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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Secretary Of State For Social Security v Walter [2001] EWCA Civ 1913 (6 December 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1913.html Cite as: [2002] ICR 540, [2002] ELR 296, [2002] 1 CMLR 27, [2001] EWCA Civ 1913

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY
COMMISSIONER

		Royal Courts of Justice Strand, London, WC2A 2LL Thursday 6 December 2001

LORD JUSTICE KEENE:

1. This appeal raises two issues concerning the Jobseeker's Allowance Regulations 1996 ("the Regulations"). First, do the Regulations discriminate on grounds of sex? Secondly, if they do, is such discrimination objectively justified? The appeal is brought by the Secretary of State for Social Security against a decision of the Social Security Commissioner dated 23 August 2000, whereby he decided that the Regulations discriminated against pregnant students in an unjustified way, and that to that extent they were in breach of the European Directive 79/7/EEC. The Commissioner remitted the case for the Tribunal to consider whether the respondent's status as a "student" for jobseeker's allowance purposes but not for university purposes came about solely because she was at that time pregnant.
2. Ms Walter began a full-time degree course at what is now Cardiff University in September 1995. She was in full-time attendance until the end of October 1997, part way through the 1997-1998 academic year. She requested and was granted leave of absence by the University with effect from 1 November 1997 for the rest of that academic year and for the year 1998-1999. She sought that leave of absence because she was pregnant, although the letter granting leave does not state the reason for which it was granted. She was expected to return to the university to resume her studies in September 1999, to complete her third year. The letter from the University Registry makes it clear that she would not be regarded as a registered student during her leave of absence.
3. Ms Walter's evidence was that her expected date of confinement had been 28 May 1998, which would have meant that she would have been sitting her final examinations in the last stages of her pregnancy. That was why she sought leave of absence. She had at that time passed at least half of the necessary examinations to obtain her degree and she did not wish to lose that advantage by giving up her studies permanently. She then went to live with her parents. They were unemployed and her father was ill. She applied for work locally but could not find any. She had no means and so she applied for jobseeker's allowance, with effect from 11 November 1997. She was refused that benefit on the ground that she was a "full-time student" according to the definition used in the Regulations, which meant that she was regarded as not available for employment. She was subsequently refused income support, council tax benefit and maternity allowance until the day her son was born, which was on 6 June 1998. It is clear from her submissions to the Social Security Commissioner that she had not been sure whether she would ever complete the course at Cardiff University or, if she did, whether it would be as a full-time or part-time student.
4. The jobseeker's allowance was introduced by the Jobseekers Act 1995. The allowance is only payable if certain conditions are met. By section 1(2), a claimant is entitled to such an allowance if he or she:

"(a) is available for employment;

(b) has entered into a jobseeker's agreement which remains in force;

(c) is actively seeking employment;

(d) satisfies either –

(i) the conditions set out in section 2; or

(ii) the conditions set out in section 3;

(e) is not engaged in remunerative work;

(f) is capable of work;

(g) is not receiving relevant education;

(h) is under pensionable age; and

(i) is in Great Britain."

5. The conditions referred to in paragraph (d) are ones which distinguish between a contribution-based jobseeker's allowance and an income-based one. It was the latter which Ms. Walter was seeking. Before the Commissioner an important issue was whether the income-based jobseeker's allowance fell within the scope of Directive 79/7/EEC, but since then this court has held in Hockenjos v. Security of State for Social Security [2001] EWCA Civ 624 that it does. That issue therefore no longer arises.
6. There is no doubt that under the Regulations Ms. Walter is not entitled to jobseeker's allowance. There is no issue on that point. That is because regulation 15 provides that a person shall not be regarded as available for employment -

"if he is a full-time student during the period of study ………"

"Full-time student" is defined by regulation 1(3) so as to include a person aged 19 or over (which Ms. Walter was) attending a full-time "course of study" of certain types, including such a course as she had been attending. The same regulation defines "course of study". It provides:

"for the purposes of this definition a person who has started a course of study shall be treated as attending or undertaking it …. until the last day of the course or such earlier date as he abandoned it or is dismissed from it."

"Period of study" is defined by regulation 4 in similar terms. Consequently, any student who takes leave of absence from his or her studies for any reason will not be entitled to claim jobseeker's allowance. Yet at the same time the "intercalating" student who has interrupted his or her studies in this way is not entitled to a mandatory or discretionary student grant, or a student loan, during the period of intercalation. The difficulties thereby created for certain groups, such as those with caring responsibilities or suffering bereavement, as well as those who take leave of absence because of pregnancy, have been the subject of critical comment by the Social Security Advisory Committee in its report to the Secretary of State dated 7 May 1998. Nonetheless, a challenge on the ground of irrationality to earlier similar regulations dealing with income support failed in O'Connor v. Chief Adjudication Officer [1999] 1 FLR 1200. Auld LJ commented at p. 1214 F that:

"the fact that the general policy may produce hardship in individual cases does not make it or the subsidiary legislation implementing it irrational. More specifically, simply because there may be a powerful or sympathetic case for inclusion in the system of social security benefits for full-time students whose courses are interrupted for one reason or another short of illness, and for full inclusion in the case of illness, does not make it irrational to exclude them."

7. Swinton Thomas LJ at p. 1220A said of the regulation that:

"It may be shown to be unfair but, in my view, it cannot possibly be stigmatised as being irrational."

8. Ms. Walter did not seek to challenge the Regulations on the basis that they were irrational but did so on the basis that they were discriminatory on grounds of sex. It was and is said that they are directly discriminatory against pregnant women and so against women generally, contrary to Directive 79/7/EEC. That contention was accepted by the Social Security Commissioner, Mr Commissioner David Williams. He proceeded on the basis that the Directive was by then of direct effect and therefore had to be applied in preference to the domestic law Regulations insofar as the latter did not comply with the Directive. In itself that approach is not in dispute. What is in issue is whether there is any breach of the Directive.
9. Council Directive 79/7/EEC of 19 December 1978 states in Article 1 that:

"The purpose of this Directive is the progressive implementation, in the field of social security and other elements of social protection provided for in Article 3, of the principle of equal treatment for men and women in matters of social security, hereinafter referred to as "the principle of equal treatment"."

10. Article 3 provides that the Directive applies to statutory schemes providing protection against the risks of sickness, invalidity, old age, accidents at work and occupational diseases, and unemployment, and to social assistance insofar as it is intended to supplement or replace those statutory schemes.
11. Article 4 defines "the principle of equal treatment" as follows:

"1. The principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:

- the scope of the schemes and the conditions of access thereto;

- the obligation to contribute and the calculation of contributions;

- the calculation of benefits including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits.

2. The principle of equal treatment shall be without prejudice to the provisions relating to the protection of women on the grounds of maternity."

12. The Social Security Commissioner based his decisions principally on the reasoning of the European Court of Justice in Webb v. EMO Air Cargo (UK) Ltd [1994] 2 CMLR 729. He took as his starting point the propositions that the position of men and women cannot be identical with regard to pregnancy and that "if it can be shown that an individual is subject to discrimination, that is, she is treated differently in some way because she is pregnant, then that is a breach of the principle of equal treatment". He noted that Ms. Walter stopped actively being a student only because she was pregnant, a position in which a male student could not find himself. So she faced the choice of abandoning her studies and obtaining benefit or continuing with those studies in due course and in the meantime having no entitlement to benefit under the Regulations. Such a choice was not faced by a man. Insofar as the Regulations treated a pregnant woman in the same way as a male, without making special provision for the case of the pregnant student, then they were discriminatory on the grounds of sex.
13. The Commissioner considered whether such discrimination could be justified because the Regulations reflected a legitimate social policy aim, were appropriate to achieve that aim and were necessary to do so. That approach was derived from the European Court's decision in Nolte [1995] ECR 1-4625. He took into account a policy statement by the Secretary of State to the Social Security Advisory Committee on 6 March 1998 which, amongst other things, spelt out the government's view that the primary source of financial support for higher education students should be the student loan/grant system, rather than the social security system, that students have a responsibility to make proper progress on their course and that if they take a year off "they are expected to support themselves, usually by obtaining temporary work."
14. The Commissioner concluded that the policy was a legitimate one and that it was not for him to say that the treatment of pregnant students by the Regulations was appropriate or not. But he found that it had not been shown that it was necessary to discriminate against pregnant students in the way he had identified.
15. That decision is now challenged by the Secretary of State. On his behalf, Mr Paines, QC, emphasises that the Regulations contain no explicit discrimination against pregnant women. Regulation 15(a) simply excludes full-time students from entitlement to jobseeker's allowance and is applicable to men and women alike. The same is true of the Regulations as a whole. Nor is it being alleged by the respondent that the Regulations are indirectly discriminatory by having a disproportionate effect on women in the way the Regulations operate in practice. The claim is one of direct discrimination, yet Ms. Walter was not treated differently by the Regulations when she became pregnant. She was ineligible for jobseeker's allowance before she became pregnant, because she was a student, and she remained in the same situation after she became pregnant. It was her status as a student which at all times disentitled her to the allowance.
16. It is further submitted on behalf of the Secretary of State that the decision of the European Court in Webb does not establish that any detriment experienced by a pregnant woman as a consequence of pregnancy automatically amounts to discrimination. Even in the workplace situation, European law does not protect pregnant women from all the consequences of pregnancy, as one can see from Handels-og Kontorfunktionaerernes Forbund v. Dansk Arbejdsgiverforening [1990] ECR 1-3979 (the Hertz case) and Gillespie v. Northern Health and Social Services Board [1996] ECR 1 at 475. So it would be wrong to find in European law any universal principle that pregnant women should be protected against any detriment.
17. As for justification, Mr Paines argues that the Commissioner's reasoning that it was unnecessary to include pregnant students in the policy could be applied to any category of ineligible students. Moreover, the decision in Nolte shows that it is for the legislature to decide whether the subordinate legislation was necessary and that the decision should not be interfered with if the legislature was reasonably entitled so to decide.
18. For the respondent, Mr Drabble QC adopts the reasoning of the Commissioner. He stresses that his client took leave of absence because of her pregnancy. Until then she enjoyed financial support as a student, but upon becoming pregnant and taking leave of absence that ceased. Yet she was prevented by the Regulations from accessing social security benefit in the form of income-based jobseeker's allowance, the basic safety net in society. She was faced with a choice between obtaining such benefit and not abandoning her course. As a result of her pregnancy, she suffered a clear detriment.
19. It is submitted that Webb shows that pregnancy is to be treated as a unique situation, where there can be no male comparator. To cause pregnant women detriment is itself discriminatory. The approach in European law is to protect pregnant women, because that is a broad policy aim: see Gillespie, para. 20. Their situation cannot be compared with that of male students taking leave of absence for reasons other than pregnancy.
20. Mr Drabble argues that, since this is a case of direct discrimination, it is not possible to seek to justify it. In any event, there would be no difficulty in exempting pregnant students from the harsh consequences of the Regulations, and it follows that their inclusion cannot be seen as necessary.
21. I propose to consider first the issue of whether the Regulations are directly discriminatory on grounds of sex, because of the way in which they treat pregnant women. The starting point must be the fact that the Regulations make no express distinction between men and women, nor do they seek to deal with whether a woman is pregnant or not. They contain no reference of that kind. What they do is to define student status in such a way that any full-time student who interrupts his or her course is deemed to remain a student, and so is ineligible for jobseeker's allowance "until the last day of the course or such earlier date as he abandoned it or is dismissed from it."
22. There may, of course, be many reasons why male and female students obtain leave of absence from their course, quite apart from pregnancy. Indeed, a female student who becomes pregnant may not need to take leave of absence at all, depending on her anticipated date of confinement and the dates of her academic terms and vacations. I do see considerable force in Mr Paines' submission that the respondent's ineligibility for jobseeker's allowance derived from the fact that she was a student, not from the fact that she was pregnant. She was not eligible before she became pregnant and she remained not eligible when she became pregnant. That ineligibility did not even relate to her taking leave of absence. It derived from her status as a student and her leave of absence did not alter the position. That can be illustrated by the fact that a pregnant non-student is not prevented (subject to meeting the other qualifications) from claiming the benefit, while conversely a student could not claim, whether pregnant or not. It is therefore difficult to identify the breach of the principle of equal treatment as defined by the Commissioner in this case, namely treating a person differently in some way because she is pregnant.
23. Many of the cases relied on in argument dealt with the field of employment. Those are certainly not irrelevant, since both Directive 79/7/EEC and the Directive dealing with equal treatment as regards employment, Directive 76/207/EEC, seek to implement "the principle of equal treatment". But particular assistance may be found on the present issue from the European Court's decisions in Nolte, since that was expressly dealing with Directive 79/7/EEC and with equal treatment in matters of social security. That was a case where the issue was whether a provision excluding employees working normally less than 15 hours per week, described as being in "minor employment", from a statutory old-age insurance scheme entailed discrimination on grounds of sex contrary to Article 4(1) of the Directive if considerably more women than men were thereby affected. The Court said this at para. 27 of its judgment:

"It is common ground that the national provisions at issue in the main proceedings are not directly discriminatory, since they do not exclude persons in minor employment from the statutory scheme at issue on the ground of their sex. It must therefore be considered whether such provisions may constitute indirect discrimination."

24. I refer to that passage, because although the point that the material provisions were not directly discriminatory was common ground, the Court appears to have agreed. In so doing, it was following the approach of Advocate-General Leger at para. 20 of his Opinion. Likewise the Regulations with which this appeal is concerned do not exclude pregnant women from entitlement to jobseeker's allowance. It might be that evidence could be produced to demonstrate that the Regulations have a disproportionate effect on women and that they are therefore indirectly discriminatory. But that is not what has been contended for in this appeal. Ms. Walter's case has been that the Regulations are directly discriminatory. I find that difficult to accept.
25. In the case of Dekker [1990] ECR 1-3941, the European Court in an employment case said this at para. 17:

"It should be stressed that the reply to the question whether the refusal to employ a woman constitutes direct or indirect discrimination depends on the reason for that refusal. If that reason is to be found in the fact that the person concerned is pregnant, then the decision is directly linked to the sex of the candidate."

26. Yet in the present case the refusal of jobseeker's allowance was not based on the respondent's pregnancy. If she had continued as an unpregnant student the allowance would still have been refused, and likewise pregnant women generally are not ineligible for the allowance. The reasoning in Dekker reinforces the view that the Regulations do not directly discriminate.
27. There is no doubt that, where a pregnant student obtains leave of absence, the effect of the Regulations is to prolong her student status, assuming that in due course she returns to her studies. While on leave of absence, she is placed in a difficult financial situation, as are a number of other categories of students who, for one reason or another, interrupt their studies, sometimes with little or no choice in the matter. The harshness of their financial plight can only evoke sympathy. Does the fact that a pregnant woman on leave of absence from her studies is placed in such a situation render the Regulations discriminatory?
28. The respondent contends that it does, on the basis that she is suffering detriment as a result of her pregnancy. The foundation stone of that argument is the European Court's decision in Webb. There Mrs Webb had been engaged by a company to replace someone who was going on maternity leave. Mrs Webb shortly thereafter discovered that she was pregnant, and her employer then dismissed her because of her pregnancy. The Court had already made it clear in earlier decisions, including the Hertz case, that dismissal on account of pregnancy constitutes direct discrimination on grounds of sex. In Webb it rejected the argument that the termination of her employment could be justified because she would be unable to perform the work for which she had been engaged. In this connection the Court attached weight to the fact that Mrs Webb had been engaged for an indefinite period, whereas her inability to perform the work in question was temporary: see para. 27.
29. In the course of its judgment, the Court referred to the harmful effects which the risk of dismissal might have on the physical and mental state of pregnant women (para. 21) and rejected any attempt to compare the situation of a pregnant employee with that of a male employee unavailable for work because of illness. In effect the Court took the view that there could not be a male comparator. But since only a woman could become pregnant, it followed that, if she was dismissed because of her pregnancy, that in itself was discrimination on grounds of sex.
30. Undoubtedly European law does seek to protect in general terms the position of pregnant women, especially in the area of employment. But it is an over-simplification to assert that for a pregnant woman to suffer any detriment connected with her condition amounts to discrimination. When Mrs Webb's case came back to the House of Lords, Webb v. EMO Air Cargo (No. 2) [1995] 1 WLR 1454, Lord Keith of Kinkel in the leading speech noted that the European Court had emphasised the indefinite duration of Mrs Webb's contract: page 1458H. It is clear that the House took the view that that was a different situation from one where a woman's pregnancy meant that she would be unavailable for the whole of the work for which she had been engaged: see, in particular, page 1459D.
31. Similarly, the European Court in Hertz did not regard it as contrary to the principle of equal treatment to dismiss a woman as a result of absences from work due to illness attributable to pregnancy or confinement, if the illness manifested itself after maternity leave. In both these cases, therefore, it seems to have been accepted that a woman could experience some form of disadvantage as a result of her pregnancy without that amounting to discrimination. The same is true where one is concerned with the issue of equal pay under Directive 75/117/EEC. In Gillespie the European Court held that the principle of equal pay for men and women did not require that women should continue to receive full pay during maternity leave, so long as the amount paid was not so low as to undermine the purpose of maternity leave, namely the protection of women before and after giving birth: see para. 20.
32. One also needs to bear in mind the decision of the Court of Appeal in R v. South Bank University, ex parte Coggeran [2000] 1CR 1342. There a University had required a female student to withdraw from a course because of her non-attendance which was caused by pregnancy-related illness. This court emphasised that one could not simply transpose rulings from employment cases to the field of education: para. 30.
33. Overall, therefore, it is impossible to find any principle of European law that any detriment suffered by a pregnant woman gives rise to discrimination. In the present case, the Regulations do mean that Ms Walter was faced with a difficult choice, in effect between obtaining jobseeker's allowance or keeping her degree course alive while on leave of absence. That was a detriment which she suffered. But her position was not one which deprived her of benefit while pregnant: she could claim jobseeker's allowance even though pregnant. What she could not do was to obtain benefit while still retaining her student status. She could therefore still obtain financial support from the state during her pregnancy. It is well established that Member States have a margin of discretion as to the social measures they adopt to provide protection for women during pregnancy and maternity: see Hofmann v. Barmer Ersatzkasse [1984] ECR 3047, para. 27. One may well feel that it is harsh that any student, male or female, who seeks leave of absence because of bereavement, caring responsibilities or other personal problems, is faced with the choice between obtaining benefit and being able to return to his or her course, and the same may be felt about someone in Ms. Walter's position. But I cannot see that her situation renders discriminatory Regulations which on the face of them are not discriminatory. Nor do they deprive a pregnant woman of the right to benefit.
34. Mr Drabble's argument seeks to stretch the significance of Webb well beyond the limit to which it can properly extend. I conclude that the Regulations are not directly discriminatory against pregnant women or against women generally and are not, for that reason, in breach of the Directive 79/7/EEC. Whether they may indirectly discriminate is not an issue raised in this appeal.
35. In those circumstances it is unnecessary to go on to consider whether, if they were discriminatory, such discrimination could be justified. I have some doubt as to whether there could be such justification, but that would depend, in part at least, on the discrimination established. Given the conclusion to which I have come on the first issue in this appeal, it would be inappropriate to express any firm view on that second issue.
36. I would allow this appeal and set aside the order of the Social Security Commissioner.

LORD JUSTICE ROBERT WALKER:

37. I have had the advantage of reading in draft the judgments of Peter Gibson and Keene LJJ and I agree with both of them.
38. The essential point can be put, as both my lords recognise, as an issue of causation (see the judgment of the Court of Justice in Dekker [1990] ECR I-3941 at paragraphs 10-17). The reason why the respondent was not entitled to jobseeker's allowance was that she was a student. The reason why she was treated as a student, even during a lengthy leave of absence from college, was because of the definitions of "full-time student" and "course of study" in the regulations. These definitions reflect a policy, deliberately adopted by Government, which is capable of causing hardship to intercalating students, male or female, in difficult personal circumstances of various sorts. The reason why the respondent had sought and obtained leave of absence from college was her pregnancy and the fact that her expected date of confinement was close to the time of her final examinations. That was not a sufficiently close causal link to make her position, unfortunate though it was, amount to discrimination on the grounds of sex.
39. I would therefore allow the appeal.

LORD JUTSICE PETER GIBSON:

40. I also agree, but differing as we are from the conclusion reached by the Commissioner in a full and carefully reasoned decision, and in deference to the skilful and attractive argument of Mr Richard Drabble Q.C. for the Respondent, I add a few words of my own.
41. The question which arises is whether the Job-Seeker's Allowance Regulations 1996 are discriminatory on the grounds of sex in respect of intercalating students. More specifically the question is directed to whether the Regulations are so discriminating in respect of a female intercalating student, who is pregnant, during the period of her pregnancy. It is in that period that the student who is disentitled from obtaining the Allowance can obtain no other state benefit. Once the baby is born other benefit becomes payable. If the student abandons her status as a student, then she can obtain the Allowance (provided that the other conditions for eligibility are satisfied).
42. At first blush it is hard to see how the Regulations can be said to be discriminating. The disentitlement to the Allowance stems not from pregnancy but from her status as a student. Every student, and in particular every intercalating student, is not entitled to the Allowance, and the pregnancy makes no difference to that fact. Pregnant students are treated in the same way under the Regulations as any other student.
43. The Commissioner assumed what is likely to be factually correct that it was because of her pregnancy that Ms. Walter stopped actively being a student and, being unwilling to abandon her degree, became an intercalating student, but it requires much creative and, I have to say, impermissible reasoning to treat the pregnancy as the cause of the denial of the Allowance.
44. I do not think that the decision in Webb v EMO Air Cargo (UK) Ltd. [1994] QB 718 is of direct assistance. True it is that the European Court of Justice in that case recognised the special quality of the condition of pregnancy as being applicable to women alone and held that no other conditions which may keep men away from work temporarily, such as illness, can be treated as valid comparisons. But in Webb the female employee was treated adversely by being dismissed by reason of her pregnancy. In the present case Ms. Walter has not been treated adversely by reason of her pregnancy. Furthermore the European Court placed some emphasis on the fact that in Webb the female employee was employed for an unlimited term and the pregnancy would only keep her away from work temporarily. It does not follow that pregnancy could not be a valid reason for dismissal of an employee employed to work for a limited period which the pregnancy prevented the employee from performing. The Commissioner expressed himself too broadly in para. 34 of his decision when saying:

"If it can be shown that an individual is subject to discrimination, that is, she is treated differently in some way because she is pregnant, then that is a breach of the principle of equal treatment."

45. The true basis for the Commissioner's decision is in para. 39:

"If the Secretary of State treats her in the same way as a male, without making special provision for the case of the pregnant student, then he is discriminating against pregnant women, and therefore discriminating against women in general." (My emphasis).

46. The complaint is therefore not that the Regulations are discriminating but that they do not discriminate in favour of pregnant women. That, however, is a complaint about the policy.
47. For my part I have every sympathy with that complaint. To me it is quite extraordinary that the Secretary of State has adhered to a policy which leaves intercalating students like Ms. Walter without benefit regardless of their financial circumstances and their willingness to work. Criticisms of the rigidity of the policy were contained in the report dated 7 May 1998 of the Social Security Advisory Committee, but Government has yet to be persuaded. That, however, is not the issue for this court.
48. With considerable regret therefore, for the reasons which I have given as well as for the reasons given by Keene L.J., I too would allow this appeal.
Order: Appeal allowed. No Order for costs. Public funding assessment of Appellant's costs. Permission to appeal to the House of Lords refused. (Order does not form part of the approved judgment)