European social law – unemployment allowances29/11/06 / cata_european-union-news

Mr. De Cuyper, a Belgian national, was granted unemployment allowances in 1997 as he had been employed in Belgium previously. He made a declaration in 1999 stating that he was living in Belgium. The inspectors from the Office national de l’emploi (“ONEM”) investigated the accuracy of these declarations in 2000 and Mr. De Cuyper admitted that he had not lived in Belgium since January 1999 and was in fact residing in France. On the basis of that investigation, he was refused unemployment allowances due to no longer satisfying the requirement of actual residence prescribed under Belgian law. ONEM also demanded repayment of allowances paid since January 1999. Mr. De Cuyper contested ONEM’s decision before the Tribunal du travail de Bruxelles, which sought a preliminary ruling from the European Court of Justice (“ECJ”).

The ECJ held that unemployment allowance is a social security benefit to which Regulation (EEC) No 1408/71 of the Council of 14 June 1971, on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as amended (“Regulation No. 1408”), applies even if, under a national provision, the recipient is exempt from registering as a job-seeker and thus the requirement of being available for work. The ECJ stated in this regard that the fact the unemployed person obtains such exemption does not mean the person is exempt from the requirement to remain available to employment services. Even if that person does not have to register as a jobseeker or accept any suitable employment, he or she must remain available to these services so that their employment and family situation can be monitored.

Concerning the question whether a Member State is authorized under Community law to make entitlement to unemployment allowance conditional to residence in its territory, the ECJ observed that, even though the EC Treaty (“ECT”) allows every citizen of the European Union (“EU”) the right to move and reside freely within the territory of Member States, the right of residence is not unconditional, but rather it is conferred subject to limitations and conditions laid down by the Treaty and adopted measures to give it effect.

The Regulation provides for only two scenarios under which a Member State is required to allow recipients of unemployment allowance to reside in the territory of another Member State while retaining their entitlement to allowance: the first is when the unemployed person goes to another Member State ‘to seek employment there’; the second is when the unemployed person resides in the territory of another Member State of his or her last employment. It is clear from the documents presented to the ECJ that Mr. De Cuyper’s position was not covered by either of the two scenarios.

The ECJ accepted that national legislation, which places certain of its nationals at a disadvantage simply because they exercise their freedom to move and reside in another Member State, is a restriction on the freedoms conferred on every citizen of the EU. In this case however, the enactment of a residence clause reflects the need to monitor the employment and family situation of unemployed persons. The clause allows ONEM inspectors to check whether the situation of a recipient of the unemployment allowance has undergone changes that may have an effect on the benefit granted. The justification is accordingly based on objective considerations of public interest and is independent of the nationality of the persons concerned. The monitoring carried out with regard to unemployment allowance is thus of a specific nature that justifies the introduction of more restrictive arrangements than those for monitoring in respect of other benefits.