- These
proceedings raise the important question whether the failure of the Government
of the United Kingdom to pay to pensioners resident in certain countries
abroad, in the case of the Claimant South Africa, the inflation uprating of
their UK State pensions contravenes the European Convention on Human Rights.
- The Claimant
is resident in South Africa. She spent most of her working life in England,
and while she was employed she and her employer, and while she was
self-employed she alone, paid full National Insurance contributions. She has
been resident in South Africa since 1990. When she was working in South Africa
she paid voluntary contributions to protect her right to a UK State pension.
She began to draw her pension in September 2000. She receives a British
Retirement Pension of £103.62 per week, comprising a Basic Pension of £67.50,
an Additional Pension (under the State Earnings Related Pension Scheme, or
SERPS) of £32.17 and Graduated Pension of £3.95. She has not received the
increase in the Basic Retirement Pension of £5 (from £67.50 to £72.50) that
has been paid since 9 April 2001 to those entitled to it; nor has she received
the percentage increase in the Additional Pension and Graduated Pension that
has been paid since that date. It is accepted on her behalf that she is not
qualified for these increases by reason of the relevant provisions of UK
legislation and delegated legislation, apart from the Human Rights Act 1998.
While the Claimant remains in South Africa, her total British pension will
remain frozen at £103.62 irrespective of inflation-based uprating of pensions
for those who live in Great Britain and certain other countries referred to
below.
- The position
of the Claimant, as a recipient of a "frozen" pension, is representative of UK
pensioners not only in South Africa, but in all the countries of the so-called
Old Commonwealth, including Australia, Canada and New Zealand.
- Pensioners
living in other countries, such as the USA, EU countries, the states of the
former Yugoslavia, Japan, Mauritius, Turkey, Bermuda, Jamaica and Israel,
receive the same pension from the UK Government as they would receive if they
lived here: i.e., their Basic Retirement Pensions are uprated. Of some 760,000
pensioners and widow beneficiaries who live abroad, some 330,000 receive the
annual uprating. The remainder do not. The great majority of the remainder
live in the Old Commonwealth countries mentioned above.
- In some
respects, the position of the Claimant is not representative. A pensioner who
lives abroad receives initially the full pension that he would have received
if he had remained in this country. He is denied the uprating for inflation
from the date of his emigration or if earlier the date of his qualifying for
his pension: in effect, his pension is frozen at the amount payable when he
reached 65 if he had already emigrated or when he emigrated if he did so
subsequently. (If he returns to Great Britain, his uprated pension is paid
while he is here, but if he leaves his pension reverts to its previous
amount.) The effect on the Claimant has so far been relatively minor: she has
not received the small percentage uprating applied in 2001. The effect on
those who retired long ago is more substantial and may be dramatic. Mr William
Hayes, who lives in Australia, reached 65 in 1972. He receives a pension of
the inconsiderable sum of £6.75 a week, less than one-tenth of the sum of
£72.50 that would be paid to a pensioner with a complete contribution record
who retired last year. Someone who retired as recently as 1990 receives only
£46.90 a week.
- Very many of
the expatriate UK pensioners who do not receive uprated pensions have a strong
and understandable sense of grievance. They paid their contributions
calculated in the same way as pensioners now living here and in, say, the USA,
yet they do not receive the same pension. They feel that they have been
deprived of an increasingly substantial part of the fruit of their
contributions. The real value, at least in the UK, of their pensions is
declining from year to year. As a result, they have formed associations to
press their cause for equal treatment. As will be seen, before the coming into
force of the Human Rights Act 1998 a number of them made applications to the
European Commission of Human Rights, complaining that their rights under
Article 1 of the First Protocol and under Article 14 had been infringed. Their
applications were unsuccessful. However, they contend that recent developments
in the jurisprudence of the European Court of Human Rights establish that the
UK Government has indeed infringed their rights under those Articles.
- In her second
witness statement, the Claimant suggested that she had not been informed that
her pension would be frozen when she decided to pay her voluntary
contributions from South Africa. That allegation has not been pursued on her
behalf. Indeed, it is clear that the literature distributed by the Department
of Social Security (and sent to her) was explicit and clear as to the position
of UK pensioners who live in South Africa. The issues pursued on behalf of the
Claimant are not dependent on her individual facts, and turn on the provisions
of the applicable UK legislation and of Article 1 of the First Protocol and
Article 14 of the Convention.
The Issues
- Article 1 of
the First Protocol is as follows:
Protection of
Property
Every natural or
legal person is entitled to the peaceful enjoyment of his possessions. No one
shall be deprived of his possessions except in the public interest and subject
to the conditions provided for by law and by the general principles of
international law.
The preceding
provisions shall not, however, in any way impair the right of a State to
enforce such laws as it deems necessary to control the use of property in
accordance with the general interest or to secure the payment of taxes or
other contributions or penalties.
- In summary,
the Claimant's contentions under Article 1 are as follows:
- Her state
pension, or alternatively its uprating, are pecuniary rights, and therefore
"possessions" within the meaning of Article 1 of the First Protocol.
- The failure
of the UK Government to pay her the amount of the annual uprating wrongfully
deprives her partly or wholly of one or other of those possessions, i.e.,
part of her pension and the entirety of the uprating.
- Mr Eadie, on
behalf of the Secretary of State, accepted that the right to a contributory
pension is protected by Article 1 of the First Protocol. However, he submitted
as follows:
- Article 1
does not confer a right to a pension in any particular amount, and is
therefore not infringed by the failure to pay uprating to the Claimant.
- The right
protected by Article 1 of the First Protocol is defined by domestic law.
Since UK law does not confer (and has never conferred) a right to an uprated
pension on pensioners living in South Africa, the Claimant has not been
deprived of any right, and therefore of any possession, within the meaning
of Article 1.
- The decision
of the Government not to pay uprating to the Claimant and to those in her
position is objectively and reasonably justified and is therefore a
permissible deprivation of such possession as she may have.
- Article 14 is
as follows:
Prohibition of
discrimination
The enjoyment of
the rights and freedoms set forth in this Convention shall be secured without
discrimination on any grounds such as sex, race, colour, language, religion,
political, or other opinion, national or social origin, association with a
national minority, property, birth or other status.
- It is common
ground that there may be a breach of Article 14 without there having been a
breach of any other Article of the Convention. Clearly, Article 14 adds to the
protection conferred by the other provisions of the Convention. It is not
however every act of discrimination that is within the scope of Article 14: it
protects only "the enjoyment of the rights and freedoms set forth in this
Convention". In Gaygusuz v Austria (1996) 23 EHRLR 230, the Court put
the matter in terms that constitute a virtual formula applied in other cases:
"According to the
Court's established case-law, Article 14 of the Convention complements the
other substantive provisions of the Convention and the Protocols. It has no
independent existence since it has effect solely in relation to "the enjoyment
of the rights and freedoms" safeguarded by those provisions. Although the
application of Article 14 does not presuppose a breach of those provisions –
and to this extent it is autonomous – there can be no room for its application
unless the facts at issue fall within the ambit of one or more of them."
- Mr Drabble
submitted that the complaint in the present case is "within the ambit" of
Article 1 of the First Protocol, not least because the right to a state
pension is a right protected by Article 1. He submitted that the Claimant has
been the subject of discrimination, on the ground of her residence in South
Africa, as compared with UK pensioners living in this country and in those
other countries in which uprating is paid.
- Mr Eadie
submitted:
- If the
Claimant has no possession within the meaning of Article 1 of the First
Protocol (as he submitted), she has no claim within the ambit of Article 14
read with Article 1 of the First Protocol.
- The basis of
the differential treatment of the Claimant and others to whom comparison was
made was not "any ground such as sex, race .... or other status" to which
Article 14 applies.
- In any
event, the decision of the Government not to pay uprating to the Claimant
and to those in her position is objectively and reasonably justified.
- The above
submissions of the parties raise the following issues:
- Is the state
pension or the uprating a possession of the Claimant within the meaning of
Article 1 of the First Protocol?
- If so, is
the failure or refusal of the Government to pay an uprated pension to the
Claimant a deprivation of that possession for the purposes of Article 1 of
the First Protocol?
- If so, is
that deprivation justified?
- If uprating
is not a possession for the purposes of Article 1 of the First Protocol, is
the payment of uprating to some, but not all, pensioners nonetheless within
the scope of Article 14? I.e., does the Claimant's complaint relate to "the
enjoyment of the rights and freedoms set forth in (the) Convention?"
- If so, what
is the criterion applied to determine the differential treatment of
pensioners?
- Is that
criterion a ground "such as sex, race, ... or other status" that is, unless
objectively justified, prohibited by Article 14?
- If so, is
the differential treatment of the Claimant as compared with:
- pensioners
living in this country, or
- pensioners
living in states such as the USA, whose residents are paid uprated
pensions,
wrongful
discrimination in breach of Article 14?
- In addition,
in the course of my consideration of my judgment in this case, I concluded
that an additional, and more fundamental, issue must be considered, namely
whether the provisions of the Convention apply to persons, such as the
Claimant, who are outside the jurisdiction. That question arises by reason of
the terms of Article 1 of the Convention, which is as follows:
"The High
Contracting Parties shall secure to everyone within their jurisdiction the
rights and freedoms defined in Section I of this Convention."
The Claimant and
those like her are of course not within the territorial jurisdiction of the
United Kingdom.
- The express
jurisdictional qualification in Article 1 of the Convention is not expressly
reflected in the provisions of the Human Rights Act. If the Act is to be
construed as subject to the same qualification, and Article 1 refers to
presence within the territorial jurisdiction of the State, the Claimant is not
entitled to any of the rights conferred by the Convention, and she has no
rights under either Article 1 of the First Protocol or Article 14.
- In these
circumstances a further hearing took place on 8 May 2002 to enable to parties
to make submissions on the jurisdictional issue raised by Article 1. In view
of its importance I consider it first.
The
jurisdictional issue
- The natural
reading of Article 1 of the Convention limits Convention rights to persons
within the territorial jurisdiction of the High Contracting Parties. Prima
facie, the jurisdiction of states in international law is territorial.
This presumption is part of English Law: Parliament is presumed to intend an
Act to extend to each territory of the United Kingdom, but not to any
territory outside the United Kingdom: see Bennion, Statutory
Interpretation, 3rd edition, at section 106, page 252. The
comity of nations is doubtless one basis for this presumption: one state
should not be taken to interfere with the sovereignty of another state by
enacting legislation extending to its territory. Another is practicality: most
legislation cannot practically be applied to those present in another state.
- However,
jurisdiction need not refer simply to personal presence within the territory
of a state. Rights and property may be within the jurisdiction of a state,
though the owner of the right or of the property may be outside the state. The
French version of Article 1 of the Convention differs from the English:
Les Hautes Parties
contractantes reconnaissent à toute personne relevant de leur juridiction
les droits et libertés définis au titre I de la présente Convention.
The French text
suggests that the High Contracting Parties undertook to accord Convention
rights to all persons relevant to their jurisdiction. On this basis, a person
whose rights or property are within the jurisdiction of a state is entitled to
such of the Convention rights as apply to those rights or property. On this
basis, Article 1 refers not to the presence of persons within the territorial
jurisdiction, but to jurisdiction in a legal sense.
- That this is
the correct meaning to be given to Article 1 is confirmed by the jurisprudence
of the Court as well as State practice. In none of the cases in which
expatriate state pensioners have made applications to the Commission has the
territorial limitation of the Convention been explicitly referred to. In
Air Canada v UK (1995) 20 EHRR 150, the European Court of Human Rights
held that the seizure of an aircraft belonging to the Canadian applicant had
not infringed Article 1 of the First Protocol. It was not suggested that the
fact that the applicant was resident in Canada affected its rights under that
provision. (However, it may well be that Air Canada carried on business in the
UK, and was present within the jurisdiction in any event.) In Drozd and
Janousek v France and Spain (1992) 14 EHRR 745, the Court said, at
paragraph 91 of its judgment:
"The term
'jurisdiction' is not limited to the national territory of the High
Contracting Parties; their responsibility can be involved because of acts of
their authorities producing effects outside their own territory."
In Bankovic and
ors v Belgium and others (App. no. 52207/99), the Court rejected as
inadmissible the complaint of the applicants that the NATO bombing in Belgrade
was in breach of, principally, Article 2 of the Convention. The state
respondents relied on Article 1 of the Convention. They submitted that
jurisdiction in that provision referred to "the assertion or exercise of legal
authority, actual or purported, over persons": paragraph 36 of the judgment.
The Court accepted this interpretation: it referred, in paragraph 80 of the
judgment, to the Convention operating in the legal space (espace juridique)
of the Contracting States.
- In the present
case, the object of the application of the Convention is legislation that
confers benefits on individuals. It clearly operates in (and only in) the
"legal space" of the UK, and is therefore within the scope of the Convention.
There is no question of any possible infringement of the sovereignty of
another state or the exercise of sovereignty over those present in another
state. Mr Eadie, on behalf of the Secretary of State, did not submit that the
Claimant's case fell to be rejected on the basis of jurisdiction, and it was
therefore common ground between the parties that it falls to be considered on
the merits.
- Article 1 of
the Convention is not part of English Law: it was not included in Schedule 1
to the Human Rights Act. In the circumstances, it is unnecessary to consider
the question whether the ambit of the rights and freedoms legislated by the
Act differ from those of the Convention. I am bound to say that I should be
surprised if there were any such difference.
The United
Kingdom statutory provisions on pensions
- Of all
legislation, that relating to social security should be clear and accessible.
Regrettably, the relevant provisions are typically and unnecessarily complex,
involving the application and disapplication of other provisions: compare the
comments of Munby J in Ryan v Liverpool Health Authority [2002] Lloyd's
Rep Med 23, and of myself in Bell v Todd [2002] Lloyd's Rep Med 12. The
relevant provisions are summarised and so far as necessary set out in Annex 1
to this judgment. For present purposes, the effect of the statutory provisions
may be summarised as follows:
- Contrary to
popular perception, a person's contributions do not in whole or in part
constitute a fund from which her pension is later paid: there is nothing in
the legislation to warrant such a conclusion.
- The basic
state pension is contributory only in the sense that the payment of
sufficient contributions is a condition of entitlement. In addition, if more
than a quarter but less than the full number of qualifying years has been
achieved, a reduced rate pension is payable.
- Provided
Parliament approves the statutory instrument that the Secretary of State is
required to put before it by virtue of section 150(9) of the SSAA, the basic
state pension is uprated annually in line with UK inflation.
- However,
a person who is both absent from, and ordinarily resident outside, Great
Britain is disqualified from receiving any additional benefit payable as a
result of uprating after the date she reaches retirement age or her
emigration, whichever is later.
- It follows
from (d) that a person who is ordinarily resident abroad who returns to this
country temporarily receives her uprated pension while here; when she
returns to her country of residence however her pension reverts to its
previous sum.
- However,
uprated pensions are paid to those living in the countries referred to in
paragraph 4 above, with whom the UK has entered into reciprocal agreements
and in respect of whom appropriate Orders in Council have been made. Where
it is paid, no regard is had to inflation in the country of residence.
Finance and
History
- The National
Insurance scheme, including the payment of state pensions, is financed on a
"pay as you go" basis, that is, current National Insurance contributions to
the National Insurance Fund ("NIF"), mainly from employers, employees and the
self-employed, fund current benefits. Thus a person's contributions fund not
her own benefits, but those of others. As the Social Security Committee of the
House of Commons stated in its Third Report of January 1997 ("the Social
Security Committee Report"):
"13. The reality
is that National Insurance operates as a form of taxation, with the benefits
being paid out on a pay as you go basis from a notional fund topped up as
required by grants from the Exchequer. The record of contributions still
serves as a control for determining the amount of pension payable, but even
this principle has been blurred by the introduction of home responsibilities
protection and credits, while the availability of means tested Income Support
and Housing Benefit has to some extent replaced the old age pension itself as
the principal defence against poverty in old age."
- The rates and
levels of contributions are set each year to ensure so far as practicable that
the overall income to the NIF is sufficient to pay for the various benefits.
When necessary, the income from contributions is supplemented by a Treasury
grant, i.e. from general taxation. The current contribution rates naturally do
not include an allowance for uprating all retirement pensions paid to those
who have chosen to reside abroad. Given the amount required to fund payment of
pension uprating to those living in South Africa, New Zealand, Australia and
Canada, it follows that, if uprating were applicable to their pensions, either
contributions would have to be increased or the additional cost financed out
of other taxation. (I ignore, for present purposes, the possibility of
borrowing to fund the cost.)
- Provision
could be made by UK legislation for the payment of uprated pensions to
pensioners living abroad without the necessity of any reciprocal agreement
with their country of residence. In practice, however, uprated pensions are
paid only to those living in countries with which the UK Government has
entered into a reciprocal agreement requiring their payment.
- According to
the DSS Memorandum on the uprating of state retirement pensions payable to
people resident abroad submitted to the Social Security Committee of the House
of Commons:
"17. The main
purpose of reciprocal agreements so far has been to provide a measure of
social protection for workers, and the immediate members of their families,
when moving from one to country to the other during their working lives. In
effect, they generally prevent such workers from having to contribute to both
countries' Social Security schemes at the same time while ensuring that they
retain benefit cover from either one country or the other. On reaching
pensionable age, such workers who have been insured in two or more countries'
schemes can receive a pension from each which reflects the amount of their
insurance in each.
18. Whether a
reciprocal Social Security agreement with another country is entered into
depends on various factors, among them the numbers of people moving from one
to the other, the benefits available under the other country's scheme, how far
reciprocity is possible and the extent to which the advantages to be gained by
an agreement outweigh the additional expenditure likely to be incurred by the
UK in negotiating and implementing it. Where an agreement is in place, the
flow of funds may differ depending on the level of each country's benefits and
the number of people going in each direction.
19. Since June
1996, the Government's policy has been that future reciprocal agreements
should normally be limited to resolving questions of liability for social
security contributions."
- Between 1948
and 1992 the UK entered into reciprocal social security agreements with a
number of foreign states. With one minor exception, the agreements entered
into after 1979 fulfilled earlier commitments made by the UK Government.
Agreements with Australia, New Zealand and Canada came into force in 1953,
1956 and 1959 respectively, but these did not require payment of uprated
pensions. The agreement with Australia was terminated by it with effect from 1
March 2001, because of the refusal of the UK Government to pay uprated
pensions to its pensioners living in Australia.
- Uprating has
never been applied to those living in South Africa, or indeed to the residents
of any of Australia, Canada and New Zealand. They have never had a statutory
entitlement to uprating of their pensions. According to the Social Security
Committee Report:
"It is impossible
to discern any pattern behind the selection of countries with whom bilateral
agreements have been made providing for uprating."
- The EC
Regulations on Social Security for Migrant Workers require uprating of
benefits throughout the European Union. In practice, the entry of the UK into
the EC had little effect on the provision for uprating pensions in the Member
States, because there were pre-existing reciprocal agreements with all of them
except Denmark providing for their payment.
- A responsible
UK Minister has admitted that there is no consistent or coherent pattern for
these differences other than the intention to save cost. The then Minister of
State, Mr Jeff Rooker, stated in the House of Commons on 13 November 2000:
"I have already
said I am not prepared to defend the logic of the present situation. It is
illogical. There is no consistent pattern. It does not matter whether it is in
the Commonwealth or outside it. We have arrangements with some Commonwealth
countries and not with others. Indeed, there are differences among Caribbean
countries. This is an historical issue and the situation has existed for
years. It would cost some £300 million to change the policy for all
concerned..."
- The cost of
comprehensive uprating would presumably now exceed that figure of £300
million. The 1996 DSS Memorandum stated:
"11. Agreeing to
additional expenditure on pensions paid overseas would be incompatible with
government's policy of containing the long term costs of the social security
system to ensure that it remains affordable.
12. In June and
July 1995, during the passage of the Pensions Bill, amendments were tabled in
both Houses calling for upratings to be paid. All were defeated by large
majorities."
- According
to the evidence filed on behalf of the Secretary of State:
"Successive
Governments have taken the view that the level of increases in retirement
pensions relates to conditions in the UK and that it would not be right to
impose an additional burden on contributors and taxpayers in the UK in order
to pay pension increases to people who have chosen to become resident
elsewhere in the world."
State practice
- There is
relatively little material before me to show the practice of other states in
relation to payment of pensions to ex-patriots. Information contained in the
appendix to the DSS Memorandum was drawn from a 1993 research report, and is
set out as annex 2 to my judgment (supplemented, in the case of Australia, by
the information in paragraph 27 of the Memorandum). It will be seen that there
was no consistent practice among the seven states referred to.
- The United
Kingdom is the only OECD country that discriminates between pensioners in
different overseas countries.
Convention
rights
- The parties'
submissions referred to above reflect the jurisprudence of the European Court
of Human Rights and the decisions and opinions of the Commission, to which I
refer below. The European jurisprudence was reviewed by Moses J in Hooper
and ors v Secretary of State for Work and Pensions [2002] EWHC 191 (Admin)
and Wilson J in The Queen on the application of Reynolds v Secretary of
State for Work and Pensions [2002] EWHC 426 (Admin), and I do not propose
to consider all of the material that has been put before me.
- In
Alconbury [2001] 2WLR 1389, Lord Slynn of Hadley said at paragraph 26:
"Although the
Human Rights Act 1998 does not provide that a national court is bound by these
decisions it is obliged to take account of them so far as they are relevant.
In the absence of some special circumstances it seems to me that the court
should follow any clear and constant jurisprudence of the European Court of
Human Rights. If it does not do so there is at least a possibility that the
case will go to that court, which is likely in the ordinary case to follow its
own constant jurisprudence."
Decisions of the
Commission are not of the same level as those of the Court. Where, however,
there is a clear and constant line of decisions of the Commission that are not
inconsistent with those of the Court, good reason is required if this Court is
to decline to follow them.
- The starting
point is the opinion of the Commission in Müller v Austria (App. No.
5849/72, Comm. Report 1.10.75, 73 DR 19). The position was subsequently
helpfully summarised by the Commission in T v Sweden (App. No.
10671/83) (1986) EHRR 269:
"The Commission
recalls its constant case-law, according to which the right to a pension is
not as such guaranteed by the Convention. At the same time the Commission has
frequently held that the payment of contributions to a pension fund may in
certain circumstances create a property right in a portion of such a fund and
a modification of the pension rights under such a system could therefore in
principle raise an issue under Article 1 of Protocol No. 1. The Commission has
added, however, that "even if it is assumed that Article 1 of Protocol No. 1
guarantees persons who have paid contributions to a special insurance system
the right to derive benefit from the system, it cannot be interpreted as
entitling that person to a pension of a particular amount" (see Müller v
Austria, Comm. Report 1.10.75, para. 30, D.R 3 p.25)."
- In X v
Italy (App. No. 7459/76), the Commission rejected as manifestly
ill-founded a claim of infringement of Article 1 of the First Protocol on the
basis that the applicant had not satisfied the requirements under his domestic
law for the payment of a pension.
- JW and EW v
UK (App. No. 9776/82) was the first of the cases in which the Commission
considered a complaint that the UK Government's failure to pay an uprated
pension infringed the pensioner's Convention rights. The applicants were
emigrating to Australia. The Commission rejected the complaint as
inadmissible. In view of the relevance of their decision I shall set out the
reported extract in full.
"3. The Commission
has considered the applicants' complaint under Article 1 of the Protocol. It
first recalls that it has previously held that although this provision does
not as such guarantee a right to a pension, the right to benefit from a social
security system to which a person has contributed may in some circumstances be
a property right protected by it. However the Commission also held that
Article 1 does not guarantee a right to a pension of any particular amount,
but that the right safeguarded by Article 1 consists, at most, "in being
entitled as a beneficiary of the social insurance scheme to any payments made
by the fund" (App. No. 5849/72, Müller v. Austria, D.R 3, p.25 at p.
31). It has further held that before the right to benefit protected by Article
1 can be established, it is necessary that the interested party should have
satisfied domestic legal requirements governing the right (App. No. 7459/76,
X. v. Italy, D.R. 11, p. 114).
In the present
case when the applicants emigrate to Australia their entitlement to benefit
from the United Kingdom pension scheme will come to be regulated by different
rules of domestic law, under which they will cease to qualify for payment of
future pension increases contemplated by the relevant legislation. To that
extent they will not satisfy domestic legal requirements to benefit from the
United Kingdom pension scheme. Even if the right to benefit from a scheme will
normally also apply to the regular increases this is not necessarily the case
where a person leaves the country where the specific scheme operates. The
Commission notes that in many countries specific restrictions as to the
payment of social security benefits to foreign countries exist or have existed
(cf. App. No. 6572/74 X. v. Federal Republic of Germany, D.R. 8, p.
70). In the Commission's view such operation of domestic law does not amount
to a deprivation of possessions infringing Article 1 of the Protocol and there
is thus no appearance of any breach of this provision.
4. The Commission
has nevertheless further considered the applicants' complaints in the light of
Article 14 of the Convention which provides that enjoyment of Convention
rights shall be secured without discrimination. In this respect it notes that
one element of the applicants' complaint appears to be that they will receive
less favourable treatment under the United Kingdom pension scheme than would
other persons who have paid the same contributions but who have remained in
the United Kingdom or emigrated to other countries. The Commission has
therefore considered whether such differential treatment could amount to
discrimination in the enjoyment of their rights under Article 1 of the
Protocol contrary to Article 14.
The Commission
notes that it is a common feature of international life that social security
agreements are entered into between different countries for the purpose of
regulating the rights of persons moving from one country to another under the
social security systems of each country. Such agreements commonly provide for
the substitution, to a greater or lesser degree, of benefits under one system
for those due under another. Under the Agreement between the United Kingdom
and Australia the applicants' rights under the United Kingdom social security
scheme are to some extent restricted and replaced by certain rights under the
Australian scheme. The applicants, in their particular circumstances, will
apparently be less well off than they would have been if they had remained in
the United Kingdom or if they had gone to certain other countries. However it
is almost inevitable that where a person in effect changes over from one
social security system to another, he may find that his entitlements differ
from those of persons in other countries. Depending on the circumstances such
differences may or may not favour the individual. Furthermore the Commission
notes that the applicants will only lose the benefit of future increases in
their pensions, whose purpose broadly speaking is to compensate for rises in
the cost of living in the United Kingdom. Given that they will not be living
in the United Kingdom it appears reasonable that this element in their pension
rights in particular should be replaced by the possibility of benefiting under
the system of the country they are moving to."
- There is no
longer a social security agreement between Australia and the UK, and there has
never been an agreement with South Africa. However, I do not read the
Commission's decision as depending on the existence of such an agreement. That
this interpretation of the decision is correct is confirmed by the next
decision of the Commission to which I must refer.
- Two years
after its decision in JW and EW v UK, the Commission considered another
complaint as to the Government's failure to pay uprated pensions, this time by
an applicant who had emigrated to South Africa. In Corner (App. No.
11271/84), the Commission rejected as manifestly ill-founded the complaint
that the failure to pay uprating infringed Article 1 of the First Protocol and
Article 14. (There was also a complaint of breach of Article 2 of Protocol 4,
but this was rejected because the UK had not ratified that Protocol.) The
Commission stated:
"The Commission
recalls that it has previously held that, although Article 1 of Protocol No. 1
does not, as such, guarantee a right to a pension, the right to benefit from a
Social Security system to which a person has contributed may, in some
circumstances, be a property right protected by it. ... However, the
Commission has also held that Article 1 does not guarantee a right to a
pension of a particular amount, but that the right safeguarded by Article 1
consists, at most, "in being entitled as a beneficiary of the social insurance
scheme to any payments made by the fund" (Dec. No. 5849/72, 1.10.75, D.R. 3 p.
25 at p. 31) in accordance with domestic legal requirements (Dec. No. 7459/76,
5.10.77, D.R. 11 p. 114). Further, the Commission has held that the "freezing"
of a pension at a particular level when a person leaves the United Kingdom
does not amount to a deprivation of possessions infringing Article 1 of the
Protocol. (Dec. No. 9776/82, 10.83 to be published in D.R. 34). Moreover, the
different treatment of persons entitled to pensions who remain in the country
of payment compared with those who emigrate is justified on the grounds that
the applicant will only lose the benefit of future increases in the pension,
whose purpose broadly speaking is to compensate for rises in the cost of
living in the United Kingdom and which the applicant will not have to endure
(Dec. No. 9776/82, loc. cit.). The Commission also considers that the economic
state of third countries is not a matter which domestic pension authorities
should be obliged to consider."
- It is
difficult to distinguish the present case from Corner, which if correct
is fatal to the Claimant's case. Moreover, Corner, unlike JW and EW
v UK, cannot be explained on the basis of the reciprocal agreement between
the UK and Australia. However, it and other pre-1996 decisions must be
reconsidered in the light of the judgment of the European Court of Human
Rights in Gaygusuz v Austria (1996) 23 EHRLR 230. The Applicant
was a Turkish national resident in Austria. The Austrian Government had
refused to pay him emergency assistance, a social security benefit,
entitlement to which depended on the payment of contributions into the state
unemployment insurance fund. Austrian law confined entitlement to emergency
assistance to Austrian nationals. Since the applicant had no right to benefit
under Austrian law, the Austrian Government contended that he had no right
within the scope of Article 14. The Court held that the Austrian Government
had acted in breach of Article 14 taken in conjunction with Article 1 of the
First Protocol. It said:
"41. The Court
considers that the right to emergency assistance in so far as provided for in
the applicable legislation – is a pecuniary right for the purposes of Article
1 of Protocol No. 1 (P1-1). That provision (P1-1) is therefore applicable
without it being necessary to rely solely on the link between entitlement to
emergency assistance and the obligation to pay "taxes or other contributions".
Accordingly, as
the applicant was denied emergency assistance on a ground of distinction
covered by Article 14 (art. 14), namely his nationality, that provision (art.
14) is also applicable (see, among other authorities, mutatis mutandis, the
Inze v. Austria judgment of 28 October 1987, Series A no. 126, p. 18, para.
40, and the Darby v. Sweden judgment of 23 October 1990, Series A no.
187, p12, para. 30).
B. Compliance with
Article 14 of the Convention taken in conjunction with Article 1 of Protocol
No. 1 (art 14+P1-1)
42. According to
the Court's case-law, a difference of treatment is discriminatory, for the
purposes of Article 14 (art. 14), if it "has no objective and reasonable
justification", that is if it does not pursue a "legitimate aim" or if there
is not a "reasonable relationship of proportionality between the means
employed and the aim sought to be realised". Moreover the Contracting States
enjoy a certain margin of appreciation in assessing whether and to what extent
differences in otherwise similar situations justify a different treatment.
However, very weighty reasons would have to be put forward before the Court
could regard a difference of treatment based exclusively on the ground of
nationality as compatible with the Convention.
...
45. The Austrian
Government submitted that the statutory provision in question was not
discriminatory. They argued that the difference in treatment was based on the
idea that the State has special responsibility for its own nationals and must
take care of them and provide for their essential needs. Moreover, sections 33
and 34 of the Unemployment Insurance Act laid down certain exceptions to the
nationality condition. Lastly, at the material time, Austria was not bound by
any contractual obligation to grant emergency assistance to Turkish nationals.
46. The Court
notes in the first place that Mr Gaygusuz was legally resident in Austria and
worked there at certain times (see paragraph 10 above), paying contributions
to the unemployment insurance fund in the same capacity and on the same basis
as Austrian nationals.
...
50. The Court ...
finds the arguments put forward by the Austrian Government unpersuasive. It
considers, like the Commission, that the difference in treatment between
Austrians and non-Austrians as regards entitlement to emergency assistance, of
which Mr Gaygusuz was a victim, is not based on any "objective and reasonable
justification".
51. Even though,
at the material time, Austria was not bound by reciprocal agreements with
Turkey, it undertook, when ratifying the Convention, to secure "to everyone
within [its] jurisdiction" the rights and freedoms defined in section I of the
Convention.
52. There has
accordingly been a breach of Article 14 of the Convention taken in conjunction
with Article 1 of Protocol No. 1 (art. 14+P1-1)."
- The fact that
the Court did not find a breach of Article 1 of the First Protocol taken alone
supports the view that a pecuniary right that may qualify as a possession for
the purposes of that provision is defined by domestic law, in that case the
law of Austria. A person who does not qualify for that right under domestic
law is not "deprived" of it for the purposes of that Article. However,
Gaygusuz establishes that a domestic law that disqualifies an individual
from enjoyment of a pecuniary right of a kind protected by Article 1 of the
First Protocol on grounds prohibited by Article 14 without objective and
reasonable justification infringes Article 14.
- The second
sentence of paragraph 41 of the Court's judgment is framed in not untypical
Delphic terms. It is unnecessary for me to decide what the Court intended to
lay down, but I read it as holding that a state benefit may be a pecuniary
right protected by Article 1 of the First Protocol even if it is not a
contributory benefit entitlement to which is conditional on compulsory payment
of a tax or other contribution. This is logical. There would be some logic in
restricting Article 1 to pecuniary rights derived from a defined investment
funded by individual contributions. In such a case the right is a true right
of property. Where, however, the payment of contributions is no more than a
condition for entitlement to a benefit (as I assume was the position in
Gaygusuz), it is difficult to see why entitlement to a benefit resulting
from satisfaction of that condition should create a pecuniary right protected
by Article 1, when entitlement to benefit resulting from satisfaction of some
other condition should not. In a case such as the present, the payment of
benefit does not create a right of property in any real sense. The earlier
decisions of the Court following Gaygusuz indicated that my reading was
incorrect (see Skorkiewicz, Coke and Bellet v France
(App. no. 4083332/98)), and Moses J and Wilson J similarly held that
non-contributory benefits were outside the scope of Article 1 of the First
Protocol in Hooper and in Reynolds. However, in Walden
v Liechtenstein (Decision no. 33916/96) (a decision on admissibility only)
the Court held that a non-contributory pension was protected by Article 1 of
the First Protocol. In Shackell v UK (App No. 4585/99), the Court
rejected the applicant's complaint as manifestly ill-founded, but in the
course of doing so was prepared to assume that a non-contributory social
security benefit was a pecuniary right for the purposes of Article 1 of the
First Protocol. In Matthews v United Kingdom (App. No. 40302/98) (also
a decision on admissibility only), the Court held that an allegation of
discrimination on grounds of gender in relation to a bus pass, a
non-contributory benefit, "raises complex issues under Article 14 of the
Convention and Article 1 of Protocol No. 1 taken together".
- However, I
entirely agree with Moses J, in paragraph 50 of his judgment in Hooper,
that a pecuniary right protected by Article 1 is defined by the domestic
legislation that created it. I refer in particular to the decision of the
Court in Bellet, in which the Court stated:
"... while no
right to the grant of a pension is, as such, guaranteed by the Convention,
compulsory contributions to a retirement fund may give rise, in certain cases,
to a right of ownership over part of the funds .... However, it is still
necessary, in order for such a right to accrue, that the persons concerned
should fulfil the conditions laid down by national law."
- In the present
case, UK legislation has never conferred a right on the Claimant to the
uprating of her pension while she lived in South Africa. She does not satisfy
and has never satisfied the conditions for payment of an uprated pension. She
has never had a right to an uprated pension. There can therefore be no
question of her having been deprived of any such right.
- In my
judgment, therefore, there has been no infringement of Article 1 of the First
Protocol. I add, however, that it does not follow that legislation that
removes a right protected under Article 1 of the First Protocol cannot
infringe that provision. That case is not before me. I also do not have to
consider Mr Eadie's submission that the claim under Article 1 of the First
Protocol must fail because that provision does not guarantee payment of a
pension of any particular amount, and the Claimant has not been deprived of
the substance of the right. I do not find the distinction between loss of part
of a sum payable by reason of a pecuniary right and impairment of the
substance or essence of the right (see Jankovic v Croatia Dec. no.
43440/98) an easy one.
- I therefore
turn to consider the allegation of breach of Article 14 read with Article 1 of
the First Protocol.
Article 14 read
with Article 1 of the First Protocol
The questions
to be considered
- In Michalak
v London Borough of Wandsworth [2002] EWCA Civ 271, Brooke LJ said:
"It appears to me
that it will usually be convenient for a court, when invited to consider an
Article 14 issue, to approach its task in a structured way. For this purpose I
adopt the structure suggested by Stephen Grosz, Jack Beatson QC and the late
Peter Duffy QC in their book Human Rights: The 1998 Act and the European
Convention (2000). If a court follows this model it should ask itself the
four questions I set out below. If the answer to any of the four questions is
"no", then the claim is likely to fail, and it is in general unnecessary to
proceed to the next question. These questions are:
(i) Do the facts
fall within the ambit of one or more of the substantive Convention
provisions...?
(ii) If so, was
there different treatment as respects that right between the complainant on
the one hand and the other persons put forward for comparison ("the chosen
comparators")?
(iii) Were the
chosen comparators in an analogous situation to the complainant's situation?
(iv) If so, did
the difference in treatment have an objective and reasonable justification: in
other words, did it pursue a legitimate aim and did the differential treatment
bear a reasonable relationship of proportionality to the aims sought to be
achieved?"
- As I indicated
in paragraph 15 above, in my judgment, there is a fifth question to be
considered, although it may well be that Brooke LJ intended it to be
encapsulated in his question (iii). That question is: is the basis for the
different treatment of the complainant as against that of the chosen
comparators based on "any ground such as sex, race, colour, language...or
other status" within the meaning of Article 14? Differences in treatment based
on other factors are not discriminatory for the purposes of Article 14: see,
for example, the decision of the Commission in P v UK (App. No.
14751/89) and those referred to in paragraph 55 below.
(i) Do the
facts fall within the ambit of a substantive Convention provision?
- The answer is
clearly Yes: the present claim falls within the ambit of Article 1 of the
First Protocol. The applicant in Gaygusuz succeeded although he had no
right under Article 1 of the First Protocol. It follows from the decision of
the Court in that case that Article 14 read with Article 1 of the First
Protocol applies equally in the present case.