5 Free movement of workers

The free movement of workers, together with the free movement of goods and free movement of services, contributes to the realization of mobility within the internal market. It is regulated in the Article 45 TFEU and is considered to be one of the most important right of EU nationals. A worker shall have the right to full mobility between member states.  

Free movement of workers is more closely connected with the free movement of persons and it has implications beyond the economics of market integration. The free movement of workers is a free movement of human beings who are the beneficiaries of this freedom. This chapter only deals with the rights of persons connected with their right to performa work in another EU member state, i.e. it regulates the right of an individual to labour mobility. The worker has two basic rights, first, to move freely to take up employment in another member state, and second, to be handled non-discriminatory in comparison to domestic workers, including the access to social protection once installed in the host member state. However, the free movement of workers is not applied to all EU nationals, although the free movement of persons is a fundamental precondition of the internal market and an eseential element of the EU citizenship. Transition period to full mobility of workers is applicable to nationals of new member states (this was applied in 2002 and 2007).

5.1 Who is a worker?

The TFEU provides a wide definition of the term worker to include not only persons performing dependant economic activity, but also persons engaged in vocational training (e.g. students) and unemployed persons searching for work.

Article 45 TFEU Freedom of movement for workers shall be secured within the Union. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health: to accept offers of employment actually made; to move freely within the territory of Member States for this purpose; to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission. The provisions of this Article shall not apply to employment in the public service.

Since the term worker is not defined either in the Treaties or secondary legislation, it has been shaped by the Court of Justice of the EU. It insisted that the term worker is a term of EU law and cannot thus be defined by national legislation. Otherwise, the member state could restrict the freedoms established by the Treaties and toeliminate the protection awarded by the EU law to migrant workers. The worker is a person who performs economic activity in an employment relationship which are effective and genuine and performs these activities in a subordinate position.

In Levin case, the British national, Mrs Levin married to South African national was refused to obtain the residence in Holland because she was not in gainful employment. The case was decided by national Dutch court that asked the preliminary question in which the Court was asked to explain the notion of a worker. The Court was asked if a person who earns less than the minimum required for subsistence as defined under national law, is considered to be a worker. As this question is not defined by the EU legislation it was up to the Court to interpret this term.  

53/81 D.M. Levin v. Staatssecretaris van Justitie Judgment of the Court of Justice of 23 March 1982 11 THAT ARGUMENT CANNOT, HOWEVER, BE ACCEPTED. AS THE COURT HAS ALREADY STATED IN ITS JUDGMENT OF 19 MARCH 1964 IN CASE 75/63 HOEKSTRA ( NEE UNGER ) ( 1964 ) ECR 1977 THE TERMS ''WORKER'' AND ''ACTIVITY AS AN EMPLOYED PERSON'' MAY NOT BE DEFINED BY REFERENCE TO THE NATIONAL LAWS OF THE MEMBER STATES BUT HAVE A COMMUNITY MEANING. IF THAT WERE NOT THE CASE, THE COMMUNITY RULES ON FREEDOM OF MOVEMENT FOR WORKERS WOULD BE FRUSTRATED, AS THE MEANING OF THOSE TERMS COULD BE FIXED AND MODIFIED UNILATERALLY, WITHOUT ANY CONTROL BY THE COMMUNITY INSTITUTIONS, BY NATIONAL LAWS WHICH WOULD THUS BE ABLE TO EXCLUDE AT WILL CERTAIN CATEGORIES OF PERSONS FROM THE BENEFIT OF THE TREATY. 12 SUCH WOULD, IN PARTICULAR, BE THE CASE IF THE ENJOYMENT OF THE RIGHTS CONFERRED BY THE PRINCIPLE OF FREEDOM OF MOVEMENT FOR WORKERS COULD BE MADE SUBJECT TO THE CRITERION OF WHAT THE LEGISLATION OF THE HOST STATE DECLARES TO BE A MINIMUM WAGE, SO THAT THE FIELD OF APPLICATION RATIONE PERSONAE OF THE COMMUNITY RULES ON THIS SUBJECT MIGHT VARY FROM ONE MEMBER STATE TO ANOTHER. THE MEANING AND THE SCOPE OF THE TERMS ''WORKER'' AND ''ACTIVITY AS AN EMPLOYED PERSON'' SHOULD THUS BE CLARIFIED IN THE LIGHT OF THE PRINCIPLES OF THE LEGAL ORDER OF THE COMMUNITY. 13 IN THIS RESPECT IT MUST BE STRESSED THAT THESE CONCEPTS DEFINE THE FIELD OF APPLICATION OF ONE OF THE FUNDAMENTAL FREEDOMS GUARANTEED BY THE TREATY AND, AS SUCH, MAY NOT BE INTERPRETED RESTRICTIVELY. 14 IN CONFORMITY WITH THIS VIEW THE RECITALS IN THE PREAMBLE TO REGULATION (EEC) NO 1612/68 CONTAIN A GENERAL AFFIRMATION OF THE RIGHT OF ALL WORKERS IN THE MEMBER STATES TO PURSUE THE ACTIVITY OF THEIR CHOICE WITHIN THE COMMUNITY, IRRESPECTIVE OF WHETHER THEY ARE PERMANENT, SEASONAL OR FRONTIER WORKERS OR WORKERS WHO PURSUE THEIR ACTIVITIES FOR THE PURPOSE OF PROVIDING SERVICES. FURTHERMORE, ALTHOUGH ARTICLE 4 OF DIRECTIVE 68/36/EEC GRANTS THE RIGHT OF RESIDENCE TO WORKERS UPON THE MERE PRODUCTION OF THE DOCUMENT ON THE BASIS OF WHICH THEY ENTERED THE TERRITORY AND OF A CONFIRMATION OF ENGAGEMENT FROM THE EMPLOYER OR A CERTIFICATE OF EMPLOYMENT, IT DOES NOT SUBJECT THIS RIGHT TO ANY CONDITION RELATING TO THE KIND OF EMPLOYMENT OR TO THE AMOUNT OF INCOME DERIVED FROM IT. 15 AN INTERPRETATION WHICH REFLECTS THE FULL SCOPE OF THESE CONCEPTS IS ALSO IN CONFORMITY WITH THE OBJECTIVES OF THE TREATY WHICH INCLUDE, ACCORDING TO ARTICLES 2 AND 3, THE ABOLITION, AS BETWEEN MEMBER STATES, OF OBSTACLES TO FREEDOM OF MOVEMENT FOR PERSONS, WITH THE PURPOSE INTER ALIA OF PROMOTING THROUGHOUT THE COMMUNITY A HARMONIOUS DEVELOPMENT OF ECONOMIC ACTIVITIES AND A RAISING OF THE STANDARD OF LIVING . SINCE PART-TIME EMPLOYMENT, ALTHOUGH IT MAY PROVIDE AN INCOME LOWER THAN WHAT IS CONSIDERED TO BE THE MINIMUM REQUIRED FOR SUBSISTENCE, CONSTITUTES FOR A LARGE NUMBER OF PERSONS AN EFFECTIVE MEANS OF IMPROVING THEIR LIVING CONDITIONS, THE EFFECTIVENESS OF COMMUNITY LAW WOULD BE IMPAIRED AND THE ACHIEVEMENT OF THE OBJECTIVES OF THE TREATY WOULD BE JEOPARDIZED IF THE ENJOYMENT OF RIGHTS CONFERRED BY THE PRINCIPLE OF FREEDOM OF MOVEMENT FOR WORKERS WERE RESERVED SOLELY TO PERSONS ENGAGED IN FULL-TIME EMPLOYMENT AND EARNING, AS A RESULT, A WAGE AT LEAST EQUIVALENT TO THE GUARANTEED MINIMUM WAGE IN THE SECTOR UNDER CONSIDERATION. 16 IT FOLLOWS THAT THE CONCEPTS OF ''WORKER'' AND ''ACTIVITY AS AN EMPLOYED PERSON'' MUST BE INTERPRETED AS MEANING THAT THE RULES RELATING TO FREEDOM OF MOVEMENT FOR WORKERS ALSO CONCERN PERSONS WHO PURSUE OR WISH TO PURSUE AN ACTIVITY AS AN EMPLOYED PERSON ON A PART-TIME BASIS ONLY AND WHO, BY VIRTUE OF THAT FACT OBTAIN OR WOULD OBTAIN ONLY REMUNERATION LOWER THAN THE MINIMUM GUARANTEED REMUNERATION IN THE SECTOR UNDER CONSIDERATION. IN THIS REGARD NO DISTINCTION MAY BE MADE BETWEEN THOSE WHO WISH TO MAKE DO WITH THEIR INCOME FROM SUCH AN ACTIVITY AND THOSE WHO SUPPLEMENT THAT INCOME WITH OTHER INCOME, WHETHER THE LATTER IS DERIVED FROM PROPERTY OR FROM THE EMPLOYMENT OF A MEMBER OF THEIR FAMILY WHO ACCOMPANIES THEM. 17 IT SHOULD HOWEVER BE STATED THAT WHILST PART-TIME EMPLOYMENT IS NOT EXCLUDED FROM THE FIELD OF APPLICATION OF THE RULES ON FREEDOM OF MOVEMENT FOR WORKERS, THOSE RULES COVER ONLY THE PURSUIT OF EFFECTIVE AND GENUINE ACTIVITIES, TO THE EXCLUSION OF ACTIVITIES ON SUCH A SMALL SCALE AS TO BE REGARDED AS PURELY MARGINAL AND ANCILLARY. IT FOLLOWS BOTH FROM THE STATEMENT OF THE PRINCIPLE OF FREEDOM OF MOVEMENT FOR WORKERS AND FROM THE PLACE OCCUPIED BY THE RULES RELATING TO THAT PRINCIPLE IN THE SYSTEM OF THE TREATY AS A WHOLE THAT THOSE RULES GUARANTEE ONLY THE FREE MOVEMENT OF PERSONS WHO PURSUE OR ARE DESIROUS OF PURSUING AN ECONOMIC ACTIVITY. 18 THE ANSWER TO BE GIVEN TO THE FIRST AND SECOND QUESTIONS MUST THEREFORE BE THAT THE PROVISIONS OF COMMUNITY LAW RELATING TO FREEDOM OF MOVEMENT FOR WORKERS ALSO COVER A NATIONAL OF A MEMBER STATE WHO PURSUES, WITHIN THE TERRITORY OF ANOTHER MEMBER STATE, AN ACTIVITY AS AN EMPLOYED PERSON WHICH YIELDS AN INCOME LOWER THAN THAT WHICH , IN THE LATTER STATE, IS CONSIDERED AS THE MINIMUM REQUIRED FOR SUBSISTENCE , WHETHER THAT PERSON SUPPLEMENTS THE INCOME FROM HIS ACTIVITY AS AN EMPLOYED PERSON WITH OTHER INCOME SO AS TO ARRIVE AT THAT MINIMUM OR IS SATISFIED WITH MEANS OF SUPPORT LOWER THAN THE SAID MINIMUM, PROVIDED THAT HE PURSUES AN ACTIVITY AS AN EMPLOYED PERSON WHICH IS EFFECTIVE AND GENUINE. THIRD QUESTION 19 THE THIRD QUESTION ESSENTIALLY SEEKS TO ASCERTAIN WHETHER THE RIGHT TO ENTER AND RESIDE IN THE TERRITORY OF A MEMBER STATE MAY BE DENIED TO A WORKER WHOSE MAIN OBJECTIVES, PURSUED BY MEANS OF HIS ENTRY AND RESIDENCE, ARE DIFFERENT FROM THAT OF THE PURSUIT OF AN ACTIVITY AS AN EMPLOYED PERSON AS DEFINED IN THE ANSWER TO THE FIRST AND SECOND QUESTIONS. 20 UNDER ARTICLE 48(3) OF THE TREATY THE RIGHT TO MOVE FREELY WITHIN THE TERRITORY OF THE MEMBER STATES IS CONFERRED UPON WORKERS FOR THE ''PURPOSE'' OF ACCEPTING OFFERS OF EMPLOYMENT ACTUALLY MADE. BY VIRTUE OF THE SAME PROVISION WORKERS ENJOY THE RIGHT TO STAY IN ONE OF THE MEMBER STATES ''FOR THE PURPOSE'' OF EMPLOYMENT THERE. MOREOVER, IT IS STATED IN THE PREAMBLE TO REGULATION (EEC) NO 1612/68 THAT FREEDOM OF MOVEMENT FOR WORKERS ENTAILS THE RIGHT OF WORKERS TO MOVE FREELY WITHIN THE COMMUNITY ''IN ORDER TO'' PURSUE ACTIVITIES AS EMPLOYED PERSONS, WHILST ARTICLE 2 OF DIRECTIVE 68/360/EEC REQUIRES THE MEMBER STATES TO GRANT WORKERS THE RIGHT TO LEAVE THEIR TERRITORY ''IN ORDER TO'' TAKE UP ACTIVITIES AS EMPLOYED PERSONS OR TO PURSUE THEM IN THE TERRITORY OF ANOTHER MEMBER STATE. 21 HOWEVER, THESE FORMULATIONS MERELY GIVE EXPRESSION TO THE REQUIREMENT, WHICH IS INHERENT IN THE VERY PRINCIPLE OF FREEDOM OF MOVEMENT FOR WORKERS, THAT THE ADVANTAGES WHICH COMMUNITY LAW CONFERS IN THE NAME OF THAT FREEDOM MAY BE RELIED UPON ONLY BY PERSONS WHO ACTUALLY PURSUE OR SERIOUSLY WISH TO PURSUE ACTIVITIES AS EMPLOYED PERSONS. THEY DO NOT, HOWEVER, MEAN THAT THE ENJOYMENT OF THIS FREEDOM MAY BE MADE TO DEPEND UPON THE AIMS PURSUED BY A NATIONAL OF A MEMBER STATE IN APPLYING FOR ENTRY UPON AND RESIDENCE IN THE TERRITORY OF ANOTHER MEMBER STATE, PROVIDED THAT HE THERE PURSUES OR WISHES TO PURSUE AN ACTIVITY WHICH MEETS THE CRITERIA SPECIFIED ABOVE, THAT IS TO SAY, AN EFFECTIVE AND GENUINE ACTIVITY AS AN EMPLOYED PERSON. 22 ONCE THIS CONDITION IS SATISFIED, THE MOTIVES WHICH MAY HAVE PROMPTED THE WORKER TO SEEK EMPLOYMENT IN THE MEMBER STATE CONCERNED ARE OF NO ACCOUNT AND MUST NOT BE TAKEN INTO CONSIDERATION. 23 THE ANSWER TO BE GIVEN TO THE THIRD QUESTION PUT TO THE COURT BY THE RAAD VAN STATE MUST THEREFORE BE THAT THE MOTIVES WHICH MAY HAVE PROMPTED A WORKER OF A MEMBER STATE TO SEEK EMPLOYMENT IN ANOTHER MEMBER STATE ARE OF NO ACCOUNT AS REGARDS HIS RIGHT TO ENTER AND RESIDE IN THE TERRITORY OF THE LATTER STATE PROVIDED THAT HE THERE PURSUES OR WISHES TO PURSUE AN EFFECTIVE AND GENUINE ACTIVITY.

The Court confirmed that the worker's activity must be effective and genuine as opposed to marginal and ancillary activities not covered by the relevant rules regulating the free movement of workers. In case 139/85 R.H. Kempf v. Staatssecretaris van Justitie the Netherlands government expressed doubts as to whether the work of a teacher who gives 12 lessons a week may be regarded as constituting in itself effective and genuine work.

139/85 R.H. Kempf v. Staatssecretaris van Justitie Judgment of the Court of Justice of 3 June 1986 13 THE COURT HAS CONSISTENTLY HELD THAT FREEDOM OF MOVEMENT FOR WORKERS FORMS ONE OF THE FOUNDATIONS OF THE COMMUNITY. THE PROVISIONS LAYING DOWN THAT FUNDAMENTAL FREEDOM AND, MORE PARTICULARLY, THE TERMS 'WORKER' AND 'ACTIVITY AS AN EMPLOYED PERSON' DEFINING THE SPHERE OF APPLICATION OF THOSE FREEDOMS MUST BE GIVEN A BROAD INTERPRETATION IN THAT REGARD, WHEREAS EXCEPTIONS TO AND DEROGATIONS FROM THE PRINCIPLE OF FREEDOM OF MOVEMENT FOR WORKERS MUST BE INTERPRETED STRICTLY. 14 IT FOLLOWS THAT THE RULES ON THIS TOPIC MUST BE INTERPRETED AS MEANING THAT A PERSON IN EFFECTIVE AND GENUINE PART-TIME EMPLOYMENT CANNOT BE EXCLUDED FROM THEIR SPHERE OF APPLICATION MERELY BECAUSE THE REMUNERATION HE DERIVES FROM IT IS BELOW THE LEVEL OF THE MINIMUM MEANS OF SUBSISTENCE AND HE SEEKS TO SUPPLEMENT IT BY OTHER LAWFUL MEANS OF SUBSISTENCE. IN THAT REGARD IT IS IRRELEVANT WHETHER THOSE SUPPLEMENTARY MEANS OF SUBSISTENCE ARE DERIVED FROM PROPERTY OR FROM THE EMPLOYMENT OF A MEMBER OF HIS FAMILY, AS WAS THE CASE IN LEVIN, OR WHETHER, AS IN THIS INSTANCE, THEY ARE OBTAINED FROM FINANCIAL ASSISTANCE DRAWN FROM THE PUBLIC FUNDS OF THE MEMBER STATE IN WHICH HE RESIDES, PROVIDED THAT THE EFFECTIVE AND GENUINE NATURE OF HIS WORK IS ESTABLISHED.

The rules on free movement of workers also apply to job-seekers who must be treated as workers for the purposes of a right to residence permit. This was confirned by the Court of Justice in the case Collins.

C-138/02 Brian Francis Collins v. Secretary of State for Work and Pensions Judgment of the Court of 23 March 2004 (36) In the context of freedom of movement for workers, Article 48 of the Treaty grants nationals of the Member States a right of residence in the territory of other Member States in order to pursue or to seek paid employment (Case C-171/91 Tsiotras [1993] ECR I-2925, paragraph 8). (37) The right of residence which persons seeking employment derive from Article 48 of the Treaty may be limited in time. In the absence of Community provisions prescribing a period during which Community nationals who are seeking employment may stay in their territory, the Member States are entitled to lay down a reasonable period for this purpose. However, if after expiry of that period, the person concerned provides evidence that he is continuing to seek employment and that he has genuine chances of being engaged, he cannot be required to leave the territory of the host Member State (see Case C-292/89 Antonissen [1991] ECR I-745, paragraph 21, and Case C-344/95 Commission v Belgium [1997] ECR I1035, paragraph 17).

5.2 The rights of a worker

The rights of a worker are very closely connected with the rights arising from free movement of persons. The rights to entry and to obtain a residence permit (including permanent residence permit) are granted by the Directive 2004/38 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States that provides a legislative framework of the free movement of persons.

Regulation (EU) No 492/2011 of the European Parliament and of the Council of 5 April 2011 on freedom of movement for workers within the Union (OJ L 141, 27.5.2011, p. 1-12)

The Regulation 492/2011 guarantees several rights to persons who decide to perform work in another EU member state. The basic principle is prohibition of discrimination of the migrant worker in the host member state as regards employment remuneration and other conditions of work and employment, as well as the right of such workers to move freely within the Union in order to pursue activities as employed persons subject to any limitations justified on grounds of public policy, public security or public health. The right to work in another EU member state should be enjoyed without discrimination by permanent, seasonal and frontier workers and by those who pursue their activities for the purpose of providing services.

5.2.1 Eligibility to employment

Article 1 1. Any national of a Member State shall, irrespective of his place of residence, have the right to take up an activity as an employed person, and to pursue such activity, within the territory of another Member State in accordance with the provisions laid down by law, regulation or administrative action governing the employment of nationals of that State. 2. He shall, in particular, have the right to take up available employment in the territory of another Member State with the same priority as nationals of that State. Article 2 Any national of a Member State and any employer pursuing an activity in the territory of a Member State may exchange their applications for and offers of employment, and may conclude and perform contracts of employment in accordance with the provisions in force laid down by law, regulation or administrative action, without any discrimination resulting therefrom. Article 4 1. Provisions laid down by law, regulation or administrative action of the Member States which restrict by number or percentage the employment of foreign nationals in any undertaking, branch of activity or region, or at a national level, shall not apply to nationals of the other Member States. 2. When in a Member State the granting of any benefit to undertakings is subject to a minimum percentage of national workers being employed, nationals of the other Member States shall be counted as national workers, subject to Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications. Article 5 A national of a Member State who seeks employment in the territory of another Member State shall receive the same assistance there as that afforded by the employment offices in that State to their own nationals seeking employment.

The principle of equal treatment means that the migrant workers enjoy the same priority as regards employment as the national workers. Migrant workers shall be guaranteed the possibility of improving their living and working conditions and promoting their social advancement, while helping to satisfy the requirements of the economies of the Member States.

5.2.2 Equality of treatment in employment

Article 7 1. A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and, should he become unemployed, reinstatement or re-employment. 2. He shall enjoy the same social and tax advantages as national workers. 3. He shall also, by virtue of the same right and under the same conditions as national workers, have access to training in vocational schools and retraining centres. 4. Any clause of a collective or individual agreement or of any other collective regulation concerning eligibility for employment, remuneration and other conditions of work or dismissal shall be null and void in so far as it lays down or authorises discriminatory conditions in respect of workers who are nationals of the other Member States. Article 8 A worker who is a national of a Member State and who is employed in the territory of another Member State shall enjoy equality of treatment as regards membership of trade unions and the exercise of rights attaching thereto, including the right to vote and to be eligible for the administration or management posts of a trade union. He may be excluded from taking part in the management of bodies governed by public law and from holding an office governed by public law. Furthermore, he shall have the right of eligibility for workers’ representative bodies in the undertaking. The first paragraph of this Article shall not affect laws or regulations in certain Member States which grant more extensive rights to workers coming from the other Member States. Article 9 1. A worker who is a national of a Member State and who is employed in the territory of another Member State shall enjoy all the rights and benefits accorded to national workers in matters of housing, including ownership of the housing he needs. 2. A worker referred to in paragraph 1 may, with the same right as nationals, put his name down on the housing lists in the region in which he is employed, where such lists exist, and shall enjoy the resultant benefits and priorities. If his family has remained in the country whence he came, they shall be considered for this purpose as residing in the said region, where national workers benefit from a similar presumption.

The right to free movement requires that equality of treatment be ensured in fact and in law in respect of all matters relating to the actual pursuit of activities as employed persons and to eligibility for housing, and also that obstacles to the mobility of workers be eliminated, in particular as regards the conditions for the integration of the worker’s family into the host country.

5.2.3 The rights of workers’ families and the right of housing

Article 9 1. A worker who is a national of a Member State and who is employed in the territory of another Member State shall enjoy all the rights and benefits accorded to national workers in matters of housing, including ownership of the housing he needs. 2. A worker referred to in paragraph 1 may, with the same right as nationals, put his name down on the housing lists in the region in which he is employed, where such lists exist, and shall enjoy the resultant benefits and priorities. If his family has remained in the country whence he came, they shall be considered for this purpose as residing in the said region, where national workers benefit from a similar presumption. Article 10 The children of a national of a Member State who is or has been employed in the territory of another Member State shall be admitted to that State’s general educational, apprenticeship and vocational training courses under the same conditions as the nationals of that State, if such children are residing in its territory. Member States shall encourage all efforts to enable such children to attend these courses under the best possible conditions.

5.3 Organisation of work – EU labour law

The EU regulates not only the freedom of movement of workers but also introduced som minimum requirements in the area of worker rights and organisation of work. These requirements concern the following areas:

5.3.1 Collective redundancies

Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies  (OJ L 225, 12.8.1998, p. 16–21)

This Directive requires the employers to consult the employee representatives in case of collective redundancies. It regulates the process of collective redundancies and the extent of information that must be provided to employee representatives during the consultations. The purpose of consultations is to reach an agreement with employee representatives to avoid collective redundancies or to reduce the number of affected workers or to adopt measures that make the consequnces of collective redundancies less severe (redeploying or retraining of redundant workers).

The Directive also specifies the type of information that must be provided in writing by the employer to employee representatives during consultation process: (i) reasons of collective redundancies, (ii) the period during which redundancies are to be effected, (iii) the number and category of employees normally employed, (iv) the number to be made redundant, (v) the criteria used to select those workers to be made redundant, (vi) the method used to calculate compensation.

The Directive also specifies the procedure of collective redundancies. It is also obligatory to notify the competent authority of any projected collective redundancies and to provide all relevant information about collective redundancies. The employer also sends a copy of the notification to employee representatives. Collective redundancies can take effect at the earliest 30 days after the notification.  

5.3.2 Insolvency of the employer

Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer (OJ L 283, 28.10.2008, p. 36–42).

The purpose of this Directive is to protect employees who were not paid their remuneration by their insolvent employer. All employees may benefit from this Directive, irrespective of the duration of their employment relationship, i.e. it is applicable to part-time employees, employees working on a fixed-term or temporary employees. The member states shall be obliged to establish a guarantee institution that shall guarantee the payments of employees' claims.

5.3.3 Transfer of undertaking

Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (OJ L 82, 22.3.2001, p. 16–20)

Transfer of undertaking is a situation if there is a transfer of an economic entity that retains its identity, defined as an organised grouping of resources that has the objective of pursuing an economic activity. The Directive stipulates that the transferee becomes an employee of the transferor. In this situation, the rights and duties of the employment contracts (irrespective the number of working hours performed, part-time employees, employees working on a fixed-term or temporary employees) of the employees from the transferred undertaking will be recognised.

The basic principle of the Directive is that the rights and obligations of the transferred employees maintain after the transfer and are connected with the existing employment relationship. The transfer shall not constitute a ground for dismissal. If there is a collective agreement concluded, the working conditions arising from the concluded collective agreement are maintained for the duration of this agreement (at least one year after the transfer).

The employer must fulfil information and consultation obligations towards employees. Employees shall be informed about the transfer through the employee representatives or directly if there are no employee representatives. They shall be informed about the date or proposed date of the transfer, the reasons for the transfer, the legal, economic and social implications, and any measures envisaged in relation to the employees.

5.3.4 Consultation and information of workers

Council Directive 91/533/EEC of 14 October 1991 on an employer's obligation to inform employees of the conditions applicable to the contract or employment relationship (OJ L 288, 18.10.1991, p. 32–35)

The purpose of this directive is to ensure that the employees are informed about facts relevant to their employment. Employers must provide the employees with the following information relating to their employment: (i) identity of the parties, (ii) place of work, (iii) title, grade, nature or category of the work for which the employee is employed, (iv) brief job description, (v) date of work commencement, (vi) expected duration of a temporary contract, (vii) the amount of paid leave, (viii) the length of a notice period, (ix) the amount of remuneration and the frequency of payment of the remuneration, (x) the length of a working day or working week, (xi) collective agreements governing the employee's conditions of work. All this information must be provided in an employment contract or in a letter of engagement or in one or more other written documents. The information must be given to the employee within two months of commencement of employment, failing which the employee must be given a written declaration signed by the employer. If the employee shall work in another counry, the employer must provide him/her information about duration of employment abroad, currency for payment of remuneration or other benefits attendant on the employment abroad or the conditions governing the employee's repatriation.

5.3.5 Working hours

Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time (OJ L 195, 1.8.2000, p. 41–45)

This directive regulates the organisation of working time of employees. The working time is defined as a period during which the employee is working, at the employer's disposal and carrying out his activity or duties. The directive regulates the entitlement of the employee to (i) a minimum daily rest period of 11 consecutive hours per 24-hour period, (ii) a rest break if the working time exceeds 6 hours, (iii) a minimum uninterrupted rest period of 24 hours for each seven-day period, which is added to the 11 hours' daily rest, (iv) maximum weekly working time of 48 hours, including overtime, (v) paid annual leave of at least four weeks. The directive also regulates the night work. Its duration must not exceed an average of eight hours in any 24-hour period. Night workers must have a level of safety and health protection adapted to the work they perform. They are entitled to a free health assessment before being assigned to night work and thereafter at regular intervals. Employers who regularly use night workers must bring this information to the attention of the competent health and safety authorities. A special regulation of working time applies to certain sectors of employment, e.g. road transport, civil aviation, etc.

5.3.6 Equal treatment and equal pay

Directive 2000/78/EC of 27 November 2000, establishing a general framework for equal treatment in employment and occupation (OJ L 303, 2.12.2000, p. 16–22)

Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) (OJ L 204, 26.7.2006, p. 23–36)

Council Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin (OJ L 180, 19.7.2000, p. 22–26)

These directives reflect the principles on which the EU is founded – liberty, democracy, respect for human rights and fundamental freedoms and rule of law. The area of employment and occupation are crucial for ensuring equal treatment and equal opportunities for all. Employment is one of the most frequent area where discrimination is detected. The EU is empowered to combat against discrimination based on sex, race or ethnic origin, religion or belief, disability, age or sexual orientation (Article 13 TFEU). These directives define the scope of their application, i.e. the areas where the discrimination is prohibited as well as the forms of discrimination. Further details are described in a chapter below.

Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008 on temporary agency work (OJ L 327, 5.12.2008, p. 9–14)

Temporary work is an area which is regulated by EU law. The regulation on EU level was necessary due to increasing number of temporary workers employed by temporary work agencies. Temporary workers are persons with a contract of employment or an employment relationship with a temporary-work agency with a view to being posted to a user employer to work temporarily under its supervision. This directive ensures that the temporary workers and workers employed directly by the user employer for the same type of position receive equal treatment. The principle of equal treatment applies to employment conditions (remuneration, duration of working hours, overtime, rest periods, night work, holidays) and to protection of special categories of workers (pregnant women and nursing female workers, children and juveniles) and equal treatment for men and women and protection against discrimination based on sex, race or ethnic origin, religion, beliefs, disabilities, age or sexual orientation.the directive enable the temporary workers to conclude an employment contract with the user undertaking at the end of their posting. They must therefore be informed of vacancies for permanent employment. Temporary workers must have access to the amenities and collective services of the user undertaking (canteens, childcare facilities and transport) under the same conditions as the workers of the user employer.

5.3.7 Posting of workers

Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ L 18, 21.1.1997, p. 1–6)

The Directive applies to employers that post their workers to another member state to perform the services, provided there is an employment relationship between the posting employer and the posted worker during the period of posting. The posted worker carries out duties, for a limited period, in the territory of a member state other than the state in which the employee performs work. The Directive requires the member states that they ensure that the posted worker is guaranteed core of mandatory protective legislation laid down in the member state where the work is performed. The worker shall be granted the following rights regulating the conditions of employment in the member state where the work is performed: (i) maximum work periods and minimum rest periods, (ii) minimum paid annual holidays, (iii) minimum remuneration, (iv) the conditions of hiring-out of workers, in particular the supply of workers by temporary employment undertakings, (v) health and safety at work, (vi) protection of pregnant women or women who have recently given birth, of children and of juvenile employees, (vii) equality of treatment between men and women and equal treatment provisions.

6 FREE MOVEMENT OF SELF-EMPLOYED

The free movement of self-employed persons is regulated in the TFEU by articles regulating the freedom of establishment and free movement of services. Both these freedoms apply to economically active persons who perform independent activity.

6.1 Freedom of establishment

Article 49 TFEU Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State. Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.

6.1.1 Restrictions to the free movement of self-employed

With respect to natural persons are these derogations regulated, together with the application to workers, by relevant provisions of Directive 2004/38. With respect to self-employed persons, the derogations are regulated by the TFEU and general principles of EU law (principle of proportionality, prohibition of discrimination, etc.), together with the relevant provisions of the Services Directive.

Article 51 The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority. The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may rule that the provisions of this Chapter shall not apply to certain activities. Article 52 (ex Article 46 TEC) 1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health. 2. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the coordination of the abovementioned provisions.

6.1.2 Prohibition of discrimination of self-employed

The freedom of self-employed persons is regulated by the principle of national treatment that includes the principle of non-discrimination based on national origin. The self-employed persons shall be subject to national rules, conditions or regulations of various professional organizations.

Article 54 Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States. ‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making. Article 55 Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of Article 54, without prejudice to the application of the other provisions of the Treaties.

6.2 Freedom to provide services

The free movement of services in the EU is one of the fundamental freedoms guaranteed by the TFEU. To ensure the free movement of services the national legislation has been harmonized. Providing of services is defined as an economic activity that is provided for remuneration. Free movement of services is guaranteed to the service provider and the recipient. The basic principle in the free movement of services is prohibition of discrimination on grounds of nationality. Freedom to provide services is not absolute. Member states may, where justified by public policy, public safety and public health, adopt measures which restrict this freedom. Restrictions must pursue a legitimate aim, must not conflict with the objectives of the EU and shall be proportionate to the objective to be achieved.

Freedom to provide services entails the right to carry out an economic activity for a temporary period in which either the provider or recipient of services is not established.

Article 56 Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended. The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may extend the provisions of the Chapter to nationals of a third country who provide services and who are established within the Union. Article 57 Services shall be considered to be ‘services’ within the meaning of the Treaties where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons. ‘Services’ shall in particular include: activities of an industrial character; activities of a commercial character; activities of craftsmen; activities of the professions. Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the Member State where the service is provided, under the same conditions as are imposed by that State on its own nationals.

6.2.1 Secondary legislation

The obstacles to freedom to establishment and free movement of services could be removed by harmonization, i.e. by enactment of secondary legislation. Several directives were adopted that harmonized the rules regulating free movement of services or the freedom to establishment. Directives regulating mutual recognition of qualifications were adopted in various trades and professions. This process was however achieved very slowly and took several years.

6.2.1.1 Services Directive 2006/123

The Services Directive was enacted after long discussions and with a delay. Its purpose was to consolidate the freedoms to provide services and to liberalize the internal market between the member states. The directive is complex in the scope of the regulation (Article 2(1)). Certain sectors are excluded from its application (Article 2(2) and Article 3).

Article 2 Scope 1. This Directive shall apply to services supplied by providers established in a Member State. 2. This Directive shall not apply to the following activities: non-economic services of general interest; financial services, such as banking, credit, insurance and re-insurance, occupational or personal pensions, securities, investment funds, payment and investment advice, including the services listed in Annex I to Directive 2006/48/EC; electronic communications services and networks, and associated facilities and services, with respect to matters covered by Directives 2002/19/EC, 2002/20/EC, 2002/21/EC, 2002/22/EC and 2002/58/EC; services in the field of transport, including port services, falling within the scope of Title V of the Treaty; services of temporary work agencies; healthcare services whether or not they are provided via healthcare facilities, and regardless of the ways in which they are organised and financed at national level or whether they are public or private; audiovisual services, including cinematographic services, whatever their mode of production, distribution and transmission, and radio broadcasting; gambling activities which involve wagering a stake with pecuniary value in games of chance, including lotteries, gambling in casinos and betting transactions; activities which are connected with the exercise of official authority as set out in Article 45 of the Treaty; social services relating to social housing, childcare and support of families and persons permanently or temporarily in need which are provided by the State, by providers mandated by the State or by charities recognised as such by the State; private security services; services provided by notaries and bailiffs, who are appointed by an official act of government. 3. This Directive shall not apply to the field of taxation. Article 3 Relationship with other provisions of Community law 1. If the provisions of this Directive conflict with a provision of another Community act governing specific aspects of access to or exercise of a service activity in specific sectors or for specific professions, the provision of the other Community act shall prevail and shall apply to those specific sectors or professions. These include: Directive 96/71/EC; Regulation (EEC) No 1408/71; Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities; Directive 2005/36/EC. 2. This Directive does not concern rules of private international law, in particular rules governing the law applicable to contractual and non contractual obligations, including those which guarantee that consumers benefit from the protection granted to them by the consumer protection rules laid down in the consumer legislation in force in their Member State. 3. Member States shall apply the provisions of this Directive in compliance with the rules of the Treaty on the right of establishment and the free movement of services.

The directive simplifies the national administrative procedures for providers of services or fot those who want to establish in another EU member state.

Article 16 Freedom to provide services 1. Member States shall respect the right of providers to provide services in a Member State other than that in which they are established. The Member State in which the service is provided shall ensure free access to and free exercise of a service activity within its territory. Member States shall not make access to or exercise of a service activity in their territory subject to compliance with any requirements which do not respect the following principles: non-discrimination: the requirement may be neither directly nor indirectly discriminatory with regard to nationality or, in the case of legal persons, with regard to the Member State in which they are established; necessity: the requirement must be justified for reasons of public policy, public security, public health or the protection of the environment; proportionality: the requirement must be suitable for attaining the objective pursued, and must not go beyond what is necessary to attain that objective. 2. Member States may not restrict the freedom to provide services in the case of a provider established in another Member State by imposing any of the following requirements: an obligation on the provider to have an establishment in their territory; an obligation on the provider to obtain an authorisation from their competent authorities including entry in a register or registration with a professional body or association in their territory, except where provided for in this Directive or other instruments of Community law; a ban on the provider setting up a certain form or type of infrastructure in their territory, including an office or chambers, which the provider needs in order to supply the services in question; the application of specific contractual arrangements between the provider and the recipient which prevent or restrict service provision by the self-employed; an obligation on the provider to possess an identity document issued by its competent authorities specific to the exercise of a service activity; requirements, except for those necessary for health and safety at work, which affect the use of equipment and material which are an integral part of the service provided; restrictions on the freedom to provide the services referred to in Article 19. 3. The Member State to which the provider moves shall not be prevented from imposing requirements with regard to the provision of a service activity, where they are justified for reasons of public policy, public security, public health or the protection of the environment and in accordance with paragraph 1. Nor shall that Member State be prevented from applying, in accordance with Community law, its rules on employment conditions, including those laid down in collective agreements.

Rights of recipients of services Article 19 Prohibited restrictions Member States may not impose on a recipient requirements which restrict the use of a service supplied by a provider established in another Member State, in particular the following requirements: an obligation to obtain authorisation from or to make a declaration to their competent authorities; discriminatory limits on the grant of financial assistance by reason of the fact that the provider is established in another Member State or by reason of the location of the place at which the service is provided. Article 20 Non-discrimination 1. Member States shall ensure that the recipient is not made subject to discriminatory requirements based on his nationality or place of residence. 2. Member States shall ensure that the general conditions of access to a service, which are made available to the public at large by the provider, do not contain discriminatory provisions relating to the nationality or place of residence of the recipient, but without precluding the possibility of providing for differences in the conditions of access where those differences are directly justified by objective criteria.

6.2.2 Case law of EU courts

At the same time, as the Commission was negotiating adoption of harmonization regulation, the Court of Justice of the EU had to deal with cases in which the self-employed persons had to face hard restrictions in trying to practice their profession in another EU member state.

In case Van Binsbergen case, the Court of Justice had to deal with the residency requirement. The case concerned a Dutchman resided in Belgium who was refused audience rights before Dutch courts. The Court of Justice confirmed that the Article 56 TFEU was directly effective and was not conditional on the issue of subsequent directive, nor on a residence requirement in Holland.

33/74 Johannes Henricus Maria van Binsbergen v Bestuur van de Bedrijfsvereniging voor de Metaalnijverheid. Judgment of the Court of 3 December 1974 20 WITH A VIEW TO THE PROGRESSIVE ABOLITION DURING THE TRANSITIONAL PERIOD OF THE RESTRICTIONS REFERRED TO IN ARTICLE 59, ARTICLE 63 HAS PROVIDED FOR THE DRAWING UP OF A "GENERAL PROGRAMME" – LAID DOWN BY COUNCIL DECISION OF 18 DECEMBER 1961 (1962, P . 32) – TO BE IMPLEMENTED BY A SERIES OF DIRECTIVES. 21 WITHIN THE SCHEME OF THE CHAPTER RELATING TO THE PROVISION OF SERVICES, THESE DIRECTIVES ARE INTENDED TO ACCOMPLISH DIFFERENT FUNCTIONS, THE FIRST BEING TO ABOLISH, DURING THE TRANSITIONAL PERIOD, RESTRICTIONS ON FREEDOM TO PROVIDE SERVICES, THE SECOND BEING TO INTRODUCE INTO THE LAW OF MEMBER STATES A SET OF PROVISIONS INTENDED TO FACILITATE THE EFFECTIVE EXERCISE OF THIS FREEDOM, IN PARTICULAR BY THE MUTUAL RECOGNITION OF PROFESSIONAL QUALIFICATIONS AND THE COORDINATION OF LAWS WITH REGARD TO THE PURSUIT OF ACTIVITIES AS SELF-EMPLOYED PERSONS. 22 THESE DIRECTIVES ALSO HAVE THE TASK OF RESOLVING THE SPECIFIC PROBLEMS RESULTING FROM THE FACT THAT WHERE THE PERSON PROVIDING THE SERVICE IS NOT ESTABLISHED, ON A HABITUAL BASIS, IN THE STATE WHERE THE SERVICE IS PERFORMED HE MAY NOT BE FULLY SUBJECT TO THE PROFESSIONAL RULES OF CONDUCT IN FORCE IN THAT STATE. 24 THE PROVISIONS OF ARTICLE 59, THE APPLICATION OF WHICH WAS TO BE PREPARED BY DIRECTIVES ISSUED DURING THE TRANSITIONAL PERIOD, THEREFORE BECAME UNCONDITIONAL ON THE EXPIRY OF THAT PERIOD. 25 THE PROVISIONS OF THAT ARTICLE ABOLISH ALL DISCRIMINATION AGAINST THE PERSON PROVIDING THE SERVICE BY REASON OF HIS NATIONALITY OR THE FACT THAT HE IS ESTABLISHED IN A MEMBER STATE OTHER THAN THAT IN WHICH THE SERVICE IS TO BE PROVIDED. 26 THEREFORE, AS REGARDS AT LEAST THE SPECIFIC REQUIREMENT OF NATIONALITY OR OF RESIDENCE, ARTICLES 59 AND 60 IMPOSE A WELL-DEFINED OBLIGATION, THE FULFILMENT OF WHICH BY THE MEMBER STATES CANNOT BE DELAYED OR JEOPARDIZED BY THE ABSENCE OF PROVISIONS WHICH WERE TO BE ADOPTED IN PURSUANCE OF POWERS CONFERRED UNDER ARTICLES 63 AND 66.

In Reyners case the Dutchman was refused the access to Belgian Bar on the grounds of nationality. The Dutch government argued that the current Article 56 TFEU (then Article 52 EEC Treaty) was not directly effective because it was incomplete without issue of the directive required by that article. The Court confirmed that the nationality cannot be a barrier for a qualified lawyer to enter a country to practice.

2/74 Jean Reyners v Belgian State Judgment of the Court of 21 June 1974 43 HAVING REGARD TO THE FUNDAMENTAL CHARACTER OF FREEDOM OF ESTABLISHMENT AND THE RULE ON EQUAL TREATMENT WITH NATIONALS IN THE SYSTEM OF THE TREATY, THE EXCEPTIONS ALLOWED BY THE FIRST PARAGRAPH OF ARTICLE 55 CANNOT BE GIVEN A SCOPE WHICH WOULD EXCEED THE OBJECTIVE FOR WHICH THIS EXEMPTION CLAUSE WAS INSERTED. 44 THE FIRST PARAGRAPH OF ARTICLE 55 MUST ENABLE MEMBER STATES TO EXCLUDE NON-NATIONALS FROM TAKING UP FUNCTIONS INVOLVING THE EXERCISE OF OFFICIAL AUTHORITY WHICH ARE CONNECTED WITH ONE OF THE ACTIVITIES OF SELF-EMPLOYED PERSONS PROVIDED FOR IN ARTICLE 52. 45 THIS NEED IS FULLY SATISFIED WHEN THE EXCLUSION OF NATIONALS IS LIMITED TO THOSE ACTIVITIES WHICH, TAKEN ON THEIR OWN, CONSTITUTE A DIRECT AND SPECIFIC CONNEXION WITH THE EXERCISE OF OFFICIAL AUTHORITY. 46 AN EXTENSION OF THE EXCEPTION ALLOWED BY ARTICLE 55 TO A WHOLE PROFESSION WOULD BE POSSIBLE ONLY IN CASES WHERE SUCH ACTIVITIES WERE LINKED WITH THAT PROFESSION IN SUCH A WAY THAT FREEDOM OF ESTABLISHMENT WOULD RESULT IN IMPOSING ON THE MEMBER STATE CONCERNED THE OBLIGATION TO ALLOW THE EXERCISE, EVEN OCCASIONALLY, BY NON-NATIONALS OF FUNCTIONS APPERTAINING TO OFFICIAL AUTHORITY. 47 THIS EXTENSION IS ON THE OTHER HAND NOT POSSIBLE WHEN, WITHIN THE FRAMEWORK OF AN INDEPENDENT PROFESSION, THE ACTIVITIES CONNECTED WITH THE EXERCISE OF OFFICIAL AUTHORITY ARE SEPARABLE FROM THE PROFESSIONAL ACTIVITY IN QUESTION TAKEN AS A WHOLE.

6.2.3 Providing of services and the obligation to be established

The EU rules make a difference between providing of services and a right to establishment. The difference between application of these rights is crucial for obligations of a service provider established in the EU country that provides services outside its country of origin, including the obligation to have licences required by local legislation.

The key factor distinguishing services from establishment is duration, i.e. if a company stays in the host member state permanently, it is likely to be covered by the rules relating to establishment, but if it stays in the host member state temporary, it is likely to provide services only. Generally, it is sometimes very difficult to distinguish which situation is applicable. The Court of Justice of the EU confirmed that the temporary nature of the activities performed has to be determined “in the light, not only of the duration of the provision of the service, but also of its regularity, periodicity or continuity”.

C-55/94 Reinhard Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano Judgment of the Court of 30 November 1995 25 The concept of establishment within the meaning of the Treaty is therefore a very broad one, allowing a Community national to participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom, so contributing to economic and social interpenetration within the Community in the sphere of activities as self-employed persons (see, to this effect, Case 2/74 Reyners v Belgium [1974] ECR 631, paragraph 21). 26 In contrast, where the provider of services moves to another Member State, the provisions of the chapter on services, in particular the third paragraph of Article 60, envisage that he is to pursue his activity there on a temporary basis. 27 As the Advocate General has pointed out, the temporary nature of the activities in question has to be determined in the light, not only of the duration of the provision of the service, but also of its regularity, periodicity or continuity. The fact that the provision of services is temporary does not mean that the provider of services within the meaning of the Treaty may not equip himself with some form of infrastructure in the host Member State (including an office, chambers or consulting rooms) in so far as such infrastructure is necessary for the purposes of performing the services in question. 28 However, that situation is to be distinguished from that of Mr Gebhard who, as a national of a Member State, pursues a professional activity on a stable and continuous basis in another Member State where he holds himself out from an established professional base to, amongst others, nationals of that State. Such a national comes under the provisions of the chapter relating to the right of establishment and not those of the chapter relating to services. ........ 39 Accordingly, it should be stated in reply to the questions from the Consiglio Nazionale Forense that: the temporary nature of the provision of services, envisaged in the third paragraph of Article 60 of the EC Treaty, is to be determined in the light of its duration, regularity, periodicity and continuity; the provider of services, within the meaning of the Treaty, may equip himself in the host Member State with the infrastructure necessary for the purposes of performing the services in question; a national of a Member State who pursues a professional activity on a stable and continuous basis in another Member State where he holds himself out from an established professional base to, amongst others, nationals of that State comes under the provisions of the chapter relating to the right of establishment and not those of the chapter relating to services;

From the above mentioned facts and with respect to the obligation to have a licence for providing of services in the host member state, there is necessary to distinguish, whether the company will permanently provide recruitment services in the host member state. If the services are provided on a permanent basis, there is necessary to have a licence in the host member state, as the EU rules regulating the freedom of establishment will be used. On the other hand, if the services are not provided permanently, i.e. the relevant company does not provide the services permanently, EU rules on free movement of services are applied.

It is thus up to the national court to determine the situation on a case to case basis. However, in case Trojani, the Court of Justice of the European Union made clear that an activity carried out on a permanent basis, or at least without a foreseeable limit to its duration, would not fall within the services provisions.  

C-456/02 Michel Trojani v. Centre public d'aide sociale de Bruxelles (CPAS) Judgment of the Court of 7 September 2004 27 Now, first, the freedom of establishment provided for in Articles 43 EC to 48 EC, includes only the right to take up and pursue all types of self-employed activity, to set up and manage undertakings, and to set up agencies, branches or subsidiaries (see, in particular, Case C-255/97 Pfeiffer [1999] ECR I-2835, paragraph 18, and Case C-79/01 Payroll and Others [2002] ECR I-8923, paragraph 24). Paid activities are therefore excluded. 28 Second, according to the settled case-law of the Court, an activity carried out on a permanent basis, or at least without a foreseeable limit to its duration, does not fall within the Community provisions concerning the provision of services (see Case 196/87 Steymann [1988] ECR 6159, paragraph 16, and Case C-215/01 Schnitzer [2003] I-0000, paragraphs 27 to 29).

6.2.4 Providing of services and measures adopted by member states

The basic principle is the principle of non-discrimination on the ground of nationality against those wishing to provide and receive services. Article 57 TFEU stipulates that a person providing services may pursue his activities in the member state, where the service is provided, under the same conditions as are imposed by that state on its own nationals.

However, from the case law of EU courts results that a member state may not make the provision of services in its territory subject to compliance with all the conditions required for establishment and thereby deprive of all practical effectiveness the provisions of the treaties whose object is, precisely, to guarantee the freedom to provide services.

C-76/90 Manfred Säger v Dennemeyer & Co. Ltd. Judgment of the Court of 25 July 1991 13 In particular, a Member State may not make the provision of services in its territory subject to compliance with all the conditions required for establishment and thereby deprive of all practical effectiveness the provisions of the Treaty whose object is, precisely, to guarantee the freedom to provide services. Such a restriction is all the less permissible where, as in the main proceedings, and unlike the situation governed by the third paragraph of Article 60 of the Treaty, the service is supplied without its being necessary for the person providing it to visit the territory of the Member State where it is provided.

This was also confirmed by the Laval case which stipulates that host member states cannot require service providers and their staff to comply with all of the host state's labour standards since they have already satisfied the standards in the home state. Applying both sets of rules imposes a double burden and this would deprive Article 56 TFEU of all practical effectiveness. This conclusion was also supported by the Court of Justice which found that German rules requiring insurance companies wishing to provide insurance in Germany to be both established and authorized in Germany breached articles 56 and 57 TFEU because the rules increased costs for those providing services in Germany, especially when the insurer conducted business there only occasionally.

C-341/05 Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet, Svenska Byggnadsarbetareförbundets avd. 1, Byggettan, Svenska Elektrikerförbundet, Judgment of the Court of 18 December 2007 86 As regards use of the means available to the trade unions to bring pressure to bear on the relevant parties to sign a collective agreement and to enter into negotiations on pay, the defendants in the main proceedings and the Danish and Swedish Governments submit that the right to take collective action in the context of negotiations with an employer falls outside the scope of Article 49 EC, since, pursuant to Article 137(5) EC, as amended by the Treaty of Nice, the Community has no power to regulate that right.

C-164/99 Portugaia Construções Lda Judgment of the Court of 24 January 2002 16. It is settled case-law that Article 59 of the Treaty requires not only the elimination of all discrimination on grounds of nationality against providers of services who are established in another Member State, but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit, impede or render less attractive the activities of a provider of services established in another Member State in which he lawfully provides similar services. 17. In particular, a Member State may not make the provision of services in its territory subject to compliance with all the conditions required for establishment, thereby depriving of all practical effectiveness the provisions of the Treaty whose object is, precisely, to guarantee the freedom to provide services (see Säger, paragraph 13). 18. In that regard, the application of the host Member State's domestic legislation to service providers is liable to prohibit, impede or render less attractive the provision of services by persons or undertakings established in other Member States to the extent that it involves expenses and additional administrative and economic burdens (Mazzoleni and ISA, paragraph 24).

6.3 Free movement of lawyers

The free movement of legal services is regulated by directives. Member States have the obligation to transpose the objectives of the directives into their national laws. In order to harmonize member states' legislation in the area of the free movement of legal services, two directives were adopted that reflect a different degree of integration of providers of legal services into national systems operating in different member states. The system is based on the mutual recognition of qualification of the legal profession between the member states. Member states mutually recognize the qualification obtained in another member state and they shall enableto perform the profession of a lawyer on their territory under the same conditions as are applicable to domestic lawyers. The directive also defines the term “lawyer” and thus defines the personal scope. Free movement of legal services is regulated by the following directives:

• Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services (OJ L 78, 26.3.1977, p. 17–18)
• Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained (OJ L 77, 14.3.1998, p. 36–43)

6.3.1 Directive 77/249

This directive regulates providing of legal services on the territory of another member state, or the European Economic Area other than the State in which the lawyer is established, on a temporal basis. The directive does not provide for permanent operation of the legal profession in another member state, but greatly facilitates the activities of lawyers within the EU. The lawyers who provide legal services in another EU member state must use the professional title used in the member state from which he/she comes, expressed in the language or one of the languages, of that state, with an indication of the professional organization by which he/she is authorized to practise or the court of law before which he/she is entitled to practise pursuant to the laws of that state.

6.3.1.1 Rights and obligations arising from the directive

The scope of legal assistance which the lawyers may provide under this directive is limited. This is related to the effort to protect the legitimate interests of the beneficiaries of legal services, as different countries have specific rules set out in the specific areas. Member states may decide that the broad freedom to provide legal services is restricted in the inheritance law and land law in preparing the documents creating or transferring rights in land.

Article 1 1. This Directive shall apply, within the limits and under the conditions laid down herein, to the activities of lawyers pursued by way of provision of services. Notwithstanding anything contained in this Directive, Member States may reserve to prescribed categories of lawyers the preparation of formal documents for obtaining title to administer estates of deceased persons, and the drafting of formal documents creating or transferring interests in land.

Member states may impose condition requiring collaboration with a local lawyer in cases where a lawyer from another member state represents a client before a court or tribunal. The local lawyer assumes responsibility for the operation of a lawyer from another member state. Cooperation with a local lawyer shall also eliminate the problems with delivery of documents.

6.3.1.2 Practical problems with application of the directive 77/249

In Vlassopoulou case, the Court of Justice was dealing with non-discrimination provisions of the primary law regulating the freedom to provide services. This case was decided before adoption of a secondary legislation regulating the free movement of lawyers. Iréne Vlassopoulou was not enabled the profession of a lawyer in Germany despite she was a member of the bar in Greece and was performing legal praxis in Germany for five years.

C-340/89 Irène Vlassopoulou v Ministerium für Justiz, Bundes- und Europaangelegenheiten Baden-Württemberg Judgment of the Court of 7 May 1991 16 Consequently, a Member State which receives a request to admit a person to a profession to which access, under national law, depends upon the possession of a diploma or a professional qualification must take into consideration the diplomas, certificates and other evidence of qualifications which the person concerned has acquired in order to exercise the same profession in another Member State by making a comparison between the specialized knowledge and abilities certified by those diplomas and the knowledge and qualifications required by the national rules.

In Gebhard case the Court was dealing with the right to establishment in another member state and the conditions for application of this right that are determined in the light of the intended activity on the territory of the host member state. If the area is not regulated in the host member state, there exist any obstacles to establish in the host member state. However, if there are specific standards, these must be fulfilled by the concerned person. Such standards, include, for example possession of a diploma, membership in a professional organization or adaptation to the professional rules. Compliance with these standards shall be subject to the following four requirements.

• these standards must be applied on a non-discrimination basis
• must be justified by legitimate public interest requirements
• must be suitable for achieving the objective and goals
• must satisfy the requirement of proportionality, must not exceed what is necessary to achieve them.

C-55/94 Reinhard Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano Judgment of the Court of 30 November 1995 31 The provisions relating to the right of establishment cover the taking-up and pursuit of activities (see, in particular, the judgment in Reyners, paragraphs 46 and 47). Membership of a professional body may be a condition of taking up and pursuit of particular activities. It cannot itself be constitutive of establishment. 32 It follows that the question whether it is possible for a national of a Member State to exercise his right of establishment and the conditions for exercise of that right must be determined in the light of the activities which he intends to pursue on the territory of the host Member State. 33 Under the terms of the second paragraph of Article 52, freedom of establishment is to be exercised under the conditions laid down for its own nationals by the law of the country where establishment is effected. 34 In the event that the specific activities in question are not subject to any rules in the host State, so that a national of that Member State does not have to have any specific qualification in order to pursue them, a national of any other Member State is entitled to establish himself on the territory of the first State and pursue those activities there. 35 However, the taking-up and pursuit of certain self-employed activities may be conditional on complying with certain provisions laid down by law, regulation or administrative action justified by the general good, such as rules relating to organization, qualifications, professional ethics, supervision and liability (see Case C-71/76 Thieffry v Conseil de l' Ordre des Avocats à la Cour de Paris [1977] ECR 765, paragraph 12). Such provisions may stipulate in particular that pursuit of a particular activity is restricted to holders of a diploma, certificate or other evidence of formal qualifications, to persons belonging to a professional body or to persons subject to particular rules or supervision, as the case may be. They may also lay down the conditions for the use of professional titles, such as avvocato. 36 Where the taking-up or pursuit of a specific activity is subject to such conditions in the host Member State, a national of another Member State intending to pursue that activity must in principle comply with them. It is for this reason that Article 57 provides that the Council is to issue directives, such as Directive 89/48, for the mutual recognition of diplomas, certificates and other evidence of formal qualifications or, as the case may be, for the coordination of national provisions concerning the taking-up and pursuit of activities as self-employed persons. 37 It follows, however, from the Court' s case-law that national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain it (see Case C-19/92 Kraus v Land Baden-Wuerttemberg [1993] ECR I-1663, paragraph 32). 38 Likewise, in applying their national provisions, Member States may not ignore the knowledge and qualifications already acquired by the person concerned in another Member State (see Case C-340/89 Vlassopoulou v Ministerium fuer Justiz, Bundes- und Europaangelegenheiten Baden-Wuerttemberg [1991] ECR I-2357, paragraph 15). Consequently, they must take account of the equivalence of diplomas (see the judgment in Thieffry, paragraphs 19 and 27) and, if necessary, proceed to a comparison of the knowledge and qualifications required by their national rules and those of the person concerned (see the judgment in Vlassopoulou, paragraph 16).

6.3.2 Directive 98/5

This directive enables, under certain conditions, be permanently incorporated into the bar of the host member state.

Article 1 Object, scope and definitions 1. The purpose of this Directive is to facilitate practice of the profession of lawyer on a permanent basis in a self-employed or salaried capacity in a Member State other than that in which the professional qualification was obtained.

The benefit of this directive is that it enables to perform the legal praxis under the professional title of the host member state. The knowledge of the lawyer from the other member state will not be subject to review by the host country, although he/she has never studied the law of the host member state. The directive meets the needs of consumers of legal services who, owing to the increasing trade flows resulting, in particular, from the internal market, seek advice when carrying out cross-border transactions in which international law, EU law and domestic laws often overlap.

6.3.2.1 Rights and obligations arising from the directive 98/5

The lawyers are entitled to practice the legal profession in a host member state, provided that he/she is registered with the competent authority in that member state. The competent authority has the obligation to register the lawyer upon submission of a certificate attesting to his/her registration in their home member state. The competent registering authority of the host member state is obliged to inform the competent authority of the home member state of that fact. A lawyer practising in a host member state under his home-country professional title shall do so under that title, which must be expressed in the official language or one of the official languages of his home Member State, in an intelligible manner and in such a way as to avoid confusion with the professional title of the host member state.

Article 5 Area of activity 1. Subject to paragraphs 2 and 3, a lawyer practising under his home-country professional title carries on the same professional activities as a lawyer practising under the relevant professional title used in the host Member State and may, inter alia, give advice on the law of his home Member State, on Community law, on international law and on the law of the host Member State. He shall in any event comply with the rules of procedure applicable in the national courts. 2. Member States which authorise in their territory a prescribed category of lawyers to prepare deeds for obtaining title to administer estates of deceased persons and for creating or transferring interests in land which, in other Member States, are reserved for professions other than that of lawyer may exclude from such activities lawyers practising under a home-country professional title conferred in one of the latter Member States. 3. For the pursuit of activities relating to the representation or defence of a client in legal proceedings and insofar as the law of the host Member State reserves such activities to lawyers practising under the professional title of that State, the latter may require lawyers practising under their home-country professional titles to work in conjunction with a lawyer who practises before the judicial authority in question and who would, where necessary, be answerable to that authority or with an 'avoué` practising before it. Nevertheless, in order to ensure the smooth operation of the justice system, Member States may lay down specific rules for access to supreme courts, such as the use of specialist lawyers.

The directive regulates the rules of professional conduct, including the obligation to be insured as requested by the rules of the host member state.

Article 6 Rules of professional conduct applicable 1. Irrespective of the rules of professional conduct to which he is subject in his home Member State, a lawyer practising under his home-country professional title shall be subject to the same rules of professional conduct as lawyers practising under the relevant professional title of the host Member State in respect of all the activities he pursues in its territory. 2. Lawyers practising under their home-country professional titles shall be granted appropriate representation in the professional associations of the host Member State. Such representation shall involve at least the right to vote in elections to those associations' governing bodies. 3. The host Member State may require a lawyer practising under his home-country professional title either to take out professional indemnity insurance or to become a member of a professional guarantee fund in accordance with the rules which that State lays down for professional activities pursued in its territory. Nevertheless, a lawyer practising under his home-country professional title shall be exempted from that requirement if he can prove that he is covered by insurance taken out or a guarantee provided in accordance with the rules of his home Member State, insofar as such insurance or guarantee is equivalent in terms of the conditions and extent of cover. Where the equivalence is only partial, the competent authority in the host Member State may require that additional insurance or an additional guarantee be contracted to cover the elements which are not already covered by the insurance or guarantee contracted in accordance with the rules of the home Member State.

Disciplinary proceedings

Article 7 Disciplinary proceedings 1. In the event of failure by a lawyer practising under his home-country professional title to fulfil the obligations in force in the host Member State, the rules of procedure, penalties and remedies provided for in the host Member State shall apply. 2. Before initiating disciplinary proceedings against a lawyer practising under his home-country professional title, the competent authority in the host Member State shall inform the competent authority in the home Member State as soon as possible, furnishing it with all the relevant details. The first subparagraph shall apply mutatis mutandis where disciplinary proceedings are initiated by the competent authority of the home Member State, which shall inform the competent authority of the host Member State(s) accordingly. 3. Without prejudice to the decision-making power of the competent authority in the host Member State, that authority shall cooperate throughout the disciplinary proceedings with the competent authority in the home Member State. In particular, the host Member State shall take the measures necessary to ensure that the competent authority in the home Member State can make submissions to the bodies responsible for hearing any appeal. 4. The competent authority in the home Member State shall decide what action to take, under its own procedural and substantive rules, in the light of a decision of the competent authority in the host Member State concerning a lawyer practising under his home-country professional title. 5. Although it is not a prerequisite for the decision of the competent authority in the host Member State, the temporary or permanent withdrawal by the competent authority in the home Member State of the authorisation to practise the profession shall automatically lead to the lawyer concerned being temporarily or permanently prohibited from practising under his home-country professional title in the host Member State.

The directive also enables full integration. It makes easier for the lawyers from other member states to obtain the professional title of that host member state. After effectively and regularly pursuing in the host member state an activity in the law of that state including EU law for a period of three years, a lawyer may reasonably be assumed to have gained the aptitude necessary to become fully integrated into the legal profession there.

Article 10 Like treatment as a lawyer of the host Member State 1. A lawyer practising under his home-country professional title who has effectively and regularly pursued for a period of at least three years an activity in the host Member State in the law of that State including Community law shall, with a view to gaining admission to the profession of lawyer in the host Member State, be exempted from the conditions set out in Article 4(1)(b) of Directive 89/48/EEC, 'Effective and regular pursuit` means actual exercise of the activity without any interruption other than that resulting from the events of everyday life. It shall be for the lawyer concerned to furnish the competent authority in the host Member State with proof of such effective regular pursuit for a period of at least three years of an activity in the law of the host Member State. To that end: (a) the lawyer shall provide the competent authority in the host Member State with any relevant information and documentation, notably on the number of matters he has dealt with and their nature; (b) the competent authority of the host Member State may verify the effective and regular nature of the activity pursued and may, if need be, request the lawyer to provide, orally or in writing, clarification of or further details on the information and documentation mentioned in point (a). Reasons shall be given for a decision by the competent authority in the host Member State not to grant an exemption where proof is not provided that the requirements laid down in the first subparagraph have been fulfilled, and the decision shall be subject to appeal under domestic law. 2. A lawyer practising under his home-country professional title in a host Member State may, at any time, apply to have his diploma recognised in accordance with Directive 89/48/EEC with a view to gaining admission to the profession of lawyer in the host Member State and practising it under the professional title corresponding to the profession in that Member State. 3. A lawyer practising under his home-country professional title who has effectively and regularly pursued a professional activity in the host Member State for a period of at least three years but for a lesser period in the law of that Member State may obtain from the competent authority of that State admission to the profession of lawyer in the host Member State and the right to practise it under the professional title corresponding to the profession in that Member State, without having to meet the conditions referred to in Article 4(1)(b) of Directive 89/48/EEC, under the conditions and in accordance with the procedures set out below: (a) The competent authority of the host Member State shall take into account the effective and regular professional activity pursued during the abovementioned period and any knowledge and professional experience of the law of the host Member State, and any attendance at lectures or seminars on the law of the host Member State, including the rules regulating professional practice and conduct. (b) The lawyer shall provide the competent authority of the host Member State with any relevant information and documentation, in particular on the matters he has dealt with. Assessment of the lawyer's effective and regular activity in the host Member State and assessment of his capacity to continue the activity he has pursued there shall be carried out by means of an interview with the competent authority of the host Member State in order to verify the regular and effective nature of the activity pursued. Reasons shall be given for a decision by the competent authority in the host Member State not to grant authorisation where proof is not provided that the requirements laid down in the first subparagraph have been fulfilled, and the decision shall be subject to appeal under domestic law. 4. The competent authority of the host Member State may, by reasoned decision subject to appeal under domestic law, refuse to allow the lawyer the benefit of the provisions of this Article if it considers that this would be against public policy, in a particular because of disciplinary proceedings, complaints or incidents of any kind. 5. The representatives of the competent authority entrusted with consideration of the application shall preserve the confidentiality of any information received. 6. A lawyer who gains admission to the profession of lawyer in the host Member State in accordance with paragraphs 1, 2 and 3 shall be entitled to use his home-country professional title, expressed in the official language or one of the official languages of his home Member State, alongside the professional title corresponding to the profession of lawyer in the host Member State.

Free movement of legal services brings the lawyers a possibility of providing legal services within the whole area of the EU the EEA. This possibility enables the free movement of legal services within the internal market. The Court of Justice of the EU has developed praxis, where no restrictions of this freedom are accepted. Free movement of legal services is harmonized field of European internal market. Directives have been adopted to make this freedom available for practicing lawyers in the EU. Lawyers shall provide legal services under their professional title used in state of their registration. The professional title shall be expressed in the language of state of their registration. Lawyers also have the possibility to become a member of a bar in the member state where they are practicing their profession. Free movement of legal services helps the EU to create an area without restrictions in the field of providing legal services. This is closely connected with the growth of trade between member states.

7 FREE MOVEMENT OF CAPITAL

The free movement of capital was necessary for proper functioning of the internal market. The member states were prohibited to introduce new restrictions on capital movement. The Treaty on EU completely revised the provisions on free movement of capital.

Article 63 1. Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited. 2. Within the framework of the provisions set out in this Chapter, all restrictions on payments between Member States and between Member States and third countries shall be prohibited.

As was confirmed by the Court of Justice of the EU, Article 63 has direct effect as it laid down clear and unconditional prohibition for which no implementing measure was required.  

Exceptions from the free movement of capital

Article 65(1) TFEU regulates the exceptions from the free movement of capital. The first exception concerns taxation and constitutes one of the main exceptions to Article 63 TFEU. The second exception concerns the grounds of public policy and public security.

Article 65 1. The provisions of Article 63 shall be without prejudice to the right of Member States: to apply the relevant provisions of their tax law which distinguish between taxpayers who are not in the same situation with regard to their place of residence or with regard to the place where their capital is invested; to take all requisite measures to prevent infringements of national law and regulations, in particular in the field of taxation and the prudential supervision of financial institutions, or to lay down procedures for the declaration of capital movements for purposes of administrative or statistical information, or to take measures which are justified on grounds of public policy or public security.

8 PROHIBITION OF DISCRIMINATION IN EU LAW

Prohobition of discrimination forms an important part of EU legislation. EU legislation covers various grounds for which the discrimination is prohibited.

In antidiscrimination legislation, two main approches are used. These two approaches have their origin in Aristotle's understaning of equality as treating like cases alike and unalike cases unalike, in proportion to their difference:

• Formal approach to equality
• Treating like cases alike – treating the same persons in the same way
• Practical problem: where cases are alike?
• Substantive approach to equality
• Treating unalike cases unalike – the focus is not put on the treatment itself, but on the effect of the treatment – the result should be equal, even if the treatment must be different. The substantive approach takes into account the differences between people.
• Practical problem: how far to go to accommodate differences?

The EU law represent a combination of formal and substantive approach to equality. The substantive approach is reflected in prohibition of indirect discrimination.

8.1 EU law on equality

The EEC Treaty (1957) introduced Article 119 (now Article 157 TFEU) that established the right to equal pay regardless sex. Introduction of this article was demanded by France as it was bound by the ILO Equal Pay Convention and German attitude on free economy (competitive disadvantage of French economy if all countries could pay women less). Nowadays, both primary and secondary legislation contain provisions on equality.

8.1.1 Primary legislation

Bothe treaties (and Charter) contain provisions on sex/gender equality. The primary legislation has precedence over secondary legislation. This has influence on interpretation of directives.

Articles of the TEU

Article 2 The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail. Article 3 It shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child.

Articles of the TFEU

Article 8 In all its activities, the Union shall aim to eliminate inequalities, and to promote equality, between men and women. Article 10 In defining and implementing its policies and activities, the Union shall aim to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. Article 157 (ex Article 141 TEC) 1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied. 2. For the purpose of this Article, ‘pay’ means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer. Equal pay without discrimination based on sex means: that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement; that pay for work at time rates shall be the same for the same job. 3. The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, and after consulting the Economic and Social Committee, shall adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value. 4. With a view to ensuring full equality in practice between men and women in working life, the principle of equal treatment shall not prevent any Member State from maintaining or adopting measures providing for specific advantages in order to make it easier for the underrepresented sex to pursue a vocational activity or to prevent or compensate for disadvantages in professional careers.

Article 157 was amended by the Amsterdam Treaty. Paragraph 3 enables to adopt measures to ensure equal opportunities in employment and occupation, i.e. it constitutes a legal basis for adoption of secondary legislation (before only other general or harmonising articles were used) and paragraph 4 enables to adopt positive actions.

As was confirmed by the Court of Justice in case Defrenne v. Sabena, the article 157 is directly applicable. The Court of Justice established that the right to equal pay was legally binding. Ms Defrenne, a Belgian air hostess, felt that she was entitled to a similar salary as male air stewards (as a woman she was required to retire at 40, had been paid less, had a shorter working life and thus smaller pension). Although there was no equal pay legislation in Belgian law, she argued that her entitlement was derived directly from Art 119 (now Article 157). The Court of Justice recognised for the first time the binding nature and direct effects of Article 119 and confirmed that equality between the sexes was eventually recognised by the Court as a fundamental constitutional principle of EU law: "...respect for fundamental personal human rights is one of the general principles of the Community law... There can be no doubt that the elimination of discrimination based on sex forms part of those fundamental rights".

149/77 Gabrielle Defrenne v Société anonyme belge de navigation aérienne Sabena Judgment of the Court of 15 June 1978 2. FUNDAMENTAL PERSONAL HUMAN RIGHTS FORM PART OF THE GENERAL PRINCIPLES OF COMMUNITY LAW, THE OBSERVANCE OF WHICH THE COURT HAS A DUTY TO ENSURE. THE ELIMINATION OF DISCRIMINATION BASED ON SEX FORMS PART OF THOSE FUNDAMENTAL RIGHTS. HOWEVER, IT IS NOT FOR THE COURT TO ENFORCE THE OBSERVANCE OF THAT RULE OF NON-DISCRIMINATION IN RESPECT OF RELATIONSHIPS BETWEEN EMPLOYER AND EMPLOYEE WHICH ARE A MATTER EXCLUSIVELY FOR NATIONAL LAW.

The argumentation from the Defrenne case was also confirmed by the subsequent case law of EU courts. The Court of Justice confirmed that the right not to be discriminated on ground of sex constitutes a fundamental human right.

C-50/96 Deutsche Telekom AG v Lilli Schröder Judgment of the Court of 10 February 2000 4 Moreover, the economic aim pursued by Article 119 of the Treaty, namely the elimination of distortions of competition between undertakings established in different Member States, is secondary to its social aim, which constitutes the expression of a fundamental human right not to be discriminated against on grounds of sex.

8.1.2 Secondary antidiscrimination legislation

The equal treatment is regulated by the secondary legislation (directives) that was transposed by the member states into their national legislation. Secondary legislation harmonized antidiscrimination legislation within the EU and requires the member states its effective enforcement. The following main directives regulate the equal treatment:

• Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) (OJ L 204, 26.7.2006, p. 23–36)

The purpose of this directive is to ensure the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation. To that end, it contains provisions to implement the principle of equal treatment in relation to (a) access to employment, including promotion, and to vocational training; (b) working conditions, including pay; (c) occupational social security schemes. The Directive has the following titles:

• General Provisions on the aim of the directive and definition of concepts
• Equal Pay provisions and equal treatment in occupational social security schemes and equal treatment as regards access to employment, vocational training and promotion and working conditions
• Remedies and enforcement provisions, including burden of proof, penalties prevention of discrimination, etc.

The directive includes also transgender persons, i.e. transgender people are protected against employment discrimination

Recital 3 The Court of Justice has held that the scope of the principle of equal treatment for men and women cannot be confined to the prohibition of discrimination based on the fact that a person is of one or other sex. In view of its purpose and the nature of the rights which it seeks to safeguard, it also applies to discrimination arising from the gender reassignment of a person.

• Council Directive 2004/113/EC of 13 December 2004 implementing the principle of equal treatment between men and women in the access to and supply of goods and services (OJ L 373, 21.12.2004, p. 37–43)

The directive lays down a framework for combating discrimination based on sex in access to and supply of goods and services, with a view to putting into effect in the Member States the principle of equal treatment between men and women.

The scope of its application:

Article 3 Scope 1. Within the limits of the powers conferred upon the Community, this Directive shall apply to all persons who provide goods and services, which are available to the public irrespective of the person concerned as regards both the public and private sectors, including public bodies, and which are offered outside the area of private and family life and the transactions carried out in this context. 2. This Directive does not prejudice the individual's freedom to choose a contractual partner as long as an individual's choice of contractual partner is not based on that person's sex. 3. This Directive shall not apply to the content of media and advertising nor to education. 4. This Directive shall not apply to matters of employment and occupation. This Directive shall not apply to matters of self-employment, insofar as these matters are covered by other Community legislative acts.

• Directive 2010/41/EU of the European Parliament and of the Council of 7 July 2010 on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity and repealing Council Directive 86/613/EEC (OJ L 180, 15.7.2010, p. 1–6)

This directive introduces a framework for putting into effect in the Member States the principle of equal treatment between men and women engaged in an activity in a self-employed capacity, or contributing to the pursuit of such an activity, as regards those aspects not covered by Directives 2006/54/EC and 79/7/EEC

The material scope of the directive: the principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex in the public or private sectors, either directly or indirectly, for instance in relation to the establishment, equipment or extension of a business or the launching or extension of any other form of self-employed activity.

• Council Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin ( OJ L 180, 19.7.2000, p. 22–26)

This directive lays down a framework for combating discrimination on the grounds of racial or ethnic origin, with a view to putting into effect in the Member States the principle of equal treatment.

The scope of its application:

Article 3 Scope 1. Within the limits of the powers conferred upon the Community, this Directive shall apply to all persons, as regards both the public and private sectors, including public bodies, in relation to: conditions for access to employment, to self-employment and to occupation, including selection criteria and recruitment conditions, whatever the branch of activity and at all levels of the professional hierarchy, including promotion; access to all types and to all levels of vocational guidance, vocational training, advanced vocational training and retraining, including practical work experience; employment and working conditions, including dismissals and pay; membership of and involvement in an organisation of workers or employers, or any organisation whose members carry on a particular profession, including the benefits provided for by such organisations; social protection, including social security and healthcare; social advantages; education; access to and supply of goods and services which are available to the public, including housing.

• Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation ( OJ L 303, 2.12.2000, p. 16–22)

The directive lays down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.

8.2 Key concepts of discrimination

All these directives work with and define the key concepts of discrimination. These include:

8.2.1 Direct discrimination

Direct discrimination occurs where one person is treated less favourably on grounds of [sex, racial or ethnic origin, religion, belief, disability, age, sexual orientation] than another is, has been or would be treated in comparable situation.

Direct discrimination occurs when someone is treated differently just because of his or her characteristic feature that constitute a ground for which the discrimination is prohibited.

When does the direct discrimination occur?

1. Unequality of treatment (less favourable);
2. Specific characteristic for which discrimination is prohibited is a ground for different treatment;
3. Comparison (real life comparator is not necessary)

Direct discrimination is prohibited per se. However, the specific directives may contain a closed system for exceptions, e.g. the Directive 2006/54 stipulates that member states may provide, as regards access to employment including the training leading thereto, that a difference of treatment which is based on a characteristic related to sex shall not constitute discrimination where, by reason of the nature of the particular occupational activities concerned or of the context in which they are carried out, such a characteristic constitutes a genuine and determining occupational requirement, provided that its objective is legitimate and the requirement is proportionate.

8.2.2 Indirect discrimination

Indirect discrimination occurs where an apparently neutral provision, criterion or practice would put persons of one [sex, racial or ethnic origin, religion, belief, disability, age, sexual orientation] as a particular disadvantage compared with persons of the other [sex, racial or ethnic origin, religion, belief, disability, age, sexual orientation], unless that provision, criterion or practice is objectively justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary.

In Bilka case the Court was dealing with the access to pension scheme. Part-timers could only access the scheme if they had worked at least 15 years full time over a total period of 20 years. The Court found that if a lower proportion of women worked full time, the policy regarding part-timers would be contrary to 157 TFEU, if that result could not be explained by factors other than discrimination on the ground of sex. The Court, however said that the practice could then nevertheless still be justified if the company could show that they addressed a real need of the company and were appropriate and necessary to address that need to achieve that aim.

170/84 Bilka-Kaufhaus GmbH v Karin Weber vorn Hartz Judgment of the Court of 13 May 1986 29 IF, THEREFORE, IT SHOULD BE FOUND THAT A MUCH LOWER PROPORTION OF WOMEN THAN OF MEN WORK FULL TIME, THE EXCLUSION OF PART-TIME WORKERS FROM THE OCCUPATIONAL PENSION SCHEME WOULD BE CONTRARY TO ARTICLE 119 OF THE TREATY WHERE, TAKING INTO ACCOUNT THE DIFFICULTIES ENCOUNTERED BY WOMEN WORKERS IN WORKING FULL-TIME, THAT MEASURE COULD NOT BE EXPLAINED BY FACTORS WHICH EXCLUDE ANY DISCRIMINATION ON GROUNDS OF SEX. 30 HOWEVER, IF THE UNDERTAKING IS ABLE TO SHOW THAT ITS PAY PRACTICE MAY BE EXPLAINED BY OBJECTIVELY JUSTIFIED FACTORS UNRELATED TO ANY DISCRIMINATION ON GROUNDS OF SEX THERE IS NO BREACH OF ARTICLE 119.

The indirect discrimination assessment includes the objective justification test. This represents the substantive equality approach and includes the potential objective justification of unequal treatment that must follow a legitimate aim and the means of achieving the aim are appropriate and necessary.

8.2.3 Harassment

Harassment occurs where unwanted conduct related to the [characteristic for which the discrimination is prohibited] of a person occurs with the purpose or effect of violating the dignity of a person, and of creating an intimidating, hostile, degrading, humiliating or offensive environment.

The unwanted conduct must result in violating the dignity of a person and creates an hostile degrading, humiliating or offensive environment.

8.2.4 Sexual harassment

Sexual harassment occurs where any form of unwanted verbal, non-verbal or physical conduct of a sexual nature occurs, with the purpose or effect of violating the dignity of a person, in particular when creating an intimidating, hostile, degrading, humiliating or offensive environment. There is less strict definition in comparison to harassment as the violation of dignity suffices. No intent of the perpetrator must be proved. It is enough if the behaviour has sexual connotation and is unwanted by the victim and results in violation of his/her dignity.

8.2.5 Instruction to discriminate

Instruction to direct or indirect discrimination shall be deemed to be discrimination. It applies in hierachical relationships.  

8.3 Enforcement of antidiscrimination legislation

Member states have an aboligation to ensure effective enforcement of antidiscrimination legislation. The effective implementation of the principle of equal treatment requires appropriate procedures to be put in place by the Member States. This includes the obligation of member states to introduce adequate judicial or administrative procedures for the enforcement and effective implementation of the principle of equal treatment.

8.3.1 Defence of rights

With a view to further improving the level of protection offered by EU antidiscrimination law, associations, organisations and other legal entities should also be empowered to engage in proceedings, as the member states so determine, either on behalf or in support of a complainant, without prejudice to national rules of procedure concerning representation and defence. Member states shall ensure that associations, organisations or other legal entities which have, in accordance with the criteria laid down by their national law, a legitimate interest in ensuring that the antidiscrimination law provisions are complied with, may engage, either on behalf or in support of the complainant, with his/her approval, in any judicial and/or administrative procedure.

8.3.2 Burden of proof

The adoption of rules on the burden of proof plays a significant role in ensuring that the principle of equal treatment can be effectively enforced. As the Court of Justice has held, provision should therefore be made to ensure that the burden of proof shifts to the respondent when there is a prima facie case of discrimination, except in relation to proceedings in which it is for the court or other competent national body to investigate the facts. It is however necessary to clarify that the appreciation of the facts from which it may be presumed that there has been direct or indirect discrimination remains a matter for the relevant national body in accordance with national law or practice.

8.3.3 Compensation and reparation

Member states have an obligation to introduce into their national legal systems such measures as are necessary to ensure real and effective compensation or reparation as the member states so determine for the loss and damage sustained by a person injured as a result of discrimination, in a way which is dissuasive and proportionate to the damage suffered.