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The free movement of workers and transitional periods in the EU

Writer: Alena Krunkova
Alena Krunkova
4 days ago
8 min read

Updated: 5 minutes ago


Advantages of the internal market

The free movement of workers is one of the essential positive aspects of the European Union (hereinafter also referred to as "the Union") Internal Market. The internal market comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties.[1] The legal basis for the free movement of workers is subsequently elaborated in the first chapter of Title IV, Articles 45 to 48. The essence of the legal framework for this component of the Union’s internal market is the prohibition of discrimination against workers based on nationality in all areas of dependent employment, including working conditions, the social security system for workers, and opportunities for training and improving qualifications. Citizens of all Member States of the Union thus have the right not only to work in each country without any work permit, but also to reside there for this purpose (i.e. the right to reside in a given Member State), to remain there even after the end of their employment, or to seek employment in that or another EU Member State. The free movement of workers generally also applies to the countries of the European Economic Area, including Iceland, Liechtenstein and Norway. These facts are a driving force for those EU citizens seeking new (and often better) working conditions, which are closely linked to the personal and family life of the individual.

 

Free movement of workers

Although the EU internal market did not become fully operational until 1992, the free movement of workers began much earlier within the European Economic Community (hereinafter also referred to as the "EEC”). On 8 November 1968, Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community came into force.[2] Its provisions were aimed not only at workers from Member States, but also, on a secondary level, at their family members (spouse and children under the age of 21 or dependent on them – Articles 10 to 12). There was also an increase in the movement of workers in connection with the opening of borders under the Schengen Agreements (Schengen I – 1985, Schengen II – 1990). Although these agreements fell outside the scope of the founding treaties and outside the scope of Community law, they played crucial role in relation to the free movement of persons. It should be noted that the free movement of workers is not identical in content to the free movement of persons within the meaning of EU law. The free movement of persons covers a broader group of eligible persons. With some generalisation, the free movement of workers can be seen as part of the free movement of persons, but these freedoms cannot be equated.[3] The difference lies in the personal scope of these freedoms. Since the right to free movement of persons is linked to Union citizenship and, within the meaning of Article 21 of the Treaty on the Functioning of the European Union (hereinafter also referred to as the ‘TFEU’), allows every citizen to move and reside freely within the territory of the Member States. It is subject only to the limitations and conditions laid down in the Treaties and in the measures adopted to give them effect. The subjects of the free movement of workers (Article 45 TFEU et seq.) are workers as defined in more detail by the case law of the Court of Justice of the European Union (hereinafter also referred to as the ‘Court of Justice’).[4] The term ‘worker’ is a specific term in EU law. In simple terms, it refers to a person who performs dependent work under the instructions of an employer and in return for remuneration. The term ‘worker’ itself is interpreted quite broadly. A worker is considered to be any person who performs work for remuneration and under the instructions of an employer, as well as a person who remains in the territory of a Member State after the end of their employment. A person with a lower workload (part-time employment) is also considered a worker. The essential thing is the person must perform an activity that brings a certain value to the employer, they must act according to the employer's instructions, and for remuneration in the form of a wage or salary. Workers include persons in both private and public law employment relationships. The term 'worker' also includes doctoral students receiving scholarships and athletes receiving remuneration but does not apply to migrant workers from third countries and nationals of overseas territories.

At the same time, we need to distinguish between the free movement of workers and the temporary posting of employees to another Member State. This arises as a result of the implementation of the freedom to provide services, i.e. the freedom of an economic operator who employs posted workers and decides to change their place of work in order to provide services in another Member State within the meaning of Article 56 TFEU.


Transitional periods

Like any legal institution, the free movement of workers has its pros and cons. The Union had the ambition to eliminate the negative consequences of the free movement of workers, among other things, through transitional periods set for the accession of new candidate countries. Countries had the option to use these transitional periods. Some took full advantage, others used them a little, and some didn’t use them at all. Paradoxically, the United Kingdom opened its labour market without restrictions. 

From a historical perspective, 2004 can be seen as a watershed year in terms of transitional periods for the free movement of workers, when 10 new Member States joined the EU. Before 2004, transitional periods were exceptional and less formalised, negotiated bilaterally or as part of accession, but there was no uniform mechanism such as the one introduced in 2004. For example, when Greece joined in 1981, Germany introduced temporary restrictions on the Greek labour market, with a transitional period lasting seven years. Similarly, when Spain and Portugal joined in 1986, there were transitional periods of seven years. Existing Member States were able to restrict access for workers from these countries, which Germany and France took advantage of. On the other hand, when Austria, Sweden and Finland joined in 1995, transitional periods for the free movement of workers were not applied because these countries already had similarly high economic and labour standards as the old Member States.

During the so-called ‘big enlargement’ in 2004, a standardised and systematic approach was introduced as part of the transitional measures relating to the free movement of workers. This was a 2+3+2 system, which meant that, initially, the older Member States could restrict access to their labour markets for a period of two years after the accession of the new Member States. These restrictions could be extended by a further three years if there was a risk of disruption to the labour market. In exceptional cases, it was possible to extend this by a further two years, but the transitional period could not exceed seven years for any particular country.

In this case, transitional periods for the free movement of workers were designed as a tool to protect the labour markets of existing (older) Member States following the enlargement of the EU to include new countries. And this is how they began to be used on a larger scale. However, not all existing Member States applied these transitional periods. For example, the United Kingdom, Ireland and Sweden opened their labour markets to new members without restrictions as early as 2004. Germany and Austria, on the other hand, made use of the entire seven-year transitional period (until 2011). In the case of later accessions (2007 - Bulgaria and Romania, 2013 - Croatia), transitional periods were again applied according to the above scheme for a maximum period of seven years, with Germany again making the most use of this. 

 

Current challenges

The current situation is unique. The European Union is undergoing fundamental changes regarding free movement of workers. Not only is migration within the European Union increasing, but also global mobility within third countries. A specific factor in this regard is the war in Ukraine, which has also affected the free movement of workers in a certain way. The European Union continues to face new challenges in relation to the free movement of workers and is forced to respond, for example, to the fact that despite relaxed conditions, there is a shortage of labour in some economic sectors. Although the labour market is performing increasingly well and the employment rate is significantly higher than a few years ago, the imbalance between supply and demand still exists and is likely to persist. In recent years, several new factors have emerged that have brought new problematic parameters. These include demographic changes, an ageing population, technological progress, green and digital transformation, and the inability to increase the attractiveness of certain professions. All of this contributes to jobs in key sectors remaining unfilled. Elsewhere, there is an oversupply. Among the occupations where labour shortages are most pronounced are drivers, welders, healthcare workers, cooks and electricians. The labour surplus is most evident in administrative and secretarial occupations.

The European Union responded to this situation by establishing the European Labour Authority (ELA) in 2019, which is based in Bratislava.

Among other things, the ELA helps to ensure that the rules on worker mobility and social security coordination are enforced in a fair, simple and effective manner. Its role is also to coordinate the European Employment Services (hereinafter also referred to as "EURES"), which facilitates the free movement of workers in the EU, the EEA and Switzerland by connecting job seekers and employers in 31 European countries.[5] Every year, the ELA publishes reports mapping developments in the free movement of workers and proposes tools to improve the situation. According to the latest report, a key step in addressing labour shortages and surpluses is to invest in skills and, above all, to prepare for the digital revolution. The fact that this is a serious issue within the Union is also evidenced by the European Commission's publication on 5 March 2025 of a Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions entitled "The Skills Union".[6] 

The aim of the Skills Union is to ensure that everyone in Europe, regardless of where they are, can build a solid foundation of skills and engage in lifelong skills development and retraining in line with the European Pillar of Social Rights. The Skills Union is designed to support European education and training systems in providing equal opportunities for all, including all young people, regardless of their background. At the same time, skills and qualifications, regardless of where in Europe they were acquired, should be transparent, credible and recognised throughout the single market, enabling individuals to exercise their right to free movement of workers. This will also enable employers to recruit staff effectively across borders. At the same time, the Commission calls on Member States to strive for the rapid recognition of skills and qualifications acquired outside the EU.

There has therefore been a significant shift in the free movement of workers. Whereas the EU originally introduced transitional periods with the aim of restricting the labour market, it is now looking for measures to support and increase the movement of workers. It is also open to the idea of this movement of workers taking place outside the EU Member States, i.e. within third countries.


[1] Article 26(2) of the Treaty on the Functioning of the European Union

[2] This Regulation was amended by Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States, amending Regulation (EEC) No 1612/68.

[3] Dolobáč, 2012

[4] Case of Deborah Lawrie-Blum v Land Baden-Württemberg (1986) Judgement of the Court of Justice of the European Communities Case 66/85

[5] At its meeting on 29 October 2024, the Ukrainian government approved an action plan to join the EURES network, thereby launching the preparatory phase of integration. This plan is an important step towards integration into the European labour market and the introduction of free movement of workers. The preparatory activities planned in the plan are aimed at providing a basis for accession to EURES. In particular, this involves the implementation of regulations that will enable Ukraine to interact effectively with European labour force databases.


 

 

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