52 EU/Turkey coordination of social security
systems
| Committee's assessment
| Legally and politically important |
| Committee's decision | Cleared from scrutiny; drawn to the attention of the Work and Pensions Committee
|
| Document details | Draft Council Decision on the position to be taken on behalf of the European Union within the Association Council set up by the Agreement establishing an association between the European Economic Community and Turkey with regard to the provisions on the coordination of social security systems
|
| Legal base | Articles 48 and 218(9) TFEU; QMV
|
| Department
Document numbers
| Work and Pensions
(33815), 8556/12, COM(12) 152
|
Summary and Committee's conclusions
52.1 The purpose of this Council Decision is to implement provisions
on the coordination of social security systems contained in the
EU/Turkey Association Agreement. The Decision remains under scrutiny,
despite having been adopted in December 2012, pending the outcome
of a legal challenge brought by the United Kingdom in the Court
of Justice contesting its validity.[ 364]
This follows unsuccessful challenges to two similar Council Decisions,
one concerning social security arrangements within the European
Economic Area (encompassing EU Member States and Iceland, Liechtenstein
and Norway), the other the implementation of an EU/Switzerland
Agreement on the Free Movement of Persons.[ 365]
52.2 The nub of the dispute between the Commission
and Council, on the one hand, and the UK Government, on the other,
concerns the appropriate legal base for measures determining the
social security rules applicable to certain third country nationals.
The choice of legal base is significant as it determines whether
the UK's Title V (justice and home affairs) opt-in, set out in
Protocol No. 21 to the EU Treaties, applies to a particular measure
and whether or not, as a consequence, the UK is bound by it.
52.3 In this chapter, we summarise the Court's judgment
and the Government's reaction.
52.4 This is the third case concerning the legal
base for EU measures on the coordination of social security arrangements
for certain third country nationals which the UK has lost. The
Government does not appear to accept that these defeats have any
wider implications for its policy of asserting that the UK's Title
V (justice and home affairs) opt-in can apply to measures which
do not cite a Title V legal base.
52.5 In evidence to Sub-Committee E (Justice,
Institutions and Consumer Protection) of the European Union Committee
in the House of Lords last January, the then Lord Chancellor and
Secretary of State for Justice (Chris Grayling) suggested that,
in a series of cases brought by the UK to challenge the omission
of a Title V (justice and home affairs) legal base, the Court
of Justice had "ducked the issue" by failing to give
"a definitive judgment" on the application of the UK's
opt-in Protocol to measures containing "partial" or
"incidental" JHA content.[ 366]
It had simply ruled that the measures in question lacked any JHA
content.
52.6 The Court's judgment in the EU/Turkey case
makes clear that the UK's opt-in Protocol "is not capable
of having any effect whatsoever on the question of the correct
legal basis".[ 367]
Moreover, the Court also refers to its earlier judgment in Case
C-137/12 (concerning the legal base for EU accession to the Council
of Europe Convention on conditional access services) which expressly
clarifies that "it is the legal basis for a measure —
the appropriateness or otherwise of which falls to be assessed
[…] on the basis of objective factors such as main or predominant
purpose of the measure and its content — which determines
the Protocols to be applied, and not vice versa".[ 368]
We take this as a clear statement that a Title V legal base, rather
than the more tenuous assertion of partial, incidental or ancillary
JHA content, is a necessary pre-requisite for the application
of the UK's Title V opt-in.
52.7 This latest Court of Justice ruling concludes
recent litigation on the correct legal base for EU measures determining
the rules on the coordination of social security systems applicable
to certain third country nationals. We now release the Council
Decision from scrutiny, but draw our observations to the attention
of the Work and Pensions Committee.
Full
details of the documents:
Draft Council Decision on the position to be taken on behalf of
the European Union within the Association Council set up by the
Agreement establishing an association between the European Economic
Community and Turkey with regard to the provisions on the coordination
of social security systems: (33815), 8556/12, COM(12) 152.
Background
52.8 The Agreement, concluded in 1963, establishing
an Association between the then European Economic Community and
Turkey was intended to pave the way for Turkish membership of
the EEC by, amongst other things, "progressively securing
freedom of movement of workers".[ 369]
The Agreement was supplemented, in 1970, by an Additional Protocol
which required the Association Council (a body comprising representatives
of Turkey, the Member States and the Commission) to adopt social
security measures for workers of Turkish nationality moving within
the Community and members of their family living with them.[ 370]
52.9 These measures were to provide for:
· the
aggregation of periods of insurance or employment completed in
individual Member States for the purpose of determining entitlement
to health care and to old age pensions, death benefits and invalidity
pensions;
· the
payment of family allowances in respect of family members resident
within the Community; and
· the
transfer (or export) of old age pensions, death benefits and invalidity
pensions (meaning that payment can be made in Turkey if the beneficiary
has left the paying State).
52.10 In 1980, the EU/Turkey Association Council
adopted Decision No 3/80 to give effect to the social security
provisions of the Association Agreement, but a further implementing
Regulation (proposed in 1983 but never adopted) was required.
Notwithstanding the absence of implementing rules, the Court of
Justice determined that two provisions of Decision No. 3/80 were
directly effective and could therefore be relied on in proceedings
brought in national courts.[ 371]
The provisions concerned the application of the principle of equal
treatment and the payment (export) of certain benefits and pensions
to beneficiaries resident in Turkey.[ 372]
52.11 The Council Decision proposed by the Commission
would repeal and replace Decision No. 3/80 and implement "in
one single step" the provisions on social security coordination
contained in the Association Agreement and Additional Protocol,
thereby ensuring legal certainty. It would also "permit Turkey
to align its policies on social security coordination with those
of the EU in preparation for future accession to the EU".[ 373]
The Council Decision is based on Article 48 of the Treaty on the
Functioning of the European Union (TFEU) which authorises the
EU to adopt "such measures in the field of social security
as are necessary to provide freedom of movement for workers".
52.12 The legal challenge brought by the UK concerns
the appropriate legal base for EU measures determining the social
security rules applicable to certain third country nationals.
In recent cases concerning the coordination of social security
arrangements between the EU and Switzerland, and within the European
Economic Area, the Court of Justice rejected the argument advanced
by the UK that the relevant Council Decisions should be based
on a Title V (justice and home affairs) legal base — Article
79(2)(b) TFEU which defines the rights of legally resident third
country nationals within the framework of the EU's common immigration
policy. It ruled that Article 48 TFEU, a non-Title V Treaty provision,
was the appropriate substantive legal base for both Decisions.
As a consequence, the UK is bound by the Decisions.
52.13 The Court issued its judgment in the EU/Turkey
case on 18 December 2014. A more detailed overview of the legal
issues at stake in this case, and in the earlier EEA and Switzerland
cases, can be found in our earlier Reports listed at the end of
this chapter.
The Court's judgment
52.14 In its judgment[ 374],
the Court notes that the contested Decision was adopted on the
basis of Articles 48 and 218(9) TFEU, the latter establishing
the procedures for its adoption by a qualified majority of the
Council. The Court describes the legal context by reference to
the relevant provisions of the Association Agreement, the Additional
Protocol and Decision No. 3/80 concerning the application of Member
States' social security schemes to legally resident Turkish workers
and their families. It explains that the UK, supported by Ireland
(a co-beneficiary of the Title V opt-in Protocol), contended that
Article 48 TFEU "is a provision ancillary to the principle
of free movement within the EU for employed and self-employed
workers who are nationals of Member States" and cannot, therefore,
extend to the coordination of social security systems for Turkish
nationals. The UK considered Article 79(2)(b) TFEU to be the appropriate
legal base for a measure which concerns "the definition of
the rights of third country nationals residing legally in a Member
State". The UK added that the choice of a different legal
base, outside Title V of Part Three of the TFEU, would deprive
the UK of the right, enshrined in Protocol No. 21, not to take
part in, and be bound by, the draft Decision. The UK also contended
that the adverse judgments already given by the Court in the EEA
and EU/Switzerland cases should not apply by analogy to the facts
in this case, as "the purpose of the EEC/Turkey Agreement
and the Additional Protocol is not to extend the internal market
to Turkey or to secure the free movement of persons between the
Union and that non-Member State".[ 375]
52.15 By contrast the Council, supported by the Commission,
argued that Turkish workers were "no longer in the same situation
as that of nationals of other non-member countries" by virtue
of provisions in the Association Agreement and Additional Protocol
providing for freedom of movement of workers to be secured by
progressive stages. The partial coordination of social security
systems contained in the Decision was intended to achieve that
objective, not to develop a common immigration policy, as envisaged
in Article 79 TFEU.[ 376]
52.16 The Court's judgment reiterates settled case
law establishing that "the choice of the legal basis for
a European Union measure must rest on objective factors amenable
to judicial review, which include in particular the aim and content
of the measure".[ 377]
It adds that the context of the measure — in this case the
Association Agreement and Additional Protocol — may also
be relevant to the choice of legal base, and concludes:
"Thus, the contested Decision constitutes
a further stage in progressively securing freedom of movement
for workers between the European Union and Turkey and in developing
the links created by their Association Agreement."[ 378]
52.17 The Court rejects the UK's contention that
Article 79(2)(b) TFEU is the appropriate substantive legal base,
as the Decision "pursues a purpose other than that of the
common immigration policy" and must reflect the specific
context of which it forms part.[ 379]
The Court makes clear that "Protocol No. 21 is not capable
of having any effect whatsoever on the question of the correct
legal basis for the adoption of the contested Decision".[ 380]
52.18 The Court accepts that the objectives of the
Association Agreement differ from those considered previously
in its judgments concerning the EEA Agreement and the EU/Switzerland
Agreement on the Free Movement of Persons and concludes that Article
48 TFEU should not constitute the sole legal base for the Decision,
since:
"As a rule, it is only in the sphere of
the internal policies and actions of the European Union or of
the external actions relating to third countries which can be
placed on the same footing as a Member State of the European Union
[…] that Article 48 TFEU empowers the European Union to adopt
measures in this area."[ 381]
52.19 The Court considers whether Article 217 TFEU,
which empowers the EU to conclude Association Agreements establishing
"reciprocal rights and obligations, common action and special
procedure" with third countries, should have been cited as
a legal base for the Decision. It concludes that the Decision
should cite both Article 48 TFEU and Article 217 TFEU "since
it has been adopted in the framework of an Association Agreement
and is aimed at the adoption of measures coordinating social security
systems".[ 382]
As the omission of Article 217 TFEU has no effect on the content
of the Decision or the procedure for its adoption, the Court rules
that its absence constitutes "a purely formal defect which
does not entail its annulment".[ 383]
The then Minister's letter of 22 February 2015
52.20 As a consequence of an administrative oversight
within the Department for Work and Pensions, we only received
the letter from the former Minister for Employment (Esther McVey)
in May. The Minister explains the background to the Commission's
proposal, in 2012, for a Council Decision to repeal Decision No.
3/80 of the EU/Turkey Association Council and to implement the
provisions on social security coordination contained in the Association
Agreement and Additional Protocol:
"Decision 3/80 established the rules for
implementing the social security provisions in the Additional
Protocol. In 2011 the Court of Justice of the EU (CJEU) in Akdas
(C-485/07) decided that Decision 3/80, although never actually
implemented, had direct effect. It meant that certain non-contributory
benefits or social assistance that are not exportable within the
EEA under the EU Regulations may be payable to Turkish nationals
living in Turkey under the EU-Turkey Agreement.
"The 2012 proposal is therefore intended
to correct the unintended imbalance created by Akdas. The
European Commission considered that to achieve this, the proposal
required an Article 48 TFEU legal base. Although the draft Council
Decision was adopted by QMV on 6 December 2012, the UK and Ireland
again entered a minute statement objecting to the Article 48 legal
base and on this occasion were joined also by the Netherlands.
The Commission gave an assurance that the Decision would not be
put forward for adoption in the EU-Turkey Association Council
until the CJEU had ruled in the EU-EEA Agreement (C-431/11) and
EU-Switzerland Free Movement of People Agreement (C-656/11) cases.
"For the reasons already contested in those
two cases, the United Kingdom, again supported by Ireland, brought
a third legal action in the CJEU (Case C-81/13) over the use of
Article 48."
52.21 As in the earlier cases, the Minister explains
that the Court found that Article 48 TFEU was the correct legal
base "in so far as the Decision extended rights under the
EU-Turkey Agreement to EU nationals", but also ruled that
this legal base should have been used in conjunction with a second
legal base, Article 217 TFEU, which "empowers the EU to guarantee
commitments towards third countries". The Court added that
Article 79 TFEU — the legal base proposed by the Government
— was only to be used "for the purposes of a common
immigration policy aimed at ensuring efficient migration flows".
Since the omission of Article 217 TFEU from the Council Decision
"had no effect on the content of the measure", the Minister
notes that the Court did not require the measure to be annulled.
52.22 Now that the Court has confirmed the validity
of the Council Decision, the Minister sets out the next steps:
"[…] the Decision adopted by QMV in
December 2012 is the EU's negotiating position which it will take
to the EU-Turkey Association Council. We wait to see if Turkey
will accept the repeal of Decision 3/80 with the subsequent loss
of rights for their nationals achieved from the Akdas judgment.
The Government will carefully consider any further developments
and remains committed to protecting the United Kingdom's best
interests."
Previous Committee Reports
Second Report HC 86-ii (2012-13), chapter 10 (16
May 2012); Eleventh Report HC 86-xi (2012-13), chapter 29 (5 September
2012); and Twenty-ninth Report HC 83-xxvi (2013-14), chapter 7
(8 January 2014). The previous Committee's Forty-fifth Report
HC 83-xl (2013-14), chapter 4 (2 April 2014) is also relevant.
364 The Commission has given an undertaking not to
implement the Decision (by seeking approval of the EU/Turkey Association
Council) until the Court has given its ruling. Back
365 The main elements of the Court's rulings in these cases are summarised
in our Twenty-ninth Report of Session 2013-14, agreed on 8 January
2014, and our Forty-fifth Report, agreed on 2 April 2014, listed
at the end of this chapter. Back
366 Public oral evidence session held on 14 January 2015. Back
367 Para 37 of the judgment in Case C-81/13 (Turkey). See also para
49 of Case C-656/11 (EU/Switzerland). Back
368 Para 74 of Case C-137/12. Back
369 Article 12 of the Association Agreement. Back
370 Article 39 of the Additional Protocol. Back
371 See Case C-485/07, Akdas. Back
372 Articles 3(1) and 6 of Decision No. 3/80. Back
373 See recital (7) to the draft Decision and p. 3 of the Commission's
accompanying explanatory memorandum. Back
374 Case C-81/13. Back
375 See paras 19-27 of the judgment. Back
376 See paras 29-32 of the judgment. Back
377 Para 35 of the judgment. Back
378 Para 45 of the judgment. Back
379 Para 46 of the judgment. Back
380 Para 37 of the judgment. Back
381 Para 59 of the judgment. Back
382 Para 63 of the judgment. Back
383 Para 67 of the judgment. Back
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