England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Mr Justice Burton

		Royal Courts of Justice Strand, London, WC2A 2LL Friday 25th May 2001

LORD JUSTICE WALLER :

1. Ms Whillier commenced proceedings before an Employment Tribunal by an application dated 7 April 1997. By that application she claimed against the London Borough of Southwark (1) that there had been an unlawful deduction of wages under the Employment Rights Act 1996; (2) that there had been discrimination on the grounds of sex under the Sex Discrimination Act 1975; and (3) that there had been an action short of dismissal under section 146 of the Trade Union and Labour Relations (Consolidation ) Act 1992 (The 1992 Act).
2. The wages claim was dismissed by the Employment Tribunal (the ET). Ms Whillier succeeded on the other two claims and the London Borough of Southwark (the Council) appealed. The Employment Appeal Tribunal (the EAT) allowed the appeal of the council under the Sex Discrimination Act but dismissed the appeal in relation to the claim under s.146.
3. This is an appeal from the decision of the EAT given on 3 March 2000, the judgment being given by Burton J on the s.146 point. Ms Whillier has not attempted to pursue any appeal relating to the Sex Discrimination Act. Furthermore, although a respondent's notice was put in on her behalf seeking to raise alternative grounds on which the EAT decision in relation to s.146 should be upheld, those points were not pursued.
4. This appeal relates thus only to Ms Whillier's claim under s.146, and Mr Oldham, for the council, sought to argue only two short points on that aspect. In order to deal with those points it is unnecessary thus to set out the full history of Ms Whillier's dispute with the council. It is enough to summarise the position in the following way.
5. Ms Whillier was an employee of the council and she was Branch Secretary of Unison. Under the time off for trade union duties agreement ("TOFTUDS"), she was released for trade union duties regardless of her position, with cover funded from the TOFTUDS' budget. While on full-time release for trade union duties, Ms Whillier, in settlement of a grievance which she had lodged, was made an offer by the council. That offer was of promotion to a post at a higher grade than her then current post, but on the basis that she would be paid at the higher rate of pay attaching to the new post only once she was able to undertake the duties of the new post.
6. Section 146 of the 1992 Act provides as follows in so far as material:-

"(1) An employee has the right not to have action short of dismissal taken against him as an individual by his employer for the purpose of -

(a) . . .

(b) preventing or deterring him from taking part in the activities of an independent trade union at an appropriate time, or penalising him for doing so,

(c) . . . ."

7. Ms Whillier's claim is summarised by the ET at paragraph 30 of their decision in the following way:-

"Ms Whillier's claim under this head is that (the council), although apparently willing to promote her, indicated that they would not pay her the salary appropriate to any promoted post until she was in a position to carry out the duties of such a post after giving up her trade union duties."

8. The submission of Mr Oldham, who represented the council before the ET, as well as before the EAT and the Court of Appeal, was as follows. He submitted that the real complaint of Ms Whillier was that she was not being paid the extra salary and that a failure to pay that salary was simply an "omission" but not "action", and he relied on the decision of the House of Lords in Associated Newspapers Ltd v Wilson; Associated British Ports v Palmer [1995] 2 AC 469(HL), [hereinafter referred to as either the Wilson or the Palmer case]. His alternative submission was that if the proper characterisation of the council's conduct was "action", then it was not "action short of dismissal", because it formed part of a series of actions designed to benefit Ms Whillier. His submission was that in order to succeed under s.146, any action complained of had to be to the detriment of the complainant. He suggested that this must be so for two reasons; first in order to be "short of dismissal" it still had to be the negative side of neutral, and second, he relied on the word "against" which he suggested carried that flavour as well.
9. The ET made the following findings:-

"39. Applying that approach here, we consider that Mr Oldham is wrong in submitting that the Applicant's complaint is of an "omission", rather than of any "action" on the part of the Respondents. On the basis of the way in which the Respondents' position was stated in Mr Bull's letter of 12 November 1996, it is apparent that they decided that the Applicant would not be allowed to take up the duties of a new post while she was on trade union release, as well as deciding that she would not be paid at the rate for the new job until she took up the duties. The Respondents' decision that the Applicant should not be allowed to take up the duties of a new post while on trade union release was, in our view an "action", rather than merely an omission, and therefore within the scope of section 146.

40. We also reject Mr Oldham's submission that the action taken by the Respondents was not "action short of dismissal" because it formed part of a series of actions designed to benefit the Applicant. Unlike the anti-discrimination legislation, section 146 imposes no requirement of less favourable treatment, and we take the view that the section should not be construed as requiring an investigation by the Tribunal as to whether any particular action is intended to be, or is in fact, beneficial or detrimental to an employee. In our judgment, section 146(1) should be construed as requiring a tribunal to decide only, first, whether the employer has taken action short of dismissal against the applicant as an individual and, secondly, whether the purpose of such action was one of those prohibited by paragraphs (a) to (c).

41. We have reached the conclusion that the purpose of the action taken by the Respondents in relation to the Applicant was to deter her from taking part in the activities of her trade union. Although Mr Bull stated that his letter was written in accordance with advice from Mr Walker, Mr Walker, who was responsible for the TOFTUDS scheme, said in his evidence that the fact that the Applicant was on (trade union) release did not affect her taking up promotion in the usual way. Whilst Gallacher v Department of Transport (above) decides that there is a difference between purpose and effect, there is therefore no basis in this case for holding that the Respondents' purpose was anything other than to oblige the Applicant to choose between promotion and remaining in office as trade union branch secretary, and thereby to deter her from remaining in office. Both Mr Walker and Mr Bull denied any hostility to trade unions and, whilst we do not wholly accept Mr Walker's evidence to that effect, we do not consider it necessary to our finding to hold that any of the Respondents' employees were motivated by hostility to trade unions or, as the Applicant suggested, because she was particularly effective in carrying out her trade union duties. For the reasons given below, we consider that the Respondents' action against the Applicant was the result of sex discrimination, but we do not consider that that finding prevents us from holding that the Respondents' action was also in breach of section 146. "

10. The EAT upheld the findings of the ET. It is unnecessary to quote substantial passages, but sufficient to quote two sentences which are in the following terms:-

"That conduct (by which the EAT meant any promotion given to Ms Whillier which would not be accompanied by the necessary salary increase), it seems to us, amounts to an action, that is to offer a particular kind of promotion, one which is not accompanied by the necessary salary increase. It is not simply the failure or omission to pay a salary increase, it is the fact or promise that there will be, not the usual promotion, but an unusual promotion, on Mr Walker's evidence, a promotion not accompanied by the salary increase which would ordinarily follow; and that it seems to us is action and not omission."

11. On the detriment point, they said:-

"We are not satisfied that (Mr Oldham) is right to say that there would have to be a detriment, but we reach no conclusion about that, because we are satisfied that the conduct in question, the action in question, mainly the offering of unsatisfactory promotion, that is promotion without the concomitant salary increase, was detrimental, because it was not as beneficial as the offer of promotion with the appropriate concomitant salary increase."

Action or Omission

12. The foundation of Mr Oldham's argument was the Palmer case. He suggested that the effect of that decision is to hold that omissions cannot be actions and thus something which can be characterised as an omission can never be action. Thus his argument was that any failure to pay should be characterised as an omission, that the complaint here should be characterised as a failure to pay and thus the complaint was of an omission and not action.
13. In my view the above is all far too simplistic. The facts of the cases in the House of Lords were as follows. In the Wilson case the employers offered a 4.5% pay rise to all those willing to sign "individual" contracts divorced from collective bargaining; other employers were told that they could not expect any increase in pay until the next review of salaries. The employees who did not specifically sign the individual contracts complained that the omission to pay them pay rises was a contravention of s.23. In the Palmer case employees whose terms were set by collective bargaining were offered the alternative of individual contracts, with an inducement of a pay rise, or continuing on the same terms and conditions under collective bargaining. Thus in both cases the applicants who did not sign the individual contracts simply continued in their employment as before. They did not have any legitimate right or expectation to an increase in pay. Thus it was that it could be said accurately in relation to the applicants, the employer was simply doing nothing. The claims in that case were actually made on the basis that there was an omission i.e. a failure to pay. The argument was that by the definition section then applicable "omission" equalled "action". The majority of the House of Lords held that the definition section simply did not apply so as to render an omission "action". Some argument was addressed to the House to the effect that even without the definition section a liberal construction should be placed on the then equivalent to s.146, which would render the discrimination complained of in that case "action" within that section. That was rejected on the basis that the discrimination complained of had been deliberately excluded (see Lord Bridge at p.473F-475C.)
14. It is noteworthy I suggest that Lord Bridge makes clear that the House was not dealing with a case where "B had any reasonable expectation of receiving that benefit". (p.671D). There was furthermore no attempt in the judgment of Lord Bridge to define with any precision what might amount to "action" and what might not. I respectfully suggest that the case is not authority for the proposition that all factual situations which could be characterised at least in part as omissions can never be action. For example a failure to pay a sum which is contractually due, or (I would think) was legitimately expected to be paid for the purpose of dissuading someone from taking part in trade union activities, could, in one sense, be characterised as an omission, but it is equally clear as I would see it, "action against" that particular employee.
15. In Department of Transport v Gallacher [1994] ICR 967 the Court of Appeal were dealing with a situation in which the applicant had applied for promotion to the grade of senior executive officer but was told by the promotion board that he needed to demonstrate his ability to do managerial work before he could be promoted. An Industrial Tribunal upheld his complaint that by stating that he would not be suitable for promotion unless he undertook a line management job, which in effect meant reducing his union activities, the employer had taken action (short of dismissal) against him for the purpose of deterring him from taking part in the activities of an independent trade union contrary to the then equivalent of s.146.
16. In relation to the finding that the employer had taken "action" Neill LJ said as follows:-

"It was argued on behalf of the employer, both before the appeal tribunal and in this court, that the decision of the industrial tribunal was flawed in two important respects. (a) The tribunal had failed to identify the "action (short of dismissal)" which in its view contravened section 23 of the Act of 1978. In some parts of the decision the "action" appeared to be the recommendation that the applicant should not be promoted. In other parts the "action" appeared to be the comment or guidance that the applicant should return to a post which involved some managerial responsibilities. (b) The tribunal had failed to distinguish between the likely effect of the board's recommendation and guidance and the purpose for which that recommendation and guidance was made and given. The important words in section 23(1)(b) were "for the purpose of . . . preventing or deterring [the employee] from taking part in the activities of an independent trade union."

For my part, I see some force in the first of these criticisms. The task of the board was to interview the candidates and to decide whether they reached the standard required for the senior executive officer grade. The additional guidance was given, as I understand it, on an informal basis. In the end, however, I have come to the conclusion that the industrial tribunal was entitled to look at the matter as a whole and in the manner which was explained at the beginning of paragraph (10):

"As far as the action short of dismissal in this case is concerned, it is the whole report of the board - their finding that the applicant was not to be promoted this time and the rider giving him certain advice as to what he should do if he was to be promotable."

17. Mr Oldham pointed out that that case was cited in Palmer although not referred to in the judgments. He suggested it should be treated as inconsistent with the Palmer decision. I do not follow that submission. The House of Lords were not concerned to define "action". The claim in Gallacher was of "action" by the employer, and it was not a complaint of an omission, which by the definition section should be construed as "action". The decision furthermore shows that "action" must be construed to cover the broad picture. That, it should be said, is consistent, as Lady Justice Hale pointed out during argument, with the fact that the word in the sub-section is "action" not "the" or "an" action, never mind "the" or "an" act.
18. The finding of the tribunal that, following the conclusion of the grievance procedure, to offer promotion which was not accompanied by a salary increase, was "action" by the council, is one which was eminently open to the tribunal, and one, which it seems to me, the EAT were entitled to uphold.

Detriment

19. It may well be that the words "action against" "short of dismissal" do suggest that the action must be detrimental to the employee. But the main detriment seems to be the fact that the employee might be "prevented" or "deterred" from taking part in trade union activities. But I agree with the EAT that it is unnecessary to go into the question whether some other detriment is a necessary element. The offer being made after a grievance procedure was of promotion, but no payment for that promotion until the job of secretary had been relinquished. The finding was that this offer was made for the purpose of deterring Ms Whillier from her trade union activities. The obvious inference is that if she had not been conducting trade union activities, the offer for promotion would have been made and carried with it the full salary. That seems to me to be action which is to the detriment of Ms Whillier.
20. The ET were entitled to look at the broad picture and ask whether the council, when they offered promotion without the salary increase, were taking action against Ms Whillier "for the purpose of . . . preventing or deterring her from taking part in trade union activities". That is essentially a factual question and one which they were entitled to answer in the way that they did.
21. I would dismiss the appeal.

LADY JUSTICE HALE:

22. I agree.

SIR PHILIP OTTON:

23. I also agree.
ORDER: Appeal dismissed with costs in the sum of £4,186. (Order does not form part of approved Judgment)