Patmalniece CPC 1072 2006
| Jurisdiction | UK Non-devolved |
| Judge | Judge M. Rowland |
| Judgment Date | 16 March 2011 |
| Appellant | Patmalniece |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Subject Matter | European Union law |
| Docket Number | CPC 1072 2006 |
| Respondent | Secretary of State for Work and Pensions |
[2011] AACR 34
(Patmalniece v Secretary of State for Work and Pensions
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SC |
Lord Hope, Deputy President Lord Rodger Lady Walker Lady Hale Lord Brown |
CPC/1072/2006 |
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16 March 2011 |
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European Union law – right to reside – whether condition contrary to Article 3 Regulation (EEC) 1408/71
The claimant, who was born in Latvia in 1938, came to the United Kingdom in 2000 before Latvia joined the European Union. Her claim to asylum was refused in January 2004, but no steps were taken to remove her from the United Kingdom. On 1 May 2004 Latvia joined the European Union, so pursuant to derogations from Article 39(3) of the EC Treaty she became entitled to work in the United Kingdom if she complied with the Workers Registration Scheme in the Accession (Immigration and Worker Registration) Regulations 2004. She had worked for about 40 years in Latvia and was in receipt of a retirement pension from the Latvian social security authorities, but she had not worked at any time in the United Kingdom and had no other income. In August 2005 she claimed state pension credit. Her claim was refused on the ground that she lacked a right to reside in the United Kingdom. Regulation 2 of the State Pension Credit Regulations provides that a person is to be treated as not in Great Britain if he is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland. As amended from 2004, Regulation 2 further provides that no person shall be treated as habitually resident in those territories if he does not have a right to reside in one of them. The claimant appealed, asserting direct discrimination on grounds of her nationality contrary to Article 3(1) of Regulation (EEC) 1408/71. Her case was that it was her Latvian nationality that precluded the entitlement to state pension credit which she would have had if she had been a United Kingdom national. The appeal tribunal allowed her appeal on the grounds of direct discrimination, but the Secretary of State’s appeal against that decision was allowed by a Social Security Commissioner. He held that the imposition of the right to reside test was indirect discrimination, but that it was justified as a proportionate means of achieving the legitimate aim of protecting the public finances of the host Member State. The Court of Appeal dismissed the claimant’s appeal against the decision of the Commissioner ([2009] EWCA Civ 621) and the claimant appealed to the Supreme Court. It was conceded for the purposes of these proceedings that the claimant fell within the personal scope of Regulation 1408/71 as an “employed person” as defined by Article 1(a), and also that state pension credit fell within the material scope of the Regulation because it was among the special non-contributory benefits listed in Annex IIa
Held, dismissing the appeal, that
- the test of presence “in Great Britain” was constructed in a way that was more likely to be satisfied by a United Kingdom national than by a national of another Member State, but the judgment of the Court of Justice of the European Union in Case C-73/08 Bressol v Gouvernement de la Communauté Française [2010] 3 CMLR 20 required the court to find that that was not directly discriminatory on grounds of nationality (although the Court of Justice had not explained why it did not accept the opinion of the Advocate General on that point), but that it was indirectly discriminatory as it put nationals of other Member States at a particular disadvantage. As such, to be lawful, it had to be justified on objective considerations independent of nationality (paragraphs 30 to 35, 73. 89 to 92, 109);
- the Secretary of State’s purpose was to protect the resources of the United Kingdom against exploitation of welfare benefits and social tourism by persons who were not economically or socially integrated with the United Kingdom and that was a legitimate aim according to the principle laid down in Case C-456/02 Trojani v Centre Public d’Aide Sociale de Bruxelles [2004] ELR I-7573; [2004] 3 CMLR 38, and was independent of the nationality of the person concerned, since, while a person’s nationality has a bearing on whether that test can be satisfied, the justification itself is blind to the person’s nationality. The parties were agreed that the provisions were proportionate to the aim. The Secretary of State had therefore provided a sufficient justification (paragraphs 47 to 53, 105 to 108, 109);
- the provision for Irish citizens in regulation 2 did not undermine the policy justification for treating the other Member States differently as for economic, historical and social reasons Ireland is different from the other Member States. The provision was protected by Article 2 of the Protocol on the Common Travel Area as an arrangement between the two states relating to the movement of persons between their territories (paragraphs 54 to 61, 80, 109);
- (per Lord Walker, dissenting) the provisions of regulation 2(2) discriminate against economically inactive foreign nationals on the grounds of nationality, whether or not that was the intention of those who framed them, and even though classified as indirect discrimination, the difference of treatment is not capable of justification because, while every British national passed the test automatically, non-nationals would not pass it unless they came within the special categories in regulation 2(1) and so the proposed justification, once examined, was founded on nationality (paragraphs 74 to 81).
DECISION OF THE SUPREME COURT
Simon Cox and Alison Pickup, instructed by Tower Hamlets Law Centre, appeared for the appellant.
Clive Lewis QC and Jason Coppel, instructed by DWP/DH Legal Services, appeared for the respondent.
Richard Drabble QC and Charles Banner, instructed by Bates Wells & Braithwaite LLP, appeared for the intervener (The AIRE Centre).
LORD HOPE (with whom Lord Rodger agrees):
1. The issue in this appeal is whether the conditions of entitlement to state pension credit prescribed by regulation 2 of the State Pension Credit Regulations 2002 (SI 2002/1792) (the 2002 Regulations) are compatible with EU law. Regulation 2 is not easy to summarise in a few words, but its general effect is to restrict entitlement to state pension credit to those who have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland (the Common Travel Area). The question is whether this is compatible with Article 3(1) of Council Regulation (EC) No 1408/71 (Regulation 1408/71).
2. Regulation 1408/71 was replaced on 1 May 2010 by Regulation (EC) No 883/2004, which need not be examined as all the relevant events preceded that date. Article 2(1) of Regulation 1408/71 provides that the Regulation applies to employed persons or self-employed persons who are or have been subject to the social security legislation of a Member State as well as to members of their families. Article 3(1) provides, in respect of those to whom the Regulation applies, for equality of treatment in the application of social security schemes. They are to be entitled to the same benefits under the legislation of any Member State of the kind to which Regulation 1408/71 applies as the nationals of that State. The general effect of the 2002 Regulations, on the other hand, is as stated above. Entitlement to state pension credit depends on whether the person concerned has a right to reside in the United Kingdom or elsewhere in the Common Travel Area.
3. The problem arises because regulation 2(2) of the 2002 Regulations affects nationals of different Member States in different ways. A citizen of the United Kingdom has a right to reside in the United Kingdom by virtue of his or her right of abode under section 2(1) of the Immigration Act 1971. An Irish citizen has, by virtue of his or her Irish nationality, a right to reside in the Republic of Ireland. In their case regulation 2 of the 2002 Regulations does not preclude entitlement to state pension credit. But nationals of other Member States do not qualify for the same treatment unless they have a right to reside here, which they do not have simply on the grounds of their nationality.
4. The appellant was born in Latvia on 1 June 1938. She came to the United Kingdom on 12 June 2000 before Latvia joined the European Union. She claimed asylum on the ground that, as she is of Russian ethnic origin, she had a well founded fear of persecution if she were to return there. Her claim to asylum was finally refused in January 2004, but no steps were taken to remove her from this country. On 1 May 2004 Latvia joined the EU, so pursuant to derogations from Article 39(3)...
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