RJ v Secretary of State for Work and Pensions (JSA) [2011] UKUT 477 (AAC)

UKUT-AAC
RJ v Secretary of State for Work and Pensions (JSA)
[2011] UKUT 477 (AAC) · 2011-12-01
[1]The claimant is a thirty two year old man. He is a Polish national and accordingly a citizen of the European Union. On 8 May 2009 he claimed Jobseeker’s Allowance. In response, a decision maker, on 31 May 2009 held that the claimant’s applicable amount for the purpose of his claim to income based jobseeker’s allowance was nil as he was “a person from abroad” because he did not have a right to reside and accordingly was not habitually resident in the United Kingdom.[2]The claimant appealed against that decision. It was then reconsidered but left unaltered. The appeal proceeded. It was adjourned on 10 November 2009 and 1 April 2010. It was heard and determined on 30 June 2010. On that occasion the tribunal refused it.[3]The claimant now appeals with the permission of the District Tribunal Judge.[4]The Registrar granted a hearing at the request of the claimant’s representative. It took place on 11 March 2011. On that date, after oral argument, I adjourned it for the lodging of further written submissions by both parties. After those were lodged, I directed a resumed hearing. That was scheduled for 3 August 2011 but had to be postponed due to illness on the part of the Secretary of State’s Counsel. It was rescheduled for 20 September 2011 and took place on that date. It proved impossible on that occasion to complete the oral arguments so the hearing was continued until 11 November 2011 when those arguments were concluded. I am grateful to the party’s representatives for their research and their written and oral submissions in a complex appeal.[5]The legislative background to the decision of the decision maker, upheld by the tribunal, is as follows:(a) The assessment of entitlement to income based jobseeker’s allowance is by way of the calculation of a claimant’s applicable amount under sections 1(4) and 3 of the Jobseekers Act 1995. The applicable amounts are set by regulations made under section 4(5) of that Act. Section 4(12) of that Act permits the fixing of an applicable amount of nil by such regulations.(b) An applicable amount of nil is fixed for “persons from abroad” by paragraph 14 of schedule 5 to the Jobseekers Allowance Regulations 1996, made under the above primary legislation.(c) Regulation 85(4) of the above regulations inter alia provides: “Person from abroad has the meaning given in regulation 85A.(d) Regulation 85A provides, so far as relevant, as follows: “ 85A. - (1) “Person from abroad” means, subject to the following provisions of this regulation, a claimant who is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the republic of Ireland. (2) No claimant shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland unless he has a right to reside in (as the case may be) the United Kingdom, the Channel Irelands, the Isle of Man or the Republic of Ireland other than a right to reside which falls within paragraph (3). (3) A right to reside falls within this paragraph if it is one which exists by virtue of, or in accordance with, one or more of the following – (a) regulation 13 of the Immigration (European Economic Area) Regulations 2006; or (b) Article 6 of Council Directive No.2004/38/EC. (4) A claimant is not a person from abroad if he is – (a) a worker for the purposes of Council Directive No. 2004/38/EC; (b) a self-employed person for the purposes of that Directive; (c) a person who retains a status referred to in sub-paragraph (a) or (b) pursuant to Article 7(3) of that Directive; (d) a person who is a family member of a person referred to in sub-paragraph (a), (b) or (c) within the meaning of Article 2 of that Directive;(e) a person who has a right to reside permanently in the United Kingdom by virtue of Article 17 of that Directive; [ 4(f) a person who is treated as a worker for the purpose of the definition of “qualified person” in regulation 6(1) of the Immigration (European Economic Area) Regulations 2006 pursuant to – (i) regulation 5 of the Accession (Immigration and Worker Registration) Regulations 2004 (application of the 2006 Regulations in relation to a national of the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia or the Slovak Republic who is an “accession State worker requiring registration”), or (ii) regulation 6 of the Accession (Immigration and Worker Authorisation) Regulations 2006 (right of residence of a Bulgarian or Romanian who is an “accession State national subject to worker authorisation”);][6]Article 7 of Council Directive No. 2004/38/EC (referred to in Regulation 85A(4)(a) – (c) cited in paragraph 3(d) above provides, so far as relevant, as follows: Article 7 Right of Residence for more than three months 1. All Union citizens shall have the right of residence on the territory of another member state for a period of longer than three months if they: (a) are workers or self-employed persons in the host member state; 3. For the purposes of paragraph 1(a), a Union citizen who is no longer a worker or self-employed person shall retain the status of worker or self-employed person in the following circumstances:
“(a) He/She is temporarily unable to work as a result of an illness or accident; (b) He/She is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a jobseeker with the relevant employment office; (c) He/She is in duly recorded involuntary unemployment after completing a fixed term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a jobseeker with the relevant employment office. In this case, the status of worker shall be retained for no less than six months;”
[7]It is important to record two points of agreement between the parties. Firstly, the claimant at the date of his claim or immediately before it was not a “worker”. The suggestion to the contrary in paragraph 14 of document 223, (written submissions from the Secretary of State) was specifically abandoned orally by his Counsel. Also the proposition that the claimant was “a worker” was never advanced on his behalf orally or in writing. Secondly, there is no factual basis for the claimant being covered by Article 7.3(a), cited in paragraph 6 above.[8]The original position of the Secretary of State, expressed in his written submissions appearing as documents 154-157, was to offer no support to the claimant’s appeal. However, Mr Collins reneged from that position and replaced it with the submissions summarised in paragraph 9 below.[9]The position taken by the Secretary of State at the oral hearings was as follows:(a) The tribunal’s decision was erroneous in law because they had made insufficient primary findings of fact to determine properly whether the claimant was self-employed at his date of claim. It should be set aside on the basis of that error and the case remitted to a freshly constituted tribunal for appropriate fact finding and a determination of that question.(b) The tribunal’s decision was erroneous in the manner suggested especially because being self-employed and actually working as such were not the same thing. Mr Collins referred me to paragraph 12 of CJSA/1489/08, document 292, paragraphs 5 and 8 of CIS/616/10, documents 287-288, and paragraph 3 of Secretary of State for Work and Pensions v AL [2010] UKUT 451 (AAC) , document 167, in support of that proposition. He then went on to submit that careful fact finding on the question of self-employment was required of a tribunal especially as that matter was one of degree, not involving any fixed period of time. The tribunal had not carried out that exercise to the necessary standard. He drew my attention by way of contrast to paragraph 5 of Secretary of State for Work and Pensions v AL, document 168.(c) If the new tribunal were to find that the claimant was self-employed at the date of his claim then he gained the benefit of regulation 85A4(b), cited in paragraph 3(d) above. Alternatively – and it came to the same thing in practical terms – he would on that basis be covered by regulation 85A(2) and (3) in that he would be within regulations 2(1)(b), 6(1)(c) and 14(1) of the Immigration (European Economic Area) Regulations 2006, documents 268-275. The rights conferred by those provisions last for more than three months unlike those referred to in regulation 85A(3) which are excluded from the effect of regulation 85A(2) by the terms of that paragraph itself.(d) However, according to the submission of Mr Collins, establishing that he was self-employed at the above date was the only way by which the claimant could succeed in his appeal against the decision maker’s decision because he could not retain that status if he was held to have ceased self-employment. Article 7.3(b) and (c), cited in paragraph 6 above, only applied to “workers” and not to “self-employed persons”. That was the ratio of the decision of the Court of Appeal in Tilianu v Secretary of State for Work and Pensions [2010] EWCA Civ 1397 , documents 170-175. Mr Collins invited me to follow and apply that decision.[10]In contrast, the position taken on behalf of the claimant, laid out in his skeleton argument documents 281-285 was as follows:(a) The right to reside test established by Article 85A of the Jobseekers Allowance Regulations 1996 cannot lawfully be applied under European Union law.(b) Alternatively, the claimant could retain his self-employed status under Article 7.3(b) of Council Directive No 2004/38/EC.(c) In any event, self-employed European Union citizens seeking new self-employed activity are entitled to Jobseekers Allowance under the European Union Treaties.(d) So far as disposal is concerned, I was invited to set aside the tribunal’s decision, substituting my own decision in the claimant’s favour on one or other of the above bases or, alternatively, to make a reference of certain questions to the Court of Justice of the European Union under Article 267 of the Treaty on the Functioning of the European Union, “TFEU”. A draft of the questions which I was asked to submit to the Court of Justice appears on documents 284-285. Mr Collins opposed all of the above submissions as well as presenting the case summarised in paragraph 9 above.[11]I should mention for the sake of completeness that at an early stage in the first oral hearing, it was mildly submitted by Mr Douglas on behalf of the claimant that I should determine the appeal by finding in fact, on the basis of material on file, that the claimant was self-employed. Apart from the point that this suggestion was to some degree linked with the more complex argument on the claimant’s asserted retention of his self-employed status (referred to in paragraph 10(b) above), I did not consider that there was sufficient unambiguous evidence available to enable me to make such a finding. Thus I reject Mr Douglas’ submission.[12]The submission narrated in paragraph 10(a) above was correctly abandoned by the claimant’s representatives in the light of the decision of the Supreme Court in Patmalniece v Secretary of State for Work and Pensions [2011] 1 WLR 783 , documents 311-346, given on 16 March 2011. That case related to State Pension Credit. However, its ratio applies to income based jobseeker’s allowance. See paragraph 102 of the judgement per Baroness Hale of Richmond, document 345. Patmalniece establishes that the right to reside test in its application to European Union citizens (other than United Kingdom citizens) amounted to indirect but not direct discrimination on the ground of nationality. However the Supreme Court, by a majority of four to one, held that that discrimination was justified because the right to reside test had the legitimate purpose of ensuring that a claimant had achieved economic or social integration in the United Kingdom as a pre-condition of entitlement to benefit and that that justification was relevant, sufficient and independent of the issue of nationality. Mr Weiss helpfully produced a Press Release (documents 450-451) indicating that on 29 September 2011 the European Commission had given a reasoned opinion that despite Patmalniece the continued application of the right to reside test by the United Kingdom constituted a contravention of European law. The Commission has requested the United Kingdom Government to stop its continued application. No reference of the United Kingdom to the Court of Justice of the European Union on this matter has been made by the Commission. I hold that that expression of opinion by the European Commission does not affect the binding authority or the persuasiveness of Patmalniece so far as this tribunal is concerned. I take the same view in regard to the note from the legal service of the European Commission, documents 485-488 (lodged after the hearing of 11 November 2011.)[13]In respect of the claimant’s argument laid out in paragraph 10(b) above, his representatives invited me not to follow Tilianu . They agree that that decision of the Court of Appeal establishes that Article 7.3(b) and (c) apply only to “workers” but not to “self-employed persons”. That is clearly correct. See especially paragraphs 2, 11 and 20 of the Judgement of Lord Justice Sedley, documents 171, 172 and 174. However they submitted that I should take a different approach and hold that the claimant could retain his status as a self-employed person under the above provisions and indeed had done so. I reject that submission for the following reasons:(a) Sitting as a judge of the Upper Tribunal in Scotland I am not bound by a decision of the Court of Appeal in England and Wales. However, I accept Mr Collins’ argument by analogy with the decision of the Court of Appeal relating to the Employment Appeal Tribunal in Marshalls Clay Products Ltd. v Caulfield [2004] ICR 1502 , paragraph 31 that, as a matter of pragmatic good sense, I should ordinarily expect to follow decisions of the Court of Appeal where the point before me is indistinguishable from what they decided. In other words I should only decline to follow such a decision of the Court of Appeal if it is clearly wrong.(b) However, I do not consider that Tilianu is indeed clearly wrong. Rather, in my view it is correct. It represents a sound analysis and construction of the provisions of Article 7. See especially the comment of Lord Justice Sedley on “the apparent and natural meaning of Article 7(3)(c)” in paragraph 22 of his judgement on document 175 I do not consider that the interpretation of Article 7 was affected by the procedural peculiarities in Tilianu and, in particular, by the absence of a proper factual foundation, referred to by Lord Justice Sedley in paragraph 7 on document 171. Likewise those peculiarities do not affect the highly persuasive status of the decision of the Court of Appeal in that case described in sub-paragraph (a) above.(c) I draw further support for following Tilianu from the failure to appeal that decision to the Supreme Court and also from the fact that the Court of Appeal did not make a reference to the Court of Justice of the European Union.(d) Furthermore, I am fortified in my conclusion to follow Tilianu by virtue of the identical decision on the point of legal principle taken by Upper Tribunal Judge Rowland in Secretary of State for Work and Pensions v RK [2009] UKUT 208 (AAC) , documents 119-123. See in particular paragraph 11 of his judgement on document 122.(e) Furthermore, I draw support for my conclusion that Tilianu is correct from the fact that the interpretation of Article 7 established by it is that adopted and implemented by the draftsman of the Immigration (European Economic Area) Regulations 2006, referred to in paragraph 9(c) above.(f) In regard to the suggested inconsistency between Tilianu and the decision of the European Court of Justice in Roux v Bolgium [1993] 1 C.M.L.R. 3, documents 100-109, I find the submission made on behalf of the Secretary of State in paragraph 10 on documents 221-222 to be telling and convincing. I accept it in its entirety. In addition, I agree with the comment made on his behalf in paragraph 13 of document 223 that the Roux judgement “says nothing about the correct interpretation of Article 7 of the Directive.”[14]The submission on behalf of the claimant narrated in paragraph 10(c) above is to the effect that UK citizens can in certain conditions be awarded jobseeker’s allowance if they are seeking self-employed activity. (This only applies in very restricted circumstances in any event. Those circumstances are laid out in paragraphs 7 and 8 of the Secretary of State’s submissions on documents 220-221). The claimant’s representatives then argued that those rights apply only to UK citizens and not to other European Union citizens nor to citizens of European Economic Area States. The contention that this is unlawful is founded on the prohibition of restrictions on freedom of establishment contained in Article 43 of the Treaty establishing the Economic Community, TEC, which has since 1 December 2009 been contained in Article 49 of TFEU.[15]In my judgement the above submission falls to be rejected for the following reasons: “(a) It is incorrect to assert, as the claimant’s representatives do, that the claimant was refused jobseeker’s allowance on the ground that he was seeking self-employed activity. Rather, he was assessed as having an applicable amount of nil because of the application to him of the rules regarding “persons from abroad” which, in turn, involved the application of the test of habitual residence, linked in his case with his lack of a right to reside in the United Kingdom. The habitual residence test applies to UK citizens. They too will be assessed as having an applicable amount of nil in a claim for income based jobseeker’s allowance if they are held to be “persons from abroad” on the ground that they do not satisfy that test. Thus the application of the habitual residence test does not constitute direct discrimination on the ground of nationality. Rather, following the decision of the Supreme Court in Patmalniece it constitutes indirect discrimination on that ground which was held by the majority (4-1) of that Court to be justifiable and justified. I accept the submission made on behalf of the Secretary of State that the principle of Patmalniece applies to exclude the argument of the claimant summarised in paragraph 14 above. That submission is found in paragraph 6 of document 220 read along with paragraph 11 of document 222. The approach taken by the majority of the Justices of the Supreme Court in Patmalniece applies to anti-discrimination provisions in European Union Treaties (primary European Union Law) as much as to such provisions in the European Union Regulations (secondary European Law) which were specifically before them. I agree with Mr Collins’ oral submission to that effect. (b) I also agree with the oral submission of Mr Collins that the decision of the European Court of Justice in Meeusen, documents 179-185 relied on by the claimant’s representatives cannot avail to support his case because that decision related to direct discrimination on the ground of nationality. That was not the case here. Rather, as explained in sub-paragraph (a) above, the application of the habitual residence test is indirect discrimination on that ground. (c) The claimant’s representatives also rely on the decision of the European Court of Justice in Vatsouras, documents 186-214. Paragraph 38 of the judgement in that case, document 194, establishes that in the case of a benefit of a financial nature intended to facilitate access to the labour market it is legitimate for a member state to grant such an allowance only if a real link with the labour market of that State has been established in the case of a jobseeker from another European Union State. In Collins v Secretary of State for Work and Pensions [2006] 1 WLR 2391 , documents 347-375, it was held by the Court of Appeal that such a real link was not synonymous with a requirement of actively seeking work but could be some other requirement imposed in addition to that requirement. In particular, the habitual residence test was held to be both legitimate and justified as such an additional means of establishing a genuine link between an applicant for jobseeker’s allowance and the United Kingdom employment market. As such it was fully compatible with European Law. (d) Mr Weiss helpfully drew my attention to the decision of Upper Tribunal Judge Rowland in R(IS)4/09, documents 432A-449. He invited me to apply it by analogy. In R(IS)4/09 a right to reside by direct application of European Union Treaty Law was accepted. However that was on the basis of a lacuna in European Union Directives. See the express terms of paragraphs 36 and 37, documents 443-444. I do not consider that there is a lacuna in the terms of Article 7 of Directive 204/38/EC. Thus I cannot recognise a right to reside for the claimant based upon direct application of any provision of the European Union Treaties.[16]In regard to disposal the claimant’s representatives invited me to make a reference to the Court of Justice of the European Union. It was common ground between the parties that such a reference was a matter of judicial discretion. Exercising that discretion, I hold that a reference is not appropriate. I do so on the ground that I consider that the law applicable to this appeal is sufficiently clear. A reference is thus not required. In my opinion, the principal points at issue have been decided by Tilianu and Patmalniece respectively. As indicated above I have been persuaded to follow and apply both those authorities. Mr Weiss helpfully drew my attention to CIS/1465/2009, documents 240-250 and CIS/2357/2009, documents 251-259. In each of those cases where Upper Tribunal Judge Jacobs made a reference, enquiring of the Court of Justice inter alia whether “there is a general principle of EU Law that equates the position of “workers” and the “self-employed”. Upper Tribunal Jacobs’ decisions to request such a ruling do not bind me. Mr Weiss did not suggest the contrary. I took into account however his decision to seek rulings but, for the reasons just given, I have declined to make a reference. Mr Weiss also cited a reference to the Court of Justice of the European Union made by the Upper Tribunal (Immigration and Asylum Chamber) in Alarape, documents 464-483, where the terms of the reference they made included one relating to an issue previously decided by the Court of Appeal. He then submitted that, in the light of that authority, I was not precluded from making a reference in this case simply because an aspect of it may well have been decided by the Court of Appeal in Tilianu. Mr Collins responded to that submission by drawing my attention to the fact that there was no opposition either to the making of a reference or to its terms in Alarape. See paragraph 5 of the judgement in that case, document 466. In this case, on the other hand, he opposed the making of such a reference principally on the basis of sufficient clarity in the law because inter alia of the decision of the Court of Appeal in Tilianu . As mentioned above, I agree with Mr Collins’ submission that the principal matters in this case are, in the language of European law Acte Claire, and that thus this case is not an appropriate one for the making of a reference. In my judgement, the lack of opposition either to the making of a reference or to its terms in Alarape enables me to distinguish that case which, in any event, does not bind me.[17]For the reasons given in detail above, therefore I reject the arguments advanced by the claimant’s representatives. On the other hand, I accept the position advanced by Mr Collins narrated in paragraph 9 above. I thus set the tribunal’s decision aside on the limited ground mentioned in that paragraph and remit the case for redetermination by a freshly constituted tribunal in accordance with the directions laid out in paragraph 18 below.[18]The task of the new tribunal will be to decide as a matter of fact, on balance of probabilities, whether at the date of his claim for jobseeker’s allowance the claimant was self-employed. In doing so, they must carefully bear in mind that being self-employed and actually working as such are not the same thing. They should have regard to the decisions in CJSA/1489/08 and CIS/0616/10, cited in paragraph 9 above. If they are satisfied that the claimant was self-employed at the above date then they should go on to hold that he was not a “person from abroad” at that date under regulation 85A(4)(b) of the Jobseekers Allowance Regulations 1996. As these reasons for decision make clear it is not open for them to hold that at that date he had retained the status of a self-employed person for the purposes of regulation 85A(4)(c) of the above regulation.[19]The claimant’s appeal thus to a degree succeeds. He should draw no inference as to his eventual success on the merits. Those will be determined by the new tribunal rehearing the case and applying the directions in paragraph 18 above. (Signed) A J GAMBLE Judge of the Upper Tribunal Date: 1 December 2011

Cited in 1 later judgment