Sharda Sobhy v The Chief Appeals Officer, Minster for Employment Affairs and Social Protection, Ireland and The Attorney General

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 16 December 2021
• Neutral Citation: [2021] IESC 81
• Court: Supreme Court
• Docket Number: S:AP:IE:2021:000025

Between/

Sharda Sobhy

Respondent/Applicant

and

The Chief Appeals Officer, Minster for Employment Affairs and Social Protection, Ireland and The Attorney General

Appellants/Respondents

and

Irish Human Rights and Equality Commission

Notice Party

[2021] IESC 81

O'Donnell C.J.

MacMenamin J.

Dunne J.

O'Malley J.

Baker J.

S:AP:IE:2021:000025

High Court Record No. 2020/335 JR

THE SUPREME COURT

Social welfare – Benefits – Accrual – Whether person making contributions but without permission to be in State can accrue - Employment Permits Act 2003 - Immigration Act 2004 - Social Welfare Consolidation Act 2005

Facts: The respondent was a national of Mauritius who had overstayed her initial permission to remain in the State. She had undertaken paid employment as a chef, albeit without the benefit of a work permit. Subsequently, she was granted permission to remain and work in the State. The respondent’s later application for maternity benefit had been refused on the basis her contributions during her illegal period of employment did not afford her an entitlement to social welfare payments. The High Court had granted an order of certiorari, which was now appealed by the first and other State appellants.

Held, having considered the statutory provisions and the jurisprudence cited, that the appeal would be allowed. Whilst the respondent and her employer were entitled to a refund of their respective contributions, the relevant statutory provisions made clear that illegal employment did not qualify under the social welfare code.

Ms. Justice Baker gave the judgment in the matter in which all the other Judges concurred. Quinn v IBRC [2015] IESC 29, [2016] 1 IR 1 considered.

Judgment of Ms. Justice Baker delivered on the 16 ^th day of December, 2021

1 . This appeal raises the net question of law of whether social welfare benefits under the Social Welfare Consolidation Act 2005 (“the Act of 2005”) can accrue to a person who makes the relevant statutory contributions, but who does not have a work permit or permission to be in the State.

2 . While in essence the question is a net one, it does raise the rather more complex issue as to whether or not there is any interplay between the common law doctrine of illegality as set out in Quinn v. IBRC [2015] IESC 29, [2016] 1 I.R. 1 and its effect on the correct interpretation of the statutory scheme.

3 . This appeal has potentially far-reaching consequences as to the entitlement of individuals to benefits under social welfare legislation in circumstances where they have paid PAYE and PRSI, but did not work with the correct authorisation.

Background facts

4 . The respondent, Ms. Sharda Sobhy is a national of Mauritius who arrived in Ireland on 5 March 2008 under a scheme designed to attract foreign students, and she studied and worked here lawfully until 2012. A change in the scheme under which she was present in the State required that she apply for a change of status, but her two applications to be allowed to remain were unsuccessful. She remained, and continued to work in Ireland as a chef, but without a work permit. For the purposes of the present appeal, the relevant period is that running from 26 June 2012 to 3 March 2019 when Ms. Sobhy was resident in and working in the State but without permission to remain or any form of work permit.

5 . During the entire period in which the respondent worked in Ireland, including that period when she did not have permission to work in the State, she paid PAYE. She and her employer made PRSI contributions into the Social Insurance Fund.

6 . Following the delivery by this Court of judgment in Luximon and Balchand v. Minister for Justice and Equality [2018] IESC 24, [2018] 2 I.R. 542, a scheme was established under which she was granted permission to remain and work in the State on 3 March 2019.

7 . On 15 December 2018 Ms. Sobhy, who then was eight months pregnant, took maternity leave from her employment. On 11 April 2019, after her status was regularised, she applied for maternity benefit under the Act of 2005. On 4 June 2019, her application was refused by a deciding officer in the Department of Employment Affairs and Social Protection who took the view that, as it was illegal for her to engage in employment in the State during the period when she did not have a valid work permit, her contributions could not validly afford her entitlement to social welfare payments under the Act of 2005.

8 . That decision was affirmed on appeal by the first appellant, the Chief Appeals Officer (the “CAO”) on 5 March 2020.

9 . It is not in dispute that the respondent, and her employer, had each made the qualifying number of PRSI contributions, nor that the respondent met the other relevant eligibility criteria. The question in the appeal is whether contributions made by her when she did not have a work permit or permission to remain in the State can give rise to entitlement under the Act of 2005.

The High Court decision

10 . This is the appeal by the State parties of the order of certiorari made by Heslin J. on 10 March 2021, which quashed the decision of 5 March 2020, and remitted the matter to the CAO for further consideration for the reasons set out in his written judgment delivered on 11 January 2021 ( [2021] IEHC 93) in which he determined that the CAO had erred in law.

11 . The High Court judge determined the legal question arising in the light of the decision of this Court in Quinn v. IBRC, and the appellants argue that in so doing he applied the wrong test as that authority concerns the circumstances in which an unlawful contract may be enforced between the parties to that contract. In the alternative it is argued that, if the test in Quinn v. IBRC provides an appropriate legal framework, the trial judge erred in failing to recognise that, in the absence of Ms. Sobhy having a work permit, the legislative framework made illegal for all purposes the contract under which the respondent worked.

12 . The trial judge in a careful and detailed judgment did not himself conclude that the respondent had the necessary qualifying contributions, but rather remitted the matter for decision because it was not “self-evident” that a contract of employment made by a person who did not have permission to work in the State under the Employment Permits Act 2003 (as amended) (“the Act of 2003”), could not meet the requirements of the Act of 2005, and nor was it self-evident that a contract made by such a person was unenforceable and void for all purposes, and in particular for the purposes of the Act of 2005.

13 . He considered that it was therefore not correct for the deciding officer and the CAO to take as a starting point the proposition that a person working without a permit should be treated for the purposes of the Act of 2005 as not having made qualifying contributions.

The appeal

14 . This Court gave leave for a so-called leapfrog appeal by determination on 11 May 2021 ( [2021] IESCDET 55).

15 . The State parties contend that by reason of the legislative provisions and purpose, PRSI contributions made by a person who does not have permission to work in the State may not be treated as valid contributions for the purpose of obtaining benefits under the Act of 2005.

16 . The respondent argues that the trial judge was correct and that the approach to the question of entitlement must have regard to the nuanced test in Quinn v. IBRC, and in the light of what is contended to be a broader approach to the accrual of benefits under illegal contracts generally apparent from that judgment of this Court.

The legislative background

17 . The legislative provisions are relatively recent or have been recently amended, and are found in three primary Acts, none of which refers to the other. The relevant legislation concerns non-EU or EEA nationals who work or reside in the State, called generally “foreign nationals”, and the largely unrelated social welfare code.

Employment Permits Act 2003 (as amended): requirement for a work permit

18 . Section 2(1) of the Act of 2003 requires that a foreign national who wishes to work in the State shall have the benefit of a work permit granted under its provisions:

“2.—(1) A foreign national shall not —

(a) enter the service of an employer in the State, or

(b) be in employment in the State,

except in accordance with an employment permit granted by the Minister under section 8 of the Employment Permits Act 2006 that is in force.

19 . I will here use the general term “work permit”. Non-EU/EEA students who are permitted to reside in the State to study may hold a Stamp 2 permission to work up to a maximum of 20 hours per week. The respondent did have the benefit of a student work permit but it expired by effluxion of time in 2012 and she remained in the State without permission, and worked without a permit thereafter.

20 . Section 2(2) prohibits an employer from employing a non-national who does not have a work permit:

“(2) A person shall not employ a foreign national in the State except in accordance with an employment permit granted by the Minister under section 8 of the Employment Permits Act 2006 that is in force.”

21 . Section 2(3) provides that a foreign national who works without a permit, and a person who employs a foreign national without a permit, shall be guilty of an offence:

(3) A person who contravenes subsection (1) ( 2) or (2C) or fails to take the steps specified in subsection (2B) shall be guilty of an offence and shall be liable—

( a) on summary conviction, to a fine not exceeding €3,000 or imprisonment for a term not exceeding 12 months or both, or

( b) if the offence is an offence consisting of a contravention of subsection ( 2) or (2C) or a failure to take the steps specified in subsection (2B), on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a term not...