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Cite as: [2014] UKUT 549 (AAC)

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Secretary of State for Work and Pensions v PD (ESA) (Employment and support allowance : other) [2014] UKUT 549 (AAC) (10 December 2014)




Before Mr Justice Charles

Upper Tribunal Judge Rowland

Upper Tribunal Judge Mullan




For the Appellant: Mr Tim Buley of counsel, instructed by the Treasury Solicitor


For the Respondent Mr Tom Royston of counsel, instructed by the Child Poverty Action Group



Decision:  The Secretary of State’s appeal is allowed.  The decisions of the First-tier Tribunal dated 4 September 2012 and 11 December 2012 are set aside and the case is remitted to a differently-constituted panel of the First-tier Tribunal to be re-decided.




The legislation


1. Part 1 of the Welfare Reform Act 2007 introduced employment and support allowance to replace incapacity benefit, severe disablement allowance and income support paid on the ground of “incapacity for work” or disability.  Schedule 4, introduced by section 29, makes transitional provision and, in particular, paragraphs 1 and 7 provided at the material time –


1. (1) Regulations may make such provision as the Secretary of State considers necessary or expedient—

(a)   in connection with the coming into force of any provision of, or repeal relating to, this Part, or

(b) otherwise for the purpose of, or in connection with, the transition to employment and support allowance.

  (2) The following provisions of this Schedule are not to be taken as prejudicing the generality of subparagraph (1).

7. (1) Regulations may—E+W+S

(a) make provision for converting existing awards into awards of an employment and support allowance, and with respect to the terms of conversion;

(b) make provision for the termination of existing awards in prescribed circumstances.

  (2)  Regulations under sub-paragraph (1)(a) may, in particular—

(a) make provision for conversion of an existing award—

(i) on application, in accordance with the regulations, by the person entitled to the award, or

(ii) without application;

(b) make provision about the conditions to be satisfied in relation to an application for conversion;

(c) make provision about the timing of conversion;

(d) provide for an existing award to have effect after conversion as an award of an employment and support allowance—

(i) of such a kind,

(ii) for such period,

(iii) of such an amount, and

(iv) subject to such conditions,

as the regulations may provide;

(e) make provision for determining in connection with conversion of an existing award whether a person has limited capability for work-related activity.

  (3) Regulations under sub-paragraph (1)(a) may, in relation to existing awards which have been the subject of conversion under this paragraph, include provision about revision under section 9 of the Social Security Act 1998, or supersession under section 10 of that Act in respect of the period before conversion.”


The term “existing award” is defined in technical terms in paragraph 11 so as to include an award of income support such as the present claimant had.


2. Although Part 1 of the Act came into force for new claimants on 27 October 2008, paragraph 7 of Schedule 4 was not brought into force until 27 July 2010.  Partly made under that paragraph and also under paragraph 1(1) are the Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No.2) Regulations 2010 (SI 2010/1907), which came into force on 1 October 2010. 


3. The 2010 Regulations make provision for notifying a person under regulation 4 that the conversion process has started and then making a “conversion decision” that either decides that a notified person’s existing award qualifies for conversion into an award of employment and support allowance or that it does not (see regulation 5(2)).  Qualifying for conversion usually depends on the claimant being found to have limited capability for work, as determined under the work capability assessment normally applicable to claims for employment and support allowance (see regulation 6).  The decision is effective from a date determined under regulation 13.  Regulation 14 provides that, if an existing award or awards qualify for conversion, they are converted into an award of employment and support allowance with effect from the effective date.


4. As amended, regulation 15(1) and (2) then provides –


15.(1) Subject to paragraphs (2A) and (4), paragraphs (2), (3) and (6) apply in any case where the conversion decision is that a notified person’s (“P”) existing award or awards do not qualify for conversion into an employment and support allowance.

  (2) P’s entitlement to one or both of –

(a) an existing award of incapacity benefit or severe disablement allowance; or

(b) an existing award on income support (being an a award made to a person incapable of work or disabled),

shall terminate by virtue of this paragraph immediately before the effective date of P’s conversion decision.”


5. Regulation 16 applies Chapter 2 of Part 1 of the Social Security Act 1998 to conversion decisions so as to make provision for their revision or supersession and, through a modification to the 1998 Act made by paragraph 5 of Schedule 2 to the 2010 Regulations, so as to provide for appeals against them (which appears to be necessary because a conversion decision is generally made neither on an award of an existing benefit nor on a claim for employment and support allowance).


6. The 1998 Act provides in section 8 for the Secretary of State to decide any claim for a “relevant benefit” or, unless the matter is one to be determined by Her Majesty’s Revenue and Customs, “any decision that falls to be made under or by virtue of a relevant enactment” (see section 8(1)(c)) and then provides in sections 9 and 10 for, respectively, the revision and supersession of such decisions and, in section 12, for appeals against decisions under sections 8 and 10.  Section 17 provides –


17.(1) Subject to the provisions of this Chapter and to any provision made by or under Chapter 2 of Part 1 of the Tribunals, Courts and Enforcement Act 2007, any decision made in accordance with the foregoing provisions of this Chapter shall be final; …”


Paragraph 17 of Schedule 3 to the 2007 Act made a number of amendments to the 1998 Act.  In particular, it amended section 8 so that employment and support allowance is now a “relevant benefit” and Part 1 of the 2007 Act is a “relevant enactment”.  Thus the adjudication provisions of the 1998 Act are applied to decisions in respect of the new benefit. 


The procedural history of the case


7. The claimant was awarded income support on the ground of incapacity for work with effect from 25 October 2007.  On 3 January 2012, the Secretary of State made a conversion decision.  He decided that the claimant did not have limited capability for work and that therefore the claimant’s award of income support did not qualify for conversion to an award of employment and support allowance.  Consequently the award of income support was terminated with effect from 16 January 2012.


8. The claimant appealed.  Neither party asked for an oral hearing and, on 4 September 2012, the First-tier Tribunal decided on the papers as a preliminary issue that the claimant did not have limited capability for work with effect from 16 January 2012 but adjourned “every other issue in this appeal”.  In relation to its decision that the claimant did not have limited capability for work, it said –


“The Tribunal will give reasons for its decision that [the claimant] does not have limited capability for work after the decision which finally disposes of all issues in these proceedings and if requested to do so.”


It gave directions requiring the parties to provide it with evidence that the claimant was a “notified person”. 


9. On 22 October 2012, the First-tier Tribunal further adjourned the appeal so that it could be determined on paper immediately after a hearing in five other cases in which there would be considered the questions whether the 2010 Regulations were valid – an issue the judge raised himself – and, if so, whether the notice issued to the claimant had been adequate for the purposes of compliance with regulation 4 – an issue raised by some of the claimants.


10. On 11 December 2012, the First-tier Tribunal held the hearing in the five cases in which a hearing had been requested and, after receiving legal argument on behalf of both the claimants and the Secretary of State, allowed the claimants’ appeals.  Immediately after the hearing, it allowed the present claimant’s appeal and appeals in three other cases in which no hearing had been requested.  The claimant was informed in the decision notice that the conversion decision issued by the Secretary of State on 3 January 2012 was ineffective to bring his entitlement to income support to an end and that therefore he continued to be entitled to income support, although any employment and support allowance paid to him while his appeal was pending should be treated as having been paid on account of the income support to which he was entitled by virtue of the decision.  He was also told –


“The Tribunal will issue a written statement of reasons for this decision at the earliest opportunity under rule 34(2)(a) of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (i.e., on the tribunal’s own initiative and without the need for an application).”


Reasons were given in a common appendix issued on 11 July 2013 for the nine similar cases decided by the First-tier Tribunal at or following the hearing on 11 December 2012. 


11. The First-tier Tribunal reasoned that, by virtue of section 17 of the 1998 Act, the decision to award income support to the claimant was final and could not be brought to an end by the Secretary of State save by way of a supersession under section 10 of that Act, which would be subject to an appeal under section 12 of that Act.  The termination of an award under the 2010 Regulations was not, it held, such a supersession and those Regulations could not have the effect of amending the 1998 Act because the enabling provisions in the 2007 Act under which the Regulations were made were not in the clear terms required to enable subordinate legislation to amend primary legislation and, in particular, to amend primary legislation so as to remove a provision giving finality to a decision subject to a process that includes a right of appeal (the “finality argument”) not in sufficiently clear termssection 12 of.  Accordingly, the 2010 Regulations were held to be ultra vires.


12. The Secretary of State sought permission to appeal in this case and the other similar cases, which was granted by the First-tier Tribunal on 19 August 2013.  Unfortunately, the Secretary of State did not receive the first copy of the grant of permission sent to the relevant office and it was not until 19 September 2013 that he did receive it.  The appeals were sent by Goldfax to the Upper Tribunal on 24 September 2013 but were apparently not received and it was not until 29 January 2014 that the appeal was received in one case and 5 February 2014 that the appeal was received in the present case.  As the claimant in this case had secured legal representation, this was selected as the lead case and the others have been stayed.  Both parties asked that this appeal be heard by a three-judge panel and, on 28 July 2014, the Chamber President made a direction to that effect.  During the hearing, we admitted the appeal despite its lateness, so that the important point raised by it could be determined.


The parties’ submissions


13. The Secretary of State argues that the 2010 Regulations are clearly valid because they do exactly what is permitted by the 2007 Act.  In particular, regulation 15(2) uses the same language of termination as paragraph 7(1)(b) of Schedule 4 to the 2007 Act.  He submits that there is no tension between the 2007 Act and the 1998 Act because, while section 17 of the 2008 Act makes decisions under that Act final, it does not make the decision-making structure in that Act exclusive but merely requires that any award made pursuant to a decision under the 1998 Act can be brought to an end only by a valid legal mechanism.  Termination under regulations made under Schedule 4 to the 2007 Act is such a mechanism.


14. The claimant supports the First-tier Tribunal’s reasoning and, in particular, places a great deal of emphasis on section 17 of the 1998 Act and the fact that the 2007 Act did not amend the opening words of subsection (1) or expressly permit such an amendment.  It is argued that the 1998 Act provides a comprehensive scheme of adjudication and that the statutory language of the 2007 Act does not call for innovation, which would be unprecedented and unnecessary.




15. The claimant accepts that, had the 2010 Regulations been expressed differently so as to provide for the termination of existing awards to be made under the 1998 Act, they could properly have achieved precisely the same effect as they purport to achieve.  This claimant’s case is therefore that the 2010 Regulations took an impermissible route to achieving the result intended by Parliament, even though the enabling words are in very broad terms and the subordinate legislation falls within their literal scope.


16. It is a crucial part of the claimant’s case and the reasoning of the First-tier Tribunal that the 2010 Regulations operate so as to amend the 1998 Act, without the 2007 Act having authorised such an amendment.  Reliance is placed on R. (Totel Limited) v First-tier Tribunal (Tax Chamber) [2012] EWCA Civ 1401; [2013] QB 860 in which Moses LJ, with whom Lord Neuberger MR and Arden LJ agreed, said at [29] that “provided the power conferred by one statute to amend the provisions of another by delegated legislation is clear and express so that it is plain that Parliament understood the nature and scope of the power it was conferring on the executive, there is no reason in principle why the statute should not do so.”  It is submitted that the finality argument summarised in paragraph 11 above is correct.  


17. However, we agree with the Secretary of State that regulation 15(2) of the 2010 Regulations, made under paragraph 7(1)(b) of Schedule 4 to the 2007 Act, does not purport to amend the 1998 Act.  It is a transitional provision made under a broad power to “make provision for the termination of existing awards”.  It provides – at least on the Secretary of State’s analysis and the primary argument advanced by the claimant – for the termination of existing awards otherwise than by way of revision or supersession and thus implies an exception to the general rule in section 17(1) of the 1998 Act, but express amendment of the 1998 Act is not required for the provision to have that effect.  One Act often has to be read subject to a second, later, Act.  Moreover, it would be surprising if an express amendment were to be made to an Act so as to make it clear that a provision in it was subject to transitional provisions in either that Act or a later Act.  Transitional provisions often operate through the modification of other legislation and are often, although not always, transitory in nature.  (Indeed, it is to be noted that one of the regulation-making powers cited in the preamble to the 2010 Regulations is section 28(2) of the 2007 Act, which provides that regulations “may make provision consequential on this Part amending or repealing any provision of … an Act passed on or before the last day of the Session in which this Act is passed”.)


18. In our judgement, the real question in this case is simply whether regulation 15(2) falls within the scope of the enabling provisions in Schedule 4 to the 2007 Act.  It does so literally but, just as the 1998 Act must be read subject to the 2007 Act, so the later statute must be read in the light of the earlier one, because Parliament passed it against that legislative background and that may have a bearing on how it is to be interpreted. 


19. The essential substantive force in the finality argument is that it preserves a right of appeal because it is only where a decision is made under section 8 or 10 of the 1998 Act that there is a right of appeal under section 12.  We agree that that has force and so that it is unlikely that Parliament would have intended Schedule 4 to the 2007 Act to permit the making of regulations providing for a conversion decision that might lead to a loss of benefit without there being a right of appeal. 


20. However, the 2010 Regulations do provide for a right of appeal against a conversion decision and so the essential substantive force of the finality argument disappears.  (Although we did not hear argument on this point, this “modification” of the 1998 Act – in effect a temporary amendment – appears to be made under section 28(2) of the 2007 Act, mentioned in parenthesis above.  It is consequential because the need for it arises out of the nature of the conversion decision for which the 2010 Regulations make provision.)


21. We acknowledge that the 2010 Regulations do not – at least on the Secretary of State’s analysis and the claimant’s primary case – provide for a right of appeal against a termination of the existing award.  However, in our judgement, that is readily understandable.  The 2007 Act repeals the provisions in primary legislation under which existing awards are made, except where they need to remain in force for other purposes.  The 2010 Regulations provide for the gradual movement of claimants entitled to existing awards from the old régime to the new one and the making of the conversion decision is the moment that the movement takes place for the particular claimant concerned.  Thus the termination of the award must be the inevitable consequence of a conversion decision to the effect that the claimant’s existing award or awards do not qualify for conversion into an employment and support allowance.  There is therefore no value in there being an independent right of appeal against the termination; at that point there can be no question of the existing award continuing unless the conversion decision was invalid.  If the conversion decision is accepted as valid, the claimant may either seek an employment and support allowance by appealing against that decision or must look elsewhere for support (e.g., by claiming jobseeker’s allowance if eligible).  Any argument as to the validity of the conversion decision may be taken in an appeal against it. 


22. Thus, assuming that the background of the 1998 Act and thus the finality argument means that Schedule 4 of the 2007 Act must be read as requiring regulations made under paragraph 7(1) to be drafted so that a claimant who suffers a loss of benefit under the regulations has an effective right of appeal, the 2010 Regulations meet that requirement by providing for an appeal against a conversion decision even if there is no separate right of appeal against the termination of the existing award.  There is no need to read paragraph 7(1)(b) as necessarily requiring that regulations provide for a right of appeal against a termination as such.  Therefore, since the wording of regulation 15(1) and (2) of the 2010 Regulations falls within the literal scope of paragraph 7(1)(b) of Schedule 4 to the 2007 Act, those paragraphs are clearly valid even if there is no appeal against a termination.  The First-tier Tribunal’s decision to the contrary – and to the effect that the whole of the 2010 Regulations are therefore invalid – is wrong in law.


23. Towards the end of the hearing, counsel for the claimant submitted that, if the Secretary of State's appeal were to be allowed and the 2010 Regulations were to be held valid, it should be on the basis that the termination of an existing award under regulation 15(2) was to be understood as a form of supersession against which there was a right of appeal.  Reference was made to CJSA/2327/2001 (followed in R(JSA) 2/04), R(H) 4/08 and MC v Secretary of State for Work and Pensions (ESA) [2014] UKUT 125 (AAC); [2014] AACR 35, which are all cases in which a decision to end an award of benefit was found upon analysis to amount to a supersession under section 10 of the 1998 Act or an equivalent provision.  If the 2010 Regulations had not contained a right of appeal against a conversion decision, thus making an independent appeal against a termination unnecessary, we might have accepted that argument.  But as they do contain an entirely adequate right of appeal, the argument is not needed and is unsound because it would introduce an unnecessary complication into decision-making.




24. For the reasons we have given, the Secretary of State’s appeal against the decision of 11 December 2012 must be allowed.  However, as we have indicated, to preserve the finality of an existing decision subject to an existing right of appeal similar regulation-making powers or regulations might, in another context, be construed more narrowly or to a different effect than we have considered necessary or appropriate in the present case.


25. In the light of JM v Secretary of State for Work and Pensions (ESA) [2013] UKUT 234 (AAC), the question whether a valid notice was issued under regulation 4 of the 2010 Regulations, which the First-tier Tribunal had found it unnecessary to decide, is not pursued by the claimant. 


26. The parties agree that the case should be remitted to the First-tier Tribunal.  This involves the setting aside also of the decision of 4 September 2012.  It is submitted that that decision should be set aside because no reasons have been given for the decision and the information provided to the claimant did not alert him, as a litigant-in-person, to the need to ask for reasons for the decision of 4 September 2012 after the decision notice of 11 December 2012 had informed him that his appeal had been allowed, in order to protect his position should the Secretary of State appeal and be successful.  We see the force in that submission and accordingly set aside both decisions and remit the case to be re-decided by a differently-constituted panel of the First-tier Tribunal.






Mr Justice Charles

President of the UT(AAC)






Mark Rowland

Judge of the Upper Tribunal






K. Mullan

Judge of the Upper Tribunal



10 December 2014

(Signed on the original)

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