CMcQ-v-Department for Social Development (REA) [2010] NICom 45

Decision No:  C1/06-07(REA)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

REDUCED EARNINGS ALLOWANCE

Appeal to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 8 June 2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the claimant, with the permission of Mrs Commissioner Brown, against a decision of the appeal tribunal sitting at Armagh on 8 June 2006.  The respondent is the Department for Social Development (“the Department”).  For the reasons I am about to explain that decision is not erroneous in point of law.  The claimant’s appeal against it is, therefore, dismissed.

	The issue

2.	This appeal involves a claim for reduced earnings allowance (“REA”).  That is a benefit which compensates employed earners for loss of earning power as a result of an industrial accident or disease.  Claims for REA can be complicated and as this appeal has gone through its various stages a number of issues, factual as well as legal, have been raised. However, most of these have been resolved leaving one issue outstanding.  That issue is one of statutory construction.  Among the issues that have been resolved is the particular point in time on which attention must be focussed.  It is accepted that this is December 2002. This is on the basis that the claim which gives rise to this appeal is a claim for REA from and including 25 December 2002. The issue which remains outstanding relates to the interpretation of paragraph 11 in Part IV of Schedule 7 to the Social Security Contributions and Benefits Act (Northern Ireland) 1992. The text of the relevant parts of that paragraph is set out later in this decision.  The live grounds of appeal put forward by the claimant’s able representative are as follows:

“2.	The tribunal agreed with the Department that the wages from two separate jobs can be added together to arrive at the probable standard of remuneration in suitable alternative employment.  The Tribunal has nothing to say about the several authorities I cited in support of the proposition that it is unlawful to combine the incomes from two jobs in this way.  I believe this is a misapplication of the law.

3.	I also submit it is an error of law to fail to give adequate reason for preferring the Department’s view on the foregoing, and simply to say: “The Tribunal accepted the Department’s argument ...” C/7/99(IB).”

	The facts

3.	The first of those issues is of particular importance.  It is an issue that has to be set in the context of the facts.  These are, I think, now largely agreed.  The claimant is a woman who was born on 3 May 1946.  In 1968 she started work as a sewing machinist with a company which I shall call SRL.  The work involved sewing pillow cases, pillow slips, sheets and the like.  She says, and I entirely accept, that she became an experienced sewing machinist who always achieved her weekly targets.  She says that she was ranked as one of SRL’s top five sewing machinists and that she would have had no difficulty in obtaining similar employment with other employers.  Unfortunately, in about 1974, she developed prescribed disease D5.  That is “Non-infective dermatitis of external origin ...”.  The Department accepts that this was caused by a particular lubricant used in connection with the sewing machines.  The claimant’s attempts to return to her usual work merely resulted in recurrences of the dermatitis and established that the offending lubricant really was the cause of the disease.

4.	The claimant left her occupation with SRL and sought other kinds of employment.  She also made a successful claim for industrial injuries disablement benefit based on prescribed disease D5 and a claim for special hardship allowance.  With effect from 19 November 1986, the latter benefit was replaced by REA.  However nothing turns on that.  She received a number of awards of REA over the years.  The last being for a period up to and including 24 December 2002.  She subsequently made a further claim so that her REA would continue after that date.  By a decision dated 13 February 2003, she was refused REA from 25 December 2002.  She appealed against that decision.  The decision of 13 February 2002, was then examined and found to contain errors.  On 26 November 2004, it was revised so that it now read as follows:

“I have revised the decision of the Department dated 13.02.03.  This is because it arose from official error.

	My decision is that:-

	Reduced Earnings Allowance is not payable from and including 24.12.02.  This is because the claimant’s probable standard of remuneration in her regular occupation is £158.55 and the probable standard of remuneration in employed earner’s employment which is suitable in her case namely home help/care worker which she is not incapable of following as a result of the relevant loss of faculty is £249.75.”

	That decision was not favourable to her and, as a consequence, her appeal continued.  It thus became an appeal against the decision of 13 February 2003, as revised on 26 November 2004.  

5.	It is important to note three matters in relation to the latter decision.  First, it contains a simple clerical error.  The claimant had been awarded, and paid, REA up to and including 24 December 2002.  Consequently the decision ought to read “Reduced Earnings Allowance is not payable from and including 25.12.02 ...”.

6.	Secondly the figure of £158.55 requires explanation.  It is the result of relatively extensive researches made by the Department into wages paid to sewing machinists in December 2002.  Two problems emerge from a reading of the papers.  First, SRL has ceased to operate.  Secondly, which is not surprising, it appears that conditions in the industry have changed since the claimant left it over 30 years ago.  There appear to be changes in the manner in which wages are determined and, I suspect, the demand for sewing machinists is not as great as it once was.  Furthermore, overtime does not appear to be readily available.

7.	The figure of £158.55, was obtained by the Department from a company which operates in County Down and related to sewing machine work consisting mainly of duvet covers, quilted bed throws, sheets and pillowcases.  The work was largely straight line sewing with close attention required to matters such as quality and matching patterns.  Some products required frilled or embroidered edging.  This was work which was more skilled.  The claimant did not agree with the figure of £158.55.  She produced her own and this was the figure that was eventually used.  Her figure is £231.35.

8.	I should add that in a letter dated 12 March 2003 (document 14) she stated that if she had “been fit to continue working as a machinist my weekly earnings for a 40 hour week would have been £302.80”.  This figure is based on an hourly rate of £7.57 payable by a particular named employer for “someone of my calibre who has always achieved 100% and in fact at times exceeded it”.  However, there was no confirmation of the hourly rate from the named employer and none of the hourly rates obtained by the Department come anywhere near £7.57 per hour.  In the end, as recorded, a figure of £231.35, was agreed upon.

9.	Thirdly, there was at first some difficulty in discovering how the figure of £249.75, had been arrived at.  However, in paragraph 5 of its supplementary submission the Department explained that the claimant’s gross earnings from the Armagh and Dungannon HSS Trust for the tax year ending on 5 April 2003, were £9,587.92, while her gross earnings from the Clogher Valley Care Services were £3,399.11, for the same tax year.  It was then stated:

“Her total earnings for the tax year 5/4/03 was therefore £12,987.03.  When divided by 52 this equates to average weekly earnings of £249.75.”

10.	The appeal was heard in Armagh on 8 June 2006.  It was unsuccessful.  The decision notice states:
	
“Appeal disallowed.  Reduced Earnings Allowance is not payable from 25/12/02 because the probable standard of remuneration in the alternative occupations that are suitable to her case (£249.75) exceeds the probable standard of remuneration in her regular occupation (£231.35).”

	The appeal tribunal’s statement of reasons contained the following paragraphs.

“The Tribunal found that any award from 25/12/02 had to be based on a comparison between the Appellant’s probable standard of remuneration in her regular occupation and the probable standard of remuneration in any suitable alternative occupation at 25/12/2002.

A further argument raised by the Appellant’s representative is that he questions the Department’s entitlement to take account of the incomes which the Appellant had from two jobs to determine her probable standard of remuneration in the suitable alternative occupation.  The Tribunal accepted the Department’s argument that in arriving at its assessment the Department were entitled to take into account the Appellant’s actual earnings as both a home help and care assistant.

In respect of the information received by the Department relating to the probable standard of remuneration in the Appellant’s regular occupation and the extensive efforts made in respect of this.  The Tribunal was satisfied that for the purposes of the claim of 25/12/2002 and accepted on the basis of the evidence provided that the probable standard of remuneration in the regular occupation based on an hourly rate of £4.65 for a 39 hour week and an additional £50 bonus as given in the information from L & M Fashions, which is nearer to the Appellant’s home than other possibilities, should be applied in this case.

The Tribunal therefore accepted that the probable standard of remuneration in the suitable alternative occupation should be based on the actual wages in the jobs of care assistant and home help and that this is £249.75.  As this exceeds the probable standard of remuneration in the regular occupation of £231.35 the appeal is disallowed.”

	Permission to appeal against that decision was refused by the chairman of the appeal tribunal but was subsequently granted by Mrs Commissioner Brown.

	The present appeal

11.	That brings me back to the grounds of appeal.  The first and most important ground is that, while in practice the claimant had two part-time jobs, the legislation does not permit her earnings from both jobs being added together to produce the weekly total of £249.75.  The second ground is that the appeal tribunal did not explain why it considered that it could proceed to use the total figure and did not deal with the claimant’s representative’s legal submissions to the contrary.

12.	At this stage it is appropriate to set out the relevant legislation.  This is paragraph 11 in Part IV of Schedule 7 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992.  Paragraph 11 is of some length so I shall only set out those paragraphs which are relevant.  Of particular importance is sub-paragraph (10).

	“11(1)	subject to the provisions of this paragraph, an employed earner shall be entitled to reduced earnings allowance if –

(a)	he is entitled to a disablement pension or would be so entitled if that pension were payable where disablement is assessed at not less than one per cent; and

(b)	as a result of the relevant loss of faculty, he is either –

(i)	incapable, and likely to remain permanently incapable, of following his regular occupation; and

(ii)	incapable of following employment of an equivalent standard which is suitable in his case,

or is, and has at all times since the end of the period of 90 days referred to in section 103(6) above been, incapable of following that occupation or any such employment;

but a person shall not be entitled to reduced earnings allowance to the extent that the relevant loss of faculty results from an accidental happening on or after 1st October 1990 (the day on which Article 5 of the Social Security (Northern Ireland) Order came into operation).

(8)	Reduced earnings allowance shall be awarded –
(a)	for such period as may be determined at the time of the award; and
(b)	if at the end of that period the beneficiary submits a fresh claim for the allowance, for such further period, commencing as mentioned in sub-paragraph (2) above, as may be determined.
...
(10)	Reduced earnings allowance shall be payable at a rate determined by reference to the beneficiary’s probable standard of remuneration during the period for which it is granted in any employed earner’s employments which are suitable in his case and which he is likely to be capable of following as compared with that in the relevant occupation, but in no case higher than 40 per cent of the maximum rate of a disablement pension or at a rate from such that the aggregate of disablement pension (not including increases in disablement pension under any provision of this Act) and reduced earnings allowance awarded to the beneficiary exceeds 140 per cent of the maximum rate of a disablement pension.”

13.	The issue of construction is, accordingly, whether paragraph 11, and in particular the words “a rate determined by reference to the beneficiary’s probable standard of remuneration during the period for which it is granted in any employed earner’s employments which are suitable in his case and which he is likely to be capable of following ...”, prohibit the Department, or a tribunal, from adding together the incomes from two or more part-time jobs which the person seeking REA performs on a regular basis.  I stress that I am considering regular part-time work.  I am not considering other circumstances of employment which might give rise to other, more difficult, questions.  For example, where a person has a regular part-time job and a second part-time job but the latter is only done on an irregular or intermittent basis.  Another such example might be where a person has a full-time job and also a part-time job.  These are questions which will have to be considered when they arise and on the basis of the facts which are then established.  Coming back to the present appeal, I can see nothing in either sub-paragraph (10) or otherwise in paragraph 11, which prohibits the adding together of the income from two, regular, part-time jobs.  I would reach the same conclusion even if sub-paragraph (10) referred to “... the beneficiary’s probable standard of remuneration ... in any employed earner’s employment ...”.  In other words, I do not attach too much significance to the fact that the legislation refers to “employments”.  However, the fact that it does makes it difficult to reach the opposite construction.

14.	My reasons are that to hold otherwise gives rise to considerable practical difficulties.  The first being which of two or more jobs is to be selected for the purposes of comparison, who is to make the selection and on what basis?  Suppose a person works for 40 hours per week split equally between two part-time jobs.  Further, suppose that in Job A, he or she earns £200 per week while Job B, returns £100 per week.  (I endeavour to make the arithmetic simple.)  Which job is to be used to calculate whether the applicant is entitled to REA and, if so, to how much?  Who makes the choice and what criteria do they apply?  These are potentially complicated questions for which the legislation makes no provision.  If only one part-time job can be taken into account one would expect much guidance to appear in the legislation. Secondly, if only one of those jobs is to be selected, then is it permissible to calculate what the applicant would have received if he or she had worked for, say, 40 hours rather than 20?  If Job A is chosen the pay for a 40 hours week would be £400.  This would be more than he or she actually earned.  If Job B were chosen the corresponding figure would be £200.  

15.	Further, if only one of two or more part-time jobs can be taken into account a number of serious anomalies arise.  Suppose that two men were employed by the same employer and each of them earned £250 per week.  They develop the same industrial disease for the same reasons and are forced to give up their employment. However, they both obtain alternative employment at £300 per week.  One of them earns that amount from a single, full-time, job.  He is not entitled to REA.  The second earns the same amount but from part-time employment.  His earnings are split equally between two jobs so that he earns £150 from each.  If account can be taken of only one of those jobs he is entitled to REA – assuming other conditions are satisfied.  I think it has already been demonstrated that the problems become more difficult if the split in earnings is unequal.  Say £200:£100.  Further, it would be to the advantage of a potential applicant for benefit to arrange, where it is possible to do so, to hold two or more part-time jobs rather than one full-time one.  (I wish to stress that there is no suggestion in the present case that the claimant has organised matters so as to maximise her opportunities of obtaining benefit.) 

16.	The claimant’s representative is quite correct in pointing out that the textbook commentaries are all on the basis that the suitable alternative employment consists of a single job.  However, this is because those commentaries are written on the basis that the alternative employment which the person seeking benefit has obtained is, in fact, a single full-time job.  The various statements of principle in the decided authorities are similarly worded because they are directed towards that factual situation.  The fact that the commentaries and decisions proceed on the basis of the common situation is not in itself a reason for stating that account cannot be taken of two part-time jobs.  There is no comment to that effect and nothing in the legislation which supports disregarding the income from one of two part-time jobs.  Such a prohibition would require additional legislative provisions to say how it should operate in practice.  Further, the courts have drawn attention to the fact that the legislation uses the expression “probable standard of remuneration” rather than referring to wages, earnings or hourly remuneration.  See the Mellors case to which I am about to refer.

	The arguments to the contrary

17.	I turn to examine the arguments to the contrary put forward by the claimant’s representative.  The first of these is based on a passage from Lord Denning MR’s judgement in R –v- National Insurance Commissioner ex parte Mellors [1971] 2 QB 401.  The passage relied upon begins at the very bottom of page 420.  The representative relies on what Lord Denning says, for the propositions that “the repeated mention of the term “normal” in relation to a working week, and the indication that it is a job rather than several jobs taken together, that is to be considered”.  With great respect to the claimant’s representative, what Lord Denning and the two judges who sat with him said does not support the proposition that “it is a job rather than several jobs taken together that is to be considered”.  The simple reason is that that was not the point with which the Court of Appeal was dealing.

18.	Poor Mr Mellows had been a miner.  In October 1961, when working at the coal face he injured his left eye.  His sight was affected and he could no longer work underground.  However, in due course his employers gave him a surface job as a driver in the “plant pool”. At the coal face he had earned £28.1s.9d for a week of 361/4 hours.  As a driver he worked for 65 or 66 hours per week for £26.19s.2d.  Mr Mellors therefore earned less for longer hours – nearly twice as many hours.  The Court of Appeal decided that it was necessary to compare the normal levels of remuneration likely to be received in the two employments without regard to their respective conditions including the different hours worked.  Putting it another way, what had to be compared was the remuneration a coal face worker received for a normal week against what a “plant pool” driver received for a normal week.  The fact that the latter normally worked twice as long as the first was to be ignored.  If one takes a rather longer passage from Lord Denning’s judgement it reads (beginning on page 420):

“One thing is clear.  “Standard of remuneration” is different from “rate of remuneration”.  When you speak of “rate of remuneration” you mean a rate per hour or per shift, such as 8s. an hour or £2 a shift.  But, when you speak of “standard of remuneration”, you use the word “standard” in the same sense as in the phrase “standard of living”.  It means the level of remuneration which a man earns week by week or month by month, as the case may be.

Another thing is clear.  “Standard of remuneration” is different from “average weekly earnings”.  Under the old Workmen’s Compensation Act 1925 you had to take the man’s total earnings over the year and then divide them by 52 in order to get the weekly average.  That was not altogether satisfactory, especially when wages are very variable.  So instead, in this Act, we are to take the “standard of remuneration”.  It is usually a weekly standard.  The Act itself shows it.  It prescribes a maximum allowance of £3 7s. a week.

In these circumstances I think that the comparison required by section 14(6) is to be taken in this way.  On the one side you find the level of remuneration which would probably have been received by the man in his regular occupation in a normal working week if he had not been injured.  On the other side, since the accident, you look at the level of remuneration which he is probably capable of receiving in a normal working week in employment which is suitable in his case.

In making the comparison you look at the financial remuneration for a normal working week.  You do not look at the conditions of work.  You do not look to see whether it is a high rate per hour because it is hazardous (underground in a mine), or a low rate because it is safe (on the surface): nor whether the work is burdensome or easy; light or heavy; long hours or short hours; paid by the hour or by the piece: paid extra for overtime or not.  None of these things comes into the calculation.  The only thing that matters is the level of remuneration week by week he would probably have been receiving if he had not been injured, compared with what he is probably capable of receiving after the accident.  Of course in the same neighbourhood.”

	The Court of Appeal was not considering part-time work.  The important point in the case was that Mr Mellors now worked nearly twice as many hours as he had at the coal face.  However, the Court of Appeal decided that since drivers in the “plant pool” normally worked such hours this was not a factor to be taken into account.  The Court of Appeal was dealing with the common case where both employments were full-time.  Nothing that was said by any member of the Court of Appeal supports the prohibition for which the claimant’s representative contend.

19.	The representative also relies on a passage in the 2005 edition of Social Security Legislation, Volume 1, Non Means Tested Benefits.  The passage will be found at page 316 under the heading “Employment of an equivalent standard ... suitable in his case”.  (The text has remained unchanged and will be found at page 332 of the current edition.)  It is a commentary on paragraph 11(1)(b)(ii), which provides that among the conditions for benefit an applicant must show:

(b)	as a result of the relevant loss of faculty, he is either –

(i)	incapable, and likely to remain permanently incapable, of following his regular occupation; and

(ii)	incapable of following employment of an equivalent standard which is suitable in his case.

	The legislation, and the commentary, refer in the singular to “occupation” and “employment” (the legislation) and “his regular job” and “another suitable job” (the commentary).  However, this is because what is being considered is a comparison between two full-time employments – which is the common case.  I can see nothing in either the legislation or the commentary which says that if a man has two or more part-time jobs you can only take account of one of them.  The normal rule when construing legislation is that, where appropriate and unless excluded, the singular includes the plural and vice versa.  See section 6(c) of the Interpretation Act 1978.  In my judgment paragraph 11 works perfectly well in a case like the present and I see nothing in its terms which prohibit taking into account the claimant’s remuneration from both her jobs.  

20.	It follows that the appeal tribunal applied the law correctly.  The question then arises whether it erred by simply saying that it accepted the arguments of the Department rather than setting out the claimant’s arguments to the contrary and explaining why it rejected them.  In my judgment the appeal tribunal did not err in law.  It might have been better if the statement of reasons had given rather more explanation but it nevertheless did enough.  It clearly accepted the Department’s written submissions on the law and, in effect, incorporated them into its decision.  Test it this way.  Someone who wishes to know why the appeal tribunal took the view of the law that it did knows, from the statement, where to look in the case papers and will, on looking, find the explanation.

21.	Reliance is placed on decision C7/99 (IB), a decision of the Chief Commissioner.  That was an incapacity benefit case where one of the grounds of appeal was that insufficient reasons had been given.  In paragraphs 10 and 11 the Chief Commissioner said this.:

“10.	In relation to the claimant’s second point – namely that the Tribunal failed to give adequate reasons for its decision – the situation is somewhat different.  Both [representatives] submit that there was a clear conflict of evidence between the evidence of the medical support services doctor and the evidence of the claimant.  This conflict can be summarised shortly by noting that the claimant’s evidence, if accepted in its entirety, would have resulted in a score in relation to both physical and mental descriptors that would have easily exceeded the relevant thresholds, while the medical support services doctor’s evidence, if accepted, would have resulted in a score well below the relevant threshold.  I accept accordingly that [the representatives’] submissions are correct.

11.	In the circumstances both [representatives] submit that the Tribunal ought to have given some general indication of the evidence it preferred and the reasons for its preference.”

	The Chief Commissioner then referred to passages from two decisions of Mrs Commissioner Brown, namely C37/98 (IB) and C38/98 (IB), both of which deal with evidential matters.  The Chief Commissioner then said:

“15.	In the present case the Tribunal has failed to explain, however briefly, why the claimant’s evidence has been rejected.  If, as is likely, it intended to rely on the examining medical practitioner’s report, it has failed to state that fact.  The Tribunal also has failed to give some general indication of the evidence it preferred and the reasons for its preference in circumstances where there is an obvious conflict of evidence.”

22.	I quote those passages to show that C7/99 (IB) was concerned with evidential matters and not with legal arguments.  The two are not in the same category.  The tribunal below is the fact-finding body and, unless it erred in law, appellate bodies are bound to accept its factual conclusions even if the person hearing the appeal would have reached a different conclusion had he or she heard the appeal at the lower level.  It follows that it is of the utmost importance to know what the tribunal’s findings of fact were, how it resolved conflicts of evidence and the reasons for its findings and resolution of any conflicts.  Arguments of law fall into a different category.  The appellate body is not bound by the view of the tribunal and must reach its own conclusions on the law.

23.	I add that if I had been for the claimant on this particular point I would, in view of my other conclusions, have set aside the appeal tribunal’s decision but then gone on to give my own decision to the like effect.

24.	For the reasons which I have given I dismiss the appeal.

(signed):  J P Powell

Deputy Commissioner

21 May 2010