Banks and Stafford v Chief Adjudication Officer
House of Lords June 2001
UNISON's test case on whether term-time only workers are entitled to claim job seekers' allowance has unfortunately been rejected by the House of Lords. However, the House of Lords emphasise the extreme financial hardship this conclusion entails for term-time workers and increases the pressure for amendments to the social security legislation.
Mr Banks and Mr Stafford were special needs assistants working term-time only. With UNISON's support, they claimed that they should be entitled to claim job seekers' allowance during school holidays. The Doncaster Social Security Appeal Tribunal refused their claims, as did the Court of Appeal. They both appealed to the House of Lords.
Under section 124(1) of the Social Security Contributions and Benefits Act 1992, Mr Banks was entitled to claim job seekers allowance if:
(i) he had no income or his income did not exceed "the applicable amount"
(ii) he was not engaged in "remunerative work" and
(iii) except in certain circumstances-
(a) he was available for, and actively seeking, employment.
It was accepted that Mr Banks qualified under (i) and (iii). The issue was therefore whether or not he was engaged in "remunerative work".
Regulation 5, as amended of the Income Support (General) Regulations 1987 and Regulation 53 of the Jobseeker's Allowance Regulations 1996 define the circumstances in which someone like Mr Banks is to be regarded as engaged in "remunerative work". If Mr Banks was employed for an average of at least sixteen hours per week, then he would be treated as engaged in remunerative work. For this purpose, the whole school year had to be looked at as a "recognisable cycle of work". School holiday periods, however, had to be discounted.
Unison argued that Mr Banks could only be treated as engaged in "remunerative work" when he was actually working and that the definitions in the 1987 and 1996 regulations did not mean that he was necessarily to be treated as engaged in "remunerative employment" throughout the whole calendar year.
The House of Lords disagreed. It found that Mr Banks was to be treated as engaged in "remunerative employment" throughout the "recognisable cycle of work" Ð ie the calendar year. This meant that he could not treat the school holidays differently, and he could not satisfy criterion (iii) set out above. His appeal therefore failed on a majority decision.
Although finding against Mr Banks, each of the Law Lords questioned whether this result was socially desirable, effectively inviting the Department of Social Security to change the law. Lord Scott, dissenting, thought that Mr Banks' appeal should succeed. He said that Mr Banks' annual income of £3,367 was "surely below poverty level", and recognised that he had little prospect of supplementing his income when he would only be available for other work during the school holidays. This was a "poverty trap sequence that the Social Security Act 1986 was intended to cure".
The Department of Social Security must now to remedy this longstanding injustice in the social security system.