Chief Adjudication Officer v. Stafford and Another

Where a worker’s fluctuating hours form a recognisable annual cycle which includes school holidays, the worker is treated as engaged in work throughout that cycle. This includes weeks in which no work is performed.

Under regulation 5(3B) of the Income Support (General) Regulations 1987, school holidays are disregarded only when calculating average weekly hours. They remain part of the cycle to which the resulting average applies. If the average, calculated without the holiday weeks, reaches 16 hours, the worker is engaged in remunerative work throughout the year and is ineligible for income support during unpaid school holidays. The materially equivalent provisions governing jobseeker’s allowance have the same effect.

Mr Banks worked under a continuing contract as a special needs assistant. He worked approximately 20 to 26 hours weekly during school terms, but performed no work and received no pay during school holidays. He claimed income support for the 1996 summer holiday and jobseeker’s allowance for the autumn half-term holiday.

A social security appeal tribunal rejected the claims. Social Security Commissioner Rowland allowed Mr Banks’s appeal, but the Court of Appeal unanimously reversed his decision: [2000] 1 All ER 686. Mr Stafford’s related appeal was determined at the same time, but he did not appeal to the House of Lords.

The central issue was whether the statutory averaging provisions caused Mr Banks to be treated as engaged in remunerative work throughout his annual cycle, including unpaid school holidays.

1. Appeal dismissed by a majority of three to two. Lord Slynn of Hadley, Lord Hope of Craighead and Lord Millett held that Mr Banks was engaged in remunerative work throughout his annual cycle. Lord Cooke of Thorndon and Lord Scott of Foscote dissented.

2. Per Lord Hope, with reasoning supported by Lord Millett and consistent with Lord Slynn’s conclusion, regulation 5(2)(b)(i) of the Income Support (General) Regulations 1987 distinguishes between being engaged in work and actually performing work. A recognisable cycle may include weeks in which no work is performed. Averaging therefore treats the claimant as engaged for the average number of hours in every week of the complete cycle.

3. Regulation 5(3B) did not shorten the annual cycle or remove the holiday weeks from the period during which the claimant was treated as engaged in work. It required those weeks to be disregarded only when establishing average weekly hours. The total hours were consequently divided by the working weeks rather than all 52 weeks. As the resulting average exceeded 16 hours, Mr Banks was engaged in remunerative work throughout the cycle, including the holidays.

4. Per Lord Hope, the distinction between statutory provisions defining remunerative work and provisions deeming a person to be engaged in it could not be maintained rigidly. An element of deeming was inherent in any averaging exercise. The regulations were therefore construed as a whole according to their ordinary language. Lord Millett added that regulation 5(3B) merely modified regulation 5(2)(b)(i); it did not replace it. The equivalent provisions of the Jobseeker’s Allowance Regulations 1996 produced the same result despite their different drafting.

5. Lord Cooke dissented. In his view, disregarding school holidays when calculating the average meant that the claimant was not treated as engaged in remunerative work during those holidays. Any ambiguity should have been resolved consistently with ordinary language and by requiring clearer language before unpaid non-working weeks were treated as remunerative work.

6. Lord Scott also dissented. He considered that the averaging provisions defined whether existing work was remunerative but did not deem a person who was not working to be engaged in work. He would also have construed any ambiguity consistently with the legislation’s purpose of relieving poverty and avoiding a poverty trap.

1. House of Lords: By a majority of three to two, dismissed Mr Banks’s appeal and affirmed the Court of Appeal’s decision: [2001] UKHL 33.
2. Court of Appeal: Unanimously allowed the Chief Adjudication Officer’s appeal from Commissioner Rowland and rejected the claims: [2000] 1 All ER 686.
3. Social Security Commissioner: Commissioner Rowland allowed Mr Banks’s appeal and upheld his claims: CIS/3216/1997 and CJSA/3218/1997.
4. Social Security Appeal Tribunal: Rejected the claims for income support and jobseeker’s allowance.