Low & Ors, R (on the application of) v Secretary of State for the Home Department [2009] EWHC 35 (Admin)

[2009] EWHC 35 (Admin)Case No CO/5092/2008
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 21 January 2009
Before
HIS HONOUR JUDGE DAVID PEARLSitting as a Deputy Judge of the High Court
Between
THE QUEENClaimantsOn the application ofClaimant(1) Ms LEE LING LOWClaimant(2) Ms MOY YEN LEONGClaimant(3) Ms YU TING YANGClaimant(4) RISING SUN CATERING SERVICESClaimantCOMPANY LIMITEDClaimant(5) HOT HOT GRILL AND BAR LIMITED trading as MALAYSIAN DELIGHTS RESTAURANTClaimantSECRETARY OF STATE FORDefendantTHE HOME DEPARTMENTDefendant
Mr M. Gill QC and Mr R. de Mello(instructed by Christine Lee & Co. (Birmingham)) for ClaimantsMr I. Rogers (instructed by Treasury Solicitors) for DefendantHearing Hearing dates: 8 and 9 December 2008
JudgmentHHJ David Pearl :
[1]The Claimants challenge the decisions made by the Defendant in arresting and detaining the first three Claimants (Ms Low, Ms Leong and Ms Yang), and the decisions dated 21st May 2008 (in relation to Ms Yang) and dated 27th May 2008 (in relation to Ms Low and Ms Leong) refusing to grant them confirmation of their right to work under Community Law. It is submitted by the Claimants that all three are “Posted Workers” of Rising Sun Catering Services Company Ltd (“the Irish Company”) who were working at the premises of the Malaysian Delight UK Company (“the UK Company”). The first three claimants have been released on temporary admission.[2]I have been told that this case is a test case which has a bearing on other judicial review applications. There are some twenty two other judicial review applications pending, and some 650 cases of third country nationals having been dealt with by the Secretary of State in the same manner as in these three cases.[3]It is accepted that in each of the three cases before me, “the Irish company” has employed Chinese catering staff who are unlawfully present in the UK and has supplied them to a restaurant in the UK (the fifth claimant).

Procedural issues

[4]I need first to consider a procedural issue relating to whether permission has been granted to apply for judicial review.[5]Mr Justice Plender, by Order dated 31st July 2008, made an Order granting permission. However, in his observations set out in the Order, he stated:
“It is appropriate that there should be a ‘rolled up’ hearing to determine whether the Claimants shall have leave and if so, whether they shall be granted the relief that they claim.”
His Honour Judge Waksman QC by Order dated 18th August 2008 made an Order that states: “For the avoidance of doubt the order of Mr Justice Plender dated 31st July 2008 was not that permission be granted but that there be a rolled-up hearing (a) for permission and (b) (if permission is granted) of the substantive application for judicial review (“the hearing”) as appears from the body of his order”.[6]With the agreement of Counsel, I have decided that the appropriate approach to take in this case is that suggested by Sullivan J in the case of The Queen on the Application of Vetterlein v Hampshire County Council and Hampshire Waste Services Ltd [2001] EWHC Admin 560. In that case, Sullivan J said:
“…I am satisfied that all the arguments open to the claimants on matters of fact and law have been placed before the Court. In the circumstances it would be wholly artificial to consider the by now academic question: is the claimant’s case arguable? Having heard the arguments I am in a position to determine the substantive application for judicial review on its merits.”
[7]This case has been identified as the lead case, and there is a need, as both Counsel urged on me, for a speedy judgment. In these circumstances, I deal with the substantive application on its merits.

Background facts

[8]The factual background to these applications appears in the witness statement of Mr Padraig Ferrell, who is a director of Rising Sun Catering Services Ltd (the “Irish company”).[9]He states that this company was incorporated in the Republic of Ireland on the 16th January 2008, and is currently owned by himself and a Mrs Nuala Murphy. They are the two Directors of this company. He states in his witness statement that the “main objectives of the company are to provide catering services and staff mainly to Chinese restaurants and other Chinese food and catering outlets within the EU.” Mr Gill, on behalf of the claimants, admitted that the major concentration of their efforts has been within the UK. He said that some exploratory work had been done by the “Irish company” in the Netherlands, but that this was no more than preliminary activity.[10]Mr Ferrell’s witness statement sets out the reason why, he says, the “Irish company” is active in the UK market. Mr Gill emphasises in particular, the following passage at paragraph 8 of his witness statement:
“…there has always been a shortage of good chefs and staff for the Chinese catering industry in both the UK and Eire…These businesses are dependent on Chinese workers who possess skills in relation to the preparation and service of Chinese food and who can enhance the promotion and development of such businesses. This situation has become almost untenable in recent months. There was a need for staff and the scenario unfolding because of recent immigration policy changes in the UK it became apparent that the Chinese restaurants in the UK were experiencing a substantial labour and skills shortages which could not be filled within the available labour forces in the UK or from within the EU. In particular these Chinese restaurants were looking for Chinese chefs and Chinese staff because this was critical to their success in a very competitive market.”
[11]Mr David Ho, a solicitor at Christine Lee & Co, has been instructed to act on behalf of the “Irish company” in these cases, and in many of the other cases. He has submitted a witness statement that confirms that at the time the “Irish company” contracted to employ the workers, the majority did not have valid legal status in the UK. This is certainly true of the three cases I am considering in the present judicial review proceedings. Ms Low, a Malaysian national, entered the UK in April 2005 as a visitor intending to visit the UK for 6 months, and is therefore an overstayer with no right to work in the UK. Ms Leong, also a Malaysian national, entered as a visitor in September 2003 for six months. She also is an overstayer with no right to work in the UK. Ms Yang, is a Chinese national, who first came to the UK in May 2006 and claimed asylum. Employment is prohibited in her case as well.[12]Christine Lee & Co applied on 11th February 2008 for temporary residence permits for “Employees of Company duly incorporated and registered in an EU member state to perform services in the UK for a limited period of time pursuant to Article 49 EC Law.” The letter makes the following four statements: i) Where a service provider is a company incorporated in a EU member state, then the service provider shall be entitled, without restrictions, to enter into another EU member state for the performance of services pursuant to contract. ii) For the purpose of duly performing the contracted services, the company shall be entitled to bring employees of the Company into the EU member state (where services are to be performed). iii) Such employees of the Company may be nationals of EU member states or may be nationals of non-member countries and such employees shall not require work-permits or be subject to the immigration or employment controls/restrictions by reason of article 49. iv) This is permissible because such employees are present in the EU member state for only a limited period of time to perform the services which the company is legally bound to perform and does not have access to the domestic employment market of the relevant EU member state.[13]The 11th February 2008 letter goes on to say that “in order to perform this contract, the Company will have to move the Applicants, who are permanent employees of the Company, to the UK restaurant premises for the duration of the contract, namely 18 months, in order to perform its obligations under the contract.”[14]The letter ends as follows:
“Given that the Applicants will accordingly be considered ‘posted workers’ validly working in the UK for the due performance of services on behalf of their Company, the Applicants are entitled to make the present application to be issued with temporary residence permits under EC law.”
[15]The applications were refused by the letters dated 15th May 2008 (Ms Yang) and 27th May 2008 (Ms Low and Ms Lee). The letters are in identical terms and are headed “Spurious applications you have submitted on the basis of Article 49 EC law.”[16]The letters reject the applications on the basis that Article 49 has no relevance to the applicants as they are not EU nationals nor legally resident in the member state where the company is established, that is the Republic of Ireland.

Article 49 EC treaty

[17]The first issue that I need to consider, therefore, is whether Third Country Nationals have any derivative claim from any right of the Irish Company to provide services in the UK under Article 49.[18]Article 49 states:
“Within the framework of the provisions set out below, restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom services are intended. The Council may, acting by a qualified majority on a proposal from the Commission, extend the provisions of the Chapter to nationals of a third country who provide services and who are established within the Community.”
[19]Article 49 is the first article within Chapter 3 dealing with “Services” which is defined in Article 50 as “normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and person.”[20]Mr Gill submits that there is no requirement under Community law as set out in Article 49 for the posted workers who are employed by an establishment in one member state (in this case, the Republic of Ireland) to have prior habitual lawful residence or employment in that state before being supplied to an undertaking in another member state. He submits further that Article 49 covers the current situation, in that the posted workers assume a derivative right to enter and reside for a temporary period to enable the agreement between the Irish company and the UK company to be fulfilled, irrespective of the fact that the workers were not legally resident or employed in the Republic of Ireland prior to working at the UK company on behalf of the Irish company.[21]Mr Gill cites in support of this proposition a number of European authorities. The first that requires consideration is Rush Portuguesa Limitada v Office National D’Immigration Case C-113/89 [1990] ECR 1-1417, [1991] 2 CMLR 818. The facts of that case, of course, are very different to those before me. The Portuguese Company, a building and public works undertaking, was governed by Portuguese law. It entered into a subcontract with a French company for works on several sites in France, and in order to carry out the works, the Company brought its Portuguese workforce from Portugal. The ECJ in this case held that the service provider had the right to move temporarily with its Portuguese workforce to France where it was providing services for the duration of the services. The key extract from the judgment in this case is as follows:
“…an undertaking established in Portugal providing services in the construction and public works sector in another member state may move with its own labour force which it brings from Portugal for the duration of the works in question. In such a case, the authorities of the member state in whose territory the works are to be carried out may not impose on the supplier of services conditions relating to the recruitment of manpower in situ or the obtaining of work permits for the Portuguese work-force.”
[22]Mr Gill relies on the underlying principle as set out in Rush Portugesa, and he makes the point that all the third country nationals in the current case have agreed to return to their countries of origin after the completion of their work. I do not believe, however, that Mr Gill can obtain any assistance from this case; which is solely concerned with the movement of a workforce from one member state to another for the duration of the service.[23]This case was followed in Raymond Vander Elst v Office des Migrations Internationales Case C – 43/93 [1994] ECR 1-3803, [1995] 1 CMLR 513. In this case, the Belgian service provider brought its Moroccan workers to France in order to carry out a demolition contract. The workers had been “lawfully and habitually employed” in Belgium and they intended to return to Belgium after completion of the project. The French employment inspectors considered that Mr Vander Elst had infringed certain articles of the French Labour Code by employing in France, nationals of non-member countries who had no corresponding work permits, without informing the French authorities. The ECJ answered the questions referred to it by stating that the Treaty “precluded a member state from requiring undertakings which are established in another member state and enter the first member state in order to provide services, and which lawfully and habitually employ nationals of non-member countries, to obtain work permits for those workers from a national immigration authority and to pay the costs, with the imposition of an administrative fine as the penalty for infringement” (para 26).[24]Although Vander Elst is concerned with Third Country Nationals, it is clear from a reading of the case that is predicated on the assumption that the applicant third country national be both lawfully resident in the country of the service provider, and be lawfully and habitually employed by that service provider.[25]Mr Gill, in his skeleton argument, submits that the question referred to the court in Vander Elst related to the third country nationals being “lawfully and habitually employed by the undertaking” and that there was no reference to “their being lawfully resident in Belgium”. Accordingly, he submits that this case supports his primary argument in this case, no point being taken, at least in the decision letter, on the point that the third country nationals are indeed lawfully employed by the Irish company.[26]I do not read Vander Elst in this way. The Advocate General (at para 31) concludes his opinion as follows:
“Where an undertaking established in one member state provides services in another member state and to that end sends to the latter state workers who are nationals of non-member countries and are lawfully and habitually employed by that undertaking,…the Treaty precludes the application of national legislation such as the French legislation…which makes the employment of those workers subject to [certain requirements]. (underlining added)”
[27]The Judgment (at para 18) states:
“it is important to note, first, that the Moroccan workers employed by Mr Vander Elst were lawfully resident in Belgium.”
[28]I agree with the writers of the decision letters’ approach to Vander Elst. The letters state “Your clients cannot therefore benefit from this ruling as they are not, and have not, been lawfully employed in another member state, and are not required as a requirement of being employed by a company established in an EU member state to reside in another member state.”[29]The next case that is relied upon by Mr Gill is the case of Commission of the European Communities v Germany C244/04 [2006] ECR 1-885, [2006] 2 CMLR 23. The German law at this time required third country nationals posted by an EU establishment to obtain a specific residence visa prior to commencing their posting. Such a visa was only available to those who could demonstrate that they were lawfully and habitually employed in the member state of establishment by showing that they had been employed by the posting undertaking for at least twelve months. The ECJ held that the German law constituted a disproportionate interference with the freedom to provide services.[30]This case, however, supports the position adopted by the Defendant. The Advocate General in his Opinion (para 28) states:
“…undertakings intending to operate temporarily on the territory of another member state with workers from third countries must bear responsibility for ensuring that these employees are legally resident in the member state of establishment and that their employment conditions are in line with the relevant social legislation.”
[31]He further remarks (at para 35) “…it is in the nature of posting workers…that the workers concerned return to the country of establishment of the service provider after completion of their work and that they do not seek admission to the employment market of the member state where the service is provided.”[32]His opinion was relied upon by the Court. It said (at para 41):
“However, as the Advocate General observed…a requirement that the service provider furnishes a simple prior declaration certifying that the situation of the workers concerned is lawful, particularly in the light of the requirements of residence, work visas and social security cover in the member state where that provider employs them, would give the national authorities, in a less restrictive but as effective a manner as checks in advance of posting, a guarantee that those workers’ situation is lawful and that they are carrying on their main activity in the member state where the service provider is established (see, to that effect, Commission v Luxembourg C – 445/03; [2004] ECR 1 – 10191; [2005] 1 CMLR 22).”
[33]Mr Gill draws my attention in particular to paragraph 55 of the judgment in Commission v Germany. Here, the Court refer back to Vander Elst and states that “it must be observed that the court did not couple the concept of ‘lawful and habitual employment’ with a requirement of residence or employment for a certain period in the state of establishment of the service provider.”[34]This is indeed the case, and the Court went on in Commission v Germany to state that the requirement of at least a year’s prior employment by the undertaking effecting the posting must be regarded as disproportionate to attain the objectives relied upon by Germany.[35]However, the court in Commission v Germany did not suggest that it was not necessary for the undertaking to make a prior declaration certifying that the situation of the workers concerned was lawful, particularly in the requirements of residence, work visas and social security cover in the member state where that provider employs them”. (underlining added). Indeed, the Court made clear that such a prior declaration was necessary, and I see nothing in this case that supports Mr Gill’s submission.[36]The earlier case of Commission v Luxembourg C – 445/03; [2004] ECR 1 – 10191; [2005] 1 CMLR 22 is similarly unhelpful to the claimants. The decision in that case is again predicated on deployment of third country nationals from one EU country to another. Paragraph 50 of the determination is set out in the decision letter. This paragraph states:
“The Court finds that, by imposing on service providers established in another member state who wish to deploy in its territory workers who are nationals of non-member countries a requirement of individual work permits, the issuance of which is subject to considerations relating to the employment market, or a requirement of a collective work permit, which is granted only in exceptional cases and only when the workers concerned have, for at least six months prior to the deployment, been in a relationship with their undertaking of origin through a contract of employment of indefinite duration, and by requiring those service providers to provide a bank guarantee, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Art 49 EC”
[37]The ratio of the case in no way supports the contention that the “requirement that a posted worker be lawfully or habitually employed in the original member state as a pre condition for entry and residence in the host member state is not lawful.” It is my finding that that there is no merit at all in the submission made by the claimants in relation to this case, and the decision letter is correct to state that “there is nothing in the court’s determination to support your claim.”[38]I turn now to consider Commission v Austria C-168/04 [2006] ECR 1-09041. In this case, the Court recalls the settled case-law that Article 49 requires not only the elimination of all discrimination on grounds of nationality against service providers who are established in another member state, but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other member states, which is liable to prohibit, impede or render less advantageous the activities of a service provider established in another member state, where he lawfully provides similar services (para 36).[39]Mr Gill submits that this case supports the proposition that the freedom to provide services applies to both lawful and/or unlawful entry and residence in the host member state, in the case where the posting is made of workers who are nationals of a non-member state and who are posted by a service-providing undertaking established in another member state. I am referred to the Opinion of the Advocate General at paras 102-104. Paragraph 104 states:
“…by thus making it entirely impossible for the situation of the worker concerned to be regularised in situ, that legislation [the Austrian legislation] exposes the worker to the risk of being expelled from national territory, and may even lead to his automatic expulsion and, in some cases, a prohibition on his returning to or residing within that territory. Such a prospect is liable seriously to jeopardise the carrying out of the planned posting.”
[40]It is indeed the case that this passage does not distinguish between lawful and unlawful entry, but I have no doubt that Mr Rogers is correct when he states that the Advocate General was not contemplating a situation where “posted workers” were amongst those already unlawfully present in the host country. Paragraph 109 makes this clear: “The prohibition on awarding an entry or residence permit, laid down by the legislation at issue, is intended to apply automatically where a posted worker who is a national of a non-member state has entered the national territory without holding the necessary visa”. (emphasis added)[41]The Court acknowledged (para 57) that the requirement at issue was a guarantee that the situation of the workers was lawful and that they are carrying on their main activity in the member state in which the service provider is established.[42]There is no doubt in my mind but that Mr Rogers is absolutely correct in his primary submission made in paragraph 30 of his skeleton argument. The case law to which I have referred makes very clear indeed the following three propositions of law: i) None of the claimants have any entitlement to rely on Article 49 and the posted workers cases because the third party nationals are not resident in Ireland. ii) The UK, in any event, would be justified under EC law in taking proportionate measures to ensure that third party nationals are legally employed and lawfully resident in the member state of establishment. iii) As the third country nationals are not lawfully resident in the Republic of Ireland, the defendant’s decisions not to regularise their status and to detain and remove them were proportionate and were not in breach of EC law.[43]Finally in this context I consider the case R (on the application of Loutchansky and Ors) v The First Secretary of State [2005] 3 CMLR 15. In this case, Moses J gave the claimant permission to argue community law issues. Moses J said that “the underlying principle is that, in order to render a community right effective, it may be necessary to recognise a derivative right in a non-national who has no independent community rights.”[44]Moses J said that the Austrian company in that case (Nordex) could not exercise its Art 49 rights without having the advantage of Dr Loutchansky’s entry into, and service within, the UK. Any prohibition on Dr Loutchansky’s entry and service had therefore to be justified, and such justification assessed in accordance with community law procedures.[45]It is correct, of course, as the decision letters state, that this decision is solely a “determination of a preliminary issue.” In any event, Dr Loutchansky was lawfully resident in an EU state and he was seeking entry to the UK. The claimants in this case are in an entirely different position, being already present in the UK and being here unlawfully. Loutchansky is therefore only of limited assistance to me.

Directive 96/71/EC: Posted Workers Directive

[46]This Directive is of limited value in this case because it deals with the situation of an undertaking posting employees abroad temporarily to perform work in the territory of a member state other than the state in which they are habitually employed. The Directive is also without prejudice to national laws relating to the entry, residence and access to employment of third-country workers. I agree with Mr Gill to the extent that the Directive focuses on protective regimes, and that it is article 49 that should be the primary concern in this case.[47]The Directive is protective in the sense that it sets out a framework for ensuring that posted workers are not exploited in the host member state. Rights of entry as regards posted workers have not been harmonised, and the Directive is only relevant when an employee is being moved from one member state to another in ways that would impact adversely on their social rights. It sets out minimum safeguards which must be complied with.[48]Article 2 of the Posted Workers Directive defines a “posted worker” as a “worker who, for a limited period, carries out his work in the territory of a member state other than the state in which he normally works.”[49]Mr Gill submits that because the Directive defines a posted worker in this way, Article 2 cannot set out the full extent of situations protected by Article 49.[50]Mr Rogers submits that there is no basis for suggesting that the Posted Workers Directive definition of a posted worker does not represent EC law as regards matters covered by the Directive. The claimants applied for the status as “posted workers” to be recognised by the UK Government, and therefore would have expected to benefit from the protective EC Directive. For instance, the letter dated 25th February 2008 says “please therefore confirm and acknowledge the Posted Workers position in the UK and please issue them with appropriate EU residence permits for the duration of the contract in the UK”. Mr Rogers argues that it is appropriate to look at Article 2 when answering the question of the definition of Posted Worker. I agree with him.[51]None of the first three claimants normally works in the Republic of Ireland. They normally work, on the evidence in this case, illegally in the UK.[52]I do not agree with Mr Gill’s interpretation of Article 2. The only reading of Article 2 that makes sense is that a posted worker is a worker who is normally working in member state A and who is posted by a service provider established in member state A to work in member state B. Submissions based on ECJ case law from other areas.[53]Mr Gill submits that movement between states is not critical to constituting services under article 49, and he cites in support of this argument a series of ECJ cases.[54]The first case is Mary Carpenter v SSHD C-60/00 [2003] 2 WLR 267; [2003] QB 416. Mrs Carpenter, a national of the Philippines, was given leave to enter the UK as a visitor on 18th September 1994 for six months. She overstayed that leave and failed to apply for any extension. On 22nd May 1996 she married Mr Peter Carpenter, a UK national. Mr Carpenter runs a business selling advertising space in medical and scientific journals and offering various administrative and publishing services to the editors of those journals. Mr Carpenter travels to other member states for the purpose of his business. Mrs Carpenter’s application to stay in the UK was refused and a decision was made to deport her. She argued that the Secretary of State was not entitled to deport her because she was entitled to a right to remain in the UK under community law. She maintained that since her husband’s business required him to travel around in other member states, providing and receiving services, he could do so more easily as she was looking after the children of his first marriage, and thus her deportation would restrict her husband’s right to provide and receive services. The Immigration Appeal Tribunal, in a reference to the ECJ for a preliminary ruling, sought principally the answer to the question whether in circumstances such as those of the case, the non-national spouse could derive a right of residence in his or her spouse’s member state of origin from the application of article 49 on the freedom to provide services. The Court answered the reference as follows:
“…article 49 EC, read in the light of the fundamental right to respect for family life, is to be interpreted as precluding, in circumstances such as those in the main proceedings, a refusal, by the member state of origin of a provider of services established in that member state who provides services to recipients established in other member states, of the right to reside in its territory to that provider’s spouse, who is a national of a third country.”
[55]The refusal letter states that the claimants cannot benefit from the Carpenter decision because they are not EEA nationals exercising a treaty right.[56]Mr Gill submits that Carpenter illustrates the point that cross-border services may be provided without leaving the member state in which he is established. In his oral submissions, Mr Gill put the point as follows:
“Where there is a genuine economic activity under article 49, you can rely on that activity to derive a right which legitimizes a person who otherwise under domestic law is unlawfully present.”
[57]I do not read Carpenter in this way. Mr Carpenter was an EU national who was a service provider who lived in his country of nationality, and exercised his right of the provision of services in other member states. This brought him within the scope of the treaty. As a result of the direct application of the right to respect for family life from Article 8, his wife was entitled to residence in the UK. This is the limit of this case.[58]The next case relied on by Mr Gill is Gamelli C - 243/01 [2003] ECR 1 -13031. The Court decided in this case that national legislation which prohibits on pain of criminal sanctions the pursuit of the activities of collecting, taking, booking and forwarding offers of bets without a licence or authorisation from the member state concerned constitutes a restriction on the freedom of establishment and the freedom to provide services provided for in article 43 and 49. I do not see how this case can in any way be of assistance to Mr Gill. It deals with an entirely different factual situation. It deals simply with services which a provider offers to potential recipients established in other member states, and which can be provided without moving from the member state in which he is established. The provider does not need to move; but the case does not say or even consider whether a “posted worker” does not need to move.[59]I turn now to the important case of Centros Ltd v Erhvervs – og Selskabsstyreisen C – 212/97 [2000] Ch 446. The facts of this case are set out in the following abstract. Centros Ltd is a private limited company registered in the UK. It applied to register a branch in Denmark from where it was trading. The national authorities refused that application, contending that establishment of a branch was a way of avoiding national rules on the paying up of minimum share capital. The refusal, it was claimed, was justified in order to protect creditors and to try to prevent fraudulent insolvencies. The company contended that it was entitled to set up a branch in Denmark under the freedom of establishment. The question was referred to the ECJ for a preliminary ruling. The court decided that the refusal to register the branch was incompatible with European law in so far as it prevented an exercise of the right freely to set up a secondary establishment, and the national establishment could adopt less restrictive measures. It would seem that if the company has conducted any business in England and Wales, the Danish authorities would have agreed to register its branch in Denmark.[60]Mr Gill draws the analogy of Centros with the current case. He submits that the express purpose of creating the company in that case was to get around Danish law; that they set up the business because of the demand. In the same way, he submits, the Irish company in the present case set up a business because of a demand. Mr Rogers deals with the Centros case in the context of “abuse”, and I shall consider that case under that heading.[61]In the present context, Centros is not a case that can be of assistance to the claimants. There is nothing to prevent the Irish company, if it so wished, from setting up a branch in the UK; the issue is: can it employ third country nationals who are prohibited from working in the UK? The answer is that it cannot.[62]I turn now to consider the case of Chen v SSHD; Zhu v SSHD C – 2000/02 [2005] QB 325, another case which is very different on its facts, but which Mr Gill relies upon as suggesting a principled approach to recognising the provision of services. Chen, a Chinese national, entered the UK from China when she was six months pregnant and went to Belfast (Northern Ireland) where her daughter (Zhu or Catherine) was born. The law of the Republic of Ireland states that any person born in the island of Ireland can have Irish nationality. Thus the child (Catherine) acquired Irish nationality and became a citizen of the EU by virtue of article 17 EC. The mother and daughter moved to Cardiff and Ms Chen applied for a permit for long term residence in the UK for her child and herself. On the reference for a preliminary ruling, the court held that the entitlement of a national of a member state to the benefit of the provisions of community law on the free movement of persons and residence was not affected by the fact that the person concerned was a minor or had never moved from the member state of birth to another member state, or indeed that the person’s nationality had been acquired solely in order to secure a right of residence under community law for a national of a non-member country.[63]The Advocate General’s opinion is set out at paras 92-96: “92. The rationale of [the case law] lies, of course, above all in the requirement of protecting the interests of the minor, having regard to the fact that it is precisely that purpose which must be pursued when the power granted to the parents (or guardian) to choose the place of establishment of the minor on behalf of the latter is exercised. 93. If she were to be denied a right of residence in Great Britain, Mrs Chen would only be able to exercise the right of establishment in the territory of that state on Catherine’s behalf in a manner manifestly contrary to the daughter, because in such a case the child would automatically have to be abandoned by her mother. …95. In order to preclude such a result, therefore, Mrs Chen would simply have to decline to exercise the right of her daughter to establish her residence in Great Britain. That means, however, that contrary to the case law…the right of movement and residence attaching to the Irish national Catherine under Art 18 EC and Directive 90/364 would not only not be ‘facilitated’ but would even be deprived of any useful effect.96. For that reason alone, therefore, I consider that Catherine’s mother may invoke a right of residence derived from her daughter’s right”.[64]The Court followed this opinion. In particular, it said “…it is not permissible for a member state to restrict the effects of the grant of nationality of another member state by imposing an additional condition for recognition of that nationality with a view to the exercise of fundamental freedoms provided for in the Treaty.” (para 39).[65]The Chen decision is distinguishable from the present case because Chen deals solely with Art 18(1) EC and Council directives on the right of residence. Mrs Chen has a right of residence for an indefinite period in the UK by virtue of the fact that her daughter is a national of a member state.[66]Mr Gill submits that the first three claimants in the present case can benefit in the same way as Mrs Chen on the basis that the “Irish company” has a freedom to provide services in the UK. Mr Gill submits that there is a proper comparator that can be identified and that an “expansive” approach to Art 49 would enable me to “read across” the principle in Chen to the facts of this case. I am unable to accept this argument. Chen is dealing with a very specific area of community law, namely the entitlement to residence of a third country national based upon the rights of her daughter. This case deals with the provision of services, and it not appropriate for me to borrow a concept from an entirely different area of the law.[67]I have reached the same view of the application of a different area of the law to the provision of services when considering Mr Gill’s other case in this context, namely Metock v Minister for Justice, Equality and Law Reform C – 127/08[68]Metock is a case that considers a series of Directives which precludes legislation of a member state which requires a national of a non-member country who is a spouse of an EU citizen residing in that member state but not possessing its nationality to have previously been lawfully resident in another member state before arriving in the host member state. In particular, the Court interprets Art 3(1) of Directive 2004/38 as meaning that a national of a non-member country who is the spouse of an EU citizen residing in a member state whose nationality he does not possess and who accompanies or joins that EU citizen benefits from the provisions of that Directive, irrespective of when and where their marriage took place and of how the national of a non-member country entered the host member state. The issues requiring consideration in Metock have no bearing on the issues in the present case.[69]The view I have taken on Art 49, the posted workers Directive, and the case law which I have referred to would enable me to give judgment in favour of the Defendant in this case. However, Counsel has made submissions on the issue of “Abuse” and thus it is appropriate that I deal with this aspect of the case, even though my findings relating to article 49 and posted workers is fatal to the claimants’ case.

Abuse arguments

[70]Mr Justice Plender in his observations stated that “both parties are requested to make their submissions on the principle that ‘community law cannot be relied on for abusive or fraudulent ends’. Mr Justice Plender drew Counsels’ attention to a series of cases, namely Van Binsbergen v Bedrifsvereniging Metaalnijverheid [1974] ECR 1299; TV 10 v Commissariaat voor de Media [1994] ECR 1-4795; Leclerc and others v ‘Au Ble Vert’ and others [1985] ECR 1; Lair v Universitat Hannover [1988] ECR 3161; General Milk Products v Hauptzollazmt Hamburg-Jonas [1993] ECR 1-779; and Brennet v Paletta [1996] ECR 1-2357. Van Binsbergen and TV10, in particular, are service cases and are therefore of particular relevance to the cases before me.[71]The principle is of course a well established principle of community law; expressed powerfully by Professor Planiol “law ceases where abuse begins.” (cited in para 20 of the Advocate General’s opinion in Centros.)[72]Both Mr Gill and Mr Rogers made submissions on the “abuse” argument. Neither disagreed with the Advocate General in Centros who said “the problem of abuse is resolved in the last analysis by defining the material content of the particular situation and thus the scope of the right conferred on the individual concerned.” This would appear to me to be the correct way in which to consider this question.[73]Mr Rogers draws my attention to Halifax plc v Commissioners of Customs and Excise Case C – 255/02 [2006] 2 CMLR 36, and in particular the opinion of the Advocate General at paras 60 ff. The Advocate General summarises the case law of the Court on “abuse”. He says that the case law shows that “improper circumvention of a member state’s rules by the exploitation of [fundamental] freedoms is not permissible.” He refers to the Centros decision as illustrating the two main contexts in which the notion of abuse has been analysed by the court; first when community law provisions are abusively invoked in order to evade national law, and secondly when community law provisions are abusively relied upon in order to gain advantages in a manner that conflicts with the purposes and aims of those same provisions. The Advocate General states that the assessment of the abuse must be based on the objective evidence. But also, and most importantly, the assessment must be made in conformity with the purpose and objectives of the provision of community law allegedly relied upon in an abusive way.[74]I agree with this approach. Applying this test, I have been left in no doubt, from the witness statements of Mr Farrell and Ms Patching (the Director of the Restaurant) in particular, that, looked at objectively, the Irish Company is directing its services at the UK in a manner that purports to avoid the national laws of the UK. If it were a UK company, it would have to comply with UK law and would in consequence be unable to enter into employment agreements with those who were unlawfully present in the UK. The sole purpose of the Irish company’s agreements with the UK company and the “posting” of the workers unlawfully present in the UK is to avoid the UK immigration rules and the UK criminal law. There has been an “improper circumvention of a member state’s rules.” I have concluded that the Irish company’s reliance on article 49 is abusive.[75]There is, in my view, no genuine posting of workers in these cases, there has been an improper attempt to invoke community rights, and there has been, in particular, an attempt by the Irish company to wrongfully secure an advantage over companies in UK. This case is an example of the abusive practices as explained by the court in Halifax at para 69 of the judgment in particular:
“The application of community legislation cannot be extended to cover abusive practices by economic operators, that is to say transactions carried out not in the context of normal commercial operations, but solely for the purpose of wrongfully obtaining advantages provided for by Community law.”
[76]I reject the submissions by Mr Gill relating to the cases of Chen and Centros. Neither case deals with the provision of services, and can be distinguished from the present case. As Mr Rogers correctly submits, the reliance on UK company law rather than Danish company law was not an improper circumvention of Danish law. And Chen, unusual on its facts, involved a child who had a right to live in the UK by operation of the national law of Ireland. Mr Gill’s argument that once article 49 is engaged, the legality or illegality of a person’s presence in the UK is unimportant, is an unattractive argument and is not supported by either Centros or Chen.[77]Mr Gill cites the case of Metock and others v Minister for Justice, Equality and Law Reform C-127/08. This case again deals with a different factual situation, namely a reference for a preliminary ruling concerning the right of citizens of the Union and their family members to move and reside freely within the territory of the member states. There is nothing in that case that directly impacts on this case.[78]Mr Gill asks the question:
“What is the abuse?”
He draws my attention to the fact that there is evidence of an attempt to trawl the domestic market, but that there remains an unmet need. He further asks the question:
“How is this unmet need going to be filled?”
He states that it is legitimate to employ those within the EU and that this is not abusive.[79]In TV10, the Court said:
“…a Member State cannot be denied the right to take measures to prevent the exercise by a person providing services whose activity is entirely or principally directed towards its territory of the freedoms guaranteed by the Treaty for the purpose of avoiding the rules which would be applicable to him if he were established within that State.”
This statement remains the law, and is a total answer to Mr Gill’s questions.[80]For the reasons that I have set out above, there is no European authority that supports Mr Gill’s proposition. Article 49 is not engaged, but even if it were to be, it is my finding that the scheme is an abuse of European community law, and the Defendant has made no error of law in calling the scheme in the decision letter “spurious.”

Is there a publicly available Policy?

[81]There is one final issue that I need to consider, arising out of the supplementary statement of Mr David Ho, the solicitor of Christine Lee & Co. He submits, from his experience and practice as an immigration lawyer, that individuals who have been granted temporary admission have been allowed by practice and the custom of the Secretary of State to take employment in the UK for the duration of their stay in the UK. He states that to his knowledge there is no current published policy indicating when and in what circumstances the Secretary of State through his instructions given to the Immigration Officers will grant those persons who are subject to immigration control and who are granted temporary admission, the permission to work. He says that it is his experience that the immigration officer has absolute discretion. He refers to the statement by the then Immigration and Nationality Minister (Beverley Hughes) in Parliament on 17th November 2003. He identifies four cases from his files. He says that the Defendant in the current cases has applied a blanket ban on granting these claimants permission to work for the duration of their contract with the EEA establishment; whereas if they had applied for permission to work as domestic workers then the Defendant would have exercised her discretion to grant or refuse the applicant permission.[82]These arguments were not included in the claim form, but the Defendant has responded to them by way of a supplementary skeleton argument. It is therefore appropriate that I deal with the submission. Mr Rogers submits that the relevant policy is publicly available: www.bia.homeoffice.gov.uk/policyandlaw/guidance/enforcement.[83]I have looked at the policy document on this website and in particular the relevant paragraphs, namely paras 55.20; 55.20.1; 23.10 and 23.10.5. The policy is publicly available, and as a consequence, the submission on this issue by Mr Gill has no substance, and I reject it.

Should there be a reference?

[84]The final issue that I need to deal with is whether there should be a reference to the European Court on the questions that I have had to consider. Mr Gill submits that if there is a doubt as to the answer to the question “Is there a requirement for prior lawful residence in the territory of the sending state or the UK for Art 49 rights to be engaged?” then the matter should be referred for a preliminary ruling.[85]There is no doubt in my mind as to the answer to this question, which is “Yes”, and accordingly there is no room for a reference.[86]The admission that the Third country nationals have no lawful residence in the member state of establishment on their claim to be “posted workers” is fatal to the claim that Article 49 EC is engaged. In any event, there has been an abuse of EC law. There is a transparent and publicly available policy relating to permission to work for those granted temporary admission; and the decisions in these cases were in accordance with this policy.

Conclusion

[87]For all of the reasons as set out above I formally grant permission to apply for judicial review, only to dismiss the substantive application.

Cited in 1 later judgment