16 June, 2020 Open access
16 June, 2020 Open access
In a new judgment, the High Court has ruled that government decisions on the Coronavirus Job Retention Scheme and changes to statutory sick pay were not unlawful in relation to 'limb b workers'.
Introducing the Court's decision in Adiatu & Anor, R (On the Application Of) v Her Majesty's Treasury  EWHC 1554 (Admin) (15 June 2020), Lord Justice Bean and Mr Justice Cavanagh explain that -
'This claim for judicial review arises from the unprecedented circumstances arising from the COVID-19 or coronavirus pandemic, which at the time of the hearing before us had been the cause (or a cause) of the deaths of more than 40,000 people in the UK and many hundreds of thousands of people around the world. In particular it is brought in the interests of those workers whose incomes are seriously affected by stringent social distancing measures imposed by the Government, generally referred to as the "lockdown", which began in March 2020. The claim challenges certain decisions made by the Treasury in relation to the availability of support by way of statutory sick pay (SSP) and the Coronavirus Job Retention Scheme (JRS).' (paragraph 2)
The judges also highlight that Mr Adiatu - who is Nigerian and has leave to remain with the requirement that he has 'no recourse to public funds' - is a private hire driver for Uber, and that -
'His income decreased dramatically in March 2020 and he could not afford to pay for his private hire vehicle licence renewal in April 2020 so is now unable to work, and has fallen into rent arrears. He has a wife and four children aged from 7 months to 12 years, two in the UK and two in Egypt. In his first witness statement he understandably described his financial situation as 'dire and terrifying'. More recently he has received a payment under the Self-Employed Income Support Scheme, but the financial pressures on him remain severe.' (paragraph 4)
In addition, the judges explain that -
'Uber drivers such as Mr Adiatu were held by the Court of Appeal in Uber BV v Aslam  EWCA Civ 2748;  ICR 845, to be workers within the scope of s 230(3)(b) of the Employment Rights Act 1996 (though an appeal by Uber from that decision is shortly to be heard by the Supreme Court). Such workers occupy an intermediate status between those working under a contract of employment and the genuinely self-employed. The universal, if inelegant, abbreviation used by lawyers (and by the Government in some official documents) is 'limb b workers'.' (paragraph 6)
Before the High Court, Mr Adiatu, and another claimant who subsequently withdrew from the proceedings, submitted that the following decisions were unlawful -
The claimant also asked the court to grant a declaration that the decisions were unlawful -
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In relation to whether the decision to exclude limb b workers from the JRS was unlawful, Lord Justice Bean and Mr Justice Cavanagh highlight that the scheme is only available to those who are paid by PAYE and that, as a result, it excludes many limb b workers.
Going on to consider whether the decision was in breach of the Human Rights Act 1998, the judges find that the situations of limb b workers who are outside the PAYE system and employees or other workers who are within it are analogous to some extent for the purposes of Article 14. However, they go on to say that -
'The real question in our view is whether, to the extent that the situations of the two groups are analogous in the context of the JRS, the difference in their treatment is justified.' (paragraph 52)
Having considered that question, the judges find that -
'The JRS is a taxpayer-funded employment support programme on a vast scale, created in circumstances of the utmost urgency to provide help to millions of furloughed employees by seeking to preserve their jobs at least during the worst of the crisis. The Defendant was entitled to take the view that any system which took months to establish would be almost useless, and a system which involved officials making rapid decisions in very large numbers of individual cases while minimising fraud would be impracticable.' (paragraph 81)
As a result, the judges conclude that -
'... we are satisfied that as a matter of law, in particular under Article 14 and A1/P1 of the ECHR, and applying the test of a wide margin of discretion, the decision to confine the JRS to employees and other workers within the PAYE system was plainly justified.' (paragraph 82)
Turning to the decision to exclude limb b workers from SSP, the judges find that the situations of limb b workers who are outside the PAYE system and employees or other workers who are within it are more analogous in the context of SSP during the pandemic than in the context of the JRS. However, the judges go on to find that the difference in treatment between the two groups was justified for reasons including that -
'The additional costs for employers, and for government, of extending SSP in this way would have been very significant. It was not practicable to extend SSP to all limb b workers in a speedy or sudden manner. It would have required a fundamental rewrite of the SSP system at a time when the scale of the problem combined with the urgency of the crisis required a bright line solution. Limb b workers who were not on PAYE would not be on payroll systems which could be used to calculate and then pay SSP. There was no readily available information which could be used to determine whether a person was a limb b worker, rather than a different type of self-employed person or a small business, and it was not sensible, or even possible, to adopt a new criterion for entitlement on no notice in the middle of a pandemic.' (paragraph 99)
In relation to the EU law challenges, the judges note the claimants' submissions that -
However, having set out a detailed consideration of these submissions - and the justification for the measures advanced by the government - the judges reject all of the EU law challenges, finding instead that -
'The aims of the measures under challenge were legitimate, since they were rational and were all directed towards providing assistance to employers and employees in response to the crisis, and the means adopted were appropriate to achieve the aims that were selected.' (paragraph 193)
In relation to the argument that the government had failed in its public sector equality duty (PSED) duty in making the SSP changes, the judges highlight that a change to the LEL could only be made through primary legislation and find that, as a result, the PSED challenge in relation to the LEL fail because the PSED does not apply to changes that would have to be made in primary legislation.
In addition, having considered evidence including two Equality Impact Assessments on the SSP changes, the judges say that it is clear that the government had in mind the particular vulnerability of women and BAME workers, amongst others, because they are more likely to be lowly paid and vulnerable to income loss, and that -
'Applying a realistic and proportionate approach to evidence of compliance, and bearing in mind, in particular, the extreme urgency with which the Defendant had to act in response to the pandemic, we take the view that there has been compliance with the PSED in relation to the changes to SSP. Even if we are wrong that the PSED challenge to the LEL cannot proceed because it would require a change to primary legislation, therefore, the challenge would fail in any event on the merits.' (paragraph 258)
Similarly, the judges find that evidence including ministerial submissions to the Chancellor on the JRS demonstrates that the government had sufficient regard to equalities issues in relation to the JRS to satisfy its obligation under section 149 of the Equality Act 2010.
In conclusion, the judges say that -
'We grant permission to the claimants to apply for judicial review in the light of the public importance of the issues raised but, for the reasons set out above, we dismiss the application for judicial review.' (paragraph 265)