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You are here: BAILII >> Databases >> Upper Tribunal (Administrative Appeals Chamber) >> JA v Secretary of State for Work and Pensions [2012] UKUT 122 (AAC) (16 April 2012) URL: https://www.bailii.org/uk/cases/UKUT/AAC/2012/122.html Cite as: [2013] AACR 15, [2012] UKUT 122 (AAC) |
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Decision
of the Upper Tribunal
(Administrative Appeals Chamber)
As the decision of the First-tier Tribunal (made on 15 September 2010 at Colwyn Bay under reference 187/09/00138) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007 and the case is REMITTED to the tribunal for rehearing by a differently constituted panel.
DIRECTIONS:
A. The tribunal must undertake a complete reconsideration of the issues that are raised by the appeal and, subject to the tribunal’s discretion under section 12(8)(a) of the Social Security Act 1998, any other issues that merit consideration.
B. In particular, the tribunal must investigate and decide whether Mr A was a worker between 1 July 2008 to 19 October 2008.
C. In doing so, the tribunal must not take account of circumstances that were not obtaining at the time of the claim: see section 12(8)(b) of the Social Security Act 1998. Later evidence is admissible, provided that it relates to the time of the decision: R(DLA) 2 and 3/01.
Reasons for Decision
The decision of the Secretary of State issued on 10 February 2009 is confirmed.
It was common ground between the Presenting Officer and the Representative that to establish entitlement the appellant needed to establish that he was a “Worker” between 19/06/2008 and 19/11/2008.
For the substantial part of the above period the appellant’s wages were “cash in hand” and not subject to the deductions of either Income tax or national insurance contributions.
In the above circumstances I am not satisfied that the appellant can be treated as a “Worker” during the above period. Accordingly he has not established a right to reside in the UK.
4. The judge expanded on this in his written reasons:
I took the view that the appellant could not retain “worker status” while effectively being employed in the black market. He knew that he was required to pay income tax and National Insurance as he had done in his previous employment. He had accepted a position and worked for several months without fulfilling those legal obligations. It had not been raised as an issue prior to or during the appeal that the appellant was unaware of his obligations in this regard.
In seeking leave to appeal, the appellant’s representative seems to be asserting that the appellant was not knowingly a party to the deception of the Revenue. I cannot see how this can be the case, given that he accepted employment that paid him cash in hand and continued to undertake that employment until the business closed. I am not aware of any concept in European law that would treat employment of this kind as valid for the purpose of attaining worker status.
Right of residence for more than three months
1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:
(a) are workers or self-employed persons in the host Member State; …
3. For the purposes of paragraph 1(a), a Union citizen who is no longer a worker or self-employed person shall retain the status of worker or self-employed person in the following circumstances:
(a) he/she is temporarily unable to work as the result of an illness or accident;
(b) he/she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a jobseeker with the relevant employment office; …
12. The effect on the employee depends on two factors: (i) the employee’s knowledge of how the contract will be performed; and (ii) the nature and extent of the employee’s participation. As to knowledge, the test is subjective (what did the employee know?) not objective (what ought the employee to have known?). See Newland at 528. As to participation, the test is whether ‘there has been sufficient degree of participation by the employee’: Hall v Woolston Hall Leisure Ltd [2001] 1 WLR 225 at paragraph 38.
… where both employer and employee knowingly commit an illegality by way of fraud on the revenue in the payment and receipt of the employee’s remuneration under the contract of employment, which is an essential part of such a contract, then we think that there can be no doubt that this does turn it into a contract that is prohibited by statute or common law, and consequently the employee is precluded from enforcing any employment rights she might otherwise have against her employer.
The judge only made his remark in response to the application for permission to appeal. He did not say that he had found it as a fact at the hearing. He seems to have thought it was inevitable that Mr A knew and colluded in what his employer was doing. That is not a necessary inference in the circumstances. The facts of this case are very similar to those in Newland. The employee there was paid weekly in cash. The industrial tribunal found that she either knew or should have known what her employer was not accounting for the tax and contributions. The Employment Appeal Tribunal remitted the case for rehearing to clarify the employee’s knowledge. And it did so despite the fact that she had previously been the manager of a hairdressing salon who might be expected to understand tax arrangements.
16. Worker is a European concept. That means that it is defined by European law, through the decisions of the Court of Justice of the European Union. Work means the performance of services under the direction of another for remuneration: Lawrie-Blum v Land Baden-Wurttemberg [1986] ECR 2121, paragraph 17. The services must be in pursuit of an economic activity: Levin v Staatssecretaris van Justitie [1982] ECR 1035, paragraph 17. It does not matter that the job is short-term or temporary. In Lawrie-Blum, the Court included in its definition of work that it should be for a certain period of time. But it has since held that work for any given period is not essential: Lair v Universitat Hannover [1988] ECR 3161, paragraph 42. The Court has applied the same test whether the activity undertaken is part-time, irregular or intermittent: does it represent the pursuit of an effective and genuine economic activity? See Levin paragraph 11. Activities which are on such a small scale as to be purely marginal and ancillary do not amount to work. See Levin paragraph 17.
Signed on original |
Edward Jacobs |