ECJ issues rulings on social security benefit and annual leave

The European Court of Justice (ECJ) issued two important rulings in March 2004, which have implications for social and employment policy. The first deals with the question of whether annual leave entitlement can be taken upon return from maternity leave, even if the period for taking annual leave, set by collective agreement, falls within the period of maternity leave. The second relates to the rules surrounding the entitlement of a national of one Member State to claim unemployment benefit in another Member State.

March 2004 saw two European Court of Justice (ECJ) judgments of significance for employment rights and social security entitlements.

Taking annual leave upon return from maternity leave

The ECJ issued a ruling on 18 March 2004 in case C-342/01, María Paz Merino Gómez v Continental Industrias del Caucho SA, concerning whether a worker is able to take her annual leave during a period other than her maternity leave, if the maternity leave coincides with the general period of annual leave fixed for the entire workforce by a collective agreement.

The case concerned Merino Gómez, who worked for Continental Industrias. She was on maternity leave from 5 May to 24 August 2001, a period that coincided with one of the periods of annual leave at her workplace, established by a collective agreement. She applied to take her annual leave when she returned from maternity leave, but her application was refused by her employer. She therefore brought a case to the Spanish courts, which referred to the ECJ questions on the 1993 working time Directive (93/104/EC), the 1992 Directive on the protection of pregnant workers [92/85/EEC) and the 1976 equal treatment Directive (76/207/EEC). The Spanish courts essentially asked whether these three EU Directives guarantee a worker’s entitlement to take annual leave during a period other than the one agreed and that does not coincide with her period of maternity leave. If they do, the courts also asked about the substantive scope of the entitlement to annual leave - does it cover exclusively the four weeks’ leave referred to in the working time Directive, or does it extend to the 30 calendar days laid down by Spanish national legislation?

The ECJ stated that paid annual leave of at least four weeks, provided for by the working time Directive, is a particularly important principle of Community social law, and its aim is to ensure that workers take a proper break. It stated also that the purpose of maternity leave is different as this is intended to protect a woman’s physical condition through the relevant period and to protect the relationship between a woman and her child after childbirth.

The ECJ then stated that the pregnant workers’ Directive provides that, in principle, the rights connected to an employment contract must also be ensured in a case of maternity leave. This includes the right to paid annual leave.

Finally, the Court stated that the determination of when paid annual leave is to be taken falls within the scope of the equal treatment Directive. This Directive also allows provisions to be adopted which are intended to protect women during pregnancy and the period following childbirth. However, they may not result in unfavourable treatment regarding their working conditions.

Consequently, the ECJ stated that Community law requires that a worker should be able to take her annual leave during a period other than the period of her maternity leave, including where the period of maternity leave coincides with the general period of annual leave fixed for the entire workforce by a collective agreement. It also ruled that the pregnant workers’ Directive should, in this case, apply to the longer annual leave entitlement set out by national legislation, rather than the minimum of four weeks as set out by the working time Directive.

Ruling on UK jobseeker’s allowance

In Case C-138/02, Brian Francis Collins v Secretary of State for Work and Pensions (EU0309201N), the ECJ issued a ruling on 23 March 2004 that examines the extent to which national legislation may make entitlement to unemployment benefit - jobseeker’s allowance in the UK - conditional on a residence requirement.

The case involved Brian Francis Collins, who was born in the USA and possesses dual US and Irish nationality. In 1980 and 1981, he lived in the UK for around 10 months, during which time he performed part-time and casual work. He returned to the UK on 31 May 1998 to find work there in the social services sector. On 8 June 1998 he claimed jobseeker’s allowance, which was refused on the ground that he was not habitually resident in the UK. Under UK law, in order to qualify for jobseeker’s allowance, a claimant without family to support must be habitually resident in the UK or otherwise must be a worker for the purposes of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community, as amended by Council Regulation (EEC) No 2434/92 of 27 July 1992, or a person with a right to reside in the UK pursuant to Council Directive 68/360/EEC of 15 October 1968 on the abolition of restrictions on movement and residence within the Community for workers of Member States and their families.

Mr Collins appealed to the UK Social Security Commissioner, who asked the ECJ the following questions:

• is a person in the circumstances of the claimant in the present case a worker for the purposes of the above-mentioned 1968 Regulation?

• if the answer is no, does a person in the circumstances of the claimant in the present case have a right to reside in the United Kingdom pursuant to the above-mentioned 1968 Directive?

• if the answer to both of the above questions is no, do any provisions or principles of European Community law require the payment of a social security benefit with conditions of entitlement like those for income-based jobseeker's allowance to a person in the circumstances of the claimant in the present case?

The ECJ found first that Mr Collins’ position in 1998 must be compared with that of any national of a Member States looking for their first job in another Member State. However, there is a distinction to be drawn between Member State nationals who are looking for their first job in the host Member State and those who are working or have worked there. People looking for their first job benefit from equal treatment only in respect of access to employment, while those who have already entered the labour market may, under the 1968 Regulation, claim the same social and tax advantages as national workers. The ECJ found that a person in Mr Collins’ position is not a worker entitled to the same social and tax advantages as national workers. However, it also observed that, in certain provisions of the 1968 Regulation, the term 'worker' has a broader meaning and therefore gave the Social Security Commissioner the task of determining in which sense the term 'worker' as referred to by the UK legislation is to be understood.

The ECJ also stated that the Treaty establishing the European Community (TEC) grants nationals of a Member State seeking employment in another Member State a right of residence which may be limited in time. However, this right is, in accordance with the 1968 Directive, accorded only to nationals of a Member States who are already in employment in another Member States. Therefore, Mr Collins does not have a right to reside in the UK solely on the basis of that Directive.

Finally, the ECJ stated that nationals of a Member State seeking employment in another Member State fall within the scope of the TEC's provisions on freedom of movement for workers and therefore enjoy a right to equal treatment. This right also encompasses benefits of a financial nature, such as the UK’s jobseeker’s allowance. The ECJ therefore stated that a citizen who is seeking employment in another Member State cannot be discriminated against on grounds of nationality when claiming such an allowance. Given that the UK legislation on the jobseeker’s allowance contains a difference in treatment according to whether a person is habitually resident in the UK and since that requirement can be met more easily by UK nationals, the legislation places at a disadvantage nationals of other Member States. The ECJ therefore stated that this residence requirement can only be justified if it is based on objective considerations that are independent of the nationality of the persons concerned and if it is proportionate to the legitimate aim of the national provisions.

The ECJ therefore ruled that the answer to the first two questions was no and that Community law does not preclude national legislation which makes entitlement to a jobseeker’s allowance conditional on a residence requirement, in so far as that requirement may be justified on the basis of objective considerations that are independent of the nationality of the persons concerned and proportionate to the legitimate aim of the national provisions.

Commentary

These two rulings serve to clarify further the interpretation of Community law governing two important areas of social policy. The question of whether a worker returning from maternity leave has the right to take annual leave, even if the period of annual leave, as fixed by a collective agreement, has fallen within the period of maternity leave, has now been clarified. This will have relevance for all women returning from maternity leave who are covered by similar circumstances. The question of under what circumstances an EU national may claim social security benefit in another EU Member State has been clarified in respect of the UK legislation governing the jobseeker’s allowance. This area is likely to increase in importance over the coming years, as the EU enlarges, possibly leading to more movement of workers within the Union. (Andrea Broughton, IRS)