EEA citizens and self-employed status – the updated EEA Regulations banner


EEA citizens and self-employed status – the updated EEA Regulations

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The updated EEA regulations come into force on 24th July 2018 and EEA Immigration solicitors will be pleased to see that they bring the conditions under which self-employed EEA citizens can retain their self-employed status in line with the conditions under which EU citizens can retain worker status. This amendment to the EEA Regulations follows the decision of the Court of Justice of the European Union in the case C-442/16 Gusa, a recent case that aroused much interest among EU Immigration solicitors.

The advantages of retaining self-employed status

If an individual can retain self-employed status even when not working, Immigration solicitors in London recognise that there are clear advantages, not least in that he or she will still be ‘exercising Treaty rights’ and so can continue to live in the UK and access benefits. The rights in respect of bringing family members to the UK continue, and the individual continues to accrue time that counts towards the 5 years necessary to acquire permanent residence – still pertinent even with the announcement of the settled status for EU citizens affected by Brexit.

Since 2010, and the decision in Tilianu, R (on the application of) v Secretary of State for Work and Pensions [2010] EWCA Civ 1397, English courts have taken the view that a self-employed EU citizen who becomes unemployed is unable to retain his or her worker rights. All the best Immigration solicitors in London were well aware of the obvious implications for EEA citizens who found themselves without a right to continue residing in the UK under the EU treaties.

EEA citizens retain self-employed status following Gusa

The position changed with the case of Florea Gusa v Minister for Social Protection, Ireland and Attorney General. Mr Gusa, a Romanian national, worked as a plasterer, and paid all relevant contributions in Ireland from 2008-2012. In 2012, the economic downturn led to a reduction in his work and he applied for job seeker’s allowance to make up for his lack of income. The Irish authorities decided that because he was no longer working as a self-employed plasterer, he had lost his self-employed status and therefore did not satisfy the conditions for a right of residence under the Free Movement Directive.

Article 7 of the Free Movement Directive sets out 4 cases in which an EU citizen who was, but is no longer, working or self-employed in the host member state, can retain his or her status – including when he or she 'is in … involuntary unEmployment after having been employed for more than one year'. In the Gusa case, a reference was made to the CJEU to establish whether this applied to employees (those who had been employed) only, or whether it extended to EEA citizens who had been self-employed but then found themselves in a comparable position of ‘involuntary unEmployment’.

The CJEU confirmed that the provision in the directive could not be read as excluding the self-employed and only applying to employees. There were several reasons for this

• The different language versions of the Directive vary in the terms they use, some referring to ‘occupational activity’ while others are more specific and refer to employees.

• In cases of divergence, the legislation needs to be interpreted in accordance with the general scheme and purpose of the legislation

• Although the Directive distinguishes between economically active and inactive EU citizens, it does not distinguish between employed and self-employed

• The Directive concerned was supposed to iron out discrepancies in treatment between employed and self-employed

• The Court decided that a restrictive approach would introduce an unjustified discrepancy in treatment between employees who had stopped working and self-employed EEA citizens in a host state who had stopped working. This could lead to someone who had been self-employed and who had contributed to the economy of the host state being treated the same as a first time job seeker in the host state who had never paid taxes or otherwise contributed.

The impact of retaining self-employed status

As Immigration lawyers will recognise, this could have a potentially big impact on self-employed EEA citizens in the UK. The conditions are contained in the new Regulation 6(4) which set out the conditions that the self-employed person must meet in order to retain his or her status. These are that he or she:

“(a)is temporarily unable to engage in activities as a self-employed person as the result of an illness or accident;

(b)is in duly recorded involuntary unEmployment after having worked as a self-employed person in the United Kingdom for at least one year provided the person—

(i) has registered as a jobseeker with the relevant Employment office; and

(ii) satisfies conditions D and E;

(c)is in duly recorded involuntary unEmployment after having worked as a self-employed person in the United Kingdom for less than one year, provided the person—

(i) has registered as a jobseeker with the relevant Employment office; and

(ii) satisfies conditions D and E;

(d)is involuntarily no longer in self-Employment and has embarked on vocational training; or

(e)has voluntarily ceased self-Employment and has embarked on vocational training that is related to the person’s previous occupation.”

The updated EEA Regulations allow those who have stopped being self-employed and are not working to retain their status for at least 6 months. Those who have worked for at least a year before self-Employment stopped can retain their status for longer if they can offer persuasive evidence that they are continuing to seek Employment and have a genuine chance of being engaged.

OTS Solicitors are Legal 500 recommended for Immigration law, including all aspects of Immigration as it affects EEA citizens and EU citizens. As Brexit approached, many EU citizens are uncertain about their status. Our top London immigration solicitors can explain the position and help you and your family achieve the best solution whether you are looking for permanent residence or want help with settled status. Call 0203 959 9123 to book an appointment with one of our Immigration lawyers.

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