D, R (on the application of) v Secretary of State for Work and Pensions

Transitional provisions made for EU enlargement may permit a member state to regulate access to its labour market for nationals of a new member state. The permitted derogation can include nationality-based restrictions on benefits intended to facilitate access to employment.

The general Treaty prohibition on nationality discrimination does not override that specific transitional regime. Once employment is obtained, equal employment and benefit rights apply. A time-limited registration requirement and fee may nevertheless be lawful where they monitor workers within the derogation and cease after 12 months of uninterrupted employment.

The claimant, a Latvian national, entered the United Kingdom in 2002, claimed asylum, and remained after refusal of his claim and appeal. Latvia joined the European Union on 1 May 2004. He challenged 2004 regulations governing access to benefits for persons without a right to reside and requiring accession-state workers to register and pay a fee.

Mr Justice Collins refused permission on 4 May 2004. By the Court of Appeal hearing, the claimant had obtained employment, creating an additional challenge concerning discrimination during employment and after any loss of employment before 12 months. The central issue was whether the domestic measures exceeded the transitional derogation under EU law.

Disposition. The Court of Appeal refused the application. The proposed grounds were unarguable and there was no other compelling reason to grant permission.

1. Jobseeking period. Between 1 May and 1 July 2004 the claimant was not a worker for the purposes of Article 7.2 of Council Regulation (EEC) No 1612/68. Annex V to the Treaty of Accession permitted derogation from Articles 1 to 6 of that Regulation. That derogation extended to discrimination concerning benefits intended to facilitate access to employment. The general prohibition in Article 12 of the EC Treaty did not assist because it operated subject to special Treaty provisions, including Article 39 and the transitional regime. The court agreed with Mr Justice Collins.
2. Employment and possible unemployment. While employed, the claimant was entitled to the same employment rights and benefits as other workers. If employment ended before 12 months, he would cease to be a worker for Article 7.2 and would return to the position covered by the derogation. The court regarded this issue as outside the scope of the lower-court proceedings and wholly hypothetical. It was therefore unconvinced that the claimant had sufficient interest under section 31(3) of the Supreme Court Act 1981, although the primary reason for refusal remained the absence of arguable merit.
3. Registration scheme. The registration requirement and £50 fee were discriminatory on grounds of nationality. Viewed in context, however, the scheme enabled the Secretary of State to monitor and control workers within the derogation. The requirement ceased after 12 months of uninterrupted employment under Regulation 2.4 of the Accession Regulations. It was consequently a reasonable and proportionate concomitant of the permitted derogation.

Lord Justice Mummery agreed with Lord Justice Maurice Kay's reasons. The application was refused with costs subject to detailed assessment.

1. Court of Appeal (Civil Division), [2004] EWCA Civ 1468: refused the application and ordered costs subject to detailed assessment.
2. High Court, Administrative Court: on 4 May 2004, Mr Justice Collins refused permission to apply for judicial review.