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Kazantzis v. Chief Adjudication Officer [1999] UKSSCSC CIS_85_1997 (15 June 1999)

R(IS) 13/99

(Kazantzis v. Chief Adjudication Officer )

CA(Peter Gibson, Judge and Waller LJJ) CIS/85/1997
15.6.99

Remunerative work - mini-cab driver - whether waiting in office was "remunerative work"

The claimant was a self-employed mini-cab driver. A social security appeal tribunal decided that time spent waiting in the office for potential customers was "work .... which is done in expectation of payment" within the meaning of regulation 5(1) of the Income Support (General) Regulations 1987. The claimant appealed to the Commissioner who dismissed the appeal on the facts and found no analogy with the employee (a "retained" fireman) in Suffolk County Council v Secretary of State for the Environment [1984] ICR 882, HL. The claimant appealed to the Court of Appeal.

Held, dismissing the appeal, that:

sections 137(2)(c) and (d) of the Social Security Contributions and Benefits Act 1992 are wide enough to allow the Secretary of State to provide that work which does not of itself result in payment is to be treated as remunerative;

waiting at the cab office was an essential part of the claimant's work as a cab driver;

there was no obligation on the Commissioner to apply, by analogy, the principles of Suffolk to a self-employed mini-cab driver.

DECISION OF THE COURT OF APPEAL

Mr. N. Nicol (Instructed by Stephen Fidler & Co. of Clerkenwell, London) appeared on behalf of the appellant.

Mr. J. R. McManus QC (Instructed by Solicitor for Department of Social Security) appeared on behalf of the respondent.

LORD JUSTICE PETER GIBSON:

This appeal raises the question whether the time spent by a freelance mini-cab driver at a mini-cab office whilst awaiting customers constituted time in which he was "engaged in remunerative work" for the purposes of Section 124(1) of the Social Security (Contributions and Benefits) Act 1992 ("the 1992 Act") and regulation 5(1) of the Income Support (General) Regulations 1987 ("the Regulations"). If it was, he was not entitled to income support on the facts of this case. If it was not, he was entitled to such benefit.

I go at once to the statutory provisions. Section 124(1) of the 1992 Act sets out the conditions which must be satisfied if a person in Great Britain is entitled to income support. They include the condition in paragraph (c) that "he is not engaged in remunerative work". Section 137(2) empowered the Secretary of State to make regulations. By paragraphs (c) and (d) such regulations may make provision as to what is or is not to be treated as remunerative work and as to the circumstances in which a person is to be treated as engaged in remunerative work. The Regulations made pursuant to the power in section 137(2) define in regulation 5(1) "remunerative work" as meaning for the purposes of section 124(1)(c):

"work in which a person is engaged, or, where his hours of work fluctuate, he is engaged on average for not less than 16 hours a week being work for which payment is made or which is done in expectation of payment."

I come now to the facts. The appellant is a self-employed mini-cab driver in his mid-fifties. Prior to November 1995 he had been in receipt of income support as an unemployed man. In November 1995 he completed forms which he supplied to the Department of Social Security in which he indicated that as such a driver he worked 16 hours per week. An adjudication officer decided that he was not entitled to income support on 29 October 1995 because the appellant was engaged in remunerative work. The appellant's son gave notice, on his father's behalf, on 28 December 1995 of the appellant's intention to appeal, and in a further letter of 2 January 1996 claimed that the appellant had worked just under 16 hours per week but had rounded up the hours as he did not realise that he could not work 16 hours a week without loss of benefit.

The appeal was heard by the Edmonton Social Security Appeal Tribunal on 19 July 1996. The tribunal, in giving their findings of fact, referred to the matters which I have stated and continued:

"(4) It became clear that the appellant measured his hours of work as a cab driver in travelling time, taken from the office where he was based to answer a call, deliver a passenger to his or her destination and return to the base office. These times had been carefully recorded. However, Mr. Kazantzis was in the habit of driving from his home to the office and waiting there for potential customers, sometimes spending several hours; ..... The tribunal were satisfied on the evidence that such waiting periods were indeed working time, since the waiting was economically motivated by the prospect of receiving a call from a prospective customer, which was the opportunity for the appellant to work and earn money. That kind of activity appeared to come entirely within the scope of regulation 5(1) [work done in expectation of payment].

(5) The appellant was therefore engaged in remunerative work."

The tribunal gave reasons for their decision in the following terms:

"The evidence indicated that Mr. G. Kazantzis was engaged in work for in excess of 16 hours per week, since the operations of a freelance cab driver, based at a cab office, comprised being present there in order to be available to answer calls, answering such calls as might be received, transporting the various customers and returning to the base office each time until the end of the working spell or shift. As the appellant was a freelance cab driver, he was under no obligation or compulsion to stay at the cab office, waiting for customers except for economic self interest. It was that factor which came within the scope of the definition in regulation 5(1) 'work ..... which is done in expectation of payment'. He certainly would not be paid for waiting time, for there might well be no customers, but if a call came which he dealt with, his charge for that work would incorporate an element to cover expenses including time spent waiting."

The tribunal therefore dismissed the appeal but ended by saying:

"Defining accurately the scope of regulation 5(1) was sometimes difficult and Mr. Kazantzis' business activity was near the borderline."

Leave to appeal from a tribunal to a Social Security Commissioner lies only on a point of law, but with leave. The tribunal chairman gave leave to appeal. The appellant appealed but the appeal was dismissed by the Commissioner, Mr. M. J. Goodman. In his written decision of 6 May 1998 the Commissioner said that he had come to the conclusion that undoubtedly the tribunal had arrived at the correct conclusion on the facts of this case in deciding that the appellant's waiting time was "work in expectation of payment". The appellant was refused leave to appeal to this court by the Commissioner and by the single Lord Justice. But on the hearing of the renewed application in open court, when, for the first time, the appellant was represented by counsel, this court granted leave.

Mr. Nicol, for the appellant, argues, as his first ground of appeal, that, having regard to the statutory provisions, the tribunal and the Commissioner erred in law in holding that the appellant's waiting time fell to be taken into account as hours of work under the provisions of regulation 5(1). He stresses that the condition of section 124(1)(c) is that the person is not engaged in remunerative work and submits that the section is concerned with work for which the claimant is remunerated. He argues that regulation 5(1) is only intra vires if concerned with work for doing which the person is paid. I am not persuaded that that is correct because section 124(1) must be read with section 137(2), and it is clear from the latter section that the regulations may describe what is or is not to be treated as remunerative work and the circumstances in which a person is or is not to be treated as engaged in such work. Mr. Nicol referred us to paragraphs (i) and (j) of section 137(2), allowing regulations to make provision for treating any person liable to make payments in respect of a dwelling as if he were not so liable are for treating any person not so liable as if he were so liable. He suggested that that showed that section 137(2)(c) and (d) did not allow regulations to be made treating work which is, in fact, remunerative as if it were not or vice versa. I cannot agree. Paragraphs (c) and (d) seem to me to be amply wide enough to allow the Secretary of State, by regulations, to treat what is not work as work and work which is not remunerative as work which is remunerative. Indeed, regulation 5(7), on which Mr. Nicol relies, is an example of what is not work being treated as work. I see no reason why, for example, if that is intra vires, so regulation 5(1) should not also provide that work which does not in fact eventuate in payment is to be treated as remunerative.

Mr. Nicol's next argument was that the work of which account may be taken under regulation 5(1) is only that work for which a person is paid or for which he expects to be paid. He argues that this excludes unpaid work for which the person has no realistic expectation of being paid. There he was saying that there must be a correlation between the payment and the work. He pointed to two provisions which he submitted assisted him. One was the regulations relating to family credit; but, as they seem to me to use language which is really indistinguishable from regulation 5(1), I cannot see how those provisions assist him. The other was regulation 5(7) which provides:-

"For the purposes of [regulation 5(1)] in determining the number of hours for which a person is engaged in work, that number shall include any time allowed to that person by his employer for a meal or refreshment, but only where that person is, or expects to be, paid earnings in respect of that time."

Mr. Nicol emphasises the explicit link made between the remuneration and the activity in respect of which it is being paid. But in that particular case the activity, having a meal or taking refreshments, is not work at all, but the time for it is treated by regulation 5(7) as relevant to the time for which the person is engaged in remunerative work. I do not see how one can extrapolate from that explicit deeming provision relating to a specific non-work activity that regulation 5(1) should be construed as, in effect, including the words "for that work" at the end of the paragraph. On the contrary, the absence of such an explicit link suggests that a wider condition was intended and that any work done in the expectation of payment, even if the payment is not made directly for that work, would suffice. It was the appellant's own case that while driving to pick up his customer he was engaged in remunerative work because of the expectation of payment and that similarly he was working when he was driving back to the office, no doubt in expectation of a further fare. The appellant had no expectation of being paid directly for the time he took to drive to the customer or for the time he took to drive back to the office, having conveyed the customer.

To my mind the appellant was being entirely realistic when he treated the time so spent as time in which he was engaged in work done in expectation of payment.

It is convenient at this stage to refer to a point taken by Mr. Nicol challenging a factual statement made by the tribunal. This was not in their express findings of fact but in their reasons for decision where they say:

" ..... if a call came which he dealt with, his charge for that work would incorporate an element to cover expenses including time spent waiting."

The last four words are to be contrasted with the opening words of the sentence:

"[The appellant] certainly would not be paid for waiting time, for there might well be no customers ....."

Mr. Nicol submits, and Mr. McManus QC for the Chief Adjudication Officer does not dispute, that there was no evidence before the tribunal that the appellant's charge to a customer included time spent waiting. Looking at the sentence as a whole, I understand the tribunal to be making the point that while there is no direct correlation between the waiting time and the payment, in an economic sense the fare charged to the customer would be not merely for transporting the customer where he wished to go but also would cover the appellant's expenses including time spent waiting, there being no other source of remuneration for the appellant as a mini-cab driver. There is therefore, in my view, nothing in this particular criticism.

Mr. Nicol then submitted that the appellant whilst waiting in the mini-cab office was not working at all and that all he was doing was waiting in expectation of work, not waiting in expectation of payment. It seems to me artificial in the extreme, on the facts of this case, to distinguish between the waiting in the mini-cab office in expectation of work (in the form of carrying the customer where he wanted to go) and waiting in expectation of payment. One went with the other. If the appellant did that work and carried the customer, he was paid. In my judgment, the waiting was as much in expectation of payment as it was in expectation of work.

The crucial question in this case is whether what the appellant did in waiting at the cab office can properly be called work at all. Whether it can fell to be determined by the tribunal as the tribunal of fact, having regard to all the relevant facts. Mr. Nicol himself posed the test of whether what the appellant did was essential to the delivery of services by him as a mini-cab driver. I agree. He suggested that because the appellant was free to come or go as he chose, and because the appellant might be contacted at home, it was not essential for him to spend time waiting in the cab office. I do not see how the appellant can go behind the evidence - which, after all, could only have come from him - of the operations of a freelance cab driver and which the tribunal record as comprising being present at the cab office in order to be available to answer calls.

We know nothing of the possibility of the appellant being available elsewhere such as at home and, in my judgment, we must only concern ourselves with the waiting time in the cab office, applying the test, which Mr. McManus also supported, whether it was an essential part of the appellant's work as a mini-cab driver to wait at the cab office. It seems to me plain that that test was satisfied. The appellant could only obtain work by making himself available to customers. He needed to attend at the cab office in order to receive calls from customers. That is, no doubt, why he chose to drive back to the cab office after taking a customer to whatever destination the customer wanted.

The appellant himself asserts that time spent returning to the office is time in which he is engaged in work. I see no difference between that time spent driving back to the office and his waiting time at the office, during which he is equally making himself available to take a fare-paying passenger. All the time spent waiting in the office and, when a call is received, going to the passenger, and driving the passenger to his destination and returning to the office, is time spent engaged in work as a mini-cab driver for which he was paid by the fares of the paying passengers. The mini-cab driver waiting in the cab office is in no different position, as it seems to me, from that of a licensed taxi driver with his taxi sign lit when he wishes to show that he is available for taking passengers.

Accordingly, on this first ground of appeal, I am in no doubt but that the tribunal and the Commissioner reached the correct conclusion.

Mr. Nicol advanced a second ground of appeal based on the decision of the House of Lords in Suffolk County Council v Secretary of State for the Environment [1984] ICR 882. In that case a distinction was drawn between time spent by an employee fireman on duty and the time spent by him when he was free to do as he pleased. Mr Nicol submitted that an analogy should be drawn with that case and that the Commissioner erred in law in holding that that authority did not provide a valid analogy. The question in Suffolk was whether a retained fireman was a "whole-time employee" for the purpose of the Local Government (Superannuation) Regulations 1974, and that turned on whether the fireman's contractual hours of employment regularly or usually amounted to at least 30 hours a week. Lord Templeman, in delivering the only reasoned speech in the House of Lords, drew the distinction relied on by Mr. Nicol (see pages 890 and 892). Only the time spent on duty was held to be part of the fireman's working hours, notwithstanding the fact that the retained fireman was paid an annual retaining fee not only to attend at a fire station or at a fire but also for being available for immediate call even when he was involved in other activities such as running his own shop. Lord Templeman contrasted the position of a regular fireman on duty for a stipulated number of hours with that of a retained fireman who was not working for the fire authority until he was called. Lord Templeman said (at page 892):

"He is not at the disposal of or under the control or direction of the fire authorities and his services cannot be required until a fire takes place."

Mr. Nicol submitted that the dichotomy between being on duty and doing as one pleases was also appropriate for determining whether or not a self-employed person was engaged in work or not; and he pointed to the finding by the tribunal that the appellant was under no obligation or compulsion to stay at the cab office waiting for customers.

I can derive but little assistance from Suffolk because of its different circumstances. I agree with the Commissioner when he said:

"The issue in the Suffolk County Council case was different. The question was whether or not the waiting time constituted 'contractual hours of employment' (Local Government (Superannuation) Regulations 1974, reg. A3 (1)). The issue in the present case was not whether the claimant was employed during his waiting time but whether he was 'at work' within regulation 5 (1) of the Income Support (General) Regulations 1987. That is a different issue and the decision of the House of Lords does not therefore in my view assist. There can be 'work' without employment ..... The claimant was self-employed and his waiting time was undoubtedly 'in expectation of payment' (regulation 5(1).....) The retained fireman in the Suffolk County Council case was treated not as a self-employed person but as an employee in the legal sense of that word i.e. under what used to be called a master and servant relationship. I must therefore reject the claimant's son's contention that I should apply by analogy the decision in the Suffolk County Council case .....

For the reasons given above I do not consider that there is any analogy."

Further as Lord Justice Waller pointed out in the course of argument, if an analogy is to be drawn between Suffolk and the present case it is doubtful if it is helpful to the appellant. Lord Templeman had said of the retained fireman that he was not at the disposal of the fire authorities. The appellant waiting in the mini-cab office might be said in a real sense to have been at the disposal of the dispatcher in that office unless the appellant had chosen to leave before a call came. However, whether that is right or wrong, for the reasons I have given, it seems to me plain that there was no obligation on the Commissioner in law to apply, by analogy, the principles of Suffolk to a self-employed mini-cab driver. The second ground of appeal, in my judgment, must therefore also be dismissed.

For these reasons I would dismiss this appeal.

LORD JUSTICE JUDGE:

I agree. The appellant was a self-employed cab driver who earned money by making himself and his car available for hire. When he went to the cab office at the start of his working hours or returned to the office having completed a hiring he waited there in expectation or anticipation of work for which he would be paid. There was no guarantee that his services would be required and no payments were made directly to him for the times spent by him waiting in that office. Apparently, he was not obliged to go to the office at all. He was free to leave it at any time he wished. But while he was there he waited in the expectation of paid hire work and his waiting time at the office was integral to the way in which he both worked and was remunerated as a freelance cab driver.

In the circumstances of this case it would be artificial to compartmentalise his work and his remuneration between hours spent in the cab office and time spent physically driving his cab, whether with a paying passenger or on his way to pick up such a passenger or on his way back to the cab office after dropping a passenger off. No error of law has been shown.

In my judgment, too, the appeal should be dismissed for the reasons given by my Lord.

LORD JUSTICE WALLER:

I also agree. The issue in this case is whether the Social Security Appeal Tribunal erred in law in holding that the period spent by Mr. Kazantzis, as a mini-cab driver, waiting in the mini-cab office for calls was "work done in the expectation of payment". If it was, it is common ground that he worked in excess of 16 hours over a period from 29 October 1995 and is not entitled to income support. If it was not, it is equally common ground that he worked for less than 16 hours per week and would be entitled to such support. Mr. Nicol sought to argue that because Mr. Kazantzis was free to go to the office and free to leave the office at any time the period of waiting was not "work". In the alternative, or cumulatively, he sought to argue that whether it was work or not the expectation required by the regulation was that payment would be received directly for what Mr. Kazantzis was doing during that period.

It seems to me clear that on any view what Mr. Kazantzis was doing at the office, that is to say, holding himself out as available to take calls, was work. It does not seem to me to matter that he did not have to be there. While he was there he was partaking in an essential activity in the work as a self-employed mini-cab driver, holding himself out as ready to take calls. Mr. Nicol sought to rely on the House of Lords' decision in Suffolk County Council v Secretary of State for the Environment [1984] ICR 882. That case was concerned with a rather different question than that raised in this case, that is to say, whether the retained fireman was employed while waiting to be called. The House of Lords held that he was not. The passage relied on by Mr. Nicol is at page 892 E-F. My Lord has already quoted the relevant sentence where Lord Templeman said:

"But a retained fireman is not working for the fire authority until he is called. He is not at the disposal of or under the control or direction of the fire authorities and his services cannot be required until a fire takes place."

Since that case was not concerned to find when the person self-employed was working, I am doubtful whether the case is of any real assistance. But Mr. Nicol pointed out that the case had been used by way of analogy in a case relating to a self-employed fisherman - R (IS) 12/95. In that case the Commissioner held that a fisherman on a boat can be held to be working for the whole time the boat is at sea even during his rest periods because in those periods he was not free to "do as he pleased". I am doubtful whether the case really helps. But if any analogy can be drawn, I think that the analogy is against Mr. Nicol's submissions.

In the case with which we are concerned Mr. Kazantzis was not waiting to be called to the premises, that is the office, as in the retained fireman case. He came to the premises and remained there until he decided to go home. The question to be considered is what was he doing while he was there. It seems to me that in real terms, even if not in legal terms, he was "at the disposal" of the mini-cab office and making himself available at the office to take calls. That, in my view, supports the view that he was working. Was he working "in expectation of payment"? It is accepted by Mr. Nicol that Mr. Kazantzis had correctly included as work the periods when he was travelling to collect a fare. Mr. Nicol was not so sure that it had been right to concede, as Mr. Kazantzis had done, the periods when he was returning from collecting a fare to the office.

The concession was right because a self-employed person does perform essential activities in the expectation of payment not directly for those activities but for work performed as a direct result of those activities, that is to say, in the expectation that payment will be received by way of fees (or whatever) for work to be done. The shopkeeper is working in the expectation of payment, even when he or she is waiting for customers, or while he or she is tidying the shelves, even though the payment comes from the activity of making an actual sale. The shopkeeper could not make the sales without performing the essential activities of keeping the shelves tidy and being there with the shop open. The mini-cab driver cannot earn his fares unless he actively holds himself out as available to take on those fares. It might be a different or more difficult case if the person was actually doing something other than making himself available to take fares, but prepared to be called by telephone, but that is not this case. Mr. Kazantzis was going to the office with one object in mind, that is to say, carrying out the activity of being a self-employed mini-cab driver by attending the office and putting himself at the disposal of the office to take calls as they came in, with the expectation that that would be the most likely method of obtaining the payment of fares.

I agree that this appeal should be dismissed.

Order: Appeal dismissed with a legal aid taxation