England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HIS HONOUR JUDGE RICHARDSON
UKEAT/01291/16, [2017] UKEAT 0291_16_0108

		Royal Courts of Justice Strand, London, WC2A 2LL
		01/11/2018

Lord Justice Bean:

1. Florence Pinaud joined British Airways on 24 June 1985 as a full-time cabin crew member. She was promoted to the rank of purser in 1993. Until 2005 she was employed on a full-time contract under which she would work six days on duty followed by three days off duty. This 2:1 ratio meant that she was paid on the basis of 243 work days per year.
2. On her return from maternity leave in 2005 she made a request, which was accepted, for a part-time contract described as a "14-14" contract. Under this contract she would be on duty for 14 days and off duty for the next 14 days. Within the 14-day period during which she was on duty she had to be "available for work" on only ten days. "Available for work" did not usually mean her having to work on each of the ten days. She might, for example, actually be in the air on six of the ten days; go on a training course on one day; and be on standby (whether at home or at the airport) on three days, during which she could be summoned to go on a flight at very short notice. Since (disregarding fractions of a day) there are 13 28-day cycles in a calendar year, the effect of the 14-14 contract was that she had to be available for work on 130 days each year.
3. On 30 April 2015 Ms Pinaud's employment terminated when she took voluntary redundancy. On the same date she submitted a written grievance complaining that she had been discriminated against as a part-time worker, because, although she was paid exactly 50% of a full-time salary, the number of days on which she was required to be available to work each year (130) was 53.5% of the number of days when a full-time worker in the same job was required to be available (243).
4. Following the rejection of her grievance and an unsuccessful internal appeal Mrs Pinaud presented her complaint to an employment tribunal on 25 August 2015. We were told that 628 of her colleagues have presented tribunal claims against British Airways, which have been stayed pending the outcome of this appeal, and that this is regarded both by British Airways and by the trade unions to which their cabin crew belong as a test case.
5. In a skeleton argument submitted on behalf of Ms Pinaud to the Reading Employment Tribunal ("ET) at the start of the hearing before them, Michael Smith of counsel submitted at paragraph 19 that:-

"(1) The Claimant as a part-time worker, was required to perform 3.5% more work days proportionately than a full-time worker from 2005-2015; and

(2) The Claimant was regularly required to work more than 50% of the duty hours of a full-time employee, despite receiving 50% of a full-time employee's salary.

The above constitutes less favourable treatment under Regulation 5"

6. It was agreed before the ET that Ms Fiona Evans, a cabin crew Purser who had been employed on a full-time 6-3 contract since 1993 was a suitable comparator.

The regulations

7. Regulation 5 of the Part-Time Workers (Prevention of Less Favourable) Treatment Regulations 2000 ("the PTW Regulations") provides:-

"5.—(1) A part-time worker has the right not to be treated by his employer less favourably than the employer treats a comparable full-time worker—

(a) as regards the terms of his contract; or

(b) by being subjected to any other detriment by any act, or deliberate failure to act, of his employer.

(2) The right conferred by paragraph (1) applies only if—

(a) the treatment is on the ground that the worker is a part-time worker, and

(b) the treatment is not justified on objective grounds."

8. These two subparagraphs are at the heart of the present case. It is convenient shorthand to refer to paragraph 5(1), coupled with paragraph 5(2)(a), as dealing with prima facie unfavourable treatment, which has to be shown before the issue of justification falls to be considered.
9. British Airways, however, also refer to the pro rata principle which is dealt with in Regulations 5(3), 1(2) and 1(3):-

"5(3) In determining whether a part-time worker has been treated less favourably than a comparable full-time worker the pro rata principle shall be applied unless it is inappropriate."

10. The "pro rata principle" mentioned in Regulation 5(3) is defined in Regulation 1:-

"1(2) In these Regulations—

…

"pro rata principle" means that where a comparable full-time worker receives or is entitled to receive pay or any other benefit, a part-time worker is to receive or be entitled to receive not less than the proportion of that pay or other benefit that the number of his weekly hours bears to the number of weekly hours of the comparable full-time worker;

1(3) In the definition of the pro rata principle and in regulations 3 and 4 "weekly hours" means the number of hours a worker is required to work under his contract of employment in a week in which he has no absences from work and does not work any overtime or, where the number of such hours varies according to a cycle, the average number of such hours."

11. It was common ground between counsel before the ET, as it has been before us, that the first way in which the Claimant put her case, namely that she was required to perform 3.5% more work days proportionately than a full-time work, did not engage the pro rata principle, but that the second way of putting the case, namely that she was required to work more than 50% of the duty hours of a full-time employee despite receiving only 50% of the latter's salary, did engage the pro rata principle.

The decision of the employment tribunal (ET)

12. The ET (Employment Judge Vowles and two lay members) heard evidence from the Claimant and from two witnesses on behalf of British Airways. They found that the Claimant had been treated less favourably on the ground that she was a part-time worker; rejected the employer's defence that the less favourable treatment was justified; and ordered that the case should be listed again to determine remedy. On the central issue their judgment was short and to the point:-

"25. It was … not in dispute that the claimant had to be available for work on 130 days per year and the comparator had to be available for work on 243 days per year.

26. The respondent accepted that the requirement to be available for 243 days and 130 days respectively amounted to terms of the respective contracts of employment of the comparator and the claimant.

27. 50% of 243 days would be 121.5 days. The Claimant had to be available for 130 days. That was 8.5 days more than 50%. Put another way, she had to be available for 53.5% of the days on which the comparator had to be available, but was only paid 50% of the comparator's salary.

28. The Tribunal found that the Claimant had therefore been treated less favourably than the comparator as regards the terms of her contract within the meaning of Regulation 5(1)(a).

29. Under Regulation 8(6) where less favourable treatment is found it is for the employer to identify the ground for that less favourable treatment.

…

33. The Tribunal rejected the suggestion that 3.5% additional availability was trivial. The requirement to be available for work for an additional 8.5 days over the course of a year was a significant period."

13. The ET went on to find that the reason for the requirement to be available for the additional 8.5 days per year was because the Claimant was employed on the 14-14 contract on which only part-time workers were employed. After referring to the decision of the EAT in Carl v University of Sheffield [2009] ICR 1286 they found that part-time worker status was the "effective and predominant cause" of the less favourable treatment. It was common ground before us that, if the ET were correct in their view that the requirement to be available for 130 days rather than 121.5 days constitutes less favourable treatment, causation is not an issue.
14. We can summarise the ET's decision on justification briefly since, as will shortly appear, it was not in dispute before us. The ET found that there was a legitimate objective in the part-time shift pattern but that the less favourable treatment was not a necessary or appropriate means of achieving the objective; and that "a non-discriminatory means of achieving the same legitimate aim would be to simply re-name the part-time 14-14 contract as a part-time 53.5% contract and pay an annual salary of 53.5% of the full-time 6-3 salary."
15. The ET went on to note that they had been presented with a range of statistics showing the actual hours worked by the Claimant and the comparator and others who, like Ms Evans, were also on a 6-3 full-time contract. They found that, so far as concerned the first way in which the Claimant put her case, the statistics were not only unnecessary but irrelevant. They emphasised that "the tribunal's finding is based on the requirement to be available for work on a specific number of days and not on the actual work which was carried out on those days."
16. They concluded by saying that they considered it unnecessary to consider the complaint based on the alternative way of putting the Claimant's case (being required to work more than 50% of the duty hours of a full-time comparator despite receiving 50% of her salary) but added that that matter, and the statistics presented to them about the actual number of hours worked, might be relevant to the issue of remedy.

The appeal to the Employment Appeal Tribunal

17. The appeal to the EAT was heard by HHJ David Richardson, sitting alone. In a reserved judgment given on 8 September 2017 he held that the ET had been right to compare the number of days the Claimant was required to be available for work (130) with the number of days on which the comparator was required to be available for work (243), but that the ET had erred in their approach to justification. He decided to remit the issue of justification to the ET and said:-

"46. The ET, having accepted that the unfavourable treatment was in pursuance of a legitimate aim, was, to my mind, bound to make a practical assessment of the impact of the unfavourable treatment, when deciding whether the treatment was appropriate and necessary for achieving the objective pursuit. Part of the case of the Respondent on this question depended on the statistical evidence. It argued that the impact on the part-time worker was limited, because the statistics showed that the part-time worker, once the bidding process was undertaken, was in practical terms not required to work more hours than her full-time comparator. Hence, even if there was, as so the ET found, unfavourable treatment, the Respondent said that the statistics showed that its impact was minimal.

47. I confess that I am sceptical about the Respondent's "swings and roundabouts" argument based on the statistical evidence. I find it difficult to see why, if the part-time worker had to be available for a greater number of days, this should not work its way through into a significant impact for the employee, both in terms of days of availability and hours worked. However, once granted that the ET found the unfavourable treatment to be in pursuance of a legitimate aim, I think the Respondent's case about the practical impact required to be addressed. The ET appears to have thought that the mere fact that the Claimant would have to be available to work on proportionately more days meant that the statistics were irrelevant. I do not think this was correct. The fact that the Claimant had to be available to work on proportionately more days was the feature that required to be justified. Its existence did not rule out an enquiry into the extent to which it impacted on her so that a conclusion could be reached on whether the measure was proportionate.

48. It also seems to be impossible for the ET to advocate, as it did, an increase in salary as a simple, non-discriminatory way of achieving the same aim, without asking whether the unfavourable treatment, in terms of days of availability, did work its way through into the amount of work the Claimant did. If it did not, then it is far from obvious that an increase in salary was an alternative way of achieving the legitimate aim, which the Respondent could be expected to adopt. It might, indeed, be out of proportion to the impact of the disparate treatment on the Claimant.

49. I am told that this feature, the ET's suggestion of a salary increase, did not figure largely in the hearing and was not put to the Respondent's witnesses. If it had been, I think the ET would have understood more clearly the importance of addressing the statistical evidence which it had before it.

50. It follows that on that ground, the appeal will be allowed. The ET's finding of less favourable treatment will be upheld but the question of justification will be remitted.

51. I turn now to the question of remission. If justification of the first way in which the Claimant put her case is to be remitted then as matter of elementary justice the ET will also have to consider the second way in which she put her case, so the matter is remitted for the ET to consider afresh justification in respect of the first way in which the claimant put her case and all aspects of the second way in which she put her case."

The appeal to this court

18. British Airways appeal against the decision of the EAT insofar as it upheld the finding by the ET that the fact that the Claimant had to be available for 130 days rather than 121.5 days per year established her case of prima facie less favourable treatment within Regulation 5(1)-5(2). There is no cross-appeal against Judge Richardson's decision to set aside the ET's decision on justification and remit it to a freshly constituted ET for re-hearing; and it is clear that when the case does come before the ET again they should pay careful attention to what Judge Richardson has said about how the justification issue should be approached.
19. I have said that the ET dealt with the central issue briefly and I shall do the same. The terms of the Claimant's contract required her to be available for work 130 days per year. The terms of the comparator's contract required her to be available 243 days per year. The Claimant was paid 50% of the comparator's salary. Half of 243 is 121.5. There may be advantages to the part-time worker from the way the 14-14 contract was constituted, and these may or may not be found sufficient to establish the justification defence when the case is remitted to the ET. But that does not affect the question of whether the terms of the Claimant's contract, insofar as they require her to be available for 130 days rather than 121.5 days, were prima facie less favourable than those of her full-time comparator: which is all we are concerned with in this appeal. In my view the ET were right to hold that they were.
20. We were referred to the decision of this court in Royal Mencap Society v Tomlinson-Blake [2018] IRLR 932 as to the meaning of the phrase "required to work" in the National Minimum Wage Regulations 1999 and 2015. I did not find this of assistance in the present case for two reasons. Firstly, the phrase "required to work" only occurs in the PTW Regulations in the sections dealing with the pro rata principle which are irrelevant to the point in issue on this appeal. Secondly, the NMW Regulations have extensive and detailed provisions on what amounts to work which are not found in the PTW Regulations.
21. When the case is remitted to the ET, as I consider it should be, on the basis that a prima facie case of less favourable treatment has been established, the ET will first have to consider the justification defence. If that is rejected, the ET will then have to go on to consider remedy. British Airways were understandably concerned at the ET's observation that a non-discriminatory way of treating the part-time workers on the 14-14 contract would have been to increase their pay to 53.5% of the full-time salary. The Claimant's schedule of loss puts forward as one alternative a simple claim for 3½% of salary and pension contributions over the ten-year period during which the Claimant was on the 14-14 contract: a claim for more than £50,000 in her case alone.
22. The remedy under Regulation 8 of the 2000 Regulations is compensation:-

"(9) … such as the tribunal considers just and equitable in all the circumstances having regard to (a) the infringement to which the complaint relates; and (b) any loss which is attributable to the infringement having regard … to the pro rata principle except where it is inappropriate to do so; and

(10) The loss shall be taken to include

(a) any expenses reasonably incurred by the claimant in consequence of the infringement; and

(b) loss of any benefit which he might reasonably have expected to have had, but for the infringement."

23. Both counsel before us accepted that should the case at the remitted hearing get to the stage of remedy, compensation would be at large. I will only say that if the Tribunal accepts the statistical evidence put forward by British Airways to the effect that the days per year actually worked by the Claimant were fewer pro rata than the days actually worked by her comparator, but rejects the defence of justification, it would be a very surprising conclusion to go on to find that she has suffered "loss attributable to the infringement" amounting to 3.5% of her total remuneration over the ten year period which is the subject of her claim, or that compensation on that special damage basis would be just and equitable in all the circumstances.
24. I would dismiss this appeal.

Lord Justice Flaux:

25. I agree.

Lord Justice Peter Jackson:

26. I also agree.