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|Judgments - Zalewska (AP) (Appellant) v Department for Social Development (Respondents) (Northern Ireland)
HOUSE OF LORDS
 UKHL 67
on appeal from:NICA 17
OF THE LORDS OF APPEAL
FOR JUDGMENT IN THE CAUSE
Zalewska (AP) (Appellant) v Department for Social Development (Respondents) (Northern Ireland)
Lord Hope of Craighead
Baroness Hale of Richmond
Lord Brown of Eaton-under-Heywood
Lord Neuberger of Abbotsbury
John O'Hara QC
(Instructed by Law Centre NI)
Clive Lewis QC
Paul Maguire QC
(Instructed by Departmental Solicitors Office, Department of Finance and Personnel)
Interveners (Child Poverty Action Group and Public Law Project)
Richard Drabble QC
(Instructed by Child Poverty Action Group/Public Law Project)
23 and 24 JULY 2008
WEDNESDAY 12 NOVEMBER 2008
HOUSE OF LORDS
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
Zalewska (AP) (Appellant) v Department for Social Development (Respondents) (Northern Ireland)
 UKHL 67
LORD HOPE OF CRAIGHEAD
1. By the Treaty on Accession that was signed in Athens on 16 April 2003 an agreement was entered into for the accession on 1 May 2004 of 10 new member states to the European Union, including the Republic of Poland. The European Union (Accessions) Act 2003 made provision for the Accession Treaty to be implemented into domestic law. One of the issues that the Accession Treaty addressed in the case of the acceding member states other than Cyprus and Malta (the A8 states) was the freedom of movement for workers which is guaranteed by article 39 of the Treaty establishing the European Community (article 39EC). The accession of Cyprus and Malta, on account of their small size, was not seen as being likely to overload the labour markets of the 15 existing member states. But it was decided as an integral part of the Treaty to lay down conditions as to access to their labour markets by nationals of the A8 states.
2. Part 2 of Annex XII to the Accession Treaty made provision for freedom of movement of persons in the case of Poland. Similar provision was made for the other A8 states in other Annexes. Section 2 of the 2003 Act gave power to the Secretary of State to make regulations that a specified enactment relating to the entitlement of a national of a State in the European Economic Area to enter or reside in the United Kingdom as a worker was to apply in relation to a national of an acceding state as it did to a national of an EEA state, with such exceptions and modifications that might be specified. In the exercise of that power the Secretary of State made various modifications to the Immigration Act 1971 (the 1971 Act) by the Accession (Immigration and Worker Registration) Regulations 2004 (SI 2004/1219) (the 2004 Regulations).
3. The question in this case is whether the appellant, who is Polish and has worked in the United Kingdom without interruption for 12 months, qualifies for income support under the relevant social security legislation as a person who is habitually resident in this country. The answer to it depends on whether the modifications that the 2004 Regulations made to the 1971 Act about the right of access of nationals of the A8 states to the labour market of the United Kingdom, on which depends the right of residence, are compatible with Community law. The facts are relatively simple. But to set the scene I must first describe the background of Community law against which the 2004 Regulations were made. I must then set out the provisions of the 2004 Regulations with which the appellant was expected to comply under the worker registration scheme as a condition of access to the benefit and the relevant provisions of the social security legislation under which she claimed that benefit. The amount of detail that has to be included in this introduction is regrettable. But it is a necessary prelude to a discussion of the issues of law that are before your Lordships.
The Community law background
4. The starting point is to be found in the EC Treaty. Article 18EC sets out one of the rights of citizenship of the Union. It provides that every citizen shall have the right to move and reside freely within the territory of the member states. Article 39EC provides that freedom of movement for workers shall be secured within the Community, and that such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of member states as regards employment, remuneration and other conditions of work and employment.
5. On 15 October 1968 the Council adopted Regulation (EEC) No 1612/68 on freedom of movement for workers within the Community. The preamble to the Regulation explains that this was done to enable the objective laid down in article 49 of the EEC treaty (now article 39EC) to be achieved and to perfect measures previously taken for its attainment. Part I of the Regulation makes provision for employment and workers families. It is divided into three Titles. Title I deals with eligibility for employment. Title II deals with employment and equal treatment. Title III, which is not in issue in this case, deals with workers families.
6. The basic rule about eligibility for employment is set out in Part I, Title I, article 1 of Regulation 1612/68. It provides that any national of a member state shall, irrespective of his place of residence, have the right to take up an activity as an employed person within the territory of another Member State. Title 1, article 2 provides that this right shall be enjoyed in accordance with any provisions laid down by law, regulation or administrative action, without any discrimination resulting there from. Title II, article 7 provides for the equal treatment of workers who are eligible for the right to take up an activity as an employed person under article 1:
1. A worker who is a national of a member state may not, in the territory of another member state, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal and, should he become unemployed, reinstatement or re-employment.
2. He shall enjoy the same social and tax advantages as national workers.
7. The Accession Treaty established by common agreement among the 15 member states the conditions of admission to the European Union of the 10 new members and the adjustments to be made to the Treaties on which the European Union was founded. The conditions and adjustments are set out in the Act of Accession which is annexed to the Treaty. Article 10 of the Treaty provides that the application of the original Treaties and Acts shall, as a transitional measure, be subject to the derogations provided for in the Act. Article 24 of the Accession Act incorporates Annex XII which deals with the position of the Republic of Poland. Part 1 of Annex XII contains the conditions and adjustments relating to free movement of goods. Part 2 contains the conditions and adjustments relating to freedom of movement for persons. Para 1 of Part 2 provides that article 39EC shall fully apply only, in relation to the freedom of movement of workers between Poland on the one hand and the 15 member States on the other hand, subject to the transitional provisions laid down in paragraphs 2 to 14. The word only indicates that, subject to the conditions that they lay down, the transitional provisions must be taken to replace the guarantee of free movement of workers in the article.
8. Paragraph 2 of Part 2 of Annex XII provides:
By way of derogation from Articles 1 to 6 of the Regulation (EEC) No 1612/68 and until the end of the two year period following the date of accession, the present member states will apply national measures, or those resulting from bilateral agreements, regulating access to their labour markets by Polish 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.
Polish nationals legally working in a present member state at the date of accession and admitted to the labour market of that member state for an uninterrupted period of 12 months or longer will enjoy access to the labour market of that member state but not to the labour market of other member states applying national measures.
Polish nationals admitted to the labour market of a present member state following accession for an uninterrupted period of 12 months or longer shall also enjoy the same rights.
The Polish nationals mentioned in the second and third subparagraphs above shall cease to enjoy the rights contained in those subparagraphs if they voluntarily leave the labour market of the present member state in question
Polish nationals legally working in a present Member State at the date of accession, or during a period when national measures are applied, and who were admitted to the labour market of that Member State for a period of less than 12 months shall not enjoy these rights.
Paragraph 12 provides:
Any present member state applying national measures in accordance with paragraphs 2 to 5 and 7 to 9, may introduce, under national law, greater freedom of movement than that existing at the date of accession, including full labour market access. From the third year following the date of accession, any present member State applying national measures may at any time decide to apply articles 1 to 6 of Regulation (EEC) No 1612/68 instead. The Commission shall be informed of any such decision.
9. The United Kingdom, Sweden and the Republic of Ireland chose to exercise their right to derogate from articles 1 to 6 of Regulation 1612/68, which deal with eligibility for employment, by applying national measures to regulate access to their labour market by nationals of the A8 states. The United Kingdom did this by making amendments to the Immigration (European Economic Area) Regulations 2000 (SI 2000/2326) (the 2000 Regulations) and by the 2004 Regulations. The effect of these amendments was to provide nationals of the A8 states with access to the labour market of the United Kingdom subject to the conditions set out in the 2004 Regulations. The other member states put in place or maintained more restrictive provisions than those adopted by the United Kingdom, Sweden and Ireland. The question whether the conditions in the 2004 Regulations are compatible with Community law is the central issue in this appeal.
10. The 2000 Regulations provide nationals of all the member states of the EU with a right of entry into and residence in the United Kingdom, and a right of access to its labour market, in conformity with the Treaty obligations set out in articles 18 and 39EC. Regulation 12(1) provides that an EEA national must be admitted to the United Kingdom if he produces, on arrival, a valid national identity card or passport issued by an EEA state. Regulation 14(1) of the 2000 Regulations provides that a qualified person is entitled to reside in the United Kingdom, without the requirement for leave to remain under the 1971 Act. Qualified person means a person who is an EEA national and in the United Kingdom as, inter alia, a worker": reg 5(1). A worker does not cease to be a qualified person solely because he is temporarily incapable of work as a result of illness or accident or because he is involuntarily unemployed, if that fact is duly recorded by the relevant employment office: reg 5(2). Regulation 3(1) provides that worker means a worker within article 39EC. The word worker is not defined by that article. So it must be given a wide meaning that is consistent with the aims and principles of the Treaty.
11. The 2004 Regulations were made to give effect in the United Kingdom to the derogation provisions in the Act of Accession as to access to the labour market during the accession period from 1 May 2004 to 30 April 2009. Subject to various exceptions required by paragraph 2 of Part 2 of Annex XII to the Act of Accession which are not relevant to this case, the basic rule of the scheme that it sets out is that a national of an A8 state working in the United Kingdom during the accession period is an accession state worker requiring registration: 2004 Regulations, reg 2(1). He ceases to be an accession state worker requiring registration if he legally works 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 will only be treated as legally working in the United Kingdom during that period if he is working for an authorised employer: reg 2(7)(b). Regulation 4 deals with the right of residence of workers from the A8 states during the accession period. Reg 4(1) derogates from the relevant Community provisions on the abolition of restrictions on movement and residence within the Community for workers of member states. Reg 4(4) provides:
An accession state worker requiring registration shall only be entitled to reside in the United Kingdom in accordance with the 2000 Regulations as modified by regulation 5.
12. Regs 5(1) and 5(2) of the 2004 Regulations provide:
(1) The 2000 Regulations shall apply in relation to an accession State worker requiring registration subject to the modifications set out in this regulation.
(2) An accession state worker requiring registration shall be treated as a worker for the purpose of the definition of qualified person in regulation 5(1) of the 2000 Regulations only during a period in which he is working in the United Kingdom for an authorised employer.
13. Regs 7(1), 7(2) and 7(3) of the 2004 Regulations provide:
(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) provides that a registration certificate expires on the date on which the worker ceases working for that employer.
14. Reg 8 of the 2004 Regulations sets out the system that is to be followed for obtaining a registration certificate. The application can only be made by an applicant requiring registration to work for an employer who is working for that employer at the date of the application. It must be made in writing to the Secretary of State. Except in the case of a first registration, the application must 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. If the Secretary of State is satisfied, he sends 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) provides that, subject to various exceptions which do not apply to this case, an employer who employs an accession state worker requiring registration during a period in which the employer is not an authorised employer in relation to that worker shall be guilty of an offence.
15. In order to qualify for income support a person must be habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland. Unless he is habitually resident in one of these places he will be treated as a person from abroad". The applicable amount for the purposes of income support in the case of a person from abroad is nil: Income Support (General) Regulations (Northern Ireland) 1987 (SR 1987/459), Schedule 7, para 15.
16. Following the changes made to the 2000 Regulations by the 2004 Regulations, the 1987 Income Support Regulations were amended by the Social Security (Habitual Residence Amendment) Regulations (Northern Ireland) 2004 (SR 2004/197). Prior to the amendment, the expression person from abroad was defined simply as a claimant not habitually resident in the United Kingdom: reg 21(3). A person who was exercising a right of residence in the United Kingdom under Community law was entitled to benefit. The effect of the 2004 amendments is that an A8 state national requiring registration under those Regulations is to be treated as habitually resident in the United Kingdom, but only if he has a right to reside here. This is the effect of reg 21(3E), as inserted by reg 3 of the amendment Regulations, which provides that for the purposes of the definition of a person from abroad no person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland if he does not have a right to reside there. An accession state worker requiring registration has a right to reside in the United Kingdom only during the period while he is working for an authorised employer, and he does not cease to be an accession state worker requiring registration until he has worked for an authorised employer without interruption for a period of 12 months.
17. The appellant is a national of the Republic of Poland. She came to Northern Ireland for the purpose of seeking employment on 1 July 2004. From 9 July 2004 to 7 January 2005 she worked for Monaghan Mushrooms Ltd in Co Tyrone picking mushrooms. She applied for a registration certificate under reg 8 of the 2004 Regulations. On 5 November 2004 she was issued by the Home Office with a registration certificate. It recorded her starting date as 9 July 2004 and gave the name of Monaghan Mushrooms as her employer. Thus far she had complied with the requirements of reg 5 of the 2004 Regulations. Monaghan Mushrooms was an authorised employer in relation to her for the first month of her employment starting on 9 July: reg 7(3). There was a gap until 5 November 2004. This appears to have been due to a delay in the issuing of her registration certificate by the Home Office. Thereafter Monaghan Mushrooms was an authorised employer in relation to her because she had received a valid registration certificate which had not expired as she was still working for that employer: reg 7(2)(c).
18. On 7 January 2005 the appellant left Monaghan Mushrooms. She secured further work with two other employers through an agency. She worked for Smirnoff Vodka in Belfast for about three weeks from 8 January 2005. From the end of January 2005 she worked for Linwoods. On 10 July 2005, one year after she started work with Monaghan Mushrooms, she stopped working. By that date she had worked for an uninterrupted period of 12 months. But she had not applied for a registration certificate in connection with her employment either with Smirnoff or with Linwoods. This did not matter in the case of her employment with Smirnoff. She was with that employer for period of less that one month. So she was covered during that period by reg 7(3), as she was for the first month of her employment with Linwoods. But after that initial period Linwoods was not an authorised employer in relation to her as none of the conditions of reg 7(2) were satisfied. She was still an accession State worker requiring registration under reg 2(1) of the 2004 Regulations, as she had not yet worked for an authorised employer in the United Kingdom for an uninterrupted period of 12 months: reg 2(4). But, as she was no longer working for an authorised employer, she was no longer entitled to be treated as a worker for the purpose of the definition of qualified person in reg 5(1) of the 2000 Regulations: 2004 Regulations, reg 5(2). This in turn meant that she no longer had a right of residence: reg 4(4).
19. In the meantime the appellant had been joined in Northern Ireland first by her daughter who arrived in January 2005 and then by her partner, her childs father, who arrived in April 2005. At the end of June 2005 she left her partner due to domestic violence. She stayed with a friend for three weeks and then moved to a Womens Aid hostel in Portadown. On 22 July 2005 she applied for income support for herself and her daughter. Her claim was disallowed on the ground that, as she was an accession state worker requiring registration who was not entitled to be treated as a qualified person in reg 5(1) of the 2000 Regulations, she had no right to reside in the United Kingdom. To qualify for that right she required to have worked for an authorised employer for an uninterrupted period of 12 months, and the only registration certificate that she was able to produce related to her first employer for whom she had not worked since January 2005. She appealed to a Social Security Appeal Tribunal which on 18 November 2005 allowed her appeal on the ground that income support was a social advantage and that the Income Support Regulations discriminated against her contrary to article 7(2) of Regulation 1612/68. To give effect to that article she was to be treated as habitually resident in the United Kingdom for the purposes of the Income Support Regulations despite her failure to register with Linwoods.
20. The respondent appealed against this decision to the Social Security Commissioner. On 23 August 2006 the Commissioner allowed the appeal and set aside the decision of the tribunal. The appellant then appealed to the Court of Appeal in Northern Ireland by way of case stated. The judgment of the Court of Appeal was delivered on 9 May 2007 by Girvan LJ. He said that, on the facts as set out in the sated case, there was insufficient evidence to establish conclusively that the appellant would have qualified for income support as a worker admitted to the United Kingdom labour market. There was no finding of fact as to why she left her work or whether she was still genuinely seeking work when she was seeking income support. Although the tribunal appeared to have accepted that she was a worker as she was still intent on finding work, this was a matter that would have to be remitted to the Commissioner for further inquiry if her decision was wrong in law.
21. On the issue of law however the Court of Appeal upheld the decision of the Commissioner. A wide discretion had been conferred on member states by the Act of Accession. The conditions on which accession workers were to be admitted to the national labour market had been left to the member states, so they must be determined in accordance with national law. The appellant had failed to satisfy the requirements of the 2004 Regulations. They had a national legal basis which was consistent with the right given to member states. The appellant had been unable to demonstrate that the registration scheme lacked rationality or proportionality. So she was not entitled to the benefit.
22. The central issue is whether the registration requirements in reg 7 of the 2004 Regulations on which the appellants right to reside in the United Kingdom under the worker registration scheme depends are compatible with Community law. For the appellant Mr O'Hara QC said that her primary argument is that she is entitled, relying directly on article 39EC and article 7(2) of Regulation 1612/68, to the same social and tax advantages as workers who are nationals of the United Kingdom. If this argument is right, any failure to comply with the registration requirements must simply be disregarded. Her second argument is that the right to reside test, which is linked to the requirement to register the initial employment and to re-register all subsequent changes during the first 12 months, is unnecessary and disproportionate.