Commissioner's File: CSJSA 395/98
Mr Commissioner May QC
18 March 1999 

SOCIAL SECURITY ADMINISTRATION ACT ACT 1992 
JOBSEEKERS ACT 1995

APPEAL FROM DECISION OF SOCIAL SECURITY APPEAL TRIBUNAL ON A QUESTION OF LAW 

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Claim for: Jobseekers Allowance
Appeal Tribunal: Dundee SSAT 
Tribunal date: 3 December 1997
[ORAL HEARING]

1. My decision is that the decision of the social security appeal tribunal held at Dundee on 3 December 1997 is enµoneous upon a point of law. I set it aside. In consequence of the findings given below I make the decision I consider appropriate in light of them pursuant to my powers under and in terms of section 23(7)(a)(ii) of the Social Security Administration Act 1992. That decision is to uphold the decision of the adjudication officer. 

2. This appeal along with another appeal relating to the same claimant and three other claimants caine before me for an oral hearing on 9 March 1999. The claimant was represented by Mr McNeil, the Regional Officer of Unison. One of the other claimants was represented by her husband. The two other claimants did not appear at the hearing. The adjudication officer was represented by Mr Armstrong, Advocate instructed by Mrs Gibson of the Office of the Solicitor to the Secretary of State for Scotland. 

3. Section 1(2) of the Jobseekers Act 1995 sets out the conditions upon which a claimant is entitled to a jobseekers allowance. Amongst those conditions at sub-section (2)(e) there is the condition that the claimant is not engaged in remunerative work. Paragraph 1 of Schedule 1 to the Act provides that for the purposes of the Act ·remunerative workº has such meaning as may be prescribed. Such a meaning was prescribed in regulation 5 1(1) of the Jobseekers Allowance Regulations 1996 which so far as relevant to this appeal is as follows:
51. - (1) For the purposes of the Act "remunerative work" means - 
  
(a) in the case of the claimant, work in which he is engaged or, where his hours of work fluctuate, is engaged on average, for not less than 16 hours per week;
and for those purposes, ·workº is work for which payment is made or which is done in expectation of payment.º

4. In the same regulation the formula is set out to enable the number of hours which a claimant is engaged in work to be determined. That provision is in the following terms:·
  
(2) For the purposes of paragraph (1), the number of hours which the claimant or his partner is engaged in work shall be determined -
  
(a) where no recognisable cycle has been established in respect of a personµs work, by reference to the number of hours or. where those hours are likely to fluctuate, the average of the hours, which he is expected to work in a week;
(b) where the number of hours for which he is engaged fluctuate, by reference to the average of hours worked over -
  
(i) if there is a recognisable cycle of work, and sub-paragraph (c) does not apply, the period of one complete cycle (including where the cycle involves periods in which the person does not work, those periods but disregarding any other absences);
(ii) in any other case, the period of five weeks immediately before the date of claim or the date of review, or such other length of time as may, in the particular case, enable the personµs average hours of work to be determined more accurately;
(c) where the person works at a school or other educational establishment or at some other place of employment and the cycle of work consists of one year but with school holidays or similar vacations during which he does no work, by disregarding those periods and any other periods in which he is not required to work."
Further regulations set out circumstances in which persons are to be treated as engaged in remunerative work. Included in that category are those referred to in regulation 52(1) which is in the following terms:
  
"52- (1) Except in the case of a person on maternity leave or absent from work through illness, a person shall be treated as engaged in remunerative work during any period for which he is absent from work referred to in regulation 51(1) (remunerative work) where the absence is either without good cause or by reason of a recognised customary or other holiday."
There are also further regulations contained in regulation 53 which set out persons treated as not engaged in remunerative work.

5. The claimant made a claim for jobseekers allowance on 17 March 1997. That claim was dealt with in a decision of an adjudication officer issued on 17 March 1997. It was in the following terms:-
  
"[The claimant] is not entitled to jobseekerµs allowance from and including 17.3.97 as she is in remunerative employment."

6. The claimant appealed to a social security appeal tribunal. Her appeal was heard on 3 December 1997. It was not successful. The tribunal made its decision on the same basis as the adjudication officer.

7. The claimant has appealed to the Commissioner. The principal ground of appeal is shortly put in the first ground of appeal where it is said:·
  
"1. The claimant's case is that the application to her of regulation 5l(2)(c) of the Jobseeker's Allowance Regulations 1996 would constitute indirect discrimination against her on the grounds of sex in breach of Council Directive 79/7: and that therefore she has a directly enforceable right not to have the provisions of regulation 51 (2)(c) applied to her."
These grounds of appeal were amplified in the written grounds of appeal at pages 56 and 57.

8. This point relating to European law had been advanced before the tribunal. They had however declined to deal with it on the basis that they considered that it was not within their jurisdiction. That is not the position and they were required to address it. Thus I am satisfied that the tribunal erred in law. Their decision must accordingly be set aside.

9. In the event I do not consider that there is any substance to this ground of appeal having regard to the particular facts of the case. I did not understand it to be disputed in the appeal that the claimant had a cycle of work consisting of one year. Indeed perusal of the contractual documents relating to her employment and correspondence from her employers demonstrates this.

10. According to a letter from her employers dated 14 March 1997 recorded at page 43 of the bundle the claimant has a permanent 31 week contract. According to an addendum to her contract of employment with Gardner Merchant Ltd which had been taken over Dundee University Students Association it was said that the claimant was entitled to a weekly wage which it was said would be paid for a total of 34 working weeks per annum. It was also said in that addendum that the claimant would receive full holiday entitlement during summer close-down period. It was however stated that she would not be entitled to receive holiday pay at the Easter and winter shut-down periods. According to the claimantµs representative, Mr McNeil the claimant had a 32-week contract that she was paid for five weeks holiday. It was therefore said by him that the claimant received no payment for a period of 15 weeks. There was evidence in the case which demonstrated that the claimant on the weeks when she was at work, worked for 33 hours per week. By a simple process of arithmetic if the calculation for the purposes of paragraph 1 of regulation 51 of the Jobseekers Allowance Regulations 1996 was made by reference to the basis of calculation complained against in the grounds of appeal, namely 51 (2)(c), the number of hours worked by the claimant still exceed the 16 hours per week set out in the definition contained in regulation 51(1 )(a). Thus even if the argument advanced in the grounds of appeal relating to the European Directive were sound and regulation 51 (2)(c) was accordingly not applied as the method of calculation it could not affect the result as the appropriate alternative method of calculation would on the facts result in the claimant being over the 16 hours threshold on that basis also. Therefore, the argument, even if successful, would not assist the claimant. It is thus unnecessary and undesirable for me in these circumstances to determine it.

11. In a separate letter Mr McNeil indicated that there was an additional ground of appeal relying on Commissioner’s decision CIS/14661/1996. This is a separate argument from the European Directive argument and proceeds upon the basis that regulationS l(2)(c) applies. In his oral submission to me he indicated that, as he put it. he was "quite happy with the more recent decisions" in CIS/l 118/97, CIS/3216/97 and CJSA/3218197 which were three appeals heard together and in respect of which one decision was given by Mr Commissioner Rowland. For the sake of convenience I will refer to that decision as CJSA/3218/97. It will be noted that in that unified decision Mr Commissioner Rowland was dealing with two benefits, namely income support and jobseekers allowance. It should be noted that in respect of income support section 124(1 )(c) of the Social Security Contributions and Benefits Act 1992 makes it a condition of entitlement to income support that neither the claimant nor his partner should be engaged in remunerative employment. The definition of remunerative employment and the method of calculation in respect of the number of hours worked follows the same pattern as jobseekers allowance. The relevant regulation is regulation 5 of the Income Support (General) Regulations 1987. It explains why Mr Commissioner Rowland heard the three appeals an two different benefits together. It also explains why some of the relevant authorities relate to income support as opposed to jobseekers allowance.

12. Mr Armstrong in his submission supported the claimant's appeal. Mr Armstrong drew my attention to what was said by Mr Commissioner Rowland in CJSA/3218/97. In that decision he reviewed the authorities and set out the basis upon which he reached his decision. He said:·
  
"19. I agree with the Deputy Commissioner who decided CJSA/3816/97 that the Regulations make no provision as to the period over which a claimant is to be considered to be engaged in work for the number of hours calculated under regulation 5(1) and (2). The point did not really arise in R(IS) 15/94 or R(IS) 7/96 where it was held that the claimant was not engaged in remunerative employment even during term time. In CIS/52l/94, the Commissioner seems to have assumed that the claimant was engaged in remunerative work only during the period when she was actually working, save insofar as regulation 5(3) might operate to deem periods of holiday to be periods of remunerative work, and in CIS/14661/96 1 implicitly made the same assumption. However, in CIS/521/94, the assumption was made against the background of the Commissioner's view tat regulation 5(2) did not come into play unless the claimant was actually working at the relevant time and I agree with the criticism made in CJSA/38I6/97 of that part of the reasoning in CIS/521/94. Furthermore, the conclusions reached in CIS/521/94 and CIS/1466l/96 are inconsistent with R(IS) 8/95, where the Commissioner assumed that the claimant was to be treated as engaged in remunerative work throughout the whole two week cycle over which the average number of hours was calculated. On reflection, I consider that, despite the lack of reasoning on this point, R(IS) 8/95 is to be prefened to CIS/521/94 and CIS/l466l/96. I find it very difficult to see why, if one has to average the number of hours over a period that includes periods of no-work, the resulting decision that the person is, or is not, in remunerative work should not apply to the whole period, including the periods of no-work.
20. However, although I consider CIS/521/94 and CIS/14661/96 to have been wrongly decided on the legislation as it existed at the dates material to those cases, regulation 5(3B) has now been introduced to reverse the effect of R(IS) 15/94 by, as the Deputy Commissioner put it in CJSA/3 816/97, ensuring that the number of hours a claimant works during term time is "not diluted" by bringing into account periods of no-work during school holidays. In my view, it follows that any decision that a claimant is engaged in remunerative work because the number of hours worked during school terms is no less than 16, applies only during the periods of the terms. This is effectively the conclusion reached in CJSA/3 816/97 but I have reached it by a different pat and would reformulate the test proposed by the Deputy Commissioner at the end of paragraph 27 of his decision because his formulation is inconsistent with R(IS) 8/95. A better statement of the law is that a person is engaged in remunerative work during any part of a cycle of work taken into account in establishing the average hours for which he or she is engaged in work, except during periods when on maternity leave or when absent from work because of sickness.
21. Therefore, unless either regulation 5(3) or regulation 5(5) may be said tc apply, it would follow that a person to whom regulation 5(3B) applies is not to be regarded as engaged in remunerative work during school holidays."

13. Mr Armstrong endorsed what was said by the Commissioner in that case. If I were to accept his submission the effect would be that the tribunalµs decision would be erroneous in point of law on these grounds also. That is because the tribunal in giving reasons for their decision indicated that because regulation 51 (2)(c) applied to the claimant she was in remunerative employment for the duration of the Easter vacation arid was therefore not entitled to jobseekers allowance.

14. The basis for Mr Commissioner Rowland's decision is to be found in the last sentence in paragraph 20. It seems to me that apart from the exceptions to which he refers a person is to be taken to be engaged in remunerative work only during that part of the cycle of work which is taken into account in establishing the average hours for which she is engaged in work. In other words the part of the cycle of work in respect of which she is not in attendance is to be excluded.

15. Mr Armstrong in his submission said that the position of workers in educational establishments by virtue of regulation 51 (2)(c) constituted an exception to the general rules in respect of the calculation of hours set out in regulation 51. He later conceded that by virtue of the phrase "or at some other place of employment" the exception was wider than he initially thought. The particular working conditions of such employees was recognised in R(IS) 15/94 to which Mr Commissioner Rowland refers. He said that the result of that decision was that periods when such workers on enforced holidays were taken into account in averaging over the whole year the number of hours worked the result was that it was possible for such a worker, although working more than 16 hours a day during term time, was eligible for the relevant benefit during that period. He said the practical effect of R(IS) 15/94 was to artificially dilute the hours of work during term-time and it was to rectify that difficulty that, in respect of income support, regulation 5(3B) of the Income Support (General) Regulations and in respect of jobseeker's allowance regulation 51 (2)(c) of the Jobseekers Allowance Regulations had been introduced. It was his submission on behalf of the adjudication officer that enforced holidays were to be disregarded in calculating the number of hours actually worked on an average during term-time. It was his position that in these circumstances regulation 51 (2)(c) does not assist in calculating the hours worked during enforced holidays in the consideration of a claim for jobseekers allowance on behalf of such a worker. It was his position that it was necessary to turn to regulation 52 during these periods to determine whether an enforced holiday or any part of it was a recognised holiday. If the answer to that question was in the negative for all or any of the period it was his submission that subject to other criteria there was an entitlement to the allowance for as appropriate the whole or part of the period.

16. I do not accept that submission or the conclusion reached by Mr Commissioner Rowland in CJSA/3218/97. As Mr Commissioner Rowland said the introduction of regulation 5(3B) the Income Support Regulation was introduced to reverse the effect of R(IS) 15/94 in the sense, as the Deputy Commissioner put it in CJSA/3816/97, the number of hours a claimant works during term-time was not to be "diluted" by bringing into account periods of no work during school holidays. As has already been indicated regulation 51(2)(c of the Jobseekers Regulations was introduced to achieve a similar result in jobseeker allowance cases. However it is to be noted that Mr Commissioner Rowland does not dissent from the conclusion reached by Mr Commissioner Mesher in R(IS) 8/95 in relation to the effect of paragraph 5(2) of the Income Support Regulations which are mirrored in regulation 51 (2)(a) and (b) of the Jobseekers Allowance Regulations. In regulation 51 (2)(b)(i) of the Jobseekers Allowance Regulations and regulation 5(2) of the Income Support (General) Regulations the method of calculation of hours provision is made in relation to a situation where there is a recognisable cycle of work. It was said by Mr Commissioner Mesher in respect of such a cycle of work in paragraph 12 of the Appendix:
  
"If the result of those decisions is a recognisable cycle of work, in the sense of arecurring round of events, in which the end point of each round is identical to its start point and forms the start point of the next round, then it has to be accepted for as long as the cycle remains intact a cycle may include weeks in which no work at all is done."
It is implicit from what is said there that the Commissioner is indicating that for the purpose of applying the relevant income support and jobseekers regulations the cycle is not broken, of necessity, by short term working in respect of which there are weeks where no work is done. I accept what Mr Commissioner Mesher says in that regard.

17. Applying that proposition for the purposes of calculating the hours the claimant is engaged in work the cycle referred to in sub-paragraph (c) of regulation 51(2), in the sense ·cycleº is spoke of by Mr Commissioner Mesher in the quotation above, it is not broken by school holidays or other similar vacations and remains intact as the cycle is the basis of the contractual employment arrangements. To determine otherwise would mean that it would lose its character as the cycle of work in the course of a calendar year. What regulation 51 (2)(c) does is to impose a generally less favourable method of calculation for the claimant for establishing the number of hours engaged in work by taking out for the purposes of the calculation the periods in which the claimant does no work during school holidays or similar vacations or other periods during which she is not required to work. Though they are taken out for the purposes of the method of the calculation of hours it does not follow that these periods become independent of the cycle of work and are to be subjected to the treating provisions in regulation 52 with the consequence that all or at least part of these periods are to be taken as periods when the claimant is not in remunerative work as defined in regulation 51(2). In my view upon a proper construction of regulation 51, when read as a whole, if as a consequence of the calculation in regulation 5l(2)(c) the claimant's hours are sufficient to place her within the definition of remunerative work that work covers the whole period of the cycle; namely the calendar year which is clearly the cycle in the claimant's contract. It can thus be seen that I come to a directly opposite view to that expressed by Mr Commissioner Rowland in paragraph 21 of CJSA/32l8/97.

18. It therefore follows that I do not accept Mr Armstrong's further submission that the consequence of the inclusion of regulation 51(2)(c) was to create a statutory anomaly whereby the workers referred to in sub-paragraph (c) had been given a definite advantage ever other workers such as short-time workers in a cycle of work the calculation of these hours would be on a different basis. It was said that regulation 51(2)(b)(i) is exclusive from 5l(2)(c) and that this accordingly made the difference. I do not consider that there is anomaly. The adoption of the consistent approach that the cycle remains intact during t periods of no work means that there is no such anomaly and that workers in the category referred to in regulation 51 (2)(c) are not placed in a better position than other workers short-time working.

19. It was also submitted by Mr Armstrong that regulations 51 and 52 are complementary to each other and that either one will suffice. He said that regulation 52 applies to people who are otherwise employed in remunerative work. He made reference to paragraph 22 CJSA/3816/97. The Deputy Commissioner, as he then was, said therein:-
  
"Regulation 52(1) provides that a person who is otherwise engaged in remunerative work is to be treated as remaining so in the circumstances covered by the condition specified in that paragraph. The effect of this provision is that the claimant is deemed to be in remunerative work as defined by regulation 51(1) and there is no scope need to refer to the calculation provisions of regulation 51(2)."
I do not accept what is said by the Deputy Commissioner as the definition of remunerative work is set out in regulation 51(1) with different methods of calculation of hours of work depending on different factual circumstances, set out in regulation 51(2). It is to this regulation that one must first proceed in determining whether a person is in remunerative work. All that regulations 52 and 53 do are to set out special circumstances in which particular claimants are otherwise, notwithstanding regulation 51(1), to be treated as being in remunerative work or not in remunerative work. Regulation 52(1) deals with certain specified absences from work which would bring a person with the ambit of remunerative work where otherwise they would not be so. In this case by virtue of the cycle of work an the operation of regulation 51(2)(c) the claimant is in remunerative work as on the calculation of the whole cycle she falls within the definition of regulation 51(1).

20. In these circumstances I have reached the conclusion that the adjudication officer came to the correct result on the claimant's claim. Although the tribunal erred in law they too in substance came to the correct conclusion. In these circumstances I have made the decision I have made in paragraph 1.

21. The appeal succeeds. However that success is of no advantage to the claimant.

Signed

D J May
Commissioner 
18 March 1999