THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

DECISION OF THE UPPER TRIBUNAL JUDGE

The appeal against the decision of the First-tier Tribunal given at Edinburgh on 27.04.2010 is refused. It is dismissed.

REASONS FOR DECISION

1.               I have refused this appeal, because I consider that the issue in this case is one of fact, rather than of law.  The tribunal has held that the claimant has “never terminated his activity as a self-employed person” and I consider that finding is conclusive against the Secretary of State.

2.               The main findings of the tribunal are that the claimant came to the UK in autumn of 2006 and after a few months employment registered under the Accession State Worker Registration Scheme that the claimant commenced self-employment.  He worked initially as a labourer and then as a joiner.  He registered as a self-employed person with HMRC from March 2007 and paid tax as a self-employed person.  He worked continuously on various contracts until the summer of 2009.  When the construction industry was badly affected by the recession his existing contract ended in the summer of 2009 and he found that opportunities for work had dried up.  The tribunal found that he continued to seek self-employed work, albeit without success and that at the date of his claim for JSA on 30 September 2009 he was seeking self-employed work.  Further that during his period of claim he continued to seek self-employed work as well as conforming to his jobseekers contract by seeking any available employed work.

3.               I agree with the tribunal that a self-employed person does not necessarily cease to be self-employed just because they do not have any contract for work at that particular time.  If a self-employed person is actively seeking self-employed work, then I consider that they can be held still to be self-employed.  Clearly it is a question of fact and degree and maybe if a self-employed person has not been able to find work for a period of time and there is little prospect of finding such work in the future a tribunal might hold that at some date he ceased to be self-employed because there was no realistic prospect of getting such employment in the future.  In the present case the finding is that the existing contract ended in the summer of 2009 and the application for JSA was made on 30 September 2009.  If one assumes summer meant June, then the claimant was only 3 months without self-employed work, albeit he continued to look for it.  I consider that against the finding that he continued to seek self-employed work throughout this period that the tribunal was entitle to find that he “never terminated his activity as a self-employed person”.

4.               I take support for my decision from the decision in CJSA/1489/2008 where, at

paragraph 12, Mr Commissioner Jacobs said:

“12. As to paragraph (4)(b) [of Reg 85A(4)(b) of JSA Regulations 1996], there was no evidence before the tribunal to permit it to find that the claimant remained in self-employment while temporarily without work.  That may occur, for example, if a self-employed plasterer finds it difficult to find work for the time being, but is continuing to advertise and seek such work.  There was no evidence that that was the position here.”

5.               The tribunal in the present case has made specific findings along the lines suggested by the Commissioner and accordingly I find that this case is really a question of fact finding for the tribunal and in light of the facts found I cannot fault the decision.

6.               For the above reasons I do not accept the Secretary of State’s submission that “if a person is no longer self-employed, he cannot retain the status of being self-employed person for the purposes of determining if he remains a ‘qualified person” if the Secretary of State meant by that submission that the moment a self-employed person had no more self-employed work he ceases to be self-employed.  I would accept that submission if the question of whether or not a person continues to be self-employed is answered in the manner outlined in paragraph 12 of CJSA/1489/2008, by examining the facts to see whether or not the status has been retained.

7.               I agree with the tribunal that this case can be distinguished from R (on app Tilianu) and Secretary of State for Work and Pensions [2010] EWHC 313 (Admin), in that in Tilianu there was no consideration of whether or not accepted self-employed status had been retained. I note that the Court of Appeal has just issued its decision in Tilianu on appeal ([2010] EWCA Civ 1397) in which the appeal was not allowed and the decision does not alter my opinion that the factual situation in Tilianu can be distinguished in the present case in light of the findings of the tribunal. However, I do note that Sedley LJ does suggest that the distinction between “worker” and “self-employed” might not be as clear cut as appears to have been accepted in the past. Sedley LJ noted that there had been no fact finding in the case and went on to say:

“8. The reason why this may not only matter but be crucial is that the concept or status of self-employment, on which the present question of law turns, is elusive. It is, first of all, an oxymoron: you cannot in law or in common sense be employed by yourself. What it signifies in English is carrying on business on your own behalf by providing services to others. Its counterpart in both the Treaty and the Directives is “worker”. The equivalents in the French version of the Directive are travailleur non salarié – a non-salaried worker – and travailleur salarié; in the German version, Selbstständiger – literally a freestanding person – and Arbeitnehmer – literally one who takes work. These disparities of language and usage, however, are not problematical because they are subsumed in the autonomous meaning given by EU law to both concepts. For EU purposes, a worker is anyone who, irrespective of the legal label put on the relationship, “performs services for and under the direction of another person in return for which he receives remuneration” as contrasted with “independent providers of services” : Allonby v Accrington and Rossendale College [2004] ICR 1328 (ECJ), §67-8.

9. We do not know where Mr Tilianu comes on this spectrum …”

8.               I can well understand a situation where a person is self-employed for UK tax purposes, but never-the-less is working in a situation “under the direction of another person in return for which he received remuneration”. This is particularly so in the Construction Industry Scheme (CIS). Mr Tilianu worked in the CIS and it is of note that Sedley LJ was prepared to consider that if the facts had been investigated, that Mr Tilianu might have come within the definition of worker, notwithstanding that he was working under the CIS where he would have been paying tax as a self employed person. At paragraphs 68 &  71 in Allonby [C-256/01] the ECJ said:

“68 …the Treaty did not intend that the term 'worker', within the meaning of Article 141(1) EC, should include independent providers of services who are not in a relationship of subordination with the person who receives the services …

…

71. The formal classification of a self-employed person under national law does not exclude the possibility that a person must be classified as a worker within the meaning of Article 141(1) EC if his independence is merely notional, thereby disguising an employment relationship within the meaning of that article.”

9.               Had I not found that the tribunal was entitled to find that the claimant had retained his self-employed status, I would have allowed the appeal and remitted to a tribunal to investigate the nature of the claimant’s working relationship on the various contracts to see whether or not he had the status of “worker” under the EC definition, notwithstanding the fact that he was registered as self-employed and paid tax as a self employed person in the UK. If he was truly working “under the direction of another person” and the relationship was one of “subordination with the person who receives the services” then it does not seem to me that it matters that the payment of remuneration is with or without tax, by reason of the UK tax laws, which had classified the person as self-employed.

(Signed)

Sir Crispin Agnew of Lochnaw Bt QC

Judge of the Upper Tribunal

Date: 9 December 2010