Part III
Substantive Law

15. Free Movement of Persons: Workers and Beyond  


Going beyond an internal market in goods, the EU Treaties also envisage the free movement of persons. This constitutional choice was originally inspired by an economic rationale. The second fundamental freedom had been created to assist people wishing to work in another Member State and was consequently confined to economically active persons. The Treaties thereby distinguished between two classes of economic migrants: ‘employed’ and ‘self-employed’ persons; and the Treaty Title dealing with the movement of persons today still addresses ‘Workers’ and the ‘Right of Establishment’ in two separate chapters. The establishment chapter thereby not only covers natural persons but also, importantly, the rights of companies.

With subsequent Treaty amendments, these two special chapters were nevertheless complemented by the ‘horizontal’ rules on Union citizenship; and with the introduction of the citizenship provisions, the Union has (partially) cut the economic link that traditionally connected persons to EU free movement rights. The Union’s citizenship rules grant every citizen the (limited) ‘right to move and reside freely within the territory of the Member States’.

What is the scope of these three sources of rights with regard to the free movement of persons? This chapter hopes to explore each source individually as well as the horizontal connections between them. Sections 1 and 2 analyse the special free movement rights for economically active persons; that is: workers and self-employed professionals, while section 3 specifically explores the free movement rights of companies (and their subsidiaries). An overview of the relevant Treaty provisions can be found in Table 15.1.

When compared to the free movement of goods provisions – discussed in Chapter 13 – two fundamental differences can here immediately be noted. First, the free movement of persons provisions do not expressly distinguish between regulatory and fiscal barriers to trade; and the Court has confirmed that both fall within the same free movement provisions. Second, and again unlike the free movement of goods, the Treaty chapters on workers and establishment only each contain one central prohibition outlawing restrictions on the free movement of persons.

The concentration of all ‘negative’ integration into a single provision for workers and a single provision for the self-employed appears to make the legal regime governing the free movement of persons much less complex than the fragmented constitutional regime governing the free movement of goods. Yet, beware: the opposite is the case! The high complexity within this area of EU law thereby stems from two roots. First, each of the Treaty chapters contains a number of special harmonisation competences to positively assist the Union to establish the free movement of persons. These competences have been widely exercised; and for this reason, the Union law governing persons is a rich and complex amalgam of primary and secondary law. However, the complexity within this area also has a second root: the existence of general free movement rights granted to all European citizens. Section 4 explores these general rights and their relationship to the special movement rights for workers and the self-employed.

Section 5 – finally – analyses the horizontal rules that govern the various justifications for national restrictions on the free movement of persons. In addition to the ordinary public policy justifications, the main derogation here is a public service exception that allows Member States to restrict access to professions that are linked to the exercise of public authority. In order to better distinguish the various elements and overlapping aspects of the free movement of persons provisions, Figure 15.1 offers a first schematic arrangement that should be kept in mind when studying this chapter.

Free Movement of Workers

  1. Personal Scope I: ‘Workers’ and Quasi-workers
    1. Employment: A Minimalist Definition
    2. Beyond Employment: Former Workers and Job-seekers
  2. Personal Scope II: Family Members
  3. Material Scope: Discrimination and Beyond
    1. Discriminatory Measures I: Article 7(1) of the Regulation
    2. Discriminatory Measures II: Article 7(2) of the Regulation
    3. Non-discriminatory Measures adopted by Member States
  4. Positive Integration: National Social Security Systems
    1. National Coordination: Regulation 883/2004
    2. In Particular: The ‘Single-Legislation’ Principle

Establishment I: Natural Persons

  1. Negative Integration under Article 49
    1. Personal Scope: Self-employed Persons
    2. Material Scope: Discrimination and Beyond
  2. Positive Integration under Article 53
    1. Horizontal Harmonisation: Mutual Recognition of Professional Qualifications
    2. Vertical Harmonisation: Free Movement of Lawyers?

Establishment II: Companies

  1. Personal Scope: The Definition of ‘Companies’
    1. Home State Restrictions and Daily Mail
    2. Host State Restrictions and Centros
  2. Material Scope: Primary and Secondary Establishment
    1. Primary Establishment: A Discrimination Test?
    2. Secondary Establishment: A Restriction Test
  3. Letter-box Companies’: The Doctrine of ‘Abuse of Rights’
  4. Positive Integration: Article 50(2)(g) and Beyond
    1. Harmonisation: Company Law Directives
    2. In Particular: European Corporate Forms

Horizontal Rules I: European Citizenship

  1. European Citizenship: A Third Source of Movement Rights
  2. Citizenship Directive: Substantive Content
    1. Residency Rights for Union Citizens (and Their Families)
    2. Beyond Residency: Equal Treatment

Horizontal Rules II: Justifications and Derogations

  1. General Justifications: Express and Implied Public Policy Grounds
  2. Special Derogation: The Public Service Exception


  1. Art. 21(1) TFEU. A similar right is enshrined in Art. 45 EU Charter of Fundamental Rights. 
  2. See Case C-204/90, Bachmann v. Belgium [1992] ECR I-249; Case C-279/93, Finanzamt Köln-Altstadt v. Schumacker [1995] ECR I-225; Case C-80/94, Wielockx v. Inspecteur der Directe Belastingen [1995] ECR I-2493. For an analysis of these cases, see F. Vanistendael, ‘The Consequences of Schumacker and Wielockx: Two Steps Forward in the Tax Procession of Echternach’ (1996) 33 CML Rev. 255.