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Contributions paid by undocumented worker cannot be counted in social welfare payments application

The Supreme Court ruled that Sharda Sobhy is not entitled to have PAYE and PRSI payments considered in her application for maternity benefit.
Dec 16th 2021, 6:11 PM 21,574 0

THE SUPREME COURT has ruled that PAYE and PRSI payments made on behalf of a chef who worked here illegally is not entitled to have those contributions considered in her application for social welfare payments while on maternity leave.

The chef, Sharda Sobhy from Mauritius, had studied and worked in Ireland lawfully between 2008 and 2012.

Between 2012 and 2019 she continued to work here, but without either a valid work permit or permission to be in the State.

During that time, she paid PAYE tax, and her employer made PRSI contributions to the Social Insurance Fund.

After she regularised her residency in 2019, she applied for maternity benefit from the Department of Employment Affairs and Social Protection on foot of her PRSI payments.

However, her application for maternity benefit was refused by the deciding officer, whose decision was upheld on appeal by the Chief Appeals Officer.

She appealed those decisions to the High Court in proceedings against the Chief Appeals Officer, the Minister for Social Protection, Ireland and the Attorney General.

The Human Rights and Equality Commission were a notice party to the proceedings.

At the High Court Mr Justice Mark Heslin, after hearing the case, remitted the matter back to the Chief Appeals Officer for further consideration. However, the Supreme Court allowed the State to bring a leapfrog appeal against that decision, arguing that Sobhy’s claim should be dismissed.

In its decision the five-judge court comprised of the Chief Justice, Mr Justice Donal O’Donnell, Mr Justice John MacMenamin, Ms Justice Elizabeth Dunne, Ms Justice Iseult O’Malley, and Ms Justice Marie Baker dismissed her appeal.

In a unanimous decision, delivered by Justice Baker, the court determined that an employment contract is unlawful when a person does not have a work permit or permission to be in the State.

The judge noted that the 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.

The court held that the period that the applicant worked in the state without a permit or permission to reside in Ireland cannot be regarded as “contract of service” for the purposes of qualifying for maternity benefit under the Social Welfare Consolidation Act 2005.

The court noted that if the contributions made when she worked without a permit were included, she would have been entitled to payments under the Act

However, the action concerns the period when she worked and was present in the State unlawfully.

The central question was whether Sobhy had a “contract of service” within the meaning of the Act, the Judge said.

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The judge held that if a contract is illegal, it cannot be considered a “contract of service”.

The judge determined that the statutory framework operated to render Sobhy’s contract illegal because the 2003 Employment Permits Act prohibits a person from working in the State without a work permit as well as the employment of such person by an employer.

In addition, the plaintiff’s presence in the State under the 2004 Immigration Act was illegal for all purposes, the judge said.

The 2003 Act does create criminal sanctions arising from such contract, the judge said.

While certain exemptions relieve against the possible harshness of the consequences of illegality, there were no legislative exemption exists to permit the payment of social welfare benefit to a person employed without a work permit, the judge said.

The judge said that the nature of the relationship between Sobhy and the State was not contractual in nature. For that reason, the enforceability of an illegal contract could not be said to effect Sobhy’s statutory entitlements.

The judge said that the purpose of laws directed towards the protection of the borders of the State would be significantly frustrated if the 2005 Act permitted the payment of maternity benefit on foot of PRSI contributions made by a person employed in the State who did not have the benefit of a work permit.

The judge was further satisfied that public policy does not require the courts to treat persons employed in the State who require a permit, but who work without one, to nonetheless be entitled to the benefit of social welfare payments.

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Aodhan O Faolain


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