House of Lords
|Session 2001- 02
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|Judgments - Chief Adjudication Officer v. Stafford and Another
HOUSE OF LORDS
Lord Slynn of Hadley Lord Cooke of Thorndon Lord Hope of Craighead Lord Millett Lord Scott of Foscote
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
CHIEF ADJUDICATION OFFICER
STAFFORD AND ANOTHER
ON 28 JUNE 2001
 UKHL 33
LORD SLYNN OF HADLEY
1. Mr Banks was employed in a junior school as an assistant for children with special needs. During term time in 1995/1996 he worked for periods of 20 hours a week. He did not work during school holidays and was not paid for those periods. In respect of the summer holidays in 1996 he applied for income support under the Social Security Contributions and Benefits Act 1992 and the Income Support (General) Regulations 1987 (SI 1987/1967). On 7 October 1996 income support was replaced by a jobseeker's allowance under the Jobseekers Act 1995 and the Jobseeker's Allowance Regulations 1996 (S1 1996/207). For the half term holiday in October 1996 he applied for the jobseeker's allowance. Although on an earlier occasion a different officer and tribunal had awarded him the earlier benefit the adjudication officer and the social security appeal tribunal rejected these new claims. Commissioner Rowland allowed his appeal upholding his claims. The Court of Appeal unanimously reversed the commissioner:  1 All ER 686.
2. It does not seem that anyone has found this a straightforward or an easy case and there is much sympathy for Mr Banks who was not paid during the not insignificant periods of school holidays and who tried actively but unsuccessfully to obtain other employment during the two relevant periods. The question, however, for your Lordships is whether under these somewhat complex legislative provisions, properly interpreted, he is entitled to the allowances. It is accepted that the conditions of entitlement to the two allowances, though differently structured and sometimes differently phrased, are substantially the same and that on this appeal nothing turns on the difference between them. I accordingly refer to the earlier Act of 1992 which covers the first claim. The equivalent provisions of the jobseekers legislation are set out in the judgment of Auld LJ to which reference can be made.
3. Section 124 (1) of the 1992 Act provides that a person is entitled to income support if inter alia "(b) he has no income or his income does not exceed the applicable amount", and "(c) he is not engaged in remunerative work" and "(d) ... he is available for, and actively, seeking employment". The amount of support is the applicable amount if he has no income and the difference between his income and the applicable amount if higher if he has no income. The manner in which the amount payable for a period to which subsection (5) of section 124 applies is prescribed and that period can be for less than a week by virtue of subsection (6) of section 124. By section 137 (2) of the 1992 Act Regulations can be made "(c) as to what is or is not to be treated as remunerative work or as employment" and "(d) as to circumstances in which a person is or is not to be treated as (i) engaged in remunerative work".
4. Regulation 5 of the 1987 Regulations as amended deals with two linked but separate matters. The first is in paragraph (1) which defines remunerative work:-
5. Regulation 5 further provides
Paragraph (3B) took effect from 10 April 1995.
6. The application of these sections and regulations has given rise to sharp differences of opinion. Auld LJ has set out or summarised a number of passages from the decisions of commissioners in England and Scotland reflecting these differences. I refer to and gratefully adopt without repeating those passages from his judgment.
7. It was and is accepted on behalf of Mr Banks that his employment by the authority even with holiday breaks constituted one "recognisable cycle of work" from the beginning of one school year to the beginning of the next. Accordingly, since the number of hours for which he was engaged to work fluctuated, paragraph (2)(b)(i) of regulation 5 applies subject to paragraph (3B) and the number of hours for which he is engaged in work is to be determined by reference to the average of hours worked over the period of the cycle "including, where the cycle involves periods in which [he] does not work, those periods". However, it is said against him that since his recognisable cycle of work is one year at a school and includes periods of school holidays during which he is not required to work, those holidays are to be disregarded in establishing the average hours for which he is engaged in work. On that basis if the total school holidays are 14 weeks the total number of hours worked is divided by 38 and not by 52 to arrive at the average. The average is accordingly higher and in Mr Banks's case took him over the figure of 16 hours which was the cut off point for both income support and jobseeker's allowance.
8. The appeal tribunal found that Mr Banks had a continuing contract of employment from 1 September 1995 which was not due to expire at the end of the school year. The tribunal accepted that in 1995/1996 he worked 20 hours a week though initially he was working for 26 hours a week during the term from 3 September 1996. The commissioner found that "at the material time which I assume to be the term time periods adjacent to the holidays, in respect of which the claims are made, he was working for 20 hours a week." In the agreed statement of facts it is accepted for the purposes of this appeal that his hours of work fluctuated between about 20 to 26 hours per week during term times. On that agreement and on those facts I think it right to approach the case on the basis that the "number of hours for which he is engaged fluctuate" for the purposes of regulation 5 (2)(b) of the 1987 Regulations. The alternative approach of the appeal tribunal that the number of hours for which he was engaged "in work" (paragraph (2)(b) read with the opening words of paragraph (2)) fluctuated between 20 and 0 is more debatable since he was engaged to do no hours of work or to be in work in the vacation.
9. It is accepted, that in Mr Banks's case there was "a recognisable cycle of work" within the meaning of regulation 5 (2)(b)(i), ie one school year. It follows that "subject to" paragraph 3B of regulation 5, the number of hours for which he is engaged in work is to be determined by the average of hours worked over the period of the complete cycle including "where the cycle involves periods in which the person does no work, those periods". If that were the end of the provisions 52 weeks would be the relevant denominator.
10. However by paragraph (3B) his "recognisable cycle of work at a school is one year and includes periods of school holidays during which he does not work, those periods ... shall be disregarded in establishing the average hours for which he is engaged in work". If that applies the total number of hours worked is divided by 38 and not 52. The average is accordingly higher and in Mr Banks's case took him over the 16 hours.
11. It is said that this result of reading the two paragraphs so as to exclude school holidays in calculating the numerator is inconsistent with the provision of regulation 5 (1), by which for the purpose of defining remunerative work takes the work in which, because his hours fluctuate, is engaged on average "for not less than 16 hours a week, being work for which payment is made or which is done in expectation of payment". In Mr Banks's case he was not paid and did not expect to be paid during the vacation. Those 14 weeks must therefore be excluded from the relevant remunerative work.
12. Paragraph (3) which brings into the concept of being engaged in remunerative work periods of absence by reason of a recognised, customary or other holiday, does not apply because school holidays as such do not fall into those categories of holiday.
13. It is obvious that remunerative work indicates in ordinary language that the work is to be the subject of remuneration. If Mr Banks does not work and is not remunerated during the holidays it may sound strange to say that the holidays form part of "remunerative work". The question, however, is whether that is the result of the various provisions of regulation 5, since in principle it is perfectly possible for Parliament to provide, whether by a deeming provision or otherwise, that a person is "engaged in work" even "remunerative work", when he is not working and for which he is not being paid.
14. There does not seem to me any difficulty in reading paragraph (2)(b)(i) together with paragraph (3B). The former is dealing with the generality of workers. The latter takes out of the general category a particular group of workers.
15. The objective of regulation 5 as the heading shows is to identify "Persons treated as engaged in remunerative work". The criterion for being engaged in remunerative work is that a person must be "engaged in work" for not less than 16 hours a week unless his hours of work fluctuate, when an average has to be taken. Paragraph 5(2)(b)(i) identifies the overriding period where there is a recognisable cycle of work. That is a constant when applying sub-paragraph (b)(i) and paragraph (3B) which prescribe how the average is to be calculated in order to show whether the individual is engaged in remunerative work within the paragraph 5(1) definition. Paragraph 5(3B) in my opinion requires that in conducting the averaging exercise periods of holiday are to be disregarded. Paragraph (3B) does not say, contrary to paragraph (2)(b)(i), that the cycle is to be reduced from one complete cycle to that cycle (here one year) less the holiday period.
16. It is inherent in the process of averaging that there may be weeks when someone works and is paid for less than 16 hours and in principle there is no reason why throughout the period the average should not take into account a week or weeks in which no work is done or no work for which payment is made. That the week of no work when he is not "engaged in work" can be included, is evident from paragraph 5(2)(b)(i). The fact that the relevant hours for the purposes of paragraph 5(1) are hours for which payment is made or expected to be made does not prevent the scheme from laying down which weeks are to be taken into account for the purposes of averaging in paragraph (2)(b)(i). The regulation took the whole cycle. In paragraph (3B) it excluded the weeks of holiday. It does not seem to me that the fact that the claim here is made in respect of a week in which no work is done and for which he is not remunerated makes the position different from a case in which the claim is sought to be made for a week in which he is employed and remunerated. The averaging is the same in both cases. Accordingly I conclude that the Court of Appeal and the adjudication officer took the right denominator by excluding the holiday weeks.
17. My noble and learned friend, Lord Scott of Foscote, considers for reasons with which I have much sympathy that if the interpretation which he considers right is not accepted "the sooner the Secretary of State remedies the situation by making appropriate new Regulations the better". But it is to be noticed that Commissioner Rowlands, also greatly experienced in this field in adopting a result in favour of the appellant concluded
18. If the result arrived at by the Court of Appeal unanimously and by the majority of your Lordships is not a result which is now desired the Department will no doubt consider the position. I consider, however, that this appeal must be dismissed.
LORD COOKE OF THORNDON
19. The issue is whether, during the school holidays when he did not work at or for the school, the appellant, a special needs assistant in a junior school, was disqualified initially from receiving income support and later from receiving jobseeker's allowance by the statutory condition that he "is not engaged in remunerative work". The condition was laid down in turn by the Social Security Contributions and Benefits Act 1992, section 124(1)(c), and the Jobseekers Act 1995, section 1(2)(e). The answer depends on the interpretation of the relevant Regulations. It is sufficient to discuss the case in terms of the Income Support (General) Regulations 1987. The Jobseeker's Allowance Regulations 1996 are not, I think, significantly different in relation to such an issue as arises in the present case.
20. Regulation 5 of the 1987 Regulations is concerned throughout with defining when persons are to be treated as engaged in remunerative work. This is indicated accurately by its heading "Persons treated as engaged in remunerative work". I think that the answer to the issue is to be found by taking four straightforward steps as follows.
21. The first step is to note that, by regulation 5(1), where a person's hours of work fluctuate, remunerative work is work on which he is engaged on average for not less than 16 hours a week being work for which payment is made or which is done in expectation of payment. Thus the average hours are a key part of the criterion for determining whether he is engaged in remunerative work.
22. The next step is prescribed in the generality of cases of cyclical work by regulation 5(2)(b)(i). If there is a recognisable cycle of work, the average hours are to be ascertained by reference to the period of one complete cycle, including periods in which the claimant does no work. Thus in general a cyclical worker is to be treated as engaged in work throughout the whole cycle. This is for the purpose of averaging, which itself, as has been seen, is for the purpose of determining whether he is engaged in remunerative work.
23. But regulation 5(2)(b)(i), like the whole of paragraph 2, is expressly made subject to paragraph (3B), which provides -
This special and overriding provision applies to the present case. For the purpose of determining the average hours - and hence of determining whether the appellant is engaged in remunerative work within the meaning of regulation 5(1) - the school holidays are to be disregarded. That is to say, contrary to the general rule for cyclical workers, he is not to be treated as engaged in remunerative work during the school holidays.
24. That conclusion accords with the natural and ordinary use of language. One would not normally say that a person is engaged in remunerative work during weeks when he does no work. It is a conclusion which flows, in my view, from the language of these Regulations. To the extent, however, that they are ambiguous (as the differences of opinions in this and other cases suggest), I would adopt the approach that if those responsible for the Regulations wished to achieve a result different from the ordinary and natural one, the public were entitled to clearer language as regards the class of workers covered by regulation 5(3B). For other classes of cyclical workers, regulation 5(2)(b)(i) is clear enough. The effect of the addition of regulation 5(3B) has proved to be obscure; and I respectfully think that the fair and reasonable interpretation is the one that I favour.
25. That conclusion is also consistent with the judgments in the Court of Appeal in R v Ebbw Vale and Merthyr Tydfil Supplementary Benefits Appeal Tribunal, Ex p Lewis  1 WLR 420 (Lord Denning MR, Oliver and Watkins LJJ). But, as the facts and the statutory provisions in that case were different, I have not relied on it.
26. Conscious that the majority of your Lordships' Committee consider the foregoing reasoning simplistic, I respectfully add that as an alternative approach to the present appeal I prefer the opinion of my noble and learned friend Lord Scott of Foscote.
27. For these reasons I would allow the appeal.
LORD HOPE OF CRAIGHEAD
28. On 1 September 1995 the appellant Daniel John Banks began work as a special needs assistant at Denaby Main Junior School under a contract of employment with Doncaster Metropolitan Borough Council. His principal duties were to provide support to two children while they were attending the school. During term time the appellant worked 20 hours a week. He was not required by his contract to work, nor was he paid by his employer, during the school holidays. At the end of the summer term he applied for and obtained a change of duties under his contract. He undertook to do similar work for the same employer but with different children at a different school.
29. The summer holiday began on 22 July 1996. On that day the appellant claimed income support for the period when he was not working during the holiday and for which he was not paid. He then worked from the start of the next term on 3 September 1996 to the start of the autumn half term holiday. That holiday ran from 25 October 1996 to 3 November 1996. This was another period during which he was not required to work and for which he was not paid. On 25 October 1996 he claimed jobseeker's allowance for the period of the holiday. This was because income support had been brought to an end and replaced by the jobseeker's allowance on with effect from 7 October 1996. He resumed work at the school on 4 November 1996. His claims were based on the proposition that, although he was in employment under his contract with the education authority during the school holidays, he was entitled to benefit for the weeks during which he was not expected to work for his employer and for which he was not paid.
30. The issue which the appellant's claims has raised is one of general public importance. It relates to the entitlement to the benefit of what is now the jobseeker's allowance of all part-time and ancillary staff engaged at schools, other educational establishments or other places of employment under contracts with an annual cycle of work which includes holiday periods during which they do not work and for which they are not paid. The question whether the benefits are payable during these holiday periods is purely and simply one of statutory entitlement. The answer to it is to be found by construing the statutory and regulatory provisions which describe the entitlement to the benefit.
31. On 24 February 1999 Social Security Commissioner Rowland held that the effect of the regulations was that the appellant was entitled to income support and job seeker's allowance during the holidays: CIS/3216/1997; CJSA/3218/1997. On 29 July 1999 the Court of Appeal (Auld and Aldous LJJ and Rattee J) allowed an appeal against the commissioner's decision by the Chief Adjudication Officer:  1 All ER 686. An appeal in the case of another claimant to income support named Frank Stafford, whose wife was employed in a primary school to assist pupils with special educational needs, was allowed by the Court of Appeal on 29 July 1999 at the same time and for the same reasons as in the appellant's case. But Mr Stafford, who represented himself in the Court of Appeal, has not appealed against that decision to your Lordships' House.
32. Section 124(1) of the Social Security Contributions and Benefits Act 1992 provides that a person is entitled to income support if he satisfies four conditions. The relevant one for the purposes of this case is that stated in paragraph (c) of the subsection, which provides:
Section 137(2) of that Act provides that regulations may make provision for the purposes of that Part of the Act:
The relevant regulations are the Income Support (General) Regulations 1987 (SI 1987/1967).
33. The relevant conditions for entitlement to benefit for income support are reproduced in similar but not identical terms in the Jobseekers Act 1995. Section 1(e) of that Act provides that a claimant is entitled to a jobseeker's allowance if he "is not engaged in remunerative work." Paragraph 1 of Schedule 1 to that Act provides:
The relevant regulations are the Jobseeker's Allowance Regulations 1996 (SI 1996/207).
34. It is common ground that, although they differ in some respects both in wording and layout, the two sets of Regulations have the same effect. One of the basic rules is that only a person who is not engaged in remunerative work is entitled to benefit. But a person is not denied benefit merely because he does some work during the week for which he is paid or is entitled to expect payment. Benefit is denied only to those who are in remunerative work full time. The dividing line between full time work and work which is not full time work for this purpose is set at 16 hours of work each week. As the circumstances in which people work vary from case to case, provision is made as to how the number of hours for which a person is engaged in work is to be calculated.
35. In cases where the number of hours worked fluctuate the number of hours in which a person is engaged in work is to be determined by reference to the average of hours worked. Provision is made as to how that calculation is to be made in the case of a person who works at a school, other educational establishment or other place of employment whose cycle of work consists of one year but with school holidays or similar vacations during which he does not work. The appellant contends that the effect of the latter provision as to the period over which the hours of work is to be averaged is that the number of hours obtained by means of that calculation is to be applied only to the weeks during which the person is actually working. He maintains that it does not have the effect of deeming the person to be in remunerative employment in weeks during which he does not work and for which he is not paid.
36. The relevant provisions of the Income Support (General) Regulations 1987 as amended are to be found in regulation 5, which is headed "Persons treated as engaged in remunerative work." It provides as follows: