Report for the Hearing in Case C-357/89
I — Facts and procedure
1. The relevant provisions
The Wet op de Studiefinanciering (Law on Study Finance, Staatsblad, 1986, 252, hereinafter referred to as the WSF) introduced into the Netherlands, as from 1 October 1986, a system of study finance to provide students with an income enabling them to meet the costs of their maintenance and of their studies. All Netherlands students and students treated as such aged between 18 and 30 are entitled to an allowance provided they do not have sufficient income. The WSF distinguishes between a basic grant, which is nonrefundable and is awarded regardless of the financial situation of the student's parents, and supplementary finance taking the form of an interest-bearing loan and/or a supplementary grant.
Under the WSF foreign students in possession of a residence permit for an indefinite period are treated in the same manner as Netherlands nationals. They may claim under the study finance system if they are under 23 years of age and their parents have resided in the Netherlands for at least three years without interruption. That three-year requirement does not apply when at least one parent is or has been employed in the Netherlands and is a national of one of the European Community Member States or of certain other countries.
Students who have themselves been resident in the Netherlands for an uninterrupted period of three years and who are orphaned, married or over 21 years of age may also receive study finance unless they have a fixed-duration residence permit for a temporary purpose.
2. Background to the main proceedings
The plaintiff in the main proceedings, Ms V. J. M. Raulin (who was born on 12 November 1958 and is of French nationality) came to live in the Netherlands at the end of 1985. In March 1986 she concluded an employment contract covering the period from 5 March 1986 to 3 November 1986, which expressly stipulated that no guarantee could be given as to the number of hours to be worked, and that the employer was liable to pay wages and grant holiday rights and so forth only in so far as the plaintiff had worked as a waitress when called on to do so by her employer. Under that contract the plaintiff performed some work during the period from 5 to 21 March 1986 (a total of 60 hours). On 1 August 1986, without having a residence permit, she began a course of fulltime day studies at the Gerrit Rietveld Academie, a visual arts college, in Amsterdam.
On 5 December 1986 the plaintiff submitted, pursuant to the WSF, an application for study finance to the Netherlands Minister van Onderwijs en Wetenschappen (Minister for Education and Science), requesting both a basic grant and supplementary finance. Her application was rejected on the grounds that, pursuant to the WSF, she could not be assimilated to a Netherlands national since she did not possess the necessary residence permit. She lodged an objection against the decision rejecting her application to the Netherlands Minister van Onderwijs en Wetenschappen, who dismissed her objection. She then appealed to the College van Beroep Studiefinanciering (the Study Finance Tribunal, which rules at final instance in disputes about the award of study finance, hereinafter referred to as the College). The plaintiff contended before the College that by virtue of her oproepcontract (on-call contract) she was a worker for the purposes of Article 48 of the EEC Treaty and hence was entitled to an allowance covering costs of maintenance and of study pursuant to Article 7(2) of Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community (Official Journal, English Special Edition 1968 (II), p. 475). In the alternative, she argued that since she was, at all events, a Community national living in the Netherlands for the purpose of studying she was entitled by virtue of the general prohibition of discrimination set out in Article 7 of the EEC Treaty to that part of the study finance granted to Netherlands students to cover their tuition fees.
Taking the view that the solution to the dispute hinged on the interpretation of the Community provisions at issue, the College, by an order of 24 November 1989, submitted the following questions for a preliminary ruling pursuant to Article 177 of the EEC Treaty:
3. Procedure before the Court of Justice
The order for reference was received at the Court Registry on 27 November 1989.
Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted on 23 February 1990 by the Netherlands Government, represented by B. R. Bot, Secretary-General of the Ministry of Foreign Affairs, on 7 March 1990 by the Commission of the European Communities, represented by M. Wolfcarius and B. J. Drijber, acting as Agents, on 8 March 1990 by the German Government, represented by E. Roder and J. Karl, acting as Agents, on 22 March 1990 by the Italian Government, represented by O. Fiumara, Avvocato dello Suto, and on 29 March 1990 by the United Kingdom, represented by J. E. Collins of the Treasury Solicitor's Department, acting as Agent.
Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory enquiry.
II — Summary of the written observations submitted to the Court
1. The concept of worker within the meaning of Article 48 of the EEC Treaty (the first three questions)
The Netherlands Government contends that the essential feature of an employment relationship is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration (see, in particular, the judgment in Case 344/87 Bettray [1989] ECR 1621, at p. 1644, paragraph 12). The essential feature is not a formal criterion, such as the type of legal relationship, but a substantive criterion, that is to say it must be an effective and genuine paid activity. In this context, under the case-law of the Court a part-time worker is, in principle, also a worker within the meaning of Article 48 of the EEC Treaty. However, as shown by the judgment in Case 53/81 Levin [1982] ECR 1035, at p. 1050, paragraph 17, the situation is different in a case of activities on such a small scale as to be regarded as purely marginal and ancillary. The Netherlands Government believes that that is the case in this instance: since the person concerned worked only five hours a day over a period of 12 days, her activity was purely marginal and ancillary.
Nor would it make any difference if the person in question had previously pursued effective and genuine activities in another Member State of the EEC. According to the Netherlands Government, the adjective effective qualifying the word work, as used in the judgment in Case 139/85 Kempf [1986] ECR 1741, and in Levin cited above, shows that, in order to determine the concept of worker within the meaning of Article 48 of the EEC Treaty, only the activities last pursued in the host Member State are to be taken as the basis.
Consequently, the Netherlands Government concludes that a person who has worked only five hours a day over a period of 12 days under an oproepcontract cannot be regarded as a worker within the meaning of the EEC Treaty.
According to the German Government the first three questions do not have to be answered because they are not relevant for the purposes of the decision.
The Italian Government submits that in the light of the case-law of the Court, in particular the Levin and Kempf judgments cited above, a person who has concluded a contract of employment as an oproepkracht (on-call worker) must be regarded as a worker within the meaning of Article 48 of the EEC Treaty; this cannot be altered by the fact — once the work has been effected and its subordinate nature is clear — that the work was performed on an irregular and insecure basis, nor later by the small scale of the work actually done.
The United Kingdom observes that it is well established in the jurisprudence of the Court (including the judgment in Case C-66/85 Lawrie-Blum [1986] ECR 2121) that merely to contract to provide services is not sufficient to make the contracting party a worker. To benefit from this provision, it is essential for a person to perform services, and such services have, among other things, to constitute effective and genuine activity. The nature of the activities of a person such as the plaintiff, who works only when called on to do so, and the duration of the work are some of the criteria to be applied when judging if such activities are effective and genuine or purely marginal and ancillary. However, the United Kingdom submits that this is a matter to be determined on the facts of each case and is accordingly a matter for the national courts.
Since it appears that the plaintiff did not enter the Netherlands for the purpose of taking up work, and since the reference for a preliminary ruling provides no information as to the nature of her activities before she settled in the Netherlands at the end of 1985, the third question referred to the Court is not relevant to the issues in the case and it is therefore not necessary for the Court to answer it.
Before dealing with the first three questions, the Commission sets out the main features of an oproepcontract concluded with an employer. On the basis of such a contract, the employer can call on the worker to perform services only as and when he requires such services. The on-call worker is therefore different from a part-time worker, a temp or a provider of services.
The Commission recalls that the Court has consistently held that the provisions concerning the freedom of movement for workers apply only to cases of effective and genuine activities and not purely marginal and ancillary activities (see, in particular, the Bettray and Levin cases, cited above). There is no single element determining in principle whether the person involved is to be considered to be a Community worker. National courts must look at all the various relevant factors when assessing the criterion of effective and genuine activities. These have to be activities of an economic nature undertaken during a minimum number of hours each week and over a certain number of months.
In the case of the plaintiff, the Commission believes the nature of the activities undertaken by her does not preclude her from being considered to be a Community worker, but since their duration is so limited, it could be argued that they are purely marginal and ancillary; it stresses, however, that it is up to national courts to determine the matter on the facts of each case.
The Commission considers, in the light of the judgment in Case 39/86 Lair [1988] ECR 3190 that when assessing the status of worker all the activities exercised by the person in question in the host Member State must be taken into consideration, but the aim of integrating a migrant worker into the social life of the host country does not require that the activities exercised in other Member States be taken into consideration as if they had been exercised in the host country.
2. Retention of the status of worker (the fourth question)
In view of the reply it proposes to give to the first three questions, the Netherlands Government believes that the fourth question is irrelevant. However, for the sake of completeness, it notes that a reply in the negative to this question follows from the Lair judgment cited above, in which the Court held that a national of another Member State who has undertaken university studies in the host State, after having engaged in occupational activity in that State, must be regarded as having retained his status as a worker only if there is a link between the previous occupational activity and the studies in question. Conversely, therefore, the total absence of such a link implies that the person concerned cannot retain the status of worker.
The German and Italian Governments and the United Kingdom also note the requirement for there to be a link between the occupational activity and the studies pursued. Since no such link exists in the case in question, they submit that the fourth question should be answered in the negative. Furthermore, the United Kingdom submits that the need for this kind of link is particularly important since students very often undertake casual unskilled employment.
The Commission draws attention to the requirement that there must be a link between the previous occupational activity and the studies concerned, as follows, in particular, from the judgment in Lair, cited above. Application of that judgment to the present case leads to the conclusion that the plaintiff has not retained her status as a worker, assuming that she ever had such status. Nevertheless, the Commission proposes three solutions for overcoming the consequences of this continuity criterion. Firstly, it suggests that the plaintiff could be considered to be an unemployed person because in actual fact she was not engaged in any occupational activity at the time she began her studies. It would be up to the national court to verify whether the plaintiff should in actual fact be considered to be an involuntarily unemployed person. Secondly, it would be possible to interpret the Lair judgment as meaning that the requirement of a link between the previous activity and the type of studies chosen does not apply if she has commenced non-university vocational training. However, the Commission is not in favour of that approach because it would give rise to relatively arbitrary differences according to whether the training in question was provided at a university or other establishment of higher education. The third possibility would be to interpret the concept of vocational school within the meaning of Article 7(3) of Regulation (EEC) No 1612/68 in such a broad sense as to cover a visual arts college. The validity of this approach is nevertheless doubtful in the light of the judgment in Case 197/86 Brown [1988] ECR 3205, in which the Court expressly stated that a university is not a vocational school.
In the light of the above, the Commission concludes that a national of a Community country who has voluntarily ended his activities in a Member State in order to undertake training not linked in any way with his previous activities has lost his status as a worker.
3. Students' right of residence (the fifth and sixth questions)
The Netherknds Government submits that it is a principle of international law that a country cannot refuse its own nationals the right of entry to and residence on its territory, but nationals of another Member State on the other hand must always comply with the specific provisions of national or Community law to obtain a legal residence permit. Therefore, Article 7 of the EEC Treaty does not preclude a residence permit from being required of non-nationals in order for them to have access to financing under the WSF.
As regards the sixth question, the Netherlands Government recalls the judgment in Case 293/83 Gravier [1985] ECR 593, in which the Court held that the prohibition of discrimination on grounds of nationality, contained in Article 7 of the EEC Treaty, also applies to conditions of access to vocational training.
That judgment concerned, in particular, enrolment or tuition fees, not the right of residence. Therefore, Articles 7 and 128 of the EEC Treaty cannot be interpreted as meaning that the mere fact of a person having been formally admitted to pursue vocational training confers on that person the right of residence in the State where such training takes place. Such a right of residence can be derived only from specific provisions of Community law and, consequently, students' right of residence can become a reality only when the Council has adopted the relevant draft directive (COM(89) 675 fin., Official Journal 1990, C 26, p. 15). Accordingly, the Netherlands Government submits that the first part of the sixth question be answered in the negative, thus making an answer to the other parts of that question superfluous.
The German Government notes that the conditions of access to vocational training fall within the scope of the EEC Treaty and that making foreigners pay an enrolment fee as a condition for access to vocational training courses constitutes discrimination on grounds of nationality prohibited by Article 7 of the EEC Treaty. Consequently, it is not permissible to make the award of an allowance covering the aforementioned fees conditional on requirements which normally only nationals fulfil. Therefore, Member States are forbidden to make the award of an allowance covering enrolment fees conditional upon a residence permit.
As for the sixth question, the German Government believes that the EEC Treaty does not grant the right of residence to students who have no status other than that of students, for example that of workers or family members of a migrant worker. Nevertheless, if such a right exists, the right to a residence permit also exists. Apart from application of the public policy clause in Article 48(3) of the EEC Treaty, this right cannot, in principle, be restricted by any national provision.
The Italian Government submits that, notwithstanding the right of a Member State to take measures to keep it informed of a person's movements on its territory, that person's right of residence, whether he possesses the status of worker or not, cannot be made subject to any condition, in particular concerning his ability to support himself.
The United Kingdom submits that Article 7 of the EEC Treaty does not confer a right of residence on persons who are admitted to a course of study in another Member State. It adds that the Court has not as yet had to consider, as it must in this case, whether admission to a training course automatically confers upon the person involved the right to reside in the country where the course takes place. The United Kingdom contends that where the EEC Treaty has expressly conferred a right of freedom of movement, including residence, it has placed certain limitations on that right (see, for example, Articles 48 to 51 and Articles 52, 56 and 60). If, on the other hand, it were held that by reason of Article 7 of the EEC Treaty alone a student had a right of residence in any Member State where he had been accepted for a training course, then that right would not be subject to any express qualifications. Since the EEC Treaty does not confer unqualified rights of entry and residence in other instances, this shows that Article 7 does not confer any right of entry and residence on students.
It adds that if, contrary to this view, the Court were to hold that a right of entry to a Member State could be inferred from Article 7, then any such right could not be different from those conferred by other provisions of the EEC Treaty. It would therefore have to be subject to such qualifications appropriate to ensure that the exercise of such a right would be subject to the legitimate interests of Member States.
The Commission notes that the fifth, sixth and seventh questions proceed from the premise that the migrant student is not a worker but merely has the status of student. It adds that, from a systematic point of view, it would have been more logical to start with the seventh question in order to determine whether or not study finance falls within the scope of the EEC Treaty, because if the answer is no, the fifth and sixth questions are redundant. As for the fifth question, the Commission notes that nothing precludes a Member State from obliging a migrant student to obtain a residence permit but, on the other hand, that Member State cannot refuse to grant a migrant student study finance on the grounds that he does not have a specific residence permit, if it is established that the student involved is entitled to obtain study finance under Community law. Otherwise, that right would be illusory in practice, thus rendering Article 7 ineffective. The Commission therefore proposes that the fifth question be answered in the affirmative.
Regarding the first part of the sixth question, the Commission submits that the right to be admitted to vocational training under the same conditions as nationals would be illusory if the student enjoying that right were not also allowed to reside on the territory of the Member State where the vocational training is provided. Consequently, the right of residence is a corollary of the other right. The proposal for a Council Directive on the right of residence for students (Official Journal 1989, C 191, p. 2, and Official Journal 1990, C 26, p. 15) proceeds from the same principle and differs from another proposal submitted at the same time, namely the proposal on the right of residence for employees who have ceased their occupational activity (Official Journal 1990, C 26, p. 19). In the case of students, Member States recognize the right of residence, whereas in the case of employees who have ceased their occupational activity, they grant it. In order to avoid any misunderstanding, the Commission points out that while the proposal for a directive aims to regulate the arrangements governing students' right of residence, this right exists independently of adoption of the directive.
As for the second part of the sixth question, the Commission submits that the right of residence derives directly from the EEC Treaty and the Member States cannot therefore subordinate the exercise of this right to possession of a specific residence permit because, if they did, this would frustrate the direct effect of the first paragraph of Article 7 of the EEC Treaty.
As for the third part of this question, the Commission considers that Member States are entitled to issue a residence permit solely for the purposes of vocational training and for the duration thereof, but, on the other hand, they cannot make the residence permit subject to conditions which would disproportionately hinder migrant students' exercise of the right of residence.
4. Application of Article 7 of the EEC Treaty (the seventh question)
The Nethe^nds Government notes that the WSF system consists of two elements of study finance, that is to say the basic grant and supplementary study finance. Award of the basic grant, a monthly allowance of HFL 620.15, is independent of the income of a student's parents, whereas the supplementary finance consists of an interest-bearing loan plus a supplementary grant, both of which do depend on parental income. The amount of the allowance is related to a student's monthly budget, which consists of various elements, including maintenance costs, the cost of purchasing books, costs of access to the course and, in some cases, the cost of health insurance.
The Netherlands Government points out that according to the case-law of the Court, public financial assistance for purposes of study does not fall within the scope of the EEC Treaty unless it is granted to cover enrolment fees. In the light of that case-law, the Netherlands Government maintains that the basic grant and the supplementary study finance lie entirely outside the scope of Articles 7 and 128 of the EEC Treaty since the supplementary study finance is an instrument of social policy and the basic grant has no specific link with access to vocational training. The aim of the basic grant is to provide students with a large degree of financial independence and to contribute to the harmonious evolution of their studies. Any attempt to break down the basic grant according to the various cost factors would be artificial and alien to the WSF's overall philosophy. Therefore, the Netherlands Government concludes that a system of study finance which makes no distinction between maintenance costs and the costs of access to the course falls entirely outside the scope of Articles 7 and 128 of the EEC Treaty.
The German and Italian Governments and the United Kingdom contend that a study finance system like that provided for by the WSF can be considered to be a social advantage from which a worker from another Member Sute may benefit, whereas a migrant student, who is not regarded as a worker, can claim, pursuant to Article 7 of the EEC Treaty, such finance only in so far as it is intended to cover the enrolment fees or the costs of access to the course. The United Kingdom adds that since different Member States have different administrative arrangements for making grants available to students, it is for the national courts to determine what any particular allowance is intended to cover.
The Commission acknowledges that the supplementary study finance, which depends on the incomes of the student and his parents and is therefore covered by educational and social policy, does not fall within the scope of Article 7 of the EEC Treaty. On the other hand, the basic grant is a form of public assistance not dependent on income. It is possible that a notional part thereof serves to cover tuition fees and other course costs. It is for the national court itself to decide whether the basic grant covers, wholly or in part, the tuition fee and any other costs. If such coverage is partial, Article 7 of the EEC Treaty requires that migrant students benefit only on a proportionate basis from the basic grant.
1 Language of the case: Dutch.