IN THE UPPER TRIBUNAL Case No  CJSA/3172/2012

ADMINISTRATIVE APPEALS CHAMBER

 

Before UPPER TRIBUNAL JUDGE WARD

 

Attendances:

 

For the Appellant: Mr Adam Weiss, the AIRE Centre

 

For the Respondent Mr James Cornwell, Counsel, instructed by Solicitor, Department of Work and Pensions

 

Decision:  I decline to make any reference to the Court of Justice of the European Union.  The appeal fails in the result.  The decision of the First-tier Tribunal sitting at King’s Lynn on 1 May 2012 under reference SC141/1100322 did  involve the making of errors of law and is set aside but having made further findings of fact I re-make it in the same terms.

 

REASONS FOR DECISION

 

1. The facts of this case are relatively straightforward.  The legal issues it gives rise to are numerous and difficult.  They may be summarised thus:

 

A. Is the derogation from Article 7(3) of Directive 2004/38/EC (“the Citizenship Directive”) made by the now repealed Accession (Immigration and Worker Registration) Regulations 2004/1219 (“the 2004 Regulations”) lawful?  Whether as part of this or as a self-contained point, was the impact upon the claimant disproportionate?

 

B. If the answer to issue A is or may be no, could the claimant in any event bring himself within Article 7(3) so as to establish that, at the time his claim, he was a “worker” in EU law who, though not then working, had retained that status so as to be able to rely on Article 7 of Regulation 1612/68 so as to claim parity with national workers?

 

C. If he was not a person with retained worker status, was he able – in combination with the admittedly limited periods when he had worked in employment covered by a worker registration certificate under the 2004 Regulations - to point to sufficient resources to meet that limb of the test of self-sufficiency in Article 7(1)(b) of the Citizenship Directive over the five year period leading up to the claim for jobseekers allowance (“JSA”), which, if D below were also to be satisfied, would mean that he had a right of permanent residence under Article 16 of the Citizenship Directive?  For this, he sought to rely on the fact that he had not been dependent on social assistance during that five year period, but had managed on the money he had been able to earn.

 

D. Over the same five year period and with the same end in view, could he assert that he had comprehensive sickness insurance by virtue of such rights as he possessed to treatment under the National Health Service?

 

E. Does the decision in C-140/12 Brey operate to confer any ability on the claimant to claim successfully which he would not otherwise have had?

 

F. Is the right to reside test unlawful on the grounds that it is unlawfully discriminatory on the grounds of nationality?

 

G. Is the right to reside test unlawful on the ground that it is incompatible with Article 70(4) of Regulation 883/2004?

 

2. The claimant is a national of Lithuania.  He is single and does not have children.  He came to the UK in May 2005, following the accession of Lithuania and the other so-called A8 states to the EU on 1 May 2004.  Between May 2005 and December 2007 he worked (through agencies) for a poultry business and then a sheet-metal business. Though he clearly worked considerable amounts of time in those jobs, it is not possible to say that he always did so to the extent of a full conventional working week.  It is said that between January 2008 and August 2009 he worked in the building trade, on a self-employed basis, but there is no evidence as to this and I make no finding that he did.  In the period from 29 May 2009 to week ending 28 November 2009 he worked as a (horticultural) nursery worker.  A worker registration certificate was issued for that employment on 17 July 2009 with effect from May 2009.  His jobs were manual jobs, at low rates of pay, at least sometimes temporary in nature and/or for fluctuating hours.  On 7 January 2010 he sought to claim JSA.  That claim failed on the ground that he did not have the right to reside.  The decision, taken on 28 February 2010, was not appealed against.

 

3. His last employment that is material for present purposes was with Moore & Burrell Ltd (“M&B”) and commenced on 13 April 2010.  He was issued with a worker registration certificate on 14 July 2010, taking effect from the date of issue.  It is not in dispute that he failed at any point to complete the 12 month period of registration which would have taken him outside the controls imposed by the 2004 Regulations.   His statement of particulars of employment, not before the First-tier Tribunal (“FtT”) but subsequently provided to the Upper Tribunal, indicates that his job title was “general worker”.  His terms and conditions, which reflect M&B’s business as a labour supplier to the horticultural industry, inter alia contained a right for the employer to lay him off without pay if there was no work available.  It appears though that before the cessation of work which ultimately led to a further claim for JSA being made in September 2010, there had been a fair amount of work for the claimant to do: between the start of the tax year (6 April 2010) and 29 July 2010 (his last payslip) he had earned £3165 gross.  Using his ”Pay Rate Normal” of £5.81, this equates to 545 hours in a period of roughly 16 weeks, or on average 34 hours a week.  Other payslips suggest that weeks in which he was working the number of hours worked ranged between 20 and 40 hours.  It is evident from this and from the statement of particulars that it is probable there were some days when there was no work available. 

 

4. The claimant was given a form P45 stating his leaving date as 20 July 2010, but the form itself is dated 20 September 2010 and thus could not have been given to him before then.  (There is, curiously, part of what appears to be a further P45 in the bundle, giving a leaving date of 1 September 2010. The identity of the employer on this form is not shown.  The “employer reference” on the document is different.  No reliance has been placed upon the second P45 before me and, whatever its provenance, Mr Weiss does not submit that the claimant was doing any work – whether for M&B or anyone else – between 20 July 2010 and 1 September 2010.)

 

5. It is said (but has never been fully properly evidenced) that the understanding of the claimant and of the proprietors of M&B was that, should more work have become available for the claimant, he would be contacted. They were said to be unable to recall why a P45 was issued.  The claimant’s evidence is that as soon as he realised that no work would be forthcoming from M&B he registered with the jobcentre.  I accept this in the light of the lay-off clause in the statement of terms and conditions, the claimant’s apparent ability to ride through fluctuations in his work in the period 2005-2010 without making any claim for benefit until January 2010 and the fact that the P45 issued by M&B which made clear that his services were no longer required was not sent him until later.  (The second P45 likewise could not have been sent to the claimant in the period between his last work for M&B on 20 July 2010 and his next claim for JSA on 3 September 2010.)

 

6. When he made that claim, on 3 September he approved the requisite customer statement recording his telephone claim and completed the relevant habitual residence forms.  Arrangements were put in place for him to sign on, reflected in a completed form ES40JP, and there is no reason to suppose that he did not comply.  He took a number of unsuccessful steps to look for work in the period through to February 2011 on a somewhat intermittent basis.  There is no suggestion that the jobcentre considered his efforts in this regard to be insufficient.  The September 2010 claim was eventually rejected on 13 January 2011 following delays in the production of evidence regarding his worker registration status.

 

7. The claimant then once again claimed JSA from 23 February 2011 and on 13 April 2011 the DWP took the decision under appeal, holding that he did not have the right to reside, the applicable amount for the purposes of his JSA claim was £nil and thus that it effectively failed.  (The relevant provisions are contained in the Jobseeker’s Allowance Regulations 1996/207, regulations 85 and 85A and schedule 5, para 14.)  Although earlier in the proceedings there had been some uncertainty which claim it was that had led to the decision under appeal, it is no longer in dispute that it is the claim identified in this paragraph with which we are concerned.

 

8. On 1 May 2012 the FtT disallowed the claimant’s appeal, holding that he had not completed 12 months of registered employment under the 2004 Regulations and had not completed 5 years’ continuous residence as a worker or as a self-sufficient person.  On 22 August 2012 a District Tribunal Judge gave permission to appeal.

 

9. I offered the Secretary of State for the Home Department the opportunity to be joined in these proceedings, which was declined.

 

10. On 26 and 27 June 2013 I held an oral hearing.  I am grateful to Mr Weiss and Mr Cornwell for their submissions on that occasion and to those who at various stages have provided written submissions.  In the course of the hearing, Mr Weiss invited me to stay consideration of the appeal in whole or part in the light of the earlier announcement by the European Commission that it was proposing to take the UK to the CJEU to challenge the legality of the “right to reside“ test, although it appeared that proceedings had not then been commenced (indeed, I am still not aware that they have been).

 

11. The application for a stay was rejected on 10 July 2013 on the grounds that (in summary):

 

(a) the contemplated proceedings under Articles 258 and 260 would not enable the Court of Justice to declare UK laws void.  If the Court were to find against the UK, the question of remedy would be looked at that point and might well be the subject of negotiation;

 

(b) the Upper Tribunal was being asked to stay the present proceedings based on speculation rather than knowledge as to the content of the action being taken by the Commission;

 

(c) to the extent that such speculation might prove to be accurate, one ground suggested by Mr Weiss had been dealt with in a binding decision of the Supreme Court, taken with full knowledge of the threatened proceedings (namely Patmalniece v Secretary of State for Work and Pensions [2011] UKSC 11; [2011] 1 WLR 783 at [40]), and the extent to which those proceedings had since moved on was immaterial, while the second ground appeared to be an extension, unjustified in my view, of the caselaw of the Court of Justice; and

 

(d) imposing a stay would cause delay and considerable administrative burdens and so there would have to be powerful countervailing factors to justify it.

 

12. Directions dated 28 June 2013 required the production of further evidence relating to the claimant’s employment with M&B and the dealings between him and the jobcentre and submissions as to the legal effect of that material.

 

13. Directions dated 12 July 2013 sought submissions principally as to cases not discussed at the oral hearing but which I considered potentially relevant to whether the derogation from Article 7(3) of Directive 2004/38/EC in regulation 5(3) of the 2004 Regulations is lawful.

 

14. On 19 September 2013 the CJEU issued its decision in Brey and by Directions dated 23 September 2013 the parties were given the opportunity to file submissions as to the implications, if any, of that decision for the present case.

 

15. As will become apparent, I consider that the FtT’s statement of reasons did contain errors of law. I return to them at the end of this decision.  That such errors exist empowers me to make such further findings of fact as are contained within the present decision.  In writing it however I consider it preferable to focus on the underlying legal issues, rather than to concern myself over much with the detail of the wording of the FtT’s statement of reasons.

 

Issues A and B. Scope of derogation/availability of Article 7(3): an introduction

 

16. The scheme of the 2004 Regulations was set out by Lord Hope in Zalewska v Department for Social Development [2008] UKHL 67 [2008] 1 WLR 2602 and I need only refer to those parts specifically relevant to the present case.  (What is said there in relation to a Polish national is equally applicable to a Lithuanian national, as there is no material difference in the provisions applicable to any of the A8 states.)  It is not in dispute that at the time he worked for M&B, the claimant was an “accession State worker requiring registration” under regulation 2(1).  As such, he was subject to regulation 7, which provided:

 

“Requirement for an accession State worker requiring registration to be authorised to work

 

(1) By way of derogation from Article 39 of the Treaty establishing the European Community and Articles 1 to 6 of 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 30th 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 1st 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.

...

(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.

...”

 

17. The claimant had started work with M&B on 13 April 2010. He had not applied for a certificate within the initial month and it was issued on 14 July 2010.  Such certificates were held not to be retrospective to the start of employment in Szpak v SSWP [2013] EWCA Civ 46, a decision which it is understood there are ongoing attempts to appeal against, but it is common ground that even a retrospective certificate would not help the claimant in the present case.

 

18. Consequently, on and from 14 July 2010 he held a registration certificate but had not held one for 12 months by the time his job came to an end.

 

19. The key consequence was that the Immigration (European Economic Area) Regulations 2006/1003 (“the EEA Regulations”), which implement the Citizenship Directive (discussed below) fell to be modified under regulation 5 of the 2004 Regulations.

 

“5.— Application of 2006 Regulations in relation to accession State worker requiring registration

(1) The 2006 Regulations shall apply in relation to a national of a relevant accession State subject to the modifications set out in this regulation.

 

(2) A national of a relevant accession State who is seeking employment in the United Kingdom shall not be treated as a jobseeker for the purpose of the definition of “qualified person” in regulation 6(1) of the 2006 Regulations and an accession State worker requiring registration shall be treated as a worker for the purpose of that definition only during a period in which he is working in the United Kingdom for an authorised employer.

 

(3) Subject to paragraph (4), regulation 6(2) of the 2006 Regulations shall not apply to an accession State worker requiring registration who ceases to work.

 

(4) Where an accession State worker requiring registration ceases working for an authorised employer in the circumstances mentioned in regulation 6(2) of the 2006 Regulations during the one month period beginning on the date on which the work begins, that regulation shall apply to that worker during the remainder of that one month period.

 

(5) ....

 

20. Preventing the claimant from being a “jobseeker” for the purposes of regulation 6(1)(a) precluded him from JSA on that basis.  Mr Weiss does not take issue with that.  The battleground is regulation 5(3).  Regulation 6(2) of the EEA Regulations, which it excludes, provided at the material time.

 

““Qualified person”

 

(1) In these Regulations, “qualified person” means a person who is an EEA national and in the United Kingdom as—

(a) a jobseeker;

(b) a worker;

(c) a self-employed person;

(d) a self-sufficient person; or

(e) a student.

 

(2) A person who is no longer working shall not cease to be treated as a worker for the purpose of paragraph (1)(b) if—

(a)...

(b) he is in duly recorded involuntary unemployment after having been employed in the United Kingdom, provided that he has registered as a jobseeker with the relevant employment office and—

(i) he was employed for one year or more before becoming unemployed;

(ii) he has been unemployed for no more than six months; or

(iii) he can provide evidence that he is seeking employment in the United Kingdom and has a genuine chance of being engaged;

(c) and (d) ...

 

(3) ...

 

(4) For the purpose of paragraph (1)(a), “jobseeker” means a person who enters the United Kingdom in order to seek employment and can provide evidence that he is seeking employment and has a genuine chance of being engaged.”

 

21. In that, it (inter alia) implements in the UK the provisions of Article 7 of the Citizenship Directive, which provides:

 

“Article 7
Right of residence for more than three months

 

1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:

(a) are workers or self-employed persons in the host Member State; or

(b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State; or

(c) and (d) ....

 

2. ....

 

3. For the purposes of paragraph 1(a), a Union citizen who is no longer a worker or self-employed person shall retain the status of worker or self-employed person in the following circumstances:

(a) and (b) ...;

(c) he/she is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a job- seeker with the relevant employment office. In this case, the status of worker shall be retained for no less than six months;

(d) ...

4. ...”

 

22. Were it not for regulation 5(3), therefore, it would be open to the claimant to assert that he retained worker status under regulation 6(2) of the EEA Regulations (note the three limbs of subparagraph (2)(b) are disjunctive), implementing Article 7(3)(c).  If that were so, then Article 7 of Regulation 1612/68 (since consolidated and codified in Regulation (EU) 492/2011) would have precluded him from being denied JSA in circumstances where a UK national would have received it.  Article 7 provided:

 

“1. A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and should he become unemployed, reinstatement or re- employment.

2. He shall enjoy the same social and tax advantages as national workers.

3. He shall also, by virtue of the same right and under the same conditions as national workers, have access to training in vocational schools and retraining centres.

4. Any clause of a collective or individual agreement or of any other collective regulation concerning eligibility for employment, employment, remuneration and other conditions of work or dismissal shall be null and void in so far as it lays down or authorises discriminatory conditions in respect of workers who are nationals of the other Member States.

 

23. To succeed he therefore needs to show that regulation 5(3) is an unlawful derogation (issue A) and that on the facts he could rely on Article 7(3)(c) (issue B).

 

Issue A scope of derogation

 

24. Art 21 TFEU (previously Art 18 TEC) provides:

 

“1. Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect.”

 

25. Art 45 TFEU (previously Art 39 TEC) (freedom of movement of workers) provides

“1. Freedom of movement for workers shall be secured within the Union.

 2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.

3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health:

(a) to accept offers of employment actually made;

(b) to move freely within the territory of Member States for this purpose;

(c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action;

(d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission.

4. The provisions of this Article shall not apply to employment in the public service.”

 

Any derogation from that is to be interpreted restrictively: C-77/82 Peskeloglou v Bundesanstalt für Arbeit [1983] 2 CMLR 381 (though see Miskovic and Blazej v Secretary of State for Work and Pensions [2011] EWCA Civ 16; [2011] 2 CMLR 20 at [41] regarding the application of the principle in relation to construing a domestic statute.)

 

26. I turn to the arrangements for the accession of the A8 states, including Lithuania, implemented in the UK pursuant to the European Union (Accessions) Act 2003.  The accession was effected by the Treaty of Accession signed in Athens on 16 April 2003, Annex IX (which deals with Lithuania), Pt 2 of which provides:

 

“1. Article 39…shall fully apply only, in relation to the freedom of movement of workers…between Lithuania on the one hand and...the United Kingdom on the other hand, subject to the transitional provisions laid down in paragraphs 2 to 14.” 

 

It is only necessary to set out paragraphs 2 and 9, which provide:

 

“2. By way of derogation from Articles 1 to 6 of the 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 Lithuanian 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.

Lithuanian 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.

Lithuanian 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 Lithuanian nationals mentioned in the second and third subparagraphs above shall cease to enjoy the rights contained in those subparagraphs if they voluntarily leave the labour market of the present Member State in question

Lithuanian 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.

9. Insofar as certain provisions of Directive 68/360/EEC may not be dissociated from those of Regulation (EEC) No 1612/68 whose application is deferred pursuant to paragraphs 2 to 5 and 7 and 8, Lithuania and the present Member States may derogate from those provisions to the extent necessary for the application of paragraphs 2 to 5 and 7 and 8.”

I accept that the wording of the above provisions appears to draw a distinction between admission to the labour market of a Member State and access to the labour market.  A similar distinction appears in the French text.

27. At that time, the relevant legislation was Regulation 1612/68 and Directive 68/330/EEC. Art 1 of Regulation 1612/68 conferred the right on any Member State national to take up activity as an employed person within the territory of another Member State.  Articles 2 – 6 rule out various practices which might be discriminatory compared with nationals of the host Member State in relation to their “Eligibility for employment”.  Article 7 provides for a guarantee of equal treatment of a worker as regards terms and conditions, dismissal etc. 

 

28. Directive 68/330 is to a degree parasitic on, and, as paragraph 9, quoted at [26] indicates, to an extent incapable of being dissociated from Regulation 1612/68. As the former’s recital provided:

 

”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…” (emphasis added)

 

29. Article 4 of Directive 68/330 provided for a system of residence permits ”as proof of the right of residence”. Article 7(1) of that Directive prohibited the withdrawal of a valid residence permit (and, at that time, by extension the right of residence) where a person became “involuntarily unemployed, confirmed by the employment office.”  This was therefore the predecessor to what is now Article 7(3)(c) of the Citizenship Directive.

 

30. It was apparently the view of the European Commission that the scope of the derogation (and in particular paragraph 9) was insufficiently wide to allow the UK to adopt in all respects the approach it had done.  Thus, in a letter dated 4 February 2010 to senior officers of the AIRE Centre and the Immigration Law Practitioners Association, Jackie Morin, the Head of the Unit dealing with “Social Protection and Integration [-] Coordination of Social Security Schemes, Free Movement of Workers” wrote:

 

“In my view, this derogation from Article 7(3) of Directive 2004/38 is not covered by the transitional arrangements on free movement of workers (that allow Member States to derogate from EU law on residence ‘to the extent necessary’ for the application of the transitional arrangements) because the UK does de facto not restrict access to its labour market which might make such a derogation necessary.  In my view it is therefore contrary to Article 7(3) of Directive 2004/38.”

 

Indeed, it is understood that the European Commission subsequently pursued the matter to the “reasoned opinion” stage, though did not ultimately proceed beyond that, the derogation period, even as extended, having come to an end in 2011.

 

31. The first question I have to determine is whether there is binding authority on point A.  While I have read them carefully, I derive only limited assistance for the reasons below from the decision of Collins J in R(H and D) v Secretary of State for Work and Pensions [2004] 3 CMLR 11 and that of the Court of Appeal in the same case:  [2004] EWCA Civ 1468.  The decision of Collins J was on a refusal of permission to bring judicial review proceedings and in any event is a decision of a court of (in this regard) co-ordinate jurisdiction.  The Court of Appeal’s decision was given on a refusal of permission to appeal and was not authorised for citation pursuant to the Practice Direction (Citation of Authorities) [2001] 1 WLR 1001 and, insofar as it bears on the point with which I am presently concerned, was considered only with an apparent considerable degree of hesitation:  [16].  Neither is binding upon me and most fundamentally both predate the decision of the House of Lords in Zalewska, to which I now turn in more detail.  I must also consider the decisions of the Court of Appeal in Miskovic and Blazej and in Szpak, which are the authorities which, along with Zalewska, Mr Cornwell submits provide binding authority that the aspects of the worker registration scheme at issue in the present case are within the scope of the permitted derogation.

 

32. Ms Zalewska had worked for three employers.  For some 6 months she worked for M Ltd, a period that was fully covered by a certificate under the 2004 Regulations.  She then worked for S Ltd for three weeks.  Periods of less than a month are covered under regulation 7(3) anyway, even if not certificated.  Then she worked for L Ltd.  She never applied for a certificate while working there and at any rate once a month had elapsed, “as she was no longer working for an authorised employer, she was no longer entitled to be treated as a worker for the purpose of the definition of “qualified person” in [what is now the EEA Regulations]”: Zalewska at [18].  When her job with L Ltd came to an end she was refused income support accordingly.

 

33. The immediate subject of the challenge before the House of Lords was the requirement to re-register under the 2004 Regulations following a change in employment.  The challenge was rejected on the basis that the Treaty of Accession gave power to regulate access to the UK labour market by (as EU law required) proportionate measures and the requirement to register  (including the requirement to re-register) was (by a bare majority) proportionate.

 

34. Mr Weiss accepts that the Treaty of Accession gave such a power.  As regards the requirement to have a certificate, including following a change of job, as a condition of access to the labour market, Zalewska provides binding authority.  But, he says, the situation here is a different one: the present claimant did, when his employment came to an end, have a certificate.  He had obtained to a sufficient extent access to the labour market for rights to flow under Article 7(3)(c) of the Citizenship Directive and/or regulation 6 of the EEA Regulations, and, because of the operation of Article 7 of Regulation 1612/68, he should not be treated differently from a national worker when it comes to claiming JSA.

 

35. I accept that this was not the factual scenario with which the House of Lords was concerned in Zalewska.  But did its process of reasoning extend to it?

 

36. I can see considerable force in the suggestion that it did not.  The ”central issue” according to Lord Hope at [22] was “whether the registration requirements in reg 7 of the 2004 Regulations on which the appellant’s right to reside depends are compatible with Community law.”  So expressed, that description is not determinative of the question I have to address.  Counsel for the claimant in the case is recorded as relying for one limb of his argument on Article 39EC and Article 7(2) of Regulation 1612/68.  The respective role of those two provisions was addressed by Lord Hope at [26]:

 

“Absent the derogation provisions in that paragraph, a worker who is a national of any member state has the same rights of access to the labour market and to the social advantages that go with it as those of any other member state. That is the effect of article 39EC read together with article 7 of the Regulation. It is not open to the United Kingdom to impose restrictions on workers who are nationals of other member states that are incompatible with the fundamental rules of Community law. But, as paragraph 1 of Part 2 of Annex XII makes clear in the case of Poland, article 39EC is subject to derogation in the case of the freedom of movement of workers from nationals of the A8 states. Paragraph 2 of Part 2 states, by way of derogation, that for the two year period from the date of accession the member states will apply national measures, and that they will continue to apply such measures until the end of the five year period following the date of accession. The effect of that paragraph was to enable the United Kingdom, notwithstanding the fundamental rules of Community law as to freedom of movement of persons, to lay down its own rules for access to its labour market by A8 state nationals.”

37. I interpolate that in that analysis it is Article 39 that deals with rights of access and Article 7 which deals with the social advantages that go with it.  The reason why Article 7 is not mentioned in the derogation provisions, but why a person in the position of Ms Zalewska could not avail herself of it, is dealt within the following paragraph:

“27. It is true that paragraph 2 does not mention article 7 of Regulation 1612/68. It states that the liberty that is given to the member states to apply national measures is by way of derogation from articles 1 to 6 of the Regulation. But I think that there are two reasons for the fact that article 7 is not mentioned in this paragraph. The first is that mention of it was unnecessary. Access to labour markets is treated in Title I of the Regulation as a question of eligibility. The fundamental rules about the eligibility for employment of any national of a member state are set out in articles 1 to 6. A national of a member state who takes up employment in another member state under those rules is a worker for the purposes of article 7, but not otherwise. Taking Poland as the example, displacement of articles 1 to 6 by national measures was all that the derogation provision in paragraph 2 of part 2 of Annex XII needed to do to ensure that access to employment in the 15 existing member states by workers from Poland was controlled by national measures during the five year period. The second is that its exclusion from derogation ensured that any workers from Poland who did obtain access to the labour market in an existing member state under its national measures enjoyed the same guarantees against discrimination as regards conditions of employment and social and tax advantages as national workers. But the rights conferred on Polish workers by article 7 were to depend on their compliance with the national measures. It is those measures that determine their eligibility to obtain access to the national labour market on which the rights given by article 7 in their turn depend. The reference to Polish nationals "admitted to the labour market of a present member state" in the third subparagraph of paragraph 2 of Part 2 of Annex XII is a reference to Polish nationals who have been admitted to it under the national measures regulating access.

38. Lord Hope thus acknowledged the continuing role for Article 7 in respect of workers ”who did obtain access to the labour market in an existing member state under its national measures”.  At [40], Lord Hope likewise expresses the view that it is “access” that is relevant to rights under Article 7 of Regulation 1612/68, following 12 months of “admission”.

 

39. By contrast at [29], he refers to the test for the applicability of Article 7 being that of admission to the labour market.  Further, the implication of his remarks at [36] is that it is registration (triggering “admission”, though not yet “access”) that holds the key:

 

“Registration brings with it the package of benefits that a worker is entitled to because article 7 of Regulation 1612/68 requires that he must not be treated differently.  Failure to register does not.”

 

40. At [43] he makes clear his view that it is incorrect to suggest that a person is admitted to the UK labour market only once 12 months had elapsed.  Rather, “Admission to the United Kingdom labour market is obtained as soon as the A8 state national begins work for an authorised employer.”

 

41. So the question is: once admitted in accordance with national measures (as Ms Zalewska, having failed to register her third job was not, but the present claimant was in relation to work for M & B), what is it that a person can rely upon?  It is sustainable in the light of Zalewska that while employed he can rely on e.g. Article 7 of Regulation 1612/68. And, if that is correct, questions arise such as whether the package of rights attaching to him as a “worker” under national law includes the protection against his worker status coming to an end; whether an A8 national can rely on that part of Art 7 which deals with “should he become unemployed, reinstatement or re-employment” and whether the UK, in respect of a person who has (albeit belatedly) complied with its rules to obtain admission to the labour market, can rely on the self-limiting status of worker under national law (in that, having been acquired, it is defeated by the fulfilment, outside the person’s control, of a condition to which national law made the status subject) to take away rights under EU law which would meanwhile have accrued. 

 

42. It seems to me that Zalewska provides useful guidance on many aspects of the accession of the A8 states and the 2004 Regulations but is not determinative of the present question.  While there may be an argument that the distinction between “admission” and “access” to the labour market means that it is only those who have the latter who have the full panoply of rights of a worker under EU law, it is not unequivocally and consistently stated in Zalewska that such is the case and indeed, as has been noted, in a number of places there are suggestions that the rights attach to those who have been admitted to the labour market.  That there should be a degree of ambiguity in this regard in my view testifies to the fact that the position of someone who was “admitted” (having obtained a worker registration certificate) was not what was in issue in that case.  It was not necessary for the case to deal with such points and it did not in the event do so.  In my view Zalewska does not provide binding authority against Mr Weiss’s submission.

 

43. I accept that in Miskovic and Blazej Elias LJ, with whom the other Lords Justices agreed, indicated at [10] that the effect of regulations 5(2) and 5(3) of the 2004 Regulations “is that A8 workers requiring registration have a right to reside only when they are actually working.”  However, Miskovic was concerned with whether the claimant was excluded from being an “accession State worker requiring registration” altogether (in which case the 2004 Regulations would not apply to him) and the sentence quoted was by way of explanation of the legislative context in which that issue arose, rather than part of the ratio of the case.  It was not concerned with whether it was possible to derogate from the rights obtained by someone who had meanwhile complied with the conditions required by national law to obtain admission to the labour market.  Blazej, like Zalewska, was a case where no certificate had been obtained in respect of the claimant’s employment: see [63].  Szpak was a case concerning the mechanics of the registration process.  The Court of Appeal did not need to engage with the issue which arises in the present case.  I accept that a similar point might perhaps have been taken on behalf of Mr Szpak to that taken by the claimant here, but I do not draw any particular conclusion from that.  I therefore consider that these cases no more provide binding authority against the claimant than does Zalewska.  None of this of course means that Mr Weiss’s argument is necessarily right – merely that I am not constrained to find against it.

 

44. Turning then (relatively briefly in view of the conclusions I reach below) as to the substance of the scope of derogation point, I note that a number of the decisions on similar accession provisions, when read together with the provisions of the accession treaties in issue, serve to illustrate how careful the European legislator is with regard to the provisions from which derogation is to be permitted in any particular case and that provisions which are not expressly derogated from continue to apply: see C-305/87 Commission v Greece and C-9/88 Lopes da Veiga v Staatssecretaris van Justitie [1989] ECR 2989.

 

45. Mr Cornwell argues that these cases are of no material assistance to the claimant when one affords detailed consideration to the terms of the accession instrument in each case, which he submits contain material differences from the Treaty of Accession for A8 states.  He submits that Commission v Greece and Lopes da Veiga concerned the situation of persons who were working, whereas Zalewska and the present case concern persons who have ceased to comply with the national measures on which the route to “worker” status and its associated rights depend.  He submits that Lord Hope’s reasons for dismissing the relevance of Lopes da Veiga in Zalewska were correct and not such that it is necessary to go wider than them when applying the case to the present appeal; and that it was inevitable that Lord Hope would have considered Commission v Greece, even though he did not refer to it, but in any event the legislative provisions in that case were different from those with which we are presently concerned.  He further submits by reference to a number of detailed points of construction which I need not set out at length that the scope of the derogation extends to the power to place conditions on access such that if the condition is not met access to the labour market is denied.  These include the points made above (in the context of discussing the ratio of Zalewska) concerning the distinction between “admission” and “access” to the labour market.

 

46. On behalf of the claimant, it is submitted inter alia that (a) the approach now set out at [44] is correct; (b) that the reference to the right of freedom of movement being exercised “in freedom and dignity” in recital (5) to Regulation 1612/68, preserved as recital (6) in Regulation 492/11 and also to be found in recital (5) of the Citizenship Directive (supported, at least to a degree, by Article 1 of the Charter of Fundamental Rights of the European Union) carries the implication that those admitted should be protected against unexpected events such as involuntary unemployment; and (c) that it is not possible for the UK to rely on national law to defeat EU law rights which have meanwhile accrued.

 

47. It does seem to me that as each of the accession treaties has broadly similarly structured provisions with specific differences, one may take the view that Article 7 of Regulation 1612/68 – the normal concomitant of “worker” status - was advisedly not included in the A8 accession derogations.  The derogations in paragraphs 2 and 9 of the relevant schedule for Lithuania fall to be interpreted narrowly.  This is not a question of construing a UK statute but an EU instrument.  The distinction between “access” and “admission” does not lead inexorably to the conclusion that rights under Article 7 of Regulation 1612/68 only extend to those who enjoy access to the labour market: those who have been admitted could still enjoy Article 7 rights, without depriving the concept of “access” of effect, which could carry a right to be exempted from quotas or similar mechanisms a Member State may adopt to limit access to its labour market.  While I do not need to decide the point at this stage and do not do so, it seems to me to be arguable that the intention expressed in the derogation provisions may have been that once a person is admitted to the labour market at all, they should be protected against discriminatory adverse treatment in the event of subsequent supervening involuntary unemployment, rather than that they could be admitted on essentially any terms because they could have been excluded altogether.  The contention that the UK did not “de facto restrict access to its labour market” (which must I think be interpreted in its context as referring to stopping people from joining it in the first place) is a sustainable one – rather, the UK imposed the worker registration scheme, described by Baroness Hale in Zalewska at [52] as a “purely administrative act”.  If de facto control of access to the labour market is what is relevant (as opposed to shrouding it in legal conditions through national measures to control the rights that person has once “admission” has been obtained) the argument that paragraph 9 of the derogation schedule does not extend far enough does not appear manifestly doomed to fail.  The position adopted by Jackie Morin and set out at [30] does appear realistically arguable. If I thought it might make a difference to the outcome in this case, I would have to give consideration to making a reference to the CJEU under Article 267 TFEU.  I therefore turn below to whether the argument can help the claimant in the circumstances of this case.

 

48. Before doing so, I need briefly to address Mr Weiss’s ancillary argument in relation to reg 5(3). He does not argue that there is a proportionality issue here in relation to the worker registration scheme as a whole, the scope for which is, in the light of the decision of the majority in Zalewska and those of the Court of Appeal in Miskovic and Blazej and in Szpak, in my view minuscule or non-existent. He does however argue proportionality in relation to the individual circumstances of this claimant and in particular in relation to the disentitlement created by reg 5(2) of the 2004 Regulations.  As to whether there is still room to argue the proportionality of the effect on individuals, Miskovic and Blazej at [39] and Szpak at [44] – [50] suggest there is, but Mirga v Secretary of State for Work and Pensions [2012] EWCA Civ 1952 (understood to be likely to be the subject of an attempted further appeal) at [17] suggests otherwise.  But even if there were to prove to be room despite Mirga, it is, in my view, difficult for Mr Weiss to argue that the impact on this claimant of being subject to the scheme was disproportionate when his circumstances as a largely working single man without dependents were unremarkable, when he had wrongly failed to register various jobs, had only registered this one belatedly and had only been in it for a short length of time.  In any event, if disapplying Article 7(3)(c) is indeed within the scope of the derogation and thus envisaged by EU law, individual proportionality would be to undermine the scheme rather than to fill a lacuna: (cf. Kaczmarek v Secretary of State for Work and Pensions [2008] EWCA Civ 1310; [2009] 2 CMLR 3 [2008] at [19]-[23].)

 

Issue B: reliance on Article 7(3)(c) available in this case?

 

49. If it was open to the claimant to rely on Article 7(3)(c), could he do so in the circumstances of this case?  To recall, the provision applies where:

 

“(c) he/she is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a job- seeker with the relevant employment office.”

 

50. It is not in dispute (a) that the claimant’s unemployment was involuntary, due to the seasonal reduction in work; or (b) that in the light of the decision of the Court of Appeal in Secretary of State for Work and Pensions v Elmi [2011] EWCA Civ 1403 the claimant by answering “yes” to the question “Are you looking for work” on the customer statement dated 3 September 2010 amounted to recording his unemployment and registering as a jobseeker.

 

51. The claimant faces three possible difficulties in relying on Article 7(3)(c) if it is open to him to do so:

 

(a) the delay between his last day of work with Moore & Burrell on 20 July and claiming JSA on 3 September (a period of 45 days);

(b) the absence of any evidence of job-seeking activity between 20 July and 3 September 2010; and

(c) the period of time which had elapsed between 20 July 2010 when he last worked and 23 February 2011, the date as of which the claim the subject of the present case was made.

 

52. I deal with each in turn.

 

53. In Elmi, the Court of Appeal (Moses LJ, with whom Black J agreed) observed:

“24. The rights which this respondent seeks to exercise are rights derived from Article 45(ex39) of the Treaty. It is trite that in order to be able to exercise those rights the claimant must demonstrate a real and genuine link with economic activity in this Member State, the United Kingdom. In those circumstances it is right that the United Kingdom should, as it is permitted to do pursuant to Article 7.3 of the Directive in issue, put in place a system which monitors and checks the link between one who is temporarily unemployed and seeking benefits and economic activity in this country.

25. For that purpose, and because it is right that Member States should exercise that measure of control in order to see whether a citizen of the EU has rights pursuant to Article 45, Article 7.3(c) of the Directive provides not only that one in the position of this respondent is in duly recorded involuntary employment, but also has registered as a job seeker with the relevant employment office.

26. In that connection I suggest that the Upper Tribunal in its majority decision failed properly to recognise that Article 7[3](c) does impose two requirements both being in duly recorded involuntary employment and registration as a job seeker. To that extent I agree with the minority decision of Judge Howell QC, but what follows? The Directive imposes upon Member States an obligation to put in place a lawful system of registration whereby that Member State can undertake monitoring and control in order to assess whether a particular applicant has in truth a genuine link with economic activity in this country.”

54. Maurice Kay LJ at [15] noted that the Citizenship Directive and the predecessor Directive (in this regard) 68/360/EEC

 

“are qualitatively different. Directive 68/360 was directed at confirmation of involuntary unemployment by the competent employment office, i.e. in a UK case, the relevant Jobcentre. Article 7(3)(c) of the Citizen's Directive is concerned with "duly recorded involuntary unemployment" and the requirement that the claimant "has registered as a jobseeker with the relative employment office".” (Emphasis in original.)

 

55. In the light of the Court of Appeal’s decision, I accept that the Citizenship Directive did add a further step of registration, to be complied with by the claimant, if he was to be able to rely on Article 7(3)(c).  A similar conclusion was reached by Judge White in Secretary of State for Work and Pensions v MK [2013] UKUT 0163 (AAC) at [52] and [55].  As he went on to observe at [56]:

 

“The difficulty with Mr Watson’s [counsel for the claimant’s] position is that it permits a degree of self regulation, which might have been consistent with the wording of the earlier Directive, but cannot survive the addition of the new registration requirement. Let me flesh this out a little. Under a system where involuntary unemployment needed only to be confirmed or recorded in an employment office, it is possible to argue that, provided a claimant can show that they have been actively and genuinely seeking work in any period between the end of employment and the making of a claim, then a Member State should accept that and record or confirm it on the making of a claim. That does not seem to me to be possible where one of the preconditions to retaining worker status is registration with an employment office.”

 

56. Judge White then turned to the correct approach to delay in asserting rights under Article 7(3)(b) (there is no reason not to apply the argument to Art 7(3)(c) also).  He held that the test should be whether there had been undue delay, which he explained as follows:

 

“70. What then is involved in a test of undue delay? There must be a full enquiry into the reasons for, and circumstances of, any delay in completing the requirements specified in Article 7(3)(b) of the Citizenship Directive. In practice, that will be delay in making a claim for a jobseeker’s allowance, since that is the normal means by which the requirements are met.

71. Undertaking this enquiry will require decision makers and tribunals to make full and careful findings of fact about what a claimant did between the ending of employment and the completion of the requirements of Article 7(3)(b) of the Citizenship Directive. In the light of those findings, decision makers and tribunals are required to exercise a judgment as to whether there are reasonable grounds for the delay such that it is not right to regard it as an undue delay.

72. It follows that the longer the delay, the more compelling must be the reasons for it. I do not specify any outer limit beyond which a delay will necessarily be regarded as an undue delay.”

 

57. In the submissions which I have received on the point, no attempt has been made to suggest that MK does not represent good law.  Indeed, I respectfully consider that it is correct.  In my view it is implicit in the concept of when worker status can be “retained” under Article 7(3) that there is some form of temporal link between work ceasing and compliance with the conditions and it is not enough that the conditions have belatedly been met at a time when they need to be relied upon.  I also consider that previous authorities such as IR v Secretary of State for Work and Pensions [2009] UKUT 11 (AAC), which concerned the predecessor legislation, cannot be taken as governing the position in the light of the changes effected by the Citizenship Directive and the interpretation of them by the Court of Appeal in Elmi.

 

58. I do not accept the claimant’s analogy with the position of a self-employed person between engagements in SSWP v AL [2010] UKUT 451 (AAC).  It is intrinsic in the nature of self-employed work that there will be gaps between engagements but also that there is a variety of tasks such as marketing, accountancy and so on to be carried out.  On that basis, a person could remain self-employed when so engaged.  The issue here is whether the claimant was able to retain a status he would otherwise have lost, which is governed by the terms of Article 7(3)(c).

 

59. In the present case, I can see that from the perspective of this apparently rather self-reliant claimant, it may have been reasonable to defer going to the jobcentre.  He knew both from the particulars of his employment and from the occasional days without work which there had been that the absence of work was part and parcel of the post in which he had been engaged.  I am prepared to accept also that at the relevant time his employers considered him a suitable person to be given more work, if they had it to give, and that no definitive view had been reached on their part that work was not going to be available, this only being arrived at later, as evidenced by the subsequently-issued Form P45.  He had had to manage on previous earnings before and evidently did so during that period also.

 

60. But for the reasons given at [56] of MK, this was no longer a sufficient answer.  The Citizenship Directive (which, it should be recalled, is not solely concerned with social security but with rights of residence and other incidents of Union citizenship more generally), as interpreted by the Court of Appeal in Elmi, recognises registration as a further precondition to claiming that worker status has been retained, permitting the State to monitor and check a person’s continuing link with the labour market.  In this case the State did not have the chance to do so for the 45 day period.  There was no sufficient reason for the claimant not to apply sooner: he was without work and registering sooner might have enabled other work to be found for him, even if only as a stop gap pending further work being made available from M&B, were there to be any. 

 

61. I therefore conclude that there was undue delay in the claimant registering and that for that reason, he would not be, if it applied to him, able to avail himself of Article 7(3)(c) and in turn of the benefit of Regulation 1612/68. 

 

62. The Secretary of State submits in the alternative that there was no evidence of the claimant’s job-seeking during the period from 20 July 2010 to 3 September 2010.  I accept that that is so, but as the claimant was, reasonably in my view, hanging on in the hope of further work from M&B I do not find it possible to construe from the lack of any alternative job search that he was not active in the labour market so as to have lost his status of involuntary unemployment, which in any event the Secretary of State has conceded.  The point does not avail the Secretary of State but is academic in the light of the conclusions I have reached.

 

63. It also seems to me that in any case, the gap between last working on 20 July 2010  and claiming on 23 February 2011 was more than 6 months. 

 

64. Returning then to issue A (scope of the derogation), even if it otherwise met the requirements for a reference under Article 267 TFEU, the Upper Tribunal could only make one if it were to “consider[ ] that a decision on the question is necessary to enable it to give judgment.”  As, even if the claimant were to succeed on that point, he would not be able to succeed under Article 7(3)(c) in any event, I do not consider it appropriate to make a reference.  Nor is it necessary to decide point A in the light of the conclusion I have reached on point B and I do not do so.

 

65. For the sake of completeness I record my view that regulation 6(2)(b) of the EEA Regulations, like Article 7(3) of the Citizenship Directive, implies a similar temporal link between the work and the subsequent fulfilment of the conditions through its use of “shall not cease to be treated as a worker” (emphasis added). That requirement applies to sub-paragraphs (a) to (d) and, within sub-paragraph (b), to heads (i) to (iii), thus although the regulation does – in regulation 6(2)(b)(iii) – go further than the Citizenship Directive , it does not do so in any way that affects the foregoing conclusions.

 

Issue C: self-sufficiency (sufficiency of resources)

 

66. This falls into two sub-questions: (a) When does self –sufficiency fall to be looked at? and (b) What resources did the claimant have that fell to be taken into account?

 

67. As is well known, Article 6 of the Citizenship Directive confers a right of residence for up to three months on Union citizens. For more than three months, the position is dealt with by Article 7, which, to recap, so far as relevant, provides:

 

“1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they

…

(b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State.”

 

...

 

68. Article 8 provides that “for periods of residence longer than three months, the host Member State may require Union citizens to register with the relevant authorities”: Art 8(1).  A registration certificate is to be issued immediately: Art 8(2).  In the case of people wanting to rely on Art 7(1)(b) Member States may only require presentation of a valid identity card or passport and proof that the person satisfies the conditions laid down in that provision: Art 8(3).  By Art 8(4):

“Member States may not lay down a fixed amount which they regard as sufficient resources, but they must take into account the personal situation of the person concerned.  In all cases this amount shall not be higher than the threshold below which nationals of the host Member State become eligible for social assistance, or, where this criterion is not applicable, higher than the minimum social security pension paid by the host Member State.”

 

The UK does not operate such a compulsory scheme.  In SSWP v EM [2009] UKUT 44 (AAC), the judge suggested that the effect of such a certificate under the Directive was that it amounted to evidence that, as at the date of issue, the applicant was a citizen of the European Union with a right of residence under Art 7(1).  Ultimately however, the effect of such a national measure must be one of national law, at any rate so long as consistent with EU law.

 

69. Article 16 then confers a right of permanent residence on those who have “resided legally for a continuous period of five years in the host Member State”.  This requires residence in accordance with the relevant provisions of Community law.

 

70. It is also relevant to mention the following further provisions of the Directive:

 

Recital (10) indicates that:

 

“persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions.”

 

Recital (16) provides that:

 

“As long as the beneficiaries of the right of residence do not become an unreasonable burden on the social assistance system of the host Member State they should not be expelled. Therefore, an expulsion measure should not be the automatic consequence of recourse to the social assistance system. The host Member State should examine whether it is a case of temporary difficulties and take into account the duration of residence, the personal circumstances and the amount of aid granted in order to consider whether the beneficiary has become an unreasonable burden on its social assistance system and to proceed to his expulsion.”

 

Article 14, so far as relevant, provides:

 

“(2) Union citizens … shall have the right of residence provided for in Articles 7, 12 and 13 as long as they meet the conditions set out therein.

 

In specific cases where there is a reasonable doubt as to whether a Union citizen…satisfies the conditions set out in Articles 7, 12 and 13, Member States may verify if these conditions are fulfilled.  This verification shall not be carried out systematically.

 

(3) An expulsion measure shall not be the automatic consequence of a Union citizen’s …recourse to the social assistance system of the host Member State.”

 

Article 24, so far as relevant, provides:

 

“(1) Subject to such specific provisions as are expressly provided for in the Treaty and secondary law, all Union citizens residing on the basis of this Directive in the territory of the host Member State shall enjoy equal treatment with the nationals of that member State within the scope of the Treaty…”

 

71. This aspect of the present case falls to be decided against the background of the decision of the Court of Justice of the European Union in C-140/12 Brey (19 September 2013). The CJEU outlined the facts of that case as follows:

 

“16. Mr Brey and his wife, who are both of German nationality, left Germany and moved to Austria in March 2011. In Germany, Mr Brey receives an invalidity pension of EUR 862.74 per month before tax, and a care allowance of EUR 225 per month. The couple has no other income or assets. Mr Brey’s wife received a basic benefit in Germany; however, because of her move to Austria, she has not received it since 1 April 2011. The monthly rent payable on the couple’s apartment in Austria is EUR 532.29.

17. By decision of 2 March 2011, the Pensionsversicherungsanstalt refused Mr Brey’s application for a compensatory supplement to be granted with effect from 1 April 2011 on the ground that, owing to his low retirement pension, Mr Brey does not have sufficient resources to establish his lawful residence in Austria.

18. On 22 March 2011, the Bezirkshauptmannschaft Deutschlandberg (first‑level Deutschlandberg administrative authority) (Austria) issued Mr Brey and his wife with an EEA citizen registration certificate in accordance with the [relevant Austrian legislation].”

72. The “compensatory supplement” referred to in [17] of the Court’s judgment is an Austrian benefit making up the shortfall between a person’s resources and their requirements: judgment, [14].  It is classified as a special non-contributory benefit within Art 70 of Regulation 883/2004 “because it augments a retirement pension or an invalidity pension and is by nature social assistance in so far as it is intended to ensure a minimum means of subsistence for its recipient where his pension is insufficient”: judgment, [21].

 

73. Para 15 of the Court’s judgment indicates that the conditions which would have had to have been satisfied under Austrian law for issue of a registration certificate largely mirror Article 8(3), although the requirement for sufficiency of resources was expressed by reference to avoiding the need for recourse “to social assistance benefits or the compensatory supplement”.  The CJEU noted at [29] of its judgment that the provision in question:

 

”by making explicit reference to the compensatory supplement, is now intended to prevent a national of another Member State from being able to obtain the right to reside in Austria by virtue of EU law where that national applies, during his period of residence, for the compulsory supplement.”

 

74. Thus it was that while the referring Court wanted to know the answer to one question, i.e. whether the compensatory supplement was “social assistance“ for the purposes of Art 7(1)(b), the CJEU reformulated it so as to answer another, which it set out at [32] and proceeded to answer in its ruling (emphasis added):

 

“EU law - in particular, as it results from Article 7(1)(b), Article 8(4) and Article 24(1) and (2) of Directive 2004/38/EC ... must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which, even as regards the period following the first three months of residence, automatically - whatever the circumstances - bars the grant of a benefit, such as the compensatory supplement... to a national of another Member State who is not economically active, on the grounds that, despite having been issued with a certificate of residence, he does not meet the necessary requirements for obtaining the legal right to reside on the territory of the first Member State for a period of longer than three months, since obtaining that right of residence is conditional upon that national having sufficient resources not to apply for the benefit.”

 

75. The CJEU held at [64] that what was required was

 

 “an overall assessment of the specific burden which granting that benefit would place on the national social assistance system as a whole, by reference to the personal circumstances characterising the individual situation of the person concerned.”

 

76. Its reasoning on the issue was set out in particular at [65] to [72] of its judgment. 

 

“65. First, it should be pointed out that there is nothing in Directive 2004/38 to preclude nationals of other Member States from receiving social security benefits in the host Member State (see, by analogy, Grzelczyk, paragraph 39).

 

66. On the contrary, several provisions of that directive specifically state that those nationals may receive such benefits. Thus, as the Commission has rightly pointed out, the very wording of Article 24(2) of that directive shows that it is only during the first three months of residence that, by way of derogation from the principle of equal treatment set out in Article 24(1), the host Member State is not to be under an obligation to confer entitlement to social assistance on Union citizens who do not or no longer have worker status. In addition, Article 14(3) of that directive provides that an expulsion measure is not to be the automatic consequence of recourse to the social assistance system of the host Member State by a Union citizen or a member of his family.

 

67. Second, it should be noted that the first sentence of Article 8(4) of Directive 2004/38 expressly states that Member States may not lay down a fixed amount which they will regard as 'sufficient resources', but must take into account the personal situation of the person concerned. Moreover, under the second sentence of Article 8(4), the amount ultimately regarded as indicating sufficient resources may not be higher than the threshold below which nationals of the host Member State become eligible for social assistance, or, where that criterion is not applicable, higher than the minimum social security pension paid by the host Member State.

 

68. It follows that, although Member States may indicate a certain sum as a reference amount, they may not impose a minimum income level below which it will be presumed that the person concerned does not have sufficient resources, irrespective of a specific examination of the situation of each person concerned (see, by analogy, Chakroun, paragraph 48).

 

69. Furthermore, it is clear from recital 16 in the preamble to Directive 2004/38 that, in order to determine whether a person receiving social assistance has become an unreasonable burden on its social assistance system, the host Member State should, before adopting an expulsion measure, examine whether the person concerned is experiencing temporary difficulties and take into account the duration of residence of the person concerned, his personal circumstances, and the amount of aid which has been granted to him.

 

70. Lastly, it should be borne in mind that, since the right to freedom of movement is - as a fundamental principle of EU law - the general rule, the conditions laid down in Article 7(1)(b) of Directive 2004/38 must be construed narrowly (see, by analogy, Kamberaj, paragraph 86, and Chakroun, paragraph 43) and in compliance with the limits imposed by EU law and the principle of proportionality (see Baumbast and R, paragraph 91; Zhu and Chen, paragraph 32; and Commission v Belgium, paragraph 39).

 

71. In addition, the margin for manoeuvre which the Member States are recognised as having must not be used by them in a manner which would compromise attainment of the objective of Directive 2004/38, which is, inter alia, to facilitate and strengthen the exercise of Union citizens' primary right to move and reside freely within the territory of the Member States, and the practical effectiveness of that directive (see, by analogy, Chakroun, paragraphs 43 and 47).

 

72. By making the right of residence for a period of longer than three months conditional upon the person concerned not becoming an 'unreasonable' burden on the social assistance 'system' of the host Member State, Article 7(1)(b) of Directive 2004/38, interpreted in the light of recital 10 to that directive, means that the competent national authorities have the power to assess, taking into account a range of factors in the light of the principle of proportionality, whether the grant of a social security benefit could place a burden on that Member State's social assistance system as a whole. Directive 2004/38 thus recognises a certain degree of financial solidarity between nationals of a host Member State and nationals of other Member States, particularly if the difficulties which a beneficiary of the right of residence encounters are temporary (see, by analogy, Grzelczyk, paragraph 44; Bidar, paragraph 56; and Förster, paragraph 48).”

 

77. I read [72] as directed to what happens at the time when a person needs to make a claim.  It makes no mention of the initial question of whether a person has sufficient resources in the first place to avoid becoming a burden for the purposes of Article 7(1)(b) but deals with whether the “grant of a social security benefit” could trigger the condition to which the right of residence for more than three months is made subject.  That the Court is concerned with the situation at that point is also clear from the tense used at [75]:

 

“the mere fact that a national of a Member State receives social assistance is not sufficient to show that he constitutes an unreasonable burden on the social assistance system of the Member State.”

 

78. Such a reading is also confirmed by the authorities on which the Court relied.  In C-184/99 Grzelczyk [2002] 1 CMLR 19, Mr Grzelczyk was a student who had been subject to a somewhat lighter-touch version of the “sufficient resources” requirement under predecessor legislation, having to provide a declaration of sufficient resources in order to obtain the right to reside as a student in Belgium, which he had done.  When after three years of study his resources ran out, he was held not disqualified, as the national of another Member State, from receiving the Belgian minimex (minimum subsistence allowance).  C-209/03 Bidar concerned the ability of a student whose right of residence was not contested (see judgment, [47]) to rely on Article 12 EC (now Article 18 TFEU) to obtain access to a student maintenance loan.  C-158/07 Förster likewise, in examining what restrictions may lawfully be imposed on the ability of a student from another Member State to access funding, is concerned with a student whose right of residence had arisen.

 

79. As the CJEU’s concern in Brey was with legislation which ordained that any claim was bound to fail rather than looking at the various wider issues to which the Court refers in its judgment, it did not need to concern itself with the logically prior question of whether Mr Brey had the right to reside at all.  In this it may have been influenced by the fact that Mr Brey had been granted a registration certificate by the relevant Austrian authorities.  The fact that the certificate had been granted was repeatedly emphasised by the Court: see [30], [32], [78], [80] and the ruling.  It may properly be argued that the fact that on 22 March 2011 a registration certificate had been issued on the basis that Mr Brey had sufficient resources did not mean that he continued to do so at a subsequent date (e.g. 1 April, when his wife’s German benefit had stopped).  It may be therefore that the CJEU could have explored the prior question of whether Mr Brey had any right to reside at all which potentially stood to be defeated if the claim for the supplement he made did represent unreasonable reliance on social assistance, but in my view the repeated references to the certificate are a powerful indication that in its desire to rule on one perceived problem area the CJEU was not looking back to that prior question.  In my view, therefore, Brey is concerned with what follows where a right of residence has arisen in the first place.

 

80. While Brey contains a number of observations regarding the terms of Article 7(1)(b) – see the passage quoted at [22] above - it certainly therefore does not undermine the scheme created by Article 7.  Indeed, the judgment is at pains to hold a balance between the rights of European Citizens and the interests of Member States.  Thus at [46] and [47]:

 

“46. It should be borne in mind that the right of nationals of one Member State to reside in the territory of another Member State without being engaged in any activity, whether on an employed or a self-employed basis, is not unconditional. Under Article 21(1) TFEU, the right of every citizen of the Union to reside in the territory of the Member States is recognised subject to the limitations and conditions laid down in the Treaty and by the measures adopted for its implementation (see, to that effect, Trojani, paragraphs 31 and 32; Case C-200/02 Zhu and Chen [2004] ECR I-9925, paragraph 26; and Case C-291/05 Eind [2007] ECR I-10719, paragraph 28).

 

47. By way of such limitations and conditions, Article 7(1)(b) of Directive 2004/38 provides that a Member State may require nationals of another Member State wishing to have the right of residence on its territory for a period of longer than three months without being economically active to have comprehensive sickness insurance cover in the host Member State and sufficient resources for themselves and their family members not to become a burden on the social assistance system of that Member State during their period of residence (see, to that effect, Case C-480/08 Teixeira [2010] ECR I-1107, paragraph 42).”

 

81. To like effect, [53]-[55]:

 

“53. By contrast, although the aim of Directive 2004/38 is to facilitate and strengthen the exercise of the primary and individual right - conferred directly on all Union citizens by the Treaty - to move and reside freely within the territory of the Member States (see Case C-127/08 Metock and Others [2008] ECR I-6241, paragraphs 82 and 59; Case C-162/09 Lassal [2010] ECR I-9217, paragraph 30; and Case C-434/09 McCarthy [2011] ECR I-3375, paragraph 28), it is also intended, as is apparent from Article 1(a) thereof, to set out the conditions governing the exercise of that right (see, to that effect, McCarthy, paragraph 33, and Joined Cases C-424/10 and C-425/10 Ziolkowski and Szeja [2011] ECR I-0000, paragraphs 36 and 40), which include, where residence is desired for a period of longer than three months, the condition laid down in Article 7(1)(b) of the directive that Union citizens who do not or no longer have worker status must have sufficient resources.

 

54. It is apparent from recital 10 in the preamble to Directive 2004/38, in particular, that that condition is intended, inter alia, to prevent such persons becoming an unreasonable burden on the social assistance system of the host Member State (Ziolkowski and Szeja, paragraph 40).

 

55. That condition is based on the idea that the exercise of the right of residence for citizens of the Union can be subordinated to the legitimate interests of the Member States - in the present case, the protection of their public finances (see, by analogy, Case C-413/99 Baumbast and R [2002] ECR I-7091, paragraph 90; Zhu and Chen, paragraph 32; and Case C-408/03 Commission v Belgium [2006] ECR I-2647, paragraphs 37 and 41).”

 

82. The legitimacy of the principle is thus firmly endorsed, but subject to the caveats in the passage from [65] to [72] quoted above.  What was objectionable was to treat the condition which defeats the subsisting right as automatically fulfilled by the claim for benefit.

 

83. Applying Article 7(1)(b), the legislation envisages that it will be possible for a person in a Member State which operates a compulsory registration system to be able to provide proof to the Member State, at that point, that he satisfies the conditions of Article 7(1)(b).  (I do not regard the legal position as different in those States which do not operate such a scheme.)  The person will have to show that they “have” (i.e. at that point) (cf. C-200/02 Zhu and Chen at [30]) sufficient resources for the purpose identified in the Article, namely (under the predecessor legislation) “the protection of the public finances of the Member State”:  [33].  Those include the resources to guard against ”becoming” a burden.  The ability to see that those resources are in place is an important protection for the host Member State against a person running short of money and needing to throw themselves on the mercy of the State, as is the ability to require comprehensive sickness insurance against the person becoming ill (see e.g. the observations of Sullivan LJ in FK (Kenya) v Secretary of State for the Home Department [2010] EWCA Civ 1302, where he said at [15].

 

The Regulations give effect to the United Kingdom's obligations under EU law to facilitate the free movement, not merely of workers and those who are self-employed, but also those who are self-sufficient together in each case with their family members. A requirement that a person be self-sufficient is no less a matter of substance than a requirement that a person be either employed or self-employed. A person who has to rely on the United Kingdom's National Health Service is no more self-sufficient than a person whose resources are inadequate so that he may become a burden on the United Kingdom's social assistance system.”

 

Neither may in the event prove to be a watertight guarantee against the State incurring cost (nor, on authorities such as Brey and Grzelczyk, should they be), but it is a question of managing risk and financial exposure.

 

84. “Resources” there must be and they must enable the condition to be fulfilled “during their period of residence”.  Thus I am of the view that a person wishing to assert self-sufficiency at the beginning of a five year period (with a view to subsequent permanent residence) would have to point to “resources” to see them through five years.  As the UK does not have a registration system, it may often be the case however that consideration is only given to the topic at the end of the five year period when a right of permanent residence is asserted (whether as part of a benefit claim or otherwise).  There is no objection merely because the inquiry is being conducted later (see C-325/09 Dias and C-424 and 425 Ziolkowski).  In my view the question, whenever asked, remains: was the person at the beginning of year 1 – and in principle at any other times in the period – able to show sufficient resources to meet the test?  I do not accept that a person who could not meet the test on that basis could simply lie low for five years and through a combination of luck and an unusually frugal lifestyle avoid being any kind of burden to the social assistance system and then argue that they have retrospectively shown that they had throughout had the resources to be self-sufficient.  They may have been fortunate, but the risk was still there.  Such an approach seems highly undesirable in social policy terms in that it would promote an economic underclass with restricted ability to participate in society as Union citizens and undermine the promotion of social cohesion and integration into the host Member State, both of which are key aims of the Citizenship Directive (see recitals (17) and (18).)  While I acknowledge the different legislative framework, and in particular the potential impact of Article 8(4) of the Citizenship Directive, I also note that similar policy considerations carried weight in a not dissimilar context in immigration law in KA and Others (Adequacy of Maintenance) Pakistan [2006] UKUT 65 at [8].

 

85. While I am aware that in C-147/11 Czop, counsel for the Secretary of State conceded that an EEA national  who had been residing in the UK but who had not been economically active met the conditions of Article 7(1)(b), the circumstances of, and reasons for, the concession are shrouded in obscurity and I derive no assistance from it.

 

86. While the emphasis in Art 7(1)(b) is on “resources”, one has to make the important caveat that C-408/3 Kingdom of Belgium [2006] ECR I-2647 makes clear that there can be few constraints over the means by which a person comes to have those resources. 

 

87. What is clear from Brey in relation to applying the test is that the argument based on the German (and, one might add, the English) text of the Directive that the question is whether a person has the sufficient resources to avoid becoming a “burden” (without more) is not accepted by the Court.  The question falls to be asked by reference to the resources necessary to avoid becoming an “unreasonable” burden: see Brey at [73] and [74].  To the extent that my decision in SG v Tameside MBC [2010] UKUT 243 (AAC) suggests otherwise at [49], that part of that decision can no longer stand.

 

88. I turn to the resources available to the claimant and in particular whether earnings can be taken into account in the present situation. What sort of resources are sufficient may be very difficult.  We know from C-408/03 Commission v Belgium [2006] ECR I-2647 that, for instance, contributions from others such as contributions in cash or kind (eg accommodation) from friends or family members are to be taken into account.  (I exclude from this special situations such as where the resources are derived from criminal activity or where a child has the right to reside if self-sufficient, but what is relied upon are the contributions from the child’s parents which they would only be in a position to earn by relying on a right derived from the child’s status, thus creating a circular situation.)

 

89. It is easy to see how say an occupational pension, a pension from another Member State or reliable maintenance payments from an ex partner might fall to be taken into account.  Those fortunate to have sufficient capital can point to it.  But the present case is a very different one.  Save for the very limited periods when he was in employment covered (or treated as covered) by a worker registration certificate, the claimant relies on periods of short term employment, often uncertificated, and unproven self-employment, subject to fluctuation and in predominantly low –paid sectors, to have seen him through the five year period.  In my view the short-term nature of the periods of employment and the unproven self-employment is inconsistent with the degree of reliability necessary to represent resources to see him through the five year period needed to achieve the right of permanent residence.

 

90. But there is in my view a further objection to relying on wages for this purpose as against the Member State in which one earns them. Art 7(1)(a) deals with economically active persons, Art 7(1)(b) with those who are self sufficient and Art 7(1)(c) with students. Each of these (as recital (3) to the Citizenship Directive acknowledges) has a different genesis, listed in recital (4).  In those Member States where registration schemes are in place, Article 8 requires different types of evidence, according to whether a person is within (a) (a worker or self employed) or within (b) or (c).  In the case of a worker, some form of confirmation of employment is all that is needed.  Given that to be a worker all that is required is that the work be “genuine and effective” and not “marginal and ancillary” (53/81 Levin [1982] ECR 1035), in such cases the regime is light-touch about the resources a person is required to have.  Clearly in the case of a part-time job at the national minimum wage in London, for example, though it might pass the Levin test, a person who fully had to provide for themselves might fall well short.  Similarly in the case of self-employment, all that is required is that the activity be genuine and effective, which may be very different from anything which turns a significant profit:  see e.g. Bristol City Council v FV (HB) [2011] UKUT 494(AAC).

 

91. The structures and content of Articles 7 and 8 reflect the position, both historical and ongoing, that EU law treats those who are economically active differently from those who are not.

 

92. It is of course an unusual situation that a person would have been working so as to achieve savings without being a “worker” when the work was being done.  Whether it is within the contemplation of the Directive that one should be able to rely on ones earnings to be self –sufficient may be an unusual issue.  However, in the paradigm case, the structure and legislative origins of the Directive lead me to the conclusion that, as against a Member State in which a person works, he may only rely on his rights as a worker and not assert that his earnings as a worker entitle him to be treated as a self-sufficient person.  I find myself in respectful agreement with Chief Commissioner Mullan on this issue, in his obiter remarks in AS v HM Revenue and Customs (CB) [2013] NICom 15 at [110] and with the observations by Senior Immigration Judges (as they then were) Storey and Grubb in the (then) Asylum and Immigration Tribunal in MA & Others (EU national; self-sufficiency; lawful employment) Bangladesh [2006] UKAIT 00090 where they said following a review of the authorities:

 

“44. …[O]ur conclusion accords with a proper understanding of the notion of 'self-sufficiency' and the distinction between free movement in reliance upon economic and, alternatively, non-economic rights.

An EU national who claims to be self-sufficient is not asserting a right to enter and reside in another EU state on the basis of economic activity in that country. If he were, he would be seeking to enter, for example, as a worker or self-employed person. Rather, he relies upon his resources which exist independently of any economic activity in the host Member state.”

 

93. To hold otherwise would undermine both the self-sufficiency provisions which provide protection for Member States and the effectiveness of the derogation from the free movement of workers in the Treaty of Accession in a way which in my judgment cannot have been the legislative intention.

 

94. None of this conflicts with the position put forward by the European Commission in Communication from the Commission to the European Parliament and the Council on guidance for the better transposition and application of Directive 2004/38/EC [etc.] COM(2009)313 Final that (italics in original):

 

“Frontier workers are covered by Community law in both countries (as a migrant worker in the Member State of employment and as a self- sufficient person in the Member State of residence).”

 

I can accept that a person who is a worker in Member State A may fall to be treated as self-sufficient in Member State B, based on his earnings in Member State A, provided always (and it is a not inconsiderable proviso) the employment is established to the necessary extent to allow people to demonstrate his ability to be self-sufficient for the period of his intended residence in Member State B (or the five years needed for a right of permanent residence).  As against Member State A, he would be a worker.

 

95. Reference was made at the oral hearing to the opinion of the Advocate General in C-86/12 Alopka v Ministre du Travail.  Ms Alopka was not an EU national, but her young children were French.  All three sought to assert a right of residence in Luxembourg.  If Ms Alopka had a right at all, it would have to be derived from her children.  She had an offer of a job of indefinite duration in Luxembourg, subject to obtaining a residence permit and a work permit.  The question was whether the children had sufficient resources, through their mother.  Advocate General Mengozzi expressed the following view, on which Mr Weiss relied:

 

“26. At the hearing, the Luxembourg and Netherlands Governments adopted a strict interpretation of the condition laid down in Article 7(1)(b) of Directive 2004/38, taking the view that a mere job offer represented nothing more than a hypothetical possibility of obtaining the resources required, which is not covered by the wording   of that provision. According to those governments, the means of subsistence must have already been acquired when the application for residence is made and any interpretation to the contrary would have the result of rendering the requirement laid down in Article 7(1)(b) of that directive meaningless and redundant.

 

27. As a matter of principle, I am not convinced by that view.

 

28. Like the German Government and the Commission, I consider   that the condition of ‘sufficient resources’ is capable of being satisfied by the definite prospect of future resources which would stem from a job offer to which a Union citizen or a member of his family responded successfully in another Member State. A different interpretation would deprive the freedom of movement enjoyed by citizens of the Union of its practical effect, whereas the objective of Directive 2004/38 is precisely to strengthen the right to freedom of movement.

 

29.In addition, with regard to the amount of sufficient resources, Article 8(4) of Directive 2004/38 requires Member States to take into account the personal situation of the person concerned. Accordingly, when   taking into account the specific situation of a person, the fact that he has been offered a job from which he will be able to derive income enabling him to satisfy the condition laid down in Article 7(1)(b) of Directive 2004/38 cannot be overlooked. Any interpretation to the contrary would lead to the individual situations of Union citizens and their family members being treated unfairly, thus rendering Article 8(4) of that directive meaningless.

 

30.The referring court should therefore, in principle, examine the job offer for an indefinite period made to Ms Alokpa with a view to determining whether her children, who are citizens of the European Union, have ‘sufficient resources’ within the meaning of Directive 2004/38.”

 

96. I consider this case does not assist Mr Weiss, for two reasons.  The first is that because the case was not about whether a person can rely on resources from their job, but whether someone else can do so, the legislative intention that is to be derived from a context where specific provision is made for the rights of “workers” does not apply.  The second reason is that the CJEU subsequently gave judgment on 10 October 2013 in which it failed to adopt that part of the Advocate-General’s reasoning, merely at [30] referring the whole question of sufficiency of resources back to the national court to decide, without providing any guidance.

 

97. My conclusion on the sufficiency of his resources is that both because of their instability and because of their origin the claimant was not at the time of his claim in a position to show that he had been self-sufficient for the purposes of the Directive in respect of the five year period on which he needs to rely.  This conclusion makes it unnecessary to decide the further point submitted by the Secretary of State, namely that to the extent that the resources relied upon were derived from work not covered by a worker registration certificate, they were derived from unlawful work and so could not be taken into account: see W and X (China) v Secretary of State for the Home Department [2006] EWCA Civ 1494; [2007] 1 WLR 1514 and Liu v Secretary of State for the Home Department [2008] 1 CMLR 27 at [12(iv)].. 

 

Issue D: self-sufficiency - comprehensive sickness insurance

 

98. Access to the NHS without charge is (in general terms) on the basis of ordinary residence: see (now) the National Health Service (Charges to Overseas Visitors) Regulations 2011/156 (by regulation 2 an “overseas visitor” means “a person not ordinarily resident in the United Kingdom”) and (at the time in issue in this case) the predecessor regulations 1989/306.  While there is no suggestion that such is the case in the present appeal, in the case of some EU nationals, the UK may be able to recover the cost of providing treatment from another Member State under Regulation (EC) No 987/2009, the implementing regulation for Regulation (EC) No 883/2004.  Such was, for instance, the position – under the equivalent previous Regulations - in SG (cited at [87] above).  In other cases, including the present one, there will be no such ability and the cost of providing the treatment falls squarely on the UK.

 

99. Mr Weiss relies on the rights of EU nationals under Regulation 883/2004 to access National Health Service Treatment, as a non-cash social security benefit, on the same terms as UK nationals.  That in my view is a misguided approach in that it confuses the right of those EU nationals who by one route or another have managed to be ordinarily resident in the UK not to be discriminated against (with which Regulation 883/2004 is concerned) with whether the conditions for possessing a right of residence are fulfilled (which is the concern of the Citizenship Directive).  The purposes of the two measures are different: see Brey at [50] – [53].

 

100. The cost of providing treatment falling on the host Member State is precisely what the definition of self-sufficiency seeks to avoid, as noted by the majority in W and X(China).  At [10] – [11] Buxton LJ observed:

 

“10. [The point was raised that] in the case of the United Kingdom the requirement of sickness insurance was otiose, or automatically fulfilled, because health care was in any event available free of charge under the National Health Service. That argument overlooks the fundamental reason for the insurance requirement that was identified as the basis of the scheme of the Directive in Chen: to prevent the presence of the EU citizen placing a burden on the host state. Use of free state medical services exactly creates such a burden. And in any event, even if the argument were otherwise valid its factual premise is false: Mr Gill did not demur from the assumption that, as citizens of a third country, W   and X would not be entitled to free care under the NHS.

11. It is also because of the nature of the NHS that the social security payments currently being made by W do not count as "insurance" for these purposes. The NHS scheme is not financed solely out of the social security scheme, but is largely tax-financed. Contribution to the social security fund cannot therefore serve as any sort of proxy for insurance designed to remove from the taxpayer the burden of providing health care.”

 

101. Mr Cornwell submits that this part of the decision is binding upon me.  I am not persuaded in view of the final sentence of [10] quoted above, but it does not matter.  Despite Mr Weiss’s valiant efforts to persuade me otherwise on the basis - which I consider immaterial when there is no relevant difference between them on the point -  that the decision refers only to the EEA Regulations and not to the Citizenship Directive, I consider I am bound by (and in any event respectfully agree with) Sullivan LJ (giving the judgment of the Court of Appeal) in FK (Kenya) where he said at [15]:

 

“The requirement that there be comprehensive sickness insurance cover is not a mere formality, as was submitted by Ms Nnamani on behalf of the appellant, it is an integral part of the concept of self- sufficiency under the Regulations. The Regulations give effect to the United Kingdom's obligations under EU law to facilitate the free movement, not merely of workers and those who are self-employed, but also those who are self-sufficient together in each case with their family members. A requirement that a person be self-sufficient is no less a matter of substance than a requirement that a person be either employed or self-employed. A person who has to rely on the United Kingdom's National Health Service is no more self-sufficient than a person whose resources are inadequate so that he may become a burden on the United Kingdom's social assistance system. Thus there was in this case a complete failure to comply with a fundamental requirement of the Rules.”

 

And at [16]:

 

“For the reasons I have given above, I do not accept that the requirement is a mere formality. It is a matter of substance which goes to the heart of self-sufficiency and that in turn goes to the heart of the question: what kinds of person are entitled to free movement within the community under EU law.

 

102. I note the remarks of Sedley LJ at [26] of W and X:

 

“But I would enter a caveat as to whether the Directive, when it speaks of "sickness insurance in respect of all risks" is necessarily speaking of private health insurance. The National Health Service, although now heavily funded out of general taxation, is in origin and in law based on national insurance. Nothing would have been easier, in the Directive and in the Rules, than to include the word 'private' if that alone was what was meant – especially since, so far as I know, private insurance rarely if ever covers all risks, such as the risk of requiring long-term medical care.”

 

For my part, I do not regard the issue as one of public v private provision, but of whether the host member state, in this case the UK, is (by one means or another) protected – at least to a degree -  against claims on its financial resources.  The claimant in SG was rightly accepted by the UK to have comprehensive sickness insurance not because she had private insurance but because her social security arrangements in Sweden, coupled with the relevant EU Regulations (see [98] above) meant that the Swedish state had to bear the cost of National Health Service treatment she needed.

 

103. These views are consistent with the position formerly adopted by the Commission in the Guidance cited at [94] above.  Para 2.3.2 stated (emphasis added):

 

“Any insurance cover, private or public, contracted in the host Member State or elsewhere, is acceptable in principle, as long as it provides comprehensive coverage and does not create a burden on the public finances of the host Member State.  In protecting their public finances while assessing the comprehensiveness of sickness insurance cover, Member States must act in compliance with the limits imposed by Community law and in accordance with the principle of proportionality.  Pensioners fulfil the condition of comprehensive sickness insurance cover if they are entitled to health treatment on   behalf of the Member State which pays their pension. The European Health Insurance Card offers such comprehensive cover when the EU citizen concerned does not move the residence in the sense of Regulation (EEC) No 1408/71 to the host Member State and has the intention to return, e.g. studies or posting to another Member State.”

 

104. The position adopted by the Commission appears subsequently to have changed, in that by a Press Release (IP/12/417 of 26 April 2012) the Commission announced that a reasoned opinion had been sent to the United Kingdom regarding a number of issues said to “remain unresolved”, including:

 

“Under the Free Movement Directive, EU citizens who settle in another EU country but do not work there may be required to have sufficient   resources and sickness insurance. The United Kingdom, however, does not consider entitlement to treatment by the UK public healthcare scheme (NHS) as sufficient.  This breaches EU law.”

 

I respectfully disagree with that view as being incompatible with the legislative purpose of Article 7(1)(b) as that purpose was explained in the authorities most recently reviewed in Brey.  There is no indication before me of the reason for the Commission’s apparent change of heart and I see no reason to refer the matter under Article 267 merely because the change of heart has occurred.  I therefore follow FK (Kenya).

 

105. It follows that I also respectfully disagree with the obiter remarks suggesting that entitlement to NHS treatment is or may well be sufficient for this purpose by Judge Rowland in Secretary of State for Work and Pensions v SW (IS) [2011] UKUT 508 (AAC) at [20] and by Chief Commissioner Mullan in AS at [128] (xi) and (xii).  It is not evident that FK was cited in either case and it may well be that if it had been their conclusions on the point would have been otherwise.

 

Issue E: other effects of Brey ?

 

106. It was submitted on behalf of the claimant that (a) Brey made it “unlawful for the Secretary of State to automatically conclude from the mere fact of [the claimant] having claimed JSA, that he was not self-sufficient for the purposes of Article 7(1)(b)” ; (b) that JSA in any event does not amount to “social assistance” (cf. C-2 and 3/08 Vatsouras at [45]); and (c) that it would be an important factor in an examination of the claimant’s circumstances that it was known at the date of his claim that the worker registration scheme was due to end on 1 May 2011 and that at that point any ongoing claim for JSA would be as a jobseeker, so the period for which he needed to rely on a right based on self-sufficiency amounted merely to two months and one week.

 

107. In my view this submission fails. I have held that the claimant had not retained worker status at the time of his claim nor was he self-sufficient.  I consider that he was in a materially different situation from Mr Brey, who for the reasons set out at [74]-[79] had been found to be self-sufficient by the Austrian immigration authorities shortly before his benefit claim, thus taking him into the need for Grzelczyk-style case by case examination.  The present case is not one where a right under Article 7 could be asserted, only for some supervening event then to occur which rendered the claim necessary.  I therefore express no view as to the outcome, if (contrary to my view) an individualised examination of the present claimant’s circumstances were to be required.

 

Issue F: unlawful discrimination

 

108. This point may be dealt with briefly. Mr Weiss contends that the “right to reside “ test is unlawfully discriminatory on the grounds of nationality.  He accepts that the matter has been determined against him by binding domestic authority in the form of the decision of the Supreme Court in Patmalniece v Secretary of State for Work and Pensions [2011] UKSC 11; [2011] 1 WLR 783. He does not seek to argue that there is any distinction to be drawn between the provisions relating to state pension credit which were in issue in Patmalniece and the provisions regarding JSA with which the present appeal is concerned. As noted at [11(c)] above, the Supreme Court was aware of the threatened proceedings and the situation has not changed in any material respect.  I therefore merely note the argument and reject it.

 

Issue G: conflict with Article 70 of Regulation (EC) No 883/2004

 

109. This issue as put by Mr Weiss in written submissions:

 

“comes from the language of Regulation 70(4) of EU Regulation 883/04 which deals with “special non-contributory benefits”, a  category which includes income-based JSA: “The benefits referred to in paragraph 2 shall be provided exclusively in the Member State in which the persons concerned reside, in accordance with its legislation.  Such benefits shall be provided by and at the expense of the institution of the place of residence.” The definition of “residence” is given in Article 1(j):““residence” means the place where a person habitually resides”. As the Court of Justice made clear in case C-90/97 Swaddling, the UK cannot alter the EU law definition of “habitual residence” in order to deprive Union citizens of special non-contributory benefits (paras 28-30) they are entitled to receive when the EU “habitual residence” test is applied.”

 

110. This point was not developed by Mr Weiss at the oral hearing.  I merely record my view that Swaddling was a case where the UK added to the EU concept of habitual residence by imposing a requirement of such residence for a minimum period of time, which forms no part of the definition in European law.  In those circumstances, one can readily understand the decision of the Court of Justice.  But what is now regulation 70 in any event only provides for special non-contributory cash benefits to be paid on the basis of residence (rather than, for instance, being exportable) and to be paid “in accordance with its legislation” i.e. that of the Member State in which the person concerned resides.  The Regulation has a different purpose from the Citizenship Directive.  I do not see the point as a compelling one.  I expressed myself in similar terms in relation to the predecessor legislation on the point in JS v SSWP [2010] UKUT 131 (AAC) at [34] – [38], a case which has subsequently been appealed to the Supreme Court and been the subject of a reference to the CJEU without, so far as I can see, any point on Swaddling thus far having been taken.  I reject this point also.

 

The First-tier Tribunal’s decision

 

111. The First-tier Tribunal directed itself that

 

“Although the Appellant relies upon the letter from the European Commission to support his position that the derogation referred to above is unlawful, it is not within the scope of the powers of the First- tier Tribunal to set aside a statutory instrument.” 

 

However, by section 2 of the European Communities Act 1972:

 

“(1) All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression “ “enforceable EU right”“ and similar expressions shall be read as referring to one to which this subsection applies.”

 

It follows that the tribunal erred in law in concluding that it could not consider the validity of the derogation point.

 

112. I also consider, for the reasons I have given, that the tribunal wrongly concluded that Zalewska provided binding authority against the derogation point.

 

113. In the event, for the reasons I have given, the derogation point does not help the claimant, but that goes to the materiality of the tribunal’s error and/or the steps I should take in consequence of it.  One could not know it was immaterial until further facts had been found.

 

114. The tribunal also failed to address the issue of whether the claimant had sufficient resources to be self-sufficient, if he could meet the comprehensive sickness insurance point.  It may be that as the tribunal considered that as he failed on the latter, it did not need to consider the former, but if that was so, it should have said so.

 

115. It follows that the decision of the tribunal was indeed in error of law.  As indicated in the decision at the head of these reasons, I set it aside and find further facts and, having done so, am satisfied that the tribunal’s decision was right in the result and re-make it accordingly.

 

 

 

CG Ward

Judge of the Upper Tribunal

23 January 2014