R(SB) 6/91
(Blaik v. Chief Adjudication Officer)

Mr. J. B. Morcom	               CSB/1121/1986
26.1.88 
CA (Parker, Nicholls and McCowan LJJ)	
Discrimination on grounds of sex - aggregation of married couple’s resources - whether indirect discrimination contrary of Council Directive 79/7/EEC
The claimant, a married man aged 54, ceased to work on 19 April 1985, claiming supplementary benefit on 3 June 1986. As his wife, aged 56, was then working full‑time, the adjudication officer decided that supplementary allowance was not payable because the resources of the assessment unit exceeded its requirements. The claimant appealed against that decision to the social security appeal tribunal, which unanimously confirmed the decision of the adjudication officer. The claimant applied to a social security Commissioner for leave to appeal, having been refused such leave by the appeal tribunal chairman. The claimant having contended that the appeal tribunal had erred in law in failing to apply the principle contained in Directive 79/7/EEC (“the equal treatment principle”)
Held:
1.	(by the Commissioner)
(i)	the appeal tribunal’s decision was erroneous in law for failing to deal with the point raised by the claimant regarding “the equal treatment principle”, such failure involving a breach of regulation 19(2)(b) of the Social Security (Adjudication) Regulations 1984;
(ii)	that Directive 79/7/EEC did not apply to the claimant’s case since the supplementary benefits scheme was not covered by the express provisions of Article 3(1)(a) of the Directive;
(iii)	this was also clear from article 2 of the Directive which showed that it was intended to cover schemes which can directly or indirectly be linked to the working population. Inasmuch as the supplementary benefit scheme was not so limited, since it applied to any person over 16 years of age in Great Britain, it was clearly not covered by the Directive.
2.	(by the Court of Appeal (Parker, Nicholls and McCowan, LJJ), dismissing the appeal)
(i)	a difference of treatment accorded to a man and a woman on the ground of differing marital or family status did not amount to an indirect form of discrimination on the grounds of sex and was not therefore contrary to Article 4 of the Directive;
(ii)	as there was no discrimination on grounds of sex, within Article 4 of the Directive, it was unnecessary to decide whether the supplementary benefit scheme constituted a statutory scheme of the type mentioned in Article 3(1)(a) or a form of social assistance under Article 3(1)(b).

DECISION OF THE SOCIAL SECURITY COMMISSIONER
1.	My decision is that the decision of the Doncaster social security appeal tribunal dated 11 August 1986 is erroneous in point of law. Accordingly I set it aside and give the decision that they themselves should have given namely that the provisions of section 34(1) of, and paragraph 3(l) of Schedule 1 to, the Supplementary Benefits Act 1976 as amended by the Social Security Act 1980 are properly applicable to the claimant’s case and accordingly the claimant is not entitled to a supplementary allowance.
2.	This is an appeal by the claimant to the Commissioner with the leave of the Commissioner against the decision of the appeal tribunal dated 11 August 1986 confirming the decision of the adjudication officer issued on 9 June 1986 stating: 
“That the claimant is not entitled to a supplementary allowance as assessed in accordance with the Supplementary Benefit (sic) Act and Regulations.”
3.	The facts of the case are as follows. The claimant is a married man, aged 54 at the time of his appeal to the tribunal. His wife was at that time 56. The claimant ceased to work on 19 April 1985. He claimed supplementary allowance on 3 June 1986, shortly before the exhaustion of his unemployment benefit, which had been in payment at the rate of £30.45 weekly. At that time the claimant’s wife was working full‑time, for net wages of £65.71 weekly, her fares to work being £2.40 per week. The adjudication officer determined that the assessment unit’s resources exceeded its requirements and subsequently issued a decision refusing supplementary allowance on 9 June 1986. The claimant appealed against the decision on 3 July 1986 and the case was heard by the appeal tribunal on 11 August 1986, in the absence of the claimant. The tribunal decided unanimously to confirm the decision of the adjudication officer. A letter from the claimant received on 19 August 1986 was treated as an application for leave to appeal to the Commissioner but the chairman refused leave on 5 September 1986. The claimant applied to the Commissioner for leave on 1 October 1986. The Commissioner, before ruling on this application, issued a direction on 10 November 1986 requiring that the adjudication officer make a submission concerning the claimant’s submission as to the application of European Community Directive 79/7/EEC. The Commissioner granted leave to appeal on         2 June 1987.
4.	The relevant supplementary provisions applicable are those referred to in paragraph 1 of this decision. No useful purpose would be served by my setting them out afresh here.
The relevant EEC law is Directive 79/7/EEC and Directive 76/207/EEC (Article 1 on which is set out in para. 6 below).
Article 1 of the Directive provides: 
“The purpose of this Directive is the progressive implementation in the field of social security and other elements of social protection provided for in Article 3, of the principle of equal treatment for men and women in matters of social security, hereinafter referred to as “the principle of equal treatment”.”
Article 2 provides:
“This Directive shall apply to the working population‑including self-employed persons, workers and self‑employed persons whose activity interrupted by illness, accident or involuntary unemployment and persons seeking employment and to retired or invalided workers and self‑employed persons.”
Article 3 provides so far as relevant as follows: 
“1. This Directive shall apply to:
(a)	statutory schemes which provide protection against the following risks:		
sickness,
invalidity, 
old age,
accidents at work and occupational diseases, 
unemployment;
(b)	social assistance, insofar as it is intended to supplement or replace the schemes referred to in (a);
2.	This Directive shall not apply to the provisions concerning survivors benefits nor to those concerning family benefits, except in the case of family benefits granted by way of increases of benefits due in respect to the risks referred to in paragraph 1(a).
3.	With a view to ensuring implementation of the principle of equal treatment in occupational schemes, the Council, acting on a proposal from the commission, will adopt provisions defining its substance, its scope and the arrangements for its application.
Further provisions are set out in Article 7 of the directive permitting the exclusion of Member States of other matters from the scope of the Directive.”
5.	In my judgment the decision of the appeal tribunal is erroneous in point of law in that they did not deal with the issue of European Law put before them by the claimant. Accordingly the appeal tribunal decision breaches the Social Security (Adjudication) Regulations 1984, regulation 19(2)(b). The sole reference on the face of the record to the European Law contention as to equal treatment is in the chairman’s notes of evidence where it is stated that the claimant’s letter dated 3 August 1986 was “read by the tribunal”. This letter makes the claim that the treatment of the claimant’s case that is the aggregation of his wife’s requirements and resources with his own under the Supplementary Benefits Act and Regulations was unlawful under European Law. The appeal tribunal failed to deal with this contention and the claimant is left in the dark as to why his contention was not accepted by the tribunal.
6.	I turn therefore to the question of the application of European Law. The claimant in his grounds for application for leave to appeal refers to Council Directives, 76/207/EEC and 79/7/EEC. Article 1 of Council Directive 76/207/EEC provides as follows:
“1.	The purposes of this Directive is to put into effect in the Member States the principle of equal treatment for men and women as regards access to employment, including promotion, and to vocational training and as regards working conditions and, on the conditions referred to in paragraph 2, social security. This principle is hereafter referred to as “the principle of equal treatment”.
2.	With a view to ensuring the progressive implementation of the principle of equal treatment in matters of social security, the Council acting on a proposal from the Commission, will adopt provisions defining its substance, its scope and the arrangements for its application.”
The Council adopted Directive 79/7/EEC with a view to ensuring the progressive implementation of the equal treatment principle. Accordingly except insofar as it may assist with the interpretation of Directive 79/7/EEC, Directive 76/207/EEC is not relevant to the claimant’s case. There is no question that the scheme established by the Supplementary Benefits Act 1976 falls within the purview of Directive 76/207/EEC. In my judgment for the principle of equal treatment to apply to the supplementary benefits scheme, that scheme must be covered by the provisions of the Directive 79/7/EEC. 
The scheme does not come within the express provisions of Article 3(1)(a). From the express exclusion either provided for or permitted by the Directive 79/7/EEC and the qualification of the phrase “social assistance” by the words “insofar as it is intended to supplement or replace the scheme referred to” in Article 111, it is clear that the Directive 79/7/EEC was drafted and adopted on the basis that certain matters and areas were to be excluded from its scope. There is no express definition as to the meaning of “social assistance” provided in the Directive though I derive guidance from the reference in the preamble and in Directive 76/297/EEC to “social security” and in the context of protection accorded by schemes linked to employment; the reference in Article 2 of the application of the Directive to the “working population”, to the application to “statutory schemes” which are, identified as schemes providing specific protection against the risks listed in Article 3(1)(a); and to the qualification imported into sub‑paragraph (b) of the Article 3 by the words “insofar as it is intended to supplement or replace the schemes referred to.” In my judgment the scheme introduced by the Supplementary Benefits Act 1976 is not covered by Directive 79/7/EEC and this is clear from Article 2 which shows that it is intended to cover schemes which can directly or indirectly be linked to the protection of the working population. Although members of the working population are described in Article 2 and are awarded supplementary benefit, the scheme under the Supplementary Benefits Act 1976 is not so limited (the 1976 scheme applies to any person in Great Britain over the age of 16 years lacking resources as provided for in that Act and the Regulations made thereunder.)
7.	As in my judgment European Law does not apply in the instant case. I turn to the provisions of the Supplementary Benefits Act 1976 (referred to in para. 1 of this decision). It is clear that the claimant and his wife are such a couple as is defined by section 34(1). A married couple’s requirements and resources shall by paragraph 3(l) of Schedule 1 to the 1976 Act be aggregated and treated as those of whichever of them is the claimant. In effect the appeal tribunal have applied these provisions in that from the face of their record they state that the couple’s resources and requirements fall to be aggregated. The appeal tribunal correctly so concluded although they did not properly state their reasons. It was a matter of fact that the assessment unit’s resources exceeded its requirements under supplementary benefit legislation and as in my judgment European Law has no application consequently the supplementary benefit legislation rightly applies in the claimant’s case.
8.	In accordance with my jurisdiction my decision is as set out in paragraph 1 of this decision. As the facts are fully found it is expedient that I give the decision that the tribunal themselves should have given which I do in paragraph I of this judgment. I would add that though I have found that the appeal tribunal erred in law it is for the claimant a pyrrhic victory in that his claim is in substance rejected.
9.	Accordingly the claimant’s appeal is allowed.

Date: 26 January 1988                                                                  (signed) Mr. J. B. Morcom
	Commissioner

The claimant appealed to the Court of Appeal. The decision of the Court of Appeal follows.

DECISION OF THE COURT OF APPEAL

The Appellant appeared in person. 
Mr. N. Pain (instructed by the Solicitor to the Departments of Health and Social Security) appeared on behalf of the Respondent.

LORD JUSTICE PARKER: I will ask Nicholls LJ to deliver the first judgment on the question now before the court.

LORD JUSTICE NICHOLLS: The appellant, Mr. Hugh Blaik, lives with his wife in their own house in Armthorpe, near Doncaster. In 1986 he was 54 years old. He had worked as a postman but that ceased on 19 April 1985. He received unemployment benefit at the rate of £30.45 per week until that also ceased on 5 June 1986, Mr. Blaik then applied for supplementary benefit. On 9 June the adjudication officer rejected the application.

Supplementary benefit is to be calculated in accordance with the provisions of the Supplementary Benefits Act 1976 and the relevant regulations. In accordance with those provisions, the amount required for living expenses by Mr. Blaik and his wife was £47.85 per week. To that was added a sum for water charges and housing costs. Mr. Blaik had no mortgage outstanding. The result was that, in accordance with the statutory formula, the total of the amount needed each week was £51.83. But here enters the complication. Mr. Blaik’s wife worked part‑time as a nursing auxiliary. Her net earnings, less transport costs, amounted to £63.31 per week. This meant that, in accordance with the regulations and after making a prescribed deduction of £4, the sum of £59.31 as the money coming in each week had to be set against and deducted from the sum of £51.83 which was the amount needed each week. This left no shortfall. Indeed there was an excess. So Mr. Blaik’s claim was rejected.

Mr. Blaik appealed to the social security appeal tribunal. His appeal was dismissed on 11 August 1986. The chairman refused leave to appeal. Nothing daunted, Mr. Blaik applied to the social security Commissioners for leave to appeal. That was granted. On 26 January 1988 Mr. Commissioner Morcom held that the Doncaster social security appeal tribunal had erred in failing to deal with a point of European Community Law raised by Mr. Blaik. The Commissioner then considered and rejected the point. He formally allowed the appeal but, as he observed, Mr. Blaik had achieved a pyrrhic victory because his claim for supplementary benefit remained unsuccessful.

One might have expected that that would be the end of the matter. But Mr. Blaik is made of sterner stuff. He asked for leave to appeal still further, although that was refused by the Commissioner. So he applied to this court. On 5 July 1988 he was granted leave. The appeal which is now before us is that appeal from Mr. Commissioner Morcom.

Mr. Blaik has appeared in person. He does not challenge the computation made in this case. In short, his point is that to take into account and aggregate his wife’s earnings when calculating his entitlement to supplementary benefit contravenes Directive 79/7/EEC of the Council of the European Communities.

Directive 79/7 was adopted on 19 December 1978. It was preceded by an earlier Directive 76/207, adopted on 9 February 1976. Articles 1 and 2 of the earlier directive provide as follows:
“1.	The purposes of this Directive into put into effect in the Member States the principle of equal treatment for men and women; as regards access to employment, including promotion, and to vocational training and as regards working conditions and, on the conditions referred to in paragraph 2, social security. This principle is hereafter referred to as ‘the principle of equal treatment’.
2.	With a view to ensuring the progressive implementation of the principle of equal treatment in matters of social security, the Council acting on a proposal from the Commission, will adopt provisions defining its substance, its scope and the arrangements for its application”.
Directive 79/7 was adopted in furtherance of that Directive.

Article 1 of the Directive 79/7 (which I shall henceforth refer to simply as “the directive”) set out the aim of that directive. Article 1 reads:
“The purpose of this Directive is the progressive implementation in the field of social security and other elements of social protection provided for in Article 3, of the principle of equal treatment for men and women in matters of social security, hereinafter referred to as ‘the principle of equal treatment’”.

Articles 2 and 3 set out the scope of the directive. So far as material, they provide as follows:
“2.	This Directive shall apply to the working population, including self‑employed persons, workers, and self‑employed persons whose activity is interrupted by illness, accident or involuntary unemployment and persons seeking employment, and to retired or invalided workers and self‑employed persons. .
3. 1. This Directive shall apply to:
(a)	statutory schemes which provide protection against the following risks:
sickness,
invalidity,
old age,
accidents at work and occupational diseases, 
unemployment;
(b)	social assistance, in so far as it is intended to supplement or replace the schemes referred to in (a)”.

Article 4 gives effect to the aim set out in Article 1, in these terms:
“1.	The principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex either directly, or indirectly, by reference in particular to marital or family status in particular as concerns:
the scope of the schemes and the conditions of access thereto, the obligation to contribute and the calculation of contributions,
the calculation of benefits including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits”.
I need not refer to the remaining articles.
	
Mr. Pain, for the respondent, accepted that Mr. Blaik is entitled to rely on the provisions of the Directive in relation to his claim for supplementary benefit, even in the absence of domestic legislation implementing the directive.

Mr. Blaik’s submission raises two issues. First, does supplementary benefit within the meaning of the Supplementary Benefits Act 1976 constitute either a statutory scheme of a type mentioned in paragraph 1(a) of Article 3 of the Directive, or a form of social assistance intended to supplement or replace such a scheme within the meaning of that paragraph? Secondly, if so, did the refusal of supplementary benefit to Mr. Blaik constitute or involve discrimination on grounds of sex within the meaning of Article 4?

To succeed on this appeal Mr. Blaik needs to succeed in obtaining a favourable answer on both those issues. The first issue was determined in favour of the Chief Adjudication Officer by Mr. Commissioner Morcom. Accordingly, he did not need to consider the second issue and did not do so. For a reason which will become apparent, I shall turn straight to the second of those two issues.

Assuming that the first issue were to be decided in favour of Mr. Blaik, did the refusal of supplementary benefit constitute discrimination on grounds of sex? The grounds on which Mr. Blaik was refused his benefit was that his resources and requirements fell to be aggregated as I have mentioned, and that the combined resources of him and his wife exceeded their requirements as calculated in accordance with the Act. Mr. Blaik’s argument was that such aggregation of his own and his wife’s resources contravened Article 4 by reason of marital or family status. Benefit was denied to him, a married man, where it would have been granted to a single man or woman. He was making no claim in respect of his wife. But he and his wife were treated together as one unit, whereas a single man or woman would have been treated as a single unit and not subject to accretion with anyone else. I am unable to accept this argument, for this short reason. The legislation does not treat persons differently on grounds of sex but only on the ground of being a member of a couple, married or unmarried, irrespective of sex. For a difference of treatment on the ground of marital or family status to be contrary to Article 4 it must amount to an indirect form of discrimination on the ground of sex. That would be so if the apparent differentiation on the ground of marital or family status was in reality a difference of treatment on the ground of sex. But that is not so in this case.

The material legislation is to be found in the Supplementary Benefits Act 1976 and the regulations made thereunder. That Act is no longer in force but it is the legislation relevant to the present case. Section 1(1) provides as follows:
“Subject to the provisions of this Act, every person in Great Britain of or over the age of 16 whose resources are insufficient to meet his requirements shall be entitled to benefit as follows -
(a)	a supplementary pension as one of a married or unmarried couple of whom one is or both are over the age of 65, if he is not one of such couple and has attained pensionable age; and
(b)	a supplementary allowance in any other case.
2.(1)	Where, under the provisions of this Act, the requirements and resources of any person fall to be aggregated with and treated as those of another person, that other person only shall be entitled to supplementary benefit.
(2)	Entitlement to, and the amount of, any supplementary benefit shall be determined in accordance with:-
(a)	the provisions of this Part of this Act and Schedule 1 to this Act”.

Paragraphs 1 and 3 in the First Schedule, so far as material provide:
“1. (1) The amount of any supplementary benefit to which a person is entitled shall, subject to the following provisions of this Part of this Act, be the amount by which his resources fall short of his requirements.
(2)	For the purpose of ascertaining that amount -
(a)	a person’s requirements shall be determined in accordance with Paragraph 2 of this schedule; ...
(b)	a person’s resources shall be calculated in the prescribed manner
3.(1)	Where two persons are a married or unmarried couple, their requirements and resources shall be aggregated and treated -
(a)	until the prescribed date [which is November 1983] as those of a man; and
(b)	on or after that date as those or such one of them has satisfied prescribed conditions or where both of them satisfy or where neither of them satisfy those conditions as those or such one of them as they may jointly nominate in accordance with the regulations or in default of such nomination as the Secretary of State may determine”.
I need not go into the detail of paragraph 3. Mr. Blaik was a person who satisfied the prescribed conditions in the present case but nothing turns on that. The outcome of the claim for supplementary benefit would have been the same even had that not been so.

Finally, I should just mention the statutory definitions of married and unmarried couples which are set out in section 34:
“A married couple means a man and a woman who are married to each other and are members of the same household and an unmarried couple means a man and a woman who are not married to one each other but who are living together as husband and wife otherwise than in the prescribed circumstances”.

What emerges from that legislation is that this is not a case where the entitlement to benefit differs according to whether a person is a man or a woman or, indeed, according to whether a person is married or unmarried. The jurisprudence of the European Court confirms that in such a case there is not a contravention of Article 4. In the case of Jean Borrie Clarke v. Chief Adjudication Officer [1987] ECR 2865 the court enunciated the general principle flowing from Article 4 (and I refer to para. 13 of the judgment) in these terms:
“ .. women are entitled to be treated in the same manner, and to have the same rules applied to them, as men who are in the same situation,
And, I would add, vice versa. But that principle has not been contravened in this case.

When one considers the legislation it appears, quite clearly, that both members of a married couple or an unmarried couple are treated alike. The man is treated the same as the woman and vice versa. Equally, persons who are not members of a married couple or an unmarried couple are treated the same, whether male or female. 

But I must go one step further. Mr. Blaik advanced a contention that here there was indirect discrimination between persons who are members of couples, married or unmarried, on the one hand, and persons who are living alone on the other hand. That is discrimination on the grounds of family status. He further submitted that there are more female part‑time, employees than male. So, he submitted, the aggregation principle does not bear evenly on finales and females because where the income earner is female she is likely to be earning less than where the income earner is male. She is more likely to be engaged in only part‑time employment. Thus, there is indirect discrimination on the grounds of sex, because in such cases there will, be no entitlement to supplementary benefit although the ability of the female income earner to sustain the married couple will be less than in the case of the male income earner. He is more likely to be in full employment and earning more. Those were the submissions, as I understood them. I cannot accept them. Apart from any other consideration, we do not have before us any figures showing that the aggregation principle enshrined in the legislation results in the members of one sex being treated less favourably in practice than the other. Even if we did, I am far from persuaded that that would lead to the conclusion that the legislation involves indirect sex discrimination within Article 4. Here again, we are not without assistance from the European Court.

In the case of J. W. Teuling v. Bedrijfsvereniging voor de Chemische Industrie [1987] ECR 2497 the European Court considered a Dutch scheme under which entitlement to a higher level of benefit was dependent upon either the income of the claimant and his or her spouse falling below a certain level or, if the claimant was unmarried, the claimant having dependent children. The court held that if, on the statistics, a smaller proportion of women than men qualify for benefit, the legislation would contravene Article 4 (and I refer to para. 13 of the judgment):
“ …that system of benefits cannot be justified by reasons which exclude discrimination on grounds of sex”.
But the court further held that (and I quote from para. 22):
“ … it must be recognized that Community law does not prevent a Member State, in controlling its social expenditure, from taking account of the fact that the need of beneficiaries who have a dependent child or spouse or whose spouse has a very small income is greater than that of single persons”.

Apply that approach to this case. Clearly the provisions of the 1976 Act relating to aggregation in the case of married and unmarried couples are intended to take account of the greater financial need for supplementary benefit of those whose spouse has a lower income and a correspondingly lesser need of those whose spouse has a higher income. So, in the result, I am unable to accept Mr. Blaik’s submissions.

That conclusion on the second of the two issues suffices to dispose of this appeal. It becomes unnecessary, therefore, to decide the first issue. We have heard no argument either way on that issue and I express no view, therefore, either way on the correctness of the Commissioner’s decision on this point. At first sight the point is a difficult one. It is possible that, if we had heard argument, we might have felt obliged to make a reference to the European Court. It would not be right to make such a reference in a case where that was not necessary for the court’s decision. Accordingly, that issue has not been pursued further before us.

For those reasons I would dismiss this appeal.

LORD JUSTICE McCOWAN:  I agree.

LORD JUSTICE PARKER: I agree. I add only this. The purpose of the legislation in this country, insofar as relevant to present matters, is plainly to see that families whose joint income is sufficient or more than sufficient to meet their needs are not a burden upon the state. With that simple purpose in mind, it appears to me that the whole of Mr. Blaik’s observations about discrimination disappear. Both parts of the family unit are treated from first to last in precisely the same way.

I would add perhaps one further thing. I am, for myself, unable to see how any question of indirect discrimination comes in. Mr. Blaik submitted that his wife is discriminated against because if she were a single woman she should enjoy all her own income, whereas as a result of her marital status and the fact that she and her husband are living together she has to use part of her income to support him, in effect. That does not appear to me to be discrimination as between men and women. It is simply a fact that a woman once married is, under British legislation, liable to support her husband and her children just as a man is under the same obligation. I can see no question of sex discrimination arising, and I agree that this appeal must be dismissed.

Order: Appeal dismissed