Supreme Court refuses to refer Article 49 posted workers cases to the ECJ

06 Apr 2010

The Supreme Court (Lord Rodger, Lady Hale, Lord Mance) has rejected an application for permission to appeal which sought a reference to the European Court of Justice on the scope of Article 49 EC (the freedom to provide services, now Article 56 of the Treaty on the Functioning of the European Union).

The Court of Appeal (Rix LJ, Lloyd LJ, Sir David Keene) [2010] EWCA Civ 4 had dismissed an appeal against the decision of the Administrative Court refusing Judicial Review of various decisions of the Home Secretary concerning the application of Article 49 EC and the case law relating to “posted workers”.

The decision under appeal (R(Lee Ling Low and others) v Secretary of State for the Home Department [2009] 2 C.M.L.R. 22) was the lead case among 23 Judicial Review applications. A further 650 cases had been dealt with in the same manner by the Home Secretary.

The Court of Appeal decided against the Appellants both on the basis that Article 49 and the case law on posted workers could not be extended to cover the Appellants’ case and because the scheme which had been devised was an abuse of EC law. The scheme involved an Irish company entering into agreements to supply catering services to UK restaurant companies. The services were to be provided by third country nationals who were illegally present in the UK and had no right to reside in Ireland. An application was made on behalf of the Irish company, UK company and the third country nationals in this and hundreds of other cases, seeking confirmation of the workers’ status as “posted workers” of the Irish company under Article 49 EC and the principle of derivative rights. On the application of the “abuse” doctrine of EC law, the Court held,

“When it commenced its operations [the Irish appellant company] had no business in Ireland or the UK involving employees who were lawfully present or employed in either country. On its own evidence it has targeted the UK because of recent immigration law changes which have made it harder for Chinese restaurants here to comply with the law in their employment practices. It has therefore sought to put between the UK restaurant and its staff the fiction of an undertaking established in another EU member state of establishment purportedly using its article 49 freedom to bring or “post” its lawful employees to the UK for the purpose of its operations here. This is solely in order to attempt to translate those unlawfully present and illegally working in the UK into workers protected under Community law. The truth, however, is that the Irish company has no employees lawfully present as such in Ireland and has posted none to the UK. The whole thing is a charade…”

Ian Rogers appeared for the Home Secretary in all stages of the proceedings.

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