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Neutral Citation Number:
Reported Number: R(IS)5/95
File Number: CIS 181 1993
Appellant:
Respondent:
Judge/Commissioner: Judge J. Mesher
Date Of Decision: 20/04/1994
Date Added: 25/07/2002
Main Category: Remunerative work
Main Subcategory: Expectation of payment
Secondary Category:
Secondary Subcategory:
Notes: Remunerative work - director of limited company in financial difficulties - whether work done “in expectation of payment” The claimant was a director and an employee of a small private limited company. He stated that he had not been paid by the company since 6 April 1991 due to the company’s financial difficulties, but that he normally worked as an unpaid director for 30 hours per week trying to keep the business afloat. He claimed income support on 24 June 1991. The adjudication officer decided that he was not entitled to income support because he was engaged in remunerative work as defined in regulation 5(1) of the Income Support (General) Regulations 1987. The claimant appealed against the decision. Before the appeal was heard the claimant was awarded income support from 6 August 1991 on a claim made on 31 July 1991. On appeal the tribunal decided that the claimant was in remunerative work because he had worked in expectation of receiving income. The claimant appealed to the Commissioner. Held that: 1. the social security appeal tribunal has failed to deal with the whole of the period before it. The award of income support from 6 August 1991 operated to put a terminal date on the period in issue in the appeal. The social security appeal tribunal should have examined the evidence (for instance in the claim made on 31 July 1991) on his hours of work throughout the period in issue from 24 June 1991 to 5 August 1991 (para. 7); 2. the social security appeal tribunal had erred in identifying the claimant with the company. The claimant was an employee of the company which was a separate legal person. It was necessary to identify the capacity in which the claimant did any work, as employee or as director, and to ask whether the claimant had a realistic expectation of receiving payment in the relevant capacity week by week. It is enough that there is an expectation of payment in the future for the current week’s work. An expectation that payment will be made for work done in future weeks is not an expectation that payment will be made for work in the current week (para. 8); 3. in such circumstances, if a claimant is not excluded from entitlement to income support by reason of being in remunerative work, it should be asked whether regulation 42(6) of the Income Support (General) Regulations 1987 applies to deem the claimant to possess earnings for the work done for the company based on earnings in comparable employment. [Note: for the cases of sole traders and business partnerships see Chief Adjudication Officer v. Ellis (Court of Appeal, 15 February 1995) [now reported as R(IS) 22/95]].
Decision(s) to Download: Is05_95.doc Is05_95.doc