices  and take the  necessary  steps  to  ensure  effective  compliance  with  Community  law,
including  starting infringement procedures  if  necessary.  In  addition,  while  Article  39(4)  EC
authorises  Member  States  to  reserve  specific  posts  for  their  nationals,  it  should  be  recalled
that there is no  obligation  to do so and Member  States  are  called  upon  to  open  their  public
services as much as possible in order to facilitate the mobility of workers.

With the exception of the posts that may be restricted to nationals of the host Member State,
migrant workers are entitled to apply for work in the public sector of another Member State
under the same conditions as apply to nationals of the Member State concerned, for example
they  can  be  subject  to  the  same  recruitment  or  competition  procedure.  However,  a  specific
issue arises in relation to competitions used to recruit people for specific training with a view
to filling a post in the relevant field of public service activity (e.g. in the education and health
sectors). EU migrant workers who are already fully qualified in the field in question must be
exempted  from  the  training  in  question,  in  view  of  the  training  and  the  professional
experience already acquired in their Member State of origin. The question whether they can
be  subject  or  not  to  the  same  competition  is  currently  being  examined  by  the  Court  in  the
context of a preliminary ruling 117.

The Commission is frequently asked by public sector workers whether Community law gives
an absolute right to be seconded or have direct access to the public sector of another Member
State. Although this is not the case, for many years the Commission has appealed to Member
States'  authorities  to  enhance  the  mobility  of  their  personnel.  Member  States  have  as  a
consequence  introduced  numerous  bilateral  possibilities  for  secondment  and  exchange  of
workers between their services118.

5.3. Recognition of professional experience and seniority

It  should  be  recalled  that  the  recognition  of  professional  experience  and  seniority  is  not  a
question falling within the derogation of Article 39(4) EC. If a post may not be restricted to
the nationals of the host Member State according to Article 39(4) EC, a migrant worker may

117

118

Case C- 285/01, Burbaud; Conclusions of the Advocate General of 12.09.2002, nyr
For  more  information  interested  citizens  are  advised  to  contact  the  national  authorities  in  their  home
state and in the state in which they intend to work.

20

                                                
not be treated  differently to nationals  as  regards other  aspects of  access to  the public  sector
and to working conditions, once he has been accepted into the public sector119.

Following  the  Court's  case  law,  the  Commission  considers  that  migrant  workers'  previous
periods  of  comparable  employment  acquired  in  another  Member  State  must  be  taken  into
account  by  Member  States'  administrations  for  the  purposes  of  access  to  their  own  public
sector  and  for  determining  professional  advantages  (e.g.  salary,  grade)  in  the  same  way  as
applies to experience acquired in their own system. This raises the following issues:

-

-

In  some  Member  States  professional  experience  or  seniority  are  either  a  formal
condition of access to a recruitment competition or additional points are awarded for
it during such a procedure (this places candidates at a higher position on the final list
of successful candidates).

In  many  Member  States  professional  advantages  (e.g.  grade,  salary,  holiday
entitlement) are determined on the basis of the previous professional experience and
seniority.

If the professional experience and seniority acquired by a worker in another Member State are
not  correctly  taken  into  account  these  workers  consequently  either  have  no  or  a  less
favourable access to the other Member State's public sector or they must restart their career
from  the  beginning  or  at  a  lower  level.  The  Commission  still  receives  a  large  number  of
complaints from migrant workers, and has therefore launched infringement procedures.

The Court has already ruled several times that provisions of national law that prevent previous
periods  of  employment  in  the  public  service  of  other  Member  States  from  being  taken  into
account, constitute unjustified indirect discrimination, for example in relation to access to the
public  sector120.  In  its  further  judgments  about  taking  into  account  professional  experience
and seniority for the purposes of determining salary, the Court stated that "previous periods of
comparable employment completed in the public service of  another Member State" must be
equally taken into account121. It also ruled that requirements which apply to periods spent in
other Member States must not be stricter than those applicable to periods spent in comparable
institutions of the Member State122.

The Court has not yet accepted any of the justifications put forward by Member States, such
as  the  specific  characteristics  of  employment  in  the  public  sector;  to  reward  loyalty  (under
certain  conditions);  differences  in  career  structures;  reverse  discrimination;  difficulties  in
making a comparison; principle of homogeneity.

In  practice  the  comparing  and  taking  into  account  of  professional  experience  and  seniority
causes  numerous  problems  for  migrant  workers.  In  order  to  ensure  a  non-discriminatory
application of Member States' rules in this area, the Commission would like to emphasise that
the expression "previous periods of comparable employment" must be seen in the context of
each  Member  State's  system.  Therefore,  if  the  host  Member  State  has  rules  taking  into
account professional experience and seniority, these same rules must be applied equally to the
periods  of  comparable  employment  acquired  in  another  Member  State  without  causing

119

120

121

122

Case 152/73, Sotgiu ECR [1974] 153
Case C-419/92, Scholz ECR [1994] I-00505
Case  C-15/96,  Schöning  ECR  [1998]  I-00047  and  Case  C-187/96,  Commission  v.  Greece  [1998]  I-
01095
Case C-195/98, Österreichischer Gewerkschaftsbund ECR [2000] I-10497

21

                                                
prejudice to the migrant worker. The above-mentioned case law does not require that a new
concept (on periods of comparable employment) has to be introduced in the Member States'
legislation; however, the Member States must adapt their legislation/administrative practice in
order  to  bring  them  into  conformity  with  this  principle.  Due  to  the  great  diversity  of  the
organisation  of  Member  States'  public  sectors  and  their  rules  about  taking  into  account
professional experience, and the fact that the Member States alone are competent to organise
their  public  sectors,  provided  that  EClaw  is  respected,  the  Commission  has  refrained  from
proposing detailed rules to be applied identically in all Member States.

However, the Commission considers that in line with the Court's jurisprudence the following
guidelines at least have to be respected when adapting national rules/administrative practice:

-

-

-

-

Member States have the duty to compare the professional experience/seniority; if the
authorities have difficulties in comparing they must contact the other Member States'
authorities to ask for clarification and further information.

If  professional  experience/seniority  in  any  job  in  the  public  sector  is  taken  into
account,  the  Member  State  must  also  take  into  account  experience  acquired  by  a
migrant worker in any job in the public sector of another Member State; the question
whether  the  experience  falls  within  the  public  sector  must  be  decided  according  to
the criteria of the home Member State. By taking into account any job in the public
sector the Member State in general wants to reward the specific experience acquired
in the public service and enable mobility.  It would breach the requirement of equal
treatment of Community workers if experience which, according to the criteria of the
home Member State, falls into the public sector were not to be taken into account by
the  host Member State because it considers  that  the  post  would  fall  into  its  private
sector.

If a Member State takes into account specific experience (i.e. in a specific job/task;
in  a  specific  institution;  at  a  specific  level/grade/category),  it  has  to  compare  its
system with the system of the other Member State in order to make a comparison of
the  previous  periods  of  employment.  The  substantive  conditions  for  recognition  of
periods completed abroad must be based on non-discriminatory and objective criteria
(as  compared  to  periods  completed  within  the  host  Member  State).  However,  the
status of the worker in his previous post as civil servant or employee (in cases where
the  national  system  takes  into  account  in  a  different  way  the  professional
experience/seniority of civil servants and employees) may not be used as criterion of
comparison123 .

If  a  Member  State  also  takes  into  account  professional  experience  in  the  private
sector,  it  must  apply  the  same  principles  to  the  comparable  periods  of  experience
acquired in another Member State's private sector.

The  complaints  and  Court  cases  so  far  have  only  concerned  the  taking  into  account  of
professional experience acquired in the public sector of another Member State. Nevertheless,
the Commission wants to point out that due  to the very varied organisation  of public  duties

123

See Case 152/73, Sotgiu ECR  [1974] 153,  in  which  the  Court  held  that  it  is  of  no  interest  whether  a
worker is engaged as employee or as civil servant or even whether the terms on which he is employed
come  under  public  or  private  law;  these  legal  designations  can  be  varied  at  the  whim  of  national
legislature and therefore cannot provide a criterion for interpretation appropriate to the requirements of
Community law.

22

                                                
(e.g. health, teaching, public utilities etc) and the  continuous privatisation of  those duties, it
cannot be excluded that comparable professional experience acquired in the private sector of
another Member State also has to be taken into account, even if private sector experience is in
principle not taken into account in the host Member State. If an obstacle to free movement is
created  by  not  taking  into  account  such  comparable  experience,  only  very  strict  imperative
reasons could justify it.

5.4. Recognition of qualifications and diplomas

The system of mutual recognition of qualifications and diplomas (see section 2.3) is equally
applicable to the public sector in relation to regulated professions.

Directives  89/48/EEC  and  92/51/EEC124are  only  applicable  if  the  diploma  required  for  the
practice of a given profession testifies to training that prepares specifically for the exercise of
the profession. Posts within the public sector of a Member State often call for a different type
of diploma, i.e.:

-

-

a diploma attesting to a certain level of education without the content being specified
(e.g. university degree, school-leaving certificate plus three years' higher education,
etc.) or,

a diploma attesting to a level of education that meets certain content-related criteria
without the content in question constituting vocational training within the meaning of
Directives 89/48/EEC and 92/51/EEC (e.g. a requirement to have a diploma in either
economics, political science, science or social sciences, etc.).

As  these  cases  do  not  fall  within  the  scope  of  Directives  89/48/EEC  and  92/51/EEC  only
Article 39 EC may be invoked. The Commission's view is that, to comply with Article 39 EC,
the relevant procedures must comply with the following principles:

-

Diploma awarded on completion of a certain level of education or training without a
specific content being required

When only the level of study for which a diploma is awarded is significant, the authorities of
the host Member State are not entitled to take the content of the training into account. Only
the  level  of  the  diploma  may  be  taken  into  account  by  the  authorities  of  the  host  Member
State.

To evaluate this level, it is advisable to  look  first of  all at the  rules in the  Member State of
origin. Where a diploma of a certain level gives access to a public-sector post in that Member
State or to a selection procedure for a post in a particular category, it should also give access
in  the  same  way  to  a  selection  procedure  for  a  post  in  an  equivalent  category  in  the  public
sector of the host Member State.

To decide what is an equivalent category, the nature of the functions to which this category
provides access (management, policy-making, policy implementation, etc.) must be taken into
account. The actual denomination of the category is irrelevant. As with the general system for
the mutual recognition of qualifications and diplomas, there could be a safety mechanism to
protect against too great a disparity between requisite diplomas, e.g. school-leaving certificate
in the Member State of origin and university degree in the host Member State

124

OJ L019, 24.01.1989 p.16 & L209, 24.07.1992 p.25

23

                                                
– 

Diploma  attesting  to  a  level  of  training  meeting  certain  content-related  criteria
without the content in question constituting vocational training within the meaning of
Directives 89/48/EEC and 92/51/EC

The  Commission's  view  on  evaluating  the  level  of  the  diploma  is  the  same  as  that  given
above.

As regards assessment of the actual content of the training, it is generally the case that, where
an academic content is required, for example economics, political science, etc., the basic aim
is to recruit somebody with a general knowledge of the field in question, the ability to think
critically, adapt to a certain environment, etc. In other words, there will not necessarily be a
perfect match  between  the  content  of  the  training received by  candidates and the  tasks  they
will be required to perform. As long as the diploma was awarded on completion of education
or training in the required subject, the equivalence of the diploma should be recognised.

Recognition procedure

As  far  as  possible,  migrants  should  be  able  to  submit  their  application  for  a  diploma  to  be
recognised at any time, without having to wait for a post to be advertised. The aim is to give
them the necessary time to prepare for a selection procedure. A problem that migrant workers
frequently  encounter  is  the  length  of  time  taken  to  recognise  diplomas  and  qualifications.
Member  States  are  called  upon  to  ensure  that  such  procedures  are  completed  as  quickly  as
possible, in order to maximise mobility and not endanger the career prospects of individuals.

6. CONCLUSION

Despite the fundamental character of the right to free movement, a number of obstacles still
appear to exist, even after more than 30 years, which may endanger the ability to effectively
exercise the right to free movement. The very technical and complicated nature of the existing
legislative  framework,  coupled  with  the  extensive  case  law  of  the  Court,  can  make  the
interpretation  and  correct  application  of  Community  law  in  the  area  of  free  movement  of
workers  difficult.  A  joint  effort  by  Member  States,  European  institutions  and  employers
(public and private sector) is therefore required.

Many of the problems signalled above can be solved by the provision of accurate and up-to-
date information.  The Commission is  confident that  the  publication  of  this  Communication,
which is part of that process. will help to clarify the interpretation and application of the rules
in this area for all those involved125.

Member  States  of  course  are  responsible  for  ensuring  that  Community  law  is  properly
implemented,  at  all  levels  of  the  administration.  The  Commission  calls  upon  the  Member
States  to  ensure  that  the  necessary  national  measures  are  taken  so  that  all  the  Community
rules on free movement are properly respected.

Improved  information  will  also  enable  individuals  to  better  enforce  their  Community  law
rights and thus to enhance the opportunities for effective mobility. Better enforcement starts at
the national level, and may include legal proceedings by individual workers. In addition to the

125

See also the planned Commission "one stop" mobility web-site and the updated Guide on social security
rights when moving within the Community.

24

                                                
Administrative Commission on Social Security for Migrant Workers126, the Commission has
set  up  a  number  of  networks  at  Member  State  level  dealing  with  specific  free  movement
related issues by which problems can be solved in a more informal manner127.

Employers  should  avoid  discriminating,  directly  or  indirectly.  The  Court  has  held  that  the
Treaty  rules  on  non-discriminatory  access  to  employment  are  directly  applicable,  which
means  that  an  individual  can  rely  upon  them  before  the  national  courts  to  challenge  an
employer who has refused him a job128.

It goes without saying that the Commission will propose new legislative acts or amendments
as  necessary,  to  simplify,  improve  and  update  existing  legislation129. The  Commission  calls
on the co-legislators to discuss and adopt such proposals as quickly as possible.

Last  but  not  least,  the  Commission  services  will  monitor  the  Member  States'  national  rules
and  their  application  and  take  the  necessary  steps  to  ensure  effective  compliance  with  the
fundamental freedoms of the EC Treaty,  including bringing matters before the Court on  the
basis of Article 226 of the EC Treaty.

126

127

128

129

on 

the 

Set up under Regulation 1408/71 and made up of Member State representatives
See  for  example  the  SOLVIT  network  for  cross-border  problems  (COM(2001)  702)  and  the  NARIC
network 
diplomas
(http://europa.eu.int/comm/education/socrates/agenar.html) and the contact points for the recognition of
professional  qualifications  http://europa.eu.int/comm/internal_market/en/qualifications/contact.htm  &
EURES advisor network
Case C-281/98, Angonese ECR [2000] I-04139
See for example the Commission's proposal to modernise and simplify Regulation 1408/71, footnote 79
above

recognition 

academic 

of 

25