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England and Wales High Court (Administrative Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Parkin, R (On the Application Of) v Secretary of State for Work And Pensions [2019] EWHC 2356 (Admin) (19 September 2019) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2019/2356.html Cite as: [2019] EWHC 2356 (Admin) |
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QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
THE QUEEN on the application of CHARMAINE PARKIN |
Claimant |
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- and - |
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SECRETARY OF STATE FOR WORK AND PENSIONS |
Defendant |
____________________
(instructed by LEIGH DAY SOLICITORS) for the Claimant
MR JAMES CORNWELL AND MR PAUL SKINNER
(instructed by GOVERNMENT LEGAL DEPARTMENT) for the Defendant
Hearing date: 17 & 18 July 2019
____________________
Crown Copyright ©
MRS JUSTICE ELISABETH LAING :
Introduction
The facts
A summary of the main provisions of the Welfare Reform Act 2012 ('the WRA') and of the Universal Credit Regulations (2013 SI No 376) ('the Regulations')
The WRA
The Regulations
The policy materials
The White Paper
'Some self-employed people under Tax Credits report very low levels of income. We know that in starting up a business that [sic] it can take some time before it becomes profitable. But once established we would expect to see a reasonable income from the business activity. So for Universal Credit we are considering introducing a floor of assumed income from self-employment for those registering as such. The floor will be set at the National Minimum Wage for the reported hours; clearly profits above this limit may be received and reported.'
A summary of the Secretary of State's evidence
more about that in paragraphs 67 to 79, below.
The relevance of the policy materials
The Impact Assessments
The law
Article 8
1. Everyone has the right to respect for his private and family life, his home and his correspondence.
2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
Article 1 of Protocol 1
Protection of property
Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
Article 14
Prohibition of discrimination
The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.
i. Do the circumstances 'fall within the ambit' of another Convention right?
ii. Is there a difference in treatment between the claimant and another person whose situation is, in relevant respects, analogous?
iii. Is the difference in treatment on the grounds of the claimant's status?
iv. Is the difference in treatment objectively justified?
See In re McLaughlin's Application for Judicial Review [2018] UKSC 48; [2018] 1 WLR 4250 at paragraph 15.
Section 149 of the Equality Act 2010
'(a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;
(b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;
(c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it'.
'involves having due regard, in particular, to the need to -
(a) remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic;
(b) take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it;
(c) encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.
'involves having due regard, in particular, to the need to -
(a) tackle prejudice, and
(b) promote understanding.'
i. Section 149 does not require a substantive result.
ii. It implies a duty to make reasonable inquiry into the obvious equality impacts of a decision.
iii. It requires a decision maker to understand the obvious equality impacts of a decision before adopting a policy.
iv. Complying with it is not a box-ticking exercise.
Discussion
Article 14
i. Do the circumstances 'fall within the ambit' of another Convention right?
ii. Does the claimant have a status for the purposes of article 14?
iii. There are two questions at this third stage.
1. Is there a difference in treatment between the claimant and another person?
2. Is that person's situation, in relevant respects, analogous to the claimant's?
iv. Is that treatment on the grounds of the claimant's status?
v. Is the treatment justified?
I will do so for convenience, as, because of my answers to the relevant questions, the order in which I answer them makes no difference to the overall result.
Question 1: are the circumstances within the ambit of a Convention right?
Question 2: does the Claimant have a 'status' for the purpose of article 14?
Questions 3(1) and 4: is there a difference in treatment and is it on the grounds of the Claimant's status?
Question 3(2): are the situations analogous?
'The employee undertakes to serve; the contractor does not. The employee sells his labour; the contractor sells the end product of his labour. In the one case the employer buys the individual; in the other he buys the job.'
i. An employee is entitled to the NMW/NLW for the hours which he works, which enables him to be self-sufficient to some extent. A person who is self-employed can sell his services at the rate he thinks is appropriate, to the extent that a buyer will pay it. The difference therefore is that an employee is entitled to be paid a fixed minimum for the hours he works, whereas a self-employed person has no fixed minimum entitlement to pay which is directly related to the hours he works.
ii. An employee is subject to the control of his employer during his working hours. No-one controls how, on what, or for how long, a self-employed person works.
iii. There are times when a self-employed person will work for no direct remuneration at all, for example when he is developing his business, seeing clients, advertising, and doing administrative jobs such as budgets and accounts.
'…unless there are very obvious relevant differences between the two situations, it is better to concentrate on the reasons for the difference in treatment and whether they amount to an objective and reasonable justification.'
Question 5: is the difference in treatment justified?
The significance of regulation 99(6)
i. The failure to allow people in GSE to escape the MIF by accepting WRR is a significant flaw in the rationale for the MIF. The Secretary of State was wrong to imply in her post-hearing note that GSE claimants could not comply with conditions.
ii. The effect of regulation 99(6) is that employed claimants are exempt from 'the core aspects of conditionality' as soon as they earn at least £78.10 per week. People who are in GSE are subjected to a 'particularly perverse incentive' to stop their gainful self-employment.
Rationality at common law
Section 149 of the Equality Act 2010
Conclusion
i. The circumstances of this claim are within the ambit of article 8 and I have assumed of A1P1.
ii. Self-employment is a status for the purposes of article 14.iii. The MIF results in a difference in treatment between the self-employed and the employed.
iv. They are not, however, in relevantly analogous circumstances.
v. The difference in treatment, is, any event, not MWRF.
vi. The MIF is not irrational at common law.
vii. The Secretary of State complied with section 149 of the 2010 Act in designing the UC scheme.