Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No.  CPC/1026/2014

ADMINISTRATIVE APPEALS CHAMBER

 

BEFORE UPPER TRIBUNAL JUDGE WARD

 

Attendances:

 

For the Appellant: Mr Tom Royston, instructed by Howells

 

For the Respondent Ms Julia Smyth, instructed by Solicitor to DWP

 

Decision: The appeal is allowed.  The appellant is not disentitled from state  pension credit on her claim made with effect from 8 November 2012 on the ground of lacking the right to reside.  She had such a right pursuant to Article 17 of Directive 2004/38/EEC and/or regulations 5(2)(a) and 15(1)(c) of the Immigration (European Economic Area) Regulations 2006.

 

REASONS FOR DECISION

 

1. The appellant’s original appeal was against a decision dated 18 December 2012 that she was not entitled to state pension credit on her claim, made with effect from 8 November 2012, because she did not have the right to reside in the UK:  see State Pension Credit Act 2002, s1(2)(a) and State Pension Credit Regulations 2002/1792, reg.2. 

 

2. The appellant was born on 30 July 1951.  She is a national of Latvia who moved to the UK on an unknown date in 2008.  In due course she obtained work through agencies.  Findings as to the dates of such work and the treatment of such work for pay and tax purposes and what occurred when there was no work for her to do are set out in Appendix B to this decision.  A registration card and certificate under the worker registration scheme (“WRS”) constituted by the Accession (Immigration and Worker Registration) Regulations 2004/1219 (“the Registration Regulations”) were issued to her on 20 August 2010.  Her employments before that date were not covered by a WRS certificate.  A summary of the WRS and of relevant parts of the Registration Regulations is set out in Appendix A.  I acknowledge my indebtedness to Lord Hope’s speech in Zalewska v Department for Social Development (Northern Ireland) [2008] UKHL 67 at paras 11 to 14, although I have necessarily had to modify what is said there to reflect legislative changes and the circumstances of this case.

 

3. In a written submission to the First‑tier Tribunal (“FtT”) it was argued on behalf of the appellant that the decision was wrong in law because the extension of the WRS for the period 1 May 2009 to 30 April 2011 which was effected by the Accession (Immigration and Worker Registration) (Amendment) Regulations 2009/892 (“the Extension Regulations”) was incompatible with EU law. 

 

4. On 19 November 2013 a district tribunal judge gave a decision, the material parts of which were in the following terms:

 

“  3. The point in issue is straightforward.  The submission requests me to decide whether the labour market restrictions imposed by the UK Government on A8 nationals for the period from 2009 to 2011 were lawful.  The submission is asking for a ruling on whether the decision of the UK Government to extend the scheme for a further two years beyond the initial first five years is lawful. 

 

4. I have no power to declare legislation to be … lawful or not lawful.  I cannot declare it to be ultra vires.  I cannot give the remedy sought.  The  First‑tier Tribunal does not have a judicial review jurisdiction …

 

5. The decision I make is that the tribunal does not have jurisdiction to make a decision declaring legislation to be valid or invalid.  This decision is an interlocutory decision and can be appealed to the Upper Tribunal.”

 

5. On 16 January 2014 the district tribunal judge gave permission to appeal, indicating that “the issue for the Upper Tribunal on which I grant permission to appeal is whether the remedy asked for by the appellant is outside the powers of the First‑tier Tribunal to grant”. 

 

6. In my directions of 7 May 2014 I indicated to the parties my view that although the district tribunal judge had referred to her decision as an interlocutory decision I considered, subject to submissions, that it was correctly to be viewed as a substantive decision  determining the appeal and a final one rather than an interlocutory one.  I suggested that if I were to find that the various conditions in section 12(2) of the Tribunals, Courts and Enforcement Act 2007 were met I would be able to remake the FtT’s decision, which would encompass the substantive matter before it i.e. the legality of the extension of the WRS.  Neither party objected to this proposed course of action. 

 

7. The appellant obtained permission to introduce a further point before the Upper Tribunal (discussed further below) relating to the quality of “residence” required for the purposes of Article 17 of Directive 2004/38/EEC (“the Directive”) and the legislation implementing the Directive in the UK, namely regulations 5(2)(a) and 15(1)(c) of the Immigration (European Economic Area) Regulations 2006/1003 (“the IEEA Regulations”).  

 

8. A brief attempt was made earlier in the proceedings to challenge the decision on the basis of the disproportionate impact on the appellant individually but was expressly abandoned in the course of the oral hearings.

 

9. It is common ground that the FtT was wrong in law.  Section 2(1) of the European Communities Act 1972 provides:

 

“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.”

 

If the appellant’s submission to the FtT was correct, she enjoyed what is defined by the section as an “enforceable EU right” which the FtT was required by the section to enforce.  It did not matter that the FtT did not have a judicial review jurisdiction.  The theoretical availability of judicial review in the High Court did not prevent the tribunal from considering the lawfulness of the legislation and the relief sought was not such that it could only be given on judicial review. 

 

10. The question whether the appellant could rely on Article 17 of the Directive and/or reg 5(2)(a) and 15(1)(c) of the IEEA Regulations breaks down into a number of issues.

 

Issue A: Does the requirement in Article 17(1)(a) of the Directive for a person to “have resided [in another Member State] continuously for more than three years” at the material time refer to actual residence or to residence that is in accordance with specific legal instruments (the point equally apples to the IEEA Regulations)?  If actual residence suffices, it is not disputed that the appellant succeeds on the facts.  If actual residence is not sufficient and an examination of the appellant’s circumstances in the light of the relevant legal instruments is required, that takes us to issue B.

 

Issue B: Was the extension of the WRS by the Extension Regulations compatible with EU Law?  As now put, this is a proportionality challenge.  If the answer to issue B is that the extension was lawful, then the appellant would not be able to rely for the purposes of her Article 17 claim on any period of work before 20 August 2010 when her WRS certificate was issued.  Such certificates are not retrospective:  Szpak v Secretary of State for Work and Pensions [2013] EWCA Civ 46.  Nor would she be able to rely on any period as a jobseeker, because of, in particular, regs 4(2) and 5 of the Registration Regulations: see Appendix A.  She would in consequence be unable to point to three years of work compliant with the WRS as, on this hypothesis, she would need to be able to. If the answer to issue B is that the extension was unlawful, we turn to issue C.

 

Issue C: On the assumption that the extension of the WRS was unlawful so that work undertaken by the appellant was not subject to its requirements, was she a worker even at times when she was not actually working, or a jobseeker, for EU law purposes?  This involves consideration of the detailed factual evidence in Appendix B.

 

11. It was common ground between the parties that I should receive submissions on all of issues A to C.  Having done so, it is appropriate to rule on all of them, in particular with a view to minimising delay to the case lest there should be a further appeal and to clarify the position for other cases in which there may not be the advantage of professional representation. 

 

12. On 6 August 2014 I held an oral hearing in Manchester at which the appellant gave evidence through an interpreter.  As it was common ground that the FtT’s decision was in error of law I was entitled to make findings of fact and did so:  they are those now forming Appendix B.  I also received submissions on issues A and C.  Because of shortage of time, issue B was dealt with at a subsequent hearing in London on 15 December 2014.  Further submissions were also permitted on specific aspects of issues A and C following applications made by the respondent.  I am grateful to both counsel for their assistance in this case. 

 

13. I deal with each issue in turn.  So far as possible, the law applicable to each is discussed in the relevant section in order to avoid an excessively indigestible block at this point in the decision.

 

Issue A

 

14. By Article 21 of the Treaty on the Functioning of the European Union:

 

“  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.”

 

15. The Directive provides in the following terms.

 

Recitals 17 to 19 read:

 

“(17) Enjoyment of permanent residence by Union citizens who have chosen to settle long term in the host Member State would strengthen the feeling of Union citizenship and is a key element in promoting social cohesion, which is one of the fundamental objectives of the Union. A right of permanent residence should therefore be laid down for all Union citizens and their family members who have resided in the host Member State in compliance with the conditions laid down in this Directive during a continuous period of five years without becoming subject to an expulsion measure.

 

(18) In order to be a genuine vehicle for integration into the society of the host Member State in which the Union citizen resides, the right of permanent residence, once obtained, should not be subject to any conditions.

 

(19) Certain advantages specific to Union citizens who are workers or self-employed persons and to their family members, which may allow these persons to acquire a right of permanent residence before they have resided five years in the host Member State, should be maintained, as these constitute acquired rights, conferred by Commission Regulation (EEC) No 1251/70 of 29 June 1970 on the right of workers to remain in the territory of a Member State after having been employed in that State and Council Directive 75/34/EEC of 17 December 1974 concerning the right of nationals of a Member State to remain in the territory of another Member State after having pursued therein an activity in a self-employed capacity.”

16. Article 6 confers on Union citizens a right of residence for a period of up to three months.  Article 7 confers a right of residence for more than three months on certain categories of people – workers, self‑employed persons, those who are self‑sufficient or students, and their family members. 

 

17. Article 16 provides:

“General rule for Union citizens and their family members

1.  Union citizens who have resided legally for a continuous period of five years in the host Member State shall have the right of permanent residence there. This right shall not be subject to the conditions provided for in Chapter III.

2.  Paragraph 1 shall apply also to family members who are not nationals of a Member State and have legally resided with the Union citizen in the host Member State for a continuous period of five years.

3.  Continuity of residence shall not be affected by temporary absences not exceeding a total of six months a year, or by absences of a longer duration for compulsory military service, or by one absence of a maximum of 12 consecutive months for important reasons such as pregnancy and childbirth, serious illness, study or vocational training, or a posting in another Member State or a third country.

4. Once acquired, the right of permanent residence shall be lost only through absence from the host Member State for a period exceeding two consecutive years.”

 

18. Article 17 provides:

“Exemptions for persons no longer working in the host Member State and their family members

1.  By way of derogation from Article 16, the right of permanent residence in the host Member State shall be enjoyed before completion of a continuous period of five years of residence by:

(a) workers or self-employed persons who, at the time they stop working, have reached the age laid down by the law of that Member State for entitlement to an old age pension or workers who cease paid employment to take early retirement, provided that they have been working in that Member State for at least the preceding twelve months and have resided there continuously for more than three years.

If the law of the host Member State does not grant the right to an old age pension to certain categories of self-employed persons, the age condition shall be deemed to have been met once the person concerned has reached the age of 60;

(b) workers or self-employed persons who have resided continuously in the host Member State for more than two years and stop working there as a result of permanent incapacity to work.

If such incapacity is the result of an accident at work or an occupational disease entitling the person concerned to a benefit payable in full or in part by an institution in the host Member State, no condition shall be imposed as to length of residence;

(c) workers or self-employed persons who, after three years of continuous employment and residence in the host Member State, work in an employed or self-employed capacity in another Member State, while retaining their place of residence in the host Member State, to which they return, as a rule, each day or at least once a week.

For the purposes of entitlement to the rights referred to in points (a) and (b), periods of employment spent in the Member State in which the person concerned is working shall be regarded as having been spent in the host Member State.

Periods of involuntary unemployment duly recorded by the relevant employment office, periods not worked for reasons not of the person's own making and absences from work or cessation of work due to illness or accident shall be regarded as periods of employment.

2.  The conditions as to length of residence and employment laid down in point (a) of paragraph 1 and the condition as to length of residence laid down in point (b) of paragraph 1 shall not apply if the worker's or the self-employed person's spouse or partner as referred to in point 2(b) of Article 2 is a national of the host Member State or has lost the nationality of that Member State by marriage to that worker or self-employed person.

3.  Irrespective of nationality, the family members of a worker or a self-employed person who are residing with him in the territory of the host Member State shall have the right of permanent residence in that Member State, if the worker or self-employed person has acquired himself the right of permanent residence in that Member State on the basis of paragraph 1.

4.  If, however, the worker or self-employed person dies while still working but before acquiring permanent residence status in the host Member State on the basis of paragraph 1, his family members who are residing with him in the host Member State shall acquire the right of permanent residence there, on condition that:

(a) the worker or self-employed person had, at the time of death, resided continuously on the territory of that Member State for two years; or

(b) the death resulted from an accident at work or an occupational disease; or

(c) the surviving spouse lost the nationality of that Member State following marriage to the worker or self-employed person.”

 

19. The terms of recital (19) and also the principle in C-127/08 Metock (at para 59) that “Union citizens cannot derive less rights from [the Directive] than from the instruments of secondary legislation which it amends or repeals” necessitate looking at the previous law also.  Under Article 48 of the (then) EEC Treaty:

 

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

…

3. It shall entail the right …

 

(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.”

 

20. Thus it came about that Regulation (EEC) No. 1251/70 of the Commission of 29 June 1970 came to be made, which it is necessary to quote at some length.

 

“The Commission of the European Communities,

 

Having regard to the Treaty establishing the European Economic Community, and in particular Article 48(3)(d) thereof …

 

Having regard to the Opinion of the European Parliament

 

Whereas Council Regulation (EEC) No  1612/68 of 15 October 1968 and Council Directive No  68/360/EEC of 15 October 1968 enabled freedom of movement for workers to be secured at the end of a series of measures to be achieved progressively;  whereas the right of residence acquired by workers in active employment has as a corollary the right, granted by the Treaty to such workers, to remain in the territory of a Member State after having been employed in that State; whereas it is important to lay down the conditions for the exercise of such right;

 

Whereas the said Council Regulation and Council Directive contained the appropriate provisions concerning the right of workers to reside in the territory of a Member State for the purposes of employment; whereas the right to remain, referred to in Article 48(3)(d) of the Treaty, is interpreted therefore as the right of the worker to maintain his residence in the territory of a Member State when he ceases to be employed there;

 

…

 

Whereas it is important, in the first place, to guarantee to the worker residing in the territory of a Member State the right to remain in that territory when he ceases to be employed in that  State because he has reached retirement age or by reason of permanent incapacity to work …

 

…

 

Has adopted this Regulation:

 

Article 1

The provisions of this Regulation shall apply to nationals of a Member State who have worked as employed persons in the territory of another Member State and to members of their families, as defined in Article 10 of Council Regulation (EEC) No 1612/68 on Freedom of Movement for Workers within the Community. 

 

Article 2

1. The following shall have the right to remain permanently in the territory of a Member State:

 

(a) a worker who, at the time of termination of his activity, has reached the age laid down by the law of that Member State for entitlement to an old‑age pension and who has been employed in that State for at least the last twelve months and has resided there continuously for more than three years;

 

(b) a worker who, having resided continuously in the territory of that State for more than two years, ceases to work there as an employed person as a result of permanent incapacity to work …;

 

(c) A worker who, after three years’ continuous employment and residence in the territory of that State, works as an employed  person in the territory of another Member State, while retaining his residence in the territory of the first State to which he returns, as a rule, each day or at least once a week.

Periods of employment completed in this way in the territory of the other Member State shall, for the purposes of entitlement to the rights referred to in sub‑paragraphs (a) and (b), be considered as having been completed in the territory of the State of residence. 

 

…

 

Article 4

1. Continuity of residence as provided for in [Article 2(1) … ] may be attested by any means of proof in use in the country of residence.  It shall not be affected by temporary absences not exceeding a total of three months per year, nor by longer absences due to compliance with the obligations of military service.

 

2. Periods of involuntary unemployment, duly recorded by the competent employment office, and absences due to illness or accident shall be considered as periods of employment within the meaning of Article 2(1).

 

…

 

It is common ground that the Opinion of the European Parliament referred to in the recitals adds nothing material for present purposes. 

 

21. The wording of Article 2 of Directive 75/34/EEC (the equivalent provision relating to the self‑employed) is identical to that of Regulation 1251/70.

 

22. Regulation 1251/70 was repealed not by the Directive but, as it was a Commission Regulation, by Commission Regulation (EEC No. 635/2006).  The recital to that Regulation, having recorded the consolidation effected by the Directive, states:

 

“Article 17 thereof includes the main elements of Commission Regulation (EEC) No 1251/70 of 29 June 1970 on the right of workers to remain in the territory of a Member State after having been employed in that State and amends them by granting beneficiaries of the right to remain a more privileged status, namely that of the right of permanent residence.”

 

23. Article 17 is, as previously noted, implemented in the UK through the IEEA Regulations. Regulation 15 provides as follows:

 

“Permanent right of residence

 

(1) The following persons shall acquire the right to reside in the United Kingdom permanently –

 

(a) an EEA national who has resided in the United Kingdom in accordance with these Regulations for a continuous period of five years;

 

(b) a family member of an EEA national who is not himself an EEA national but who has resided in the United Kingdom with the EEA national in accordance with these Regulations for a continuous period of five years;

 

(c) a worker or self‑employed person who has ceased activity;

 

(d) the family member of a worker or self-employed person who has ceased activity…”

 

Thus sub-paragraphs (1)(a) and (b) deal with Article 16 rights, (c) and (d) with those under Article 17.

 

24. The expression “worker or self‑employed person who has ceased activity” is defined by regulation 5(1) by reference to fulfilment of one of a number of conditions.  That in paragraph (2) provides:

 

“A person satisfies the conditions in this paragraph if he –

 

(a) terminates his activity as a worker or self‑employed person and –

(i) has reached the age at which he is entitled to a state pension on the date on which he terminates his activity; or

(ii) in the case of a worker, ceases working to take early retirement;

 

(b) pursued his activity as a worker or self‑employed person in the United Kingdom for at least 12 months prior to the termination; and

 

(c) resided in the United Kingdom continuously for more than three years prior to the termination.”

 

Paragraph (3) then makes equivalent provision for those who terminate activity as a worker or self-employed person as a result of a permanent incapacity to work.  The residence condition in that paragraph is that “he resided in the United Kingdom continuously for more than two years prior to the termination.”  Paragraph (7) makes equivalent provision to that made by Article 17 in relation to various circumstances of involuntary inactivity. 

 

25. Before turning to the parties’ submissions it is appropriate to review the (by no means straightforward) existing authorities.  The only authority of the CJEU directly on Regulation 1251/70 appears to be C‑257/00 Givane v Secretary of State for the Home Department.  This was a case not directly on Article 2 but on Article 3, which conferred rights on family members of a worker who had died during his working life and before having acquired the right to remain in the territory of the State concerned.  It was subject to a condition that “the worker, on the date of his decease, had resided continuously in the territory of that Member State for at least two years”.  Mr Givane had been resident in the UK for about three years, then went to India for 10 months before returning to the UK where he resided for about 21 months before his death. The issue accordingly was whether the necessary two year period of residence must immediately precede the worker’s death.  The Court referred at para 29, in the context of explaining the legislative background, to a condition imposed by Article 2(1)(a) of:

 

“a degree of established connection with the host State, which is evidenced by a three-year period of continuous residence and a period of employment during the last 12 months preceding the end of a worker's working life due to his reaching the age laid down by the law of that Member State for entitlement to an old-age pension.”.

 

At para 46 it commented that the role of the two-year residence requirement in Article 3 was that the condition is intended:

 

“to establish a significant connection between, on the one hand, that Member State, and on the other hand, that worker and his family, and to ensure a certain level of their integration in the society of that State.”

 

The Court decided in favour of the narrower of the options available to it, namely that the two-year period must immediately precede the worker’s death, rejecting a gloss put forward by the appellant in that case which

 

 “would introduce into Regulation No. 1251/70 criteria which do not flow expressly from it” (para 48).

 

26. All I derive from Givane for present purposes is:

 

(a)  an acknowledgement of the role played by “residence” (whatever that means) as a proxy for the desirable goal of integration; and

(b)  a disinclination on the part of the Court to an expansive reading of the Regulation, in particular by reading things in that are not there.

 

27. The only domestic authority at a level above the Upper Tribunal is the decision in RM (Zimbabwe) v Secretary of State for the Home Department [2013] EWCA Civ 775.  The appellant was a Zimbabwean national who in 2008 married a Mr Nicolau, a Spanish national.  Mr Nicolau had worked in the United Kingdom for many years before stopping in 2002 because of ill‑health.  By the time the case came before the Court of Appeal, the issue was whether the appellant could rely on Article 17(3) of the Directive which, as noted above, confers the right of permanent residence on

 

“the family members of a worker or a self‑employed person who are residing with him in the territory of the host Member State … if the worker or self‑employed person has acquired himself the right of permanent residence in that Member State on the basis of paragraph 1.”

 

28. Mr Nicolau, having stopped work in 2002, could not have acquired rights under the Directive, unlike a person who had stopped work on the grounds of permanent incapacity after the Directive came into force in 2006.  However, he had fulfilled the criteria of Regulation 1251/70.  The question for the Court was whether thereby Mr Nicolau had “acquired himself the right of permanent residence … on the basis of paragraph 1” so that the appellant could rely on Article 17(3).

 

29. Gloster LJ, who gave the principal judgment, based her view heavily on the opinion of the Advocate General in C-162/09 Secretary of State for Work and Pensions v Lassal [2011] 1 CMLR 31.  In that case, although the issue was whether for the purposes of Article 16 a person could rely on residence completed before the Directive came into force, the Advocate General’s opinion nonetheless indicated at paragraphs 63 to 67 that residence completed before 2006 should be taken into account for the purposes of Article 17.

 

30. It is necessary to refer in particular to the following paragraphs of the Advocate General’s opinion: 

“68. In the scheme of Directive 2004/38, Article 16(1) and 17(1)(a) are closely connected. They are both in the chapter which provides for a right of permanent residence, in the section in which the substantive conditions for the acquisition of that right are set out. Furthermore, the introductory wording of Article 17 of the directive – ‘By way of derogation from Article 16, the right of permanent residence in the host Member State shall be enjoyed before completion of a continuous period of five years of residence by’ – makes clear that there is also a close substantive connection between Article 16 and 17 of the directive.

69. Against that background of a close connection between those two provisions it must in principle be assumed that the two factual elements whose wording is almost identical – ‘a continuous period of five years of residence in the host Member State’ in Article 16(1) of the directive and ‘resided continuously in the host Member State for more than two years’ in Article 17(1)(b) of the directive – are to be interpreted in the same way. Therefore, a period of residence which ended before 30 April 2006 would also have to be taken into account in the context of Article 16(1) of the directive.

70. The Government of the United Kingdom contests that point of view by arguing that the right of permanent residence under Article 16 of the directive is a right which was not previously provided for in secondary legislation. That objection is unconvincing. The Community legislature could easily have decided to make a distinction between Article 17(1)(b) and Article 16(1) of the directive concerning the application of the conditions of those provisions to past periods of residence. It chose not to. The use of virtually identical conditions in both provisions is a strong indication that the Community legislature was following the same approach to that issue in both provisions.”

The CJEU in Lassal, while endorsing the Advocate-General’s conclusion, makes no express reference to the relationship between Articles 16 and 17 in its reasoning.

 

31. In any event, Gloster LJ, placing weight at para 41 on (inter alia) recital (19) of the Directive emphasising the maintenance of the existing rights previously conferred by Regulation 1251/70, concluded that the appellant could rely on Mr Nicolau having fulfilled the conditions of Article 17 by virtue of his earlier work, residence and ill-health retirement, and was not confined to Article 16, which would have been less helpful for the appellant’s purposes.  Further, at para 43:

“The fact that the rights conferred by Article 17 are in derogation of the social integration objective of the Directive (because they allow the conferring of permanent rights of residence without the necessary period for social integration to take place), and that, accordingly, Article 17 is required to be strictly interpreted (see paragraph [23] of the judgment in Commission of the European Communities v Italy C-40/93 [1995] ECR I‑1319), does not lead to any different conclusion.  That is because the recitals to the Directive, and indeed [a Commission Memorandum], make it clear that previously acquired rights are to be preserved.” 

 

32. Reference should also be made to Gloster LJ’s rejection of a submission for the Secretary of State that it would be inappropriate to confer a right under Article 17(3) when no right was available under Article 16(2).  She observed:

 

“As is apparent, Article 17 is not seeking to implement the integration objective of the Directive; on the contrary, it is providing an exceptional right in circumstances where, through loss of ability to work as a result of permanent incapacity, the Union Member may well be unable to fulfil the necessary five years residence requirement and thereby integrate, because he no longer qualifies under Article 7(1)(a) as a worker or self‑employed person.”

 

33. I also record the observation of Longmore LJ, concurring at para 56, that:

 

 “I have found it a little puzzling that, whereas under Article 16 a family member of a Union citizen (who has resided legally for a continuous period of five years in a host Member State) does not acquire a right of permanent residence unless he or she has resided with a Union citizen for a continuous period of five years, under Article 17 the family member of a Union citizen (who has resided continuously in the host Member State for more than two years and has stopped working as a result of permanent [incapacity] to work) can acquire a right of permanent residence immediately he or she becomes a family member by marrying that Union citizen.  But that does seem to be what Article 17 says.”

 

34. Accordingly, while the case contained analysis and dicta requiring careful consideration, the actual question considered by the Court of Appeal, namely whether reliance could be placed for the purposes of Article 16(1) on a period fulfilling the conditions before the coming into force of the Directive, is not the issue with which I am concerned and there is in my view nothing in that case which is binding upon me.  While I accept that the Advocate General’s observations in Lassal clearly commended themselves to Gloster LJ, those observations were both given and applied in the context of an issue (taking past residence into account) where there was no reason on the face of the Articles to draw a distinction whereas here there is - residence or legal residence.  Furthermore, Gloster LJ’s reliance on those observations was not such as to diminish the importance given by the Directive to the preservation of existing rights:  see [31] above.

 

35. I then turn to two decisions of the Upper Tribunal (Immigration and Asylum Chamber). Following the initial hearing, my own researches led me to MAH (dual nationality – permanent residence) (Canada) [2010] UKUT  445 (IAC) (heard on 28 October 2010) on which I invited written submissions.  The respondent in turn cited Zubair (EEA Regs: self‑employed persons) [2013] UKUT  196 (IAC).  As the significance of both cases has been keenly contested, I make no apology for looking at them in some detail. Both were decisions following oral argument with representation on both sides.

 

36. In MAH, the appellant, a Canadian national who was seeking to assert a right under regulation 15(1)(d) was not the person whose activity was in issue: that was her (separated) husband, a dual national of UK and Republic of Ireland, who had worked as a lorry driver before becoming permanently incapacitated.  He had resided in the UK for the two year period prior to terminating his activity as a worker.  Indeed, he had lived all his life in the UK. For our purposes the key section of the Upper Tribunal’s decision begins at para 22 - whether the husband could be regarded as having been exercising Treaty rights when he had never moved from one Member State to another.  At the time of the Upper Tribunal’s decision, the Court of Appeal had ruled in McCarthy v Secretary of State for the Home Department [2008] EWCA Civ 641, and the case had been appealed onwards to the Supreme Court (or House of Lords – it is variously stated in the material before me), by whom a reference had been made to the CJEU, which was pending, as the Upper Tribunal noted at paras 23 and 26.  At para 24 the Upper Tribunal analysed the course of the litigation in McCarthy, concluding that

 

“In summary it appears that what defeated Ms McCarthy’s application was that she was never a worker within the meaning of EU law and consequently could not have exercised EU treaty rights to reside in another State.”

 

The Upper Tribunal went on to cite the view of Pill LJ (with whom the other members of the Court of Appeal concurred) that it was not the case that “the Directive invariably imposes a requirement that there is movement from one country to another and that the movement required excluded the appellant.”

 

37. The Upper Tribunal then indicated (at para 26) (emboldening added):

 

“Whereas in McCarthy the appellant had to show she was an EEA national who had been residing in the United Kingdom “in accordance with the Regulations”, in terms of reg 15(1)(a),  by contrast in the present appeal the claimant has to show that her husband was an EEA national who had resided in the United Kingdom continuously for more than two years prior to terminating his activity as a worker, in terms of reg 5(3).  Regulation 5(3) is predicated on the person in question being an EEA national who is present in the United Kingdom, in terms of reg 5(1).  There is no specific requirement in reg 5(1) or (3) equivalent to the requirement in reg 15(1)(a) to the effect that the person must have been residing in the United Kingdom “in accordance with the Regulations”.  Accordingly, the claimant and her husband do not fall within the parameters of the decision in McCarthy, as presently set out in the judgments of the Court of Appeal prior to the reference to the European Court of Justice, the outcome of which is awaited.“

 

38. We are concerned with the logic of the Upper Tribunal’s decision on what it knew about the McCarthy litigation as it stood at the time of the decision.  It knew that by that time the reference had been made and the Immigration and Asylum Chamber sitting as a panel with both the President (Blake J) and Vice-President (Mr CMG Ockelton) and a Senior Immigration Judge would doubtless have known the terms of the reference.  As set out by the CJEU at para 21 of its judgment, the questions put by the Supreme Court were:

 

“1. Is a person of dual Irish and United Kingdom nationality who has resided in the United Kingdom for her entire life a “beneficiary” within the meaning of Article 3 of Directive 2004/38...?

 

2. Has such a person “resided legally” within the host member State for the purpose of Article 16 of [that] directive in circumstances where she was unable to satisfy the requirements of Article 7 of that directive?”

 

It follows that whether or not what had defeated Ms McCarthy’s application earlier in the litigation was the fact that she had never worked, there was a real possibility (because the Supreme Court had by then referred the case to the CJEU) that her case might ultimately fail rather for failure to have moved between Member States.  That was, no doubt, why the Upper Tribunal introduced the case under paragraph 22 of its decision, which had raised the question of the relevance of a lack of movement, and why it would not have been sufficient to distinguish McCarthy that Ms McCarthy had not worked, whereas the husband of Ms MAH had, a distinction which, if valid, might have rendered paragraph 26 unnecessary.  More was needed in order to deal with the possibility of a ruling on the relevance of movement between Member States and in my judgment that is the role played by paragraph 26.  It noted the difference between reg 5(1) and (3) (on which Ms MAH relied) and reg 15(1)(a) (which deals with the Article 16 right Ms McCarthy was seeking to claim) and that the former, unlike the latter, did not require residence “in accordance with the Regulations”. It was for that reason (“accordingly”) that McCarthy was irrelevant.  Paragraph 26 in my judgment is therefore part of the ratio of MAH.  Whether Ms McCarthy could not meet the requirement of reg 15(1)(a)  because she had never worked or (as the CJEU subsequently found) because she had never moved between Member States was not to the point: the key point was that the requirement of lawful residence did not apply to reg 5.

 

39. Turning to Zubair, Mr Zubair was a German national who had run a business in the UK which had ultimately foundered.  Thereafter he had lived off the assets of the wound-down business, then been a job-seeker before, 42 months after termination of the business, he became permanently incapable of work.  Permission to appeal had been given on a human rights challenge, but the Upper Tribunal of its own motion raised a further question.

 

40. It was not permanent incapacity which stopped Mr Zubair’s self-employed activity, but closing the business: para 3.  The FtT so found: para 6(iii).  It was reg 5(3)(a) on which the FtT based its decision – which sets out the condition of termination of activity as a worker or self-employed person as a result of a permanent incapacity to work, not reg 5(3)(b), which is where the additional requirement of  two years’ continuous residence is found.  It was the conclusion in para 6(iii) that was put in issue by the Upper Tribunal (para 12) and ultimately found to be correct (para 14).

 

41. At para 14 the Upper Tribunal gave its reasons in the following terms:

 

“Having considered the matter further, we conclude the judge was correct in his reasoning and no error of law accordingly arises on this issue. We summarise our reasons as follows:-

 

1. Regulation 5(3) requires a person to terminate his activity as a worker or self-employed person as a result of permanent incapacity to work and has [sic] either resided in the United Kingdom continuously for more than two years prior to the termination or has suffered an accident at work or occupational disease that precludes such a period of residence.

 

2. Mr Zubair has resided in the United Kingdom for more than two years prior to his permanent incapacity to work but he has not resided either as a worker or as a self-employed person for more than two years before that incapacity. His self-employment lasted 16 rather than 24 months and although he has remained as a work seeker for 38 months prior to his permanent incapacity such residence never counted as residence as a worker as he never found work.

 

3. His illness was not an accident at work or industrial disease obviating the requirement for two years lawful residence within the meaning of EU law before he acquired permanent residence.

 

4. We see no reason why a person who has entered the United Kingdom in another capacity cannot subsequently become a work seeker, and note that the respondent treated him as such.  The words of regulation 6 (4) ‘enters the United Kingdom in order to seek employment’ should be read to include those who having entered can provide evidence that he is seeking employment. We do not think the judge was correct in his conclusions summarised at paragraph 6 (iii) [sic] above. However, such an interpretation does not avail  Mr Zubair  because although he was a genuine work seeker,  he never obtained employment and thus never fell to be considered as a worker within the meaning of regulation 6 (2)(b) which properly reflects Article 7 (3) of the Citizens’ Directive.

 

5. The judge was correct to note that  Mr Zubair could not benefit from regulation 6 (3) because it was not illness that caused him to be unable to pursue his activity as a self-employed person but the closing of his business some 42 months before he first became ill.  Similarly he did not terminate his activity as a worker or self-employed person as a result of permanent incapacity to work within the meaning of regulation 5 (3)(a), faithfully reflecting  Article 17 of the Citizens’ Directive. What his illness terminated was his activity as a work-seeker.

 

6. We have considered whether regulation 5(3)(a) should be read purposefully to treat activity as a self-employed person or a worker the same, as Article 17 (1)(b) appears to do, but on reflection conclude that this would not be appropriate. Preamble 19 to the Directive explains that these provisions were designed to continue rights that had been separately provided to workers and self-employed persons by different previous Directives. Council Directive 75/34/EC dealt with self-employed persons and there is nothing in the terms of that Directive that suggests that periods of self-employment could be combined with periods of work seeking to achieve the requisite period of residence.  There is no concept of ‘self-employment seeking’.

 

7. Contrary to the indication we raised during the hearing, it does not, on reflection, appear to be the case that the critical issue is whether the self- employment was immediately prior to the illness, but whether illness prevented continued lawful residence either as a worker or self-employed person.”

 

42. These reasons appear to go further than is necessary to uphold the FtT’s decision.  Sub-para (i) elides paras (a) and (b) of reg 5(3).  Sub-paras (ii) and (iii) are directed to satisfying (or obviating) the residence requirement in regulation 5(3)(b) which is not what was in issue.  As it is the treatment of the issue identified at para 6(iii) with which we are concerned it is necessary to record that where in sub-para (iv) there is a reference to “paragraph 6(iii)”, (as to which the FtT was said to have erred), that was a slip for “paragraph 6(ii)”.  What the Upper Tribunal was dealing with at sub-para (iv) was second time jobseekers, which was recorded by the Upper Tribunal as having been rejected by the FtT at para 6(ii), not 6(iii).  In sub-para (v) the Upper Tribunal upheld the FtT’s finding on reg. 5(3)(a).  In sub-para (vi) it is held that work-seeking cannot be counted for that purpose.

 

43. In sub-para (vii) the Upper Tribunal addresses what it regards as “the critical issue”, correcting a misleading impression it may have given.  This in my view is directed to reg 5(3)(a).  The question is whether it is a question of timing or causation.  It is not timing, but causation cf. “as a result of” in reg 5(3)(a), thus, whether illness prevented continued lawful residence.  The reference to “lawful residence either as a worker or self-employed person” must therefore be taken as directed to reg 5(3)(a) (and such activity would ipso facto be lawful residence) rather than a discussion of what constitutes residence for the purposes of reg 5(3)(b).

 

44. Accordingly, insofar as the decision contains remarks which imply a view that residence must be lawful they are obiter and there is no reason to suppose the point was argued.  Nor is there any indication that MAH (Canada) was cited.  The ratio of Zubair is that the judge was correct to conclude that self-employment was terminated not by permanent incapacity, because it is the cause of the termination that is relevant, and there is no basis for equating workseeking with self-employment for this purpose.

 

45. There is also authority of this Chamber, namely ID v SSWP (IS) [2011] UKUT 401 (AAC).  The same judge took a decision to similar effect in CPC/2314/2011, in respect of which the parties take no additional points to those taken on ID.  In ID, the claimant asserted a right of permanent residence on the basis that he was a self-employed person who has ceased that employment on becoming permanently incapable of work.  Upper Tribunal Judge Jacobs dismissed the appeal, indicating:

“17. As to the Directive, the representative compares the wording of Articles 16 and 17, pointing out that only Article 16 refers to the need to reside legally. That is correct, but irrelevant. Article 17 expressly derogates from Article 16 by reducing the necessary period of residence. There is nothing to indicate that it changes the nature or quality of the residence that is still required. The two Articles form a package of provisions (along with Article 18) and it would not be appropriate to interpret them in the disjointed fashion of the representative’s argument.

18. As to the Regulations, the same argument applies. They implement the Directive and I can see nothing to indicate that they are intended to be wider than the Directive in this respect. As I have said, the representative’s argument is contrary to the tenor of the provisions, which is to change the period of residence required, not its nature or quality.”

46. This part of the decision is clearly in point for present purposes.  However, while the decision was given after that in MAH (Canada) there is no indication that that case was cited to Judge Jacobs.  Nor is there any indication that he was taken to Regulation 1251/70 or the potential relevance of the preserved acquis.  There is also no indication that ID was a decision given following oral argument.

47. At this point, it is appropriate to address the question of precedent in the Administrative Appeals Chamber of the Upper Tribunal (AAC). In short:

“In so far as the AAC is concerned, on questions of legal principle, a single judge shall follow a decision of a Three-Judge Panel of the AAC or Tribunal of Commissioners unless there are compelling reasons why he should not, as, for instance, a decision of a superior court affecting the legal principles involved.  A single judge in the interests of comity and to avoid confusion on questions of legal principle normally follows the decisions of other single judges.  It is recognised however that a slavish adherence to this could lead to the perpetuation of error and he is not bound to do so.”

 

(see Dorset Healthcare NHS Foundation Trust v MH [2009] UKUT 4 (AAC) at [37]).

48. The AAC takes the same approach to decisions of other tribunals and courts of equivalent seniority as it takes to its own decisions: see R(IS)3/08 where it was said in relation to a decision of the predecessor to the Immigration and Asylum Chamber (“IAC”):

“Decisions of the Asylum and Immigration Tribunal are not binding on a Commissioner but a fully reasoned reconsideration decision of a tribunal presided over by the President, the Deputy President or a Senior Immigration Judge ought generally to be followed by a single Commissioner as a matter of judicial comity, although it must be recognised that a slavish adherence to this could lead to the perpetuation of error. In other words, a Commissioner may be expected to approach such a decision in the same way as a decision of another single Commissioner (see R(I) 12/75). Perhaps there will be less readiness to depart from a decision of the Asylum and Immigration Tribunal than a decision of a Commissioner, given the expertise in immigration matters of that tribunal, but such additional inhibition will be lessened if, as in this instance, the unsuccessful party before the Asylum and Immigration Tribunal was not legally represented. “

49. While my understanding is that with the exception of Country Guidance cases, it is only “starred” cases of the IAC which a single judge there is required to follow[1], very considerable respect is given to decisions of a three judge panel and all the more so where it is presided over by the Chamber President.  The test for convening a two or three judge panel was at the time of MAH (Canada)[2], and is, the same in both the AAC and the IAC, namely that:

“the Senior President or the Chamber President considers that the matter involves a question of law of special difficulty or an important point of principle or practice, or that it is otherwise appropriate, the matter is to be decided by   two or three Upper Tribunal judges.”

50. While R(IS)3/08 does not deal in terms with the status of a three judge panel  of another Chamber, even less the possibility that there might be different tests between Chambers as to the precedential value of a three judge panel, it is clear to me that I should follow a decision of a three judge panel of the IAC unless there are compelling reasons not to – either because that is the relevant test or as a matter of comity and in the case of MAH (Canada) in recognition of the considerable seniority and experience of the panel, presided over by the Chamber President.  For the reasons I have attempted to show, nothing in the caselaw of the higher courts undermines that decision.

51. Mr Royston for the appellant submits:

 

(a) if Article 17 is intended to maintain the existing acquis on the right to remain, it is not evident how it could be restricted to rights of residence arising under the 2004 Directive or (which I think is putting the same point another way) Regulation 1251/70, from which Article 17 is derived, cannot have included a requirement that residence must be in accordance with the terms of a Directive made 34 years later;

 

(b) ID (and similarly CPC/2314/2011) are wrongly decided.  The absence of the word “legally” from Article 17 of the Directive when it is present in Article 16 is not an accident and the distinction must be given effect to and

 

(c) the Metock principle (see [19]) requires that rights conferred by the earlier Regulation are maintained under the Directive;

 

(d) the matter in issue forms part of the ratio of MAH, which should be followed.

 

52. Ms Smyth submits:

 

(a) the appellant’s interpretation of Article 17 would “drive a coach and horses” through the Scheme of the Directive, with the graduated rights described at [16] and [17];

 

(b) there is a distinction between residence and presence and in order to “reside legally”, a Union citizen must fulfil the conditions of Article 7: see C- 325/09 Dias at paras 63 and 64;

 

(c) there has never been any free-standing right to reside in another Member State, so there has always been a difference between “presence” (being in a Member State, but without any right to be there, and “residence”;

 

(d) it is obvious that Articles 16 and 17 are to be read together: see Advocate General’s opinion in Lassal at para 69;

 

(e) Article 17(1) expressly states that it is a ”derogation” from Article 16, so save where Article 17 expressly derogates from Article 16, Article 16 continues to apply.  For this reason the effect of Article 17 is simply to reduce the number of years of legal residence necessary to achieve permanent residence;

 

(f) whilst Article 17(1)(a) does not include the word “legal”, nor does the introductory part of Article 17(1), which is obviously referring to “legal   residence”;

 

(g) “in interpreting a provision of EU law, it is necessary to consider not only its wording, but the context in which it occurs and the objectives pursued by the rules of which it is part… Where a provision of EU law is open to several interpretations, preference must be given to the interpretation which ensures that the provision retains its effectiveness…” (per the CJEU in Lassal at para 46).  Applying such an approach it would be wrong to interpret Article 17 in such a way as runs counter to the scheme of the Directive (see (a) above) and which ignores the qualitative, integrative link represented by legal residence (see (b) above);

 

(h) it avails not that the predecessor of Article 17(1)(a) is Article 1(a) of Regulation 1251/70. The directive “codifies and revises” the instruments of EU law which receded it and introduces a gradual system of rights of residence, while “reproducing, in essence” the stages and conditions set out in the various predecessor legislation and case-law: see C-529/11 Alarape at para 46;

 

(i) Regulation 1251/70 falls to be strictly construed: Givane;

 

(j) any doubt there may have been about the scope of what was required in terms of residence to assert an Article 17 right has now been conclusively resolved, in particular by Dias;

 

(k) there is no infringement of the Metock principle.  Only very limited rights were conferred by Regulation 1251/70 and so the interpretation of Article 17 for which she contends does not result in a person having fewer rights than the rights previously enjoyed; and

 

(l) the point in issue is obiter in MAH (Canada) or, if is not, that decision is  wrong.

 

53. The problem with appeals to the scheme of the Directive is that it begs the question what the “scheme” is.  Certainly it provides for graduated rights of residence, but it also specifically maintained the existing acquis (recital (19)) and has been held  not to be capable of conferring lesser rights than the instruments it replaced: Metock.  Phrases such as “reproducing, in essence” or “including the main elements” (see [22] above) do not help us, in that they introduce scope for subjectivity concerning e.g. what the “essence” of the previous provision was. However, if Regulation 1251/70 did not require legal residence and Article 17 took a similar approach, the former would indeed have been reproduced in essence.

 

54. I derive little assistance from Dias.  The Court’s consideration of the constitutive or declaratory effect of a residence permit issued pursuant to Directive 68/360 was for the specific purpose of the relatively new right under Article 16 of permanent residence after 5 years of having “resided legally”, known following Lassal to equate to having resided in accordance with the Directive (or predecessor instruments).  Because Article 16 requires a person to have “resided legally”, it was unsurprising that residence with a residence permit, but without any of the conditions for a right to reside having been met, did not count.  I note that para 64 of the Court’s decision refers to the “integration objective” behind the right of permanent residence laid down in Article 16 as being based not only on territorial and time factors but also on qualitative elements.  That all makes sense in the context of Article 16, but that does not preclude the possibility that the European legislator, working in different conditions more than 40 years ago, might have seen fit to see actual residence as a sufficient proxy for integration in the limited circumstances of Regulation 1251/70 and that the legislator at the time of the Directive saw fit not to depart from such a right.

 

55. I agree that as Ms Smyth says, there were only defined bases on which it was possible to assert rights of residence under European law in 1970, i.e. as a worker, a self-employed person or recipient or provider of services.  But that does not rule out the possibility that the mere fact of residence, coupled with a period as a worker (or self-employed person) may have been thought a proxy for a sufficient degree of integration.  One is not considering a period of residence in isolation, but one that (a) is typically linked to the exercise by an individual of rights of freedom of movement as a worker or self-employed person, something which the European legislator would have been keen to promote; and (b) only needs to be considered because supervening circumstances – retirement, ill-health, accident at work etc – intervened to stop the period of work or self-employment being longer than it was.  It is in my view at least as likely that the legislator was content with the notion of actual residence (without feeling the need to define too closely the basis for it) as that he regarded the point that residence needed to be lawful in EU terms as so obvious as not to be worth saying.  Further, if the latter was the view in 1970, there was no compunction in 2004 in referring to the need to have “resided legally” in the context of Article 16 and the opportunity could have been taken, as part of the exercise of consolidation and codification which the Directive represents, to include such wording in Article 17(1)(a), without contravening what became the Metock principle, but it was not done.

 

56. I also accept that as a matter of domestic law – such as under the IEEA Regulations or their predecessor – there is a distinction between a right to reside and lawful presence without any such right: see Abdirahman v Secretary of State for Work and Pensions [2007] EWCA Civ 657.  But here we are concerned not with lawful presence alone – which I accept would not be sufficient to establish a right to reside, but with lawful presence – or rather, residence – as a possible condition, with others for establishing a right to reside under European law.

 

57. Article 17 is indeed expressed to be by way of derogation from Article 16: but that does not necessarily mean that it was derogating only by accepting a lesser period of the same quality of residence as Article 16 envisages, for it could have been derogating both as to period and as to that quality.  That does not mean to say that it was doing so and to that extent I do not think Mr Royston’s point (a) above helps him.  It is entirely possible that Regulation 1251/70 might have required legal residence, not because it was mysteriously anticipating a piece of legislation to be made 34 years later, but simply because that was what the legislator of those days thought fit.

 

58. I do not derive assistance from Ms Smyth’s reliance on para 69 of the Advocate General’s opinion in Lassal. The Advocate General’s purported quotation from Article 16 does not match the text of the Directive in English and, significantly, overlooks the presence of the word “legally” which is part of the basis for the claimed distinction between the two articles.  It mattered not in Lassal, where the point whether to take into account pre-Directive residence was one which could be answered without reference to that distinction.

 

59. Nor do I consider it determinative that  the opening words of Article 17(1) refer only to “residence”: in effect at that point the text is merely providing a précis of the requirements of Article 16.

 

60. Givane, it seems to me, cuts both ways.  While it applied the stricter of the available constructions (which might avail Ms Smyth) it also cautioned against reading words in – which it seems to me would extend to reading in words such as “lawfully” as Ms Smyth is inviting me to do.

 

61. The policy intention is not entirely clear-cut but I do consider that the wording of Regulation 1251/70 provides more positive indications as to what may have been intended.  I am mindful that it is European legislation, not a domestic statute.  Ms Smyth argued against the legitimacy of the approach to the following points, though I note that the passage in Lassal on which she relies at [52g] acknowledges the legitimacy of looking not only at the legislative context and objectives but also the wording of a provision, as do certain of the arguments on which she relies.

 

62. It seems to me first that in creating two conditions, both needing to be fulfilled, with a distinction between having been “employed in that State for at least the last twelve months” and having “resided there continuously for more than three years” prior to retirement, the Regulation gives us an indicator.  If it had wanted three years as a worker, it could easily have said so, as for example Article 2(1)(c).  That provision also clearly uses “residence” to mean actual residence.

 

63. Further, alternative bases for having a right to reside in 1970 were, as noted at [55], limited.  The likelihood of someone of retirement age having worked for the last 12 months but preceded that with 2 years of activity not as a worker but still generating the right to reside might be thought slight.  Either the Regulation was contemplating actual residence, or it was being a good deal less generous than might at first appear.  The former seems the more likely given the aim of the original Article 48.

 

64. Further, Article 4 allows “temporary absences” totalling up to three months per year for the purposes of “continuity of residence as provided for in Articles 2(1) and 3(2).”  Such a saving is more consistent with continuity of residence being to do with physical presence – which would otherwise be interrupted by “temporary absences”  than to do with a right to reside based on carrying out a particular type of activity.

 

65. While I accept that the legislative context is with the passage of time a little obscure, I consider that it, taken together with the wording of Regulation 1251/70, points for the above reasons towards actual residence having been sufficient under that regulation. If that is so, then I do not see how the Directive can be construed otherwise than as preserving that position for this limited class of cases.

 

66. Such a view is consistent with that apparently taken by the draftsman of the IEEA Regulations, who on Ms Smyth’s view would have been entitled to include provision requiring residence “in accordance with these Regulations” for those asserting rights derived from Article 17 just as was done for those asserting rights derived from Article 16, yet did not do so.  The view is consistent too with the conclusion reached by the three judge panel in MAH and, having already rejected Ms Smyth’s contention that that decision is obiter on the point, I reject the argument that it is wrong.  Certainly there are not compelling reasons not to follow it and in any event, I think it is correct.  For the reasons given in [46], I decline to follow ID and I also decline to follow CPC/2314/2011, a case in which likewise MAH (Canada) does not appear to have been cited and in which there was no participation at all by or on behalf of the claimant.

67. Like Longmore LJ in RM (Zimbabwe) I acknowledge that the presence of the parallel systems in Article 16 and 17 can lead to some perhaps surprising results but that is a reflection of the importance attached by the European legislator to the preservation of existing rights, reflected in recital (19) of the Directive and in the Metock principle.

 

68. Although neither party asked me to do so, I did give some consideration whether to make a reference under Article 267 TFEU on this point, but concluded that it was not necessary to do so (a) because a combination of my own view and that of the panel in MAH leads me to the view that the law is sufficiently clear to meet the test in C-283/81 CILFIT s.r.l. v Ministry of Health and (b) because in view of the conclusion I have reached on issues B and C, under which the appellant wins anyway, I was not satisfied in any event that such a reference  would be necessary to enable the Upper Tribunal to give judgment.

 

Issue B: whether the extension of the worker registration scheme effected by the Extension Regulations was compatible with EU law.

 

69. The Treaty of Accession, signed at Athens on 16 April 2003, by which Latvia (and the other so-called “A8” states) acceded to the European Union, by its Article 24 brought into play a series of Annexes, one for each new Member State. They are in materially identical form for present purposes. That for Latvia, so far as material, is set out below.

 

70. Paragraph 2 of Annex VIII provides:

"1. By way of derogation from Articles 1 to 6 of Regulation (EEC) No 1612/68 and until the end of the two year period following the date of accession, the present Member States will apply national measures, or those resulting from bilateral agreements, regulating access to their labour markets by Latvian 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…”

…

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

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

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

5. A Member State maintaining national measures or measures resulting from bilateral agreements at the end of the five year period indicated in paragraph 2 may, in case of serious disturbances of its labour market or threat thereof and after notifying the Commission, continue to apply these measures until the end of the seven year period following the date of accession.  In the absence of such notification, Articles 1 to 6 of Regulation (EEC) No 1612/68 shall apply.

…

7. Those Member States in which, by virtue of paragraphs 3,4 or 5, Articles 1 to 6 of Regulation (EEC) No 1612/68 apply as regards Latvian nationals, may resort to the procedures set out in the subparagraphs below until the end of the seven year period following the date of accession.

When a Member State referred to in the preceding first subparagraph undergoes or foresees disturbance on its labour market which could seriously threaten the standard of living or level of employment in a given region or occupation, that Member State shall inform the Commission and the other Member States thereof and shall supply them with all relevant particulars.  On the basis of this information, the Member State may request the Commission to state that the application of Articles 1 to 6 of Regulation (EEC) No 1612/68 be wholly or partly suspended in order to restore to normal the situation in that region or occupation.  The Commission shall decide on the suspension and on the duration and scope thereof not later than two weeks after receiving such a request and shall notify the Council of such a decision.  Any Member State may, within two weeks from the date of the Commission’s Decision, request the Council to annul or amend the Decision.  The Council shall act on such a request within two weeks, by qualified majority.

A Member State referred to in the first subparagraph may, in urgent and exceptional cases, suspend the application of Articles 1 to 6 of Regulation (EEC) No 1612/68, followed by a reasoned ex-post notification to the Commission.”

Such provisions accordingly serve to offer a degree of protection to the labour markets of existing Member States if a State chooses to avail itself of them.  However:

 

”The starting point under the Accession Treaty is that A8 nationals have the full rights of free movement conferred unless a State chooses to limit them” (per Elias LJ in Miskovic and Blazej v Secretary of State for Work and Pensions [2011] EWCA Civ 16).

 

For the extension of the scheme, it is on the power conferred by para 5 of Annex VIII that the UK relies in relation to Latvia.

 

71. The Extension Regulations were made under the negative resolution procedure.  They were made on 6 April 2009, laid before Parliament on 8 April and came into effect on 29 April 2009.

 

72. The Explanatory Memorandum records:

 

“7. Policy background

What is being done and why

7.1 The WRS was introduced in the UK as a transitional measure to monitor A8 nationals’ access to the UK labour market. The WRS does not place any restriction on nationals of the A8’s access to the labour market in terms of numerical ceilings, resident labour market test or skills test but does make employment subject to a requirement that the worker register their employment under the WRS within one month of starting work. Workers cease to be subject to the requirement to register after 12 months continuous employment in the UK.

7.2 The 2004 Regulations provided for the WRS to continue until the end of April 2009 on the basis that any further continuation of the WRS beyond that point would need to be subject to an assessment of the labour market circumstances at that point in time. That labour market assessment has recently been undertaken by the Migration Advisory Committee (MAC) and, in the light of the MAC’s advice, it is has been decided that the WRS should continue until the end of April 2011.

…

8. Consultation outcome

8.1 The decision to extend the 2004 Regulations for a further two years is based on advice from the Migration Advisory Committee. The MAC’s report, including details of the consultation it undertook in connection with it, is being made publicly available.

….

10. Impact

10.1 The impact on business, charities or voluntary bodies is negligible. Employers of workers subject to the registration requirement may be guilty of an offence if those workers fail to register. It is, however, for the worker, and not the employer, to apply for registration. Applications to register are subject to a fee of £90.

10.2 The impact on the public sector is the cost of continuing to administer the WRS. These costs are, however, recovered through the fee charged for applications.

10.3 An Impact Assessment has not been prepared for this instrument.”

 

73. The Migration Advisory Committee (“MAC”) was described by the Court of Appeal in R(MM)(Lebanon) v Secretary of State for the Home Department [2014] EWCA Civ 985 at para 35 as “a non-departmental public body consisting of distinguished economists and migration experts, who provide independent, evidence-based advice to the government on migration issues.”

74. The MAC was asked by the Government in February 2009 to:

“consider what the likely labour market impact of relaxing transitional measures [for A8 nationals] would be and whether it would be sensible to do so.”

Advice was required by 20 March 2009, resulting in “limited time” being available to the MAC (report, para 1.9) and a “tight timescale” for replies to consultation (ibid. para 1.11).

75. The MAC’s report is dated April 2009 and I return to it more detail below. For now it suffices to note that its view that at the time it was writing (and at the time the Extension Regulations were made) the UK labour market was seriously disturbed is not disputed.  The gateway condition in para 5 of the Annex is thus met.

76. It is not Mr Royston’s argument before me that paragraph 5 could not apply at all unless serious disturbance would result from the ending of the WRS.  He further accepts that the power to extend restrictions could be engaged by an existing as well as future disturbance.  His position is that the restrictions must tackle that disturbance proportionately.

77. Accordingly, the areas of dispute in relation to issue B are the following:

 

(a) While it is not in dispute that proportionality is a principle of EU law, Ms Smyth submits that because the power relied upon is in a negotiated treaty and because the right to extend for a further two years only arises on fulfilment of a condition pitched at a demanding level, para 5 has proportionality built in and there is no room for a proportionality analysis by the Upper Tribunal.

 

(b) Relying principally on the decision of the Court of Appeal in R(Sinclair Collis Limited) v Secretary of State for Health and Another [2011] EWCA Civ 437, she submits that, if the Upper Tribunal is against her on (a), then the intensity of review for the purposes of an EU proportionality analysis is a matter that falls on a spectrum ranging from “manifest error” at one extreme to detailed examination applying traditional proportionality criteria at the other and that in this case, the appropriate intensity of review, if not at the “manifest error” end of the spectrum, is certainly a good deal nearer to it than to the other end.

 

(c) Ms Smyth submits that if I were to be against her on both (a) and (b), then nonetheless even on the more intensive basis of review, the Extension Regulations pass it.

 

Sub-issue (a): Proportionality built in?

 

78. I do not find this argument compelling.  Lord Hope noted, rejecting a submission there was no room for a proportionality analysis in relation to para 2 of the equivalent schedule for Poland in Zalewska at para 30:

 

“The only authority that the United Kingdom has to introduce national measures to give access to nationals of an A8 state to its labour market in place of article 39EC and Title I of Regulation 1612/68 is that which is given to it by paragraph 2 of Part 2 of Annex XII. As article 10 of the Treaty of Accession makes clear, this derogation from the application of the original Treaties and acts adopted by the institutions of the Community was agreed to by the member states under the umbrella of Community law.”

 

This of course is not a complete answer to an argument, not that proportionality does not apply, but that it is inbuilt.  The House of Lords was dealing with an empowering provision, para 2 of the Annex, which contained on its face no condition governing when it could be applied, unlike para 5 which the present case concerns.

 

79. I asked Ms Smyth if there were other cases in which proportionality had been found to have been built into the terms of a European measure and was not taken to any.  The Judicial Review Handbook by Michael Fordham QC cites at 58.4.5 a number of authorities (albeit none of them in relation to EU law) under the rubric “Whether proportionality built into statutory scheme”.  I can see that such an argument might be conceptually possible, as it is in relation to compliance with a requirement of the ECHR for action to be proportionate. As Baroness Hale said  in Belfast City Council v Miss Behavin’ Limited [2007] UKHL 19 [2007] 1 WLR 1420:

 

“I do agree, of course, that there are situations in which the court is entitled to say that the legislation itself strikes a fair balance between the rights of the individual and the interests of the community, so that there is no room for the court to strike the balance in the individual case. That is what this House decided in Kay v Lambeth London Borough Council [2006] 2 AC 465. At issue there was whether a landowner with the right to possession of land (in that case a public authority, but the same question would arise with a private landowner whose rights are protected under Article 1 of Protocol 1) could be deprived of that right because to enforce it against the particular individual occupier would be a disproportionate interference with the occupier's right to respect for his home under Article 8 of the Convention, even though he had no right in domestic law to be or to continue in occupation. The whole history of housing law since rent control began has been an attempt by the legislature to strike just that balance. In those circumstances, the courts are entitled to say that unless the legislation itself can be attacked, the issue cannot be raised in an individual case.”

 

80. I do not think that, if there is indeed room for the parallel argument in EU law, this is such a case. This is not a case where the legislation itself (or Treaty) contains an express provision aimed at protection of the other interests that would fall to be taken into account on a proportionality analysis, as in R(London and Continental Stations and Property Ltd) v Rail Regulator [2003] EWHC 2607(Admin) or in the planning legislation considered in Lough v First Secretary of State [2004] EWCA Civ 905 [2004] 1WLR 2557.  As can be seen from the terms of Annex VIII above, what was being implemented was a staged procedure, under which by mechanisms of phasing, increasingly rigorous criteria and reviews, the ability of Member States to restrict access to their labour markets by A8 nationals would diminish over time. Against that background, the pre-condition that there be actual or threatened serious disturbance of the labour market in my view was setting, in effect, a minimum standard of severity, five years down the line from accession, for an aim of dealing with it to be capable of being a legitimate aim for the purposes of proportionality analysis.

 

81. While the reason why the Annexes to the Treaty of Accession make the provision under discussion is the protection of existing Member States’ labour markets, that is not to the total exclusion of principles of freedom of movement, as Elias LJ noted (see [70] above.)  For the reasons given by Lord Hope set out at [78], in my view fundamental principles of the EU such as freedom of movement for workers (and with it the notion that derogations from such principles are to be construed narrowly:  C-77/82 Peskeloglou) and that the actions of (among others) Member States when implementing EU law or when limiting or regulating in the context of freedoms guaranteed by EU law are required to be proportionate must be taken to have been in the contemplation of the negotiating parties.  There is in my judgment no compelling reason to suppose that the contracting parties thought that Member States would be entitled to take the step for which para 5 of Annex VIII provides automatically on fulfilment of the condition, irrespective of whether such a step would be proportionate, rather than that Member States would in those circumstances be entitled to take proportionate action.  There is no reason why the signatories to the 2003 Treaty should have contemplated that the continuation of labour market restrictions, adopted pursuant to the Treaty in 2004, would necessarily represent an appropriate and proportionate measure to deal with serious labour market disturbances in 2009.  Of course, one is dealing with a situation where, ex hypothesi, there are actual or threatened serious disturbances of the labour market but the balancing exercise which proportionality requires has ample scope for weight to be given to the seriousness of the situation.

 

Sub-issue (b): What level of intensity of review?

 

82. Sinclair Collis is not an entirely straightforward decision, having been taken by a majority and with the majority expressing themselves differently on some aspects.  However, I need not concern myself with the divergences of view in that case about the extent to which Parliament as well as the Executive may have been involved in making the particular order that was challenged in that case.  In the present case, the order was made by the Secretary of State under a procedure which provided for the lowest level of Parliamentary involvement.

 

83. Members of the Court of Appeal cited as a statement of the core principle of proportionality the decision of the CJEU in R v Minister of Agriculture, Fisheries and Food, Ex parte Federation Européenne de la Santé Animale (FEDESA) and Others [1990] ECR I-4023 which stated:

"The Court has consistently held that the principle of proportionality is one of the general principles of Community law. By virtue of that principle, the lawfulness of the prohibition of an economic activity is subject to the condition that the prohibitory measures are appropriate and necessary in order to achieve the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued."

84. Arden LJ proceeded to discuss the role of the “manifestly inappropriate” test found in some proportionality cases, indicating at para 116 that she considered that:

“The "manifestly inappropriate" test is a statement of the level of intensity of review that is applicable to any of the requirements of the test of proportionality. It can, therefore, either form part of, or appear side-by-side with, a conventional statement of the core principle of proportionality.“

85. She went on to note some of the examples where the “manifestly inappropriate” test arose.  In FEDESA it was in relation to a decision by the Community legislature about the common agricultural policy.  At para 120 she cited R v Secretary of State ex p BAT and Imperial Tobacco [2002] ECR I-1453, where the CJEU observed:

“123. With regard to judicial review of the conditions referred to in the previous paragraph, the Community legislature must be allowed a broad discretion in an area such as that involved in the present case, which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Consequently, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (see, to that effect, Case C-84/94 United Kingdom v Council [1996] ECR I-5755, paragraph 58; Case C-233/94 Germany v Parliament and Council [1997] ECR I-2405, paragraphs 55 and 56, and Case C-157/96 National Farmers' Union and Others [1998] ECR I-2211, paragraph 61)."

86. The Court in Sinclair Collis was concerned with a decision (the banning of cigarette vending machines) where issues of public health were involved. That is an area where, in genuine cases (para 124), Member States have also been made subject to the “manifestly inappropriate test”, reflecting the diversity of circumstances in Member States with regard to public health issues  which, within the broadest limits, individual Member States are considered in a better place to judge (cf. Arden LJ at para 127).

 

87. At para 126 she examined the effect of the “manifestly inappropriate” standard for review:

“The effect of the level of intensity of review denoted by the expression "manifestly inappropriate" is that the Court of Justice does not apply the "least intrusive means" requirement (as in FEDESA), or, if it does, it applies it with the lower level of intensity of scrutiny consistent with the "manifestly inappropriate" level: see, for example, R (o/a National Federation of Fishermen's Organisations) v Minister of Agriculture, Fisheries and Food and Fish (cited by Laws LJ at paragraph 38 above) at [59]:

"Nor can doubt be cast on the finding that the disputed measures are proportionate merely because other kinds of measures could have been adopted, since the selection of measures to be taken is a political decision falling within the purview of the Member State concerned, within the limits set by Decision 92/593."

 

88. At para 129 she rejected a submission that “the manifestly inappropriate” level of intensity was limited to judicial review of EU policy measures, citing inter alia R v Secretary of State for Health ex p. Eastside Cheese [1999] 3CMLR123 and indicated that the test also applied to decision makers other than the national legislature, citing R(Mabanaft) v Secretary of State for Climate Change [2009] EWCA Civ 224.  This latter case, unlike many of the others, was not a public health case, but was concerned with the requirement on Member States to ensure sufficient reserves of oil stocks, a process which involved both complex calculations in order to achieve a fair balance between the commercial interests of different categories of business in the oil industry and numerous rounds of policy papers and consultations.

 

89. Nonetheless, she noted at para 132:

 

“The approach of the Court of Justice is bound to vary according to whether the act in question is that of a European Union institution or that of a national institution, since in the former case, the Court of Justice will be deciding whether an interest of the Union should prevail over that of a person or state, whereas in the latter case it is concerned also to ensure that the member state has resisted any temptation to favour its national interest at the expense of the Union's interest. That, no doubt, is why there are only a limited number of situations in which the Court of Justice applies the lower level of intensity of scrutiny to the acts of a member state institution.”

 

There were, she noted, agreeing with Lord Bingham CJ in Eastside Cheese, not just the two tests for which the Secretary of State in Sinclair Collis had contended at para 128, namely the “normal” test and the “manifestly inappropriate” level of scrutiny, but “many points on a spectrum”.

 

90. Turning to the judgment of the then Master of the Rolls, the other member of the majority, he expressed the issue in terms of ”the width of the discretion, or margin of appreciation, to be accorded to the Government”.  At para 197 he cited with approval the observations of Lord Bingham CJ in Eastside Cheese:

"41. Because the principle [of proportionality] is so general (and may affect a range of issues from the validity of primary legislation … to much narrower points …) it must be related to the particular situation in which it is invoked. …

48. … The margin of appreciation for a decision-maker … may be broad or narrow. The margin is broadest when the national court is concerned with primary legislation enacted by its own legislature in an area where a general policy of the Community must be given effect in the particular economic and social circumstances of the member state in question. The margin narrows gradually rather than abruptly with changes in the character of the decision-maker and the scope of what has to be decided. …”

And then at para 199:

 

“…Lord Bingham said

 

"It is clear that the national legislature has a considerable margin of appreciation, especially in legislating on matters which raise complex economic issues connected with the Community's fundamental policies."  It is worth noting that this observation related to the legislature, but it must also apply to the executive, albeit with less force, in the light of what he had said at [1999] CMLR 123, para 48.”

 

91. He further noted at para 200:

 

“The breadth of the margin of appreciation in relation to any decision thus depends on the circumstances of the case and, in particular, on the identity of the decision-maker, the nature of the decision, the reasons for the decision, and the effect of the decision.  Further, because the extent of the breadth cannot be expressed in arithmetical terms, it is not easy to describe in words which have the same meaning to everybody, the precise test to be applied to determine whether, in a particular case, a decision is outside the margin.  It is therefore unsurprising that in different judgments, the same expression is sometimes used to describe different things, and that sometimes different expressions are used to mean the same thing.”

 

92. While there may be some scope for debate about whether both roads with their differing terminology lead to exactly the same place (see Arden LJ at para 181), it has not been suggested to me that there is any material difference in this case.  I accept therefore that proportionality is a flexible tool, whether because there is a spectrum of intensity of review, with the manifestly inappropriate test at one end of it, or by virtue of the differing margin of appreciation which it is appropriate to accord in differing categories of case.  I also accept that that is equally true, in relation to decisions of the Secretary of State as well as to those of Parliament and to those of Community institutions.  The task I am faced with is to decide where in the spectrum to place the proportionality review of the present decision (or how widely to set the margin of appreciation.)

 

93. Both members of the majority provided helpful guidance for present purposes,

As well as the guidance provided by the Master of the Rolls, set out at [91] above, at para 136 Arden LJ observed:

 

“The factors that may be taken into account in determining the application of the three elements of proportionality include the nature of the decision-maker but go far beyond this. The subject matter of the decision is clearly relevant: does it relate to policy or strategy, or is it about the implementation of a policy decision, which has already been taken? If it is a policy decision, does the decision fall in one of the areas that are generally left to member states, such as national security, domestic economic policy or public health? In this case, the subject matter is public health, which has the highest priority under European Union law…. Other factors include how the decision was reached and the quality of the decision-making process.”

 

94. Arden LJ took a different view from her colleagues as to the effective identity of the decision maker in the particular circumstances of the Sinclair Collis case.  Lord Neuberger MR at para 200 held that ”the decision to impose the ban must…be assessed on the basis that it was made by the executive arm of the Government of a single member state” before indicating at para 214 that, even allowing for various factors which are of little or no relevance to the present case:

 

“I do not consider that the margin is as broad as it would be if the decision had been that of the democratically elected national legislature. Even less do I consider that the margin is as broad as it would be if the decision had applied across all EU member states.”

 

95. For his part, Laws LJ, the dissenting member of the Court, on this issue agreed (at para 33) that “the proportionality of the ban cannot be judged by reference to the margin of appreciation which might aptly be applied to the product of primary legislation” (and thus by implication that the two are different).

 

96. Before turning to determining the correct basis of applying the test of proportionality in the present case, I should briefly refer to the decision in R(Rotherham BC) v Secretary of State for Business, Innovation and Skills [2014] EWCA Civ 1080.  A central feature of that case was whether proportionality could only apply where there was a derogation from a specific legal standard and whether, in other circumstances, it would add anything to a rationality challenge.  The present case sits more with cases such as Eastside Cheese and Sinclair Collis which involved derogations from specific Treaty articles than with Rotherham.  In Rotherham it was expressly acknowledged in the Court’s reasoning at para 49 that the right of free movement was an example of the sort of “legal reference point” that enabled a proportionality test to be meaningfully applied.

 

97. I begin by noting that under para 5 of Annex VIII, the United Kingdom had a very restricted choice.  It could either continue to maintain, for a further two years, “these measures” i.e. the national measures it had been maintaining for five years already, or it had to operate the default position of Arts 1 to 6 of regulation 1612/68.  Mr Royston accepts that it may theoretically have been open to the UK to have maintained a part only of its existing controls, but it is hard to see what sort of intervening position there could have been in practice, as the MAC noted at para 3.5 of its report, and in any event the options would still have been highly restricted.  The position may be contrasted with the matters in issue in cases where the margin of discretion – or intensity of scrutiny – was a particularly generous one to the decision-taker. In Rotherham, for instance, the decision concerned the allocation of European Structural Funds with a view to the reduction of disparities between levels of economic development of regions, “not hard-edged decisions which admit of clear and straightforward answers”.  The issues

 

“specifically included detailed guidelines on employment policies, a target of improving conditions for research and development and a target for reducing greenhouse gas emissions and increasing energy efficiency. These objectives could be achieved in many different ways. In our view, this is classic territory for affording the decision-maker a wide margin of discretion. Adopting the language of Sinclair Collis, we consider that the court should only interfere if satisfied that the decisions were manifestly inappropriate or manifestly wrong.”    (per the Master of the Rolls at para 57).

 

A similar breadth of choice in how to achieve an underlying objective can be found in other cases where a wide margin of appreciation was allowed, such as those cited in [85] above, which concern respectively wide-ranging measures to promote the health and safety of employees across Europe, measures to protect the security of deposits of bank customers across Europe and emergency restrictions on export in response to a risk to animal – and possibly also human- health from the BSE outbreak.  That breadth is lacking in the present case.

 

98. Of Lord Neuberger’s factors quoted at [91] above, the Court of Appeal in Rotherham regarded the nature of the decision as usually the most important.  I acknowledge the need for “a broad discretion in areas that involve political economic or social choices” (Sinclair Collis at paras 120, 136 and 199; Rotherham at para 57).  I do not view the present matter as one involving political choice to a significant degree (this is reflected in the Secretary of State’s reliance on technical advice from an outside body and also in the lack of Parliamentary scrutiny) but it does involve “economic or social choices”, albeit, those choices are, as shown above, limited in range.

 

99. It is also the case that the evidence, and the MAC’s ability to analyse it, were constrained by factors identified at para 5.3 of its report – the uniqueness of the WRS, the difficulty of finding a counterfactual (i.e. of knowing what would happen were the WRS to be maintained) and the limited evidence available on the labour market impacts of immigration in a recessionary environment.  Those uncertainties in my view tend to broaden the margin of discretion that ought to be accorded.

 

100. Factors from Lord Neuberger’s list tending to a more intensive degree of scrutiny  include that the measure was adopted by delegated legislation, that it was implemented through the negative resolution procedure and, in my view, that it was adopted in reliance on a report which the MAC itself clearly considered rushed and as allowing less time for consultation than it might have wished.

 

101. Also, there is no evidence before me of the Secretary of State having conducted his own proportionality analysis, despite the limitations in the question put to the MAC, and the need, identified by the MAC, for their answer to it to be weighed against other factors.  I am not deciding a judicial review and so do not base my decision on this procedural flaw (if such it was), but the lack of evidence of reasoned evaluation of proportionality by the Secretary of State is a further factor tending towards a greater, rather than a lesser, degree of scrutiny being appropriate.

 

102. Further, as Arden LJ identified (see [89]), the Court of Justice in applying proportionality may be concerned to ensure that the member state has resisted any temptation to favour its national interest at the expense of the Union's interest and thus the cases in which a generous margin of appreciation has been afforded to national governments is limited.  Section 2 of the European Communities Act 1972 (see [9]) makes it as necessary for domestic courts to apply EU law where relevant as it is for the CJEU and it is right for the Upper Tribunal to maintain an appropriate degree of alertness that the balance between the principle of freedom of movement of workers and the time-limited restriction of it given the circumstances in the domestic labour market has been appropriately struck.

 

103. It follows that I aim to apply an approach to proportionality which is not confined to the “manifestly inappropriate” test but is a good way along the spectrum towards the core principles of proportionality as set out in cases such as FEDESA, while nonetheless being prepared to afford some margin of appreciation to the Secretary of State in relation to what is an economic and social decision, taken in an uncertain environment.  With that in view, I turn to the MAC Report.

 

Sub-issue (c):  do the Extension Regulations pass the proportionality test on the appropriate level of scrutiny?

 

104. It is necessary to start with the question the MAC was asked, namely “to consider what the labour market impact of relaxing transitional measures [for A8 nationals] would be and whether it would be sensible to do so.”  The MAC’s answer was in the following terms (emphasis in original):

 

“6.4 It is likely that net inflows of A8 immigrants to the UK will fall in the next few years due to the economic downturn and reducing income differentials between the UK and A8 countries.  Indeed there is evidence suggesting that   these factors have already contributed to reduced flows of immigrant labour from A8 countries, and this has been supported by some stakeholder   evidence.  Nonetheless, our remit requires us to consider the impact of abolishing the scheme relative to the position if it was to be maintained rather than relative to the position now or at any other point in time.

 

6.5 The WRS was designed on the basis of a Treaty of Accession power to control (or monitor) access to EU labour markets.  It does not, in practice, provide any substantial barriers to employment for A8 immigrants.  We would therefore expect any impact of abolishing or retaining it on the number of A8   immigrants employed to be small.  The evidence reviewed does not indicate   that any substantial negative labour market impacts are likely to result from removing the WRS.  Nevertheless, negative impacts of a lower order are plausible, even though evidence is limited and this is only a possibility.

 

6.6 We emphasis that any impacts resulting from removal of the WRS would be small in comparison to the overall negative labour market consequences of the economic downturn.  Nonetheless, we believe that it would be sensible   to retain the WRS for two more years due to the possibility of small but adverse labour market impacts from abolishing it.

 

6.7 The Government will, justifiably, want to weigh the above factors against the longer-term aim of free movement of labour within the EU and the spirit of the Treaty of Accession.  However, in the immediate future, even if retaining the WRS has only a small positive impact, that would be important to the domestic workers affected. Furthermore, the restrictions can only be maintained for two more years, beyond which the worst of the labour market disturbance will hopefully be over. So retaining the WRS would not, in itself, hinder the free movement of labour within the EU in the longer term.

 

6.8 Other factors are also worth mentioning, although our recommendation is not determined by these. First, it is clear that the WRS creates burdens for employers and immigrants.  While we do not wish to trivialise these, they need to be assessed against the benefits of the scheme.

 

6.9 Second, WRS abolition may have a very small impact on spending on social security benefits, as it would slightly increase the numbers among the existing stock of A8 workers eligible to receive benefits.

 

6.10 Finally, the absence of the WRS would reduce the stock of data available to the Government for monitoring labour market conditions.  While WRS data is not perfect, it complements other data sets, and it can potentially play an   important role in helping us to understand the impact of the recession on immigration flows.”

 

105. The question was put, and answered, in terms of whether it would be “sensible” to retain the WRS for two more years.  That question does not directly tie in with the legal test.  What is “sensible” can be answered from the point of view of one party, whereas a proportionality analysis requires the weighing of other interests, as the MAC in effect alluded to in paras 6.7 and 6.8 of its report.  As noted, there is no evidence from the Secretary of State of such a weighing-up, merely an acceptance of the conclusion that it was sensible to retain the WRS scheme.

 

106. It is necessary to examine the MAC’s reasoning as set out in its report and, given my conclusion at [103], I do so in relatively general terms.  To such extent (if any) as there may be perceived to be a conflict between the Chairman’s foreword and what is said in the body of the report, I prefer the latter, given the inevitable difficulties of summarising a reasoned report in four paragraphs.  At para 3.16 it listed six factors which could potentially increase the volume of inflows of A8 workers, if the WRS were to be removed.  At para 3.18 it listed four factors which could result in disturbance of the labour market if removal of the scheme were to incentivise certain behaviours.  All of these were, as the report noted at para 3.19, “hypothetical possibilities”, the direction of the impact of which was, in most cases, ambiguous.  For present purposes, it is in chapter 5 of the report that the relevant evidence is weighed and conclusions reached.

 

107. At para 5.6, the MAC returned to five of the six factors that had been listed in para 3.16.  It noted (para 5.9) that removal of the £90 would have “a limited impact” because of relative incomes between the UK and A8 states and that, because of the inability to penalise immigrants who failed to register (and so to pay the fee) the fee was “less likely to be having a substantial impact” (para 5.10).  At para 5.13 it noted that there was little reason to expect removal of the WRS to increase flows on this basis.  On the impact of social security benefits, the MAC appears to have found the evidence equivocal (paras 5.14 and 5.15)  Its conclusion on this section, at para 5.16, was that:

 

“[I]t is very unlikely that removing the WRS would result in any substantial change in A8 immigrant inflows.  However, it is possible that some factors, including the £90 registration fee, could have a small effect at the margin.  The effect of maintaining the WRS will be to slightly reduce flows relative to what would otherwise be observed.  We argue in this report that this slight dampening effect on flows is a positive phenomenon in the current economic circumstances, which is why we have not given detailed consideration to the option of relaxing the WRS by keeping the scheme but abolishing the £90 fee.”

 

I observe that the key role in the MAC’s reasoning played by the £90 fee payable under the WRS in possibly slightly dampening inflow is made quite explicit by the final sentence of the passage quoted above, as well as being evident from the lack of other reasons for concluding that inflow would be dampened if the WRS were to be lifted.

 

108. At paras 5.17 and following, the MAC looked at the impact of abolition on behaviour in the labour market, concluding that “there is no clear evidence that abolition would affect behaviour to a significant degree.”

 

109. In a section at paras 5.22 and following the MAC considered what it termed “likely wider economic impacts”.  These included the usefulness or otherwise of the data obtained through the WRS, as to which it concluded (at para 5.30) that:

 

“it is probable that most, but not all, of the data collected by the WRS could be substituted with other data series.  Nevertheless, the WRS could possibly prove to be a useful additional data source during times of economic disturbance, given the limited evidence on the effect of the recession on immigration flows and their impacts.”

 

110. It continued by noting the representations received from employers’ organisations about the administrative burden of the WRS, noting that “little research has been performed to examine the scale of such a burden”.  At para 5.33 it noted that public spending on social security could potentially increase to a limited extent.  Its concluding remarks to chapter 5 require to be set out in full:

 

“5.35 The evidence reviewed indicates that the abolition of the WRS would not result in substantial changes in flows and therefore there would not be significant labour market impacts.  This is because the absence of the £90 fee would probably have only a marginal effect on immigration decisions and behaviour changes resulting from abolition of the scheme would be small.  Nevertheless, it is plausible to argue that abolition of the WRS could potentially result in a small positive impact on immigration inflows.

 

5.36 Abolishing the scheme would potentially lead to additional public expenditure in terms of increased benefit payments to A8 immigrants, although the sums involved would be relatively small.  There would also be a   loss of data.  On the other hand , there would be some easing of administrative burdens on employers and the immigrants themselves.”

 

The factors referred to in para 5.36 were not those on which the MAC relied for its recommendation: see paras 6.8 to 6.10 quoted at [104] above.

 

111. It is difficult to imagine a report favouring retention of the WRS couched in weaker or more heavily qualified terms.  Evidence of the “small” behaviour changes resulting from abolition was not such as to establish them “to any significant degree”.  The abolition of the £90 fee would have an effect that was “probably …only …marginal”.  Any positive (i.e. increased) impact on inflows from abolition was (a) “small”; (b) only a “potential[..] result” and (c) only something that could be “plausibl[y] argued”.

 

112. “Sensible” it may have been, even if the effects were a matter of conjecture and small or marginal, on the basis that if they did come to pass, when seen from the perspective of the government it could only help.  But was it proportionate?  The MAC’s conclusion depends in very large measure on the deterrent effect of the £90 fee, but is maintaining that fee a measure that is “appropriate and necessary”?  This was a scheme which if complied with did not otherwise restrict the access of A8 nationals to the labour market: see MAC report, para 2.36; also the evidence cited by Baroness Hale in Zalewska at para 53.  The United Kingdom originally had a wider power to put national measures in place and, albeit by a bare majority, the House of Lords held in Zalewska that the action then was proportionate.  But by 2009 it was a question of whether it was a proportionate step to take in the context of there being a serious disturbance to the UK labour market (or threat thereof) and whether maintaining the scheme would help address that disturbance.  Because of the passage of time, the appellant’s argument cannot in my view properly be characterised, as does Ms Smyth, as a “challenge to Zalewska itself”.  Data collection was more relevant in 2005 than it had become by 2009, because the provisions of Annex VIII and similar annexes for reviews and extensions of the national measures which required data to be gathered as evidence had, with time, fallen away.  Any residual value in data derived from the WRS was limited in that it was largely replaceable from elsewhere and was otherwise speculative (“could possibly prove to be…”).  Other than that, the WRS had no demonstrable material impact on inflows or behaviour, and so on the labour market, at all.  What we are left with as impacting on the labour market is the fee, set to defray the costs of an administrative scheme which does not itself materially help to address the disturbance.  I do not regard it as an “appropriate” tool for proportionality purposes for addressing the serious disturbance to the UK labour market in that it relies effectively on payment of a sum of money by A8 nationals, while not otherwise affecting their access to it.

 

113. Given the prominence given in the MAC’s reasoning to the fee, this conclusion would itself be enough to invalidate the proportionality of a decision taken relying upon that reasoning.  However, if I am wrong in that conclusion, I would in any event consider that the disadvantages caused are disproportionate to the aims pursued.

 

114. There is a burden on employers, even if little research had been done to examine its scale. Regulation 9 of the Registration Regulations created a criminal offence if an employer employed A8 nationals who were required to be registered under the WRS but were not, subject to various defences of due diligence.  Even if there is no known instance of anyone ever having been prosecuted, the procedures must have created additional burdens for any conscientious employer: certainly that (or something akin to it) seems to have been the view of the Confederation of British Industry, British Chambers of Commerce, Association of Labour Providers, the Scottish Executive, the Recruitment and Employment Confederation, the Gangmasters Licensing Authority and the National Farmers’ Union (MAC report, para 5.31).

 

115. The precise effect of the Registration Regulations has been and remains to this day (though they have been repealed) the subject of legal uncertainty and so difficulties for those affected by it.  In addition to Zalewska, reference should be made to SSWP v ZA [2009] UKUT 294 AAC and Szpak v SSWP [2013] EWCA Civ 46 which illustrate the inadequacies of the drafting in relation to whether a WRS certificate was when issued retrospective to the start of the employment.  Cases on other aspects continue to go through the legal system.  On an orthodox view, the effect of the Registration Regulations is that a person who ought to comply with them but does not is excluded from benefits, no matter how unforeseeable the circumstances which have caused them to be in need of them.  Such a person is also prevented from relying on that time for the purposes of the 5 years required to establish permanent residence in the UK under Article 16 of the Directive, notwithstanding that he or she may have been working, paying taxes and generally participating actively in UK society.  There is, in short, a very real downside for those who do not comply for whatever reason, one regarded by Baroness Hale at para 57 of Zalewska as “severe”.  Factors such as language difficulties and the frequent participation of A8 nationals in short-term work obtained through agencies may make it more likely that there is non-registration.  The MAC was uncertain (para 5.21) whether such confusion as there may have been on the part of A8 immigrants was as to the WRS or as to employment rights more generally; but even if it was the latter, the WRS can only have served to make an already difficult situation worse.  The MAC report cites at para 57, albeit not in wholly unambiguous terms, a study in which (at very least) some 33% of A8 nationals failed to register when they needed or potentially needed to do so.  For those who did comply, there was the need to pay a sum equivalent to around 1 per cent of annual gross pay for someone working at the national minimum wage for a 35 hour week for 48 weeks (MAC report, para 5.9).

 

116. While I acknowledge that the scheme, when introduced, was held by the majority in Zalewska to be proportionate, that was in substantial measure dependent on factors which had ceased to be relevant, such as the need for ongoing monitoring for the purposes of the next level of the graduated accession provisions (Zalewska at para 33) and the concern about the number of A8 state nationals already working illegally in 2004 (Zalewska para 34) which, unless the Registration Regulations had proved ineffective in their purpose, would necessarily have been reduced by 2009.  Most fundamentally, that decision was concerned with when the United Kingdom had a wider power to introduce “national measures”, so the debate was about whether particular features of those “national measures” were proportionate.  In the present case, the debate is about whether it was in 2009 proportionate to retain the national measures at all, to which Zalewska does not provide an answer.

 

117. I do not base this decision on whether the means adopted were the “least intrusive means”.  Rather, the small and speculative advantage is wholly outweighed by the disadvantage to A8 nationals and employers and the limitation on Treaty principles of freedom of movement, even allowing for the argument that “every little helps” in the difficult circumstances which the economy faced.

 

118. If, contrary to my view, the “manifestly inappropriate “ test were to apply, the Extension Regulations would in my view fail it for the same reasons.

 

119. For the reason given in [112] and if I am wrong in that the reason in [113], I conclude that the decision to extend the WRS in 2009 was not a proportionate exercise of the United Kingdom’s power under the Treaty of Accession.  It follows that the Extension Regulations must be disapplied.

 

120. The foregoing conclusion is as Mr Royston submits consistent with para 7 of Annex VIII and with Article 37 and 38 of the Treaty of Accession but they have played no significant part in my reasoning and I do not dwell on them.  Mr Royston argued also by reference to C-77/82 Peskeloglou and C-9/88 Lopes da Veiga that as a matter of law the capacity of the measure concerned to assist with dealing with the labour market disturbances must be “substantial”.  I am unable to derive this proposition from those cases, but Mr Royston does not need it.

 

121. Mr Royston was at one stage inviting me to refer certain questions relating to proportionality to the CJEU while Ms Smyth was of the view that this was not necessary.  I have not done so, because I consider that the relevant principles are acte claire and the assessment of proportionality is pre-eminently a matter for the national court.

 

Issue C: was the appellant a worker or jobseeker for EU purposes at all material times?

 

122. The periods which we particularly require to examine are those between 27/12/09 (or thereabouts) and 26/03/10 and between 13/6/10 or thereabouts and some time in the week ending 13/07/10.  Ms Smyth does not attempt to argue that at other times the appellant was not a worker.  Mr Royston’s primary position was that the appellant was at all material times a “worker”, relying on cases such as C-357/89 Raulin [1992] ECR I-1027 and NE v Secretary of State for Work and Pensions [2009] UKUT 38(AAC).  I have no evidence as to the terms of the appellant’s engagement with the relevant agency.  At the start of each of the two periods concerned the appellant was sent form P45 and that fact, coupled with the duration of those periods, leads me to reject this argument.

 

123. Mr Royston does not seek to argue that the appellant retained “worker” status under article 7(3) of the Directive: such a concession appears inevitable at this level in view of the decision of the Court of Appeal in Secretary of State for Work and Pensions v Elmi [2011] EWCA Civ 1403 that the requirement to have “registered as a jobseeker with the relevant employment office” creates an additional condition to that prevailing before the Directive.

 

124. Thus we arrive at whether in the two periods the appellant was a jobseeker.  Ms Smyth does not take any point in relation to the periods in question not being periods as a “first-time” jobseeker.  That approach is consistent with the government’s approach in other cases, such as Shabani v Secretary of State for the Home Department (EEA-jobseekers; nursery education) [2013] UKUT 315 (IAC).

 

125. At the material time, regulation 6(4) of the IEEA Regulations provided:

 

“(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.”

 

126. As to the requirement of “seeking employment”, Ms Smyth seeks to argue that the appellant has to show that she was doing so “seriously and effectively”.  In support she relies on paras 37, 39 and 41 of the Advocate-General’s Opinion in C-292/89 R v Immigration Appeal Tribunal ex parte Antonissen [1991] ECR I-745.  But reading the judgment of the Court, there is in my view no indication that it intended to adopt that part of the Opinion.  What the Court considered important (paras 16 and 21) was that a person should have “a reasonable time to apprise themselves, in the territory of the Member State concerned, of offers of employment corresponding to their occupational qualifications and to take, where appropriate, the necessary steps in order to be engaged.”  Against that background the six month rule then operated in the United Kingdom was considered “in principle not insufficient”, but “if after the expiry of that period the person concerned provides evidence that he is continuing  to seek employment and that he has genuine chances of being engaged, he cannot be required to leave the territory of the host Member State.”  The Court’s decision appears to acknowledge that a jobseeker from abroad is likely to need a reasonable time to “apprise themselves” of jobs  and then apply for them.  I reject the proposed “seriously and effectively” test as a gloss on what the Court said.

 

127. Ms Smyth then relies on C-138/02 Collins v SSWP [2005] QB 145 and C-22/08 Vatsouras v ARGE [2009] All ER (EC) 747 for the proposition that there is a need to establish “genuinely” having sought work.  The context is somewhat different, but the point is not in dispute; however, it does not materially add to the test in Antonissen. Nor does the decision of the Upper Tribunal (Immigration and Asylum Chamber) in AG and others Germany [2007] UKAIT 00075, which so far as relevant was a decision on the facts of that case, where the evidence was particularly sparse.

 

128. I derive no assistance from Begum v SSHD [2011] UKUT 00275(IAC).  That was a case where there were very real credibility issues generally and where the evidence in support of job-seeking consisted of a single sentence, given in response to cross-examination, that the appellant’s husband had been looking for a second job alongside a claimed first job which was correctly held to be neither effective nor genuine.  In the present case, by contrast, there is oral evidence as to job-seeking and written and oral evidence as to the work in fact obtained, given in a hearing before the Upper Tribunal and on which Ms Smyth has had the opportunity to cross-examine.  I do not think Ms Smyth is suggesting that Begum is authority for the proposition that evidence as to job-seeking requires corroboration; in any event, it is not.

 

129. I agree with Ms Smyth that:

 

(a) the correct approach to assessing whether the appellant was a jobseeker for the purposes of regulation 6(4) in circumstances where the extension of the WRS has been held to be unlawful is the same as if it were lawful; and

 

(b) “jobseeker” has an independent meaning in EU law and the status of a person as a jobseeker cannot be contingent on entitlement to benefit under domestic law (such as jobseeker’s allowance, which the appellant did not claim.) 

 

130. There is no obligation on anyone to claim jobseeker’s allowance or indeed national insurance credits so, while having done so might have meant that the appellant’s task now would have been straightforward (in that there would have been contemporaneous verification), the fact that she did not do so is not determinative.

 

131. In order to succeed via this route, the appellant needs to be able to point to three years as a worker or jobseeker, leaving out of account the impact of the WRS, ending on the effective date of her claim, 8 November 2012 or a date shortly thereafter (as to which see [135]).

 

132. It is a reasonable assumption that by September 2009 when she first obtained work, the £500 with which she had come to the UK in 2008 must have been seriously depleted, even though she had had what must have been substantial help from friends in the Manchester area.  She had not attempted to claim social security benefit and in my judgment there would have been powerful economic motivators to look for work when she did not actually have it.  It was known that by the time of the DWP’s decision under appeal, the appellant had, for prolonged periods of time, performed unskilled work whenever it was available, despite the inconvenience of fluctuating hours, and often for substantial numbers of hours per week.  I do not think there can be any doubt as to her motivation to find work.

 

133. More to the point is whether, as a person with extremely limited English and new to the UK, she did enough to put that motivation into practice.  Much work done by A8 nationals seeking unskilled or manual work is done through agencies (see e.g. MAC report at para 5.27).  With her very poor English, it seems to me that she was liable to fare better going through agencies, with whom initial contact could be established with the help of friends, than going for any job whose application process required her personally to take any sort of initiative in the English language. By late December 2009 she had obtained two lots of work through agencies and it was not unreasonable to rely upon them as a key route to further work.  Despite language difficulties, she was not totally passive with regard to the agencies, ringing up Heads Recruitment, through whom her most recent assignment had been obtained, at weekly intervals.  She was clearly aware of the jobcentre and took some steps to use what it could offer, printing off details of jobs.  The jobcentres’ facilities were described by Ms Smyth in terms that

 

“A8 nationals were able to use “Jobpoints” in Jobcentres to conduct job searches, and to use telephones in place at Jobcentre Plus offices for the purposes of telephoning potential employers or using the then available Jobseeker Direct, a telephone job search assist service.  “Drop in” services were also available for any customer who did not have a live claim to JSA.”

 

One can imagine though that it may have been difficult for the prospective employers concerned, rung up by the appellant using just one stock English phrase, to respond positively.  For that reason, much of what Ms Smyth says was on offer at the jobcentre, heavily dependent on the use of the telephone, may have been of little use to the appellant, so that reliance on her strategy was appropriate.  On the basis of Antonissen, a person is entitled to a reasonable opportunity to apprise herself of jobs in the Member State and to apply for them.  I construe the requirement of reg 6(4) of “seeking employment” in that light and conclude that by the steps taken, the appellant was indeed seeking employment during the period late December 2009 to late March 2010.  In Summer 2010 she did less, but (a) the period was shorter and (b) she had by then had a third assignment from an agency (once again Heads Recruitment) and was in my judgment entitled to rely on the agencies as a suitable means of “seeking employment”.

 

134. That leaves the limb of regulation 6(4) requiring evidence of a “genuine chance of being engaged”.  In my view, the appellant did have such a chance.  The “circumstances obtaining” down to the date of the DWP’s decision (cf. Social Security Act 1998, s.12(8)) allow in this case the luxury of a certain amount of hindsight.  Her first assignment with Heads Recruitment, making “Christmas sausages”, had evidently been seasonal in character and had duly come to an end after Christmas.  There is no suggestion that the appellant had in any way prejudiced her work record by the way she had performed that assignment and indeed it is clear that Heads Recruitment were content to re-engage her in March 2010 and subsequently in July 2010.  The evidence shows that the appellant is flexible (having worked in more than one type of work) and ready to take work when offered.  While her chances of being engaged, notwithstanding her personal qualities, were also dependent on the availability of work, the work she was prepared to take and did take (factory, warehouse) was not of a restricted type such as would narrow the chances of there being suitable work.  The time periods involved (never more than three months) were not such of themselves to suggest that her chances of success were otherwise than “genuine” and she did, in the event, succeed.  I conclude accordingly that she fulfilled this limb of the definition of “jobseeker” also in respect of the periods identified at [122].

 

135. Consequently, whether or not I am right as to my conclusion on issue A, the appellant also succeeds by virtue of the combination of issues B and C.  There is no evidence as to her job-seeking in the period 4 October 2009 to 18 November 2009 and, if she succeeds on the latter basis, she consequently does so only from 19 November 2012 rather than the date stated in the decision at the top of these Reasons.  The difference in dates appears academic, in that the appellant was paid by her employer until 25 November 2012 and any substantive entitlement would have to reflect that.

 

 

 

C.G.Ward

Judge of the Upper Tribunal

30 January 2015

 

APPENDIX A

 

Summary of the WRS and of relevant parts of the Registration Regulations (as amended)

1. The basic rule of the scheme that it set out is that a national of an A8 state working in the United Kingdom during the accession period was an accession state worker requiring registration: 2004 Regulations, reg 2(1). He ceased to be an accession state worker requiring registration if he legally worked in the United Kingdom without interruption for a period of 12 months falling wholly or partly after 30 April 2004: reg 2(4). But he would only be treated as legally working in the United Kingdom on or after 1 May 2004 if he was working for an authorised employer: reg 2(7)(b). Regulation 4 dealt with the right of residence of workers and work seekers from the A8 states during the accession period. Reg 4(1) derogated from the relevant Community provisions on the abolition of restrictions on movement and residence within the Community for workers of member states. Reg 4(2) provided that a national of a relevant accession State was not entitled to reside in the United Kingdom as a work seeker if he would be subject to the scheme if he began working. Reg 4(4) provided:

"A national of a relevant accession State who is seeking employment and an accession state worker requiring registration shall only be entitled to reside in the United Kingdom in accordance with the 2006 Regulations as modified by regulation 5."

2. Regs 5(1) to 5(4) of the 2004 Regulations provided:

"(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.”

3. Regs 7(1), 7(2) and 7(3) of the 2004 Regulations provided:

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

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

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

(b) the worker -

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

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

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

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

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

Reg 7(5)(b) provided that a registration certificate expired on the date on which the worker ceased working for that employer.

4. Reg 8 of the 2004 Regulations set out the system that was to be followed for obtaining a registration certificate. The application could only be made by an applicant requiring registration to work for an employer who was working for that employer at the date of the application. It had to be made in writing to the Secretary of State. Except in the case of a first registration, the application had to be accompanied by, among other things, a letter from the employer confirming that the applicant began working for the employer on the date specified in the application.  On a first registration a registration fee of £90 was payable.  If the Secretary of State was satisfied, he sent the applicant a registration card with a reference number, for use in subsequent applications, and a registration certificate. The registration certificate stated, among other things, that it authorised the worker to work for the employer stated in the certificate and that it would expire on the date the worker ceased working for that employer. Reg 9(1) provided that, subject to various exceptions, an employer who employed an accession state worker requiring registration during a period in which the employer was not an authorised employer in relation to that worker was guilty of an offence.

APPENDIX B

1. The appellant was born on 30 July 1951.  She is a Latvian national and speaks Russian and Latvian.  She moved to the UK in 2008 with £500 in savings, intending to settle and to look for employment.

 

2. At that time she had little or no knowledge of the English language or of Manchester (where she lived) or the United Kingdom and was dependent on friends to help her.

 

3. At an unknown date or dates she registered with several employment agencies: Careermakers, Heads Recruitment, Time Recruitment and another whose name is not known but which is based in Middleton, Lancs.

 

4. The first work she obtained was through Careermakers.  She worked for in excess of 30 hours in each of the weeks reflected in payslips dated 18/09/09 (a Friday), 25/09/09 and 02/10/09 and for 6.5 hours in the week in the payslip dated 09/10/09. In the absence of evidence as to the correlation between pay dates and weeks worked it is not possible to make more exact findings as to the dates of that employment.  She was paid by BACS transfer.

 

5. She subsequently obtained work through Heads Recruitment in a meat factory, making what she describes as “Christmas sausages”, commencing on 19 November 2009.  In the week ending (Sunday) 22/11/09 she worked 23.5 hours, for which she was paid by cheque.  She then worked again (always at least 21 hours) in the weeks ending 13/12/09 to 27/12/09, and was paid by BACS.  That job then came to an end and the following week she was paid her holiday pay. She was taxed using Tax Code 647L (which reflects eligibility for a personal allowance).  She was sent Form P45.

 

6. The terms of her engagement with Heads Recruitment (other than as to pay) are not in evidence and no finding is made as to those matters.

 

7. Between the termination of the work described in [6] some time in the week ending 27/12/09 and 26/03/10 she did no work.

 

8. On Friday 26 March 2010 the appellant was called up by Heads Recruitment to work 4.5 hours in a clothes warehouse.  She was paid by cheque.  Tax code BW (an “emergency” code) was applied, resulting in the deduction of tax.  Although this was still in the same tax year 2009/10 in which her previous work for Heads Recruitment had fallen, her payslip for the March 2010 work showed figures for cumulative totals such as “Gross Year to Date” which started again rather than carrying figures from the previous work forward.

 

9. She next worked, in the same place, in the week ending 11/04/10.  She worked each week through to w/e 30 May 2010, working hours that were never less than 28.5.  During this time she was paid by BACS.  Her code was changed from BR to 647L in respect of the week ending 02/05/10.

 

10. There was no work for her in the week ending 06/06/10.  In w/e 13/06/10 she worked 15.75 hours. She was also paid holiday pay and received a tax refund.  On the balance of probabilities, she was sent a further P45 at this time.

 

11. The appellant did no more work until w/e 18/07/10.  She was once again on Tax Code BW and the “Gross Year to Date” figure again started from zero.  She then worked every week up to and including w/e 15/08/10, never working less than 28 hours.  In w/e 22/08/10 she did no work.  From w/e 29/08/10 she was once again working through to w/e 05/09/10.  She did not work in w/e 12/09/10. She resumed in w/e 19/09/10 working right through to Christmas.  She was paid holiday pay in respect of the Christmas/New Year week and then resumed working through to w/e 06/02/11.  For w/e 13/02/11 and most of w/e 20/02/11 she received holiday pay, resuming work at the end of the latter week.  It suffices to describe the hours worked in each of these weeks when she was working as being for at least the greater part of a conventional 35 hour week.

 

12. In w/e 27/02/11 she worked for 7 hours only.  Thereafter she resumed and worked in each week through to w/e 13/11/11 apart from weeks in which she received holiday pay.  In each week she worked she never did so for less than 14 hours and usually worked considerably more.  She did not work in w/e 20/11/11. She resumed in w/e 27/11/11, working through to w/e 25/12/11 (with holiday pay in Christmas week).  Between w/e 25/12/11 and w/e 15/01/12 the appellant worked (or was entitled to holiday pay for) a little over 6 hours though it is not possible to say when.  Thereafter she worked continuously though to w/e 06/05/12. In general the hours worked in that period were, or were approaching, full-time.  In w/e 13/05/12 she did not work but received holiday pay.  In w/e 20/05/12, 27/05/12 and 03/06/12 she worked for 20, 7 and 21 hours respectively.  In w/e 10/6/12 she received a small amount of holiday pay only. In w/e 17/6/12 she worked 7 hours. She resumed more substantial work in w/e/ 24/06/12, working through to w/e 07/11/12, working never less than 18 hours and often a good deal more.  She then received holiday pay until her employment ended on 25/11/12.

 

13. Apart from when she was on holiday, if there were times when she did not work, it was because no work was available for her to do.

 

14. A registration certificate under the Worker Registration Scheme was issued on 20/08/10.  Her employments before that date were not covered by such a certificate.

 

15. She registered with the agencies with the help of friends.  In the period between late December 2009 and late March 2010 her efforts to find work consisted of calling Heads Recruitment every week, to ask if they had any work for her, together with being passively on the books of Career Makers and Time Recruitment.  She also went to the jobcentre, where she was shown how to print off particulars of vacancies from the machines there.  The appellant made some efforts to follow up the jobs on the printouts by phone (using a simple English phrase she had memorised for the purpose), but these proved  unsuccessful due to her poor English at that time.  If she had been offered work, she would have taken it.

 

16. In Summer 2010 at times when there was no work the appellant relied on waiting for the agencies to call and on asking friends about jobs.  Again, if she had been offered work, she would have taken it.

 

17. At no time did she seek to claim jobseeker’s allowance, in the belief that her poor English would prevent her from meeting the jobcentre’s requirements.  Once she had started work, in periods when there was no work she was able to support herself from her previous earnings.