interpreted, mean that the calculation must be done in a particular way, that is what the law requires. The court does not belittle either the administrative inconvenience or the cost involved but the language of the regulations cannot be distorted to give effect to a design which may have proceeded on a basis which is wrong in law. Secondly, the existing regulations already contemplate manual intervention at some stages. Regulation 61 of the 2013 Regulations contemplates that there will be circumstances where the DWP cannot base a calculation on the information provided by the employers (for example, where the information is unlikely to be sufficiently accurate or timely). Then the DWP must calculate the person’s employed earnings using such information as the SoS thinks fit and that may involve treating a payment of employed earnings received in one assessment period as received in another. That indicates that there is no insurmountable problem in carrying out calculations, including calculations treating earned income received in one assessment period as being received in another assessment period. It may be that the number of instances where that will need to be done because of the problem which arises in this case will be greater than might otherwise have been anticipated by the DWP (although the DWP’s evidence is that it will be less than 1% of the UC caseload). Ultimately, however, the regulations properly interpreted require that exercise to be carried out and there is no insurmountable problem in doing so. Mr Brown also submitted that one purpose underlying the 2012 Act, and the 2013 Regulations, was to encourage changes in behaviour. He submitted that it would be open to the employees to ask their employers to alter the date or the method of paying salaries so that the problem with two months’ salaries being paid within one assessment period would not arise. That, it seems, is suggested as a reason why the interpretation of regulation 54 adopted by the DWP would not argument. First, the ultimate question is whether, on a proper interpretation, regulation 54 is to be interpreted in the way contended for by the DWP and, for the reasons given above, it does necessarily lead to problems. The High Court dismissed this
not. Secondly, in these cases, and more generally, it is the employer not the employee who determines the date and method of payment. It is difficult to see how it could be said that the regulations were drafted on the assumption that any problems would be resolved by claimants asking third party employers to alter their payroll systems. Thirdly, Ms Johnson, Ms Woods and Ms Stewart did ask their employers to change their pay arrangements and the employers declined. Fourthly, whilst it may be that UC was intended to contribute to changed behaviour patterns, those would appear to be connected, at best, with encouraging or facilitating work in particular as a means of enabling those on low incomes to move out of poverty. ... it is the employer not the employee who determines the date and method of payment... There is nothing to suggest that the behavioural changes envisaged included encouraging employees to request, and employers to make, changes to payroll arrangements. In any event, however desirable such behavioural changes may be (and that is a matter of policy for the executive and not a matter of law for the courts), there is no basis for inferring that the relevant regulations in this case were drafted on the assumption that such
changes would occur. The SoS must apply the legislation as it currently is and as correctly interpreted. The judgment In reaching judgment, the High Court considered the factual situation of each claimant, and the legal framework governing the calculation of the amount of UC, before analysing the proper interpretation of the regulations governing that calculation in these cases. On a proper interpretation of regulation 54 of the 2013 Regulations, read in context, the amount of the earned income of a claimant in respect of an assessment period is to be based on, but will not necessarily be the same as, the amount of earned income actually received in that assessment period. There will need to be an adjustment where, as in the present case, the claimant actually received two months’ salary in one assessment period but the combined salaries do not, in fact, constitute earned income in respect of the period of time included in that assessment period. The DWP, therefore, erred in treating the combined salary for those two months’ as earned income in respect of that assessment period for the purposes of calculating the amount of UC payable. The claims for judicial review succeed on that basis. Accordingly, it is unnecessary and inappropriate to address other grounds which do not arise on the correct interpretation of the legislation. The only other ground which it is necessary and appropriate to address (based on section 149 of the 2010 Act) is not made out on the facts of this case. o
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Issue 48 | March 2019
| Professional in Payroll, Pensions and Reward |
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