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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> McKeown v Ulster Community & Hospitals Trust [2003] NIIT 884_00 (12 March 2003)
URL: http://www.bailii.org/nie/cases/NIIT/2003/884_00.html
Cite as: [2003] NIIT 884_, [2003] NIIT 884_00
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- It was conceded before us, and the tribunal so determines, that the respondent and the Royal Group of Hospitals are separate legal entities.
- The tribunal determines the second preliminary question put to it in the negative. The respondent and the Royal Group of Hospitals are not associated employers within the meaning of Section 1(7) of the Equal Pay Act (Northern Ireland) 1970 ["the 1970 Act"].
- Mr McAdam conceded that the applicant was not employed at the same establishment as any of her chosen comparators. The tribunal determines that the applicant and her chosen comparators were not employed in the same service on 5 May 2000. The tribunal thus answers the third preliminary question put to it in the negative.
- Having made the determinations above, the tribunal now dismisses the applicant's complaints.
- Whether the respondent and the Royal Group of Hospitals Trust are separate legal entities.
- If so, whether they are associated employers.
- Whether the applicant and her chosen comparators, or any of them, were as at 5 May 2000 employed in the same establishment or service.
- At a previous Hearing on Directions, another tribunal Chairman had directed that the parties collaborate to produce an agreed Statement of Facts. This was adduced before the tribunal on 12 March 2003, and provided as follows:-
- At the hearing before the tribunal on 12 March 2003, the respondent withdrew any issue it had taken in the Notice of Appearance regarding the possibility of the applicant's claim being out of time.
- Moreover, at the hearing for the tribunal on 12 March 2003, Mr McAdam conceded that the respondent and the Royal Group of Hospitals were separate legal entities. The tribunal therefore answers the first of the preliminary questions put to it in the negative.
- The tribunal received an agreed witness statement made by Christopher Dennison, signed and dated 10 March 2003. Mr Dennison is employed by the respondent as Human Resources Manager. Inter alia, Mr Dennison deposed as follows;
- Before the tribunal, Mr McAdam submitted the applicant could rely on Article 141 of the EC Treaty to argue that another employer within the National Health Service could be deemed to be an 'associated employer'. He argued that these employers were originally one employer and then were separated into Trusts as separate legal entities which continued to be funded by the Department of Health, and all were under the Eastern Health and Social Services Board, which commissioned their services and funded their staffing allocations. Each Trust concerned employed staff under the Whitley Council terms and conditions, which are negotiated between both sides of management in London. These terms and conditions of employment are adopted by the Department in Northern Ireland, which then (in turn) instructs each of its Health Trusts to implement same. The tribunal was referred to agreed documents. One such document from J L Townson, Deputy Director at the Department of Health, Social Services & Public Safety, and dated 15 May 2002, instructs the agent HSS Boards and Trusts to implement the latest changes to national salary scales for 2002/03. Mr McAdam argued that the applicant could not, therefore, compare herself with a counterpart in the private health care sector, since that was clearly not an associated employer and not subject to the annual variations in the Whitely Council's agreements.
- According to Mr McAdam, there exist policies affecting recruitment of staff throughout all Trusts in Northern Ireland in a redundancy situation, or indeed where staff through changes in GP fund-holding as imposed by the Department of Health were surplus, they would be accommodated/ redeployed on an ongoing basis into other Trusts, under the control of the Department of Health. The Department could order a Trust to suspend external competition for posts until such supernumerary individuals had been assigned suitable alternative employment within another Trust under its care and control. In this respect, the tribunal was referred to an agreed document dated 21 March 2002 from Karyn Patterson, Human Resources Manager of the Eastern Health and Social Services Board, which attached a policy for staff redeployment. Likewise, the tribunal had adduced to it a document dated 26 February 2002 from J L Townson, Deputy Director of Human Resources at the Department of Health, Social Services and Public Safety, setting up a clearing house system for the ending of GP fund-holding which was to be applied by, inter alia, the Chief Executive of each HSS Trust within Northern Ireland. The tribunal also was asked to consider a similar document from J L Townson dated January 2002, as an example of how the clearing house system was to operate to find suitable alternative employment for employees made redundant on foot of the ending of GP fund-holding. In addition, the tribunal received a document dated June 1996, which was promulgated by the Eastern Health and Social Services Board, and which issued a draft redundancy and redeployment policy for all staff within the Eastern Health and Social Services Board (which comprised both the respondent and the Royal Group of Hospitals).
- Moreover, Mr McAdam submitted that the Department of Health is currently engaged in an exercise of partnership involving the Trades Unions to standardise a single system of pay, terms and conditions, training and career progression. This alignment has been driven by the Agenda for Change policy over the past four years. Mr McAdam adduced the Agenda for Change policy document, dated December 2000, before the tribunal. This document is about to introduce job profiles which will apply across the Health Service, single pay spines for staff, and career progression paths which are standardised for all. Apart from the Greater London area, weighting and clearly-demonstrated recruitment and retention premia would affect jobs across the United Kingdom and would be equalised given the equal work carried out. Mr McAdam conceded that the Agenda for Change policy will come into effect in October 2004 across all HSS Trusts in Northern Ireland under the aegis of the Department of Health, Social Services and Public Safety, and that – until then – its provisions remained in draft only.
- Mr McAdam also submitted that proof of this association was the fact that each HSS Trust was funded from the central DHSSPS.
- Drawing these arguments together, Mr McAdam contended that the respondent was an associated employer of the Royal Group of Hospitals, and therefore that the applicant was employed "in the same establishment or service" in which common terms and conditions are observed. Mr McAdam cited Scullard v. Southern Regional Council for Education & Training [1996] IRLR 344, EAT.
- Referring to paragraphs ix and x. of the agreed statement of facts, Mr Devlin for the respondent urged the tribunal to answer the second preliminary question in the negative. He cited the Equal Pay Act (NI) 1970, and in particular section 1(7) of the Act which provides;
- Mr Devlin also cited Article 10 of the Health & Personal Social Services (NI) Order 1991, which provides:-
- Schedule 3, Part II to the 1991 Order sets out the specific duties, powers and status of each such Health and Social Services Trust so created.
- Mr Devlin therefore argued that the respondent was a body corporate, as was the Royal Group of Hospitals Trust. In this regard, he cited Heasley v. Fair Employment Agency [1988] NI Reports 585 as authority of the Northern Ireland Court of Appeal which was binding on the tribunal. In Heasley the appellant was employed by the Fair Employment Agency (as it then was) and she brought a complaint to the Industrial tribunal for a decision that she was employed on like work to the administrative officer in the Equal Opportunities Commission (as it then was), arguing that the Agency and the Commission were associated employers within the meaning of the Equal Pay Act (NI) 1970. Ms Heasley argued that the Agency and the Commission were directly and indirectly controlled by government departments namely the Department of Economic Development and the Department of Finance and Personnel. The head note to the report summarises the Judgement of the Court of Appeal, led by Lowry LCJ, as follows;-
- Lord Lowry held, in respect of the distinction to be drawn between a company and a body corporate, that;-
- Mr Devlin therefore argued that Lord Lowry's dictum in Heasley made it clear beyond peradventure that, where an employer and a comparator are bodies corporate, they cannot come under the definition provided by section 1(7) (c) of the 1970 Act. Finally, in respect of the concluding paragraph of section 1(7) of the 1970 Act, Mr Devlin submitted that this is a deeming provision, setting out the conditions to be satisfied if one is so employed by an associated employer.
- Turning to the third preliminary question put before the tribunal, Mr McAdam submitted that he was not arguing that the applicant was employed at the same establishment but in the same service as the comparators she had cited, Messrs Doherty, McGlinchey and Brown. Article 119 of the Treaty of Rome {as amended by the Treaty of Amsterdam to become Article 141} could thus be cited in aid of the applicant. In this respect, Mr McAdam cited Scullard v. (1) Knowles & (2) Southern Regional Council for Education & Training [1996] IRLR 344. In that case the appellant was employed by the second respondent [SRCET] as a further education manager. The first respondent was the secretary to the second respondent. SRCET was an independent voluntary association of local education authorities established for the purpose of co-ordinating the work of colleges of further education and exchanging information about further education. There were, at that time, twelve further education units in Great Britain, most of them attached to regional advisory councils. The units were supported and funded by the Training & Education Directorate of what then became the Department of Education and Employment. The appellant, as the only woman employed as a unit manager, brought an equal pay claim, seeking to compare herself to the unit managers employed by other councils, all of whom received higher salaries for the same or similar work. At first instance, the industrial tribunal found that neither SRCET nor the other regional advisory councils were "companies". Therefore, the comparators could not be employed by "associated employers" within the meaning of the equivalent of section 1(7) of the 1970 Act. On appeal, the Employment Appeal tribunal held that the class of comparators defined in section 1(7) is more restricted than applies under the current Article 141 of the EC Treaty, as interpreted by the European Court of Justice. Per Mummery J;
- Mr McAdam also cited South Ayrshire Council v. Morton [2001] IRLR 27 in support of his contention that the applicant was in the same service (the provision of services to patients under what is commonly thought of as the National Health Service) as her comparators, Messrs. Doherty, McGlinchey and Brown. In South Ayrshire Council v. Morton, the Employment Appeal tribunal held that;
- For the applicant, Mr McAdam also put forward Lawrence & Others v. Regent Office Care Ltd [2002] IRLR 822. He exhorted the tribunal to follow the reasoned opinion of Advocate General Geelhoed;-
- Extrapolating from Scullard, Morton, and Lawrence, Mr McAdam emphasised that;
- Mr Devlin argued that the burden of proof was on the applicant to persuade the tribunal in her favour; if not discharged, then the tribunal should find against Ms McKeown. Mr Devlin conceded that the European Court of Justice, in an extensive canon of jurisprudence from Defrenne (No.2)[19] through Macarthys v. Smith[20] to the cases of Worringham v. Humphreys[21] and Brunnhofer[22] had clearly established that Article 141 does have direct effect. Moreover, Mr Devlin accepted that, if in conflict with domestic legislation, the Treaty of Rome, as amended, and all European Union law emanating from it, must be given predominance. However, he reverted to his position that, by section 1(7) (c) of the 1970 Act, the applicant was left without a form of relief in this jurisdiction under the law as it stood.
- According to Mr Devlin, Scullard[23] established that the tribunal is not to be content with the restrictions imposed by section 1(7) of the 1970 Act, but must also ask itself whether the claimant and her comparators are employed "in the same establishment or service". Mr Devlin underscored this by referring back to the EAT's judgement at page 346, paragraph 18, which adumbrates the factors to be considered by a tribunal and in which passage the EAT sets out the wide variety of factual circumstances to be considered at first instance, viz:
- In Mr Devlin's view, the crucial aspect of his argument was that there was nothing in Northern Ireland that bound the Trusts together to adhere to (a) a uniform job evaluation scheme, and (b) a uniform job grading scheme. The Joint Councils were not emanations of the State, and the guidelines they produced were not binding on each and every HSS Trust, nor did they mean that each Trust was obligated to follow the practices and procedures of each and every other Trust. In practical terms, the respondent was not obliged to follow the practices and procedures established by the Royal Group of Hospitals Group Trust. Mr Devlin took the tribunal back to Mr Dennison's agreed witness statement dated 10 March 2003, wherein he had deposed that, to a greater or lesser degree, each HSS Trust was – at present – autonomous albeit in a college with other HSS Trusts working the agreement made by the Joint Councils, but that this situation was to be phased out under the Agenda for Change initiative. Agenda for Change was an initiative from central government, and will mean that from October 2004 each which Trust will be required to follow (a) uniform grading structures for posts, and (b) a uniform job evaluation scheme incorporating uniform grading definitions across all posts and across all HSS Trusts throughout the United Kingdom.
- Citing Lawrence v. Regent Office Care Ltd, Mr Devlin quoted from Advocate General Geelhoed;
- Moreover, Mr Devlin submitted that there was nothing in the Health & Personal Social Services (NI) Order 1991 that contains such a binding obligation on HSS Trusts in Northern Ireland. In this respect, he cited Schedule 3 to the 1991 Order, which provides;
- The tribunal has considered all the agreed evidence before it as laid out in the Findings of Fact above. Moreover, the tribunal has considered very carefully all the parties' submissions, and all the citations, references and case law cited. Before it sets out its Decision, the tribunal wishes to earnestly record its gratitude to Mr McAdam and Mr Devlin for the thoroughness of their preparation of these complex arguments, and for their professionalism and courtesy in their delivery.
- The tribunal makes the following decision;
CASE REF: 00884/00
APPLICANT: Alexandra McKeown
RESPONDENT: Ulster Community & Hospitals Trust
Appearances:
The applicant was represented by Mr K McAdam, MSF Union.
The respondent was represented by Mr A Devlin, of Counsel, instructed by Brangam & Bagnall, Solicitors.
THE PRELIMINARY ISSUES BEFORE THE TRIBUNAL:
THE TRIBUNAL FOUND THE FOLLOWING FACTS:
i. The applicant has been continuously employed by the respondent and its predecessor in title in the period from June 1981 to date. The applicant works in the Salaries and Wages department at Ards Hospital, where she is employed by the respondent in the capacity of a Grade 5 Payroll worker. The applicant's post is currently graded by the respondent at Administrative & Clerical ['A&C'] Grade 5.
ii. In the period prior to 2000, the applicant made application[1] to the respondent to have her post re-graded from an A&C Grade 5 post to a higher grading, namely a Grade 6 post[2]. This process was in the first instance carried out by means of job evaluation interviews. The applicant underwent such a job evaluation interview on 19 January 1999.
iii. In her attempt to have her job re-graded to an A&C Grade 6 post, the applicant was unsuccessful. The applicant persisted with her attempt to secure re-grading, and made use of the respondent's internal Grievance Procedure. The applicant was unsuccessful both at Stage I and Stage II of the Grievance Procedure.
iv. By means of her Originating Application presented on 5 May 2000, the applicant complained inter alia as follows;
On 23 February 2000 I became aware that my appeal for regrading to A&C Grade 6 had been refused.
I believe that the actions of my employer over a period from 2 November 1998 to 23 February 2000 were such that I was subject to discrimination contrary to the Sex Discrimination (NI) Order 1976 and its amendments, the Equal Pay Act and relevant European Legislation…
…As a result of these actions I believe that I have been treated in a detrimental way contrary to the Sex Discrimination (NI) Order 1976, the Equal Pay Act and relevant European Legislation.
v. By means of its Notice of Appearance presented on 31 May 2000 the respondent responded as follows;
The respondent denies the allegations of sex discrimination in their entirety…The respondent also denies that there is any basis for a claim under the Equal Pay Legislation.
vi. By means of an Order for Further Particulars dated 16 January 2001, the tribunal required the applicant to provide Particulars of "…the allegation that I have been treated in a detrimental way contrary to the Sex Discrimination (NI) Order 1976, the Equal Pay Act and relevant European Legislation" together with all facts, circumstances and contentions relied on in relation to same including the identification of comparators.
vii. In response to the Order dated 16 January 2001, the applicant's representative MSF wrote to the respondent's solicitors by letter dated 8 February 2001. In that letter it was stated inter alia as follows:-
In addition, the applicant contends that she is less favourably graded compared to other NHS employees within Payroll Departments in other Trusts of comparable size e.g. Royal Group of Hospitals Trust. Within the Payroll Section at the Royal Group of Hospitals Trust there are men who are graded higher than the applicant but with posts which are of no more value than the applicant's.
viii. Subsequently, in two letters to the respondent's solicitors, each dated 18 April 2002, the applicant's representatives have provided further clarification in relation to the identity of the cited comparators, in the following terms:-
Further to your recent correspondence re comparators, all are Grade 6 Whitley Council and all are located at the Royal Group of Hospitals payroll office, College Street, Belfast.
Please find below the names of those people whom we would be relying on as comparators from the Royal Group of Hospitals Trust
Ciaran Doherty
Gerry McGlinchey
Michael Brown[3]
It is now clear that each of the applicant's chosen comparators for this aspect of the complaint is and has at all material times been an employee not of the respondent, but rather of the Royal Group of Hospitals & Dental Hospital Health & Social Services Trust ['the Royal Trust'].
ix. Both the respondent and the Royal Trust are Health and Social Services Trusts, commonly referred to as HSS Trusts established pursuant to the Health & Personal Social Services (NI) Order 1991 ['the 1991 Order']. Within the 1991 Order the duties, powers and status of HSS Trusts are set out at Part II of Schedule 3 to the 1991 Order.
x. The respondent was established with effect as and from 1 April 1998 by means of the Ulster Community & Hospitals Health and Social Services Trust (Establishment) (NI) Order 1988: SR&O 1998 No: 121.
xi. Under Article 10(4) of the 1991 Order, the respondent is a statutory body corporate.
xii. The terms and conditions of employment of employees of the respondent, including the applicant, incorporate those Terms and Conditions of Services set out in the Terms and Conditions of Service Handbook and agreements issued from time to time by the Joint Councils for the Health and Personal Social Services (Northern Ireland).
xiii. Whilst outline grading guidelines for job evaluation are issued pursuant to the Joint Council structure, it is now and always has been for the respondent as an autonomous HSS Trust to determine what posts are necessary and/ or appropriate for it to create and fill in order to enable it to effectively discharge its statutory obligations. How the outline grading guidelines arrived at by the Joint Councils are to apply to individual posts and to individual employers is and always has been a matter for the HSS Trust to determine, subject to rights of appeal.
xiv. The respondent as an HSS Trust decided upon what posts are necessary to be created and how many. The respondent is solely responsible for the drafting and preparation of Job Descriptions and Job Specifications.
The terms and conditions of employment of all direct employees of the respondent, including the applicant, will be stated to incorporate those terms and conditions of Service which are set out in the Terms and Conditions of Service Handbook, and agreements issued from time to time by the Joint Councils for the Health and Personal Social Services (NI).
The Joint Councils are a series of bodies which negotiate and settle the terms and conditions of employment applicable to various staff disciplines within the Health Service in Northern Ireland. These terms and conditions are then incorporated within the Joint Council Terms and Conditions of Service Handbook applicable to that particular discipline…[4]
So far as the Royal Group of Hospitals Trust is concerned, so afar as I am aware, it is like the respondent an autonomous HSS Trust created I believe in or about 1992 by means of an SR&O.
So far as I am aware, the Royal Trust is managed by its own Chief Executive and Board of Directors.
I know nothing if the particular posts and/ or grades, or numbers of posts or numbers of grades, which the Royal Trust may or may not make use of in connection with the operation of its Salaries/ Wages processes.
Nor do I know what system or systems the Royal Trust may or may not operate in order to evaluate these or indeed any of its posts.
The Royal Trust may use the Joint Council guidelines, or it may use other guidelines, it may conceivably make use of the LAMSAC system, or any number of other systems either on their own or in conjunctions with the Joint Council Guidelines. I simply do not know.
Whilst at present, HSS Trusts are at liberty to grade their own posts, and to adopt internally whatever job evaluation system they may choose, this is soon coming to an end.
Recently, as part of what has been termed the Agenda for Change initiative, the government has announced its intention with effect from October 2004 to introduce into the Health Service for the first time a uniform grading structure for posts, and a uniform job evaluation scheme incorporating uniform grading definitions, which is to apply from that date to all posts and across all HSS Trusts on a UK wide basis[5].
THE SUBMISSIONS MADE ON BEHALF OF THE APPLICANT ON THE SECOND PRELIMINARY QUESTION
THE SUBMISSIONS MADE ON BEHALF OF THE RESPONDENT ON THE SECOND PRELIMINARY QUESTION
1 (7) Subject to [the following subsections] for the purposes of this section-
(a) 'employed' means employed under a contract of service or apprenticeship or a contract personally to execute any work or labour, and related expressions shall be construed accordingly;
(b) [repealed by 1976 NI 15 Article 11 Schedule 1 Part 1]
(c) two employers are to be treated as associated if one is a company of which the other (directly or indirectly) has control or if both are companies of which a third person (directly or indirectly) has control;
and men shall be treated as in the same employment with a woman if they are men employed by her employer or any associated employer at the same establishment or at establishments in Northern Ireland which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes.
Health & Social Services Trusts
10 – (1) Subject to Paragraph (2), the Department may by order establish bodies, to be known as Health & Social Services Trusts (in this Order referred to as HSS Trusts),-
a. to assume responsibility, in accordance with this Order, for the ownership and management of hospitals or other establishments or facilities which were previously managed or provided by a relevant body; or
b. to provide and manage hospitals or other establishments or facilities.
….
(4) Every HSS Trust –
(a) shall be a body corporate having a board of directors consisting of a chairman appointed by the Department and, subject to paragraph 5(2) of Schedule 3, executive and non-executive directors (that is to day, directors who, subject to paragraph (6), respectively are and are not employees of the Trust);
(b) shall have the functions conferred on it by an order under paragraph (1) and by Schedule 3; and
(c) shall be a body to which section 19 of the Interpretation Act (NI) 1954 applies.
Held, that (i) while the Departments control the Commission and the Agency, in that they have financial control of them and control the numbers, grades and terms and conditions of the persons employed, the operational independence of the Commission and the Agency being irrelevant for this purpose, the Commission and the Agency are not associated employers because, under section 1(7)(c) of the Equal Pay Act (Northern Ireland) 1970 two employers are to be treated as associated if one employer is a company of which the other, not necessarily a company, has control and the Commission and the Agency are not companies within the meaning of the section.
We have seen that a company may be incorporated or unincorporated. The [Agency] and the [Commission] are statutory bodies corporate, but as Halsbury[6] points out, such bodies are not commonly described as companies and I do not consider that they are within the meaning of the word "company" as used in section 1(7)(c) as some of them would need to be if the applicant is to succeed. Merton Council v. Gardiner [1981] ICR 186, at page 204G per Griffiths LJ supports the proposition that the word "company", unless specifically defined, does not normally extend to cover all bodies corporate. I am further of the opinion that someone employed by [the Agency] cannot claim a comparison with someone of the opposite sex employed by the [Commission], because there are two employers and they therefore require to be associated employers to permit the comparison to be made…Accordingly, in my opinion... the [Agency] and the [Commission] are not "associated employers".
The correct interpretation of the first part of section 1(7) (c) seems to be that two employers are to be treated as associated if one (employer) is a company of which the other (employer - not necessarily a company) has control. This interpretation is fortified by the apparent meaning of the second part of paragraph (c), which must, I consider, mean, 'if both (employers) are companies of which a third person (not necessarily a company) has control'".
THE SUBMISSIONS MADE ON BEHALF OF THE APPLICANT ON THE THIRD PRELIMINARY QUESTION
…There is an error of law in the decision of the industrial tribunal, that the appeal should be allowed and the case remitted to a different industrial tribunal. The error of law is the misunderstanding of the effect of Article [141], as properly interpreted and applied in relation to the relevant provisions of the 1970 Act concerning comparators. The industrial tribunal held that Mrs Scullard was confined in respect of comparators to men who were in the same employment, as defined in [section 1(7) of the 1970 Act] i.e. employees of associated companies at establishments in Great Britain at which common terms and conditions of employment were observed either generally or for employees of the relevant classes. That definition excludes, for example, employees of different employers who, though not companies, are all under the direct or indirect control of a third party and have common terms and conditions of employment. The crucial point is that the class of comparators defined in [section 1(7)] is more restricted than that available on the application of Article [141], as interpreted by the European Court of Justice. Article 141 is not, for example, confined to employment in undertakings which have a particular legal form, such as a limited company[7].
In our view, the legal position is as follows:
(1) Article [141] has direct effect between individuals in Member States. The European Court of Justice held in Defrenne v. Sabena (No.2)[8] that;
"…the principle of equal pay contained in Article [141] may be relied upon before the national courts and…these courts have a duty to ensure the protection of the rights which this provision vests in individuals, in particular as regards those types of discrimination arising directly from legislative provisions or collective labour agreements, as well as in cases in which men and women receive unequal pay for equal work which is carried out in the same establishment or service[9], whether private or public".
In their judgement, the European Court of Justice cited as instances of direct discrimination contrary to Article [141] "cases where men and women receive unequal pay for equal work whether public or private".
"In such situations, at least, Article [141] is directly applicable and may thus give rise to individual rights which the courts must protect"[10].
In Defrenne no distinction is drawn between work carried out in the same establishment or service of limited companies and of other employers, whether incorporated or not.
… (4) The crucial question for the purposes of Article [141] is, therefore, whether Mrs Scullard and the male unit managers of the other councils were employed "in the same establishment or service". The tribunal did not ask or answer that question. To the extent that that is a wider class of comparators than is contained in [section 1(7)] of the 1970 Act, [section 1(7)] which is confined to "associated employers" is displaced and must yield to the paramount force of Article 119 [now 141]. On this aspect of the claim it will be relevant for the industrial tribunal to examine factual areas which have not so far been explored, namely whether the Regional Councils (even though none is a company) were directly or indirectly controlled by a third party, the extent and nature of the control and whether they constitute the "same establishment or service". For that purpose it will also be relevant to consider whether common terms and conditions of employment were observed in the Regional Advisory Councils for the relevant class of employees[11].
…What is absolutely apparent in our view from this analysis is that if there is a connection (in a loose and non-technical sense between the same establishment or service) then the comparator selected within that umbrella may be (our emphasis) relevant and competent…[12]
It follows from this analysis that we do not accept… that because the relevant employer…has no power or control of the terms and conditions of employment of the comparator who is employed by another person…that excludes the latter person from being a relevant comparator in appropriate cases[13].
It is not evident from the wording of Article 141 EC that the comparison must be confined to one and the same employer. Its case law demonstrates that the Court has consistently stood by its requirement that for a finding of direct discrimination there must be a clear difference in pay vis-à-vis male co-workers working in the "same establishment or service" (see, inter alia, Defrenne (No.2), paragraph 22) or that this difference in pay must have its origin in legislative provisions of collective labour agreements (Defrenne (No.2), paragraph 21)[14].
The appellants, the United Kingdom Government and the Commission are in agreement that the argument that a comparison with employees outside a specific undertaking can never be made is untenable. That is also my own view[15].
This thus concerns three categories. The first covers cases in which statutory rules apply to the working and pay conditions in more than one undertaking, establishment or service. By way of example, one may think of the salaries of nursing staff working for a service such as the National Health Service. Second, there are cases in which several undertakings or establishments are covered by a collective works agreement or regulations governing the terms and conditions of employment. Finally, the third category concerns those cases in which the terms and conditions of employment are laid down centrally for more than one organisation or business within a holding company or conglomerate[16].
…The feature common to these three categories is that the regulation of the terms and conditions of employment actually supplied is traceable to one source, whether it be the legislature, the parties to a collective works agreement, or the management of a corporate group[17].
…Why is this so? Article 141 EC is addressed to those who may be responsible for the unauthorised differences in terms and conditions of employment. In the cases mentioned, these are the legislature, the parties to a collective works agreement, and the management of a corporate group. They may be held accountable in this regard. On the other hand, if differences in pay arise as between undertakings or establishments in which the respective employers are separately responsible for the terms and conditions of employment within their own undertaking or establishment, they cannot possibly be held individually accountable for any differences in the terms and conditions of employment between those undertakings[18].
(i) That both the applicant and her named comparators worked within the same service. Thus the respondent and the Royal Group of Hospitals are valid comparators – Scullard; and
(ii) all the Northern Ireland HSS Trusts are governed by the Whitley Council agreements – Morton: Lawrence;
THE SUBMISSIONS MADE ON BEHALF OF THE RESPONDENT ON THE THIRD PRELIMINARY QUESTION
i. The extent and control of the complainant and her comparator by a third party; and
ii. The nature of this control;
iii. Do common terms and conditions apply?
Mr Devlin reminded the tribunal that the applicant here had never sought to argue that common terms and conditions of employment applied to both herself and her chosen comparators, albeit that the Joint Councils in Northern Ireland (the Ulster equivalent of the Whitley Council) were formed to establish a degree of uniformity across the Province. Mr Devlin referred back to paragraph xiii. of the parties' agreed statement, which provides that the methodology of the application of the grading guidelines arrived at by the Joint Councils to each HSS Trust's employees is a matter for that Trust. The entire paragraph states;
xiii. Whilst outline grading guidelines for job evaluation are issued pursuant to the Joint Council structure, it is now and always has been for the respondent as an autonomous HSS Trust to determine what posts are necessary and/ or appropriate for it to create and fill in order to enable it to effectively discharge its statutory obligations. How the outline grading guidelines arrived at by the Joint Councils are to apply to individual posts and to individual employers is and always has been a matter for the HSS Trust to determine, subject to rights of appeal.
It is clear…that the direct effect of Article 141 EC extends to employees working for the same legal person or group of legal persons, or for public authorities operating under joint control, as well as cases in which, for purposes of job classification and remuneration, a binding collective agreement or statutory regulation applies. In all these cases, the terms and conditions of employment can be traced back to a common source.
The differences in conditions of remuneration between male and female employees which form the subject-matter of the main proceedings in the present case cannot, however, be traced back to one single source capable of being held responsible. The mere fact that the terms and conditions of employment for similar activities with the council and with the appellants' new employers diverge is not sufficient to justify the conclusion that their present employers are guilty of direct discrimination under Article 141 EC. The Court's established case law on the criterion of the "same establishment or service" allows no other conclusion[24].
Therefore, Mr Devlin submitted to the tribunal that since there was no single, common and mandatory source for the setting of the pay scales of both the respondent and the Royal Group of Hospitals, the applicant's case must fail as she had failed to establish a common link between herself and her comparators, pursuant to section 1(7) of the 1970 Act and the reasoning in Lawrence. In this regard, Mr Devlin extracted from Mr McAdam the concession that there was nothing in the various agreed documentation he had put before the tribunal that disclosed that the Department of Health could compel any of its agent HSS Trusts to follows its guidelines. This power to compel all HSS Trusts to follow agreed procedures will not take effect in Northern Ireland and across the United Kingdom until November 2004, when the Agenda for Change policy comes into effect.
General Powers
16. Subject to Schedule 4, an HSS Trust shall have power to do anything which appears to it to be necessary or expedient for the purpose of or in connection with the discharge of its functions, including in particular power-
(a) ----
(b) ----
(c) ----
(d) to employ staff on such terms as the Trust thinks fit.
17. (1) Without prejudice to the generality of paragraph 16, to or in respect of its employees as it may determine, an HSS Trust may make such arrangements for providing pensions, allowances, or gratuities as it may determine; and such arrangements may include the establishment and administration, by the Trust or otherwise, of one or more pensions schemes.
Therefore, in Mr Devlin's submission, there was nothing in the 1991 Order or its Schedules that tied the individual Trusts to the Department's grading structures.
THE DECISION OF THE TRIBUNAL IN RESPECT OF THE PRELIMINARY QUESTIONS POSED IT.
(i) As recorded in paragraph 6 above, Mr McAdam conceded that the respondent and the Royal Group of Hospitals were separate legal entities. The tribunal therefore answers the first of the preliminary questions put to it in the negative.
(ii) Turning to the second preliminary question, section 1(7) of the 1970 Act clearly provides;
1 (7) Subject to [the following subsections] for the purposes of this section-
(c) two employers are to be treated as associated if one is a company of which the other (directly or indirectly) has control or if both are companies of which a third person (directly or indirectly) has control;
and men shall be treated as in the same employment with a woman if they are men employed by her employer or any associated employer at the same establishment or at establishments in Northern Ireland which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes.
(iii) It has been established by the Northern Ireland Court of Appeal – by which authority this tribunal is bound - in Heasley v. Fair Employment Agency [1988] NI Reports 585 that under section 1(7) (c) of the Equal Pay Act (NI) 1970 two employers are to be treated as associated if one employer is a company of which the other, not necessarily a company, has control. In Heasley Lord Lowry held that;
The correct interpretation of the first part of section 1(7) (c) seems to be that two employers are to be treated as associated if one (employer) is a company of which the other (employer- not necessarily a company) has control. This interpretation is fortified by the apparent meaning of the second part of paragraph (c), which must, I consider, mean, 'if both (employers) are companies of which a third person (not necessarily a company) has control' " [25].
Since by Article 10(4) of the 1991 Order, each HSS Trust is a body corporate, such Trust's are not to be considered as companies. In Heasley Lord Lowry clearly held that Halsbury's Laws of England (4th Ed) Vol.7 clearly provided that a body corporate is not to be considered a company. Therefore, associated bodies corporate cannot be considered as associated employers. That is not the position in the applicant's case. It follows from the agreed statement of Mr Dennison for the respondent, when he stated that, "the Royal Group of Hospitals Trust…, so afar as I am aware, …is like the respondent an autonomous HSS Trust created I believe in or about 1992 by means of an SR&O", that the respondent and the Royal Group of Hospitals Trust are clearly not associated bodies corporate. They are autonomous creations of statute. This determination is fortified by Schedule 3, Part II of the Health & Personal Social Services (Northern Ireland) Order 1991, paragraph 16 of which provides that each HSS Trust so created has the power "necessary or expedient for the purpose of on connection with the discharge of its functions, including in particular power…. to employ staff on such terms and the Trust thinks fit".
(iv) Applying Heasley to the applicant's complaint, the ineluctable determination this tribunal arrives at, therefore, in respect of the second preliminary question put to it is that;
(a) associated bodies corporate fall out with the provisions of section 1(7) of the Equal Pay Act (NI) 1970; and
(b) even if such were not the case, this does not aid the applicant before us, since - as a matter of fact - the respondent and the Royal Group of Hospitals are not to be considered as associated employing bodies. Our finding of fact is that they are quite independent, autonomous organisations, created by statute to deliver similar services by separate means.
(c) Therefore, the tribunal determines the second preliminary question put to it in the negative. The respondent and the Royal Group of Hospitals are not associated employers within the meaning of section 1(7) of the 1970 Act.
(v) Turning to the third preliminary question put to it, the tribunal notes Mr McAdam's concession that the applicant was not seeking to argue that she was employed at the same establishment, but that she worked in the same service as the nominated male comparators. There was no argument between the parties that these comparators were employed by the Royal Group of Hospitals on the date of the presentation of the Originating Application, 5 May 2000. Mr Devlin conceded that the Article 141 of the Treaty of Rome as amended has direct effect, and is binding over conflicting domestic law.
(vi) Having construed the full range of questions laid out by the EAT in Scullard to determine if the applicant was employed in the same service as her comparators, the tribunal has been much struck by paragraph xiii. of the agreed statement put before it inasmuch as it provides that it is for each autonomous HSS Trust to determine how the Joint Council's agreements are to be applied to its employees. This autonomy is to come to an end in October 2004, when Central Government will apply a common mandatory standard across all HSS Trusts within the United Kingdom. In Morton, a comparison may be made with a competent comparator in another undertaking over which the complainant's employer has no power or control. Construing this with the position struck by the Advocate General in Lawrence, such a comparison can be said to be valid where the subject matter of the complaint can be traced back to one single source capable of being held responsible. The tribunal in this case is driven to adopt the same conclusion arrived at by the Advocate General in Lawrence;
The mere fact that the terms and conditions of employment for similar activities within the council and with the appellants' new employers diverge is not sufficient to justify the conclusion that the [respondent is] guilty of direct discrimination under Article 141 EC. The Court's established case law on the criterion of the "same establishment or service" allows no other conclusion[26].
(vii) The fact remains that, until October 2004, there is no single, common and mandatory source for the setting of the pay scales of both the respondent and the Royal Group of Hospitals. The applicant has failed to establish a common link between herself and her comparators, pursuant to section 1(7) of the 1970 Act and the reasoning in Lawrence. Mr McAdam conceded as much before us when he accepted there was nothing in the various agreed documentation he had put before the tribunal that disclosed that the Department of Health (or any other limb of central or devolved government) could compel any of its agent HSS Trusts to follow its guidelines. By Schedule 3, Part II, paragraph 16(d) of the 1991 Order, each HSS Trust is empowered to "employ staff on such terms as the Trust thinks fit". Paragraph 16 is supplemented by paragraph 17 of the same Schedule. The tribunal determines there is, therefore, at the moment, no single entity responsible for the "regulation of the terms and conditions of employment…traceable to one source"[27]. The tribunal notes the accepted position of the parties that there was no Grade 6 post available to the applicant on 6 May 2000. Albeit that Article 141 of the Treaty of Rome is broader than section 1(7) of the 1970 Act, and is directly effective, in applying the reasoning in Lawrence the tribunal determines that the inability of any one source or Department of central or devolved government to compel the respondent to apply (to the applicant) the same agreements and arrangements for the payment of its workers as that applied by the Royal Group of Hospitals to its employees means that the applicant and her chosen comparators were not employed in the same establishment or service on 5 May 2000. The tribunal thus answers the third preliminary question put to it in the negative.
(viii) Having answered each of the preliminary questions put to it in the negative, the tribunal therefore dismisses the applicant's complaint.
(ix) No further or other Order is made.
Chairman:
Date and place of hearing: 12 March 2003, Belfast
Date decision recorded in register and issued to the parties:
Note 1 In November 1998 [Back] Note 2 There were no Grade 6 posts for the applicant’s post within the respondent at that time. [Back] Note 3 . Agreed statements from Messrs. Doherty, McGlinchey and Brown were adduced before the tribunal to attest that each was employed at the Royal Group of Hospitals on 5th May 2000. [Back] Note 4 Page 1 of Mr Dennison’s agreed statement [Back] Note 5 pages 6-7 of Mr Dennison’s agreed statement [Back] Note 6 Halsbury’s Laws of England (4th Ed) Vol. 7 [Back] Note 7 at page 345, Para 10 [Back] Note 8 43/75 [1976] ECR 455 ECJ, paragraph 40 [Back] Note 10 ibid. paragraph 24 [Back] Note 11 [1996] IRLR 344, at page 346, Para 18 [Back] Note 14 page 826, paragraph 46 [Back] Note 15 page 826, paragraph 48 [Back] Note 16 page 826, paragraph 49 [Back] Note 17 ibid., page 826, paragraph 51 [Back] Note 18 ibid., page 826-827, paragraph 52 [Back] Note 19 43/75 [1976] ECR 455 ECJ, [Back] Note 20 [1980] IRLR 210 [Back] Note 22 Case C-381/99, [2001] IRLR 571 [Back] Note 23 Scullard v. (1) Knowles & (2) Southern Regional Council for Education & Training [1996] IRLR
344 [Back] Note 24 [2002] IRLR 822, at 827, paragraph 54-55 [Back] Note 25 [1988] NI 585, at 594B [Back] Note 26 [2002] IRLR 822, at 827, paragraph 54-55 [Back]