Secretary of State for Work and Pensions v Dias

A person who voluntarily leaves employment for an indefinite period to care for a child does not retain EU worker status merely because a return to work is contemplated. The categories preserving worker status cannot be judicially extended beyond the balance established by European law.

The court provisionally considered that pre-transposition residence complying with earlier Community law could count towards permanent residence under Article 16(1) of Directive 2004/38. It also provisionally considered that an unrevoked worker’s residence permit was evidential rather than an independent right to reside after worker status ended. Those questions, together with a possible direct right under Article 18(1) of the Treaty, required rulings from the European Court of Justice.

A Portuguese citizen claimed income support after voluntarily leaving employment to care for her child. The Social Security Commissioner held that she had acquired a permanent right of residence. His decision relied on a five-year residence permit and, alternatively, a right arising directly under Article 18(1) of the EC Treaty.

The Secretary of State appealed. The claimant also challenged the Commissioner’s conclusions that residence completed before the transposition of Directive 2004/38 could not count under Article 16(1), and that she had ceased to be a worker during an earlier period of voluntary unemployment.

The central issues were whether she retained worker status, whether earlier lawful residence counted towards permanent residence, whether possession of the permit made her residence legal despite unemployment, and whether Article 18(1) independently conferred permanent residence.

1. The appeal was not finally determined. The court decided the worker-status issue but deferred the permanent-residence issues pending rulings from the European Court of Justice. It referred two questions concerning the effect of an unrevoked residence permit and the possible direct operation of Article 18(1) of the Treaty.

2. The claimant did not retain worker status during the period after her maternity leave when she voluntarily chose not to work so that she could care for her child. Before Directive 2004/38, worker status ordinarily ended with the employment relationship, subject to limited recognised cases. Article 7(3) subsequently codified the circumstances in which that status was retained. Extending those rules to a parent who contemplated returning to work at an unspecified time would alter the balance struck by European law. Lair v Universität Hannover was distinguishable because the required continuity there was between occupational activity and a course of study: the claimant’s unemployment had no connection with her occupational activity.

3. The court provisionally concluded that Articles 16(1) and 16(4) of Directive 2004/38 applied to residence before 30 April 2006 which complied with the Community rules then governing migrant workers. On that view, the claimant’s earlier five years as a worker would have conferred permanent residence. The point was not acte clair, however, and the final decision was deferred pending the reference in Secretary of State for Work and Pensions v Lassal [2009] EWCA Civ 157.

4. The court also provisionally concluded that the residence permit did not, by itself, make the claimant’s later unemployment a period of legal residence for Article 16(1). Under the earlier legislation, the underlying right belonged to a worker and continued only while the relevant conditions were satisfied. The permit proved that conditional right; it did not create an unconditional right lasting until revocation. Treating it as conclusive until withdrawn would impose disproportionate and potentially discriminatory monitoring obligations on host states. Because pending questions in McCarthy v Secretary of State for the Home Department [2008] EWCA Civ 641 might affect the issue, the court made a further reference.

5. Article 18(1) was expressly subject to limitations and conditions in measures adopted to give it effect. If Article 16(1) covered pre-transposition residence, there was no legislative lacuna. If it did not, whether Article 18(1) independently conferred permanent residence depended on the nature of that omission and was referred to the European Court of Justice.

1. Court of Appeal (Civil Division): In [2009] EWCA Civ 807, the court upheld the Commissioner’s conclusion that the claimant had not retained worker status. It reached provisional conclusions on permanent residence, referred two questions to the European Court of Justice, and deferred its final decision.
2. Social Security Commissioner: The Commissioner held that the claimant was entitled to income support. Although he found that she had ceased to be a worker, he concluded that her residence permit, and alternatively Article 18(1) of the EC Treaty, supplied a qualifying right of residence.