UK Social Security and Child Support Commissioners' Decisions

Banks v. Chief Adjudication Officer [2001] UKSSCSC CIS_1118_1997 (28 June 2001)

R(IS) 15/01
(Banks v. Chief Adjudication Officer [2001] UKHL 33)

HL (Lord Slynn of Hadley, Lord Cook CIS/1118/1997

of Thorndon, Lord Hope of Craighead, CIS/3216/1997

Lord Millett and Lord Scott of Foscote) CJSA/3218/1997

28.6.01

Remunerative work - school ancillary worker - whether "engaged in remunerative work" during school holidays

The claimant was employed in a school as an assistant for children with special needs. During term time he worked for 20 hours a week. He did not work during school holidays and was not paid for holidays. Under regulation 5(1) of the Income Support (General) Regulations 1987 and regulation 51(1) of the Jobseeker's Allowance Regulations 1996, a person was engaged in remunerative employment if engaged, on average, for not less than 16 hours a week. Regulation 5(3B) of the 1987 Regulations and regulation 51(2)(c) of the 1996 Regulations provided that, where a person had a recognisable cycle of work of one year at a school, the number of hours worked were to be calculated by disregarding the school holidays. The claimant claimed income support in the summer holiday of 1996 and he claimed jobseeker's allowance during the autumn half-term holiday. Both claims were disallowed on the ground that he was in remunerative work during the holidays and a tribunal dismissed his appeals. He appealed to a Commissioner who heard his appeals with the appeal of another claimant whose wife was employed in a school. The Commissioner allowed the appeals, holding that a person is engaged in remunerative work during any part of a cycle of work taken into account in establishing the number of hours worked, except during periods when on maternity leave or when absent from work because of sickness. Therefore, he held that the claimant was not to be regarded as engaged in remunerative work during the holidays, because those parts of the cycle of work were not taken into account in establishing the number of hours worked. He also held that the school holidays were not holidays for the claimant and that the claimant's term-time earnings were to be disregarded during school holidays. The Secretary of State appealed to the Court of Appeal (Auld and Aldous LJJ and Rattee J) who reversed the Commissioner's decisions and held that the claimant was engaged in remunerative work during the school holidays [2000] 1 All ER 686. The claimant appealed to the House of Lords.

Held, dismissing the appeal (Lord Cooke of Thorndon and Lord Scott of Foscote dissenting), that:

as the claimant had a cycle of work of one year, he had to be regarded as engaged in work throughout the year;

regulation 5(3B) of the 1987 Regulations and regulation 51(2)(c) of the 1996 Regulations directed that the school holidays were to be disregarded merely for the purpose of calculating the number of hours worked but they did not exclude the school holidays from the cycle periods;

therefore, in view of the calculated number of hours worked, the claimant was engaged in remunerative work throughout the year.




DECISION OF THE HOUSE OF LORDS


Mr. R. Drabble QC and Ms. H. Mountfield (instructed by UNISON) for Mr. Banks.

Mr. D. Pannick QC and Ms. N. Lieven (instructed by the Solicitor to the Department of Social Security) for the Respondent.

Judgment (reserved)

LORD SLYNN OF HADLEY

My Lords,

1. Mr. Banks was employed in a junior school as an assistant for children with special needs. During term time in 1995/1996 he worked for periods of 20 hours a week. He did not work during school holidays and was not paid for those periods. In respect of the summer holidays in 1996 he applied for income support under the Social Security Contributions and Benefits Act 1992 and the Income Support (General) Regulations 1987 (SI 1987/1967). On 7 October 1996 income support was replaced by a jobseeker's allowance under the Jobseekers Act 1995 and the Jobseeker's Allowance Regulations 1996 (S1 1996/207). For the half term holiday in October 1996 he applied for the jobseeker's allowance. Although on an earlier occasion a different officer and tribunal had awarded him the earlier benefit the adjudication officer and the social security appeal tribunal rejected these new claims. Commissioner Rowland allowed his appeal upholding his claims. The Court of Appeal unanimously reversed the Commissioner [2000] 1 All ER 686.

2. It does not seem that anyone has found this a straightforward or an easy case and there is much sympathy for Mr. Banks who was not paid during the not insignificant periods of school holidays and who tried actively but unsuccessfully to obtain other employment during the two relevant periods. The question, however, for your Lordships is whether under these somewhat complex legislative provisions, properly interpreted, he is entitled to the allowances. It is accepted that the conditions of entitlement to the two allowances, though differently structured and sometimes differently phrased, are substantially the same and that on this appeal nothing turns on the difference between them. I accordingly refer to the earlier Act of 1992 which covers the first claim. The equivalent provisions of the jobseekers legislation are set out in the judgment of Auld LJ to which reference can be made.

3. Section 124 (1) of the 1992 Act provides that a person is entitled to income support if inter alia "(b) he has no income or his income does not exceed the applicable amount", and "(c) he is not engaged in remunerative work" and "(d) … he is available for, and actively, seeking employment". The amount of support is the applicable amount if he has no income and the difference between his income and the applicable amount if higher if he has no income. The manner in which the amount payable for a period to which subsection (5) of section 124 applies is prescribed and that period can be for less than a week by virtue of subsection (6) of section 124. By section 137 (2) of the 1992 Act Regulations can be made "(c) as to what is or is not to be treated as remunerative work or as employment" and "(d) as to circumstances in which a person is or is not to be treated as (i) engaged in … remunerative work".

4. Regulation 5 of the 1987 Regulations as amended deals with two linked but separate matters. The first is in paragraph (1) which defines remunerative work:

"(1) Subject to the following provisions of this regulation, for the purposes of section 20 (3)(c) of the Act (conditions of entitlement to income support), remunerative work is 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.

The second deals with the method of calculating the number of hours.

(2) Subject to paragraph (3B), the number of hours for which a person is engaged in work shall be determined–

(a) where no recognisable cycle has been established in respect of a person's work, by reference to the number of hours or, where those hours are likely to fluctuate, the average of the hours, which he is expected to work in a week;

(b) where the number of hours for which he is engaged fluctuate, by reference to the average of hours worked over–

(i) if there is a recognisable cycle of work, the period of one complete cycle (including, where the cycle involves periods in which the person does not work, those periods but disregarding any other absences);

(ii) in any other case, the period of five weeks immediately before the date of claim or the date of review, or such other length of time as may, in the particular case, enable the person's average hours of work to be determined more accurately".

5. Regulation 5 further provides

"(3) A person shall be treated as engaged in remunerative work during any period for which he is absent from work referred to in paragraph (1) if the absence is either without good cause or by reason of a recognised, customary or other holiday.

(3A) A person shall not be treated as engaged in remunerative work on any day on which the person is on maternity leave or is absent from work because he is ill.

(3B) Where for the purpose of paragraph (2)(b)(i), a person's recognisable cycle of work at a school, other educational establishment or other place of employment is one year and includes periods of school holidays or similar vacations during which he does not work, those periods and any other periods not forming part of such holidays or vacations during which he is not required to work shall be disregarded in establishing the average hours for which he is engaged in work."

Paragraph (3B) took effect from 10 April 1995.

6. The application of these sections and regulations has given rise to sharp differences of opinion. Auld LJ has set out or summarised a number of passages from the decisions of Commissioners in England and Scotland reflecting these differences. I refer to and gratefully adopt without repeating those passages from his judgment.

7. It was and is accepted on behalf of Mr. Banks that his employment by the authority even with holiday breaks constituted one "recognisable cycle of work" from the beginning of one school year to the beginning of the next. Accordingly, since the number of hours for which he was engaged to work fluctuated, paragraph (2)(b)(i) of regulation 5 applies subject to paragraph (3B) and the number of hours for which he is engaged in work is to be determined by reference to the average of hours worked over the period of the cycle "including, where the cycle involves periods in which [he] does not work, those periods". However, it is said against him that since his recognisable cycle of work is one year at a school and includes periods of school holidays during which he is not required to work, those holidays are to be disregarded in establishing the average hours for which he is engaged in work. On that basis if the total school holidays are 14 weeks the total number of hours worked is divided by 38 and not by 52 to arrive at the average. The average is accordingly higher and in Mr. Banks's case took him over the figure of 16 hours which was the cut off point for both income support and jobseeker's allowance.

8. The appeal tribunal found that Mr. Banks had a continuing contract of employment from 1 September 1995 which was not due to expire at the end of the school year. The tribunal accepted that in 1995/1996 he worked 20 hours a week though initially he was working for 26 hours a week during the term from 3 September 1996. The Commissioner found that "at the material time which I assume to be the term time periods adjacent to the holidays, in respect of which the claims are made, he was working for 20 hours a week." In the agreed statement of facts it is accepted for the purposes of this appeal that his hours of work fluctuated between about 20 to 26 hours per week during term times. On that agreement and on those facts I think it right to approach the case on the basis that the "number of hours for which he is engaged fluctuate" for the purposes of regulation 5(2)(b) of the 1987 Regulations. The alternative approach of the appeal tribunal that the number of hours for which he was engaged "in work" (paragraph (2)(b) read with the opening words of paragraph (2)) fluctuated between 20 and 0 is more debatable since he was engaged to do no hours of work or to be in work in the vacation.

9. It is accepted, that in Mr. Banks's case there was "a recognisable cycle of work" within the meaning of regulation 5(2)(b)(i) i.e. one school year. It follows that "subject to" paragraph 3B of regulation 5, the number of hours for which he is engaged in work is to be determined by the average of hours worked over the period of the complete cycle including "where the cycle involves periods in which the person does no work, those periods". If that were the end of the provisions 52 weeks would be the relevant denominator.

10. However by paragraph (3B) his "recognisable cycle of work at a school … is one year and includes periods of school holidays … during which he does not work, those periods ... shall be disregarded in establishing the average hours for which he is engaged in work". If that applies the total number of hours worked is divided by 38 and not 52. The average is accordingly higher and in Mr. Banks's case took him over the 16 hours.

11. It is said that this result of reading the two paragraphs so as to exclude school holidays in calculating the numerator is inconsistent with the provision of regulation 5(1), by which for the purpose of defining remunerative work takes the work in which, because his hours fluctuate, 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". In Mr. Banks's case he was not paid and did not expect to be paid during the vacation. Those 14 weeks must therefore be excluded from the relevant remunerative work.

12. Paragraph (3) which brings into the concept of being engaged in remunerative work periods of absence by reason of a recognised, customary or other holiday, does not apply because school holidays as such do not fall into those categories of holiday.

13. It is obvious that remunerative work indicates in ordinary language that the work is to be the subject of remuneration. If Mr. Banks does not work and is not remunerated during the holidays it may sound strange to say that the holidays form part of "remunerative work". The question, however, is whether that is the result of the various provisions of regulation 5, since in principle it is perfectly possible for Parliament to provide, whether by a deeming provision or otherwise, that a person is "engaged in work" even "remunerative work", when he is not working and for which he is not being paid.

14. There does not seem to me any difficulty in reading paragraph (2)(b)(i) together with paragraph (3B). The former is dealing with the generality of workers. The latter takes out of the general category a particular group of workers.

15. The objective of regulation 5 as the heading shows is to identify "persons treated as engaged in remunerative work". The criterion for being engaged in remunerative work is that a person must be "engaged in work" for not less than 16 hours a week unless his hours of work fluctuate, when an average has to be taken. Paragraph 5(2)(b)(i) identifies the overriding period where there is a recognisable cycle of work. That is a constant when applying sub-paragraph (b)(i) and paragraph (3B) which prescribe how the average is to be calculated in order to show whether the individual is engaged in remunerative work within the paragraph 5(1) definition. Paragraph 5(3B) in my opinion requires that in conducting the averaging exercise periods of holiday are to be disregarded. Paragraph (3B) does not say, contrary to paragraph (2)(b)(i), that the cycle is to be reduced from one complete cycle to that cycle (here one year) less the holiday period.

16. It is inherent in the process of averaging that there may be weeks when someone works and is paid for less than 16 hours and in principle there is no reason why throughout the period the average should not take into account a week or weeks in which no work is done or no work for which payment is made. That the week of no work when he is not "engaged in work" can be included, is evident from paragraph 5(2)(b)(i). The fact that the relevant hours for the purposes of paragraph 5(1) are hours for which payment is made or expected to be made does not prevent the scheme from laying down which weeks are to be taken into account for the purposes of averaging in paragraph (2)(b)(i). The regulation took the whole cycle. In paragraph (3B) it excluded the weeks of holiday. It does not seem to me that the fact that the claim here is made in respect of a week in which no work is done and for which he is not remunerated makes the position different from a case in which the claim is sought to be made for a week in which he is employed and remunerated. The averaging is the same in both cases. Accordingly I conclude that the Court of Appeal and the adjudication officer took the right denominator by excluding the holiday weeks.

17. My noble and learned friend, Lord Scott of Foscote, considers for reasons with which I have much sympathy that if the interpretation which he considers right is not accepted "the sooner the Secretary of State remedies the situation by making appropriate new regulations the better". But it is to be noticed that Commissioner Rowland, also greatly experienced in this field in adopting a result in favour of the appellant concluded

"I will add that, while these results are doubtless satisfactory from the point of view of the two claimants before me, I am not sure that the approach I have felt obliged to take is wholly desirable when viewed from a wider perspective and I very much doubt that it was what was intended when regulation 5(3B) was introduced. I therefore suspect that there will be further legislation in this field".

(Semble the other way to that contemplated by Lord Scott).

18. If the result arrived at by the Court of Appeal unanimously and by the majority of your Lordships is not a result which is now desired the Department will no doubt consider the position. I consider, however, that this appeal must be dismissed.

LORD COOKE OF THORNDON

My Lords,

19. The issue is whether, during the school holidays when he did not work at or for the school, the appellant, a special needs assistant in a junior school, was disqualified initially from receiving income support and later from receiving jobseeker's allowance by the statutory condition that he "is not engaged in remunerative work". The condition was laid down in turn by the Social Security Contributions and Benefits Act 1992, section 124(1)(c), and the Jobseekers Act 1995, section 1(2)(e). The answer depends on the interpretation of the relevant Regulations. It is sufficient to discuss the case in terms of the Income Support (General) Regulations 1987. The Jobseeker's Allowance Regulations 1996 are not, I think, significantly different in relation to such an issue as arises in the present case.

20. Regulation 5 of the 1987 Regulations is concerned throughout with defining when persons are to be treated as engaged in remunerative work. This is indicated accurately by its heading "persons treated as engaged in remunerative work". I think that the answer to the issue is to be found by taking four straightforward steps as follows.

21. The first step is to note that, by regulation 5(1), where a person's hours of work fluctuate, remunerative work is work on which 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. Thus the average hours are a key part of the criterion for determining whether he is engaged in remunerative work.

22. The next step is prescribed in the generality of cases of cyclical work by regulation 5(2)(b)(i). If there is a recognisable cycle of work, the average hours are to be ascertained by reference to the period of one complete cycle, including periods in which the claimant does no work. Thus in general a cyclical worker is to be treated as engaged in work throughout the whole cycle. This is for the purpose of averaging, which itself, as has been seen, is for the purpose of determining whether he is engaged in remunerative work.

23. But regulation 5(2)(b)(i), like the whole of paragraph 2, is expressly made subject to paragraph (3B), which provides:

"Where for the purpose of paragraph (2)(b)(i), a person's recognisable cycle of work at a school, other educational establishment or other place of employment is one year and includes periods of school holidays or similar vacations during which he does not work, those periods and any other periods not forming part of such holidays or vacations during which he is not required to work shall be disregarded in establishing the average hours for which he is engaged in work."

This special and overriding provision applies to the present case. For the purpose of determining the average hours - and hence of determining whether the appellant is engaged in remunerative work within the meaning of regulation 5(1) - the school holidays are to be disregarded. That is to say, contrary to the general rule for cyclical workers, he is not to be treated as engaged in remunerative work during the school holidays.

24. That conclusion accords with the natural and ordinary use of language. One would not normally say that a person is engaged in remunerative work during weeks when he does no work. It is a conclusion which flows, in my view, from the language of these regulations. To the extent, however, that they are ambiguous (as the differences of opinions in this and other cases suggest), I would adopt the approach that if those responsible for the regulations wished to achieve a result different from the ordinary and natural one, the public were entitled to clearer language as regards the class of workers covered by regulation 5(3B). For other classes of cyclical workers, regulation 5(2)(b)(i) is clear enough. The effect of the addition of regulation 5(3B) has proved to be obscure; and I respectfully think that the fair and reasonable interpretation is the one that I favour.

25. That conclusion is also consistent with the judgments in the Court of Appeal in R v. Ebbw Vale and Merthyr Tydfil Supplementary Benefits Appeal Tribunal, Ex p Lewis [1982] 1 WLR 420 (Lord Denning Mr. Oliver and Watkins LJJ). But, as the facts and the statutory provisions in that case were different, I have not relied on it.

26. Conscious that the majority of your Lordships' Committee consider the foregoing reasoning simplistic, I respectfully add that as an alternative approach to the present appeal I prefer the opinion of my noble and learned friend Lord Scott of Foscote.

27. For these reasons I would allow the appeal.

LORD HOPE OF CRAIGHEAD

My Lords,

28. On 1 September 1995 the appellant Daniel John Banks began work as a special needs assistant at Denaby Main Junior School under a contract of employment with Doncaster Metropolitan Borough Council. His principal duties were to provide support to two children while they were attending the school. During term time the appellant worked 20 hours a week. He was not required by his contract to work, nor was he paid by his employer, during the school holidays. At the end of the summer term he applied for and obtained a change of duties under his contract. He undertook to do similar work for the same employer but with different children at a different school.

29. The summer holiday began on 22 July 1996. On that day the appellant claimed income support for the period when he was not working during the holiday and for which he was not paid. He then worked from the start of the next term on 3 September 1996 to the start of the autumn half term holiday. That holiday ran from 25 October 1996 to 3 November 1996. This was another period during which he was not required to work and for which he was not paid. On 25 October 1996 he claimed jobseeker's allowance for the period of the holiday. This was because income support had been brought to an end and replaced by the jobseeker's allowance with effect from 7 October 1996. He resumed work at the school on 4 November 1996. His claims were based on the proposition that, although he was in employment under his contract with the education authority during the school holidays, he was entitled to benefit for the weeks during which he was not expected to work for his employer and for which he was not paid.

30. The issue which the appellant's claims has raised is one of general public importance. It relates to the entitlement to the benefit of what is now the jobseeker's allowance of all part-time and ancillary staff engaged at schools, other educational establishments or other places of employment under contracts with an annual cycle of work which includes holiday periods during which they do not work and for which they are not paid. The question whether the benefits are payable during these holiday periods is purely and simply one of statutory entitlement. The answer to it is to be found by construing the statutory and regulatory provisions which describe the entitlement to the benefit.

31. On 24 February 1999 social security Commissioner Rowland held that the effect of the regulations was that the appellant was entitled to income support and job seeker's allowance during the holidays: CIS/3216/1997; CJSA/3218/1997. On 29 July 1999 the Court of Appeal (Auld and Aldous LJJ and Rattee J) allowed an appeal against the Commissioner's decision by the Chief Adjudication Officer: [2000] 1 All ER 686. An appeal in the case of another claimant to income support named Frank Stafford, whose wife was employed in a primary school to assist pupils with special educational needs, was allowed by the Court of Appeal on 29 July 1999 at the same time and for the same reasons as in the appellant's case. But Mr. Stafford, who represented himself in the Court of Appeal, has not appealed against that decision to your Lordships' House.

32. Section 124(1) of the Social Security Contributions and Benefits Act 1992 provides that a person is entitled to income support if he satisfies four conditions. The relevant one for the purposes of this case is that stated in paragraph (c) of the subsection, which provides:

"he is not engaged in remunerative work and, if he is a member of a married or unmarried couple, the other member is not so engaged … "

Section 137(2) of that Act provides that regulations may make provision for the purposes of that Part of the Act:

"(c) as to what is or is not to be treated as remunerative work or as employment;

(d) as to circumstances in which a person is or is not to be treated as-

(i) engaged or normally engaged in remunerative work."

The relevant regulations are the Income Support (General) Regulations 1987 (SI 1987/1967).

33. The relevant conditions for entitlement to benefit for income support are reproduced in similar but not identical terms in the Jobseekers Act 1995. Section 1(e) of that Act provides that a claimant is entitled to a jobseeker's allowance if he "is not engaged in remunerative work." Paragraph 1 of Schedule 1 to that Act provides:

"(1) For the purposes of this Act, 'remunerative work' has such meaning as may be prescribed.

(2) Regulations may prescribe circumstances in which, for the purposes of this Act-

(a) a person who is not engaged in remunerative work is to be treated as engaged in remunerative work; or

(b) a person who is engaged in remunerative work is to be treated as not engaged in remunerative work."

The relevant regulations are the Jobseeker's Allowance Regulations 1996 (SI 1996/207).

34. It is common ground that, although they differ in some respects both in wording and layout, the two sets of regulations have the same effect. One of the basic rules is that only a person who is not engaged in remunerative work is entitled to benefit. But a person is not denied benefit merely because he does some work during the week for which he is paid or is entitled to expect payment. Benefit is denied only to those who are in remunerative work full time. The dividing line between full time work and work which is not full time work for this purpose is set at 16 hours of work each week. As the circumstances in which people work vary from case to case, provision is made as to how the number of hours for which a person is engaged in work is to be calculated.

35. In cases where the number of hours worked fluctuate the number of hours in which a person is engaged in work is to be determined by reference to the average of hours worked. Provision is made as to how that calculation is to be made in the case of a person who works at a school, other educational establishment or other place of employment whose cycle of work consists of one year but with school holidays or similar vacations during which he does not work. The appellant contends that the effect of the latter provision as to the period over which the hours of work is to be averaged is that the number of hours obtained by means of that calculation is to be applied only to the weeks during which the person is actually working. He maintains that it does not have the effect of deeming the person to be in remunerative employment in weeks during which he does not work and for which he is not paid.

36. The relevant provisions of the Income Support (General) Regulations 1987 as amended are to be found in regulation 5, which is headed "persons treated as engaged in remunerative work." It provides as follows:

"5(1) Subject to the following provisions of this regulation, for the purposes of section 20(3)(c) of the Act (conditions of entitlement to income support), remunerative work is 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.

(2) Subject to paragraph (3B), the number of hours for which a person is engaged in work shall be determined-

(a) where not recognisable cycle has been established in respect of a person's work, by reference to the number of hours or, where those hours are likely to fluctuate, the average of the hours, which he is expected to work in a week.

(b) where the number of hours for which he is engaged fluctuate, by reference to the average of hours worked over-

(i) if there is a recognisable cycle of work, the period of one complete cycle (including, where the cycle involves periods in which the person does no work, those periods but disregarding any other absences);

…

(3) A person shall be treated as engaged in remunerative work during any period for which he is absent from work referred to in paragraph (1) if the absence is either without good cause or by reason of a recognised, customary or other holiday.

(3A) A person shall not be treated as engaged in remunerative work on any day on which the person is on maternity leave or is absent from work because he is ill.

(3B) Where for the purpose of paragraph (2)(b)(i), a person's recognisable cycle of work at a school, other educational establishment or other place of employment is one year and includes periods of school holidays or similar vacations during which he does not work, those periods and any other periods not forming part of such holidays or vacations during which he does not work, those periods and any other periods not forming part of such holidays or vacations during which he is not required to work shall be disregarded in establishing the average hours for which he is engaged in work."

37. Paragraph (3B) of regulation 5 was inserted by regulation 19(b) of the Income-related Benefits Schemes (Miscellaneous Amendments) Regulations 1995 (SI 1995/516) as from 10 April 1995 in response to a decision by Social Security Commissioner Goodman in R(IS) 15/94, in which he held that the hours of the claimant's wife, a school receptionist who worked an average of about 24 hours in term time but did no work during school holidays, should be averaged under regulation 5(2)(b)(i) over the whole of her cycle of work of one year. The result was that the average of her weekly working hours was reduced to less that 16, and the claimant was found entitled to income support throughout the whole year. Mr. Pannick for the respondent explained that the policy purpose of the insertion of paragraph (3B) was to enable many claimants who had children to claim family credit. He said that it was thought to be right that eligibility to that form of benefit should be calculated by excluding periods of school holidays and similar vacations from the period which was to be taken into account for the purpose of working out the average.

38. The relevant provisions of the Jobseeker's Allowance Regulations 1996 are to be found in regulation 51 which is headed "Remunerative work" and in regulation 52 which is headed "Persons treated as engaged in remunerative work." They provide as follows:

"51(1) For the purposes of the Act 'remunerative work' means-

(a) in the case of the claimant, work in which he is engaged or, where his hours of work fluctuate, is engaged on average, for not less than 16 hours per week; and

(b) in the case of any partner of the claimant, work in which he is engaged or, where his hours of work fluctuate, is engaged on average, for not less than 24 hours per week;

and for those purposes, work is work for which payment is made or which is done in expectation of payment.

(2) For the purposes of paragraph (1), the number of hours in which the claimant or his partner is engaged in work shall be determined-

(a) where no recognisable cycle has been established in respect of a person's work, by reference to the number of hours or, where those hours are likely to fluctuate, the average of the hours, which he is expected to work in a week;

(b) where the number of hours for which he is engaged fluctuate, by reference to the average of hours worked over-

(i) if there is a recognisable cycle of work, and sub-paragraph (c) does not apply, the period of one complete cycle (including, where the cycle involves periods in which the person does not work, those periods but disregarding any other absences);

…

(c) where the person works at a school or other educational establishment or at some other place of employment and the cycle of work consists of one year but with school holidays or similar vacations during which he does no work, by disregarding those periods and any other periods during which he is not required to work …

52(1) Except in the case of a person on maternity leave or absent from work through illness, a person shall be treated as engaged in remunerative work during any period for which he is absent from work referred to in regulation 51(1) (remunerative work) where the absence is either without good cause or by reason of a recognised, customary or other holiday … "

39. Regulation 53 of the 1996 Regulations is headed "persons treated as not engaged in remunerative work." It is to be noted that the provision relating to the treatment of a person working at a school or other educational establishment or at some other place of work whose cycle of work consists of one year but with school holidays or similar vacations during which he does not work was included in regulation 51 (remunerative work) and not in regulation 53 (persons treated as not engaged in remunerative work). Nor was it included in regulation 52 (persons treated as engaged in remunerative work).

40. Mr. Drabble for the appellant laid great stress on the fact that each Act contained distinct and separate empowering provisions for the making of regulations as to the meaning of the expression "remunerative work" and the circumstances in which a person is or is not to be treated as "engaged in" remunerative work. He said that the appellant was only to be treated as engaged in remunerative work during weeks when he was not in fact working and for which he was not paid if the exercise of some deeming provision led to that result. He maintained that the respondent's argument that the appellant was to be treated as working throughout the whole cycle of work of which the school holidays formed part was based on a misunderstanding of the regulations, for two reasons. In the first place, the regulations which provided for the treatment of school holidays for the purpose of the average were an exercise of the power to define remunerative work, not an exercise of the power to deem persons to be engaged in remunerative work when they were not working. They did not affect the position of a person who was not engaged in remunerative work at all during the holidays. In the second place, if the regulations were to be read as an exercise of the power to deem as well as the power to define, the extent of the deeming should be confined to those weeks which were brought into account for the purpose of averaging and should leave out of account those weeks which were directed to be left out of account for the purpose of the averaging exercise.

41. The argument that the effect of the regulations ought to be determined by reference to the enabling provisions which are to found in the statutes has more force in the case of the Jobseeker's Allowance Regulations 1996 than it does in the case of the Income Support (General) Regulations 1987. This is because the layout of the 1996 Regulations indicates that the draftsman of those Regulations was making a conscious attempt to deal separately with the definition of remunerative work on the one hand (in regulation 51) and with persons treated as engaged in, and not engaged in, remunerative work (in regulations 52 and 53) on the other hand. The draftsmen of the 1987 Regulations and of the various amendments which were made to it were not so scrupulous. There is no regulation which is headed simply "Remunerative work". Regulation 5, in which the critical provision about the treatment of holidays and other periods during a cycle of one year during which a person in not required to work is to be found, is headed "Persons treated as engaged in remunerative work". But it contains within the same regulation a variety of provisions made in the exercise of each of the relevant enabling powers. Paragraph (1) contains a definition of remunerative work. Paragraph (3) provides that a person who is absent from work without good cause or by reason of a recognised, customary or other holiday is to be treated as engaged in remunerative work during any such period. Paragraph (3A) provides that a person shall not be treated as engaged in remunerative work on any day when on maternity leave or absent from work when ill. There is a separate list of persons who are not to be treated as engaged in remunerative work in regulation 6.

42. On further examination the precise separation for which Mr. Drabble contended is not maintained, even in the case of the 1996 Regulations. Where the definition of remunerative work in regulation 51 requires the working out of a number of hours of work over by reference to an average of hours worked an element of deeming is inherent in the definition of "work". The effect of the averaging exercise is to require it to be assumed that the person is working for the average numbers of hours for each week in the cycle, even although for some of those weeks he may be working for far fewer than the 16 hours which disqualifies a person from benefit. For example a person whose average is, say, 25 hours per week but who works for only one hour in a given week in the cycle is deemed, as a result of the averaging exercise, to be engaged that week in remunerative work for not less than 16 hours.

43. I am content to accept, as a general proposition, that guidance as to the meaning of a provision in a statutory instrument may be obtained from the wording of the enabling power under which it was made. But the reliability of that guidance is diminished if one finds, as one does in this case, that a variety of enabling powers were available to the draftsman of the statutory instrument and there were no compelling reasons for maintaining a strict separation between the exercise of each of them. The fact that it is accepted in this case that both sets of regulations have the same effect makes Mr. Drabble's argument even harder to accept. Mr. Pannick was entitled to ask that it be tested on the weaker alternative. When it is applied to the 1987 Regulations it is not sustainable.

44. I see no alternative therefore in this case to the normal approach to the construction of a statutory instrument, which involves examining the relevant provisions in the context of the regulations as a whole and determining their effect according to the ordinary meaning of the words used. For convenience I shall conduct my examination under reference to the Income Support ("IS") Regulations, as this was the regime which was enacted first. I shall give references to the corresponding Jobseeker's Allowance ("JSA") Regulations where this is appropriate.

45. The appropriate starting point is IS regulation 5(1) [JSA regulation 51(1)]. This provision sets out the requirements which must be met with regard to each of the two words in the phrase "remunerative work". First there is the work element. This is to be measured by reference to the number of hours of work a week in which a person is engaged. Then there is the remuneration element. This is to be determined by reference to the question whether the work in question is work for which payment is made or which is done in expectation of payment. The question of remuneration has not given rise to any difficulty in this case.

46. The choice of method which is to be used to determine the number of hours of work a week in which a person is engaged depends upon whether or not there is a recognisable cycle of work. The social security tribunal, having examined the appellant's contract of employment, found as a fact that the number of hours for which he was engaged fluctuated. This was because in the year 1995/96 he worked for 20 hours a week for 38 weeks and he did no work at all for twelve weeks. But the tribunal also held that he had a recognisable yearly cycle of work. It follows that IS regulation 5(2)(b)(i) [JSA regulation 51(2)(b)(i)] applies to this case. The calculation which it lays down is based on the average number of hours for the complete cycle.

47. The regulations do not explain what they mean by the word "cycle" in this context. But I think that the concept of a cycle of work in which the number of hours for which the person is engaged fluctuate necessarily involves the idea that there will be periods in the cycle when the person works for more hours per week than the average, and that there will be other periods in the same cycle when he works for fewer hours per week than the average or, it may be, does not work at all. The fact that the cycle may include periods when the person does not work at all is made clear by the words which appear in parenthesis in paragraph (2)(b)(i) [JSA regulation 51(2)(b)(i)] which require there to be included in the period of one complete cycle, "where the cycle involves periods in which the person does not work," those periods but disregarding any other absences. I do think that it can be doubted therefore that the reason why the periods of school holidays when the person does not work form part of his cycle of work for the purpose of calculating the number of hours for which he is engaged in work is that he is regarded for the purpose of the regulations as engaged in work during those periods even although he is not in fact working. It is on this vital point that I respectfully disagree with my noble and learned friend, Lord Scott of Foscote. To use a colloquial expression, the person is regarded as being "in work" during the periods of the cycle when he is not working, although he does no work during those periods.

48. This brings me to paragraph (3B) of IS regulation 5 [JSA regulation 51(2)(c)] to which the opening words of IS regulation 5(2) say that paragraph (2) is subject. It provides that for the purposes of paragraph (2)(b)(i) of IS regulation 5 (calculating the average of hours worked if there is a recognisable cycle of work) a person's recognisable cycle of work at a school, other educational establishment or other place of employment is one year - as it was held to be in this case - and where the cycle includes periods of school holidays or similar vacations when he does not work - as it did in this case also - those periods "shall be disregarded in establishing the average hours for which he is engaged in work." The wording of JSA paragraphs 51(2)(b)(i) and 51(2)(c) is different, but I agree with my noble and learned friend, Lord Millett, for the reasons which he has given that the result is the same.

49. Two points in particular are to be noted about the wording of the last few words of IS paragraph 5(3B) which I have placed between quotation marks. The first is the extent of the disregard which is directed by the paragraph. It extends only to the calculation of the average hours for which the person is engaged in work during the cycle. The period of the cycle of work is not to be treated as having been altered. What is altered is the periods within the cycle which are to be taken into account for the purpose of the averaging exercise. The second point is the use of the phrase "for which he is engaged in work". This reflects the wording of IS paragraph 5(1) [JSA paragraph 51(1)(a)] which states that "remunerative work is work in which a person is engaged" for not less than 16 hours a week. It maintains the distinction which is drawn throughout the regulation between the hours for which a person is engaged in work and the hours for which he is actually working.

50. For these reasons I am unable to accept Mr. Drabble's argument that IS regulation 5 [JSA regulation 51] is designed only to establish how many hours a week a person is to be treated as working in any week in which he does some work and that it does not affect the position of a person who in a given week does no work at all. In my opinion this argument overlooks the fact that, although a recognisable cycle of work may include periods when the person does no work at all, he is nevertheless treated as being "engaged in work" throughout his cycle of work. Every week is part of the cycle irrespective of whether the person does or does not work during that week. If the intention had been to provide that such a person was to be entitled to benefit during periods of school holidays or similar vacations, I would have expected the regulation to provide - as it does in the case of a person who is on maternity leave or absent from work because he is ill - that the person shall not be treated as engaged in remunerative work during those periods: see IS regulation 5(3A) [JSA regulation 52(1)]. The wording of IS regulation 5(3B) [JSA regulation 51(2)(c)] appears to me to have deliberately chosen to make it clear that it was not intended that the treatment of school holidays or similar vacations for the purpose of determining the number of hours in which the person is engaged in work should have the effect that the person was to be treated as not engaged in work during those periods simply because he was not required to work during those periods.

51. I am also unable to accept Mr. Drabble's alternative argument that the extent of deeming that a person is engaged in remunerative work during periods when he does not work should be confined to the weeks which are brought into account for the purposes of the averaging exercise, and that it should not extend to those weeks which are directed to be left out of account when the average is being calculated. According to this argument, periods which are disregarded in averaging should be disregarded also in regard to the question whether the person is to be treated as engaged in remunerative work during those periods. In my opinion the concluding words of IS regulation 5(3A) [JSA regulation 51(2)(c)] make it clear that the disregard which is directed by that paragraph is for the sole purpose of the averaging exercise. A direction is needed that these periods must be disregarded for this purpose because they are periods which fall within the person's recognisable cycle of work. In the absence of the direction they would, as Commissioner Goodman held in R(IS) 15/94, fall to be taken into account together with all the other periods in the cycle for the purpose of working out the average. But I do not find any words here to indicate that the direction was intended to affect any finding as to the cycle of work to which the result was to be applied after completing the averaging exercise.

1. It seems to me that Auld LJ stated the position correctly when he said [2000] 1 All ER 686, 693 that IS regulations 5(2)(b)(i) and (3B) [JSA regulations 51(2)(b)(i) and (c)] clearly contemplate that a recognisable yearly cycle of work may include periods in which an employee does no work, and that the averaging for which they provide is part of the means of determining whether he or she is engaged in remunerative work for the purpose of IS regulation 5(1) [JSA regulation 51(1)]. As he said, it is difficult to see what point there would be in IS regulation 5(3B) [JSA regulation 51(2)(c)] if IS regulation 5(2)(b)(i) [JSA regulation 51(2)(b)(i)] applied, contrary to its express terms, only to periods of actual work. IS regulation 5(2)(b)(i) states in terms that a person's cycle of work may involve periods when the person does not work. That was why, before the insertion of IS regulation 5(3B) [JSA regulation 51(2)(c)], the averaging exercise was done in all cases by reference to the whole period of the cycle including periods when the person was not required to work during school holidays and similar vacation periods. The effect of the insertion is simply to take these periods out of account for the purpose of working out the average.

53. As social security Commissioner May observed in CSJSA/395/98, paragraph 17, if as a consequence of the calculation directed by IS regulation 5(3B) [JSA regulation 51(2)(c)] the claimant's hours are sufficient to place the claimant within the definition of remunerative work in IS regulation 5(1) [JSA regulation 51(1)], the application of that definition covers the whole period of the cycle which has been identified as the cycle of work in the claimant's contract. I would hold that that is the result of the averaging exercise which has had to be carried out in this case.

54. I would dismiss the appeal.

LORD MILLETT

My Lords,

55. I have had the advantage of reading in draft the speeches of my noble and learned friends, Lord Hope of Craighead and Lord Cooke of Thorndon. I am in full agreement with them that, were it not for paragraph (3B) of regulation 5 of the Income Support (General) Regulations 1987 (corresponding to paragraph (2)(c) of regulation 51 of the Jobseeker's Allowance Regulations 1996), a school ancillary worker who does no work during school holidays would nevertheless be treated as being engaged in work throughout the year. The question which has divided their Lordships is whether paragraph (3B) of regulation 5 of the former regulations and the corresponding provision of the latter alter this. I agree with Lord Hope that they do not. My reasons are as follows.

(1) The 1987 regulations

56. Section 124(1) of the Social Security Contributions and Benefits Act 1992 makes benefit conditional on the claimant (inter alia) not being "engaged in remunerative work". This involves two concepts: (i) "being engaged" in work and (ii) "remunerative work". Where necessary the language of the regulations distinguishes between the two concepts.

57. As its heading indicates, regulation 5 of the 1987 Regulations is concerned with prescribing the circumstances in which a person is to be treated as being "engaged in remunerative work". This in turn involves defining the expression "remunerative work".

58. Where a person's hours of work fluctuate, regulation 5(1) defines "remunerative work" as work "in which he is engaged" on average for not less than 16 hours a week. Regulation 5(2)(b)(i) provides that, where there is a recognisable cycle of work, the number of hours for which a person "is engaged in work" is to be determined by reference to the period of one complete cycle including periods in which the person does no work. This, as Lord Cooke observes, is for the purpose of averaging, which in turn is for the purpose of determining whether the claimant is engaged in remunerative work. For these purposes, a person is treated as being engaged in work even during periods when he does no work. The contrast, as Oliver LJ observed in R v. Ebbw Vale and Merthyr Tydfil Supplementary Benefits Appeal Tribunal, Ex p Lewis [1982] 1 WLR 420, is between being "in work" and being "at work" (where however there was language which indicated that a person was not to be treated as being "in work" unless he was actually "at work").

59. The tribunal found that the work in which the claimant was engaged had a recognisable cycle of one year. Under regulation 5(2)(b)(i), therefore, he must be treated as being engaged in work throughout the year, including the school holidays when he does no work. Whether the work in which he is to be treated as engaged is remunerative work depends upon the average number of hours per week spread over the whole cycle.

60. This is not, with respect to my noble and learned friend, Lord Scott of Foscote, to imply a statutory fiction into the regulations. It merely gives effect to the distinction which is drawn in the regulations between being engaged in work and doing work. It recognises that, if the number of hours for which a person is "engaged in work" includes periods during which he does no work, it follows that a person can be "engaged in work" even if he is not working.

61. There is nothing particularly surprising in this, for were it otherwise the regulations would be open to manipulation. Suppose an employer wished to put his workforce on short time during a recession. He might ask them to work 20 hours a week instead of the usual 40 hours. The unions would ask him to introduce instead a cycle of 80 hours every four weeks, leaving it to the men to decide when to come to work. If they worked 20 hours a week, they would not be entitled to benefit. If they worked 40 hours every other week, they would prima facie be entitled to benefit during the weeks when they did not work. Paragraph (2)(b)(i) prevents this. It does not merely spread the hours when the worker is engaged in work over the four weeks; it also treats him as being engaged in work during the two weeks when he is not working.

2. Thus far I am in respectful agreement with Lord Cooke. Paragraph (2) is, however, expressly made subject to paragraph (3B), which applies where a person's cycle of work at a school, other educational establishment or other place of employment is one year and includes periods of school holidays during which he does not work. It provides that, for the purpose of regulation 5(2)(b)(i), those periods are to be disregarded in establishing the average hours for which he is engaged in work. Lord Cooke interprets this to mean that, contrary to the general rule for cyclical workers, he is not to be treated as being engaged in remunerative work during the school holidays.

63. It is at this point that I respectfully part company with him. To my mind the critical point is that paragraph (2)(b)(i) is not replaced by paragraph (3B) but merely made subject to it. Paragraph 2(b) remains in full force save only to the extent to which it is modified by paragraph (3B). The two paragraphs must be read together. They are both concerned with persons who have a regular cycle of work. Neither of them is concerned with the question when a person is to be treated as being engaged in work, but only with the determination of the average number of hours for which he is engaged in work for the purpose of determining whether the work (in which ex hypothesi he must be treated as being engaged) is remunerative work. Paragraph 2(b)(i) directs that the average number of hours is to be determined by reference to a complete cycle including periods during which he does no work, and there is nothing in paragraph (3B) which modifies this. It does not affect the duration of the cycle or exclude periods during which he does no work. In the case of the present claimant, therefore, the cycle of work remains the complete year.

64. This is confirmed by the opening words of paragraph (3B), which applies only where the cycle of work is one year and includes periods of school holidays during which he does no work. Reading paragraph 2(b)(i) as modified by paragraph (3B) and omitting immaterial words produces the following:

"Where a person's recognisable cycle of work at a school … is one year and includes periods of school holidays … during which he does not work, the number of hours for which he is engaged in work shall be determined by reference to the average of hours worked over one complete cycle including periods during which he does not work (ie one year) but so that the school holidays shall be disregarded in establishing the average hours for which he is engaged in work."

65. In my opinion the cycle remains constant at one complete year, and the claimant continues to be treated (by paragraph (2)(b)(i)) as engaged in work throughout the cycle including periods when he does no work. Paragraph (3B) directs that the school holidays are to be disregarded, not for the purpose of determining when a person is to be treated as engaged in work, but merely for the purpose of establishing the average number of hours worked during the cycle.

66. This construction is confirmed by the entirely different approach taken by paragraphs (3) and (3A), which unlike paragraph (3B) are concerned with the question when a person is to be treated as being engaged in remunerative work. Paragraph (3A), for example, provides that a person shall not be treated as engaged in remunerative work on any day when the person concerned is on maternity leave or is absent from work because he is ill. This displaces paragraph (2) altogether. A claimant is not to be treated as engaged in remunerative work while on maternity leave or absent from work because of illness. But paragraph (3B) does not provide that a claimant to whom it applies is not to be treated as engaged in remunerative work during the school holidays. It does not supplant paragraph (2)(b)(i) which directs that he is to be so treated. All it does is direct that the school holidays are to be left out of the calculations which establish the average number of hours worked during the year.

(2) The 1996 regulations.

67. Although the drafting of regulation 51 is different, and at first sight critically different, the result is in my opinion the same. The difference is that paragraph (2)(b)(i) (which provides for averaging over the whole cycle including periods when the claimant does not work) is not merely subjected to paragraph (2)(c) (which deals with school holidays) but applies only where paragraph 2(c) does not apply. At first sight, therefore, the two paragraphs are alternatives. But the drafting and the layout of the regulation are inelegant, to say the least. Paragraph (2)(c) cannot stand as an independent paragraph; it ought to have been included as (2)(b)(iii) and expanded since the sense requires the opening words of paragraph (2)(b) and part at least of paragraph (2)(b)(i) to be read into it. Omitting immaterial words, and with as little as possible read in, the regulation reads as follows:

"Where a claimant works at a school and the cycle of work consists of one year but with school holidays during which he does no work, the number of hours in which he is engaged in work shall be determined by reference to the average hours worked over the period of one complete cycle but disregarding the periods during which he does no work."

68. Even without the incorporation of the words "including in the cycle the periods during which he does no work" the effect is tolerably plain. The number of hours for which he engaged in work during the cycle (i.e. during the year) is to be determined by averaging over the year but disregarding the school holidays. Again this interpretation is confirmed by the way in which periods of illness and maternity leave are dealt with in regulation 52(1).

69. I would dismiss the appeal.

LORD SCOTT OF FOSCOTE

My Lords,

70. The title of these proceedings has become misleading. Mr. Stafford has withdrawn his appeal. The only appellant is Mr. Banks, anonymously described in the title as "another". Mr. Banks is, or was at the time when the claims with which your Lordships are concerned were made, a single man. He was, in 1996, 22 years old. He worked for Doncaster Metropolitan Borough Council as a special needs assistant. He had entered this employment on 1 September 1995 and from then until the end of the summer term in 1996 he worked at Denaby Main Junior School. His principal duties were to provide support to two named children who had special educational needs. From 3 September 1996, the beginning of the 1996 autumn term, Mr. Banks worked at a different school with different children. But his employer remained the same and his duties and terms and conditions of employment remained the same. So he had a continuing contract of employment from 1 September 1995.

71. Mr. Banks' hours of work were defined by the special educational needs of the particular children he was assisting. His hours were term time hours only and amounted to 20 hours per week. He was paid at the rate of £4.43 per hour. His conditions of employment stated that:

"There is no entitlement to paid annual leave … "

and that:

"As work is available only during the times the pupil attends school other than in exceptional circumstances it is expected that holidays and other personal commitments are arranged outside of normal working hours."

72. It is plain that Mr. Banks' hours of work were tied to the actual presence at school and the educational requirements of specific pupils. There could, therefore, never be any work for him in school holidays and his pay was not intended to remunerate him for anything other than the hours of work with the named pupils that he put in during the school terms. He submitted monthly returns, detailing the hours he had worked, and, on the basis of the returns, was paid at monthly intervals. As Mr. Commissioner Rowland commented, the monthly amounts paid to Mr. Banks would vary, depending upon the hours worked from month to month (paragraph 6 of his decision dated 24 February 1999). But what would not vary would be that during school holidays Mr. Banks would do no work with the special needs children, would not put in any returns and would be paid nothing.

73. The Doncaster social security appeal tribunal, in the decision dated 10 February 1997 that was appealed to Mr. Commissioner Rowland, found that in 1995/1996 Mr. Banks worked 20 hours a week for 38 weeks. This gives a total for the year of 760 hours (not 720 as stated in the decision). So Mr. Banks' remuneration for the year from his employment as a special needs assistant was around £3,367. Not many people would suppose that an annual income of £3,367 would suffice to keep the recipient out of poverty. So to conclude is not to charge Doncaster Metropolitan Borough Council with underpaying its special needs assistants. It is plain that the structure of employment of school ancillary workers, who include special needs assistants and many other categories, assumes that they will be available for employment elsewhere during out-of-term periods and can supplement their income by working during those periods. The reality of their contracts is that employment is available to them for limited hours during term time and that they are not employed during out-of-term periods.

74. This is why it is common ground that regulation 5(3) (of the Income Support (General) Regulations 1987), and regulation 52(1) (of the Jobseeker's Allowance Regulations 1996) do not, so far as school holidays are concerned, affect ancillary workers such as Mr. Banks. School holidays are holidays for teachers, and, of course, for the children. Teachers receive an annual salary, usually payable monthly. Their remuneration relates to the whole year. Their school employment places them in employment for the year unless earlier terminated. Not so ancillary workers. They are not in employment in any meaningful sense except during school terms.

75. It is, as I have said, to be expected that ancillary workers like Mr. Banks will make themselves available for employment in out-of-term periods in order to supplement their income, inadequate as it is if viewed on a yearly basis. If they are not able to obtain employment in out-of-term periods, it is to be expected that they will seek to supplement their inadequate income by making a claim for income-related benefit.

76. The National Assistance Act 1948, the last of the four major Acts enacted to implement the recommendations of the Beveridge Report on Social Insurance and Allied Services (1942) (Cmd 6404) was introduced to take the place of public assistance through the Poor Laws in order to provide a means-tested benefit for the relief of poverty. There have been substantial developments and changes since 1948 in the social security system of which means-tested benefit for the relief of poverty forms part. The Social Security Act 1986 abolished supplementary benefit and family income supplement and replaced them with "income support" as the basic safety net benefit and "family credit" as a progressive benefit for those with family responsibilities. The purpose of this was to counter the "poverty trap", where the financial disadvantage of losing benefit outweighed the financial advantages of taking employment. In 1992 the substantive law relating to social security benefits was consolidated in the Social Security Contributions and Benefits Act 1992 which covered inter alia income-related benefits such as income support and family credit. The 1992 Act was in force at the time Mr. Banks began his employment with Doncaster Metropolitan Borough Council. As from October 1996, however, in respect of claimants available for work, the Jobseekers Act 1995 replaced income-support under the 1992 Act with jobseeker's allowance, also an income based benefit. Income support under the 1992 Act could be claimed only by those who were not available for work. But none of these legislative changes departed from the fundamental purpose of the social security system, namely, that benefit should be provided in order to keep out of poverty those whose income was below a minimum poverty level.

77. My Lords, the statutory provisions in the Acts and Regulations made thereunder must be construed, so far as possible, so as to give effect to the fundamental purpose of the legislation to which I have referred. If there are ambiguities or inconsistencies in the statutory language these should, I respectfully suggest, be resolved in a manner which serves that fundamental purpose and is not inconsistent with it.

78. The Regulations that your Lordships must construe for the purposes of this appeal, namely, the Income Support (General) Regulations 1987 (the IS Regulations) and the Jobseeker's Allowance Regulations 1996 (the JSA Regulations) cannot, in their application to Mr. Banks' claims, be presented as models of clarity. Mr. Banks' claims raise the question whether paragraphs (2)(b)(i) and (3B) of IS regulation 5 require him to be treated as being in remunerative employment during school holidays. The same question arises under sub-paragraphs (b)(i) and (c) of paragraph (2) of JSA regulation 51.

79. In the answering of this question there have been disagreements at almost all levels. First, there have been disagreements at the tribunal level. Mr. Banks applied for income support in respect of the period 22 December 1995 to 9 January 1996 (the 1995 Christmas school holiday) and for the period 1 April 1995 to 14 April 1996 (the 1996 Easter school holiday). The Doncaster social security tribunal in its decision of 28 May 1996 held that IS regulation 5(2)(b)(i) did not apply because Mr. Banks' hours of work did not fluctuate. They said that:

"he works regular hours during term time and does not work in school holidays. This is not an example of fluctuating hours but of periods of work for non-fluctuating hours followed by periods of no work. We are of opinion that the appellant is engaged in work for a regular number of hours in term time and not so engaged during the holiday periods. The provisions of paragraph 5(2)(b)(i) do not therefore apply to the appellant's work. As a consequence he is in remunerative work only during the periods when he is working 20 hours per week at the school. During holiday periods he is not in remunerative work. Consequently he is not in remunerative work between 22 December 1995 and 9 January 1996 and between 1 April 1996 and 14 April 1996. The matter should be referred to the adjudication officer to consider whether he was available for work during those periods."

80. Presumably the adjudication officer was satisfied about Mr. Banks' availability because he was paid income support for the two periods of claim. He was paid £36.80 per week.

81. Mr. Banks made another claim to income support in respect of the 1996 summer holiday, 22 July 1996 to 3 September 1996, and a claim to jobseeker's allowance in respect of the Michaelmas half term holiday, 25 October 1996 to 4 November 1996.

82. The Doncaster social security tribunal, in its decision of 10 February 1997, disagreed with the decision of 28 May 1996 that had been reached by a differently constituted tribunal. There was no material difference in the facts but the 1997 tribunal held that IS regulation 5(2)(b)(i) did apply. Since, over the cycle of one year, Mr. Banks worked 20 hours a week for 38 weeks and no hours at all for 14 weeks, the tribunal held that "the number of hours for which Mr. Banks is engaged fluctuate". The difference between the two tribunals was that the 1997 tribunal thought that Mr. Banks should be treated as engaged in work during the school holidays. The 1996 tribunal thought he should not be so treated.

83. Second, there have been disagreements at the commissioner level. In dealing with Mr Banks' appeal against the conclusions of the 1997 tribunal, Mr. Commissioner Rowland held that, in a case where a "recognisable cycle of work" had been established:

"a person is engaged in remunerative work during any part of a cycle of work taken into account in establishing the average hours for which he or she is engaged in work … it would follow that a person to whom regulation 5(3B) applies is not to be regarded as engaged in remunerative work during school holidays."

84. This is substantially the same approach to construction as that advocated by my noble and learned friend, Lord Cooke of Thorndon.

85. But, in a decision in Scotland on 18 March 1999 (CSJSA/395/98), Mr. Commissioner May, addressing the JSA Regulations, disagreed with Mr. Commissioner Rowland and held at paragraph 17 that:

" … upon a proper construction of regulation 51, when read as a whole, if as a consequence of the calculation in regulation 51(2)(c) [the counterpart of IS regulation 5(3B)] the claimant's hours are sufficient to place her within the definition of remunerative work that work covers the whole period of the cycle; namely the calendar year which is clearly the cycle in the claimant's contract."

86. The Court of Appeal, in dealing with the appeal from Mr. Commissioner Rowland's decision, gave a judgment of the court which, in effect, preferred Mr. Commissioner May's reasoning to that of Mr. Commissioner Rowland. But, in your Lordships' House there are again disagreements as to the correct application of the relevant regulations to the facts of Mr. Banks' claims.

87. In these circumstances it can hardly be said that the proper meaning and effect of the regulations is clear. In deciding upon their meaning and effect, and in resolving any ambiguity, the social purpose of the legislation should, in my opinion, be kept in mind and, if possible, given effect to.

88. Section 124(1) of the 1992 Act entitles a citizen such as Mr. Banks to income support if:

"(b) he has no income or his income does not exceed the applicable amount;

(c) he is not engaged in remunerative work … ; and

(d) except in such circumstances as may be prescribed-

(i) he is available for, and actively seeking, employment"

89. Section 1 of the 1995 Act entitles a citizen such as Mr. Banks to jobseeker's allowance if he fulfils a number of specified conditions. These conditions include those set out in section 124(1)(b), (c) and (d) as cited above.

90. This appeal is only concerned with the condition set out in section 124(1)(c) (or in section 1(2)(e) of the 1995 Act). It is accepted, at least for the purposes of this appeal, that Mr. Banks was able to satisfy all the other conditions.

91. The condition "he is not engaged in remunerative work" has two, at least, important elements. First, the expression "remunerative work" requires definition. It is not a term of art. Second, the question whether and when a person is "engaged in" remunerative work is, obviously, of importance. The 1992 Act, in section 137(2), provides that:

"Regulations may make provision for the purposes of this Part of this Act-

…

(c) as to what is or is not to be treated as remunerative work …

(d) as to circumstances in which a person is or is not to be treated a-

(i) engaged or normally engaged in remunerative work;

(ii) available for employment; or

(iii) actively seeking employment."

92. The 1995 Act has a regulation making power in more or less the same language (see section 21 and paragraph 1 of Schedule 1)

93. In IS regulation 5 there is an exercise both of the section 137(2)(c) power and of the section 137(2)(d) power. Paragraph (1) describes the work that is to be treated as "remunerative work". And paragraphs (3), (3A) and (4) set out circumstances in which a person is to be "treated" as engaged in remunerative work ((3) and (4)) and "not treated" as so engaged ((3A)).

94. The issues of construction that arise on this appeal relate to paragraphs (2) and (3B). These two paragraphs amplify and supplement paragraph (1). They identify what is or is not "remunerative work". They do not purport to, and do not, describe circumstances in which a person who is not engaged in remunerative work is to be treated as so engaged or circumstances in which a person who is engaged in remunerative work is to be treated as not so engaged. To make good these propositions it is necessary to set out the text of the relevant paragraphs, omitting irrelevant passages:

"(1) Subject to the following provisions of this regulation … remunerative work is 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.

(2) Subject to paragraph (3B), the number of hours for which a person is engaged in work shall be determined-

(a) where no recognisable cycle has been established in respect of a person's work, by reference to the number of hours or, where those hours are likely to fluctuate, the average of the hours, which he is expected to work in a week;

(b) where the number of hours for which he is engaged fluctuate, by reference to the average of hours worked over-

(i) if there is a recognisable cycle of work, the period of one complete cycle (including where the cycle involves periods in which the person does no work, those periods but disregarding any other absences);

(ii) …

(3) A person shall be treated as engaged in remunerative work during any period for which he is absent from work referred to in paragraph (1) if the absence is either without good cause or by reason of a recognised, customary or other holiday.

(3A) A person shall not be treated as engaged in remunerative work on any day on which the person is on maternity leave or is absent from work because he is ill.

(3B) Where for the purpose of paragraph (2)(b)(i), a person's recognisable cycle of work at a school … is one year and includes periods of school holidays … during which he does not work, those periods and any other periods not forming part of such holidays … during which he is not required to work shall be disregarded in establishing the average hours for which he is engaged in work."

95. As is apparent, paragraph (1) contains a description of the work that for the purposes of section 124(1)(c) is "remunerative work". It does not set out circumstances in which a person who is not engaged in work at all is to be treated as engaged in work. It is an exercise of the section 137(2)(c) power. If a person is engaged in work, paragraph (1) will tell you whether or not the work is "remunerative work".

96. But some amplification of paragraph (1) was plainly necessary. How should the number of "hours of work" which will determine whether or not the work is "remunerative work", be calculated? Paragraph (2) provides the answer. It enables the relevant number of hours, for paragraph (1) purposes, to be calculated.

97. To reprise, a person who is not at or in work at all is, obviously, or so it seems to me, not in "remunerative work". If, on the other hand, a person is in work, he may or may not be in "remunerative work". Paragraphs (1) and (2) will tell you whether he is or is not.

98. I now come to paragraph (3B). Paragraph (3B) qualifies paragraph (2)(b)(i). It only applies if there is a recognisable cycle of work of one year. It alters the "number of hours" calculation that would otherwise be made under paragraph (2)(b)(i). But no more than paragraph (2)(b)(i) does paragraph (3B) require a person who is not engaged in work at all to be treated as if he was in work. All it does is to affect the calculation of the average number of hours "for which a person is engaged in work" (see the opening words of paragraph (2)).

99. In paragraph 5 of his opinion, my noble and learned friend, Lord Millett, says that under paragraph (2)(b)(i) the claimant must be treated as being engaged in work throughout the yearly cycle. Why? The paragraph does not say so. Nowhere are the words "treated as being engaged in work", or anything similar, to be found. Those words are, by contrast, to be found in paragraphs (3), (3A) and (4), and in other paragraphs as well. But they are absent from paragraph (2), as they are from paragraph (3B).

100. I would agree, without any difficulty, that the wording of paragraph (2) and of paragraph (3B) does create some problems. For example, there is the parenthetic passage in paragraph (2)(b)(i): "(including, where the cycle involves periods in which the person does no work, those periods but disregarding any other absences)". What are the "other absences" to which the passage refers? What are the contrasted "periods in which a person does no work"? Mr. Commissioner Morcom who decided CIS/261/1990 thought that school holidays were excluded from "periods in which the person does no work" and, presumably, were included in "other absences". Mr. Commissioner Goodman in R(IS)15/94 disagreed and held that school holidays were, for paragraph (2)(b)(i) purposes, "periods in which the person does no work". His decision led to paragraph (3B) being added to regulation 5. But whatever the right view on the meaning of the passage, its relevance is to no more than to the calculation of the average number of hours.

101. Mr. Commissioner Goodman in his decision said:

" … regulation 5(3) is not dealing with the question of hours of work as averaged but is dealing with the question of when a person shall be treated as engaged in remunerative work as defined in paragraph 1 of regulation 5."

(his emphasis)

Similarly, in my opinion, paragraph (2)(b)(i) is dealing with the question of hours of work as averaged and is not dealing with the question of when a person shall be treated as engaged in remunerative work.

102. Paragraph (3) introduces the statutory fiction that a person absent from work without good cause or during "a recognised, customary or other holiday" is in remunerative work although not in fact in work at all. It is accepted that this provision does not apply to Mr. Banks during school holidays. School holidays are not holidays for him. It would apply to him during bank holidays. Paragraph (4) says that for the first seven days of a strike, a striker is to be treated as in remunerative work. This is another statutory fiction. But there is no provision that, in terms at least, says that ancillary school workers like Mr. Banks are to be treated as engaged in remunerative work during out-of-term periods when they are not in work at all. There could easily have been such a provision. Why should the statutory fiction be implied?

103. This approach to and construction of regulation 5 and its various paragraphs is, I suggest, confirmed by the language used in the comparable JSA Regulations. It is common ground that the JSA regulations were intended to produce the same result as the IS Regulations.

104. JSA regulation 51 describes what is meant by "remunerative work". It means " … work in which [the claimant] is engaged or, where his hours of work fluctuate, is engaged on average, for not less than 16 hours per week" (paragraph (1)(a)). As with IS regulation 5(1) and (2), JSA regulation 51(1) is not expressed to treat anyone as engaged in work who is not in work. But if a person is in work paragraph (1) will tell you whether or not the work is "remunerative work".

105. Paragraph (2) of regulation 51 supplements paragraph (1). It tells you how to calculate "the number of hours in which the claimant … is engaged in work". As with paragraphs (2) and (3B) of IS regulation 5, it is the "number of hours" on which the paragraph is concentrating. In paragraph (2), as in paragraphs (2) and (3B) of IS regulation 5, the words "treated as engaged" nowhere appear. The paragraph does not describe circumstances in which a person not in work is to be treated as being in work. Paragraph (2)(a), (b)(i) and (b)(ii) of JSA regulation 51 are in the same terms and serve the same purpose as paragraph (2)(a), (b)(i) and (b)(ii) of IS regulation 5. Paragraph (2)(c) in JSA regulation 51 is in the same terms and serves the same purpose as paragraph (3B) in IS regulation 5.

106. The content of JSA regulation 51 as a whole makes it, I suggest, clear that it is describing what "remunerative work" means, and is not dealing at all with the question of who is or is not to be treated as in remunerative work. That is done by regulation 52, headed "Persons treated as engaged in remunerative work", and by regulation 53, headed "Persons treated as not engaged in remunerative work". It is these two regulations that contain the statutory fictions as to when a person is or is not to be treated as engaged in remunerative work. Regulation 51 does not do so. A construction of regulation 51 as requiring a person to be treated as engaged in remunerative work at a time when he is not engaged in work at all is to impute to the draftsman of the regulations an almost impish pursuit of confusion.

107. I venture to suggest, my Lords, that such a construction of JSA regulation 51 or of IS regulation 5 is wrong. At the least it cannot be regarded as a construction that is clearly right. And it is, I suggest, a construction that fails to give effect to the fundamental purpose of the legislation.

108. The alternative construction, and that which I prefer, is that IS regulation 5 and JSA regulation 51 do not require a person to be treated as engaged in remunerative work at a time when he was not engaged in work at all. So, was Mr. Banks in work during the periods in respect of which his claims were made? Given the contractual arrangements between him and the Doncaster MBC, the answer, in my opinion, is that he was not.

109. In R v. Ebbw Vale and Methyr Tydfil Supplementary Benefits Appeal tribunal Ex p Lewis [1982] 1 WLR 420 the Court of Appeal held that a person who was absent from work through illness was not at the time "engaged, and normally engaged, in remunerative full time work" for the purposes of the Family Income Supplements Act 1970. Lord Denning MR, at p. 422 asked the question "is he engaged in remunerative full-time work during the period when he is sick?" and said:

"The common sense answer is that he is not engaged in remunerative full-time work at that time."

Oliver LJ agreed. He rejected the proposition that "a person engaged in remunerative full-time work" meant "simply being engaged under a contract of employment … " (p. 424)

110. So, in the present case, unless there is some statutory provision that requires Mr. Banks to be treated as being engaged in work during school holidays, I would hold on the facts that he was not so engaged. There is no statutory provision that expressly so requires and, in my opinion, no sufficient justification for implying such a provision into paragraph (2)(b)(i) of IS regulation 5 or JSA regulation 51.

111. If I am wrong about that, I would concur in the opinion of my noble and learned friend, Lord Cooke of Thorndon, and hold that the "disregard" in paragraph (3B) of IS regulation 5 and in paragraph 2(c) of JSA regulation 51 requires that Mr. Banks should not be treated as in remunerative work during school holidays.

112. May I conclude, my Lords, by inviting your Lordships to consider the position that will have been reached if this appeal is to be dismissed.

113. School ancillary workers who, like Mr. Banks, are single and not eligible for family credit will be firmly caught in a "poverty trap". Mr. Banks' income from his employment as a special needs assistant was around £3,367 per annum. This is surely below poverty level. Mr. Banks' attempts to supplement this inadequate income by working elsewhere in school holidays failed. This is not surprising. It is not easy to find short term work. If school ancillary workers like Mr. Banks are barred from claiming jobseeker's allowance by being treated as being engaged in work when in fact they are not, what are they to do? They can, I suppose, give up their employment as ancillary workers and seek some form of alternative employment where they will not be caught by the construction of the regulations that will have trapped Mr. Banks and, pending such re-employment, they can claim benefit. But how will schools and other educational establishments then attract ancillary workers? And if the ancillary work employment is still open to them their benefit claim may be barred on the ground that that employment is available to them and they are not actively seeking it. This is a "poverty trap" sequence that the Social Security Act 1986 was intended to cure. If there had been some express provision in the regulations that made this result unavoidable, then your Lordships would be unable to avoid it. But why should this result be brought about by implying into the regulations a statutory fiction that is not expressed? In my opinion, for the reasons I have tried to express, a construction that produces that result is not justified and I would allow the appeal. If that course does not find favour with your Lordships, the sooner the Secretary of State remedies the situation by making appropriate new regulations the better.