First-tier Tribunal (Tax)

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Cite as: [2014] UKFTT 163 (TC)

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Mrs Rano Yasmeen Mian v Revenue & Customs [2014] UKFTT 163 (TC) (05 February 2014)
INCOME TAX/CORPORATION TAX
Other

[2014] UKFTT 163 (TC)

TC03301

Appeal number: TC/2012/11050

STATUTORY SICK PAY – whether Appellant entitled to statutory sick pay - whether absences of Appellant from work comprised days of incapacity for work - Appellant's GP certified Appellant as unfit for work - HMRC instructed doctors to give medical opinion as to Appellant's fitness to work - failed to set out full extent of duties performed by Appellant - appeal allowed

FIRST-TIER TRIBUNAL

TAX CHAMBER

	MRS RANO YASMEEN MIAN	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S REVENUE & CUSTOMS	First Respondents

- and -

ECLAT UK LIMITED Second Respondents

TRIBUNAL:

JUDGE EDWARD SADLER

JOHN WOODMAN CA

Sitting in public at Bedford Square on 17 December 2013

The Appellant was not represented and did not appear

Miss L Ramsay, of the Contributions and Employer Office of HM Revenue and Customs, for the First Respondents

The Second Respondents were not represented and did not appear

DECISION

Introduction

1. This is an appeal by Mrs Rano Yasmeen Mian ("the Appellant") against a decision of The Commissioners for Her Majesty's Revenue & Customs ("HMRC") dated 30 May 2012. That decision was made under section 8 of the Social Security Contributions (Transfer of Functions, etc) Act 1999. The decision was that the Appellant was not entitled to Statutory Sick Pay ("SSP") for the period of the Appellant's absence from work for sickness beginning on 26 August 2011 and ending on 9 March 2012. In consequence the Appellant's employer, Eclat UK Limited ("the Employer"), was not liable to pay the Appellant SSP.

2. The grounds of the decision made by HMRC were that the doctor appointed by HMRC for the purpose of determining whether she was capable of performing the duties of her employment was of the opinion that she was capable of performing those duties. The Appellant requested a review of that decision, and (after taking a further medical opinion) HMRC upheld their decision in their letter to the Appellant dated 24 October 2012. On 19 November 2012 (and therefore within the 30 day period for making an appeal) the Appellant appealed to this tribunal against that decision. The Appellant's appeal is made under section 11 of the Social Security Contributions (Transfer of Functions, etc) Act 1999.

3. When the hearing of the Appellant's appeal was called neither the Appellant nor the Employer (which was Second Respondent in the appeal proceedings) was present. The Appellant had notified the tribunal office that she would rely on the documents supplied to HMRC in the course of this matter. The Employer had not replied to any correspondence from the tribunal office. We were satisfied that both those parties had been notified of the hearing, and that it was in the interests of justice to proceed with the hearing in their absence under Rule 33 of The Tribunal Procedure (First-tier Tribunal (Tax Chamber) Rules 2009.

4. The issue we have to decide is whether, in the terms of the SSP legislation (set out below), the relevant period of absence of the Appellant from work comprised a period of incapacity for work, that is, a period when the Appellant was incapable by reason of some form of illness or disablement of doing the work which the Appellant could reasonably be expected to do under her contract of service.

5. It is our decision to allow the Appellant's appeal. From the evidence before us we find that the Appellant made a credible case that she could not, by reason of illness or disablement, carry out the duties required of her by her contract of service. HMRC sought to refute the Appellant's case by seeking their own medical opinion on the point. However, in instructing the doctors on whose opinion HMRC relied in reaching their decision, HMRC failed to explain certain of the duties of the Appellant which were, or were likely to be, material to the medical condition which the Appellant claimed rendered her incapable of working. HMRC's case that the Appellant was not entitled to SSP cannot therefore be relied on.

The relevant legislation

6. The legislation relating to SSP is primarily found in the Social Security Contributions and Benefits Act 1992 ("SSCB Act 1992"). The entitlement to SSP arises under section 151 SSCB Act 1992, the relevant parts of which provide:

(1) Where an employee has a day of incapacity for work in relation to his contract of service with an employer, that employer shall, if the conditions set out in sections 152 to 154 below are satisfied, be liable to make him, in accordance with the following provisions of this Part of this Act, a payment (to be known as "statutory sick pay") in respect of that day.

…

(4) For the purposes of this Part of this Act a day of incapacity for work in relation to a contract of service means a day on which the employee concerned is, or is deemed in accordance with regulations to be, incapable by reason of some specific disease or bodily or mental disablement of doing work which he can reasonably be expected to do under that contract.

7. The first of the qualifying conditions referred to in section 151(1) SSCB Act 1992 is set out in section 152 SSCB Act 1992 in the following terms:

(1) The first condition is that the day in question forms part of a period of incapacity for work.

(2) In this Part of this Act "period of incapacity for work" means any period of four or more consecutive days, each of which is a day of incapacity for work in relation to the contract of service in question.

8. The Appellant's case relates to the question of whether her period of absence from work comprised a period of incapacity for work. The Appellant contends that this was so: HMRC contend that since, according to the medical opinion obtained by them, the Appellant was capable of performing the duties required under her contract of employment, her absence was not a period of incapacity for work, and this first condition of entitlement to SSP was therefore not satisfied.

9. The remaining conditions which must be satisfied before an entitlement to SSP arises are not in dispute between the parties and we need therefore make no reference to them. There are provisions which govern the amount of SSP payable by reference to the employee's normal weekly earnings, but again that is not a matter in dispute in the present case. Similarly there is no dispute about the statutory limitations on entitlement (broadly, SSP cannot be claimed for the first three qualifying days of incapacity for work, nor for a period exceeding 28 weeks).

10. Regulations deal with such matters as the notice which the employee must give to the employer of the employee's day of incapacity for work, the provision of information as to the incapacity and its duration, and the provision of medical information in the terms of a doctor's statement or certificate in a prescribed form.

11. Although in most cases it is the employer who pays SSP to his sick employee, it is an officer of HMRC who, as provided in section 8(1)(f) Social Security Contributions (Transfer of Functions, etc) Act 1999, must decide whether in a particular case an employee has an entitlement to SSP.

The facts

12. The Appellant was employed from 1 May 2009 by the Employer. She worked three days a week. Her job description was as a beauty therapist. The Employer informed HMRC that the duties of the Appellant's employment required her to carry out beauty treatments on the Employer's customers (including facial therapies, manicures and pedicures, massages (including full body massages) and hair removal) and ancillary duties including reception work, ordering supplies, maintaining notes of customers' treatment programmes and medical histories, and cashing up at the end of the day.

13. The Appellant's employment duties (again, as the Employer informed HMRC) required her to stand up for lengthy periods and to bend over customers to administer the beauty treatments and, for the massages, to bend over customers and exert pressure with hands and arms. The equipment she had to operate was either fixed or mounted on wheeled trolleys.

14. The Employer kept a large and free-standing advertising board which each day was placed on the pavement outside the premises where the Appellant worked. She was expected to lift that advertising board and carry it out to the pavement each morning at the start of business and to carry it back into the premises at the end of the working day before locking up the premises.

15. The Appellant's last day of work was on 24 August 2011. On 26 August 2011 she became sick, and the first working day when she was absent because of sickness was 29 August 2011. She reported her sickness to the Employer on 30 August 2011.

16. The Appellant consulted her general practice doctor on 26 August 2011. Her doctor issued over time a series of certificates advising that the Appellant was not fit for work. The certificates covered the period beginning 26 August 2011 until mid-March 2012 (she was "signed off" by her GP on 19 March 2012). The Appellant's condition in those certificates was described as "backache, migraine and panic attacks". A medical report from the Appellant's GP dated 6 December 2011 provides a diagnosis of "back pain/panic attack", states symptoms to be "back pain after lifting heavy board at work (accident at work)" and states that treatment received is "physiotherapy, exercises at home as advised by physiotherapist, and pain killers". The outlook for the Appellant's condition is said to be "unpredictable at the moment because she is still having back pain and getting more panic attacks".

17. The Employer paid the Appellant £530 on 31 October 2011 and £163.60 on 30 November 2011.

18. In response to HMRC's request as to the reason for non-payment of SSP, the Employer advised HMRC in December 2011 that the Appellant had been absent for sickness for a period longer than would be expected from HMRC guidelines issued to employers; that the Appellant had been offered a welfare meeting, but had not attended; and that the notes from the Appellant's GP were not helpful and that the doctor was probably unaware of the nature of the Appellant's duties at work.

19. HMRC sought an independent medical opinion from the consultancy Medical Services. The doctor providing the opinion examined the Appellant on 7 December 2011. On 11 January 2012 HMRC advised the Appellant and the Employer that "it is Medical Services' opinion that [the Appellant] is capable of work as a Beauty Therapist in the periods covered by the medical evidence supplied. As a result of the Medical Services opinion, it would appear that [the Appellant] is not entitled to SSP for the periods covered by medical evidence supplied ..." We did not have in evidence either the information or instructions given to Medical Services or a copy of their opinion.

20. The Appellant wrote to HMRC on 31 January 2012 with further certificates from her GP (until mid-February 2012 and describing her back pain and panic attack illnesses in detail). She said that she had attended hospital because of sharp pains in her head and neck and pain and numbness in her arm, and had been referred for an MRI scan. On 16 February 2012 the Appellant had a cervical spine MRI scan. The scan revealed some disc degeneration in the spine, but no evidence of nerve root entrapment. The Appellant also had a lumbar spine X-ray on 4 May 2012. The report from that X-ray specifies: "Minimal scoliosis of the lumbar spine convex to the right is noted in the lower lumbar region. No other abnormality is seen."

21. From 16 February 2012 the Appellant had therapy for anxiety and depression from the mental health services department of the North East London NHS Foundation Trust.

22. Throughout this period the Appellant had physiotherapy treatment for her back condition and during part of the period she had physiotherapy for pain in her neck.

23. On 19 March 2012 the Appellant was "signed off" by her GP, that is, certified as in fit condition to work, and she approached the Employer with a view to returning to work. The Employer decided that she should not return to work and subsequently the Appellant was dismissed from her employment without returning to work.

24. HMRC sought a further opinion from Medical Services. The doctor concerned was sent a copy of the results of the MRI scan which had by then taken place. He carried out an examination of the Appellant on 12 May 2012. Following the examination Medical Services expressed the opinion that the Appellant was capable of doing her work as a beauty therapist. We did not have in evidence either the information or instructions given to Medical Services or a copy of their opinion.

25. In consequence of the opinion received by HMRC from Medical Services, on 30 May 2012 HMRC made their decision in these terms: "[The Appellant] is not entitled to Statutory Sick Pay (SSP) from 26 August 2011 and that [the Employer] is not liable to pay SSP for that period".

26. The Appellant appealed in writing to HMRC against that decision on 22 June 2012. On 11 July 2012 the Appellant wrote to HMRC setting out in detail the circumstances of her illnesses, and the tests and treatment she had undertaken. She referred to the lifting of the heavy advertising board which she carried in and out of the Employer's premises. In that connection she submitted an undated statement of a Mrs C Puaar of Wanstead, which states:

"This is to confirm that on Wednesday 24 August 2011 I was [the Appellant's] last client at Pure Medispa, South Woodford. I also confirm that she was working late by herself and there were no other therapists in the salon at this time of the day above.

I also confirm that I witnessed [the Appellant] moving the advertising board from outside the salon to inside with great difficulty. I could not assist due to my frozen shoulder but did question why she was moving such a heavy object by herself which she was greatly struggling with.

If you need any further clarification please do not hesitate to contact me."

27. On 18 July HMRC notified the Appellant that the information supplied by her had not caused the officer to change her mind, and that the decision of 30 May 2012 still stood. The Appellant was told that she could ask for an independent review of the decision or appeal to the tribunal.

28. On 8 August 2012 the Appellant requested an independent review of the decision.

29. On 19 September the officer of HMRC who was to carry out that review sent an internal memo to the officer who made the decision stating that certain of the medical reports provided by the Appellant were not held on the file previously sent to Medical Services. The reviewing officer asked the decision officer to send the reports to Medical Services. In that memo the reviewing officer also stated: "My other concern is the accuracy of the job description that the Employer has provided for the Medical examiner - he does not include the carrying of the advertising board when closing up at the end of the day."

30. There was no further medical examination of the Appellant.

31. On 24 October 2012 the reviewing officer wrote to the Appellant to inform her that the decision of 30 May 2012 that she was not entitled to SSP was upheld. The reviewing officer stated that the additional medical reports provided by the Appellant had been forwarded to Medical Services Scrutiny Panel who had been asked to review all the information on their file, and they had concluded that the Appellant could have had some limitation to doing her job but it was unlikely to have lasted more than a few days.

32. We had no evidence as to the instructions given to the Medical Services Scrutiny Panel or of exactly what information was given to them. Nor did we have in evidence the report which they provided to the reviewing officer.

33. On 19 October 2012 the Appellant appealed to this tribunal against the decision of HMRC.