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
HIS HONOUR JUDGE PROPHET

		Royal Courts of Justice Strand, London, WC2A 2LL
		7 July 2005

Lord Justice Pill :

1. This is an appeal by Hardy and Hansons plc ("the appellants") against a decision of the Employment Appeal Tribunal ("EAT"), His Honour Judge Prophet presiding, sent to the parties on 8 September 2004. The EAT dismissed an appeal by the appellants from a decision of an employment tribunal held at Nottingham sent to the parties on 29 March 2004. The employment tribunal upheld complaints by Mrs Lisa Lax ("the respondent") of unlawful sex discrimination under Section 1(2)(b) of the Sex Discrimination Act 1975 ("the 1975 Act"). The employment tribunal also found that the respondent had been unfairly dismissed. They dismissed a complaint of victimisation made under Section 4 of the 1975 Act. A complaint under the Maternity and Parental Leave Regulations 1999 (SI 1999/3312) was also dismissed.

2. At a subsequent remedies hearing, the respondent was awarded about £60,000 in damages, including £14,000 plus interest for injury to feelings. An appeal to the EAT against that decision is pending.

3. The scenario is a familiar one. A full-time female employee acquires child rearing responsibilities and applies for a job sharing arrangement in the same employment.

4. Section 1(2) of the 1975 Act, as enacted at the material time, provides:

   "In any circumstances relevant for the purposes of a provision to which this sub-section applies, a person discriminates against a woman if –

   (a) on the ground of her sex he treats her less favourably than he treats or would treat a man …

   (b) he applies to her a provision, criterion or practice which he applies or would apply equally to a man, but –

   (i) which is such that it would be to the detriment of a considerably larger proportion of women than of men, and

   (ii) which he cannot show to be justifiable irrespective of the sex of the person to whom it is applied, and

   (iii) which is to her detriment …"

5. The complaints of unlawful indirect sex discrimination were stated by the employment tribunal to have been well founded. In the extended reasons, they are grouped as two, first, the appellants' rejection in May 2002 of the respondent's request to job share the job of retail recruitment manager ("RRM") or do it on a part-time basis upon her return to work after maternity leave, and secondly, their failure in January 2003 to offer the respondent the opportunity to do the RRM or the tenant support manager's ("TSM") job on a job share basis.

6. The appellants are brewers and run a chain of managed and tenanted public houses. The employment tribunal found the following facts. (Save where square brackets appear, I have in the citations retained the original description of the present respondent as 'applicant' and the present appellants as 'respondent'):

   "On 26 February 2001 the applicant was employed by the respondent as a retail recruitment manager ("RRM"). At the time the applicant had one daughter then aged 5. The job involved the recruitment of managers, assistant mangers and trainee managers of the managed public houses owned by the respondent. It also involved the recruitment of tenants for tenanted public houses. The role was supported by a recruitment and training administrator.

   At the material time the respondent operated approximately 87 managed houses and 166 tenancies. It employed approximately 2100 people including 160 staff at its head office. On the tenanted side, it employed area managers whose main role was to collect debts from and negotiate rents for the tenants. They had also been responsible for recruiting tenants prior to the creation of the RRM role held by the applicant. After her appointment they retained their recruitment role in that they ultimately decided which tenants to appoint.

   On the tenanted side, when a vacancy arose the applicant used to prepare an internal advertisement which was sent by her administrative assistant to prospective tenants on a "talent bank". This comprised applicants for tenancies prepared by the applicant from general applications or from previously unsuccessful but potentially suitable applicants most of whom had been interviewed by her. The applicant prepared and forwarded to area mangers (or, as they were subsequently styled, business development mangers "BDMs") a shortlist of three or four suitable applicants. The BDM then conducted a second interview with each candidate and made the appointment. Usually the applicant also attended that interview."

   The RRM was required to combine a knowledge of the characteristics of the appellants' houses with a knowledge of prospective candidates for vacancies whose names and contact details were held on a database or "talent bank".

7. Having told her manager in January 2002 that she was pregnant, the respondent, on 20 March 2002, requested to be allowed to work part-time as RRM on her return from maternity leave. Following discussions and consultations, the request was rejected by the appellants on 13 May 2002.

8. Before considering the points at issue, I describe the sequence of events. On 22 July 2002, the respondent started her maternity leave. Her son was born on 23 September 2002. In the following months, roles within the appellants' organisation were reappraised and a new role of TSM was created. Responsibility for recruitment for managed houses had largely passed to the Area Managers. The new job, the employment tribunal found, "incorporated the RRM function on the tenanted side but included the new role of responsibility for the provision of training for tenants and involvement in promotions". On 5 February 2003, the respondent told Mr Webster that she was unable to work full-time and did not wish to be considered for the full-time role as TSM. The intended date of return to work from maternity leave was 3 March 2003. By letter dated 6 February 2003, the appellants confirmed that there was no part-time role involving recruitment available. The role of RRM had become redundant and the respondent was given three months' notice of dismissal on the ground of redundancy. By letter of the same date, the respondent expressed her bitter disappointment "with the company's inflexible attitude towards [her] request to work part-time/job share". A full-time TSM began work as such in April 2003, that is before the respondent's notice had expired.

9. The employment tribunal found (paragraph 14) that by December 2002 there was a diminution in the appellants' requirements for an employee to carry out the RRM work. There was a considerable reduction in vacancies on the tenanted side and none on the managed side. The employment tribunal held that there was a redundancy situation within the meaning of Section 139 of the Employment Rights Act 1996. When dealing with the complaint of unfair dismissal, the employment tribunal confirmed that the reason for dismissal was redundancy (paragraph 19).

10. The employment tribunal accepted (paragraph 18) that the TSM job could not be done on a part-time basis and that the RRM functions had to be incorporated into the TSM job. There was insufficient work for the appellants to employ a part-time RRM and a full-time TSM (paragraph 18).

11. The central issue in the case, as the parties agree, arises from clearly stated findings of the employment tribunal. At paragraph 18, it was stated:

    "However, the tribunal decided that the TSM job could have been done by two job sharers or by two part-time workers. It did not accept that the TSM job comprised certain functions which were incapable of being split between two job sharers".

    Consistent with that finding, is the finding on unfair dismissal (paragraph 21):

    "The conclusion that the [appellants] had unlawfully discriminated against the [respondent] by insisting that the TSM job be performed on a full-time basis led inevitably to the further conclusion that it was unfair to dismiss her. The [appellants] should have offered the [respondent] the opportunity of doing the TSM job on job-share or part-time basis. Its failure so to do was unreasonable".

12. What is surprising about the extended reasons, though it does not affect the ultimate decision, is that, upon that narrative and those findings of fact, the employment tribunal gave much more detailed consideration to the May 2002 refusal than to the refusal in early 2003. Clearly there is an overlap between the two situations in that some factors relevant to the RRM were also relevant to the combined RRM/TSM. But the RRM had disappeared as a full-time job before the respondent's return from maternity leave as a result of what the tribunal found to be a genuine redundancy situation. It survived only so far as part of its functions was incorporated within the new TSM. Save for the possibility, raised by the tribunal and apparently rejected (paragraph 16), of the respondent doing the rest of the RRM until an appointment to the TSM was made, the May 2002 decision had no significant effect.

13. The parties, rightly in my view, have concentrated, subject to the respondent's notice to which I will refer, upon the central question whether the refusal to permit job share of a full time job amounted to unlawful indirect sex discrimination contrary to section 1(2)(b) of the 1975 Act. It is accepted by the appellants that the refusal to consider job sharing acted to the detriment of the respondent (section 1(2)(b)(iii)) and that child caring responsibilities were such that the refusal would be to the detriment of a considerably larger proportion of women than of men (section 1(2)(b)(i)), within the meaning of those expressions in the section. The issue is whether the appellants can show their decisions to be justifiable irrespective of the sex of the person to whom they were applied (section 1(2)(b)(ii)). There must be "objective justification", the expression used by Lord Nicholls of Birkenhead in Barry v Midland Bank plc [1999] ICR 859. It was at one time conceded on behalf of the respondent that if she failed on the sex discrimination claim, she must also fail on unfair dismissal but that concession was withdrawn in the course of the hearing.

14. For the appellants, Mr Clarke QC submits, first, that the employment tribunal applied the wrong test to the issue and, secondly, that the tribunal's assessment of the evidence and reasoning was in any event so inadequate as to amount to an error of law. On the first issue, the submission of the appellants is that they ought to have been granted a margin of discretion in deciding whether to permit a job share, a room for manoeuvre within which the tribunal may disagree with the employers' assessment, in that it would have made a different decision had it been the employer, but cannot hold the employers' assessment to be unlawful. Remission to a differently constituted employment tribunal is sought.

15. Because of the issues raised on the findings of the employment tribunal upon this central issue, it is necessary to set them out in full. I say at this stage that the similarity for material purposes between two jobs, RRM and TSM, including the incorporation of part of the former RRM job into the TSM job, means that the successful party on the one issue is likely also to be the successful on the other.

16. Of the appellants' employees mentioned in the extended reasons, Mr Webster is retail director, Mr Godson, general manager (tenanted houses), Mr Crabbe, operations manager (managed houses) and Ms Hicklin became the first TSM. In relation to the RRM, the employment tribunal stated:

    "The respondent's objections

    10. The respondent's objections to job share could be summarized as follows:-

    (a) both job sharers would either have to interview each candidate on the "talent bank" and be familiar with each vacancy or detailed handover notes would have to be prepared by one and handed over to the other. Each would have to meet the outgoing tenant and the remaining staff. Mr Webster likened the situation to that of buying a house. There was a real risk that good tenants would be missed and that tenants would not be properly matched

    (b) it was important for the RRM to visit the public house, see the job applicant and to meet the staff. Detailed handover notes would not resolve the problem. There was no substitute for meeting the people and seeing the premises for oneself

    (c) there were regular meetings which both job sharers had to attend. This would lead to duplication of time and effort. There was a monthly communications meeting on the tenanted side which the applicant used to attend for about half an hour. There was also a monthly team meeting between Mr Godson and his BDMs which she did not attend but for which she provided relevant recruitment information. On the managed estate side, there was a monthly meeting which the applicant used to attend. Mr Crabbe also used to have informal monthly review meetings with the applicant.

    (d) there was no obvious way of splitting the workload as the recruitment requirements varied so much from week to week.

    11. The tribunal decided that the respondent's objections were overstated. At the outset it found that its witnesses greatly exaggerated their evidence in relation to the alleged disadvantages to the job being done on a job share or part time basis. They disregarded the respondent's stated intention to be flexible. Mr Webster did not even tell Mr Godson and Mr Crabbe about the respondent's willingness to work flexibly. Their objections were made in ignorance of this fact. Mr Webster, in particular, failed to explore with the respondent what she meant by flexible working. He closed his mind to potential solutions. Indeed he told the Tribunal that he did not want to waste time where the problems were "insurmountable". He said that it was not possible for job sharers to work together unless they were telepathic. Mr Crabbe said it would have been unworkable for one job sharer to tell the other about how an applicant dressed. Mr Godson stated that there were many instances where the tenant asked for early release. On closer examination the Tribunal found that it was most rare for such an occurrence to create an emergency. He also stated that it was necessary for the RRM to meet people on the "talent bank" on an almost daily basis. The tribunal decided that these were typical examples of overstatement.

    12. The Tribunal's specific reasons for reaching its conclusion in relation to each objection were (adopting the lettering used in the tribunal's paragraph 10) as follows:-

    (a) Ms Hicklin told the Tribunal that she would have been able to rely on the applicant's description and assessment of a public house. There would have been no need for her to visit. The Tribunal considered that communication between job sharers was the most important consideration (and this was accepted by several respondent witnesses). There was a need for the two to be like minded people. The Tribunal accepted that reliance on notes alone would not have been entirely satisfactory. However, this was not the only form of communication. Flexibility of working maximized the possibilities and extent of contact. In particular, Mr Godson accepted that the personal knowledge of a candidate could be placed on a database. It was also vital not to lose sight of the fact that the job sharers would only be putting forward for interview four prospective tenants and that the appointment was to be made by a BDM. In those circumstances, although there was a slight risk that an inappropriate person would be put forward for interview, it was inevitable that this would become evident at the interview. The final decision was to be made by the BDM. The process was not an exact science and the Tribunal had no doubt that even where there was one RRM (either the applicant or Ms Hicklin) an inappropriate candidate had been put forward for interview.

    (b) The Tribunal decided that to some extent this consideration overlapped with the last matter. The respondent's witnesses underestimated the potential for storing relevant information on a database. The Tribunal considered that at least in relation to the public house itself such a process was an efficient method for the transfer of information between two job sharers. It rejected Mr Crabbe's suggestion that a database was unworkable because the level of detail required would mean that the jobsharers would spent much time in updating. Firstly, he provided no evidence of the volume or level of sophistication of detail used in the process. Secondly, the Tribunal did not understand why a database could not store such detail. It would have helped reduce the time spent and improved the chance of a successful match of tenant and public house.

    (c) The Tribunal decided that in most instances it would only have been necessary for one of the jobsharers to attend a meeting. It rejected Mr Benson's [solicitor] analogy with the solicitor and client. Jobsharers could share the information so that either could present a report to the meeting. The Tribunal preferred Mr Hutchinson's [solicitor] analogy with shift managers or nurses handing over to colleagues at the end or beginning of a shift. Although the Tribunal accepted that there could be some loss of impact where one reported on behalf of the other, there was no reason why a full report could not have been presented to the meeting. In exceptional cases where the presence of both employees would be beneficial, flexibility of working would have facilitated their attendance. The Tribunal understood that the meetings were conducted on a regular basis and that the dates were known well in advance. Certainly there was no evidence to the contrary. The Tribunal decided that any difficulties in relation to provision of information to and attendance at meetings were not insurmountable.

    (d) The Tribunal accepted that there was a need for a constant flow of information between the BDMs, the RRM and the prospective tenant. It understood that there was an administrator who could assist in the liaison between a BDM and the jobsharers. It had no reason to doubt that in most cases the requested information could be provided promptly and accurately. The shift manager or nurse analogy was again appropriate here. Exceptionally, flexibility of working would allow for job sharers to be contacted outside working hours if the other did not have the relevant information. The Tribunal was satisfied that in most, if not all, cases it would have made no material difference that a response to a query could not have been immediately provided.

    (e) It was clear that the respondent had failed to give any weight whatsoever to the advantage of jobsharers working flexibly at peak times. It would have been possible to require both to work during such times. Further it would have been possible to ensure that there was some cover when one of the jobsharers was on holiday or absent on account of sickness.

    The Tribunal accepted Mr Webster's evidence that as a relatively small employer in the industry the respondent had constantly to look for competitive advantage. It understood that companies like the Wolverhampton and Dudley Brewery did not have a job share for the RRM post. He genuinely believed that there was a need to have an efficient and competitive recruitment process. However, the Tribunal decided that the matters relied upon as justification did not outweigh the serious impact of the effect of the application of the provision to the applicant. This operated to her detriment in that she was unable to continue in employment. An efficient and competitive process could have been maintained if the RRM job had been done on a job share basis. Accordingly the Tribunal decided that the applicant's complaint that the respondent's failure in May 2002 to permit the applicant to do the recruitment manager job either on a job share or part time basis on her return to work from maternity leave constituted unlawful sex discrimination under the provisions of section 1(2) of the 1975 Act."

17. The TSM position was dealt with much more briefly:

    "17. The Tribunal then considered the position in the context of the 1975 Act. The respondent accepted (and the Tribunal decided) that the respondent applied a provision to the applicant that the RRM job had to be incorporated into the TSM job which had to be done on a full time basis by one person. That operated to her detriment.

    18. The Tribunal again considered the guidance of Allonby when it approached the issue of justification. It accepted that the TSM job could not be done on a part time basis and that the RRM functions had to be incorporated into the TSM job. There was insufficient work for the respondent to employ a part-time RRM and a full time TSM. However, the Tribunal decided that the TSM job could have been done by two job sharers or by two part time workers. It did not accept that the TSM job comprised certain functions which were incapable of being split between two job sharers. It accepted Ms Hicklin's evidence as to how she undertook her functions in the TSM role but it did not accept that this was the only efficient way in which they could be performed. The respondent never discussed how the applicant's willingness to work flexibly might be exploited to ensure that the TSM role was efficiently performed. As soon as Mr Webster became aware that the RRM job comprised only two days work a week, he should have consulted the applicant as to how the TSM role should be designed. There was more than a suspicion that the TSM role was designed with Ms Hicklin in mind. The Tribunal was in no doubt that, if the applicant had been kept in mind, the TSM role could have been devised so as to allow for two employees (including the applicant) to perform it on a job share basis. That conclusion was supported by the fact that Mr Godson did encourage the applicant to apply for the job. It did not accept the respondent's evidence that this was not possible because of the 'lumpiness' of the job, the variation of the workload and the problems of backlog of work. It found again that the respondent witnesses' evidence on these matters was overstated. In these circumstances, the Tribunal decided that the respondent had not shown that the provision was justifiable. Accordingly, the Tribunal decided that the applicant's complaint that the respondent's failure to offer the applicant an opportunity to do the TSM job on a job share basis constituted unlawful sex discrimination was well founded under the provisions of section 1(2) of the 1975 Act.

18. In a brief judgment, following a preliminary hearing, the EAT stated that the employment tribunal had allowed a margin of discretion and was not substituting its own views as to what could possibly be regarded as the employers' business interests and needs. It found that the evidence and submissions had been considered with considerable care by the employment tribunal. The EAT made no appraisal of the evidence of its own.

19. In Barry, Lord Nicholls considered the impact of the jurisprudence of the European Court of Justice. At page 870B, Lord Nicholls stated:

    "I turn to the question of objective justification. In Bilka-Kaufaus G.m.b.H. v Weber von Hartz (Case 170/84) [1987] ICR 110 a department store pursued a policy of excluding part-time workers, mostly women, from an occupational pension scheme. The employer's case was that the exclusion of part-time workers was intended to discourage part-time work, since part-time workers generally refused to work in the later afternoon or on Saturday. The Court of Justice held, at p.126, para. 36, it was for the national court to determine whether and to what extent the ground put forward by the employer might be regarded as an objectively justified economic ground. The court added:

    "If the national court finds that the measures chosen by Bilka correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objectives pursued and are necessary to that end, the fact that the measures affect a far greater number of women then men is not sufficient to show that they constitute an infringement of article 119 [of the Treaty]."

    More recently, in Enderby v Frenchay Health Authority Case C-127/92 [1994] ICR 112, 163 the Court of Justice drew attention to the need for national courts to apply the principle of proportionality when they have to apply Community law. In other words, the ground relied upon as justification must be of sufficient importance for the national court to regard this as overriding the disparate impact of the difference in treatment, either in whole or in part. The more serious the disparate impact on women or men as the case may be, the more cogent must be the objective justification. There seem to be no particular criteria to which the national court should have regard when assessing the weight of the justification relied upon. "

20. Lord Nicholls agreed with the Court of Appeal that the bank's scheme was lawful but the facts are so different from the present facts that it would not be helpful to recite them. Two other members of the panel considered that issue, Lord Clyde agreeing with Lord Nicholls and Lord Steyn stating that he "would have had no difficulty in ruling that the bank should fail on objective justification". Lord Steyn did not give reasons for that opinion, having agreed with Lord Nicholls on other grounds.

21. The employment tribunal cited the decision of this court in Allonby v Accrington and Rossendale College and Others [2002] ICR 1189. The college had decided not to renew contracts of its part-time lecturers, the majority of whom, including the applicant, were women but to re-engage them as sub-contractors. As a result, the applicant's income fell and she lost benefits and a career structure. The employment tribunal concluded that a greater proportion of women then men were affected but that, while any decision taken for sound business reasons inevitably affected one group more than another, the decision of the college was justifiably taken after a proper analysis of the problems it faced. The EAT upheld that decision.

22. On appeal to this court, Sedley LJ, at paragraph 24, referred to Webb v Emo Air Cargo (UK) Ltd [1993] ICR 175 where Lord Keith of Kinkel, giving the only reasoned opinion, approved the test of what was "justifiable" under section 1(2)(b)(ii) stated by Balcombe LJ in Hampson v Department of Education and Science [1989] ICR 179, 191:

    "In my judgment "justifiable" requires an objective balance between the discriminatory effect of the condition and the reasonable needs of the party who applies the condition."

23. Sedley LJ also cited with approval the judgment of Peter Gibson LJ in the Court of Appeal in Barry [1999] ICR 319, 335:

    "[In Bilka … para 37, the European Court of Justice] held that the employer could exclude part-time workers from the pension scheme on the ground that it sought to employ as few part-time workers as possible only where it was found that 'the means chosen for achieving that objective correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objective in question and are necessary to that end.' In our judgment it would be wrong to extrapolate from those words written in that context that an employer can never justify discrimination in a redundancy payment scheme unless the form of the scheme is shown to be necessary as the only possible scheme. One must first consider whether the objective of the scheme is legitimate. If so, then one goes on to consider whether the means used are appropriate to achieve that objective and are reasonably necessary for that end."

24. Dealing with the facts in Allonby, Sedley LJ stated:

    "26. In my judgment, the employment tribunal has failed to apply the scrutiny which the law requires when a discriminatory condition is said to be justifiable. Moreover, such reasons as it gives do not stand up in law.

    27. The major error, which by itself vitiates the decision, is that nowhere, either in terms or in substance, did the tribunal seek to weigh the justification against its discriminatory effect. On the contrary, by accepting that "any decision taken for sound business reasons would inevitably affect one group more than another group" it fell into the same error as the appeal tribunal in the Brook case [1992] IRLR 478 and the Enderby case [1991] ICR 382 and disabled itself from making the comparison.

    28. Secondly, the tribunal accepted uncritically the college's reasons for the dismissals. They did not, for example, ask the obvious question why departments could not be prevented from overspending on part-time hourly-paid teachers without dismissing them. They did not consider other fairly obvious measures short of dismissal which had been canvassed and which could well have matched the anticipated saving of £13,000 a year. In consequence they made no attempt to evaluate objectively whether the dismissals were reasonably necessary – a test which while of course not demanding indispensability, requires proof of a real need.

    29. In this situation it is not enough that the tribunal should have posed, as they did, the statutory question "whether the decision taken by the college was justifiable irrespective of the sex of the person or persons to whom it applied". In what are extended reasons running to 15 closely-typed pages, there has to be some evidence that the tribunal understood the process by which a now formidable body of authority requires the task of answering the question to be carried out, and some evidence that it has in fact carried it out. Once a finding of a condition having a disparate and adverse impact on women had been made, what was required was at the minimum a critical evaluation of whether the college's reasons demonstrated a real need to dismiss the applicant; if there was such a need, consideration of the seriousness of the disparate impact of the dismissal on women including the applicant; and an evaluation of whether the former were sufficient to outweigh the latter. There is no sign of this process in the tribunal's extended reasons. In particular there is no recognition that if the aim of dismissal was itself discriminatory (as the applicant contended it was, since it was to deny part-time workers, a predominantly female group, benefits which Parliament had legislated to give them) it could never afford justification.

    30. It is conceivable that the tribunal misunderstood Lord Nicholls's remark, at the end of the passage quoted above, that "There seem to be no particular criteria to which the national court should have regard when assessing the weight of the justification relied upon" Lord Nicholls was not saying that the question was at large or the answer one of first impression; he was saying that, in the exercise which he had spelt out, no single factor or group of factors was of special weight.

    31. I would therefore allow the appeal on this ground. This court is not in a position to say that the outcome of a proper approach will inevitably be in the applicant's favour, and I would therefore remit the case for a further hearing on this issue and that of proportionate impact considered above."

25. Ward LJ and Gage J, as he then was, agreed with that conclusion. Ward LJ stated, at paragraph 84:

    "Secondly, was the application of that requirement or condition justifiable? I confess that I have wavered considerably over deciding whether this court could interfere with the tribunal's decision that the steps taken by the college were objectively justifiable. My hesitation sprang from my chastened reticence to assume that a specialist tribunal like this, having been referred to the relevant authorities, did not know how to perform its function and which matters it should and should not take into account in reaching its conclusion. To subject a decision of the court or tribunal below to too narrow a textual analysis is a besetting sin for the appellate court. Sedley LJ has, however, subjected it to more penetrating analysis than that. He has raised a number of very pertinent questions which the employment tribunal properly addressing the problem ought to have posed and ought to have answered in the extended reasons which it is their duty to give."

26. Having referred to the judgment of Henry LJ in Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377, Ward LJ continued, at paragraph 85:

    "When the disparate impact on men and women of the college's action is as serious as it is for Mrs Allonby, there must, in my judgment, be a cogent explanation of what the objective justification is for implementing that action. No sufficiently cogent explanation appears in the decision as enables me now to be sure that the tribunal can be assumed to have directed themselves properly along the lines Sedley LJ has set out and properly taken the appropriate factors into account in striking their balance. I am now left in doubt why Mrs Allonby lost and, for that reason alone, I would allow her appeal."

27. In Cadman v Health and Safety Executive [2004] IRLR 971, the relevant issue was whether the use of length of service as a criterion in an incremental pay system was objectively justified. Women in the pay band, overall, had shorter service than men so that length of service had a disproportionate impact as between male and female employees and was indirectly indiscriminatory. The EAT had allowed an appeal against a decision of an employment tribunal which had upheld Mrs Cadman's claim.

28. When considering the employer's measures, the employment tribunal, at paragraph 31 of its decision, posed the question: "Was it necessary ?" Giving the judgment of this court, dismissing the appeal from the EAT, Maurice Kay LJ stated, at paragraph 31:

    "Although one should not approach the decision of an employment tribunal as if one were construing a statute, and although it is always incumbent upon an appeal court to resist a pedantic approach, we consider that there is force in this criticism. The test does not require the employer to establish that the measure complained of was 'necessary' in the sense of being the only course open to him. That is plain from Barry. The language used by the employment tribunal in paragraph 31 does suggest that it was looking for 'necessity' in the sense of there being no alternative course. The difference between 'necessary' and 'reasonably necessary' is a significant one and, in our judgment, paragraph 31 contains a misdirection."

29. The court considered the complaint, made also in Allonby and in the present case, of the employment tribunal's lack of analysis. The court stated, at paragraph 34:

    "What was lacking was what Sedley LJ has referred to as "the minimum … critical evaluation" (See Allonby at paragraph 29). Although in some cases it is possible to make deductions or even assumptions by reading between the lines of the decision that an appropriately rigorous approach has been carried out, in our judgment it is not possible in this case".

    Having stated that it is important to keep in mind that "one must not succumb to the temptation to substitute one's own view for that of the tribunal" and that the courts will not interfere with a decision which has "covered the correct ground and answered the right questions", the court concluded that the employment tribunal had "misdirected itself as to the law, misunderstood an important passage of evidence and failed to do justice to the way in which the [employer's] case had been put."

30. In Banner Business Supplies Ltd v Greaves, 4 November 2004 UK EAT/0420/04/ILB, the EAT, Bean J presiding, held, on the facts of that case, that the majority of the tribunal "simply treats justifiability as an industrial jury question without undertaking the analysis which Bilka requires". The finding of sex discrimination was set aside and the case remitted to the employment tribunal.

31. For the respondent, Mr Langstaff QC submits that the requirement that the employer justify the scheme objectively does not permit the margin of discretion or range of reasonable responses for which Mr Clarke contends. Mr Langstaff accepts that, if another possible scheme is unreasonable, the employer is justified in not adopting it. He accepts that the test does not require the employer to establish that the measure complained of was "necessary" in the sense of being the only course open to him. There is, however, it is submitted, no room for the introduction into this test of the band of reasonable responses which a reasonable employer would adopt which is available to an employer in cases of unfair dismissal (Foley v Post Office [2002] ICR 1283). It is for the employment tribunal to weigh the real needs of the undertaking, expressed without exaggeration, against the discriminatory effect of the employer's proposal. The proposal must be objectively justified and proportionate.

32. Section 1(2)(b)(ii) requires the employer to show that the proposal is justifiable irrespective of the sex of the person to whom it is applied. It must be objectively justifiable (Barry) and I accept that the word "necessary" used in Bilka is to be qualified by the word "reasonably". That qualification does not, however, permit the margin of discretion or range of reasonable responses for which the appellants contend. The presence of the word 'reasonably' reflects the presence and applicability of the principle of proportionality. The employer does not have to demonstrate that no other proposal is possible. The employer has to show that the proposal, in this case for a full-time appointment, is justified objectively notwithstanding its discriminatory effect. The principle of proportionality requires the tribunal to take into account the reasonable needs of the business. But it has to make its own judgment, upon a fair and detailed analysis of the working practices and business considerations involved, as to whether the proposal is reasonably necessary. I reject the appellants' submission (apparently accepted by the EAT) that, when reaching its conclusion, the employment tribunal needs to consider only whether or not it is satisfied that the employer's views are within the range of views reasonable in the particular circumstances.

33. The statute requires the employment tribunal to make judgments upon systems of work, their feasibility or otherwise, the practical problems which may or may not arise from job sharing in a particular business, and the economic impact, in a competitive world, which the restrictions impose upon the employer's freedom of action. The effect of the judgment of the employment tribunal may be profound both for the business and for the employees involved. This is an appraisal requiring considerable skill and insight. As this court has recognised in Allonby and in Cadman, a critical evaluation is required and is required to be demonstrated in the reasoning of the tribunal. In considering whether the employment tribunal has adequately performed its duty, appellate courts must keep in mind, as did this court in Allonby and in Cadman, the respect due to the conclusions of the fact finding tribunal and the importance of not overturning a sound decision because there are imperfections in presentation. Equally, the statutory task is such that, just as the employment tribunal must conduct a critical evaluation of the scheme in question, so must the appellate court consider critically whether the employment tribunal has understood and applied the evidence and has assessed fairly the employer's attempts at justification.

34. The power and duty of the employment tribunal to pass judgment on the employer's attempt at justification must be accompanied by a power and duty in the appellate courts to scrutinise carefully the manner in which its decision has been reached. The risk of superficiality is revealed in the cases cited and, in this field, a broader understanding of the needs of business will be required than in most other situations in which tribunals are called upon to make decisions.

35. The employment tribunal, at paragraph 9, referred to Allonby and stated:

    "It is understood that it was necessary to weigh the justification put forward by the [appellants] against its discriminatory affect. Accordingly, it proceeded to consider the matters on which the [appellants] relied in order to refuse the applicants request that the RRM job be done on a job share or part-time basis".

36. I find nothing wrong with that general statement. Whether the correct test has been applied, and an analysis conducted with appropriate rigour, can in this case be considered only upon a detailed consideration of the reasoning of the employment tribunal, which I have already set out in full. In his submissions, Mr Clarke has analysed it in detail.

37. The employment tribunal's analysis, Mr Langstaff submits, correctly focused on evaluating the employers' reasons for their decisions. The members gave weight to the employers' evidence where it was entitled to weight and had regard to the employers' needs. Detailed reasoning was not required; it was sufficient to indicate in broad terms what the answer was. The tribunal did not accept that the business could not be run efficiently with a job share. It was not necessary to go further and state how the job share was to be arranged. The tribunal's conclusion was plainly expressed. The TSM job could have been done by two job sharers or two part-time workers.

38. The general point is made by Mr Clarke that where placements in public houses are concerned, the advantage in terms of fairness as well as efficiency of one person doing the job are obvious. It improves the prospects of the right person being allocated to the right public house. However flexible a part-time employee is, difficulties remain. Mr Webster's opinion that the problems were "insurmountable" was entitled to respect and to dismiss it as a "typical example of overstatement" was not a substitute for a detailed analysis of reasons given.

39. While accepting the obvious link between the RRM and TSM asserted by Mr Langstaff, Mr Clarke refers to the oddity of the detailed consideration given to RRM, which it is submitted is of no practical importance, as compared with the much shorter treatment of TSM. That is confined to a single paragraph (paragraph 18) and the appellants' case is not systematically set out but interwoven with conclusions.

40. It is submitted that the tribunal's criticism, at paragraph 11, of witnesses "greatly exaggerating" their evidence and as overstating their objections arises from a misapprehension of the evidence given. The court has been supplied with the Chairman's note of the evidence given by Mr Crabbe and Mr Godson, for the appellants, on 11 and 12 November 2003. (The Extended Reasons were not signed until 29 March 2004, 4½ months later.) The tribunal recorded that Mr Crabbe said it would have been "unworkable for one job sharer to tell the other about how an applicant dressed." The Chairman's note, which, it is submitted, is truncated, reads: "basic – how dress – feeding across is unworkable". The witness's reference to unworkable, it is submitted, was to communication generally, with dress given as an example of information which had to be communicated. Had Mr Crabbe stated that it was unworkable for one person to tell another how a candidate dressed, that would have been an exaggeration but that was not a fair interpretation of his evidence.

41. Also in paragraph 11, the Chairman's notes record Mr Godson as saying in relation to requests for early release: "shortest can be 1½ hours. Infrequent – probably two a year". The witness was not guilty of "overstatement" as the tribunal found he was. Further, Mr Godson did not make the statement attributed to him in paragraph 11 that "it was necessary for the RRM to meet people on the "talent bank" on an almost daily basis." The reference to almost daily meetings, as shown by the witness statement, was to meetings between the RRM and Mr Godson or one or other of the BDMs, not between the RRM and potential candidates for vacancies. There was no "overstatement" by Mr Godson.

42. It is submitted that the tribunal failed, in paragraph 12, to appreciate or give any weight to the disadvantages and difficulties in using a database. It had been submitted on behalf of the appellants that a database would not be an appropriate means of conveying information about potential candidates for vacancies between job sharers. The tribunal found, at paragraph 12(b), that the database was an efficient method of transfer of information between two job sharers "at least in relation to the public house itself". The house is presumably there being distinguished from the candidates, which is where the real difficulty arose. Further, it is submitted, it is difficult to understand the tribunal's rejection of Mr Crabbe's evidence that a database was unworkable because "the level of detail required would mean that the job sharers spend much time in updating." The second reason given for rejecting that suggestion, namely that the tribunal did not understand why a database could not store such detail, does not deal with the proposition. Nor did the tribunal deal with a further objection to the database, the amount of time that would be spent by a job sharer in obtaining information from it, rather than relying on his or her own knowledge.

43. The risk that an inappropriate person would be put forward for interview by reason of the job share was thought, at paragraph 12(a), to be met by the inevitability that "this would become evident at the interview." That ignores the possibility that appropriate people might not have been put forward at all, which is an equally unsatisfactory possibility, to the disappointed candidate as well as to the employer.

44. It is further submitted that, at paragraph 12 (c), the tribunal failed to appreciate and take into account the large number of informal meetings, described by Mr Godson in his statement, which required the RRM to convey personal views about the nature of public houses and candidates for positions. The analogy with handing over at the end of shifts was inappropriate because the situation was quite different.

45. While the tribunal was entitled to find that the respondent was prepared to work flexible hours, inadequate consideration was given to the problems arising from job share, it is submitted. Preparedness by the employee to be flexible did not meet the problems which would arise.

46. It is submitted that the much shorter consideration of TSM was wholly inadequate. The nature of the job is stated in only two lines at paragraph 4.17 of the Extended Reasons: the incorporation of the RRM function on the tenanted side and a new role of responsibility for the provision of training of tenants and involvement in promotions. There are no findings as to the amount of time which would be required for each aspect of the job or the extent to which the job could sensibly be divided. Save that the reasoning from RRM earlier in the Extended Reasons could to some extent be carried forward, the tribunal rejected, again finding overstatement, the appellants' evidence that job sharing was not possible because of the "lumpiness" of the job, the variation of the workload and the problems of backlog. The finding is not reasoned, it is submitted, and the assertions in the paragraph are no substitute for reasoning. The expression of a suspicion that the TSM role was designed with Miss Hicklin in mind and of Mr Godson's encouragement to the respondent to apply for the job do not contribute to a conclusion that the role could have been devised to allow job share. Mr Godson's encouragement was based on a return to work full-time. The appellants submit that the reasoning is inadequate and that, while the members of the tribunal made it clear that they rejected the appellants' case, the appellants do not know why they have done so.

47. The tribunal have stated in strong terms their dislike of the appellants' evidence, regarding it as overstated and greatly exaggerated. In some respects, doubts are expressed as to the appellants' motivation. There is force in Mr Clarke's submission that the tribunal did not conduct the thorough analysis required or sufficiently appreciate the points made on behalf of the appellants. In a number of respects, evidence has, it appears, been misunderstood and the reasoning is in some respects lacking in cogency.

48. The condemnation by the tribunal of the appellants' approach is at times, and for the reasons given, somewhat thinly supported by analysis or reasoning. My misgivings are increased by the long lapse of time between the giving of the evidence and the decision of the tribunal.

49. However, not without hesitation, I have come to the conclusion that, upon an application of the correct test, the decision of the employment tribunal should be upheld. The following considerations have enabled me to do so:

    a) The appellants' objections to job sharing are substantially summarised at paragraph 10 of the extended reasons, already cited, and elsewhere in the reasons, including in the last part of paragraph 12, in paragraph 13 where the need for an efficient and competitive recruitment process was acknowledged, and in paragraph 18. That is a strong indication that they were in the minds of the members of the tribunal. While I accept the force of Mr Clarke's submission about the limitations of the notes of evidence, the notes do include, particularly in the note of Mr Crabbe's cross-examination, a quite detailed account of the problems which it was said would arise from job sharing and this account must be assumed to have been taken into account.

    b) Weight must be given to the fact that the tribunal had every opportunity during the hearing to assess the seriousness with which the appellants' witnesses had approached the feasibility of job sharing. If the members formed the overall view, as they did, that possibilities were insufficiently explored and objections overstated it is difficult to reject their conclusion. Defects in the detailed reasoning do not invalidate the general and basic conclusion. I am not able to conclude that there was such a misunderstanding or misapprehension of the appellants' case that the conclusion is invalidated. The appellants failed before the tribunal because they failed to persuade the tribunal that their decisions were justified.

    c) The comparatively brief treatment of the major new elements in TSM is surprising but the appellants' case has been concentrated, before this court, as before the tribunal, on the RRM elements in the job. In his written statement, Mr Godson did make reference, albeit quite brief, to the new elements; Mr Crabbe made none. The tribunal's assessment of Ms Hicklin's evidence was important in this context because she became TSM. The tribunal expressed a conclusion about it in paragraph 18. The appellants' stress on the RRM elements makes the tribunal's approach understandable. If the appellants had considered the substantial new elements to be decisive, I would have expected much greater emphasis to have been placed on that aspect of their case. The tribunal was entitled to reach the same conclusion on TSM as it had reached on RRM.

50. I agree with the employment tribunal that a finding of unfair dismissal follows inevitably from the findings adverse to the appellants under section 1(2)(b) of the 1975 Act. In the light of the tribunal's conclusions on the issues argued before them, the tribunal's summary expression of its Reserved Decision was also in my judgment appropriate. Further issues were for the remedies hearing.

51. I would dismiss this appeal.

52. The cross-appeal is correctly stated by the respondent to arise only if the court is minded to allow the appeal. There is a renewed application for permission, Peter Gibson LJ having refused permission on paper. I agree that the cross-appeal would arise only upon a hypothesis which does not exist and I would not propose to deal with the application.

    Lord Justice Thomas:

53. I agree.

54. For the reasons Pill LJ gives at paragraph 32, it is for the Tribunal to determine whether the employer has shown that the proposal is justifiable irrespective of the sex of the person to whom it is applied. As it is the Tribunal which must decide on justification without according any margin of appreciation to the employer, the Tribunal must therefore set out a critical and thorough evaluation following the tests set out in Bilka when making its determination of the merits of the justification advanced. I agree with Pill LJ that this task requires considerable skill and insight.

55. Where the economics of the business of the enterprise or its working practices forms part of the justification, then I would expect the reasons to set out at least a basic economic analysis of the business and its needs; the emphasis in Bilka was on "objectively justified economic grounds". Although the extent of the analysis of the economics of the business and its working practices must depend on the nature of justification advanced and of the enterprise being considered, the analysis must be through and critical and show a proper understanding of the business of the enterprise.

56. It is therefore only after some hesitation and in the particular circumstances of this case that I have been persuaded that the reasons of the Tribunal just achieve the minimum acceptable analysis.

    Lord Justice Gage :

57. I agree that this appeal should be dismissed. I gratefully adopt Pill LJ's summary of the background facts and the statutory provisions.

58. The appellant's first ground of appeal is that the Employment Tribunal applied the wrong legal test when deciding whether or not the admitted indirect sex discrimination was objectively justifiable by the appellant's reasonable business requirements. The appellants argue that in determining this issue the Employment Tribunal should afford an employer a margin of appreciation. Mr Clarke QC submits that the test to be applied is one akin to a test of whether the employer's justification comes within a reasonable range of responses.

59. In my judgment, to hold that an Employment Tribunal must adopt a test of a margin of appreciation would be to add a gloss to the test of "reasonably necessary" (see Cadman v Health & Safety Executive [2004] IRLR 97) and not justified by reference to Barry v Midland Bank Plc [1999] ICR 859 and Allonby v Acrington Rossendale College and Others [2002] ICR 189. As Sedley LJ pointed out in Allonby (citing what Balcombe LJ had said in Hampson v Department of Education and Science [1989] ICR 179) "justifiable" requires an objective balance between the discriminatory effect of the condition on the employee and the reasonable needs of the employer. I agree with Pill LJ that it requires the Employment Tribunal to assess the reasonable needs of the business taking into account the principle of proportionality. In my view the reasonably necessary test is much the same as a test of proportionality and rather different to a margin of appreciation.

60. On the second main ground of appeal I also agree with Pill LJ's analysis of the Employment Tribunal's decision and his conclusions in respect of it. The Employment Tribunal clearly had in mind the guidance given by Sedley LJ in Allonby to which Pill LJ has referred. For my part, I see no reason to depart from what was said in Allonby namely that the decision of an Employment Tribunal is not to be approached by this court with an over fastidious eye (see para 70 of Allonby). In its written decision at paragraph 18 the Employment Tribunal set out in some detail the reasons for its conclusions on the evidence which it had heard. It is also clear that they had in mind the appellant's objections to job sharing. In the circumstances, despite the forceful submissions made on behalf of the appellants, it seems to me impossible to hold that the decision displays an error of law which would justify this court setting aside its decision.

61. For these and the reasons expressed by Pill LJ, with which I agree, I would uphold the decision of the Employment Tribunal and the Employment Appeal Tribunal and dismiss this appeal.