England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL (ADMINISTRATIVE APPEALS CHAMBER)
Upper Tribunal Judge C.G. Ward
[2011] UKUT 452

		Royal Courts of Justice Strand, London, WC2A 2LL
		13/02/2013

Lord Justice Rimer :

Introduction

1. The first and main issue raised by this appeal is as to the construction of provisions in the Accession (Immigration and Worker Registration) Regulations 2004 (SI 2004/1219, 'the 2004 Regulations'), which came into force on 1 May 2004. They governed the terms upon which nationals of the so-called A8 states (eight of the 10 states which acceded to the European Union in 2004 following the Treaty on Accession signed in Athens on 16 April 2003) were admitted as workers to the United Kingdom labour market following accession.
2. The appellant is an A8 state national. He worked for a period in the United Kingdom and then, when he became unemployed, claimed income-based Jobseeker's Allowance ('JSA'). His claim was refused. The effect of the 2004 Regulations was that it was a condition of his entitlement to JSA that he had been 'legally working' in the United Kingdom for 12 months or more for an 'authorised employer'. In claiming to satisfy that condition, he relied on a 'registration certificate' relating to his employment issued to him by the Secretary of State for the Home Department under Part 3 of the regulations. He had, however, applied for the certificate after the expiration of the first month of his employment and the certificate was issued to him over three months after he commenced his employment. There is no dispute that the effect of the certificate was that his employer was an 'authorised employer' during the period of his employment that followed its receipt. He could, however, only satisfy the 12 months' condition if he could be given credit not just for the period of employment that followed its receipt, but also for the whole of the period of his employment that preceded it: he had to show that his employer was an 'authorised employer' during that period as well. The question of construction is whether (as the appellant contends) such a certificate has effect in all cases so as to validate (including retrospectively) the whole period of the employment identified on the certificate; or (as the respondent contends), whether it only validates the period of such employment following the date of receipt of the certificate by the worker.
3. The second issue on the appeal arises if, upon the correct construction of the 2004 Regulations, the appellant's certificate did not validate the whole period of his employment. In that event, it is said the regulations visited upon him a disproportionate penalty as the price of his late application for a certificate and that such a penalty was, in consequence, contrary to European Union law insofar as it operated to deprive him of the full panoply of social security rights to which he would otherwise have been entitled.

The facts

4. The appellant, Mariusz Szpak, came to the United Kingdom from the Republic of Poland in 2006 and has since worked here. His appeal is against the decision by Upper Tribunal Judge C.G. Ward in the Upper Tribunal (Administrative Appeals Chamber) on 11 November 2011. Judge Ward had dismissed Mr Szpak's appeal against the decision of Tribunal Judge R.J. Bradshaw in the First-tier Tribunal (Social Entitlement Chamber), who had dismissed his appeal against a decision by the Secretary of State for Work and Pensions refusing his claim for JSA from 4 February 2010.
5. Judge Ward set out the facts as follows:

'[Mr Szpak] commenced working for Major Recruitment Ltd on 21 January 2009. His application for a certificate under the worker registration scheme then applicable to A8 nationals was received on 23 April 2009. The certificate was issued on 1 May 2009. His employment ended on 30 August 2009 or 6 September 2009 (the former seems more likely but it does not matter.) On 3 September 2009 he commenced working for Industrious Ltd. His application for a certificate was received on 14 September 2009. A certificate was issued on 17 September 2009. His employment ended on 31 January 2010. The remainder of [Mr Szpak's] work history in the United Kingdom does not appear material for present purposes.'

6. The registration certificate, issued by the Home Office to Mr Szpak on 1 May 2009, read as follows:

'ACCESSION STATE WORKER REGISTRATION SCHEME

REGISTRATION CERTIFICATE

PLEASE DO NOT LOSE – REPLACEMENTS MAY NOT BE ISSUED

Thank you for your application to register on the Accession State Worker Registration Scheme. I am pleased to inform you that we have approved your application.

This is your worker registration certificate. It authorises you to work for the employer specified in this certificate.

This certificate ceases to be valid if you are no longer working for the employer specified in this certificate on the date on which it is issued.

This certificate expires on the date you cease working for the specified employer.

This certificate should be retained with your worker registration card.

Name:	Mariusz Szpak
Date of Birth :	[a date in] 1979
Nationality :	Poland
Unique Reference Number:	A8/57xxxxx
Job Start Date:	21 January 2009
Employer's Name :	Major Industrial Recruitment Ltd
Employer's Address :	[an address in Yorkshire]'

7. Judge Ward explained that Mr Szpak could succeed in his claim for JSA only if his worker registration certificate in respect of his employment with Major Recruitment Ltd, once issued, was retrospective to the start of his employment, even though he had applied for the certificate after the first month of his employment (I shall explain the significance of that month). It was critical to Mr Szpak's case that the certificate issued on 1 May 2009 validated the prior period of his employment since 21 January 2009. Judge Ward held that it did not. In so ruling, he followed his own decision in Secretary of State for Work and Pensions v. ZA [2009] UKUT 294 (AAC). That decision had also been the subject of an appeal to the Court of Appeal but it was disposed of by consent on a basis leaving unanswered the same question that was later to be raised by Mr Szpak's case.
8. Mr Szpak's appeal to this court is brought with Judge Ward's permission. The 2004 Regulations have been repealed (with certain savings) with effect from 30 April 2011 by SI 2011/544 but the issue is important for cases other than Mr Szpak's. The respondent is the Secretary of State for Work and Pensions; and the Secretary of State for the Home Department has, by an order of Tomlinson LJ of 29 August 2012, been joined as an interested party. Mr Richard Drabble QC and Mr Adam Fullwood represented Mr Szpak. Mr Jason Coppel represented the respondent and the interested party.

The legislative framework

9. The Accession Treaty under which ten new member states acceded to the European Union on 1 May 2004 included (save in the case of Malta and Cyprus) a labour market derogation providing that, during a transitional period following accession, the existing Member States could derogate from the free movement of worker provisions in article 45 of the Treaty on the Functioning of the European Union (formerly article 39 EC) and articles 1 to 6 of Regulation (EEC) 1612/68. That Regulation included provisions protecting a worker who is a national of a member state from discriminatory treatment in another member state in respect of conditions of employment and work, and entitling him to enjoy the same social and tax advantages as national workers. The rationale of the permitted derogation was to prevent the disruption of the labour markets of the existing member states through a massive influx of nationals from A8 states seeking employment.
10. Annex XII to the Act of Accession applied to Poland. Paragraph 1 provided (inter alia) that article 39EC should 'fully apply only' in relation to the freedom of movement of workers between Poland on the one hand and the existing member states on the other hand, subject to the transitional provisions laid down in paragraphs 2 to 14. In Zalewska v. Department for Social Development [2008] UKHL 67; [2008] 1 WLR 2602, Lord Hope of Craighead observed, at paragraph 7, that '[t]he word "only" indicates that, subject to the conditions that they lay down, the transitional provisions must be taken to replace the guarantee for free movement of workers in [article 39EC].'
11. Paragraphs 2 to 4 of Part 2 of Annex XII made provision as to the length of time for which national measures regulating access to the labour market of an existing member state could be maintained. They provided that they should apply during the first two years following accession; that they could be continued for a further three years if a member state notified the Commission before the end of the first two-year period; and for a further two years by a member state 'in case of serious disturbance of its labour market or threat thereof' and after notifying the Commission. The derogation is framed as follows in Annex XII:

'2. By way of derogation from Articles 1 to 6 of Regulation (EEC) No 1612/68 and until the end of the two year period following the date of accession, the present Member States will apply national measures, or those resulting from bilateral agreements, regulating access to their labour markets by Polish nationals. The present Member States may continue to apply such measures until the end of the five year period following the date of the accession.

Polish nationals legally working in a present Member State at the date of accession and admitted to the labour market of that Member State for an uninterrupted period of 12 months or longer will enjoy access to the labour market of that Member State but not to the labour market of other Member States applying national measures.

Polish nationals admitted to the labour market of a present Member State following accession for an uninterrupted period of 12 months or longer shall also enjoy the same rights.

The Polish nationals mentioned in the second and third sub-paragraphs above shall cease to enjoy the rights contained in those sub-paragraphs if they voluntarily leave the labour market of the present Member State in question.

Polish nationals legally working in a present Member State at the date of accession, or during a period when national measures are applied, and who were admitted to the labour market of that Member State for a period of less than 12 months shall not enjoy these rights.

3. Before the end of the two year period following the date of accession, the Council shall review the functioning of the transitional provisions laid down in paragraph 2, on the basis of a report from the Commission.

On completion of this review, and no later than at the end of the two year period following the date of accession, the present Member States shall notify the Commission whether they will continue applying national measures or measures resulting from bilateral agreements, or whether they will apply Articles 1 to 6 of Regulation (EEC) No 1612/68 henceforth. In the absence of such notification, Articles 1 to 6 of Regulation (EEC) No 1612/68 shall apply.

4. Upon Poland's request one further review may be held, The procedure referred to in paragraph 3 shall apply and shall be completed within six months of receipt of Poland's request.'

The 2004 Regulations and the 'Worker Registration Scheme'

12. The European Union (Accessions) Act 2003 ('the 2003 Act') made provision for the Accession Treaty to be implemented into domestic law. The 2004 Regulations were made under section 2 of the European Communities Act 1972 and section 2 of the 2003 Act. The latter section, headed 'Freedom of movement for workers,' provides, so far as material:

'(1) The Secretary of State may by regulations provide that a specified enactment relating to –

(a) the entitlement of a national of an EEA State to enter or reside in the United Kingdom as a worker, or

(b) any matter ancillary to that entitlement,

applies in relation to a national of a relevant acceding State as it applies in relation to a national of an EEA State.

(2) Regulations under this section in respect of a specified enactment may apply that enactment subject to specified exceptions or modifications.'

13. The United Kingdom's transitional arrangements adopted pursuant to the derogation are contained in the 2004 Regulations. Save for certain exemptions, they placed conditions on access to the labour market for A8 workers by modifying in their case the application of the Immigration (European Economic Area) Regulations 2000 (subsequently the Immigration (European Economic Area) Regulations 2006, 'the 2006 Regulations'). Lord Hope provided a succinct summary of the scheme of the 2004 Regulations in Zalewska's case, supra, at paragraph 11:

'The 2004 Regulations were made to give effect in the United Kingdom to the derogation provisions in the Act of Accession as to access to the labour market during the accession period from 1 May 2004 to 30 April 2009. Subject to various exceptions required by paragraph 2 of Part 2 of Annex XII to the Act of Accession … the basic rule of the scheme that it sets out is that a national of an A8 state working in the United Kingdom during the accession period is an accession state worker requiring registration: 2004 Regulations, regulation 2(1). He ceases to be an accession state worker requiring registration if he legally works in the United Kingdom without interruption for a period of 12 months falling wholly or partly after 30 April 2004: regulation 2(4). But he will only be treated as legally working in the United Kingdom during that period if he is working for an authorised employer: regulation 2(7)(b). Regulation 4 deals with the right of residence of workers from A8 states during the accession period. Regulation 4(1) derogates from the relevant Community provisions on the abolition of restrictions on movement and residence within the Community for workers of member states. Regulation 4(4) provides: "An accession state worker requiring registration shall only be entitled to reside in the United Kingdom in accordance with the 2000 Regulations as modified by regulation 5."

14. The 2004 Regulations established the worker registration scheme based on the concept of an 'accession State Worker requiring registration', to which worker the 2006 Regulations applied as modified. The accession period has been successively extended but ended on 30 April 2011, from which date the 2004 Regulations were repealed, subject to savings. Under regulation 2(4) of the 2004 Regulations, an A8 national working in the United Kingdom during the accession period becomes exempt from the requirement to register under the worker registration scheme – and so entitled to the same rights as non-A8 European Union nationals – if he 'legally works' in the United Kingdom without interruption for 'a period of 12 months falling partly or wholly after 30^th April 2004'. Regulation 2(7)(b) explains what is meant by 'legally working':

'(7) For the purposes of this regulation –

…

(b) a person working in the United Kingdom on or after 1^st May 2004 is legally working during any period in which he is working in the United Kingdom for an authorised employer.'

15. 'Authorised employer' is defined in regulation 7, which is central to the issues on the appeal. It provides, so far as material:

'(1) By way of derogation from Article 39 of the Treaty establishing the European Community and Articles 1 to 6 of the Regulation (EEC) No 1612/68 on freedom of movement for workers within the Community, an accession State worker requiring registration shall only be authorised to work in the United Kingdom for an authorised employer.

(2) An employer is an authorised employer in relation to a worker if –

(a) the worker was legally working for that employer on 30 April 2004 and has not ceased working for that employer after that date;

(b) the worker –

(i) during the one month period beginning on the date on which he begins working for the employer, applies for a registration certificate authorising him to work for that employer in accordance with regulation 8; and

(ii) has not received a valid registration certificate or notice of refusal under regulation 8 in relation to that application or ceased working for that employer since the application was made;

(c) the worker has received a valid registration certificate authorising him to work for that employer and that certificate has not expired under paragraph (5); or

(d) the employer is an authorised employer in relation to that worker under paragraph (3) or (4).

(3) Where a worker begins working for an employer on or after 1 May 2004 that employer is an authorised employer in relation to that worker during the one month period beginning on the date on which the work begins.

(4) …

(5) A registration certificate –

(a) is invalid if the worker is no longer working for the employer specified in the certificate on the date on which it is issued;

(b) expires on the date on which the worker ceases working for that employer.

(6) …'.

16. Regulation 8 prescribes the procedure for applying for a registration certificate and the information to be contained in the registration card and certificate. It provides so far as material:

'(1) An application for a registration certificate authorising an accession State worker requiring registration to work for an employer may only be made by an applicant who is working for that employer at the date of the application.

(2) The application shall be in writing and shall be made to the Secretary of State.

(3) The application shall state –

(a) the name, address and date of birth of the applicant;

(b) the name and address of the head or main office of the employer;

(c) the date on which the applicant began working for that employer;

(d) where the applicant has been issued with a registration card, the reference number of that card.

(4) Unless the applicant has been issued with a registration card under paragraph (5), the application shall be accompanied by –

…

(d) a letter from the employer concerned confirming that the applicant began working for the employer on the date specified in the application.

(5) In the case of an application by an applicant who has not been issued with a registration card under this paragraph, the Secretary of State shall, where he is satisfied that the application is made in accordance with this regulation and that the applicant –

(a) is an accession State worker requiring registration; and

(b) began working for the employer on the date specified in the application,

send the applicant a registration card and a registration certificate authorising the worker to work for the employer specified in the application, and shall return the applicant's national identity card or passport.

(6) In the case of any other application, the Secretary of State shall, if he is satisfied as mentioned in paragraph (5), send the applicant a registration certificate authorising the worker to work for the employer specified in the application. …

(8) A registration certificate issued under paragraph (5) or (6) shall contain –

(a) the name of the applicant;

(b) the reference number of the applicant's registration card;

(c) the name and address of the head or main office of the employer, as specified in the application; and

(d) the date on which the applicant began working for the employer, as specified in the application; and

(e) the date on which the certificate was issued.

(9) Where the Secretary of State receives an application made in accordance with this regulation and he is not satisfied as mentioned in paragraph (5), he shall –

(a) send the applicant a notice of refusal; and

(b) return any documents and fee that accompanied the application to the applicant.

(10) Where the Secretary of State sends a registration certificate or notice of refusal to an applicant under this regulation he shall, at the same time, send a copy of the certificate or notice to the employer concerned at the address specified in the application for that employer ….'

17. Regulation 9 makes it an offence for an employer to employ a worker who is not authorised under the registration scheme. It provides so far as material:

'(1) Subject to paragraph (2), if an employer employs an accession State worker requiring registration during a period in which the employer is not an authorised employer in relation to that worker, the employer shall be guilty of an offence.

(2) Subject to paragraph (4), in proceedings under this regulation it shall be a defence to prove that –

(a) there was produced to the employer during the one month period beginning on the date on which the worker began working for the employer a document that appeared to him to establish that the worker was not an accession State worker requiring registration; and

(b) the employer took and retained a copy of that document.

(3) Subject to paragraph (4), in proceedings under this regulation it shall be a defence to prove that –

(a) there was produced to the employer during the one month period beginning on the date on which the worker began working for the employer a document that appeared to him to establish that the worker had applied for a registration certificate in accordance with regulation 8 authorising the worker to work for that employer;

(b) the employer took and retained a copy of that document; and

(c) the employer has not received a copy of a registration certificate or notice of refusal in relation to that application.

(4) The defence afforded by paragraph (2) or (3) shall not be available in any case where the employer knew that his employment of the worker would constitute an offence under this regulation.

(5) A person guilty of an offence under this regulation shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale. ….'

The Jobseeker's Allowance Rules

18. The appeal is a challenge to the decision of the Secretary of State for Work and Pensions that Mr Szpak was, at the time he claimed JSA, a 'person from abroad' and so not entitled to income-based JSA. That is because he was said to be an 'accession state national requiring registration' with no right of residence in the UK whilst unemployed. The relevant provision is Regulation 85A of the Jobseeker's Allowance Regulations 1996 (SI 1996/207):

'(1) "Person from abroad" means, subject to the following provisions of this regulation, a claimant who is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland.

(2) No claimant shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland unless he has a right to reside in (as the case may be) the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland …

(4) A claimant is not a person from abroad if he is –

…

(f) a person who is treated as a worker for the purpose of the definition of "qualified person" in reg. 6(1) of the Immigration (European Economic Area) Regulations 2006 pursuant to –

(i) reg. 5 of the Accession (Immigration and Worker Registration) Regulations 2004 (application of the 2006 Regulations in relation to a national of the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia or the Slovak Republic who is an 'accession State worker requiring registration") ….'

19. By regulation 5(2) of the 2004 Regulations, an accession State worker requiring registration is treated as a worker only during a period in which he is working in the United Kingdom for an authorised employer. Mr Szpak was not working when he made his application for JSA. It is agreed that his application for JSA could only succeed if he had by then ceased to be an 'accession State worker requiring registration'. He could only have so ceased by qualifying under regulation 2(4) of the 2004 Regulations. If he did so qualify, he would have been a 'qualified person' under regulation 6(1) of the 2006 Regulations, with a right to reside and a consequential entitlement to JSA.
20. The Secretary of State's decision was that Mr Szpak was not such a 'qualified person' as he had not satisfied the requirement of 12 months' continuous employment required by regulation 2(4) of the 2004 Regulations: he was still an 'accession state national requiring registration' and had no right of residence whilst not in registered work (regulation 5(3)). The reason why it was said he had not satisfied the requirements of 12 months' continuous employment was that although he was in work from 21 January 2009 to 31 January 2010, and so on one view had completed 12 months' continuous employment, he could not be given credit in the calculation for the period (or at any rate the whole of the period) running from 21 January 2009 to his receipt of the registration certificate issued on 1 May 2009. That was because the certificate did not retrospectively validate any prior period of his employment. He was, therefore, the Secretary of State decided, not 'legally working' during the prior period for an 'authorised employer' within the meaning of regulations 2(7)(b) and 7(2) of the 2004 Regulations and so never ceased to be an 'accession State worker requiring registration.'

The reasoning of the Upper Tribunal

21. The First-tier Tribunal ('FTT') dismissed Mr Szpak's appeal against that decision, and Judge Ward in the Upper Tribunal dismissed the appellant's appeal from the decision of the FTT. He did so by adopting his reasoning in his earlier decision in ZA [2009] UKUT 294 (AAC). That decision related to three appeals by the Secretary of State for Work and Pensions, who had submitted that, contrary to the decisions of the FTT, each respondent's claim for income support and/or JSA fell to be determined on the basis that he was a 'person from abroad' and so not qualified, that phrase being the key phrase in regulation 85A(1) of the JSA Regulations. Put another way, in order to be entitled to the means tested benefits for which each respondent was claiming, each had to show that he had ceased to be an 'accession State worker requiring registration' within the meaning of regulation 2 of the 2004 Regulations. The point in issue was the same as on this appeal. As Judge Ward put it in paragraph 2:

'Each had worked for longer than 12 months; the employment of each had been registered with the Home Office; however, this had not been done at, or, the Secretary of State argued, sufficiently soon after, its commencement. If the date that counted was when the registration process was complete and the relevant certificate issued, none of the claims could succeed. If however the registration was operative from the date of commencement of the employment, then, subject to specific points relating to each claim, the door was opened to the claims succeeding.'

22. Judge Ward gave a full, thoughtful and carefully reasoned judgment. Mr Drabble, for Mr Szpak, rightly paid tribute to its quality, whilst submitting that Judge Ward fell into error in his answer to what he had regarded as a finely balanced question of interpretation. I shall summarise the essence of Judge Ward's reasoning, but do not attempt to set out all of it.
23. Judge Ward pointed out that the use of the present tense in regulations 2(7)(b) and 7(2) was said to show that a worker on a given day who had not received his registration certificate was not on that day working for an authorised employer. Regulation 7(2)(b) and (3) provided an express exception to that consequence when an application for a certificate was made during the first month of employment. The counter argument was that, even in a case in which the 'one month' provisions did not apply, the receipt of a certificate brought the case within regulation 7(2)(c), which could have provided that such a certificate only had prospective effect but did not. Judge Ward's provisional view was that the argument against retrospectivity was the stronger, but that when considered in the context of the 2004 Regulations as a whole the problem became more complex.
24. He noted that in Zalewska's case ([2008] 1 WLR 2602) Lady Hale had said that the issue of a registration certificate was a 'purely administrative act' (see paragraph 52): that is, that such a certificate must be issued if the application for it was in order. There was no restriction confining the right to apply for a certificate to those who apply in the first month of employment. Moreover, the 2004 Regulations, unusually, specified the information that a certificate was required to contain. That information was in regulation 8(8), and included the date on which the applicant 'began working for the employer, as specified in the application'. If the Secretary of State was right, the inclusion of such a date was potentially misleading, since in a case such as the present it would have no relevance to the date from which the worker was in fact working for an 'authorised employer'. In addition, the certificate is not required to give the date upon which the applicant applied for it. Thus the presentation of a certificate to someone with a working knowledge of the 2004 Regulations would not enable that person to work out from it whether or not the worker had, by virtue of regulations 7(2)(b) and (3), been working for an 'authorised employer' from day 1.
25. Equally, one possible inference from the form of the certificate was that it reflected a true legislative intention that, once issued, the certificate should be effective from the start date with the employer. Judge Ward explained that, if that was right, it would not deprive the remainder of the registration mechanism of all effect, and he explained why. He then focused on the criminal sanctions provision in regulation 9 and identified certain apparently illogical and circular features of its structure.
26. Judge Ward arrived, at paragraph 40, at the conclusion that there were arguments both ways as to whether a certificate once granted was intended to be retrospective; and that a decision either way would 'involve doing a degree of violence to some provisions of the 2004 Regulations.' His ultimate conclusion was against a retrospective construction. He said, in paragraph 66:

'Returning to the construction of the Regulations, I have set out at [53] what I perceive as the essential difficulty. I have reached the conclusion that a certificate is not retrospective, in part because I agree with [counsel for the Department for Work and Pensions] as to the more natural reading of the words of the relevant parts of regulations 7 and 2. Further, I consider it on balance preferable to adopt a construction which gives effect to regulation 9. A construction which allows retrospectivity renders regulation 9 in some situations totally unworkable, leading to the possibility of unjustified convictions. By contrast, the consequences of a construction refusing retrospectivity means that those who have applied after the initial month have certificates which are potentially misleading. While administratively unhelpful, the problems to which it gives rise can be mitigated by further enquiry on the part of those needing to rely on the certificates. Though the terms of regulation 8 appear misguided (and as set out in [4] above, the Second Respondent appears to have been in some difficulty in this regard), it does not necessarily mean that there is a legislative intention to be derived from the words that a certificate should be retrospective. Though I regard the terms of regulation 8 as very important for the reasons set out at [26], I am unable to elevate them over the considerations pointing the other way. It follows from the view I have reached concerning regulation 7(2) that on the true construction of regulation 5(2), a person is not "working in the United Kingdom for an authorised employer" unless he has, at the time when the work is performed, received a valid registration certificate in respect of that employment (or one of the other provisions of Regulation 7 applies).'

The appeal

(a) The construction of the 2004 Regulations

27. Mr Szpak's entitlement to JSA depended upon his having 'legally [worked] in the United Kingdom without interruption for a period of 12 months falling … wholly after 30^th April 2004' within the meaning of regulation 2(4) of the 2004 Regulations. If he had so worked, he would, at the end of such period of 12 months, have ceased to be an accession State worker requiring registration and would have qualified for JSA. On the facts explained by Judge Ward (see paragraph 5 above), Mr Szpak had to show that he had been 'legally working' for a 12-month period commencing in January 2009.
28. As to how regulation 2(4) can be satisfied, regulation 2(7)(b) provides that a person 'is' legally working during any period in which he is working in the United Kingdom for an 'authorised employer'. The use of the present tense shows that the relevant focus is on each day of his employment, the question being whether on such day he is working for an 'authorised employer'. It is regulation 7 which explains what an 'authorised employer' is, and that too is directed at identifying whether, on each day of an employment, the worker's employer is or is not an 'authorised employer': note again the use of the present tense in regulations 7(2), (3) and (4). It is only those periods of a worker's employment for an 'authorised employer' for which he can be given credit in an enquiry under regulation 2(4).
29. Regulations 7(2) to (4) prescribe when an employer is an 'authorised employer' in relation to the worker, although regulations 7(2)(a) and (4) have no application to the present case, nor in my view do they shed light on it. The crucial provisions are regulations 7(2)(b), (c) and (d) and (3), which must be interpreted in the context of the regulations as a whole, including in particular regulations 2, 8 and 9.
30. Regulation 7(2)(c) plainly regards a 'registration certificate' as a document that, upon receipt, has the effect of qualifying the employer as an 'authorised employer' (see also the last part of regulation 8(5)), and there is no dispute that it so qualifies the employer in respect of the term of the employment following its receipt. In this case, the certificate was issued on 1 May 2009 and was presumably received shortly afterwards. The critical question is whether, upon its receipt, it also qualified the employer as an 'authorised employer' during any part of the prior period of employment since 21 January 2009.
31. The scheme of regulation 7 is in my view clear. It works on the practical basis that the employer cannot expect, or be expected, to have a certificated status as an 'authorised employer' on the day the employment begins. It recognises that it is only once the employment has begun that steps can be taken towards obtaining a certificate. To that end, it confers a grace period of one month, commencing on the first day of the employment, during which the worker is expected to apply for a certificate. During the whole of that month, the employer is an 'authorised employer' and will be so whether or not the worker applies for a certificate during that month (see regulation 7(3)). Regulation 7(2)(b) shows, however, that the legislative intent is that the worker will apply for a certificate within that month. If he does not, at the expiry of the month the employer will lose the protection of regulation 7(3), he will cease to be an 'authorised employer' and any continued employment of the worker will involve his commission of a criminal offence (regulation 9). On the other hand, if the employee does apply during the first month, the employer will upon its expiry automatically continue to be an 'authorised employer' during the subsequent period of the employment prior to the receipt by the employee of a valid registration certificate, although he will cease to be an 'authorised employer' on the first to occur of (a) the notice of a refusal of a certificate under regulation 8 (see regulations 8(9) and (10), the latter providing for a copy of the refusal notice to be sent to the employer), or (b) the worker ceasing to work for the employer. If alternative (a) applies, the employer will have to take immediate stock of his position, and may have to take prompt steps to terminate the employment since otherwise he may be at risk of conviction for a criminal offence (see again regulation 9).
32. Regulation 7(2)(b) does not, however, cover the case in which the outcome of the worker's application is that he does receive a valid registration certificate authorising him to work for the employer. That circumstance is covered by regulation 7(2)(c), which provides that, so long as the certificate has not expired, the employer is an 'authorised employer'.
33. In, therefore, what the legislation must intend to be the paradigm case, namely one in which the worker applies for a certificate in month 1 of his employment and it is issued to him in, say, month 2, there is no scope for the view that the certificate, when received, operates retrospectively to the beginning of the employment so as to qualify the employer as an 'authorised employer' as from such beginning. The reason for that is because there is no need for it to have any such retrospective operation. The employer will be an 'authorised employer' during the first month of the employment (regulation 7(3)); and if, as he will in the paradigm case, the worker applies for a certificate during that month, the employer will continue at the end of the month to be an 'authorised employer' during the subsequent period in which there is no response to the application from the Home Office (regulation 7(2)(b)). Upon the worker's receipt of the certificate, the employer will continue to be an 'authorised employer' (regulation 7(2)(c)). He will, therefore, have been an 'authorised employer' from the outset, with the issue of the certificate simply, and seamlessly, continuing his status as such. The certificate cannot have had the effect of retrospectively conferring on the employer the status of an 'authorised employer' which he has at all prior material times always had.
34. This case is not such a case. It is one in which the employer will have been an 'authorised employer' during the first month of Mr Szpak's employment. As, however, Mr Szpak did not apply for a certificate during that month, but only applied for it at about the beginning of month 4, the employer's status as an 'authorised employer' lapsed at the end of the first month. Mr Szpak's case is, however, that upon his receipt of the certificate issued in May 2009, the certificate operated retrospectively so as to confer the status of an 'authorised employer' on his employer as from the beginning of the employment. That is said to be the effect of regulation 7(2)(c).
35. If it is suggested that such retrospectivity is to the beginning of the employment, the argument is illogical: there can be no justification for a retrospective operation to such beginning when during the first month the employer was, and will always have been, an 'authorised employer'. Any retrospectivity must be confined to that part of the prior period when, under the ordinary intended workings of regulation 7 the employer was not an 'authorised employer'. The retrospectivity that is invoked is therefore a selective one directed at filling the gap created by the worker's failure to comply with the intended scheme of regulation 7.
36. To derive such a selective retrospectivity from regulation 7(2)(c) when read in the context of the 2004 Regulations as a whole appears to me to be a difficult task. Neither the scheme of regulations as a whole, nor the wording of regulation 7(2)(c), supports it. The argument also runs into the stormy waters of regulation 9. That shows that, in a case such as this, in which the worker's employment begins in month 1 but he makes no application for a certificate until month 4, the employer will immediately after the expiration of month 1 have committed, or be committing, a criminal offence under regulation 9. Assume, however, (i) that a prosecution for such offence is then brought against the employer and that a trial is fixed for month 5; and that (ii) just before the trial, the worker receives a registration certificate. If, upon the true construction of regulation 7, the certificate retrospectively qualified the employer as an 'authorised employer' during the prior period since the expiration of month 1, one might think that the worker's receipt of the certificate would give the employer a complete defence to the charge brought against him: a defence which, immediately before such receipt, he did not have.
37. Mr Drabble, however, disclaimed such a proposition. He recognised that once month 2 had started, the employer's offence was complete and committed. He conceded that the worker's subsequent receipt of a certificate could not retrospectively turn the employer into an 'authorised employer' during the period when otherwise he was not, and that therefore the certificate did not provide the employer with a defence. But, he said, that was no reason not to read regulation 7(2)(c) as retrospectively conferring upon the employer the status of an 'authorised employer' at least for the different purpose of enabling the worker to count the prior period as part of the period when he had been 'legally working' in the United Kingdom.
38. Charmingly though Mr Drabble advanced that submission, I respectfully regard it as wrong and as fatally undermining the retrospectivity argument. Once it is accepted that there is no retrospectivity of which the employer can take advantage in answer to criminal proceedings brought against him, the submission that there is a residual element of retrospectivity of which the worker can take advantage for social security purposes of his own appears to me to be an impossible one. It is also particularly unattractive bearing in mind that the right to apply for a registration certificate is exclusively that of the worker, whose own default in that respect was the immediate cause of his employer's criminal discomfort. I consider that Mr Drabble was, with respect, right to concede that the receipt of a certificate could not retrospectively undo the criminal offence resulting from the worker's default. That is because, when received, the certificate has no retrospective operation at all.
39. Mr Drabble is too good a lawyer not to recognise the difficulties with which regulation 9 presented his retrospectivity argument, as of course he did. His main point was that it was regulation 8 that provided the key to the question of construction, and regulation 8 had also troubled Judge Ward. Judge Ward noted that regulation 8 took the unusual step of specifying the information that the certificate was required to contain (regulation 8(8)). He inferred that the legislative purpose was that such a certificate should enable a person to prove his status to those who might need to know it; and he noted that specifying what went into the certificate would serve to ensure that relevant information would be given. He noted that those who might need to consider the certificate would be staff in JSA or other benefits offices, or local authority staff for housing benefit or homelessness purposes. One item that regulation 8(8) requires to be included in the certificate is the date the worker began working for the employer. In the paradigm case in which the application is made within month 1, as the legislation intends, that presents no problem: the worker will have been working for an 'authorised employer' from day 1. In a case such as the present, however, the inclusion of the start date could, if the certificate is not retrospective, be misleading: it might lead a third party to assume the employer had been an 'authorised employer' throughout the period of employment prior to the date of issue of the certificate. In particular, the certificate is not required to include the date upon which the worker applied for it. If it did, it would enable anyone with an understanding of the 2004 regulations to work out whether the worker had been working throughout for an 'authorised employer'.
40. Considerations of this nature were regarded by Judge Ward as providing a pointer towards an interpretation of regulation 7 under which a registration certificate did have retrospective effect. If so, the inclusion of the start date of the employment would inform the third party that the employer had from then been an 'authorised employer'. If, however, the certificate does not have retrospective effect, its inclusion of the start date would, without more, tell the reader nothing as to whether the employer had at all times prior to the date of the certificate been an 'authorised employer'. Mr Drabble urged that the inferences to be drawn from the form of the certificate ought to be regarded as decisive as to the resolution of the retrospectivity issue.
41. Whilst I recognise the considerations that can be based on regulation 8, they are only factors to be brought into account in the interpretation exercise. It can equally be said about regulation 8, as Judge Ward did, that no certificate can entirely obviate the need for the person relying on it to make further inquiry: for example, the production of the certificate would not, without more, prove that the worker was still working for the employer. It is also to be noted that regulation 8 does not state that, once received, the certificate is conclusive as to any particular facts. In agreement with Judge Ward, I do not regard the provisions of regulation 8 as countering the compelling pointers against retrospectivity to be derived from, in particular, a combined consideration of regulations 7 and 9. In my judgment, a registration certificate when received has no retrospective effect as to the status of the employer as an 'authorised employer'. Its effect is exclusively prospective.
42. I should add that, whilst in Zalewska's case no like issue of retrospectivity was in issue (nor, as Mr Drabble told us, was even argued, and he was counsel in the case), Lady Hale, in her dissenting judgment appears to have favoured the view that regulation 7(2)(c) did confer some retrospective effect on a certificate: see [2008] 1 WLR 2602, at paragraph 49, upon which Mr Drabble placed passing reliance in his reply. Lady Hale did not, however, engage in any full consideration of the relevant provisions in the 2004 Regulations and I propose simply to say that, for the reasons I have given, I respectfully disagree with her apparently different view.
43. In respectful agreement with Judge Ward, I consider that, upon the correct interpretation of the 2004 Regulations, Mr Szpak was not 'legally working' during the period between the expiry of the first month of his employment and the subsequent receipt by him of his registration certificate. I would reject his argument on the construction of the 2004 Regulations.

(b) Proportionality

44. If wrong on the question of construction, Mr Drabble's essential point under this head of the appeal was that, whilst there was in principle nothing unreasonable about the worker registration scheme to which Mr Szpak was subject, the penalty imposed on him in consequence of his late application for registration under that scheme was a disproportionate one and so incompatible with the European Union law principle of proportionality.
45. The proportionality issue is most easily approached by reference to Zalewska's case [2008] 1 WLR 2602. That appeal raised a similar issue of proportionality in relation to the scheme of the 2004 Regulations, but on facts differing slightly from those of the present appeal. The appellant, Z, came from Poland to Northern Ireland on 1 July 2004. She started work for M Ltd on 9 July 2004 and applied for a registration certificate, which was issued to her on 5 November 2004. The report does not disclose when she made her application, which appears to have been uncertain, but the inference from the report is that there was no question that throughout her employment with M Ltd, which ended on 7 January 2005, M Ltd was an 'authorised employer' (and Lady Hale, at paragraph 52, said that it was likely Z had made her application within the first month). After leaving M Ltd, Z worked first for SV for three weeks from 8 January 2005, after which she started working for L, whom she left on 10 July 2005, one year after she had started working for M Ltd. Whilst, therefore, Z had worked for an uninterrupted period of 12 months, she had not applied for a registration certificate in respect of her employment either with SV or L. That mattered not as regards SV, since she was with them for less than a month and so SV was an 'authorised employer' during her time with them by reason of regulation 7(3). But as she never applied for a certificate in relation to her subsequent employment with L, L ceased to be an 'authorised employer' after the expiration of her first month of work with them. It followed that as by 10 July 2005 Z had not satisfied the requirements of regulation 2(4), she remained an accession state worker requiring registration. That meant that she no longer had a right of residence and her claim for income support for herself and her daughter was disallowed. As Lord Hope said, in paragraph 19:

'To qualify for that right she required to have worked for an authorised employer for an uninterrupted period of 12 months, and the only registration certificate that she was able to produce related to her first employer for whom she had not worked since January 2005.'

46. Z's case was that the linking of her right to reside to the requirement to register the initial employment and to re-register all subsequent changes during the first 12 months was unnecessary and disproportionate. Lord Hope, giving the main speech for the majority, accepted that (paragraph 30):

'The conclusion that any national measures that the member states introduce under the authority of paragraph 2 [of Part 2 of Annex XII: see paragraph 11 above] must be compatible with the authority given to them by the Treaty of Accession and with the Community law principle of proportionality seems to be inescapable.'

47. The question, therefore, was whether the registration requirements of the 2004 Regulations were proportionate. Proportionality requires, as Lord Hope explained in paragraph 31, that the means employed to achieve an aim recognised by Community law as legitimate corresponded to the importance of that aim and were necessary for its achievement. He continued:

'There is no doubt that it was legitimate for the United Kingdom to exercise the right of derogation that the Treaty of Accession provides and to introduce regulations that gave effect to it. The question is whether a national measure which says that only those A8 state nationals who work for an authorised employer for an uninterrupted period of 12 months are entitled to the status of "worker", having regard to the consequences of according them that status, is disproportionate.'

48. Lord Hope answered that question in the negative. He was of course focusing on a case in which there had been a failure to register a change of employment during the 12-month period rather than, as in this case, where there had been a late registration of one of the employments during such period. He explained his reasons for his decision in paragraphs 39 to 44, which save for paragraph 44 I do not propose to quote in full. In paragraph 39, he identified that the aim of the worker registration scheme was to enable the Government to monitor the impact of A8 state nationals on the United Kingdom's labour market and to discourage them from working illegally. It is that point upon which, in particular, Mr Coppel relied in this case in support of the proportionality of the worker registration scheme. In paragraph 40, Lord Hope observed that the terms on which A8 state nationals were to have access to the labour market were also critical to safeguarding the United Kingdom's social security system from exploitation by people who wished to come to the United Kingdom not to work but to live off benefits; and he observed that the 'proportionality of the formalities of registration and re-registration and of the consequences of a failure to comply with these requirements must be judged in this context.' Importantly, Lord Hope also expressly endorsed the like opinion of Mr Commissioner Rowland in four decisions to which Lord Hope referred in paragraph 41 that the registration scheme in the 2004 Regulations was not a disproportionate one. The direct relevance of that is that at least one of the four cases that Mr Commissioner Rowland considered (CIS/3232/2006) was not relevantly distinguishable on its facts from the present one (he also rejected the retrospectivity argument: see paragraph 39 of his judgment). Lord Hope concluded his speech by saying:

'44. In any event this point does not affect Commissioner Rowland's assessment of the issue of proportionality, which I would respectfully endorse. I think that he was right to have regard to the need for a system which imposed some degree of pressure on A8 nationals to register their employment, on the desirability of up-to-date statistics and means of verification, and on the problems that devising other possible sanctions for a failure to register or re-register might give rise to. The right that the accession treaty gives to regulate access to the labour market during the accession period carries with it the right to ensure that the terms on which access is given are adhered to. Regulation of the right of access and monitoring its exercise are proportionate and necessary consequences of making that right available. Furthermore, it does not seem to me that there is any difference in principle between the consequences of late registration, which have not been criticised as disproportionate, and those that flow from a failure to register. They are the result, in both cases, of the same basic failure. The terms on which access is given have not been adhered to, so the rights that flow from them are not available. This may come with a cost, depending on the person's circumstances. But, for the reasons that the commissioner gave and the other reasons that I have mentioned in the previous paragraphs of this opinion, I do not think that the consequences in either case when examined in their whole context are unreasonable or disproportionate.' (Emphasis supplied)

Lord Hope was there expressing a view that the consequences of a late registration (as in this case) were not disproportionate, any more than were the consequences of a failure to re-register (as in Zalewska). Lord Carswell agreed with Lord Hope's opinion, as did Lord Brown of Eaton-under-Heywood, adding supporting reasons of his own.

49. Insofar as Lord Hope addressed the proportionality of the worker registration scheme in relation to late registrations (as in this case) rather than in relation to a failure to register a change of employment (as in Zalewska), his opinion was obiter. But Judge Ward re-considered the proportionality issue in ZA in relation to cases indistinguishable from the present one and concluded, in paragraph 65, that whilst not strictly bound by Lord Hope's observations in relation to late registration cases, he could find no reason not to apply them to the appeals before him. He rejected the proportionality argument in relation to cases indistinguishable from the present one.
50. The determination of the proportionality or otherwise of a piece of legislation in relation to the aim at which the legislation is directed is a matter of evaluative assessment for the judge tasked with the determination and an appellate court should be slow to differ from his assessment unless satisfied that it has been reached by defective reasoning, omits relevant considerations, includes irrelevant considerations or is obviously wrong. In light of the approach of the majority in Zalewska's case, I should have been surprised if Judge Ward had arrived at a different conclusion on the issue of proportionality. I cannot see how the worker registration scheme can have been a proportionate one as regards its impact on a failure to apply for a certificate, yet disproportionate as regards a late failure to apply for one, when such failure might in some cases not just be a matter of days or weeks, but of months or even years. I have not been persuaded that Judge Ward's assessment was flawed and there is in my view no ground on which this court can properly adopt a view different from his.

Disposition

51. I would dismiss Mr Szpak's appeal.

Lord Justice Hughes :

52. I agree.

Lord Justice Pill :

53. I also agree.