ON APPEAL FROM THE UPPER TRIBUNAL
ADMINISTRATIVE APPEAL CHAMBER
UPPER TRIBUNAL JUDGE WARD
 UKUT 131 (AAC)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE STANLEY BURNTON
LADY JUSTICE BLACK
|- and -
|SECRETARY OF STATE FOR WORK AND PENSIONS
Jason Coppel and Denis Edwards (instructed by the Legal Group of the Department for Work and Pensions) for the Respondent
Hearing dates : 20, 21 June 2011
Crown Copyright ©
Lord Justice Stanley Burnton:
"The claimant is not to be treated as habitually resident in the UK for the purposes of her claim to income support made on 18 March 2008 because she did not at the material time have a right to reside in the United Kingdom. Therefore for those purposes she was a "person from abroad" with an Income Support applicable amount of nil."
"5. The claimant is a French national who came to the UK on 10 July 2006. She worked in various jobs in the UK from 1 September 2006 to 1 August 2007, most or all of which were as a teaching assistant. She enrolled on a Post-Graduate Certificate in Education (PGCE) course for modern languages at the Institute of Education, University of London, the envisaged period of study being 17 September 2007 to 27 June 2008. The tuition fees were funded by a student loan and she was supported by a bursary. She became pregnant, the expected date of confinement being 2 June 2008. Realising that she would have given birth prior to the end of her course she withdrew from her studies as of 1 February 2008. Her bursary payments ceased. She undertook agency work from 22 January 2008, hoping to find teaching assistant positions in secondary schools. None was available so she took agency positions working in nursery schools. By 12 March 2008 the demands of caring for nursery school children while some 6 months pregnant were proving too much and she stopped such work. The claimant looked unsuccessfully for lighter work for a few days before giving up doing so and on 18 March 2008 claiming income support, which was refused.
6. Her baby was born on 21 May 2008. Some three months later, the claimant resumed employment. Sadly, in May 2009, the baby died from a heart condition.
7. It is not in dispute that the posts that she held and the period of study were sufficient to make the claimant a "worker" for EU purposes as long as she held them, i.e. until 12 March 2008. Her claim of 18 March 2008 was rejected by a decision on 4 May 2008 on the basis that she lacked the right to reside and so her "applicable amount" for income support purposes was nil: see paragraph 17 of Schedule 7 to the Income Support (General) Regulations 1987/1967 ("the 1987 Regulations"). …"
"Article 7 Right of residence for more than three months
1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:
(a) are workers or self-employed persons in the host Member State; or
(b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State; or
(c) – are enrolled at a private or public establishment, accredited or financed by the host Member State on the basis of its legislation or administrative practice, for the principal purpose of following a course of study, including vocational training; and
– have comprehensive sickness insurance cover in the host Member State and assure the relevant national authority, by means of a declaration or by such equivalent means as they may choose, that they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence; or
(d) are family members accompanying or joining a Union citizen who satisfies the conditions referred to in points (a), (b) or (c).
2. The right of residence provided for in paragraph 1 shall extend to family members who are not nationals of a Member State, accompanying or joining the Union citizen in the host Member State, provided that such Union citizen satisfies the conditions referred to in paragraph 1(a), (b) or (c).
3. For the purposes of paragraph 1(a), a Union citizen who is no longer a worker or self-employed person shall retain the status of worker or self-employed person in the following circumstances:
(a) he/she is temporarily unable to work as the result of an illness or accident;
(b) he/she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with the relevant employment office;
(c) he/she is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a job-seeker with the relevant employment office. In this case, the status of worker shall be retained for no less than six months;
(d) he/she embarks on vocational training. Unless he/she is involuntarily unemployed, the retention of the status of worker shall require the training to be related to the previous employment.
4. By way of derogation from paragraphs 1(d) and 2 above, only the spouse, the registered partner provided for in Article 2(2)(b) and dependent children shall have the right of residence as family members of a Union citizen meeting the conditions under 1(c) above. Article 3(2) shall apply to his/her dependent direct relatives in the ascending lines and those of his/her spouse or registered partner."
The parties' contentions in summary
(1) Article 7.1 confers the relevant right of residence on workers and self-employed persons. The appellant was a worker at the relevant time, albeit that, having become pregnant, she ceased work temporarily. Article 7.3 is not to be construed as a comprehensive definition of persons who, while not actually working, retain the status of a worker. Here, the appellant ceased work only days before she made her claim for income support, too brief a period for her to have lost her status as a worker and her right to reside in this country.
(2) If the appellant was not a worker for the purposes of Article 7, its provisions unfairly discriminate against pregnant women who as a result of pregnancy cannot work.
(3) Any doubt on these issues should lead this Court to make a reference.
(1) Article 7 is and was intended to be a comprehensive provision. It was inherent in Article 7.3 that someone who ceases to work in circumstances other than those set out in paragraphs (a) to (d) is not a worker entitled to the relevant right of residence.
(2) Pregnancy was deliberately excluded from the conditions in which the status of worker is retained despite the cessation of work, as demonstrated by the travaux préparatoires and the reference to and the provision made for pregnancy in Article 16.
(3) In any event, in Secretary of State for Work and Pensions v Dias  EWCA Civ 807  1 CMLR 4 this Court held that Article 7.3 is a codification of Community law; this was part of the ratio decidendi of the decision, by which we are bound. It follows that in this Court, the meaning and effect of Article 7.3 are acte clair.
(4) Article 7.3 does not discriminate on the ground of pregnancy, and therefore does not discriminate directly. In relation to the right to social security benefits, to discriminate on the ground of nationality, based on whether the individual has the right of residence, is justified: see the decision of the Supreme Court in Patmalniece v Secretary of State for Work and Pensions  UKSC 11  1 WLR 783. In any event, the allegation of indirect discrimination was not raised below, and has not been the subject of appropriate evidence. Lastly, in Dias this Court rejected the contention that Article 7.3 was discriminatory.
(a) The interpretation of Article 7
"2. Ms Dias is a Portuguese citizen and a single lady. She came to the UK in January 1998 with her two children. She got a job immediately. Those children are now grown up and have left home. She was in continuous employment, without significant gaps until the Summer of 2002. She was then pregnant and took maternity leave. Her youngest child was born on 7 October 2002. Her maternity leave expired on 17 April 2003. She opted not to go back to work and remained unemployed (receiving income support under the then prevailing rules) until 26 April 2004. She worked again for the same employer from 26 April 2004 until 23 March 2007, but on that latter day she gave up work because she wanted to be able to give more time to her youngest child. Accordingly her employment history divides into 5 periods:
i) January 1998 (arrival in UK) to Summer 2002: in work
ii) Summer 2002 to 17 April 2003: maternity leave
iii) 18 April 2003 to 25 April 2004: not working
iv) 26 April 2004 to 23 March 2007: in work
v) 23 March 2007 onwards: not working."
"18. For Ms Dias, Mr Berry contends that during period (iii) Ms Dias maintained a sufficient link with her previous employment to remain a 'worker', just as it is agreed that she did when on maternity leave (and thus still in employment) in period (ii). He says that the court should proceed by analogy with Lair v Universität Hannover, Case 39/86  ECR 3161, to reach this conclusion. He accepts that there was no contract of employment in period (iii). Ms Dias maintained a sufficient link with her employment, he contends, because (a) she would have returned to the job but for the twin facts of a child to care for, who moreover for some of the time was not very well, and a measure of domestic violence, and (b) her erstwhile employers remained willing to have her back. And he contends that it is necessary to hold that she retained the status of 'worker' in order to avoid any discrimination against her as a woman, the factors which led to her being out of work being ones which are, he asserts, particularly likely to affect women.
19. Prior to Directive 2004/38 the general rule was that once the employment relationship had ended the person concerned lost his or her status as a worker, but there were a limited number of situations in which that status was retained, for example when the person had lost his job and was genuinely seeking another: Martinez Sala v Freistaat Bayern Case C-85/96  ECR 1-2691 at paragraph 32. Once Directive 2004/38 came into force the conditions for retention of worker status were codified in Article 7(3): broadly, temporary incapacity to work, involuntary unemployment after a qualifying period and vocational training. Mr Berry accepts that Ms Dias could not bring herself within any decision prior to Directive 2004/38 or within the conditions codified in Article 7(3). But he says that these rules are not exhaustive and should be supplemented by a ruling that a person in the position of Ms Dias who voluntarily gives up employment to care for her child but who contemplates a return in the future is similarly still to be regarded as a worker, at least where subsequently she does in fact return.
20. The facts are not entirely certain but some things seem clear. Ms Dias' statement does say that she had had to take time off work because her child was ill, but this must have been in period (iv); it has no bearing on period (iii) which is what is in question. Her decision not to work in period (iii) was made, she says, because her son was small (six months) and she did not want to leave him. Thus she made a perfectly comprehensible but voluntary decision to care for her child herself rather than to work. The "problems with my son's father" were, she says, sometime after she decided not to go back to work; these did not cause the decision not to return after maternity leave, nor were they the cause of her remaining unemployed throughout period (iii); what they perhaps did was somewhat to delay the re-start at work (period (iv)).
21. Mr Berry's proposition would be an impermissible judicial extension of rules carefully formulated in Europe, first by the courts and latterly by Article 7(3) of Directive 2004/38. The circumstances of a parent, of either sex, who gives up employment to care for a child but anticipates a return after some as yet unknown time are very common. The breadth of the concept of 'worker' has to recognise a balancing of the interests of migrants and of host States and their taxpayers. The codification of the concept which has been accomplished by Article 7(3) of Directive 2004/38 demonstrates where that balance has been struck. The circumstances under consideration are not analogous to those which are set out in that Article, but would represent a significant departure from them.
22. There is, moreover, no true analogy with Lair. Ms Lair was held to be entitled to a student maintenance grant if but only if there was "some continuity between her previous occupational activity and the course of study" (see paragraph 37 of the judgment). Ms Dias left employment for reasons which are perfectly understandable socially but which had nothing whatever to do with her occupational activity: indeed precisely the reverse.
23. The Commissioner was accordingly right in his decision (ii). Ms Dias did not retain the status of worker during period (iii) and it follows that period (iii) cannot count, on this basis, towards a cumulative total of five years' continuous legal residence."
"68. Ms Dias' period of residence in period 3 would be legal residence within the meaning of Article 16(1) of Directive 2004/38 if she had also been a worker in that period. The referring court held that not to be the case and in that regard did not refer a question for a preliminary ruling.
69. The referring court's conclusion that Ms Dias was not a worker in period 3 appears to be in conformity with the case-law of the Court. According to that case-law, once the employment relationship has ended, the status of worker is as a rule lost. (Case C-43/99 Leclere  ECR I-4265, paragraph 55.) It is apparent from the order for reference that Ms Dias' employment relationship ended when period 3 began, that is when she decided following the end of her maternity leave to continue to care for her son and not to go back to her job. Ms Dias thereby voluntarily lost her status of worker as such.
71. Ms Dias can also not base her status of worker on provisions of secondary law. Admittedly, Article 7(1) of Directive 68/360 (See now Article 7(3)(b) of Directive 2004/38/EC) provides that persons who are not workers within the meaning of that term are in certain circumstances to be assimilated to them. It makes such provision however only for persons who became unemployed involuntarily and not, on the other hand, for those in voluntary unemployment."
"Union citizenship should be the fundamental status of nationals of the Member States when they exercise their right of free movement and residence. It is therefore necessary to codify and review the existing Community instruments dealing separately with workers, self-employed persons, as well as students and other inactive persons in order to simplify and strengthen the right of free movement and residence of all Union citizens."
The italics are mine. To the same effect, Article 1 states:
"This Directive lays down:
(a) the conditions governing the exercise of the right of free movement and residence within the territory of the Member States by Union citizens and their family members;
(b) the right of permanent residence in the territory of the Member States for Union citizens and their family members;
(c) the limits placed on the rights set out in (a) and (b) on grounds of public policy, public security or public health."
If the appellant's submissions are well-founded, the Directive does not lay down the matters that Article 1 states that it does lay down.
"19. … the test of worker status is as set out by the European Court of Justice in C-85/96 Martinez Sala  ECR I-2691:
"The status of worker within the meaning of Article 48 of the Treaty and Regulation No 1612/68
32. In the context of Article 48 of the Treaty and Regulation No 1612/68, a person who, for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration must be considered to be a worker. Once the employment relationship has ended, the person concerned as a rule loses his status of worker, although that status may produce certain effects after the relationship has ended, and a person who is genuinely seeking work must also be classified as a worker (see, in that connection, Case 66/85 Lawrie-Blum  ECR 2121, paragraph 17, Case 39/86 Lair  ECR 3161, paragraphs 31 to 36, and Case C-292/89 Antonissen  ECR I-745, paragraphs 12 and 13).
(What was then Article 48 is what is now Article 39)."
To the same effect is paragraph 55 of Leclere, referred to by the Advocate General in Dias. Accordingly, I reject Mr Drabble's submission that the Citizenship Directive is inconsistent with the Treaty, in that on the basis of the Secretary of State's case it incorporates a narrower meaning of worker than that in the Treaty, and is therefore ultra vires, or must at least be construed compatibly with the Treaty. The Directive is consistent with the Treaty, and does not purport to restrict the Treaty rights granted to workers who are nationals of Member States. Furthermore, since the appellant was not at the relevant date a worker within the meaning of the Treaty, she was not entitled to the benefit of Article 7 of Regulation (EEC) No. 1612/68.
"42. Mr Drabble reserves his position, lest he may wish to argue them before a higher Court, in respect of the following:
a. whether the refusal of income support to the claimant amounts to unlawful discrimination on the grounds of nationality, contrary to Article 3 of Regulation 1408/71 (as argued unsuccessfully in Patmalniece v Secretary of State for Work and Pensions  EWCA Civ 621 before the Court of Appeal and in respect of which it is understood that permission to appeal to the Supreme Court has been granted)
b. whether such refusal involved unlawful discrimination on grounds of nationality contrary to Article 12 of the EU Treaty, (a route not open to him before the Upper Tribunal because of the decision of the Court of Appeal in Abdirahman)
c. whether Kaczmarek is rightly decided
d. whether Article 7(3) of the Directive is contrary to European law … as amounting to unlawful sex discrimination."
(31) This Directive respects the fundamental rights and freedoms and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. In accordance with the prohibition of discrimination contained in the Charter, Member States should implement this Directive without discrimination between the beneficiaries of this Directive on grounds such as sex, race, colour, ethnic or social origin, genetic characteristics, language, religion or beliefs, political or other opinion, membership of an ethnic minority, property, birth, disability, age or sexual orientation,
(1) … the effect of the right to reside test in regulation 2(2) of the 2002 Regulations, which was linked to nationality, had to be looked at in the context of section 1(2)(a) of the 2002 Act and regulation 2 as a whole, under which all claimants for state pension credit had to establish that they were habitually resident in the UK or elsewhere in the common travel area; that, although the test of habitual residence would not be satisfied by all UK nationals, it was a test which, in practice, put nationals of other European Union member states at a particular disadvantage; and that, accordingly, the conditions for entitlement to state pension credit were indirectly discriminatory and, to be lawful, had to be justified on grounds independent of nationality.
(2) … regulation 2 of the 2002 Regulations had the legitimate purpose of ensuring that a claimant had achieved economic or social integration in the UK or elsewhere in the common travel area as a precondition of entitlement to the benefit; that that justification was relevant, sufficient and independent of the nationality of the persons concerned; that the fact that, for economic, historical and social reasons, different and more favourable arrangements were made for Irish nationals than for nationals of other member states, did not undermine the policy justification for not extending the benefit to other member states; that those arrangements were protected by article 2 of Protocol No 3 on the application of certain aspects of article 14 of the Treaty establishing the European Community to the United Kingdom and to Ireland, in order to promote free movement between those two countries; and that, accordingly, the indirect discrimination that resulted from regulation 2 was not made unlawful by article 3(1) of Council Regulation (EEC) No 1408/71.
Lord Hope, giving the leading judgment, said:
"52. … the Secretary of State's purpose was to protect the resources of the United Kingdom against resort to benefit or social tourism by persons who are not economically or socially integrated with this country. This is not because of their nationality or because of where they have come from. It is because of the principle that only those who are economical or socially integrated with the host member state should have access to its social assistance system. The principle, which I take from the decision in the Trojani case, is that it is open to member states to say that economical or social integration is required. A person's nationality does, of course, have a bearing on whether that test can be satisfied. But the justification itself is blind to the person's nationality. The requirement that there must be a right to reside here applies to everyone, irrespective of their nationality.
53 For these reasons I would hold that the Secretary of State has provided a sufficient justification, and that it is independent of the nationality of the person concerned. It follows that the indirect discrimination that results from regulation 2 of the 2002 Regulations was not made unlawful by article 3(1) of Regulation 1408/71.
See also the judgment of Baroness Hale, who referred to the judgment of the Court of Justice in Trojani v Centre public d'aide sociale de Bruxelles (Case C-456/02)  ECR I-7573:
"107. …. The court in the Trojani case pointed out, at para 45, that
"it remains open to the host member state to take the view that a national of another member state who has recourse to social assistance no longer fulfils the conditions of his right of residence. In such a case the host member state may, within the limits imposed by Community law, take a measure to remove him. However, recourse to the social assistance system by a citizen of the Union may not automatically entail such a measure."
108 Once again, the emphasis is on the right to reside. I do not find there any suggestion that it is not open to the host member state to make entitlement to such benefits conditional upon that right. For that reason, and in agreement with Lord Hope DPSC, I would dismiss this appeal.
Lady Justice Black:
Lord Justice Ward: