Charges for work permits

Keith Rogerson writes:
It seems that EU nationals are still required to register at the Employment and Training Corporation in order for the ETC to monitor the number of foreigners working in Malta. No problem with that. It is quite understandable.

However, my partner recently applied for a permit and the relevant form states that there is a Lm25 fee for the permit. However, the same form goes on to state that "No fee is due when a request for a new application or extension of a licence is made."

When we pointed this out we were told that the fee is for the permit and not for the application!

Can this be correct? I was not aware that EU nationals had to actually pay for a work permit. Perhaps you would like to have a look at this one.

From enquiries that I have made it appears that EU nationals are indeed requested to pay Lm25 for the permit when this is issued while non-EU nationals must pay Lm40 on application and Lm20 when it is issued.

The question here is whether such a charge can be imposed on EU nationals, there being no question that a fee can be imposed on non-EU nationals.

Under EU law, EU nationals may seek work in any EU country without any need to obtain a work permit. The work permit system was only retained in Malta by way of exception on the basis of a concession that was agreed during accession negotiations.

I have often had occasion to explain that during accession negotiations, Malta and the EU agreed on a concession whereby Malta would retain its work permit system until 2011 and even withhold the granting of work permits if the influx of foreign workers created a serious disturbance to Malta's labour market.

The retention of the work permit system enables Malta to gauge the number of EU nationals seeking to work in Malta. But as long as no serious disturbance arises and as long as Malta does not need to withhold work permits, EU nationals applying for work permits should be issued with a permit "automatically".

I stress the word "automatically" because while acknowledging that Malta may retain the work permit system, the Accession Treaty adds that Malta "shall issue such work permits automatically".

Now given that the work permit system is only being retained by way of exception, rather than as a rule, I would say that one has to be careful about the way that this system is administered and on how it treats EU nationals.

Imposing a fee on the granting of a work permit does not seem to me to be "automatic" and may therefore be dubious, considering that EU nationals are entitled to such a permit as of right - a right which can only be suspended if Malta applies its safeguard, as explained above.

Since work permits are not required in other EU countries, an analogy can be drawn with the principle of free movement of goods and the extent to which charges may be imposed.

There is a great deal of case law in this regard and in particular on whether charges imposed on goods that move within the EU constitute charges that are equivalent to customs duties and therefore illegal.

In these cases, the European Court has been faced with the defence that the charge imposed on imported goods is justifiable because it is merely a payment for a service which the state has rendered to the importer, and that therefore it should not be regarded as a duty. The court has been willing to accept this argument in principle. However, it has cautioned against presenting a charge in this way when in reality the intention was to impede imports. Therefore, the court has interpreted this exception strictly and has only accepted the charge to the extent that it compensated the actual cost of the service that was actually and individually provided.

Applying this jurisprudence, by analogy, to this case, it may perhaps be argued that the imposition of a fee for the granting of a work permit is justified because it represents a charge for the actual service rendered. Indeed, the charge itself does not appear to be prohibitive and certainly cannot be said to be intended to discourage free movement of persons.

However, this argument may be tenuous in that the charge jars with the treaty-enshrined commitment to grant the work permit "automatically". Imposing a charge can only mean that the work permit is not automatic because it would presumably not be granted to whoever refuses to pay the charge.

So if imposing a charge means that the work permit is not granted automatically, then the charge can arguably be challenged.

Finally, on the actual tariffs. In charging different rates between EU nationals and non-EU nationals one has to be careful to ensure that EU nationals are not asked to pay more than non-EU nationals. Charging EU nationals Lm25 when a permit is issued as against Lm20 for non-EU nationals, even if EU nationals appear to be exempt from any application fees, is also dubious.

Readers who would like to raise issues or ask a question to Dr Busuttil are invited to send an e-mail to contact@simonbusuttil.com or through www.simonbusuttil.com