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Poundland Back-to-Work Scheme Unlawful

By Principal Lawyer, Employment & Partnership

The Court of Appeal ruled the back-to-work scheme unlawful in Poundland test case – Employment Solicitor Samantha Mangwana answers the questions the case raises.

1. Why was the back-to-work scheme unlawful?

Although the Court of Appeal said there was nothing wrong in principle with reforming Jobseeker's Allowance or withdrawing it if people failed to participate in back-to-work schemes, the problem was that the Government had gone beyond their powers here.  

The manner in which the Regulations were introduced by Iain Duncan-Smith in 2011 about the new back-to-work schemes fell short of the requirements for Parliamentary oversight that the Jobseekers Act 1995 sets out. Those strict requirements were in there for good reason, because of the consequences of serious personal hardship for people who stood to lose Jobseeker's Allowance. It was not enough simply to set up schemes on the Minister for Work and Pensions say-so.

2. What did the Court of Appeal rule this week?

The Court of Appeal's ruling was a departure from the decision of the Administrative Court which had criticised the 2011 Regulations, but did not rule they were unlawful. The Court of Appeal has now done so, and quashed them.

The three judges also agreed with the earlier decision that the individuals who had brought the case had not been properly informed about the rules of the back-to-work schemes and the implications for their benefits. Proper notices were not given, but worse, the information was misleading, and this was fundamentally unfair. For example, one individual had been told he could lose his benefit for up to 6 months, when in fact at that stage there was only a risk of losing 2 weeks benefit, so he was denied a proper choice. In situations where sanctions might be applied and benefits withdrawn, it was vital to be crystal clear about the circumstances.

3. What happens now?

The government has said that they were disappointed and surprised by the decision, and intend to appeal to the Supreme Court. If they do so, they will be seeking to overturn this decision on the basis that the 2011 Regulations were sufficiently detailed.

However, if matters are left as they stand, either if the Government do not appeal, or if they appeal and lose again, clearly they have a problem. The Courts have ruled that they got the law wrong, and the 2011 Regulations have been quashed. They can expect people who lost their jobseekers' allowance through sanctions under these schemes to seek to reclaim their benefits.

4. What's all this about slavery?

It had been argued that requiring people to work for free in order to get work experience under these schemes was 'forced labour' and contrary to basic human rights. The Court of Appeal completely dismissed this claim, and pointed to a ruling of the European Court of Human Rights when the argument had come up before. That had concerned a student lawyer in Belgium, who had to work pro bono. It was not contrary to his human rights because the scheme allowed him to gain useful training and professional experience. The idea behind the back-to-work schemes was to give jobseekers useful potential benefits to help them in the job market. Working for free could only be a breach of human rights if it was so excessive or disproportionate to this potential useful outcome.

5. How can a Court decide that the government is wrong like this? Isn't Parliament allowed to change the law to reform the welfare system?

Judicial review is part and parcel of the fabric of our democracy. Parliament is sovereign, and so our elected MPs can pass whatever legislation a majority vote in favour of. But that does not mean that government ministers or local authorities can do whatever they wish in the name of the law. Our courts are here to hold public authorities to account, and ensure they play by the rules which Parliament has set. Someone needs to watch over the watchers after all - unfettered power is a dangerous thing.

The Court of Appeal were very careful to emphasise that the case was not about the social, economic or political merits of the back-to-work schemes. Parliament is entitled to authorise schemes to assist the unemployed get jobs, including the use of sanctions where people forfeit their benefits if they refuse to participate without good reason. But that doesn't mean that proper processes can be ignored. Our system has checks and balances that are there to protect us. And it is the role of the courts to hold the Executive to account where they fall short of those strict requirements.

The current government has announced proposals that, if passed, will make it much harder to bring judicial reviews in future. It's easy to see why ministers might get annoyed with pesky courts getting in the way and telling them they can't do things when they get it wrong. But that's precisely why we have judicial review.  It's to promote better decision-making and better government. No shoddy schemes and regulations in this country - that's for tinpot dictatorships. We are entitled to demand the very highest standards of law and order.

Samantha Mangwana is an Employment Solicitor at Slater and Gordon Lawyers in London.

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