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The appellants primary case, however, is that regulation 2 is overtly, or directly, discriminatory. ARG
Mr Lewis QC for the Secretary of State said that, if the requirement constituted direct discrimination, he could not seek to justify it. ARG
The following issues are therefore raised by this appeal: (1) Do the conditions of entitlement to benefit in regulation 2 of the 2002 Regulations give rise to direct discrimination for the purposes of article 3(1) of Regulation 1408/71? (2) If they give rise only to indirect discrimination, is that discrimination objec...
In the Court of Appeal Moses LJ, with whom the other members of the Court agreed, held that the conditions for entitlement to state pension credit were not overtly based on the nationality of the claimant because nationals from other Member States might satisfy the right to reside test in other words, they did not disc...
Addressing himself to the question whether the indirect discrimination was justified on grounds independent of the appellants nationality, he held that it was so justified: paras 52-53. RLC
State pension credit had the characteristics of social assistance, despite its inclusion within the scope of Regulation 1408/71. RLC
The prohibition on discrimination might be restricted in that context to those who were economically or socially integrated with the country whose social assistance they sought, for the purpose of protecting the finances of the country. RLC
He said that this conclusion imposed no disadvantage on the appellant in the exercise of her rights under the Treaty, as she retained her Latvian pension. RLC
He rejected the appellants argument that the justification for restricting entitlement to those economically or socially integrated within the United Kingdom was undermined by the special treatment of Irish nationals: para 54. RLC
Discrimination Ratio
The fifth recital of the preamble to Regulation 1408/71 recognised that it was necessary, within the framework of the system of coordination that it laid down, to guarantee to workers living in the Member States within the Community equality of treatment under the various national legislations. Ratio
Article 3(1) gives effect to this aim by requiring that persons to whom the Regulation applies are to enjoy the same benefits under the legislation of any Member State as the nationals of that State. Ratio
The approach which the national court must adopt to this issue was described in Case C-124/99 Borawitz v Landesversicherungsanstalt Westfalen [2000] ECR I-7293: 23 In this respect, it must be borne in mind that the object of article 3(1) of Regulation No 1408/71 is to ensure, in accordance with [article 39 EC], equal t...
24 It is settled case law that the principle of equal treatment, as laid down in that article, prohibits not only overt discrimination based on the nationality of the beneficiaries of social security schemes but also all covert forms of discrimination which, through the application of other distinguishing criteria, lea...
25 Accordingly, conditions imposed by national law must be regarded as indirectly discriminatory where, although applicable irrespective of nationality, they affect essentially migrant workers or where the great majority of those affected are migrant workers, as well as conditions which are applicable without distincti...
26 It is otherwise only if those provisions are justified by objective considerations independent of the nationality of the workers concerned, and if they are proportionate to the legitimate aim pursued by the national law (OFlynn, paragraph 19). PRE
The European Court applied the adjectives overt and covert to the two forms of discrimination discussed in this passage. PRE
As Mr Cox for the appellant explained, however, they are best described as direct and indirect discrimination. PRE
Direct discrimination occurs where the discrimination is based on the nationality of the beneficiaries of social security schemes: Borawitz, para 24. PRE
Indirect discrimination occurs where, through the application of other criteria, the legislation leads to the same result: Borawitz, para 25. PRE
Advocate General Sharpston used the expressions direct and indirect when she analysed the Courts case law on discrimination in Case C-73/08 Bressol v Gouvernement de la Communaut Franaise [2010] 3 CMLR 559, as did the Court in paras 40-41 of its judgment. PRE
In para 46 of her opinion the Advocate General said that the distinction between direct and indirect discrimination lacks precision, and in para 50 that the distinction between what is overt and covert does not necessarily always coincide with that between direct and indirect discrimination. PRE
But I think that Mr Lewis identified the issue in this case correctly when he said that the key question on the discrimination issue is whether the conditions for entitlement to state pension credit are formulated in terms of the nationality of the claimants, or in terms of criteria other than nationality. PRE
The basis of entitlement under section 1(2)(a) of the State Pension Credit Act 2002 is whether the claimant is in Great Britain. Ratio
Thus far, it appears to be based solely on physical presence in this country and to have nothing to do with nationality. Ratio
But the matter does not, of course, stop there. Ratio
Section 1(2)(a) must be read with the 2002 Regulations which, as required by section 1(5)(a) of the 2002 Act, set out the circumstances in which a person is to be treated as being in, or not being in, Great Britain. Ratio
This test appears, at a superficial level, to have nothing to do with nationality either. Ratio
It is expressed in terms of whether or not the person is habitually resident in the United Kingdom or elsewhere in the Common Travel Area. Ratio
But the rules as to when a person is or is not to be treated as habitually resident do introduce tests which raise issues about nationality. Ratio
They are also hard, at first reading, to assimilate. Ratio
They involve the use of not just one, but two double negatives. Ratio
In regulation 2(1) a list is given of five circumstances in which no person is not to be treated as habitually resident. Ratio
Then in regulation 2(2) a direction is given that no person shall be so treated if he does not have a right to reside there. Ratio
As Lord Walker said in the course of the argument, the wording of these provisions suggests that they may be trying to hide something. Ratio
It is necessary to look more closely at their effect. Ratio
Read in isolation, the right to reside requirement in regulation 2(2) sets out a test which no United Kingdom national could fail to meet. Ratio
And it puts nationals of other Member States at a disadvantage. Ratio
As already noted, a British citizen has, by virtue of his or her United Kingdom nationality, a right to reside in the United Kingdom by virtue of his right of abode under section 2(1) of the Immigration Act 1971. Ratio
Those who do not have United Kingdom nationality do not have that right automatically. Ratio
Nationals of other Member States of the EU who do not fall within the provisions of regulation 2(1) must do something else to acquire it. Ratio
Under EU law they must be economically active or self-sufficient, or must be a member of the family of an EU citizen who meets these requirements. Ratio
The disadvantage which nationals of other Member States will encounter in trying to meet the requirements of regulation 2(2) is due entirely to their nationality. Ratio
Had a right to reside in the United Kingdom or elsewhere in the Common Travel Area been the sole condition of entitlement to state pension credit, it would without doubt have been directly discriminatory on grounds of nationality. Ratio
The effect of regulation 2(2) of the 2002 Regulations must, however, be looked at in the context of section 1(2)(a) of the 2002 Act and regulation 2 as a whole. Ratio
The condition which all claimants must meet, if they are to be treated as in Great Britain for the purposes of section 1(2)(a) of the 2002 Act, is that they must be habitually resident in the United Kingdom or elsewhere in the Common Travel Area. Ratio
Everyone, including United Kingdom nationals, must meet this requirement. Ratio
But while all United Kingdom nationals have a right to reside in the United Kingdom, not all of them will be able to meet the test of habitual residence. Ratio
Most are, of course, habitually resident here. Ratio
Others are not. Ratio
They can all meet the right to reside requirement that regulation 2(2) sets out because of their nationality. Ratio
But nationality alone does not enable them to meet the requirement in regulation 2(1). Ratio
Katherine Fleay, an employee of the Department of Work and Pensions involved in formulating policy relating to access by people from abroad to income-related benefits, referred in para 17 of her witness statement to the Departments memorandum to the Social Security Advisory Committee in February 1994. Ratio
In that statement it was pointed out that some UK nationals returning to the UK after a long period of absence may be held not to be habitually resident in this country. Ratio
EU nationals who satisfy one of the conditions listed in regulation 2(1) do not need to meet the right to reside test, as they are to be treated as habitually resident here. Ratio
Mr Cox for the appellant submitted that the requirement to have a right to reside here discriminated directly between citizens of the United Kingdom on the one hand and citizens of other Member States on the other. ARG
It was a clear case of discrimination on the basis of nationality: Vera Hoeckx v Centre Public dAide Sociale de Kalmthout [1987] 3 CMLR 638, para 24. PRE
That being so, article 3(1) of Regulation 1408/71 required that discrimination to be eliminated by deeming the appellant to be a British citizen for the purposes of entitlement to state pension credit. Ratio
I do not think that it is as simple as that when regulation 2 of the 2002 Regulations is read as a whole. Ratio
The requirement which everyone must satisfy is that they are in Great Britain. Ratio
The test which regulation 2 lays down is a composite one. Ratio
Some United Kingdom citizens will be able to say that they are in Great Britain. Ratio
Some will not. Ratio
That is true also of nationals of other Member States. Ratio
No doubt it will be more difficult in practice for nationals of other Member States to meet the test. Ratio
But not all United Kingdom nationals will be able to meet the test either. Ratio
In James v Eastleigh Borough Council [1990] 2 AC 751 a rule that those who were not of pensionable age had to pay for admission to a public swimming pool was held to directly discriminate between men and women because their pensionable ages were different. PRE
In that case there was an exact match between the difference in pensionable ages and the rule, as the right to free admission depended upon a single criterion an exact coincidence, as Lady Hale puts it: see para 91, below. PRE
The statutory pensionable age alone determined whether the person had to pay or not. PRE
As Lord Ackner put it at p 769, if you were a male you had, vis--vis a female, a five-year handicap. PRE
This was true of every male, not just some or even most of them. PRE
That is not so in the present case. Ratio
There is no such exact match. Ratio
The composite test is one that some UK nationals may fail to meet too because, although they have a right of residence, they are not habitually resident here. Ratio
Furthermore, we are not required in this case to say whether this amounts to direct discrimination in domestic law. Ratio
The question for us is whether it amounts to direct discrimination for the purposes of article 3(1) of Regulation 1408/71. Ratio
The approach which EU law takes to a composite test of this kind is indicated by the decision of the European Court of Justice in Bressol v Gouvernement de la Communaut Franaise [2010] 3 CMLR 559. Ratio
The Belgian legislation that was analysed in that case was similar in structure to that of regulation 2 of the 2002 Regulations. Ratio
It too involved a composite test, one element of which could be satisfied by a person who was not a national of the host Member State only if he met certain additional conditions but which every national of the host member state would automatically satisfy. Ratio
A restrictive French education policy had resulted in an influx of students from France to Belgium, whose system was based on free access to education. Ratio
This was thought to impose an excessive burden on public finances and to jeopardise the quality of the education provided in Belgium. Ratio
So the government sought, by a decree adopted in June 2006 by the Parliament of the French Community of Belgium, to limit the number of non-resident students who were entitled to enrol in certain programmes in the first two years of undergraduate studies in each university or school of higher education. Ratio
A resident student for the purposes of this decree was defined as a student who, at the time of registration in an institution of higher education, proved that his principal place of residence was in Belgium. Ratio
This was the first of two cumulative conditions which a prospective student had to satisfy. Ratio
He also had to fulfil one of eight other conditions, one of which was that he had the right to remain permanently in Belgium. Ratio
Belgians have that right by virtue of their Belgian nationality. Ratio
Citizens of other Member States have the right to remain permanently in Belgium only if they have a right to do so which is recognised by EU law. Ratio
Among the questions referred to the Court by the Belgian Constitutional Court was whether this measure was precluded by articles 12 and 18 EC read with articles 149 and 150 EC. Ratio
Advocate General Sharpston, in a powerful opinion, identified the issues that this question gave rise to as being whether the conditions, which had to be satisfied cumulatively, constituted direct or indirect discrimination. Ratio
She said that discrimination could be considered to be direct where the difference in treatment was based on a criterion which was either explicitly that of nationality or was necessarily linked to a characteristic indissociable from nationality: para 53. Ratio
She then examined each of the cumulative conditions separately. Ratio
She held that the first cumulative condition that the principal place of residence was in Belgium did not constitute direct discrimination. Ratio
This was because Belgians and non-Belgians alike could establish their principal place of residence in Belgium. Ratio
As this, apparently neutral, condition was likely to operate mainly to the detriment of nationals of other member states, it was indirectly discriminatory: paras 60-62. Ratio
It seemed to her, in contrast, that the second cumulative condition was necessarily linked to a characteristic indissociable from nationality. Ratio
Belgians automatically had the right to remain permanently in Belgium. Ratio
They therefore satisfied the second cumulative condition automatically. Ratio
Non-Belgians, on the other hand, had to fulfil additional criteria to acquire a right permanently to remain in Belgium or to satisfy one of the seven other conditions. Ratio
This discrimination was based on nationality and was therefore direct discrimination. Ratio
The answer to the question was that the measures in question were precluded by the articles of the EC Treaty that had been founded upon. Ratio