(back to preceding text)

    68. Even without the incorporation of the words "including in the cycle the periods during which he does no work" the effect is tolerably plain. The number of hours for which he engaged in work during the cycle (ie during the year) is to be determined by averaging over the year but disregarding the school holidays. Again this interpretation is confirmed by the way in which periods of illness and maternity leave are dealt with in regulation 52(1).

    69. would dismiss the appeal.

LORD SCOTT OF FOSCOTE

My Lords,

    70. The title of these proceedings has become misleading. Mr Stafford has withdrawn his appeal. The only appellant is Mr Banks, anonymously described in the title as 'another'. Mr Banks is, or was at the time when the claims with which your Lordships are concerned were made, a single man. He was, in 1996, 22 years old. He worked for Doncaster Metropolitan Borough Council as a special needs assistant. He had entered this employment on 1 September 1995 and from then until the end of the summer term in 1996 he worked at Denaby Main Junior School. His principal duties were to provide support to two named children who had special educational needs. From 3 September 1996, the beginning of the 1996 autumn term, Mr Banks worked at a different school with different children. But his employer remained the same and his duties and terms and conditions of employment remained the same. So he had a continuing contract of employment from 1 September 1995.

    71. Mr Banks' hours of work were defined by the special educational needs of the particular children he was assisting. His hours were term time hours only and amounted to 20 hours per week. He was paid at the rate of £4.43 per hour. His conditions of employment stated that:

"There is no entitlement to paid annual leave …"

and that

"As work is available only during the times the pupil attends school other than in exceptional circumstances it is expected that holidays and other personal commitments are arranged outside of normal working hours."

    72. It is plain that Mr Banks' hours of work were tied to the actual presence at school and the educational requirements of specific pupils. There could, therefore, never be any work for him in school holidays and his pay was not intended to remunerate him for anything other than the hours of work with the named pupils that he put in during the school terms. He submitted monthly returns, detailing the hours he had worked, and, on the basis of the returns, was paid at monthly intervals. As Mr Commissioner Rowland commented, the monthly amounts paid to Mr Banks would vary, depending upon the hours worked from month to month (paragraph 6 of his decision dated 24 February 1999). But what would not vary would be that during school holidays Mr Banks would do no work with the special needs children, would not put in any returns and would be paid nothing.

    73. The Doncaster Social Security Appeal Tribunal, in the decision dated 10 February 1997 that was appealed to Mr Commissioner Rowland, found that in 1995/1996 Mr Banks worked 20 hours a week for 38 weeks. This gives a total for the year of 760 hours (not 720 as stated in the decision). So Mr Banks' remuneration for the year from his employment as a special needs assistant was around £3,367. Not many people would suppose that an annual income of £3,367 would suffice to keep the recipient out of poverty. So to conclude is not to charge Doncaster Metropolitan Borough Council with underpaying its special needs assistants. It is plain that the structure of employment of school ancillary workers, who include special needs assistants and many other categories, assumes that they will be available for employment elsewhere during out-of-term periods and can supplement their income by working during those periods. The reality of their contracts is that employment is available to them for limited hours during term time and that they are not employed during out-of-term periods.

    74. This is why it is common ground that regulation 5(3) (of the Income Support (General) Regulations 1987), and regulation 52(1) (of the Jobseeker's Allowance Regulations 1996) do not, so far as school holidays are concerned, affect ancillary workers such as Mr Banks. School holidays are holidays for teachers, and, of course, for the children. Teachers receive an annual salary, usually payable monthly. Their remuneration relates to the whole year. Their school employment places them in employment for the year unless earlier terminated. Not so ancillary workers. They are not in employment in any meaningful sense except during school terms.

    75. It is, as I have said, to be expected that ancillary workers like Mr Banks will make themselves available for employment in out-of-term periods in order to supplement their income, inadequate as it is if viewed on a yearly basis. If they are not able to obtain employment in out-of-term periods, it is to be expected that they will seek to supplement their inadequate income by making a claim for income-related benefit.

    76. The National Assistance Act 1948, the last of the four major Acts enacted to implement the recommendations of the Beveridge Report on Social Insurance and Allied Services (1942) (Cmd 6404) was introduced to take the place of public assistance through the Poor Laws in order to provide a means-tested benefit for the relief of poverty. There have been substantial developments and changes since 1948 in the social security system of which means-tested benefit for the relief of poverty forms part. The Social Security Act 1986 abolished supplementary benefit and family income supplement and replaced them with "income support" as the basic safety net benefit and "family credit" as a progressive benefit for those with family responsibilities. The purpose of this was to counter the "poverty trap", where the financial disadvantage of losing benefit outweighed the financial advantages of taking employment. In 1992 the substantive law relating to social security benefits was consolidated in the Social Security Contributions and Benefits Act 1992 which covered, inter alia, income-related benefits such as income support and family credit. The 1992 Act was in force at the time Mr Banks began his employment with Doncaster Metropolitan Borough Council. As from October 1996, however, in respect of claimants available for work, the Jobseekers Act 1995 replaced income-support under the 1992 Act with jobseeker's allowance, also an income based benefit. Income support under the 1992 Act could be claimed only by those who were not available for work. But none of these legislative changes departed from the fundamental purpose of the social security system, namely, that benefit should be provided in order to keep out of poverty those whose income was below a minimum poverty level.

    77. My Lords, the statutory provisions in the Acts and Regulations made thereunder must be construed, so far as possible, so as to give effect to the fundamental purpose of the legislation to which I have referred. If there are ambiguities or inconsistencies in the statutory language these should, I respectfully suggest, be resolved in a manner which serves that fundamental purpose and is not inconsistent with it.

    78. The Regulations that your Lordships must construe for the purposes of this appeal, namely, the Income Support (General) Regulations 1987 (the IS Regulations) and the Jobseeker's Allowance Regulations 1996 (the JSA Regulations) cannot, in their application to Mr Banks' claims, be presented as models of clarity. Mr Banks' claims raise the question whether paragraphs (2)(b)(i) and (3B) of IS regulation 5 require him to be treated as being in remunerative employment during school holidays. The same question arises under sub-paragraphs (b)(i) and (c) of paragraph (2) of JSA regulation 51.

    79. In the answering of this question there have been disagreements at almost all levels. First, there have been disagreements at the tribunal level. Mr Banks applied for income support in respect of the period 22 December 1995 to 9 January 1996 (the 1995 Christmas school holiday) and for the period 1 April 1995 to 14 April 1996 (the 1996 Easter school holiday). The Doncaster Social Security Tribunal in its decision of 28 May 1996 held that IS regulation 5(2)(b)(i) did not apply because Mr Banks' hours of work did not fluctuate. They said that

"he works regular hours during term time and does not work in school holidays. This is not an example of fluctuating hours but of periods of work for non-fluctuating hours followed by periods of no work. We are of opinion that the appellant is engaged in work for a regular number of hours in term time and not so engaged during the holiday periods. The provisions of paragraph 5(2)(b)(i) do not therefore apply to the appellant's work. As a consequence he is in remunerative work only during the periods when he is working 20 hours per week at the school. During holiday periods he is not in remunerative work. Consequently he is not in remunerative work between 22 December 1995 and 9 January 1996 and between 1 April 1996 and 14 April 1996. The matter should be referred to the adjudication officer to consider whether he was available for work during those periods."

    80. Presumably the adjudication officer was satisfied about Mr Banks' availability because he was paid income support for the two periods of claim. He was paid £36.80 per week.

    81. Mr Banks made another claim to income support in respect of the 1996 summer holiday, 22 July 1996 to 3 September 1996, and a claim to jobseeker's allowance in respect of the Michaelmas half term holiday, 25 October 1996 to 4 November 1996.

    82. The Doncaster Social Security Tribunal, in its decision of 10 February 1997, disagreed with the decision of 28 May 1996 that had been reached by a differently constituted tribunal. There was no material difference in the facts but the 1997 tribunal held that IS regulation 5(2)(b)(i) did apply. Since, over the cycle of one year, Mr Banks worked 20 hours a week for 38 weeks and no hours at all for 14 weeks, the tribunal held that "the number of hours for which Mr Banks is engaged fluctuate". The difference between the two tribunals was that the 1997 tribunal thought that Mr Banks should be treated as engaged in work during the school holidays. The 1996 tribunal thought he should not be so treated.

    83. Second, there have been disagreements at the commissioner level. In dealing with Mr Banks' appeal against the conclusions of the 1997 tribunal, Mr Commissioner Rowland held that, in a case where a "recognisable cycle of work" had been established:

"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 … 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."

    84. This is substantially the same approach to construction as that advocated by my noble and learned friend, Lord Cooke of Thorndon.

    85. But, in a decision in Scotland on 18 March 1999 (CSJSA/395/98), Mr Commissioner May, addressing the JSA Regulations, disagreed with Mr Commissioner Rowland and held at paragraph 17 that:

"… upon a proper construction of regulation 51, when read as a whole, if as a consequence of the calculation in regulation 51(2)(c) [the counterpart of IS regulation 5(3B)] 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."

    86. The Court of Appeal, in dealing with the appeal from Mr Commissioner Rowland's decision, gave a judgment of the court which, in effect, preferred Mr Commissioner May's reasoning to that of Mr Commissioner Rowland. But, in your Lordships' House there are again disagreements as to the correct application of the relevant regulations to the facts of Mr Banks' claims.

    87. In these circumstances it can hardly be said that the proper meaning and effect of the regulations is clear. In deciding upon their meaning and effect, and in resolving any ambiguity, the social purpose of the legislation should, in my opinion, be kept in mind and, if possible, given effect to.

    88. Section 124(1) of the 1992 Act entitles a citizen such as Mr Banks to income support if—

"(b)  he has no income or his income does not exceed the applicable amount;

(c)  he is not engaged in remunerative work … ; and

(d)  except in such circumstances as may be prescribed—

(i)  he is available for, and actively seeking, employment"

    89. Section 1 of the 1995 Act entitles a citizen such as Mr Banks to jobseeker's allowance if he fulfils a number of specified conditions. These conditions include those set out in section 124(1)(b), (c) and (d) as cited above.

    90. This appeal is only concerned with the condition set out in section 124(1)(c) (or in section 1(2)(e) of the 1995 Act). It is accepted, at least for the purposes of this appeal, that Mr Banks was able to satisfy all the other conditions.

    91. The condition "he is not engaged in remunerative work" has two, at least, important elements. First, the expression "remunerative work" requires definition. It is not a term of art. Second, the question whether and when a person is "engaged in" remunerative work is, obviously, of importance. The 1992 Act, in section 137(2), provides that:

"Regulations may make provision for the purposes of this Part of this Act— ….

(c)  as to what is or is not to be treated as remunerative work …

(d)  as to circumstances in which a person is or is not to be treated as—

(i)  engaged or normally engaged in remunerative work;

(ii)  available for employment; or

(iii)  actively seeking employment."

    92. The 1995 Act has a regulation making power in more or less the same language (see section 21 and paragraph 1 of Schedule 1)

    93. In IS regulation 5 there is an exercise both of the section 137(2)(c) power and of the section 137(2)(d) power. Paragraph (1) describes the work that is to be treated as "remunerative work". And paragraphs (3), (3A) and (4) set out circumstances in which a person is to be "treated" as engaged in remunerative work ((3) and (4)) and "not treated" as so engaged ((3A)).

    94. The issues of construction that arise on this appeal relate to paragraphs (2) and (3B). These two paragraphs amplify and supplement paragraph (1). They identify what is or is not "remunerative work". They do not purport to, and do not, describe circumstances in which a person who is not engaged in remunerative work is to be treated as so engaged or circumstances in which a person who is engaged in remunerative work is to be treated as not so engaged. To make good these propositions it is necessary to set out the text of the relevant paragraphs, omitting irrelevant passages,—

"(1)  Subject to the following provisions of this regulation, …, remunerative work is work in which a person is engaged or, where his hours of work fluctuate, 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.

(2)  Subject to paragraph (3B), the number of hours for which a person is engaged in work shall be determined—

(a)  where no recognisable cycle has been established in respect of a person's 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, the period of one complete cycle (including where the cycle involves periods in which the person does no work, those periods but disregarding any other absences);

(ii)  ….

(3)  A person shall be treated as engaged in remunerative work during any period for which he is absent from work referred to in paragraph (1) if the absence is either without good cause or by reason of a recognised, customary or other holiday.

(3A)  A person shall not be treated as engaged in remunerative work on any day on which the person is on maternity leave or is absent from work because he is ill.

(3B)  Where for the purpose of paragraph (2)(b)(i), a person's recognisable cycle of work at a school … is one year and includes periods of school holidays …. during which he does not work, those periods and any other periods not forming part of such holidays … during which he is not required to work shall be disregarded in establishing the average hours for which he is engaged in work."

    95. As is apparent, paragraph (1) contains a description of the work that for the purposes of section 124(1)(c) is "remunerative work". It does not set out circumstances in which a person who is not engaged in work at all is to be treated as engaged in work. It is an exercise of the section 137(2)(c) power. If a person is engaged in work, paragraph (1) will tell you whether or not the work is "remunerative work".

    96. But some amplification of paragraph (1) was plainly necessary. How should the number of "hours of work", which will determine whether or not the work is "remunerative work", be calculated? Paragraph (2) provides the answer. It enables the relevant number of hours, for paragraph (1) purposes, to be calculated.

    97. To reprise, a person who is not at or in work at all is, obviously, or so it seems to me, not in "remunerative work". If, on the other hand, a person is in work, he may or may not be in "remunerative work". Paragraphs (1) and (2) will tell you whether he is or is not.

    98. I now come to paragraph (3B). Paragraph (3B) qualifies paragraph (2)(b)(i). It only applies if there is a recognisable cycle of work of one year. It alters the "number of hours" calculation that would otherwise be made under paragraph (2)(b)(i). But no more than paragraph (2)(b)(i) does paragraph (3B) require a person who is not engaged in work at all to be treated as if he was in work. All it does is to affect the calculation of the average number of hours "for which a person is engaged in work" (see the opening words of paragraph (2)).

    99. In paragraph 5 of his opinion, my noble and learned friend, Lord Millett, says that under paragraph (2)(b)(i) the claimant must be treated as being engaged in work throughout the yearly cycle. Why? The paragraph does not say so. Nowhere are the words "treated as being engaged in work", or anything similar, to be found. Those words are, by contrast, to be found in paragraphs (3), (3A) and (4), and in other paragraphs as well. But they are absent from paragraph (2), as they are from paragraph (3B).

    100. I would agree, without any difficulty, that the wording of paragraph (2) and of paragraph (3B) does create some problems. For example, there is the parenthetic passage in paragraph (2)(b)(i): "(including, where the cycle involves periods in which the person does no work, those periods but disregarding any other absences)". What are the "other absences" to which the passage refers? What are the contrasted "periods in which a person does no work"? Mr Commissioner Morcom who decided CIS/261/1990 thought that school holidays were excluded from "periods in which the person does no work" and, presumably, were included in "other absences". Mr Commissioner Goodman in R(IS)15/94 disagreed and held that school holidays were, for paragraph (2)(b)(i) purposes, "periods in which the person does no work". His decision led to paragraph (3B) being added to regulation 5. But whatever the right view on the meaning of the passage, its relevance is to no more than to the calculation of the average number of hours.

    101. Mr Commissioner Goodman in his decision said:

"… regulation 5(3) is not dealing with the question of hours of work as averaged but is dealing with the question of when a person shall be treated as engaged in remunerative work as defined in paragraph 1 of regulation 5."

(his emphasis)

    Similarly, in my opinion, paragraph (2)(b)(i) is dealing with the question of hours of work as averaged and is not dealing with the question of when a person shall be treated as engaged in remunerative work.

    102. Paragraph (3) introduces the statutory fiction that a person absent from work without good cause or during "a recognised, customary or other holiday" is in remunerative work although not in fact in work at all. It is accepted that this provision does not apply to Mr Banks during school holidays. School holidays are not holidays for him. It would apply to him during bank holidays. Paragraph (4) says that for the first seven days of a strike, a striker is to be treated as in remunerative work. This is another statutory fiction. But there is no provision that, in terms at least, says that ancillary school workers like Mr Banks are to be treated as engaged in remunerative work during out-of-term periods when they are not in work at all. There could easily have been such a provision. Why should the statutory fiction be implied?

    103. This approach to and construction of regulation 5 and its various paragraphs is, I suggest, confirmed by the language used in the comparable JSA Regulations. It is common ground that the JSA regulations were intended to produce the same result as the IS Regulations.

    104. JSA regulation 51 describes what is meant by "remunerative work". It means "… work in which [the claimant] is engaged or, where his hours of work fluctuate, is engaged on average, for not less than 16 hours per week (paragraph (1)(a)). As with IS regulation 5(1) and (2), JSA regulation 51(1) is not expressed to treat anyone as engaged in work who is not in work. But if a person is in work paragraph (1) will tell you whether or not the work is "remunerative work".

    105. Paragraph (2) of regulation 51 supplements paragraph (1). It tells you how to calculate "the number of hours in which the claimant … is engaged in work". As with paragraphs (2) and (3B) of IS regulation 5, it is the "number of hours" on which the paragraph is concentrating. In paragraph (2), as in paragraphs (2) and (3B) of IS regulation 5, the words "treated as engaged" nowhere appear. The paragraph does not describe circumstances in which a person not in work is to be treated as being in work. Paragraph (2)(a), (b)(i) and (b)(ii) of JSA regulation 51 are in the same terms and serve the same purpose as paragraph (2)(a), (b)(i) and (b)(ii) of IS regulation 5. Paragraph (2)(c) in JSA regulation 51 is in the same terms and serves the same purpose as paragraph (3B) in IS regulation 5.

    106. The content of JSA regulation 51 as a whole makes it, I suggest, clear that it is describing what "remunerative work" means, and is not dealing at all with the question of who is or is not to be treated as in remunerative work. That is done by regulation 52, headed "Persons treated as engaged in remunerative work", and by regulation 53, headed "Persons treated as not engaged in remunerative work". It is these two regulations that contain the statutory fictions as to when a person is or is not to be treated as engaged in remunerative work. Regulation 51 does not do so. A construction of regulation 51 as requiring a person to be treated as engaged in remunerative work at a time when he is not engaged in work at all is to impute to the draftsman of the Regulations an almost impish pursuit of confusion.

    107. I venture to suggest, my Lords, that such a construction of JSA regulation 51 or of IS regulation 5 is wrong. At the least it cannot be regarded as a construction that is clearly right. And it is, I suggest, a construction that fails to give effect to the fundamental purpose of the legislation.

    108. The alternative construction, and that which I prefer, is that IS regulation 5 and JSA regulation 51 do not require a person to be treated as engaged in remunerative work at a time when he was not engaged in work at all. So, was Mr Banks in work during the periods in respect of which his claims were made? Given the contractual arrangements between him and the Doncaster MBC, the answer, in my opinion, is that he was not.

    109. In R v Ebbw Vale and Methyr Tydfil Supplementary Benefits Appeal Tribunal Ex p Lewis [1982] 1 WLR 420 the Court of Appeal held that a person who was absent from work through illness was not at the time "engaged, and normally engaged, in remunerative full time work" for the purposes of the Family Income Supplements Act 1970. Lord Denning MR, at p 422 asked the question "is he engaged in remunerative full-time work during the period when he is sick?" and said:

"The common sense answer is that he is not engaged in remunerative full-time work at that time."

Oliver LJ agreed. He rejected the proposition that "a person engaged in remunerative full-time work" meant "simply being engaged under a contract of employment …" (p 424)

    110. So, in the present case, unless there is some statutory provision that requires Mr Banks to be treated as being engaged in work during school holidays, I would hold on the facts that he was not so engaged. There is no statutory provision that expressly so requires and, in my opinion, no sufficient justification for implying such a provision into paragraph (2)(b)(i) of IS regulation 5 or JSA regulation 51.

    111. If I am wrong about that, I would concur in the opinion of my noble and learned friend, Lord Cooke of Thorndon, and hold that the "disregard" in paragraph (3B) of IS regulation 5 and in paragraph 2(c) of JSA regulation 51 requires that Mr Banks should not be treated as in remunerative work during school holidays.

    112. May I conclude, my Lords, by inviting your Lordships to consider the position that will have been reached if this appeal is to be dismissed.