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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 |
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