Case C-709/20 CG – The Right to Equal Treatment of EU Citizens: Another Nail in the Coffin

1. Introduction

Before heading into its judicial vacation for the summer at the end of last week, the CJEU delivered a seminal decision on Union citizenship and the right to equal treatment: CG v The Department for Communities in Northern Ireland. There is much to unpack in this Grand Chamber judgment. First, the case concerns an EU citizen who was granted pre-settled status under UK law during the transition period. What kind of protection does she still enjoy under EU law? Second, this case falls within the ever-growing line of case law on the EU citizen’s equal access to social assistance when residing in a host Member State (i.e. in a Member State other than that of their nationality). The CG judgment illustrates the CJEU’s very restrictive interpretation of the right to equal treatment of economically inactive EU citizens that has already been evident since Dano. In a surprising and unprecedented move, the CJEU has turned to the Charter of Fundamental Rights (Charter or CFREU) to fill the gaps of the dwindling right to equal treatment of economically inactive EU citizens.

Two posts are dedicated in parallel to the decision: while the present post situates the case within the Union citizenship case law, Oliver Garner’s post discusses the Brexit aspects of this case.

2. Facts

The case concerns a Dutch-Croatian single mother of two who moved to Northern Ireland (UK) in 2018 to join the father of her children. Since separating from her partner due to allegations of domestic abuse, she has been living in a women’s shelter and cares solely for her children. Throughout her stay in the UK, she has never been economically active. In June 2020, she was granted pre-settled status by the UK Home Office. This status allows Union citizens to remain in the UK for five years after the end of the transition period (see here also Garner’s post). Crucial for this case is that the claimant enjoys a temporary right to reside in the host state under domestic law but not necessarily under EU law (more on this in the analysis of the judgment below).

Shortly after having been granted a right to reside, the claimant applied to receive social assistance benefits. The Northern Irish authorities rejected her application on the grounds that the pre-settled status itself does not confer the right to such benefits. In the appeal against the authorities’ refusal, the referring court asked the following question to the CJEU: Does Article 18 TFEU – the right to non-discrimination on the basis of nationality – prohibit Member States from denying equal access to social assistance to Union citizens who enjoy a right to reside under domestic law?

3. Judgment

The Court first addressed its jurisdiction in the case, and the admissibility of the preliminary reference: for a detailed discussion on this, see Garner’s post.

The Grand Chamber then turned to the question whether an EU citizen can automatically be excluded from receiving social assistance and thus be treated differently to nationals. It confirmed that Union citizens who have exercised their right to free movement (under Article 21 TFEU) also enjoy the right to non-discrimination under Article 18 TFEU (para 63). The Court repeated its now consistently held argument that Article 18 TFEU is, however, a general right to non-discrimination that cannot be relied on in circumstances in which a more specific expression of the same right also applies (first established in Dano, para 61; more recently confirmed in Jobcenter Krefeld, para 78). EU citizens, who have moved to a host Member State, fall within the scope of the Citizenship Directive (see Article 3(1)). Such persons enjoy a right to equal treatment with the nationals of the host Member State under Article 24(1) of the Directive. According to the Court, someone like CG can therefore only rely on the latter equal treatment provision; Article 18 TFEU does not apply (para 67). This has an important consequence. Since the Dano judgment, it is clear that only EU citizens who fulfil the residence conditions under Article 7 of the Directive – i.e. persons who pursue an economic activity, or who have sufficient resources and comprehensive health insurance – enjoy the right to non-discrimination under Article 24(1) (Dano, paras 69 and 73; repeated in CG, para 75). Economically inactive citizens who do not have sufficient resources may therefore be excluded from equal access to social assistance (Dano, para 78).

The claimant in the present case is in fact an economically inactive EU citizen without sufficient resources. The Court holds that she “is likely to become an unreasonable burden on the social assistance system of the United Kingdom and cannot therefore rely on the principle of non-discrimination laid down in Article 24(1)” (para 80). It is also irrelevant in that context that she has a right to reside under domestic law (para 81). Because she does not enjoy a right to reside lawfully under EU law (i.e. she does not fulfil the residence conditions under Article 7 of the Citizenship Directive), the Court holds that it is for the host state alone “to specify the consequences of a right of residence granted on the basis of national law” (para 83). The claimant thus has no right to equal treatment under EU law and can be refused social assistance.

The Court goes on to argue, however, that a host state, like the UK, who has granted a right to reside to an EU citizen under domestic law is in fact implementing Article 21 TFEU and is therefore obliged to comply with the Charter (see paras 85 and 88). This means that the authorities of a Member State can only deny social assistance to Union citizens, like CG and her children, after checking that such a refusal would not pose ‘an actual and current risk of violation of their fundamental rights’ (para 92). The Court highlights the following three fundamental rights: under Article 1 CFREU, the host Member State must guarantee that the Union citizen is able to live in dignified conditions. The state must also protect the citizen’s right to private and family life under Article 7 CFREU and take the best interests of the child protected under Article 24 CFREU into consideration (paras 89–91).

4. Comments

The Grand Chamber’s judgment is puzzling. On the one hand, this is the first time the Court has confirmed that a Union citizen who has been granted a right to reside under domestic law enjoys protection under the Charter. On the other, the Court’s interpretation of the right to equal treatment is remarkably restrictive and unconvincing.

There is little doubt in the present case that, according to a strict reading of the Directive (in particular Article 7(1)(b)) the claimant does not enjoy a right to reside under EU law. Instead, she enjoys a right to reside under domestic law. This is compatible with the Citizenship Directive, which is an instrument of minimum harmonisation and allows Member States, under Article 37 of the Directive, to establish more favourable rules (see also CG, para 82). The Court has previously held that, even where a Union citizen enjoys a right of residence in a host state only on the basis of domestic law (or a bilateral international agreement), he or she may still rely on the primary EU right to non-discrimination (see famously in Martínez Sala, paras 62–63).

In CG, the Court has now changed its mind: a Union citizen who is granted a right to reside only under domestic law, may not rely on the primary right to equal treatment under Article 18 TFEU. Instead, she may only rely on the secondary right to non-discrimination (Article 24 of the Citizenship Directive). But, because the EU citizen is not resident on the basis of the Citizenship Directive, she also cannot make use of the right to non-discrimination under that Directive. Consequently, the conclusion that the Court comes to in CG is, that a Union citizen with a lawful right to reside, does not enjoy the right to equal treatment on the territory of the host Member State. This is precisely what Advocate General de la Tour warned against in his Opinion (para 86): “the fact that no conditions are imposed for the grant of a right of residence must not have the effect of obliging Member States to refrain from carrying out any check as regards entitlement to social benefits.” The Court’s restrictive interpretation on the right to equal treatment, furthermore, creates a distinction between EU citizens with a lawful right to reside under EU law and those with a lawful right under domestic law. Only EU citizens with a lawful right of residence under EU law also enjoy a right to equal treatment. The Court could have easily avoided this situation which ultimately undermines the equal status of Union citizenship. It had two options:

1. AG de la Tour proposed in his Opinion that a claimant, like CG, enjoys a lawful right to reside under the above-mentioned Article 37 of the Directive and thus should benefit from the right to equal treatment under Article 24 (see, in particular, paras 72–74). This is a neat proposal because it does not require the CJEU to change its now settled case law that Article 18 TFEU is a general right that does not apply if there is a more specific rule of equal treatment, i.e. Article 24 of the Citizenship Directive. However, the Court explicitly rejects the AG’s idea in paragraph 83 of its decision: “a right of residence [granted under domestic law] cannot … be regarded in any way as being granted ‘on the basis of’ Directive 2004/38 within the meaning of Article 24(1) of that directive.”
2. The second option is not addressed in the Court’s judgment. In a case like CG’s, where the Directive does not apply because the Member State has provided for more favourable domestic rules, the Union citizen should still be able to fall back on the Treaty right to non-discrimination under Article 18 TFEU. This had been the previous interpretation of the Court (see the above-mentioned Martínez Sala). The Court admits itself that, in providing the EU citizen with a domestic right to reside, the Member State is implementing EU primary law on Union citizenship (para 88). Why can such an EU citizen not also rely on the primary right under Article 18 TFEU? Denying the application of Article 18 TFEU instead has the consequence that a lawfully resident EU citizen enjoys neither a primary nor a secondary right to equal treatment. The Court’s focus on a narrow reading of secondary law deprives the EU citizen of the primary rights conferred by the Union citizenship status. This is by no means a new development in the case law of the Court, and has been cautioned against by commentators since Dano (see in the academic literature, e.g. Nic Shuibhne and Iliopoulou-Penot). CG, however, illustrates the full extent of this line of case law. The EU citizen’s equal treatment protection starts and ends with the Citizenship Directive. It would seem that Article 18 TFEU – save for rare exceptions (e.g. TopFit and Biffi) – has largely lost its significance in protecting EU citizens.

Despite the Court’s refusal to safeguard the right to equal treatment, CG is not deprived of all protection of EU law. The Court argues the UK must still comply with the Charter. CG cannot be refused access to social assistance if such a rejection were to breach her EU Charter rights. Interestingly, the Court omits Article 21(2) CFREU which also provides for the right to non-discrimination on the basis of nationality, but focuses instead on Articles 1, 7 and 24 CFREU which have to be upheld by the national authorities. The effects of this protection are clearly limited (see also Garner’s post). The protection under the Charter is granted to CG only because she has a lawful right to reside under domestic law. An applicant, who has no sufficient resources and has not been granted a more favourable residence right under national law, will not be able to benefit from the Charter (see Dano, paras 87 and 91). The Charter therefore does not offer a wider scope of protection to Union citizens but rather is only relevant for the select group of Union citizens who have been granted a right to reside under domestic law.

The Court clearly intended to protect the individuals in this case, CG and her two children, and to ensure that they can continue to live in Northern Ireland in dignified conditions. However, in taking a very narrow approach, the Court severely limited the effects of this decision on the protection of the broader population of Union citizens and continued to hollow out the primary right to equal treatment under Article 18 TFEU.