European citizens who are self-employed in another European Union state and become unemployed can continue to have the right to live in the country, a court has ruled.

The Court of Justice of the European Union has ruled in favour of a plaster from Romania who had been working in Ireland. He was self-employed from 2008 to 2012 and then applied for jobseeker's allowance when work dried up due to the economic downturn.

The ruling could have implications for self-employed expats in the UK and British expats in EU countries regarding their status after Brexit. Negotiations point to a freezing of rights at a certain specified date. The judgment might affect, and indeed protect, a significant number of self-employed EU citizens who have worked for more than a year at that date but have ceased their economic activity.

The court heard that Florea Gusa worked as a self-employed plasterer and paid his taxes, pay related social insurance and other levies on his income in Ireland but in 2012 he stopped working, claiming an absence of work caused by the economic downturn.

Left without an income he registered as a jobseeker and applied for a jobseeker’s allowance in November 2014 but was refused on the ground that he had not demonstrated that he still had a right to reside in Ireland. It was considered that, on cessation of his self-employment as a plasterer, Gusa had lost the status of self-employed person and therefore no longer satisfied the conditions for a right of residence laid down by the Free Movement Directive.

Article 7 of the directive provides, however, that an EU citizen who is no longer a worker or self-employed person is to retain the status of worker or self-employed person, and thus a right of residence in the host Member State, in four cases. One of those cases is the situation in which a citizen 'is in involuntary unemployment after having been employed for more than one year'.

Gusa argued that he has retained the status of self-employed person and, therefore, a right of residence in Ireland under that provision. The Irish authorities claimed, however, that provision applies only to persons who have worked as employees.

The judgement found that it cannot be inferred from the wording of the provision at issue that that provision covers only the situation of persons who have ceased to work as employed persons and excludes those who have ceased to work as self-employed persons.

The Court pointed out that there are variations between the different language versions of the directive. Certain versions refer, in essence, to work as an employee, whereas in others the EU legislature uses the neutral formulation of 'occupational activity' instead. But it also pointed out that where there is divergence between the various language versions of an act, the provision in question must be interpreted by reference to the general scheme and the purpose of the act.

The Court decided that while the directive distinguishes between the situation of economically active citizens from that of inactive citizens and students, it does not make a distinction between citizens working as employed persons and those working as self-employed persons in the host Member State.