CS_83_1989
Secretary of State v. Scully [1992] UKSSCSC CS_83_1989 (12 June 1992)
CA (Purchas and Stocker LJJ and Sir Christopher Slade) CS/83/1989
12.6.92 Commissioner case no. Date
Contribution conditions - whether adjudicating authorities or Secretary of State had jurisdiction to determine the "relevant past year" for the purpose of establishing if the contribution conditions have been satisfied
From 18 November 1985 to 22 March 1986 the claimant was awarded and paid maternity allowance. On 20 June 1988 she claimed sickness benefit supported by evidence that she had been incapable of work since 27 March 1986. The adjudication officer allowed backdating to 20 June 1987, but refused the claim on the grounds that the claimant did not satisfy the condition laid down in paragraph 1(3) of Schedule 3 to the Social Security Act 1975 because she had not paid or been credited with sufficient contributions in the "relevant past year" as defined in paragraph 1(4) of the Schedule.
The adjudication officer proceeded on the basis that the relevant past year was the year ending 5 April 1986 because the period of interruption of employment which included the date of the claim had commenced on 20 June 1987. The claimant contended that there was no rule preventing days of incapacity prior to the date to which the claim had been backdated from forming part of the period of interruption of employment. On that basis the period of interruption of employment had commenced on 18 November 1985 (as the maternity and sickness benefit clams "linked") and so the relevant past year was the year ending 5 April 1984 for which the claimant's contribution record was sufficient.
The social security appeal tribunal confirmed the adjudication officer's decision. The claimant appealed to a Commissioner. The Secretary of State, appearing as a separate party, contended that any dispute over the determination of the relevant past year came within his jurisdiction under section 93(1)(b) of the Act, which provided that the questions to be determined by the Secretary of State included "…a question whether the contribution conditions to any benefit are satisfied or otherwise relating to a person's contributions or his earnings factor".
Mr. Commissioner Goodman held that (a) although the Secretary of State had jurisdiction to determine matters arising under paragraphs 1(2) and 1(3) of the Schedule, matters arising under paragraph 1(4) fell to be determined by the adjudicating authorities (a conclusion which he based on the decision of a tribunal of Commissioners, R(G) 1/82); and (b) days of incapacity prior to the date to which the claim had been backdated could not form part of the period of interruption of employment. He therefore rejected the appeal. The Secretary of State appealed to the Court of Appeal on the jurisdiction issue.
Held, allowing the appeal, that:
- the Secretary of State had exclusive jurisdiction over all matters arising under paragraph 1 of Schedule 3 to the Social Security Act 1975. Paragraph 1(4) did no more than contain definitions for the purposes of paragraphs 1(2) and 1(3). Therefore the functions allotted to the Secretary of State by section 93(1)(b) of the Act, the language of which was quite general, necessarily included those of applying those definitions and of determining any questions that might arise in the course of such application;
- in so far as decision R(G) 1/82 was based on the proposition that questions arising under paragraph 1(4) of the Schedule did not fall to be determined by the Secretary of State, it was wrongly decided.
The Court set aside the Commissioner's decision and ordered that the question of the date on which the period of interruption of employment which included the sickness benefit claim commenced should be referred to the Secretary of State for determination. The Commissioner should make a fresh decision on the appeal in the light of that determination.
Mr. D. Pannick QC (instructed by the Solicitor to the Department of Social Security) appeared on behalf of the Appellant.
Mr. J. Howell (instructed by Messrs. Sinclair Taylor and Martin, London) appeared on behalf of the Respondent.
SIR CHRISTOPHER SLADE: This is an appeal by the Secretary of State for Social Security from a decision of Mr. Commissioner Goodman given on 25 April 1991. The respondent is a married woman, Mrs. Nora Scully ("the claimant"), who was born on 5 June 1955. She made a claim for "sickness benefit," which is a contributory benefit as described in section 12(1)(6) of the Social Security Act 1975. Section 13(1) of that Act provides that entitlement to contributory benefits, including sickness benefit, "depends on contribution conditions being satisfied." Section 13(6) provides that in relation to such benefits "the relevant contribution conditions are those specified in Part I of Schedule 3 to this Act." Section 14(1) provides:
"Subject to the provisions of this section, a person who satisfies any of the three conditions of subsection (2) below shall be entitled–
(a) to unemployment benefit in respect of any day of unemployment which forms part of a period of interruption of employment; and
(b) to sickness benefit in respect of any day of incapacity for work which forms part of such a period."
Section 14(2)(a) then sets out three conditions, of which only the first needs to be quoted:
"The conditions of this subsection are that-
(a) the person is under pensionable age on the day in question and satisfies the contribution conditions specified for unemployment or, as the case may be, sickness benefit in Schedule 3, Part I, paragraph 1; or ..."
Schedule 3, Part I, paragraph 1, duly specifies the "contribution conditions" and, as originally enacted, provides:
"(1) The contribution conditions for unemployment benefit or sickness benefit are the following.
(2) The first condition is that-
(a) the claimant must in respect of any one year have actually paid contributions of a relevant class, and those contributions must have been paid before the relevant time; and
(b) the earnings factor derived from those contributions must be not less than that years' lower earnings limit multiplied by 25.
(3) The second condition is that-
(a) the claimant must in respect of the relevant past year have either paid or been credited with contributions of a relevant class; and
(b) the earnings factor derived from those contributions must be not less than that year's lower earnings limit multiplied by 50.
(4) For the purpose of these conditions-
(a) 'the relevant time' is the day in respect of which benefit is claimed; and
(b) 'the relevant past year' is the last complete year before the beginning of the relevant benefit year; and
(c) 'the relevant benefit year' is the benefit year in which there falls the beginning of the period of interruption of employment which includes the relevant time."
Certain amendments to paragraph 1 have been made from time to time, but it has not been suggested that any of them affect the question which we have to decide on this appeal.
The expression "period of interruption of employment" is not as such defined in the Act of 1975, but the expression "day of interruption of employment" is defined by section 17(1)(c) as meaning "a day which is a day of unemployment or of incapacity for work."
Regulation 7(1)(c) of the Social Security (Unemployment, Sickness and Invalidity Benefit) Regulations 1983 (SI 1983 No. 1598), as in force at the relevant dates, provided:
"For the purposes of ... sickness and invalidity benefit ... (c) a day shall not be treated as a day of incapacity for work if it is a day in respect of which a person is disqualified for receiving sickness benefit or invalidity benefit; ..."
By a decision issued on 10 August 1988, an adjudication officer decided inter alia and so far as relevant for present purposes, that the claimant was "not entitled to sickness benefit from 20 June 1987 to 15 September 1988" (inclusive) on the grounds that:
"the earnings factor derived from contributions of a relevant class paid by or credited to her in the relevant year which ended on 5 April 1986 is less than 50 times the lower earnings limit for that year (Social Security Act 1975, Schedule 3, para. 1(3))."
In other words, on the grounds that she did not satisfy the second contribution condition.
The claimant appealed against this decision to a social security appeal tribunal which, by a decision of 11 January 1989, dismissed her appeal. She then appealed from that decision to the Commissioner.
In his decision the Commissioner pointed out that the claimant had an insufficient contribution record for payment of sickness benefit for the period 20 June 1987 to 20 June 1988 unless it could be linked to an earlier period. The claimant, however, contended that the year ending 5 April 1986 was the wrong "year" for ascertaining her contributions record and that her period of incapacity due to sickness should be linked with a period during which maternity benefit had been paid to her. It was submitted that there had been a single continuous "period of interruption of employment" from the start of the payment of the maternity benefit on 18 November 1985 right through to the end of the relevant period of incapacity, 15 September 1988. If this submission were correct, it was common ground before the Commissioner that the relevant contribution year would not be the year ending on 5 April 1986 but that ending on 5 April 1984 in which the claimant had an adequate contributions record for the payment of benefit. The Commissioner, however, rejected the submission. He held that there was:
"no continuity of a period of interruption of employment between the end of the maternity benefit period on 22 March 1986 and the beginning thereafter of the period for which incapacity through illness was claimed."
He therefore held that the relevant contribution year was that ending on 5 April 1986 and that the claimant was not entitled to sickness benefit for the period in issue. In the course of his decision, however, he also considered, and rejected, another major submission, namely, that he had no jurisdiction to determine the question before him, on the grounds that it was a matter reserved for decision by the Secretary of State for Social Security under section 93(1)(b) of the Social Security Act 1975.
On 26 July 1991 the Commissioner granted both the Secretary of State and the claimant leave to appeal to this court from his decision. The Secretary of State's appeal raises the question whether, as he submits, section 93(1)(b) deprived the social security Commissioner of jurisdiction to decide the issue between the parties relating to the claimant's entitlement or otherwise to sickness benefit. It has therefore been agreed between the parties that this issue of jurisdiction should be determined before the claimant decides whether to appeal against the substantive decision of the Commissioner, which went against her.
Before discussing the issue of jurisdiction, I must refer to a few more of the relevant statutory provisions. Section 93 of the Social Security Act 1975 provides:
"(1) Subject to this Part of this Act, any of the following questions arising under this Act shall be determined by the Secretary of State-
...
(b) subject to subsection (2) below, a question whether the contribution conditions for any benefit are satisfied, or otherwise relating to a person's contributions or his earnings factor;
...
(3) The Secretary of State may, if he thinks fit, before determining any question within subsection (1) above, appoint a person to hold an inquiry into the question, or any matters arising in connection therewith, and to report on the question, or on those matters, to the Secretary of State."
It has not been suggested that section 93(2) is relevant. Section 94 provides a route for appeals from a decision of the Secretary of State:
"(1) A question of law arising in connection with the determination by the Secretary of State of any question within section 93(1) above may, if the Secretary of State thinks fit, be referred for decision to the High Court or, in Scotland, the Court of Session.
...
(3) Any person aggrieved by the decision of the Secretary of State on any question of law within subsection (1) above which is not referred in accordance with that subsection may appeal from that decision to the court.
(4) The Secretary of State shall be entitled to appear and be heard on any such reference or appeal.
...
(7) Notwithstanding anything in any Act, the decision of the court on a reference or appeal under this section shall be final."
Section 98, as amended by Schedule 5 to the Social Security Act 1986, provides:
"(1) There shall be submitted forthwith to an adjudication officer for determination in accordance with sections 99 to 104A below–
(a) any claim for benefit;
(b) subject to subsection (2) below, any question arising in connection with a claim for, or award of, benefit; and
(c) any question whether a person would by reason of the provisions of, or of any regulations under, section 20(1) or (2) of this Act have been disqualified for receiving unemployment benefit, sickness benefit or invalidity benefit if he had otherwise had a right thereto.
(2) Subsection (1) above does not apply to any question which falls to be determined otherwise than by an adjudication officer. ...."
The route for appeals from decisions of an adjudication officer is as follows. Such decisions are subject to a right of appeal to a social security appeal tribunal, under section 100 of the Social Security Act 1975. Section 101 gives a right of appeal to a Commissioner from that tribunal on a point of law. A right of appeal from the Commissioner to the Court of Appeal is available, with leave, on a point of law: section 14 of the Social Security Act 1980. Section 103 of the Act of 1975, as amended by Schedule 5 to the Act of 1986, provides:
"(1) Subject to subsection (2) below–
(a) if on consideration of any claim or question an adjudication officer is of opinion that there arises any question which under or by virtue of this Act falls to be determined otherwise than by an adjudication officer, he shall refer the question for such determination; and
(b) if on consideration of any claim or question a social security appeal tribunal or a Commissioner is of opinion that any such question arises, the tribunal or Commissioner shall direct it to be referred by an adjudication officer for such determination.
(2) The person or tribunal making the reference shall then deal with any other question as if the referred question had not arisen."
At least at first sight it would appear to me clear that before the Commissioner there arose a question which, by virtue of the Act of 1975, "falls to be determined otherwise than by an adjudication officer" within the meaning of section 103. The adjudication officer had decided that the claimant was not entitled to sickness benefit for the period in question on the grounds that she did not satisfy the second condition of the contribution conditions specified for sickness benefit in paragraph 1(3) of Schedule 3 to the Act of 1975. The claimant disputed that contention. In those circumstances, at least at first sight, it would appear to me clear that a question had arisen as to "whether the contribution conditions for any benefit are satisfied" within the meaning of section 93(1)(b) of the Act of 1975, and that under that subsection the Secretary of State had exclusive jurisdiction to determine that question.
The Commissioner however, following the reasoning of an earlier decision of the tribunal of Commissioners in R(G) 1/82, held in effect that this was too simple a way of looking at the matter. In that decision the tribunal had to consider the application of section 93(1)(b) of the Act of 1975 to paragraph 3 of Part I of Schedule 3 to that Act. The form of paragraph 3, which related to maternity allowance, was mutatis mutandis in all relevant respects the same as that of paragraph 1 relating to unemployment and sickness benefit. The part of the tribunal's decision most relevant for present purposes, since it contains the essential reasoning, is to be found in the following passages:
"13. So far as the actual construction of section 93(1)(b) of the Act of 1975 is concerned i.e. 'a question whether the contribution conditions for any benefit are satisfied,' we consider that this is limited to a question arising under paragraph 3(1)(2) and (3) of Part I of Schedule 3 to the Act. The whole of paragraph 3 is set out in paragraph 7 above, and it will be seen that sub-paragraphs (1), (2) and (3) relate to what are termed the first and second contributions i.e. the actual contributions paid or credited, of what class they are, and how many of them are in a given period. Paragraph 3(4), the interpretation of which we consider to be a matter for the statutory authorities and not the Secretary of State begins 'For the purposes of these conditions' and does not itself specify the conditions themselves. Moreover, the matters specified in paragraph 3(4) are all factual matters e.g. what date is the 'beginning of the maternity allowance period' and what is the 'relevant benefit year.' Those matters involve consideration of a problem commonly adjudicated on by the statutory authorities in a number of other contexts arising under the Act of 1975, as to none of which is it suggested that it constitutes a 'Secretary of State's question.' Indeed it would be surprising, to put it no higher, were the same question under the Act of 1975 to be the subject of divided jurisdiction according to the context in which it arises.
The Commissioner in the present case pointed out that it was critical to the determination of the appeal before him to ascertain whether the claimant was correct in contending that there had been a continuous period of interruption of employment during the period asserted. Following the reasoning of R(G) 1/82, he held that this was a point arising under paragraph 1(4) of Part I of Schedule 3 to the Social Security Act 1975, not under the earlier sub-paragraphs, since it related to the ascertainment of "the relevant past year," and that accordingly he had jurisdiction to determine it. He did not regard the decision of this court in Scrivner v. Chief Adjudication Officer [1990] 1 CMLR 637, to which I shall revert, as having completely overruled R(G) 1/82, and thus as compelling him to reach a contrary conclusion.
Mr. Howell, for the claimant, has invited us to uphold the Commissioner's decision and to draw a similar distinction between questions arising under sub-paragraphs (2) and (3) of paragraph 1 of Part I of Schedule 3 to the Act of 1975, which he accepts are matters for the Secretary of State, and questions arising under paragraph 1(4). He has sought to draw a distinction between (a) a question as to whether the contribution conditions ... are satisfied in relation to a claimant," and (b) a question concerning what the relevant contribution conditions are for that claimant in respect of the benefit claimed. In Mr. Howell's submission, the latter question is separate from and logically prior to the former. He pointed out that in order to determine what the contribution conditions were in respect of the claimant in the present case, it was necessary to ascertain "the relevant time," "the relevant past year" and "the relevant benefit year" within the meaning of paragraph 1(4).
In the present case it was common ground before the Commissioner that the claimant would satisfy the contribution conditions if "the relevant past year" was the year ending on 5 April 1984, but would not do so if it was the year ending on 5 April 1986, and that for this purpose the correct period of the interruption of employment was the crucial issue. It was pointed out with force that, having regard to the wording of section 14(1) of the Social Security Act 1975, the ascertainment of "a period of interruption of employment" has to be carried out at least provisionally by an adjudication officer in order to determine whether a claimant is prima facie entitled to sickness benefit. Mr. Howell submitted that, rather than providing for the two systems of adjudication, the legislature must have intended that adjudication officers should finally determine that question for all purposes, including that of paragraph 1(4) of Part I of Schedule 3 to the Act of 1975. In his submission, while the Secretary of State is well equipped to determine what contributions have been paid, since they are payable to him and he keeps records of them, matters such as the days in respect of which benefit is claimed and the period of interruption of employment, are better suited for determination by adjudication officers. In summary, he submitted that in the present case the Commissioner had jurisdiction to determine "the relevant past year" in relation to the claim before him and that, having regard to his determination on that point, there remained no "question arising under this Act" within the meaning of section 93(1) of the Act of 1975 which required determination by the Secretary of State under that section.
I have attempted to summarise quite fully Mr. Howell's admirably presented argument in support of the Commissioner's decision, not only out of deference to him and the Commissioner, but also because we have been told that the issue of jurisdiction raised by this case is of some general importance. I intend no disrespect if I give my answers very shortly. They involve more or less complete acceptance of the clear and compelling submissions of Mr. Pannick for the Secretary of State.
In my judgment, there can be no justification for drawing the fine distinction sought to be drawn between paragraph 1(2) and paragraph 1(3) of Part I of Schedule 3 to the Act of 1975 on the one hand, and paragraph 1(4) on the other hand, and treating them as giving rise to separate issues. Paragraph 1(4) does no more than contain a series of definitions for the purpose of "the first condition" set out in paragraph 1(2) and "the second condition" set out in paragraph 1(3). The language of section 93(1) of the Act of 1975 is quite general. It allots to the Secretary of State the exclusive functions of determining not only any question as to "whether the contribution conditions for any benefit are satisfied," but also "any questions otherwise relating to a person's contributions or his earnings factor." In my judgment, these functions must necessarily include those of applying the definitions in paragraph l(4) to paragraph 1(2) and paragraph 1(3) and of determining any questions that may arise in the course of such application. The application of these definitions is an essential part of the function of determining whether the contribution conditions are met.
In my judgment, the dichotomy suggested by Mr. Howell would not only place a quite unduly restrictive construction on section 93(1)(b) of the Act of 1975 but might well cause practical difficulties for adjudication officers, since in any given case where questions of jurisdiction arose, they would be required to differentiate between questions as to what the relevant contribution conditions were and questions whether those conditions were satisfied. As Mr. Pannick submitted, the broad language of section 93(1)(b), read according to its ordinary and natural meaning, plainly intended to leave it to the Secretary of State to make all determinations relevant to the "contribution conditions" as set out in Schedule 3, Part I, paragraph 1, to the Act of 1975.
Before concluding, 1 should refer to two further points. First, Mr. Howell drew our attention to regulation 21(1) of the Social Security (Adjudication) Regulations 1986 (SI 1986 No. 2218) which provides:
"Where an adjudication officer has decided any claim or question on an assumption of facts as to which there appeared to him to be no dispute, but concerning which, had a question arisen, that question would have fallen for determination by the Secretary of State, it shall be deemed to be a sufficient compliance with the requirements of regulation 20 as to notification to the claimant, to give him notice in writing informing him of the decision and of the reasons for it and that, if he is dissatisfied with the decision, he should reply to that effect, giving the reasons for his dissatisfaction."
Regulation 20 contains rules providing for written notification of the decision of an adjudication officer on any claim or question and the reasons for it to be given to the claimant. Mr. Howell submitted that regulation 21 makes it plain that an adjudication officer is entitled to proceed on an assumption of tact as to which there is no dispute. In the present case, as the Commissioner pointed out, there was no dispute as to whether the claimant had or had not made sufficient contributions in each of the relevant years. Mr. Howell invoked regulation 21 to support his submissions that in the present case no question arose as to whether the contribution conditions were satisfied within the meaning of section 93(1)(b) of the Social Security Act 1975, that the only question which arose was what were the contribution conditions for this claimant in respect of sickness benefit and that, there being no dispute as to the former question, the adjudication officer had jurisdiction to determine the latter question.
In my judgment, however, reference to regulation 21 carries the matter no further. That regulation cannot be read as restricting or derogating from the exclusive jurisdiction conferred by section 93(1)(b) of the Act of 1975 on the Secretary of State in cases of dispute to decide all questions concerning whether the contribution conditions are satisfied in respect of a particular claimant, and all questions otherwise relating to a person's contributions. For the reasons explained above, I think that a dispute of this nature does arise in the present case. Regulation 14(1) of the regulations of 1986 itself contains provisions relating to an application by a person desiring to obtain the decision of the Secretary of State on any of the questions mentioned in section 93(1) of the Act of 1975.
Secondly, I should refer to the decision of this court in Scrivner v. Chief Adjudication Officer [1990] 1 CMLR 637. In that case the issue was whether, as the appellant contended, contributions to other member states of the European Community ranked as contributions for unemployment benefit, for the purpose of the contribution conditions set out in Part I of Schedule 1 to the Act of 1975. Dillon LJ, who delivered the leading judgment, said, at p. 642:
"For my part I see no answer to the appellant's point on this procedural issue. Mr. Morcom felt bound, and may indeed have been bound, by earlier decisions of social security Commissioners, and particularly a decision of a tribunal of Commissioners (Mr. Hilary Magnus, Mr. Edward-Jones and Mr. Goodman in case R(G) 1/82), where the view was taken that it was much more suitable that issues of law be decided by the statutory authorities, that is to say, the adjudication officer, the appeal tribunal and the Commissioner, rather than by the Secretary of State. The function of the Secretary of State, under section 93, was accordingly relegated to providing the figures when the law had been determined. For my part I cannot accept that in the face of the plain wording of the section. It follows, in my judgment, that we must allow this appeal and remit the case to the Secretary of State to follow the correct procedure. It is therefore unnecessary for us to decide the substantive point."
Staughton LJ said, at p. 646:
"For the reasons given by Dillon LJ, I agree that the question whether Mr. Scrivner has made sufficient contributions to entitle him to unemployment benefit here is one for the Secretary of State to decide."
Mann LJ said, at pp. 647-648:
"The question in this appeal is whether it is right to take into account for the purposes of unemployment benefit contributions paid by the claimant in other member states of the European Community. In my judgment, like that of my Lords, this is a question solely for the Secretary of State. It appears to me to be a question falling squarely within section 93(1)(b) ..."
Mr. Pannick submitted that the issue in the present case cannot be distinguished from that considered in Scrivner's case which accordingly binds this court to reach the conclusion for which he contended. The Commissioner, having analysed Scrivner's case with care and detail, came to the conclusion that that decision did not bind him to reach that conclusion. On this point, I agree with the Commissioner. In Scrivner's case this court was not concerned at all with the definitions set out in paragraph 1(4) of Part I of Schedule 3 to the Act of 1975. As appears from the passages from the judgments quoted above, its task was simply to ascertain whether the contributions paid by the claimant in other member states of the European Community qualified as contributions for the purposes of paragraph 1(2) and 1(3). There was no dispute as to the identification of the "relevant past year." Accordingly, there was no need for the court to consider the extent to which R(G) 1/82 was wrongly decided, save to indicate that a possible inference that the Secretary of State's role was limited to arithmetic rather than law could not stand in view of the plain words of the statute. The court was not concerned, as we are in the present case, with a proposition that questions arising under paragraph 1(4) do not fall to he determined by the Secretary of State.
For the reasons which I have stated, however, I am of opinion that that proposition is ill-founded and that, in so far as case R(G) 1/82 was based on that proposition, it was wrongly decided. While Scrivner v. Chief Adjudication Officer [1990] 1 CMLR 637, does not, in my judgment, oblige this court to reach those conclusions, it is in no respect inconsistent with them.
I would allow this appeal. Subject to any submissions as to the precise form of the order, I would declare that the decision of the Commissioner given on 25 April 1991, on the question whether for the purposes of the claim for sickness benefit made by the claimant for the period 20 June 1987 to 15 September 1988 there was a period of interruption of employment within the meaning of paragraph 1(4)(c) of Schedule 3 to the Social Security Act 1975, was made without jurisdiction. I would accordingly set aside that decision and, pursuant to section 103(1) of the Act of 1975 remit that question to the Secretary of State for determination. 1 would further direct that the disposal of the claimant's claim be remitted to the adjudication officer to give a ruling thereon after the Secretary of State has made his determination.
STOCKER LJ: I agree.
PURCHAS LJ: I also agree.
Order: Appeal allowed. Leave to appeal refused.