Introduction

The case of DV v. Secretary of State for Work and Pensions ([2017] UKUT 155 (AAC)) presents a critical examination of what constitutes genuine and effective self-employment under European Economic Area (EEA) law. This case involves DV, a Romanian national, who appealed a decision denying her the status of a "qualified person" necessary for exercising her right of residence in the United Kingdom for the purpose of claiming child benefits. The central issue revolves around whether her self-employment as a Big Issue seller qualifies as genuine and effective economic activity under Article 49 of the Treaty on the Functioning of the European Union, thereby entitling her to residence rights.

Summary of the Judgment

The Upper Tribunal, presided over by Judge Markus QC, dismissed DV's appeal against the First-tier Tribunal's decision. The First-tier Tribunal had determined that DV's self-employment was neither genuine nor effective, as her income from selling the Big Issue magazine was marginal (£50 per week) and did not contribute meaningfully to her household income, which was primarily supported by state benefits. The Tribunal considered factors such as the number of hours worked, level of earnings, and the sustainability of the business, concluding that DV's self-employment served more as a means to qualify for benefits rather than as a viable economic activity.

Analysis

Precedents Cited

The judgment extensively references key European Court of Justice (ECJ) cases that define the parameters of self-employment under EEA law:

• Jany v Staatssecretaris van Justitie (Case C-268/99): Established that self-employment requires economic activity carried out independently without subordination and must be genuine rather than marginal.
• Levin v Staatssecretaris van Justitie (Case 53/81): Affirmed that the right to free movement encompasses part-time and marginal employment, provided it is genuine and effective.
• Kempf v Staatssecretaris van Justititie (Case 139/85): Reinforced that earnings from self-employment can be supplemented by other sources, including state assistance, as long as the self-employment is not merely ancillary.
• Genc v Land Berlin (Case C-14/09): Highlighted that both remuneration levels and hours worked are pertinent in assessing the effectiveness of self-employment.
• Trojani v Centre Public D’Aide Sociale De Bruxelles [2004] 3 CMLR 38: Provided criteria for assessing genuine and effective employment through objective measures.
• Bristol City Council v FV (HB): Addressed the general authority of tribunals in determining self-employment status based on specific circumstances.

These precedents collectively underscore the necessity for self-employment to be substantial, ongoing, and capable of contributing meaningfully to the individual's economic independence.

Legal Reasoning

The crux of the legal reasoning lies in determining whether DV's self-employment as a Big Issue seller meets the "genuine and effective" criteria under Article 49 of the Treaty on the Functioning of the European Union. The Tribunal employed an objective assessment, evaluating multiple factors:

• Economic Activity: DV's sales yielded a minimal profit of £50 per week, translating to less than £2 per hour, which the Tribunal deemed insufficient for genuine economic self-sufficiency.
• Work Stability and Regularity: While DV demonstrated commitment by consistently selling 40 magazines per week, the stagnation in sales figures suggested a lack of growth and sustainability.
• Contribution to Income: DV's earnings were deemed a marginal supplement to her primarily benefit-dependent household income.
• Business Viability: The absence of detailed business records and the nature of DV's engagement implied that her self-employment was not a viable economic endeavor but rather a mechanism to qualify for benefits.
• Motive and Intent: DV's lack of intent to seek more remunerative employment or further develop her business indicated that her self-employment was not pursued for economic independence but to secure residency rights.

The Tribunal concluded that despite the subjective perception of DV's commitment, objectively, her self-employment did not fulfill the legal requisites of being genuine and effective.

Impact

This judgment has significant implications for EEA nationals residing in the UK under similar circumstances. It clarifies that nominal self-employment activities, especially those primarily intended to secure eligibility for public benefits, will not satisfy the "genuine and effective" requirement. Future cases will likely reference this decision to assess the viability and substantive nature of self-employed activities, ensuring that individuals cannot exploit self-employment provisions solely to gain residency or access to benefits without contributing meaningfully to the economy.

Moreover, the decision reinforces the importance of comprehensive evidence demonstrating the sustainability and economic impact of self-employed endeavors. It sets a precedent that tribunals must undertake holistic assessments, considering both qualitative and quantitative factors, rather than relying solely on financial metrics.

Complex Concepts Simplified

• Qualified Person: Under EEA Regulations, a "qualified person" is someone who is employed, self-employed, a student, or financially self-sufficient. They are entitled to reside in another EEA member state.
• Genuine and Effective Self-Employment: This refers to self-employment that is real, substantial, and capable of providing significant economic independence, as opposed to nominal or marginal activities primarily serving other purposes.
• Marginal and Ancillary Activity: Activities that generate only a small portion of income or are secondary to the individual's primary source of support, thus not qualifying as effective self-employment.
• Free Movement of Workers: A fundamental principle allowing EEA nationals to work and reside freely within member states, subject to certain conditions such as being a qualified person.
• Economic Activity: Any form of activity undertaken for remuneration, whether it is self-employment, employment, or seeking employment.

Understanding these concepts is crucial for assessing eligibility for residency and benefits under EEA law, particularly in contexts where self-employment is a key factor.

Conclusion

The judgment in DV v. Secretary of State for Work and Pensions underscores the stringent criteria that self-employed individuals must meet to qualify as "qualified persons" under EEA Regulations. By delineating the boundaries between genuine economic activity and marginal engagements, the Tribunal reinforces the necessity for self-employment to be both viable and substantial. This decision not only provides clarity for similar cases but also ensures that the provisions for free movement are not misused to obtain residency or access to public funds without corresponding economic contributions.

For practitioners and EEA nationals alike, this case serves as a pivotal reference point in understanding the expectations surrounding self-employment under immigration and benefits law. It highlights the importance of demonstrating meaningful economic activity and the potential repercussions of failing to meet these standards.