The Child Support Agency (‘CSA') is able to order what some of us remember as ‘Garnishee Orders’ against employers in order to siphon-off a percentage of an employee's income for the purpose of collecting child maintenance. Such orders, in this area of law, are a creature of statute and are called ‘Detachment of Earnings Orders’ (‘DEO'). Rather confusingly, DEO's are not the same as the Third Party Debt Orders found in Part 72 of the Civil Procedure Rules. Nomenclature aside, the real difference that is to be found in the DEO is the way in which one applies to have them set aside. An appeal against a DEO's lies to the magistrates’ court on circumscribed bases, the definition of which has led to costly, confusing, litigation.
The power to order a DEO
The CSA's power to collect child maintenance arises from section 4 of the Child Support Act 1991 (‘the Act'). In turn, the CSA's power to order the employer to comply with a DEO arises from section 31 of the Act which allows the Secretary of State to may make an order against a ‘liable person’ to secure the payment of any amount due under a maintenance calculation. A deduction from earnings order may be made so as to secure the payment of arrears of child support maintenance payable under the calculation and/or amounts of child support maintenance which will become due under the calculation.
Penalties against an employer
It is a criminal offence for the employer not to comply. Section 32(8) of the Act provides that if an employer fails to comply with the requirements of a DEO he shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding level two on the standard scale (£500).
Circumscribed grounds of appeal
What then is the available remedy for the employee who has had his earnings slashed by virtue of a DEO? The possible grounds for appeal against a DEO are contained in Regulation 22 of the Child Support (Collection and Enforcement) Regulations 1992 (‘the Regulations') which provides that an appeal may be made only on one or both of the following grounds: (1) that the deduction from earnings order is ‘defective'; and/or (2) that the payments in question do not constitute earnings. In reality the second ground of appeal is rarely argued because a dispute as to what constitutes earnings usually only occurs where the liable person is self-employed.
Appealing against a DEO on the basis that it is ‘defective', however, is becoming an increasingly common avenue of appeal. Unfortunately, the common misconception as to the meaning of ‘defective’ in the discrete world of CSA law is leading to expensive and unnecessary litigation. This situation is sadly often fuelled by the lack of awareness of this area of law in the magistrates’ court. This may go to the absurdity of the legislation providing that the appeal ought to lie to the magistrates’ court rather than any fault of those courts.
However, surprising as it may seem, a ‘defective’ DEO is not, for example, one which ought not to have been ordered because the child support maintenance was never owed; nor that the calculation is entirely wrong; nor that the person who is the subject of the DEO is not a liable person. This is made clear by section 32(6) of the Act which provides that a court hearing an appeal under subsection (5) the shall not question the maintenance calculation by reference to which the deduction from earnings order was made. One begins to wonder if the ‘right’ to appeal is an Orwellian term.
Finding the definition of ‘defective’ requires some hunting around because it is not contained in the Act. Instead it is contained in Regulation 8(1) of the Regulations which provides that: “defective" means . . . that it does not comply with the requirements of regulations 9 to 11 and such failure to comply has made it impracticable for the employer to comply with his obligations under the Act and these Regulations. The criteria in Regulations 9 – 11 are rather banal provisions pertaining to: the name and address of the liable person, the name of the employer at whom it is directed; where known, the liable person's national insurance number; and the protected earnings proportion (no more than 40% of a liable person's earnings may be deducted). However, even if sections 9 – 11 are wholly ignored Regulation 8 will not bite unless the failure has made it impracticable for the employer to comply (so long as there is no breach of the protected earnings proportion). In other words if any monies have been deducted successfully in any month by the CSA, the DEO cannot be said to be defective.
Other avenues of appeal
The best weapon against DEO's does not lie by way of statutory appeal, but in fact by way of an appeal against the maintenance calculation itself which lies to the CSA Appeal Tribunal. The Tribunal has the power to question the all important calculation which in turn may lead to some success in challenging the DEO. Unfortunately, this is still a little known form of redress against the DEO.
Ian Mann - Employment Barrister http://www.employment-barrister-uk.com
13 King’s Bench Walk Ian Mann was called to the Bar in 2000. He practices in employment disputes representing both employers and employees. His employment practice embraces the full spectrum of Employment Tribunal, High Court and appellate work and covers all areas of employment law, especially discrimination.