13/11/2008

Access to benefits and proportionality

While Zalewska v Department for Social Development (Northern Ireland) [2008] UKHL 67 is not a housing case as such, I hope that many of our readers will still find this useful and interesting.  It is the second time in a fortnight (after RJM) that the House of Lords has had to consider whether UK legislation preventing someone from accessing benefits is compatible with European emanations, but this time it is EC law that is under consideration.

The issue was whether a Polish applicant was entitled to income support having worked in the UK for 12 months without interruption.  She was required to register her periods of employment and had not done this for all of them.  Her claim was disallowed as her failure to register for some of the time meant that she had no right to reside.

By a 3-2 majority their Lordships (Lords Hope, Carswell and Brown) held that she was not habitually resident (Baroness Hale and Lord Neuberger dissenting).

Facts

Ms Zalewska, a Polish national, went to Northern Ireland to look for work on 1 July 2004.  Between 9 July 2004 and 7 January 2005 she worked picking mushrooms.  From 8 January 2005 for a period of about three weeks she worked for a well know vodka producer.  From the end of January 2005 she started working for a company called Linwoods.  At about this point her three year old daughter joined her in Northern Ireland.  In April her daughter’s father also moved to Northern Ireland.  Ms Zalewska and her daughter moved in with him in May 2005.  She continued to work for Linwoods until 10 July 2005, at which point she stopped.  On 22 July 2005 she applied for income support for her and her daughter.  Before Paul Dacre starts jumping up and down at this point, it should be pointed out that Ms Zalewska had left the family home due to domestic violence before she stopped working for Linwoods.  As Baroness Hale notes two points follow on from this factual history [51]:

first, that she was going through a very difficult time when she ceased work; and second, that there is nothing at all to suggest that she came here to work with a view to claiming benefits in due course. Indeed, the Tribunal which heard her case in November 2005 stated that she was continuing to seek work although not required by the benefit rules to do so.

However, her claim for income support was rejected as she had not been registered as working for an authorised employer for an uninterrupted period of 12 months, as required by the Accession (Immigration and Worker Registration) Regulations 2004 (SI 2004/1219).  Although she had correctly registered the employment picking mushrooms for Monaghan Mushrooms Ltd, she had not done so while working for either Smirnoff Vodka or Linwoods.  In the case of Smirnoff this was not a problem – she was with them for less than a month so this period was covered by reg 7(3).  By failing to register her employment with Linwoods, Ms Zalewska was no longer entitled to be treated as a “worker” for the purposed of the Regulations.  Consequently she had no right to reside and could not become habitually resident.

Arguments

On behalf of Ms Zalewska, Mr O’Hara QC argued that art 39EC and art 7(2) of Regulation 1612/68 entitled her to the same social and tax advantages as workers who are UK nationals.  Therefore her failure to comply with the registration requirements should just be disregarded.  As a secondary argument Mr O’Hara suggested that the right to reside test that is applied, including the registration requirements for employment, is unnecessary and disproportionate.  This second argument was supported by the interveners, the Child Poverty Action Group and the Public Law Project.

On behalf of the Department of Social Development Mr Lewis QC argued that the question of whether national rules were a disproportionate restriction of EC rights did not arise due to the derogation.

Held

The measures taken were compatible with the authority given by the Treaty of Accession, but they were still subject to the EC requirement of proportionality.  All of their Lordships agreed on these two points (see [25]-[30]).  Where the majority and the minority differed was in their treatment of proportionality, acknowledged by Lord Hope as “the most troublesome aspect of this case” [31].  Lord Hope’s view, adopted by the majority, was that when the whole context was examined the measures and their consequences were neither unreasonable nor disproportionate.

As Lord Hope stated at [31]:

The principle of proportionality requires that the means employed to achieve an aim recognised by Community law as legitimate correspond to the importance of that aim and are necessary for its achievement.

In this case, the legitimate aim was to enable the UK to monitor and review arrangements for access by A8 nationals to the labour market, in order that the UK could determine whether further steps needed to be taken to prevent disruption to the labour market during the accession period.  The argument against the measures is that they were not proportionate to achieving this aim, specifically that the requirement to re-register was unnecessary.

In Lord Hope’s view this argument focussed too much on “access” to the labour market simply meaning point of entry.  In his judgment, a complete picture of the impact of A8 workers on the UK labour market could only be obtained by gathering information about the sectors in which they were employed over the whole 12 months.  The requirement to have worked “legally” for 12 months before benefits could be claimed was a rational way of imposing pressure on A8 nationals to register their different periods of employment in order to build up this picture (see [41] endorsing Commissioner Rowland’s assessment of proportionality).

Baroness Hale, with whom Lord Neuberger agreed, applied proportionality differently.  Baroness Hale noted that various parts of the scheme “could have been better designed and implemented” for the purpose of the principal aim of monitoring ([55]).  She cited the one month rule (reg 7(3)), which could mean that some A8 workers were never counted; the long delay in issuing certificates of registration; and the fact that the £50 fee charged to applicants could be a deterrent to applying.

Above and beyond that though, Baroness Hale felt that it was difficult to see how the future denial of benefits to a person who has worked in the UK for at least 12 months was a suitable means of achieving the aim of monitoring [56].  Baroness Hale went on to say:

57.  It is even more difficult to see how denial of benefits can be a necessary means of achieving the monitoring aim. The consequences for the worker’s right to freedom of movement are severe. She was allowed to come and to work here for 12 months. But she has been denied what she would otherwise be entitled to, having worked for so long. And by that stage the benefits for the monitoring scheme scarcely exist, but could in any event be achieved by allowing retrospective registration. The worker would still, of course, have to prove that she had indeed qualified by having worked here for the required period. The consequences of the sanction are particularly severe in a case such as this, where the claimant has registered once. She has therefore been counted for the main purpose of the scheme, which is to count heads rather than jobs.

58.  Even if encouragement to join the formal economy were an aim, a more suitable and proportionate means of achieving it would be by criminal sanctions against employers. The scheme does provide for sanctions against employers and an extended time limit for prosecution applies. But we have no information about how vigorously this has been pursued, either in general or in this particular case. If the agency (or Smirnoff or Linwoods) had been clear that they would be prosecuted for every A8 worker they took on without a certificate, the appellant would not have been in the predicament in which she found herself on 22 July 2005. The perils for them would not be disproportionate whereas the perils for her undoubtedly were.

While this case will be of interest to those who deal with the decreasing numbers who might be caught up in a similar factual situation, it is also very interesting to compare the two different approaches to proportionality, see [31]-[44] & [63]-[65] on the one hand and [48]-[59] & [68]-[69] on the other.  As this concept continues to make inroads into UK public law the tensions between the two treatments will inevitably crop up again and again.  That is something that housing lawyers can’t afford to ignore.

chief is a barrister in the big city. he specialises in public law, landlord & tenant, football and rock 'n' roll (the last two are only when his clerks aren't watching). he sometimes pops by here, but not as often as he'd like. he will occasionally eschew capital letters. the reasons for this odd affectation are lost in the mists of time.

10 Comments

  1. NL

    And of course the same issue arises for entitlement to housing assistance, so a harsh penalty indeed.

    I need to consider the approaches to proportionality (although it is now a little less pressing need that it was at the beginning of the week).

    Reply
  2. house

    Whilst I find these sorts of cases fascinating I do find them thoroughly confusing.

    Whilst this may well not be the most helpful comment I can’t be the only one and it’s worrying that I or other advisers might not be giving the best advice to clients.

    To be honest when words such as ‘unnecessary, arbitrary, unreasonable’ spring to mind I may do a letter, quoting random bits of cases to try and make it look like I know more than I do,to the HA or LA saying if they don’t back down it’s off to a solicitor for possible JR action. This initial step often works and to be honest I don’t know what else to do!

    Reply
  3. NL

    @house Unfortunately, the A8 accession countries rules are (now) fairly straightforward – the 12 months registered work requirement before standard EU residence rights kick in (and with it benefit and housing entitlement for workers and workseekers. This was a challenge to the operation of those regulations. And it wasn’t successful.

    Reply
  4. house

    @NL my apologies I was referring to proportionality etc in regards to JR when helping clients defend possession claims brought by LA’s and HA’s.

    It was rather the wrong thread for me to post my comment under but the case had just got me thinking how confusing any advice that mentions proportionality can be.

    Reply
  5. NL

    Well, just to be even more confusing, proportionality is not a ground of JR, or so says the ECtHR. The House of Lords, in Doherty, said – at least for public law defences to possession claims in the County Court – that proportionality may be a public law ground, or it may not be, or it may or may not be, depending on which Judgment you go with.

    Overall – it seems to be heading that way, but we are not clearly there yet.

    Plus, just to add to the confusion, the HoL in Kay and again in Doherty suggest that the proper place for a public law ‘defence’ (technically a counterclaim) to a possession claim is the County Court, even though it is pretty much a JR in many ways (which may or may not be more likely to include proportionality if it is in the County Court than it is in the High Court).

    I trust that has cleared it up.

    Reply
  6. house

    Absolutely :)

    As a lesser mortal I shall continue to write confusing letters, which may or may not be correct to the relevant parties and hope that they are as equally as confused as I. Seems to be working so far.

    Reply
  7. The Dark One

    As NL points out, it has a direct impact on Allocation and Homelessness as well in terms of eligibility. In these regards it doesn’t actually change anything, it just strengthens the existing regulations.

    Reply
  8. chief

    @house Apologies if I have left you as confused as an England batsman trying to run with Bopara (that’s really one for Charon). I had to write this in three batches, so it may not be as clear as it should have been. Keep on trucking with the confusing letters and you can’t go wrong.

    @NL If you have access to Public Law there is an article by Tom Hickman of Blackstone Chambers at pp 694-716 of the Winter edition, entitled ‘The substance and structure of proportionality’. I must confess I haven’t read it yet – it’s one of a pile of things that I am saving up to read on a beach next week. That’s just the exciting, care-free kinda guy I am.

    Reply
  9. house

    @Chief haha it’s all good I was confused before the post which I enjoyed reading. I think I need to set aside quite a lot of time to try and get my head around the issues.

    I think all non solicitor CLS Housing Advisers should be forced to go on a training course re Public Law. I for one could certainly do with one.

    Reply
  10. Mark

    @House: I wouldn’t worry too much. At least you’re alive to the issue. In my experience most LA/HA workers don’t consider proportionality, particularly when such arguments are likely to be raised in the absence of a conventional defence provided for by statute – e.g. when seeking possession against an occupier without statutory protection – and don’t know how to respond to such arguments. So in that sense you’re ahead in the game.

    Reply

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