ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HHJ McMullen QC, Mr K Edmondson JP & Mr D Smith
UKEAT/0116/10/ZT, BAILII:  UKEAT 0116_10_2312
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE ELIAS
LORD JUSTICE DAVIS
| COPPLE & ORS
|- and -
|LITTLEWOODS PLC & ORS
Mr Thomas Linden QC and Mr Stefan Brochwicz-Lewinski (instructed by Messrs Weightmans LLP) for the Respondent
Hearing dates : 11 October 2011
Crown Copyright ©
Lord Justice Elias :
"The Claimants were employed in various positions, principally in occupations where they were described as "graded employees", as opposed to the supervisory and management positions of "zoned employees". Their dates of employment begin as long ago as 1968. For the purposes of legal proceedings, 8 April 1976 is the relevant start date, for this is when the judgment of the ECJ in Defrenne v Sabena  ECR I-455 took effect. The availability of a pension scheme to employees of the Respondents changed at different stages and the relevant periods are as follow:
(1) 8 April 1976 to 1 January 1977: membership of the scheme was compulsory for supervisors and voluntary for others, but part-time staff were excluded.
(2) 1 January 1977 to 6 April 1988: membership of the scheme was made compulsory for new entrants in the zoned categories; part-timers were excluded. It was closed to graded employees but those already in the scheme were entitled to remain and to continue contributing. In effect, it became a "top hat" scheme available only to managers.
(3) 6 April 1988 when section 15 of the Social Security Act 1986 came into effect to 1 June 1988: This rendered void any term within an occupational pension scheme which made membership of the scheme compulsory. The Respondents' scheme, therefore, was voluntary by law.
(4) 1 June 1988: membership of the scheme was made available on a voluntary basis to all zoned and graded staff, but not to part-timers.
(5) 1 April 1990 to 1 July 1995: eligibility for the scheme was opened up in stages to part-timers, first to those working 22.5 hours, then 15 hours, then 12 hours a week and finally to all on 1 July 1995."
"The Equal Pay Act shall be so modified as to provide that where a court or an industrial tribunal finds that there has been a breach of a term in a contract of employment which has been included in the contract, or modified, by virtue of an equality clause and which relates to membership of a scheme, or where it makes an order declaring the right of an employee to admission to membership of a scheme in pursuance of the equal access requirements, it may declare that the employee has a right to be admitted to the scheme in question with effect from such date ("the deemed entry date") as it may specify, not being earlier than …8 April 1976."
The hearing before the Employment Tribunal.
The decision of the Employment Appeal Tribunal.
The grounds of appeal.
Is the opt-out principle compatible with EU law?
"sufficiently effective to achieve the objective of the directive. …Such measures may include, for example, provisions requiring the employer to offer a post to the candidate discriminated against or giving the candidate adequate financial compensation."
At paragraph 23 the Court said this:
"Although… full implementation of the directive does not require any specific form of sanction for unlawful discrimination, it does entail that that sanction be such as to guarantee real and effective judicial protection. Moreover, it must also have a real deterrent effect on the employer."
Finally, at paragraph 28 it said:
"It should, however, be pointed out to the national court that although Directive 75/207/EEC, for the purpose of imposing a sanction for the breach of the prohibition of discrimination, leaves the member-States free to choose between the different solutions suitable for achieving its objective, it nevertheless requires that if a member-State chooses to penalise breaches of that prohibition by the award of compensation, then in order to ensure that it is effective and that it has a deterrent effect, that compensation must in any event be adequate in relation to the damage sustained and must therefore amount to more than purely nominal compensation such as, for example, the reimbursement only of the expenses incurred in connection with the application. …"
"Where financial compensation is the measure adopted in order to achieve the objective indicated above, it must be adequate, in that it must enable the loss and damage actually sustained as a result of the discriminatory dismissal to be made good in full in accordance with the applicable national rules."
Here the remedy is not compensation as such, but it is just as effective since the declaration enables the woman claimant to be treated as if she was always a member of the scheme.
"Where such discrimination has been suffered, equal treatment is to be achieved by placing the worker discriminated against in the same situation as that of workers of the other sex. Consequently, the worker cannot claim more favourable treatment, particularly in financial terms, than he or she would have had if he or she had been duly accepted as a member…"
The 'Sorbie' principle.
"In our view, to allow the declaration to continue during the open period up until the time she actually joined the scheme would be to give her an advantage over her colleagues who did not so join. She would be in a better position than a full-timer whose contract at all times included a term that he could join the scheme, but who never did. In the closed period, the implied term operated to equiperate her terms with his so that both had the right to join the scheme. In his case it is express and in hers implied. When the scheme was open to all, there was an express term in her contract, and in his, giving a right of access to the scheme. There is no discrimination of any sort going on thereafter and no reason in law why she should be compensated for not joining the scheme, by extending a declaration to her, when he is not entitled to it. The reason why neither of them joined the scheme is not found in discrimination but in choice. For that matter, she would also be in a better position than a female full-time colleague."
The scope of the declaration.
"I hasten to emphasise that those reasons would not entitle her to succeed in respect of that part of the claim which falls after the date on which she became eligible for membership. It can only ever be of relevance to that part of the claim during which she was excluded from membership by the scheme's rules."
The burden of proof.
"181. The burden of proof is of course, as in all civil proceedings, on the applicant and it will therefore be for an applicant who did not opt in on becoming eligible to do so, or who positively opted out when invited to join, to satisfy the tribunal that she would, nonetheless, have joined during the period of exclusion had she been able to. If she can satisfy the tribunal that she would have joined, she will have established a breach of the equality clause. It is not difficult to think of circumstances which might well persuade a tribunal that there had been a breach of the equality clause. For example, because of her exclusion from the scheme the applicant had made alternative private arrangements and membership of the employer's scheme was no longer either relevant or available to her; or, by the time she became eligible to join the scheme, the applicant was so close to retirement that it was not worthwhile contributing…."
"Your claim will not succeed in respect of this period if you do not join the scheme when the rules later changed to allow you to do so or you only did so after significant delay. This is because your failure to join the scheme when you were allowed to, suggests that had you been a full–timer you would not have joined the scheme during this earlier period of time anyway and therefore you have lost nothing. However, there is an exception for applicants who can satisfy a tribunal that they would have joined during the earlier period had they been eligible. This is to allow for special cases such as those where by the time the rules were changed to enable part–timers to join, an applicant was so near to retirement that joining was pointless, or she had already taken out a private pension plan."
"13. The respondent has taken the view that any claimant who did not join the scheme within three months of becoming eligible is guilty of significant delay and has therefore suffered no detriment. There are two flaws in this position: that delay of itself is a disqualification and that any particular length of delay can be regarded as a cut off or watershed. Even if this latter proposition were true, [there is no warrant for it in Preston (No.3)] in our judgment 3 months is too short and, if it is their only argument, the respondent is unlikely to succeed against any claimant who appears to have had a reason for not joining the scheme at an earlier date and who has delayed for say 4 or even 5 months. Note that we do not qualify the word 'reason' by any adjective such as 'good' or 'valid'. It is not for a tribunal to determine whether the decision not to join within a certain period was logical, sensible, rational or even comprehensible. The tribunal's function is to determine whether the claimant's explanation for the delay in joining negatives the evidential presumption of an absence of detriment during the period of exclusion to which a lengthy period of delay gives rise. An inability to comprehend the claimant's reasons for the post-eligibility delay however, is very likely to undermine her ability to discharge the burden of proving that it does.
14. As the presumption is evidential rather than legal, delay by itself cannot be decisive, although it clearly will have some, and particularly with long delays, probably a major, part to play in influencing the tribunal in deciding whether a claimant would have joined the scheme at an earlier date had she had the opportunity…..
15. Delay and its absence may both in fact be illusions, equally capable of deceiving the casual observer. The claimant who delays several months before joining the scheme may just be ultra cautious or even down right dilatory, and would have taken as long to decide to join whenever the opportunity to do so had arisen. Or she may be subject to a domestic regime which requires her to obtain her husband's approval before making such a decision and when the opportunity to join first arises he just happens to be abroad or seriously ill. Or in recent times she may have been labouring under financial or other constraints that prevent her from joining the scheme that were not operative factors even 6 months before. In none of these cases does the delay in joining signify an absence of earlier detriment."
"Paragraph 7.2 is in similar but not identical terms to the passage of the Chairman's judgment, which we have quoted, found in paragraph 36 of the Preston decision. In effect, it raises a rebuttable presumption. If on becoming eligible a person did not join the scheme, then the presumption is that they would not have joined it even had they been eligible to join at an earlier stage, but there may be circumstances where they can rebut that presumption by demonstrating in one way or another that they would then have joined. Neither party has suggested that the guidance is inappropriate or legally incorrect, and in my judgment it provides a legally sound and practical approach which tribunals can safely adopt in relation to cases which it is addressing."
"The fact that when she becomes eligible she does not join will be powerful and often very powerful evidence from which a Tribunal will readily draw the inference that she would not have joined even had she been notified of her eligibility at an earlier stage. But it is not necessarily conclusive and the tribunal must always focus on the crucial question whether she would have joined the scheme at the earlier stage or not. There may be explanations as to why she did not join later but would nonetheless have joined earlier. Paragraph 7.2 recognises that this is a clear possibility. A potential special case which identified in paragraphs 7.2 is where she has taken out a private pension and it may have been more sensible for one reason or another to maintain that arrangement in place rather than to go into the employer's scheme. But there may be other explanations, good or bad, as to why she did not join when she became eligible to her knowledge and yet will still be able to establish that she would have joined at an earlier date."
"I have a concern that if the first sentence of that paragraph is taken out of context then a claimant who is in fact in a position to succeed in her claim will assume that she is not. It is plainly not the law that a claimant cannot succeed in the circumstances envisaged. She may well be able to do so. In Dennison, Elias J commented, at paragraph 10, that:
"In effect, it raises a rebuttable presumption. If on becoming eligible the person did not join the scheme, then the presumption is that they would not have joined it even had they been eligible to join at an earlier stage, but there may be circumstances where they can rebut that presumption by demonstrating in one way or another that they would then have joined."
I do not read those comments as indicating that there is a presumption in law that requires to be rebutted in any case where a claimant has not joined a pension scheme when first allowed to do so or has delayed. Indeed, the governing statute, the Equal Pay Act, does not provide for any such presumption. Another way of putting it would be to recognise that as a matter of evidential assessment, a Tribunal will be entitled to infer from the fact that the claimant did not join the scheme when she became entitled to do so or, if she did join later, that she delayed in doing so, that she would probably not have joined it at an earlier date. However, as ever, the Tribunal will require to consider the whole facts and circumstances and will, equally, be entitled to conclude that the claimant would have joined earlier notwithstanding her not having done so at the first opportunity if, on those facts and circumstances, it is satisfied that she probably would have done. As the present case shows, approaching matters in terms of presumptions which require to be rebutted may not always be helpful."
Lord Justice Davis:
Lord Justice Mummery: