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[1998] UKSSCSC CIS_16410_1996 (18 March 1998)

R(IS) 9/99

Mr. D. Williams CIS/16410/1996
18.3.98

Person from abroad - habitual residence – European Union nationals - whether Council Directive 68/360/EEC restricted worker's right of residence to period of employment

The claimant, a French national, arrived in Britain in July 1994. She was employed as a foreign language assistant from October 1994 to 31 May 1995. She claimed income support from 7 June 1995. The Adjudication Officer decided that she was not habitually resident in the United Kingdom at the date of claim. On appeal, the tribunal decided that the claimant had lost her right to reside under Council Directive 68/360/EEC when her employment ended and that on the facts of the case, she was also not actually resident in the United Kingdom. The claimant appealed to the Commissioner.

Held, allowing the appeal, that:

the decision that the claimant was not actually resident in the United Kingdom was wrong since this was not supported by the tribunal's findings of fact;

the tribunal's unstated assumption that the claimant could not be habitually resident combined with the failure to apply European Community law as part of the "habitual residence" test were errors of law (paragraphs 10 and 11);

whether a person remained a worker after her employment ended depended on the circumstances of her leaving, in particular her intentions and actions at the time, which could indicate whether she was still in the labour market or not (following the Commissioner's analysis of Lair v Universitat Hannover [1988] ECR 3161 in R(IS)12/98) (paragraph 14);

whether the claimant was a worker for the purposes of Council Regulation (EEC) 1612/68 was independent of any other rights she might have under Council Directive 68/360/EEC which had been implemented by the Immigration (European Economic Area) Order 1994 (SI 1994 No. 1895). The residence permit was a recognition of the claimant's rights of residence and not a formal grant of those rights. The claimant's right to reside was derived directly from her rights under Article 48 of the European Community Treaty (see Procureur du Roi v Royer [1976] ECR 497 and Roux v Belgian State [1991] ECR 1-273) and subject only to the condition that she was carrying on an economic activity within the meaning of Articles 48, 52 or 59 (paragraph 20);

as the claimant did not require a work permit, no limit could have been imposed on her under Article 12 of the 1994 Order. Furthermore, the imposition of any limit to someone with a job lasting between three and twelve months was not automatic but discretionary (paragraph 23).

After further findings of fact had been made, the Commissioner decided that the claimant was, and was to be treated as, habitually resident in the United Kingdom on the date of claim.

DECISION OF THE SOCIAL SECURITY COMMISSIONER

I allow the claimant's appeal against the decision of the Worcester social security appeal tribunal on 10 January 1996 that the claimant is not entitled to income support because she is not habitually resident in the United Kingdom. This is because the decision of the tribunal is erroneous in law. I therefore set it aside.

For the reasons given below, I substitute my own decision. This is that the claimant is, and is to be treated as, habitually resident in the United Kingdom on 7 June 1995 down to and including the date of the tribunal hearing on 10 January 1996 and thereafter until her residential arrangements change. She is therefore not a person from abroad for the purposes of the Income Support (General) Regulations 1987, and is not disentitled to income support for that reason.

The decision of the tribunal dealt only with the claimant's status as a person from abroad, and I therefore deal only with that question, as I am not able to consider any other aspect of the claimant's claim for income support on 7 June 1995. The claimant's entitlement to income support from that claim should therefore be determined by an adjudication officer in the light of this decision. If the claimant disagrees with that decision, she has a separate right of appeal from it.

The claim

The claimant, who is a French citizen and passport holder and a European citizen, came to Britain in July 1994. She worked in temporary employment obtained through an agency in Sussex, then as a foreign language assistant at a school in Worcestershire. That job lasted from October 1994 to 31 May 1995. When it ended, she claimed unemployment benefit with effect from 7 June 1995. She was not entitled to that benefit because she had not paid enough contributions (in the United Kingdom or France), so her claim was taken as a claim for income support.

Her claim for income support was refused under the rule (which came into effect in August 1994) that a claimant for income support must be, or be treated as being, habitually resident in the United Kingdom at the date of claim. Otherwise, a claimant is treated as a "person from abroad" and is not normally entitled to income support. The "habitual residence test" is laid down by regulation 21(3) of the Income Support (General) Regulations 1987, second definition of "person from abroad". This included in the definition of "person from abroad" at the date of this claim:

"a claimant who is not habitually resident in the United Kingdom"

Because the claimant comes from another European Union member state, her entitlement to income support is also judged on a second separate ground. This is because a proviso to the rule about habitual residence provides that:

"no claimant shall be treated as not habitually resident in the United Kingdom who is —

(a) a worker for the purposes of Council Regulation (EEC) No 1612/68 or (EEC) No. 1251/70 or a person with a right to reside in the United Kingdom pursuant to Council Directive No. 68/360/EEC or No. 73/148/EEC......"

The claimant's claim was considered, but refused, by an adjudication officer on both grounds. The claimant appealed this decision to the tribunal. The tribunal confirmed the refusal, again on both grounds. Its findings and reasons are brief:

Findings: "The appellant made a claim to income support on 7 June 1995. She is a French national and has been living in the United Kingdom for more than one year. She has returned to France on a number of occasions, her family is still in that country she holds a return ticket and has possessions in France."

Reasons: "The Regulation concerning EEC Nationals are complicated but the majority do not apply to the facts of this case. The appellant does not satisfy the habitual residents tests as she had the right to reside here only until 31 May 1995 and therefore has lost her right under Directive 68/360. On the facts of the case we also find that she is not actually resident in this country as she still visits France regularly and her family is there. She also still holds a return ticket. Accordingly, the appeal cannot be allowed."

The claimant appealed against the tribunal decision because, to quote her last submission, "I always felt that the original decision was unfair as I am a European citizen and supposedly have the right to move and work freely within the EC."

Actual habitual residence

I deal first with the test of actual habitual residence. In its reasons, the tribunal states "On the facts of the case we also find that she is not actually resident in this country...". In its findings, however, the tribunal finds "She is a French national and has been living here in the United Kingdom for more than a year." The unstated, but important, assumption in this reasoning is that because she was not actually resident here, she could not be habitually resident here. The tribunal, I assume for that reason, made no finding of fact on the claimant's habitual residence. This is a double error on the part of the tribunal.

On the tribunal's own findings, the claimant was clearly actually resident in the United Kingdom at the time. This is because she had been living and working here for about a year with only brief visits to France, and her stay here was a voluntary stay and not just an overextended holiday or other transient visit on the way to some other place. Further, she had rented accommodation here. It may be that the claimant was also actually resident in France - dual actual residence is perfectly possible - but that does not prevent her United Kingdom residence. The claimant also stated, though the tribunal did not find, that she was paying income tax and social security contributions here. Those payments, in cases such as this, are further evidence suggesting that the claimant is resident. Noting all these factors, there is no basis on which a tribunal considering all the evidence could find that the claimant was not actually resident here, and the tribunal's conclusion on this point is therefore one that is wrong in law. It may have been that the tribunal could have concluded on those facts that the claimant was not habitually resident in the United Kingdom, but it did not consider this. That is its second error.

Entitlement under EC law

Separately from actual habitual residence, the claimant has entitlements as a French national, and therefore a European citizen. (Article 8 of the EC Treaty provides that all nationals of member states of the EU are citizens of the EU). The tribunal was required to consider EC law as part of the "habitual residence test". The wording in issue is in paragraph 6 above.

I sympathise with the tribunal's comment that "The Regulation concerning EEC nationals are complicated", but have to note that an EC Regulation such as Regulation 1612/68 is automatically part of the law of the United Kingdom and has to be applied in the same way as any other United Kingdom law. In this case, however, the tribunal did not deal with the regulation, as it did not expressly deal with the question whether the claimant was a worker for those purposes at the relevant time. It assumed, without making any findings or giving any reasons, that she was not. This was a further error in law, as this was a matter the tribunal should have considered. But I do have an advantage that the tribunal did not, that Commissioners have now considered this difficult area of law in some detail.

The question whether the claimant was a worker at the relevant time is analogous to the claim considered by Mr. Commissioner Mesher in his decision in CIS/12909/1996 (*59/97) [R(IS) 12/98]. That case also concerned a foreign national who had ended a period of employment in this country and then claimed benefit. The decision includes a careful analysis of the relevant case law that I accept and adopt for this decision, and I see no reason to repeat it here.

In particular, that decision quotes extensively from the decision of the European Court of Justice in Lair v Universitat Hannover (Case 39/86) [1988] ECR 3161. Lair concerned someone who clearly had been a worker, but then ceased to have a job. In that case, the claimant was a French migrant worker who had left employment in Germany voluntarily to take up university studies but was refused a maintenance grant to undertake those studies. In the opinion of the Court the issue was whether the individual could continue to be a worker after the work finished. I agree with Mr. Commissioner Mesher that the test whether someone remains a "worker" for the purposes of the relevant EC law laid down in that case, as applied to this, can be summarised as he states it:

"The question is whether the circumstances of the leaving, and in particular the person's intentions and actions at the time, indicate that the person was still in the labour market or not." (CIS/12909/1996 [R(IS) 12/98], paragraph 21).

In my view this is the test to be applied to this claimant. I add that the claimant had, at the time of her claim, already sought and obtained two genuine and effective jobs in the United Kingdom, and had then sought further employment. She was not therefore to be judged only as a work-seeker.

The relevance of Council Directive 68/360

The test whether the claimant is a worker for the purposes of Regulation 1612/68 is independent of any other rights that a claimant might have under Directive 68/360. But in its decision the tribunal seems to have assumed that any rights under Regulation 1612/68 are subject to the provisions of Directive 68/360. The tribunal's reasoning on this point (quoted in paragraph 7 above) is explained by the chairman's note of evidence, which records:

" [The presenting officer] referred to paragraph 6.29 of the submission which maintained that the appellant lost her right to reside in this country habitually because she had been in the country for more than one year and the right had ceased on 31 May 1995."

The adjudication officer's submission at paragraph 6.29 reads:

"[The claimant] worked for an employer in the United Kingdom from October 1994 to 31 June 1995. I submit that under Directive 68/360 she had the right to reside here only until 31 June 1995. Having lost this right, [the claimant] cannot be treated as being habitually resident in the United Kingdom under that provision. [The claimant's] employment was for more than 3 months and less than one year and therefore her rights of residence were limited to the period of employment"

The full title of Directive 68/360 (the Directive) is Council Directive of 15 October 1968 on the abolition of restrictions of movement and residence within the Community for workers of Member States and their families (OJ Sp Ed 1968 11, p 485). The purpose of the Directive, as stated in its preamble, is:

"Whereas Council Regulation (EEC) No. 1612/68 fixed the provisions governing freedom of movement for workers within the Community; whereas consequently, measures should be adopted for the abolition of restrictions which still exist concerning movement and residence within the Community, which conform to the rights and privileges accorded by the said Regulation to nationals of any Member State who move in order to pursue activities as employed persons and to members of their families;

Whereas the rules applicable to residence should, as far as possible, bring the position of workers from other Member States and members of their families into line with that of nationals..."

The Directive was adopted by the European Council on the same day as Regulation 1612/68, to assist in implementing it. It is clear from this and from both the title and the preamble that the purpose of the Directive is to abolish existing restrictions preventing free movement in particular by means of residence permits for non-national workers and for members of their families. In principle, therefore, it is to be expected that the terms of the Directive will assist the free movement of workers rather than restrict it.

Article 1 of Directive 68/360 provides:

"Member states shall, acting as provided in this Directive, abolish restrictions on the movement and residence of nationals of the said States and of members of their families to whom Regulation (EEC) No. 1612/68 applies." (Regulation 1612/68 applies to any national of a Member State: Article 1 paragraph 1 of the Regulation).

Article 4 provides, in part:

"1. Member States shall grant the right of residence in their territory to the persons referred to in Art. 1 who are able to produce the documents listed in paragraph 3... (For a worker, paragraph 3 requires only the production of a passport or identity card used to enter the territory of the state and conformation of employment.)

Article 6 provides, in part:

"3. Where a worker is employed for a period exceeding three months but not exceeding a year in the service of an employer in the host state or in the employ of a person providing services, the host Member State shall issue him a temporary residence permit, the validity of which may be limited to the expected period of the employment."

Article 7 provides, in part:

"1. A valid residence permit may not be withdrawn from a worker solely on the ground that he is no longer in employment, either because he is temporarily incapable of work as a result of illness or accident, or because he is involuntarily unemployed, this being duly confirmed by the competent employment office."

The Directive is implemented into the law of the United Kingdom, at least so far as relevant in this case, by the Immigration (European Economic Area) Order 1994 (the 1994 Order)(1994 Statutory Instrument No. 1895). This applies to nationals of all EU states.

Article 4 of the 1994 Order provides, in part:

"(1) A qualified person shall be entitled to reside in the United Kingdom, without the requirement for leave to remain under the 1971 Act, for as long as he remains a qualified person."

Article 6 provides, in part:

"(l) In this Order "qualified person" means an EEA national who undertakes in the United Kingdom the activities of -

(a) a worker; ...

(2) For the purposes of paragraph (1) -

(a) a "worker" means a worker within the meaning of Article 48 of the EC Treaty; ...

Article 7 provides, in part:

"(1) A worker does not cease to be a qualified person on the ground of unemployment if —

(a) he is temporarily incapable of work as a result of illness or accident, or

(b) he is involuntarily unemployed and that fact is duly recorded by the relevant employment office."

Article 12 provides, in part:

"(2) In the case of a worker who is to be employed in the United Kingdom for less than twelve months but more than three months, the validity of the residence permit may be limited to the duration of the employment."

The claimant states that she was told that she did not need a residence permit. The tribunal did not enquire into this issue, but I see no reason to question that statement. For the purposes of the Directive and 1994 Order a residence permit is only a recognition of the claimant's rights of residence, not a formal grant of those rights. The provisions summarised above show that, at least at first sight, the claimant was a qualified person. She was therefore entitled to the right to reside in the United Kingdom with or without a permit under article 4 of the 1994 Order (implementing article 4 of the Directive) if she was a worker for the purposes of Article 48 of the EC Treaty.

It is clear law, in applying both the Directive and the Order, that the claimant's right to reside is not derived from the Directive (or the Order) but directly from her rights under Article 48 of the EC Treaty. This was established by the European Court of Justice in Procureur du Roi v Royer, Case 48/75, [l976] ECR 497, and has been confirmed by the Court in a series of subsequent decisions. See also the judgment of the Court in Roux v Belgian State, Case C-363/89, [1991] 1 - 273:

"It should be pointed out that the court has already held on several occasions that the right of residence is a right conferred directly by the Treaty subject only to the condition that the person concerned is carrying on an economic activity within the meaning of articles 48, 52 or 59 of the Treaty" (paragraph 9).

It follows, as the "habitual residence test" itself indicates, that the claimant's right of residence as a worker is separate from any right of residence under the Directive. The Directive merely facilitates her right to reside in the United Kingdom, as does the 1994 Order, as least while she is a "worker" for the purposes of article 48 of the EC Treaty. A right to reside will only arise under the Directive for someone who is not a worker, for example, a member of a worker's family. Further, the Directive does not itself impose any conditions on the right of a worker to reside in another member state. Consistently with this, the 1994 Order does not do this in the case of a worker residing in the United Kingdom. It follows that if the claimant was a worker at the date of claim, the Directive is not relevant to her right to reside in the United Kingdom.

The claimant's right of residence might be limited by article 7 of the 1994 Order (reflecting article 7 of the Directive) after her employment ceased, provided that it was done consistently with the principles of European law and the European Court's judgments. This might be the case if it could be shown that a claimant had ceased to be active in the labour market. No evidence of this was offered in this case. Further, if a claimant has a residence permit, it might be limited by article 12, paragraph 2, of the 1994 Order (reflecting article 6, paragraph 3, of the Directive), provided again that this was consistent with the principles of European law and the European Court's judgments. I need explore these issues no further in this case because neither provision was called in question in this case.

Insofar as I can determine, the claimant did not have a work permit and did not need to have one. If she did not have a permit and did not need one, it follows that no limit could have been imposed on the claimant under Part 12 of the 1994 Order. Further, contrary to the submission to the tribunal, any limit applying to someone with a job lasting between three and twelve months under article 12 of the 1994 Order is not automatic. Both the Directive and the 1994 Order make it clear that any limit is a matter of discretion. The suggestion from the adjudication officer that there is some sort of automatic limit here has no basis in the 1994 Order or the European law. Nor was any question raised about whether the claimant should be regarded as being voluntarily or involuntarily unemployed. If the claimant lost her status as a worker, then the question might arise whether she had any other rights, but I do not need to consider this further.

Summarising the position under European law as it applies to the claimant, the residence rights of the claimant are to be judged initially on her status as a worker under Regulation 1612/68. This depends on the test (set out at paragraph 14) whether she is active in the labour market. If she is a worker, Directive 68/360 is not relevant to her claim. It may be that after her work ceased, the claimant at some point ceases to be a worker. Directive 68/360 may be relevant in establishing whether she ceases to be a worker, and any rights she has after she ceases to be a worker. That is something into which a tribunal would have to enquire if the point arises. In particular, it would have to enquire whether there was a residence permit, and if so, on what terms it was issued. The provisions of the Directive (and 1994 Order) about whether the claimant is to be regarded as voluntarily unemployed takes us back to the question (discussed in paragraph 14 above) whether the claimant is or is not in the labour market.

Decision

For the reasons given above, the tribunal's decision is wrong in law and I set it aside. Having done so, I have the power to make findings, and give the decision I consider appropriate, if it is expedient to do so: section 23 of the Social Security Administration Act 1992. I find it expedient to do so in this case because of further evidence now available to me, and which I can consider, that enables the question to be answered by me. It is expedient that I should do so rather than cause further delay and cost by a reference to another tribunal.

I find as fact the statements in paragraph 4 above, and further find the following facts from the documents before me, as they are undisputed. The claimant ended her work in Worcestershire at the end of May 1995. She "signed on" for unemployment benefit, and then claimed income support the following week, the income support claim form being accepted from 7 June when her claim for unemployment benefit was made. She then went to France to see her parents, originally for a week, on 15 June 1995 and returned to the United Kingdom on 1 July 1995.

I further find that on her return she was interviewed and completed a habitual residence test questionnaire. I accept her answers to the questionnaire as truthful. She stated that she returned to "live in England", and that her trip to France was to visit her parents. She considered her move to the United Kingdom to be permanent. She was single, without a partner, and aged 22. She had a good command of English. Her family lived in France, and she paid several visits to France in the year from June 1994. However, she had accommodation in the United Kingdom, had a bank account here, had been paying income tax and social security contributions here and, by June 1995, had had two jobs here. She was looking for any type of work, but did not have qualifications for a particular kind of work (save, I add, for her linguistic ability). Asked about other sources of income, she replied "Have to find a job, do not have savings or anything else to live off." On that basis I find that she was active in the labour market at the date of claim and, insofar as it was relevant, the local employment services were aware of this.

She further states, and I accept, that she had by February 1996 obtained first temporary and then permanent work, and was living, in Hereford. In January 1998, she further confirmed that she was still working and living in Hereford and her job there is permanent.

The facts that the tribunal considered significant in finding that she was not actually resident here were that she still visited France regularly, that her family were in France, that she had left some possessions in France (though their importance to her had not been established), and that she had a return ticket. Given the fare structures and the ease of travel between Britain and France, I find that the last factor is of no significance whatsoever to the claimant's status. The other factors indicate a continuing link with her family, but one that many younger people retain when leaving "home" permanently regardless of where "home" is and regardless of their own new location. Those factors are, as I have stated above, not decisive of her actual residence here (save possibly for the location of her possessions) nor of her actual habitual residence.

The test of actual habitual residence has now been confirmed by the Court of Appeal in Nessa v Chief Adjudication Officer (5 February 1998, on appeal from CIS/2326/1995). While that case is to be heard by the House of Lords, the issue here is sufficiently clear that, in my view, no problem arises in applying the established law. This is that the test of habitual residence is one of fact. It requires residence here that is voluntary, for a settled purpose and, subject to possible questions not relevant here, for an appreciable period of residence. I find that the claimant had been voluntarily resident in the United Kingdom for almost a year as at 7 June 1995, that she had a settled intention of staying here on a permanent basis and that accordingly she was habitually resident here on that date.

I further find that the claimant had been active in the labour market in the United Kingdom since her arrival in 1994. She had reported her unemployment to the local employment office within a week of her job ending at the end of May 1995, and she was looking for any job. Her trip to France in June 1995 was a visit to see the family and was not, and was never intended to be, a return to France. She returned here to find work, and she did find work. On that basis, I find that she was active in the labour market here on 7 June 1995. This is confirmed by her finding temporary work by September 1995, and a permanent job by October 1995. Applying the test set out in paragraph 14 above, I find that she was a "worker" for the purposes of Regulation 1612/68, and therefore for the purposes of the "habitual residence test", at that date. Directive 68/360 is therefore not relevant to her status in this case.

The claimant therefore satisfies the test of actual habitual residence on 7 June 1995. In addition, she is entitled to be treated as habitually resident here because she was a worker for the purposes of Regulation 1612/68 at that date. I further find that she remained both a worker and actually habitually resident until at least the date of the tribunal hearing. I therefore give the decision in paragraph 2.

The claimant's entitlement to income support is therefore not prevented by her habitual residence, and is to be determined as set out in paragraph 3. However, the adjudication officer might find, in determining the claimant's entitlement to income support from 7 June 1995, that her trip to France from 15 June 1995 is relevant to her claim, particularly her entitlement to income support while she was in France. This is because additional conditions of entitlement apply to a claimant for income support who is absent from Britain, by regulation 4 of the Income Support (General) Regulations 1987. Given the claimant's present position in permanent fulltime employment in Britain, I assume from her most recent letter that the issue is now one of principle. That has been established by this decision and I hope the outstanding issues may be swiftly settled on that basis.

Date: 18 March 1998 (signed) Mr. D. Williams
Commissioner