COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM A SOCIAL SECURITY COMMISSIONER
Strand London WC2 |
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B e f o r e :
LORD JUSTICE AULD
SIR PATRICK RUSSELL
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BROWN | Appellant | |
-v- | ||
THE CHIEF ADJUDICATION OFFICER | Respondent |
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Smith Bernal Reporting Limited
180 Fleet Street London EC4A 2HD
Tel: 0171 831 3183 Fax: 0171 831 8838
(Official Shorthand Writers to the Court)
MR M. KENT QC (instructed by the Office of the Solicitor of the Department of Social Security, London WC2) appeared on behalf of the Respondent.
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Crown Copyright ©
LORD JUSTICE NOURSE: This is an appeal by the claimant, Ms Brown, against a decision of one of the social security commissioners, Mr D.G. Rice, refusing her claim for statutory sick pay.
The claimant was employed by the Granta Housing Society Limited at Wessex Place in Cambridge for a continuous period from 9th September 1991 to 20th June 1992, being a period somewhat in excess of nine months. During each week in that period she worked for not less than 24 hours. A majority of the social security appeal tribunal at Cambridge found that she was throughout employed on a day-to-day basis. On 20th June 1992 she injured her neck at work and was, in consequence, incapable of working until 9th December of that year. In due course she made a claim for statutory sick pay, which came to be treated as a claim for the period from 21st June until 9th December 1992.
The provisions relating to statutory sick pay are contained in part XI of the Social Security Contributions and Benefits Act 1992. Section 151 provides, shortly stated, that where an employee has a day of incapacity for work the employer shall pay him statutory sick pay in respect of that day, provided that three qualifying conditions are satisfied, of which the first and third are satisfied here and the second (see section 153(1)) is that the day of incapacity for work should fall within a period which is, "as between the employee and his employer, a period of entitlement". That expression is defined in section 153(2) which, so far as material, provides:
"For the purposes of this Part of this Act a period of entitlement as between an employee and his employer, is a period beginning with the commencement of a period of incapacity for work and ending with whichever of the following first occurs:
(a) the termination of that period of incapacity for work;
...
(c) the day on which the employee's contract of service with the employer concerned expires or is brought to an end."
Section 153(3) provides that schedule 11 has effect for the purpose of specifying circumstances in which a period of entitlement does not arise in relation to a particular period of incapacity for work. Paragraph 1 of that schedule provides that a period of entitlement does not arise in relation to a particular period of incapacity for work in any of the circumstances set out in paragraph 2. The circumstance set out in paragraph 2(b) is that the employee's contract of service was entered into for a specified period of not more than three months.
The claimant's claim to statutory sick pay has been rejected by her employers, the adjudication officer, the social security appeal tribunal and the learned commissioner. The individual grounds on which those successive rejections were based need not now be canvassed. It is enough to say that by the end of the second oral hearing before the commissioner the adjudication officer had accepted that, by virtue of other provisions of schedule 11, the claimant's contract of service had effectively been entered into for a specified period of more than three months, so that the disentitling effect of paragraph 2(b) had no application. In paragraph 13 of his decision dated 12th January 1995 the commissioner so held.
In paragraph 14 he continued:
"However, that is not the end of the matter. For it is still necessary to consider the effect of section 153(2)(c). When the claimant became unable to work because of incapacity, then by reason of her being employed on a daily basis, her contract ended with the last day worked. Accordingly, there could be no period of entitlement, as the contract had already ended."
Having then considered the point further, the commissioner, in paragraph 18, adhered to the view he had expressed in paragraph 14 and held that the second qualifying condition had not been satisfied, so that the claimant was not entitled to statutory sick pay. However, in paragraph 19 he said:
"For completeness, I should mention that Mr. Cox, in his submissions to me, endeavoured to rely on the Employment Protection (Consolidation) Act 1978 in an attempt to establish that the contract of the claimant was for an indefinite period. In particular, he relied on section 49(4) and paragraph 3 of Schedule 13. He contended that, by virtue of the foregoing provisions, the claimant was entitled, on the facts of the case, to one week's notice of termination of her employment, and accordingly her employment did not terminate on the day she contracted her incapacity."
As to that passage, I should state, first, that Mr. Cox was counsel who appeared for the claimant before the commissioner; secondly, that the claimant was never given one week's notice to terminate her contract of employment or any notice. Her employers evidently assumed throughout that the contract, being on a day-to-day basis, did not require notice of termination. Later in paragraph 19 the commissioner rejected Mr. Cox's submission, saying that he did not see how the 1978 Act could effect the wording of section 153(2)(c) of the 1992 Act.
On a reading of the commissioner's decision as a whole, confirmed by the recollection of those who were present at the second oral hearing, it seems likely that Mr. Cox's submission as to the effect of section 49(4) of the 1978 Act was not put at the forefront of his argument, as it has been in the argument of Miss Booth QC, who has appeared for the claimant in this court. It is now clear that it is on the effect of that subsection that the outcome of this appeal depends.
The marginal note to section 49 is:
"Rights of employer and employee to a minimum period of notice"
So far as material, subsection (1) provides:
"The notice required to be given by an employer to terminate the contract of employment of a person who has been continuously employed for one month or more -
(a) shall be not less than one week's notice if his period of continuous employment is less than two years;"
Continuous employment is defined in section 151 and schedule 13. Section 49(4) provides:
"Any contract of employment of a person who has been continuously employed for three months or more which is a contract for a term certain of one month or less shall have effect as if it were for an indefinite period and, accordingly, subsections (1) and (2) shall apply to the contract."
On the face of it section 49(4) applies to the claimant here. No difficulty arises in relation to the definition of continuous employment; she was continuously employed for rather more than nine months; and her contract of employment was for a term certain of one day. Accordingly, the contract had effect as if it were for an indefinite period.
What then is the effect of section 49(4) on the claimant's entitlement to statutory sick pay? Being a deeming provision, that is to say a provision which requires you to assume to be true a state of affairs you know to be untrue, the extent of its application must be judged by ascertaining for what purposes and between what persons it is to be resorted to. Part IV of the 1978 Act is entitled "Termination of employment". As I read its provisions, they are intended to be of general application as between employer and employee, so that, by virtue of section 49(4), an employer or employee who is affected by them is entitled or subject to all the rights and obligations to which he would be entitled or subject if the contract of employment had in reality taken effect as it is deemed to take effect, provided only that that would not, in any particular application, lead to an unjust, anomalous or absurd result.
Section 153(1) of the 1992 Act having defined the period of entitlement "as between the employee and his employer", the provisions of part IV of the 1978 Act must be taken to apply for the purposes of ascertaining that period. Moreover, there is nothing inherently unjust, anomalous or absurd in applying the fiction under section 49(4) to an employee's entitlement to statutory sick pay. I therefore conclude that section 49(4) did indeed apply to the claimant's case. The result was that her contract of employment had become a contract for an indefinite period which, under section 49(1)(a), was terminable by not less than one week's notice, which notice was never given. Therefore, by virtue of section 153(2)(a) of the 1992 Act, the period of entitlement should properly be treated as being the period from 21st June to 9th December 1992, with the consequence that the claimant is entitled to statutory sick pay during that period.
I can well understand how it came about that the commissioner rejected the argument based on section 49(4). It is one of those points whose significance only becomes apparent when isolated from others and made the subject of full submissions. Indeed, Mr. Kent QC, who appears on behalf of the Chief Adjudication Officer before us but did not appear below, has, after the matter has been fully considered, supported the claimant's appeal on this point. I should add that the Secretary of State for Social Security was informed of the stance to be adopted by the Chief Adjudication Officer, but stated that he did not wish to be represented on the appeal or to make alternative submissions. The claimant's employers have also been informed of this hearing and have indicated their intention not to seek to intervene.
For these reasons I would allow the claimant's appeal on the first ground advanced by Miss Booth. That makes it unnecessary to say anything about the second ground, except that it would have been opposed by the Chief Adjudication Officer.
LORD JUSTICE AULD: I agree.
SIR PATRICK RUSSELL: I also agree.
Order: appeal allowed with costs and remitted to the social security appeal tribunal with a direction to proceed in accordance with these judgments.