CIS/185/2008

DECISION OF THE SOCIAL SECURITY COMMISSIONER
  
1.	The Secretary of State’s appeal is unsuccessful.  I set aside the decision of the Fox Court appeal tribunal dated 26 September 2007 but I substitute a decision to the same effect.  The claimant had a right of residence, and was habitually resident, in the United Kingdom from 26 March 2007, when she claimed income support.

REASONS

2.	I held an oral hearing of this appeal.  The Secretary of State was represented by Mr Kevin Nelson of the Office of the Solicitor to the Department of Health and the Department for Work and Pensions.  The claimant was represented by Mr Adrian Berry of counsel, instructed by Ole Hansen & Partners, solicitors, of London SE11.  I am grateful to both advocates for their helpful submissions.

3.	The facts of the case are not in dispute.  The claimant is a Portuguese citizen who came to the United Kingdom with two children (who have now grown up and left home) in January 1998.  She obtained work immediately.  The evidence as to her employment history is not entirely consistent but it is accepted that she was in continuous employment, with no significant gaps between jobs, until the summer of 2002, when she went on maternity leave.  Her youngest child was born on 7 October 2002.  She remained on maternity leave until 17 April 2003 and then ceased to be employed (and received income support) until 26 April 2004, when she returned to work with the last of her former employers until 23 March 2007.  She left work then because she wished to spend more time with her son and she claimed income support as a single parent with effect from 26 March 2007.  She did not have a resident permit at that time but had had one that was issued on 13 May 2000 and was valid until 13 May 2005.  She had not thought it necessary to renew it.

4.	On 30 April 2007, the Secretary of State disallowed her claim for income support on the ground that she had no right of residence in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, with the consequence that she could not be treated as habitually resident in any of those territories and so was a “person from abroad” with an applicable amount of “nil” (see section 124(1)(b) of the Social Security Contributions and Benefits Act 1992 and regulations 21 and 21AA of the Income Support (General) Regulations 1987 (S.I. 1987/1967, as amended).  The claimant appealed, contending that she did have a right of residence in the United Kingdom.  On 26 September 2007, the tribunal allowed her appeal on the ground that she had remained a “worker” during the period from 18 April 2003 to 25 April 2004 and so, by the time she made the relevant claim for income support, she had acquired a right of permanent residence in the United Kingdom under regulation 15 of the Immigration (European Economic Area) Regulations 2006 (S.I. 2006/1003) by virtue of 5 years’ qualifying residence.  The Secretary of State now appeals with my leave.

5.	Regulation 15(1)(a) of the 2006 Regulations provides –

“The following persons shall acquire the right to reside in the United Kingdom permanently—
    (a) 	an EEA national who has resided in the United Kingdom in accordance with these Regulations for a continuous period of five years; …”

6.	The 2006 Regulations came into effect only on 30 April 2006 but were preceded by the Immigration (European Economic Area) Regulations 2000 (S.I. 2000/2326).  Paragraph 6 of Schedule 4 to the 2006 Regulations provides –

“Any period during which a person carried out an activity or was resident in the United Kingdom in accordance with the 2000 Regulations shall be treated as a period during which the person carried out that activity or was resident in the United Kingdom in accordance with these Regulations for the purpose of calculating periods of activity and residence under these Regulations.”

7.	Under both the 2000 Regulations and the 2006 Regulations, a person had a right of residence while a “worker” within the meaning of Article 39 of the EC Treaty; hence the tribunal’s approach.  It was not in issue that the claimant had been a worker for some years before 18 April 2003 and from 26 April 2004 to 23 March 2007 and so if she had been a worker from 18 April 2003 to 25 April 2004, she clearly satisfied the condition of five years’ continuous residence “in accordance with these Regulations” and so had acquired a right of permanent residence which did not depend on her continuing to be a worker.

8.	Despite Mr Berry’s arguments in support of the tribunal’s reasoning, I accept Mr Nelson’s submission that that reasoning is flawed.  Mr Nelson rightly conceded that the claimant remained a worker for the purpose of the 2000 Regulations for as long as she was on maternity leave and her contract of employment subsisted.  However, he submitted that she did not remain a worker during the following year.  I agree.  It is true that she returned to work for the same employer at the end of that year and I am prepared to assume that the employer had indicated that she would be able to do so, but there was no contractual obligation on the employer and any offer of reemployment could have been withdrawn at any time.  Equally, and perhaps more importantly, there was no obligation on the claimant to return to work.  The fact, if it be a fact, that her return to work was delayed by domestic violence is, in my judgment, irrelevant because it has not been suggested that that was the cause of the whole year’s delay.  I am satisfied that, as a matter of EC law, the claimant ceased to be a worker from 18 April 2003 to 25 April 2004.  It is true that there are occasions when EC legislation uses the term “worker” to include those who have ceased to be workers or who are merely looking for work (see Martinez Sala v Freistaat Bayern (Case C-85/96) E.C.R. I-2691 at paragraphs 31 and 32), but in this context it seems clear that a distinction is to be drawn between those contracted to work and those who are taking a break from employment to care for children.

9.	However, even if the claimant was not a worker during the period from 18 April 2003 to 25 April 2004, it does not necessarily follow that she had not acquired a right of permanent residence by the time she claimed income support in 2007.  Mr Berry advanced four alternative arguments.  

10.	In my view, the strongest of those arguments is based on the fact that the claimant had a residence permit during the period from 18 April 2003 to 25 April 2004.  The permit was issued by, or on behalf of, the Home Office and declares –

“This permit is issued pursuant to regulation (EEC) No. 1612/68 of the Council of the European Communities of 15 October 1968 and to the measures taken on the implementation of the Council Directive of 15 October 1968.

“In accordance with the provisions of the above mentioned Regulation, the holder of the above mentioned Regulation, the holder of this permit has the right to take up and hold employment in the United Kingdom under the same conditions as United Kingdom workers.

YOU ARE ADVISED TO PRODUCE THIS PERMIT TO THE IMMIGRATION OFFICER WHENEVER YOU ENTER OR LEAVE THE UNITED KINGDOM.”

On the last page, there appears –

“NOTICE TO THE HOLDER OF THIS PERMIT
1.	You must not make any alteration to this permit.  Loss of the permit should be reported to the police and it should be surrendered to the Immigration Officer if you leave the country permanently.

2.	The validity of this permit is the time limit on your stay in the United Kingdom.  This time limit will apply, unless superseded, to any subsequent leave to enter you may obtain after an absence from the United Kingdom within the period of validity of this permit.”

The emphasis is in the original.

11.	That permit was plainly issued under regulation 15 of the 2000 Regulations.  Under regulation 22(2)(b)(i), the Secretary of State for the Home Department was entitled to revoke such a permit if the holder ceased to be a “qualified person” within the scope of regulation 5, which the claimant ceased to be when she ceased to be a worker.  However, he was not bound to do so and did not do so and the claimant was under no obligation to inform him that she had ceased to be a worker.  At that time, there was no reason relevant to this case why a permit should be revoked when a holder ceased to be a qualified person, because entitlement to social assistance did not depend on a claimant being a qualified person.  It was only from 30 April 2004 that it became important for the purposes of entitlement to income support and other forms of social assistance that a person have a right of residence in the United Kingdom such as was conferred on any qualified person by virtue of regulation 14 of the 2000 Regulations.  That is why the claimant was entitled to income support during the year when she was not a worker and it was no doubt because the claimant had never found it necessary to use her permit that she did not seek to have it renewed when it expired.

12.	It is well established that possession of a residence permit cannot be made a condition of entitlement to social assistance if no equivalent document is required of nationals of the host Member State (see Martinez Sala at paragraph 65) but it is equally well established that once a right of residence has been recognised by a Member State through the issuing of a residence permit, the claimant is entitled to be treated on the same basis as nationals of that Member State whether or not he or she would have a right of residence under Community law, until the permit is revoked (see Trojani v. Centre public d’aide sociale de Bruxelles (Case C-456/02) [2004] E.C.R. I-7573 at paragraph 46).  That is presumably on the basis that a residence permit confers, or is conclusive evidence of, a right of residence. 

13.	Mr Nelson was totally unable to explain why the residence permit possessed by the claimant in this case should not be regarded as exactly what it purported to be: a document conferring permission to reside in the United Kingdom for as long as it was valid.   It did not purport to be valid only for as long as the claimant was a qualified person.  If it had done it would have been virtually worthless because the claimant’s economic status would have had to be investigated each time the document was presented in order for it to be established whether she did have a right of residence.  For this reason, I doubt that it would have been consistent with the provisions relating to residence permits in Council Directive 68/360/EC, to which the 2000 Regulations were intended to give effect, for the residence permit to have ceased to be valid automatically upon a claimant ceasing to be a “worker”, which is no doubt why regulation 22 of the 2000 Regulations was expressed as it was.  Moreover, there is a good practical reason why a residence permit should not automatically cease to be valid when a person ceases to be a qualified person which is that, when consideration is given to whether a permit should be revoked, it can also be given to whether the claimant should in the alternative be granted leave to remain in the United Kingdom under the Immigration Act 1971, either as leave within the Immigration Rules or as exceptional leave.

14.	I am quite satisfied that the claimant did have a right of residence from 18 April 2003 to 25 April 2004 because such a right had been recognised by the Secretary of State for the Home Department through the issuing of the residence permit and the lack of any decision to revoke the permit (or, indeed, the lack of any relevant mechanism for drawing his attention to the possibility of there being grounds to revoke it).  Moreover, I incline to the view that that right of residence (i.e., a right recognised in a permit that could be, but had not been, revoked) was one guaranteed by Council Directive 68/360/EEC.  The right of residence conferred by the permit was a right of residence “in accordance with the 2000 Regulations”, because the permit was issued under those Regulations which also had the effect that the permit remained in force until revoked.  Accordingly, at the time the claimant claimed income support, she had a right of permanent residence by virtue of regulation 15(1)(a) of the 2006 Regulations read with paragraph 6 of Schedule 4, having, on one ground or another, had a relevant right of residence continuously for five years.

15.	In case I am wrong about the effect of the permit, I must consider another of Mr Berry’s submissions, which is that the claimant had a right of permanent residence because she had been a worker continuously for five years before her maternity leave ended and so had already acquired a right of permanent residence.  This involves some consideration of issues that will be determined by the Court of Appeal in an appeal from the decision of Mr Commissioner Jacobs in CIS/4299/2007.  Mr Nelson asked me to adjourn this case to await the decision of the Court of Appeal but I declined to do so because, for reasons given above, I can decide this appeal on other grounds.  Having got this far, I also consider it appropriate to deal with this alternative ground, as my reasoning contains an additional element not considered by Mr Commissioner Jacobs.

16.	The facts of CIS/4299/2007 were only slightly different from the facts of the present case.  The claimant, a French citizen, claimed to have exercised a right of residence in the United Kingdom as a workseeker or worker for over five years up until February 2005.  She then went to France until December 2005, when she returned to the United Kingdom.  She claimed income support in November 2006.  Mr Commissioner Jacobs held that, if she had been exercising rights of residence under EC law for five years up until 2005, she had acquired a right of residence by February 2005 and had not lost it by the time of her claim, because, while the period of absence from the United Kingdom would have affected the continuity of residence for the purpose of acquiring a right of residence, it was less than the two years that would bring to an end an acquired right of permanent residence.

17.	In reaching that conclusion, Mr Commissioner Jacobs held that the fact that a right of residence as a workseeker was not recognised under either the 2000 Regulations or the 2006 Regulations or that some of the residence preceded the coming into force of the 2000 regulations was immaterial because, insofar as the 2006 Regulations limit the relevant residence to that which is “in accordance with” either the 2000 Regulations or the 2006 Regulations, they do not give effect to Article 16(1) of Council Directive 2004/38/EC, which refers only to “Union citizens who have resided legally for a continuous period of five years in the host Member State” and which has direct effect.  I understand that the Secretary of State does not challenge that part of Mr Commissioner Jacobs’ reasoning, with which I respectfully agree (save that I do not agree that the 2006 Regulations could not have given full effect to the Directive had they been properly drafted).  It is possible to contrast the phrase “resided legally” in Article 16(1) both with the phrase “residing on the basis of this Directive” in Article 24 and with the simple word “resided” in Article 28(3)(a).  It seems plain that any residence in accordance with a right of residence guaranteed by EC law is covered by the phrase “resided legally” and, although it is not necessary to decide the point in this case, I also incline strongly to the view that the phrase also captures residence in accordance with rights of residence conferred or recognised by the domestic law of the host Member State, having regard to Martinez Sala and Trojani.

18.	While I understand the Secretary of State now to accept, rightly in my judgment, that residence before Council Directive 2004/38/EC came into force is relevant for the purposes of Article 16(1), he appeals against Mr Commissioner Jacobs’ decision on the ground that the claimant in CIS/4299/2007 cannot have acquired a right of residence under Article 16(1) of that Directive in February 2005 because the Directive did not come into effect until 30 April 2006 and earlier Directives did not guarantee any right of permanent residence.  I can see some force in that argument and it obviously applies equally to the present case where it is contended that the claimant had acquired a right of residence by 17 April 2003.

19.	It needs to be contended that the claimant in the present case acquired a right of residence by 17 April 2003 due to the length of the gap in the claimant’s status as a worker immediately after that date.  Regulation 3(2) of the 2006 Regulations makes provision for calculating continuity of residence for the purpose of regulation 15.  It provides –

“Continuity of residence is not affected by —
    (a) 	periods of absence from the United Kingdom which do not exceed six months in total in any year;
    (b) 	periods of absence from the United Kingdom on military service; or
    (c) 	any one absence from the United Kingdom not exceeding twelve months for an important reason such as pregnancy and childbirth, serious illness, study or vocational training or an overseas posting.”

This paragraph is clearly designed to, and does, give effect to Article 16(3) of Directive 2004/38/EC but it completely fails to make any provision for those who remain in the United Kingdom but cease to reside in the United Kingdom “in accordance with these Regulations”.  Provision for continuity in those circumstances is to be expected in domestic legislation rather than a Directive.  The lack of any such provision may create anomalies.  There is, for instance, a question whether it implies that a person must remain a “qualified person” within the terms of regulation 6 even if abroad in circumstances covered by regulation 3(2) or whether people who remain in the United Kingdom but cease to be qualified persons may find themselves less well treated than a person who goes abroad.  However that question does not arise in this case because Mr Berry rightly accepted that, if the claimant had no right of residence in the United Kingdom from 18 April 2003 to 25 April 2004 and had not already acquired a right of residence before then, that period would, on any view, have broken the continuity of her residence for the purpose of either regulation 15 or Article 16. 

20.	For the purposes of this decision, I am quite content to accept the Secretary of State’s submission that the claimant cannot have acquired a right of permanent residence under Article 16 before Directive 2004/38/EC came into effect.  However, in CIS/2358/2006 and CIS/408/2006, I have held that a claimant can rely instead on Article 18(1) of the EC Treaty.  In short, my reasoning has been that it is clear from Baumbast v. Secretary of State for the Home Department (Case C-413/99) [2002] E.C.R. I-7091, having particular regard to what Mr Advocate General Geelhoed said at paragraphs 19 to 36 and 120 to 122 of his Opinion about the inadequacy of existing Directives, that the Directives in force before 30 April 2006 could not be regarded as the sole source of rights of residence and that, once Council Directive 2004/38/2004 had been adopted, it provided a guide as to the scope of the rights conferred directly by Article 18(1) of the EC Treaty, although not an exhaustive guide if it was possible to show a lacuna in that Directive.  Thus, in CIS/408/2006, the claimant was successful even though his case would not have fallen within Directive 2004/38/EC had it been in force.  In CIS/2358/2006, the claimant was unsuccessful (and now has an appeal pending before the Court of Appeal).  Although Directive 2004/38/EC was not adopted until a few days after the claimant in the present case had returned to work in 2004, in my judgment it is still capable of providing a guide as to the scope of Article 18(1) as at 18 April 2003.  Moreover, it is particularly appropriate to have regard to it when considering what is in effect a transitional case arising under Article 16 of the Directive itself.

21.	Had the Directive been in effect on 17 April 2003, the claimant would have acquired a right of permanent residence and therefore a right of residence from 18 April 2008 to 25 April 2004, notwithstanding that she had ceased to be a worker during that period.  I am satisfied that she had a right of residence under Article 18(1) of the Treaty during that period.  Consequently, by the time she claimed income support after the Directive had come into force, she had “resided legally for a continuous period of five years” and so had acquired a right of residence under Article 16(1) of the Directive, which meant she no longer needed to rely directly on the Treaty.

22.	If, having regard to the terms of paragraph (15) of the preamble to the Directive, which are more limited that the terms of Article 16(1), Article 16(1) must be given a very narrow construction and applies only where a claimant has been exercising rights of residence recognised by the Directive itself (contrary to the view I have expressed above), the claimant would not have acquired a right of permanent residence under the Directive.  However, the third of Mr Berry’s arguments is that she could rely on Article 18(1) of the Treaty instead, from the time she made her claim for income support in 2007.  It does appear inconsistent with the concept of citizenship of the Union to deny a right of residence in a Member State to a person who has lived in that State for nine years and been a worker for eight of those years, including a continuous period of over five years.  On the other hand, applying the approach I have taken in CIS/2358/2006 and CIS/408/2006, the question would arise whether it could be said that there was a lacuna in the Directive, in which case a national court or tribunal could apply Article 18(1) of the EC Treaty, or whether the Directive had deliberately been given the effect it had despite it appearing to be inconsistent with the EC Treaty, in which case a national court or tribunal would be obliged to refer the case to the European Court of Justice.  In view of the conclusions I have already reached in favour of the claimant, it is unnecessary for me to consider that question further.

23.	Mr Berry’s final argument was one I have rejected in CIS/3444/2006 and CIS/1121/2007 but which is to be considered in other cases pending before the Commissioners and also, in a different context, in a case that has been referred by the Court of Appeal to the European Court of Justice.  I indicated that I would be minded to adjourn this case if this issue became determinative and I did not invite the parties to develop their arguments on it at the oral hearing.  In those circumstances, I need say no more about it.

24.	Although I accept that the claimant did not have a right of residence on the ground found by the tribunal, I have found that she had a right of residence on the grounds identified in paragraphs 14 and 21.  Accordingly, the Secretary of State’s appeal is unsuccessful.

	(signed on the original)	MARK ROWLAND
		Commissioner
		11 August 2008