Select Committee on European Scrutiny Ninth Report


COM(01) 386

Draft Council Directive on the conditions of entry and residence of third-country nationals for the purpose of paid employment and self-employed economic activities.
Legal base: Article 63 (3)(a)EC; consultation; unanimity of participating States
Document originated: 11 July 2001
Forwarded to the Council: 6 September 2001
Deposited in Parliament: 25 September 2001
Department: Home Office
Basis of consideration: EM of 10 October 2001
Previous Committee Report: None
To be discussed in Council: No date set
Committee's assessment: Politically important
Committee's decision: Not cleared; further information requested


  8.1  This is one of several proposals being prepared in accordance with the principles set out in the Commission Communication on a Community Immigration Policy,[24] which was cleared following a debate in European Standing Committee B in April.

  8.2  As the legal base of this draft Directive falls within Title IV of the EC Treaty, the UK has three months from the formal publication of the proposal in which to decide whether to opt in to the measure (in accordance with the provisions in the Protocol on the position of the United Kingdom and Ireland now annexed to the EC Treaty and the Treaty of European Union).

The document

  8.3  The document is intended to address the substantial differences among Member States in the conditions of admission and stay for third country nationals who are in the European Union for employment purposes. It aims to provide a common legal framework within which Member States would have considerable flexibility to develop their own admission policies for economic migrants.

  8.4  The draft Directive does not apply to third-country nationals who are

  • carrying out activities connected with the supply of goods and services from third countries to the European Community for up to three months;

  • established within the European Community and posted to another Member State for the purpose of providing cross-border services;

  • in a Member States as asylum applicants or under temporary protection schemes or subsidiary forms of protection;

  • illegally residing in a Member State and awaiting deportation;

  • family members of EU citizens who have exercised their right to free movement within the Community; and

  • staying in a Member State under family reunification rules.

  8.5  Even when third-country nationals fall within the scope of the measure, it may not apply to them if more favourable provisions exist under bilateral or multilateral agreements. In the absence of specific Community law provisions, Member States may introduce more favourable conditions for various categories, including academics, members of religious orders, journalists and sport professionals. Specific rules are laid down in the proposal for various other categories, such as seasonal workers and "au pairs".

  8.6  One of the key proposals in the draft Directive is for joint residence and work permits, processed on a "one stop shop" basis. There are different permits ("residence permit — worker"and "residence permit — self-employed person") and different application procedures for those seeking entry and residence for the purposes of paid employment, and for those wishing to undertake self-employed economic activities.

  8.7  Applications for third-country nationals seeking entry and residence for the purposes of paid employment can be made by individuals themselves, or by employers on their behalf. They must be accompanied by evidence of a work contract or binding offer of work, of the applicant's fitness for the work, and of his or her ability to meet the costs of living. In addition, the "economic needs" test must be met. — that is, it must be demonstrated that the job vacancy could not be met, in the short term, by EEA nationals or others regarded as part of the resident labour force. However, Member States have considerable flexibility in how they apply the economic needs test, so that they can react to worker shortages in a specific sector, make use of income thresholds, and allow intra-company transfers, for example.

  8.8  Applications for those wishing to undertake self-employed economic activities involve a "beneficial effects" rather than an "economic needs" test. Besides submitting proof of adequate financial means and a business plan, applicants must show that their intended activities will have a beneficial effect on employment in the Member State concerned or on its economic development. Member States will have discretion about how this test is applied, and will be able to replace it by imposing a financial threshold of investment.

  8.9  The draft Directive proposes that the permits should be valid initially for a maximum of three years, and renewable for the same period. Those who have held a permit for more than three years will not need to satisfy the "economic" or "beneficial means tests". Those entering with permits would receive a "core" set of rights immediately upon entry. Besides rights of entry, re-entry and residence, those listed in the Commission's explanatory memorandum are "working conditions, access to vocational training, recognition of diplomas, social security including healthcare, access to goods and services which are available to the public, including housing and trade union rights." The Commission explains that this list is aligned with that proposed for long-term resident third-country nationals,[25] but — in line with the principle that rights should be incremental with length of stay — "less exhaustive". Member States may restrict the rights to vocational training to those who have been resident for at least a year, and the rights to public housing to those who have been resident for at least three years.

  8.10  The proposals also include time limits for the processing of applications, the need to ensure that processes are transparent and the sharing of information on policy developments among Member States.

The Government's view

  8.11  The Parliamentary Under-Secretary of State at the Home Office (Angela Eagle) tells us:

"If the UK were to opt in, it would require changes to the UK's current systems in the following main areas:

—   integration of immigration and work permit decision processes

—   avenues for waiving the resident labour test in work permit cases arrangements for seasonal agricultural workers

—   consideration of the status of Au Pairs

—   implications for the UK state pension scheme, which are detailed in Annex A.

"The proposed joint self-employed permission/residence permit is in line with the UK's existing policy. The beneficial need test proposals also appear to be broadly in line.

"The draft Directive is unclear on whether or not we would be able to maintain the current 'no switching' provisions in the Immigration Rules where we deem it appropriate to do so. ... The lack of clarity about when a Member State is required to accept an application from an individual on their territory is a concern and needs to be fully explored. The Government's view would be that the UK must be able to determine the circumstances in which prior entry clearance is required and also the conditions under which an individual can 'switch' to worker or self-employed status.

"Another potential concern is the proposal that all decisions must be made within 180 days of application on 45 days in the case of intra-corporate transfers. Whilst the vast majority of cases are dealt with well within such a time limit, we would resist the setting of legal limits on turnaround times as it has a potential adverse impact on operational procedures, particularly if a rapid increase in applications is received. The Government would, however, agree to publish its own turnaround targets on applications. Guidance is already provided on average processing times on application forms.

"The Government has not yet taken a decision about whether to opt in to this draft Directive. We will inform scrutiny committees of our position."


  8.12  This is one of a number of proposals being prepared in line with the Commission Communication on a Community Immigration Policy. We agree with our sister Committee in the House of Lords that "the publication of the proposals in no logical sequence and with very limited explanation as to their inter-relationships, has proved unhelpful".[26] It certainly makes the scrutiny task more difficult.

  8.13  In relation to this specific proposal, we welcome the principle of a common legal framework. We recognise the difficulty of harmonisation in this area, and the need to respect the principle of subsidiarity. We wonder, however, whether the degree of discretion allowed to Member States and the possibility of some third-country nationals enjoying more favourable provisions under existing bilateral or multilateral agreements seriously undermine the framework. We ask for the Minister's views.

  8.14  We welcome the proposal for joint entry and residence permits and for the immediate granting of some basic rights. We ask the Minister for a more detailed explanation of these rights and the way in which they differ from those proposed for long-term resident third-country nationals, and, in particular, for an explanation of why the right to vocational training may be restricted.

  8.15  We note the Government's continuing dislike of time limits, but do not understand why they have "a potential adverse impact on operational procedures". We ask for an explanation.

  8.16  We welcome the Minister's assurance that she will tell us of the Government's decision on whether to opt in to this measure. We ask that she give us a detailed explanation of the reasons, whatever the decision. We also ask that, at that time or beforehand, she send us Annex A (which apparently contains the implications of the proposal for the UK state pension scheme) which was not attached to her Explanatory Memorandum.

  8.17  Meanwhile, we keep the document under scrutiny.

24  (21845) 11529/00; see HC 28-iii (2000-01), paragraph 3 (17 January 2001). Back

25   (22362) 8237/01: see HC 152-i (2001-02), paragraph 6 (18 July 2001).  Back

26  The legal status of long-term resident third-country nationals: Fifth Report from the House of Lords Select Committee on the European Union, HL Paper 33 (2001-02), paragraph 37. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 18 December 2001