UK Social Security and Child Support Commissioners' Decisions

R(G) 2/91 (Jones v. Chief Adjudication Officer)


Mrs. R. F. M. Heggs CG/35/1988

14.7.89

CA (Mustill, Nourse and Butler - Sloss LJJ)

31.7.90

Discrimination on grounds of sex - invalid care allowance overlapping with claimant's husband increase of invalidity benefit - whether discrimination contrary to Council Directive 79/7 EEC

The claimant's husband was in receipt of invalidity benefit including a dependency increase of the claimant. She worked part-time and her earnings were within the limit for such an increase. She then gave up work to look after her father. She claimed invalid care allowance. Under regulation 10 of the Overlapping Benefit Regulations the dependency increase fell to be adjusted, and arrears of invalid care allowance payable to her were reduced by the amount of the increase of invalidity benefit already paid to her husband. The Commissioner held that the application of the Overlapping Benefits Regulations gave rise to indirect discrimination on the grounds of sex but that this was objectively justifiable and not in breach of Article 4(1) of EEC Directive 79/7.

On 7 March 1991, the Court of Appeal dismissed an appeal by the claimant and held that:

the Overlapping Benefit Regulations had the effect of making the increase of the husband's benefit on account of the claimant's dependency not payable because the claimant was receiving invalid care allowance. That was not discriminatory as regards the dependent claimant because it was the husband and not the claimant who lost the benefit.

DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. My decision is that the decision of the social security appeal tribunal given on 1 March 1988 is erroneous in point of law and accordingly I set it aside. However, as I consider it expedient to give the decision the tribunal should have given, I further decide that arrears of invalid care allowance of £2,483.83 due to the claimant for the inclusive period from 1 April 1985 to 7 May 1987 are reduced by £2,449.94 which amount has already been paid to the claimant's husband for the claimant as a dependant for that period because that amount is to be treated as properly paid to the claimant's husband.
2. This is an appeal by the adjudication officer, brought with the leave of the tribunal chairman, against the decision of the social security appeal tribunal given on 1 March 1988, reversing the adjudication officer's decision issued on 30 April 1987. At the oral hearing held before me the adjudication officer was represented by Mr. M. Kent of Counsel, instructed by the Solicitor's Office of the Departments of Health and Social Security. The claimant did not attend but she was represented by Mr. R. Drabble of Counsel, instructed by the Warrington Community Law Centre. I am grateful to them both for their helpful and detailed submissions.
3. The facts are not in dispute. The claimant's husband was in receipt of invalidity benefit, which included a dependency increase for the claimant. She worked part-time, the amount of her weekly earnings being within the limit prescribed by regulation 8(2) of the Social Security Benefit (Dependency) Regulations 1977. However, she had to give up work in order to care for her father, who was in receipt of attendance allowance. On 10 July 1985 she claimed invalid care allowance stating that she wished the claim to be considered from 1 April 1985.
4. The adjudication officer accepted that the claimant satisfied the conditions for an award of invalid care allowance for the inclusive period from 1 April 1985 to 7 May 1987 but he applied regulation 10 of the Social Security (Overlapping Benefits) Regulations 1979 which provides that where a dependency benefit under the Social Security Act 1975 (invalidity benefit being such a benefit) is payable for the same period as a personal benefit as defined in the regulations (invalid care allowance being such a benefit) the dependency benefit shall be adjusted. Regulation 10(2)(a) provides that where the weekly rate of the personal benefit is equal to or exceeds the weekly rate of the dependency benefit, the dependency benefit shall not be paid. The weekly rate of invalid care allowance has at all times been equal to or exceeded the weekly rate of the dependency benefit. The adjudication officer also had regard to regulation 6 of the Social Security (General Benefit) Regulations 1982 (repealed as from 6 April 1987 by regulation 5 of the Social Security (Payments on Account, Overpayments and Recovery) Regulations 1987) which provides that benefit paid to one person in respect of another person, as a dependant of the first mentioned person, shall unless it is required to be repaid, be treated as properly paid for any period for which it is not in fact payable where under a subsequent decision that other person (i.e. the dependant) is entitled to a personal benefit for the same period in their own right, and any arrears of benefit payable for that period by virtue of the subsequent decision shall be reduced or withheld accordingly. As a result of the combined effect of regulation 10 of the Overlapping Benefits Regulations and regulation 6 of the General Benefit Regulations the adjudication officer deducted £2,449.94, being the amount of dependency benefit paid to the claimant's husband for the inclusive period from 1 April 1985 to 7 May 1987 from £2,483.83, being the amount of invalid care allowance arrears due to the claimant for the said period, leaving a balance owing to her of £33.89. The claimant appealed to the tribunal.
5. In his written observations on the claimant's appeal to the tribunal Mr. Drabble submitted:

" … The offset claimed by the adjudication officer is a result of the combined effect of regulation 10 of the Social Security (Overlapping Benefits) Regulations 1979 (SI 1979 No. 597) and regulation 6 of the Social Security (General Benefit) Regulations 1982, and it is accepted on behalf of the claimant that these regulations, if read without reference to Council Directive 79/7 EEC (Equal Treatment in matters of Social Security) do provide for a complete offset. However, it is contended that once the effect of the Directive is taken into account, it becomes clear that to provide for a complete offset is to indirectly discriminate against women who were, before they began to care for the invalid in respect of whom they are entitled to invalid care allowance, part-time workers earning wages which were disregarded when calculating the relevant dependants addition for invalidity benefit …"

6. The claimant and her solicitor attended the hearing of the appeal before the tribunal on 1 March 1988. In the event the tribunal allowed the appeal. After recording the relevant findings of fact, the reasons for decision read:

"The tribunal is satisfied that the benefits involved in this case comes within the scope of Article 3(1)(a) of the Directive. In arriving at their decision the tribunal had regard to Drake v. Chief Adjudication Officer.

It is not contended by the claimant's representative that there is direct discrimination on grounds of sex but that there is indirect discrimination on the grounds of sex because the setting off of one benefit against the other is more unfavourable to women than to men and is not objectively justifiable. It is argued and it is accepted by the tribunal that as part-time earnings are disregarded in calculating increase of invalidity benefit and because there are many more women who are in part-time employment than men in deducting increase of invalidity benefit from invalid care allowance women are treated less favourably than men. In arriving at this conclusion the tribunal had regard to the opinion of Advocate General Mancini.

From the evidence presented both by [the claimant] and as shown in Parliamentary Questions and Answers letter showing part-time employment rules and the extract from the employment Gazette March 1987 it is accepted that [the claimant] was a part-time low paid worker, because she ceased work to look after her father and that more women are low paid part-time workers and dependants than men.

The final question is whether even if the rule requires the offsetting of one benefit against another predominantly affects woman is it justifiable. The tribunal do not think that it is justifiable for the reason that if it had not been necessary for the claimant to give up her job to look after her father, she would have been allowed to retain her wages and the increase of invalidity benefit would still have been payable. Furthermore invalid care allowance was to assist the claimant to look after her father, whereas increase of invalidity benefit was to assist the husband to provide for his wife as a dependant. The two benefits were not in the opinion of the tribunal to cover the same contingency. The tribunal find that there is indirect discrimination in this case and therefore uphold the claimant's appeal."

7. Section 45(2)(a) of the Social Security Act 1975, as amended ("the Act") provides that the weekly rate of invalidity pension, when payable to a man, shall be increased for any period during which he is residing with his wife. Regulation 8(2) of the Dependency Regulations provides that no increase of benefit is payable where the adult dependant has earnings which exceed the amount specified in sub-paragraph 1(a) of Part I of Schedule 4 to the Act, which is the same amount as the personal rate for unemployment benefit. Section 37(1) of the Act provides that invalid care allowance is payable to a person who is regularly and substantially engaged in caring for a severely disabled person, who must be in receipt of attendance allowance. Regulation 4(1) of the Invalid Care Allowance Regulations provides that such care must be given "for at least 35 hours a week". Regulation 8(1) of the Invalid Care Allowance Regulations provides that no benefit is payable if the claimant's weekly earnings exceed £12, such earnings being calculated in accordance with the Social Security Benefit (Computation of Earnings) Regulations 1978. The prescribed limit of earnings is considerably higher for entitlement to an increase of invalidity benefit than it is for entitlement to invalid care allowance. The question at issue is whether the application of regulation 10 of the Overlapping Benefits Regulations to the facts of the present case is contrary to Directive 79/7/EEC of the Council of European Communities ("Directive 79/7").
8. Article 1 defines the purpose of Directive 79/7 as follows:

"The purpose of this Directive is the progressive implementation, in the field of social security and other elements of social protection provided for in Article 3, of the principle of equal treatment for men and women in matters of social security, hereinafter referred to as 'the principle of equal treatment'."

9. The relevant articles of Directive 79/7 are as follows:

(i) Article 2 provides:

"This Directive shall apply to the working population including self-employed persons, workers and self-employed persons whose activity is interrupted by illness, accident or involuntary unemployment and persons seeking employment and to retired or invalid workers and self-employed persons."

(ii) Article 3(1)(a) states that the Directive shall apply to:

"statutory schemes which provide protection against the following risks: sickness, invalidity, old age, accidents at work and occupational diseases, unemployment;"

(iii) Article 4(1) provides so far as relevant to the present appeal:

"The principle of equal treatment means that there shall be no discrimination whatsoever on ground of sex either directly or indirectly by reference in particular to marital or family status, in particular as concerns:

…

- the calculation of benefits including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits."

(iv) Article 5 provides:

"Member States shall take the measures necessary to ensure that any laws, regulations and administrative provisions contrary to the principle of equal treatment are abolished."

(v) Article 7 provides so far as relevant to the present appeal:

"1. This Directive shall be without prejudice to the right of Member States to exclude from its scope:

(a)-(c) ...

(d) the granting of increases of long-term invalidity, old age, accidents at work and occupational disease benefits for a dependent wife;

(e) ...

(vi) Article 8(1) provides:

"Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive within six years of its notification. They shall immediately inform the Commission thereof."

[This period expired on 22 December 1984].

(vii) Article 8(2) provides:

"Member States shall communicate to the Commission the text of laws, regulations and administrative provisions which they adopt in the field covered by this Directive, including measures adopted pursuant to Article 7(2)."

10. In the absence of implementing measures, individuals may rely on Directive 79/7 against the state as from 23 December 1984 in order to preclude the application of any national provision inconsistent with Directive 79/7. In particular, in such circumstances women are entitled to be treated in the same manner, and to have the same rules applied to them, as men who are in the same situation: see Netherlands v. FNV [1987] 3 CMLR 767. Any derogation from the fundamental principle of equal treatment for men and women must be strictly interpreted. This is so whenever the Member State is required by a Directive to implement the principle of equal treatment within a specified area, and in particular in the case of Directive 79/7: see Marshall v. Southampton Hampshire Area Health Authority (Teaching) [1986] QB 401.
11. It is common ground that the claimant, who gave up her job to look after her father was and is part of "the working population" within the meaning of Article 2 of Directive 79/7. The Directive applies to a coherent and comprehensive system of protection against invalidity and includes all benefits which make up the relevant scheme. It is clear that increase of invalidity benefit and invalid care allowance fall within the scope of Directive 79/7: see Article 3(l)(a) and the decision of the European Court of Justice in Drake v. Chief Adjudication Officer [1987] QB.
12. The first question I have to consider is whether the effect of regulation 10 of the Overlapping Benefits Regulations is excluded from the scope of Directive 79/7 by Article 7(1)(d). Mr. Kent argued that as an increase of invalidity pension and invalid care allowance together formed part of a statutory scheme providing protection against invalidity, that was sufficient to escape the scope of Directive 79/7 under Article 7(1)(d). He submitted that the combined effect of regulation 10 of the Overlapping Benefits Regulations and regulation 6 of the General Benefit Regulations whereby the amount of invalid care allowance due was offset against the amount of increase of invalidity pension already paid for the same period, did not affect entitlement to the benefits as such and was no more than "the mechanics" of the calculation. I do not agree. I accept Mr. Drabble's arguments that although an increase of invalidity benefit and invalid care allowance together form part of a statutory scheme providing protection against invalidity, the exclusion from the scope of Directive 79/7 provided by Article 7(1)(d) of one benefit forming part of the statutory scheme cannot be interpreted to extend to the exclusion of other benefits forming part of the same scheme. Regulation 10 of the Overlapping Benefit Regulations affects the part of the scheme relating to the claimant's husband and the part of the scheme relating to the claimant's father. The issues are interrelated and cannot be severed. Mr. Drabble further stressed that Article 7(1)(d) was limited to "the granting [my emphasis] of increases of long-term invalidity . . benefits for a dependant wife". It did not include the deduction of this benefit where the effect was to negate payment of some other entitlement, whether or not it was included in the same statutory scheme. Lastly Mr. Drabble submitted that Article 7 did not itself exclude Article 7(1)(d) matters from the scope of the Directive 79/7. It simply provided a power for Member States to do so. Mr. Kent had not referred to any measure of the United Kingdom Government excluding the granting of increases of long-term invalidity benefits for a dependant wife from the scope of Directive 79/7. In my view Article 7(1)(d) has no application on the facts of the present case. It follows that the claimant can avail herself of Article 4(1). The next question is whether the application of regulation 10 resulting in the whole of the dependency benefit paid being deducted from invalid care allowance payable for the same period constitutes a breach of Article 4(1) of Directive 79/7.
13. Article 4(1) refers to both direct and indirect discrimination on ground of sex. It is not alleged that the combined effect of regulation 10 of the Overlapping Benefits Regulations and regulation 6 of the General Benefit Regulations results in direct discrimination, it being accepted that the same provisions apply to men and women in corresponding circumstances. What is alleged is that the measures, with particular reference to regulation 10, predominantly affect women and result in indirect discrimination. It is conceded that in the population at large there are far more women part-time workers or very low paid full-time workers than men.
14. Mr. Drabble submitted that Article 3 of Directive 79/7 applied to "statutory schemes providing protection against the risk of … invalidity". The decision of The European Court of Justice in the Drake case made it plain that the United Kingdom statutory scheme providing such protection was the combination of attendance allowance and invalid care allowance. If a Member State organised its affairs so that either element was paid on a discriminatory basis, it fell foul of Article 4(1). One purpose of the overall scheme recognised by the European Court of Justice was the provision of a "subsidy" to the person providing the care, no doubt to encourage them to do so, and to replace in whole or in part any loss of earning power which the carer had undergone. The claimant's case was that the United Kingdom rules taken as a whole meant that a disproportionately large number of women were denied the "subsidy". Mr. Drabble referred me to the opinion of the Advocate General Mancini in the case of J.U. Teuling-Worms v. Bedrijfsvereniging voor de Chemishe Industrie (30/85) which he submitted enshrined the European Court of Justice's traditional approach to indirect discrimination. It involved two stages. First, the Court or Tribunal had to establish whether "a measure affects persons of one sex" either "exclusively" or "predominantly". If it did, the Court or Tribunal had to go on to consider whether the measure was "objectively justified". Mr. Drabble stressed that the issue was the different treatment of earnings and invalid care allowance for the purposes of the dependant's addition. The essential merits of the present case were that while in the Drake case the European Court of Justice felt it appropriate to intervene in order to ensure that Mrs. Drake, who had given up part-time work to look after her mother, received the invalid care allowance in part to compensate for her loss of wages, the claimant in the present case received no such compensation because her invalid care allowance was offset against the dependants addition even though her wages had been specifically disregarded. In other words, the effect of regulation 10 of the Overlapping Benefit Regulations created the anomalous position that while the claimant's husband was in receipt of an increase of invalidity pension, she was entitled to retain her part-time earnings, whereas when she was obliged to forego those earnings and became entitled to invalid care allowance, she lost her dependency status although the rate of invalid care allowance was within the prescribed earnings limit for the purpose of the increase. The complete offset resulting from the application of regulation 10 of the Overlapping Benefits Regulations indirectly discriminated against women who were, before they became entitled to invalid care allowance, part-time or very low paid full-time workers.
15. Mr. Kent argued that in order to establish indirect discrimination on grounds of sex, it had to be shown that the "victim" received less favourable treatment. As he accepted that part-time workers were predominantly women it raised the question whether there was discrimination between part-time and full-time workers. It was necessary to compare the claimant's position with that of a person in similar circumstances who worked full-time prior to entitlement to invalid care allowance. The decisive factor was not what had been, but what they ended up with. In the case of a person who worked full-time, no increase of invalidity benefit was payable because the earnings exceeded the earnings limit. There was no dependency status. In the case of a person who worked part-time, or full-time with very low earnings, she was entitled to be regarded as a dependent, and keep her earnings within the prescribed limit. That was a concession. They were treated more favourably than the person who worked full-time. When they gave up work and became entitled to invalid care allowance, both the part-time and full-time workers were treated identically. Both were entitled to the same amount of benefit. There was no discrimination on the grounds of sex. He submitted that Mr. Drabble's argument was misconceived because it was based on the premise that a part-time worker was treated less favourably instead of more favourably. Mr. Kent cited as an example a hairdresser who offered free "hairdos" for his staff. More women were likely to avail themselves of this than men. Therefore it was discriminatory. The offer was then withdrawn, could it be said that the women had suffered a detriment on a return to neutrality? The reality of the position in the present case was that the claimant had returned to neutrality on giving up work. There was no discrimination on the grounds of sex, whether direct or indirect. To say otherwise was a misuse of the word "discriminatory".
16. Since the oral hearing I have had the opportunity to refer to R v. Secretary of State for Education ex parte Schaffter, [1987] 1 RLR 53 in which Schiemann J provided a helpful explanation of indirect discrimination on ground of sex, albeit for the purposes of EEC Equal Treatment Directive 76/207/EEC. He said:

"Indirect discrimination arises where:-

(a) the complainant proves a demographic point, namely, that the practice or enactment complained of, although apparently sexually neutral, in fact has a disproportionate impact on one sex; and,

(b) the author of the practice or enactment is unable to establish that the practice or enactment complained of can be explained by objectively justified factors unconnected with the discrimination on grounds of sex-see the judgment of the Court of Justice of the European Communities in the case of Bilka-Kaufhaus GmbH v. Karin Weber Von Hartz [1986] 1 RLR 317."

17. Regulation 10 of the Overlapping Benefits Regulations has no application to a person in full-time employment whose earnings exceeded the prescribed limit for the purposes of an increase of invalidity pension, because no dependency benefit was in payment. Accordingly as regulation 10 is confined to circumstances where a dependency benefit and a personal benefit are payable for the same period, it must follow that its application is confined to a dependant, whose earnings fell within the prescribed limit for the purposes of the dependency benefit. It is accepted that more women than men are dependants who are the subjects of invalidity benefit increase and that more women than men are part-time or very low paid earners. Accordingly "the practice or enactment complained of although apparently sexually neutral, in fact has a disproportionate impact on one sex" (Schiemann J in Schaffter's case), the demographic or disproportionate impact point. Consequently I accept Mr. Drabble's submission. I reject Mr. Kent's submission because it looks at the result of the application of regulation 10, whereby all persons whether previously dependants or in part-time or in full-time employment find themselves in the same circumstances, instead of considering to whom the regulation will apply. In my view whether that group of persons was previously treated more or less favourably is not decisive of the issue. It follows that in my judgment the application of regulation 10 gives rise to indirect discrimination on ground of sex and is in breach of Article 4(1).
18. I now have to consider whether the measures despite the fact that they bear disproportionately on women, are objectively justified. The question is whether the contested measures giving rise to indirect discrimination are nevertheless founded in equity and based on reasonable grounds. The burden is on the Secretary of State to establish that the practice or enactment complained of "could be explained by objectively justified factors unconnected with discrimination on grounds of sex". The absence of intention to discriminate on the part of the author of the practice complained of is not a crucial factor; see Bilka-Kaufhaus Gmbh v. Weber Von Hartz.
19. Mr. Kent submitted that the tribunal erred in law in concluding that the offsetting of invalid care allowance against the increase of invalidity benefit could not be objectively justified. The matter had to be considered broadly as a question of fact, having regard to the purpose of the statutory scheme of invalid benefit and invalid care allowance as a whole. The two entitlements had different objectives. The dependency increase for the invalidity pension was based on financial dependency. That was tested by a relatively high level of earnings of the dependent, being equivalent to the personal rate of unemployment benefit. By contrast the invalid care allowance was designed to help maintain the income of person, who had taken themselves out of the labour market in order to perform the caring role for at least 35 hours a week. It was therefore appropriate to allow only a limited amount of earnings to be disregarded for this purpose. The 35 hours per week caring condition could be satisfied in non-working hours. There was a £12 a week earnings rule but this was a net earnings figure after deduction of various expenses from take home pay. So a person could work part-time and receive invalid care allowance. Mr. Kent argued that as invalidity pension was contributory, whereas invalid care allowance was not, it was justifiable to adopt a different earnings test in relation to the entitlement to the two benefits.
20. Mr. Kent then referred me to the tribunal's finding that the provisions were unjustifiable because the two benefits covered different contingencies. He submitted that as both invalid care allowance and the dependency increase were basic income maintenance benefits which took the family needs into account, given the limited resources available, the Secretary of State was entitled to impose an upper limit on the amounts paid to any one person. Furthermore, to the extent that a person was receiving invalid care allowance, the receipt of that benefit was relevant to whether her needs were met, and to whether she was financially dependent on her husband and whether the dependency increase should therefore be paid. Mr. Kent argued that although a family might be worse off because some earnings ceased, it was not for the State to compensate for earnings disregarded.
21. Mr. Drabble submitted that although normally an offset between a personal benefit payable to a woman and a dependant's addition receivable on her behalf would be objectively justifiable to prevent double payment of income maintenance benefit, it was not so where the purpose of one was inter alia to replace earnings specifically disregarded by the second. He stressed that the issue was the different treatment of earnings in invalid care allowance for the purposes of the dependant's addition. It appeared to be the policy to encourage part-time work by dependants, without affecting the amount of benefit payable in respect of them. Further, it was apparent from the facts of the Drake case, and the general scheme of the legislation, that a function of invalid care allowance was to replace earnings, albeit part-time. In those circumstances, measures which ensured that a part-time worker was not compensated for her loss of earnings by invalid care allowance could not be objectively justified. He supported the view taken by the tribunal concerning the different contingencies covered by the two benefits. He submitted that it was no answer to say that the receipt of invalid care allowance was relevant to whether the claimant's needs were met, and to whether she was financially dependent on her husband. The point was that having decided to disregard, for good social policy reasons, a large tranche of earnings, it was illogical and therefore not justifiable to deliberately bring into account invalid care allowance, the "subsidy" designed to replace such earnings.
22. I accept Mr. Kent's submission and reject Mr. Drabble's submission. In my view in considering whether the offset resulting from the application of regulation 10 of the Overlapping Benefits Regulations is based on reasonable and equitable provisions, I have to consider the position as at the date when the earner became the carer and became entitled to invalid care allowance. The part-time or very low earner will be in the same financial position as the full-time earner, in that both will receive a flat rate "subsidy" in respect of former earnings, which is not calculated by reference to the level of those earnings. The question at issue is whether it is objectively justified to deny recipients of invalid care allowance dependency status for invalidity benefit purposes, when such "subsidy" is within the earnings limited prescribed by regulation 8(2) of the Dependency Regulations. I think it is for the reasons given by Mr. Kent. There is an economic link between the two benefits and although the availability or shortage of Government money is irrelevant in determining whether or not it is being distributed in a discriminatory or non-discriminatory manner (R v. Secretary of State for Education ex parte Schaffter) nevertheless it is objectively justified in my view for the Secretary of State to impose an upper limit on the amounts paid in respect of any one person, resulting in all recipients of invalid care allowance being treated on identical terms. Consequently, although the application of regulation 10 of the Overlapping Benefits Regulations has a disproportionate impact on women, it is objectively justified in the sense of being "acceptable to right thinking people as sound and tolerable reasons"; see the words of Eveleigh LJ in Ojutiku v. Manpower Services Commission [1982] ICR 661.
23. For the reasons set out above, the tribunal's decision was erroneous in law. The adjudication officer's appeal is allowed and I give the decision set out in paragraph 1.

Date: 14 July 1989 (signed) Mrs. R. F. M. Heggs

Commissioner

The claimant appealed to the Court of Appeal. The decision of the Court of Appeal follows.


 
DECISION OF THE COURT OF APPEAL

Mr. R. Drabble (instructed by the Warrington Community Law Centre) appeared on behalf of the Appellant.

Mr. M. Kent (instructed by the Solicitor to the Department of Social Security, London WC2A 2LS) appeared on behalf of the Respondent.

LORD JUSTICE MUSTILL: Mrs. Mildred Jones appeals against the decision of the Social Services Commissioner, Mrs. R. F. M. Heggs, given on 14 July 1989, reversing a decision of a social security appeal tribunal, which had in turn allowed an appeal by Mrs. Jones against the refusal by the adjudication officer of her claim for invalid care allowance.

This is an appeal about social security benefits and sex discrimination. Several issues arise for decision, all difficult and some of general importance. In only one respect do they involve the interpretation of any legislative provision, namely a directive of the Council of the European Communities. There is no dispute between the parties about the meaning and effect of the one Act of the United Kingdom Parliament and the four statutory instruments which, if valid under European law, create and regulate the appellant's right to benefit. Nevertheless, I believe that a statement of the issues would be almost unintelligible without some legislative scene-setting. Unfortunately, the domestic primary and delegated legislation is hard to penetrate for a non-specialist, not because it is poorly expressed, but because the topic is broad and complex, and the legislation has to create manifold and interlocking benefits, conditions, exemptions, limits, enhancements, reductions and the like. The resulting patchwork has been built up by accretion and ad hoc modification over the decades. Simply to make the present proceedings manageable it is necessary to isolate those provisions which are most directly in point, but there are risks involved, not only because over-simplification may simply lead to technical mistakes, but also because, if the appellant's contentions are right, the court will be required to examine the policy underlying one crucial part of one regulation, an activity which cannot be safely undertaken (so far as it can be undertaken at all in any way which holds intellectual water) without some perspective of the broader social context of the entire field of social services. Nevertheless the task must be attempted.

We are concerned here with four types of benefit, payable to four types of individual.

A. Invalidity Pension

This is a contributory benefit, which begins to be payable to claimants who have been incapable of work for longer than the maximum period of entitlement to sickness benefit. [Sections 12(1)(c) and 15 of the Social Security Act 1975 ("the Act").]

B. Pension Increase

Where an invalidity pension is payable to a man who is residing with his wife or contributing to her maintenance the weekly rate of his pension is increased, subject to certain conditions. [Section 45(2) of the Act.]

During the period in question the amount of increase varied. At the end of the period it was £23.75 per week [para. 2 of Part IV of Schedule 4 of the Act]. For ease of reference it is convenient to treat this as the relevant figure.

One of the conditions for the payment of the pension increase is that the wife does not earn from employment more than an amount which at the relevant time was £31.45 [regulations 8(1)(a) and 8(2) of the Social Security Benefit (Dependency) regulations 1977, SI 1977 No. 343, read with para. 1(a) of Part 1 of Schedule 4 of the Act].

I pause to note three features of the pension increase under section 45:

24. The pension increase is a "dependency benefit". It is paid because of the existence of the wife, but does not belong to the wife. It is paid to the husband in his own right. (See the definition in regulation 2 of the Social Security (Overlapping Regulations) Regulations, SI 1979 No. 597).
25. Although the pension increase is a contributory benefit in the sense that it is an enhancement of a pension due to the husband by virtue of his having been a contributor to the social security scheme, it does not stem from any contribution made by the wife. It is part of the "safety net" provided by our country for those whose income is insufficient to meet even their most frugal needs.
26. This pension increase is payable only where the dependant is a woman: obviously so, since only a woman can be a wife.

(There is, however, a provision in section 47 which seems to me to produce an effect which so far as material is mutatis mutandis the same in respect of a husband dependent on a pensioner wife. But this was not explored in argument and my opinion on this is only provisional.)

C. Attendance Allowance

Subject to certain conditions a person who is so severely disabled physically or mentally that by day or night he requires frequent attention in connection with his bodily functions or continual supervision in order to avoid substantial danger to himself or others is entitled to an attendance allowance. (Section 35(1) of the Act.)

This is a non-contributory benefit. (Section 34(1)(a) of the Act.) The rates of benefit are immaterial for present purposes.

D. Invalid Care Allowance

This allowance, which I will call "ICA", is payable to a person in respect of any day on which he is regularly and substantially engaged in caring for a severely disabled person, in respect of whom an attendance allowance is payable. (Section 31(1) and (2) of the Act.)

The following features of ICA must be noted.

27. It is payable irrespective of the sex of the recipient and of any relationship to the disabled person. (regulation 6 of the Social Security (Invalid Care Allowance) Regulations SI 1976 No. 409, which effectively nullifies the opening words of section 37(1)(c) of the Act.).
28. ICA is a non-contributory benefit. (Section 34(1)(c) of the Act.)
29. ICA is a "personal benefit", since although it is paid because someone other than the recipient exists (namely the invalid whom the recipient looks after) nevertheless it belongs to the recipient in his or her own right. ICA therefore differs from a "dependent benefit", where although the existence of the dependent wife generates the right to benefit that right belongs to the person who is the focus of the benefit (namely, in the case of pension increase under section 45, the husband).
30. The rate of ICA at the material time was £23.75. (Section 37(9) and para. 2 of Part III of Schedule 4 of the Act.)
31. The criterion for being regularly and substantially engaged in caring for the disabled person is that the carer is regularly engaged in caring for 35 hours a week (regulation 4 of the ICA Regulations.)
32. There is an upper earnings limit of only £12 per week for the carer. (Section 37(1)(b) of the Act and Regulation 8(1) of the ICA Regulations.)

For ease of reference I will call the persons to whom these various benefits relate the "invalid pensioner", the "dependent wife", the "disabled person" and the "carer", respectively.

This is not the only legislative provision material to the present case, for even a glance at the subject matter of the Act, quite apart from other legislation under which benefits are payable, is sufficient to show that there will be many instances in which a person will be the subject of more than one benefit: such benefit being payable either to that person, or to someone else because of that person's existence. These situations are the subject of the overlapping Benefits Regulations, SI 1979 No. 597. This daunting instrument need not be explored in detail, and I will not attempt to do so, especially since our attention has been directed solely to regulation 10. I must however say something about its general shape, and draw attention to one important feature, before describing regulation 10, which is the genesis of the present appeal.

As I understand them the regulations set out to deal with the following types of situation:

33. Where the same person is eligible for two or more personal benefits of certain stated types. (regulations 4 and 6.)
34. Where two or more earnings-related supplements are payable. (regulation 5.)
35. Where the same person is the subject of two or more dependency benefits of certain stated types. (regulations 7, 9 and 13.)
36. Where a dependency benefit is made to person A in respect of the dependency of B, and a personal benefit is also payable to B. (regulation 10.)
37. There are also provisions for dealing with certain less general categories of overlapping.

As one would expect, the regulations deal differently with different instances of overlapping, no doubt in accordance with Ministerial perceptions of fairness and also the necessity to ensure that certain claimants do not, by drawing too deep on a purse which is not bottomless, unduly diminish the funds available to others equally in need. Thus, the regulations variously provide that the existence of one benefit shall annul the right to the other: or that they are both payable in full; or that they are both payable subject to an aggregate limit; or that one benefit is payable, but is deducted from the other. In the case with which we are concerned here, where a dependency benefit is payable to A in relation to B, and a personal benefit is payable to B, regulation 10(2) provides that the dependency benefit shall be reduced or extinguished by the amount of the personal benefit.

Before leaving these regulations, there is one particular aspect of them which is worth attention; namely that there are certain measures to deal with overlapping which not only might be taken to bear harder on women than on men, but which apply exclusively to women, simply because one or both of the benefits which overlap can by their nature be payable only to women. Thus we have:

(a) Overlapping invalidity pension and widows pension both payable up to a limit. (regulation 3.)

(b) Overlapping earnings-related addition to widow's allowance and benefit referable to contributions of husband: deduction of former from latter, subject to proviso. (regulation 5(2).)

(c) Maternity allowance overlapping training allowance: latter deducted from former. (regulation 6 and Schedule 1.)

(d) Widow's benefit and unemployability supplement, industrial death benefit or war pension death benefit: latter deducted from former. (regulation 6 and Schedule 1.) I shall return to these provisions at a later stage.

THE FACTS

We now come to the circumstances of Mrs. Jones' claims for benefit. These arise from the sad fact that two of her close relatives became seriously ill. The chronology as stated by her in evidence was as follows. From 1962 to 1980 she was employed, latterly in the licensed premises managed by her husband. In 1980 Mr. Jones became ill and began to receive invalidity benefit. He gave up the licensed premises. Mrs. Jones continued to work, briefly full-time and then part-time. In 1983, Mrs. Jones' father, Mr. Fellowes (now deceased), also became ill, and received attendance allowance at the lower rate. In 1985 he began to receive it at the higher rate. Mrs. Jones was at that time receiving £17.34 per week for her part-time work, but she then gave up work to look after her father.

Thus we find that, adopting the terminology suggested above, Mr. Jones was the invalid pensioner and Mrs. Jones his dependent wife. This being so, if these had been the only persons involved, Mr. Jones would have been entitled to receive his invalidity pension, augmented by the pension increase referable to his dependent wife. This would not be subject at any time to a deduction on account of Mrs. Jones' earnings, as these were below the earnings limit of £31.45.

This simple situation became more complicated when the late Mr. Fellowes became a disabled person and Mrs. Jones became his carer. On the face of it this would mean that Mr. Fellowes would receive an attendance allowance and Mrs. Jones would receive in her own right an invalid care allowance. Although her earnings of £17.34 would have been a bar to recovery in view of the low earnings disregard if she had gone on working, in fact she did not continue to work, so the earnings limit never applied.

Thus there is no doubt and it has never been disputed that Mrs. Jones qualified in her own right for a personal benefit in the shape of ICA, and that her husband was entitled to a dependency benefit relating to her dependency, namely a pension increase. Nor has it ever been disputed that, since Mrs. Jones was thus the subject of benefits which fell within regulation 10 of the Overlapping Benefits Regulations, if the British legislation alone is regarded, the effect of regulation 10 is to cancel the latter entitlement, since the amount of Mrs. Jones' ICA (£23.75 per week) was exactly equal to the amount of the pension increase attributable to her dependency on Mr. Jones.

The result should therefore have been that Mr. Jones received no pension increase whereas Mrs. Jones received her ICA in full. In practice this did not happen, since Mr. Jones claimed and received the pension increase before Mrs. Jones made her claim for ICA. The need which would thus have arisen for the Department to recover the total sum paid from Mr. Jones and pay it out again to Mrs. Jones was however forestalled by another statutory instrument (The Social Security (General Benefit) regulations SI 1982 No. 1403), which has the effect of creating an off-set between the overpaid pension increase and the arrears of the ICA. (The regulations have now been repealed, but still govern this case.) At this point a curious complication enters the scene. The mechanism employed by regulation 6, in cases where it turns out that dependency benefit has continued to be paid when, if a claim for a personal benefit had been made more promptly the dependency benefit would have been withheld, is to treat the dependency benefit "as having been properly paid" and to reduce or withhold the personal benefit pro tanto.

The result is therefore to reverse the position which would have existed if the claims had been made simultaneously i.e. that Mr. Jones would have lost his pension increase and Mrs. Jones would have received her ICA and produce a situation where Mr. Jones keeps his pension increase and his wife loses her ICA. I am confident that in the overwhelming majority of cases this sensible administrative short cut would make no difference at all, and but for the European dimension it would have made none here, since the Jones' family income was wholly unaffected. But in the present case the anomaly is not trifling, as will appear.

THE APPELLANT'S COMPLAINTS

On the facts stated it is clear the Jones/Fellowes family unit is worse off financially than if either:

(a) Mrs. Jones had stayed at work and someone else had been persuaded to look after her father at the rate of £23.75 for a 35-hour week; or

(b) the Minister had not included regulation 10(1) in the Overlapping Benefit Regulations. In the former event the pension increase would have been paid without abatement, since the dependent wife and the carer would not have been the same person; the benefits would not have overlapped; and Mrs. Jones would have kept her part-time earnings. In the latter event Mrs. Jones could have left work and more than made up the loss by receiving her ICA.

I believe that many, although certainly not all, of the difficulties of this case arise from the assumption that it is sufficient to establish a hardship, in the sense that receipts which are already small are further reduced in consequence of the legislation, and to proceed at once to the question of discrimination. In my judgment one must be more circumspect, and identify precisely what prejudice the legislation under attack is alleged to have caused to Mrs. Jones, and to have caused to her as a woman.

In the decisions of the tribunal and the Commissioner, and in the written and oral arguments addressed, this prejudice has from time to time been variously identified as:

(a) the loss to Mrs. Jones of her part-time earnings,

(b) the loss to Mrs. Jones of her ICA, and

(c) the loss of the pension increase.

In my opinion, alternative "(a)" must be rejected for, whilst it is true that, if Mrs. Jones had gone on working, her husband would have received the pension increase and she would have kept her wages, the fact that she no longer has her wages is not due in any way to the legislation, but to the sad circumstance that Mr. Fellowes became so ill that Mrs. Jones through affection and duty felt it right to give up her individual pursuits to look after him. For many years this has been the unhappy lot of daughters married and unmarried, and without doubt it is a burden which has borne disproportionately hard on the female sex. But this is not a hardship which, as it seems to me, the European directive ever sets out to mitigate.

Version "(b)" is much more attractive. After all, Mrs. Jones has made a claim for arrears of ICA which has been turned down, and this is why the appellate machinery has been set in motion. This has been put forward as the appellant's case on more than one occasion. Thus, in the written submissions made on her behalf to the tribunal we find it said (in relation to the fact that ICA is a subsidy to encourage home carers) that the regulations "create a situation in which a class of people who will be disproportionately women are not entitled to the benefit of the 'subsidy'"; and, a little later, that "the complaint is ... the arrangement of a scheme designed to protect the invalid (in this case Mr. Fellowes) on a discriminatory basis". Tempting as this analysis may be, I am satisfied that the Commissioner was right not to accept it. The true effect of the Overlapping Benefit Regulations, which is the measure under attack, is to forfeit the pension increase and not the ICA; and the only reason why the complaint is that Mrs. Jones has lost the latter and not Mr. Jones the former is that for administrative convenience the General Benefit Regulations have created a set-off. Nobody has suggested that these regulations are discriminatory.

The real complaint, to my way of thinking, is that the pension increase has been annulled by the entitlement to ICA, whereas it would not have been compromised by Mrs. Jones' low earnings if she had remained at work. I am fortified in this analysis by the following passages from the documents:

[The Commissioner, rehearsing the appellant's contentions]

"In other words, the effect of regulation 10 of the Overlapping Benefit Regulations created the anomalous position that while the claimant's husband was in receipt of an increase of invalidity pension, she was entitled to retain her part-time earnings, whereas when she was obliged to forego those earnings and became entitled to invalid care allowance, she lost her dependency status although the rate of invalid care allowance was within the prescribed earnings limit for the purpose of the increase." (Appeal Bundle, page 9.)

[The appellant's written submissions before the Commissioner]

"The issue is the different treatment of earnings and ICA for the purposes of the dependants addition." (Appeal Bundle, page 19.)

[The appellant's written submissions to the tribunal]

"... it becomes clear that to provide for a complete off-set is to indirectly discriminate against women who were, before they began to care for the invalid in respect of whom they are entitled to invalid care allowance, part-time workers earning wages which were disregarded when calculating the relevant dependants addition for invalidity benefit." (Appeal Bundle, pages 29-30.)

So the sexual discrimination for which we must look here is one which bears on the increase of pensions payable to invalid men in relation to their dependent wives.

THE COUNCIL DIRECTIVE

Now we arrive at the source of the dispute. The relevant provisions of Directive 79/7/ EEC read as follows:

"Whereas Article 1(2) of Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions provides that, with a view to ensuring the progressive implementation of the principle of equal treatment in matters of social security, the Council, acting on a proposal from the Commission, will adopt provisions defining its substance, its scope and the arrangements for its application; whereas the Treaty does not confer the specific powers required for this purpose; whereas the principle of equal treatment in matters of social security should be implemented in the first place in the statutory schemes which provide protection against the risks of sickness, invalidity, old age, accidents at work, occupational diseases and unemployment, and in social assistance in so far as it is intended to supplement or replace the above mentioned schemes;

Article 1

The purpose of this Directive is the progressive implementation, in the field of social security and other elements of social protection provided for in Article 3, of the principle of equal treatment for men and women in matters of social security, hereinafter referred to as 'the principle of equal treatment' . ...

Article 3

38. This Directive shall apply to:

(a) statutory schemes which provide protection against the following risks:

- sickness,

invalidity,

old age,

accidents at work and occupational diseases,

unemployment;

. . .

39. This Directive shall not apply to the provisions concerning survivors' benefits nor to those concerning family benefits, except in the case of family benefits granted by way of increases of benefits due in respect of the risks referred to in paragraph 1(a) ....

Article 4

40. The principle of equal treatment means that there shall be no discrimination whatsoever on ground of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:

the scope of the schemes and the conditions of access thereto,

the obligation to contribute and the calculation of contributions,

the calculation of benefits including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits.

...

Article 5

Member States shall take the measures necessary to ensure that any laws, regulations and administrative provisions contrary to the principle of equal treatment are abolished.

...

Article 7

41. This Directive shall be without prejudice to the right of Member States to exclude from its scope: ...

(c) the granting of old-age or invalidity benefit entitlements by virtue of the derived entitlements of a wife:

(d) the granting of increases of long-term invalidity, old-age, accidents at work and occupational disease benefits for a dependent wife: ...

42. Member States shall periodically examine matters excluded under paragraph 1 in order to ascertain, in the light of social developments in the matter concerned, whether there is justification for maintaining the exclusions concerned.

Article 8

43. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive within six years of its notification. They shall immediately inform the Commissions thereof.
44. Member States shall communicate to the Commission the text of laws, regulations and administrative provisions which they adopt in the field covered by this Directive, including measures adopted pursuant to Article 7(2). They shall inform the Commission of their reasons for maintaining any existing provisions on the matters referred to in Article 7(1) and of the possibilities for reviewing them at a later date."

This Directive has not been explicitly re-enacted in the United Kingdom but it is common ground that it is directly enforceable, in the sense that, if the regulation offends against it, the regulation may not be relied upon against the appellant.

THE ISSUES

There are three broad areas of dispute, each comprising more than one issue:

45. Does the legislation of which the appellant complains fall within the scope of the Directive?
46. If so, does the legislation entail any discrimination in terms of gender?
47. If so, can the discrimination be "objectively justified", as the respondent accepts it must be if it is to be enforced in face of the Directive?

Although this is the logical order in which the questions arise I will begin with the second, since I believe this to be at the heart of the dispute.

ARE THE REGULATIONS DISCRIMINATORY?

The question is whether regulation 10 involves "discrimination ... on ground of sex either directly or indirectly by reference to ... the scope of the schemes and the conditions of access thereto" within the meaning of Article 4(1) of the Directive. It is not suggested that any other legislation whether of the European Communities or of the United Kingdom bears on the present dispute.

We are not troubled here with direct discrimination. It is true that a number of provisions for benefit are directly discriminatory in the sense that they are payable only to persons of a specified gender, or are payable on terms which are more readily satisfied by persons of one gender than another. This is not so in the case of regulation 10(1), for if one looks at the matter individual by individual it makes no difference whether the claimant of benefit is male or female.

What we must consider is whether, if one looks not at individuals but at the population of claimants as a whole, it can be seen that there is indirect discrimination. The parties agree that for this purpose it is the effect, not the intent, of the legislation which counts. They also agree that what was called the "demographic" argument represents one way in which indirect discrimination can be established. As I understand it, the process for establishing discrimination on this basis takes the following shape. (For ease of illustration I will assume that the complaint stems from the failure of a woman to satisfy a relevant positive qualification for selection, and that only one such qualification is in issue.):

48. Identify the criterion for selection.
49. Identify the relevant population, comprising all those who satisfy all the other criteria for selection. (I do not know to what extent this step in the process is articulated in the cases. To my mind it is vital to the intellectual soundness of the demographic argument.)
50. Divide the relevant population into groups representing those who satisfy the criterion and those who do not.
51. Predict statistically what proportion of each group should consist of women.
52. Ascertain what are the actual male/female balances in the two groups.
53. Compare the actual with the predicted balances.
54. If women are found to be under-represented in the first group and over-represented in the second, it is proved that the criterion is discriminatory.

The reasoning thus summarised may be illustrated by the oft-cited but none the less useful example of the height qualification for police officers. Assume that amongst the various conditions for enrolment in the police force is a requirement that the candidates shall all be at least 5 ft. 10 ins. tall. This is not aimed at discouraging women from becoming police officers. Nor does it have the effect that no women can become police officers, for some are tall enough. Nevertheless, because women tend at present to be shorter than men, when one comes to examine the population of those who fulfil all the other requirements of entry it is found that the proportion of women who fail for lack of inches is markedly greater than that of men. Hence, the requirement is discriminatory.

I make no comment on this chain of reasoning, since the parties agree that it is sound and indeed accept that we are bound to treat it as such by the decisions of the European Court of Justice in Teuling v. Bedrijfsvereniging voor de Chemische Industrie ...Case 30/85) and Bilka Kaufhaus v. Weber von Hartz [1986] IRLR 317. (See also the opinion of Advocate General Mancini in the former case, and the epitome of the law given by Schiemann J in R v. Secretary of State for Education ex parte Schaffter ([1987] IRLR 53.) Nor is it necessary to question the assumption that the demographic argument is capable in principle of being applied to one particular provision in isolation from the complex statutory network of which it forms a small part: for this has been common ground between the parties at all stages of the dispute.

Approaching the present case, we find the demographic argument stated by the Commissioner in a way upon which it would be impossible to improve:

"Regulation 10 of the Overlapping Benefits Regulations has no application to a person in full-time employment whose earnings exceeded the prescribed limit for the purposes of an increase of invalidity pension, because no dependency benefit was in payment. Accordingly as regulation 10 is confined to circumstances where a dependency benefit and a personal benefit are payable for the same period, it must follow that its application is confined to a dependant, whose earnings fell within the prescribed limit for the purposes of the dependency benefit. It is accepted that more women than men are dependants who are the subjects of invalidity benefit increase and that more women than men are part-time or very low paid earners. Accordingly 'the practice or enactment complained of although apparently sexually neutral, in fact has a disproportionate impact on one sex' (Schiemann J in Schaffter's case) ..."

An important feature of this formulation is that it refers the question of discrimination to the pension increase, not the invalid care allowance. For the reasons already given I consider that the Commissioner was right to pose the question in this way.

Thus, we must ask ourselves whether, and if so in what shape, the loss of the pension increase payable to Mr. Jones in respect of his wife's dependency resulting from the set-off with "his wife's" ICA, is a discrimination against his wife on the ground of sex. (I put "his wife's" in quotation marks because Drake teaches us that the ICA was merely a separately-paid portion of Mr. Fellowes' disablement benefit.) When the issue is framed in these terms it leads at once to a question which does not seem to have been posed during these proceedings. If, following the steps of the demographic argument, one divides the relevant population into those who forfeit their pension increase through regulation 10 and those who do not, it is likely to be found that men are over-represented, because the majority of invalids with dependent spouses are probably male - or so I assume the question has not been investigated. If so, it must follow that if there is discrimination at all it is discrimination against men, for which an objective justification must be established if it is to survive.

One possible escape from this conclusion is to assert that Mrs. Jones suffered hardship because the family group of which she was part lost one of the two benefits. So indeed she did, but the Directive is not concerned with hardship but with "discrimination on ground of sex". I do not see how it can be legitimate simultaneously to postulate hardship by identifying Mrs. Jones with Mr. Jones and also to treat this hardship as sex-weighted hardship by looking at Mrs. Jones in isolation from her husband.

I believe however that there is a better solution, namely that the anomaly disappears once it is recognised that regulation 10(1) involves no discrimination against either sex. Since neither in the decisions under review nor in argument has the possibility been explored that it is Mrs. Jones' husband, not Mrs. Jones herself, who was the subject of discrimination, and since the argument is just the same if it is applied to Mrs. Jones, I will address it by reference to the position of Mrs. Jones. I will begin with two general questions.

The first is this. Assume that the qualifications for achieving a desired result include one which favours persons of gender X, assume also that they establish a second qualification which does not favour persons of either sex. Is the second qualification discriminatory against persons of gender X?

I would answer this question, No. The first qualification certainly does involve sexual discrimination in favour of X, and hence unfavourably to Y. The second qualification does reduce the number of qualifiers of gender X, and hence reduces the disparity of qualifiers within the population as a whole. But the discrimination will always be there. There are various ways of expressing the reasons, all coming to the same thing. One explanation is that the second qualification serves merely to mitigate the consequences of the discrimination against Y inherent in the first qualification, and will never eliminate them except in the trivial case where the second qualification is so hard to satisfy that nobody at all can qualify. Alternatively, it may be said that the relevant population consists of those who satisfy the second qualification, and that the selection from this population is gender-biased by the first qualification.

This rather rarefied analysis can be explored by reference to some simple examples.

Take first an elaboration of a homely instance given by Mr. Kent in the course of argument. A large children's party is being given, the guests being equally divided between girls and boys. The host announces that all the girls will be given presents, but that the boys will have none. Later, he discovers that the presents have not been delivered, and has to tell the guests that unfortunately nobody will receive a present. Is there sexual discrimination here? Yes, at the time of the first announcement: discrimination in favour of the girls against the boys, since the proportion of qualifiers is unbalanced. But common sense impels the answer that there is no sexual discrimination at the second stage. The disadvantage to the girls is not mirrored by any corresponding advantage to the boys. All that has happened is that the original discrimination has been nullified.

Now modify the example so that the host discovers, not that there are no presents, but that there are not enough for all the girls. He therefore announces that presents will be given only to red headed girls. Is there sexual discrimination at the second stage? Again there is not, albeit fewer girls than originally intended will receive presents. One reason is that there is no gender bias in the new qualification of being red-headed. More importantly, the second qualification (of being red-headed) operates on a population (composed only of girls) which is already sexually biased, and serves only to ameliorate this bias.

Let us modify the example further, by introducing a second qualification which this time is gender-biased. The host announces that the presents will go, not to red-headed girls, but to red-headed girls who play football. (I assume that even nowadays more boys than girls play football.) This new qualification will again redress some of the original imbalance, but although it disadvantages some girls it does not help any boy. The discrimination is not between boy and girl, but between one group of girls and another i.e. the relevant population is already irremediably biased against boys.

In the course of a resourceful argument Mr. Drabble sought to deal with examples of this kind by submitting that one should look separately at the justification for the two discriminations: so that if it was justified to create one discrimination, and unjustified to take it away, in whole or in part, the second step was objectionable and invalid. I agree to this extent, that when considering the justification for an act of discrimination one must take into account the justification for every element of it. But the question of justification arises only when discrimination has been found to exist, and I do not agree that, when deciding whether it does exist, one can properly isolate only one of the qualifications and disregard all the others. In our last example, an observer might think that the method of distribution was hard on non-footballers, but if asked whether the girls were discriminated against vis a vis the boys (and this is the only relevant question for the purposes of sex discrimination) there could I believe be only one possible answer: namely that as a group it was the boys, not the girls, who had come off worse.

When one leaves the world of children's parties and returns to the harsh realities of the social services legislation it does I believe become clear that to isolate one qualification cannot be right, for it would mean that in relation to a benefit payable only to people of a particular sex, any condition or restriction imposed on the benefit would automatically be discriminatory, and require to be separately justified, since it could bear only on people of that sex. Such a result would be nonsense. Take for example the mothers' and widows' benefits. These are made subject by the primary and delegated legislation (including, as I have shown, by the Overlapping Benefits Regulations) to various qualifications and limitations. These may or may not be fair. But could anyone seriously suggest that they are discriminatory as between man and woman? Surely not. (The position is of course entirely different where the legislation deals with the same subject-matter separately for the two sexes, as with the pension increases relating to wives and husbands in section 45 and 45A of the Act. Here the qualifications and limitations may be discriminatory: not individually but because, if they are not the same, they may yield unequal treatment for men and women. But we are not concerned with any such question here.)

Let us take the analysis one stage further. Thus far, we have been concerned with explicit, direct and complete discrimination at the first stage. All boys have been excluded from receiving prizes, and all men from widows' benefits. The position is more complicated where the discrimination is not direct and is established indirectly through the demographic argument. Here the discrimination in favour of gender X and against gender Y at the first stage is unlikely to be total, and some members of the latter will be among the population to which the qualification is applied at the second stage: a qualification which may involve factors now discriminatory in favour of, rather than against, persons of gender Y. In these cases there is a real possibility that one gender bias will swamp the other, and reverse the discrimination. This possibility makes it more than ever important to look at the two stages together, for the exercise is not completed merely by demonstrating the existence of discrimination. What matters is whether the discrimination invalidates the measure, and for this purpose all are agreed that objective justification must be regarded. This is not a function which can sensibly be performed by pretending that only one amongst two or more qualifications is subject to gender bias. In my judgment the analysis should be the same whether the initial discrimination or any discriminatory qualification upon it is direct or indirect.

Now to the present case. We are concerned here with the pension increase. Since the overwhelming proportion of recipients of this are male, the logic of the demographic argument insists that we regard this as discriminatory in favour of men and against women, since so few women have dependant husbands. Nobody has displayed any interest in this feature, no doubt because the justification for it is obvious. Nevertheless it must represent the starting point of the enquiry. Superimposed is the limitation created by regulation 10(1) which takes away or reduces the pension increase by references to the circumstances of the beneficiary's dependent. Is the consequence discriminatory? I would say, No. Not as regards the dependent wife, since it is not she but her husband who loses the benefit. Nor as regards the pensioner himself, because the regulation serves only to diminish a discrimination which ex hypothesi is favourable to his gender group.

My conclusion would be the same even if one adopted a different formulation from any so far proposed in this case and regarded Mrs. Jones as suffering hardship through regulation 10(1) because she is a participant in the Jones family group whose total income is reduced by it. I find it impossible to discern any sexual discrimination here, for the hardship is borne equally by the male element in that group. Quite apart from this, the conferring of benefit notionally on the group, and the removal of it in certain instances, is not, for the reasons previously stated, a discrimination against either sex; and the fact that the removal happens to be limited to the income characteristics of the female member of the group does not in my view make any difference.

I would therefore hold that no discrimination on ground of sex is established in this case and that regulation 10(1) does not offend against Article 4 of the Directive. Accordingly I propose that the appeal should on this ground be dismissed.

I would add two comments. In the first place the views just expressed are founded, as was the decision of the Commissioner, on the premise that the hardship of which complaint is made consists of the loss of pension increase. Even if this were wrong, and the case could somehow be made out that Mrs. Jones has lost her ICA, my conclusion would be the same. The statistics show that the majority of those receiving ICA are women. If the impact of the Overlapping Benefits Regulations had been so gender-biased as to produce a situation where most of those receiving ICA are men, there might indeed be an argument for the existence of sexual discrimination. No argument on these lines has however been presented, nor do I see how it could have been, on the data laid before us. In reality what has happened is that a balance in favour of women has to some extent been redressed.

The second observation may be introduced by a reference to the words "in favour of", which I have just employed. It may well seem odd, and indeed rather objectionable, to say that there is any favouritism in conferring an income replacement benefit primarily on women who for necessity rather than choice tend because of the way our society is organised to form the majority of those who care for invalids. Nevertheless the demographic argument in the form presented to us leads inexorably to the conclusion that ICA is a discriminatory benefit, albeit one which is of course readily justifiable. I say "in the form presented to us" because it is plain that the version which I have summarised is wider than necessary to deal with qualifications which women cannot (e.g. the height qualifications) as distinct from do not in practice comply with. It is obvious that, if the argument in its wider form is carried through, it will be found that the social security legislation of every member state is permeated with sexual discrimination and could not be otherwise, given that the legislation must cope with the needs of society as it exists today, not as it may be tomorrow or the day after. Society is not at present in even an approximate condition of gender balance. Like it or not, women are the primary child carers, men are still the primary earners, and women therefore the majority of dependants men are the principal contributors to contributory benefits and so on. No doubt the balance will change, but for the time being a social security regime which did not recognise that things are as they are would be cruel, and a demographic argument, which shirked the consequences of its own logic, would lead only to well-intentioned unclear thinking.

It is of course true that in the overwhelming majority of cases such discriminations will not offend against the Directive, since the justification for them will be obvious. This is not however a sufficient answer, because the suggestion that it is enough to prove differential impact to throw the burden of proving justification on to the legislator, the employer, or whatever, by expensive and time-consuming litigation, seems to me wholly inimical to the interests of society in general and the cause of equal treatment in particular.

This has caused me to wonder whether in some future case the court may not think it worth while to look more closely at the formulation and intellectual underpinnings of the demographic argument. We have no need to do so here, nor indeed have we the means to do so, since we have seen nothing beyond the brief observations of Advocate General Mancini in Tueling. I must make it absolutely clear that, in making this suggestion, I intend to cast no doubt on the concept of indirect discrimination which is quite clearly binding on this court, or on the general aims of the Equal Treatment Directives, which are not only directly effective in this country but reflect an aim of social policy to which the courts should and must subscribe. Quite the reverse. What I do propose is that in the best interests of equal treatment the courts would do well not to equate too readily an apparent disparity with discrimination, and to be careful not to be too ready to accept arguments such as the present which to my mind are essentially misconceived.

DOES THE DIRECTIVE APPLY?

In the light of the opinions just expressed the question whether, if discrimination on the ground of sex could be established, it would offend against Article 4, does not arise. The matter was however discussed by the Commissioner, and explored to some extent in argument, and since it is important I ought to say something about it. The question has two aspects. The first concerns the scope of the Directive and of the permissive provisions in Article 7. The second concerns the manner in which the member state may exercise its liberty under that Article.

On the first aspect three issues were argued.

55. Is the pension increase prima facie within the scope of the Directive? The answer seems clearly affirmative, since sections 15 and 45 are interlinked parts of a single scheme for conferring protection against invalidity, within the meaning of Article 3(1)(a). Paragraph 2 of this Article emphasises that the element of Mr. Jones' invalidity pension which was attributable to his wife's dependency is within the purview of the Directive. The case is therefore even stronger than Drake v. Chief Adjudication Officer [1987] 1 QB 166, where it was held that invalidity benefit and ICA were part of the same scheme, albeit payable to different persons, whereas here both the pension and the pension increase were payable to Mr. Jones.
56. Is the pension increase the kind of benefit which is capable of being excluded from the requirements of the Directive under Article 7(1)(d)? Again, I would answer in the affirmative. There might have been an argument if the expression in paragraph (1)(d) had been "... to a dependent wife ...", since the increase was payable to Mr. Jones, but there can surely be no doubt, on a fair reading of this paragraph, that it is an increase "... for a dependent wife".
57. Does the benefit in issue here fall outside the liberty to exclude conferred by Article 7(1)(d) on the ground that this is concerned only with the "granting of increases ... of benefits", whereas the effect of the Overlapping Benefits Regulations is that no increase is granted? Again, the answer seems clear. In the context of a Directive concerned with discrimination, a topic with a predominantly negative connotation, a permissive article must surely be interpreted as enabling benefits of the stated kind to be withheld.

So much appears plain sailing. The second aspect of Article 7 is altogether more troublesome, partly because the parties seem to be at cross purposes with each other, or perhaps with the tribunal, the Commissioner and the court, about its implications.

The point can best be illustrated by a short extract from paragraph 12 of the Commissioner's decision. In the first part of this paragraph the Commissioner dealt successively with arguments advanced for Mrs. Jones to the effect that Article 7(1)(d) did not extend to the whole of the scheme now under review, and that it did not apply to provisions relating to disentitlement to benefit. (For the reasons just stated I venture to disagree on both points.) She then proceeded to record, and as I read her decision to accept, an argument to the following effect :

"Lastly Mr. Drabble submitted that Article 7 did not itself exclude Article 7(1)(d) matters from the scope of the Directive 79/7. It simply provided a power for Member States to do so. Mr. Kent had not referred to any measure of the United Kingdom Government excluding the granting of increases of long-term invalidity benefits for a dependant wife from the scope of Directive 79/7."

The reason why I find this aspect of the case to be troublesome is that the question raised by the argument just mentioned serves to conceal a second question which has not been debated at any stage of the proceedings. The first question is this: in order to take advantage of the liberty in Article 7 must the member state explicitly declare that it is excluding from the scope of the Directive some or all of the matters referred to in paragraphs (a) to (d) of Article 7(1), and that certain legislation inconsistent with Article 4 is being enacted pursuant to this exclusion? or is it enough for the member state simply to enact such inconsistent legislation, on the basis that this is a tacit exercise of the liberty under Article 7?

The concealed question is this. Assume that the member state has not (in whatever manner is permissible according to the answer given to the first question) excluded a discriminatory measure from the scope of the Directive, is it nevertheless possible to validate the measure by showing that it is "objectively justifiable" by reference to some non-discriminatory motive for the legislation, this being the formulation employed in the present dispute for the familiar concept of proportionality? Or does the issue of proportionality arise only if the member state has expressly declared that it exercises the liberty under Article 7, the court of the member state being then called on to decide whether the exercise of the option was objectively justifiable.

Now it is easy to see that the second question disappears if the answer to the first is that the liberty can be exercised either by a formal declaration, or by leaving in force of legislation inconsistent with Article 4: for in such a case it should make no practical difference whether proportionality is assessed in terms of the formal exclusion or the legislation under attack: for the considerations to be put in the scale are the same.

On the other hand, if only a formal exercise of the option will suffice for Article 7, and if none has been made, the second question will come into play. In such a situation the member state, having been given the option to exclude the Directive, has chosen not to use it, and the legislation under attack is thus flatly contradictory to Article 4, without Article 7 entering the picture at all. One would expect that the legislation would then simply be struck down, without any consideration of the proportionality which would have been relevant if the state had elected to avail itself of the option.

It is this later situation to which the decision of the Commissioner has given rise. She has accepted that Article 7 calls for an explicit use of the member state, and has found that none has been demonstrated. One would expect the result to be that if the measure is found to be discriminatory (and the Commissioner has so found) no question of proportionality could arise, the Directive forbids discrimination and that is the end of it. Yet all concerned, including the Commissioner, have evidently assumed that the regulation would still be valid, if objective justification could be proved.

Although I have formed some provisional views on this conundrum, I think it better not to express them. If I am right that regulation 10(1) involves no discrimination on the ground of sex, the relationship between the option and proportionality is academic. Moreover, if the position had been otherwise, we might have been implied to seek further assistance from counsel, for it seems to me probable that the answers to these questions will have been either stated or tacitly assumed in cases which have already been decided in the courts of the Community or this country. In particular, the court would have invited submission on the very recent decision in Secretary of State for Social Security v. Thomas and others, in which it seems to have been assumed on all hands that legislation in a manner contrary to Article 4 in the area delineated by Article 7 is itself an exercise of the option, and that the issue of proportionality is to be addressed by reference to this exercise of the option. In the event, of course, we have not thought it necessary to reconvene the hearing so that the matter could be examined in more depth.

In these circumstances, I prefer to do no more than express my reservations about the reasoning of the Commissioner in the passage quoted above, and also the use of it as a starting-point for the discussion of proportionality. If the topic is raised again in some other case it can then be given a closer scrutiny than has been possible here.

OBJECTIVE JUSTIFICATION

The question whether regulation 10(1) can be saved by proof of objective justification does not arise if I am right in holding that there is no discrimination and hence nothing to justify. Nevertheless, since the Commissioner decided in favour of the respondent on this basis, differing there from the tribunal, I will offer some general observations upon it.

In the first place, I think it is essential when considering proportionality in the context of the Directive to be very clear about the issue which the national court is called upon to decide. What the court does not have to decide is whether it represents a sensible and moderate way of giving effect to a general legislative policy. These general questions fall within the purview of the national legislature and of the national constitutional court, if the member state possesses one, and are not the concern of European law. What the national court must do is to identify with precision those features of the measure under attack which discriminate against members of one sex either directly by their terms or indirectly by their effect. The court must then consider whether those features are the unavoidable consequence of a justifiable policy, not in itself of a sexually discriminatory nature.

This point is worth labouring because it is very easy, when faced with an issue of proportionality, to fall into considering whether the measure in question was well-conceived and properly thought through. This is not so at all. As will appear from the summary given at an earlier stage, the Overlapping Benefit Regulations embody the fruits of numerous decisions on matters of social policy. Some of these may have been evenly balanced no doubt it would be possible to muster reasons for arguing that some of them are wrong. So in the case of regulation 10. On the face of it, there seems good reason for making some abatement of dependency benefits in cases where the dependent receives a personal benefit, for such receipt will serve to reduce the dependency. The selection of personal benefits to which this applies set out in regulation 10(1) may well be debatable: and, so also the decision to apply the abatement to income replacement benefits, of which ICA is only one example. Criticism might also be made of the feature that the personal benefit is debited pound for pound against the dependency benefit, rather than by treating the income replacement benefit as equivalent to the income which it notionally replaces, up to the limit of permissible earnings for the purposes of the dependency benefit. The possible answers to these criticisms are very clearly set out by the Commissioner in her decision.

No doubt, if we were in the political arena there could be lively debate on the fairness of all this, and I suppose that, if this were an application for judicial review founded on an argument that the regulation was so unfair as to be irrational, we would have to enter into it, although I hardly see how such an argument could begin to succeed. But we are not engaged on any such exercise. The task is not to assess the general merits of regulation 10 but to consider whether these features of it which are sexually discriminatory can be validated on the grounds of a sexually neutral social policy.

It will be clear from what has already been said that I find this exercise impossible to perform in the present context. Let us take again the extreme case of the benefits which can by their nature be payable only to women. In several cases these are payable subject to conditions, limits and deductions. No doubt there could be lively controversy on whether the imposition of these qualifications means that society is being too ungenerous to widows and mothers, and this could be presented as a controversy about whether the qualifications were "justified". That would not, however, have anything to do with Directive 79/7, unless it could be made out that the qualification had an element of sexual discrimination which needed to be validated by an overriding contrary interest. For the reasons given, I believe that no such element is present.

So also here. The starting point for the appellant's argument must be to demonstrate a sexually discriminatory element in regulation 10(1). Skilfully although it was deployed, the argument never clearly settled on what the discrimination was said to be. The Commissioner certainly did so, but I must repeat with due respect that neither that version, nor any of the alternatives which came to the surface during argument are in my view instances of discrimination on the ground of sex against women. This being so, I cannot enter upon the difference of opinion between the Commissioner and the tribunal because they address an issue which, on the view which I have formed, not only does not but cannot arise.

CONCLUSION

For these reasons I would dismiss the appeal.


 


LORD JUSTICE NOURSE: I have had the advantage of reading in draft the judgment of Lord Justice Mustill and for the reasons given by him I too would dismiss this appeal.

LORD JUSTICE BUTLER-SLOSS: For the reasons given in the judgment of Lord Justice Mustill, which I have read in draft, I agree that Mrs. Jones has not been discriminated against and therefore the appeal must fail. I would respectfully endorse the view that he expressed, that the court ought not to equate too readily an apparent disparity with discrimination. I also agree that, consequently, the issue of objective justification does not and cannot arise.

I am, however, troubled by the application of Article 7 of the 1979 Directive to national legislation and the circumstances in which the state may opt out of the Directive. I am uncertain whether the member state is under an obligation to indicate that specific legislation is to be excluded (see Article 7(2)) or whether the legislation in question may fall within the exclusion by subsequent construction of the Article upon which the member state may rely after a challenge in the national court. The Social Security Act 1975 and the regulations under it were passed, no doubt, without the 1979 Directive in contemplation. In a recent decision in Secretary of State for Social Security v. Thomas and Others it appears to have been assumed on all sides that the opting out permitted by Article 7 does not require a conscious decision by the member state and no argument on the point was addressed to the court.

In view of the failure of the appellant to demonstrate to the satisfaction of this court that she had been discriminated against, a decision is not necessary upon the extent and application of article 7(1)(d). However, had it been necessary to decide this point, I should myself have been very unhappy at coming to a conclusion on a point of such general importance without the assistance of argument from the Secretary of State, who was not party to these proceedings.

I, too, would dismiss this appeal.