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[1990] UKSSCSC CS_67_1990 (19 December 1990)

R(S) 2/93

Mr. A. T. Hoolahan QC CS/67/1990

19.12.90

Presence condition - German national visiting Germany - whether application of presence condition amounts to discrimination on grounds of nationality contrary to Article 3.1 of Council Regulation (EEC) 1408/71

The claimant was born in East Germany and moved with her parents to West Germany in about 1951. In 1964 she married a British national and acquired British nationality, but also retained her German nationality. Subsequently she came with her husband to live in Great Britain. In 1989 she retired on grounds of ill-health. Sickness benefit was awarded from 1 May 1989 to 11 November 1989. On 6 August 1989 she went to West Germany to see her home, relatives and friends, returning to Great Britain on 9 September 1989. The adjudication officer disqualified the claimant under section 82(5)(a) of the Social Security Act 1975 for receiving sickness benefit from 7 August 1989 to 8 September 1989 because she was absent from Great Britain and the Secretary of State had not certified (pursuant to regulation 2(1)(a) of the Social Security Benefit (Persons Abroad) Regulations) that it was consistent with the proper administration of the Act that the claimant should not be disqualified. The claimant appealed to the social security appeal tribunal who dismissed the appeal.

The claimant's appeal to the Commissioner, with the leave of the tribunal chairman, was on the grounds that the decision to disqualify constituted indirect discrimination on the grounds of nationality, contrary to Article 7(1) of the EEC Treaty and Article 3(1) of Council Regulation (EEC) No. 1408/71.

Held that:

the principles applied to indirect discrimination on grounds of sex can be applied to indirect discrimination on the grounds of nationality (para. 16);

in deciding whether there is indirect discrimination the pool of comparison is the class of persons who are in receipt of sickness benefit and who are absent from Great Britain but do not come within regulation 2(1) of the Persons Abroad Regulations (para. 16);

section 82(5)(a) of the Social Security Act 1975 and regulation 2(1) of the Persons Abroad Regulations impose no discrimination, direct or indirect, on the grounds of nationality contrary to Article 3.1 of Council Regulation (EEC) No 1408/71 or of Article 7.1 of the EEC Treaty; in particular they do not create a disproportionate impact upon non British EEC nationals compared with British nationals (para. 16);

the appeal tribunal's decision was set aside, because they failed to apply EEC law but the Commissioner's decision was the same as that given by the tribunal (para. 17).

DECISION OF THE SOCIAL SECURITY COMMISSIONER

The decision of the social security appeal tribunal dated 30 January 1990 was based on reasons which were erroneous in law. Accordingly, I allow the appeal by the claimant and set aside the appeal tribunal's decision. I substitute my own decision by virtue of section 101(5)(a)(i) of the Social Security Act 1975. My decision is that the claimant was disqualified for receiving sickness benefit from 7 August 1989 to 8 September 1989 both dates included.

The claimant has been incapable of work since 1 May 1989 and the adjudication officer awarded sickness benefit from that date until 11 November 1989. By a decision issued on 26 July 1989 the adjudication officer reviewed the decision of the adjudication officer awarding sickness benefit because the claimant was going abroad, and his revised decision was that the claimant was disqualified for receiving sickness benefit from 7 August 1989 to 8 September 1989 (both dates included) because the claimant was absent from Great Britain and the period had not been certified by the Secretary of State as a period for which it was consistent with the proper administration of the Social Security Act 1975 that the claimant should not be disqualified. The claimant appealed. On 30 January 1990 the social security appeal tribunal dismissed the appeal. The claimant appeals with the leave of the tribunal chairman.

On 20 November 1990 I held an oral hearing. The claimant was not present but was represented by her son. The adjudication officer was represented by Mr. Nicholas Paines of Counsel instructed by Ms. P. Cohan. I am grateful to them for their submissions.

The law

Section 14(l)(b) and (2)(a) of the Social Security Act 1975 provide that a person who is under pensionable age and satisfies the contribution conditions for sickness benefit shall be entitled to sickness benefit in respect of any day of incapacity for work which forms part of a period of interruption of employment. Section 82(5)(a) of that Act provides:

"(5) Except where regulations otherwise provide, a person shall be disqualified for receiving any benefit, and an increase of benefit shall not be payable in respect of any person as the beneficiary's wife or husband, for any period during which the person-

a) is absent from Great Britain; ..."

Regulation 2(l) of the Social Security Benefit (Persons Abroad) Regulations provides:

"2. (1) A person shall not be disqualified for receiving sickness benefit . . by reason of being temporarily absent from Great Britain for any day if-

(a) the Secretary of State has certified that it is consistent with the proper administration of the Act that, subject to the satisfaction of one of the conditions in sub-paragraph (b), (bb), (c) and (d) below, the disqualification under section 82(5)(a) of the Act should not apply, and

(b) the absence is for the specific purpose of being treated for incapacity which commenced before he left Great Britain, or

(bb) in the case of sickness benefit ..., the incapacity for work is the result of a personal injury of a kind mentioned in section 50(1) of the Act, and the absence is for the specific purpose of receiving treatment which is appropriate to that injury, or

(c) on the day on which the absence began he was, and had for the past 6 months continuously been, incapable of work and on the day for which the benefit is claimed he has remained continuously so incapable since the absence began, or

(d) [not relevant]."

On 26 July 1989 the Secretary of State refused to certify that it was consistent with the proper administration of the Act that the disqualification for receiving sickness benefit under section 82(5)(a) of the Act should not apply in respect of the period from 7 August 1989 to 8 September 1989. The claimant failed to satisfy, therefore, regulation 2(a) of the Persons Abroad Regulations. She was unable to contend, therefore, that she should not be disqualified by reason of being temporarily absent from Great Britain. Further and in any event, even if the Secretary of State had given his certificate under paragraph (a) of regulation 2(1), it was common ground that the claimant could not satisfy any of the remaining paragraphs of that regulation. In other words, she could not in any event contend that she was not to be disqualified by reason of being temporarily absent from Great Britain. It was the claimant's case, however, that her disqualification for receiving sickness benefit while absent from Great Britain was in contravention of the European Economic Community Law.

Background

At the oral hearing the claimant's son stated that his mother the claimant had been born in East Germany and had moved with her parents to West Germany in about 1951. His mother worked in West Germany and obtained a West German passport. In 1964 she married in West Germany a British national and thereby acquired British nationality. She retained her German nationality. The claimant came with her husband to England after the marriage and lived in Suffolk. The claimant studied in England and graduated at the University of East Anglia. In 1978 she became a teacher in the employ of a local authority. In 1989 she retired on the grounds of ill health. She was paid sickness benefit. On 11 July 1989 she signed the form at page T1 of the case papers in which she stated that she was going to West Germany, leaving the United Kingdom on 6 August 1989 and returning on 9 September 1989, and that her reason for leaving was "to see home, country, relatives, and friends". As I have said, on 26 July 1989 the Secretary of State refused to give his certificate for the purposes of regulation 2(l)(a) of the Persons Abroad Regulations.

Before the appeal tribunal the claimant's son produced what the appeal tribunal described as "cogent and well set out arguments" and expressed their appreciation to him. Having read his submissions I endorse those observations. However, they decided in form AT3, box 4, paragraph (4) that the case should be decided under domestic law alone and they declined to apply European Economic Community Law. It is unnecessary for me to set out the clear reasons given by the appeal tribunal. There is no doubt that they gave the matter very careful consideration. However, Mr. Paines at the oral hearing before me conceded that their decision must be set aside by reason of their failure to apply EEC law. He submitted, however, that the application of EEC law will still lead to the dismissal of the appeal.

The claimant's son submitted that the decision to disqualify the claimant for receiving sickness benefit constituted indirect discrimination on the ground of nationality. He relied upon Article 7(1) of the EEC Treaty and Article 3(1) of Regulation (EEC) No. 1408/71.

Article 7(l) of the Treaty provides:

"Within the scope of application of this Treaty, and without prejudice to any special provision contained therein; any discrimination on grounds of nationality shall be prohibited."

Article 3(1) of Regulation (EEC) No. 1408/71 provides:

"1. Subject to the special provisions of this Regulation, persons resident in the territory of one of the Member States to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of that State."

There was no dispute that that Article applied to the claimant. She was an "employed person", that is to say she was insured under a sickness benefit social security scheme within Article 1(a)(i) and Article 4.1. and she was, therefore, a person covered by Article 2, that is to say the regulation applied to her.

The claimant's son submitted that the effect of Article 3(1) was that a non-British national who was a national of a Member State of the EEC must be treated equally with a British national in receipt of sickness benefit; that the claimant had gone abroad to West Germany to visit relatives and friends; that a "foreign" national (i.e. a national within the European Economic Community) was more likely to have friends and relatives abroad than a British national whose relatives and friends will be within Great Britain. He submitted that the protected minority group were non British nationals who were in receipt of the same benefit as British nationals but they were being penalised under English social security law for having friends and relatives abroad. He submitted that the effect of section 82(5)(a) was that foreign nationals were disadvantaged if visiting relatives abroad and that this was a restriction of their free movement. The application of section 82(5)(a) and the regulations constituted, he submitted, a violation of Article 3(1) in disqualifying the claimant for receiving sickness benefit while visiting relatives and friends in Germany. That constituted an indirect discrimination in that it disadvantaged foreign nationals who, as I have said, were more likely than British nationals to have relatives and friends abroad. He further submitted that if there were any doubt as to whether or not Article 3.1 applied to this factual situation, I should refer the matter to the European Court under Article 177 for a preliminary opinion.

The claimant's son submitted that if Article 3.1. did not apply, Article 7 of the Treaty was relevant. Mr. Paines accepted that Article 7.1 could be relied upon against the State and that discrimination included indirect discrimination that the scope was co-extensive with Article 3(1). It was clear that the claimant's son was raising the same point under Article 7 as he raised under Article 3.1. He also sought to raise a further argument under "Equality under Community Law" but, again, his point was the same point as he raised under Article 3.1.

Mr. Paines accepted that the claimant was an "employed person" within Article 1 of Regulation (EEC) No. 1408/71; that she was covered by Article 2.1; that the benefit fell within Article 4.1 (a); and that the rule against discrimination applied. But he submitted that there had been no infringement of that rule. He submitted that the rule against discrimination meant that foreign nationals were to be treated no better and no worse than British nationals, but that there was no rule that that entitled a person to benefits at all times. The rule meant simply that EEC nationals must be dealt with even handedly. The claimant's failure to comply with regulation 2(1)(b), (bb) and (c) of the Persons Abroad Regulations had nothing to do with the claimant's nationality. In considering indirect discrimination, the "pool" of comparison was the recipients of sickness benefit wishing to go abroad and within that "pool" one must compare British nationals and other nationals. He submitted that it was wrong to take as the pool of comparison sickness benefit recipients wishing to visit relatives. The requirement in section 82(5)(a) and in regulation 2(1) of the Persons Abroad Regulations was absence from Great Britain and not absence to visit relatives. He pointed out that there were many reasons why a person in receipt of sickness benefit may wish to go abroad as he or she may wish to seek the sun or the sea or the mountains and it was difficult to see why the rule operated harshly against non British nationals.

In reply to the question of indirect discrimination, the claimant's son submitted that the "pool" was of persons in receipt of sickness benefit and within that "pool" one should compare British nationals and EEC nationals.

Mr. Paines also referred to Article 22 of Regulation (EEC) No. 1408/71 and submitted that nothing in that Article required cash benefits to continue to be paid during her stay abroad and that section 82(5)(a) was not inconsistent with Article 22 and did nothing prohibited by Article 22. The claimant's son, on the other hand, submitted that Article 22 was inconsistent with section 82(5)(a) and that it did not legitimate section 82(5)(a). I accept Mr. Paines' submissions in relation to Article 22 but, in view of my decision, I do not need to consider that Article further.

Section 82(5)(a) disqualifies for receiving sickness benefit any person who "is absent from Great Britain". Regulation 2(1) of the Person's Abroad Regulations modifies the full impact of that provision and provides that a person shall not be disqualified for receiving sickness benefit if he or she is "temporarily absent from Great Britain" and if the Secretary of State has given his certificate and one or other of paragraphs (b), (bb) and (c) applies. It seems to me, therefore, that we are considering the category or class of persons who are in receipt of sickness benefit and who are absent from Great Britain but do not come within regulation 2(1) of the Persons Abroad Regulations. That category or class constitutes the "pool". As Mr. Paines submitted, a person in receipt of sickness benefit may go abroad for a variety of reasons. If the person goes abroad for the purpose of receiving treatment, he of course, will not lose the sickness benefit: regulation 2(b) of the Persons Abroad Regulations. But the person in receipt of sickness benefit may go abroad to sit in the sun or to rest in the mountains or for any other form of recuperative holiday, or indeed, for visiting friends or relatives. It seems to me that both British nationals and other EEC nationals are treated even handedly. In my judgment, it is wrong to take as the category or class or "pool", persons in receipt of sickness benefit who wish to visit relatives or friends abroad. That is an additional restriction to the "pool" which is not warranted by the statute or regulations. In my judgment, therefore, the statute and regulations impose no discrimination, direct or indirect, on the ground of nationality and are not in violation of Article 3.1 of Regulation (EEC) No. 1408/71 or of Article 7.1 of the Treaty. As I understand the position, to constitute indirect discrimination there must be a disproportionate impact on foreign nationals (as above defined) which cannot be objectively justified: see the decision of Schiemann J in R. v. Secretary of State for Education ex parte Shaffer [1987] 1 RLR 53 (the principles were there applied to indirect discrimination on the ground of sex but they must apply equally to indirect discrimination on the ground of nationality). In my judgment, the statute and regulations do not create a disproportionate impact upon non British EEC nationals compared with British nationals. For those reasons I allow the appeal.

Although I allow the appeal I substitute my own decision which is as set out in paragraph 1 herein. My decision is the same as was the decision of the social security appeal tribunal but for the reasons that I have given.

Date: 19 December 1990 (signed) Mr. A. T. Hoolahan QC

Commissioner