Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> McMenemy v Capita Business Services Ltd [2007] ScotCS CSIH_25 (30 March 2007)
URL: http://www.bailii.org/scot/cases/ScotCS/2007/CSIH_25.html
Cite as: [2007] IRLR 400, 2007 GWD 13-267, 2007 SC 492, 2007 SLT 428, [2007] CSIH 25, [2007] ScotCS CSIH_25

[New search] [Help]

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lord Nimmo Smith

Lord Eassie

Lord Mackay of Drumadoon

Lord Nimmo Smith

~~Revised by M of D 24 March 2007.~~

[2007] CSIH 25

XA91/06

OPINION OF THE COURT

dDelivered by LORD NIMMO SMITH

APPEAL

Under section 37(1) of the Employment Tribunals Act 1996

WILLIAM JOHN McMENEMY

Appellant;

against

CAPITA BUSINESS SERVICES LIMITED

Respondents:

_______

Act: Stevenson, Solicitor Advocate; Thompsons, (Appellant)

Alt: Napier, Q.C.; Brodies, LLP (Respondents)

30 March 2007

Introduction

[1] The appellant was a part-time employee of the respondents. He claimed that he was suffering detriment in the manner in which the respondents applied the provisions of his contract of employment relating to the incidence of public holidays. He applied to the Employment Tribunal under the provisions of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (S.I.2000/1551) ("the 2000 Regulations"). By a judgment registered with extended reasons on 4 August 2005 the Employment Tribunal refused the application. The appellant appealed to the Employment Appeal Tribunal, who by judgment dated 7 March 2006 ordered that the appeal be dismissed. The appellant now appeals to this Court with leave of the Employment Appeal Tribunal, under section 37(1) of the Employment Tribunals Act 1996.

The legislation

[2 ] Council Directive 97/81/EC, concerning the Framework Agreement on part-time work ("the Directive"), provides by Clause 1 of the Framework Agreement:-

"The purpose of this Framework Agreement is: (a) to provide for the removal of discrimination against part-time workers and to improve the quality of part-time work; ...."

Clause 3 provides the following definitions:-

"1. The term 'part-time worker' refers to an employee whose normal hours of work, calculated on a weekly basis or on average over a period of employment of up to one year, are less than the normal hours of work of a comparable full-time worker.

2. The term 'comparable full-time worker' means a full-time worker in the same establishment having the same type of employment contract or relationship, who is engaged in the same or a similar work/occupation, due regard being given to other considerations which may include seniority and qualification/skills."

The principle of non-discrimination is set out in Clause 4 in these terms:

"1. In respect of employment conditions, part-time workers shall not be treated in a less favourable manner than comparable full-time workers solely because they work part time unless different treatment is justified on objective grounds.

2. Where appropriate, the principle of pro rata temporis shall apply...."

[3 ] There was some discussion before us of the significance of the word "solely" in Clause 4.1. Reference was made to versions of the Directive in a number of other languages. It is sufficient to refer to the French ("au seul motif") and German ("nur deswegen") versions to reinforce the impression that would be gained from a straightforward reading of the English version that "solely" does indeed mean that the less favourable treatment of part-time workers which is prohibited by the Directive must be for the reason that they work part-time and for that reason alone.

[4 ] The Directive was extended to the United Kingdom by Council Directive 98/23/EC. These Directives were implemented, though not in identical terms, by the 2000 Regulations. By Regulation 1(2) the "pro rata principle" is defined as meaning 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. Regulation 2 provides:

"(1) A worker is a full-time worker for the purpose of these Regulations if he is paid wholly or in part by reference to the time he works and, having regard to the custom and practice of the employer in relation to workers employed by the worker's employer under the same type of contract, is identifiable as a full-time worker.

(2) A worker is a part-time worker for the purpose of these Regulations if he is paid wholly or in part by reference to the time he works and, having regard to the custom and practice of the employer in relation to workers employed by the worker's employer under the same type of contract, is not identifiable as a full-time worker.

.....

(4) A full-time worker is a comparable full-time worker in relation to a part-time worker if, at the time when the treatment that is alleged to be less favourable to the part-time worker takes place - (a) both workers are - (i) employed by the same employer under the same type of contract, and (ii) engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification, skills and experience; ...."

Regulation 5 provides:-

"(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.

(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. ...."

Regulation 8(1) enables a worker to present a complaint to an Employment Tribunal that his employer has infringed a right conferred on him by inter alia Regulation 5.

[5 ] At the hearing of this appeal, parties were agreed on the approach to construction of this legislation. The 2000 Regulations should be construed consistently with the Directive, and should be given a purposive construction. Reference was made to the decision of the European Court of Justice in Wippel v Peek & Cloppenburg GmbH & Co KG, Case C-313/02 [2004] ECR I-9483, [2005] IRLR 211. In the course of their judgment the Court said, at paragraph 54:

"[C]lause 4 of the Framework Agreement annexed to Directive 97/81, in regard to employment conditions, precludes part-time workers from being treated less favourably than comparable full-time workers on the sole ground that they work part-time unless different treatment is warranted on objective grounds".

At paragraph 55 the Court referred to Articles 2(1) and 5(1) of Directive 76/207 and case law relating to indirect discrimination against women. At paragraph 56 they said:

"The prohibition on discrimination enunciated in the abovementioned provisions is merely a particular expression of a fundamental principle of Community law, namely the general principle of equality under which comparable situations may not be treated differently unless the difference is objectively justified .... That principle can therefore apply only to persons in comparable situations ...."

Reference was also made to Litster v Forth Dry Dock & Engineering Co Ltd 1989 SC (HL) 96, in which the House of Lords held that United Kingdom courts are under a duty to give a purposive construction to Directives and to Regulations issued for the purpose of complying with Directives, and Webb v Emo Air Cargo (UK) Ltd [1993] 1 ICR 175, in which Lord Keith said at page 186:

"[I]t is for a United Kingdom court to construe domestic legislation in any field covered by a Community Directive so as to accord with the interpretation of the Directive as laid down by the European Court of Justice, if that can be done without distorting the meaning of the domestic legislation ..."

This is consistent with the approach laid down by the European Court of Justice in Paola Faccini Dori v Recreb Srl, Case C-91/92 [1994] ECR I-3325, in which the Court said at paragraph 26:

"[W]hen applying national law, whether adopted before or after the directive, the national court that has to interpret that law must do so, as far as possible, in the light of the wording and the purpose of the directive so as to achieve the result it has in view and thereby comply with the third paragraph of Article 189 of the Treaty."

[6] It was common ground between the parties that the foregoing cases established the proper approach construction of the legislation. It was not suggested that the 2000 Regulations went further than the Directive in conferring protection on part-time workers, or were intended to do more than to bring United Kingdom law into line with community law. Where the parties disagreed was over the implications of the inclusion of the word "solely" in Clause 4 1. of the Directive. In our opinion, the language of Clause 4 1. of the Directive~~This~~ connotes the need to consider whether there is a causative connection between the discrimination complained of by the worker and the part-time nature of the worker's employment.: Aas we have said, the prohibition is against less favourable treatment of part-time workers, than comparable full-time workers, for the reason that they work part-time and for that reason alone. This necessitates inquiry into the employer's intention in so treating the part-time worker. In Gibson v Scottish Ambulance Service, Appeal No. UKEAT/0052/04, 16 December 2004, the Employment Appeal Tribunal, in construing this legislation, said at paragraph 11:

"Whatever may be the motive of the employer, it is necessary to look at the intention behind the decision to impose part-time working, whatever may be its consequence in other respects. We therefore reject the 'but for' test in this context and we consider that for the reasons given by the Tribunal, they applied their minds to the right question and reached a conclusion, namely, that the real reason was the issue of demand in the local area which means that the appellant was not being discriminated against on the ground that he was a part-time worker per se."

We agree with this approach. The part-time worker who complains that his employer is treating him less favourably than he does a comparable full-time worker in breach of the legislation must therefore establish that the employer intends to treat him less favourably on the sole ground that he is a part-time worker (see the passage in Wippel quoted above). Additional reasons for construing the word "solely" in this way are that, as counsel for the respondents pointed out, there is, firstly, no reference in the Directive to indirect discrimination and, secondly, different treatment, if established, may nevertheless be "justified on objective grounds".

The facts
[7] The relevant facts were not in themselves in dispute. A convenient summary of them is set out in the following passage in the judgment of the Employment Appeal Tribunal:

"[8] The respondents are a large company. They provide business support services throughout the UK. They operate on a seven day per week basis. One of their call centres is based at Glasgow, where there are about 120 employees. The claimant was employed as a member of their research team there as from 1998. Initially he worked on a full-time basis. In April 1999, he applied for part-time working so as to enable him to fulfil his childcare responsibilities. He and the respondents reached agreement that he would, thereafter, work on a part-time basis, on Wednesday, Thursday and Friday each week. Thereafter, he was not allowed time off in lieu when public holidays fell on Mondays although full-time workers in his team who normally worked on Mondays were given the day off.

[9 ] The team in which the claimant worked seems to have varied in size but was of about 8-10 full-time equivalent members. For a period, his line manager, Mr Keeman, worked full-time Tuesday to Saturday. It was made clear to him by the respondents in April 2004 that he was not, when working those days, entitled to days off in lieu when he missed a Monday public holiday. The respondents' approach was in accordance with the terms of the contracts of employment issued by the respondents. Whether in respect of part-time or full-time employment, clause 9 of those contracts provided that employees were entitled to public holidays only: '...where these fall on your normal working day ...'."

[8 ] The issue between the parties was whether, on these facts as properly understood, the appellant had established a contravention of the legislation as interpreted above. This raised two questions: first, whether he was treated less favourably than a comparable full-time worker; and, secondly, if so, whether that was for the reason that he worked part-time and for that reason alone.

The judgment of the Employment Tribunal

[9 ] The appellant claimed that he was being treated less favourably than comparable full-time workers as he did not receive the benefit of public holidays which fell on Mondays. In holding that there had been no contravention of the legislation, the Employment Tribunal had regard to the respondents' policy document on public holidays and said, at para.20:

"The whole basis of the policy both in relation to full-time and part-time employees makes it clear that in the interests of overall fairness to the whole workforce, the benefits of statutory holidays will only apply to those who work them. The distinction therefore is not between full-time and part-time workers, but between those who work Mondays and those who do not, whether or not they are full-time. This would have been clearer there if there had been such a full-time employee; but the manner in which the case of Mr Keeman was dealt with leaves us in no doubt that had such a hypothetical employee existed, he or she would not have had the benefit of statutory holidays".

The judgment of the Employment Appeal Tribunal

[10] The Employment Appeal Tribunal upheld the decision of the Employment Tribunal. In the course of their judgment they said:

"[16] We are readily satisfied that the conclusion reached by the Tribunal was one which they were entitled to reach on the evidence. They did ... consider what would have happened if, at the time they were considering matters, one of the comparable full-time workers was not working on Mondays. To that extent, they were constructing a hypothetical employee. That was, however, something that they were quite entitled to do when considering the second question, the 'reason why' question. .... In the circumstances, it was obviously open to them to conclude that a full-time employee who did not work on Mondays would have been treated to the same as the claimant as regards Monday holidays. That was clearly powerful evidence in support of the respondents' case that the reason for the claimant's treatment and the ground on which he received it was nothing to do with his part-time status. There was nothing wrong in them asking themselves what would have happened if there had, at that time, been a full-time employee in the claimant's team who did not work on Mondays.

[17 ] ....That was evidence upon which it was open to the Tribunal to determine that the ground for the respondents' decision to refuse the claimant's request for days off in lieu of Monday holidays was not that he was a part-time worker but that he did not work on a Monday. The Tribunal were entitled to find that that was their reason and did so."

The Employment Appeal Tribunal also held that the appellant did not have an independent right to pro rata treatment as regards holidays. They said, at para.[18], that the pro rata principle contained in Regulation 5(3) related only to the first question of whether or not a part-time worker had received less favourable treatment than a full-time worker. It was not stated as an independent right and it was not something that a Tribunal was directed to have in mind when considering whether or not the less favourable treatment was on the ground that the employee was a part-time worker.

The Appeal to this Court
Submissions for the appellant

[11 ] Although the appellant has stated three grounds of appeal, we see no need to refer to them separately. It is alleged in them that the Employment Appeal Tribunal erred in law by failing to apply a purposive approach to the legislation, that they misinterpreted the provisions relating to the pro rata principle, and that they erred in law by allowing a comparison with a hypothetical employee working full-time but not on Mondays. In support of these grounds, the solicitor advocate for the appellant submitted that the important point on the facts was that the working week for the appellant's team was a five-day fixed shift. The proper comparison was between him and a full-time employee who worked from Monday to Friday. The judgment of the Employment Appeal Tribunal drove a cart and horses through the purpose of the Directive, as the admittedly less favourable treatment of the appellant as a part-time employee, far from being removed, was affirmed. In contradiction of the clear legislative intention, the Employment Appeal Tribunal had excluded the pro rata principle from consideration of the circumstances leading to the fact of less favourable treatment. Despite the existence of directly comparable full-time employees, a hypothetical full-time employee was used to defeat the principle of non-discrimination. In any event, in the circumstances of this case, where a team comprising the appellant, who worked a part-time fixed shift on Wednesdays, Thursdays and Fridays, and full-time comparators, who worked a fixed shift on Mondays to Fridays, the only real ground for his less favourable treatment was that he was a part-time worker. Not working on Mondays was a consequence of his working part-time. Guidance provided by the Department of Trade and Industry ("the DTI") stated:

"[W]here workers work fixed days each week, such a practice could put part-timers at a disadvantage. For example, because most bank and public holidays fall on Monday, those who do not work Mondays will be entitled to proportionately fewer days off. In many workplaces, these workers will predominantly be part-timers. In such cases, it may be necessary to remove the disadvantage suffered by the staff who do not receive particular days off as a result of their particular working pattern, for example by giving all workers a pro rata entitlement of days off in lieu according to the number of hours they work."

This reflected the proper approach to the application of the pro rata principle. In addition, it was not legitimate to construct a hypothetical comparator. That was only permissible where there was no actual comparator, but here there were actual comparators, the full-time employees.

Submissions for the respondents

[12 ] Counsel for the respondents submitted that the Employment Tribunal were entitled to reach the decision they did and that there was no error of law on the part of the Employment Appeal Tribunal. The fact that there were comparable full-time workers who did not suffer less favourable treatment did not of itself establish liability. The purpose of the Directive was only contravened if it could be established that the sole reason for the less favourable treatment was that the disadvantaged person worked part-time. Counsel submitted that it was wholly appropriate to apply the pro rata principle to establish the existence of less favourable treatment, but it was wholly inappropriate to apply it to the question of causation. The Employment Appeal Tribunal correctly held that it was not an independent right. So far as a hypothetical comparator was concerned, it was perfectly proper to look at evidence that went beyond the actual facts in order to establish the reason that motivated the employer. The DTI Guidance, which was expressed in qualified terms by use of the words "could" and "may", was not a useful guide.

Discussion

[13 ] We have already set out the relevant legislation and discussed its proper interpretation. It was not in dispute that the appropriate comparators were the full-time workers in the appellant's team, who worked from Mondays to Fridays, and that by comparison with them the appellant received less favourable treatment, because by working part-time on Wednesdays, Thursdays and Fridays he did not receive the benefit of statutory holidays which fell on Mondays (though he did receive the benefit of any statutory holiday which, in a particular year, fell on a Wednesday, a Thursday or a Friday). It is at this stage, in considering whether there has been less favourable treatment, that the pro rata principle is applicable: if the appellant had received a pro rata amount of time off in lieu of Monday statutory holidays, he would not be less favourably treated.

[14 ] The next question is whether this less favourable treatment was solely because the appellant was a part-time worker. This, as we have discussed, requires examination of the respondents' intention: did they intend to treat him less favourably for the sole reason that he was a part-time worker? It is clear to us that the Employment Tribunal and the Employment Appeal Tribunal gave the correct answer to this question. On examination of the facts, the reason why the appellant received less favourable treatment than did a comparable full-time worker was through the accident of his having agreed with the respondents that he would not work for them on Mondays or Tuesdays. It is at this point that it becomes legitimate to consider hypothetical situations, in order to test the true intention of the respondents. It is clear on the evidence that, in accordance with the respondents' policy on public holidays, if a full-time member of the appellant's team worked a fixed shift from Tuesday to Saturday, he would not receive the benefit of statutory holidays which fell on Mondays. Likewise, if the appellant, or any other part-time member of his team, worked on Mondays, they would receive the benefit of statutory Monday holidays in exactly the same way as full-time employees would do. We can therefore see no reason to fault the reasoning of the Employment Tribunal or the Employment Appeal Tribunal, especially the latter, in the passages quoted above. This is sufficient to dispose of the appeal.

[15 ] In these circumstances no question arises as to whether the less favourable treatment of the appellant is justified on objective grounds, and no submissions were advanced in that regard.

Result

[16 ] For the foregoing reasons this appeal is refused. We would add that the solicitor advocate for the appellant invited us, rather tentatively, to consider making a reference to the Court of Justice of the European Communities`. In our opinion, however, no issue of interpretation of the legislation arises which cannot be resolved by reference to the established case law referred to above, and we see no need to make such a reference.