In a decision of 7 November 2017, the Court of Appeal unanimously found, yet again, that the extension of the Worker Registration Scheme from 1 May 2009 to 30 April 2011 was unlawful and incompatible with EU law. The case is Secretary of State for Work and Pensions v Gubeladze [2017] EWCA Civ 1751.

The facts of the case are not necessary to understand the outcome, so I will not dwell on them.

What was the Worker Registration Scheme?

On 1 May 2004, ten new states joined the European Union. Of those, eight are large countries in eastern Europe and are collectively referred to as the “A8 states”.

Annex VIII of the Act of Accession allowed the EU’s existing members to limit, during a five-year transitional period, the free of movement of workers from the A8 states. It further stated that these measures could be extended for a further two years “in case of serious disturbances of its labour market or threat thereof and after notifying the Commission” (section 5 of Annex VIII).

As a result, the UK introduced the Worker Registration Scheme, initially to last from 1 May 2004 to 30 April 2009. In April 2009, the British government decided to extend the Scheme for a further two years on the basis of “serious disturbances to its labour market”. The scheme was to end on 30 April 2011.

In short, and but for a few exemptions, any nationals of an A8 state coming to the UK during that period had to register under the scheme before starting to work. Those not registered were not deemed to be residing legally in the UK.

Why was the extension unlawful?

The short answer is that it was not proportionate.

The Court of Appeal and all parties accepted that

in 2009 the UK was experiencing “serious disturbances of its labour market”. […] So the precondition for extending the national measures by two years (as set out in paragraph 5 of Annex VIII of the Accession Treaty) was satisfied. That, however, was not the end of the matter. The UK Government could only extend the WRS for two years if such a step was proportionate and compatible with EU law [paragraph 64].

Whether the Worker Registration Scheme was proportionate depended on what its aim was. The scheme was meant to monitor the impact of A8 citizens on the UK’s labour market. This archived page from the then UK Border Agency confirmed that

it allows us to monitor where citizens of those countries (except Malta and Cyprus) are coming into our labour market, the type of work they are doing, and the impact this has on our economy.

By 2009, the Court of Appeal said,

the Secretary of State had had the benefit of five years monitoring through the WRS. As the [Migration Advisory Committee] report observed, an extension of two years would yield little additional information of value [paragraph 77].

The MAC report noted that there was a serious disturbance of the UK labour market. But an extension of the WRS would not make any substantial contribution to alleviating the problem [paragraph 78].

It therefore concluded

When that small benefit is weighed against the profound consequences for individuals such as the respondent in this case, it is hardly surprising that the Upper Tribunal found the extension to be disproportionate [paragraph 79].

What does it mean today?

The fact that the extension of the Worker Registration Scheme was unlawful should not be news. The Upper Tribunal had already found the extension disproportionate and unlawful back in January 2015. This was the Secretary of State’s appeal.

Although the extension was found unlawful almost three years ago, those who had not complied with the scheme continued to be affected by it until today. The Home Office guidance on EEA qualified persons, updated on 1 February 2017, still says

An EU8 national who has worked in the UK, and who had to register under the WRS during the accession period but did not do so, would not have been exercising free movement rights in the UK for any time spent in the UK as a worker before 30 April 2011.

Therefore those who did not comply with the scheme could have issues showing that they acquired a right to permanent residence, or when they acquired it.

Others had issues with applications to naturalise, either because they could not show that they had acquired the right to permanent residence, or because they had issues meeting the good character requirement on the basis that they had a period of “unlawful residence” in the UK in the ten years prior to the application.

Colin reported issues with the entitlement to British citizenship for children of A8 citizens last summer.

Although the Secretary of State can continue to hold a failure to register under the scheme between 1 May 2004 and 30 April 2009 against an applicant, she should not be able to do so any more for a failure to register between 1 May 2009 and 30 April 2011.

Side note on the meaning of “residence” in the Citizens Directive

The Court of Appeal also considered a point about the meaning of “resided” in article 17(1)(a) of the Citizens Directive, which allow workers or self-employed people who retire to acquire permanent residence earlier than the usual five years. This is provided they have worked in the country for the preceding 12 months and “have resided there continuously for more than three years”.

The court found that “resided” in that context meant “legally resided”. This is bad news for our claimant in SSWP v NZ (ESA) [2017] UKUT 0360 (AAC), which I talked about in this previous post.