[2023] UKUT 246 (AAC)

This appeal concerns the proper interpretation and application of Article 15(1)(b) of the SPO. The question is therefore whether the claimant’s “disablement is such as to render him incapable, and likely to remain permanently incapable, of following his regular occupation and incapable of following any other occupation with equivalent gross income which is suitable in his case taking into account his education, training and experience”.

The test under Article 15(1)(b) needs to be taken in stages. First, and indisputably, the claimant’s “disablement is such as to render him incapable, and likely to remain permanently incapable, of following his regular occupation” as a (Gunner) Private.

The question then is secondly whether, in the alternative, he is “incapable of following any other occupation with equivalent gross income which is suitable in his case taking into account his education, training and experience”. However, this is not a stand-alone requirement which can be applied in isolation. The qualifying test is governed by the opening phrase in Article 15(1)(b), namely that the individual’s “disablement is such as to render him incapable … (etc).” This requirement falls to be considered at two points in time, given the way the Tribunal approached the case. The first was at the date of claim in December 2020, when the claimant was being made redundant from his position as Concierge Team Leader. The second was in November 2021, when he took up his appointment as a Concierge with his new employer.

In the former instance the Tribunal found as a fact that the claimant was not made redundant from his previous position as Concierge Team Leader because of his accepted conditions (i.e. his disablement). Rather, he was made redundant as part of a cost-cutting exercise by his former employer. The claimant therefore ceased to be employed as a Concierge Team Leader for reasons not related to his disablement and the accepted conditions. The Tribunal was therefore correct to find (albeit it did so only by inference) that the claimant was not entitled to ALSO as from the date of claim in December 2020. At that point in time his “disablement was not such as to render him … incapable of following any other occupation with equivalent gross income which is suitable in his case taking into account his education, training and experience.” He could still do that job as a Concierge Team Leader – it was just that his former employer had decided to take steps to rein in its wage bill and so to dispense with his service.

What then of the latter point in time, namely in November 2021 when the claimant took up the job as Concierge with the new employer? Had anything changed? Clearly the claimant had spent nearly a year being unemployed and searching for a Concierge Team Leader role but unfortunately without any success. Clearly after such a period of time the claimant had taken the pragmatic and understandable decision to accept a post as a Concierge. Clearly his new salary in that role was less than the pay he would have received both as a Concierge Team Leader and as in his regular (service) occupation. However, equally clearly, nothing had changed in terms of the application of Article 15(1)(b) of the SPO. His disablement was not such as to render him incapable of following the occupation of Concierge Team Leader. He could still do that more senior job and would no doubt have snapped up such an appointment had a suitable vacancy arisen. It was the wider state of the labour market that rendered him incapable of following his preferred occupation, and not his disablement. Accordingly, the occupation of Concierge Team Leader remained “suitable in his case taking into account his education, training and experience”.

Thus, the focus of the language of Article 15(1)(b) is very much on the individual war pensioner and not on wider externalities. This is evident in at least two respects. First, as noted, under the SPO it is the disablement, the accepted conditions, which must render the claimant incapable of following a relevant occupation, and not the state of the labour market. Secondly, the test for such a relevant (civilian) occupation is whether it is “suitable in his case taking into account his education, training and experience”. Those latter three attributes are uniquely personal characteristics and cannot be extended to cover the state of the wider labour market. The test is therefore one which focusses on the individual’s reduced earning capacity as a result of service (see e.g. Secretary of State for Defence v DK [2009] UKUT 51 reported as R(AF) 4/09 at paragraph 24).

It follows that the Tribunal misdirected itself by posing the test in terms of whether the claimant had made a sensible and pragmatic decision to take up the Concierge appointment in November 2021 in the light of the prevailing labour market conditions. In its summary reasons, the Tribunal reasoned as follows: “The employment is appropriate [sic: what the Tribunal meant to say was ‘suitable’] taking into account his education, training and experience given the current economic climate and the period of time he attempted to find employment at his previous grade and remuneration.” The Tribunal should have ended that passage with “education, training and experience”. There was no warrant under the SPO for introducing the qualifying phrase starting with “given”. Those givens were obviously important in the real world, but they do not form part of the assessment process under Article 15(1) of the SPO.

It follows that the Tribunal erred in law in the two respects identified by the Secretary of State. First, it should have taken into account that the occupation of Concierge Team Leader was suitable for the purposes of Article 15(1)((b) of the SPO for the whole period in question. Second, the Tribunal was wrong to take into account the claimant’s new job as Concierge and its salary with effect from November 2021.

Finally, the Secretary of State has made reference at various stages in these proceedings to the Ministry of Defence’s policy and operational guidance to decision-makers on dealing with claims for ALSO. I have not relied on, or referred to, such guidance in this decision for the simple reason that it is just that, guidance. This appeal must be determined by reference to the law and not to the Secretary of State’s internal guidance, however helpful that is intended to be.

In conclusion, I am satisfied that the First-tier Tribunal erred in law for the reasons set out above. I therefore allow the Secretary of State’s appeal to the Upper Tribunal and set aside the Tribunal’s decision. This is not a case in which it is necessary to remit the appeal for re-hearing before a fresh Tribunal, as the material facts are not in dispute and the appeal does not require the specialist input of the medical member or service member who would sit on a first instance new panel. The re-made decision is that the claimant’s appeal to the First-tier Tribunal against the Secretary of State’s decision of 28 January 2022 is refused. This is because the claimant was not incapable of following an occupation with equivalent gross income to that of his regular service occupation. Accordingly, the claimant is not entitled to ALSO with effect from the date of claim on 23 December 2020 (or from 1 November 2021).

Although I do not need to rely on the point for my decision, I note that the construction of Article 15(1) of the SPO advanced above is consistent with the approach taken in relation to the equivalent allowance under the civilian industrial injuries scheme. That scheme used to have a special hardship allowance for individuals with reduced earning capacity (later replaced by reduced earnings allowance, itself since abolished for new claims). The case law of the Industrial Injuries Commissioners showed that special hardship allowance was not payable where a claimant’s failure to obtain employment was due to causes other than their loss of faculty, e.g. to “slackness of trade” (reported decision R(I) 29/53 at paragraph 7).