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[1996] UKSSCSC CU_7238_1995 (29 March 1996)

R(U) 1/97

Mr. J. M. Henty CU/7238/1995

29.3.96

Compensation - resettlement grant paid to Church of England clergyman - whether made "in respect of" the termination of "employment" and whether there is a "period of notice applicable to" the incumbent of a parish

The claimant was formerly a Church of England clergyman. He was the incumbent of a parish and so resident in a parsonage house. He resigned from his living effective from 30 November 1994 because he objected on conscientious grounds to the Church's decision to admit women into the priesthood. As a result he received a resettlement grant of £3,780 from the Church of England Pensions Board under a scheme intended to provide for clergy who resigned in such circumstances and in consequence had to give up their accommodation. On 12 December he claimed unemployment benefit.

The adjudication officer decided that (a) the resettlement grant constituted a payment of compensation on termination of employment and so the claimant could not qualify for benefit during the "ineligible period"; and (b) there was no "due date" in the claimant's case and so the ineligible period had to be calculated according to the arithmetical formula provided in the regulations, which produced a date of 5 April 1995.

The claimant appealed to a social security appeal tribunal contending that, as the resettlement grant was intended to cover the costs of his having to move out of the parsonage house, it should not prevent him from receiving benefit for living expenses. On 16 May 1995 the tribunal allowed the appeal on the grounds that the claimant had been self employed and so the expression in the regulations "termination of employment" could not apply in his case. The adjudication officer appealed to a Commissioner.

Held, allowing the appeal, that:

the resettlement grant fell within the definition of "compensation" in regulation 7(6) of the Unemployment, Sickness and Invalidity Benefit Regulations 1983 i.e. a "... payment made to or for a person in respect of the termination of the employment ..." because:

(a) if the claimant's incumbency had not been terminated by his resignation, the grant would not have been made. It was therefore apt to describe it as having been made "in respect of" that termination (para. 13);

(b) the claimant's incumbency was an office or vocation and so fell within the definition of "employment" laid down in section 122 of the Contributions and Benefits Act 1992. As there was no definition of "employment" in the regulations, that provided by the Act must apply (para. 14);

the resettlement grant did not fall within any of the exceptions listed in paragraphs (a) to (f) of regulation 7(6). The fact that it was intended to cover re-location expenses was not a reason to bring it under any of the exceptions (para. 15);

there was no "due date" as defined in regulation 7(6), in the claimant's case. The incumbent of a parish can only be removed from office for certain specified reasons following a formal process laid down in ecclesiastical law and cannot be dismissed on notice in the manner of an employee. Therefore there was no "... period of notice applicable to …" the claimant and so there could not be a due date (para. 3);

the "ineligible period" had to be calculated according to the formula in paragraph (b) of the definition of "the standard date" in regulation 7(6). In accordance with regulation 7(1)(d) of the regulations, the claimant was not entitled to unemployment benefit for any day during the ineligible period.

The Commissioner set aside the tribunal decision and restored the decision of the adjudication officer that the claimant was not entitled to unemployment benefit for the period 1 December 1994 to 5 April 1995 inclusive.

DECISION OF THE SOCIAL SECURITY COMMISSIONER

The appeal is allowed. In pursuance of the power in that behalf in section 23(7)(i) of the Administration Act 1992, I give the decision which I consider the tribunal should have given, namely that the claimant is not entitled to unemployment benefit for the period 1 December 1994 to 5 April 1995 inclusive.

The claimant made a claim for unemployment benefit. Having determined that the claimant had shown good cause for his delay in claiming benefit before 12 December 1994, the AO nevertheless then decided that for the period 1 December 1994 to 5 April 1995 the claimant was not entitled, since that period was "the ineligible period" for the purposes of regulation 7(1)(d) of the Unemployment Sickness etc. Regulations 1983. This was because of the fact that the claimant had, in circumstances which I will relate, been paid what the AO decided was "compensation" for the purposes of regulation 7(6).

The circumstances of this case arise out of the fact that the claimant was in Holy Orders in the Church of England and was the incumbent of a parish i.e. he was a beneficed priest. An incumbent has certain property rights e.g. the freehold of the church, churchyard and parsonage house is vested in him as corporation sole, although with a qualified estate, and he cannot, without his consent, be removed except if, broadly speaking, he has committed a serious ecclesiastical offence and has been deprived by the competent court (see Parts II, III and IV of the Ecclesiastical Jurisdiction Measure 1963) or, in certain circumstances has been convicted of a criminal offence and been sentenced to a term of imprisonment or is guilty of certain other matters, see section 55 ibid. There is also power under the Incumbents (Vacation of Benefices) Measure 1977 and 1993 where there has been a breakdown in pastoral relationship or in case of disability in the incumbent. It is not for nothing, that a beneficed priest is often referred to as having "the parson's freehold".

As a result of the decision to admit women into the priesthood, the General Synod of the Church of England passed the Ordination of Women (Financial Provisions) Measure 1993, to give some measure of support to those of the priesthood who, as a matter of conscience, felt unable to accept women into the priesthood and who, accordingly, resigned. The claimant, in this case, was one such person and he resigned his living on 30 November 1994. I would add that a Measure of the Church of England has the force of statute.

Under section 1(1) of the Measure every person to whom the section applies is entitled to:

"(b) receive from the Board financial benefit consisting of-

(i) a resettlement grant in accordance with section 3 below ..."

Section 3 of the Measure provides as follows:

"3(1) A resettlement grant under section 1(1)(b) above shall be a single payment of an amount equal to three-tenths of the national minimum stipend for the year in which application for the grant was made ...

(2) Such a grant shall not be paid unless the Board is satisfied that the applicant was, immediately before the material time, residing in accommodation made available to him in order to enable him to undertake the service from which he has resigned."

"The Board" means the Church of England Pensions Board. Before leaving that Measure I would note that section 1(2) lays down the persons to whom that section applies and one of the conditions is that the person in question must:

"(c) within the period commencing six months immediately before the relevant date and ending ten years immediately after that [have] ceased to be in such ecclesiastical service consequent on his resigning therefrom ... "

"The relevant date" is defined as the date on which the Canon of the Church of England enabling a woman to be ordained to the office of priest is promulged. The relevant canon is Canon C4B and it was promulged on 22 February 1994. Clearly, therefore, the claimant in this case, who resigned his living on 30 November 1994, satisfied the condition in para. (c) above.

It is, I think, quite plain that the resettlement grant is precisely what it means. It is intended to assist the claimant in moving into new accommodation and work, the parsonage house no longer being available to him. The claimant himself described it at p 55:

"... the resettlement grant provided by the Church of England authorities and designated as such in the relevant legislation is money provided as reimbursement for personal costs involved in moving."

He also states that other clergy have in similar circumstances received unemployment benefit in full. I have no knowledge about those cases and, even if payment in full has been made in other cases, that is not a matter before me in this present case. In this respect, what I have to determine is not, what the purpose of a resettlement grant is but whether it comes squarely and fairly within the definition of "compensation" in regulation 7(6).

In any event the claimant received a resettlement grant of £3,780.

The claimant appealed against the decision of the AO to a SSAT who, on 16 May 1995, allowed his appeal. They held that he was entitled to unemployment benefit from 4 December 1994 (i.e. from the date of resignation less the first three qualifying days) to 5 April 1995, the date on which the ineligible period expired. They gave their reasons as follows:

"The appellant is self-employed and therefore before 4 December 1994 he was gainfully employed in Great Britain otherwise than in employed earner's employment. We consider that regulation 7(1)(d) of the Unemployment, Sickness and Invalidity Benefit Regulations does not apply to the appellant because he does not have employment which can be terminated by virtue of the fact that he is in self-employment."

From that decision, with the leave of the chairman, the AO appeals to me.

This case turns entirely on the interpretation of regulation 7. Regulation 7(1)(d) provides:

"(d) where in any case the employment of a person is terminated and he receive compensation, a day shall not be treated as a day of unemployment if it is a day-

(i) which falls within the ineligible period as defined in paragraph (5) ... "

Para. (5) provides that, in the context of the present case, "the ineligible period" starts on the day following the termination of the employment and ends on either "the due date" (sub-para. (a) or "the standard date" (sub-para. (b)). Para. (6) of regulation 7 defines "compensation" as follows:

"(6) In this regulation-

"compensation" means any payment made to or for a person in respect of the termination of the employment other than-

(a) any remuneration paid in respect of the period before the termination;

(b) any holiday pay;

(c) any payment not falling within paragraph (a) or (b) of this definition which is paid in respect of any emolument of the employment (whether in money or in kind) and which has accrued before the termination of the employment;

(d) any redundancy payment within the meaning of section 81(1) of the Employment Protection (Consolidation) Act 1978; and

(e) any refund or contributions to which he was entitled under an occupational pension scheme within the meaning of section 66(1) of the Pensions Act;

(f) any compensation payable by virtue of section 178(3) or (4) of the Education Reform Act 1988."

The paragraph is widely drawn.

Two questions arise:

(1) Is the resettlement grant "a payment made to or for a person in respect of the termination of his employment"? Out of that question arises a subsidiary question "Is an incumbent within the concept of "employment" for the purposes of this definition?"

(2) Can the claimant in this case bring himself within any of the paras. (a) to (f) of regulation 7(6)?

Question 1

In R(U) 5/92, when considering whether a severance payment based on the number of years worked was "compensation" for the purposes of the regulation, the Commissioner adopted a broad construction. In para. 4 he said:

"[Both parties] rightly in my view both agreed that the severance payment in this case was a payment" made ... in respect of the termination of the employment ... " and was therefore within the primary meaning of "compensation". It seems to me that that definition of "compensation" is wide enough to include all payments made on and with reference to the termination of the employment. One must then consider whether the severance payment is within any of the items under paragraph (6) list ... "

The Commissioner went on to hold that the fact that the severance payment was calculated by reference to past years of service did not bring it within para. (a) of regulation 7(6).

Clearly, for reasons I have set out above, the claimant qualified and fulfilled condition 1(2)(c) of the 1993 Measure by reason of his resigning. It seems to me clear that, subject to the subsidiary question concerning the expression in the regulation "employment", the payment of the resettlement grant was made on and with reference to, or in respect of, the termination of his incumbency, in the sense that if it had not been terminated by resignation the claimant would not have been entitled to the grant. Further, in a case like this, I do not forget that resignation involves not only loss of the "office" of the incumbent but also of the parsonage house as a home and the expenses of re-location are inevitable. In my view, the settlement grant was thus "compensation" for the purposes of regulation 7(6).

The subsidiary question

What is meant by "employment"? The AO quite simply submits to me that, there being no definition in the regulation, the relevant definition is that to be found in section 122 of the Contributions and Benefits Act 1992. That definition is as follows:

""Employment" includes any trade business profession office or vocation ..."

That prima facie clearly comprehends the "office or vocation" of an incumbent, or beneficed priest. I think that this submission must be correct for it is by virtue of the claimant's "interruption of employment" that he is, under section 25(1) of the SSCBA, able to claim unemployment benefit at all. "Employment" is used in each time in the same sort of context and should have the same meaning. I therefore decide that the resettlement grant was compensation in the sense that it was a "payment" made "to or for a person in respect of the termination of his employment."

Question 2

The claimant now has to bring himself within one of the paras. (a) to (f) in para. 7(6) if he is to succeed. Paras. (b) and (d) to (f) are clearly inapplicable. So far as para. (a) is concerned, I do not see how a resettlement grant payable under the 1993 Measure, as a result of the resignation of an incumbent, can possibly qualify as remuneration paid in respect of the period before the termination. For one thing it was not paid in respect of the period before the termination. It was paid only as a result of the termination. For another, it is not that, as the claimant himself in effect points out, remuneration. It was payment for expenses of re-location. So far as (c) is concerned, similarly, the grant did not accrue before the termination. Under the terms of the Measure it is only payable after, and by reason of, the termination by resignation. The claimant does not therefore, in my view, qualify under any of the paras. (a) to (f) and accordingly it seems to me that the ineligible period is applicable in the case of the claimant.

The result has the unforeseen consequence of the Church of England Pensions Board is, to some extent, in effect, unwittingly subsidising the welfare service.

It appears to me, therefore, that the decision of the AO was correct and that of the SSAT incorrect. For reasons briefly explained by me above, an incumbent is not dismissable on notice. He can only be deprived, which term for all intents and purposes means "dismissed", after lengthy legal or semi-legal process. Accordingly, the ineligible period falls to be calculated by reference to "the standard date" and "the standard date" falls to be calculated according to para (b) of the definition of "standard date" in section 7(6). This the AO has done.

I therefore allow the appeal. My decision is as set out in para. 1 above.

Before leaving the case, if might be useful were I to make some comment upon what I conceive the effect the payment of a resettlement grant may have on claims for unemployment benefit by the various main classes of "Ministers" within the Church of England. Such persons must, in order to qualify under S1(2) of the 1993 Measure, satisfy the test in S1(2)(a) of the clergy Pensions Measure 1961 as being persons "in whole time ecclesiastical service within the area to which this Measure applies in connection with a diocese, cathedral or parish or in connection with the collegiate churches of Westminster or Windsor". The Measure applies to the Province of Canterbury and the Province of York as well as the two collegiate churches which are extra diocesan, as being Royal Peculiars. I do not know precisely how many persons could be affected. On the ordination of women into the priesthood there has not been the stampede of priests leaving the Church of England as had once been feared, and I understand that the number to date is about 150

I now consider the main classes.

Archbishops, bishops, deans and residentiary canons. They are "dismissible" under the 1963 Measure after due legal process (or under s. 55 or s. 51 as appropriate).

Licensed priests. They are dismissible under the 1963 Measure. However, all they have is a revocable licence determinable on "reasonable notice" which in their case is usually considered to be three months.

Curates. Their position is similar to that of a Licensed priest except in their case six months is the usual notice, which incidentally is the period prescribed by s. 95 Puralities Act 1838.

Team vicars. They are appointed under a Pastoral Scheme usually for a fixed period of five or seven years. When that term expires, the appointment simply terminates unless renewed.

It seems to me that in all these cases, a resettlement grant would be "compensation" within reg. 7(6) and accordingly an ineligible period would apply as appropriate.

Similarly, the ineligible period would, in the case of archbishops, bishops, deans and residentiary canons be calculated by reference to "the standard date" according to the definition in para. (6) of the regulation in the same say as a beneficed priest. But the relevant date with regard to the other classes could conceivably be "the due date" if for the purposes of reg. 7(5)(a) the resettlement grant was paid "on account of the early termination of a contract of employment". In the light of Barthorpe v. Exeter D.B.F. [1979] 1CR 900 and Coker v. Diocese of Southwark [1995] 1CR 563, a curate, and possibly other classes (except I think those I have, in this respect, considered above) could have a contract of employment. On the question whether the relevant date could with regard to them be "the due date" it would be inappropriate for me here to express an opinion. The question will have to be determined, if as and when it arises, in the particular circumstances of each case and after detailed submissions.

Date: 29 March 1996 (signed) Mr. J. M. Henty

Commissioner