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Decision in brief

Tribunal erred in deciding claimant was not self-employed because his earnings were taxed under the PAYE system – that was not the correct test – the Social Security Benefit (Computation of Earnings) Regulations 1996 provide that an ‘employed earner’ is someone in gainful employment ‘under a contract of service’, and that ‘self-employed earner’ is a residual category (ie, someone who is in gainful employment ‘otherwise than as an employed earner’) – it was not open to the tribunal to decide that the claimant was neither an employed earner nor self-employed but instead a ‘worker’ – it was the contractual relationship that was key in deciding whether claimant was working under a ‘contract of service’ (and so an employee) or not

Decision in brief

Tribunal erred in holding that claimant could engage with others on basis of interactions with neighbours – tribunal adopted unduly narrow approach in failing to address whether the neighbours were already known to the claimant and how she would engage with people unknown to her – per HA v SSWP (PIP) [2018] UKUT 56 (AAC), tribunal must undertake a holistic assessment of ability to engage with others, considering a range of interactions and not limiting itself to those involving familiar persons

Decision in brief

Senior President of Tribunals has issued a Practice Statement requiring judges to make a record of proceedings and for tribunal to preserve it for a specified period – record of proceedings could, depending on facts, consist of multiple documents, such as an audio recording, judge’s notes and written reasons – but in this case, even all of that taken together did not adequately record the evidence taken and submissions made

Summary

In or around May 2019, the claimant received around £27,000 under an ACAS settlement of her employment tribunal proceedings. That comprised sums for loss of employment, statutory redundancy pay and for injury to feelings arising from alleged discrimination. Her claim for UC was refused. She was later told by the DWP that the refusal was for excess capital and so ‘your claim was closed’. In November 2020, she made a new claim for UC and declared that her capital was now at £10,700. She was awarded UC but with the capital leading to assumed income of £82.65 for each monthly assessment period. Following mandatory reconsideration, the claimant appealed, with her substantive argument that, as the capital was not taxable, it should be disregarded. The First-tier Tribunal dismissed the appeal, holding that the decision on the 2020 claim not to disregard any of the capital and apply the stated assumed income from it was correct. The claimant appealed, additionally arguing that the tribunal had failed to investigate the 2019 claim. 

Judge Wikeley dismissed the claimant’s further appeal, holding that the tribunal had made no material error of law. Regarding the capital, the tribunal had agreed with the decision maker that, on the relevant law (in particular, regulations 7 and Schedule 10 of the Universal Credit Regulations 2013, SI No.376), none of the compensation awarded in the ACAS settlement fell to be disregarded. The fact that it was not taxable was irrelevant under that legislation, and none of the disregards that were provided applied. The tribunal was correct. The payment for loss of employment did not fall to be disregarded under Schedule 10, and neither did the redundancy payment. Regulation 75 provided a disregard for compensation for ‘personal injury’, but that term had to be given its ordinary meaning and, as the tribunal had held, ‘damages paid to compensate injury to feelings is distinct from an award of damages for actual injury to physical or mental health (by way of, for instance psychiatric injury)’ (paragraph 27). 

The tribunal had erred regarding its approach to the 2019 claim. The tribunal had held that it had no jurisdiction regarding that as it found that the claimant had not made a claim then. In fact (as accepted by the Secretary of State before the Upper Tribunal), there was DWP correspondence on file which confirmed that a claim had been made in 2019 (and that the claimant’s 2020 mandatory reconsideration was treated as outside the absolute time limit regarding that). So, the tribunal had made a decision not supported by the evidence on that point and was in error. The correspondence showed the claimant was told that she was not entitled to UC and so her claim was ‘closed’. That was wrong as it was not a concept that appeared in the legislation and may have effectively denied the claimant a right of appeal in 2019. However, in this case, none of that rendered the tribunal’s error material to the outcome of the appeal. The tribunal had in any case made a ‘clear and indisputable’ finding of fact that the claimant had capital in excess of the UC capital limit of £16,000 in 2019 and so even if the DWP had followed the correct notification procedure and the claimant had applied in time for a mandatory reconsideration and then appealed, the outcome would have been no different (paragraph 24). 

Summary

The claimant appealed against a decision that, for the purposes of his universal credit (UC), he did not have limited capability for work-related activity, or limited capability for work. He opted to have his appeal determined on the papers. The First-tier Tribunal refused his appeal. The claimant appealed further, arguing that the tribunal had erred in making assumptions about the evidence, in particular that before getting a Blue Badge he must have been parking some distance away from the shop he normally used, and walking, and that therefore his evidence about his abilities was not credible. 

Judge Stout allowed the claimant’s further appeal and remitted the case to a fresh tribunal at an oral hearing. Firstly, the tribunal had erred in failing to give adequate reasons for its decision, as it simply stated that it had considered the relevant law and was satisfied that it had been able to proceed without an oral hearing. That was merely a statement of the rules rather than giving reasons, and so made the error identified by Judge Poynter in JP v SSWP [2011] UKUT 459 (AAC). 

Moreover, the tribunal also erred in failing to adjourn to an oral hearing, so he could respond to matters that fairness required would be put to him in such a hearing. In CC v SSWP (ESA) [2019] UKUT 14 (AAC), Judge Poole had held that in general matters natural justice did not require that matters of inference or credibility must be put to a claimant at an oral hearing. However, the caveat to that was that it would be contrary to natural justice if a case was decided on a basis which the claimant had no chance to address; so, if the matter was new and not foreshadowed in the papers, then specific matters may need to be put to the claimant for comment. Judge Stout considered that applied in the present case. The tribunal said the claimant had ‘considerably exaggerated’ his walking problems in part because of the assumptions it made about his abilities prior to getting his Blue Badge. But the tribunal had ‘just made an assumption about a matter that was not foreshadowed in the papers’ and which the claimant did not have a fair opportunity to address. Additionally, the tribunal had also inferred the claimant was exaggerating because he was not receiving the treatment it expected he would be receiving if his condition were as bad as he claimed. The risks of such an inference without further information had been pointed out by Judge Poynter in MM v SSWP (ESA) [2018] UKUT 446. In the present case, the judge again considered the tribunal had erred ‘...because it was unfair for the tribunal to draw the inferences it did...without giving the appellant an opportunity to respond to its concerns’ (paragraph 13).

Comment from CPAG

Making assumptions and drawing adverse inferences about a claimant’s evidence is especially problematic in the context of a determination on the papers, where there is no opportunity for discussion. For a wider discussion, see the article ‘You’re unbelievable! Tribunals and claimants’ in Bulletin 291 (December 2022).