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URL: http://www.bailii.org/uk/cases/UKSPC/2004/SPC00411.html
Cite as: [2004] UKSC SPC00411, [2004] UKSC SPC411

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Stevens & Ors v Inland Revenue [2004] UKSC SPC00411 (20 May 2004)

NATIONAL INSURANCE CONTRIBUTIONS – Treaty with Switzerland scheduled to the National Insurance and Industrial Injuries (Switzerland) Order 1969 – whether changes in contributions authorised by primary legislation – yes – employees taken on in the UK to work in Switzerland were persons in the service of the UK employer who were sent to Switzerland so that article 5(3) of the Treaty applies and UK contributions continue for 24 months

THE SPECIAL COMMISSIONERS

RICHARD STEVENS, RAYMOND GARNHAM

AND HUGH PAYNE Appellants

- and -

THE COMMISSIONERS OF INLAND REVENUE Respondent

Special Commissioner: DR JOHN F AVERY JONES CBE

Sitting in public in London on 30 October 2003 and 4 May 2004

Roy Long for the Appellant

Launcelot Henderson QC (4 May 2004) Hugh McKay (30 October 2003), counsel, instructed by the Solicitor of Inland Revenue for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

1. These are appeals by Messrs Stevens, Garnham and Payne. They raise the same issue of whether they should pay social security contributions in the UK or Switzerland, which depends on the UK-Switzerland social security Convention. The Appellants were represented by Mr Roy Long, and the Revenue by Mr Launcelot Henderson QC (at the resumed hearing) and Mr Hugh McKay (at the first hearing). The reason for having two hearings is explained in paragraph REF _Ref72060677 \r \h below.
2. The question for determination was not specifically agreed but I adopt the question put forward by the Revenue:

Were the three Appellants in this case subject to the provisions of article 5(3) of the Family Allowances, National Insurance and Industrial Injuries (Switzerland) Order 1969 ("the Swiss Order") during the periods set out in the section 8 [of the Social Security Contributions (Transfer of Functions etc) Act 1999] decisions issued upon them (and which are subject to this appeal) such that the legislation of the United Kingdom applied exclusively in respect of their liability to pay social security contributions during these periods.

3. I had witness statements from all three Appellants, from Mr Philip Bound (officer of the Respondents in the Centre for Non-Residents' Business Improvement Team), Mr Steven Michael Reszetniak (Senior Policy Adviser, Revenue Policy International), and Mr Reginald Gourgey (managing director of Premmit Associates Limited which had since taken over the business of Premmit Engineering Services Limited ("Premmit")). All except Mr Garnham gave oral evidence.
4. The following facts were either agreed or I find them as facts:

Hugh Payne

Appeals against a decision under section 8 Social Security Contributions (Transfer of Functions etc) Act 1999 in respect of liability to pay contributions during the period of 8 June 1985 to 31 July 1988.

(1) Mr Hugh Payne ("Mr Payne"), National Insurance number LW940215A, was born on 31 May 1929.

(2) Mr Payne was an aircraft engineer.

(3) At a time uncertain, but before 7 June 1985, Mr Payne agreed to work as an employee for Premmit.

(4) Premmit had a United Kingdom place of business at all relevant times.

(5) On Friday 5 June 1985, Mr Payne left his job with BSG in Holland. Whilst he was working for BSG he paid his social security contributions into the UK social security system.

(6) At a time uncertain, Premmit applied, as Mr Payne's employer, to the then Department of Health and Social Security ("DHSS") for a Certificate of Continuing Liability ("CCL") on behalf of Mr Payne.

(7) At a time uncertain a CCL was issued.

(8) Under the CCL, Mr Payne would not be required to pay Swiss contributions whilst he worked in Switzerland for Premmit during the period 8 June 1985 to 7 June 1987, but would instead continue to pay UK social security contributions.

(9) At the time Premmit applied for the CCL, there was an expectation on the part of Mr Payne and Premmit that Mr Payne would work in Switzerland for Premmit for less than 24 months.

(10) Mr Payne travelled from the Netherlands to Switzerland on Sunday 7 June 1985.

(11) On Monday 8 June 1985 Mr Payne commenced work as an employee for Premmit in Switzerland, though he actually performed work for the Premmit's representative in Switzerland, Pilatus Aircraft Ltd, 6370, Stans, Switzerland ("Pilatus").

(12) At some time after starting employment in Switzerland Mr Payne agreed to continue working for Premmit in Switzerland beyond the 24 months originally envisaged.

(13) On 12 June 1987 Premmit applied to the DHSS for an extension of Mr Payne's CCL so as to allow him to continue to pay into the UK contributions system.

(14) On 23 July 1987 the DHSS wrote to their Swiss counterparts asking whether they would agree to Mr Payne remaining insured under UK legislation from 8 June 1987 to 7 June 1989.

(15) On the 27 August 1987 the Swiss authorities agreed the extension of time for Mr Payne.

(16) At a time uncertain but after 27 August 1987 the DHSS issued a CCL on Mr Payne allowing him to continue paying into the UK contributions system from 8 June 1987 to 7 June 1989.

(17) In voluminous correspondence, first with the DHSS starting in or around 1986 and more recently with various sections of the Inland Revenue, the representative for Mr Payne challenged the Departments' interpretation of the relevant legislation and the issuing of the CCL.

(18) By letter dated 8 February 2002 a Notice of decision was issued by the Inland Revenue.

(19) By letter dated 28 February 2002 the representative for Mr Payne informed the Revenue of his wish to appeal the decision.

Raymond Garnham

Appeals against a decision under section 8 Social Security Contributions (Transfer of Functions etc) Act 1999 in respect of liability to pay contributions during the period from 22 September 1986 to 25 September 1988.

(20) Mr Raymond Garnham ("Mr Garnham"), National Insurance number ZS754978C was born on 2 January 1938.

(21) Mr Garnham was an aircraft engineer.

(22) On Friday 5 September 1986 Mr Garnham left his then job with British Caledonian Airways Ltd. During his employment with British Caledonian he was paying contributions into the UK social security system.

(23) On Wednesday 10 September 1986 Mr Garnham registered for unemployment benefit in the UK. As unemployment benefit could only be awarded for a complete week of unemployment, Mr Garnham did not receive any benefit until Monday 15 September.

(24) In total Mr Garnham received one week's worth of unemployment benefit for the period Monday 15 September to Saturday 20 September 1986.

(25) At a time uncertain, but prior to 17 September 1986, the Appellant agreed to work for Premmit in Switzerland commencing on 22 September 1986 for a period uncertain save that it would be less than 24 months. Mr Garnham would work for Premmit's representative in Switzerland, Pilatus.

(26) On 17 September 1986, Premmit applied, as Mr Garnham's employer, to the DHSS for a CCL on behalf of Mr Garnham.

(27) At a time uncertain a CCL was issued.

(28) Under the CCL, Mr Garnham would not be required to pay Swiss contributions whilst he worked in Switzerland for Premmit during the period 22 September 1986 to 21 September 1988, but would instead continue to pay UK social security contributions.

(29) At the time Premmit applied for the CCL, there was an expectation on the part of Mr Garnham and Premmit that Mr Garnham would work in Switzerland for Premmit for less than 24 months.

(30) On Monday 22 September 1986 Mr Garnham commenced work for Premmit in Switzerland.

(31) By letter dated 24 January February 2002 a Notice of decision was issued by the Inland Revenue.

(32) By letter dated 13 February 2002 the representative for Mr Payne informed the Revenue of his wish to appeal the decision.

Richard Stevens

Appeals against a decision under section 8 Social Security Contributions (Transfer of Functions etc) Act 1999 in respect of liability to pay contributions during the period of 17 June 1985 to 30 May 1987.

(33) Mr RS Stevens ("Mr Stevens"), National Insurance number YA642773D, was born on 11 July 1942.

(34) Mr Stevens was an aircraft engineer.

(35) Mr Stevens was employed by British Aerospace until 28 June 1985. Whilst he was working for BA he paid his social security contributions into the UK social security system.

(36) On 30 May 1985 Mr Stevens agreed to work as an employee for Premmit starting on 17 June in Switzerland.

(37) At a time uncertain, Premmit applied, as Mr Stevens's employer, to the DHSS for a CCL on behalf of Mr Payne.

(38) On 30 July 1985 a CCL was issued.

(39) Under the CCL, Mr Stevens would not be required to pay Swiss contributions whilst he worked in Switzerland for Premmit during the period 17 June 1985 to 16 June 1987, but would instead continue to pay UK social security contributions.

(40) At the time Premmit applied for the CCL, there was an expectation on the part of Mr Stevens and Premmit that Mr Stevens would work in Switzerland for Premmit for less than 24 months.

(41) Mr Stevens travelled to Switzerland on 15 June 1985.

(42) On 17 June 1985 Mr Stevens commenced work as an employee for Premmit in Switzerland, though he actually performed work for the Premmit's representative in Switzerland, Pilatus. Notwithstanding this however, Mr Stevens continued to be paid by his previous employer, BA, up until 28 June 1985.

(43) At some time after starting employment in Switzerland Mr Stevens agreed to continue working for Premmit in Switzerland beyond the 24 months limit originally envisaged.

(44) On 12 June 1987 Premmit applied to the DHSS for an extension of Mr Stevens's CCL so as to allow him to continue to pay into the UK contributions system.

(45) On 23 July 1987 the DHSS wrote to their Swiss counterparts asking whether they would agree to Mr Stevens remaining insured under UK legislation from 17 June 1987 to 16 June 1989.

(46) On the 27 August 1987 the Swiss authorities agreed the extension of time for Mr Stevens.

(47) At a time uncertain but after 27 August 1987 the DHSS issued a CCL on Mr Stevens allowing him to continue paying into the UK contributions system from 17 June 1987 to 16 June 1989.

(48) On 22 September 1987 Premmit wrote to the DHSS to confirm that Mr Stevens had left their employment and that the CCL should therefore be cancelled.

(49) In voluminous correspondence, first with the DHSS starting in or around 1986 and more recently with various sections of the Inland Revenue, the representative for Mr Stevens challenged the Departments' interpretation of the relevant legislation and the issuing of the CCL.

(50) By letter dated 26 November 2001 a Notice of Decision was issued by the Inland Revenue.

(51) By letter dated 10 December 2001 the representative for Mr Stevens informed the Revenue of his wish to appeal the decision.

5. Although following a preliminary hearing I had directed the parties to use their best endeavours to agree and serve the bundle of documents for use by the Tribunal by 14 July 2003, at the hearing Mr Stevens produced for the first time his employment contract with Premitt, which was a vital document in the appeal. Mr McKay was therefore faced with dealing with it without notice, which was unsatisfactory both for him and the Tribunal.
6. Mr Stevens' contract is a printed form entitled a contract for services. It is dated 30 May 1985 and provides that he "will give his services to [Premmit] by way of devotion of his time and skill in the service of [Premmit] in whatever part of the world and as and when instructed by [Premmit] in his occupation of aerospace consultant IPC/compiler-writer/spare parts coordinator at Pilatus Aircraft Co, Stans/ Switzerland." The duration of the contract is stated to be "from 17 June 1985 to 31 May 1986 (extendible)." There is a three month trial period. The hours of work are 40 hours per week but not guaranteed. An hourly rate is stated which Premmit will pay for each hour worked monthly in arrears following submission of a time sheet. No payment is made for time off work except in exceptional circumstances and by prior agreement of Premmit. There is power to dismiss him summarily in the event of failure to carry out the reasonable demands and instructions of Premmit or Pilatus. He undertakes to carry out the reasonable instructions of Premmit with regard to work to be carried out but will retain the discretion of an independent contractor with regard to the manner of performance. He confirms that he will give his British National Insurance number and Inland Revenue code to Premmit and permit deductions in accordance with UK legislation. No payment is made for travel to Switzerland, the printed clause providing for the outward journey and after a year's service a return journey being crossed out. Tools, equipment and protective clothing are supplied by Pilatus and loss or damage is charged to him. It is stated that UK dismissal procedures apply to the contract.
7. Mr Gourgey, managing director of Premmit, explained that Premmit was responsible for providing aircraft engineers to Pilatus and other European aircraft manufacturers. The responsibility of Premmit was to select staff with the right skills and also to manage the payment of salaries and social security charges. They had to oversee the correctness of the work performed and to correct any errors or any problems of low standards. The Appellants were working on documentation for a specific aircraft for a time that was normally 3 to 6 months, with the possibility of extension if the person was taken on to do similar work for another aircraft which was a derivative of the original one. All staff contracts were on the basis of the same printed form. I accept all of his evidence.
8. Mr Payne could not produce a contract with Premmit but confirmed that his was similar to Mr Stevens' contract. It was for a term of one year but extendible. He was engaged by telephone by Mr David Cain, a director of Premmit in London while he working in the Netherlands. He went straight from the Netherlands to Switzerland finishing work in the Netherlands on a Friday, travelling on Sunday and starting work on Monday. He signed the contract with Premmit in Switzerland which was given to him by Premmit's representative at Pilatus's offices. I accept all of his evidence.
9. There is no evidence from Mr Garnham about his contract but he was in the UK and receiving unemployment benefit for the week before going to Switzerland. I shall infer that he signed the same form of contract in London as Mr Stevens before going to Switzerland.
10. I heard evidence from Mr Philip Bound, officer of the Board in the Centre for Non-Residents' Business Improvement Team on the procedure for dealing with applications for CCLs. He said that information from employers is taken at face value. CCLs issued for up to 24 months are usually accepted by the Swiss authorities. The Department does not have a service level agreement with the Swiss authorities dealing with the application of article 5(3). There is no document setting out a shared understanding of how article 5(3) ought to be applied. I accept this evidence.
11. The legal background to National Insurance contributions in force at the relevant time is not in dispute. Primary Class 1 National Insurance contributions are payable by employed earners (section 1(2)(a) Social Security Act 1975). An employed earner includes a person who is gainfully employed in Great Britain under a contract of service (section 2(1)(a)). No person is liable to pay Class 1 contributions unless he fulfils prescribed conditions as to residence or presence in Great Britain (section 1(6)(a)). The prescribed conditions are that at the time of a person's employment he is resident in Great Britain or present or but for any temporary absence would be present in Great Britain (Regulation 119(1)(a) Social Security (Contributions) Regulations 1979). A person who is gainfully employed outside Great Britain is nevertheless treated as being in employed earner's employment for a period of up to 52 weeks if the employer has a place of business in Great Britain, the earner is ordinarily resident therein and immediately before the commencement of the employment the earner was resident in Great Britain (Regulation 120(1) and (2)).
12. The Swiss Order is made pursuant to section 105(1) of the National Insurance Act 1965 (and other Acts dealing with family allowances and industrial injuries, which are not material to this appeal) which provides as follows:

"(1) For the purpose of giving effect to any agreement with the government of a country outside the United Kingdom providing for reciprocity in matters relating to payments in respect of interruption of employment by unemployment, sickness or otherwise, or payments in respect of the confinement of women, widowhood, orphanhood, retirement, old age or death, it shall be lawful for Her Majesty by Order in Council to make provision for modifying or adapting this Act in its application to cases affected by the agreement.

(2) The modifications of this Act which may be made by virtue of the foregoing subsection shall include provision—

(a) for securing that acts, omissions and events having any effect for the purposes of the law of the country in respect of which the agreement is made shall have a corresponding effect for the purposes of this Act (but not so as to confer a right to double benefit);

(b) for determining, in cases where rights accrue both under this Act and under the law of the said country, which of those rights shall be available to the person concerned;

(c) for making any such provisions as are referred to in section 104(4)(a)(iii) of this Act [which relates to making provisions as to administration and enforcement of section 33(1)(f) of the Bankruptcy Act 1913 (and the equivalent Scots provision) and section 319(1)(e) of the Companies Act 1948 applicable for the purposes of the Northern Ireland legislation] applicable also for the purposes of the law of the said country;

(d) for making any necessary financial adjustments by payments into or out of the National Insurance Fund."

13. The material parts of the Convention (which I shall call "the Treaty") scheduled to the Order are:

Article 1

For the purpose of the present Convention:…

"(k) 'contribution period' means, in relation to the United Kingdom, a period for which contributions appropriate to the benefit in question have been paid under the legislation of the United Kingdom…;

(l) 'equivalent period' means a period for which contributions appropriate to the benefit in question have been credited under the legislation of the United Kingdom;….

Article 5

(1) Subject to the provisions of paragraphs (3), (5) and (6) of this Article and of Articles 6 and 7 of the present Convention, where a national of either Contracting Party is gainfully occupied in the territory of one Party, either as an employed person or otherwise, the legislation of that Party shall apply to him, and, for the purpose of calculating any contributions payable under that legislation, no account shall be taken of any income he may receive from a gainful occupation in the territory of the other Party.

…

(3) Where a person, in the service of an employer having a place of business in the territory of one Party, is sent by that employer to the territory of the other Party immediately after a contribution period or equivalent period under the legislation of the former Party, that legislation shall continue to apply to him as if he were employed in the territory of the former Party, provided that his employment in the territory off the latter Party is not expected to last for more than twenty-four months or such longer period as may be agreed by the competent authorities of the two Parties in any particular case; and no contributions shall be payable in respect of his employment under the legislation of the latter Party."

The statutory authority for the Swiss Order giving effect to Article 5 of the Treaty

14. Mr McKay's skeleton had referred to section 143 of the Social Security Act 1975 as the authority for the making of the Swiss Order but when I came to write this decision I noticed that it was made under section 105 of the National Insurance Act 1965 which is worded differently and on a first reading did not seem to me to deal with contributions. My initial impression of section 105(1) was that "providing for reciprocity in matters relating to payments in respect of interruption of employment by unemployment, sickness or otherwise, or payments in respect of the confinement of women, widowhood, orphanhood, retirement, old age or death" must all relate to payments of benefits rather than contributions. It should be noted that, unlike the position with income tax treaties, if section 105 applies, it authorises a complete modification of internal law, not a modification so far as it has a relieving effect. Nor is the Order laid before Parliament in draft and approved by Parliament as is the case for income tax treaties; section 107 requires various orders or regulations to be laid before, and approved by, Parliament but that section does not apply to Orders in Council. I shall first consider what change is made to the contributions payable under internal law by article 5. Normally internal law provides that someone in the position of the Appellants should pay UK contributions for the first 52 weeks of their work in Switzerland (although Mr Payne's situation may be different as he may not have been ordinarily resident since he was previously working in the Netherlands). The Swiss Order purports to change the law so that where article 5(1) applies no UK contributions are payable during those 52 weeks, and where article 5(3) applies UK contributions are payable for 24 months or such longer period as may be agreed by the competent authorities. If article 5(3) applies, article 9(2) provides that the person has the right to sickness and maternity benefit as if he or she were in the UK, and the right to a benefit from an industrial accident as if it had occurred in the UK, or from an industrial disease as if it had been contracted in the UK. (Article 9(3) also provides that if an accident happens to the person on his way to Switzerland it is treated as occurring in the UK.) Article 9(1) is the reciprocal rule applying in Switzerland but only to industrial accidents and diseases. The Treaty does not apply to unemployment benefit. Although I accept that contributions are different from tax as benefits follow directly from contributions, contributions are nevertheless compulsory and one would expect clear words authorising a change in the law both to extend the period for paying them and to enable competent authorities to agree an even longer period of contributions, even though benefits continue as though the person was in the UK. I have no knowledge of the Swiss contributions position for someone sent to work abroad.
15. Having doubts about the statutory authority for giving article 5 by the Swiss Order effect in internal law I therefore asked the Respondent for a note and requested that a copy of the note be sent to Mr Long who, as a lay person, I assumed would not wish to deal with the point. The Respondent through Mr McKay put in a written submission contending that the authority for giving effect to article 5 was section 105(2)(d) in that the Swiss Order modifies the Act and the Regulations made under the Act so that the obligations to make payments into the Swiss Social Security Fund applies to a person covered by article 5(1) (subject to the application of article 5(3)); that the key point is that, having regard to the reciprocity of benefits obligations agreed between the two states it is necessary to adapt the contribution regimes of both countries to reflect this properly; and that this requires making "necessary financial adjustments" to which effect is given by means of payments into or out of the National Insurance Fund (payments into the Fund meaning contributions).
16. I was not convinced by this argument. But as the point had not been argued at the hearing I issued a decision in draft to the effect that I considered that there was no Parliamentary authority for the Order giving effect to article 5 of the Treaty in internal law. I gave the Respondent liberty to reinstate the appeal to argue this aspect. The Respondent took up that offer and I heard full argument from Mr Henderson QC who put forward somewhat different arguments to the ones put forward through Mr McKay, who was unfortunately unavailable on the date fixed for the second hearing.
17. Mr Henderson QC did not argue that the statutory authority was found in section 105(2)(d) and accordingly I need not set out in full my reasons for saying why I though that it was insufficient. In summary these were that extending the period for paying contributions was not "making any necessary financial adjustments by payments into or out of the National Insurance Fund" and a more likely explanation for section 105(2)(d) was to authorise provisions such as article 19 of the Treaty by which one state may make payments on behalf of the other. Such a provision appears to be necessary because of the restriction in section 83 on payments out of the Fund, which would prevent payments to the Swiss competent authority to compensate it for payments of benefits it had made as agent for the UK competent authority. A payment out of the Fund in such circumstances is aptly described as "making any necessary financial adjustments." Mr Henderson did not dispute this.
18. Mr Reszetniak gave evidence that there are 34 Orders incorporating social security treaties covering 40 territories, most of which contain similar provisions to article 5 of the Treaty covering contribution periods from 6 months to 5 years, the normal periods being 24 or 36 months, with longer periods being found in more recent treaties, for example 5 years for Japan and Korea (both 2000). A decision in this case that Parliament had not authorised the inclusion of article 5 of the Treaty in the Swiss Order would have wide implications. He considered that the main purpose of these treaties was to prevent the payment of double contributions in two countries.
19. Mr Henderson QC contended that my task was to give effect to the intention of Parliament as expressed in the words used (see R v Environment Secretary ex p. Spath Holme [2001] 2 AC 349, 388D per Lord Bingham). The National insurance Act 1965 provides for a system of insurance under which benefits were dependent on, and largely funded by, the payment of compulsory contributions. There are contribution conditions contained in Schedule 2 for all types of benefit (except guardian's allowance but this requires that at least one of the dead parents was an insured person who was accordingly liable to pay contributions). Contributions and benefits were opposite sides of the same coin.
20. Mr Henderson fully accepted the need for clear statutory authority to justify a charge on the subject, and that that the rule applied to compulsory contributions under the National Insurance Act 1965. The statutory authority could be conferred either expressly or by necessary implication. As Atkin LJ said in AG v Wilts United Dairies Ltd (1921) 37 TLR 884, 886:

"In these circumstances, if an officer of the executive seeks to justify a charge upon the subject made for the use of the Crown (which includes all the purposes of the public revenue), he must show, in clear terms, that Parliament has authorised the particular charge. The intention of the legislature is to be inferred from the language used, and the grant of powers may, though not expressed, have to be implied as necessarily arising from the words of a statute…".

This principle was endorsed by the House of Lords in R v Richmond LBC ex p. McCarthy & Stone [1992] AC 48 at 66G-68C per Lord Lowry.

21. Mr Henderson QC relied for the authority for giving article 5 effect in internal law on section 105(1) which provides for modifying or adapting the Act by Order in Council for the purpose of giving effect to a treaty "providing for reciprocity in matters relating to payments in respect of in respect of interruption of employment by unemployment, sickness or otherwise, or payments in respect of the confinement of women, widowhood, orphanhood, retirement, old age or death." The word "payments," he contended, was apt to refer to both payments and contributions. The words "in respect of" were wide and general enough to link both kinds of payment with the specified areas of cover. Since the draftsman did not refer only to payment of benefits the irresistible inference is that Parliament intended the treaties to be incorporated into domestic law in their entirety.
22. Alternatively, even if the word "payments" refers only to benefits, Mr Henderson submitted in the alternative that "reciprocity in matters relating to" the payment of benefits must by necessary implication include reciprocity in relation to the payment of contributions which earn, or confer entitlement to, those benefits. Reciprocity of benefit without reciprocity of burden would be nonsensical in this context. Parliament cannot have intended that treaties should be incorporated into domestic law only insofar as they related to benefits.
23. The provisions of section 105(2) were entirely compatible with this construction of subsection (1). In paragraph (a) "acts, omissions and events" could cover the payment of contributions or fulfilment of other qualifying conditions for benefit in Switzerland. The financial adjustments in paragraph (d) could include the payment of contributions into the National Insurance Fund in excess of those required by the unmodified legislation. However, the function of subsection (2) was to provide for certain minimum provisions that must ("shall") be included by way of modification of the Act. By contrast the power of incorporation in subsection (1) is limited only by the scope of the purpose stated, and extends to adaptation (a more radical concept) as well as modification of the Act. It would therefore be unsafe to seek to confine its area of operation by reference to the specific matters identified in subsection (2).
24. Mr Henderson QC also refereed to the statutory history, including the Beverage Report and the long title of the National Insurance Act 1946 establishing "an extended system of national insurance providing pecuniary payment by way of" various benefits.
25. I did not have the benefit of any argument on behalf of the Appellants since very understandably Mr Long, as a laymen, did not feel able to contribute on this aspect.

Reasons for the decision on the statutory authority for giving effect to article 5

26. I am not persuaded by Mr Henderson QC's first argument that "payments" in the phrase "reciprocity in matters relating to payments in respect of interruption of employment by unemployment, sickness or otherwise…" includes payment of contributions giving rise to such benefits. On the ordinary meaning of language payments refer here to benefits. I may have misunderstood his point that section 105(2) sets out minimum provisions that must be included by way of modification of the Act. The wording is permissive: "the modifications of this Act which may be made by virtue of the foregoing subsection shall include provision…". In any case I agree that it would therefore be unsafe to seek to confine the area of operation of subsection (1) by reference to the specific matters identified in subsection (2).
27. The only other provision of the Act allowing modification of the Act by Order in Council is section 98 which gives unrestricted power to adapt the provisions of the Act so far as they deal with Crown servants. This did not provide any assistance to the interpretation of section 105.
28. But having heard Mr Henderson's alternative argument I am persuaded that my first impression that section 105(1) authorised modification only of benefits was wrong. In the context of a system of insurance the phrase "reciprocity in matters relating to payments in respect of interruption of employment by unemployment, sickness or otherwise…" must by necessary implication include reciprocity in respect of payment of contributions which earn, or confer entitlement to, those benefits. One is surprised that Parliament should confer the right to impose compulsory contributions without further reference to Parliament merely by implication but I agree that it makes no sense to provide for reciprocity of benefit without reciprocity of burden in a case where the two are inextricably linked. Accordingly I hold that there is sufficient statutory authority for the changes to internal law made by article 5 of the Swiss Order.

The application of Article 5

29. My draft decision was to the effect that each of the Appellants fell within article 5(3) of the Treaty. Since I allowed the Respondent to argue the statutory authority aspect at the resumed hearing, I allowed Mr Long to comment on the draft decision. I have considered his further points and also his subsequent letter but they do not persuade me to modify my overall view, although I have made some minor changes to the draft decision. Mr Henderson QC was content not to comment further on this aspect of the draft decision.
30. The essential facts common to all three Appellants are that they entered into contracts with Premmit (this was an oral contract in the case of Mr Payne) under which they were required to start work in Switzerland a few days later. The dispute between the parties is whether each of the Appellants is within article 5(3) as a "person, in the service of an employer having a place of business in [the UK], [who] is sent by that employer to [Switzerland]." It is common ground that Premmit has a place of business in the UK. I shall deal with the remaining requirements of article 5(3), relating to being sent immediately after a contribution period, and the expected length of the employment in Switzerland, after I have dealt with this main issue.
31. Mr Long contends that, using Mr Stevens' contract as an example, Mr Stevens was not in Premmit's service before he arrived in Switzerland and started work and accordingly he was not sent by Premmit to Switzerland. Although made on 30 May 1985 the contract states under the heading Duration: "The duration of this contract will be from 17 June 1985 to 31 May 1986 (extendible)." Until 17 June 1985 he was accordingly not in the service of Premmit. In particular, he was not paid until he arrived and worked; he even had to pay his own travel to Switzerland. He quoted from a Swiss information leaflet referring to "salaried employees from Great Britain detached to Switzerland by their employer." Mr Long contends that a person is in the service of an employer from the first day of paid [salaried] employment. If this was while the employee was in the UK, then article 5(3) applies; if not, article 5(1) applies. He contends that the CCLs issued to the Appellants were not valid. The form of application refers to the employee being "posted" to the other country, which is not the case here.
32. Mr McKay contends that whether someone is an employee is a mixed question of fact and law. The fact that Mr Stevens' contract specifies the start date as 17 June 1985 does not mean that he is not in the service of Premmit until that date. As Lord Hoffmann said in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98, 115:

"the meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean."

He contends that looking at all the surrounding circumstances, Mr Stevens was in Premmit's service as soon as he signed the contract regardless of whether he was then being paid. From 30 May 1985 the contract provided a framework under which Mr Stevens was instructed to go to Switzerland and start work on 17 June. If he did not arrive in time he would be in breach of contract. Arrangements were made so that they were expected in Switzerland and a room was available for him at the Pilatus hostel. This indicates that there must have been some communication either between Pilatus and Mr Stevens, or between Premmit and him which Premmit relayed to Pilatus, about when he was travelling. He had obligations from 30 May, in particular to travel to Switzerland before the date he started work so that he would be in a position to start work in the morning of 17 June 1985. He was sent by Premmit to Switzerland because he went there as a consequence of entering into the contract. The other two Appellants were in the same position save that Mr Payne's contract was oral until he signed the written one on arrival in Switzerland.

33. Before considering these rival contentions I must first consider whether the contract is a contract of service, as required by the definition of employment (and employer) to mean employment as an employed person. Mr McKay contended that it was a contract of service in spite of the title "contract for services," the hourly payments, the lack of any guarantee of 40 hours work, and its reference to Mr Stevens' discretion as an independent contractor with regard to the manner of performance of his work. There is control in that he gives his services to Premmit "in whatever part of the world and as and when instructed by [Premmit]" with the right of summary dismissal for failure to carry out reasonable demands and instructions. Deduction of tax in accordance with UK rules is envisaged. Dismissal procedures in accordance with UK legislation apply. The fact that equipment is provided is neutral bearing in mind that we are dealing with the aerospace industry. Mr Long said nothing about this and I think accepts that it is a contract of employment.
34. The contract appears to have some attributes of self-employment but predominantly it is one of employment. On balance I consider that it is an employment contract. The control over the Appellants seems much more consistent with an employment relationship. The lack of control over the manner of performance of the work is common with employment contracts for skilled employees.
35. The Swiss Order gives effect in internal law to the Treaty made between the Government of the UK and the Swiss Federal Council scheduled to it. No submissions were made on the correct approach to treaty interpretation. I shall set out what I understand the correct approach to be, which I do not think will be controversial. The first point to make is that I am interpreting a treaty; it is brought into effect by Order but the document I am interpreting is a treaty not UK legislation. I shall adopt Mummery J's summary in IRC v Commerzbank [1990] STC 285, 297-8 of the approach to be adopted in treaty interpretation laid down by the House of Lords in Fothergill v Monarch Airlines Ltd [1981] AC 251:

(1) It is necessary to look first for a clear meaning of the words used in the relevant article of the convention, bearing in mind that 'consideration of the purpose of an enactment is always a legitimate part of the process of interpretation': per Lord Wilberforce (at 272) and Lord Scarman (at 294). A strictly literal approach to interpretation is not appropriate in construing legislation which gives effect to or incorporates an international treaty: per Lord Fraser (at 285) and Lord Scarman (at 290). A literal interpretation may be obviously inconsistent with the purposes of the particular article or of the treaty as a whole. If the provisions of a particular article are ambiguous, it may be possible to resolve that ambiguity by giving a purposive construction to the convention looking at it as a whole by reference to its language as set out in the relevant United Kingdom legislative instrument: per Lord Diplock (at 279).

(2) The process of interpretation should take account of the fact that—

'The language of an international convention has not been chosen by an English parliamentary draftsman. It is neither couched in the conventional English legislative idiom nor designed to be construed exclusively by English judges. It is addressed to a much wider and more varied judicial audience than is an Act of Parliament which deals with purely domestic law. It should be interpreted, as Lord Wilberforce put it in James Buchanan & Co. Ltd v. Babco Forwarding & Shipping (UK) Limited, [1987] AC 141 at 152, "unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation': per Lord Diplock (at 281–282) and Lord Scarman (at 293).

(3) Among those principles is the general principle of international law, now embodied in art 31(1) of the Vienna Convention on the Law of Treaties, that 'a treaty should be interpreted in good faith and in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose'. A similar principle is expressed in slightly different terms in McNair's The Law of Treaties (1961) p 365, where it is stated that the task of applying or construing or interpreting a treaty is 'the duty of giving effect to the expressed intention of the parties, that is, their intention as expressed in the words used by them in the light of the surrounding circumstances'. It is also stated in that work (p 366) that references to the primary necessity of giving effect to 'the plain terms' of a treaty or construing words according to their 'general and ordinary meaning' or their 'natural signification' are to be a starting point or prima facie guide and 'cannot be allowed to obstruct the essential quest in the application of treaties, namely the search for the real intention of the contracting parties in using the language employed by them'.

(4) If the adoption of this approach to the article leaves the meaning of the relevant provision unclear or ambiguous or leads to a result which is manifestly absurd or unreasonable recourse may be had to 'supplementary means of interpretation' including travaux préparatoires: per Lord Diplock (at 282) referring to art 32 of the Vienna Convention, which came into force after the conclusion of this double taxation convention, but codified an already existing principle of public international law. See also Lord Fraser (at 287) and Lord Scarman (at 294).

(5) Subsequent commentaries on a convention or treaty have persuasive value only, depending on the cogency of their reasoning. Similarly, decisions of foreign courts on the interpretation of a convention or treaty text depend for their authority on the reputation and status of the court in question: per Lord Diplock (at 283–284) and per Lord Scarman (at 295).

(6) Aids to the interpretation of a treaty such as travaux préparatoires, international case law and the writings of jurists are not a substitute for study of the terms of the convention. Their use is discretionary, not mandatory, depending, for example, on the relevance of such material and the weight to be attached to it: per Lord Scarman (at 294)."

36. Article 31 of the Vienna Convention on the Law of Treaties referred to in this quotation provides as follows:

"1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.

The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:

(a) Any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty;

(b) Any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.

There shall be taken into account together with the context:

(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;

(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;

(c) any relevant rules of international law applicable in the relations between the parties.

A special meaning shall be given to a term if it is established that the parties so intended."

37. I also refer to a recent statement on the correct approach of courts to interpreting treaties by Lord Steyn in R v Secretary of State for the Home Department, ex p Adan [2001] 2 WLR 143, 154E where after quoting article 31 of the Vienna Convention he says:

"It follows that, as in the case of other multilateral treaties, the Refugee Convention must be given an independent meaning derivable from the sources mentioned in articles 31 and 32 [of the Vienna Convention on the Law of Treaties] and without taking colour from distinctive features of the legal system of any individual contracting state. In principle therefore there can only be one true interpretation of a treaty. If there is disagreement on the meaning of the Refugee Convention, it can be resolved by the International Court of Justice: article 38. If has, however, never been asked to make such a ruling. The prospect of a reference to the International Court of Justice is remote. In practice it is left to national courts, faced with a material disagreement on an issue of interpretation, to resolve it. But in doing so it must search, untrammelled by notions of its national legal culture, for the true autonomous and international meaning of the treaty. And there can only be one true meaning."

38. My task is therefore to apply a purposive interpretation unconstrained by technical rules of English law, in accordance with article 31 of the Vienna Convention on the Law of Treaties in order to find the true autonomous and international meaning of the Treaty. (Points (4), (5) and (6) of the summary of Fothergill does not appear to apply here.) I feel inhibited in doing this by not knowing what view the Swiss competent authority takes of article 5(3). Mr Bound said this in his witness statement:

"The Department does not have a service level agreement with the Swiss authorities dealing with the application of Art.5(3), neither is there a document setting out a shares understanding of how Art.5(3) ought to be applied….Usually there are Administrative Arrangements in place in respect of the various Conventions the Department has with other countries. These Arrangements set out the operating procedures. As I understand matters, such Arrangements were never agreed with the Swiss as regards Art.5(3)."

I do not read this as saying that they tried to come to an agreement about the interpretation of article 5(3) and failed. Rather there is no agreement about any matters relating to the Treaty. I therefore have no information about the Swiss interpretation.

39. There seem to be three possibilities. First, the Swiss authorities may agree with the Respondent. By article 31(3)(a) of the Vienna Convention such a subsequent agreement determines the interpretation of the Treaty as a matter of international law. This would not be binding as a matter of internal law but would be a highly relevant consideration. One would need to determine whether it really was an agreement on interpretation or effectively a change in the Treaty that Parliament did not contemplate when giving effect to the Treaty by making the Swiss Order.
40. Secondly, the Swiss authorities may disagree with the Respondent, in which case the Treaty contains a dispute resolution procedure. Article 23 of the Treaty provides:

(1) Any dispute concerning the interpretation or application of the present Convention shall, as far as possible, be resolved by the competent authorities of the Contracting Parties.

(2) If a dispute cannot be resolved in this way, it shall be submitted, at the request of either Party, to an arbitration tribunal….

[Paragraphs (3) and (4) deal with the appointment of the tribunal.]

(5) The arbitration tribunal shall act by majority vote. Its decision shall be binding…."

Such procedure leads to a decision that binds the UK as a matter of international law. So far as internal law is concerned there doubts have been expressed about the validity of a mutual agreement in relation to tax treaties by Mummery J in IRC v Commerzbank [1990] STC 285 at 302b (although the wording of the Treaty "any dispute…shall, as far as possible, be resolved…" is very different from that of the US-UK tax treaty provision "communicate with each other directly to…to assure its consistent interpretation and application" with which he was dealing); and section 815AA of the Taxes Act 1988 was enacted specifically to give legal effect "notwithstanding anything in any enactment" to specific case mutual agreements pursuant to tax treaties. The effect in internal law of a mutual agreement or an arbitration decision would be a matter for further argument but at the very least they would be relevant.

41. Thirdly, it may be that the Swiss authorities have never met this problem and have no views. If that were the case, at least any decision would not be contrary to the Swiss interpretation.
42. Before coming to any decision about the "true autonomous and international meaning of the Treaty" it would be helpful to know which of these three alternatives applies. I could have adjourned the case to hear argument on whether the views of the Swiss authority should be ascertained. But having already issued a decision in draft and having not been given any information this suggests that the third alternative is the most likely. Accordingly I will proceed to give my view on interpretation without the benefit of this information.
43. I shall look first for any aids to interpretation apart from the words of the Treaty. The preamble (which is defined by article 31(2) of the Vienna Convention to be part of the context) explains the object and purpose, that the two Governments:

"Having established reciprocal arrangements in the field of social security by means of the Conventions which were signed on their behalf at Berne on the 16th January 1953 and the 12th November 1959, respectively,

Desiring to widen the scope of those arrangements and, in particular, to give more complete effect to the principal (sic) that nationals of the two Contracting Parties should receive equal treatment under the social insurance legislation of each Party, have agreed as follows…."

44. There is nothing in this statement that helps me to decide the present case, which does not appear to relate to unequal treatment. I cannot see anything else in the context that helps. The immediately neighbouring provisions to which article 5(1) is subject (or in the case of article 5(2) and (4) apply in addition to article 5(1)), relate to persons not gainfully occupied (article 5(2)), the crew of a British ship (article 5(4)), and the crew of an aircraft (article 5(5) and (6)). The only other provisions relating to contributions deal with diplomats (article 6), the modification of articles 5 and 6 by agreement where this is in the interests of the person (article 7), and crediting contributions during incapacity for work in the UK by treating employment in Switzerland as employment in the UK (article 8). None of these has any connection to this case.
45. Turning to the terms of the Treaty in their context, article 5(1) modifies internal law so that an employed and self-employed UK national pays contributions only in the state in which he is gainfully employed. By way of exception, article 5(3) provides that a person (who need not be a national) continues to pay contributions to the sending state as if he were employed there where he is in the service of an employer having a place of business in the sending state who sends him to work in the other state without a break ("immediately after a contribution period") and for a limited time ("not expected to last for more than 24 months or such longer period as may be agreed by the competent authorities"). The general impression is one of temporary working in Switzerland coupled with a continuing connection with the UK. The normal case that the negotiators no doubt had in mind was an employee of a multinational being sent to work temporarily for the Swiss branch or subsidiary and who would return to work for the same employer. The issue in this appeal is the width of the exception to article 5(1) contained in article 5(3): does it apply to circumstances far removed from the normal case where, as in the Appellants' case, the employee enters into a contract with a UK employer specifically to work for a specific project in Switzerland with no work being performed in the UK before going to Switzerland and no further work in the UK being expected at the end of the project, although with a possibility of further work in Switzerland after the end of the specific project? A UK national who from the beginning (without any prior contract made while in the UK) took employment in Switzerland with a UK employer would undoubtedly pay only Swiss contributions under article 5(1) which modifies the internal law rule that he would pay UK contributions for 52 weeks, assuming the conditions of Regulation 120 of the Social Security (Contribution) Regulations 1979 are satisfied. The factors bringing article 5(3) into play are that the person must be in the service of the employer before going to Switzerland, and he must be sent by the employer to Switzerland. Both factors emphasise the UK connection before the employee goes to Switzerland. But no minimum connection is required; one day's service is sufficient. The Appellants have a contractual relationship with Premmit before going to Switzerland but do not do any work for Premmit before going.
46. The only guide to interpretation of article 5(3) to look at the words in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. I regard this as more a question of treaty interpretation than interpretation of the employment contract. I ask myself whether each of the Appellants is a "person, in the service of an employer having a place of business in [the UK], [who] is sent by that employer to [Switzerland]." There is a clear movement of the Appellants to Switzerland. The Appellants did not start in Switzerland and they went to Switzerland solely in order to work there. The reason was that their employer, Premmit, required them to work there. In my view, they were sent by Premmit. Were they in the service of Premmit at the time they were sent? They were contracted to Premmit under what I have decided was a contract of service. Premmit had a sufficient contractual relationship to send them to Switzerland. No actual work was required under the contract until a future date by which time they had to be in Switzerland. Subject to arriving in time for work on the start date, there was no restriction on what they could do between the date of entering into the contract and the date of starting work. Mr Stevens was actually employed by somebody else until 28 June 1985 and thus during both during the period after he signed the contract on 30 May 1985 while he was in the UK, and after he started work in Switzerland on 17 June 1985, as he was presumably taking a holiday from his former employer. The case is clearly borderline but the deciding factor seems to me that the entering into the contractual commitment before going to Switzerland is a sufficient connection with the UK. Even though no work was required in the UK the act of going to Switzerland (although at their own expense) was the performance of a term of the contract before they started work in Switzerland. If they had not already been in Switzerland on the starting date for their work they would have been in breach of the contract because it is common ground that they could not travel to Switzerland on the start date and still start work on time. The date of their arrival in Switzerland must have been communicated to Pilatus in order for a room in Pilatus's hostel to be ready. Suppose that an accident had occurred on the way to Switzerland and Premmit was insured for accidents to people in its service. There would surely be a strong case for saying that the accident had occurred while they were in the service of Premmit (just as under article 9(3), if article 5(3) applies, for benefits purposes the accident is treated as occurring in the UK). Accordingly, when they were going to Switzerland they were going in the service of Premmit. This, coupled with my decision that Premmit sent them to Switzerland means that this part of article 5(3) is satisfied. There is no reason to give article 5(3) a narrow construction to limit it to the normal case of an employee working for the same employer in the UK before being sent to Switzerland. The Appellants are within both the ordinary meaning of the terms of article 5(3) and what seems to me to be the object and purpose of that provision.
47. The reason I do not accept Mr Long's contention that that one must actually start to carry out paid work ("salaried employees" in terms of the Swiss information leaflet) in order to be in service is that this ignores the other contractual commitments entered into when the agreements were entered into which seem to me to gives the necessary connection with the UK. Not all employment agreements provide just for payment for work. There can be sign-on payments before work starts, and in this case there might have been payment for travel to Switzerland, as provided for in the printed contract, although it did not apply to the Appellants; or there can be holiday pay, or payments for garden leave not requiring any work for the payer but preventing work for anyone else. Mr Long contended that one needed work and payment in order to be in the service of an employer, which is clearly the case in normal situations but it does not deal with such examples. Although Mr Long put forward contentions based in the wording of the application form for a CCL, a CCL is something that follows from the application of article 5(3) of the Treaty, not something that helps me decide if that provision applies. The only legal provision determining whether the Appellants pay UK contributions is article 5(3) (I accept, of course, his point that if the decision on article 5(3) is wrong this cannot be corrected by a CCL). The wording of the CCL application form and certificate is not something that can be taken into account in interpreting article 5 because they are unilateral documents (see articles 31(2)(b) and (3)(b) of the Vienna Convention), as is the Swiss information leaflet, which in any case merely paraphrases article 5(3)..
48. I turn to the other two requirements of article 5(3) that the Appellants are sent to Switzerland immediately after a contribution period or equivalent period under UK legislation, and that their employment in Switzerland is not expected to last for more than 24 months.

Contribution period and equivalent period

49. Contribution period and equivalent period are defined in article 1, the definitions of which have been set out above. It should be noted that the definition of contribution period is not restricted to work with the employer who sent the employee to Switzerland. It can relate to work with any employer.
50. The contribution period applicable to Mr Payne was the period to 7 June 1985, the date of leaving Butler Service Group Inc. He started work in Switzerland on 8 June 1985. Clearly he was sent to work in Switzerland immediately after a contribution period.
51. The contribution period applicable to Mr Stevens was the period to the date of his leaving BAE plc on 28 June 1985. He started work in Switzerland on 17 June 1985. He therefore started work in Switzerland during a contribution period and not immediately after one. Does this satisfy the words "immediately after a contribution period"? On the ordinary meaning of those words, it does not. However, the purpose of this requirement seems to be that there must be continuity between the UK employment and the Swiss one to which the employee sent. If there is a gap (excluding an unemployment period which may be an equivalent period, as in the case of Mr Garnham below) article 5(3) is not satisfied; there is no sufficient connection with the UK for UK contributions to continue. The purpose of the provision is therefore that the employment in Switzerland must start not later than immediately after the contribution period or equivalent period. There is even more continuity with the UK employment where there is an overlap and the Swiss employment starts earlier than "immediately after a contribution period." In my view this condition is therefore satisfied. The circumstances arise only where, as here, an employee starts a job while still on holiday from the previous job. It is not surprising that the draftsmen did not specifically cover it.
52. Equivalent period, rather than contribution period, is relevant to Mr Garnham who received unemployment benefit from 15 to 20 September 1986 prior to starting work in Switzerland on Monday 22 September 1986. Article 9 of the Social Security (Credits) Regulations 1975, made pursuant to section 13 of the Social Security Act 1975, as then in force provides:

"(1) Subject to paragraph (9) of this regulation for the purposes of entitlement to any benefit by virtue of a person's contributions he shall be entitled to a Class 1 credit in respect of each week of unemployment or incapacity within the meaning of paragraph (2).

(2) Subject to paragraph (6), in this regulation 'week of unemployment or incapacity' means—

(a) a week in which in relation to the person concerned each of the 6 days from Monday to Saturday was either (i) a day of unemployment within the meaning of paragraph (3).…

(3) Subject to paragraphs (4) and (7), in this regulation a 'day of unemployment' in relation to any person means any day which (a) was a day of unemployment for the purposes of section 14(1)(a) [meaning that he was entitled to unemployment benefit in respect of that day]."

(There is no suggestion that any of the provisions to which the above are subject is relevant here.) The week ended Saturday 20 September 1986 was therefore an equivalent period. He started work in Switzerland on Monday 22 September 1986. I find that he was sent to Switzerland immediately after an equivalent period.

Whether employment in Switzerland was expected to last for more than 24 months

53. The last requirement is that the employment in Switzerland was not expected to last for more than twenty-four months or such longer period as may be agreed between the competent authorities in any particular case. Mr Stevens' contract was from 17 June 1985 to 31 May 1986 (extendible), which is just under a year but envisages the possibility of extension. There is no evidence of the periods stated in the other Appellants' contracts but I shall infer from Mr Gourgey's evidence that contracts were normally of three to six months duration, that they were of a similar period to Mr Stevens' contract or shorter. The contract period might in fact be shorter than the stated period because there was a three-month trial period, or it might be longer if it were extended, but at the beginning there was no guarantee that it would be extended. This requirement was clearly satisfied.
54. Having independently reached the conclusion that article 5(3) applies I am fortified in my conclusion that the Secretary of State for Social Security reached the same conclusion in relation to Mr Long whose position appears to be similar to the Appellants'. He signed a contract on 10 December 1985 to work for Premmit in Switzerland for a 3 month period from 6 January 1986. This decision concludes that his employment under the same printed form is a contract of service; that from the date of entering into the contract he was in the service of Premmit; that Premmit sent him to Switzerland; that he was sent immediately after a contribution period; that the expectation was that his employment would not exceed 24 months. Mr Long also argued that the Revenue (and its predecessor the DHSS) had been inconsistent in its application of the Treaty, having in fact refunded his contributions. I am afraid this is not a matter that I can take into account.

Conclusion

55. My decision in principle is that:

(1) section 105 of the National Insurance Act 1965 is sufficient statutory authority the Swiss Order giving effect to the modifications in the law on contributions made by article 5 of the Treaty.

(2) the Appellants fall within the terms of article 5(3) of the Treaty and are accordingly liable to pay UK contributions for the period therein mentioned.

J F AVERY JONES

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