No Discrimination Under Article18 TFEU

The principal issues in an appeal before the Supreme Court were:

• whether the respondents were entitled to rely on Article 18 Treaty for the Functioning of the European Union (TFEU) by virtue of being granted a domestic law right of residence, namely pre-settled status
• if so, whether the 2019 Regulations breached Article 18 TFEU; in particular,
• whether the discrimination was prohibited or direct, such that it was not capable of justification; or
• if not and the discrimination was indirect, whether it was justified

Fratila & Anor (Respondents) v Secretary of State for Work & Pensions (Appellant) [2021] UKSC 53: Lord Reed P, Lord Hodge DP, Lord Lloyd-Jones, Lord Sales, Lord Hamblen

On 21 December 2020 a Social Security Tribunal in Northern Ireland had made a preliminary reference to the Court of Justice of the European Union (CJEU)[1] which concerned the compatibility with Article 18 TFEU of the Universal Credit Regulations (Northern Ireland) 2016.

The parties to the present appeal agreed that by virtue of Articles 86(2) and (89)(1) of the Withdrawal Agreement, which had domestic effect by virtue of section 7A of the European Union (Withdrawal) Act 2018, the judgment of the CJEU in CG would have binding force in its entirety on and in the United Kingdom.

Accordingly, on 11 May 2021, Lord Reed, President, directed that the hearing date of the appeal to the Supreme Court should be vacated pending the decision of the CJEU in CG.

The CJEU delivered its judgment in CG on 15 July 2021[2] observing that every EU citizen may rely on the prohibition of discrimination on grounds of nationality laid down in Article 18 TFEU (at para 63).

However, the first paragraph of Article 18 TFEU was intended to apply independently only to situations governed by EU law with respect to which the TFEU did not lay down specific rules on non-discrimination (para 65).

Thus the principle of non-discrimination was given specific expression in Article 24 of Parliament and Council Directive 2004/38/EC in relation to EU citizens who exercised their right to move and reside within the territory of the member states (para 66).

An EU citizen who moved to or resided in a member state other than that of which he or she was a national fell within the scope of the Directive and was a beneficiary of the rights conferred by it (para 67).

The question of whether that EU national faced discrimination on grounds of nationality fell to be assessed by reference to Article 24 of the Directive and not by the independent application of Article 18 TFEU.

The CJEU concluded that an EU citizen could claim equal treatment in respect of social assistance only if his or her residence in the territory of that member state complied with the conditions of the Directive (para 75), citing Dano v Jobcenter Leipzig[3].

As a result, the first issue in the appeal had been answered by the CJEU definitively in favour of the appellant and the second issue did not arise.

Furthermore, it was common ground between the appellant and the respondents that the respondents did not reside in the United Kingdom in accordance with the Directive at the time of their claims for universal credit.

They could not therefore rely on the EU principle of non-discrimination to claim a right to equal treatment in respect of entitlement to universal credit.

The Supreme Court unanimously allowed the UK government’s appeal against a majority Court of Appeal decision in favour of the respondents, refusing at the same time to permit the respondents to advance an entirely new case which would have raised issues of fact not yet determined.

[1] CG v Department for Communities in Northern Ireland

[2] Case C-709/20) [2021] WLR 5919

[3] Case C-333/13, [2015] 1 WLR 2519, paras 68 and 69