UK Social Security and Child Support Commissioners' Decisions

 


[2004] UKSSCSC CJSA_4261_2003 (26 August 2004)

CJSA/4261/2003

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. My decision is that the decision of the appeal tribunal was erroneous in point of law. I set it aside and, in pursuance of the powers in that behalf contained in section 14(8)(a)(i) SSA 1998, I give the decision which I consider the tribunal should have given. That is that the claimant is not disentitled from JSA for the period 28.9.02 – 3.10.02. He will however be treated to be in remunerative work when he takes the six days holiday pay.
2. This is an appeal with leave granted by me from a decision of an appeal tribunal dated 25.4.03. When I granted leave on 24.11.03, I noted:

"This is clearly a matter of local importance. I doubt whether "due to be paid" as used in reg 96 JSA regs is substantially very different from "payable."

I then referred to para 21(3) of CSB/33/83. That was a misattribution for R(SB)33/83. Para 21(3) of the Decision runs:

"….payable" is an ordinary word in the English language and it is undesirable to define it: see Cozens v Brutus 1973 AC 854, HL. It is clear that when employed in the amended paragraph (d) of regulation 9(2) it does not simply mean "received", for the word "payable" was expressly substituted by amendment for the word "received" wherever the latter word occurs in that paragraph (d). In order to determine when earnings are payable, the first step would usually be to look at the terms of the contract to see whether there was a provision as to when earnings were payable." (My underlining).

3. The claimant had been employed by A & P (Appledore) and his employment was terminated on 27.9.02. He claimed contribution based JSA from 28.9.02. His employers said he had 6 days holiday pay due to him, and the DM decided they should be attributed to the period 24.9.02 – 29.9.02. He was thus treated as being in remunerative work for that period. He then served the 3 waiting days, and JSA was paid from 3.10.02. This appeal is therefore concerned with no more than the period from 28.9.02-3.10.02 less any applicable waiting period.
4. The claimant appealed to the appeal tribunal who heard and dismissed his appeal on 27.7.03. The tribunal gave their reasons thus:

"16. The tribunal took notice of case law on the subject, in particular R(SB)33/83 and agreed that the precise terms of the contract of employment which established the legal basis upon which holiday pay is due are crucial. The tribunal finds that [the claimant's] terms and conditions of employment provide that he can elect to take holiday pay when being laid off – paragraph 1.4.1.4 at page 23 of the bundle. If [the claimant] does so elect, his employer is contractually bound to pay the holiday pay at that time. It has no choice in the matter. Accordingly, the tribunal finds that for the purposes of regulation 96 of the Jobseeker's Allowance Regulations the holiday pay is due to be paid as at the date of lay off. The fact that [the claimant] can elect not to take it at that stage does not affect the fact that it becomes due on that date."

But for one matter, that seems to be unobjectionable.

5. Now the claimant in this case is what is known as "a core casual worker", the significance of which is clearly set out in the Union's letter of 31.10.03 (41/2) thus:

"The basis of our appeal is that there is a difference between "ordinary casual workers" at the docks and "core casual workers". At Falmouth Docks, ordinary casual workers have no guarantee of future employment although, following a period of lay off, they can be re-employed at the Docks. At the end of each period of employment (i.e. lay off), a contract of employment is terminated and upon being re-employed at the docks, a new contract of employment commences.

"In the case of core casual workers, they again, may be laid off, but their contract of employment continues as, if they are requested to return to employment, they are obliged to do so, unlike the ordinary casual workers. Should they fail to return, they are subject to disciplinary proceedings. A core casual worker would also be subject to such proceedings if they failed to give [notice] of termination of employment to the company. The company must also give a core casual worker notice if such employment is terminated".

The Union then submits that the claimant was not under an obligation to claim the holiday pay due to him at the time of lay off, as his contract of employment was not terminated.

Thus it was not due to be paid, but only due if the employee chose, and the claimant in this case did not chose.

6. Reg 96 provides as appropriate:

"(1) …A payment of income to which regulation 94…applies shall be treated as paid –

(a) In the case of a payment which is due to be paid before the first benefit week pursuant to the claim on the date on which it is due to be paid;

(b) In any case on the first day of the benefit week in which it is due to be paid or the first succeeding benefit week in which it is practicable to take it into account".

One question which, therefore, arises is what is meant by the expression "due to be paid". That I think seems prima facie to be governed by the dictum I have quoted in R(SB)33/98.

7. The Secretary of State submits that since a core casual worker can – though does not have to – claim payment of holiday money when laid off, that payment is due when he is laid off. In that sense it can be termed either "due to be paid" or "payable". The Secretary of State also prays in aid Reg 105(2) which provides that income, which would have become payable on application, is to be treated as possessed by the claimant. Para (2)(e) of that Reg appears to expressly exclude JSA from being treated as notional income. That is not relevant in this case. However it cannot be predicated that the claimant in this case would necessarily have received his holiday pay due on 28.9.02 in time so as to satisfy the condition in section 105(2) that such income should be treated as possessed by a claimant but only from the date on which it could be expected to be acquired were an application made.
8. In the Memorandum of Agreement between A & P Falmouth Limited and the unions (20/24) it is provided at 1.4.1.4.:

"The holidays will be claimed by one of the following methods;

1. Employees wishing to take an accrued holiday whilst employed may do so following an agreement with department managers/team leader.

2. Employees wishing to claim their holiday accrual when laid off should submit a holiday card to the Wages Office – this card need not be signed.

3. …

Employees who are laid off and who do not take holidays as stated above in clauses 1 and 2 cannot receive payment for holiday credit in any circumstance until more than 4 weeks after the termination or interruption of employment."

As stated in para 21(3) of R(SB)33/83, it is necessary to determine when earnings are payable by reference to the terms of the contract. In my view, the terms of the contract in this case provide very specifically that no holiday payments will be paid until more than 4 weeks after the termination or interruption of employment – and that, in this case, was on 27.9.02.

9. Accordingly in my judgment the claimant was prima facie entitled to JSA from 28.9.02 subject of course to any deduction there may be for any waiting period.
10. Finally, I should deal shortly with the point made in the Union's letter of 27.4.04 (55) that, if a core casual or any casual worker is made to take holiday whenever he is laid off, he may never accumulate enough time to have a proper holiday with his family. But I do not think the Secretary of States' construction has this effect, for the six days holiday pay is only on entitlement for holiday money already accrued. It is not a condition of payment that an employee has then to take his holiday, though I admit it may be difficult, from a financial point of view, for him not to.
11. My decision is therefore as set out in para 1 above.

(Signed) J M Henty

Commissioner

(Date) 26 August 2004

(Corrected) (Date) 15 October 2004