European social law – unemployment allowances

Mr. De Cuyper, a Belgian national, was granted unemployment allowances in1997 as he had been employed in Belgium previously. He made a declaration in1999 stating that he was living in Belgium. The inspectors from the Officenational de l’emploi (“ONEM”) investigated the accuracy ofthese declarations in 2000 and Mr. De Cuyper admitted that he had not lived inBelgium since January 1999 and was in fact residing in France. On the basis ofthat investigation, he was refused unemployment allowances due to no longersatisfying the requirement of actual residence prescribed under Belgian law.ONEM also demanded repayment of allowances paid since January 1999. Mr. DeCuyper 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 towhich Regulation (EEC) No 1408/71 of the Council of 14 June 1971, on theapplication of social security schemes to employed persons, to self-employedpersons and to members of their families moving within the Community, as amended(“Regulation No. 1408”), applies even if, under a nationalprovision, the recipient is exempt from registering as a job-seeker and thus therequirement of being available for work. The ECJ stated in this regard that thefact the unemployed person obtains such exemption does not mean the person isexempt from the requirement to remain available to employment services. Even ifthat person does not have to register as a jobseeker or accept any suitableemployment, he or she must remain available to these services so that theiremployment and family situation can be monitored.

Concerning the question whether a Member State is authorized under Communitylaw to make entitlement to unemployment allowance conditional to residence inits 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 territoryof Member States, the right of residence is not unconditional, but rather it isconferred subject to limitations and conditions laid down by the Treaty andadopted measures to give it effect.

The Regulation provides for only two scenarios under which a Member State isrequired to allow recipients of unemployment allowance to reside in theterritory of another Member State while retaining their entitlement toallowance: the first is when the unemployed person goes to another Member State‘to seek employment there’; the second is when the unemployed person resides inthe territory of another Member State of his or her last employment. It is clearfrom the documents presented to the ECJ that Mr. De Cuyper’s position was notcovered by either of the two scenarios.

The ECJ accepted that national legislation, which places certain of itsnationals at a disadvantage simply because they exercise their freedom to moveand reside in another Member State, is a restriction on the freedoms conferredon every citizen of the EU. In this case however, the enactment of a residenceclause reflects the need to monitor the employment and family situation ofunemployed persons. The clause allows ONEM inspectors to check whether thesituation of a recipient of the unemployment allowance has undergone changesthat may have an effect on the benefit granted. The justification is accordinglybased on objective considerations of public interest and is independent of thenationality of the persons concerned. The monitoring carried out with regard tounemployment allowance is thus of a specific nature that justifies theintroduction of more restrictive arrangements than those for monitoring inrespect of other benefits.